SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-K/A
AMENDMENT NO.1
(Mark one)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended March 31, 1997
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from __________ to________
Commission File No. 0-15360
BIOJECT MEDICAL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Oregon 93-1099680
(State of other jurisdiction of
incorporation or organization) (I.R.S. employer identification no.)
7620 SW Bridgeport Road
Portland, Oregon 97224
(Address of principal executive offices) (Zip code)
(503) 639-7221
(Registrant's telephone number, including areas code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Common Stock, no par value
Indicate by check mark 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 for 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 registrants 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. [ ]
State the aggregate market value of voting stock held by non-affiliates
of the registrant, as of May 31, 1997: $17,660,800
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of May 31, 1997: Common Stock, no par value, 19,540,413
shares.
Documents Incorporated by Reference:
None
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names and ages of the
directors and executive officers of Bioject Medical Technologies Inc.
Directors are elected annually and serve until the next annual meeting of
shareholders and until their successors have been elected and are qualified.
YEAR ELECTED
NAME AGE POSITION DIRECTOR/OFFICER
------------------ ----- ------------------------- ----------------
James C. O'Shea 52 Chairman, Chief Executive
Officer and President 1995
John Ruedy, M.D. 65 Director(a)(b) 1987
William Gouveia 55 Director(a)(c) 1994
Grace Keeney Fey 51 Director(b)(d) 1995
Eric T. Herfindal 56 Director(b)(c) 1996
Richard J. Plestina 51 Director(a)(d) 1997
David H. de Weese 55 Director 1997
Peggy J. Miller 50 Vice President, Chief
Financial Officer and
Secretary/Treasurer 1993
Richard R. Stout, M.D. 44 Vice President of Clinical
Affairs of Bioject Inc. 1994
J. Michael Redmond 37 Vice President, Sales and
Marketing of Bioject Inc. 1996
_____________
(a) Member of Nominating Committee
(b) Member of Compensation Committee
(c) Member of Audit Committee
(d) Member of Stock Option Committee
BIOGRAPHICAL INFORMATION.
JAMES C. O'SHEA has served as Chairman and Chief Executive Officer of
the Company since March 1995. Prior to joining Bioject, he was President and
Chief Operating Officer of Biopure Corporation, a developer of red blood cell
substitutes. Prior to 1989, Mr. O'Shea was Executive Vice President of
Marketing and Scientific Affairs at Delmed Inc., a manufacturer of
peritoneal dialysis solutions and parenteral products. Mr. O'Shea holds a
bachelors degree from Rutgers University. He is a member of the Board of
Directors of publicly-owned Photographic Sciences Corporation, serving as
Chairman of the Compensation Committee and previously serving as Chairman of
the Executive Committee.
JOHN RUEDY, M.D. has served as a director of the Company since 1987.
Since July 1992, he has served as Dean of the Faculty of Medicine at
Dalhousie University in Halifax, Nova Scotia. From 1978 through June 1992, Dr.
Ruedy served as Professor of Medicine at the University of British Columbia
and Head of the Department of Medicine at St. Paul's Hospital, Vancouver,
British Columbia. Since 1966, he has held an appointment to the Department
of Medicine and Pharmacology at McGill University and was Chairman of the
Department of Pharmacology and Therapeutics from 1975 through 1978. Dr. Ruedy
is also serving as a director for the Canadian AIDS Clinical Trials Network.
WILLIAM A. GOUVEIA was elected a director of the Company in January
1994. Mr. Gouveia serves in two capacities at Boston's New England Medical
Center: Director of Pharmacy (1972 to present) and Special Assistant for
Pharmaceutical Research and Development (1989 to present). He has the
following faculty appointments: Associate Professor of Medicine at Tufts
University School of Medicine (1995), Adjunct Clinical Professor of
Pharmacy at Massachusetts College of Pharmacy and Allied Health Professions,
and Adjunct Professor at Northeastern University Bouve College of Pharmacy
and Health Sciences. He holds an M.S. in Hospital Pharmacy from Northeastern
University (1966). He has published over 75 articles in leading healthcare
journals, as well as numerous book chapters, and has delivered
presentations in the U.S. and international health care organizations and
colleges. In 1984, he founded the Massachusetts-based Chartwell Home
Therapies. He is a Fellow of the American Society of Health-System Pharmacists
(ASHP) and has served as chair and member of various committees of the ASHP.
GRACE K. FEY, CFA, was elected a director of the Company in October
1995. Ms. Fey is Executive Vice President and Director of Frontier
Capital Management Company, a Boston-based investment management firm,
since 1988. From 1986 to 1988, she was a Senior Vice President of Investment
Management Associates, an investment management firm. From 1980 to 1986,
Ms. Fey was Vice President of Winchester Capital Management, also an investment
management firm.
ERIC T. HERFINDAL has served as a director of the Company since September
1996. He was Senior Vice President of Axion Healthcare, Inc., a disease
management company, from 1993 to 1996 and continues as a director of that
company, and has also served as Senior Vice President of OnCare Inc., an
oncology physician practice management company and subsidiary of Axion, since
1993. Prior to joining Axion, he served for over 20 years as a Professor of
Clinical Pharmacy, School of Pharmacy, at the University of California Medical
Center in San Francisco, where he is currently a Professor Emeritus. He holds
a Doctorate in Pharmacy from the University of California, San Francisco, and
a Masters in Public Health from the University of California, Berkeley. He is
the author of twenty-five articles and the editor or co-editor of ten books in
the field of pharmacy, including the TEXTBOOK OF THERAPEUTICS: DRUG AND
DISEASE MANAGEMENT, currently in its sixth edition. Dr. Herfindal has been
active in various professional organizations, serves on a number of editorial
and advisory boards, and is a frequent lecturer at national and international
healthcare meetings.
RICHARD J. PLESTINA was elected a director of the Company in April 1997.
Mr. Plestina is President of Quelah Corporation, NW, a family owned
investment firm, since 1986. In 1988, he was a consultant for Cologon, Inc.
DBA Alpine Glass Company, a large commercial and residential glass company.
From 1979 to 1986, he was an Executive Vice President of Orion Capital
Corporation, a multiline insurance company and President of EBI Companies,
which was later acquired by Orion Corporation in 1979. From 1974 to 1979
he served as the Vice President and Marketing Manager of EBIC. Mr. Plestina
has served previous directorships for Orion Capital Corporation, EBI
Companies, Associated Oregon Industries and Northwest Employer's Council.
DAVID H. DE WEESE was elected a director of the Company in June 1997. He
has served as Chairman of the Board of Directors, President and Chief
Executive Officer of the SIGA Pharmaceuticals, Inc., since November 1996.
Prior to joining the SIGA, Mr. de Weese served as a director and a consultant
to Biovector Therapeutics, S.A., a developer of drug delivery technology based
in France, and as an advisor to Paul Capital Partners, L.P., a private equity
investment manager with whom he maintains a consulting relationship. From
1993 to 1995, Mr. de Weese was President, Chief Executive Officer and a
Director of M6 Pharmaceuticals, Inc., a biopharmaceutical company. From 1986
to 1992, Mr. de Weese was the President, Chief Executive Officer, a Director
and a founder of Cygnus Therapeutic Systems (now Cygnus, Inc.), a developer and
manufacturer of transdermal drug delivery systems. Prior to that, Mr. de Weese
co-founded Medical Innovations Corporation, a medical device business currently
a division of Ballard Medical Products, Inc., and was Chairman of the Board,
President and Chief Executive Officer of Machine Intelligence Corporation,
a developer of computer software and hardware. Mr. de Weese received his
M.B.A. from the Harvard University Graduate School of Business.
PEGGY J. MILLER joined Bioject as Chief Financial Officer, Vice
President and Secretary/Treasurer, in February 1993. From April 1991 to
January 1993, Ms. Miller was Vice President for Finance at Oregon Health
Sciences University, an academic health sciences center. From September 1987
to April 1991, she was Senior Manager at Arthur Andersen & Co., independent
public accountants. From July 1985 to September 1987, she served as Vice
President Finance of ALPKEM Corporation, a manufacturer and distributor of
automated blood analyzers and supplies to hospitals and clinics. Prior to
June 1985, she served as an Audit Manager at Price Waterhouse, independent
public accountants. Ms. Miller is a Certified Public Accountant and serves on
the Board of Directors of CHAP, the Community Health Accreditation Program, an
affiliate of the National League for Nursing.
RICHARD R. STOUT, M.D. joined the Company in April 1994 as Director of
Clinical and Regulatory Affairs. He was promoted to Vice President of
Clinical Affairs in December 1994. From 1992-1993 he was the Director of
Clinical and Regulatory Affairs at EndoVascular Instruments, Inc., a developer
of surgical devices and methods for endarterectomy and intraluminal graft
placement. Dr. Stout acted as the Manager of Tachycardia Clinical Studies at
Telectronics Pacing Systems from 1990-1992, an international medical device
company involved in manufacturing and distributing cardiac pacemakers and
implantable defibrillators. From 1987 to 1989, Dr. Stout was Director of
Medical Programs at Biotronic Inc., also a manufacturer and distributor of
implantable cardiac pacemakers.
J. MICHAEL REDMOND was appointed Vice President of Sales and Marketing
effective February 8, 1996. Mr. Redmond has twelve years of experience in
medical marketing and product sales. Prior to joining the Company he was
Director of Business Development and Director of Sales and Marketing for
Kollsman Inc. Kollsman is a private label developer and manufacturer of
medical instrumentation. He also held positions with Abbott Laboratories
in the diagnostics division and in product management.
SEC FILINGS. Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and 10 percent shareholders to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and 10 percent
shareholders are required by Commission regulations to furnish the Company
with all Section 16(a) reports they file.
Based solely on the Company's review of the copies of such reports the
Company received and written representations from the Company's officers
and directors, the Company believes that all required reports were timely filed
in fiscal 1997, except for certain reports not filed by Mr. Cecil Spearman, a
director during fiscal 1997. Mr. Spearman filed 5 late reports with respect
to 5 purchase transactions.
Item 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION. The following table sets forth the cash
compensation paid by the Company to its Chief Executive Officer and to the
other executive officers having salary and bonus compensation greater than
$100,000 (collectively the "named executive officers"), for services rendered
to the Company during the fiscal years ended March 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation Awards
___________________ ___________________
Fiscal Options Other
Name and Principal Position(1) Year Salary Bonus Other Shares(2) Other(3) Compensation
_________________________ _______ _______ ______ _____ ________ _______
_____________
<S> <C> <C> <C> <C> <C> <C> <C>
James C. O'Shea 1997 $195,000 - $5,225(5) 25,000(6) $3,017 $ -
Chairman, Chief Executive 1996 192,737(4) - 4,117(5) 500,000(7) 146,996(8)
Officer and President 1995 - - - - -
Peggy J. Miller 1997 105,000 - - 12,500(9) 1,983 -
Vice President, Chief 1996 105,000 - 127,500(10) -
Financial Officer and 1995 99,835 3,325(11) - 75,000(12) -
Secretary / Treasurer
J. Michael Redmond 1997 100,000 6,000(14) 100,000(15) 1,616 -
Vice President of 1996 14,231(13) 1,000(14) - - -
Sales and Marketing 1995 - - - - -
</TABLE>
________________________
(1) No other executive officers had salary and bonus compensation
greater than $100,000 in fiscal 1997.
(2) The Company has in effect one major long-term compensation plan, the
1992 Stock Incentive Plan, through which all employees, officers and
non-employee consultants of the Company may be awarded incentive and
non-statutory stock options, stock bonuses, stock appreciation rights and
restricted stock under terms and performance criteria as determined by a
committee of the Board of Directors. Non-employee directors are also
awarded options to purchase a fixed number of shares on an annual basis. The
1992 Stock Incentive Plan was approved by the Company's shareholders on
November 20, 1992. Amounts listed reflect the number of options granted in the
respective fiscal years, the exercise prices for which were greater than or
equal to the fair market value of the Company's common stock on the date of
grant.
(3) The Company has a 401(k) Retirement Benefit Plan for its
employees including its executive officers which provides for voluntary
employer matches of employee contributions up to 6% of salary and for
discretionary profit sharing contributions to all employees. Such employer
contributions may be made in cash or common stock. In fiscal 1997, the
Company made all employer matching contributions in shares of the Company's
common stock based on fair market value in the period of match.
(4) Mr. O'Shea was appointed Chairman and Chief Executive Officer on
March 28, 1995 and commenced his salaried employment with the Company on April
10, 1995.
(5) Represents supplemental life and disability insurance premiums paid
pursuant to an employment agreement with Mr. O'Shea. No other executive
officers are entitled to this benefit.
(6) In fiscal 1997, Mr. O'Shea was granted 25,000 options vesting
immediately and exercisable on November 3, 1996.
(7) In connection with his employment, Mr. O'Shea was granted options to
purchase 500,000 shares of common stock of which 150,000 option shares
vested immediately, 150,000 option shares vested one-half on April 10,
1996 and one-half on April 10, 1997, and 200,000 option shares vesting one-half
on April 10, 1997 and one-half on April 10, 1998.
(8) In connection with the commencement of Mr. O'Shea's employment with
the Company, he was reimbursed his moving expenses including the costs of
selling his former residence, transportation and storage of household
goods, certain other incidental moving expenses and a gross-up for federal
and state income taxes incurred on these reimbursements.
(9) In fiscal 1997, Ms. Miller was granted 12,500 options vesting
immediately and becoming exercisable November 3, 1996.
(10) On January 26, 1996, Ms. Miller was granted 127,500 options with
101,250 vesting immediately and become exercisable on January 29, 1997, 12,500
vesting on February 1, 1996 and becoming exercisable on January 29, 1997,
1,250 vesting on July 31, 1996 and becoming exercisable on January 29, 1997
and 12,500 vesting and becoming exercisable on February 1, 1997. These options
replaced 75,000 options granted in fiscal 1995, 5,000 options granted in
fiscal 1994 and 90,000 options granted in fiscal 1993.
(11) The fiscal 1995 bonus for Ms. Miller consists of 1,000 shares of the
Company's common stock valued at fair market value at the date of grant with
the gross-up for withholding taxes.
(12) These options were granted July 8, 1994 of which 25,000 vested
immediately and the remaining 50,000 vesting at the rate of one-third on each
successive February 1. These options were replaced in fiscal 1996.
(13) Mr. Redmond commenced employment with the Company on February 8, 1996.
(14) Mr. Redmond receives an automobile allowance of $500 per month.
(15) In connection with his employment, Mr. Redmond was granted 100,000
options with one-third vesting on each anniversary of his employment with
the Company.
GRANT OF STOCK OPTIONS. Shown below is information on grants of stock options
pursuant to the Company's 1992 Stock Incentive Plan during the fiscal year
ended March 31, 1997 to the named executive officers. No stock appreciation
rights were granted during fiscal 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
_________________________________________________ Potential Realizable
Percentage of Values at Assumed
Total Options Annual Rates of Stock
Granted to Exercise or Price Appreciation
Options Employees Base Price Expiration for Option Term (4)
Name Granted in Fiscal 1997 (per share) Date 5% 10%
_______________ _______ ______________ ___________ __________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
James C. O'Shea 25,000(1) 4 1.31 03/31/03 12,277 29,500
Peggy J. Miller 12,500(2) 2 1.31 03/31/03 6,125 14,750
J. Michael Redmond 100,000(3) 14 1.30 02/07/03 50,000 119,000
</TABLE>
_____________________
(1) These options vested immediately upon grant and became exercisable
November 3, 1996. Fair market value of the Company's common stock on the
date of grant was $1.28 per share. Subsequent to year end, these
options were repriced to $0.75 per share subject to a 25% forfeiture and
delay in exercisability to April 3, 1998.
(2) These options vested immediately upon grant and became exercisable
November 3, 1996. Fair market value of the Company's common stock on the
date of grant was $1.28 per share. Subsequent to year end, these
options were repriced to $0.75 per share subject to a 25% forfeiture and
delay in exercisability to April 3, 1998.
(3) Of this total, 33,333 options vested immediately and became
exercisable on February 7, 1997, 33,333 become vested and exercisable on
February 7, 1998, and the remaining balance of 33,334 become vested and
exercisable on February 7, 1999. Subsequent to year end, these
options were repriced to $0.75 per share subject to a 25% forfeiture and
delay in exercisability to April 3, 1998.
(4) Potential realizable value is based on the assumption that the
stock price of the common stock appreciates at the annual rate shown
(compounded annually) from the date of grant until the end of the applicable
option term. These numbers are calculated based on the requirements
promulgated by the Securities and Exchange Commission and do not reflect the
Company's estimate of future stock price performance. The actual value, if
any, which may be realized by any officer will vary based on exercise date and
the market price of the related common stock when sold.
OPTION EXERCISES AND FISCAL YEAR END VALUES. Shown below is information
with respect to exercised options and unexercised options to purchase the
company's common stock granted in fiscal 1997 and prior years to the named
executive officers and held by them at March 31, 1997. None of the named
executive officers exercised any stock options during fiscal 1997. No stock
appreciation rights were outstanding or exercised during fiscal 1997.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of Unexercised Value of Unexercised
Options held at In-the-Money Options
March 31, 1997 March 31, 1997(1)
____________________________ __________________________
Name Exercisable Unexercisable Exercisable Unexercisable
_____________ ___________ _____________ ____________ _____________
<S> <C> <C> <C> <C>
James C. O'Shea 425,000(2) 100,000(2) $ - $ -
Peggy J. Miller 140,000(2) - - -
J. Michael Redmond 33,333(2) 66,667(2) - -
</TABLE>
_______________
(1) Based on the difference between the exercise price and the average
of the bid and ask price on NASDAQ of the Company's common stock on that date
($0.79). The actual value, if any, which may be realized by any officer will
vary based on exercise date and the market price of the related common stock
when sold.
(2) Subsequent to year end, the Stock Option Committee approved a proposal
whereby the named executive officers could reprice their options to $0.75 per
share subject to a forfeiture of 25% of the pre-repricing number of options
outstanding and subject further to a delay in exercisability until April 3,
1998. Based on this repricing, Mr. O'Shea would hold 393,750 unexercisable
options having a value of $15,750 at March 31, 1997; Ms. Miller would hold
105,000 unexercisable options having a value of $4,200 at March 31, 1997;
and Mr. Redmond would hold 75,000 unexercisable options having a value of
$3,000 at March 31, 1997.
DIRECTOR COMPENSATION.
All directors hold office for one year or until their successors
have been elected and qualified. There are no family relationships between
any of the directors or executive officers of the Company.
The Company pays its directors no annual cash or per meeting
compensation for services. Under the terms of the 1992 Stock Incentive
Plan, each non-employee director is automatically awarded an option to
purchase 17,500 shares of the Company's common stock immediately following
the close of each annual shareholders' meeting, at an exercise price equal to
the fair market value on date of the grant. Such options are vested and
exercisable with respect to one-half of the shares at six months from the date
of grant with the remaining shares vested and exercisable six months
thereafter. The options expire eight years after grant unless previously
exercised or terminated due to termination of service.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
Executive compensation is administered by two committees of the Board: the
Compensation Committee and the Stock Option Committee. Jim O'Shea, the
Company's Chairman, President, Chief Executive Officer and a Director,
participated in deliberations concerning executive officer compensation, but
abstained from deliberations concerning his own compensation.
EMPLOYMENT CONTRACTS. The Company entered into an employment agreement
with Mr. O'Shea to serve as Chairman and Chief Executive Officer. His salary,
currently $195,000 per annum, is subject to annual adjustment by the Board
of Directors. His agreement continues until terminated. In addition to his
base salary, Mr. O'Shea was granted a total of 500,000 incentive stock options
at prices ranging from $2.69 to $4.50 per share which vest variously over a
three year period. He will receive 100,000 shares of common stock when the
Company first achieves two consecutive quarters of positive earnings per share.
He received relocation expense reimbursements grossed-up for withholding taxes
and will receive annual payment of certain disability and life insurance
policy premiums. In the event he is terminated, he will receive his base
salary for up to two years. If he becomes disabled, he will continue at 75%
of his then current salary for not less than six months and at 50% of such
salary for the successive six months. In the event of his death, his salary
will continue for 60 days following the end of the month of his death. Under
the agreement, he is permitted to participate in any net profit sharing,
deferred compensation or other programs. In addition, he is prohibited from
competing with the Company for three years following termination of the
agreement.
The Company has entered into an employment agreement with Ms. Miller to
serve as Vice President and Chief Financial Officer. In the event she is
terminated, she will receive her base salary for up to four months. Her
salary, currently $105,000 per annum, is subject to annual adjustment by
the Board of Directors. Her agreement continues until terminated. In the event
she is disabled, she will continue at 75% of her then current salary for not
less than six months and then at 50% of such salary through the end of the
current term. In the event of her death, her salary will continue for 60 days
following the end of the month of her death. Under the agreement, she is
permitted to participate in any net profit sharing, deferred compensation
or other programs. In addition, she is prohibited from competing with the
Company for three years following termination of the agreement.
The Company has entered into an employment agreement with Mr. Redmond
to serve as Vice President of Sales and Marketing. In the event he is
terminated, he will receive his base salary for up to four months. His salary,
currently $100,000 per annum, plus $500 per month car allowance, is subject to
annual adjustment by the Board of Directors. His agreement continues until
terminated. In the event he is disabled, he will continue at 75% of his
then current salary for not less than six months and then at 50% of such salary
through the end of the current term. In the event of his death, his salary
will continue for 60 days following the end of the month of his death.
Under the agreement, he is permitted to participate in any net profit sharing,
deferred compensation or other programs. In addition, he is prohibited from
competing with the Company for three years following termination of the
agreement.
INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Generally, Sections 60.387 through 60.414 of the Oregon Business Corporation
Act (the "Oregon Act") authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers in circumstances
where the officer or director acted in good faith, in a manner that the
director or officer reasonably believed to be in (or at least not opposed to)
the best interests of the corporation and, if in a criminal proceeding, if the
director or officer had no reasonable cause to believe his conduct was
unlawful. Article IX of the Company's Bylaws provides for indemnification
to the greatest extent permitted by the Oregon Act.
Section 60.047 of the Oregon Act authorizes a corporation to limit a director's
liability to the corporation or its shareholderrs for monetary damages
resulting from conduct as a director, except in certain circumstances involving
breach of the director's duty of loyalty to the corporation or its
shareholders,intentional misconduct or knowing violation of the law, self
dealing or approval of illegal corporate loans or distributions, or any
transaction from which the director personally receives a benefit in money,
property or services to which the director is not legally entitled. Article
VII of the Company's Articles of Incorporation contains provisions
implementing, to the fullest extent allowed, limitations on a director's
liability to the Company or its shareholders.
ESCROWED SHARES. As a result of the Company's initial public offering on
the Vancouver Stock Exchange, 1.5 million shares of the Company were held in
escrow pursuant to an Escrow Agreement dated May 30, 1986, among the
Company, WAM Partnership and the escrow agent, Montreal Trust Company. WAM
Partnership was owned by Carl E. Wilcox, former chairman and chief executive
officer, and J. Thomas Morrow, former director, and managed by Mr. Wilcox.
Both Mr. Wilcox and Mr. Morrow are founders of the Company. The Escrow
Agreement provided that these escrowed shares would be released from escrow
based on two times the excess of cumulative cash flow for five consecutive
years (as defined in the agreement) over 25% of the per share price in the
Company's initial public offering, multiplied by the number of shares in
escrow, calculated on an annual basis. Alternatively, the shares could be
released by making application and obtaining consent of the Superintendent
of Brokers of British Columbia based on demonstrating company value. Under
the escrow agreement, any shares not released by July 14, 1996 would be
cancelled.
In connection with Mr. Wilcox's resignation as chairman and chief
executive officer of the Company, the Board of Directors granted Mr. Wilcox
a special power of attorney to exclusively perform all acts necessary to
obtain extension of the escrow and/or release of the WAM Partnership escrow
shares.
On June 3, 1996, the British Columbia Securities Commission informed
the Company that its Executive Director (formerly the Superintendent of
Brokers) consented to the release of all shares originally held in escrow.
This means that the 1.5 million shares of common stock which had been held
under this escrow arrangement are now held by the owners of the shares without
risk of cancellation and may be sold. Upon release, approximately 150,000
of these shares are considered to have been contributed back to the Company
and reissued to certain former employees in consideration for past services
rendered on behalf of the Company. The Company recorded the shares as
contributed capital with a corresponding non-cash charge to compensation
expense at the fair market value of the stock on the date of issuance.
Accordingly, a non-cash charge of $120,000 was recorded in the
financial statements in the first quarter of fiscal 1997.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth certain information concerning the
beneficial ownership of the Company's common stock at June 30, 1997, by:
(i) each person known by the Company to own beneficially more than 5 percent of
the outstanding capital stock of the Company; (ii) each of the directors;
and (iii) all directors and officers as a group. Each shareholder listed below
has sole voting and investment power with respect to the shares beneficially
owned, except as indicated:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1) OWNED
________________________________ ________________ ___________
<S> <C> <C>
Hambrecht & Quist (2)
50 Rowes Wharf, Boston, Massachusetts 02110 3,380,300 15.04%
Paramount Capital (3)
787 Seventh Avenue, New York, New York 10019 2,539,642 11.18
James C. O'Shea (4) 390,291 1.80
David H. de Weese (5) 10,000 *
Grace Keeney Fey (6) 27,250 *
William A. Gouveia (7) 61,250 *
Eric T. Herfindal (8) 8,750 *
Richard J. Plestina (5) 32,500 *
John Ruedy, MD (9) 144,450 *
Peggy J. Miller (10) 138,653 *
J. Michael Redmond (11) 50,000 *
All Directors and Executive
Officers as a Group (10 persons) (12) 933,891 4.23
</TABLE>
_________________________________________
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes shares over which the
indicated beneficial owner exercises voting and/or investment power. Shares
of common stock subject to options currently exercisable or exercisable within
60 days are deemed outstanding for computing the percentage ownership of the
person holding the options but not deemed outstanding for computing the
percentage of ownership of any other person. Except as indicated, and
subject to community property laws where applicable, the persons names in the
table above have sole voting and investment power with respect to all shares of
common stock as shown as beneficially owned by them.
(2) Includes warrants to purchase 1,190,00 shares of common stock which are
presently exercisable.
(3) Includes warrants to purchase 1,428,571 shares of common stock which are
presently exercisable.
(4) Includes 50,000 options which are vested and become exercisable on
October 3, 1997 and 318,750 options which are vested and become exercisable
on April 3, 1998. Does not include 75,000 options that become vested and
exercisable after 60 days.
(5) Includes only shares directly owned. Does not include 17,500 option
shares that become exercisable after 60 days.
(6) Includes options to purchase 26,250 shares of common stock which are
presently exercisable. Does not include 8,750 option shares which become
exercisable after 60 days.
(7) Includes options to purchase 61,250 shares of common stock which are
presently exercisable. Does not include 8,750 option shares which become
exercisable after 60 days.
(8) Includes options to purchase 8,750 shares of common stock which are
presently exercisable. Does not include 8,750 option shares which become
exercisable after 60 days.
(9) Includes options to purchase 78,750 shares of common stock which are
presently exercisable. Does not include 8,750 option shares which become
exercisable after 60 days.
(10) Includes options to purchase 25,000 shares of common stock which are
vested and become exercisable on October 3, 1997 and options to purchase
105,000 shares of common stock which are vested and become exercisable on
April 3, 1998.
(11) Includes options to purchase 25,000 shares of common stock which are
vested and become exercisable on October 3, 1997, and options to purchase
25,000 shares of common stock which are presently vested and become
exercisable on April 3, 1998. Does not include 50,000 option shares which
become exercisable after 60 days.
(12) Includes 175,000 options which are presently exercisable, 115,000 options
which are vested and become exercisable on October 3, 1997 and 501,250 options
which are vested and become exercisable on April 3, 1998. Does not include
204,375 options which become vested and exercisable after 60 days.
All of the outstanding capital stock of Bioject Inc. is owned by the Company.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 12, 1995, the Board of Directors announced the resignation
of the Company's Chairman and Chief Executive Officer, Carl E. Wilcox. In
consideration for Mr. Wilcox's long service to the Company, the Board
granted Mr. Wilcox 100,000 shares of common stock valued at $241,000 and cash
compensation totalling $247,000. The Board also vested 200,000 previously
granted option shares at $4.00 per share and extended the expiration date
to January 14, 1998. The Board granted Mr. Wilcox a special power of attorney
to exclusively perform all acts necessary to obtain extension and/or release
of the WAM Partnership escrow shares. In addition, the Board agreed to pay up
to $10,000 of costs associated with such extension and/or release. On June 3,
1996, the British Columbia Securities Commission informed the Company that
release of the escrow shares had been granted. The Board also agreed to pay
Mr. Wilcox $20,000 per year for two years under a covenant not-to-compete. Mr.
Wilcox continued to serve as a Director of the Company until October 25, 1995.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Bioject Medical Technologies Inc. has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized:
Bioject Medical Technologies, Inc.
(Registrant)
By: /s/ James C. O'Shea
-------------------
James C. O'Shea
Chairman of the Board, President
and Chief Executive Officer
