THERAGENICS CORPORATION
5325 OAKBROOK PARKWAY
NORCROSS, GEORGIA 30093
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
You are cordially invited to attend the Annual Meeting of Stockholders of
Theragenics Corporation (the "Company") to be held at 9:30 A.M., Atlanta time,
on Friday, June 12, 1998, at the Gwinnett Civic & Cultural Center, 6400
Sugarloaf Parkway, Duluth, Georgia 30136 for the following purposes:
1. To elect two directors;
2. To consider and act upon a proposal to approve the adoption of the
Company's Employee Stock Purchase Plan;
3. To consider and act upon a proposal to amend Theragenics'
certificate of incorporation to increase the number of authorized
shares of common stock; and
4. To consider and vote on a proposal to ratify the appointment of
Grant Thornton as independent public accountants;
The Board of Directors has fixed the close of business on April 17, 1998,
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the meeting.
Sincerely,
/s/ Bruce W. Smith
Bruce W. Smith,
Secretary
Norcross, Georgia
April 30, 1998
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS, YOU ARE
REQUESTED TO FILL IN AND SIGN THE ENCLOSED FORM OF PROXY AND MAIL IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IT
IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO ATTEND THE MEETING AND
DECIDE THAT YOU WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
<PAGE>
THERAGENICS CORPORATION
5325 Oakbrook Parkway
Norcross, Georgia 30093
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Theragenics Corporation (the "Company") to
be voted at the Annual Meeting of Stockholders of the Company to be held on
Friday, June 12, 1998, at the Gwinnett Civic & Cultural Center, 6400 Sugarloaf
Parkway, Duluth, Georgia 30136, at 9:30 A.M., Atlanta time, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders.
The Board of Directors has fixed the close of business on April 17, 1998,
as the record date for the determination of stockholders entitled to receive
notice of, and to vote at, the forthcoming Annual Meeting of Stockholders or any
adjournment thereof. Any person giving a proxy in the form accompanying this
statement has the power to revoke it at any time prior to its exercise. A proxy
may be revoked by attending and voting at the meeting, by giving a later proxy
or by written notice to the Secretary of the Company received at the Company's
offices at 5325 Oakbrook Parkway, Norcross, Georgia, 30093 prior to the date of
the Annual Meeting. When proxies are returned properly executed, the shares
represented thereby will be voted as directed in the executed proxy. If the
Proxy is signed and returned but no choice is specified therein, it will be
voted FOR the election of the nominees named therein and FOR each of the listed
proposals.
The expenses for soliciting proxies for the forthcoming Annual Meeting of
Stockholders are to be paid by the Company. Solicitation of proxies may be made
by means of personal calls upon, or telephonic or telegraphic communications
with, stockholders or their personal representatives by directors, officers and
employees of the Company, who will not be specially compensated for such
services. The Company may or may not engage a proxy service to assist the
Company in the solicitation of proxies. The Company will reimburse brokers and
other nominees for their reasonable expenses incurred in forwarding soliciting
material to beneficial owners. It is anticipated that this Proxy Statement and
enclosed Proxy will first be mailed to stockholders entitled to notice of and to
vote at the Annual Meeting on or about April 30, 1998.
<PAGE>
VOTING SECURITIES AND PRINCIPAL SECURITY HOLDERS
As of April 17, 1998, the Company had outstanding and entitled to vote at the
Annual Meeting 29,092,812 shares of Common Stock, par value $.01 per share
("Common Stock").
The holders of Common Stock are entitled to vote as a single class and to
one vote per share, exercisable in person or by proxy, at all meetings of
stockholders. Holders of Common Stock do not have cumulative voting rights.
Abstentions and "broker non-votes" are counted for purposes of determining the
presence or absence of a quorum for the transaction of business but are not
counted in determining the numbers of shares voted for or against any nominee
for director or any proposal.
The following table sets forth the ownership of the Company's Common Stock
as of April 17, 1998, by each person known to the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock, by each executive officer
and director and by all executive officers and directors as a group:
Amount and
Nature of Percentage of
Name and Address Beneficial Common Stock
of Beneficial Owner Ownership(1) Outstanding(2)
Otis W. Brawley, M.D. 88,000(3) *
9715 Hill Street
Kensington, MD 20895
Orwin L. Carter, Ph.D. 113,000(4) *
1029 Third Avenue South
Stillwater, MN 55082
John V. Herndon 16,000(5) *
617 Longview Drive
Waynesville, N.C. 28786
M. Christine Jacobs 498,456(6) 1.7%
5325 Oakbrook Parkway
Norcross, GA 30093
Mr. Charles Klimkowski 199,600(7) *
208 South LaSalle Street
Chicago, IL 60604
<PAGE>
Peter A.A. Saunders 158,000(8) *
2 Regents Close
South Croydon, Surrey CR2 7BW
England
Bruce W. Smith 132,000(9) *
5325 Oakbrook Parkway
Norcross, GA 30093
All Directors and Officers 1,205,056(10) 4.0%
as a Group (seven persons)
Non-Management Shareholder Owning Over 5%
- -----------------------------------------
Bellingham Industries Inc. 3,300,000 11.3%
Urraca Building
Frederico Boyd Avenue
Panama City, Panama
- ---------------
* Less than 1%
(1) Each person named in the table has sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by him or her.
(2) The percentage of shares of Common Stock is calculated assuming that the
beneficial owner has exercised any conversion rights, options or other rights to
subscribe held by such beneficial owner that are currently exercisable or
exercisable within 60 days and that no other conversion rights, options or other
rights to subscribe have been exercised by anyone else.
(3) Includes 88,000 shares purchasable by Dr. Brawley within 60 days upon
exercise of options.
(4) Includes 92,000 shares purchasable by Dr. Carter
within 60 days upon exercise of options.
(5) Includes 16,000 shares purchasable
by Mr. Herndon within 60 days upon exercise of options.
(6) Includes 394,000
shares purchasable by Ms. Jacobs within 60 days upon exercise of options.
(7) Includes 160,000 shares purchasable by Mr. Klimkowski within 60 days upon
exercise of options. (8) Includes 158,000 shares purchasable by Mr. Saunders
within 60 days upon exercise of options.
(8) Includes 8,000 shares purchasable by Mr.Smith within 60 days upon exercise
of options.
(9) Includes 916,000 shares purchasable by all executive officers and
directors within 60 days upon exercise of options.
<PAGE>
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes (Class
I, Class II and Class III) with two directors in each class. One class of
directors is elected each year for a three-year term. Two directors,
representing the Class III Directors, are to be elected at the Annual Meeting.
These Class III Directors will serve until the Annual Meeting of Stockholders in
2001 or until their successors shall have been elected and qualified. The
current Board of Directors has selected, and will cause to be nominated at the
meeting, Dr. Orwin Carter and Ms. M. Christine Jacobs, who upon election will
comprise the Class III Directors of the Board of Directors.
Provided that a quorum of stockholders is present at the meeting in person
or by proxy, directors will be elected by a plurality of the votes cast at the
meeting. Abstentions and "broker non-votes" will have no effect on the election
of directors. The persons named on the enclosed proxy card or their substitutes
will vote all of the shares that they represent for the above-named nominees
unless instructed otherwise on the proxy card. If at the time of the Annual
Meeting of Stockholders any nominee is unable or declines to serve, the
discretionary authority provided in the proxy will be exercised to vote for a
substitute. Management has no reason to believe that a substitute nominee will
be required.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
NAMED IN THIS PROPOSAL.
The directors and director nominees have supplied the Company with the
following information concerning their age, principal employment, other
directorships and positions with the Company:
<PAGE>
Director/Nominee Principal Occupation and Other Information
Class I Directors
John V. Herndon Mr. Herndon joined the Company in April
Director since 1987 1987 as Executive Vice President and in
Age: 57 July 1989 was appointed President, Chief Executive
Officer and Chairman of the Board of Directors of the
Company. In August 1993, Mr. Herndon relinquished his
role as Chief Executive Officer while retaining his
position as Chairman of the Board of Directors of the
Company. Mr. Herndon stepped down as Chairman of the
Board in December 1994, and currently serves as a
Director and Advisor-to-the-President.
Peter A.A. Saunders Mr. Saunders is manager/owner of PASS Consultants, a
Director Great Britain-based since 1989management consulting
Age: 56 firm established in 1988. Mr.Saunders presently serves
as a non-executive director for other British
companies, including Mayday Healthcare Trust
(hospital) and Eurobell (Sussex) Ltd. (cable TV and
telecommunications).
Class II Directors
Charles R. Klimkowski Mr. Klimkowski is employed by ABN AMRO
Director since 1993 Asset Management (USA) Inc. and was
Age: 62 employed by The Chicago Corporation prior to its
purchase by ABN AMRO. Most recently Mr. Klimkowski has
served as an Executive Vice President and Director
and formerly as Chief Operating Officer and Director
of Investments of these firms. Mr. Klimkowski has
served with ABN AMRO Asset Management (USA) Inc. and
The Chicago Corporation since 1980. Mr. Klimkowski
served as Chairman of Theragenics' Board of Directors
from December 1994 to June 1997. Mr. Klimkowski has
served as Co-Chairperson of Theragenics since June
1997 and currently serves in that position.
Otis W. Brawley, M.D. Since 1988, Dr. Brawley has been a Medical
Director since 1995 Oncologist with the National Cancer
Age: 38 Institute. Dr. Brawley is a Tenured Research Officer.
He has designed a number of clinical trials and is
especially interested in cancer prevention and cancer
epidemiology. He has authored or co-authored more than
50 publications. Dr. Brawley also reviews for several
prestigious publications.
<PAGE>
Class III Director Nominees
Orwin L. Carter, Ph.D. Dr. Carter is Vice President of Finance Director since
Hamline 1991 and Administration for University in St. Paul,
Age: 56 Minnesota. From March 1995 to August 1997, Dr.
Carter served as a consultant with INCSTAR
Corporation, a manufacturer of in vitro diagnostic
test kits and an affiliate of Sorin Biomedica. From
1989 to September 1994, Dr. Carter served INCSTAR in
various capacities including Chairman, Chief Executive
Officer and President. Dr. Carter also currently
serves on the Board of Directors of Lifecore
Biomedical, Inc.
M. Christine Jacobs Ms. Jacobs joined the Company as National Sales
Director since 1992 Manager in 1987 and was subsequently promoted to Vice
Age: 47 President of General Sales and Marketing. Since 1992,
Ms. Jacobs has been President and Chief Operating
Officer of the Company, and in August 1993, Ms. Jacobs
was promoted to the position of Chief Executive
Officer while retaining the position of President. Ms.
Jacobs has served as Co-Chairperson of Theragenics
since June 1997 and currently serves in that position.
Ms. Jacobs has also served as a director of the
Georgia Biomedical Partnership, a nonprofit
organization that promotes economic and environmental
development beneficial to the growth of biomedical
business within Georgia.
The Board of Directors held five meetings during fiscal 1997 and acted
by unanimous written consent in lieu of one meeting. All members participated in
all meetings.
The Board of Directors has established four standing committees and has
assigned certain responsibilities to each of those committees.
<PAGE>
The Audit Committee, formed in 1991, met once during fiscal 1997. The
Audit Committee reviews the independence, qualifications and activities of the
Company's independent certified public accountants and the activities of the
Company's accounting staff. The Audit Committee also recommends to the Board the
appointment of the Company's independent certified public accountants and
reviews and approves the Company's annual financial statements together with
other financial reports and related matters. The Audit Committee is composed of
Mr. Saunders and Dr. Carter, each of whom attended the meeting.
The Compensation Committee, formed in 1990, met twice during fiscal
1997. The Compensation Committee makes recommendations concerning remuneration
of the Company's Chief Executive Officer. The Compensation Committee is composed
of Mr. Klimkowski and Dr. Brawley, each of whom attended all meetings.
The Nominating Committee, formed in 1996, met once during fiscal 1997.
The Nominating Committee evaluates and makes recommendations as to individuals
believed to be best qualified and willing to fill vacancies on the Board of
Directors. The Nominating Committee is composed of Mr. Herndon and Ms. Jacobs.
The Stock Option Committee, formed in 1996, met once during fiscal
1997. The Stock Option Committee administers the Company's stock option plans
and determines the conditions and amounts of options granted under these plans.
The Stock Option Committee is composed of Dr. Brawley, Dr. Carter, Mr.
Klimkowski and Mr. Saunders, who are all non-employee directors of the
Company.
Directors who are not officers of the Company receive $2,500 per
quarter, and $1,000 for attending each Board meeting and $500.00 for attending
each Committee meeting. In addition to cash compensation, each director will be
granted upon his or her election as a director an option to purchase 48,000
shares (which has been adjusted to account for a 2-for-1 stock split that
occurred April 15, 1998) of Common Stock at an exercise price equal to the fair
market value of the Common Stock as of the date of election. Each option shall
vest as to 16,000 shares at the end of each year of service in the director's
three-year term.
<PAGE>
Executive Officers
The executive officers of the Company and their age, position with the
Company and business experience for the past five years are set forth in the
table below.
Executive Officer Office and Other Information
------------------ ------------------------------------
M. Christine Jacobs President and Chief Executive Officer
Age: 47 since 1993. See information above under
Class III Director Nominees.
Bruce W. Smith Treasurer and Chief Financial Officer
Age: 45 of the Company and Secretary of the Board of
Directors since 1989. Mr. Smith has served in
financial capacities with the Company since
joining it in January 1987.
REMUNERATION AND OTHER MATTERS
Executive Compensation
The following table summarizes the compensation paid by the Company for services
rendered during the years indicated to each of the Company's executive officers
and other employees whose total salary and bonus exceeded $100,000 during fiscal
1997. Number of underlying securities have been adjusted to account for a
2-for-1 stock split that occurred April 15, 1998.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
Securities All
Name and Underlying Other
Principal Position Year Salary(1) Bonus Options Compensation(2)
M. Christine Jacobs 1997 $209,449 $294,000 --- $322
President & Chief 1996 $151,445 $170,000 240,000 $357
Executive Officer(3) 1995 $100,010 $68,000 --- $174
Bruce W. Smith 1997 $105,445 $ 20,000 100,000 $455
Secretary, Tresurer 1996 $ 71,430 $ 20,000 --- $399
& Chief Financial 1995 $ 70,181 $ 6,549 40,000 $345
Officer
<PAGE>
(1) Includes amounts deferred under the 401(k) feature of the
Company's Employee Savings Plan.
(2) Represents premiums on a term life insurance policy.
(3) The Company has an agreement with Ms. Jacobs, dated August 1,
1996, which provides for her employment for the period
commencing August 1, 1996 and expiring July 31, 1999. This
agreement provides for a minimum annual base salary of
$200,000 plus an annual bonus determined by the Board of
Directors utilizing certain performance criteria. In addition,
in the event of termination, the agreement provides a
severance package of up to two years' salary and other related
benefits.
Options. The following table sets forth certain information concerning a grant
of stock options made during fiscal 1997 to Mr. Smith. Ms. Jacobs was not
granted stock options during fiscal 1997. Number of securities and base price
have been adjusted to account for a 2-for-1 stock split that occurred April 15,
1998.
Option Grants in Fiscal 1997
Individual Grants
% of Potential
Number of Total Realized Value at
Securities Granted to Assumed Annual
Underlying Employees Rate of Stock Price
Options in Base Appreciation
Granted Fiscal Price Expiration for Option Term
Name (#) Year ($/Sh.) Date 5%($) 10%($)
Bruce W. Smith 100,000 20% $18.50 12/01/07 $1,163,455 $2,948,424
<PAGE>
The following table sets forth information concerning the value of unexercised
options as of December 31, 1997 held by Ms. Jacobs and Mr. Smith. No stock
appreciation rights have ever been issued by the Company. Numbers of underlying
securities have been adjusted to account for a 2-for-1 stock split that occurred
April 15, 1998.
Option Exercises in Fiscal 1997
and Fiscal Year-End Option Values Table
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options on Options on
December 31, December 31,
Shares 1997 1997
Acquired Exercisable/ Exercisable/
Name on Value Un- Un-
Exercise Realized exercisable exercisable
M. Christine Jacobs --- $ --- 320,000/ $4,505,000/
160,000 $1,660,000
Bruce W. Smith --- $ --- 8,000/ $ 122,500/
124,000 $ 367,500
Board Compensation Committee Report on Executive Compensation.
The Compensation Committee sets only the compensation of the Chief
Executive Officer. Compensation of other executive officers is set by the Chief
Executive Officer based on a structure similar to that established by the
Compensation Committee for compensation of the Chief Executive Officer, except
that stock options are awarded by the Stock Option Committee of the Board of
Directors. The Compensation Committee has a policy that a significant portion of
the Chief Executive Officer's pay should be related to the performance of the
Company and the Chief Executive Officer's contribution to that performance. In
determining the amount and type of compensation, the Committee's goal is to
provide a package that is competitive with the marketplace while placing a
substantial portion of the C.E.O.'s compensation "at risk" by tying it to both
short-term and long-term measures of the Company's performance.
<PAGE>
During 1997, the Committee established criteria for the C.E.O.'s
performance bonus based upon a combination of dollar sales levels and dollar
after-tax profitability. A matrix (the "Matrix") was established, with cells
within the Matrix representing specific combinations of sales and profits.
Performance falling within a particular cell would result in a bonus to the
C.E.O. expressed as a percent of the C.E.O.'s base salary. This Matrix, which
allowed for bonuses running from 0% to 137% of the C.E.O.'s base salary, was
constructed to reward the C.E.O. for reaching specific combinations of sales and
profit levels with higher sales and profit resulting in a larger bonus. The
percentages within the Matrix recognize both the benefit to the Company of
reaching certain sales and profit levels and to a lesser extent the Committee's
assessment of the compensation the C.E.O. could obtain in the market. In
addition to the bonus called for in the Matrix, the Committee also has the
option of awarding the C.E.O. an additional bonus of up to 10% of her base
salary. This bonus, which is subjectively determined by the Committee, is based
on less quantifiable measures of performance (i.e., problem resolution, program
development and execution, internal processes and procedures development, cash
management and expense control, and the effective and efficient application of
available resources to ensure both short-term and long-term Company health).
Based upon the above criteria applied to an almost 100% increase in sales
and an approximately 180% increase in profit, Ms. Jacobs was awarded a 147%
bonus or $294,000. The 147% bonus represents a 137% bonus called for by the
Matrix plus a 10% bonus for the less quantifiable measures of performance.
It is also the Committee's responsibility to address issues raised by
Section 162(m) of the Internal Revenue Code. The revisions to this section made
certain non-performance-based compensation in excess of $1,000,000 to executives
of public companies nondeductible to the companies beginning in 1994. The
Committee has reviewed these issues and has determined that no portion of
compensation payable to any executive officer for 1997 is nondeductible.
Submitted by the Members of the Compensation Committee:
Otis W. Brawley, M.D.
Charles R. Klimkowski
<PAGE>
The Stock Option Committee of the Board of Directors administers the
Company's stock option plans and determines the terms of options granted under
these plans. These plans form the basis of the Company's long-term incentive
compensation plan. The Stock Option Committee believes that placing a portion of
executives' compensation in the form of stock options achieves three objectives.
It aligns the interest of the Company's executives directly with those of the
Company's stockholder's, gives executives a significant long-term interest in
the Company's success and helps the Company retain key executives. In
determining the number and terms of options to grant an executive, the Stock
Option Committee primarily considers the executive's past performance as an
indicator of future performance and the degree to which an incentive for
long-term performance would benefit the Company. Based on these factors, in
relatively equal proportions, the Stock Option Committee awarded the Chief
Executive Officer 240,000 options (adjusted for April 15, 1998, 2-for-1 stock
split) during fiscal 1996. No stock options were awarded to the C.E.O. in fiscal
1997. Mr. Smith was awarded the options shown in the table headed "Option Grants
in Fiscal 1997" while another 405,000 options (adjusted for April 15, 1998,
2-for-1 stock split) were granted to twelve other employees during fiscal 1997.
Submitted by Members of the Stock Option Committee:
Otis W. Brawley, M.D.
Orwin L. Carter, Ph.D.
Charles R. Klimkowski
Peter A.A. Saunders
The following table summarizes the cumulative total return on investment in
the Company's Common Stock for fiscal 1991 through 1996:
Comparison of Five Year - Cumulative Returns
[GRAPH OF FIVE-YEAR RETURNS APPEARS HERE.]
1992 1993 1994 1995 1996 1997
Theragenics Corporation 100 77 43 216 411 655
Nasdaq Stock Market (US Companies) 100 115 112 159 195 240
Nasdaq Pharmaceuticals Stocks 100 89 67 123 123 127
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Mr. Klimkowski and Dr.
Brawley, non-executive directors of the Company. No executive officer of the
Company serves or served on the Compensation Committee of another entity and no
executive officer of the Company serves or served as a director of another
entity who has or had an executive officer serving on the Board of Directors of
the Company.
PROPOSAL NUMBER TWO
APPROVAL OF THE THERAGENICS
CORPORATION EMPLOYEE STOCK PURCHASE PLAN
INTRODUCTION
The Board of Directors of the Company has adopted the Theragenics
Corporation Employee Stock Purchase Plan and has authorized the issuance of up
to 200,000 shares of Common Stock thereunder. The Employee Stock Purchase Plan
is intended to qualify as an "employee stock purchase plan" within the meaning
of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
Stockholder approval of the Employee Stock Purchase Plan by a majority of the
votes cast is required under the Code. Abstentions and "broker non-votes" will
have no effect on Proposal Two.
PURPOSE
The purpose of the Employee Stock Purchase Plan is to provide employees of
the Company with an opportunity to be compensated through the benefits of stock
ownership and to acquire an interest in the Company through the purchase of
Common Stock. The Employee Stock Purchase Plan enables eligible employees of the
Company to purchase Common Stock on advantageous terms and thereby allows such
employees to share in the success of the Company.
<PAGE>
ELIGIBILITY
Generally, any employee who was employed by the Company for at least one
year preceding the beginning date of each applicable calendar quarter, works
more than 20 hours per week, and is customarily employed for more than five
months during the calendar quarter shall be eligible to participate in the
Employee Stock Purchase Plan for the ensuing calendar quarter, except for
certain employees who are deemed to own more than 5% of the Common Stock of the
Company. Eligible employees desiring to participate in the Employee Stock
Purchase Plan must elect to do so prior to the commencement of each calendar
year. Under the terms of the Employee Stock Purchase Plan, no employee may be
granted an option that permits that employee to purchase shares of Common Stock
under the Employee Stock Purchase Plan and any other Section 423 plans of the
Company or an affiliate at a rate that exceeds $25,000 of the fair market value
of the Common Stock (determined at the time the option is granted) for each
calendar year for which the option is outstanding at any time.
MANNER OF STOCK PURCHASES
The Employee Stock Purchase Plan operates on a calendar quarter basis. An
eligible employee who elects to participate in the Employee Stock Purchase Plan
will have payroll deductions made on each payday during a calendar quarter. The
amount of the payroll deductions shall be at least 1% and shall not exceed 10%
of the employee's compensation. A participant may withdraw payroll deductions
credited to his account under the Employee Stock Purchase Plan at any time
during a calendar quarter by giving written notice to the Company. In the event
a participant withdraws from the Employee Stock Purchase Plan for any reason,
all payroll deductions credited to his account will be paid to him or his
estate, and no further deductions will be made from the participant's pay. If a
participant ceases to be an employee of the Company for any reason, including
retirement or death, the participant will be deemed to have withdrawn from the
Employee Stock Purchase Plan on the date of his termination of employment. A
participant may not alter the rate of his payroll deductions during a calendar
quarter, except to stop payroll deductions, and any such request to stop payroll
deductions will be effective as of the first payroll period following the date
of the processing of such request.
<PAGE>
At the end of each calendar quarter, participant contributions will be used
to purchase for the participant a number of shares of Common Stock, subject to
adjustment, in an amount equal to 85% of the lower of the fair market value of
the Common Stock on the first day of such calendar quarter or the last day of
such calendar quarter. Any payroll deductions credited to a participant's
account during a calendar quarter not used for the purchase of shares will be
credited to the participant's payroll deductions for the next calendar quarter.
The closing price of the Common Stock on the Nasdaq National Market on April 16,
1998 was $29.75 per share.
FEDERAL INCOME TAX CONSEQUENCES OF THE EMPLOYEE STOCK PURCHASE PLAN
The federal income tax consequences to the Company and the participants in
connection with the Employee Stock Purchase Plan under existing applicable
provisions of the Code and the regulations thereunder are substantially as
follows.
Under the Code, the Company is considered to grant participants an "option"
on the first day of each calendar quarter to purchase as many shares of Common
Stock as the participant will be able to purchase with the payroll deductions
credited to his or her account during the calendar quarter. On the last day of
each calendar quarter, the market price is determined and the participant is
considered to have exercised the "option" and purchased the number of shares of
Common Stock his or her accumulated payroll deductions will purchase at the
market price.
The required holding period for favorable tax treatment upon disposition of
Common Stock acquired under the Employee Stock Purchase Plan (the "Holding
Period") is the later of (a) two years after the "option" is granted (the first
day of a calendar quarter), or (b) one year after the Common Stock is purchased
(the last day of a calendar quarter). Consequently, if the Common Stock is held
for the required Holding Period, a participant who sells the shares will realize
ordinary income to the extent of the lesser of (1) the amount by which the fair
market value of the Common Stock at the time the option was granted exceeded the
"option price" or (2) the amount by which the fair market value of the Common
Stock at the time of the disposition exceeded the "option price." The "option
price" is determined on the date of grant for this purpose and, is therefore
equal to 85% of the fair market value of the Common Stock as of the first day of
a calendar quarter. Any further gain realized upon the sale will be considered a
long-term capital gain. If the sale price is less than the option price, there
will be no ordinary income and the participant will have a long-term capital
loss for the difference. The Company will not be entitled to a deduction for
federal income tax purposes with respect to the purchase or the subsequent
disposition of shares of Common Stock.
<PAGE>
When a participant sells Common Stock purchased under the Employee Stock
Purchase Plan before the expiration of the required Holding Period, the
participant will recognize ordinary income to the extent of the difference
between the price actually paid for the Common Stock and the fair market value
of the Common Stock at the date the option was exercised (the last day of a
calendar quarter), regardless of the price at which the Common Stock is sold. To
the extent the participant recognizes ordinary income on the sale of Common
Stock, the Company will generally receive a corresponding deduction in the year
in which the disposition occurs. Any gain realized in excess of that amount will
be taxed as a capital gain. If the sale price is less than the amount paid by
the participant, increased by the ordinary income which must be recognized, then
any such loss will be a capital loss.
If a participant dies while owning Common Stock acquired under the Employee
Stock Purchase Plan, ordinary income must be reported on his or her final income
tax return. This amount will be the lesser of (1) the amount by which the fair
market value of the Common Stock at the time the option was granted exceeded the
option price (i.e., 15% of such fair market value), or (2) the amount by which
the fair market value of the Common Stock at the time of the participant's death
exceeded the option price.
The foregoing discussion is only a general summary of the federal income
tax consequences of a purchase of Common Stock under the Employee Stock Purchase
Plan and the subsequent disposition of shares received pursuant to such
purchases. A participant should consult his or her own tax advisor to determine
the tax consequences of any particular transaction.
The state income tax treatment of purchasing and selling the shares under
the Employee Stock Purchase Plan will vary depending upon the state in which a
participant resides. If the participant is a resident of, or is employed in, a
country other than the United States, the participant may be subject to taxation
in that country in addition to or instead of United States federal income taxes.
A participant should consult his or her own tax advisor regarding the tax
consequences and compliance requirements of any particular transaction.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE EMPLOYEE
STOCK PURCHASE PLAN.
PROPOSAL NUMBER THREE
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors of the Company has adopted a resolution
unanimously approving and recommending to the Company's stockholders for their
approval an amendment to the current Certificate of Incorporation of the Company
(the "Certificate of Incorporation") increasing the number of authorized shares
of Common Stock of the Company from 50,000,000 to 100,000,000 shares.
The Certificate of Incorporation currently provides that the Company is
authorized to issue up to 50,000,000 shares of Common Stock. The Board of
Directors of the Company declared a two-for-one stock split (the "Stock Split"),
effected in the form of a 100% stock dividend, that was paid April 15, 1998, to
stockholders of record as of the close of business on March 31, 1998.
Immediately following the Stock Split as of the close of business on April 15,
1998, 29,091,812 shares of Common Stock were issued and outstanding and an
additional 2,726,392 shares were reserved for issuance in connection with
existing benefit plans and outstanding warrants.
The proposed amendment to the Certificate of Incorporation would
increase the number of authorized shares of Common Stock by 50,000,000 shares.
The additional shares of Common Stock for which authorization is sought, if and
when issued, would have the same rights and privileges as the shares of Common
Stock now outstanding.
The Board of Directors recommends the increase in the authorized Common
Stock to enable the Company to have additional shares available for possible
issuance in connection with such general corporate purposes as future stock
splits and stock dividends, issuance of shares for cash to raise equity capital,
conversions of convertible securities, or in connection with business
acquisitions, stock option plans or other employee benefit plans which may be
adopted in the future. If the proposal to amend the Certificate of Incorporation
to increase the number of authorized shares of Common Stock is approved at the
Annual Meeting, the Board of Directors will have greater flexibility to issue
additional shares of Common Stock without the expense and delay of a
stockholders' meeting unless stockholder approval is otherwise required. The
Company has no current plans, agreements or arrangements for the issuance of
additional shares of Common Stock, other than in connection with the Company's
existing benefit plans.
<PAGE>
The issuance of additional shares of Common Stock could, under certain
circumstances, render more difficult or discourage an attempt by a third party
to obtain control of the Company. For example, the issuance of shares of Common
Stock in a public or private sale, merger, or similar transaction would increase
the number of the Company's outstanding shares, thereby diluting the interest of
a party seeking to acquire control of the Company and increasing the cost of
such transaction.
Issuance of additional shares of Common Stock, depending upon the
timing and circumstances, could dilute earnings per share and decrease the book
value per share of shares theretofore outstanding and each stockholder's
percentage ownership of the Company may be proportionately reduced.
The affirmative vote of the holders of at least a majority of the
issued and outstanding shares of Common Stock is needed for the approval of this
proposal. Abstentions and broker non-votes will have the same effect as a vote
against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK.
PROPOSAL NUMBER FOUR
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Stockholders will be asked to vote for a proposal to ratify the appointment of
Grant Thornton as the independent public accountants of the Company for the
fiscal year ending December 31, 1998. Grant Thornton has been the independent
public accountants for the Company since fiscal year 1989. If the stockholders,
by affirmative vote of the holders of a majority of the votes cast, do not
ratify this appointment, the Board of Directors will reconsider its action and
select other independent public accountants without further stockholder action.
Abstentions and broker non-votes will have no effect on Proposal Four.
<PAGE>
A representative of Grant Thornton is expected to be present at the Annual
Meeting to respond to appropriate questions and will be given the opportunity to
make a statement if such representative desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY.
COMPLIANCE WITH FILING REQUIREMENTS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, officers,
directors, and beneficial owners of more than ten percent of the outstanding
Common Stock are required to file reports with the Securities and Exchange
Commission reporting their beneficial ownership of the Common Stock at the time
they become subject to the reporting requirements and changes in beneficial
ownership occurring thereafter. Based on a review of the reports submitted to
the Company and written representations from persons known to the Company to be
subject to these reporting requirements, the Company believes that its executive
officers and directors complied with the Section 16(a) requirements during
fiscal 1997, except that one transaction of Mr. Klimkowski's was reported 14
days late.
STOCKHOLDERS PROPOSALS
Stockholders of Theragenics may submit proposals for inclusion in the proxy
materials. These proposals must meet the stockholder eligibility and other
requirements of the Securities and Exchange Commission. In order to be included
in the Company's 1998 proxy material, a stockholder's proposal must be received
not later than December 31, 1998 at Theragenics Corporation offices, 5325
Oakbrook Parkway, Norcross, Georgia 30093, ATTN.: Secretary.
<PAGE>
In addition, Theragenics' By-Laws provide that in order for business to be
brought before the Annual Meeting, a stockholder must deliver or mail written
notice to the principal executive offices of the Company, which written notice
is received not less than 60 days nor more than 90 days prior to the date of the
meeting. The notice must state the stockholder's name, address, number and class
of shares of Theragenics stock held, and briefly describe the business to be
brought before the meeting, the reasons for conducting such business at the
Annual Meeting, and any material interest of the stockholder in the proposal.
The By-Laws also provide that if a stockholder intends to nominate a
candidate for election as a Director, the stockholder must deliver written
notice of his or her intention to the Secretary of the Company. The notice must
be received not less than 60 days nor more than 90 days before the date of the
meeting of stockholders. The notice must set forth the name and address of, and
the number of shares owned by, the stockholder (and that of any other
stockholder known to be supporting said nominee). The notice must also set forth
the name of the nominee for election as a Director, the age of the nominee, the
nominee's business address and experience during the past five years, the number
of shares of stock of the Company beneficially held by the nominee, and such
other information concerning the nominee as would be required to be included in
a proxy statement soliciting proxies for the election of the nominee. In
addition, the notice must include the consent of the nominee to serve as a
Director of Theragenics if elected.
MISCELLANEOUS
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM
10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1997, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, TO ANY RECORD
OR BENEFICIAL OWNER OF ITS COMMON STOCK AS OF APRIL 17, 1998, WHO REQUESTS A
COPY OF SUCH REPORT. ANY REQUEST FOR THE 10-K REPORT SHOULD BE IN WRITING
ADDRESSED TO: RON WARREN, DIRECTOR OF INVESTOR RELATIONS, THERAGENICS
CORPORATION, 5325 OAKBROOK PARKWAY, NORCROSS, GEORGIA 30093. IF THE PERSON
REQUESTING THE REPORT WAS NOT A SHAREHOLDER OF RECORD ON APRIL 17, 1998, THE
REQUEST MUST INCLUDE A REPRESENTATION THAT SUCH PERSON WAS A BENEFICIAL OWNER OF
COMMON STOCK OF THE COMPANY ON THAT DATE. COPIES OF ANY EXHIBITS TO THE FORM
10-K WILL BE FURNISHED ON REQUEST AND UPON PAYMENT OF THE COMPANY'S EXPENSES IN
FURNISHING SUCH EXHIBITS.
<PAGE>
OTHER MATTERS
Management is not aware of any matters to be presented for action at the
meeting other than those set forth in this Proxy Statement. However, should any
other business properly come before the meeting, or any adjournment thereof, the
enclosed Proxy confers upon the persons entitled to vote the shares represented
by such Proxy discretionary authority to vote the same in respect of any such
other business in accordance with their best judgment in the interest of the
Company.
Norcross, Georgia
April 30, 1998
<PAGE>
APPENDIX A
THERAGENICS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Theragenics Corporation Employee Stock Purchase
Plan (the "Plan") is to provide employees of Theragenics Corporation (the
"Company") and its subsidiary companies with an opportunity to be compensated
through the benefits of stock ownership and to acquire an interest in the
Company through the purchase of Common Stock of the Company ("Common Stock").
The Company intends the Plan to qualify as an employee stock purchase plan under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, the provisions of the Plan shall be construed so as to extend and
limit participation in a manner consistent with the requirements of Code Section
423.
2. Definitions.
(a) "Authorization" means the authorization notice that the Company will send to
each eligible Employee each Calendar Quarter advising the eligible Employee of
his right to participate in the Plan for the ensuing Calendar Quarter.
(b) "Beginning Date" means January 1, April 1, July 1, and October 1.
(c) "Calendar Quarter" means the following three-month periods: (i) January 1 to
March 31, (ii) April 1 to June 30, (iii) July 1 to September 30, and (iv)
October 1 to December 31.
(d) "Compensation" means the cash W-2 compensation, including Section 401(k) and
Section 125 contributions, paid to an Employee by the Company or a designated
subsidiary or parent corporation with respect to a calendar year.
(e) "Employee" means any person, including an officer, who: (i) is customarily
employed for more than twenty (20) hours per week; (ii) is customarily employed
for more than five (5) months per calendar year; and (iii) an employee,
determined in accordance with Section 3401(c) of the Code and the regulations
thereunder, of the Company or any subsidiary of the Company designated from time
to time by the Company's Board of Directors.
<PAGE>
(f) "Exercise Date" means March 31, June 30, September 30, and December 31.
3. Eligibility.
(a) Any Employee who has been employed by the Company for one year preceding the
Beginning Date in each Calendar Quarter shall be eligible to participate in the
Plan for the ensuing Calendar Quarter.
(b) No Employee shall be granted an option:
(1) if, immediately after the grant that Employee would own shares, and/or hold
outstanding options to purchase shares, possessing five percent (5%) or more of
the total combined voting power or value of all classes of shares of the Company
or of any parent corporation or subsidiary of the Company; or (2) which permits
his rights to purchase shares under all employee stock purchase plans of the
Company and its parent and subsidiary corporations to accrue at a rate which
exceeds $25,000 of the fair market value of the shares (determined at the time
the option is granted) for each calendar year in which such stock option is
outstanding at any time.
4. Offering Period. Commencing October 1, 1998, the offering period shall be the
Calendar Quarter. Each Calendar Quarter will begin on a Beginning Date and will
end on the Exercise Date which occurs three months later. Each Calendar Quarter,
the Company will send an Authorization to each eligible Employee advising him of
his right to participate in the Plan for the ensuing Calendar Quarter.
5. Participation. An eligible Employee may become a participant for a Calendar
Quarter by completing the Authorization and filing it with the Company on or
before the date established by the Company. Employees whose Authorizations are
received after that date may not participate in the Plan for that Calendar
Quarter. All Employees granted options under the Plan shall have the same rights
and privileges, except that the amount of Common Stock which may be purchased
under such options may vary in a uniform manner according to Compensation.
<PAGE>
6. Method of Payment. A participant may contribute to the Plan through payroll
deductions, as follows:
(a) A participant shall on his Authorization elect to have deductions made from
his Compensation on each payday during the Calendar Quarter at a rate which,
expressed as a percentage, shall be at least one percent (1%) and not exceed ten
percent (10%) of his Compensation.
(b) All payroll deductions made for a participant shall be credited to his
account under the Plan.
(c) Payroll deductions for a participant shall commence on the first payday
following the first day of each Calendar Quarter, and shall end on the last day
of that Calendar Quarter, unless the participant sooner withdraws as authorized
under Paragraph 10.
(d) A participant may not alter the rate of his payroll deductions during the
Calendar Quarter, except to stop payroll deductions. Any request to stop payroll
deductions will be effective as of the first payroll period following the date
of the processing of such request.
7. Granting of Option.
(a) A participant shall be granted an option for a number of shares of Common
Stock for a Calendar Quarter, subject to the adjustments provided for in
Paragraph 15 of the Plan, determined according to the following procedure:
Step 1 Determine the amount of payroll deductions withheld for participation in
the Plan for the Calendar Quarter; Step 2 Determine the amount which represents
eighty-five percent (85%) of the lower of fair market value of a share of Common
Stock on the (i) Beginning Date or (ii) Exercise Date; and Step 3 Divide the
amount determined in Step 1 by the amount determined in Step 2 and round the
quotient to the nearest whole number.
(b) In each Calendar Quarter, the option price of shares of Common Stock to be
purchased with a participant's payroll deductions shall be the lower of (i)
eighty-five percent (85%) of the fair market value of the shares on the
Beginning Date, or (ii) eighty-five percent (85%) of the fair market value of
the shares on the Exercise Date.
<PAGE>
(c) For purposes of the preceding subparagraph, the fair market value of a share
of Common Stock on the Beginning Date and the Exercise Date as of each such
date, or the most immediately preceding business day with respect to which the
information required in the following clauses is available, shall be determined
as follows: (i) if the Common Stock is traded on a national securities exchange,
the closing sale price on that date; (ii) if the Common Stock is not traded on
any such exchange, the closing sale price as reported by the NASDAQ Stock
Market; (iii) if no such closing sale price information is available, the
average of the closing bid and asked prices as reported by the NASDAQ Stock
Market; or (iv) if there are no such closing bid and asked prices, the average
of the closing bid and asked prices as reported by any other commercial service.
8. Exercise of Option. A participant's option for the purchase of shares during
a Calendar Quarter will be automatically exercised for him on the last day of
that Calendar Quarter for the purchase of the maximum number of full shares
which the sum of the payroll deductions credited to the participant's account on
that Exercise Date can purchase at the option price.
9. Delivery. As soon as administratively feasible after each Exercise Date, the
Company shall deliver to each participant the shares purchased upon the exercise
of his option. The disposition of any payroll deductions credited to his account
during the Calendar Quarter not used for the purchase of shares (the "Cash
Excess") shall be credited to the participant's payroll deductions for the next
Calendar Quarter or, if the participant has stopped participating in the Plan,
the Cash Excess shall be returned to the participant.
10. Withdrawal.
(a) A participant may withdraw payroll deductions credited to his account under
the Plan at any time during a Calendar Quarter by giving written notice to the
Company. A participant who for any reason, including retirement or death, ceases
to be an Employee prior to the Exercise Date during any Calendar Quarter will be
deemed to have withdrawn from the Plan on the date of his retirement, death or
other termination of employment.
(b) Upon the withdrawal of a participant from the Plan under the terms of
subparagraph (a) above, the participant's outstanding options under this Plan
shall immediately terminate.
<PAGE>
(c) In the event a participant withdraws from the Plan for any reason, all
deductions credited to his account plus earnings thereon, if any, will be paid
to him, or, in the event of his death, to the person or persons entitled thereto
under the terms of Paragraph 14, as soon as administratively feasible after the
date of the participant's retirement or other termination of employment, or
after receipt by the Company of the participant's notice of withdrawal, or
notification of the participant's death, as the case may be. No further
deductions will be made from the participant's pay.
(d) A participant's withdrawal will not have any effect upon his eligibility to
participate in the Plan during a subsequent Calendar Quarter.
11. Stock.
(a) The shares of Common Stock to be sold to participants under the Plan may, at
the election of the Company, be either treasury shares or shares originally
issued for such purpose. The maximum number of shares made available for sale
under the Plan shall be 200,000 shares, subject to adjustment upon changes in
capitalization of the Company as provided in Paragraph 15. If the total number
of shares for which options are to be exercised in accordance with Paragraph 8
exceeds the number of shares then available under the Plan, the Company shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall determine to be equitable.
(b) A participant will have no interest in shares covered by his option until
such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be registered in
the name of the participant, or, if the participant so directs, by written
notice to the Company prior to the Exercise Date, in the names of the
participant and one other person designated by the participant, as joint tenants
with rights of survivorship, to the extent permitted by applicable law.
(d) Shares of Common Stock purchased under the terms of the Plan by a
participant who is subject to Section 16 of the Securities Exchange Act of 1934
may not be sold prior to the expiration of six (6) months from the Exercise Date
upon which such shares were purchased except in the event of the participant's
disability, as determined by the Committee, or death.
<PAGE>
12. Administration. The Plan shall be administered by a committee (the
"Committee") which shall consist of not less than two (2) members of the
Company's Board of Directors, who shall be appointed by the Board of Directors
of the Company. The Committee shall be vested with full authority to make,
administer, and interpret such rules and regulations as it deems necessary to
administer the Plan, and any determination or action of the Committee in
connection with the interpretation or administration of the Plan shall be final
and binding upon all participants and any and all persons claiming under or
through any participant. The Board of Directors of the Company may at any time
and from time to time remove members from, or add members to, the Committee, or
to fill vacancies.
13. Designation of Beneficiary.
(a) A participant may file with the Company a written
designation of a beneficiary who is to receive any cash to his credit under the
Plan in the event of his death before an Exercise Date, or any shares of Common
Stock and cash to his credit under the Plan in the event of his death on or
after an Exercise Date but prior to the delivery to him of such shares and cash.
A beneficiary may be changed by the participant at any time by notice in writing
to the Company.
(b) Upon the death of a participant and upon receipt by the Company of proof of
the identity and existence at the time of the participant's death of a
beneficiary designated by him in accordance with the preceding subparagraph, the
Company shall deliver such shares and/or cash to the beneficiary. In the event a
participant dies not survived by a then living or in existence beneficiary
designated by him in accordance with the preceding subparagraph, the Company
shall deliver such shares and/or cash to the personal representative of the
estate of the deceased participant. If to the knowledge of the Company no
personal representative has been appointed within ninety (90) days following the
date of the participant's death, the Company, in its discretion, may deliver
such shares and/or cash to the surviving spouse of the deceased participant, or
to any one or more dependents or relatives of the deceased participant, or if no
spouse, dependent, or relative is known to the Company then to such other person
as the Company may designate.
<PAGE>
(c) No designated beneficiary shall, prior to the death of the participant by
whom he has been designated, acquire any interest in the shares or cash credited
to the participant under the Plan.
14. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by the participant. Any attempted assignment, transfer,
pledge, or other disposition shall be without effect, except that the Company
may treat such act as an election to withdraw funds in accordance with Paragraph
10.
15. Adjustments Upon Changes in Capitalization. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization,
reclassification, stock split, combination of shares, or dividend payable in
shares of Common Stock, an appropriate adjustment shall be made by the Committee
to the number and kind of shares available for the granting of options, or as to
which outstanding options shall be exercisable, and to the option price. No
fractional shares shall be issued or optioned in making any such adjustments.
All adjustments made by the Committee under this paragraph shall be conclusive.
Subject to any required action by the stockholders, if the Company shall be
a party to any reorganization involving merger, consolidation, acquisition of
the stock or acquisition of the assets of the Company, the Committee in its
discretion may declare (a) that all options granted hereunder are to be
terminated, or (b) that any option granted hereunder shall pertain to and apply
with appropriate adjustment as determined by the Committee to the securities of
the resulting corporation to which a holder of the number of shares of Common
Stock subject to the option would have been entitled. The adoption of a plan of
dissolution or liquidation by the Company shall cause every option outstanding
hereunder to terminate, except that, in the event of the adoption of a plan of
dissolution or liquidation in connection with a reorganization as provided in
the preceding sentence, options outstanding hereunder shall be governed by the
provisions of the preceding sentence.
Any issue by the Company of any class of preferred stock, or securities
convertible into shares of common or preferred stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to any option except as
<PAGE>
specifically provided otherwise in this Paragraph 15. The grant of an option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or assets.
16. Amendment or Termination.
(a) The Board of Directors of the Company may at any time terminate or amend the
Plan. No termination shall affect options previously granted, and no amendment
which would change any option heretofore granted in a manner which would
adversely affect the rights of any participant shall be made.
(b) Approval of the stockholders of the Company shall be required with respect
to any amendment which would require the sale of more shares than are authorized
under Paragraph 11 of the Plan.
(c) If required or advisable, the Board of Directors of the Company may
condition any amendment to the Plan on approval of the stockholders of the
Company.
17. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received by the Secretary of the Company or when received in the form
specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.
18. No Contract. This Plan shall not be deemed to constitute a contract between
the Company or any subsidiary or parent corporation and any eligible Employee or
to be a consideration or an inducement for the employment of any Employee.
Nothing contained in this Plan shall be deemed to give any Employee the right to
be retained in the service of the Company or any subsidiary or parent
corporation or to interfere with the right of the Company or any subsidiary or
parent corporation to discharge any Employee at any time regardless of the
effect which such discharge shall have upon him or her or as a participant of
the Plan.
19. Waiver. No liability whatever shall attach to or be incurred by any past,
present or future shareholders, officers or directors, as such, of the Company
or any subsidiary or parent corporation, under or by reason of any of the terms,
conditions or agreements contained in this Plan or implied therefrom, and any
<PAGE>
and all liabilities of, and any and all rights and claims against, the Company
or any subsidiary or parent corporation, or any shareholder, officer or director
as such, whether arising at common law or in equity or created by statute or
constitution or otherwise, pertaining to this Plan, are hereby expressly waived
and released by every eligible Employee as a part of the consideration for any
benefits by the Company under this Plan.
20. Approval of Stockholders. The Plan shall be submitted to the stockholders of
the Company for their approval within twelve (12) months after the adoption of
the Plan by the Board of Directors.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of this
16th day of April, 1998.
THERAGENICS CORPORATION
By: /s/ Bruce W. Smith
--------------------
Bruce W. Smith
Title: Secretary, Treasurer & CFO
ATTEST:
Title:
[CORPORATE SEAL]
<PAGE>
PROXY
THERAGENICS CORPORATION
5325 OAKBROOK PARKWAY
NORCROSS, GEORGIA 30093
PROXY - Annual Meeting of Stockholders - June 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ms. M. Christine Jacobs and Mr. Bruce W. Smith,
or either of them (the "Proxies"), as the undersigned's proxy or proxies, each
with the power to appoint her/his substitute, and hereby authorized them to
represent and to vote, as designated below, all shares of Common Stock of
Theragenics Corporation (the "Company") which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Company to be held on June 12,
1998 or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
(Continued on reverse side.)
<PAGE>
Please mark your votes as indicated in this example [X]
1. ELECTION OF DIRECTORS
(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's name
in the list below.)
[ ] FOR all nominees listed below
(except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: Dr. Orwin Carter M. Christine Jacobs
2. Proposal to approve the adoption of the company's Employee Stock Purchase
Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Proposal to approve the amendment of Theragenics' certificate of
incorporation to increase the number of authorized shares of common stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Proposal to ratify the appointment of Grant Thronton as the Independent
public accounts of the Company for the fiscal year ending December 31, 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. In their discretion, the Proxies, or either of them, are authorized to vote
upon such other business as may properly come before the meeting or any
adjournment thereof.
<PAGE>
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
in favor of Dr. Orwin Carter and Ms. M. Christine Jacobs for election as
directors and FOR Proposals 2, 3 and 4.
Signature(s) Date
Please sign exactly as your name or names appear at left. When shares are held
by joint tenants, both should sign. If signing in any fiduciary or
representative capacity, give full title as such.
