<PAGE>
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:
[X] Preliminary proxy statement
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11 or Rule 14a-12
Photomatrix, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
------------------------------------------------------------------------
(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)(4) or 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 O-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed 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 O-11 (a) (2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration number, or the Form or Schedule and date of filing.
(1) Amount previously paid:
(2) Form, schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
Notes: None
<PAGE>
PHOTOMATRIX, INC.
1958 Kellogg Avenue
Carlsbad, California 92008
August 20, 1999
Dear Shareholder:
At the Annual Meeting, you will be asked to elect the Board of Directors, to
authorize an amendment to the Articles of Incorporation to effect a Company
name change from Photomatrix, Inc., to National Manufacturing Technologies,
Inc., and to ratify the selection of BDO Seidman as the Company's independent
auditors.
The Board recommends that you vote FOR adoption of the proposals described
above and in the Proxy Statement which accompanies this letter.
I encourage you to read this Proxy Statement in its entirety.
Very truly yours,
/s/ Patrick W. Moore
----------------------------------
Patrick W. Moore, Chief Executive
Officer
<PAGE>
PHOTOMATRIX, INC.
1958 Kellogg Avenue
Carlsbad, California 92008
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 20, 1999
To: Photomatrix Shareholders
The Annual Meeting of Shareholders of PHOTOMATRIX, INC. (the "Company") will be
held on Wednesday, September 8, 1999, at 10:00 a.m., local time, at the
Company's headquarters located at 1958 Kellogg Ave., Carlsbad, California 92008,
for the following purposes:
(1) To elect six directors for the ensuing year and until their successors
are elected.
(2) To approve an amendment to and restatement of the Company's Amended and
Restated Articles of Incorporation in order to change the name of the
Company from Photomatrix, Inc., to NATIONAL MANUFACTURING TECHNOLOGIES,
INC.
(3) To ratify the appointment by the Company's Board of Directors of BDO
Seidman as independent auditors for the 1999 and 2000 fiscal years.
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on August 4, 1999 are
entitled to receive notice of and to vote at the meeting and any adjournment
thereof.
All shareholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, whether or not you
plan to attend the meeting, please sign, date, and promptly return the
enclosed proxy in the accompanying envelope. Any shareholder attending the
meeting may vote in person, even if he or she has previously returned a proxy.
By Order of the Board of Directors
Roy L. Gayhart
Secretary
Carlsbad, California
August 20, 1999
<PAGE>
PHOTOMATRIX, INC.
1958 Kellogg Avenue
Carlsbad, California 92008
PROXY STATEMENT
The accompanying proxy is solicited by and on behalf of the Board of
Directors of PHOTOMATRIX, INC. ("Photomatrix" or the "Company") to be used at
the Annual Meeting of Shareholders to be held on Wednesday, September 8,
1999, at 10:00 a.m., local time (the "Meeting Date"), at the Company's
headquarters located at 1958 Kellogg Avenue, Carlsbad, California 92008, and
any adjournment thereof. This proxy statement and the accompanying form of
proxy are being first mailed to holders of Photomatrix's Common Stock
("Common Stock") on or about August 20, 1999.
Photomatrix will bear the cost of the solicitation of proxies. In addition,
the Company may reimburse brokers, banks, custodians, nominees and
fiduciaries representing beneficial owners of shares of Common Stock for
their reasonable charges and expenses incurred in forwarding proxies and
proxy materials to the beneficial owners of such shares. Proxies may be
solicited by certain of the Company's directors, officers and regular
employees without additional compensation, personally or by telephone,
additional mailings or telegram.
The Company's principal offices are located at 1958 Kellogg Avenue, Carlsbad,
California, and the Company's telephone number is (760) 431-4999.
VOTING SECURITIES
Shareholders of record as of the close of business on August 4, 1999 (the
"Record Date") will be entitled to vote at the Annual Meeting. At the Record
Date, 9,914,000 shares of Common Stock were outstanding. Except as described
below, each of the 9,914,000 outstanding shares may be voted once on each
matter to come before the meeting. A majority of the shares entitled to vote,
represented in person or by proxy, will constitute a quorum at the Annual
Meeting.
Each shareholder voting in the election of directors may cumulate votes for
nominated directors, giving one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares held by
the shareholder, or may distribute such votes on the same principle among as
many nominated candidates as the shareholder chooses. No shareholder,
however, may cumulate votes for any candidate unless the candidate's name has
been placed in nomination prior to the voting and at least one shareholder
has given notice prior to the voting of his or her intention to cumulate
votes.
Voting for the election of directors may be, but need not be, by ballot. It
will be by ballot if before the voting begins a shareholder demands that
ballots be used. A plurality of votes shall elect the directors; that is,
provided a quorum is present, the six persons receiving the greatest number
of affirmative votes shall be elected. All matters other than the election of
directors and matters identified in this Proxy Statement as requiring
approval by the affirmative vote of a majority of the outstanding shares must
be approved, if at all, by a majority of the shares represented and voting,
provided such majority is also a majority of the required quorum.
Abstentions will be counted for purposes of determining whether a quorum is
present at the meeting. For matters other than election of directors,
abstentions will have the effect of a "no" vote due to the majority
requirements described above. Broker non-votes will not be counted for the
purpose of determining whether a quorum is present. Broker non-votes will
have no effect on actual voting, unless approval by affirmative vote of the
majority of outstanding shares is required, in which case a broker non-vote
will have the effect of a "no" vote.
Votes will be counted by the Company's proxy tabulators and inspectors of
election.
1
<PAGE>
Shareholders may revoke any proxy given pursuant to this solicitation by
delivering prior to the Annual Meeting a written notice of revocation or a
duly-executed proxy bearing a later date or by attending the meeting and
voting in person. Shares represented by a properly-executed and returned
proxy will be voted at the Annual Meeting in accordance with any directions
noted on the proxy and, if no directions are indicated, the shares
represented by the proxy will be voted in favor of the proposals set forth in
the notice attached hereto.
BENEFICIAL OWNERSHIP OF COMPANY SECURITIES
The following table sets forth information as of July 12, 1999, with respect to
each shareholder known by the Company to be the beneficial owner of more than
five percent of its outstanding Common Stock. Except as noted below, each
shareholder has sole voting and investment powers with respect to the shares
shown.
<TABLE>
<CAPTION>
Name of Beneficial Number of Shares Percent of Shares of
Owner or Group of Common Stock (1) Common Stock Outstanding
- -------------- ---------------- ------------------------
<S> <C> <C>
Patrick W Moore 1,826,501 18.21%
William L. Grivas 1,762,998 (2) 17.58%
James P. Hill 1,579,176 (3) 15.74%
Aundir Trust Company Ltd. (4) 1,054,002 (5) 10.51%
</TABLE>
(1) Includes and reflects the ownership of common stock subject to options
exercisable within 60 days of July 12, 1999.
(2) Includes 1,720,998 shares and options for shares owned directly by
William L. Grivas and 42,000 shares owned by family members.
(3) Includes 168,824 shares owned by Loma Services Corporation, of which
Mr. Hill's wife is the sole shareholder, and 1,410,352 shares owned
by Mr. Hill as Trustee of the Hill Family Trust.
(4) The address of Aundir Trust Company Ltd. is Castletown, Isle of Man,
British Isles.
(5) These shares are beneficially owned by Aundir Trust Company Ltd. as
trustee of the Bulldog Trust and the Pitkin Trust, irrevocable trusts
established by Sam Wyly and Charles J. Wyly, Jr., respectively. The
record holders are Tensas, Ltd. and Roaring Creek, Ltd., which are
corporations wholly owned by such trusts. Sam Wyly and Charles J. Wyly,
Jr. disclaim beneficial ownership of these shares.
2
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Company's Board of Directors is to
consist of from four to seven members and currently authorizes a Board
consisting of seven members. It is the intention of the Board that the Board
be comprised of six directors, leaving the seventh director seat open for a
possible appointment related to a possible future acquisition. The Board has
proposed the following six nominees to serve on the Board from the date of
their election and to hold office until the next Annual Meeting and until
their respective successors are elected and qualified.
Should any of the nominees decline or be unable to serve as a director, the
persons authorized in the Proxy to vote on your behalf will vote with full
discretion in accordance with their best judgements. The Company knows of no
reason why any nominee listed below would not be available for election or,
if elected, would not be willing or able to serve. If additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them according to cumulative voting rules to assure the
election of as many of the nominees listed below as possible. In such event,
the specific nominees for whom votes are cumulated will be determined by the
proxy holders. Proxies cannot be voted for a greater number of persons than
the number of persons nominated.
NOMINEES
Mr. PATRICK W. MOORE has been a Director of the Company since January 1991.
Mr. Moore assumed the duties of Chief Executive Officer and Vice Chairman of
the Company effective as of June 5, 1998. Mr. Moore, who has served as the
President of I-PAC Manufacturing, Inc. since 1990, has significant business
experience in both the private and public sectors. From 1986 to 1990, Mr.
Moore served as President of Southwest General Industries, a privately-held
electronic contract manufacturing company. From 1981 to 1986, Mr. Moore
served as President of the San Diego Private Industry Council and as
Executive Director of the San Diego Regional Employment and Training
Consortium. Mr. Moore has served on the National Commission on Employment
Policy, committees of the National Academy of Science, and as the national
president of various trade organizations based in Washington, D.C. Mr. Moore
is 51 years of age.
Mr. JAMES P. HILL has been a Director of the Company since June 1998. Mr.
Hill is, and for at least the last five years has been, one of the managing
directors, and president, specializing in bankruptcy law, commercial law, and
civil litigation, of the San Diego law firm of Sullivan, Hill, Lewin, Rez &
Engel. Mr. Hill was a Director of the San Diego Bankruptcy Forum from 1991
through 1994 and the Chairman of the Commercial Law Section of the San Diego
County Bar Association from 1985 through 1987. Mr. Hill is 47 years of age.
Mr. MICHAEL J. GENOVESE has been a Director of the Company since February
1999. Mr. Genovese is a partner with the law firm of Grant, Hanley &
Genovese, LLP, specializing in the area of business transactional law,
including general business, real estate acquisition and sale, and taxation
law. Mr. Genovese started his professional career with Ernst & Ernst
(currently Ernst & Young, LLP) in 1971 until 1977 when he commenced the
practice of law. Mr. Genovese is a member of the Orange County Bar
Association, the California State Bar Association (Business Law, Real
Property Law and Taxation Sections), and the American Bar Association
(Business law, Real Property, Probate & Trust Law, and Taxation Sections).
Mr. Genovese is 50 years of age.
Dr. MICHAEL R. MOORE is the sole shareholder of Western Spine Center, P.C.,
located in Aurora, Colorado, where he has practiced as an orthopedic surgeon,
specializing in spine surgery, since 1997. From 1990 to 1997, Dr. Moore was a
major shareholder and practicing surgeon at the Colorado Spine Center. Dr.
Moore earned his medical degree from Johns Hopkins University School of
Medicine and has been selected as an approved investigator by the Food and
Drug Administration for clinical trials of a new spinal fusion device. From
1976 to 1980, he held various positions as an engineer for Portland General
Electric Co. Dr. Moore is the brother of Patrick W. Moore. Dr. Moore is 45
years of age.
Mr. BINH Q. LE is Deputy General Director of BVT & Co. and General Director
and shareholder for DELICES Co., Ltd., a division of BVT & Co., Ltd., a
Vietnam-based importer since 1998. He also serves as President and sole
shareholder of Le Mortgage, Inc. (d.b.a. All City Financial Corporation), a
commercial and residential mortgage broker, a position which he has held
since 1987. From 1985 to 1987, Mr. Le was General Plant Manager at
3
<PAGE>
Southwest General Industries, a privately-held electronic contract
manufacturing company. From 1976 to 1985, he served on the San Diego Private
Industry Council. Mr. Le is 53 years of age.
Mr. LINCOLN R. WARD, JR. is President of Linc Ward Consulting, specializing
in marketing and business management consulting, a position which he has held
since 1986. In addition, since 1994 he has been Executive Vice President of
Avery Bennett, Inc. (formerly Princeton Masters International), an employment
agency, where he is responsible for executive search and career counseling
activities. From 1980 to 1986 Mr. Ward held various positions for Pacific
Bell and AT&T, including Vice President and General Manager of Pacific Bell
in San Diego, California. Mr. Ward has served as an elected director on the
Board of Directors of several companies, including Langley Corporation, Fleet
Aerospace, ExCel, Mednet (Medi-Mail) and MobilWorks. Mr. Ward is currently
Chairman of St. Vincent de Paul Villages USA and a member of the Eagle Scouts
Board of Review of the Boy Scouts and heads the Select Committee on
Government Efficiency & Reform, a citizens' effort to improve the
effectiveness and efficiency of City of San Diego operations. Mr. Ward is 75
years of age.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE NOMINEES LISTED ABOVE.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During fiscal year 1999, there were nine meetings of the Board of Directors.
All of the Company's directors attended at least 75 percent of all meetings
of the Board of Directors and other committees of the Board on which such
directors served during fiscal year 1999.
The standing committees of the Board of Directors of the Company are the
Compensation Committee, the Nominating Committee, and the Audit Committee.
The principal duties of the Compensation Committee are to review and
recommend all compensation of directors, officers, and employees of the
Company, to administer and manage the Company's incentive compensation plans,
to determine grants of stock options under Company plans, and to report to
the Board of Directors of the Company. Current members of the Compensation
Committee are Messrs. Staley, Sharp and Genovese. The Compensation Committee
met four times during fiscal year 1999.
The Nominating Committee's principal duties are to nominate persons to serve
on the Board of Directors of the Company and to report to the Board. The
members of the Nominating Committee are Messrs. Moore, Hill and Staley. The
Nominating Committee does not solicit or consider nominations from
shareholders. The Nominating Committee met once during fiscal year 1999.
The principal duties of the Audit Committee are to advise and assist the
Board of Directors in evaluating the performance of the Company's independent
auditors, including the scope and adequacy of the auditor's examination, and
to review with the auditors the accuracy and completeness of the Company's
financial statements and procedures. The members of the Audit Committee are
Messrs. Staley, Sharp and Genovese, none of whom are officers or employees of
the Company. The Audit Committee met once during fiscal year 1999.
DIRECTOR COMPENSATION
Directors who are also officers or employees of the Company or subsidiaries
receive no additional compensation for their services as directors. In prior
years and during the first quarter of fiscal year 1999, Directors who are not
employees of the Company (Messrs. Moore, Sharp and Staley) were paid a fee of
$1,000 plus $250 for each Board or Committee meeting attended. For the period
from July 1, 1998 to December 11, 1998, Directors who were not employees
(Messrs. Hill, Sharp and Staley), were each entitled to receive a fee of
$2,000. For the period from December 11, 1998 to March 31, 1999, Directors
who were not employees (Messrs. Hill, Sharp and Staley), were each entitled
to receive a fee of $10,000. From April 1, 1999, all outside directors
(Messrs. Genovese, Hill, Sharp and Staley) each shall receive a quarterly fee
of $2,500, plus additional fees of $1,000 for attending a second meeting in
any such quarter and $250 for participating in any Board meetings by
telephone. All outside directors (Messrs. Genovese, Hill, Sharp and Staley)
also each received options to purchase 25,000 shares of Photomatrix common
stock. These options vest over two years. Messrs. Moore, Sharp and
4
<PAGE>
Staley also each received $6,900 as payment in lieu of stock options that
they should have received prior to the June 5, 1998 merger between
Photomatrix and I-PAC. In addition, Directors are reimbursed for reasonable
travel expenses incurred in attending meetings.
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the ownership of
Photomatrix common stock by Directors and Executive Officers:
<TABLE>
<CAPTION>
Shares of Common Stock Percent of Shares of
Beneficially Owned Common Stock Outstanding
Name of Beneficial Owner or Group as of July 12, 1999 (1) as of July 12, 1999 (1)
- --------------------------------- ----------------------- -----------------------
<S> <C> <C>
Patrick W. Moore, Chief Executive Officer 1,826,501 (2) 18.21%
William L. Grivas, Former Chairman (3) 1,762,998 (4) 17.58%
Suren G. Dutia, Director 374,366 (5) 3.73%
James P. Hill, Director 1,579,176 (6) 15.74%
John F. Staley, Director 140,033 (7) 1.40%
Ira H. Sharp, Director 81,667 (8) *
Michael Genovese, Director -- *
J. Larry Smart, Former Director (9) -- *
Roy L. Gayhart, Chief Financial Officer, Secretary 45,000 *
All directors and executive officers as a group 5,809,741 57.92%
</TABLE>
(1) Includes and reflects the ownership by the named director or officer of
shares of Common Stock subject to options exercisable within 60 days of
August 10, 1999.
(2) Includes options to purchase 227,274 shares.
(3) Mr. Grivas resigned as director and chairman of the Photomatrix Board of
Directors on January 18, 1999.
(4) Includes 1,720,998 shares and options for shares owned directly by William
L. Grivas and 42,000 shares owned by family members.
(5) Includes options to purchase 266,667 shares.
(6) Includes 168,824 shares owned by Loma Services Corporation, of which Mr.
Hill is a principal shareholder, and 1,410,352 shares owned by Mr. Hill as
Trustee of the Hill Family Trust.
(7) Includes options to purchase 80,000 shares.
(8) Includes options to purchase 76,667 shares.
(9) Mr. Smart resigned as Director effective December 18, 1998.
* Less than 1%
5
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the most recent three years, the cash
compensation paid by the Company, as well as all other compensation paid or
accrued for those years, to the Executive Officers of the Company as of March
31, 1999. No other executive officers of the Company earned annual salary and
bonus in excess of $100,000 during the fiscal year 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------- ---------------
SECURITIES
NAME AND UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS OTHER OPTIONS/SARS(#)
- ------------------ ---- -------- ----- ----- ---------------
<S> <C> <C> <C> <C> <C>
William L. Grivas,
Former Chairman (1) (2) 1999 $125,000 $0 $2,800 (3) 153,941
1998 -- -- -- --
1997 -- -- -- --
Patrick W. Moore,
Chief Executive Officer (2) 1999 $125,000 $0 $2,700 (4) 153,941
1998 -- -- -- --
1997 -- -- -- --
Suren G. Dutia,
Former Chairman, CEO 1999 $140,000 $0 $46,500(5) --
and President (8) 1998 $140,000 $0 $11,200 (5) --
1997 $154,400 $30,000 $15,000 (5) --
Roy L. Gayhart,
Chief Financial Officer (6) 1999 $114,000 $25,000 $7,750 (7) 210,000
1998 $97,000 $0 $5,800(7) 40,000
1997 -- -- -- --
</TABLE>
(1) Mr. Grivas resigned as Chairman of the Photomatrix Board of Directors
on January 18, 1999.
(2) Mr. Grivas and Mr. Moore were not Executive Officers of the Company
prior to fiscal year 1999.
(3) Includes Company matching contributions to the Photomatrix Savings and
Investment Plan ($0) and medical premiums ($2,800) for 1999.
(4) Includes Company matching contributions to the Photomatrix Savings and
Investment Plan ($0) and medical premiums ($2,700) for 1999.
(5) Includes accrued severance pay ($32,300 in 1999), company matching
contributions to the Photomatrix Savings and Investment Plan ($2,500,
$4,900 and $4,800,) and supplemental life and medical premiums
($11,700, $7,400 and $10,200) for 1999, 1998 and 1997, respectively.
(6) Mr. Gayhart was not an employee or Executive Officer of the Company
prior to fiscal year 1998.
(7) Includes Company matching contributions to the Photomatrix Savings and
Investment Plan ($2,500 and $800) and medical premiums ($5,250 and
$5,000) for 1999 and 1998, respectively.
(8) Mr. Dutia resigned as Chairman and CEO on June 5, 1998 and as
President on June 21, 1999. He remains a Director.
6
<PAGE>
EMPLOYMENT AGREEMENTS. Mr. Moore, Mr. Dutia and Mr. Gayhart are employed
under employment agreements that expire on September 30,1999, July 31, 1999
and September 30, 1999, respectively. Mr. Dutia resigned as President on June
21, 1999, and his employment terminated on July 31, 1999. If Mr. Moore's or
Mr. Gayhart's employment is terminated by the Company without cause prior to
the end of its term, then he will be entitled to receive his base salary,
stock option vesting and health insurance benefits for the remainder of the
term.
OFFICERS SEVERANCE POLICY. In 1988, the Company's Board of Directors adopted
an Officers Severance Policy that was modified in November 1990, December
1996, February 1997 and in April 1999. Under the policy, Mr. Dutia will
receive twelve weeks' compensation beginning August 1, 1999. In addition, Mr.
Moore is to receive twelve weeks' compensation upon termination of employment
by the Company, in addition to amounts due him under his employment contract,
and Mr. Gayhart is to receive eight (8) weeks' compensation upon termination,
in addition to amounts payable for the remaining term of his employment
agreement.
STOCK OPTION GRANTS
The following table shows certain information concerning stock options granted
during fiscal year 1999 to the Company's executive officers:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (1)
------------------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE ($) ($)
- ---- ----------- ----------- ------ ---- --- ---
Patrick W. Moore 153,941 24.3% $0.4875 June 4, 2008 $19,000 $75,000
William L. Grivas 153,941 24.3% $0.4875 June 4, 2008 $19,000 $75,000
Roy Gayhart 200,000 31.5% $0.625 October 15, 2008 -- $70,000
Roy Gayhart 10,000 1.6% $0.81 April 18, 2008 -- $ 2,000
</TABLE>
(1) The potential realizable value is calculated pursuant to SEC
regulations by assuming the indicated annual rates of stock price
appreciation for the option term. Actual realized value will depend on
the actual annual rate of stock price appreciation for the option term.
This calculation assumes that the market price of the stock as of June
12, 1999 of $0.375 would appreciate to $0.6108 and $0.97265, at 5% and
10% annual rates of price appreciation respectively.
7
<PAGE>
AGGREGATED STOCK OPTION EXERCISES AND FISCAL YEAR-END STOCK OPTION VALUE TABLE
The following table sets forth certain information regarding the number and
value of specified unexercised options held by the Executive Officer as of March
31, 1999:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS(1) IN-THE-MONEY OPTIONS(2)
-------------------------------------- ------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Patrick W. Moore 190,607 36,667 - -
William L. Grivas 153,941 - - -
Roy Gayhart 20,000 230,000 - -
Suren G. Dutia 183,334 83,334 $13,000 -
</TABLE>
(1) No options were exercised in fiscal year 1999.
(2) The value is calculated as the total market value of stock subject to
the options on June 12, 1999 ($0.375 per share), less the total of the
option exercise prices.
TEN YEAR OPTION REPRICING TABLE
In July 1997 the Compensation Committee offered to reprice a portion of the
option shares previously granted to Mr. Dutia which had an original exercise
price in excess of the market value of the Company's common stock at that time.
This offer was made in conjunction with identical offers to most employees. The
following table sets forth the specified information concerning all options
repriced for all executive officers of the Company for the period August 1987
(initial public offering) through July 1999.
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SHARES MARKET PRICE OPTION TERM
UNDERLYING OF STOCK AT EXERCISE REMAINING AT
OPTIONS TIME OF PRICE AT TIME NEW EXERCISE DATE OF
NAME DATE REPRICED REPRICING OF REPRICING PRICE REPRICING
- ---- ---- -------- --------- ------------ ----- ---------
<S> <C> <C> <C> <C> <C> <C>
S. Dutia, November 1990 200,000 $0.18 $3.75 $0.18 8 years
President
S. Dutia, June 1995 25,000 $1.25 $4.13 $1.69 9 years
President
S. Dutia, November 1995 166,667 $0.88 $1.31-$2.91 $0.88 6-9 years
President
S. Dutia, July 1997 166,667 $0.37 $0.88 $0.37 4-7 years
President
B. Myers, November 1995 100,000 $0.18 $1.50-$3.48 $0.18 8 years
Former CFO
B. Myers, June 1995 16,667 $1.25 $4.13 $1.69 9 years
Former CFO
B. Myers, November 1995 116,667 $0.88 $1.31-$2.91 $0.88 6-9 years
Former CFO
</TABLE>
8
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, officers and persons who own more than ten percent of the
Company's common stock, to file reports of ownership and changes in ownership
of securities with the Securities and Exchange Commission and to furnish to
the Company copies of all Section 16(a) forms they file. Based solely on its
review of copies of such forms received by it, or written representations
from reporting persons that no Forms 5 were required for those persons, the
Company believes that during fiscal year 1999, all filings required by its
directors, officers and greater than 10 percent beneficial owners were timely
filed.
BENEFIT PLAN DESCRIPTIONS
The following are brief descriptions of the benefit plans provided to the
Company's executive officers:
1998 STOCK OPTION PLAN
The Photomatrix, Inc. 1998 Stock Option Plan ("1998 Plan") was adopted by the
Company's Board of Directors in February 1998 and approved by the Company's
shareholders in June 1998. The 1998 Plan authorizes the grant of incentive
and nonqualified stock options covering an aggregate of 1,500,000 shares of
Common Stock. As of March 31, 1999, no shares of Common Stock were reserved
for issuance pursuant to the 1998 Plan.
The 1998 Plan is administered by the Compensation Committee of the Board of
Directors, which has the authority to award incentive or nonqualified options
to any employee or Board member of the Company or its subsidiaries.
Approximately 120 employees and six Board members are currently eligible to
participate in the Plan, and 462,000 options are currently outstanding.
The exercise price of an incentive option may not be less than 100% (or 110%
in the case of a person who is the beneficial owner of more than 10% of the
Company's outstanding shares) of the fair market value per share on the date
of grant, and the exercise price for a nonqualified option may not be less
than 85% of the fair market value per share on the date of grant. The 1998
Plan defines fair market value as the mean between the bid and asked price of
the Common Stock as quoted on NASDAQ or the over the counter market. Subject
to these limitations, the Committee determines the exercise price.
The Committee also determines the schedule pursuant to which options become
exercisable. Options granted to officers and employees must vest at a rate of
at least 20% per year during the five years following the grant. The only
condition to vesting imposed under outstanding options is continuous service
as an employee or Board member during the vesting period. All outstanding
options automatically vest, in full, in the event of the dissolution or
liquidation of the Company or, in the event of a reorganization, merger or
consolidation of the Company, if the Company is not the surviving company.
Options granted under the 1998 Plan may expire no later than 10 years from
the date of the grant. If an employee terminates his employment for any
reason other than death or permanent disability, his vested options expire
within 90 days of the termination. In the case of death or permanent
disability, the vested options expire within 12 months of employment
termination.
9
<PAGE>
The exercise price is payable in full, in cash, or in the discretion of the
Committee, by the delivery of outstanding shares of Common Stock owned by the
participant, at the time of exercise of the option.
1994 STOCK OPTION PLAN
The Photomatrix, Inc. 1994 Stock Option Plan ("1994 Plan") was adopted by the
Company's Board of Directors in May 1994 and approved by the Company's
shareholders in July 1994. The 1994 Plan authorizes the grant of incentive
and nonqualified stock options covering an aggregate of 366,666 shares of
Common Stock. As of March 31, 1999, a total of 366,666 shares of Common Stock
were reserved for issuance pursuant to the 1994 Plan, all of which were
subject to outstanding options, and no options were available to be granted
in the future.
The 1994 Plan is administered by the Compensation Committee of the Board of
Directors, which has the authority to award incentive or nonqualified options
to any employee of the Company or its subsidiaries. Approximately 120
employees are currently eligible to participate in the Plan, and options are
currently held by 17 of these employees.
The exercise price of an incentive option may not be less than 100% (or 110%
in the case of a person who is the beneficial owner of more than 10% of the
Company's outstanding shares) of the fair market value per share on the date
of grant, and the exercise price for a nonqualified option may not be less
than 85% of the fair market value per share on the date of grant. The 1994
Plan defines fair market value as the mean between the bid and asked price of
the Common Stock as quoted on NASDAQ or the over the counter market. Subject
to these limitations, the Committee determines the exercise price. Because
the Company has a substantial net operating loss carryforward for federal
income tax purposes and would not materially benefit from a compensation
deduction, the Committee generally has awarded incentive stock options to
employees.
The Committee also determines the schedule pursuant to which options become
exercisable. Options granted to officers and employees typically vest as
follows: 33% to 50% of the options granted vest 12 months following the date
of grant, 33% to 50% vest 24 months following the date of grant and 0% to 34%
vest 36 months following the date of the grant. The only condition to vesting
imposed under outstanding options is continuous service as an employee during
the vesting period. All outstanding options automatically vest, in full, in
the event of the dissolution or liquidation of the Company or, in the event
of a reorganization, merger or consolidation of the Company, if the Company
is not the surviving company.
Options granted under the 1994 Plan may expire no later than 10 years from
the date of the grant. If an employee terminates his employment for any
reason other than death or permanent disability, his vested options expire
within 90 days of the termination. In the case of death or permanent
disability, the vested options expire within 12 months of employment
termination.
The exercise price is payable in full, in cash, or in the discretion of the
Committee, by the delivery of outstanding shares of Common Stock owned by the
participant, at the time of exercise of the option.
1992 STOCK OPTION PLAN
The Photomatrix, Inc. 1992 Stock Option Plan ("1992 Plan") was adopted by the
Company's Board of Directors in May 1992 and approved by the Company's
shareholders in July 1992. The 1992 Plan authorizes the grant of incentive
and nonqualified stock options covering an aggregate of 333,333 shares of
Common Stock. As of March 31, 1999, no options remained available for grant
under the 1992 Plan.
The 1992 Plan is administered by the Compensation Committee of the Board of
Directors, which has the authority to award incentive or nonqualified options
to any employee or Board member of the Company or its subsidiaries.
Approximately 120 employees and six Board members are currently eligible to
participate in the Plan, and options are currently held by nine employees and
six Board members.
The exercise price of an incentive option may not be less than 100% (or 110%
in the case of a person who is the beneficial owner of more than 10% of the
Company's outstanding shares) of the fair market value per share on the date
of grant, and the exercise price for a nonqualified option may not be less
than 85% of the fair market value per share on the date of grant. The 1992
Plan defines fair market value as the mean between the bid and asked price of
10
<PAGE>
the Common Stock as quoted on NASDAQ or the over the counter market. Subject
to these limitations, the Committee determines the exercise price. Because
the Company has a substantial net operating loss carryforward for federal
income tax purposes and would not materially benefit from a compensation
deduction, the Committee generally has awarded incentive stock options to
employees.
The Committee also determines the schedule pursuant to which options become
exercisable. Options granted to officers and employees typically vest as
follows: 33% to 50% of the options granted vest 12 months following the date
of grant, 33% to 50% vest 24 months following the date of grant and 0% to 34%
vest 36 months following the date of the grant. The only condition to vesting
imposed under outstanding options is continuous service as an employee or
Board member during the vesting period. All outstanding options automatically
vest, in full, in the event of the dissolution or liquidation of the Company
or, in the event of a reorganization, merger or consolidation of the Company,
if the Company is not the surviving company.
Options granted under the 1992 Plan may expire no later than 10 years from
the date of the grant. If an employee terminates his employment for any
reason other than death or permanent disability, his vested options expire
within 90 days of the termination. In the case of death or permanent
disability, the vested options expire within 12 months of employment
termination.
The exercise price is payable in full, in cash, or in the discretion of the
Committee, by the delivery of outstanding shares of Common Stock owned by the
participant, at the time of exercise of the option.
SAVINGS AND INVESTMENT PLAN. The Photomatrix, Inc. Savings and Investment
Plan (the "Savings Plan") generally covers all employees of the Company and
its subsidiaries (other than Photomatrix) who are at least age 21 and have
completed at least six months of service with the Company. The Savings Plan
is a qualified plan under Section 401(a) of the Code and meets the
requirements of Section 401(k) of the Code. Under the Savings Plan,
participants may elect to contribute between 2% and 10% of their annual
compensation each year to the Savings Plan. The Company may make a
discretionary matching contribution to the Savings Plan each year. For fiscal
year 1999, until the quarter ended December 31 1998, the Company made a
matching contribution in an amount equal to 50% of the first 6% of
compensation contributed by each participant. After the quarter ended
December 31, 1998, no matching contributions were made to the Savings Plan.
Through June 30, 1998, participants could elect to invest their accounts in
one of three mutual funds (a) the Janus Fund, which is a common stock fund,
(b) Invesco Industrial Income Fund, which is a common stock fund or Dreyfus
Short-Intermediate Government Fund, which invests in government obligations.
Effective July 1, 1998, the Savings Plan entered into a group annuity
contract with Manulife Financial, thereby offering its participants more than
thirty different investment options. Participants immediately acquire a
vested interest in their own contributions to the Savings Plan and acquire a
vested interest in the matching contributions by the Company and in any
earnings thereon according to a 6-year vesting schedule, pursuant to which
participants become 10% vested for each of the first three years of service,
and an additional 20% vested for each of the next two years of service and an
additional 30% vested for the following year. Participants' vested interests
are distributed after termination of employment. In addition, participants
may make withdrawals from their accounts while employed if they are either
(a) over age 59-1/2 or (b) experiencing an extreme financial hardship.
SUPPLEMENTAL LIFE INSURANCE AND MEDICAL PREMIUM PLANS. During fiscal 1999,
the Company provided life insurance to its executive officers in the amount
equal to five times base salary. The Company no longer provides this benefit.
The Company also pays medical insurance costs for its executive officers.
Such costs are based on a fixed premium. In addition, the Company pays
supplemental medical premiums for Mr. Dutia and will continue to do so
through November of 1999. These premiums cover any medical expenses that are
not covered by the Group Medical Plans that are available to all employees.
11
<PAGE>
PROPOSAL 2 - APPROVAL OF AN AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO EFFECT NAME CHANGE
The Company is asking shareholders to vote on a proposal to amend and restate
the Company's Amended and Restated Articles of Incorporation (the Articles)
in order to change the name of the Company from Photomatrix, Inc. to National
Manufacturing Technologies, Inc. The Board of Directors has unanimously
approved such an amendment to and restatement of the Articles, and a complete
copy of the proposed Amended and Restated Articles of Incorporation is
attached to this Proxy Statement as Exhibit A.
The Company desires to change the name of the Company from Photomatrix, Inc.,
because the Company believes the present name does not adequately reflect the
Company's business operations subsequent to the recent sale of product rights
and assets of the Company's scanner division to Scan-Optics; because the name
Photomatrix, Inc., has been historically associated with image capture
products; and because the Company desires to differentiate its remaining
businesses from the image capture business.
The Company desires to change the name of the Company to National
Manufacturing Technologies, Inc., because the Company believes the proposed
name would more adequately reflect the services currently offered by the
Company, as well as its continuing strategy to vertically integrate
manufacturing services, as demonstrated by its recent acquisitions of I-PAC
Manufacturing Inc., National Metal Technologies, Inc. and I-PAC Precision
Machining, Inc.. Also, the Company believes that the word "manufacturing" is
reflective of its core competency, the creation of value-added manufactured
goods.
If the proposed name change is adopted, only the Company's name will change.
The Company will use the name National Manufacturing Technologies, Inc. in
its communications with shareholders and the investment community. Also, if
the name change is adopted, it is anticipated that the Company's Common Stock
will be traded under a new symbol such as "NMFG". Final determination of any
symbol change will be subject to the approval of NASDAQ. Changing the
Company's name does not alter any of the rights of shareholders.
Upon consummation of the proposed name change, it will not be necessary to
surrender Photomatrix, Inc., stock certificates. Instead, when certificates
are presented for transfer, new certificates bearing the name National
Manufacturing Technologies, Inc., will be issued.
If any action, suit, proceeding or claim is instituted, made or threatened
related to the proposed name change, which would make effectuation of the
proposed name change inadvisable in the opinion of the Company's Board of
Directors, or if there exists any other circumstance which would make
effectuation of the proposed name change inadvisable in the opinion of the
Company's Board of Directors, the proposal to amend and restate the Articles
may be terminated by the Board of Directors either before or after approval
of the name change by the shareholders.
Approval of the amendment to and restatement of the Articles to effect the
name change requires the affirmative vote of the holders of a majority of the
outstanding shares of the Company's common stock entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
IN FAVOR OF THIS PROPOSAL TO AMEND AND RESTATE THE COMPANY'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION TO EFFECT A CHANGE IN THE COMPANY'S
NAME FROM PHOTOMATRIX, INC., TO NATIONAL MANUFACTURING TECHNOLOGIES, INC.
12
<PAGE>
PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Photomatrix's Board of Directors has selected BDO Seidman as Photomatrix's
independent auditors for the fiscal years 1999 and 2000. In the absence of
instructions to the contrary, the shares represented by the proxy delivered to
the Board of Directors will be voted in favor of ratification of this
appointment. A representative of BDO Seidman is expected to be present at the
Annual Meeting and will be available to respond to appropriate questions and to
make such statements as he or she may desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE RATIFICATION
OF THE APPOINTMENT OF BDO SEIDMAN AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE FISCAL YEARS 1999 AND 2000.
ANNUAL REPORT
The Annual Report of the Company for the 1999 Fiscal Year on Form 10-KSB,
which includes financial statements for the fiscal year ended March 31, 1999,
is being mailed with this proxy statement to shareholders of record on August
4, 1999. The Annual Report is not considered to be part of this proxy
statement. The Company has filed this Report with the Securities and Exchange
Commission.
At the discretion of the Company, additional copies of this report, excluding
exhibits, will be furnished to shareholders without charge upon written
request to Roy Gayhart, Photomatrix, Inc., 1958 Kellogg Avenue, Carlsbad,
California 92008. A copy of any exhibit will be furnished to any shareholder
upon written request and payment to the Company of a copying charge of 25
cents per page. Requests for copies of exhibits should also be directed to
the above address.
Copies of the Annual Report on Form 10-KSB, together with exhibits, can also
be obtained at the EDGAR-Online website located at http://www.edgar-online.com
SHAREHOLDER PROPOSALS
Shareholders of the Company who intend to submit proposals to the Company's
shareholders at the Company's Annual Meeting of Shareholders to be held in
2000 must submit such proposals to the Company no later than April 21, 2000,
in order to be considered for possible inclusion in the Proxy Statement and
form of Proxy relating to that meeting. Shareholder proposals should be
submitted to Roy L. Gayhart, Secretary, Photomatrix, Inc., 1958 Kellogg
Avenue, Carlsbad, California 92008.
OTHER BUSINESS
Photomatrix knows of no other business to be submitted to the meeting. If any
other business properly comes before the meeting or any adjournment thereof,
the persons named as proxy holders on the enclosed proxy card intend to vote
the shares represented in accordance with their best judgment in the interest
of the Company.
ROY L. GAYHART
Secretary
AUGUST 20, 1999
Carlsbad, California
13
<PAGE>
PHOTOMATRIX, INC.
FOR ANNUAL MEETING OF SHAREHOLDERS -SEPTEMBER 8, 1999
The undersigned stockholder of Photomatrix, Inc. (the "Company"), hereby
acknowledges receipt of the Notice of Annual Meeting of Shareholders and
Proxy Statement, each dated August 20, 1999, and hereby appoints Patrick W.
Moore as the primary proxy and attorney-in-fact, and James P. Hill as the
secondary proxy and attorney-in-fact, each with full power of substitution,
for and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Shareholders of Photomatrix, Inc. (the "Annual Meeting") to
be held at the 1958 Kellogg Avenue, Carlsbad, California 92008, on September
8, 1999 at 10:00 a.m. and at any and all postponements and adjournments
thereof, and to vote all shares of Common Stock which the undersigned would
be entitled to vote if then and there personally present, as specified below:
PROPOSAL 1
<TABLE>
<S> <C> <C>
/_/ FOR the Election of /_/ AGAINST the Election of /_/ ABSTAIN
Directors Directors
PROPOSAL 2
/_/ FOR the Approval /_/ AGAINST the Approval /_/ ABSTAIN
of an Amendment to of an Amendment to
the Company's Amended and the Company's Amended and
Restated Articles of Restated Articles of
Incorporation to Effect Incorporation to Effect
Change of Company Change of Company
Name to National Manufacturing Name to National Manufacturing
Technologies, Inc. Technologies, Inc.
PROPOSAL 3
/_/ FOR the Appointment /_/AGAINST the Appointment /_/ ABSTAIN
of Independent Auditors of Independent Auditors
</TABLE>
and in their discretion, upon such other matter or matters as may properly
come before the Annual Meeting and any adjournments or postponements thereof
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, UNLESS OTHERWISE MARKED,
THIS PROXY WILL BE VOTED FOR THE ABOVE PROPOSALS
(Please Sign and Date the Proxy on Reverse Side)
DATED: _____________________, 1999
- ------------------------------------------
(Signature)
- ------------------------------------------
(Signature)
Please sign exactly as your name appears above. Give your full title if signing
in other than individual capacity. All joint owners should sign.
<PAGE>
Exhibit A
CERTIFICATE OF
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
PHOTOMATRIX, INC.,
a California corporation
Patrick W. Moore and Roy L. Gayhart certify that:
1. They are the duly elected and acting Chief Executive Officer and
Secretary, respectively, of the corporation named above.
2. The Articles of Incorporation of the corporation shall be amended and
restated in full to read as follows:
ARTICLE I
The name of the corporation is National Manufacturing
Technologies, Inc.
ARTICLE II
The purpose of the corporation is to engage in any lawful activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporation Code.
ARTICLE III
The name and complete business address and the state of the corporation's agent
for service of process is:
Patrick W. Moore
1958 Kellogg Avenue
Carlsbad, CA 92008
ARTICLE IV
The Corporation is authorized to issue two classes of shares of capital
stock to be designated respectively Common Stock and Preferred Stock. The number
of shares of Common Stock authorized is 30,000,000. The number of shares of
Preferred Stock authorized is 3,173,275. The Preferred Stock may be issued in
one or more series. The Board of Directors is authorized to fix the number of
any such series of Preferred Stock and to determine the designation of any such
series. The Board of Directors is further authorized to determine or alter the
rights, preferences, privileges, and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock, and within the limits and
restrictions stated in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series, to increase or
decrease (but not below the number of shares of such series then outstanding)
the number of shares of any such series subsequent to the issue of shares of
that series.
ARTICLE V
The liability of directors of the Corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
ARTICLE VI
The Corporation is authorized to provide, whether by bylaw, agreement
or otherwise, indemnification of agents (as defined in Section 317 of the
General Corporation Law of California) in excess of that expressly
<PAGE>
permitted by said Section 317 for those agents of the Corporation for breach
of duty to the Corporation and its stockholders; provided, however, that such
provision may not provide for indemnification of any agent for any acts or
omissions or transactions from which a director may not be relieved of
liability as set forth in the exception to paragraph (10) of subdivision (a)
of Section 204 of the General Corporation Law of California or as to
circumstances in which indemnity is expressly prohibited by said Section 317.
ARTICLE VII
Any repeal or modification of Article V or Article VI by the
stockholders of the Corporation shall not adversely affect any right or
protection of an agent of the Corporation existing at the time of such repeal or
modification.
1. The foregoing Amended and Restated Articles and this Certificate
have been approved by the Board of Directors of the Corporation.
2. The foregoing Amended and Restated Articles was approved by the
required vote of the shareholders of the corporation entitled to vote in
accordance with Sections 902 and 903 of the California Corporation Code. The
total number of outstanding shares of each class entitled to vote with respect
to the foregoing Amended and Restated Articles was 10,013,017 shares of Common
Stock; and the number of shares of Common Stock voting in favor of the foregoing
Amended and Restated Articles equaled or exceeded the required majority vote of
outstanding shares of Common Stock voting as a class. No shares of Preferred
Stock were outstanding.
WE FURTHER DECLARE under penalty of perjury and the laws of this State
of California that the matter set forth in this Certificate are true and correct
to the best of our knowledge.
Dated: _________________, 1999 Dated: _________________, 1999
By _________________________ By ______________________
Patrick W. Moore Roy L. Gayhart
Chief Executive Officer Secretary
