UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended October 31, 1995 [Fee Required]
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from _____________ to _____________
Commission File Number: 0-14961
LUXTEC CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2741310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
326 Clark Street, Worcester, Massachusetts 01606
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(508) 856-9454
Securities registered pursuant to Section 12(b) of the Act:
American Stock Exchange
Common Stock, $.01 par value per share
(Title of class)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the voting Common Stock held by non-affiliates of
the registrant was approximately $5,134,623 based on the closing price of such
stock on December 29, 1995, as reported by the American Stock Exchange ($3.50
per share).
As of December 29, 1995, 2,443,898 shares of Common stock, $.01 par value, were
issued and outstanding.
Documents Incorporated by Reference Form 10-K Reference
None
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<TABLE>
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF LUXTEC CORPORATION
The following table sets forth , with respect to the members of the Luxtec
Board and management of the Company, (i) the name, age and length of service as
a director or executive officer, (ii) the principal occupation and business
experience of such person for at least the past five years, (iii) the names of
other companies of which such person currently serves as a director or executive
officer, and (iv) the amount and percentage of Luxtec Common Stock owned by each
such person as of February 29, 1996. The address for each person listed below is
c/o the Company at 326 Clark Street, Worcester, Massachusetts 01606-1214.
<S> <C> <C> <C>
Amount of Percent of
Position and Offices with the Company and Other Common Stock Common Stock
Name Business Experience During Last Five Years Owned Directly Outstanding
- ---------------------- ------------------------------------------------- ---------------- ---------------
James Berardo James Berardo has been a Director of the 155,520 (1) 6.36%
Age 36 Company since 1995. Mr. Berardo currently
serves as President of Darlco, Inc., a real
estate development and investment management
company. Mr. Berardo joined Darlco in 1986,
serving in various financial capacities prior
to assuming his current position in March,
1995. Mr. Berardo is a member of the Audit and
Compensation Committees of the Board of
Directors.
Paul Epstein Paul Epstein joined the Company in 1995 as 166,894 (2) 6.82%
Age 65 Vice President of Business Development and
Strategic Planning and a Director. Mr.
Epstein, a co-founder of CardioDyne, Inc.,
served as Chairman, Vice President and Chief
Financial Officer from the time of CardioDyne's
founding in February, 1989 until the merger
with Luxtec in October, 1995 Previously, Mr.
Epstein co-founded Electronic Image Systems
Corporation, Brattle Instrument Corporation
and, most recently, Omni-Flow, Inc., which
introduced the first multiple medication,
programmable infusion pump and was acquired by
Abbott Laboratories in 1989. Mr. Epstein holds
B.S. and M.S. degrees in Chemical Engineering
and a B.S. degree in Business Management from
MIT. Mr. Epstein has been jointly awarded
eleven patents in the medical instrumentation
and communication fields.
Lynn K. Friedel Lynn K. Friedel has been a Director of the 1,500 *
Age 46 Company since 1988. Since 1994, Ms. Friedel
has been Vice President of IQ Systems, Inc., a
semiconductor company based in Newtown, CT.
Ms. Friedel was employed at Termiflex
Corporation of Merrimack, NH, a manufacturer of
hand held computer terminals, from 1986 to
1993, most recently as Vice President, Finance,
Administration and Manufacturing. Ms. Friedel
is a member of the Audit and Compensation
Committees of the Board of Directors.
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Amount of Percent of
Position and Offices with the Company and Other Common Stock Common Stock
Name Business Experience During Last Five Years Owned Directly Outstanding
- ---------------------- ------------------------------------------------- ---------------- ---------------
James W. Hobbs James W. Hobbs was elected to the 4,500 *
Age 47 positions of President, Chief Executive Officer
and Director in 1993. Mr. Hobbs was Chief
Executive Officer of Graylyn Associates from
1992 to 1993. Graylyn was an investment firm
founded by Mr. Hobbs to invest in early stage
medical technology. Prior to Graylyn, Mr.
Hobbs served as the President and Chief
Executive Officer of Genica Pharmaceuticals
from 1990 to 1992. Genica Pharmaceuticals is a
corporation engaged in providing new diagnostic
assays and conducting therapeutic research for
neurological disorders. Mr. Hobbs was with
Johnson and Johnson Professional Diagnostics as
Vice President and General Manager from 1985 to
1989. Mr. Hobbs is a member of the Nominating
Committee of the Board of Directors.
Patrick G. Phillipps Patrick Phillipps joined the Company in 225,064 (3) 9.20%
Age 50 1995 as Vice President of Engineering and a
Director. Mr. Phillipps, a co-founder of
CardioDyne, Inc., served as President and Chief
Executive Officer from the time of CardioDyne's
founding in February, 1989 until the merger
with Luxtec in October, 1995. Previously, Mr.
Phillipps founded the Engineering Department of
Lifeline Systems, Inc., where he served as Vice
President of Engineering and oversaw the
development and introduction of a new
generation of Lifeline's hospital based
emergency call system for home use by the
elderly. Mr. Phillipps holds an S.B. degree in
Electrical Engineering from MIT and has been
jointly awarded over a dozen patents in the
medical monitoring and related fields.
Samuel M. Stein Samuel Stein is Vice President, Chief 1,300 *
Age 56 Financial Officer, Treasurer and Assistant
Clerk of the Company. Mr. Stein joined the
Company in October, 1993 as Vice President of
Finance and Chief Financial Officer and was
elected to the further offices of Treasurer and
Assistant Clerk during 1994. From 1990 to 1993,
Mr. Stein was employed as the Corporate
Controller of Great American Software, Inc.,
an accounting software manufacturer.
Thomas J. VanderSalm Dr. Thomas VanderSalm has been a Director 48,700(4) 1.99%
Age 55 of the Company since 1984. Dr. VanderSalm is
Chief of Cardio Thoracic Surgery and has been a
Professor of Surgery at the University of
Massachusetts Medical School in Worcester, MA
since 1970. Dr. VanderSalm is a member of the
Audit and Compensation Committees of the Board
of Directors.
Page 3
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Amount of Percent of
Position and Offices with the Company and Other Common Stock Common Stock
Name Business Experience During Last Five Years Owned Directly Outstanding
- ---------------------- ------------------------------------------------- ---------------- ---------------
Louis C. Wallace Louis C. Wallace has been a Director of 19,231 *
Age 55 the Company since 1989. Mr. Wallace is the
founder and President of Specialty Surgical
Instrumentation, Inc. (S.S.I.), a manufacturer
and distributor of surgical instruments.
S.S.I. was established in Nashville, TN in
1976. Mr. Wallace is a member of the
Compensation and Nominating Committees of the
Board of Directors.
Executive Officers and 622,709 25.46%
Directors as a group
(8 persons)
</TABLE>
=======================================================================
*Indicates less than 1.0%
(1) Mr. Berardo owns, as trustee of various trusts, 154,520 shares of the
Company's Common Stock.
(2) Mr. Epstein owns 84,676 shares in his name and may be deemed to be the
beneficial owner of 82,218 shares in the name of his wife, Mary Epstein.
(3) Mr. Phillipps owns 118,159 shares in his name and may be deemed to be
the beneficial owner of 106,905 shares in the name of his wife,
Janice B. Phillipps.
(4) The 45,700 shares of the Company's Common Stock owned of record and
beneficially by Thomas J. Vander Salm includes 32,000 shares of the
Company's Common Stock owned of record by the trustees of the Vander Salm
Family Trust, of which he may be deemed to be a beneficial owner.
ITEM 11. EXECUTIVE COMPENSATION
The table below sets forth certain compensation information for the fiscal years
ended October 31, 1995, 1994 and 1993 of those persons who were at October 31,
1995: (i) the Chief Executive Officer and the other named executive officers of
the Company and (ii) the most highly compensated executive officers whose total
annual salary and bonus exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
---------------------------------- ------------------------------------
Name and Fiscal All Other
Principal Position Year Salary($) Bonus($) Options (#) Compensation ($)
- ------------------ ----- --------- -------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
James Hobbs 1995 $154,827 $23,500 50,000 --
President, CEO and 1994 $154,903 $16,000 0 --
Director 1993 $115,385 -- 50,000 --
Samuel M. Stein 1995 $86,716 $21,750 40,000 --
CFO and Treasurer 1994 $83,366 -- 0 --
1993 $4,904 -- 10,000 --
David Mutch 1995 $86,827 $21,750 40,000 --
VP Marketing and 1994 $83,768 $17,000 0 --
Sales 1993 $76,924 -- 10,000 --
</TABLE>
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The following two tables disclose, for the Chief Executive Officer and the other
named executives, information regarding stock options granted or exercised
during, or held at the end of Fiscal Year 1995 pursuant to the Company's stock
option plan.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
- -----------------------------------------------------------------------------------------------
Number of Potential Realizable Value
Securities Percent of at Assumed Annual Rates of
Underlying Total Options Exercise Stock Price Appreciation for
Options Granted to or Base Option Term
Granted Employees in Price Expiration
Name (#)(1) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ------------------- ------------ ------------- ---------- ----------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
James W. Hobbs 50,000 38% $4.63 12/8/04 $145,500 $369,000
Samuel M. Stein 40,000 31% $4.63 12/8/04 $116,500 $295,000
David Mutch 40,000 31% $4.63 12/8/04 $116,500 $295,000
</TABLE>
=================== ============ =============
(1) Grants under the Company's 1992 Stock Option Plan, as amended. Exercises of
the options to purchase shares are permitted as determined by the
Compensation Committee upon initial grant. Such options are not
transferable, other than by will or the laws of descent and distribution.
Aggregated Option Exercises in Last Fiscal Year
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
- ----------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options at
Options at 10/31/95 (#) October 31, 1995 ($) (1)
- --------------- -------------- ------------- ---------------------------- --------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable/Unexercisable
- --------------- -------------- ------------- ------------ --------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
James Hobbs - - 30,000 70,000 $82,500 $55,000
Samuel Stein - - 4,000 46,000 $ 9,480 $14,220
David Mutch - - 4,000 46,000 $ 9,480 $14,220
</TABLE>
=============== ==============
(1) Value is based on the closing sale price of the Common Stock as of October
31, 1995 ($4.00) minus the exercise price. Mr. Hobbs has a total of 50,000
in-the-money options with an exercise price of $1.25 each. Mr. Stein and
Mr. Mutch each have a total of 10,000 in-the-money options with an exercise
price of $1.63 each.
Page 5
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Executive Employment Agreements
The Company has entered into an employment agreement with James W. Hobbs,
pursuant to which the Company has agreed to employ Mr. Hobbs as President and
Chief Executive Officer. The agreement with Mr. Hobbs was entered into on June
10, 1993 with an initial term of one year with automatic renewals for successive
terms of one year each unless either party gives notice of intention not to
renew. The Compensation Committee of the Luxtec Board set Mr. Hobbs' base salary
for 1995 at $162,000 and for 1996 at $168,500. Mr. Hobbs is entitled to receive
an annual bonus in cash and/or equity of the Company from an annual bonus pool
based, in Fiscal Year 1995, on 1.5% of the net sales of the Company, with such
bonus to be determined by the Compensation Committee. Factors taken into account
by the Compensation Committee in determining bonuses include return on
investment, net sales, and net income compared to the business plan. Although
there is no maximum percentage bonus, 30% of base salary is the expected
guideline. Mr. Hobbs is entitled to severance pay in an amount equal to six
months of his then current annual salary if his employment is terminated by (i)
the Company without cause or (ii) Mr. Hobbs for Good Reason (as defined in the
agreement).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
The following table sets forth as of February 21, 1996, the name of each
person who, to the knowledge of the Company, owned beneficially more than 5% of
the shares of Common Stock of the Company outstanding at such date, the number
of shares owned by each of such persons and the percentage of the outstanding
shares represented thereby.
Name and Address Amount and Nature of Percentage of
of Beneficial Owner Beneficial Ownership Stock
Outstanding
James Berardo 154,520 (1) 6.36%
6624 Fannin Suite 2700
Houston, TX 77030
Denton A. Cooley, MD 352,378 14.41%
6624 Fannin, Suite 2700
Houston, TX 77030
Paul Epstein 166,894 (2) 6.82%
95 Clinton Road
Brookline, MA 02146
Rita Kloots 155,100 6.34%
Box 1077
Sturbridge, MA 01566
Patrick G. Phillips 225,064 (3) 9.20%
224 Old County Road
Lincoln, MA 01773
(1) Mr. Berardo owns, as trustee of various trusts, 155,520 shares of the
Company's Common Stock.
(2) Mr. Epstein owns 84,676 shares in his name and may be deemed to be the
beneficial owner of 82,218 shares in the name of his wife, Mary Epstein.
(3) Mr. Phillipps owns 118,159 shares in his name and may be deemed to be the
beneficial owner of 106,905 shares in the name of his wife,
Janice B. Phillipps.
Page 6
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LUXTEC CORPORATION
October 31, 1995
SIGNATURES
Pursuant to the requirements of Section 13 or 15(D) of the Securities
Exchange Act of 1934, the Corporation has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the Town of
Worcester, Commonwealth of Massachusetts, on the 28th day of February, 1996.
LUXTEC CORPORATION
by
James W. Hobbs, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons in the capacities and
on the dates indicated:
Signature Title Date
President, Chief
James W. Hobbs Executive Officer
Chief Financial
Samuel M. Stein Officer, Treasurer
Assistant Clerk
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