GENETIC LABORATORIES WOUND CARE, INC.
2726 Patton Road
St. Paul, MN 55113
___________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 27, 1995
___________________________
To Our Shareholders:
The Annual Meeting of Shareholders of Genetic Laboratories
Wound Care, Inc. a Minnesota corporation (the Company), will be
held at 4:00 p.m., Central Time, on Friday, October 27, 1995 at
the Minneapolis Athletic Club, 615 Second Avenue South,
Minneapolis, Minnesota for the purpose of considering and acting
upon the following:
(1) To fix the number of members of the
Board of Directors for the ensuing
year at three (3).
(2) To elect a class of directors consisting of one
(1) person who will serve until the 1998 Annual
Meeting of Shareholders or thereafter until his
successor has been elected and qualified.
(3) Such other matters as may properly
come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on
September 8, 1995 are entitled to notice of and to vote at the
meeting and any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Robert A. Ersek
Secretary
St. Paul, Minnesota
September 22, 1995
THE FORM OF PROXY IS ENCLOSED. TO ASSURE THAT YOUR SHARES WILL
BE VOTED AT THE MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE PREPAID,
ADDRESSED ENVELOPE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES. THE GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
GENETIC LABORATORIES WOUND CARE, INC.
2726 Patton Road
St. Paul, MN 55113
___________________________
PROXY STATEMENT
___________________________
ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 27, 1995
___________________________
The enclosed Proxy is solicited by and on behalf of the
Board of Directors of Genetic Laboratories Wound Care, Inc., a
Minnesota Corporation (the Company), for use at the Company's
Annual Meeting of Shareholders to be held at 4:00 p.m., Central
Time, on Friday, October 27, 1995 at the Minneapolis Athletic
Club, 615 Second Avenue South, Minneapolis, MN 55402, and any
adjournment thereof. The Company anticipates that this Proxy
Statement and the accompanying form of Proxy will first be mailed
or given to the shareholders of the Company on or about September
22, 1995.
VOTING AND REVOCATION OF PROXY
Only shareholders of record at the close of business on
September 8, 1995 are entitled to notice of and to vote at the
meeting. Each share so held entitles the holder to one vote upon
each matter to be voted upon. On September 8, 1995, the Company
had outstanding 2,385,100 shares of common stock. A quorum,
consisting of a majority of the outstanding shares of the common
stock entitled to vote at the annual meeting, must be present in
person or represented by proxy before action may be taken at the
annual meeting.
All shares represented by proxies which have been properly
executed and returned will be voted at the meeting. Where a
specification is made by the shareholder as provided in the form
of proxy, the shares will be voted in accordance with such
specification. If no specification is made, the shares will be
voted (i) FOR fixing the number of members of the Board of
Directors for the ensuing year at three (3), and (ii) FOR the
election of the nominee for director named in this Proxy
Statement.
Any proxy given pursuant to this solicitation may be revoked
by the person giving the proxy at any time before it is voted.
Proxies may be revoked by (a) giving written notice of such
revocation to the Secretary of the Company, (b) giving another
written proxy bearing a later date, or (c) attending the Annual
Meeting and voting in person (although attendance at the Annual
Meeting will not in and of itself constitute a revocation of a
proxy).
Votes cast by proxy or in person at the Annual Meeting will
be tabulated by the Inspectors of Election appointed for the
meeting who will determine if a quorum is present. If an
executed proxy card is returned and the shareholder has abstained
from voting on any matter, the shares represented by such proxy
will be considered present at the meeting for purposes of
determining a quorum and for purpose of calculating the vote, but
will not be considered to have been voted in favor for such
matter. If a broker returns a "non-vote" proxy, indicating a
lack of authority to vote on such matter, then the shares covered
by such non-vote shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to be
represented at the meeting for purposes of calculating the vote
with respect to such matter.
DIRECTORS AND EXECUTIVE OFFICERS
Certain information concerning directors and executive
officers of the Company is set forth below.
Arthur A. Beisang (age 63) has served as C.E.O. since May
1992 and as Chairman of the Board of Directors since January
1988. He has served as President from January 1988 to May 1992.
Mr. Beisang has done post-graduate work at Wayne State University
and the University of Minnesota. Mr. Beisang is a member of the
American Association of Tissue Banks. Mr. Beisang was a founder
of Bioplasty, Inc. (formerly Genetic Laboratories, Inc.)
H. James Thompson (age 53) has served as President since May
1992. He has served as Executive Vice President from January
1990 to May 1992, and Vice President of Sales from 1988 to
January 1990. He is originally from Albert Lea, Minnesota and
graduated from the University of North Dakota. His sales
management experience prior to 1984 includes eight years with
Baxter/Travenol Laboratories during which he advanced from a Twin
Cities based sales representative to National Sales Manager of
Hyland Division. Mr. Thompson was Director of Domestic Sales and
Vice President of Sales at Bioplasty, Inc. from 1984 to 1988.
Robert A. Ersek, MD (age 57) has served as Secretary since
November 1992 and as Medical Director since January 1988. Dr.
Ersek holds a degree from Morris Harvey College (B.S.) and
Hahneman Medical College (M.D.). Dr. Ersek has done
post-graduate work at the University of Minnesota, Tulane
University, and the University of Mississippi. He is a member of
the International Society of Cryosurgery, American Society for
Artificial Internal Organs and American Medical Association,
among others. Dr. Ersek has engaged in the private practice of
plastic surgery in Austin, Texas since completing his residency
in that specialty in 1978.
John H. Olson (age 52) has served as a Director since
November 1992. He holds a degree from Macalester College (B.A.).
He has also done post-graduate work at the the University of
Minnesota, University of North Dakota (MST), Genetic Institute
and Mankato State University. Mr. Olson has been the President
and an Executive Director of Cryogenic Laboratories, Inc. (Sperm
Bank, Roseville) for over fifteen years. Mr. Olson is a member
of the American Fertility Society, Society for Cryobiology,
American Association of Tissue Banks, American Society of
Andrology and New York Academy of Sciences.
PROPOSAL 1
ELECTION OF DIRECTORS
The property, affairs, and business of the Company are
managed under the direction of the Board of Directors. As
permitted by Minnesota law, the Company's Articles of
Incorporation require that the Board of Directors of the Company
be divided into three classes, with each class containing as
nearly as possible one-third of the total number of directors,
and each class having a term of three years. The term of office
of each class is staggered so that in any one year the term of
only one class expires.
The Bylaws of the Company provide that the Board of
Directors shall number no fewer than five (5) directors unless
otherwise fixed by the shareholders. The Board of Directors
recommends that the shareholders continue the number of directors
to comprise the Board of Directors for the ensuing year at three
(3) directors.
Arthur A. Beisang is now a director of the Company and has
been nominated to serve as a member of the Board of Directors for
a term of three years to serve until the Annual Meeting of
Shareholders in 1998, and until his successor is elected and
qualified. It is the intention of the named proxies that the
shares represented by proxy, unless otherwise indicated thereon,
will be voted for the election of Arthur A. Beisang to hold
office for a term of one year until the Annual Meeting of
Shareholders in 1998, and until his successor is elected and
qualified.
Proxies cannot be voted for a greater number of nominees
than the number of nominees named herein. Unless authority to
vote in the election of directors is withheld, it is the
intention of the proxies to nominate and vote for the following
named nominee. If at the time of the meeting, the nominee shall
have become unavailable for any reason for election as a
Director, which event is not expected to occur, the persons
entitled to vote the proxy will vote for such substitute nominee,
if any, as shall be designated by the Board of Directors.
Directors are elected by a plurality of the votes cast for the
election of directors at the Annual Meeting. The nominee for
Director, who has consented to serve if elected, and the
remaining Directors who will continue in office after the Annual
Meeting of Shareholders are now directors of the Company and have
served continuously as directors of the Company since the year
indicated, are named below:
Name of Nominee and Position Director
if any, in the Company Age Since
NOMINEE TO CONTINUE IN OFFICE UNTIL 1998
Arthur A. Beisang 63 1988
(CEO and Chairman of the Board)
DIRECTOR TO SERVE IN OFFICE UNTIL 1996
Robert A. Ersek, M.D. 57 1988
(Medical Director and Secretary)
DIRECTOR TO CONTINUE IN OFFICE UNTIL 1997
John H. Olson 52 1992
(Director)
The Company knows of no arrangements or understandings
between a director or nominee and any other person pursuant to
which any person has been selected as a director or nominee.
There is no family relationship between any of the nominees,
directors, or executive officers of the Company. The Board of
Directors recommends a vote for the election of the nominee named
above.
VOTING SECURITIES
All voting rights are vested exclusively in the holders of
the Company's $.01 par value common stock with each share
entitled to one vote. Only shareholders of record at the close
of business on September 8, 1995 are entitled to notice of and to
vote at the meeting or any adjournment thereof. On September 8,
1995, the Company had 2,385,100 shares of its $.01 par value
stock issued and outstanding.
BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS
AND MANAGEMENT
The following table sets forth information as of May 31,
1995 regarding the beneficial ownership of common stock of the
Company, its only class of equity security outstanding, by each
director or nominee for director of the Company, by each
executive officer named in the Summary Compensation Table herein,
by all directors, nominees and executive officers as a group, and
by each person (including any "group" as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) who is known by the Company to be the beneficial owner
of more than five percent of the common stock of the Company.
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership(1) of
Outstanding(2)
Arthur A. Beisang..... 339,540(3)(4) 14.36%
2726 Patton Road
St. Paul, MN 55113
Robert A. Ersek, M.D... 454,898(4)(5) 19.19%
2726 Patton Road
St. Paul, MN 55113
John H. Olson...... 14,100(4) less than 1%
1944 North Lexington Avenue
Roseville, MN 55113
H. James Thompson... 107,650(4) 4.52%
2726 Patton Road
St. Paul, MN 55113
All Directors and Officers
as a group (four persons)
____________________________
(1) Each person has sole voting and sole dispositive powers with
respect to the outstanding shares held by him, except as
otherwise noted.
(2) Each figure showing the percentage of outstanding shares owned
beneficially has been calculated by treating as outstanding and
owned the shares which would be issuable within 60 days if stock
options held by the indicated person were exercised.
(3) Includes 178,920 shares owned jointly by Mr. Beisang and his
wife over which Mr. Beisang may be deemed to have shared voting
and investment power.
(4) Includes shares which would be issuable within 60 days if
stock options held by the indicated person were exercised as
follows: Mr. Beisang, 38,000 shares; Mr. Olson, 14,000 shares;
Mr. Thompson 54,000 shares; and Dr. Ersek, 45,000 shares; all
directors, nominees and executive officers as a group, 151,000
shares.
(5) Includes 157,000 shares owned by Dr. Ersek's wife and 252,898
shares held by various trusts deemed to be beneficially owned by
Dr. Ersek.
There has been no change in control of the Company since
the beginning of the last fiscal year, and there are no
arrangements known to the Company, including any pledge of
securities of the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
BOARD OF DIRECTORS AND COMMITTEES
During the fiscal year ended May 31, 1995, the Company's
Board of Directors met or took action by written consent four (4)
times. All of the directors attended at least 75 percent of the
aggregate number of meetings of the Board of Directors and the
committees of the board on which they served.
The Board of Directors has a Compensation Committee,
consisting of one (1) nonemployee director, Mr. Olson. The
Compensation Committee, which met one (1) time during the fiscal
year ended May 31, 1995, reviews salary levels, bonuses and other
matters and makes recommendations to the Board of Directors in
connection therewith.
The Board of Directors does not have an audit or a
nominating committee.
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash
compensation paid for services rendered to the Company during the
last three fiscal years by the Company's Chief Executive Officer
and the executive officers of the Company whose total annual
salary and bonus compensation for the most recent year exceeded
$100,000.
Summary Compensation Table
<TABLE>
Long Term Compensation
Annual Compensation Awards Payout
<CAPTION>
Name and Fiscal Salary($) Bonus($) Other Restricted
Securities LTIP All
Principal Year Annual Stock Underlying
Payouts Other
Position Compen- Awards(s) Options/SARs ($)
Compen-
sation($) ($) (#)
sation ($)<F1>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Arthur A. 1995 $60,000 $7,750 $0 $0 12,000 $0
$1,662
Beisang 1994 $60,000 $3,500 $0 $0 8,000 $0 $1,477
Chief 1993 $60,000 $0 $0 $0 3,000 $0 $0
Executive
Officer
H. James 1995 $79,880 $25,681 $0 $0 6,000 $0
$6,377
Thompson 1994 $76,830 $20,012 $0 $0 7,000 $0 $3,020
President 1993 $71,530 $13,699 $0 $0 6,000 $0 $0
<FN>
<F1>
All Other Compensation consists of matching fund contributions to the Company
401(k) plan.
</FN>
</TABLE>
COMPENSATION OF DIRECTORS
Mr. Olson receives $500.00 a month as a Director fee.
No other board member receives compensation for being a board
member.
STOCK OPTIONS
The Company has a stock option plan. The Genetic
Laboratories Wound Care, Inc. Incentive Stock Option Plan (the
"Plan") was adopted by the Board of Directors on May 24, 1989,
and approved by the shareholders on October 20, 1989. All
employees of the Company are eligible to receive options under
the Plan. A total of 275,000 shares of the Company's stock have
been reserved for issuance upon exercise of options granted under
the Plan. The purpose of the Stock Option Plan is to encourage
certain employees of the Company to acquire a proprietary
interest in the Company and to create additional incentive for
employees to promote the financial success of the Company.
Performance standards against which options are issued vary from
person to person, and are defined by the extent and scope of each
person's responsibility.
The Board determines the exercise price for options
granted under the Plan, subject to the Plan's express requirement
that the exercise price be equal to at least the fair market
value of the common stock on the date of grant. (For employees
who own more than 10% of the Company's common stock the exercise
price must be at least 110% of the fair market value of the
common stock on the date of grant.) The exercise price must be
paid to the Company in cash or in property having a fair market
value equal to the exercise price. During the lifetime of an
optionee an option is exercisable only by the optionee. Shares
issued upon exercise must be held two years before they may be
traded.
The following table contains information regarding the
grant of options to the Company's Executive Officers named above
during the fiscal year ended May 31, 1995.
<TABLE>
Options/SAR Grants in Last Fiscal Year
<CAPTION>
Percent of Total
Name Number of Options/SARs
Securities Granted to Exercise or Base
Underlying Employees in Price Expiration Date
Options/SARs Fiscal Year ($/SH)
Granted
<S> <C> <C> <C> <C>
Arhur A. Beisang 12,000<1> 25.0% $.412 April 16,
2000
Chief Executive Officer
H. James Thompson 6,000<2> 12.5% $.375 April 6, 2005
President
<FN>
<F1>
The option is for a term of five (5) years and is exercisable immediately.
<F2>
The option is for a term of ten (10) years and is exercisable immediately.
</FN>
</TABLE>
The following table provides information with
respect to stock option exercises in fiscal 1995 by the named
executive officers and the value of such officer's unexercised
options at May 31, 1995.
<TABLE>
Aggregated Option Exercises in Last Fiscal Year
and May 31, 1995 Option Values
<CAPTION>
Number of Securities Value of Unercised
Underlying Unexercised In-the-Money
Options
Options at May 31, 1995 at May 31, 1995 ($)
<F2>
(3) <F1>
Name Shares Value
Acquired Realized
ExercisableUnexercisableExercisableUnercisable
on Exercise ($)
(#)
<S> <C> <C> <C> <C> <C> <C>
Arthur A. Beisang -0- $0 38,000 -0- $25,906 -0-
Chief Executive Officer
H. James Thompson -0- $0 54,000 -0- $39,825 -0-
President
<FN>
<F1>
There are no outstanding stock appreciation rights.
<F2>
Calculated on the basis of the number of shares subject to such options
multiplied by the excess
of the closing price of a share of common stock of $1.00 on the Local Over the
Counter market at
May 31, 1995 over the exercise price of such options.
</FN>
</TABLE>
COMPANY ACCOUNTANTS
McGladrey & Pullen, LLP was selected by the Board of
Directors as the Company's
independent auditor for the fiscal year ended May 31, 1995. A
representative of McGladrey & Pullen, LLP is expected to be
present at the Annual Meeting of Shareholders and to have the
opportunity to make a statement if so desired. Such
representative also is expected to be available to respond to
appropriate questions at that time. The Company will be
soliciting bids for the fiscal year ending May 31, 1996.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
In May 1993, the Company entered into employment agreements
with Messrs. Beisang, Thompson and Ersek. Each of the agreements
has a term of three years. Each agreement provides for an annual
cost-of-living increase in the base salary. Additional
compensation based on pre-tax profits of the Company may be paid
to the executives as determined by the Compensation Committee.
The agreements with Messrs. Beisang and Ersek provide that the
executive may terminate his employment upon the occurrence of any
of the following events: (i) a change in majority ownership or
control of the Company which occurs as a result of a merger; a
sale of all or substantially all of the Company's assets; or the
acquisition of a majority of the Company's outstanding stock by a
single party or a group acting in concert; (ii) any attempted
termination of the executive's employment by the Company prior to
expiration of the agreement not in accordance with any
termination event as set forth in the agreement; or (iii) any
material diminution of, or any adverse change in the terms or
conditions of the executive's employment duties, responsibilities
or authority. In the event of such termination by Mr. Beisang or
Mr. Ersek, the Company shall pay said executive a severance
payment equal to their gross base salary payable over the
remaining term of the agreement. Mr. Beisang and Mr. Ersek are
paid a base annual salary of $60,000 and $24,000, respectively.
The agreements with Messrs. Beisang and Ersek provide that each
executive retains the right to new products or patents which the
executive develops and contain a covenant not to compete by the
executive during the employment period and for one year
thereafter.
COMPLIANCE WITH SECTION 16(a)
The Company's directors, its executive officers, and any
persons holding more than 10% of the outstanding Common Stock are
required to file reports concerning their initial ownership of
Common Stock and any subsequent changes in that ownership. The
Company believes that the filing requirements were satisfied. In
making this disclosure, the Company has relied solely on oral
and/or written representations of its directors, executive
officers and beneficial owners of more than 10% of Common Stock
and copies of the reports that they have filed with the
Securities and Exchange Commission.
SHAREHOLDER PROPOSALS
According to Rule 14a-8 promulgated under the Securities
Exchange Act of 1934, a shareholder may require that certain
proposals suggested by the shareholder be voted upon at a
shareholders' meeting. Information concerning such a proposal
may be submitted to the Company for inclusion in the Company's
proxy statement. Such proposals must be submitted to the Company
before May 31, 1996 for consideration at the shareholders'
meeting to be held in 1996.
SOLICITATION OF PROXIES
The Company will pay the cost of soliciting proxies in the
accompanying form. In addition to solicitation by mail, proxies
may be solicited by officers and other regular employees of the
Company by telephone, telegraph or personally for which employees
will not receive additional compensation. Arrangements also may
be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation material to beneficial owners
of the shares held of record by such persons and the Company may
reimburse such persons for reasonable out-of-pocket expenses
incurred by them in so doing.
OTHER BUSINESS
As of the date of this Proxy Statement, Management is
unaware that any business not described above will be presented
for consideration at the meeting. If any other business properly
comes before the meeting, it is intended that the shares
represented by proxies will be voted in respect thereto in
accordance with the judgment of the persons voting them.
The above Notice and Proxy Statement are sent by order of
the Board of Directors.
Robert A. Ersek
Secretary
St. Paul, Minnesota
September 22, 1995
P R O X Y
GENETIC LABORATORIES WOUND CARE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Arthur A. Beisang, John H.
Olson and Robert A. Ersek, M.D. as Proxies, each with the power
to appoint his substitute, and hereby authorizes them, or any of
them, to represent and to vote, as designated below, all of the
shares of common stock of GENETIC LABORATORIES WOUND CARE, INC.,
held of record by the undersigned on September 8, 1995, at the
Annual Meeting of the Shareholders to be held on October 27, 1995
or any adjournment(s) thereof upon the following matters.
1. NUMBER OF DIRECTORS - To fix the number of members of the
Board of Directors for the ensuing year at three (3).
(CHECK ONE) ___VOTE FOR ___ AGAINST ___ ABSTAIN
2. ELECTION OF DIRECTORS - To elect a class of Directors
consisting of one (1) person who will serve until the 1998 Annual
Meeting of Shareholders or thereafter until his successor has
been elected and qualified. NOMINEE: Arthur A. Beisang
(CHECK ONE) ___ VOTE FOR NOMINEE ___ WITHHOLD AUTHORITY
LISTED to vote for
for nominee
listed above
3. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the meeting.
(This Proxy, when properly executed will be voted in the manner
directed hereon by the undersigned stockholder. IF NO DIRECTION
IS MADE THIS PROXY WILL BE VOTED FOR PROPOSAL 1 and 2.)
The Board of Directors recommends a vote FOR Proposals 1 and 2.
The undersigned hereby acknowledges receipt of the Notice of the
Annual Meeting of Shareholders and the Proxy Statement furnished
therewith dated September 22, 1995. Please sign your name
exactly as it appears below. In the case of shares owned in
joint tenancy or as tenants in common, all should sign.
Fiduciaries should indicate their title and authority.
Please vote, sign, date and
return this proxy card
promptly, using the
accompanying post-paid
envelope.
Dated: _________, 1995
__________________________
Signature(s)
__________________________
Sign above exactly as
name(s) appears to
the left.
