<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
SUMMIT TECHNOLOGY, INC.
(Name of Registrant as Specified In Its Charter)
SUMMIT TECHNOLOGY, INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MA 02451
Dear Summit Stockholder:
It is a pleasure to invite you to our 2000 special meeting in lieu of
annual meeting of stockholders on Friday, May 19, 2000 beginning at 10:00 a.m.
local time, at The Seaport Hotel at the World Trade Center, One Seaport Lane,
Boston, Massachusetts 02110. I hope that those who find the time and place
convenient will attend the meeting.
Whether you own a few or many shares 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 02451
----------------------------------------------
NOTICE OF
2000 SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------------
Summit Technology, Inc. will hold its 2000 special meeting in lieu of
annual meeting of stockholders on Friday, May 19, 2000 at 10:00 A.M. at The
Seaport Hotel at the World Trade Center, One Seaport Lane, Boston, Massachusetts
02110, to consider and act upon the following matters:
1. To elect two directors to serve for three-year terms;
2. To reserve an additional 2,000,000 shares of common stock for issuance
under the company's 1997 Stock Option Plan;
3. To approve an amendment to the articles of organization to change the
company's name to Summit Autonomous Inc.; and
4. To transact any other business that may properly come before the
meeting or any adjournment of the meeting.
Stockholders of record at the close of business on March 31, 2000 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
/s/ James A. Lightman
-------------------------------------
JAMES A. LIGHTMAN, Clerk
April 19, 2000
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 02451
----------------
PROXY STATEMENT FOR
2000 SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 2000
----------------
INFORMATION ABOUT THE MEETING AND VOTING
The meeting
Our special meeting in lieu of annual meeting of stockholders will be held
on May 19, 2000 at The Seaport Hotel at the World Trade Center, One Seaport
Lane, Boston, Massachusetts 02110. At the meeting, stockholders will be asked to
elect two directors, approve an amendment to Summit's 1997 Stock Option Plan,
approve a corporate name change, and act on any other business that may properly
come before the meeting. We do not know of any matters other than those
discussed in this proxy statement that may come before the meeting. Our
management will also report on our performance during the past year and respond
to appropriate questions from stockholders.
Who is entitled to attend and vote at the meeting?
Stockholders of record at the close of business on March 31, 2000 are
entitled to attend and vote at the meeting. Each share of common stock is
entitled to one vote. Any stockholder may attend, whether or not entitled to
vote.
What will constitute a quorum at the meeting?
Holders of a majority of our outstanding shares on the record date must be
present at the meeting, either in person or by proxy, to establish a quorum. On
the record date, we had 46,867,723 shares of common stock outstanding. Proxies
that we receive that are marked "withhold" or "abstain" will be considered
present at the meeting for purposes of establishing a quorum.
How do I vote by proxy?
IF YOU HOLD SHARES IN YOUR NAME, you should sign and date the enclosed
proxy card and return it in the envelope provided. IF YOU HOLD YOUR SHARES IN
"STREET NAME", the proxy card that accompanies this proxy statement represents
an instruction to your broker, who is the record holder, on how to vote the
shares. The proxy card contains instructions on how to instruct your broker and
you may do so by signing and mailing the card in the envelope or using the
telephone number or internet address provided on the card.
If you sign the card but do not indicate how you would like your shares
voted, the persons named as your proxies will vote FOR the election of both
director nominees, FOR the approval of the proposed amendment to the 1997 Stock
Option Plan and FOR the approval of the corporate name change. In addition, if
any other matters are brought before the meeting,
<PAGE> 5
your proxies will vote in their discretion. At present, we do not know of any
other matters that will be brought before the meeting.
What if I fail to instruct my broker how to vote?
The rules of the New York Stock Exchange allow your broker to vote your
shares on the director nominees, on the amendment of the 1997 Stock Option Plan,
and on the corporate name change even if you do not provide the broker with
instructions.
Can I change my vote after I return my proxy card?
IF YOU HOLD YOUR SHARES DIRECTLY, you can change your vote at any time
before the meeting by:
* Filing with the Clerk of the company a written notice revoking your
earlier vote;
* Submitting a later-dated proxy card to our transfer agent; or
* Voting in person at the meeting.
IF YOU HOLD YOUR SHARES IN "STREET NAME", you must contact your broker to
revoke your proxy.
How do I vote in person?
If you plan to attend the meeting to vote in person, we will give you a
ballot when you arrive. If your shares are held in the name of your broker or
another nominee, you should bring an account statement or letter from the
nominee indicating that you were the beneficial owner of the shares on March 31,
2000, the record date.
What vote is required to approve each proposal?
* FOR THE ELECTION OF DIRECTORS, the nominees who receive the most votes
will be elected no matter how many votes are cast. Therefore, if you
do not vote for a particular nominee, or if you withhold authority for
one or all of the nominees, your vote will not count either for or
against the nominee. In any event, your shares will count to establish
a quorum.
* FOR THE APPROVAL OF THE AMENDMENT TO THE 1997 STOCK OPTION PLAN, the
required vote is a majority of the shares of common stock outstanding.
Therefore, if you abstain or otherwise do not vote on this proposal,
it will have the effect of a vote against the approval of the plan.
* FOR THE APPROVAL OF THE CHANGE OF THE NAME OF THE CORPORATION, the
required vote is a majority of the shares of common stock outstanding.
Therefore, if you abstain or otherwise do not vote on this proposal,
it will have the effect of a vote against the approval of the name
change.
Is management soliciting proxies?
Yes. We will solicit proxies, principally through the mailing of this proxy
statement. However, our officers and employees may also make solicitations by
telephone or in person. We may also enlist the assistance of brokerage houses,
custodians and other third parties. We will bear all solicitation expenses,
including the cost of preparing, assembling and mailing this proxy statement.
<PAGE> 6
This Proxy Statement and the accompanying proxy card and Annual Report are
being mailed to stockholders on or about April 19, 2000.
<PAGE> 7
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
Our articles of organization and by-laws fix the number of directors at
seven and divide the Board into three classes. Each director serves a three-year
term. Two directors will be elected at this meeting for terms ending at the
annual meeting of stockholders for the year 2003 and until their successors are
elected and qualified. The Board has nominated Dr. C. Glen Bradley and Richard
F. Miller for re-election as directors. Their business experience and
qualifications are summarized below:
DR. C. GLEN BRADLEY, 57, was elected to the Board in April 1999 for a term
expiring in 2000. Dr. Bradley has been the Chief Executive Officer of CIBA
Vision Group since 1990. Prior to 1990, Dr. Bradley served as head of CIBA
Vision's worldwide marketing and technical group and also served as President of
Ciba Vision Corporation, the USA marketing and sales arm of the CIBA Vision
Group. Dr. Bradley originally joined Ciba-Geigy Corporation, formerly Geigy
Chemical Company, in 1969 as an engineer. Prior to joining Ciba-Geigy, Dr.
Bradley was an assistant professor of chemical engineering at Louisiana State
University.
RICHARD F. MILLER was first elected to the Board in June 1988 and was
re-elected in 1997 for a three-year term expiring in 2000. Since April 1998, Mr.
Miller has served as Senior Vice President and a principal of Leerink Swann &
Company, a full service investment banking firm. From August 1994 through April
1998, Mr. Miller 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.
The Board knows of no reason why either of the nominees would be unable to
serve as a director. If for some reason either nominee is unable to serve, the
enclosed proxy will be voted for a substituted nominee designated by the Board.
THE BOARD RECOMMENDS THAT YOU VOTE FOR "FOR" THE RE-ELECTION OF DR. BRADLEY
AND MR. MILLER AS DIRECTORS.
<PAGE> 8
PROPOSAL NUMBER TWO
APPROVAL OF AMENDMENT TO SUMMIT'S 1997 STOCK OPTION PLAN
The 1997 Stock Option Plan is designed to enhance the ability of the
company and its subsidiaries to attract and retain employees and others in a
position to make significant contributions to Summit's success by allowing them
to become owners of Summit common stock. Since the inception of the Plan, a
total of 3,000,000 shares have been reserved for issuance under the Plan. As of
the record date, there were outstanding options to purchase 2,747,032 shares of
Summit common stock and 39,073 shares remained available for grant.
On March 28, 2000, the Summit board of directors voted to increase the
number of shares of Summit common stock reserved for issuance under the 1997
Plan by 2,000,000 shares, subject to approval by the Summit stockholders. The
Summit board of directors believes that this increase is necessary given that
Summit now has a larger workforce following the acquisition of Autonomous
Technologies Corporation and because equity awards will be an important part of
incentive compensation in the combined company. The Summit board of directors is
requesting that Summit stockholders approve the increase at the annual meeting.
Summary of 1997 Plan
The following is a summary of the key features of the 1997 Plan.
Eligible Participants
The Summit board of directors administers the Plan. Employees of Summit and
its subsidiaries and other persons or entities who are in a position to make a
significant contribution to Summit's success are eligible participants. The
board of directors has the authority to select employees to whom awards are
given. The number of Summit employees (including subsidiaries) as of March 24,
2000, was approximately 566.
Maximum Number of Shares
Currently, up to 3,000,000 shares of Summit common stock may be granted
under the 1997 Plan, subject to adjustments for stock splits and similar costs,
of which 39,073 shares remained available for grant as of March 31, 2000. The
Summit board of directors has approved and is recommending that the stockholders
approve an increase of 2,000,000 in the number of shares of Summit common stock
that may be awarded under the 1997 Plan.
Types of Awards
The 1997 Plan permits the board to grant the following types of awards:
* stock options--both incentive and nonstatutory
* stock appreciation rights.
Stock Options
The Summit board will determine the exercise or purchase price per share of
any option granted under the 1997 Plan. The exercise price of an incentive stock
option ("ISO") must be at least 100% (110% in the case of ten percent
shareholders) of the fair market value of the Summit common stock at the time of
grant. The Summit board of directors will
<PAGE> 9
fix the term of each option, not to exceed ten years from grant, and specify
when each option will be exercisable. Options may be exercised in the following
ways:
* by paying the exercise price in cash or check
* by tendering shares of common stock
* by using a promissory note
* by delivering to Summit an undertaking by a broker to deliver promptly
sufficient funds to pay the exercise price
* by a combination of these methods.
Stock Appreciation Rights
The Summit board may grant stock appreciation rights (SARs) under the Plan.
SARs entitle recipients to receive cash or Summit common stock of an amount
representing the appreciation in the market value of a specified number of
shares from the date of grant until the date of exercise.
Change of Control
In the case of certain mergers, consolidations or other transactions in
which Summit is acquired or liquidated, or its assets are sold, all outstanding
awards will terminate. Prior to such termination, however, all outstanding
awards will become exercisable unless the Summit board of directors arranges for
assumption of the awards by any surviving corporation.
Termination and Amendment
The Summit board of directors may discontinue granting awards under the
1997 Plan at any time. The board of directors may also amend the Plan for any
purpose permitted by law, but no amendment may adversely affect the rights of
any participant under any outstanding award without the participant's consent.
Stock Price Information
The closing price of Summit's common stock, as reported on Nasdaq on March
24, 2000 was $9.875.
Summary of 1997 Plan Federal Income Tax Consequences
Under the federal income tax laws as now in effect, the material income tax
consequences associated with stock options awarded under the Plan are as
follows:
Incentive Options. An option holder realizes no ordinary taxable income
upon the grant or exercise of an ISO. If the option holder does not dispose of
the shares received upon the exercise of the ISO within two years from the date
of grant, or within one year after their receipt, then upon sale of such shares
the option holder will be taxed on any amount realized in excess of the option
price (the amount paid for the shares) as a long-term capital gain. Any loss
allowed for tax purposes will be long-term capital loss. Summit will not be
entitled to any deduction. The exercise of an ISO will, however, increase the
option holder's alternative minimum taxable income and may result in alternative
minimum tax liability for the option holder.
<PAGE> 10
If the option holder disposes of the shares received upon exercise of an
ISO before the expiration of the holding periods described above (a
"disqualifying disposition"), the option holder generally will realize ordinary
income in the year of disposition in an amount equal to the excess (if any) of
the fair market value of the shares at exercise (or, if less, the amount
realized on a sale to an unrelated party of such shares) over the option price
thereof. Summit will be entitled to a tax deduction for that amount. Any further
gain recognized by the option holder will be taxed as short-term or long-term
capital gain and will not give Summit any deduction. Special rules may apply
where the option holder pays the exercise price of the ISO by tendering shares
of common stock. A disqualifying disposition will eliminate the alternative
minimum taxable income adjustment associated with the exercise of the ISO if it
occurs in the same calendar year as the year in which the adjustment occurred.
If an option holder exercises an ISO at a time when it no longer qualifies
for the tax treatment described above, the option is treated as a nonstatutory
option. Generally, an ISO will not be eligible for the tax treatment described
above if it is exercised more than three months following termination of
employment (one year following termination of employment, in the case of
termination by reason of permanent and total disability), except in certain
cases where the ISO is exercised after the death of the option holder. Options
otherwise qualifying as ISOs will also be treated for federal income tax
purposes as nonstatutory options to the extent they (together with other ISOs
that the option holder owns) first become exercisable in any calendar year for
shares having a fair market value, determined at the time of the option grant,
exceeding $100,000.
Nonstatutory Options. An option holder realizes no income at the time a
nonstatutory option is granted under the Plan. Generally, an option holder
realizes ordinary income at exercise in an amount equal to the difference
between the option price and the fair market value of the shares on the date of
exercise. This amount is subject to withholding in the case of options granted
to employees. Summit will be entitled to a corresponding tax deduction. Any gain
or loss that the option holder recognizes upon a later sale is treated as
capital gain or loss, either short-term or long-term, depending on the
applicable holding period for the sale.
Stock Appreciation Rights. A participant realizes no income upon the grant
of a stock appreciation right under the Plan. When a participant exercises the
stock appreciation right or receives payment in cancellation of an option, the
participant will generally be required to include as ordinary income in the year
of such exercise or payment an amount equal to the amount of cash received and
the fair market value of any stock received. Summit will have a deduction for
the corresponding amount.
Certain Limitations. Section 162(m) of the Internal Revenue Code imposes a
$1 million limitation on the deduction that a public corporation may claim for
remuneration paid to any of its five top officers, subject to a number of
exceptions and special rules. Certain performance-based compensation is eligible
for an exemption from this limit. Summit intends that compensation associated
with the exercise of stock options and SARs awarded under the Plan will qualify
for this performance-based exemption.
The Internal Revenue Code also limits the amount of compensation that may
be paid without penalty in connection with a change in control. In general, if
the total of an individual's compensation related to a change in control equals
or exceeds three times his or her average annual taxable
compensation(determined, in general, over the five calendar years preceding the
calendar year in which the change in control occurs), the amount of such
compensation that exceeds the annual average is nondeductible to Summit and
subject to an additional 20% tax on the recipient. In making this determination,
part or all of the value of options, and other awards, granted or accelerated in
connection with a change in control may be required to be taken into account.
<PAGE> 11
The foregoing discussion is provided for the information of stockholders
and does not purport to be a complete description of the federal tax
consequences of transactions under the Plan, nor does it describe state or local
tax consequences.
RECOMMENDATION AND VOTE
The Summit board of directors believes that the increase in the shares
reserved under the 1997 Plan will promote the interests of Summit and the
stockholders and enable Summit to attract, retain and reward persons important
to Summit's success.
The Board recommends that you vote "FOR" the increase in the number of
common shares reserved for issuance under the 1997 Stock Option Plan.
<PAGE> 12
PROPOSAL NUMBER THREE
APPROVAL OF CORPORATE NAME CHANGE
The company's articles of organization presently provide that the name by
which the company shall be known is Summit Technology, Inc. On March 28, 2000,
the company's board of directors voted to amend the articles of organization to
change the name of the company to Summit Autonomous Inc., subject to approval by
the company's stockholders. The board of directors believes that this name
change appropriately reflects the importance of Autonomous to the future of the
company and is asking the shareholders to approve an amendment to the articles
of organization changing the name of the company to Summit Autonomous Inc.
The Board recommends that you vote "FOR" the proposed amendment of the
articles of organization to change of the name of the company to Summit
Autonomous Inc.
<PAGE> 13
OWNERSHIP OF SECURITIES
The following table sets forth certain information regarding the beneficial
ownership of Summit's common stock on March 24, 2000 (i) by each person who is
known by Summit to own beneficially more than five percent (5%) of the
outstanding shares of Summit's common stock, (ii) by each of Summit's directors,
(iii) by each of the 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>
AXA Financial Inc.
1290 Avenue of the Americas
New York, NY 10104............................. 2,973,300(3) 6.34%
Jeffrey A. Bernfeld.............................. 72,634(4) *
C. Glen Bradley................................. 1,381,702(5) 2.95%
Richard F. Miller................................ 54,701(6) *
John A. Norris................................... 68,742(7) *
Richard M. Traskos............................... 75,213(8) *
Robert J. Palmisano.............................. 317,434(9) *
Randy W. Frey.................................... 589,168(10) 1.26%
D. Verne Sharma.................................. 113,334(11) *
Robert J. Kelly.................................. 76,334(12) *
Peter E. Litman.................................. 99,104(13) *
Menderes Akdag................................... 29,552(14) *
All Executive Officers and Directors as a Group
(25 persons).................................... 3,280,277 6.83%
</TABLE>
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* Less than 1% of the outstanding common stock.
(1) Except as otherwise noted, Summit 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
the shares pursuant to stock options which may be exercised within 60 days
of March 24, 2000.
(2) Determined on the basis of 46,867,723 shares outstanding, except that
shares underlying options exercisable within 60 days of March 24, 2000 are
deemed outstanding for calculating the percentage owned by holders thereof.
(3) As reported on a Schedule 13G dated February 14,2000 as filed by AXA
Financial, Inc.
(4) Includes options to purchase 69,334 shares of common stock.
(5) Includes options to purchase 15,000 shares of common stock. Dr. Bradley
disclaims beneficial ownership of these shares which are held by CIBA
Vision Group of which Dr. Bradley is CEO.
(6) Includes options to purchase 52,501 shares of common stock.
(7) Includes options to purchase 61,334 shares of common stock.
(8) Includes options to purchase 69,334 shares of common stock.
(9) Includes options to purchase 313,334 shares of common stock.
(10) Includes options to purchase 31,215 shares of common stock.
(11) Includes options to purchase 113,334 shares of common stock.
(12) Includes options to purchase 73,334 shares of common stock.
(13) Includes options to purchase 99,104 shares of common stock.
(14) Includes options to purchase 11,667 shares of common stock.
<PAGE> 14
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning our executive
officers and directors.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Robert J. Palmisano....... 55 Director and Chief Executive Officer
Randy W. Frey............. 42 Director, Executive Vice President and
Chief Technology Officer
Charline A. Gauthier...... 37 Executive Vice President and
Chief Operations Officer
P. Bernard Haffey......... 37 Executive Vice President and
Chief Commercial Officer
Robert J. Kelly........... 55 Executive Vice President, Chief Financial
Officer and Treasurer
James A. Lightman......... 42 Senior Vice President, General Counsel and Clerk
Steven E. Bott............ 47 Vice President
Catherine Sturgis Burnham...48 Vice President
John P. Coffidis.......... 50 Vice President
Edward P. Devnew, Jr...... 49 Vice President
Bruce A. Hays............. 53 Vice president
Donald I. Martin.......... 52 Vice President
Bernard R. Patriacca...... 56 Vice President
George H. Pettit.......... 39 Vice President
James L. Richey........... 52 Vice President
Alex C. Sacharoff......... 43 Vice President
Menderes Akdag............ 39 President, Lens Express, Inc.
Jeffrey A. Bernfeld (2)... 42 Director
C. Glen Bradley........... 57 Director
Richard F. Miller (l)..... 48 Director
John A. Norris............ 53 Director
Richard M. Traskos (1,2).. 52 Director
</TABLE>
- ----------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
ROBERT J. PALMISANO, DIRECTOR AND CHIEF EXECUTIVE OFFICER
Mr. Palmisano, 55, joined Summit in April 1997 as Chief Executive Officer
and a member of the Board. 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 from
Providence College.
RANDY W. FREY, DIRECTOR, EXECUTIVE VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER
Mr. Frey, 42, was elected to the Board in April 1999 for a term expiring in
2001. Mr. Frey is an Executive Vice President of Summit and, on March 28, 2000
was named Summit's Chief Technology Officer. From 1985 to March 1998, and again
from October 1998 to March
<PAGE> 15
2000, Mr. Frey was President of Autonomous Technologies Corporation. Mr. Frey
earned a Bachelor of Science in Electrical Engineering from the Polytechnic
Institute of Brooklyn.
CHARLINE A. GAUTHIER, PH.D., OD, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATIONS
OFFICER
Dr. Gauthier was named Executive Vice President and Chief Operations
Officer of Summit on March 28, 2000. Prior to that appointment, Dr. Gauthier,
served as Vice President and Chief Operating Officer of Autonomous Technologies
Corporation. Dr. Gauthier originally joined Autonomous in July 1995 as its
Director of Clinical Affairs and later served as Vice President of Clinical
Affairs. From March 1992 to May 1995, Dr. Gauthier was a postgraduate researcher
at the Cooperative Research Centre for Eye Research and Technology at the
University of New South Wales, Australia. Dr. Gauthier received a Ph.D. from the
University of New South Wales, her Doctor of Optometry from the University of
Waterloo, and a degree in General Science from the University of Alberta.
P. BERNARD HAFFEY, EXECUTIVE VICE PRESIDENT AND CHIEF COMMERCIAL OFFICER
Mr. Haffey, 37, joined Summit in September 1997 as Vice President, Sales
and Marketing and was named Executive Vice President and Chief Commercial
Officer on March 28, 2000. Prior to joining Summit, Mr. Haffey was employed
since 1990 at Mentor Ophthalmics, 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.
ROBERT J. KELLY, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
Mr. Kelly, 55, joined Summit 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.
JAMES A. LIGHTMAN, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CLERK
Mr. Lightman, 42, joined Summit in February 1996 as Assistant General
Counsel and was promoted to Vice President and General Counsel in January 1998
and to Senior Vice President and General Counsel in January 2000. Prior to
joining Summit, 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.
STEVEN E. BOTT, PH.D., VICE PRESIDENT
Dr. Bott, 47, was named Vice President of Summit on March 28, 2000. Most
recently, Dr. Bott served as Vice President of Product Development at Autonomous
Technologies Corporation, a position he held since joining Autonomous in May
1998. From 1989 to May 1998, he served in various roles with Coulter Corporation
(now Beckman/Coulter), most recently as Corporate Director of Research &
Development. Dr. Bott earned his Ph.D. in Physical Chemistry from Stanford
University, and his Bachelor of Science in Chemistry from Antioch College.
CATHERINE STURGIS BURNHAM, VICE PRESIDENT
Ms. Burnham, 48, joined Summit in April 1998 as Director of Investor
Relations and Corporate Communications and was promoted to Vice President of
Investor Relations and Corporate Communications in November 1999. From 1986 to
1998, Ms. Burnham served as communications head at Reebok International Ltd.,
where her Responsibilities included all corporate communications functions
including investor Relations, public relations, internal communications and
marketing communications. Ms. Burnham holds a BA from Wheaton College.
<PAGE> 16
JOHN P. COFFIDIS, VICE PRESIDENT
Mr. Coffidis, 50, joined Summit in November 1987 and was promoted to Vice
President in August 1997. Mr. Coffidis previously served with Johnson and
Johnson ("J&J") 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.
EDWARD P. DEVNEW, JR., VICE PRESIDENT
Mr. Devnew, 49, joined Summit January 1998 and was promoted to Vice
President, U.S. Sales in February 2000. From 1995 to 1998, Mr. Devnew served as
co-founder of Ophthalmology Interactive. From 1991 to 1995, Mr. Devnew served as
National Sales Manager for Sunrise Technologies, Inc. Mr. Devnew holds a BS in
Business Administration from Babson College.
BRUCE A. HAYS, VICE PRESIDENT
Mr. Hays, 53, was named Vice President of Summit on March 28, 2000. Prior
to that appointment, Mr. Hays served as Vice President of Quality and Customer
Service of Autonomous Technologies Corporation, a position he held since August
1998. Mr. Hays joined Autonomous in March 1998 as Director of Quality. From 1987
to March 1998, Mr. Hays was with Coulter Corporation (now Beckman/Coulter), most
recently serving as Director of Research and Development Quality. Mr. Hays
earned his MBA from Nova University and his Bachelor of Science in Electrical
Engineering from the Florida Institute of Technology.
DONALD I. MARTIN, VICE PRESIDENT
Mr. Martin, 52, was named Vice President of Summit on March 28, 2000. Most
recently, Mr. Martin served as Vice President of Manufacturing of Autonomous
Technologies Corporation, having joined Autonomous in August 1997 as Vice
President of Manufacturing & Engineering. From January 1995 to July 1997, Mr.
Martin was with Bio-Rad Laboratories, Inc., a maker of diagnostic and analytical
instruments for the life sciences industry. From 1977 to December 1994, he was
with the MedSystems Division of C.R. Bard, Inc. and, subsequently, Baxter
International, a maker of IV drug delivery products. Mr. Martin earned his
Bachelor of Science in Industrial Engineering from Northeastern University.
BERNARD R. PATRIACCA, VICE PRESIDENT
Mr. Patriacca, 56, joined Summit 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 Summit, 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 Video Update Corporation, a
publicly-held chain of video stores. Mr. Patriacca received a BS and an MBA from
Northeastern University.
GEORGE H. PETTIT, PH.D., MD, VICE PRESIDENT
Dr. Pettit, 39, was named Vice President of Summit on March 28, 2000. Prior
to that appointment, beginning in January 1999, Dr. Pettit served as Chief
Scientist of Autonmous Technologies Corporation. Dr. Pettit joined Autonomous in
July 1996 as Vice President of Research. Dr. Pettit's primary career focus and
expertise is in the area of ultraviolet laser ablation and applications in
medicine. From 1990 until June 1996, Dr. Pettit was a
<PAGE> 17
Medical Research Officer at the U.S. Food & Drug Administration's Center for
Devices & Radiological Health. Dr. Pettit earned his Ph.D. in Electrical
Engineering from Rice University and received his Medical Doctorate from the
University of Texas Southwestern Medical School.
JAMES L. RICHEY, VICE PRESIDENT
Mr. Richey, 52, joined Summit in September 1997 as Vice President of
Operations. Prior to joining Summit, 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
Dr. Sacharoff, 43, joined Summit in April 1986 as Senior Staff Scientist
and has held a variety of positions in Summit's Research and Development Group
before being promoted to Vice President, Research and Development in July 1996.
Prior to joining Summit, 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, 39, 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 Summit, 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 originally elected to the Board in October 1988 and was
most recently re-elected in 1998 for a three-year term expiring in 2001. Mr.
Bernfeld is currently doing private consulting. From February 1996 to November
1999, Mr. Bernfeld was 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.
C. GLEN BRADLEY, DIRECTOR
Dr. C. Glen Bradley, 57, was elected to the Board in April 1999 for a term
expiring in 2000. Dr. Bradley has been the Chief Executive Officer of CIBA
Vision Group since 1990. Prior to 1990, Dr. Bradley served as head of CIBA
Vision's worldwide marketing and technical group and also served as President of
Ciba Vision Corporation, the USA marketing and sales arm of the CIBA Vision
Group. Dr. Bradley originally joined Ciba-Geigy Corporation, formerly Geigy
Chemical Company, in 1969 as an engineer. Prior to joining Ciba-Geigy, Dr.
Bradley was an assistant professor of chemical engineering at Louisiana State
University.
<PAGE> 18
RICHARD F. MILLER, DIRECTOR
Richard F. Miller was first elected to the Board in June 1988 and was
re-elected in 1997 for a three-year term expiring in 2000. Since April 1998, Mr.
Miller has served as Senior Vice President and a principal of Leerink Swann &
Company, a full service investment banking firm. From August 1994 through April
1998, Mr. Miller 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 1998 for a three-year term expiring in 2001. 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. Our articles of organization provide that directors
will not be liable for monetary damages for breach of fiduciary duty except in
the case of breaches of the director's duty of loyalty, acts or omissions taken
in bad faith or involving intentional misconduct or knowing violations of law,
improper distributions to shareholders or loans to officers or directors or
transactions from which a director derived an improper personal benefit.
Shareholder Actions. Between August 1996 and February 1997 various
shareholder actions were commenced against Summit and certain of its officers in
the United States District Court for the District of Massachusetts (the
"District of Massachusetts") claiming, among other things, violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 arising out of
public statements made by defendants. The actions have been consolidated as In
re Summit Technology Securities Litigation, Civil Action No. 96-11589-JCT (the
"Securities Litigation"). Plaintiffs have obtained certification of the action
as a class action on behalf of all purchasers of Summit common stock, other than
defendants and persons and entities affiliated with them, between March 31, 1995
and July 3, 1996. They seek unspecified damages, interest, costs and expenses.
On October 1, 1996 an additional action was commenced in the District of
Massachusetts against Summit, its directors, certain of its officers and the
four underwriters of Summit's
<PAGE> 19
October 1995 Common Stock offering claiming violations of Sections 11, 12(2) and
15 of the Securities Act of 1933 arising out of alleged material misstatements
of fact in the registration statement used in connection with the offering. The
action was coordinated with the Securities Litigation by order of the Court
dated December 2, 1996. It also seeks unspecified damages, interest, costs and
expenses.
On December 20, 1996, a Summit stockholder filed in the District of
Massachusetts a derivative action, purportedly on behalf Summit, against Summit
as nominal defendant, its directors and certain of its present or former
officers. This action was consolidated with the Securities Litigation by order
of the Court entered July 22, 1997. The complaint alleges that the conduct of
the individual defendants has exposed Summit to the expense and inconvenience of
defending the Securities Litigation and has harmed Summit's reputation, thereby
limiting its access to capital markets. It also alleges that the individual
defendants improperly traded in Summit's common stock based upon material
non-public information.
Indemnification of Directors and Officers. Our by-laws require us to
indemnify our officers, directors, employees and agents against all liabilities
and expenses they may incur on account of all actions threatened or brought
against them by reason of their services to Summit. 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 our best interests.
We maintain a director's and officer's liability insurance policy in the
aggregate amount of $5,000,000 on behalf of our directors and officers. The
insurance policy expires on October 31, 2000 unless renewed or earlier
terminated.
OTHER TRANSACTIONS AND RELATIONSHIPS
During 1997, we made a bridge loan to Robert Palmisano, our Chief Executive
Officer and a member of the Board, in the amount of $500,000, $375,000 of which
was outstanding as of March 24, 2000. The loan is non-interest bearing and is
payable on demand.
See "Compensation Committee Interlocks and Insider Participation" for
information regarding transactions between Summit and a firm with which Mr.
Traskos is affiliated.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than ten percent of our common
stock, to file with the SEC initial reports of ownership and reports of changes
in ownership of our common stock and any other of our equity securities.
Officers, directors and greater than ten-percent stockholders must furnish us
with copies of all Section 16(a) forms they file.
To our knowledge, based on our review of the copies of the reports
furnished to us and written representations that no other reports were required,
during 1999, our officers, directors and greater than ten-percent beneficial
owners complied with all Section 16(a) filing requirements, except that Randy
Frey filed a Form 3, required to be filed on May 10, 1999, one day late and C.
Glen Bradley filed a Form 3, required to be filed on May 10, 1999, two days
late. Randy Frey also reported one transaction, required to be filed on Form 4
by January 10, 2000, on his Form 5, which was timely filed in February 2000.
<PAGE> 20
INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held six meetings during 1999. 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, which provides the
opportunity for direct contact between our independent public auditors and the
Board. The Audit Committee met two times during 1999 to review the financial
results for 1998, to review the audit plan for 1999, to review the adequacy of
financial statement disclosures, to discuss our 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, which
provides recommendations to the Board regarding compensation programs and
administers Summit'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 two
meetings during 1999. The current Compensation Committee members are Messrs.
Bernfeld and Traskos.
The company does not have a Nominating Committee.
EXECUTIVE COMPENSATION
The following table shows for the fiscal years ended December 31, 1999,
1998 and 1997 compensation paid or accrued by Summit to (i) our Chief Executive
Officer, and (ii) our four other most highly compensated executive officers who
were serving as executive officers as of December 31, 1999 (the "Named Executive
Officers"):
<PAGE> 21
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------- ------------
SECURITIES
NAME AND OTHER UNDERLYING ALL OTHER
PRINCIPAL FISCAL SALARY BONUS ANNUAL OPTIONS/ COMPENSATION
POSITION YEAR ($) ($) COMPENSATION ($) SAR'S (#) ($)(1)
--------- ------ ------- ------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Palmisano........ 1999 337,154 327,714(2) 17,522(3) 40,000(4) 4,143
Chief Executive Officer 4,453(5) 13,841(6)
1998 324,692 112,668 18,430(3) 40,000(4) 6,400
4,813(5) 2,446(6)
32,112(7)
1997 206,539 165,000 11,562(3) 300,000(4) --
45,039(5)
100,062(7)
D. Verne Sharma......... 1999 279,000 122,830 -- 55,000(8) 2,222
President & Chief 1998 275,738 25,000 -- 10,000(8) 9,600
Operating Officer 1997 250,000 74,375 65,978(5) -- 472
62,633(7)
Robert J. Kelly......... 1999 242,000 115,000 -- 30,000(9) 5,000
Executive Vice President, 1998 238,846 59,234 -- 120,000(9) 5,338
Chief Financial Officer 1997 30,962 -- -- 100,000(9) --
& Treasurer
Peter Litman............ 1999 221,313 92,915 -- 10,000(10) 2,222
Executive Vice 1998 229,517 45,903 -- 3,689(10) 9,600
President, Corporate 1997 211,313 67,620 -- -- --
Business Development
Menderes Akdag.......... 1999 224,815 109,238 -- 20,000(11) 3,570
President 1998 220,022 93,948 -- 20,000(11) --
Lens Express, Inc. 1997 204,552 119,322 -- -- --
</TABLE>
- ----------
(1) Except where otherwise noted, the indicated amounts represent Summit's
contributions to its 401(k) plan.
(2) Includes $125,000 forgiven from Mr. Palmisano's existing $500,000 bridge
loan made to him by the company.
(3) During the year ended December 31, 1999, the indicated amount represents an
automobile allowance of $12,000 and imputed interest income of $5,522
because of a loan. During the year ended December 31, 1998, the indicated
amount represents an automobile allowance of $12,462 and imputed interest
income of $5,968 because of a loan. During the year ended December 31,
1997, the indicated amount represents an automobile allowance of $8,262 and
imputed interest income of $3,300 because of a loan.
(4) During the year ended December 31, 1999, Mr. Palmisano received options
<PAGE> 22
to purchase 40,000 shares of common stock. During the year ended December
31, 1998, Mr. Palmisano received options to purchase 40,000 shares of
common stock. During the year ended December 31, 1997, Mr. Palmisano
received options to Purchase 300,000 shares of common stock.
(5) Employment tax paid on behalf of the employee by Summit.
(6) The company's contribution to its Supplemental Deferral Plan.
(7) Moving and relocation expenses reimbursed by Summit.
(8) During the year ended December 31, 1999, Mr. Sharma received options to
purchase 55,000 shares of common stock. During the year ended December 31,
1998, Mr. Sharma received options to purchase 10,000 shares of common
stock.
(9) During the year ended December 31, 1999, Mr. Kelly received options to
purchase 30,000 shares of common stock. During the year ended December 31,
1998, Mr. Kelly received options to purchase 120,000 shares of common
stock. During the year ended December 31, 1997, Mr. Kelly received options
to purchase 100,000 shares of common stock, which have subsequently been
canceled.
(10) During the year ended December 31, 1999, Mr. Litman received options to
purchase 10,000 shares of common stock. During the year ended December 31,
1998, Mr. Litman received options to purchase 3,689 shares of common stock.
(11) During the year ended December 31, 1999, Mr. Akdag, the president of
Summit's Lens Express subsidiary and not an officer of Summit, received
options to purchase 20,000 shares of common stock. During the year ended
December 31, 1998, Mr. Akdag received options to purchase 20,000 shares of
common stock.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR
OPTION TERM
-----------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OF
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- -------------- ---------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Menderes Akdag.......... 20,000 1.76 15.19 08/20/2009 191,027 484,099
Robert Kelly............ 30,000 2.64 15.19 08/20/2009 286,540 726,149
Peter Litman............ 10,000 .88 15.19 08/20/2009 95,513 242,050
Robert Palmisano........ 40,000 3.53 15.19 08/20/2009 382,053 968,199
D. Verne Sharma......... 25,000 2.20 15.19 08/20/2009 238,783 605,124
30,000(2) 2.64 12.69 04/19/2009 239,373 606,618
</TABLE>
- -----------
(1) Except as otherwise noted, option vests in three equal installments
beginning 8/20/2000.
(2) Option vests in three equal annual installments beginning 4/19/2000.
<PAGE> 23
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED ON VALUE FY-END (#) FY-END ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- -------------------- ---------------
<S> <C> <C> <C> <C>
Menderes Akdag....... -- -- 11,667/33,333(1) 86,149/109,164
Robert Kelly......... -- -- 73,334/76,666(1) 531,688/347,712
Peter Litman......... 69,999 818,395 99,104/12,459(1) 325,811/20,133
Robert Palmisano..... -- -- 263,334/116,666(1) 1,624,797/521,453
D. Verne Sharma...... -- -- 103,334/61,666(1) 658,547/54,578
</TABLE>
- ----------
(1) Options to purchase shares of common stock.
Compensation of Directors. Each of the company's outside directors is
eligible to participate in the company's 1999 Outside Director Compensation
Plan. Under the Plan, the company currently pays an annual retainer of $10,000
per year to its outside directors for their services as directors and a
committee retainer of $1,000 per year per committee to each outside director for
serving on Board committees. The company also pays each outside director a
meeting fee of $2,000 for each regularly scheduled Board meeting attended, a
committee meeting fee of $500 for each committee meeting attended, and a special
meeting fee of $2,000 for each special Board meeting attended. Annual retainers
and meeting fees are paid one-half in cash and one-half in restricted stock.
Committee retainers, committee meeting fees and special meeting fees are paid in
cash. The plan also provides that each eligible outside director shall receive
an option to purchase 5,000 shares of the company's common stock. Outside
directors joining the Board after January 1, 1999 are eligible to receive a one
time grant, on the date they join the Board, to purchase 10,000 shares of common
stock in the company.
Employment Agreements. Randy W. Frey was elected as Summit's Executive Vice
President and a Director in April 1999. Mr. Frey's employment arrangement with
Summit provides that he will receive a base salary of $212,000 per year and will
be eligible for discretionary bonuses, based on criteria established from time
to time. In addition, Mr. Frey has been granted options to purchase 200,000
shares of Summit's common stock pursuant to Summit's 1997 Stock Option Plan. The
option will be an incentive stock option to the fullest extent possible, with
the balance being a nonqualified option. The exercise price of the incentive
stock option portion will be the fair market value on the date of the grant, and
the exercise price of the nonqualified portion will be $5.625 per share. In the
event Mr. Frey's employment is terminated without cause, he will be entitled to
severance payments equal to one year's base compensation. In the event Mr.
Frey's employment terminates within twelve months of a change in control of
Summit, his severance payments will be equal to two years' base compensation.
All of Summit's executive officers, including Mr. Frey, are
employees-at-will.
<PAGE> 24
Severance Agreements. Summit's Board of Directors has approved severance
agreements for its officers and director-level employees. These severance
arrangements become available only in the event of a "change of control" of
Summit and entitle covered employees to continuation of salary, standard bonuses
and benefits in the event they are terminated without cause after a change of
control or terminate their employment for "good reason" after a change of
control. The severance arrangements would not apply to a termination for "cause"
after a change of control. The arrangements approved by the Board provide for
salary continuation for (i) three (3) years for the Chief Executive Officer,
(ii) two (2) years for each of the President, Executive and Senior Vice
Presidents, (iii) one (1) year for all other Vice Presidents and (iv) six (6)
months for director-level employees. The President of Lens Express, Inc. has a
severance arrangement with Lens Express that provides for salary continuation
for two (2)years on the same terms and under the same circumstances as the
severance arrangements for covered Summit employees.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board consists of Mr. Traskos and Mr. Bernfeld.
Shoreline Insurance Agency, Inc., a firm with which Mr. Traskos is affiliated,
currently serves as one of Summit's insurance brokers. The aggregate premiums
paid for insurance placed by Shoreline on behalf of Summit in 1999 amounted to
approximately $443,181.00, which is less than five percent of 1998 consolidated
gross revenues of Summit and Shoreline. Summit believes that all transactions
with Shoreline are on terms no less favorable than those available from other
companies.
Notwithstanding anything to the contrary set forth in any of Summit's
previous filings with the SEC 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 are not incorporated by
reference into any such filings.
REPORT OF THE COMPENSATION COMMITTEE
The primary goals of the 1999 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 Summit's stockholders.
General Policies. For 1999, 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, except for the bonus portion which
is determined by a formula based on a weighted mix of Company and individual
goals, subject to discretionary adjustment.
Base Salary. In setting the base salary of each executive, 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 Summit over the evaluation period by reference to Summit'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 Summit's overall compensation packages
place Summit'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 Summit 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
<PAGE> 25
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 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. For 1999, Summit had in place an executive
incentive compensation plan designed to provide awards in addition to base
salary based on the achievement of specific performance goals. These performance
goals are based on corporate-wide and unit financial performance as well as
individual objectives. The financial performance goals are based principally on
revenues and operating results. Executive bonuses generally range from 30% to
40% of base salary if performance goals are met and can be higher if performance
goals are substantially exceeded.
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 Summit's stock and executive compensation and that this method of
compensation allows Summit 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, as necessary, outside experts, 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. Summit has not yet adopted a policy with
respect to the million dollar cap on deduction of executive compensation.
Compensation of the Chief Executive Officer. In determining the
compensation of the Chief Executive Officer, the Compensation Committee
considers, in addition to the factors described above for all executives, the
degree to which the Company has attained the strategic objectives identified for
a particular year and the financial performance of the company as measured
against the plan approved by the Board at the beginning of the year. The
Compensation Committee may also consider the achievement of any other individual
goals that have been established for the Chief Executive Officer. In determining
the Chief Executive Officer's total compensation for the fiscal year ending
December 31, 1999, the Compensation Committee concluded that the Chief Executive
had been successful in achieving individual objectives, that the company had
attained its strategic objectives for 1999 and that the company's 1999 financial
performance had exceeded the plan approved by the Board.
The Compensation Committee is composed of the two individuals whose names
appear below, both of whom are independent directors of Summit. The Compensation
Committee has the power and authority to administer all components of Summit's
compensation program for executive officers of Summit.
Compensation Committee
Jeffrey A. Bernfeld
Richard M. Traskos
April 19, 2000
<PAGE> 26
PERFORMANCE GRAPH
The following Performance Graph assumes an investment of $100 on December
31, 1994 and compares annual percentage changes thereafter in the market price
of Summit'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). Summit 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.
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Summit Technology, Inc. $100 $176 $29 $25 $24 $65
NASDAQ Stock Market--U.S. $100 $141 $174 $213 $300 $546
Dow Jones Medical &
Biomedical Technology Index $100 $171 $182 $235 $320 $441
</TABLE>
SELECTION OF AUDITORS
Deloitte & Touche LLP ("Deloitte & Touche"), independent certified public
accountants, performed the audit of Summit's financial statements for 1999.
Representatives of Deloitte & Touche 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.
Summit has selected Deloitte & Touche as its independent auditors for the
year ending December 31, 2000.
STOCKHOLDER PROPOSALS
In order to be included on the proxy statement and form of proxy for the
2001 Annual Meeting of Stockholders, stockholder proposals must be received by
Summit at its corporate offices in Waltham, Massachusetts, no later than
December 15, 2000.
Stockholders who wish to make a proposal at the 2001 Annual Meeting--other
than one that will be included in Summit's proxy materials--should notify Summit
no later than March 5, 2000. If a stockholder who wishes to present a proposal
fails to notify Summit by this date, the proxies that management solicits for
the meeting will have discretionary authority to vote on the stockholder's
proposal if it is properly brought before the meeting. If a stockholder makes a
timely notification, the proxies may still exercise discretionary voting
authority under circumstances consistent with the SEC's proxy rules.
By Order of the Board of Directors
James A. Lightman, Clerk
April 19, 2000
<PAGE> 27
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MA 02451
--------------
PROXY FOR ANNUAL MEETING OF
STOCKHOLDERS
MAY 19, 2000
--------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Kelly and James A. Lightman, and
each of them singly, 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 Annual Meeting of Stockholders to be held at The
Seaport Hotel at the World Trade Center, One Seaport Lane, Boston, Massachusetts
02110, at 10:00 a.m., on May 19, 2000, 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> 28
[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: DR. C. GLENN BRADLEY
FOR WITHHELD
NOMINEE FOR NOMINEE
[_] [_]
NOMINEE: RICHARD F. MILLER
2. APPROVAL OF AMENDMENT TO 1997 STOCK OPTION PLAN:
FOR [_] AGAINST [_] ABSTAIN [_]
3. APPROVAL OF CORPORATE NAME CHANGE:
FOR [_] AGAINST [_] ABSTAIN [_]
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: , 2000
--------------------------------- --------------
(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.)
