<PAGE>
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 Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CARDIAC CONTROL SYSTEMS, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD OF CARDIAC CONTROL SYSTEMS, INC. APPEARS HERE]
October 3, 1996
Dear Shareholder:
The Board of Directors cordially invites you to attend, on November 13,
1996, Cardiac Control Systems, Inc.'s Annual Meeting of Shareholders, to be held
at the Hyatt Regency New Orleans, Poydras at Loyola Avenue, New Orleans,
Louisana 70113 at 4:00 p.m. local time, for the following purposes:
1. To elect the Board of Directors;
2. To ratify the appointment of independent accountants; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
To assure a quorum and that your shares will be voted at the meeting in
accordance with your instructions, please sign and return the enclosed proxy
card at your earliest convenience. If you sign and return your proxy card
without specifying your choices, it will be understood that you wish to have
your shares voted in accordance with the directors' recommendations. Mailing
your proxy card will not limit your right to vote in person at the meeting.
If you plan to be present at the meeting, please so indicate on the proxy
card so that we can mail an admission card to you. Please note that attendance
at the meeting will be limited to shareholders as of the record date (or
authorized representative) having an admission card or evidence of their share
ownership, and guests of the Company.
Respectfully yours,
CARDIAC CONTROL SYSTEMS, INC.
/s/ Robert T. Rylee
- ------------------------------
Robert T. Rylee
Secretary
Enclosures
<PAGE>
CARDIAC CONTROL SYSTEMS, INC.
3 Commerce Blvd., Palm Coast, Florida 32164
CORRECTED NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------
TO BE HELD ON
Wednesday, November 13, 1996
at 4:00 p.m.
---------
TO: Holders of shares of common stock, par value $0.10 per share ("Common
Stock"), of Cardiac Control Systems, Inc.:
NOTICE IS HEREBY GIVEN that pursuant to a call of its directors, the annual
meeting (the "Meeting") of the shareholders of Cardiac Control Systems, Inc., a
Delaware Corporation (the "Company"), will be held at the Hyatt Regency New
Orleans, Poydras at Loyola Avenue, New Orleans, Louisiana on November 13, 1996
at 4:00 p.m. local time, for the following purposes:
1. To elect the directors for the Company to serve until the next annual
meeting of the shareholders and until their successors are elected and qualify;
2. To ratify the appointment of BDO Seidman, LLP as independent accountants
to audit the Company's books and records for the fiscal year ending March 31,
1997; and
3. To transact any other business as may properly come before the Meeting
and any adjournment thereof.
THE COMPANY'S PROXY STATEMENT, PROXY AND ANNUAL REPORT FOR THE YEAR ENDED
MARCH 31, 1996 ACCOMPANIED THE ORIGINAL NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS. THE ORIGINAL NOTICE OF ANNUAL MEETING OF SHAREHOLDERS CONTAINED A
TYPOGRAPHICAL ERROR FOR THE TIME OF THE MEETING. THE MEETING WILL BE HELD AT
4:00 P.M., AND NOT 4:00 A.M. AS INADVERTENTLY INDICATED IN THE ORIGINAL NOTICE.
- --------- ---
The Proxy Statement that accompanied the Original Notice of Annual
Meeting of Shareholders summarizes information concerning the proposed business
to be acted upon at the meeting.
Only holders of record of shares of Common Stock of the Company at the
close of business on October 1, 1996 are entitled to notice of and to vote at
the Meeting and any adjournments thereof.
Shareholders are urged to attend the Meeting; but, whether you plan to
attend or not, PLEASE DATE, MARK, SIGN AND PROMPTLY RETURN THE PROXY THAT WAS
INCLUDED WITH THE ORIGINAL NOTICE OF ANNUAL MEETING OF SHAREHOLDERS.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE HOLDERS OF COMMON
STOCK OF THE COMPANY ELECT EACH NOMINEE FOR DIRECTOR AND RATIFY THE APPOINTMENT
OF INDEPENDENT ACCOUNTANTS FOR THE COMPANY; BOTH TO BE PRESENTED AT THE MEETING.
By Order of The Board of Directors
/s/ Robert T. Rylee
- ------------------------------
Robert T. Rylee
Secretary
Palm Coast, Florida
October 25, 1996
<PAGE>
CARDIAC CONTROL SYSTEMS, INC.
3 Commerce Boulevard
Palm Coast, Florida 32164
PROXY STATEMENT
ANNUAL MEETING
November 13, 1996
THE PROXY AND SOLICITATION
The accompanying Proxy is solicited by the Board of Directors of Cardiac
Control Systems, Inc. (The "Company") for use at the Annual Meeting of the
holders of the Company's Common Stock, par value $0.10 per share ("Common
Stock"), to be held on November 13, 1996 at the Hyatt Regency New Orleans,
Poydras at Loyola Avenue, New Orleans, Louisiana 70113 at 4.00 p.m. local time,
and any adjournment thereof. When such proxy card is properly executed and
returned, the shares it represents will be voted at the Annual Meeting in
accordance with any directions noted thereon, or, if no direction is indicated,
it will be voted by the persons named in the accompanying proxy card as
recommended by the Board of Directors. Any proxy given pursuant to this
solicitation may be revoked by the shareholder at any time prior to the voting
thereof by attending and voting in person at the meeting, or by giving notice of
revocation in writing to the Secretary of the Company at any time prior to its
use, or by delivery to the Secretary of the Company of a duly executed proxy
bearing a later date.
A Notice of Annual Meeting of Shareholders and a proxy card accompany this
Proxy Statement. The approximate date of the first distribution of this Proxy
Statement and the accompanying proxy card and Notice of Annual Meeting to
shareholders is October 3, 1996.
A copy of the Company's Annual Report for the year ended March 31, 1996 has
been mailed to each shareholder of record. Copies of the Company's annual
report on Form 10-KSB (exclusive of certain exhibits) may be obtained, without
charge, by writing to the Secretary of the Company at 3 Commerce Boulevard, Palm
Coast, Florida 32164.
The Company will bear the costs of solicitation of proxies. Proxies will
be solicited principally through the use of the mails, but directors, officers
and regular employees of the Company may, without additional compensation use
their personal efforts by telephone or otherwise to obtain proxies.
All properly executed, unrevoked proxies received in time for the meeting
will be voted as specified. If no other indication is made, the proxies will be
voted for the election of directors shown as nominees and as recommended by the
Board of Directors with regard to all other matters.
PURPOSES OF ANNUAL MEETING
The Annual Meeting has been called for the purposes of electing the Board
of Directors, ratifying the appointment of the Company's independent
accountants, and transacting such other business as may properly come before the
meeting.
The two persons named in the accompanying proxy card have been selected by
the Board of Directors and will vote shares represented by valid proxies.
1
<PAGE>
The Board of Directors recommends that the full Board for the ensuing year
shall consist of at least seven directors, recommends the election of the
nominees listed on pages 2-4 as Directors to hold office until the next annual
meeting of shareholders and the election and qualification of their successors
and recommends the ratification of the Company's independent accountants.
Six of the nominees, presently members of the Board of Directors, were
elected by the shareholders at the last annual meeting of the Company's
shareholders. One of the nominees, presently a member of the Board of
Directors, has been appointed since the last annual meeting of the Company's
shareholders as an addition to the Board of Directors. The Board of Directors
has no reason to believe that any of the nominees will be unable to serve as a
Director. If, at the time of the Annual Meeting any of such nominees should be
unable or decline to serve, the discretionary authority provided in the proxy
will be exercised to vote for such other person or persons as the Board of
Directors may recommend.
The Company has no knowledge of any other matters to be presented at the
Annual Meeting. In the event other matters do properly come before the meeting,
the persons named in the proxy will vote in accordance with their judgment on
such matters.
VOTING SECURITIES
The Board of Directors has fixed the close of business on October 1, 1996
as the record date for determining shareholders entitled to notice of the Annual
Meeting and to vote. As of the record date, the Company had outstanding and
entitled to vote at the Annual Meeting 2,580,799 shares of Common Stock. Each
share of Common Stock entitles the holder thereof to one vote on each matter
presented for action at the Annual Meeting.
The presence at the Annual Meeting, in person, or by proxy, of a majority
of the outstanding shares of Common Stock will constitute a quorum. Directors
will be elected by a plurality of the votes cast by the shares of Common Stock
represented in person or by proxy at the Annual Meeting. The affirmative vote
of a majority of the shares of Common Stock present and voting at the Annual
Meeting is required to ratify the appointment of BDO Seidman, LLP as the
Company's independent accountants. If less than a majority of outstanding
shares entitled to vote are represented at the Annual Meeting, a majority of the
shares so represented may adjourn the Annual Meeting to another date, time or
place, and notice need not be given of the new date, time or place if the new
date, time or place is announced at the meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
independent inspectors of election for the meeting. Such inspector(s) shall
determine the number of shares of Common Stock represented at the meeting, the
existence of a quorum and the validity and effect of proxies, and shall receive,
count and tabulate ballots and votes and determine the results thereof.
Pursuant to Delaware law, abstentions and broker non-votes are counted as
present for purposes of determining the presence of a quorum. However,
abstentions are treated as present and entitled to vote and thus have the effect
of a vote against the matter. A broker non-vote on a matter is considered not
entitled to vote on that matter and thus is not counted in determining whether a
matter requiring approval of a majority of shares present and entitled to vote
has been approved or whether a plurality of the shares present and entitled to
vote has been voted.
A list of shareholders entitled to vote at the Annual Meeting will be
available at the Company's offices, 3 Commerce Boulevard, Palm Coast, Florida
32164, for a period of ten days prior to the Annual Meeting itself for
examination by any shareholder.
2
<PAGE>
ELECTION OF DIRECTORS
For each nominee and director, the following sets forth his or her name and
age, as of August 31, 1996, as well as information respecting any positions he
or she has held with the Company, and his or her principal occupation or
employment currently and for at least the past five years. In addition, the
following sets forth the year each nominee and director was first elected or
appointed as a Director. There are no family relationships among the nominee(s)
and/or director(s). There are no arrangements or understandings between any
nominee(s) and/or director(s) and any other person(s) pursuant to which he or
she was or is to be selected as a director or nominee.
William H. Burns Jr., age 46 was appointed to the Board of Directors in
September, 1995. He has been President and CEO of Biosight, Inc., a health care
consulting company, and Vector Inc., a medical product design and distribution
company since May, 1994. From July, 1988 through March, 1994 he was Founder,
President and CEO of Matrx Medical Inc., a medical product design and
distribution company. His efforts in building Matrx Medical, Inc. earned him an
award as Entrepreneur of the Year in New York State in 1993. From 1975 through
1998, Mr. Burns held various positions with the BOC group, including Vice
President and General Manager of Ohmeda Dental, Veterinary and Emergency Care
Products. Mr. Burns is also a director of Nova Vision, a contact lens
manufacturer for the Ophthalmic and Optometric industry and a director of
Minrad, Inc., a platform technology in interventional radiology.
Bart C. Gutekunst, age 45, was appointed to the Board of Directors in July
1994 and became Chairman of the Board in October 1994. Mr. Gutekunst focuses
on growing businesses and enhancing value through strategic, managerial and
financial advisory involvement, with a particular emphasis on the medical
sector. In 1995 he also became Chairman and CEO of NovaVision, Inc., a
manufacturer of contact lenses for the Ophthalmic and Optometric industry. From
September 1992 to September 1994, he was Vice Chairman and Chief Financial
Officer of R-2 Medical Systems, Inc., a cardiac care device company, with
responsibility for strategic and corporate development as well as overseeing the
financial functions of the company. From February, 1994 to March 1996, Mr.
Gutekunst served as Chairman of the Board of Directors of United Education and
Software, Inc., a multi-state operator of nursing and vocational schools
operating under Chapter 11 of the United States Bankruptcy Code where he oversaw
the voluntary liquidation of the company's assets. Previously he had been a
director of that company for approximately ten years. From 1988 to 1990, he was
a senior member of an investment firm, Entrecanales, Inc., funded by a major
European family, making equity investments and leveraged buyouts. From 1981 to
1987, he was Executive Vice President and a member of the Board of Directors, as
well as the Management and Investment Committees of Laidlaw, Adams & Peck Inc.,
where he supervised the investment banking department and completed over 50
public and private transactions. From 1976 to 1981, he was a member of Chemical
Bank's Merchant Banking Group. Mr. Gutekunst has been a member of the Board of
Directors or advisor to the Board for many companies.
Larry Haimovitch, age 49, was appointed to the Board of Directors in
November 1994. He is President of Haimovitch Medical Technology Consultants, a
San Francisco, California based health care consulting firm which specializes in
the medical device and technology industry with a particular emphasis on
cardiology related areas and whose clients have included a major hospital chain,
numerous medical device companies, venture capital firms, investment groups, and
investment bankers. Prior to forming his firm in 1991, Mr. Haimovitch spent
over 20 years as a health care industry analyst for a number of leading research
firms and financial institutions such as Furman Selz, Sutro & Co., and Wells
Fargo Investment Advisors. He also currently serves as a director to Electro-
Pharmacology, Inc.
Augusto Ocana, age 53, was appointed to the Board of Directors in April,
1996. He has over 20 years experience in building and managing International
3
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health care businesses. Dr. Ocana joined Grupo Taper International, a European
distributor of medical devices, in 1994 as Executive Vice President. From 1990
to 1994, Dr. Ocana was President and Chairman of the Board of Rempak
International Corporation. Prior to that, Dr. Ocana was employed at Abbott
Laboratories, joining that company in 1975, there he held various management
positions, including Marketing Director, Business Development, Director
Pharmaceutical Worldwide and Managing Director of the Latin American and
European Subsidiaries. Dr. Ocana has also been trained as a Physician and has a
Doctorate in International Law and Diplomacy. He serves as a permanent member
of the council of the Centro de Estudios Internacionales, an international
association for jurisprudence.
Alan J Rabin, age 46, became President, Chief Executive Officer and was
elected to the Board of Directors in October 1994. Mr. Rabin has approximately
25 years experience in the management of medical companies, with specific
emphasis on business development through marketing, sales, new product
development and strategic relationships. Until September, 1994, Mr. Rabin was
President and Chief Executive Officer of R2 Medical Systems, Inc., a
manufacturer of cardiac care devices, including disposables used in cardiac
pacing. In this capacity, he rebuilt the sales and marketing functions, created
a sales management team, strengthened and expanded domestic and international
distribution and established budgeting and long range planning systems. Mr.
Rabin was also a successful participant in the Company's corporate development
and funding activities, which activities resulted in the completion of an
acquisition of the company by Cardiotronics, Inc.
From 1987 to 1992, Mr. Rabin was Vice President of Marketing and Sales for
Stereo Optical Company, a manufacturer of disposable and capital ophthalmic
diagnostic devices. From 1985 to 1986, he was Director of Marketing and Sales at
Tycos Life Sciences, Inc., a manufacturer of cardiovascular diagnostic and
monitoring devices, which company experienced a turnaround and subsequently was
sold. From 1980 to 1985, Mr. Rabin held various marketing, new business
development and product management positions with surgical and cardiovascular
equipment divisions of C. R. Bard. Prior to assuming those positions, Mr. Rabin
was employed in marketing and sales in the critical care and anesthesia market.
He also currently serves as a director of NovaVision Inc., a manufacturer of
contact lenses for the Ophthalmic and Optometric industry.
Robert T. Rylee, age 65, was appointed to the Board of Directors in
November 1988. He practiced law from 1958 to 1969 and was a partner in the firm
of Wood, Boykin, Rylee, and Walter from 1965 to 1969. In 1969, Mr. Rylee became
the President and CEO of Wright Manufacturing Company, a manufacturer of
orthopedic implants and instruments, a position he held until 1981 when he
became a Dow Corning U.S. Area Vice President and the General Manager of Health
Care Business. On May 31, 1993, he retired as Vice President and Chairman of
Health Care Business, a position he had held since 1986. He is currently the
Chief Executive Officer and a director of Clarus Medical Systems, which position
he has held since September 1993. Mr. Rylee is also a director of Minrad, Inc.,
a platform technology in interventional radiology.
Tracey E. Young, age 41, was appointed to the Board of Directors in
September, 1995. She is the Founder and President of Elliot Young Associates,
Inc., a proprietary health care consulting concern, formed in 1987 to assist
companies and investors in identifying, evaluating, capturing and managing
strategic growth and financing opportunities in high technology health care
markets. Ms. Young has also held key consulting positions with The Wilkerson
Group, both as the founding Associate Director of their Cardiovascular Market
Intelligence Service and as an independent consultant to the firm. She has also
spent seven years in the pacemaker industry, including holding clinical, senior
marketing management and strategic planning positions with Telectronics Pacing
Systems and Intermedics, Inc.
The Company formed audit and compensation committees to the Board of
Directors in November 1994. The audit committee consists of Larry Haimovitch as
Chairman, Bart C. Gutekunst and William H. Burns, Jr. The compensation
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committee consists of Robert T. Rylee as Chairman, Bart C. Gutekunst and Tracey
E. Young. There were three meetings of the compensation committee and two
meetings of the audit committee during the fiscal year ended March 31, 1996.
The Company does not have a nomination committee.
None of the Directors or Executive Officers of the Company is a director
in any company, other than the Company, with a class of equity securities
registered pursuant to Section 12 of the Securities and Exchange Act of 1934, as
amended, or subject to the requirements of Section 15(d) of such Act or any
company registered as an investment company under the Investment Company Act of
1940, as amended except for Bart C. Gutekunst who is Chairman of the Board of
United Education Software, Inc., and Larry Haimovitch who is a director of
Electro-Pharmacology, Inc.
The Board of Directors held a total of ten meetings during fiscal year
1996. All current Directors attended at least 90% of the total number of
meetings of the Board held during the terms of their office. The Company
compensates Directors for services to the Company in their capacity as
Directors. See "COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS - Executive
Remuneration." The Company also reimburses certain Directors for their out-of-
pocket expenses for attending meetings.
The affirmative vote of a majority of the votes cast at the Annual Meeting,
if a quorum is present, will be sufficient to elect a Director.
THE BOARD RECOMMENDS THAT THE NOMINEES FOR ELECTION BE APPROVED. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY
TO THE CONTRARY IN THEIR PROXIES.
EXECUTIVE OFFICERS OF THE COMPANY
The following sets forth the names and ages of the Executive Officers of
the Company as of August 31, 1996, in addition to information respecting their
positions and offices with the Company, their periods of service in such
capacities, and their business experience for at least the past five years.
There are no family relationships among the Executive Officers of the Company.
There are no arrangements or understandings between any nominee(s) and/or
director(s) and any other person(s) pursuant to which he or she was or is to be
selected as a director or nominee.
Alan J. Rabin, age 46, joined the Company in October 1994, in connection
with the Debenture financing. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS." At that time, he was appointed to the Board and appointed the
Company's President and Chief Executive Officer. Until September 1994, Mr.
Rabin was President and Chief Executive Officer of R-2 Medical Systems, Inc., a
manufacturer of cardiac care devices, including disposables used in cardiac
pacing. R-2 Medical Systems, Inc. was sold to Cardiotronics, Inc. in 1994. From
1987 to 1992, Mr. Rabin was Vice President of Marketing and Sales for Stereo
Optical Company, a manufacturer and distributor of disposable and ophthalmic
diagnostic devices. From 1985 to 1986, he was Director of Marketing and Sales at
Tycos Life Services, Inc., a manufacturer of cardiovascular diagnostic and
monitoring devices. From 1980 to 1985, Mr. Rabin held various marketing, new
business development, and product management positions with surgical and
cardiovascular equipment divisions of C. R. Bard. Prior to assuming those
positions, Mr. Rabin was employed in marketing and sales in the critical care
and anesthesia market.
W. Alan Walton, age 62, joined the Company as Executive Vice President and
Chief Operating Officer in March, 1996. Mr. Walton is a Fellow of the
Institute of Chartered Accountants in England and Wales, and, from March, 1995
through February, 1996, was engaged as a financial and operations consultant
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with Biosight Inc., of Orchard Park, NY, a firm specializing in helping health
care businesses enhance their performance. Prior to his experience with
Biosight, he spent nineteen years in senior Financial and Systems Management
positions with Dunlop Holdings plc in the United Kingdom and the USA including a
position as General Manager, Group Information Systems, with responsibility for
Dunlop's global computing and communications.
Jonathan S. Lee, age 44, joined the Company in May, 1996 as Vice President
of Research and Development. Mr. Lee is a biomedical engineer and has 18 years
experience in Research & Development, Regulatory Affairs and Marketing with
Telectronics, a leading pacemaker manufacturer. While at Telectronics from
March, 1978, to May, 1996, he established and managed Telectronics' world wide
service facilities, and established Telectronics' research and development
presence in Denver, Colorado. He has been a member of the North American
Society of Pacing and Electrophysiology since 1984.
Terry McMahon, age 46, joined the Company in November 1994 as its Vice
President of Regulatory Affairs and Quality Assurance. He has 10 years of
experience in managing regulatory affairs and clinical research in the
healthcare and energy industries. Prior to joining CCS, Mr. McMahon was with
Xomed-Treace, Inc. from October, 1990 to November, 1994, as Manager of
Regulatory and Clinical Affairs. Previously, he had served in a variety of
managerial positions in regulatory and technical affairs for companies involved
in medical device implants.
William Wharton, age 49, was appointed Vice President of Operations in
February 1994. Prior to that appointment, he had served the Company as Vice
President of Quality Assurance since 1985. Mr. Wharton joined the Company in
1982 as Director of Quality Assurance. Before joining the Company, he was
employed as a Quality Assurance Supervisor for at least five years by Medtronic,
Inc., a major competitor in the cardiac pacing industry. Mr. Wharton received
electronics training at Northwestern Electronics Institute in 1967 and at Bell &
Howell Electronic Systems in 1977.
Each director and executive officer, and each person owning beneficially
more than 10% of a registered class of the Company's equity securities, is
required to report to the Securities and Exchange Commission, by a specified
date, his or her transactions related to the Company's Common Stock and to
provide a copy of any such report to the Company. A late report was filed for
each of Mr. McMahon, officer, Mr. Brownlee and Ms. Mitchell, former officers,
and each of Messrs. Rabin and Gutekunst, officers and directors, and Messrs.
Haimovich and Rylee, directors, with respect to one stock option grant to each
of them. A late report was filed by Messrs. Rabin and Gutekunst with respect to
conversion of their debentures into Common Stock, which report also included
reports of de minimus amounts of stock issued to them twice during the fiscal
year in respect of interest payments on their debentures. Two late reports were
filed by Philip R. Beutel, an owner of over 10% of the Company's Common Stock,
for six transactions (which transactions include a conversion of his debenture
into Common Stock and the interest payment on the debentures in de minimus
amounts of Common Stock).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of August 31, 1996, seven (7) stockholders were known by the Company to
beneficially own five percent (5%) or more of the outstanding voting securities
of the Company. The following table sets forth the indicated information as of
August 31, 1996 with respect to each person known by the Company to own
beneficially more than five percent (5%) (calculated in accordance with the
guidelines promulgated by the Securities and Exchange Commission) of the
2,580,799 issued and outstanding shares of common stock of the Company on that
date.
In accordance with Rule 13d-3, promulgated under the Exchange Act, shares
that are not outstanding but that are issuable upon exercise of outstanding
options, warrants, rights or conversion privileges have been deemed to be
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outstanding for the purpose of computing the percentage of outstanding shares
owned by the person owning such right, but have not been deemed outstanding for
the purpose of computing the percentage for any other person.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
(1)(2)(3) (2)
- ------------------------------------------------------------------------
<S> <C> <C>
Philip R. Beutel 277,065 10.70%
3 Chase Lane
Colorado Springs, CO 80906
Special Situations Fund III, LP 327,770 12.57%
153 East 53rd St. Rm 5101
New York, New York 10022
Bradley Resources 198,705 7.65%
107 John Street
Southport, CT 06490
Penfield Partners 204,856 7.88%
c/o William D. Witter, Inc.
150 E. 53rd Street
New York, NY 10022
ROI Partners 143,399 5.53%
353 Sacramento Street
San Francisco, CA 94111
Dow Corning Enterprises, Inc. 235,714 (4) 8.48%
2200 West Salzburg Road
Auburn, MI 48611
Sirrom Capital Corporation 200,000 (5) 7.32%
511 Union Street
Suite 2310
Nashville, TN 37219
- ------------------------------------------------------------------------
</TABLE>
(1) Except as otherwise indicated, each person is the record owner of the
shares indicated and possesses the sole voting and investment power
with respect to such shares of common stock.
(2) Computations of percentage ownership of each of the shareholders named
above treat warrants and options to purchase common stock exercisable
within the next 60 days as though the shares subject thereto were
issued and outstanding.
(3) Includes shares which may be acquired within the next sixty days in the
following amounts by exercising redeemable warrants issued in
consideration of the conversion of 5% Convertible Debentures to common
stock: Philip R. Beutel - 8,665; Special Situations Fund III - LP
7
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27,731; Bradley Resources - 16,811; Penfield Partners - 17,332; ROI
Partners - 12,132.
(4) Represents redeemable warrants covering the purchase of 200,000 shares
of common stock issued pursuant to the retirement of the Company's
mortgage with Dow Corning Enterprises Inc., and 35,714 shares of common
stock held of record.
(5) Represents 50,000 shares of common stock held of record and redeemable
warrants covering a) the purchase of 100,000 shares of common stock
issued pursuant to the execution of the company's mortgage with Sirrom
Capital Corporation and b) 50,000 shares of common stock issued
pursuant to the granting of consent to a Promissory Note in the sum of
$1,000,000 in favor of Intermedics Inc.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth the number of shares of common stock
beneficially owned by each Director of the Company as of August 31, 1996 and the
percentage of the outstanding shares such ownership represented at the close of
business on August 31, 1996 (according to information received by the Company),
together with information as to stock ownership of all Directors and Executive
Officers of the Company as a group as of August 31, 1996.
<TABLE>
<CAPTION>
<S> <C> <C>
Name of Individual or Amount and Nature of Percent
Number of Persons in Group Beneficial Ownership of Class (2)
(1)(2)(3)(4)
- -------------------------------------------------------------------------------
William H. Burns, Jr. 690 0.03%
Bart C. Gutekunst 34,528 1.32%
Larry G. Haimovitch 15,304 0.59%
Augusto Ocana 0 0%
Alan J. Rabin 42,623 1.63%
Robert T. Rylee 28,019 1.08%
Tracey E. Young 5,621 0.22%
All Directors and Executive Officers as
a group (12 persons) 148,734 5.52%
- -------------------------------------------------------------------------------
</TABLE>
(1) Except as otherwise indicated, each person is the record owner of the
shares indicated and possesses the sole voting and investment power
with respect to such shares of common stock.
(2) Computations of percentage ownership of each individual and of the
group treat warrants and options to purchase common stock exercisable
within the next 60 days as though the shares subject thereto were
issued and outstanding.
(3) Includes shares which may be acquired within the next 60 days in the
following amounts upon exercise of options granted pursuant to the
Company's Non-Qualified Stock Option Plans: Bart C. Gutekunst - 24,286;
Larry G. Haimovitch - 1,333; Alan J. Rabin - 32,381; Robert T. Rylee -
25,619; Tracey E. Young - 5,000; and all Directors and Executive
Officers as a group (12 persons) - 110,429.
8
<PAGE>
(4) Includes shares which may be acquired within the next 60 days in the
following amounts by exercise of redeemable warrants issued in
consideration of the conversion of 5% Convertible Debentures to common
stock: Bart C. Gutekunst - 866; Alan J. Rabin - 866; and all Directors
and Executive Officers as a group (12 persons) - 1,732.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE REMUNERATION. The following table sets forth information about the
compensation paid or accrued by the Company during the fiscal years ended March
31, 1996, 1995, and 1994 to the Company's Chief Executive Officers and any other
Executive Officer whose aggregate compensation exceeded $100,000 in fiscal 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
Name and Principal Fiscal Other Securities All
Position Year Ended Salary Annual Underlying Other
March 31, Compensation Options Compensation
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alan J. Rabin 1996 $110,000 $ 9,094/(1)/ 20,000/(2)/ $26,349/(3)/
(President, CEO, 1995 $ 55,000 $ 1,250/(4)/ 28,571/(5)/ $64,451/(6)/
Director) 1994 - - - -
- ----------------------------------------------------------------------------------------------------
Bart C. Gutekunst 1996 $ 48,000 - 15,000/(2)/ $ 8,700
(Chairman of the 1995 $ 24,000 $ 1,250/(7)/ 21,429/(5)/ $95,050/(8)/
Board) 1994 - - - -
- ----------------------------------------------------------------------------------------------------
Robert R. Brownlee 1996 $ 96,800 $ 8,000/(9)/ 2,000/(2)/ -
(Senior Executive 1995 $ 84,015 $ 5,625/(10)/ 25,714/(11)/ -
Vice President) 1994 $ 82,100 $ 11,100/(12)/ - -
- ----------------------------------------------------------------------------------------------------
Robert S. Miller 1996 $100,000 $ 32,951/(13)/ - -
(Vice President, Sales 1995 $ 29,293 $ 6,333/(14)/ 14,286/(15)/ -
and Marketing) 1994 - - - -
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition to his salary, Mr. Rabin is entitled to a performance bonus.
This represents the performance bonus accrued in respect of Mr. Rabin's
services during the year ended March 31, 1996.
(2) On May 5, 1995, the Board of Directors awarded these options to purchase
shares in common stock of the Company at $3.63 per share. The options are
exercisable one third on August 5, 1995, one third on May 5, 1996, and one
third on May 5, 1997.
(3) This represents reimbursement of relocation expenses, $21,549, paid to Mr.
Rabin pursuant to his employment agreement and consulting fees for debenture
financing, $4,800.
(4) This represents a monthly fee of $625 paid to Mr. Rabin in October and
November 1994 for his services to the Company as a Director.
9
<PAGE>
(5) Upon execution of their employment agreements with the Company, Mr. Rabin
was granted stock options for 28,571 shares of the Company's common stock
and Mr. Gutekunst was granted stock options for 21,429 shares of the
Company's common stock, exercisable at $3.50 per share.
(6) This includes $12,751 for reimbursement of relocation expenses paid to Mr.
Rabin pursuant to his employment agreement. It also includes $51,700 for
consulting services rendered the Company in connection with the
development of its new business plan and its financing efforts prior to
his employment with the Company.
(7) This represents a monthly fee of $625 paid to Mr. Gutekunst in August and
September 1994 for his services to the Company as a Director prior to his
employment as Chairman.
(8) This includes $79,050 for consulting services rendered the Company in
connection with the development of its new business plan and its financing
efforts prior to his employment with the Company. It also includes $16,000
in connection with his facilitating the refinancing of the mortgage on the
Company's property.
(9) This represents the performance bonus accrued in respect of Mr. Brownlee's
services during the year ended March, 1996.
(10) This represents a monthly fee of $625 paid to Mr. Brownlee for nine months
for his services to the Company as a Director.
(11) This represents options to purchase 11,428 shares of common stock in the
Company at $3.50 per share, exercisable one third on August 18, 1994, one
third on May 11, 1995 and one third on May 11, 1996 and 14,286 shares of
common stock in the Company at $3.50 per share, fully exercisable October
10, 1994.
(12) This represents a monthly fee of $625 paid to Mr. Brownlee for the year
ended March 31, 1994 for his services to the Company as a Director and a
car allowance of $300 a month for the year.
(13) In addition to his salary, Mr. Miller was entitled to a performance bonus.
This represents $23,951 performance bonus and $9,000 car allowance for the
year ended March 31, 1996.
(14) This represents $3,333 performance bonus and $3,000 car allowance for the
period December 12, 1994 to March 31, 1995.
(15) Upon execution of his employment agreement with the Company, Mr. Miller
was granted options to purchase 14,286 shares of common stock in the
Company at $3.50 a share, exercisable one third on December 12, 1995, one
third on December 12, 1996 and one third on December 12, 1997.
10
<PAGE>
The following table sets forth information concerning options granted during
the fiscal year ended March 31, 1996 to those persons named in the preceding
Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Options Granted
Options to Employees in Exercise Price Expiration
Name Granted Fiscal Year ($/share) Date
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alan J. Rabin 20,000/(1)/ 28% $3.625 5/5/2000
Bart C. Gutekunst 15,000/(1)/ 21% $3.625 5/5/2000
Robert R. Brownlee 2,000/(1)/ 3% $3.625 5/5/2000
- --------------------------------------------------------------------------------
</TABLE>
(1) Two thirds of the options are subject to immediate exercise and the final
third become exercisable on May 5, 1997.
The following table sets forth information concerning the value of unexercised
stock options at March 31, 1996 for those persons named in the Summary
Compensation Table.
AGGREGATED OPTIONS IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-
Shares Underlying Unexercised The-Money Options at
Acquired on Value Options at Fiscal Year End Fiscal Year End
Name Exercise Realized Exercisable/Unexercisable/(1)/ Exercisable/Unexercisable
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alan J. Rabin - - 25,714/22,857 $0/$0
Bart C. Gutekunst - - 19,286/17,143 $0/$0
Robert R. Brownlee - - 32,531/10,183 $0/$0
Robert Miller - - 4,762/9,524 $0/$0
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options have been adjusted to give effect to the Company's one for
seven reverse stock split effected December 13, 1994.
COMPENSATION OF DIRECTORS
For their service on the Board, each outside director is entitled to
receive annually the sum of $3,000 and such number of shares of the Company's
common stock that have a total value of $6,000 based on the average of the bid
and ask prices of the Company's common stock on the NASD OTC Bulletin Board
Service as quoted on January 19, 1996. In fiscal 1996 the following individuals
11
<PAGE>
received compensation as outside directors: For his service on the Board from
August, 1995 through March, 1996, William Burns was paid $1,250 in cash and 690
shares of the Company's common stock. For her service on the Board from
September, 1995 through March 1996, Tracey Young received $1,125 in cash and 621
shares of the Company's common stock. Larry Haimovitch and Robert Rylee each
received $3,000 in cash and 2,400 shares of the Company's Common Stock for their
service on the Board for the 1996 fiscal year.
EMPLOYMENT AGREEMENTS
Mr. Alan J. Rabin is employed as the President and Chief Executive Officer
of the Company pursuant to a three year employment agreement dated as of October
13, 1994. As compensation thereunder, Mr. Rabin receives an annual salary of
$110,000; reimbursement for business travel and other business expenses; and a
bonus of 25% of his annual salary based on the performance of the Company. The
employment agreement also provides reimbursement for Mr. Rabin's relocation and
temporary living expenses, not to exceed $38,000 plus the cost associated with
the moving of personal possessions and his family. His employment agreement
provides a severance package under certain defined circumstances equal to the
balance of the salary due under the employment agreement (payable in accordance
with the Company's payroll practices) and a lump sum payment equal to nine
months of his annual base salary then in effect, plus maintenance by the Company
(to the extent permitted under plan documents) for nine months from the date of
termination all benefit plans in which he was entitled to participate while an
employee, or the equivalent. The nine month lump sum severance payment is also
payable to Mr. Rabin in the event his employment agreement is not renewed by the
Company at the end of its term. Pursuant to his employment agreement, the
Company awarded to Mr. Rabin a stock option for 28,571 shares of the Company's
common stock at an exercise price of $3.50 per share, 14,286 of which vested
immediately and the remaining 14,285 shares will be subject to exercise
incrementally over the term of his employment agreement. Mr. Rabin's stock
option agreement contains a change of control provision whereby in the event of
a change in control of the Company, all outstanding options become immediately
exercisable.
Mr. Bart C. Gutekunst is employed as the Chairman of the Board of the
Company pursuant to a three year employment agreement dated as of October 13,
1994. As compensation thereunder, Mr. Gutekunst receives an annual salary of
$48,000; reimbursement for business travel and other business expenses; and a
bonus related to the Company's financial, capital raising and corporate
development and acquisition activities in the form of the following
transactional fees: 1% for debt and equity source, and 1% of the gross
consideration for asset acquisitions or sales, which fees are payable to Mr.
Gutekunst upon closing by the Company or its successor-in-interest of the
applicable transaction. Pursuant to the employment agreement, Mr. Gutekunst
received an option for 21,429 shares of the common stock of the Company at an
exercise price of $3.50 per share, 10,715 of which became immediately
exercisable and the remaining 10,714 will become exercisable incrementally over
the term of the agreement. His employment agreement contains the same severance
provisions as Mr. Rabin's employment agreement and his stock option contains the
same change of control provision as Mr. Rabin's stock option agreement.
Mr. Robert S. Miller was employed as the Company's Vice President of Sales
and Marketing pursuant to a three year employment agreement dated December 10,
1994. As compensation thereunder, Mr. Miller receives an annual salary of
$100,000; reimbursement for business travel and other business related expenses;
and a bonus of up to 50% of his annual salary, depending upon achievement of
sales and profit goals and performance by the employee; however, $10,000 of the
bonus is guaranteed to be paid annually. Mr. Miller, pursuant to his employment
agreement, was granted options for 14,286 shares of the Company's Common Stock
at an exercise price of $3.50 per share, exercisable incrementally over a three
year period commencing December 12, 1995. Mr. Miller's employment agreement
provides for reimbursement for relocation and temporary living expenses if he is
required to relocate by the Company. His employment agreement provides a
severance package under certain circumstances equal to the balance of the salary
due under the employment agreement and a payment equal to six months of his
annual base salary then in effect (payable in accordance with the Company's
payroll practices), plus continued participation for six months from the
termination date in all benefit plans in which he was entitled to participate as
an employee (to the extent permitted under the plans), or their equivalent.
12
<PAGE>
STOCK OPTIONS
On September 9, 1987, the Board of Directors of the Company adopted the
1987 Non-Qualified Stock Option Plan (the "1987 Plan"). The 1987 Plan provided
the Board of Directors with the authority to grant to employees, officers and
directors, and employees of the Company non-qualified options to purchase up to
a maximum of 142,857 shares of the Company's common stock.
On February 7, 1992, the Company's Board of Directors adopted the 1992 Non-
Qualified Stock Option Plan (the "1992 Plan"). The 1992 Plan provided the Board
of Directors with the authority to grant officers, directors, and employees of
the Company non-qualified options to purchase up to a maximum of 42,857 shares
of the Company's common stock. On March 17, 1994, the Board of Directors
amended and restated the 1992 Plan and provided therein authorization to issue
options for up to a maximum of 157,143 shares of the Company's common stock.
On January 19, 1995, the Board of Directors of the Company authorized the
combination of the 1987 Plan and the 1992 Plan into one plan now known as the
Combined 1987-1992 Non-Qualified Stock Option Plan ("Combined Plan"). The
Combined Plan provides that all issued and outstanding stock option agreements
under the previous plans shall be governed by the Combined Plan. Under the
Combined Plan, the Company is authorized to issue options to employees, officers
and directors to purchase up to a maximum of 400,000 shares of the Company's
common stock. As of March 31, 1996, there were outstanding options for 305,186
shares under the Combined Plan, of which 237,569 shares were subject to options
held by officers and directors at exercise prices ranging from $3.50 to $5.25
per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Employment Agreements" for a description of certain compensation
arrangements.
During the last calendar quarter of 1994, the Company raised $2,885,000
through a private placement of 5% Convertible Debentures. Interest payments
were made on March 31 and October 31 of each year, commencing March 31, 1995.
The Debentures' maturity date is October 31, 1999. Effective March 31, 1996,
the holders of Debentures converted their Debentures into common stock of the
Company at a conversion rate of $2.80 per shares. Alan Rabin and Bart
Gutekunst, President/Chief Executive Officer and Chairman of the Board,
respectively, of the Company, each received 8,928 shares of the Company's Common
Stock in respect of the conversion. Those beneficial owners holding 5% or more
of the Company's issued and outstanding common stock and the common stock they
received upon conversion of their debentures is as follows: Philip R. Beutel,
89,285 shares; Special Situation Fund III, LP, 285,714 shares; Penfield
Partners, 178,571 shares; Bradley Resources Company, 173,214 shares; and ROI
Partners, 125,000 shares. Pursuant to the terms of the 5% Convertible
Debentures, the Company filed with the SEC a registration statement on Form S-1
registering the common stock underlying the Debentures, which registration
statement was declared effective by the SEC on April 27, 1995.
In respect of their conversion of the debentures, the Company agreed to
issue warrants to the debenture holders for an aggregate of 100,000 warrants (to
be divided among the debenture holders pro rata in accordance with their
percentage interests in the Debentures). The warrants will have a term of three
years and will be exercisable commencing March 31, 1996 at $5.00 per share.
Upon the closing of the minimum offering of the convertible debentures,
Alan J. Rabin and Bart C. Gutekunst entered into employment agreements with the
Company on October 13, 1994. Previously, Mr. Gutekunst and Mr. Rabin had been
13
<PAGE>
consulting with and assisting the Company in preparing its business plan and
obtaining additional financing. On July 31, 1994, Mr. Gutekunst was appointed
to the Board of Directors to fill a vacancy. On October 13, 1994, Mr. Gutekunst
was appointed Chairman of the Board and Mr. Rabin was appointed the Company's
President and Chief Executive Officer pursuant to their respective employment
agreements. For consulting services rendered the Company in connection with the
development of the Company's new business plan and the Company's financing, Mr.
Rabin and Mr. Gutekunst were paid consulting fees in the aggregate amount of
$130,750. Mr. Gutekunst and Mr. Rabin also participated in the debenture
financing discussed above, and each acquired a debenture in the amount of
$25,000.
On October 1, 1994, the Company issued to Robert R. Brownlee, Senior
Executive Vice President of the Company, an option to purchase 14,286 shares for
the Company's common stock at an exercise price of $3.50 per share. The option
agreement contains certain piggyback registration rights.
On October 7, 1994, the Company executed an employment agreement with
Robert R. Brownlee, who served the Company as Executive Vice President of
Technical Affairs. The agreement is a three year agreement whereby Mr. Brownlee
will receive an annual salary of $96,800; reimbursement for business travel and
other business expenses; and may receive from time to time such bonus
compensation as the Board of Directors of the Company in its sole discretion
shall authorize. The employment agreement provides that should Mr. Brownlee
decide to commit less time to the Company subsequent to October 1, 1995, his
base salary shall be reduced proportionately. Further, any options exercisable
at the termination of Mr. Brownlee's employment shall be retained by him. His
employment agreement provides a severance package under certain defined
circumstances equal to the balance of the salary due under the employment
agreement (payable in accordance with the Company's payroll practices) and a
lump sum payment equal to nine months of his annual base salary then in effect,
plus maintenance by the Company (to the extent permitted under plan documents)
for nine months from the date of termination all benefit plans in which he was
entitled to participate while an employee, or the equivalent.
In November, 1995, the Company entered into an agreement with Biosight
Inc., of which William H. Burns, Jr., a director of the Company, is President
and principal shareholder. Under the agreement, Biosight Inc. provides
consulting services regarding the Company's manufacturing processes and
inventory planning. The agreement provides for payment of $30,000 in fees
during the year ended March 31, 1996, plus reimbursement of approved out-of-
pocket expenses, and future performance related payments to be paid in stock and
cash, provided certain goals are met. Upon earning $30,000 in performance
related payments (in combined cash and stock), the agreement provides for
subsequent performance based payments to be made in the Company's common stock.
During fiscal 1996, Tracey E. Young, a director of the Company, provided
consulting services to the Company regarding development of international
markets for the Company's products. In March, 1996, the Board of Directors
approved payment of $5,000 in consulting fees to Ms. Young together with a grant
of a stock option for 5,000 shares, exercisable at $3.75 per share. In respect
of consulting services, the Board approved royalty payments to Ms. Young of $100
per unit (each unit comprised of a pacemaker and lead) sold in Japan for the
three year period following approval of the product by regulatory authorities in
that country.
During fiscal 1996, the Company entered into a distribution agreement for
the European market with Grupo Taper, S.A., Madrid, Spain ("Grupo Taper"). Dr.
Augusto Ocana, who became a director of the Company in April 1996, is an
executive officer of Grupo Taper.
The foregoing transactions between the Company and its affiliates have been
negotiated on behalf of the Company by its management. The Company believes that
such transactions are in compliance with the Company's policy that transactions
with affiliates were on terms at least as favorable as could have been
reasonably obtained from an unaffiliated third party.
14
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected BDO Seidman, LLP to be the Company's
independent accountants for the fiscal year ending March 31, 1997 and recommends
that such appointment be ratified by the stockholders at the Annual Meeting.
Their representatives are not expected to be present at the Annual Meeting.
BDO Seidman, LLP audited the Company's financial statement in fiscal 1995,
subsequent to the resignation of Price Waterhouse, LLP in January 1995. The
resignation of Price Waterhouse, LLP was not due to any disagreements, but was a
business decision made by Price Waterhouse on its internal priorities regarding
client development. In connection with the audits for the fiscal years ended
March 31, 1993 and March 31, 1994 and through January 5, 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,
which disagreements, if not resolved to the satisfaction of Price Waterhouse,
LLP would have caused it to make reference thereto in its report on the
financial statements for such years.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS, BDO SEIDMAN, LLP. PROXIES SOLICITED
BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS SPECIFY TO THE
CONTRARY IN THEIR PROXIES.
While ratification by shareholders of this appointment is not required by
law or the Company's Certificate of Incorporation or Bylaws, management of the
Company believes that such ratification is desirable. In the event this
appointment is not ratified by a majority vote of shareholders, the Board of
Directors of the Company will consider that fact when it appoints independent
accountants for the next fiscal year.
SHAREHOLDER PROPOSALS
Proposals of the shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Company for possible inclusion
in the Company's Proxy Statement and Form of Proxy relating to the meeting not
later than June 12, 1997, unless the month and date of the next Annual Meeting
are advanced by more than thirty calendar days, or delayed by more than ninety
calendar days from November 14, 1997, the month and day contemplated for the
next Annual Meeting. If such a change occurs, the Company will inform
shareholders in a timely manner of the change and date by which shareholder
proposals must be received. In such event, shareholder proposals must be
received by the Company a reasonable time before the solicitation of proxies is
made. Such shareholder proposals should be made in compliance with applicable
legal requirements and be furnished to the President by certified mail, return
receipt requested.
15
<PAGE>
ANNUAL REPORT
The Annual Report of the Company for the year ended March 31, 1996
accompanies this Proxy Statement.
OTHER MATTERS
The Board of Directors does not know of any matters, other than the
foregoing, that will be presented for consideration at the Annual Meeting.
However, if other matters properly come before the Annual Meeting, or any
adjournment thereof, the persons named in the accompanying Proxy will vote in
accordance with their judgment with respect to such matters.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert T. Rylee
----------------------------------
ROBERT T. RYLEE
SECRETARY
Palm Coast, Florida
October 3, 1996
16
<PAGE>
PROXY
- ------
CCS
Cardiac Control Systems, Inc.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
The undersigned hereby appoints Alan J. Rabin and Bart C. Gutekunst, or either
one of them, with power of substitution, as Proxies, and hereby authorizes them
to represent and to vote, as indicated below, all shares of common stock, par
value $0.10 per share, of Cardiac Control Systems, Inc. that the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held at the Hyatt
Regency New Orleans, Poydras at Loyola Avenue, New Orleans, Louisiana 70113 on
November 13, 1996 at 4:00 p.m. local time, or any adjournments thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below)
William H. Burns, Jr., Bart C. Gutekunst, Larry Haimovitch, Augusto Ocano,
Alan J. Rabin, Robert T. Rylee, Tracey E. Young
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, cross
out that individual's name above.)
2. RESOLUTION TO RATIFY THE APPOINTMENT OF BDO SEIDMAN, LLP as independent
accountants of Cardiac Control Systems, Inc. for the fiscal year ending March
31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The Proxies are authorized to vote in their discretion upon such other
business as may properly come before the meeting.
<PAGE>
WHEN PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS
INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL DIRECTORS AND "FOR" PROPOSAL 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President of other authorized officer, giving
full title. If a partnership, please sign in partnership name by authorized
person, giving full title.
----------------------------------------
DATED: , 1996 Signature
--------------
- -------------------------------------
| PLEASE MARK, SIGN, DATE AND RETURN |
| THE PROXY CARD PROMPTLY USING THE | ----------------------------------------
| ENCLOSED ENVELOPE. | Signature if held jointly
- -------------------------------------
______________________________________________________________________________
Address Corrections
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