Novitron International, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
September 10, l996, 10:00 a.m.
You are hereby notified that the Annual Meeting of stockholders of Novitron
International, Inc. (the "Company") will be held on September 10, l996 at
10:00 a.m. in Conference Room 1 (Seventh Floor) at the offices of Peabody &
Arnold, 50 Rowes Wharf, Boston, Massachusetts, to consider and act upon the
following matters:
l. To elect three (3) directors for the ensuing year.
2. To ratify the action of the Directors in appointing Arthur
Andersen LLP as the Company's auditors for the 1997 fiscal year.
3. To act upon such other business as may properly come before
the meeting or any adjournment thereof.
Even if you plan to attend the meeting personally, please be sure to sign
and return the enclosed proxy in the envelope provided to:
American Stock Transfer & Trust Company
40 Wall Street
New York, N.Y. 10005
Only stockholders of record on the books of the Company at the close of
business on July 15, 1996 will be entitled to receive notice of, and vote
at, the Annual Meeting or any adjournment thereof.
By order of the Board of Directors,
Anil Khosla, Secretary
August 9, 1996
IMPORTANT: In order to secure a quorum and to avoid the expense of
additional proxy solicitation, please vote, date and sign your proxy and
return it promptly in the envelope provided even if you plan to attend the
meeting personally. If you do attend the annual meeting and desire to
withdraw your proxy and vote in person, you may do so. Your cooperation is
greatly appreciated.
<PAGE>
Novitron International, Inc.
One Gateway Center, Suite 411
Newton, MA 02158
PROXY STATEMENT
SOLICITATION AND VOTING OF PROXIES
This proxy statement and the accompanying proxy form are being mailed by
Novitron International, Inc. (the "Company") to the holders of record of
the Company's outstanding shares of Common Stock, $.01 par value ("Common
Stock"), on or about August 9, 1996. The accompanying proxy is solicited by
the Board of Directors of the Company for use at the Annual Meeting of
Stockholders to be held on September 10, 1996 and any adjournment thereof.
The cost of solicitation of proxies will be borne by the Company.
Directors, officers and employees may assist in the solicitation of proxies
by mail, telephone, telegraph, and personal interview without additional
compensation.
When a proxy is returned, prior to or at the meeting, properly signed, the
shares represented thereby will be voted by the proxies named in accordance
with the stockholder's instructions indicated on the proxy card. You are
urged to specify your choices on the enclosed proxy card. If the proxy is
signed and returned without specifying choices, the shares will be voted in
favor of the matters set forth in the accompanying Notice of Annual Meeting
of Stockholders and in the discretion of the proxies as to other matters
that may properly come before the meeting. Sending in a proxy will not
affect a stockholder's right to attend the meeting and vote in person. A
proxy may be revoked by notice in writing delivered to the Secretary of the
Company at any time prior to its use, by a duly-executed proxy bearing a
later date, or by voting in person by ballot at the Annual Meeting. A
stockholder's attendance at the meeting will not by itself revoke a proxy.
VOTING SECURITIES AND RECORD DATE
The Company has one class of Common Stock, $.01 par value, outstanding.
Each share of Common Stock is entitled to one vote per share. The Board of
Directors has fixed July 15, 1996 as the record date for the meeting. Only
holders of record of the Company's Common Stock on the record date are
entitled to notice of and to vote at the meeting. On the record date, there
were 3,965,940 shares of Common Stock issued and outstanding.
The Company's By-laws provide that a quorum shall consist of the
representation in person or by proxy at the Annual Meeting of stockholders
entitled to vote a majority in interest of the votes that are entitled to
be cast at the meeting. Abstentions and broker non-votes will be counted
for purpose of determining the presence or absence of a quorum. "Broker
non-votes" are shares held by brokers or nominees which are present in
person or represented by proxy, but which are not voted on a particular
matter because instructions have not been received from the beneficial
owner. Under applicable Delaware law, the effect of broker non-votes on a
particular matter depends on whether the matter is one as to which the
broker or nominee has discretionary voting authority under applicable
rules. The effect of broker non-votes to be brought before the Annual
Meeting of Stockholders is discussed below.
<PAGE>
With respect to the two matters to come before the stockholders at the
Annual Meeting (i) directors shall be elected by a plurality of the voting
power present in person or represented by proxy at the meeting and entitled
to vote, and (ii) the appointment of the auditors shall be determined by a
majority of the voting power present in person or represented by proxy at
the meeting and entitled to vote. With respect to the election of
directors, only shares that are voted in favor of a particular nominee will
be counted towards such nominee's achievement of a plurality. Shares
present at the meeting that are not voted for a particular nominee, shares
present by proxy where the stockholder properly withholds authority to vote
for such nominee and broker non-votes will not be counted towards
achievement by such nominee of a plurality. With respect to ratification of
the appointment of the auditors, if the stockholder abstains from voting,
the shares are considered present at the meeting for such matter but, since
they are not affirmative votes for the matter, they will have the same
effect as votes against the matter. Broker non-votes will not be considered
present at the meeting for such matter and they are therefore not counted
in respect of such matter. Such broker non-votes do have the practical
effect of reducing the number of affirmative votes required to achieve a
majority for such matter by reducing the total number of shares from which
the majority is calculated.
The Company's Annual Report to Stockholders, including financial statements
for the fiscal year ended March 31, 1996, is being mailed to stockholders
of record of the Company concurrently with this proxy statement. The Annual
Report is not, however, a part of the proxy soliciting materials.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
One of the purposes of the meeting is to elect three (3) directors to serve
until the next Annual Meeting of Stockholders or until their successors
shall have been duly elected and qualified. It is intended that the proxies
solicited by the Board of Directors will be voted in favor of the three (3)
nominees named below, unless otherwise specified on the proxy card. All of
the nominees are currently members of the Board and have consented to be
named and to serve if elected. There are no family relationships between
any nominees, directors or executive officers of the Company.
The Board knows of no reason why any of the nominees will be unavailable or
unable to serve as a Director, but in such event, proxies solicited hereby
will be voted for the election of another person or persons to be
designated by the Board of Directors.
The Board recommends a vote FOR the election of each of the nominees listed
below.
The following are summaries of the background and business experience and
descriptions of the principal occupations of the nominees.
Israel M. Stein (age 53) has been a Director of the Company since 1972.
Dr. Stein also has served as Chairman of the Board and President of the
Company since 1972.
<PAGE>
Gordon B. Baty, Ph.D. (age 57) has been a Director of the Company since
1972. Dr. Baty has been a General Partner of Zero Stage Capital
Corporation since December 1985.
Arthur B. Malman (age 54) has been a Director of the Company since 1975.
Mr. Malman has been a Partner of the law firm of Holtzmann, Wise & Shepard
since October 1983.
BOARD OF DIRECTORS
Meetings of the Board of Directors and Committees
The Board of Directors met four (4) times during the fiscal year ended
March 31, l996. The Board of Directors has standing Audit and Compensation
Committees. The Board has no nominating committee. All of the directors
attended all of the meetings of the Board and Board committees on which
they served during the fiscal year ended March 31, 1996.
The Compensation Committee currently consists of Dr. Baty and Mr. Malman
and has responsibility to evaluate compensation plans for employees,
management and directors, and to make recommendations on compensation to
the Board. The Compensation Committee met once during the fiscal year ended
March 31, 1996. The Audit Committee, which consists of Dr. Baty, oversees
the accounting and tax functions of the Company, including matters relating
to the appointment and activities of the Company's auditors. The Audit
Committee met once during the fiscal year ended March 31, l996.
Compensation of Directors
Each Director is paid a fee of $1,250 per meeting of the Board of Directors
attended and each member of the Audit and Compensation Committees is paid
$750 per meeting attended. The Company reimburses Directors for all
out-of-pocket expenses incurred in attending each Board and Committee
meeting.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth the amount of Common Stock owned or deemed
beneficially owned as determined under the rules of the Securities and
Exchange Commission (the "SEC"), directly or indirectly, by (1) any person
(including any "group" as that term defined in Section 13(d)(3) of the
Securities Exchange Act of 1934) who is known to the Company to be the
beneficial owner of more than five percent of the outstanding shares of
Common Stock of the Company, (2) each Director or nominee, (3) the "named
executive officers" of the Company (as defined in Item 402 of SEC
Regulation S-K), and (4) by all Directors and executive officers of the
Company and its subsidiaries, as a group. In accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended, a person is deemed
to be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he or she has or shares voting power or investment power
with respect to such security or has the right to acquire beneficial
ownership at any time within sixty days after July 15, 1996. As used herein
"voting power" is the power to vote or direct the voting of shares, and
"investment power" is the power to dispose of or direct the disposition of
<PAGE>
shares. Except as indicated in the notes following the table below, each
individual named has sole voting and investment power with respect to the
shares listed as being beneficially owned by such individual.
<TABLE>
<CAPTION>
Shares of
Common Stock Percent
and of
Nature of Common
Beneficial Stock
Name of Beneficial Owner Ownership
<S> <C> <C>
Israel M. Stein 1,184,782(1) 29.9%
17 Edge Hill Road
Chestnut Hill, MA 02167
Alphi Investment Management 417,900(2) 10.5%
Co.
155 Pfingsten Road
Deerfield, IL 60015
Gordon B. Baty 14,000(3) *
Emile Hugen 6,000(4) *
Arthur B. Malman 8,800(5) *
Adrian Tennyenhuis 6,000(6) *
All Directors and Executive
Officers as a group (5 1,219,582(7) 30.8%
persons)
<FN>
* Indicates less than 1% ownership.
(1) Includes 95,000 shares held in joint tenancy with Dr. Stein's wife and
94,500 shares held as trustee of a private trust, as to which Dr.
Stein disclaims beneficial ownership. Also includes 6,667 shares
issuable upon the exercise of stock options exercisable within 60
days after July 15, 1996.
(2) Includes 26,000 shares for which person has shared power to direct the
vote. This information is derived from a report on Schedule 13G dated
February 8, 1996 filed with the SEC.
(3) Includes 4,000 shares issuable upon the exercise of stock options
exercisable within 60 days after July 15, 1996.
(4) Includes 6,000 shares issuable upon the exercise of stock options
exercisable within 60 days after July 15, 1996.
(5) Includes 300 shares owned by Mr. Malman's wife, as to which Mr. Malman
disclaims beneficial ownership, and 4,000 shares issuable upon the
exercise of stock options exercisable within 60 days after July 15,
1996.
(6) Includes 6,000 shares issuable upon the exercise of stock options
exercisable within 60 days after July 15, 1996.
(7) See footnotes (1), (3), (4), (5), and (6).
</FN>
</TABLE>
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires Directors,
executive officers and persons who own more than 10% of the outstanding
shares of Common Stock of the Company to file with the Securities and
Exchange Commission and NASDAQ reports of ownership and changes in
ownership of voting securities of the Company and to furnish copies of such
reports to the Company. Based solely on a review of copies of such reports
furnished to the Company or written representations from certain persons
that no reports were required for those persons, the Company believes that
all Section 16(a) filing requirements were complied with during the fiscal
year ended March 31, 1996.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following tables and notes present the compensation provided by the
Company during the last three (3) fiscal years to its executive officers
who earned total compensation of $100,000 or more during the fiscal year
ended March 31, 1996.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-------------------- -----------------------
Other Annual Securities
Name and Principal Position Fiscal Salary Bonus Compensation Underlying All Other
Year(1) ($)(2) ($)(3) ($) (4) Options(#)(5) Compensation ($)
<S> <C> <C> <C> <C> <C> <C>
Israel M. Stein, M.D. 1996 185,000 0 0 10,000 0
Chief Executive 1995 185,000 0 0 10,000 0
Officer, President and 1994 185,000 0 0 10,000 0
Treasurer
Emile Hugen 1996 100,822 30,257 0 9,000 0
Managing Director 1995 105,938 0 0 13,125 0
Vital Scientific NV 1994 105,046 19,411 0 15,125 0
<FN>
(1) The Company's fiscal year ends on March 31 of each year.
(2) Salaries paid in foreign currency are translated into U.S. dollars at
the spot rate on March 31,1996 of 1.6525 Dutch Guilders to the U.S.
Dollar.
(3) The bonus shown for Mr. Hugen for fiscal year 1996 was paid with
respect to services rendered in fiscal years 1996 and 1995.
(4) The executive officers named in the Summary Compensation Table did not
receive personal benefits or perquisites in excess of the lesser of
$50,000 or 10% of the combined salary and bonus reported with respect
to each of fiscal years 1996, 1995, and 1994.
(5) The aggregate number of options issued pursuant to the Company's 1991
Stock Option Plan and representing the right to purchase shares of
the Company's Common Stock at a fixed price per share (fair market value
on the date of the grant) in accordance with the vesting schedule
applicable to each option.
</FN>
</TABLE>
<PAGE>
Option Grants in Fiscal Year 1996
No options were granted to the above named executive officers of the
Company during the fiscal year ended March 31, 1996.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the last
fiscal year and unexercised options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
Number Number of Securities Value of Unexrecised
of Shares Value Underlying Unexercised In-the-Money Options
Acquired Realized Options at Fiscal Year (#) at Fiscal Year-End ($)(2)
Name On Exercise ($) (1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Israel M. Stein M.D. -- -- 6,667 3,333 -- --
Emile Hugen -- -- 6,000 3,000 -- --
<FN>
(1) Value realized equals fair market value on the date of exercise, less
the exercise price, times the number of shares acquired without
deducting taxes or commissions paid by employee.
(2) Value of unexercised options equals fair market value of the shares
underlying in-the-money options at March 31, 1996 ($3.00 per share),
less exercise price, times the number of options outstanding.
</FN>
</TABLE>
Long-term Incentive Plans - Awards in Last Fiscal Year
The Company maintains no long-term incentive plans for executive officers
other than the Company's 1991 Stock Option Plan.
Defined Benefit or Actuarial Plans
The Company maintains no defined benefit or actuarial plans for executive
officers.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors, consisting of Dr.
Baty and Mr. Malman, is responsible for executive compensation decisions as
described below. Mr. Malman is a partner of a law firm which provided legal
services to the Company during fiscal 1996 and which will provide legal
services to the Company in the future. See "REPORT OF THE COMPENSATION
COMMITTEE ON COMPENSATION."
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this proxy statement, in whole or in part, the following
report and the Stock Performance Graph contained elsewhere herein shall not
be incorporated by reference into any such filings nor shall they be deemed
to be soliciting material or deemed filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or under the
Securities Exchange Act of 1934, as amended.
REPORT OF THE COMPENSATION COMMITTEE ON COMPENSATION
During the fiscal year ended March 31, 1996, the Compensation Committee
appointed by the Board of Directors of the Company was responsible for
establishing and administering the policies which govern annual salary,
bonuses, and long-term incentives. During the fiscal year ended March
31,1996, the Compensation Committee consisted of two Board members, Messrs.
Baty and Malman.
Executive Officer Compensation
Approach and Objectives: The Company's Compensation Committee evaluates,
both subjectively and objectively, the Company's financial performance,
competitive position, future potential, the individual and group
performance of the members of senior management, and compensation levels at
comparable companies. In such evaluation, the Compensation Committee
reviews information prepared by the Company and employs the business
experience of the individual members of the Compensation Committee.
The Compensation Committee has historically established levels of executive
compensation that provide for a base salary intended to allow the Company
to hire and retain qualified management. The Compensation Committee has
also approved annual incentive bonuses based on individual and Company
performance in order to reward achievement. From time to time, the Company
has also granted stock options to key employees to bring the stockholders'
interests more sharply into their focus and to insure that key employees
have an interest in the long-term prospects of the Company.
<PAGE>
Annual Salary and Bonus Compensation: Officers and other key employees are
compensated within salary ranges that are generally based on similar
positions in companies of comparable size and complexity to that of the
Company. The annual pay for each officer is based on a combination of
experience, Company and individual performance, general economic
conditions, marketplace trends, and other factors deemed important by the
Compensation Committee, including the fact that the Company does not offer
a defined benefit retirement plan. In addition, consideration is given to
traditional benefits accorded employees in the part of the world where he
or she is employed.
In fiscal 1996, after consideration of recommendations by the Company's
Chief Executive Officer, Dr. Stein, other than for himself, the
Compensation Committee reviewed and confirmed the compensation for senior
management. The salary of the Company's senior management is generally
reviewed annually by the Compensation Committee, with the amount of any
increases awarded based on aforementioned factors. The Compensation
Committee also takes into consideration certain adjustments in salary as
required by practice or regulation in the countries in which the Company
and its subsidiaries operate.
The Compensation Committee historically has determined the level of bonuses
to be awarded to senior management based primarily upon the financial
performance of the Company. Under the Company's incentive bonus plan for
fiscal 1996 adopted by the Compensation Committee, certain key employees
were eligible to receive a bonus based upon base salary and the performance
of the Company in comparison to its operating budget. The Compensation
Committee awarded a bonus to Mr. Hugen for meeting targeted financial goals
for his company. For fiscal 1997, the Compensation Committee is considering
a similar bonus programs based upon Company achievement of certain targeted
goals.
Long Term Incentives: Currently, stock options are the Company's primary
long-term incentive instrument. The size of the awards has historically
been based on guidelines that take salary level, tenure, individual
performance rating and importance to the Company into account. All stock
options have been granted at exercise prices equal to the market price on
the date of grant, become exercisable in three annual installments
commencing on the first anniversary of the grant, and generally expire on
the fourth anniversary.
Chief Executive Officer Compensation: In determining the annual salary,
bonus, and long-term compensation of Dr. Stein, including stock options,
the Compensation Committee considered the performance of the Company and
the demonstrated leadership he brings to the Company. In addition to the
factors considered for other officers and key employees, the Compensation
Committee weighs the important role Dr. Stein plays within the Company as
its founder, spokesman and Chief Executive Officer. In view of his
substantial ownership of the Company's Common Stock, Dr. Stein has not, in
the past five fiscal years, been awarded or requested increases in his base
compensation, other than to reflect an increase to the cost of living. The
annual base compensation of Dr. Stein has, in fact, increased only once
since fiscal 1991 and no bonus was awarded Dr. Stein for fiscal 1996 based
principally on the Company's performance.
<PAGE>
The Compensation Committee believes that the Company's executive
compensation practices provide an overall level of compensation that is
competitive with companies of similar size, complexity and financial
performance and that its executive compensation practices have allowed it
to retain key personnel whose contribution is needed for the Company's
growth and profitability. The Compensation Committee further believes that
bonuses and long-term incentives are an important means to incentivize the
Company's overall performance and the individual performances of its senior
executives and that bonuses are necessary to keep total compensation
competitive with executive compensation at similarly situated companies.
Compensation Committee: The Board of Directors:
Gordon B. Baty, Ph.D. Israel M. Stein, M.D.
Arthur B. Malman, Esq. Gordon B. Baty, Ph.D.
Arthur B. Malman, Esq.
<PAGE>
Stock Performance Graph
Set forth below is a line graph comparing the cumulative total return of
the Company's Common Stock against the cumulative total return of the
NASDAQ Market-U.S. and Foreign Companies Index and a Company-selected peer
group index that includes: Abaxis, Inc.*, Andros, Inc., Beckman
Instruments, Inc., Bio Rad Laboratories, Inc., Biomagnetic Technologies,
Inc., Cem Corp., Coherent, Inc., Cyberoptics Corp., Dionex Corp., Drug
Screening Systems, Inc.*, Hach Co., Millipore Corp., Novitron
International, Inc., O.I. Corp., Perkin Elmer Corp., Repro Medical Systems,
Inc.*, Rheometrics, Inc., Sentex Sensing Technologies, Inc., Sepracor
Inc.*, and Thermo Instrument Systems, Inc. The peer group index was formed
on a weighted average basis based on market capitalizations at the
beginning of each period for which a return is indicated. Cumulative total
return is measured assuming an initial investment of $100 and reinvestment
of dividends. The performance and trends depicted in the graph below are
not necessarily indicative of actual or likely performance or trends for
subsequent or future periods.
* Indicates a company which became a public company in 1991. Prior to
1991 the company's weight in the index was zero.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG NOVITRON INTERNATIONAL, INC., THE NASDAQ MARKET-U.S. INDEX AND A PEER
GROUP
A graph appears here which shows at 3/96 Peer group had $236 return on $100
invested in 3/90, NASDAQ Stock Market had a $239 return and Novitron
International, Inc. had a $164 return.
<PAGE>
PROPOSAL NO. 2 - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen LLP as
auditors of the Company for the fiscal year ending March 31, 1997 and
further directed that management submit the selection of auditors for
ratification by the stockholders. Arthur Andersen LLP were the Company's
auditors for the fiscal year ended March 31, 1996.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting, with the opportunity to make a statement if they desire to
do so, and are expected to be available to respond to appropriate
questions.
The Board of Directors recommends that you vote FOR the proposal to ratify
the choice of Arthur Andersen LLP as the Company's auditors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The law firm of Holtzmann Wise & Shepard, of which Arthur B. Malman, a
director of the Company, is a partner, provided legal services to the
Company during fiscal 1996.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Any stockholder proposal intended to be presented for consideration at the
Company's 1997 annual meeting of stockholders and included in the Company's
proxy statement, must submit the proposal to the Company so that it is
received at the executive offices of the Company not later than April
11,1997. Any stockholder desiring to submit a proposal should consult
applicable regulations of the SEC.
OTHER MATTERS
As of the date of this proxy statement, management of the Company knows of
no matter not specifically referred to above as to which any action is
expected to be taken at the Annual Meeting. It is intended, however, that
the persons named as proxies will vote the proxies, insofar as the same are
not limited to the contrary, in regard to such other matters and the
transaction of such other business as may properly be brought before the
meeting, as seems to them to be in the best interests of the Company and
its stockholders.
August 9, 1996
