SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Check the appropriate box:
|_| Preliminary proxy statement.
|X| Definitive proxy statement.
|_| Definitive additional materials.
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
|_| Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
TUTOGEN MEDICAL, INC.
(Name of Registrant as specified in its Charter)
None.
(Name of person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(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:
<PAGE>
TUTOGEN MEDICAL, INC.
925 Allwood Road
Clifton, New Jersey 07012
March 1, 2000
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to
attend the 2000 Annual Meeting of the Shareholders of Tutogen Medical, Inc. (the
"Company"), which will be held at The Lucerne, 973 West 79th Street, New York,
New York 10024, on April 27, 2000, at 10:00 a.m., local time.
At the Annual Meeting, you will be asked (i) to elect eight (8) directors
as members of the Board of Directors of the Company, (ii) to approve an
amendment to the 1996 Incentive and Non-Statutory Stock Option Plan increasing
the total number of shares available for issuance under the Plan from 2,000,000
to 2,500,000, (iii) to ratify the appointment of Deloitte and Touche, L.L.P. as
the Company's independent auditors for the fiscal year ending September 30,
2000, and (iv) to transact such other business as may properly come before the
meeting or any adjournment thereof. On the following pages you will find the
Notice of the Annual Meeting of Shareholders, and the Proxy Statement providing
information concerning the matters to be acted upon at the meeting. Of course,
the Board of Directors will be present at the Annual Meeting to answer any
questions you might have.
YOUR VOTE IS IMPORTANT! The Company's Board of Directors would greatly
appreciate your attendance at the Annual Meeting. HOWEVER, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, IT IS VERY IMPORTANT THAT YOUR SHARES BE
REPRESENTED. Accordingly, please sign, date, and return the enclosed proxy card,
which will indicate your vote upon the various matters to be considered. If you
do attend the meeting and desire to vote in person, you may do so by withdrawing
your proxy at that time.
I sincerely hope you will be able to attend the Annual Meeting and I look
forward to seeing you at the 2000 Annual Meeting of Shareholders.
Very truly yours,
/s/ Charles C. Dragone
CHARLES C. DRAGONE
Chairman of the Board
<PAGE>
TUTOGEN MEDICAL, INC.
925 Allwood Road
Clifton, New Jersey 07012
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 27, 2000
TO THE SHAREHOLDERS OF TUTOGEN MEDICAL, INC.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of the Shareholders of
Tutogen Medical, Inc., a Florida corporation (the "Company") will be held at The
Lucerne, 973 West 79th Street, New York, New York 10024, on April 27, 2000, at
10:00 a.m., local time, to act on the following matters:
1. To elect eight (8) directors as members of the Board of Directors of
the Company to serve until the 2001 Annual Meeting of Shareholders
and until their respective successors shall be duly elected and
qualified;
2. To approve amendment to the Company's 1996 Incentive and
Non-Statutory Stock Option Plan increasing the number of shares
covered thereby from 2,000,000 to 2,500,000 shares;
3. To ratify the appointment of Deloitte and Touche L.L.P. as the
Company's independent auditors for the fiscal year ending September
30, 2000; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only Shareholders of record at 5:00 p.m., Eastern Standard Time, on March 7,
2000, are entitled to receive notice of, and to vote at, the Annual Meeting.
Each shareholder, even though he or she may presently intend to attend the
Annual Meeting, is requested to sign and date the enclosed proxy card and to
return it without delay in the enclosed postage-paid envelope. Any shareholder
present at the Annual Meeting may withdraw his or her proxy and vote in person
on each matter brought before the Annual Meeting.
By Order of the Board of Directors
/s/ Charles C. Dragone
Charles C. Dragone,
Chairman of the Board
Clifton, New Jersey
March 1, 2000
<PAGE>
TUTOGEN MEDICAL, INC.
925 Allwood Road
Clifton, New Jersey 07012
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 27, 2000
GENERAL INFORMATION
This Proxy Statement is being furnished to the holders
("Shareholders") of the common shares, par value $.01 per share ("Common
Shares"), of Tutogen Medical, Inc., a Florida corporation (the "Company") in
connection with the solicitation, by the Company's Board of Directors, of
proxies for use at the 2000 Annual Meeting of Shareholders to be held on April
27, 2000 at 10:00 a.m. (the "Annual Meeting") and at any adjournment thereof.
The Annual Meeting will be held at The Lucerne, 973 West 79th Street, New York,
New York 10024.
At the Annual Meeting, Shareholders will be asked to consider and
vote on (i) the election of eight (8) directors as members of the Board of
Directors of the Company, (ii) an amendment to the Company's 1996 Incentive and
Non-Statutory Stock Option Plan increasing the total number of shares covered by
the Plan from 2,000,000 to 2,500,000 and (iii) the ratification of Deloitte and
Touche, L.L.P. as the Company's auditors for the fiscal year ending September
30, 2000. All properly executed proxies received prior to or at the Annual
Meeting will be voted in accordance with the instructions indicated thereon, if
any. If no instructions are indicated, such proxies will be voted FOR the
election of the Board of Directors' nominees for directors, FOR the amendment to
the 1996 Incentive and Non-Statutory Stock Option Plan and FOR the ratification
of Deloitte and Touche L.L.P. as the Company's auditors.
The Board of Directors has fixed 5:00 p.m., Eastern Standard Time,
on March 7, 2000 as the record date (the "Record Date") for the determination of
the Shareholders of record entitled to receive notice of, and to vote at, the
Annual Meeting or any adjournment thereof. On March 1, 2000, there were
11,236,098 issued and outstanding Common Shares of the Company, constituting the
only class of stock outstanding. The presence of a majority of the outstanding
Common Shares as of the Record Date, in person or represented by proxy, will
constitute a quorum at the Annual Meeting.
Any Shareholder may revoke his or her proxy, at any time before it
is exercised, by (i) duly executing and submitting a subsequently dated proxy,
(ii) delivering a subsequently dated written notice of revocation to the
Company, which notice is received at or before the Annual Meeting, or (iii)
voting in person at the Annual Meeting (although, mere attendance at the Annual
Meeting will not, in and of itself, constitute a revocation of the proxy). Any
written notice revoking a proxy should be sent to the Secretary of the Company
at the Company's principal executive offices, located at the address set forth
above.
This Proxy Statement and the enclosed proxy card are first being
sent to Shareholders, together with the Notice of Annual Meeting, on or about
March 13, 2000. Shareholders are requested to complete, date, and sign the
accompanying form of proxy and return it promptly in the envelope provided with
these materials. No postage is necessary if the proxy is mailed in the United
States in the accompanying envelope.
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
In accordance with the Company's Bylaws, the Board of Directors has
fixed the number of directors of the Company ("Directors") to be elected at the
Annual Meeting at eight (8). The Company currently has seven Directors, each of
whose term of office will expire at the Annual Meeting. The Board of Directors
has unanimously nominated eight (8) persons (each, a "Nominee"), seven of whom
are the current Directors, to stand for election at the Annual Meeting. Each
Nominee has agreed to election as a Director, to hold office until the 2001
Annual Meeting of Shareholders and until his successor has been duly elected and
qualified.
It is intended that the proxies received from Shareholders, unless
contrary instructions are given therein, will be voted in favor of the election
of the Nominees, named below, each of whom has consented to being named herein
and have indicated their intention to serve if elected. If any Nominee, for any
reason, should become unavailable for election, or if a vacancy should occur
before the election, it is intended that the shares represented by the proxies
will be voted for such other person, as the Company's Board of Directors shall
designate to replace such Nominee. The Board of Directors has no reason to
believe that any of the Nominees will not be available or prove unable to serve
if so elected.
Nominees for Director
The following table sets forth the names and ages of each person
nominated for election as a Director of the Company, the positions and offices
that each Nominee has held with the Company, and the period during which each
has served in such positions and offices. Each Director serves for a term of one
year and until his successor is duly elected and qualified.
TABLE OF NOMINEES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Name of Nominee Age Positions/Offices Period Served in Office/Position
--------------- --- ----------------- --------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
G. Russell Cleveland 61 Director 1997 - present
- -------------------------------------------------------------------------------------------------
Charles C. Dragone 62 Chairman of the Board 1996 - present
Director 1992 - present
Interim Chief Executive Officer July 1999 - November 1999
Chief Executive Officer April 1995 - March 1996
Chief Financial Officer October 1992 - September 1994
- -------------------------------------------------------------------------------------------------
Robert C. Farone 57 Director May 1999 - present
- -------------------------------------------------------------------------------------------------
Manfred Kruger 53 Chief Executive Officer December 1999 - present
President July 1999 - present
Chief Operating Officer 1999 - present
- -------------------------------------------------------------------------------------------------
J. Harold Helderman 54 Director 1997 - present
- -------------------------------------------------------------------------------------------------
Thomas W. Pauken 55 Director January 1999-present
- -------------------------------------------------------------------------------------------------
Elroy G. Roelke 69 Director 1995 - present
Acting Secretary January 1998-March 1998
- -------------------------------------------------------------------------------------------------
Carlton E. Turner 59 Director Nominee
- -------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
Set forth below is a description of the business experience during the past five
(5) years or more, and other biographical information, for the Nominees seeking
election to the Board of Directors.
G. Russell Cleveland is the principal founder and the majority shareholder
of Renaissance Capital Group, Inc. ("Renaissance"). Renaissance specializes in
providing capital to growing emerging publicly owned companies. He is a
Chartered Financial Analyst with over 30 years experience in financial planning
and analysis. He has served as President of the Dallas Association of Investment
Analysts. For over 10 years he was a contributing editor of Texas Business
Magazine. Mr. Cleveland currently serves as the Managing General Partner of
Renaissance Capital Partners, Ltd., President and Director of Renaissance
Capital Growth & Income Fund III, Inc. (NASDAQ), and Director of Renaissance
U.S. Growth & Income Trust PLC, which is traded on the London exchange. Mr.
Cleveland also currently serves as director of Danzer Corp. (formerly Global
Environmental Corp.), Feminique, Inc. (formerly Biopharmaceutics, Inc.), Bentley
Pharmaceuticals, Inc., Technology Research, Inc., and Benz Energy, Ltd.
Charles C. Dragone is the current Chairman of the Board and has served at
various times during the past seven years as the Company's Chief Executive
Officer and as its Chief Financial Officer. Mr. Dragone is a consultant
specializing in corporate finance. He was formerly a director of KiMed
Corporation, a medical products and services company (1992 to 1997). He also was
a Partner of Financial Associates, a Sarasota, Florida, consulting firm
specializing in corporate finance (1986 to 1992), a private consultant in
corporate finance matters (1982 to 1986) and a Vice President, Chief Financial
Officer and director of K-Tron International, Inc. (NASDAQ:KTII), a manufacturer
of process control equipment used by the chemical, pharmaceutical, plastics and
food industries (1965 - 1981).
Robert C. Farone has been the President of Bag'n Baggage, Ltd. since June
1985. Bag'n Baggage is an 80-store retailer of luggage and leather goods
operating in eight (8) states under the trade names Bag'n Baggage, Biagio,
Houston Trunk Factory, Malm and Roberto's. Mr. Farone has also served as a
director on the board of Caribbean Marine, Inc. since June 1985. From September
1985 to July 1986 he served as a director on the board of 50 Off Stores, and
from August 1988 to September 1991 he served as Chairman of the Board. 50 Off
Stores were a regional chain of deep discount stores specializing in ready to
wear having 72 locations in five states.
J. Harold Helderman, MD is a Professor of Medicine, Microbiology and
Immunology at Vanderbilt University, Nashville, Tennessee, and is the Medical
Director of the Vanderbilt Transplant Center. Dr. Helderman received his MD from
the State University of New York, Downstate Medical Center in 1971, Summa Cum
Laude. In addition to book and monograph writings, he has authored more than 125
publications in his field of transplant medicine. Dr. Helderman is the immediate
past President of the American Society of Transplant Physicians.
Manfred Kruger joined the Company in June 1997, serving as Chief Operating
Officer and Managing Director for International Operations. On July 1, 1999 he
became the Company's President and on December 1, 1999, he became Chief
Executive Officer. Prior to joining the Company, Mr. Kruger was Executive Vice
President of Fresenius Critical Care International, a division of Fresenius
Medical Care, AG. Prior to Fresenius, Mr. Kruger held management positions with
Squibb Medical Systems and American Hospital Supply.
Thomas W. Pauken is an attorney and mediator. He currently serves as the
Trustee for Renaissance Capital Partners II, Ltd. For six years, Mr. Pauken
served as Vice President and Corporate Counsel of Garvon, Inc., a Dallas-based
venture capital company. From 1981 to 1985, Mr. Pauken served as Director of
ACTION, an independent federal agency. He also served on the White House legal
Counsel's staff during the Reagan Administration. Mr. Pauken's military service
included a tour of duty
3
<PAGE>
in Vietnam as a Military Intelligence Officer. Mr. Pauken received a B.A. from
Georgetown University and J.D. degree from Southern Methodist University Law
School.
Elroy G. Roelke is a practicing attorney and for more than 40 years, has
specialized in corporate finance and business law. In addition, since 1985, he
served as Chairman of Knollwood Mercantile Company, a family-owned retail liquor
and convenience store business. In March 1989, Mr. Roelke joined Renaissance
Capital Group, Inc. and served as Vice President, General Counsel and director
until he retired in December 1996. Mr. Roelke serves as a director of several
privately held companies that retain his service for corporate legal services
and as a director of EarthCare Company (NASDAQ: ECCO). Mr. Roelke received B.A.
and J.D. degrees from Valparaiso University.
Carlton E. Turner, Ph.D., D.Sc. has been the President and Chief Executive
Officer of Carrington Laboratories, Inc. ("Carrington") (NASDAQ: CARN) since
April 1995. Carrington is a research-based pharmaceutical and medical device
company in the field of wound care products. Dr. Turner has also served as the
Chief Operating Officer from November 1994 to April 1995 and as the Executive
Vice President of Scientific Affairs from January 1994 to November 1994 at
Carrington. Before that, he was the President, Chief Operating Officer and
Founder of Princeton Diagnostic Laboratories of America from 1987 to 1993. From
1981 to 1987 he was an Assistant to President Ronald Reagan with Cabinet Rank
and Director of the White House Drug Policy Office. Previously, he was a
Research Professor and Director of the Research Institute of Pharmacological
Science, University of Mississippi.
Director Meetings and Committees
During the fiscal year ended September 30, 1999 ("Fiscal Year
1999"), the Board of Directors of the Company held a total of six (6) regular
and three (3) telephonic meetings. Each of the Directors attended at least 75%
of the total number of meetings of the Board of Directors and the committees on
which the Director served with the exception of Dr. Helderman who attended
one-third of the meetings. The committees of the Board of Directors consist of a
standing Audit Committee, Compensation and Stock Option Committee and an
Executive Committee.
The Audit Committee of the Board of Directors met one (1) time in
Fiscal Year 1999. The Audit Committee is responsible for recommending to the
Board of Directors the engagement or discharge of the independent public
accountants, meeting with the independent public accountants to review the plans
and results of the audit engagement, approving the services to be performed by
the independent public accountants, considering the range of the audit and
non-audit fees, reviewing the adequacy of the Company's system of internal
accounting, reviewing the scope and results of the Company's internal audit
procedures. The Audit Committee is comprised of Charles C. Dragone and Elroy G.
Roelke.
The Compensation and Stock Option Committee administers the
Company's 1996 Stock Option Plan and its 1996 Management Compensation Plan. The
committee makes recommendations to the Board of Directors with respect to the
Company's compensation policies and the compensation of executive officers. The
Compensation and Stock Option Committee is comprised of G. Russell Cleveland,
Robert C. Farone and Thomas W. Pauken. All compensation matters were addressed
by the full Board of Directors in Fiscal 1999.
The Executive Committee acts on behalf of the Board of Directors for
certain matters. The Executive Committee is comprised of Thomas W. Pauken,
Charles C. Dragone and Manfred Kruger.
Compensation of Directors
The Company's outside Directors receive a $6,000 annual retainer,
$1,000 per meeting for attendance at Board meetings, $250 per telephonic
meeting, plus reimbursement of out-of-pocket expenses. Beginning January 1998,
the Chairman of the Board receives $1,000 per month for his services
4
<PAGE>
as Chairman. Additionally, the Company's Directors are eligible to participate
in the Company's 1996 Stock Option Plan, which plan is summarized elsewhere in
this Proxy Statement under Proposal II.
The Board of Directors recommends a vote FOR
the election of all 8 Nominees.
----------------------
PROPOSAL II
AMENDMENT TO THE 1996 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
The Company has a 1996 Incentive and Non-Statutory Stock Option Plan
(the "1996 Plan") to attract, maintain and develop management by encouraging
ownership of the Company's Common Stock by Directors, Officers and other key
employees. The 1996 Plan presently reserves 2,000,000 shares of the Company's
Common Stock for issuance there under. As of September 30, 1999, options have
been issued to purchase 1,705,172 shares leaving 294,828 shares available for
issuance under the 1996 Plan. Unless sooner terminated, the 1996 Plan will
expire on February 27, 2006.
Until November 1, 1999, the Company had in effect a Management
Incentive Compensation Plan pursuant to which 500,000 shares of Common Stock
were reserved for issuance to management personnel. As of November 1, 1999 no
shares had been issued under such Plan and the Plan was terminated by the Board
of Directors on that date. It was management's opinion that it would be more
beneficial to the Company to allocate such shares to the 1996 Plan. Therefore,
the Board approved an increase in the shares reserved for issuance under the
1996 Plan by 500,000, subject to the approval of shareholders. The proposed
amendment will cause Section 3.1 of the Plan to be replaced with the following:
3.1 Shares Subject to Plan. The stock subject to the options granted
under the Plan shall be shares of the Company's authorized but unissued
common stock, par value $.01 per share ("Common Stock"). The total number
of shares that may be issued pursuant to options granted under the Plan
shall not exceed 2,500,000 shares of Common Stock.
The proposed amendment to the 1996 Plan will be adopted upon
receiving the affirmative vote of holders of a majority of the shares present or
represented by proxy at the Meeting. Except for such amendment, if approved by
the shareholders, the 1996 Plan will remain unchanged.
At February 29, 2000 the closing market price of the Company's
shares was $ 4.19.
Summary of the Plan
The following is a summary of the provisions of the 1996 Plan. This
summary is qualified in its entirety by reference to the 1996 Plan, a copy of
which may be obtained from the Company.
The 1996 Plan authorizes the granting of both incentive stock
options, as defined under Section 422 of the Internal Revenue Code of 1986
("ISO"), and non-statutory stock options ("NSSO") to purchase Common Stock. All
employees of the Company and its affiliates are eligible to participate in the
1996 Plan. The 1996 Plan also authorizes the granting of NSSOs to non-employee
Directors and consultants of the Company. Pursuant to the 1996 Plan, an option
to purchase 40,000 shares of Common Stock shall be granted automatically to each
outside Director who is newly elected to the
5
<PAGE>
Board. In addition, an option to purchase 2,500 shares of Common Stock shall be
granted automatically, on the date of each annual meeting of shareholders of the
Company, to each outside Director who has served in that capacity for the past
six months and continues to serve following such meeting.
The Board of Directors or the Compensation and Stock Option
Committee is responsible for the administration of the 1996 Plan and determines
the employees to which options will be granted, the period during which each
option will be exercisable, the exercise price, the number of shares of the
Common Stock covered by each option, and whether an option will be a
non-qualified or an incentive stock option. The exercise price, however, for the
purchase of shares subject to such an option, cannot be less than 100% of the
fair market value of the Common Stock on the date the option is granted. The
Stock Option Committee has no authority to administer or interpret the
provisions of the 1996 Plan relating to the grant of options to outside
Directors. The current members of the Compensation and Stock Option committee
are G. Russell Cleveland, Thomas W. Pauken and Robert C. Farone.
No option granted pursuant to the 1996 Plan is transferable
otherwise than by will or the laws of descent and distribution. The term of each
option granted to an employee under the 1996 Plan is determined by the Board of
Directors or the Compensation and Stock Option Committee, but in no event may
such term exceed 10 years from the date of grant. Each option granted to an
outside Director under the 1996 Plan shall be exercisable in whole or in part
during the four year period commencing on the date of the grant of such option.
Any option granted to an outside Director shall remain effective during its
entire term, regardless of whether such Director continues to serve as a
Director. The purchase price per share of Common Stock under each option granted
to a Director will be the fair market value of such share on the date of grant.
The vesting period for options granted under the 1996 Plan is set
forth in an option agreement entered into with the optionee. Options granted to
an optionee terminate three years after retirement. In the event of death or
disability, all vested options expire one year from the date of death or
termination of employment due to disability. Upon the occurrence of a "change in
control" of the Company, the maturity of all options then outstanding under the
1996 Plan will be accelerated automatically, so that all such options will
become exercisable in full with respect to all shares that have not been
previously exercised or become exercisable. A "change in control" includes
certain mergers, consolidation, and reorganization, sales of assets, or
dissolution of the Company.
Federal Income Tax Consequences
The holder of an ISO does not realize taxable income upon the grant
or upon the exercise of the option (although the option spread is an item of tax
preference income potentially subject to the alternative minimum tax). If the
stock acquired upon exercise of the options sold or otherwise disposed of within
two years from the option grant date or within one year from the exercise date
then, in general, gain realized on the sale is treated as ordinary income to the
extent of the option spread at the exercise date, and the company receives a
corresponding deduction. Any remaining gain is treated as capital gain. If the
stock is held for at least two years from the grant date and one year from the
exercise date, then gain or loss realized upon the sale will be capital gain or
loss and the Company will not be entitled to a deduction. A special basis
adjustment applies to reduce the gain for alternative minimum tax purposes.
An optionee does not realize taxable income upon the grant of an NQO
in an amount equal to the difference between the exercise price and the market
value on the date of exercise. The Company is entitled to a deduction at the
same time and in a corresponding amount.
6
<PAGE>
In general, if an optionee delivers previously-owned shares in
payment of the exercise price of an option, no gain or loss will be recognized
on the exchange of the previously-owned shares for an equivalent number of newly
issued shares. However, if the previously-owned shares delivered in payment of
the exercise price were acquired pursuant to the exercise of an ISO and if the
requisite option holding periods are not satisfied (see above), then the
optionee will realize ordinary income on the delivery of the previously-owned
shares as in the case of any other "early" disposition of option-acquired
shares.
The Board of Directors recommends a vote FOR this proposal.
---------------------
PROPOSAL III
APPROVAL AND RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of Deloitte and Touche
L.L.P., independent public accountants, to be the Company's auditors for the
fiscal year ending September 30, 2000, and recommends that Shareholders vote to
ratify that appointment. Although submission of this matter to Shareholders is
not required by law, in the event of a negative vote, the Board of Directors
will reconsider its selection. Ratification of the appointment will require
that, at a meeting where a quorum is present, the votes cast in favor of the
ratification exceed those votes cast opposing ratification. Deloitte and Touche
L.L.P. is expected to have a representative at the Annual Meeting who will be
available to respond to appropriate questions from Shareholders attending the
meeting.
The Board of Directors recommends a vote FOR this proposal.
---------------------
EXECUTIVE OFFICERS
The executive officers of the Company ("Officers"), their ages, and
positions with the Company are set forth below:
Name Age Position with Company
---- --- ---------------------
Manfred Kruger 53 President, Chief Executive Officer & Chief
Operating Officer
George Lombardi 56 Chief Financial Officer, Treasurer and Secretary
Pursuant to the Company's Bylaws, Officers are appointed annually by
the Board of Directors, at its annual meeting, to hold such office until an
Officer's successor shall have been duly appointed and qualified, unless an
Officer sooner dies, resigns or is removed by the Board. Mr. Kruger is also a
nominee for election as Director at the Annual Meeting. Mr. Kruger's business
experience and other biographical information are summarized in the forepart of
this Proxy Statement under the caption "Proposal I - Election of Directors." Mr.
Lombardi's biographical information is summarized below.
George Lombardi is the Company's Chief Financial Officer, Treasurer
and Secretary. He joined the Company in March 1998. Mr. Lombardi was the Vice
President, Chief Financial Officer of Sheffield Pharmaceuticals, Inc., a
publicly held (AMEX) development stage pharmaceutical/biotech Company. Before
that, he was the CFO and Director of Fidelity Medical, Inc. and a Senior
Financial Executive for the New Jersey and New England Operations of National
Health Laboratories, Inc. Prior to this, Mr. Lombardi held Senior Financial
positions at the Boehringer Ingelheim Pharmaceutical Company and the Revlon
Healthcare Group in New York. Mr. Lombardi is a CPA certified in the state of
New Jersey and has a degree in accounting from Fairleigh Dickinson University.
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth the cash and non-cash compensation
paid to or accrued to all persons who have served as Chief Executive Officer and
other officers or individuals whose compensation exceeded $100,000 for the
Fiscal Year 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Annual Compensation Long Term Compensation
------------------------------------------------------------------------
Awards Payouts
- -------------------------------------------------------------------------------------------------------------------------
Securities
Other Restricted Underlying
Name And Principal Fiscal Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation Award(s) SARs Payouts Compensation
($) ($) ($) ($) (#) ($) ($)
(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Karl H. Meister (1)
President, Chief 1999 129,183 0 0 43,750 149,000 0 0
Executive Officer 1998 160,000 14,000 0 0 108,974 0 0
1997 160,000 0 0 0 360,000 0 0
Charles C. Dragone
Interim Chief (1) 1999 18,000 0 0 0 0 0 0
Executive Officer
Manfred Kruger (1)
President, Chief 1999 150,000 23,400 0 0 42,500 0 10,900
Executive Officer & 1998 134,691 21,894 0 0 25,000 0 24,900
Chief Operating 1997 39,106 0 0 0 200,000 0 1,579
Officer
George Lombardi
Chief Financial 1999 132,500 16,600 0 0 33,000 0 0
Officer, Treasurer 1998 63,462 6,400 0 0 100,000 0 0
and Secretary
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Meister retired on June 30, 1999. Mr. Meister received 100,000
shares of common stock for being retained as a consultant for the Company
through February 2000. Mr. Dragone was appointed as Interim Chief Executive
Officer and he served in this capacity from July 1, 1999 to November 30, 1999.
On December 1, 1999, Mr. Kruger was appointed Chief Executive Officer.
8
<PAGE>
Employment Agreements
The Company has an employment agreement with Manfred Kruger, its
President, Chief Executive Officer, Chief Operating Officer and Managing
Director, International Operations. Pursuant to that agreement, the term of Mr.
Kruger's employment with the Company commenced on June 16, 1997. The agreement
is for an indefinite period and shall terminate upon written notice by the
Company, notice of his election to terminate, or the Company terminates his
employment for cause. Minimum notice of termination by the Company, except for
cause, is one year from the end of a calendar quarter. Mr. Kruger's annual base
salary is currently 300,000 DM or approximately $165,000. In addition, the
employment agreement provides for: (i) an annual bonus in an amount equal to 30%
of his annual base salary, subject to the satisfaction of reasonable performance
goals established by the Board, and (ii) ten-year options to purchase 200,000
shares of Common Stock at an exercise price of $ 1.57 per share.
The Company has an employment agreement with George Lombardi, its
Chief Financial Officer, Treasurer and Secretary. Pursuant to that agreement,
the term of Mr. Lombardi's employment with the company commenced on March 30,
1998 and shall terminate on March 30, 2000, subject to automatic extensions for
additional one-year periods, unless the Company or Mr. Lombardi delivers a
written notice of his or its election to terminate, or the Company terminates
his employment for cause. Mr. Lombardi's annual base salary is currently
$143,500. In addition, the employment agreement provides for: (i) an annual
bonus in an amount equal to 25% of his annual base salary, subject to the
satisfaction of reasonable performance goals established by the Board and (ii)
ten-year options to purchase 100,000 shares of Common Stock at an exercise price
of $ 2.22 per share.
Option Grants in Fiscal Year 1999
The following table sets forth certain information regarding stock
options granted to all persons who have served as Chief Executive Officer and
other officers of the during fiscal year 1999.
OPTION/SAR GRANTS IN FISCAL YEAR 1999
(Individual Grants)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Number of Securities Percent of Total
Underlying Options/SARs Options/SARs Exercise or
Granted Granted To Base Price Expiration
Name (#) Employees ($/Sh) Date
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Karl H. Meister 40,000 5.3% $1.38 February 28, 2003
9,000 1.2% $1.56 February 28, 2003
100,000 (1) 13.2% $1.50 December 31, 2000
- ---------------------------------------------------------------------------------------------------
Charles C. Dragone 20,000 2.6% $1.19 May 12, 2004
3,789 0.5% $1.19 May 12, 2001
- ---------------------------------------------------------------------------------------------------
Manfred Kruger
42,500 5.6% $1.56 December 9, 2008
- ---------------------------------------------------------------------------------------------------
George Lombardi 33,000 4.4% $1.56 December 9, 2008
- ---------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
(1) As part of Mr. Meister's retirement agreement, the Company granted an
option to purchase 100,000 shares of the Company's common stock at an exercise
price of $1.50 per share, exercisable at any time prior to December 31, 2000.
The following table sets forth the value of the unexercised options
at September 30, 1999. No options were exercised during this fiscal year. The
market price of the Company's common stock at September 30, 1999 was $0.93.
Aggregated Option/SAR Exercises in Last Fiscal Year
And FY-End Option/SAR Values
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
Name September 30, 1999 September 30, 1999
- --------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Karl H. Meister 609,000 -0- $-0- $-0-
- --------------------------------------------------------------------------------------------
Charles C. Dragone 162,539 -0- $-0- $-0-
- --------------------------------------------------------------------------------------------
Manfred Kruger 187,500 80,000 $-0- $-0-
- --------------------------------------------------------------------------------------------
George Lombardi 68,000 65,000 $-0- $-0-
- --------------------------------------------------------------------------------------------
</TABLE>
401(k) Plan
The Board of Directors of the Company approved a tax-deferred
investment plan (the "401(k) Plan") effective in 1991. All full-time employees
of the Company may elect to participate in the 401(k) Plan, once he or she has
completed six (6) months of service to the Company. Under the 401(k) Plan, a
participating employee is given an opportunity to make an elective contribution
under a salary deferral savings arrangement of up to a maximum of 15% of the
participant's pre-tax compensation, up to a maximum of $10,000 per year. In
addition, the Company makes a separate matching contribution, in an amount equal
to 50% of the amount contributed by the employee, up to a maximum dollar amount
equal to 6% of the employee's annualized compensation in that year. An employee
of the Company may elect to retire after attaining age 65, or after age 55 and
the completion of five (5) years of service, if earlier. At that time, the total
amount contributed, plus any accumulated earnings, will be used to provide a
lump sum payment to any retiring participant in the 401(k) Plan. Participants
terminating employment prior to normal retirement date will be fully vested in
their own elective contribution. Funds accumulated from the Company's matching
contributions will vest over a six-year period. During Fiscal 1999, Mr. Lombardi
and Mr. Meister participated in the 401(k) Plan at 6% of their salary.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In November 1998, Renaissance provided the Company with a $500,000
Loan commitment. In consideration for this Loan Commitment, 400,000 warrants
were issued to Renaissance to purchase the Common Shares of the Company at an
exercise price of $1.25 per share.
On January 28, 1999, Renaissance converted a Convertible Debenture
and accrued interest and expenses (approximately $2,162,000) into 4,600,507
shares of the Company's common stock. In consideration of the agreement to
convert, the Company issued to the investor 149,334 common shares as prepayment
for one year's interest on the Debenture and agreed to amend its outstanding
Stock Purchase Warrants, totaling 1,353,957, by reducing the exercise price from
$2.50
10
<PAGE>
per share to $1.25 per share if such warrants are exercised by June 30, 2000,
after which date such warrants shall revert to their initial terms. A loss of
$187,000 on the conversion of the debenture has been recognized in net income in
1999.
On January 29, 1999, Renaissance purchased 300,000 Units at $1.00
per Unit, each Unit consisting of one common share of the Company and one Common
Stock Purchase Warrant, expiring December 31, 2000, at an exercise price of
$1.50 per share.
On February 1, 1999, Mr. Roelke, Director of the Company purchased
100,000 Units at $1.00 per Unit, each Unit consisting of one common share of the
Company and one Common Stock Purchase Warrant, expiring December 31, 2000, at an
exercise price of $1.50 per share.
On October 26 and November 12, 1999, Mr. Pauken, Director of the
Company purchased 40,000 and 35,000 Units, respectively, at $1.00 per Unit, each
Unit consisting of one common share of the Company and one Common Stock Purchase
Warrant, expiring December 31, 2000, at an exercise price of $1.50 per share.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Shares as of March 1, 2000 by (i)
each person known to the Company to own beneficially more than 5% of its Common
Shares, (ii) each Director and Officer of the Company, and (iii) all Directors
and Officers as a group. As of March 1, 2000, there were 11,266,598 Common
Shares issued and outstanding.
- --------------------------------------------------------------------------------
Name and Address of Amount and Nature Percentage
Beneficial Owner of Beneficial Owner of Class(3)
(1)(2)
- --------------------------------------------------------------------------------
Renaissance Capital Partners II, Ltd. (4) ........ 8,159,778 61.26%
5646 Milton Street
Suite 900
Dallas, TX 75206
Kleinwort Benson European Mezzanine Fund, L.P. (5) 1,395,192 12.04%
Westbourne
The Grange
St. Peter Port
Guernsey, CI
GY1 3BG
NatWest Ventures (Investments) Ltd. (6) .......... 1,918,409 16.99%
Fenchurch Exchange
8 Fenchurch Place
London, England
EC3M4TE
Karl H. Meister (7) .............................. 966,769 7.90%
G. Russell Cleveland (8) ......................... 57,300 *
Charles C. Dragone (9) ........................... 182,917 1.60%
11
<PAGE>
Robert C. Farone (10) ............................ 95,814 *
Dr. J. Harold Helderman (11) ..................... 74,488 *
Manfred Kruger (11) .............................. 233,750 2.03%
George Lombardi (11) ............................. 105,500 *
Thomas W. Pauken (12) ............................ 8,383,960 62.32%
Elroy G. Roelke (13) ............................. 282,682 2.47%
All directors and officers as a group (7 persons) 9,416,411 45.53%
- -----
* Less than 1%
1 In accordance with Rule 13d-3 promulgated pursuant to the Exchange Act, a
person is deemed to be the beneficial owner of the security for purposes
of the rule if he or she has or shares voting power or dispositive power
with respect to such security or has the right to acquire such ownership
within sixty days. As used herein, "voting power" is the power to vote or
direct the voting of shares and "dispositive power" is the power to
dispose or direct the disposition of shares, irrespective of any economic
interest therein.
2 Except as otherwise indicated by footnote, the persons named in the table
have sole voting and investment power with respect to all of the common
stock beneficially owned by them.
3 In calculating the percentage ownership for a given individual or group,
the number of shares of common stock outstanding includes unissued shares
subject to options, warrants, rights or conversion privileges exercisable
within sixty days after November 30, 1999 held by such individual or
group.
4 Includes 2,424,327 shares of common stock, which Renaissance Capital
Partners II, Ltd. has the right to acquire within sixty (60) days.
5 Includes 322,035 shares of common stock issuable upon exercise of warrants
exercisable within sixty (60) days.
6 Includes 21,615 shares of common stock issuable upon exercise of warrants
exercisable within sixty (60) days.
7 Includes 726,651 shares of common stock issuable upon exercise of options
and warrants exercisable within sixty (60) days.
8 Includes 48,650 shares of common stock issuable upon exercise of options
and warrants exercisable within sixty (60) days. Mr. Cleveland is the
President and majority shareholder of Renaissance Capital Group, Inc. His
business address is 8080 N. Central Expressway, Suite 210-LB 59, Dallas,
TX 75206. See notes 4 and 12.
9 Includes 162,539 shares of common stock issuable upon exercise of options
and warrants exercisable within sixty (60) days and 16,589 shares for
which Mr. Dragone shares voting and investment power with his spouse.
10 Includes 67,907 shares of common stock issuable upon exercise of options
and warrants exercisable within sixty (60) days.
11 All of the shares of common stock beneficially owned by Messrs. Helderman,
Kruger, and Lombardi, are derivative securities issuable upon exercise of
options exercisable within sixty (60) days
12 Includes all of the shares of common stock beneficially owned by
Renaissance Capital Partners II, Ltd (see Notes 4 and 7). Mr. Pauken is
the Liquidation Trustee of Renaissance Capital Partners II, Ltd. It also
includes 116,591 shares of common stock issuable upon exercise of options
and warrants exercisable within sixty (60) days.
13 Includes 173,091 shares of common stock issuable upon exercise of options
and warrants exercisable within sixty (60) days.
12
<PAGE>
VOTING SECURITIES
Under the Florida Business Corporation Act ("FBCA"), directors are
elected by a plurality of the votes cast at a meeting in which a quorum is
present. In connection with an election of directors, votes may be cast in favor
of, or withheld from, each nominee. Votes withheld from a nominee will be
counted in determining whether a quorum has been reached. However, since
directors are elected by a plurality, votes withheld from a nominee or nominees
will be excluded entirely and will not be counted as a vote cast in an election
of directors.
In connection with the proposals to ratify the Company's auditors,
votes may be cast "For" or "Against" a proposal, or a Shareholder may "Abstain"
from voting on the proposal or proposals. Under the FBCA, at a meeting where a
quorum is present, all matters submitted to Shareholders (other than an election
of directors) are approved if the votes cast in favor of the action exceeds the
votes cast in opposition to the matter presented (unless the Articles of
Incorporation or state law requires a greater number of votes). Accordingly,
with respect to any proposal coming before the Annual Meeting, other than the
election of Directors, all abstentions and broker non-votes will be counted as
present for purposes of determining the existence of a quorum, but since they
are neither a vote cast in favor of, or a vote cast against, a proposed action,
abstentions and broker non-votes will not be counted as a vote cast on any
matter coming before the meeting. A broker non-vote generally occurs when a
broker, who holds shares in street name for a customer, does not have authority
to vote on certain non-routine matters because its customer has not provided any
voting instructions on the matter.
Each Common Share outstanding on the Record Date entitles the record
holder thereof to cast one vote with respect to each matter to be voted upon.
SHAREHOLDER PROPOSALS
Eligible Shareholders who wish to present proposals for action at
the 2001 Annual Meeting of Shareholders should submit their proposals in writing
to the President of the Company at the address of the Company set forth on the
first page of this Proxy Statement. Proposals must be received by the President
no later than October 29, 2000 for inclusion in next year's proxy statement and
proxy card. A Shareholder is eligible to present proposals if, at the time he or
she submits a proposal or proposals, the Shareholder owns at least 1% or $1,000
in market value of Common Shares and has held such shares for at least one year,
and the Shareholder continues to own such shares through the date of the 2001
Annual Meeting.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KBS, including the
financial statements and schedules thereto (without exhibits), (the "1999 Annual
Report"), accompanies this Proxy Statement and the Notice of Annual Meeting of
Shareholders. The 1999 Annual Report is not part of the proxy solicitation
materials.
SOLICITATION COSTS
The Company will bear the costs of preparing, assembling and mailing
the Proxy Statement, the proxy card, and the 1999 Annual Report in connection
with the Annual Meeting. In addition to the use of the mail to solicit proxies
for the Annual Meeting, certain employees of the Company may be utilized by the
Company to solicit Shareholders' proxies by telephone, telegraph or in person.
Such employees will not receive additional compensation for such services to the
Company.
13
<PAGE>
Arrangements may be made with banks, brokerage houses, and other institutions,
nominees, and fiduciaries, to forward the proxy materials to beneficial owners
and to obtain authorization from beneficial owners for the execution of proxies.
The Company will, upon request, reimburse those persons and entities for
expenses incurred in forwarding proxy materials to beneficial owners.
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the Board of
Directors of the Company had not been informed of any matters which would be
presented for action at the Annual Meeting, other than the proposals
specifically set forth in the Notice of Annual Meeting of Shareholders and
referred to herein. If any other matters are properly presented for action at
the Annual Meeting, it is intended that the persons named in the accompanying
proxy card will vote or refrain from voting in accordance with their best
judgment on such matters after consultation with the Board of Directors.
By Order of the Board of Directors
/s/ Charles C. Dragone
CHARLES C. DRAGONE
Chairman of the Board
March 1, 2000
Clifton, New Jersey
14
<PAGE>
TUTOGEN MEDICAL, INC.
Annual Meeting of Shareholders, April 27, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Shares of Tutogen Medical, Inc., a
corporation organized under the laws of the state of Florida, does hereby
appoint Charles C. Dragone and Manfred Kruger, and each of them, as due and
lawful attorneys-in-fact (each of whom shall have full power of substitution),
to represent and vote as designated below all of the Common Shares of Tutogen
Medical, Inc. that the undersigned held of record at 5:00 p.m., Eastern Standard
Time, on March 7, 2000, at the Annual Meeting of Shareholders of Tutogen
Medical, Inc. to be held at The Lucerne, 973 West 79th Street, New York, New
York 10024, on April 27, 2000, at 10:00 a.m., local time, or any adjournment
thereof, on the following matters, and on such other business as may properly
come before the meeting:
1. ELECTION OF DIRECTORS
Nominees: G. Russell Cleveland; Charles C. Dragone; Robert C.
Farone; J. Harold Helderman; Manfred Kruger; Thomas W. Pauken; Elroy
G. Roelke; and Carlton E. Turner.
FOR ALL NOMINEES LISTED ABOVE WITHHOLD AUTHORITY TO VOTE FOR
ALL NOMINEES LISTED ABOVE
(Instructions: To withhold authority to vote for any individual nominee,
write that Nominee's name on the space provided below.)
2. Approval to terminate the Management Incentive Compensation Plan and
Amend the 1996 Incentive and Non-Statutory Stock Option Plan.
FOR AGAINST ABSTAIN
3.. Ratify the appointment of Deloitte and Touche L.L.P. as the
Company's auditors for the 2000 fiscal year.
FOR AGAINST ABSTAIN
4.. In their discretion, on such other business as may properly come
before the meeting.
(Please Sign and Date on Reverse Side)
<PAGE>
(Continued from other side)
PLEASE SIGN AND RETURN PROMPTLY.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS; FOR THE AMENDMENT TO THE
COMPANY'S 1996 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN AND FOR THE
RATIFICATION OF THE AUDITORS.
(Please sign, date, and return this proxy card exactly as your name or
names appear below, whether or not you plan to attend the meeting.)
I plan to attend the Annual Meeting.
I do not plan to attend the Annual Meeting.
Date: ______________________________________, 2000
Signature(s):_____________________________________
Title or Authority (if applicable)
Please sign your name here exactly as it appears
hereon. Joint owners should each sign. When signing as
an attorney, executor, administrator, trustee, guardian,
corporate officer or other similar capacity, so
indicate. If the owner is a corporation, an authorized
officer should sign for the corporation and state his
title. This Proxy shall be deemed valid for all shares
held in all capacities that they are held by the
signatory.
2
