<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Summit Technology Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MA 02154
Dear Shareholder:
It is a pleasure to invite you to your Company's 1998 Annual Meeting on
Thursday, May 28, beginning at 9:00 a.m. local time, at The Westin Hotel, 70
Third Avenue, Waltham, Massachusetts. This will be Summit Technology's eleventh
Annual Meeting of Shareholders, and it comes at a time when the Company is faced
with both significant opportunities and significant challenges. I hope that
those who find the time and place convenient will attend the meeting.
Whether you own a few or many shares of stock and whether or not you plan
to attend in person, it is important that your shares be voted on matters that
come before the meeting. I urge you to specify your choices by marking the
enclosed proxy card and returning it promptly. If you sign and return your proxy
card without specifying your choices, it will be understood that you wish to
have your shares voted in accordance with the directors' recommendations.
Thank you for your interest.
Sincerely,
/s/ Robert J. Palmisano
ROBERT J. PALMISANO
Chief Executive Officer
<PAGE> 3
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MA 02154
------------------------
NOTICE OF SPECIAL MEETING IN LIEU OF
1998 ANNUAL MEETING OF STOCKHOLDERS
------------------------
A Special Meeting in Lieu of 1998 Annual Meeting of Stockholders
("Meeting") of Summit Technology, Inc. ("Company") will be held at The Westin
Hotel, 70 Third Avenue, Waltham, Massachusetts, on Thursday, May 28, 1998 at
9:00 A.M. to consider and act upon the following matters:
1. To elect two directors to serve for three-year terms; and
2. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments of the Meeting.
Stockholders of record at the close of business on April 1, 1998 are
entitled to receive notice of and to vote at the Meeting.
All stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
JAMES LIGHTMAN SIGNATURE
JAMES A. LIGHTMAN, Clerk
April 15, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE THAT YOUR SHARES ARE REPRESENTED AND VOTED AT THE MEETING. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE> 4
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MA 02154
------------------------
PROXY STATEMENT FOR SPECIAL MEETING IN LIEU OF
1998 ANNUAL MEETING OF STOCKHOLDERS
MAY 28, 1998
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Summit Technology, Inc. ("Company") for use
at the Special Meeting in Lieu of 1998 Annual Meeting of Stockholders
("Meeting") to be held on May 28, 1998 and at any adjournments thereof. Each
signed and returned proxy will be voted in accordance with the instructions, if
any, of the stockholder(s) executing such proxy. If a stockholder attends the
Meeting and votes in person, his or her proxy will not be counted. A signed
proxy may be revoked at any time before it is exercised in person or by giving
written notice of revocation to the Clerk of the Company at the above address.
The Board of Directors (hereinafter sometimes referred to as the "Board")
has fixed April 1, 1998 as the record date for determining the stockholders
entitled to vote at the Meeting. On that date there were 31,294,627 shares of
common stock, $.01 par value ("Common Stock"), of the Company issued, of which
31,044,697 were outstanding and entitled to vote. Each share of Common Stock is
entitled to one vote.
This Proxy Statement and the accompanying proxy card and Annual Report are
being mailed to stockholders on or about April 15, 1998.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The Company's Articles of Organization and By-Laws fix the number of
directors at seven and provide for the election of directors to staggered,
three-year terms. Two directors will be elected at this Meeting for terms ending
at the annual meeting of stockholders for the year 2001 (and until their
successors are elected and qualified). The Board has nominated Jeffrey A.
Bernfeld and Richard M. Traskos for re-election as directors.
Unless otherwise instructed, the persons named in the proxy will vote to
elect such nominees as directors. Although the Board does not contemplate that
the nominees will be unavailable to serve as directors, if for some reason the
nominees are unable to serve, the enclosed proxy will be voted for such
substituted nominee(s), if any, as may be designated by the Board.
The following information summarizes the recent business experience and
qualifications of the nominees.
Mr. Bernfeld was first elected to the Board in October, 1988. Mr. Bernfeld
is Vice President and General Counsel of American Science and Engineering, Inc.,
a publicly held manufacturer of x-ray based detection equipment. Mr. Bernfeld
was Vice President and General Counsel of Spire Corporation, a publicly held
company specializing in biomaterials, optoelectronics and energy technologies,
from June, 1992 to February, 1996. From 1991 through June, 1992, Mr. Bernfeld
was a principal of the consulting firm Global Solutions, Inc., and from 1988 to
1990, Mr. Bernfeld was Vice President and General Counsel of the Mediplex Group,
Inc. Prior to joining Mediplex, Mr. Bernfeld was a member of the law firm of
Goldstein & Manello, P.C.
1
<PAGE> 5
Mr. Traskos was first elected to the Board in March, 1987. Mr. Traskos is a
vice president of Shoreline Insurance Co., Inc., a business insurance brokerage
firm located in Clinton, Connecticut. From March, 1993 to September, 1997, Mr.
Traskos was a vice president of Arthur A. Watson, Inc., a business insurance
brokerage firm located in Wethersfield, Connecticut. Before joining Arthur A.
Watson, Mr. Traskos served as a director and senior vice president of Allen,
Russell & Allen, Inc., a business insurance brokerage and consulting firm with
principal offices located in Hartford, Connecticut. Mr. Traskos is a licensed
insurance broker and certified insurance consultant.
The re-election of Messrs. Bernfeld and Traskos requires the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
entitled to notice of and to vote at the Meeting. See "Voting Procedures" for a
discussion of the method by which votes, including abstentions and broker
non-votes, will be tabulated.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RE-ELECTION OF MESSRS.
BERNFELD AND TRASKOS AS DIRECTORS.
OWNERSHIP OF SECURITIES
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock on February 28, 1998, (i) by each person
who is known by the Company to own beneficially more than five percent (5%) of
the outstanding shares of the Company's Common Stock, (ii) by each of the
Company's directors, (iii) by each of the Named Executive Officers listed below
in the Summary Compensation Table and (iv) by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER OWNED(1) OWNED(2)
---------------- ------------ ------------
<S> <C> <C>
Jeffrey A. Bernfeld......................................... 23,434(3) *
Richard F. Miller........................................... 13,834(4) *
John A. Norris.............................................. 27,542(5) *
Richard M. Traskos.......................................... 27,063(6) *
Robert J. Palmisano......................................... 101,000(7) *
Peter E. Litman............................................. 134,643(8) *
Alex C. Sacharoff........................................... 23,149(9) *
D. Verne Sharma............................................. 75,085(10) *
Menderes Akdag.............................................. 3,385(11) *
All Executive Officers and Directors as a Group (17
persons).................................................. 527,383 1.7%
Rajiv P. Bhatt.............................................. 152,050(12) *
</TABLE>
- ---------------
* Less than 1% of the outstanding Common Stock
(1) Except as otherwise noted, the Company believes that the persons named in
the table have sole voting and investment power with respect to the shares
of Common Stock set forth opposite such persons' name. Amounts shown
include shares pursuant to stock options which may be exercised within 60
days of February 28, 1998.
(2) Determined on the basis of 31,044,627 shares outstanding, except that
shares underlying options exercisable within 60 days of February 28, 1998
are deemed outstanding for calculating the percentage owned by holders
thereof.
(3) Includes options to purchase 21,834 shares of Company Stock.
2
<PAGE> 6
(4) Includes options to purchase 13,334 shares of Company Stock.
(5) Includes options to purchase 21,834 shares of Company Stock.
(6) Includes options to purchase 21,834 shares of Company Stock. Includes 1,050
shares owned by Mr. Traskos' wife as to which Mr. Traskos disclaims
beneficial ownership.
(7) Includes options to purchase 100,000 shares of Company Stock.
(8) Includes options to purchase 133,873 shares of Company Stock and 770 shares
held in the Company's 401(k) plan.
(9) Includes options to purchase 7,484 shares of Company Stock and 665 shares
held in the Company's 401(k) plan.
(10) Includes options to purchase 75,000 shares of Company Stock and 85 shares
held in the Company's 401(k) plan.
(11) Includes options to purchase 2,500 shares of Company Stock.
(12) Includes options to purchase 152,050 shares of Company Stock. Mr. Bhatt's
employment with the Company terminated effective August 18, 1997.
3
<PAGE> 7
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the executive
officers and directors of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robert J. Palmisano....... 53 Director and Chief Executive Officer
D. Verne Sharma........... 48 President and Chief Operating Officer
Robert J. Kelly........... 53 Executive Vice President, Chief Financial
Officer and Treasurer
Peter E. Litman........... 47 Executive Vice President, Corporate Business
Development
Eric P. Ankerud........... 41 Vice President, Quality, Regulatory and
Clinical Affairs
John P. Coffidis.......... 48 Vice President, Global Customer Support
P. Bernard Haffey......... 35 Vice President, Sales and Marketing
Peter J. Klopotek......... 45 Vice President, Science and Technology
James A. Lightman......... 40 Vice President and General Counsel
Bernard R. Patriacca...... 54 Vice President and Controller
James L. Richey........... 50 Vice President, Operations
Alex C. Sacharoff......... 41 Vice President, Research & Development
Menderes Akdag............ 37 President, Lens Express, Inc.
Jeffrey A. Bernfeld(2).... 40 Director
Richard F. Miller(1)...... 46 Director
John A. Norris............ 51 Director
Richard M. Traskos(1,2)... 50 Director
</TABLE>
- ---------------
(1) Audit Committee
(2) Compensation Committee
ROBERT J. PALMISANO, DIRECTOR AND CHIEF EXECUTIVE OFFICER
Mr. Palmisano, 53, joined the Company in April, 1997 as Chief Executive
Officer and a member of the Board of Directors. From 1984 to January, 1996, Mr.
Palmisano was employed at Bausch and Lomb, Inc., where he served from 1988 to
1996 as Senior Vice President and as President of the Eyewear Division. From
January, 1996 to April, 1997, Mr. Palmisano was a private consultant. Mr.
Palmisano holds a BA degree from Providence College.
D. VERNE SHARMA, PRESIDENT AND CHIEF OPERATING OFFICER
Mr. Sharma, 48, joined the Company in April, 1996 as President and served
as Interim Chief Executive Officer from September, 1996 to April, 1997. Mr.
Sharma previously served as Vice President of Marketing at United States
Surgical Corporation, and prior to that was General Manager of Business Units at
General Electric Medical Systems and Rohm and Hass Company. Mr. Sharma holds an
MBA from the Wharton School and an undergraduate degree in Chemical Engineering
from the University of the West Indies, Trinidad and Tobago.
4
<PAGE> 8
ROBERT J. KELLY, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
Mr. Kelly, 53, joined the Company in November, 1997 as Executive Vice
President, Chief Financial Officer and Treasurer. From 1972 to 1997 Mr. Kelly
was employed by Bull HN Information Systems Inc., where he served from 1992 to
February, 1997 as Executive Vice President and Chief Financial Officer. Mr.
Kelly holds an MBA from Harvard Business School and a BS from the University of
Massachusetts.
ERIC P. ANKERUD, VICE PRESIDENT, QUALITY, REGULATORY, AND CLINICAL AFFAIRS
Mr. Ankerud, 41, joined the Company in July, 1997 as Vice President of
Quality, Regulatory and Clinical Affairs. From 1994 to 1997 Mr. Ankerud served
as Director of Corporate Regulatory Affairs at Bausch and Lomb, Inc. From 1991
to 1994 Mr. Ankerud was Vice President of Regulatory Affairs for the Surgical
Products Group at C.R. Bard, Inc. Mr. Ankerud holds a JD from the Faculty of Law
and Jurisprudence, SUNY at Buffalo and a BA in economics from St. Lawrence
University.
JOHN P. COFFIDIS, VICE PRESIDENT, GLOBAL CUSTOMER SUPPORT
Mr. Coffidis, 48, joined the Company in November, 1987 and was promoted to
Vice President, Global Customer Support in August, 1997. Mr. Coffidis previously
served with Johnson and Johnson in the Medical Instrumentation Division from
1973 to 1987. During his employment with J & J, Mr. Coffidis served ten years in
Europe as International Customer Support Manager. Mr. Coffidis holds a Masters
Degree in Management from Cambridge College and a BA in biology from the
University of Massachusetts.
P. BERNARD HAFFEY, VICE PRESIDENT, SALES AND MARKETING
Mr. Haffey, 35, joined the Company in September, 1997 as Vice President,
Sales and Marketing. Prior to joining the Company, Mr. Haffey was employed since
1990 at Mentor Opthalmics, Inc., most recently serving as the Vice President of
Marketing and Sales. Mr. Haffey holds an MBA from Cornell University and a BA
from Colgate University.
PETER J. KLOPOTEK, VICE PRESIDENT, SCIENCE AND TECHNOLOGY
Dr. Klopotek, 45, joined the Company in January, 1987 as Manager of Laser
Development. Dr. Klopotek was promoted to the position of Chief Scientist in
1990 and to Vice President, Science and Technology in October, 1991. Prior to
joining the Company, Dr. Klopotek was Project Manager at Lambda Physik GmbH in
Gottingen, Germany from 1984 to 1986. Dr. Klopotek holds a Ph.D. in physics from
the Max Planck Institute and an MS in electrical engineering.
JAMES A. LIGHTMAN, VICE PRESIDENT AND GENERAL COUNSEL
Mr. Lightman, 40, joined the Company in February, 1996 as Assistant General
Counsel and was promoted to Vice President and General Counsel in January, 1998.
Prior to joining the Company, Mr. Lightman was a member of Goldstein and
Manello, P.C., a Boston law firm which he joined in 1984. Mr. Lightman holds a
JD from Boston University Law School and a BS from Boston University School of
Management.
PETER E. LITMAN, EXECUTIVE VICE PRESIDENT, CORPORATE BUSINESS DEVELOPMENT
Mr. Litman, 47, joined the Company in September, 1990 as Vice President and
General Counsel and was promoted to Executive Vice President of Corporate
Business Development in January, 1998. Prior to joining
5
<PAGE> 9
the Company, Mr. Litman was a member of Goldstein and Manello, P.C., a Boston
law firm. Mr. Litman holds a JD from Columbia University School of Law and a BA
from the University of Pennsylvania.
BERNARD R. PATRIACCA, VICE PRESIDENT AND CONTROLLER
Mr. Patriacca, 54, joined the Company in November, 1997. From 1973 to 1991,
Mr. Patriacca was employed in various capacities at Dunkin Donuts, Inc.,
including Chief Financial Officer and a Director. From 1991 to 1994, Mr.
Patriacca held senior financial management positions at several privately held
consumer services companies. From 1994 until joining the Company, Mr. Patriacca
served as Vice President of Errands Etc., Inc., a privately held homeowners'
personal service company. Mr. Patriacca also serves as a Director of
Smith-Midland Corporation, a publicly held developer and manufacturer of precast
concrete products. Mr. Patriacca received a BS and an MBA from Northeastern
University.
JAMES L. RICHEY, VICE PRESIDENT, OPERATIONS
Mr. Richey, 50, joined the Company in September, 1997 as Vice President of
Operations. Prior to joining the Company, Mr. Richey served since 1994 as Vice
President and General Manager of U.S. Operations for Datapoint Corporation, a
manufacturer of computer servers, operating systems, LANs and video
communication systems. Mr. Richey holds an MBA from Clark University, an MS in
Electrical Engineering from Northeastern University, and a BS degree in
Electrical Engineering from Worcester Polytechnic Institute.
ALEX C. SACHAROFF, VICE PRESIDENT, RESEARCH AND DEVELOPMENT
Dr. Sacharoff, 41, joined the Company in April, 1986 as Senior Staff
Scientist and has held a variety of positions in the Company's Research and
Development Group before being promoted to Vice President, Research and
Development in July, 1996. Prior to joining the Company, Dr. Sacharoff was a
Senior Staff Scientist at Raytheon Corporation. Dr. Sacharoff holds a Ph.D. in
physics from Harvard University and a BS degree in Physics from Stevens
Institute of Technology.
MENDERES AKDAG, PRESIDENT, LENS EXPRESS, INC.
Mr. Akdag joined Lens Express in May, 1991 as Chief Financial Officer. Mr.
Akdag was promoted to the position of Chief Executive Officer in 1992. He has
been in his current position as President of Lens Express since May, 1995. Prior
to joining the Company, Mr. Akdag was the Finance Manager for Beksa Steel Cord
Manufacturing and Trading, Inc. Mr. Akdag holds a Bachelor of Science degree in
Business Administration with a major in finance from the University of Florida.
Mr. Akdag is not an officer of Summit Technology, Inc.
JEFFREY A. BERNFELD, DIRECTOR
Mr. Bernfeld was elected to the Board in October, 1988 and was re-elected
in 1995 for a three-year term expiring in 1998. Mr. Bernfeld is Vice President
and General Counsel of American Science and Engineering, a manufacturer of x-ray
based detection equipment. Mr. Bernfeld was Vice President and General Counsel
of Spire Corporation, a publicly held company specializing in biomaterials,
optoelectronics and energy technologies from June, 1992 to February, 1996. From
1991 through June, 1992, Mr. Bernfeld was a principal of the consulting firm
Global Solutions, Inc. and from 1988 to 1990, Mr. Bernfeld was Vice President
and General Counsel of the Mediplex Group, Inc. Prior to joining Mediplex, Mr.
Bernfeld was a member of the law firm of Goldstein & Manello, P.C.
6
<PAGE> 10
RICHARD F. MILLER, DIRECTOR
Mr. Miller was elected to the Board in June, 1988 and was re-elected in
1997 for a three-year term expiring in 2000. Since August, 1994, Mr. Miller has
served as an investment executive with First Albany Corporation, a financial
services firm. From 1991 through August, 1994, Mr. Miller was a private
investor, and prior to that was an investment banker employed by Tucker, Anthony
& R.L. Day, Inc., from 1979 to 1991, where he last held the position of First
Vice President.
JOHN A. NORRIS, DIRECTOR
Mr. Norris was elected to the Board in May, 1990 and was re-elected in
1996. Since February, 1994, Mr. Norris has served as President of John A.
Norris, Esquire, P.C., a health care law, public policy and management
consulting firm founded in February, 1994. Mr. Norris was President and Chief
Executive Officer of National Pharmaceutical Council, Inc., an educational
resource for research-based pharmaceutical companies, from April, 1995 to March,
1996. From June, 1988 through February, 1994, he was Executive Vice President of
Hill and Knowlton, Inc., a consulting and public relations firm, and served as
the worldwide director of its Health Sciences Consulting Group. Prior to joining
Hill and Knowlton in 1988, Mr. Norris served as Deputy Commissioner and Chief
Operating Officer of the FDA from 1985 to 1988, where his main responsibility
was overseeing the operations of the FDA. Mr. Norris has taught healthcare
policy at Harvard University since 1988. Mr. Norris currently serves as a
director of Cytologies, Inc., Horus Inc. and National Applied Sciences, Inc.
RICHARD M. TRASKOS, DIRECTOR
Mr. Traskos was first elected to the Board in March, 1987 and was
re-elected in 1995 for a three-year term expiring in 1998. Mr. Traskos is a vice
president of Shoreline Insurance Co., Inc., a business insurance brokerage firm
located in Clinton, Connecticut. From March, 1993 to September, 1997, Mr.
Traskos was a vice president of Arthur A. Watson, Inc., a business insurance
brokerage firm located in Wethersfield, Connecticut. Before joining Arthur A.
Watson, Mr. Traskos served as a director and senior vice president of Allen,
Russell & Allen, Inc., a business insurance brokerage and consulting firm. Mr.
Traskos is a licensed insurance broker and certified insurance consultant.
Director Liability. The Company's Articles of Organization provide that
directors are not liable to the Company or its shareholders for monetary damages
for breach of fiduciary duty except for: (a) any breach of the director's duty
of loyalty to the Company or its shareholders, (b) acts or omissions not in good
faith or that involve intentional misconduct or knowing violations of law, (c)
under the Massachusetts Business Corporation Law, provisions imposing joint and
several liability for improper distributions to shareholders or loans to
officers or directors, (d) transactions from which a director derived an
improper personal benefit, or (e) for any act or omission occurring prior to the
effective date of such provision.
Shareholder Derivative Action. On December 20, 1996, a shareholder of the
Company filed in the United States District Court for the District of
Massachusetts a derivative action, purportedly on behalf of the Company, against
the Company as nominal defendant, its directors and certain of its present or
former officers. The complaint alleges that the defendant directors and officers
caused the Company to make public statements in violation of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and of Sections 11 and 12 of the
Securities Act of 1933. It alleges that this conduct has rendered the Company
liable to the plaintiffs in, and has exposed the Company to the expense and
inconvenience of defending, other shareholder securities laws class action
lawsuits and has harmed the Company's reputation. The complaint further alleges
that the defendant directors and officers improperly traded in the Company's
Common Stock
7
<PAGE> 11
based upon material non-public information. The complaint seeks recovery from
the defendant directors and officers, in an unspecified amount, for the damages
allegedly caused by their alleged misconduct.
Indemnification of Directors and Officers. The Company's By-Laws require
the Company to indemnify all officers, directors, employees and agents of the
Company against all liabilities and expenses they may incur on account of all
actions threatened or brought against them by reason of their services to the
Company. No indemnification is provided for any person with respect to any
matter as to which such person has been adjudicated in any proceeding not to
have acted in good faith in the reasonable belief that his action was in the
best interests of the Company.
The Company maintains a director's and officer's liability insurance policy
in the aggregate amount of $5,000,000 on behalf of its directors and officers.
The insurance policy expires on October 31, 1998 unless renewed or earlier
terminated.
OTHER TRANSACTIONS AND RELATIONSHIPS
During the fiscal year ended December 31, 1997, the Company extended a
bridge loan to Robert Palmisano, the Company's Chief Executive Officer and a
member of the Board of Directors, in the amount of $500,000. The loan is
non-interest bearing and is payable on demand.
See "Compensation Committee Interlocks and Insider Participation" for
information regarding transactions between the Company and a firm with which Mr.
Traskos is affiliated.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16 of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with, except that Mr.
Miller's report on Form 5 for the year ended December 31, 1997 was filed late,
and Mr. Haffey's Form 3 was amended due to an inadvertent failure to disclose
shares held in a trust of which Mr. Haffey is a trustee.
8
<PAGE> 12
INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company held meetings and acted by unanimous
consent 29 times during 1997. Each director then serving attended more than 75%
of such Board meetings and meetings of all committees of the Board on which he
served.
The Company has a standing Audit Committee of the Board of Directors, which
provides the opportunity for direct contact between the Company's independent
public auditors and the Board. The Audit Committee met once during 1997 to
review the financial results for 1996, to review the audit plan for 1997, to
review the adequacy of financial statement disclosures, to discuss the Company's
internal control policies and procedures and to consider and recommend the
selection of the Company's independent auditor. The current Audit Committee
members are Messrs. Miller and Traskos.
The Company also has a standing Compensation Committee of the Board of
Directors, which provides recommendations to the Board regarding compensation
programs of the Company and administers the Company's 1997 Stock Option Plan and
the 1991 Employee Stock Purchase Plan, including making recommendations
regarding issuance of stock options and shares of Common Stock to employees. The
Compensation Committee held three meetings during 1997. The current Compensation
Committee members are Messrs. Bernfeld and Traskos.
The Company does not have a Nominating Committee.
9
<PAGE> 13
EXECUTIVE COMPENSATION
The following table shows for the fiscal years ended December 31, 1997,
1996 and 1995 compensation paid or accrued by the Company to (i) the Company's
Chief Executive Officer, (ii) the four other most highly compensated executive
officers of the Company who were serving as executive officers as of December
31, 1997 and (iii) an individual for whom disclosure in this table would have
been required but for the fact that he was not serving as an executive officer
as of December 31, 1997 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ------------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING ALL OTHER
PRINCIPAL FISCAL SALARY BONUS COMPENSATION OPTIONS/ COMPENSATION
POSITION YEAR ($) ($) ($) SAR'S(#) ($)
- ------------------------ ------ ------- ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Palmisano........ 1997 206,539 165,000 100,062(1) 300,000(2) --
Chief Executive
Officer 45,039(3)
11,562(4)
1996 -- -- -- -- --
1995 -- -- -- -- --
D. Verne Sharma......... 1997 250,000 74,375 62,633(1) -- 472(6)
President & Chief 65,978(3)
Operating Officer 1996 174,308 35,960 38,436(1) 100,000(9) --
10,000(9) --
1995 -- -- -- -- --
Peter Litman............ 1997 211,313 67,620 -- -- --
Executive Vice 1996 187,502 -- -- 100,000(5) 2,996(6)
President, Corporate 15,000(5)
Business Development 1995 157,737 19,814(7) -- -- 3,000(6)
Alex Sacharoff.......... 1997 133,115 -- -- 1,800(8) 1,090(6)
Vice President of 1996 103,923 -- -- 10,775(8) 1,932(6)
Research & Development 1995 94,442 2,494(7) -- 840(8) 1,472(6)
Menderes Akdag.......... 1997 204,552 119,322 -- -- --
President, 1996 156,940 -- -- 5,000(11) --
Lens Express, Inc. 1995 88,804 80,000 -- -- --
Rajiv Bhatt............. 1997 165,276 -- -- -- 1,500(6)
Former Executive Vice 75,778(10)
President, Treasurer & 1996 188,633 -- -- 100,000(10) 2,996(6)
Chief Financial
Officer 15,000(10)
1995 165,788 21,363(7) -- -- --
</TABLE>
- ---------------
(1) Moving and relocation expenses reimbursed by the Company.
(2) During the year ended December 31, 1997, Mr. Palmisano received options to
purchase 300,000 shares of Company Stock.
(3) Employment tax paid on behalf of the employee by the Company.
(4) Represents automobile allowance of $8,262 and imputed interest income of
$3,300 calculated on loan.
(5) During the year ended December 31, 1996, Mr. Litman received options to
purchase 100,000 shares of Company Stock and 15,000 shares of common stock
of Refractive Centers International, Inc. ("RCII") a former wholly owned
subsidiary of the Company.
10
<PAGE> 14
(6) Dollar equivalent value of the Company's contribution to its 401(k) plan.
Actual contribution made in shares of Company Stock.
(7) Bonus received in the form of stock options to purchase shares of Company
Stock and is deemed annual compensation and is, therefore, not included as
long-term compensation. The amounts are calculated based on the excess of
the fair market value of the Company Stock over the price on the date of
the grant.
(8) During the year ended December 31, 1997, Dr. Sacharoff received options to
purchase 1,800 shares of Company Stock. During the year ended December 31,
1996, Dr. Sacharoff received options to purchase 10,775 shares of Company
Stock. During the year ended December 31, 1995, Dr. Sacharoff received
options to purchase 840 shares of Company Stock.
(9) During the year ended December 31, 1996, Mr. Sharma received options to
purchase 100,000 shares of Company Stock and 10,000 shares of common stock
of RCII.
(10) Mr. Bhatt's employment with the Company terminated on August 18, 1997. Mr.
Bhatt received a total of $75,778 from August 19, 1997 through December 31,
1997 for consulting services provided to the Company pursuant to the terms
of his Severance Agreement. During the year ended December 31, 1996, Mr.
Bhatt received options to purchase 100,000 shares of Company Stock and
15,000 shares of common stock of RCII.
(11) During the year ended December 31, 1996, Mr. Akdag, who is the President of
the Company's Lens Express subsidiary, received options to purchase 5,000
shares of Company Stock. Mr. Akdag is not an officer of Summit Technology,
Inc.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SAR'S APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SAR'S EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ---- ------------- ------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Palmisano.................... 300,000(1) 47.64 5.63 5/1/2007 707,506 2,241,200
Sacharoff.................... 1,800(2) 0.29 7.38 9/30/2007 8,349 21,157
</TABLE>
- ---------------
(1) 50,000 shares vest on 4/15/98, 50,000 shares vest on 4/15/99, 50,000 shares
vest on 4/15/00, 50,000 shares vest when stock prices reaches $8.00 per
share (vested 10/6/1997), 50,000 shares vest when stock price reaches $13.00
per share and 50,000 shares vest when stock price reaches $20.00 per share.
(2) Option vests in three equal annual installments beginning 9/30/98.
11
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S AT OPTIONS/SAR'S AT
SHARES FY-END(#) FY-END($)
ACQUIRED ON VALUE -------------------- --------------------
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- -------------------- --------------------
<S> <C> <C> <C> <C>
Akdag........................... -- -- 2,500/2,500(1) --/--
Bhatt........................... 40,000(2) 31,200 152,050/--(1) --/--
Litman.......................... 30,000(2) 23,400 133,873/34,000(1) 4,020/--
Palmisano....................... -- -- 50,000/250,000(1) --/--
Sacharoff....................... -- -- 7,006/4,976(1) --/--
Sharma.......................... 10,000(2) 7,800 75,000/25,000(1) --/--
</TABLE>
- ---------------
(1) Options to purchase shares of Common Stock of the Company
(2) Exercise of RCII Options
Compensation Of Directors. The Company currently pays $10,000 per year to
its outside directors for their services as directors and $1,000 per year per
committee to each outside director for serving on Board committees. The Company
also pays each outside director $2,000 for each Board meeting attended and $500
for each committee meeting attended.
In addition, the Company's outside directors (the "Participants") are
eligible to participate in the 1992 Stock Option Plan For Outside Directors,
which constitutes a "formula plan" for purposes of Section 16b-3 promulgated
under the Securities Exchange Act of 1934. Pursuant to this Plan, each
Participant has been granted as of February 28, 1998, options to purchase 13,500
shares of Common Stock (at prices ranging from $5.50 to $25.31 per share).
Provided that a Participant remains a director of the Company, he will be
granted an additional option to acquire 3,000 shares of Common Stock on January
1, 2000 at 100% of market value.
The Company's outside directors were each granted options to purchase
25,000 shares of Company Stock on November 4, 1996 at an option price of $5.38
per share. Of these, 8,333 options vest on November 4, 1997, 8,333 options vest
on November 4, 1998 and the balance vest on November 4, 1999. On July 30, 1997,
the Company's outside directors were each also granted options to purchase
35,000 shares of Company Stock at an option price of $6.75 per share. Of these,
11,667 vest on July 30, 1998, 11,667 vest on July 30, 1999 and the balance vest
on July 30, 2000.
Employment Agreements. Robert J. Palmisano was elected as the Company's
Chief Executive Officer and a Director on April 15, 1997. Mr. Palmisano's
employment arrangement with the Company provides that he will receive a base
salary of $300,000 per year and will be eligible for discretionary bonuses,
based on criteria established from time to time. In addition, Mr. Palmisano has
been granted options to purchase 300,000 shares of the Company's Common Stock
pursuant to the Company's 1997 Stock Option Plan, at an option price of $5.63
per share (see above for vesting information). In the event Mr. Palmisano's
employment is terminated without cause, Mr. Palmisano will be entitled to
severance payments equal to one year's base compensation. In the event Mr.
Palmisano's employment terminates within twelve months of a change in control of
the Company, Mr. Palmisano's severance payments will be equal to two years' base
compensation. All of the Company's executive officers, including Mr. Palmisano,
are employees-at-will.
12
<PAGE> 16
Severance Agreement. On July 17, 1997, the Company entered into a
severance agreement with Rajiv P. Bhatt, its former Executive Vice President and
Chief Financial Officer. In exchange for consulting services to continue for one
year after Mr. Bhatt's separation from employment, and for certain other
accommodations, the Company agreed to pay Mr. Bhatt a total of $221,375 in equal
biweekly installments over one year, and to accelerate the vesting of Mr.
Bhatt's existing, unexercised stock options, to the extent not already vested.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board of Directors consists of Mr. Traskos and Mr.
Bernfeld. Shoreline Insurance Agency, Inc., a firm with which Mr. Traskos is
affiliated, currently serves as one of the Company's insurance brokers. Arthur
A. Watson & Company, Inc., a firm with which Mr. Traskos was affiliated through
September, 1997, also served as one of the Company's insurance brokers in 1997.
The aggregate premiums paid for insurance placed by Shoreline on behalf of the
Company in 1997 amounted to approximately $277,625, and the aggregate premiums
paid for insurance placed by Arthur A. Watson on behalf of the Company in 1997
amounted to approximately $149,470, which in each case is less than five percent
of 1996 consolidated gross revenues of the Company, Shoreline, and Arthur A.
Watson, respectively. The Company believes that all transactions with Shoreline
and Arthur A. Watson & Company, Inc. are on terms no less favorable than those
available from other companies.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1993, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Report of the
Compensation Committee and the Performance Graph shall not be incorporated by
reference into any such filings.
REPORT OF THE COMPENSATION COMMITTEE
The primary goals of the 1997 executive compensation program established
and administered by the Compensation Committee were to attract, retain and
recognize the achievements of superior executives and to compensate these
executives in a manner that both recognized their individual performance and
aligned their interests with the interests of the Company's stockholders.
General Policies. For 1997, the executive compensation program consisted
of three principal components: base salary, bonus and stock options. The level
and mix of each of these components was determined on a case by case basis
without reference to specific criteria or formulas.
Base Salary. In setting the base salary of each executive, including the
Chief Executive Officer, the Compensation Committee takes into account the
following factors: (i) the executive's individual performance and contribution
to the management team; (ii) the performance of the Company over the evaluation
period by reference to the Company's stock value and its progress towards its
goals of obtaining regulatory approvals for sale of its products in the United
States and achieving market acceptance of procedures performed with its
products; and (iii) base salaries of executives in comparable positions in
comparable companies. In setting base salary, the Committee takes into account
all components of an executive officer's compensation package, believing that
the Company's overall compensation packages place the Company's executive
officers in the middle of the range of comparable companies. The companies
considered comparable by the Compensation Committee are not necessarily those
represented in the peer group used by the Company in preparing its Performance
Graph, but rather are companies of a comparable size, stage of development and
industry located in the New England area, as well as its primary competitor in
the United States. In determining base salary, the Committee reviews the
foregoing factors as they relate to each executive individually and applies each
factor subjectively, without reference to specific criteria. The Committee does
not weigh any one factor more
13
<PAGE> 17
or less heavily than any other and considers the input of the Chief Executive
Officer and several senior executives in reaching its determinations.
Cash and Non-Cash Bonuses. Cash and non-cash bonuses are awarded to
individual executives principally as a mechanism to recognize and reward the
executive's role in achieving short-term performance objectives of the Company.
Bonuses were awarded in 1997 based on attainment of objective and subjective
performance targets. These targets included certain revenue and profit criteria.
Stock Options. The Compensation Committee views grants of stock options as
a major component of an executive's compensation, believing that the grant of
options aligns the interests of the executives with the interests of the
stockholders by providing a direct correlation between an increase in the value
of the Company's stock and executive compensation and that this method of
compensation allows the Company to conserve cash resources.
In determining the size of a stock option award for an individual executive
officer, the Committee considers the same factors used for determining base
salary and applies each factor subjectively, without reference to specific
criteria. The Committee does not weigh any one factor more or less heavily than
any other and considers the input of the Chief Executive Officer, several senior
executives and the Company's Human Resources staff in reaching its
determinations. The size of previous option grants is not an important factor in
determining current awards. Options are typically exercisable at the market
price on the date of the grant, except in the case of recruitment packages,
which sometimes include options at below market price. The Company has not yet
adopted a policy with respect to the million dollar cap on deduction of
executive compensation.
The Compensation Committee is composed of the two individuals whose names
appear below, both of whom are independent directors of the Company. The
Compensation Committee has the power and authority to administer all components
of the Company's compensation program for executive officers of the Company.
Compensation Committee
Jeffrey A. Bernfeld
Richard M. Traskos
April 15, 1998
14
<PAGE> 18
PERFORMANCE GRAPH
The following Performance Graph assumes an investment of $100 on December
31, 1992 and compares annual percentage changes thereafter in the market price
of the Company's Common Stock with a market index of U.S. NASDAQ traded
securities (NASDAQ Market Index -- U.S.) and an industry index (Dow Jones
Medical and Biological Technology Index). The Company paid no dividends during
the periods shown; the performance of the indices is shown on an actual return
(dividend reinvestment) basis. The graph lines merely connect year-end dates and
do not reflect fluctuations between those dates.
<TABLE>
<CAPTION>
Dow Jones
Medical &
Summit NASDAQ Biological
Measurement Period Technology, Stock Market Technology
(Fiscal Year Covered) Inc. -U.S. Index
<S> <C> <C> <C>
1992 100 100 100
1993 71 115 87
1994 97 112 99
1995 170 159 170
1996 28 195 180
1997 24 240 233
</TABLE>
SELECTION OF AUDITORS
KPMG Peat Marwick LLP ("Peat Marwick"), independent certified public
accountants, performed the audit of the Company's financial statements for 1997.
Representatives of Peat Marwick have been invited to the Annual Meeting and are
expected to be present at the Meeting. They will have the opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions from stockholders.
The Company is presently in the process of considering firms, including
Peat Marwick, for engagement as its independent auditors for the year ending
December 31, 1998, and anticipates making its decision shortly.
VOTING PROCEDURES
The holders of a majority of the shares of outstanding Common Stock
entitled to notice of and to vote at the Meeting shall constitute a quorum for
the transaction of business at the Meeting. Shares of Common Stock present in
person or represented by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether or not a quorum is present
at the Meeting. Shares of Common Stock which are not voted, including "broker
non-votes" (i.e., shares held by a broker or nominee for a beneficial holder as
to which the broker or
15
<PAGE> 19
nominee does not have discretionary voting power and does not receive voting
instructions from the beneficial owner) will not be counted for purposes of
determining whether or not a quorum is present.
The affirmative vote of a majority of the shares of outstanding Common
Stock entitled to notice of and to vote at the Meeting is required for the
election of the nominees for Director (Proposal 1). Abstentions and broker
non-votes will not be counted as affirmative votes for purposes of obtaining the
required approvals and will have the effect of a vote against such Proposal.
OTHER MATTERS
The Board of Directors knows of no other matters that may come before the
Meeting. If any other matters should properly come before the Meeting, it is the
intention of the persons named in the accompanying proxy to vote in accordance
with their judgment on such matters. Such discretionary authority is conferred
by the proxy.
All costs of this solicitation, which is being made principally by mail,
will be borne by the Company. Solicitation of proxies may be supplemented by
telephone or personal contacts by the Company's directors, officers and
employees without additional compensation. Brokers will be requested to forward
proxy soliciting material to the beneficial owners of the stock held in such
brokers' names, and the Company will reimburse them for their expenses incurred
in complying with the Company's request.
STOCKHOLDER PROPOSALS
In order to be considered for presentation at the 1999 Annual Meeting of
Stockholders, and to be included in the proxy statement and form of proxy for
that meeting, stockholder proposals must be received by the Company at its
corporate offices in Waltham, Massachusetts, no later than December 14, 1998.
By Order of the Board of Directors
JAMES A. LIGHTMAN, Clerk
April 15, 1998
16
<PAGE> 20
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MA 02154
---------------
PROXY FOR SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF
STOCKHOLDERS
MAY 28, 1998
---------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James A. Lightman proxy of the undersigned,
with power of substitution, to act for and to vote all shares of Summit
Technology, Inc. common stock owned by the undersigned upon the matters set
forth in the Notice of said Meeting and the related Proxy Statement, at the
Special Meeting in Lieu of the Annual Meeting of Stockholders to be held at The
Westin Hotel, 70 Third Avenue, Waltham, Massachusetts, at 9:00 a.m. on May 28,
1998, and any adjournments thereof. The proxy is further authorized to vote, in
such proxy's discretion, upon such other business as may properly come before
the meeting, or any adjournments thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
SEE REVERSE SIDE
<PAGE> 21
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
1. ELECTION OF DIRECTORS:
FOR WITHHELD
NOMINEE FOR NOMINEE
[ ] [ ]
NOMINEE: JEFFREY A. BERNFELD
FOR WITHHELD
NOMINEE FOR NOMINEE
[ ] [ ]
NOMINEE: RICHARD M. TRASKOS
Your shares will be voted in accordance with your instructions. If you sign this
proxy but do not indicate how to vote on a particular proposal, your shares will
be voted FOR each of these proposals.
Check here for address change and write new address on the reverse side of this
proxy. [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
SIGNATURE(S)________________________________________ DATED: ____________, 1998
(Note: Please sign exactly as
your name appears hereon. When
shares are held by joint
tenants, both should sign.
Fiduciaries and corporate
officers should indicate their
full titles.)
