<PAGE>
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
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Hologic, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Hologic, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11/1/
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
- ---------------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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>
HOLOGIC, INC.
____________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 23, 1999
TO THE STOCKHOLDERS OF HOLOGIC, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of Hologic,
Inc., a Delaware corporation (the "Company"), will be held on Tuesday, February
23, 1999 at 10:00 a.m., local time, at the offices of the Company, 35 Crosby
Drive, Bedford, Massachusetts 01730 for the following purposes:
1. To elect seven (7) directors to serve for the ensuing year and until
their successors are duly elected.
2. To approve the 1999 Equity Incentive Plan (the "1999 Plan").
3. To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on January 4, 1999 are
entitled to notice of and to vote at the meeting and any continuation or
adjournment thereof. All stockholders are cordially invited to attend the
Annual Meeting. However, to assure your representation at the meeting, you are
urged to mark, sign, date and return the enclosed proxy as promptly as possible
in the postage-paid envelope enclosed for that purpose. Any stockholder
attending the meeting may vote in person even if he or she returned a proxy.
By order of the Board of Directors
Lawrence M. Levy, Secretary
Bedford, Massachusetts
January 18, 1999
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE
OF RE-ISSUING THESE PROXY MATERIALS. EVEN IF YOU HAVE GIVEN YOUR PROXY, THE
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE BY FILING WITH THE SECRETARY
OF THE COMPANY A WRITTEN REVOCATION, BY EXECUTING A PROXY WITH A LATER DATE, OR
BY ATTENDING AND VOTING AT THE MEETING.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
HOLOGIC, INC.
______________
PROXY STATEMENT
1999 ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 23, 1999
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of
Hologic, Inc. (the "Company"), for use at the Annual Meeting of Stockholders to
be held on Tuesday, February 23, 1999, at 10:00 a.m., local time (the "Annual
Meeting"), or at any continuation or adjournment thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Stockholders.
The Annual Meeting will be held at the offices of the Company, 35 Crosby Drive,
Bedford, Massachusetts 01730. This proxy statement, the accompanying proxy card
and the annual report to stockholders are first being mailed to stockholders on
or about January 18, 1999.
Record Date, Stock Ownership and Voting
Only stockholders of record at the close of business on January 4,
1999 will be entitled to receive notice of, and to vote at, the Annual Meeting.
As of that date, there were outstanding and entitled to vote 13,390,976 shares
of Common Stock, $.01 par value (the "Common Stock"), of the Company. Directors
will be elected by a plurality of the votes cast by holders of Common Stock
entitled to vote thereon, provided a quorum is present. Proposal No. 2 requires
the affirmative vote of a majority of shares of Common Stock present in person
or by proxy at the Annual Meeting and entitled to be voted, provided a quorum is
present. Shares of Common Stock held of record by brokers who return a signed
and dated proxy but who fail to grant authority to vote on one or more of the
proposals will count toward the quorum but will have no effect on the outcome of
the proposal not voted. Abstentions will have no effect on the outcome of the
vote for the election of directors, but will have the effect of a vote against
Proposal No. 2. A majority of the shares of Common Stock outstanding is
required to be present or represented by proxy at the Annual Meeting in order to
constitute the quorum necessary to take action at the Annual Meeting.
Revocability of Proxies
Any person giving a proxy in the form accompanying this statement has the
power to revoke it at any time before it is voted. It may be revoked by filing
with the Secretary of the Company at the Company's principal executive office,
35 Crosby Drive, Bedford, Massachusetts 01730, written notice of revocation or a
duly executed proxy bearing a later date, or it may be revoked by attending the
Annual Meeting and voting in person.
Solicitation
All costs of this solicitation of proxies will be borne by the Company.
The Company has retained American Stock Transfer & Trust Company to aid in the
solicitation of proxies from stockholders, banks and other institutional
nominees. The Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their reasonable expenses incurred
in forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram, or
personal solicitations by directors, officers, or employees of the Company. No
additional compensation will be paid for any such services.
<PAGE>
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company which comply with Rule 14a-8 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and which
are intended to be presented by such stockholders at the Company's 2000 Annual
Meeting of Stockholders, must be received by the Company no later than September
20, 1999, in order to be considered for inclusion in the proxy statement and
form of proxy relating to that meeting. Stockholder proposals submitted outside
the processes of Exchange Act Rule 14a-8 will be considered untimely if received
after December 4, 1999. The proxy solicited by the Board of Directors with
respect to that meeting may confer discretionary authority to vote on matters
submitted in untimely proposals.
PROPOSAL 1
ELECTION OF DIRECTORS
A board of seven (7) directors is to be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for the Board of Directors' nominees named below. All nominees are
currently directors of the Company. In the event that any nominee is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for the nominee, if any, who shall be designated by the present
Board of Directors to fill the vacancy. It is not expected that any nominee
will be unable or will decline to serve as director. The proposed nominees are
not being nominated pursuant to any arrangement or understanding with any
person. The term of office of each person elected as a director will continue
until the next Annual Meeting of Stockholders or until a successor has been
elected and qualified.
Set forth below is certain biographical information regarding the nominees,
including information furnished by them as to their principal occupation for the
last five (5) years, certain other directorships held by them and their ages as
of January 4, 1999.
<TABLE>
<CAPTION>
Director
Name Age Position Since
- ---------------------------------- ---- ---------------------------- -----
<S> <C> <C> <C>
S. David Ellenbogen 60 Chairman of the Board and
Chief Executive Officer 1985
Steve L. Nakashige 49 President and
Chief Operating Officer 1998
Jay A. Stein 56 Senior Vice President, Chief
Technical Officer and Director 1985
Irwin Jacobs 61 Director 1990
William A. Peck 65 Director 1990
Gerald Segel 77 Director 1990
Elaine Ullian 51 Director 1996
</TABLE>
Mr. Ellenbogen, a co-founder of the Company, has served as its Chief
Executive Officer and a director since its organization in October 1985, as its
Chairman of the Board of Directors since May 1994, as its President from
October 1985 until May 1994 and as its Treasurer from October 1985 until
February 1992. Prior to founding the Company, Mr. Ellenbogen served as
President, Treasurer and a director of Diagnostic Technology, Inc. ("DTI"),
which he co-founded with Dr. Stein in 1981. DTI, which developed an x-ray
product for digital angiography, was acquired in 1982 by Advanced Technology
Laboratories, Inc. ("ATL"), a wholly-owned subsidiary of Squibb Corporation.
Mr. Ellenbogen was involved in the management of the digital angiography group
of ATL from 1982 to 1985. Since July 1989, Mr. Ellenbogen has also been the
President, and a director of Vivid Technologies, Inc. ("Vivid") and typically
devotes approximately sixteen hours per week to Vivid pursuant to a management
agreement between the Company and Vivid. See "Certain Transactions".
2
<PAGE>
Mr. Nakashige has served as President and Chief Operating Officer of the
Company since May 1994. From 1988 to 1994, Mr. Nakashige was with General
Electric Medical Systems where he held the position of Senior Manager,
Ultrasound Business from 1990 to 1994 and Manager, Ultrasound Marketing
Operations from 1988 to 1990. From 1986 to 1988, Mr. Nakashige was Vice
President of Operations of Biosound Inc., a medical equipment manufacturer.
Dr. Stein, a co-founder of the Company, has served as its Senior Vice
President, Chief Technical Officer and a director since its organization. Dr.
Stein co-founded DTI with Mr. Ellenbogen in 1981, served as Vice President and
Technical Director of DTI and was Technical Director of the digital angiography
group of its successor, ATL, from 1982 to 1985. Dr. Stein received a Ph.D. in
Physics from The Massachusetts Institute of Technology. He is the principal
author of fifteen patents involving x-ray technology. Since July 1989, Dr.
Stein has also been the Senior Vice President, Technical Director and a director
of Vivid and has been devoting approximately eight hours per week to Vivid
pursuant to a management agreement between the Company and Vivid. See "Certain
Transactions".
Mr. Jacobs has been a director of the Company since January 1990. Mr.
Jacobs, currently retired, was the President of Dataviews, Inc., a company which
manufactures and distributes software products, from January 1992 to September
1997. Since December 1990, Mr. Jacobs has also been the Chairman of the Board
of Personal Protection Consultants, Inc., a company which provides specialized
training to hospitals and law enforcement agencies. From May 1990 to December
1990, Mr. Jacobs was a Vice President of Ask Computers, Inc., a computer system
developer. From 1987 to May 1990, Mr. Jacobs was the President and Chairman of
the Board of Directors of Perception Technology Corp., a manufacturer of voice
response systems.
Dr. Peck has been a director of the Company since January 1990. In 1989,
Dr. Peck became the Vice Chancellor for Medical Affairs at Washington University
(Executive Vice Chancellor since 1993) and Dean of the Washington University
School of Medicine in St. Louis, Missouri. From 1976 until his appointment as
Vice Chancellor, Dr. Peck was a Professor of Medicine and the Co-Chairman of the
Department of Medicine at Washington University, and the Physician-in-Chief at
the Jewish Hospital of St. Louis. Dr. Peck is a member of the Board of Trustees
of the National Osteoporosis Foundation and served as its President from 1985 to
1990. Dr. Peck also serves as a director of Allied Healthcare Products, Inc.,
Angelica Corporation, Reinsurance Group of America, Inc. and TIAA-CREF Trust
Company.
Mr. Segel has been a director of the Company since March 1990. Mr. Segel,
currently retired, was Chairman of the Board of Tucker Anthony Incorporated from
January 1987 to May 1990. From 1983 through January 1987 he served as President
of Tucker Anthony Incorporated. Mr. Segel also serves as a director of
Litchfield Financial, Inc., Vivid and Boston Communications Group, Inc.
Ms. Ullian has been a director of the Company since February 1996. In
1996, Ms. Ullian was appointed President and Chief Executive Officer of Boston
Medical Center, the successor corporation of Boston University Medical Center
Hospital. In April 1994, Ms. Ullian was appointed President and Chief Executive
Officer of Boston University Medical Center Hospital. From January 1987 to
March 1994, Ms. Ullian held the position of President and Chief Executive
Officer of Faulkner Corporation/Faulkner Hospital. From 1984 to 1987, she was
Vice President for Clinical Operations at New England Medical Center. Ms.
Ullian also serves as a director of Vertex Pharmaceuticals.
Board of Directors' Meetings and Committees
The Board of Directors met five times during the year ended September 26,
1998. Each director attended at least 75% of the meetings of the Board of
Directors and each of its Committees on which they served.
Standing committees of the Board include an Executive Committee, an Audit
Committee and a Compensation Committee. The Board does not have a nominating
committee or a committee performing a similar function.
3
<PAGE>
Messrs. Ellenbogen, Jacobs and Segel and Dr. Stein are currently the
members of the Executive Committee. The Executive Committee did not meet
formally during fiscal 1998. The Executive Committee has all the powers and
authority of the Board of Directors, except those powers that may not lawfully
be delegated by the Board of Directors and except those specific powers
delegated by the Board of Directors to any other committee appointed by it.
Messrs. Jacobs and Segel are currently the members of the Audit Committee.
During fiscal 1998, the Audit Committee met twice with the Company's independent
auditors. The Audit Committee reviews with the Company's independent auditors
the scope of the audit for the year, the results of the audit when completed,
the adequacy of the Company's internal control systems and financial reporting
procedures, and the independent auditors' fee for services performed.
Messrs. Jacobs and Segel, Dr. Peck and Ms. Ullian are currently the members
of the Company's Compensation Committee. During fiscal 1998, the Compensation
Committee met twice. The Compensation Committee determines the compensation to
be paid to key officers of the Company and administers the Company's Stock
Incentive Plans, Executive and Key Employee Bonus Program, Performance-Bonus
Plan, 1995 Employee Stock Purchase Plan, and 401(k) Plan.
Compensation of Directors
In fiscal 1998, each non-employee director received (i) an annual retainer
of $12,000, payable $3,000 per quarter, (ii) a director's meeting fee of $1,500
for each meeting of the Board of Directors at which the director was physically
present and $600 for each meeting at which the director participated by
telephone and (iii) a committee meeting fee for each meeting of a committee of
the Board of Directors at which the director was physically present, in the
amount of $1,200 if the meeting was held on a day other than the day of the
meeting of the Board of Directors and $600 if held on the same day as the
meeting of the Board of Directors, but no fee if the committee meeting was held
at the same time or immediately in conjunction with the meeting of the Board of
Directors.
Non-employee directors are also eligible to receive stock options pursuant
to the Company's Amended and Restated 1990 Non-Employee Director Stock Option
Plan (the "Director's Plan"). The Director's Plan provides that each eligible
director will receive an option to purchase 10,000 shares of Common Stock at the
time the director is first elected to the Board of Directors. These options
become exercisable in increments of 2,000 shares over a five year period for
each year that the director remains affiliated with the Company. Each director
who has served as a director for a full fiscal year will be granted an option to
purchase an additional 8,000 shares of Common Stock on December 15 of each year,
provided he or she continues to be an eligible director, until the director has
received options to purchase 44,000 additional shares. These options become
exercisable in full six months after the date of grant. The exercise price for
all options granted under the Director's Plan is the fair market value of the
Common Stock at the time the option is granted. The exercise price may be paid
in cash, with Common Stock (valued at fair market value on the date of
purchase), or by a combination of cash and Common Stock. On December 15, 1997,
options to purchase 8,000 shares of Common Stock, at an exercise price of
$28.125 per share, were granted to each of Messrs. Jacobs and Segel and Dr. Peck
and Ms. Ullian under the Director's Plan.
4
<PAGE>
PROPOSAL 2
ADOPTION OF THE 1999 EQUITY INCENTIVE PLAN
In December, 1998, the Board of Directors adopted, subject to shareholder
approval, the Company's 1999 Equity Incentive Plan (the "1999 Plan"). The
purposes of the 1999 Plan are to attract and retain employees, directors,
advisors and consultants, to provide an incentive for them to assist the Company
to achieve long-range performance goals and to enable them to participate in the
long-term growth of the Company. The following is a summary description of the
1999 Plan and is qualified in its entirety by reference to the full text of the
1999 Plan, which is attached hereto as Exhibit A.
Under the 1999 Plan, the Company may grant (i) incentive stock options
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), (ii) options that are not qualified as incentive stock
options ("nonqualified stock options"), (iii) stock appreciation rights either
in tandem with an option or alone and unrelated to an option ("SARs"), (iv)
shares of Common Stock awarded based on achieving certain performance goals
("performance shares"), (v) awards of Common Stock, including shares of Common
Stock awarded without payment therefor ("award shares"), or Common Stock and
other rights granted as units that are valued in whole or in part by reference
to the value of the Common Stock ("stock awards") and (vi) restricted shares of
Common Stock ("restricted stock").
All employees, and in the case of awards other than incentive stock
options, directors, advisors and consultants of the Company or any affiliate (as
that term is defined in the 1999 Plan) capable of contributing significantly to
the successful performance of the Company, other than a person who has
irrevocably elected not to be eligible, are eligible to participate in the
1999 Plan.
The 1999 Plan is administered by the Board of Directors of the Company, or
if the Board determines, by the Compensation Committee of the Board of Directors
(the "Committee"). The Committee will serve at the pleasure of the Board of
Directors which can, at its sole discretion, discharge any member of the
Committee, appoint additional new members in substitution for those previously
appointed and/or fill vacancies regardless of how they are caused. The Board of
Directors of the Company has the authority to adopt, alter and repeal
administrative rules, guidelines and practices governing the operation of the
1999 Plan and to interpret provisions of the Plan. The Board of Directors may
delegate, to the extent permitted by applicable law, to the Committee the power
to make awards to participants and all determinations under the 1999 Plan with
respect thereto.
The maximum aggregate number of shares of Common Stock available for
issuance under the 1999 Plan is 300,000 shares, plus an annual increase to be
made on the first day of each fiscal year equal to the lesser of (i) 2-1/2% of
the Issued Shares (as defined below) on the last day of the immediately
preceding fiscal year, (ii) 500,000 shares, or (iii) an amount determined by the
Board of Directors. "Issued Shares" means the number of shares of the Company's
Common Stock outstanding on the last day of the immediately preceding fiscal
year, plus any shares reacquired by the Company during the fiscal year that ends
on that date. The shares of Common Stock available for issuance under the 1999
Plan are subject to adjustment for any stock dividend, recapitalization, stock
split, stock combination or certain other corporate reorganizations. Shares
issued may consist in whole or in part of authorized but unissued shares or
treasury shares. Shares subject to an award that expires or is terminated
unexercised or is forfeited for any reason or settled in a manner that results
in fewer shares outstanding than were initially awarded will again be available
for award under the 1999 Plan. The closing price of the Company's Common Stock
on January 4, 1999 was $11.9375.
Stock Options
Subject to the provisions of the 1999 Plan, the Board may award incentive
stock options and nonqualified stock options and determine the number of shares
to be covered by each option, the option price therefor and the conditions and
limitations applicable to the exercise of the option. Each option shall be
exercisable at such times
5
<PAGE>
and subject to such terms and conditions as the Board may specify in the
applicable award or thereafter. The Board may provide for the automatic award of
an option upon the delivery of shares to the Company in payment of an option for
up to the number of shares so delivered.
The terms and conditions of incentive stock options shall be subject to and
comply with Section 422 of the Code and any regulations thereunder. No
incentive stock option granted under the 1999 Plan may be granted more than ten
years after the effective date of the 1999 Plan and no such grant may be
exercisable more than ten years from the date of grant (five years after the
date of grant for incentive stock options granted to holders of more than ten
percent of the Common Stock). Incentive stock options shall be granted only to
employees of the Company and shall be transferable by the optionee only by the
laws of descent and distribution, and shall be exercisable only by the employee
during his or her lifetime.
Nonqualified stock options may be granted at an exercise price equal to,
greater than or lesser than the fair market value of the Common Stock on the
date of grant, in the discretion of the Board. Incentive stock options,
however, may not be granted at less than the fair market value of the Common
Stock and may be granted to holders of more than ten percent of the Common Stock
only at an exercise price of at least 110% of the fair market value of the
Common Stock on the date of the grant.
Options Granted to Non-Employee Directors
The 1999 Plan provides that, unless otherwise determined by the Board of
Directors, each director of the Company who is not an employee of the Company
shall automatically be granted a nonqualified option to acquire 25,000 shares of
Common Stock as of the date he or she is first elected to the Board or, with
respect to such directors serving on the Board as of the effective date of the
1999 Plan, as of the date of the Company's 1999 Annual Meeting. In each case,
the option price will be the fair market value of the Common Stock on such date
and the expiration date will be the tenth anniversary thereof. Each such
nonqualified option will become exercisable in 20% installments beginning on
January 1 of the first year after the grant date, and on January 1 of each year
thereafter, until such option is fully exercisable on January 1 of the fifth
year following the grant date.
Furthermore, unless otherwise determined by the Board of Directors, each
director of the Company who is not an employee of the Company and who has served
as a director for six months shall automatically be granted a nonqualified
option to acquire 3,000 shares of Common Stock as of January 1 of each year,
beginning with January 1, 2000. The option price will be the fair market value
of the Common Stock on such date and the expiration date will be the tenth
anniversary thereof. These options are exercisable on and after the date that
is six months after the date of grant.
In addition, the Board may provide for such other terms and conditions of
these options as it may determine, as shall be set forth in the applicable
option agreements, including, without limitation, acceleration of exercise upon
a change of control of the Company.
Stock Appreciation Rights
Subject to the provisions of the 1999 Plan, the Board of Directors may
award SARs in tandem with an option (at or after the award of the option) or
alone and unrelated to an option. An SAR entitles the holder to receive from
the Company an amount equal to the excess, if any, of the fair market value of
the Common Stock over the reference price. SARs granted in tandem with an
option will terminate to the extent that the related option is exercised, and
the related option will terminate to the extent that the tandem SARs are
exercised.
Performance Shares
The 1999 Plan authorizes the Board of Directors to grant performance shares
to participants in the form of grants of shares of Common Stock. Performance
shares are earned over a period of time (a performance cycle) selected by the
Board from time to time. There may be more than one performance cycle in
existence at any one time and the duration of the performance cycles may differ
from each other. Unless otherwise
6
<PAGE>
determined by the Board of Directors, the payment value of the performance
shares will be equal to the fair market value of the Common Stock on the date
the performance shares are earned or on the date the Board determines that the
performance shares have been earned. The Board shall establish performance goals
for each cycle for the purpose of determining the extent to which performance
shares awarded for such cycle are earned. As soon as practicable after the end
of a performance cycle, the Board shall determine the number of performance
shares which have been earned on the basis of performance in relation to the
established performance goals. Payment values of earned performance shares are
distributed to the participant or, if the participant has died, to the
beneficiary designated by the participant.
Restricted Stock
Subject to provisions of the 1999 Plan, the Board of Directors may grant
shares of restricted stock to participants, with such restricted periods and
other conditions as the Board may determine and for no cash consideration or
such minimum consideration as may be required by applicable law. During the
restricted period, unless otherwise determined by the Board, stock certificates
evidencing the restricted shares will be held by the Company and may not be
sold, assigned, transferred, pledged or otherwise encumbered, except as
permitted by the Board. At the expiration of the restricted period, the Company
will deliver such certificates to the participant or, if the participant has
died, to the beneficiary designed by the participant.
Stock Awards
Subject to the provisions of the 1999 Plan, the Board of Directors may
award stock awards, which may be designated as award shares by the Board,
subject to such terms, restrictions, conditions, performance criteria, vesting
requirements and payment needs, if any, as the Board shall determine. Shares of
Common Stock or other rights awarded in connection with a stock award shall be
issued for no cash consideration or such minimum consideration as may be
required by law.
General Provisions
Each award shall be evidenced by a written document delivered to the
participant specifying the terms and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the 1999 Plan
as the Board considers necessary or advisable. Each type of award may be made
alone, in addition to, or in relation to any other type of award. The terms of
each type of award need not be identical and the Board need not treat
participants uniformly. The Board may amend, modify or terminate any
outstanding award, including substituting therefor another award, changing the
date of exercise or realization and converting an incentive stock option to a
nonqualified stock option, provided that the participant's consent to such
action shall be required unless the Board determines that the action would not
materially and adversely affect the participant.
The Board of Directors will determine whether awards granted pursuant to
the 1999 Plan are settled in whole or in part in cash, Common Stock, other
securities of the Company, other property or such other methods as the Board of
Directors may deem appropriate. The Board may permit a participant to defer all
or any portion of a payment under the 1999 Plan. In the Board's discretion, tax
obligations required to be withheld in respect of an award may be paid in whole
or in part in shares of common stock, including shares retained from such award.
The Board will determine the effect on an award of the death, disability,
retirement or other termination of employment of a participant and the extent to
which and period during which the participant's legal representative, guardian
or designated beneficiary may receive payment of an award or exercise rights
thereunder. Except as otherwise provided by the Board, awards under the 1999
Plan are not transferable other than as designated by the participant by will or
by the laws of descent and distribution.
The Board in its discretion may take certain actions in order to preserve a
participant's rights under an award in the event of a change in control of the
Company, including providing for the acceleration of any time period relating to
the exercise or realization of the award, providing for the cash purchase of the
award or adjusting the terms of the award in order to reflect the change in
control.
7
<PAGE>
The Board of Directors of the Company may amend, suspend or terminate the
1999 Plan or any portion thereof at any time; provided that no amendment shall
be made without shareholder approval if such approval is necessary to comply
with any applicable law, rules or regulations.
Federal Income Tax Consequences
The following general discussion of the Federal income tax consequences of
awards granted under the 1999 Plan is based upon the provisions of the Internal
Revenue Code as in effect on the date hereof, current regulations thereunder and
existing public and private administrative rulings of the Internal Revenue
Service. This discussion is not intended to be a complete discussion of all of
the Federal income tax consequences of the 1999 Plan or of all of the
requirements that must be met in order to qualify for the tax treatment
described herein. Changes in the law and regulations may modify the discussion,
and in some cases the changes may be retroactive. No information is provided as
to state tax laws. The 1999 Plan is not qualified under Section 401 of the
Code, nor is it subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended. The tax treatment of each kind of award under
the 1999 Plan is as follows:
Nonqualified Stock Options. An option holder will not recognize any
taxable income upon the grant of a nonqualified option under the 1999 Plan.
Generally, an option holder recognizes ordinary taxable income at the time a
nonqualified option is exercised in an amount equal to the excess of the fair
market value of the shares of Common Stock on the date of exercise over the
exercise price.
However, if (a) the Company imposes restrictions on the shares which do not
permit the recipient to transfer the shares to others and which require the
recipient to return the shares to the Company at less than fair market value
upon termination of employment (a "risk of forfeiture"), or (b) the recipient is
an officer or director of the Company subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended ("Section 16(b)") then, upon their sale of
shares of Common Stock, the date on which taxable income (if any) is recognized
(the "Recognition Date") will be the date on which the stock becomes "freely
transferable" or not subject to risk of forfeiture. In this circumstance, the
option holder will generally recognize ordinary taxable income on the
Recognition Date in an amount equal to the excess of the fair market value of
the shares at that time over the exercise price.
Despite this general rule, if the Recognition Date is after the date of
exercise, then the option holder may make an election pursuant to Section 83(b)
of the Code. In this case, the option holder will recognize ordinary taxable
income at the time the option is exercised and not on the later date. In order
to be effective, the Section 83(b) election must be filed with the Company and
the Internal Revenue Service within 30 days of exercise.
The Company will generally be entitled to a compensation deduction for
Federal income tax purposes in an amount equal to the taxable income recognized
by the option holder, provided the Company reports the income on a form W-2 or
1099, whichever is applicable, that is timely provided to the option holder and
filed with the IRS.
When an option holder subsequently disposes of the shares of Common Stock
received upon exercise of a nonqualified option, he or she will recognize long-
term or short-term capital gain or loss (depending upon the holding period), in
an amount equal to the difference between the sale price and the fair market
value on the date on which the option holder recognized ordinary taxable income
as a result of the exercise of the nonqualified option.
An option holder who pays the exercise price for a nonqualified option, in
whole or in part, by delivering shares of Common Stock already owned by him or
her will recognize no gain or loss for Federal income tax purposes on the shares
surrendered, but otherwise will be taxed according to the rules described above.
8
<PAGE>
Incentive Stock Options. An option holder generally will not recognize
taxable income upon either the grant or the exercise of an incentive stock
option. However, under certain circumstances, there may be alternative minimum
tax or other tax consequences, as discussed below.
An option holder will recognize taxable income upon the disposition of the
shares received upon exercise of an incentive stock option. Any gain recognized
upon a disposition that is not a "disqualifying disposition" will be taxable as
long-term capital gain. A "disqualifying disposition" means any disposition of
shares acquired on the exercise of an incentive stock option within two years of
the date the option was granted or within one year of the date the shares were
issued to the option holder. The use of shares acquired pursuant to the exercise
of an incentive stock option to pay the option price under another incentive
stock option is treated as a disposition for this purpose. In general, if an
option holder makes a disqualifying disposition, an amount equal to the excess
of (a) the lesser of (i) the fair market value of the shares on the date of
exercise or (ii) the amount actually realized over (b) the option exercise
price, will be taxable as ordinary income and the balance of the gain
recognized, if any, will be taxable as either long-term or short-term capital
gain, depending on the optionee's holding period for the shares. In the case of
a gift or certain other transfers, the amount of ordinary income taxable to the
optionee is not limited to the amount of gain which would be recognized in the
case of a sale. Instead, it is equal to the excess of the fair market value of
the shares on the date of exercise over the option exercise price.
As noted previously, the tax result may change if (a) the Company imposes
restrictions on the shares which do not permit the recipient to transfer the
shares to others and which require the recipient to return the shares to the
Company at less than fair market value upon termination of employment, or (b)
the recipient is an officer or director of the Company subject to Section 16(b).
In the case of a disqualifying disposition of shares acquired pursuant to the
exercise of such an incentive stock option, the date on which the fair market
value of the shares is determined will be postponed, and the tax consequences
will be similar to the treatment that applies to shares acquired pursuant to
options granted under the 1999 Plan, including the ability to make a Section
83(b) election.
In general, in the year an incentive stock option is exercised, the holder
must include the excess of the fair market value of the shares issued upon
exercise over the exercise price in the calculation of alternative minimum
taxable income. The application of the alternative minimum tax rules for an
option holder subject to Section 16(b) or who receives shares that are not
"substantially vested" are more complex and may depend upon whether the holder
makes a Section 83(b) election, as described above.
The Company will not be entitled to any deduction with respect to the grant
or exercise of an incentive stock option provided the holder does not make a
disqualifying disposition. If the option holder does make a disqualifying
disposition, the Company will generally be entitled to a deduction for Federal
income tax purposes in an amount equal to the taxable income recognized by the
holder, provided the Company reports the income on a form W-2 that is timely
provided to the option holder and filed with the IRS.
Stock Appreciation Rights. A recipient of an SAR will not be considered to
receive any income at the time an SAR is granted, nor will the Company be
entitled to a deduction at that time. Upon the exercise of an SAR, the holder
will have ordinary income equal to the cash received upon the exercise. At that
time, the Company will be entitled to a tax deduction equal to the amount of
ordinary income realized by the holder.
Restricted Stock and Performance Shares. The recipient of restricted stock
or performance shares will be treated in the same manner as a person who has
exercised a nonqualified stock option, as described above, for which the Company
has imposed restrictions on the shares received, and for which the exercise
price is either zero or a nominal amount. In general, this means that the
holder may either wait until the restrictions have elapsed (or the performance
goals have been met), and then pay tax at ordinary income tax rates, based upon
the fair market value of the shares at that time, or he or she can file a
Section 83(b) election, and pay tax based on the fair market value of the shares
at the time they are received. Again, the Company will get a deduction that
corresponds to the income recognized by the recipient. If a recipient makes a
Section 83(b) election but later forfeits some or all of
9
<PAGE>
the shares as to which the election was made, he or she will not be entitled to
a deduction or other reduction related to the income previously recognized.
Stock Awards. A person who receives a stock award that includes Common
Stock will be treated, with regard to such Common Stock, in the same manner as a
person who has exercised a nonqualified stock option, as described above. In
general, this means that the holder will have taxable income at the time the
shares are received if they are not subject to restrictions, or as described in
the preceding paragraph for restricted stock, if they are subject to
restrictions. The tax treatment of a stock award that consists of other rights
will depend on the provisions of the award. It may be immediately taxable if
there are no restrictions on the receipt of the cash or other property that the
stock award represents, or the tax consequences may be deferred if the receipt
of cash or other property for the stock award is restricted, or subject to
vesting or performance goals. In those situations in which a participant
receives property subject to restrictions, the participant may wish to make a
Section 83(b) election, as described above. At the time that the holder of the
stock award has ordinary income, the Company will be entitled to a tax
deduction equal to the amount of ordinary income realized by the holder.
An affirmative vote by the holders of a majority of the issued and
outstanding shares of Common Stock entitled to vote on the matter represented in
person or by proxy at the Annual Meeting is required to approve the 1999 Plan.
The Board of Directors recommends that shareholders vote "FOR" this proposal.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends that the stockholders ratify the
selection of Arthur Andersen LLP as independent public accountants to examine
the consolidated financial statements of the Company and its subsidiaries for
the fiscal year ending September 25, 1999. Arthur Andersen LLP has audited the
Company's financial statements annually since 1986, and the Board of Directors
believes it is desirable and in the best interests of the Company to continue
employment of that firm. The affirmative vote of a majority of the Company's
Common Stock present in person or represented by proxy is required to ratify
the appointment of Arthur Andersen LLP as the Company's independent public
accountants. Action by stockholders is not required by law in the appointment
of independent public accountants, but their appointment is submitted by the
Board of Directors in order to give the stockholders a voice in the designation
of accountants. If the appointment is not ratified by the stockholders, the
Board of Directors will reconsider its choice of Arthur Andersen LLP as the
Company's independent public accountants.
A representative of Arthur Andersen LLP will be present at the meeting to
make a statement if such representative desires to do so and to respond to
appropriate questions.
10
<PAGE>
OTHER INFORMATION
SHARE OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of January 4, 1999
with respect to the beneficial ownership of the Company's Common Stock of each
director, each nominee for director, each named executive officer in the Summary
Compensation Table under "Executive Compensation", below, all executive officers
and directors as a group, and each person known by the Company to be the
beneficial owner of 5% or more of the Company's Common Stock. This information
is based upon information received from or on behalf of the named individuals.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (1)
------------------------
NAME OF NUMBER PERCENT OF
BENEFICIAL OWNER OF SHARES COMMON SHARES
- ------------------------------------------------- ---------- --------------
<S> <C> <C>
S. David Ellenbogen (2) 552,082 4.1%
Jay A. Stein (3) 391,309 2.9%
Steve L. Nakashige (4) 152,723 1.1%
Jean Chaintreuil (4) 21,332 *
Mark A. Duerst (4) 54,164 *
Glenn P. Muir (4) 93,369 *
Irwin Jacobs (4) 40,000 *
William A. Peck (4) 22,000 *
Gerald Segel (4) 36,000 *
Elaine Ullian (4) 22,000 *
All directors and executive officers as a group
(10 persons)(4) 1,384,979 9.8%
- ---------------------
</TABLE>
* Less than one percent.
(1) Unless otherwise noted, each person identified possesses sole voting and
investment power with respect to the shares listed.
(2) Includes (i) 48,110 shares held by, or in trust for, Mr. Ellenbogen's
children and grandchildren and (ii) 7,150 shares held by Mr. Ellenbogen as
trustee, all of which shares Mr. Ellenbogen disclaims beneficial ownership.
Also includes options to purchase 119,996 shares of Common Stock which are
exercisable within 60 days after January 4, 1999.
(3) Includes (i) 7,230 shares held by, or in trust, for Dr. Stein's children
and (ii) 23,170 shares held by Dr. Stein as trustee or custodian, all of
which shares Dr. Stein disclaims beneficial ownership. Also includes
options to purchase 115,996 shares of Common Stock which are exercisable
within 60 days after January 4, 1999.
(4) Includes the following shares subject to options which are exercisable
within 60 days after January 4, 1999: Mr. Nakashige - 146,332; Mr.
Chaintreuil - 21,332; Mr. Duerst 54,164; Mr. Muir - 85,332; Mr. Jacobs -
40,000; Dr. Peck - 22,000; Mr. Segel - 36,000; Ms. Ullian - 22,000; and all
directors and executive officers as a group 663,152.
11
<PAGE>
EXECUTIVE OFFICERS
The names of the executive officers of the Company who are not
directors of the Company, and certain biographical information furnished by
them, are set forth below:
NAME AGE TITLE
- ------------------ --- -------------------------------------
Jean Chaintreuil 43 Vice President of European Operations
Mark A. Duerst 42 Vice President of Sales
Glenn P. Muir 39 Vice President of Finance and
Treasurer
Executive officers are chosen by and serve at the discretion of the
Board of Directors of the Company.
Mr. Chaintreuil has served as Vice President of European Operations of
the Company since February 1993. Mr. Chaintreuil has held the position of
President, Hologic Europe since joining the Company in October 1991. From 1986
to 1991, Mr. Chaintreuil held a variety of positions with General
Electric/C.G.R., including International Marketing Manager for mammography and
stand-alone products and Regional Sales and Service Manager for the Paris and
west France Territory.
Mr. Duerst has served as Vice President of Sales since September
1994. Prior to that, Mr. Duerst held the position of Director of North American
Sales since 1990 and the position of Central Regional Sales Manager since
joining the Company in 1989. From 1988 to 1989, Mr. Duerst was an independent
marketing and sales consultant and from 1983 to 1987 he was Director of Sales
and Marketing of Lunar Corporation.
Mr. Muir, a Certified Public Accountant, has served as Vice President
of Finance and Treasurer of the Company since February 1992. Prior to that, Mr.
Muir held the position of Controller since joining the Company in October 1988.
From 1986 to 1988, Mr. Muir was Vice President of Finance and Administration and
Chief Financial Officer of Metallon Engineered Materials Corp., a manufacturer
of composite materials. Mr. Muir received an MBA from the Harvard Graduate
School of Business Administration in 1986. Mr. Muir also serves as director of
Vivid Technologies, Inc.
12
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
during the last three fiscal years of the Company's Chief Executive Officer and
the four other most highly compensated executive officers whose annual salary
and bonus exceeded $100,000 for services in all capacities to the Company during
the last fiscal year (the "named executive officers").
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------
Name and Fiscal Annual Compensation Restricted Stock Securities Underlying All Other
Principal Position Year Salary($) Bonus ($) Awards ($)(1) Options (#) Compensation ($)(2)
- --------------------- -------- -------------------- ----------------- ------------------------- -------------------
<S> <C> <C> <C> <C> <C>
S. David Ellenbogen 1998 $216,945 $150,000 $ 75,000 20,000 $3,500
Chairman and CEO 1997 $201,382 $150,000 --- 25,000 $3,325
1996 $179,822 $180,000 --- --- $3,325
Steve L. Nakashige 1998 $174,407 $ 75,000 $ 75,000 20,000 $3,500
President and COO 1997 $152,441 $ 75,000 --- 20,000 $3,325
1996 $153,283 $100,000 --- --- $3,325
Jean Chaintreuil 1998 $244,574 $ 15,000 --- 10,000 ---
Vice President 1997 $242,031 $ 15,000 --- 15,000 ---
European Operations 1996 $227,671 $ 20,000 --- --- ---
Mark A. Duerst 1998 $235,347 $ 25,000 --- 10,000 $3,500
Vice President 1997 $197,909 $ 35,000 --- 15,000 $3,325
Sales and Marketing 1996 $199,252 $ 20,000 --- --- $3,223
Glenn P. Muir 1998 $159,949 $ 75,000 $75,000 20,000 $3,746
Vice President 1997 $145,104 $ 75,000 --- 20,000 $3,541
Finance 1996 $143,784 $100,000 --- --- $4,019
- ------------------
</TABLE>
(1) Represents 2,913 restricted shares of Common Stock granted to each of
Messrs. Ellenbogen, Nakashige and Muir. The amounts reported in this
column represent the fair market value of restricted shares of Common Stock
granted on November 14, 1997, calculated as of the grant date. The
underlying shares may be repurchased by the Company under certain
circumstances before November 14, 1999. At September 26, 1998, the
aggregate number of restricted shares and fair market value of such shares
on that date held by the respective named executive officers was as
follows: Mr. Ellenbogen 2,913 shares with an aggregate fair market value
of $37,505; Mr. Nakashige 2,913 shares with an aggregate fair market value
of $37,505; and Mr. Muir 2,913 shares with an aggregate fair market value
of $37,505. Dividends, if any, paid to holders of the Company's Common
Stock would also be paid to holders of restricted shares.
(2) The amounts reported in this column consist of the Company's matching
contribution under its 401(k) Profit-Sharing Plan.
13
<PAGE>
Stock Option Grants in Last Fiscal Year
The following table sets forth the stock options granted to the Company's
named executive officers during the fiscal year ended September 26, 1998.
<TABLE>
<CAPTION>
Potential Realizable Value
Individual Grants at Assumed Annual Rates
----------------------------------------------------------------- of Stock Price Appreciation
Number of % of Total for Option Term (3)
Securities Options Granted Exercise ----------------------------
Underlying Options to Employees Price Expiration
Name Granted (#) (1) in Fiscal Year ($/share)(2) Date 5% ($) 10% ($)
- --------------------------- ------------------- --------------- ------------ ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
S.D. Ellenbogen 20,000 5% $28.125 12/15/07 $353,753 $896,480
S. Nakashige 20,000 5% $28.125 12/15/07 $353,753 $896,480
J. Chaintreuil 10,000 3% $28.125 12/15/07 $176,877 $448,240
M. Duerst 10,000 3% $28.125 12/15/07 $176,877 $448,240
G. Muir 20,000 5% $28.125 12/15/07 $353,753 $896,480
- -------------
</TABLE>
(1) Options vest at the rate of 20% per year, beginning on December 15, 1998.
The options were granted under the Company's 1995 Combination Stock Option
Plan.
(2) The exercise price is equal to the fair market value of the stock on the
date of grant.
(3) The 5% and 10% assumed rates of annual compounded stock price appreciation
are set forth in the rules of the SEC and do not represent the Company's
estimate or projection of future Common Stock prices.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table sets forth certain information regarding the exercise of
stock options during the fiscal year ended September 26, 1998 and the fiscal
year-end value of unexercised options for the Company's named executive
officers.
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options at
Shares Acquired Value at Fiscal Year-End (#) Fiscal Year-End ($)(2)
Name on Exercise Realized ($)(1) Exercisable / Unexercisable Exercisable/Unexercisable
- ---------------------- ---------------- -------------- --------------------------- -------------------------
<S> <C> <C> <C> <C>
S. D. Ellenbogen --- --- 115,996 / 52,004 $ 685,107 / $59,644
S. Nakashige --- --- 142,332 / 42,668 $1,050,411 / $30,840
J. Chaintreuil --- --- 19,332 / 23,668 $ 21,000 / $ ---
M. Duerst 40,000 $804,100 48,164 / 29,336 $ 261,684 / $59,179
G. Muir --- --- 81,332 / 44,668 $ 480,786 / $44,215
- -------------------
</TABLE>
(1) The amount "realized" reflects the appreciation on the date of exercise
(based on the excess of the fair market value of the shares on the date of
exercise over the exercise price). However, because the executive officers may
keep the shares they acquired upon the exercise of the options (or sell them at
a different price), these amounts do not necessarily reflect cash realized upon
the sale of those shares.
(2) Based upon the $12.875 closing market price of the Company's Common
Stock as reported on the Nasdaq National Market System on September 26, 1998
minus the respective option exercise price.
14
<PAGE>
Executive Bonus Program
The Compensation Committee of the Board of Directors approved an Executive and
Key Employee Bonus Program for fiscal 1999 under which executive officers,
senior management and key contributors selected by the Compensation Committee
may be eligible for cash bonuses, awarded at the discretion of the Compensation
Committee, to be paid in the first quarter of fiscal 2000. Under this program,
if pre-tax profits exceed $15,000,000, a bonus pool is expected to be created
equal to up to 5% of the Company's pre-tax profits. No bonus pool is expected
to be created if the Company's pre-tax profits do not exceed $15,000,000. For
fiscal 1998, bonuses of $728,500 were granted under a similar program approved
for that year.
Severance Agreements
Severance agreements are in effect between the Company and each of the Named
Executive Officers. The agreements are intended to encourage the executives to
continue to carry on their duties in the event of a change of control of the
Company. Under the terms of these agreements, if termination of an executive's
employment occurs within the three-year period following a change of control of
the Company and such termination is by the Company (or its successor) other than
for cause or disability or by the executive for good reason (each as defined in
the agreement), each executive will be entitled to receive, among other things,
in a lump sum in cash: (i) the executive's accrued salary; (ii) a pro rata
portion of such executive's highest annual bonus; (iii) if the executive has
remained employed for one year following the change of control, a special bonus
equal to the sum of the executive's annual salary and highest annual bonus; and
(iv) a severance amount equal to $1.00 less than the executive's base amount (as
defined in the tax code), multiplied by three. In addition, all unvested stock
options or stock appreciation rights held by the executive shall be immediately
exercisable for a one year period following the executive's termination date.
The severance agreements confer no benefits prior to a change of control. In the
event that any payments received by the executives in connection with a change
of control are subject to the excise tax imposed upon certain change of control
payments under federal tax laws or would be nondeductible to the Company under
such laws, the agreements provide for a reduction in the amount to be paid to
the executive to an amount which is one dollar less than the maximum that can be
paid without subjecting the payments to such excise tax or resulting in such
payments being nondeductible to the Company.
Compensation Committee Interlocks and Insider Participation
Decisions regarding executive compensation are made by the Company's
Compensation Committee of the Board of Directors, which is composed of Irwin
Jacobs, William A. Peck, Gerald Segel and Elaine Ullian. The Compensation
Committee also administers the Company's Stock Incentive Plans, Executive and
Key Employee Bonus Program, Performance - Bonus Plan, and 401(k) Plan. None of
the members of the Compensation Committee has ever been an officer or employee
of the Company or any of its subsidiaries. Glenn P. Muir, the Vice President of
Finance and Treasurer of the Company, serves on the Board of Directors and the
Compensation Committee of Vivid. S. David Ellenbogen, the Chairman of the Board
and Chief Executive Officer of the Company, and Jay A. Stein, the Senior Vice
President, Chief Technical Officer and a director of the Company, are executive
officers of Vivid. See "Certain Transactions".
15
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, consisting entirely of
independent non-management directors, approves all policies under which
compensation is paid or awarded to the Company's executive officers. The
Committee is comprised of Messrs. Jacobs, Peck and Segel and Ms. Ullian.
Hologic's Compensation Philosophy and Plan
The Company's executive compensation program is designed to attract and retain
superior executive talent, to provide incentives and rewards to executive
officers who will contribute to the long-term success of Hologic and to closely
align the interests of executives with those of Hologic's stockholders.
The Committee reviews the Company's executive compensation program through the
application of the subjective business judgment of each of its members and
through an informal survey of executive compensation programs of peer companies.
The Compensation Committee does not use a quantitative method or use a
mathematical formula to set any element of compensation for a particular
executive officer. The Compensation Committee uses discretion and considers all
elements of an executive's compensation package when setting each portion of
compensation which is based upon corporate performance and individual
initiatives and performance. The principle elements of the Company's executive
compensation program consist of: (i) base annual salary, (ii) executive bonus
program and (iii) equity awards.
Base Annual Salaries. Base annual salaries for executive officers are initially
determined by evaluating the responsibilities of the position and the experience
and knowledge of the individual. Also taken into consideration is the
competitiveness of the marketplace for executive talent, including a comparison
of base annual salaries for comparable positions at peer companies. Individual
adjustments are made at the discretion of the Compensation Committee, taking
into consideration factors such as the Company's performance and the
Compensation Committee's subjective perception of the individual's performance.
Executive Bonus Program. The Company maintains an Executive Bonus Program
which provides for a bonus pool to be established for executive officers, senior
management and key contributors of the Company based upon the amount by which
the Company's pre-tax profits exceed certain specified targets for a fiscal
year. Bonuses from this pool are allocated among the executive officers and
other eligible employees at the discretion of the Compensation Committee, based
upon the Compensation Committee's subjective determination of the participant's
performance during the year. For Fiscal 1998, bonuses aggregating $728,500 were
granted under the Executive Bonus Program. The 1998 program was based upon pre-
tax profits exceeding $15,000,000, with up to 5% of the pre-tax profits
available to fund the bonus pool. See "Compensation of Executive Officers --
Summary Compensation Table" and "-- Executive Bonus Program".
Equity Awards. The third component of executive officers' compensation are
equity awards in the form of stock options and restricted stock grants.
Stock options and restricted stock grants are designed to align the interests
of the executive with those of the stockholders. Stock options are granted at
an exercise price equal to the fair market value of the Common Stock on the date
of grant. These options generally vest at the rate of 20% or 25% per year, with
the first installment vesting either at the end of one or two years,
respectively, from the date of employment (for options granted upon initial
employment) or the date of grant and are exercisable within ten years from the
date of grant. The restricted stock grants are awards of shares of common
stock.
16
<PAGE>
These awards are generally subject to repurchase by the Company for a two
year period from the date of grant. The size of individual option and stock
grants are based upon the Committee's subjective review of the job
responsibility and individual contribution to the Company's success. Previous
option and stock grants are considered when awards are determined. These equity
awards are designed to provide incentives for the creation of long-term value
for the Company's stockholders.
Compensation of the Chief Executive Officer
In January 1998, Mr. Ellenbogen's base salary was increased to $220,000 from
$200,000, which the Committee considers to be comparable to the salaries of
chief executive officers of peer companies based on the Committee's informal
survey of executive compensation at peer companies. In fiscal 1998, Mr.
Ellenbogen also received a bonus of $150,000. The bonus represented the amount
of the fiscal 1998 bonus pool under the Company's Executive Bonus Program
allocated to Mr. Ellenbogen by the Compensation Committee. This allocation
reflects the Compensation Committee's subjective judgment that Mr. Ellenbogen's
efforts contributed significantly to the Company's success during fiscal 1998.
In fiscal 1998, Mr. Ellenbogen also received 2,913 restricted shares of common
stock which may be repurchased by the Company under certain circumstances before
November, 1999. In fiscal 1998, Mr. Ellenbogen was instrumental in, among other
things, the Company achieving record sales.
Conclusion
Through these programs, a significant portion of the Company's executive
compensation is linked directly to individual and Company performance in
pursuance of strategic goals as well as stock price appreciation. The
Compensation Committee intends to continue the policy of linking executive
compensation to Company performance and stockholder return, recognizing however,
that fluctuations in the operating results of the business may result over time.
The Compensation Committee
Irwin Jacobs
William A. Peck
Gerald Segel
Elaine Ullian
17
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the yearly percentage change in
the Company's cumulative total shareholder return on the Company's Common Stock
for the period from September 25, 1993 through September 26, 1998, based upon
the market price of the Company's Common Stock, with the cumulative total return
on the Standard and Poor's 500 Stock Index (the "S&P 500") and the Standard and
Poor's Medical Products and Supplies Index (the "S&P Medical Products") for that
period. The Performance Graph assumes the investment of $100 on September 25,
1993 in the Company's Common Stock, the S&P 500 and the S&P Medical Products,
and the reinvestment of any and all dividends.
<TABLE>
<CAPTION>
Cumulative Total Return
September September September September September September
1993 1994 1995 1996 1997 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Hologic, Inc. $ 100 $ 359 $ 575 $1,363 $1,281 $ 644
S&P 500 $ 100 $ 104 $ 135 $ 162 $ 227 $ 248
S&P Medical
Products $ 100 $ 128 $ 207 $ 249 $ 307 $ 371
</TABLE>
18
<PAGE>
CERTAIN TRANSACTIONS
For the fiscal year ended September 26, 1998, the following transactions
occurred which involved more than $60,000 between the Company and any director,
executive officer, five percent (5%) beneficial owner of the Company's Common
Stock or any member of the immediate family of any of the foregoing persons.
Vivid Technologies, Inc.
In June 1989, the Company granted an exclusive perpetual license to use
certain patent rights and technology to Vivid Technologies, Inc. for the
development, manufacture and sale of X-ray screening security systems for
explosives, drugs, currency and other contraband (subject to termination by
either party for certain defaults). In September 1996, this license was amended
to grant Vivid a nonexclusive license to use these patents and technology for
the development, manufacture and sale of X-ray-based products capable of being
used for process control applications in the food and beverage industries. Mr.
Ellenbogen and Dr. Stein are directors of Vivid and hold similar offices in
Vivid as they do in the Company. Mr. Ellenbogen and Dr. Stein collectively
beneficially own approximately 12% of the outstanding voting stock of Vivid.
Under the license agreement, Vivid is required to pay the Company royalties
of 5% of the first $50 million of net sales of screening security systems using
the Company's technology, and 3% of net sales in excess of $50 million, up to a
maximum of $200 million of net sales of these products. Vivid is also required
to pay royalties of 3% up to a maximum of $200 million of net sales of products
covered by the nonexclusive license for food and beverage process control. The
maximum aggregate royalties payable by Vivid to the Company under this exclusive
arrangement are $7 million, and under the nonexclusive arrangement, are $6
million. In fiscal 1998, Vivid paid the Company royalties of approximately
$1,070,000 under the license agreement, on aggregate sales through fiscal 1998
of approximately $118 million.
Under a management agreement, the Company provided Vivid with the part-time
management services of Mr. Ellenbogen and Dr. Stein. Under this arrangement,
Vivid was required to pay the Company its proportionate share of the Company's
salary of the employees rendering services to Vivid. Currently, the payments
made under this arrangement are Vivid's proportionate share of Mr. Ellenbogen's
and Dr. Stein's compensation. Under this arrangement, no compensation is paid
by Vivid to any of the Company's employees. The management agreement may be
terminated by either party on six month's written notice. For the fiscal year
ended September 26, 1998, Vivid was charged approximately $140,000 by the
Company for services rendered under the agreement. In December 1998, Vivid paid
the Company a $50,000 bonus for the management services provided in fiscal 1998.
The Company estimates that Mr. Ellenbogen and Dr. Stein have typically devoted
approximately sixteen and eight hours per week, respectively, on matters
involving Vivid.
SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission ("SEC"). Specific filing deadlines of these
reports have been established and the Company is required to disclose in this
Proxy Statement any failure to file by these dates during the fiscal year ended
September 26, 1998. To the best of the Company's knowledge, all of these filing
requirements have been satisfied. In making this statement, the Company has
relied solely on written representations of its directors and executive officers
and any ten percent stockholders and copies of the reports that they filed with
the SEC.
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OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the accompanying proxy to vote the shares represented thereby
on such matters in accordance with their best judgment.
Incorporation by Reference
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Report of the Compensation Committee
on Executive Compensation" and "Performance Graph" shall not be deemed to be so
incorporated, unless specifically otherwise provided in any such filing.
FINANCIAL MATTERS AND FORM 10-K REPORT
The Company's annual report for the fiscal year ended September 26, 1998,
is being mailed with this proxy statement to stockholders entitled to notice of
the meeting. The consolidated financial statements, unaudited selected
quarterly data and management's discussion and analysis of financial condition
and results of operations included in the annual report are incorporated by
reference herein.
THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
INVESTOR RELATIONS, HOLOGIC, INC., 35 CROSBY DRIVE, BEDFORD, MASSACHUSETTS
01730.
VOTING PROXIES
The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.
By order of the Board of Directors
Lawrence M. Levy, Secretary
Bedford, Massachusetts
January 18, 1999
20
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EXHIBIT A.
HOLOGIC, INC.
1999 EQUITY INCENTIVE PLAN
Section 1. Purpose
-------
The purpose of the Hologic, Inc. 1999 Equity Incentive Plan (the "Plan") is
to attract and retain employees, directors, advisors and consultants, to provide
an incentive for them to assist Hologic, Inc. (the "Corporation") to achieve
long-range performance goals, and to enable them to participate in the long-term
growth of the Corporation.
Section 2. Definitions
-----------
(a) "Affiliate" means any business entity in which the Corporation owns
directly or indirectly 50% or more of the total combined voting power or
has a significant financial interest as determined by the Committee.
(b) "Annual Meeting" means the annual meeting of shareholders or special
meeting in lieu of annual meeting of shareholders at which one or more
directors are elected.
(c) "Award" means any Option, Stock Appreciation Right, Performance Share,
Restricted Stock, or Stock Award awarded under the Plan.
(d) "Award Share" means a share of Common Stock awarded to an employee,
director, advisor or consultant without payment therefor.
(e) "Board" means the Board of Directors of the Corporation.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(g) "Committee" means the Compensation Committee of the Board, or such other
committee of not less than two members of the Board appointed by the Board
to administer the Plan, provided that the members of such Committee must be
Non-Employee Directors as defined in Rule 16b-3(b) promulgated under the
Securities Exchange Act of 1934, as amended.
(h) "Common Stock" or "Stock" means the Common Stock, par value $.01 per share,
of the Corporation.
(i) "Corporation" means Hologic, Inc.
(j) "Designated Beneficiary" means the beneficiary designated by a Participant,
in a manner determined by the Board, to receive amounts due or exercise
rights of the Participant in the event of the Participant's death. In the
absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant's estate.
(k) "Eligible Director" means each director of the Corporation who is not then
an employee of the Corporation or affiliated with any holder of more than
5% of the outstanding voting stock of the Corporation.
21
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(l) "Fair Market Value" means, with respect to Common Stock, the last sale
price of the Common Stock as reported on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or on a national
securities exchange on which the Common Stock may be traded on the date of
the granting of the Award, or if such date is not a business day, the first
business day preceding such grant. If the Common Stock is not publicly
traded, the fair market value shall mean the fair market value of the
Common Stock as determined by the Board of Directors.
(m) "Incentive Stock Option" means an option to purchase shares of Common
Stock, awarded to a Participant under Section 6, which is intended to meet
the requirements of Section 422 of the Code or any successor provision.
(n) "Nonqualified Stock Option" means an option to purchase shares of Common
Stock, awarded to a Participant under Section 6 or Section 11, which is not
intended to be an Incentive Stock Option.
(o) "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
(p) "Participant" means a person selected by the Board to receive an Award
under the Plan.
(q) "Performance Cycle" or "Cycle" means the period of time selected by the
Board during which performance is measured for the purpose of determining
the extent to which an award of Performance Shares has been earned.
(r) "Performance Shares" mean shares of Common Stock which may be earned by the
achievement of performance goals, awarded to a Participant under Section 8.
(s) "Restricted Period" means the period of time selected by the Board during
which an award of Restricted Stock may be forfeited to the Corporation.
(t) "Restricted Stock" means shares of Common Stock subject to forfeiture,
awarded to a Participant under Section 9.
(u) "Stock Appreciation Right" or "SAR" means a right to receive any excess in
value of shares of Common Stock over the reference price, awarded to a
Participant under Section 7.
(v) "Stock Award" means an award of Common Stock, including an Award Share, or
an award of Common Stock and other rights granted as units that are valued
in whole or in part by reference to, or otherwise based on, the value of
Common Stock, awarded to a Participant under Section 10.
Section 3. Administration
--------------
The Plan shall be administered by the Board, or if the Board so determines,
by the Committee. The Committee shall serve at the pleasure of the Board, which
may from time to time, and in its sole discretion, discharge any member, appoint
additional new members in substitution for those previously appointed and/or
fill vacancies however caused. A majority of the Committee shall constitute a
quorum and the acts of a majority of the members present at any meeting at which
a quorum is present shall be deemed the action of the Committee. The Board,
including the Committee, shall have authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the operation of the
Plan as it shall from time to time consider advisable, and to interpret the
provisions of the Plan. The Board's decisions shall be final and binding. To
the extent permitted by applicable law, the Board may delegate to the Committee
the power to make Awards to Participants and all determinations under the Plan
with respect thereto. Administration of the automatic option grant provisions
of the Plan shall be self-executing in accordance with the provisions of Section
11 hereof, and neither the Board or the Committee shall exercise any
discretionary functions with respect to the Option grants made pursuant to those
provisions of the Plan, except in the event that the Board approves the grant of
Awards in addition to, or in substitution for, those provided for in Section 11.
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Section 4. Eligibility
-----------
All employees and, in the case of Awards other than Incentive Stock
Options, directors, advisors and consultants of the Corporation or any Affiliate
capable of contributing significantly to the successful performance of the
Corporation, other than a person who has irrevocably elected not to be eligible,
are eligible to be Participants in the Plan.
Section 5. Stock Available for Awards
--------------------------
(a) Subject to adjustment under subsection (b), the maximum aggregate number of
shares of Common Stock available for issuance under the Plan is 300,000
shares, plus an annual increase to be made on the first day of each fiscal
year equal to the lesser of (a) 2 1/2% of the Issued Shares (as defined
below) on the last day of the immediately preceding fiscal year, (b)
500,000 shares, or (c) an amount determined by the Board. "Issued Shares"
shall mean the number of shares of Common Stock of the Company outstanding
on the last day of the immediately preceding fiscal year, plus any shares
reacquired by the Company during the fiscal year that ends on such date.
If any Award in respect of shares of Common Stock expires or is terminated
unexercised or is forfeited for any reason or settled in a manner that
results in fewer shares outstanding than were initially awarded, including
without limitation the surrender of shares in payment for the Award or any
tax obligation thereon, the shares subject to such Award or so surrendered,
as the case may be, to the extent of such expiration, termination,
forfeiture or decrease, shall again be available for award under the Plan,
subject, however, in the case of Incentive Stock Options, to any limitation
required under the Code. Common Stock issued through the assumption or
substitution of outstanding grants from an acquired corporation shall not
reduce the shares available for Awards under the Plan. Shares issued under
the Plan may consist in whole or in part of authorized but unissued shares
or treasury shares.
(b) In the event that the Board determines that any stock dividend,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reorganization, merger, consolidation, split-up, spin-
off, combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value, or
other similar transaction affects the Common Stock such that an adjustment
is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, then the Board, subject, in
the case of Incentive Stock Options, to any limitation required under the
Code, shall equitably adjust any or all of (i) the number and kind of
shares in respect of which Awards may be made under the Plan, (ii) the
number and kind of shares subject to outstanding Awards, (iii) the number
and kind of shares for which automatic option grants are to be made
pursuant to Section 11 hereof, and (iv) the award, exercise or conversion
price with respect to any of the foregoing, and if considered appropriate,
the Board may make provision for a cash payment with respect to an
outstanding Award, provided that the number of shares subject to any Award
shall always be a whole number.
Section 6. Stock Options
-------------
(a) Subject to the provisions of the Plan, the Board may award Incentive Stock
Options and Nonqualified Stock Options and determine the number of shares
to be covered by each Option, the option price therefor and the conditions
and limitations applicable to the exercise of the Option. The terms and
conditions of Incentive Stock Options shall be subject to and comply with
Section 422 of the Code, or any successor provision, and any regulations
thereunder.
(b) The Board shall establish the option price at the time each Option is
awarded.
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(c) Each Option shall be exercisable at such times and subject to such terms
and conditions as the Board may specify in the applicable Award or
thereafter. The Board may impose such conditions with respect to the
exercise of Options, including conditions relating to applicable federal or
state securities laws, as it considers necessary or advisable.
(d) No shares shall be delivered pursuant to any exercise of an Option until
payment in full of the option price therefor is received by the
Corporation. Such payment may be made in whole or in part in cash or, to
the extent permitted by the Board at or after the award of the Option, by
delivery of a note or shares of Common Stock owned by the optionholder,
including Restricted Stock, provided, however, that the optionholder must
have owned at least such number of shares for at least six months, valued
at their Fair Market Value on the date of delivery, by the reduction of the
shares of Common Stock that the optionholder would be entitled to receive
upon exercise of the Option provided, however, that the optionholder must
have owned at least the number of shares by which the Common Stock is being
reduced for at least six months, such shares to be valued at their Fair
Market Value on the date of exercise, less their option price (a so-called
"cashless exercise"), or such other lawful consideration as the Board may
determine. In addition, to the extent permitted by the Board, an
optionholder may engage in a successive exchange (or series of exchanges)
in which the shares of Common Stock that such optionholder is entitled to
receive upon the exercise of an Option may be simultaneously utilized as
payment for the exercise of an additional Option or Options, provided,
however, that the optionholder must have owned at least the number of
shares to be used as payment for at least six months.
(e) The Board may provide for the automatic award of an Option upon the
delivery of shares to the Corporation in payment of an Option for up to the
number of shares so delivered.
(f) In the case of Incentive Stock Options the following additional conditions
shall apply to the extent required under Section 422 of the Code for the
options to qualify as Incentive Stock Options:
(i) Such options shall be granted only to employees of the Corporation,
and shall not be granted to any person who owns stock that possesses
more than ten percent of the total combined voting power of all
classes of stock of the Corporation or of its parent or subsidiary
corporation (as those terms are defined in Section 422(b) of the
Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder), unless, at the time of such grant, the
exercise price of such option is at least 110% of the fair market
value of the stock that is subject to such option and the option
shall not be exercisable more than five years after the date
of grant;
(ii) The option price with respect to Incentive Stock Options shall not
be less than 100% of the Fair Market Value of the Common Stock on the
date of award.
(iii) Such options shall, by their terms, be transferable by the
optionholder only by the laws of descent and distribution, and shall
be exercisable only by such optionholder during his lifetime.
(iv) Such options shall not be granted more than ten years from the
effective date of the Plan and shall not be exercisable more than ten
years from the date of grant.
(v) To the extent that the aggregate Fair Market Value of Common Stock
with respect to which Incentive Stock Options (determined without
regard to this section) are exercisable for the first time by any
employee Participant during any calendar year exceeds $100,000 (or
such other amount as may be proscribed by the Code), such Incentive
Stock Options shall be treated as options which are not Incentive
Stock Options.
24
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Section 7. Stock Appreciation Rights
-------------------------
Subject to the provisions of the Plan, the Board may award SARs in tandem
with an Option (at or after the award of the Option), or alone and unrelated to
an Option. SARs in tandem with an Option shall terminate to the extent that the
related Option is exercised, and the related Option shall terminate to the
extent that the tandem SARs are exercised.
Section 8. Performance Shares
------------------
(a) Subject to the provisions of the Plan, the Board may award Performance
Shares and determine the number of such shares for each Performance Cycle
and the duration of each Performance Cycle. There may be more than one
Performance Cycle in existence at any one time, and the duration of
Performance Cycles may differ from each other. Unless otherwise determined
by the Board, the payment value of Performance Shares shall be equal to the
Fair Market Value of the Common Stock on the date the Performance Shares
are earned or, in the discretion of the Board, on the date the Board
determines that the Performance Shares have been earned.
(b) The Board shall establish performance goals for each Cycle, for the purpose
of determining the extent to which Performance Shares awarded for such
Cycle are earned, on the basis of such criteria and to accomplish such
objectives as the Board may from time to time select. During any Cycle,
the Board may adjust the performance goals for such Cycle as it deems
equitable in recognition of unusual or non-recurring events affecting the
Corporation, changes in applicable tax laws or accounting principles, or
such other factors as the Board may determine.
(c) As soon as practicable after the end of a Performance Cycle, the Board
shall determine the number of Performance Shares which have been earned on
the basis of performance in relation to the established performance goals.
The payment values of earned Performance Shares shall be distributed to the
Participant or, if the Participant has died, to the Participant's
Designated Beneficiary, as soon as practicable thereafter. The Board shall
determine, at or after the time of award, whether payment values will be
settled in whole or in part in cash or other property, including Common
Stock or Awards.
Section 9. Restricted Stock
----------------
(a) Subject to the provisions of the Plan, the Board may award shares of
Restricted Stock and determine the duration of the Restricted Period during
which, and the conditions under which, the shares may be forfeited to the
Corporation and the other terms and conditions of such Awards. Shares of
Restricted Stock may be issued for no cash consideration or such minimum
consideration as may be required by applicable law.
(b) Shares of Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered, except as permitted by the Board, during the
Restricted Period. Shares of Restricted Stock shall be evidenced in such
manner as the Board may determine. Any certificates issued in respect of
shares of Restricted Stock shall be registered in the name of the
Participant and unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the
Corporation. At the expiration of the Restricted Period, if the Corporation
holds such certificates, the Corporation shall deliver such certificates to
the Participant or if the Participant has died, to the Participant's
Designated Beneficiary.
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<PAGE>
Section 10. Stock Awards
------------
(a) Subject to the provisions of the Plan, the Board may award Stock Awards
subject to such terms, restrictions, conditions, performance criteria,
vesting requirements and payment rules, if any, as the Board shall
determine.
(b) Shares of Common Stock awarded in connection with a Stock Award shall be
issued for no cash consideration or such minimum consideration as may be
required by applicable law. Such shares of Common Stock may be designated
as Award Shares by the Board.
Section 11. Options Granted to Non-Employee Directors
-----------------------------------------
(a) Unless otherwise determined by the Board, each Eligible Director shall
automatically be granted a Nonqualified Option to acquire 25,000 shares of
Common Stock effective as of the date he or she is first elected to the
Board or, with respect to Eligible Directors serving on the Board as of the
Effective Date of the Plan, as of the date of the 1999 Annual Meeting of
the Corporation, in each case, the option price for which shall be the Fair
Market Value of the Common Stock on such date and the expiration of which
shall be the tenth anniversary thereof. Each Nonqualified Option issued
pursuant to this Section 11(a) shall become exercisable in 20% installments
beginning on January 1 of the first year after the grant date, and on
January 1 of each year thereafter, until such option is fully exercisable
on January 1 of the fifth year following the grant date.
(b) Unless otherwise determined by the Board, each Eligible Director who has
served as a Director for six months shall automatically be granted a
Nonqualified Option to acquire 3,000 shares of Common Stock as of January 1
of each year, beginning with January 1, 2000, the option price for which
shall be the Fair Market Value of the Common Stock on such date and the
expiration of which shall be the tenth anniversary thereof. Each
Nonqualified Option granted pursuant to this Section 11(b) may be exercised
on and after the date that is six months after the date of grant.
(c) In addition, the Board may provide for such other terms and conditions of
the Options granted pursuant to this Section 11 as it may determine in its
sole discretion and as shall be set forth in the applicable Option
agreements, including, without limitation, acceleration of exercise upon a
change of control, termination of the Options, and the effect on such
Options of the death, retirement or other termination of service as a
director of the option holder. Notwithstanding the foregoing, nothing
herein shall preclude the Board from granting Awards to such non-employee
directors in addition to, or in substitution for, those provided for in
this Section 11.
Section 12. General Provisions Applicable to Awards
---------------------------------------
(a) Documentation. Each Award under the Plan shall be evidenced by a written
-------------
document delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent
with the provisions of the Plan as the Board considers necessary or
advisable to achieve the purposes of the Plan or comply with applicable tax
and regulatory laws and accounting principles.
(b) Securities Laws. The Participant shall make such representations and
---------------
furnish such information as may, in the opinion of counsel for the
Corporation, be appropriate to permit the Corporation to issue or transfer
the Stock in compliance with the provisions of applicable federal or state
securities laws. The Corporation, in its discretion, may postpone the
issuance and delivery of any Stock until completion of such registration or
other qualification of such shares under any federal or state laws, or
stock exchange listing as the Corporation may consider appropriate. The
Corporation may require that prior to the issuance or transfer of Stock,
the Participant enter into a written agreement to
26
<PAGE>
comply with any restrictions on subsequent disposition that the Corporation
deems necessary or advisable under any applicable federal and state
securities laws. Certificates of Stock issued hereunder may be legended to
reflect such restrictions.
(c) Board Discretion. Each type of Award may be made alone, in addition to or
----------------
in relation to any other type of Award. The terms of each type of Award
need not be identical, and the Board need not treat Participants uniformly.
Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Board at the time
of award or at any time thereafter. Without limiting the foregoing, an
Award may be made by the Board, in its discretion, to any 401(k), savings,
pension, profit sharing or other similar plan of the Corporation in lieu of
or in addition to any cash or other property contributed or to be
contributed to such plan.
(d) Settlement. The Board shall determine whether Awards are settled in whole
----------
or in part in cash, Common Stock, other securities of the Corporation,
Awards, other property or such other methods as the Board may deem
appropriate. The Board may permit a Participant to defer all or any
portion of a payment under the Plan, including the crediting of interest on
deferred amounts denominated in cash and dividend equivalents on amounts
denominated in Common Stock. If shares of Common Stock are to be used in
payment pursuant to an Award and such shares were acquired upon the
exercise of a stock option (whether or not granted under this Plan), such
shares must have been held by the Participant for at least six months.
(e) Dividends and Cash Awards. In the discretion of the Board, any Award under
-------------------------
the Plan may provide the Participant with (i) dividends or dividend
equivalents payable currently or deferred with or without interest, and
(ii) cash payments in lieu of or in addition to an Award.
(f) Termination of Employment. The Board shall determine the effect on an
-------------------------
Award of the disability, death, retirement or other termination of
employment of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may receive payment of an Award or exercise rights thereunder.
The Board shall have complete discretion, exercisable either at the time
the Award is made or at any time while the Award remains outstanding, to
accelerate the vesting of any Award or any part of any Award remaining
unvested upon the termination of employment of a Participant or to extend
the period of time for which an Option is to remain exercisable following
the termination of employment of a Participant, provided, however, that in
no event shall such Option be exercisable after the specified expiration
date of such Option.
(g) Change in Control. In order to preserve a Participant's rights under an
-----------------
Award in the event of a Change in Control of the Corporation, the Board in
its discretion may, at the time an Award is made or at any time thereafter,
take one or more of the following actions: (i) provide for the acceleration
of any time period relating to the exercise or realization of the Award,
(ii) provide for the purchase of the Award for an amount of cash or other
property that could have been received upon the exercise or realization of
the Award had the Award been currently exercisable or payable, (iii) adjust
the terms of the Award in a manner determined by the Board to reflect the
Change in Control, (iv) cause the Award to be assumed, or new rights
substituted therefor, by another entity, or (v) make such other provision
as the Board may consider equitable and in the best interests of the
Corporation, provided that, in the case of an action taken with respect to
an outstanding Award, the Participant's consent to such action shall be
required unless the Board determines that the action, taking into account
any related action, would not materially and adversely affect the
Participant. Unless otherwise provided in any Award, for purposes hereof a
"Change in Control" of the Corporation shall mean: (i) the acquisition by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of
27
<PAGE>
20% or more of the then outstanding shares of common stock of the
Corporation (the "Outstanding Corporation Common Stock"); provided,
however, that any acquisition by the Corporation or its subsidiaries, or
any employee benefit plan (or related trust) of the Corporation or its
subsidiaries of 20% or more of Outstanding Corporation Common Stock shall
not constitute a Change in Control; and provided, further, that any
acquisition by a corporation with respect to which, following such
acquisition, more than 50% of the then outstanding shares of common stock
of such corporation, is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Corporation Common Stock immediately
prior to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the Outstanding
Corporation Common Stock, shall not constitute a Change in Control; or (ii)
any transaction which results in the Continuing Directors (as defined in
the Certificate of Incorporation of the Corporation) constituting less than
a majority of the Board; or (iii) consummation by the Corporation of (i) a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Corporation Common Stock immediately
prior to such reorganization, merger or consolidation do not, following
such reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 50% of the then outstanding shares of common stock of
the corporation resulting from such a reorganization, merger or
consolidation or (ii) the sale or other disposition of all or substantially
all of the assets of the Corporation, excluding a sale or other disposition
of assets to a subsidiary of the Corporation.
(h) Withholding. The Corporation shall have the power and the right to deduct
-----------
or withhold, or require a Participant to remit to the Corporation an amount
sufficient to satisfy federal, state and local taxes (including the
Participant's FICA obligation) required to be withheld with respect to an
Award or any dividends or other distributions payable with respect thereto.
In the Board's discretion, such tax obligations may be paid in whole or in
part in shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value on the date
of delivery, provided, however, that the optionholder must have owned at
least such number of shares for at least six months. The Corporation and
its Affiliates may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the Participant.
(i) Amendment of Award. The Board may amend, modify or terminate any
------------------
outstanding Award, including substituting therefor another Award of the
same or a different type, changing the date of exercise or realization and
converting an Incentive Stock Option to a Nonqualified Stock Option,
provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.
(j) Awards Not Transferable. Except as otherwise provided by the Board, Awards
-----------------------
under the Plan are not transferable other than as designated by the
participant by will or by the laws of descent and distribution.
Section 13. Miscellaneous
-------------
(a) No Right To Employment. No person shall have any claim or right to be
----------------------
granted an Award, and the grant of an Award shall not be construed as
giving a Participant the right to continued employment. The Corporation
expressly reserves the right at any time to dismiss a Participant free from
any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Shareholder. Subject to the provisions of the applicable
------------------------
Award, no Participant or Designated Beneficiary shall have any rights as a
shareholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the holder thereof. A Participant
to whom Common Stock is awarded shall be considered the holder of the Stock
at the time of the Award except as otherwise provided in the applicable
Award.
28
<PAGE>
(c) Effective Date. Subject to the approval of the shareholders of the
--------------
Corporation, the Plan shall be effective on February 23, 1999 (the
"Effective Date"). Prior to such approval, Awards may be made under the
Plan expressly subject to such approval. Awards under the Plan may be made
for a period of ten years commencing on the Effective Date. The period
during which an Award may be exercise may extend beyond that time as
provided herein.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or
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any portion thereof at any time, provided that no amendment shall be made
without shareholder approval if such approval is necessary to comply with
any applicable requirement of the laws of the jurisdiction of incorporation
of the Corporation, any applicable tax requirement, any applicable rules or
regulation of the Securities and Exchange Commission, including Rule 16(b)-
3 (or any successor rule thereunder), or the rules and regulations of The
Nasdaq Stock Market or any other exchange or stock market over which the
Corporation's securities are listed.
(e) Governing Law. The provisions of the Plan shall be governed by and
-------------
interpreted in accordance with the laws of the jurisdiction of
incorporation of the Corporation.
(f) Indemnity. Neither the Board nor the Committee, nor any members of either,
---------
nor any employees of the Corporation or any parent, subsidiary, or other
affiliate, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with their
responsibilities with respect to this Plan, and the Corporation hereby
agrees to indemnify the members of the Board, the members of the Committee,
and the employees of the Corporation and its parent or subsidiaries in
respect of any claim, loss, damage, or expense (including reasonable
counsel fees) arising from any such act, omission, interpretation,
construction or determination to the full extent permitted by law.
29
<PAGE>
Exhibit 99.01
HOLOGIC, INC. PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
35 Crosby Drive FEBRUARY 23, 1999
Bedford, MA 01730
(781) 999-7300
The undersigned stockholder of HOLOGIC, INC., a Delaware corporation (the
"Company"), acknowledges receipt of the Notice of Annual Meeting of Stockholders
and Proxy Statement, dated January 18, 1999, and hereby appoints S. David
Ellenbogen and Jay A. Stein, and each of them acting singly, with full power of
substitution, attorneys and proxies to represent the undersigned at the Annual
Meeting of Stockholders of the Company to be held at the offices of the Company,
35 Crosby Drive, Bedford, Massachusetts 01730, on Tuesday, February 23, 1999, at
10:00 A.M. local time, and at any adjournment or adjournments thereof, with all
power which the undersigned would possess if personally present, and to vote all
shares of stock which the undersigned may be entitled to vote at said meeting
upon the matters set forth in the Notice of Meeting in accordance with the
following instructions and with discretionary authority upon such other matters
as may come before the meeting. All previous proxies are hereby revoked.
1. The election of seven (7) directors nominated by the Board of Directors for
the ensuing year:
FOR all nominees listed below WITHHOLD AUTHORITY
(except as indicated) to vote for all nominees listed below
--------------------------------- ---------------------------------
S. David Ellenbogen, Irwin Jacobs, Steve L. Nakashige, William A. Peck, Gerald
Segel, Jay A. Stein, Elaine Ullian
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
________________________________________________________________________________
- --------------------------------------------------------------------------------
<PAGE>
2. To approve the 1999 Equity Incentive Plan:
FOR AGAINST ABSTAIN
--- ------- -------
3. To ratify the selection of Arthur Andersen LLP as the Company's independent
public accountants:
FOR AGAINST ABSTAIN
--- ------- -------
This proxy is solicited on behalf of the Board of Directors. This proxy will be
voted as specified or, where no direction is given, will be voted FOR all
nominees listed in Item 1 and FOR the proposals in Items 2 & 3.
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
Dated..............................................., 1999
..........................................................
..........................................................
Please sign your name exactly as it appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as it
appears hereon. When signing as joint tenants, all parties in the joint tenancy
must sign. When a proxy is given by a corporation, it should be signed by an
authorized officer and the corporate seal affixed.
