<PAGE> 1
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 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Dextersity Surgical, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
DEXTERITY SURGICAL, INC.
12961 Park Central, Suite 1300
San Antonio, Texas 78216
Telephone: (210) 495-8787
April 20, 1999
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend
the 1999 Annual Meeting of the Stockholders of Dexterity Surgical, Inc.,
formerly known as LifeQuest Medical, Inc. The Annual Meeting will be held
Tuesday, May 18, 1999, at the San Antonio Airport Hilton and Conference Center,
611 N.W. Loop 410, San Antonio, Texas. The formal Notice of Annual Meeting is
set forth in the enclosed material.
The matters expected to be acted upon at the meeting are described in
the attached Proxy Statement. Following the meeting, stockholders will have the
opportunity to ask questions and comment on Dexterity Surgical, Inc.'s
operations.
It is important that your views be represented whether or not you are
able to be present at the Annual Meeting. Please sign and return the enclosed
proxy card promptly.
We appreciate your investment in Dexterity Surgical, Inc. and urge you
to return your proxy card as soon as possible.
Sincerely,
/s/ RICHARD A. WOODFIELD
Richard A. Woodfield
President and Chief Executive Officer
<PAGE> 3
DEXTERITY SURGICAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Dexterity Surgical, Inc., formerly known as LifeQuest Medical, Inc. (the
"Company"), will be held on Tuesday, May 18, 1999, at 10:00 a.m., C.D.T., at
the San Antonio Airport Hilton and Conference Center, 611 N.W. Loop 410, San
Antonio, Texas, for the following purposes:
(1) a proposal to elect ten (10) directors to serve until the
next annual meeting of stockholders or until their successors are elected and
qualified;
(2) a proposal to ratify the appointment of Ernst & Young LLP
as independent public accountants of the Company for the fiscal year ending
December 31, 1999; and
(3) to consider and act upon any other matter which may
properly come before the meeting or any adjournment thereof. The Board of
Directors is presently unaware of any other business to be presented to a vote
of the stockholders at the Annual Meeting.
Information with respect to the above matters is set forth in the
Proxy Statement that accompanies this Notice.
The Board of Directors of the Company has fixed the close of business
on March 25, 1999, as the record date for determining stockholders entitled to
notice of and to vote at the meeting. A complete list of the stockholders
entitled to vote at the meeting will be maintained at the Company's principal
executive offices during ordinary business hours for a period of ten (10) days
prior to the meeting. The list will be open to the examination of any
stockholder for any purpose germane to the meeting during this time. The list
will also be produced at the time and place of the meeting and will be open
during the whole time thereof.
By Order of the Board of Directors,
/s/ RICHARD A WOODFIELD
RICHARD A. WOODFIELD
President and Chief Executive Officer
San Antonio, Texas
April 20, 1999
--------------------
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN
IF YOU PLAN TO BE PRESENT, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED
PROXY AT YOUR EARLIEST CONVENIENCE IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY.
<PAGE> 4
DEXTERITY SURGICAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 18, 1999
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy are furnished to the
stockholders of Dexterity Surgical, Inc., formerly known as LifeQuest Medical,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation by the Board of Directors of proxies for use at the Annual Meeting
of Stockholders (the "Annual Meeting" or "Meeting") to be held on Tuesday, May
19, 1998, at 10:00 a.m., C.D.T., at the San Antonio Airport Hilton and
Conference Center, 611 N.W. Loop 410, San Antonio, Texas, and at any
adjournment or postponement thereof, for the purposes set forth in the
foregoing Notice of Annual Meeting of Stockholders. Properly executed proxies
received in time for the Meeting will be voted.
The securities of the Company entitled to vote at the Annual Meeting
consist of shares of common stock, $.001 par value (the "Common Stock"), and
shares of Preferred stock, $.001 par value ("Preferred Stock"). At the close of
business on March 25, 1999 (the "Record Date"), there were outstanding and
entitled to vote 10,212,742 shares of Common Stock and 2,195 shares of
Preferred Stock. The holders of record of Common Stock or Preferred Stock on
the Record Date will be entitled to one vote per share. The Company's
Certificate of Incorporation does not permit cumulative voting in the election
of directors.
The Annual Report to Stockholders for the year ended December 31, 1998
has been or is being furnished with this Proxy Statement, which is being mailed
on or about April 20, 1999, to the holders of record of Common Stock on the
Record Date. The Annual Report to Stockholders does not constitute a part of
the proxy materials.
VOTING AND PROXY PROCEDURES
Properly executed proxies received in time for the Meeting will be
voted. Stockholders are urged to specify their choices on the proxy, but if no
choice is specified, eligible shares will be voted for the election of the ten
nominees for director named herein and for ratification of the appointment of
Ernst & Young LLP as the Company's independent public accountants for the
fiscal year ending December 31, 1999. At the date of this Proxy Statement,
management of the Company knows of no other matters which are likely to be
brought before the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, the persons named in the enclosed
proxy will have discretionary authority to vote such proxy in accordance with
their best judgment on such matters.
If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked by a later-dated proxy or by written notice filed with
the Secretary at the Company's executive offices at any time before the
enclosed proxy is exercised. Stockholders attending the Annual Meeting may
revoke their proxies and vote in person. The Company's executive offices are
located at 12961 Park Central, Suite 1300, San Antonio, Texas 78216.
The holders of a majority of the total shares of Common Stock and
Preferred Stock issued and outstanding at the close of business on the Record
Date, whether present in person or represented by proxy, will constitute a
quorum for the transaction of business at the Annual Meeting. The affirmative
vote of a plurality of the total shares of Common Stock and Preferred Stock
outstanding and entitled to vote at the Meeting is required for the election of
directors and the affirmative vote of a majority of the total shares of Common
Stock and Preferred Stock present in person or represented by proxy and
entitled to vote at the Annual Meeting is required for the ratification of the
appointment of Ernst & Young LLP and any other matters as may properly come
before the Annual Meeting or any adjournment thereof.
Abstentions are counted toward the calculation of a quorum, but are
not treated as either a vote for or against a proposal. An abstention has the
same effect as a vote against the proposal. Any unvoted position in a brokerage
account will be considered as not voted and will not be counted toward
fulfillment of quorum requirements.
<PAGE> 5
The cost of solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, proxies may be solicited by the directors,
officers and employees of the Company, without additional compensation (other
than reimbursement of out-of-pocket expenses), by personal interview,
telephone, telegram or otherwise. Arrangements will also be made with brokerage
firms and other custodians, nominees and fiduciaries who hold the voting
securities of record for the forwarding of solicitation materials to the
beneficial owners thereof. The Company will reimburse such brokers, custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them
in connection therewith.
OWNERSHIP OF COMMON STOCK
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth as of March 25, 1999, certain
information with respect to the Company's Common Stock beneficially owned by
each stockholder known by the Company to be the beneficial owner of more than
5% of the Company's Common Stock, each of its directors and nominees for
director, each executive officer named in the Summary Compensation Table (the
"named executive officers") and by all its directors and executive officers as
a group. Such persons have sole voting power and sole dispositive power with
respect to all shares set forth in the table unless otherwise specified in the
footnotes to the table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP PERCENT(2)
- --------------------------------------- ----------------- ----------
<S> <C> <C>
John J. Sickler (3).......................................... 2,828,461 25.35%
Renaissance Capital Growth & Income Fund III, Inc.(4)........ 1,375,000(5) 12.00%
Renaissance U.S. Growth & Income Trust, PLC(4)............... 1,375,000(5) 12.00%
Kalford C. Fadem............................................. 858,435(6) 8.23%
Christopher K. Black......................................... 781,599(7) 7.46%
Richard H. Klein(8).......................................... 597,750 5.83%
William H. Bookwalter........................................ 326,780(9)(10) 3.19%
Robert S. Fadem.............................................. 208,000(11) 2.03%
Herbert H. Spoon(12)......................................... 201,904 1.98%
Robert L. Evans.............................................. 131,950(13) 1.29%
Richard A. Woodfield......................................... 105,000(14) 1.02%
Randall K. Boatright......................................... 91,900(15) *
Robert B. Johnson............................................ 39,095(16) *
Jeffrey H. Berg, Ph.D........................................ 29,500(17) *
Robert Pearson............................................... 0(18) 0.00%
All executive officers and directors as a group
(8 persons, including the executive officers and directors
listed above)................................................ 5,400,720(9)(18)(19) 45.17%
</TABLE>
- --------------------------
* Represents less than 1% of the issued and outstanding shares of Common
Stock.
(1) Except as otherwise noted, the street address of the named beneficial
owner is 12961 Park Central, Suite 1300, San Antonio, Texas 78216.
(2) Percentage is based on a total of 10,212,742 shares of Common Stock
issued and outstanding on March 25, 1999.
-2-
<PAGE> 6
(3) Represents shares of Common Stock beneficially owned by TFX Equities,
Inc. Mr. Sickler is the president of TFX Equities, Inc. and shares
voting and investment power with respect to such shares of Common
Stock includes 942,820 shares of Common Stock issuable upon exercise
of warrants held by TFX Equities, Inc.
(4) The address for such stockholder is 8080 N. Central Expressway, Suite
210, Dallas, Texas 75206.
(5) Includes 750,000 shares of Common Stock issuable upon conversion of
convertible debentures and 500,000 shares of Common Stock issuable
upon conversion of Preferred Stock.
(6) Includes 40,000 shares of Common Stock which Mr. Fadem has the right
to acquire upon the exercise of stock options, 425,623 shares of
Common Stock held by Surgical Visions I, Inc. ("SVI"), of which Mr.
Fadem is president, and 212,812 shares of Common Stock issuable upon
exercise of warrants held by SVI. Mr. Fadem shares voting and
investment power with respect to the shares of Common Stock
beneficially held by SVI.
(7) Includes 260,533 shares of Common Stock issuable upon exercise of
warrants.
(8) Mr. Klein resigned from his positions with the Company December 31,
1998. His address is 165065 Strong Box, San Antonio, Texas 78247.
Includes 40,000 shares of Common Stock which Mr. Klein has the right
to acquire upon exercise of stock options.
(9) Does not include 8,405 shares of Common Stock held by The 1997
Bookwalter Family Trust, of which Mr. Bookwalter serves as trustee.
Mr. Bookwalter disclaims beneficial ownership of such shares.
(10) Includes 20,000 shares of Common Stock Mr. Bookwalter has the right to
acquire upon the exercise of stock options.
(11) Includes 40,000 shares which Mr. Fadem has the right to acquire upon
exercise of stock options. Represents shares which Mr. Fadem shares
voting and dispositive power.
(12) Mr. Spoon resigned from his positions with the Company effective March
9, 1998. His address is 8 Otis Place, Verona, New Jersey 07044.
(13) Includes shares which Mr. Evans shares voting and dispositive power.
Includes 700 shares Mr. Evans has the right to acquire upon the
exercise of stock options.
(14) Includes 62,500 shares of Common Stock issuable upon exercise of
options and 22,500 shares of Common stock issuable upon conversion of
Preferred Stock.
(15) Includes 73,050 shares of Common Stock issuable upon exercise of
options.
(16) Includes 39,000 shares which Mr. Johnson has the right to acquire upon
the exercise of stock options.
(17) Represents shares which Dr. Berg has the right to acquire upon the
exercise of stock options.
(18) Does not include shares of Common Stock held by Renaissance Capital
Growth & Income Fund III, Inc. and Renaissance U.S. Growth & Income
Trust, PLC. Mr. Pearson is an executive officer of the investment
advisor to each of these entities and may be deemed the beneficial
owner of such shares. Mr Pearson disclaims such beneficial ownership.
(19) Includes 2,828,461 shares of Common Stock beneficially owned by TFX
Equities, Inc., 638,435 shares of Common Stock beneficially owned by
SVI, 275,520 shares of Common Stock issuable upon the exercise of
options held by executive officers or directors, 260,533 shares of
Common Stock issuable upon the exercise of warrants held by executive
officers or directors and 22,500 shares of Common Stock issuable upon
conversion of Preferred Stock held by executive officers or directors.
Does not include 597,750 shares of Common Stock beneficially owned by
Richard Klein and 201,904 shares of Common Stock held by Herbert
Spoon.
-3-
<PAGE> 7
OWNERSHIP OF PREFERRED STOCK
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth as of March 25, 1999, certain
information with respect to the Company's Preferred Stock beneficially owned by
each stockholder known by the Company to be the beneficial owner of more than
5% of the Company's Preferred Stock, each of its directors, each executive
officer named in the Summary Compensation Table contained in the Proxy
Statement to the Company's 1998 Annual Meeting of Stockholders and by all its
directors and executive officers as a group. Such persons have sole voting
power and sole dispositive power with respect to all shares set forth in the
table unless otherwise specified in the footnotes to the table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP PERCENT(2)
- --------------------------------------- ----------------- ----------
<S> <C> <C>
Renaissance Capital Growth & Income Fund III, Inc.(3) 1,000 45.55%
Renaissance U.S. Growth & Income Trust, PLC (3) 1,000 45.45%
Richard A. Woodfield....................................... 45 2.1%
Robert Pearson............................................. 0(4) 0%
Richard H. Klein(5)........................................ 0 0%
William H. Bookwalter...................................... 0 0%
Herbert H. Spoon(6)........................................ 0 0%
Randall K. Boatright....................................... 0 0%
Kalford C. Fadem........................................... 0 0%
Robert L. Evans............................................ 0 0%
Jeffrey H. Berg, Ph.D...................................... 0 0%
Robert B. Johnson.......................................... 0 0%
Robert S. Fadem............................................ 0 0%
All executive officers and directors as a group
(nine persons, including the executive officers and
directors listed above).................................... 45 *
</TABLE>
- ---------------------
* Represents less than 1% of the issued and outstanding shares of
Preferred Stock.
(1) Except as otherwise noted, the street address of the named beneficial
owner is 12961 Park Central, Suite 1300, San Antonio, Texas 78216.
(2) Percentage is based on a total of 2,195 shares of Preferred Stock
issued and outstanding on March 25, 1999.
(3) The address for such stockholder is 8080 N. Central Expressway, Suite
210, Dallas, Texas 75206.
(4) Does not include shares of Preferred Stock held by Renaissance Capital
Growth & Income Fund III, Inc. and Renaissance U.S. Growth & Income
Trust, PLC. Mr. Pearson is an executive officer of the investment
advisor to each of these entities and may be deemed the beneficial
owner of such shares. Mr. Pearson disclaims such beneficial ownership.
(5) Mr. Klein resigned from his positions with the Company December 31,
1998. Mr. Klein's address is 16506 Strong Box, San Antonio, Texas
78247.
(6) Mr. Spoon resigned from his positions with the Company effective March
9, 1998. Mr. Spoon's address is 8 Otis Place, Verona, New Jersey
07044.
-4-
<PAGE> 8
MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
Ten directors (constituting the entire Board) are to be elected at the
Annual Meeting. All of the nominees named below are now directors of the
Company. All nominees have consented to be named and have indicated their
intent to serve if elected.
<TABLE>
<CAPTION>
Served as a
Name Age Positions and Offices with the Company Director Since
- ---- --- --------------------------------------- --------------
<S> <C> <C> <C>
Richard A. Woodfield 56 President, Chief Executive Officer, Director 1998
Randall K. Boatright 50 Executive Vice President, Chief Financial Officer, 1997
Secretary and Director
William H. Bookwalter 33 Vice President and Director 1997
Kalford C. Fadem 40 Vice President and Director 1997
Robert B. Johnson 68 Director 1990
Jeffrey H. Berg, Ph.D. 55 Director 1995
Robert L. Evans 59 Director 1997
Robert Pearson 64 Director 1998
John J. Sickler 57 Director 1999
Christopher K. Black 42 Director 1999
</TABLE>
- -------------------
Biographical information on these directors is set forth below under
"Further Information -- Board of Directors and Executive Officers."
It is the intention of the persons named in the enclosed proxy to vote
such proxy for the election of such nominees. Management of the Company does
not contemplate that any of such nominees will become unavailable for any
reason, but if that should occur before the meeting, proxies that do not
withhold authority to vote for directors will be voted for another nominee, or
other nominees, in accordance with the best judgment of the person or persons
appointed to vote the proxy.
The enclosed form of proxy provides a means for the holders of Common
Stock and Preferred Stock to vote for each of the nominees listed therein, to
withhold authority to vote for one or more of such nominees or to withhold
authority to vote for all nominees. Each properly executed proxy received in
time for the Meeting will be voted as specified therein, or if a stockholder
does not specify in his or her executed proxy how the shares represented by his
or her proxy are to be voted, such shares shall be voted for the nominees
listed therein or for other nominees as provided above. The ten director
nominees receiving a plurality of the votes cast at the Annual Meeting will be
elected as directors. Abstentions and broker non-votes will not be treated as a
vote for or against any particular director nominee and will not affect the
outcome of the election.
-5-
<PAGE> 9
COMMITTEES OF THE BOARD OF DIRECTORS
The business of the Company is managed under the direction of its
Board of Directors. The Company's Board of Directors has established two
standing committees: Audit and Compensation.
The Audit Committee recommends the selection of and confers with the
Company's independent accountants regarding the scope and adequacy of annual
audits, reviews reports from the independent accountants and meets with the
independent accountants and with the Company's financial personnel to review
the adequacy of the Company's accounting principles, financial controls and
policies. The Audit Committee consists of two non-employee directors: Jeffrey
H. Berg, Ph.D. and Robert B. Johnson.
The Compensation Committee reviews the Company's compensation
philosophy and programs, exercises authority with respect to the payment of
direct salaries and incentive compensation to directors and officers of the
Company and administers the Option Plan. The Compensation Committee consists of
two non-employee directors: Jeffrey H. Berg, Ph.D. and Robert B. Johnson.
MEETINGS OF THE BOARD OF DIRECTORS
During 1998, the Board of Directors met four times and took action on
five occasions by unanimous written consent. The Compensation Committee and the
Audit Committee each met one time during 1998 and the Compensation Committee
took action on four occasions by unanimous written consent. Each of the
directors of the Company attended at least 75% of the aggregate of the meetings
of the Board of Directors and Committees of which he was a member.
COMPENSATION OF DIRECTORS
During 1998, each non-employee member of the Board of Directors
received an annual stipend of $9,000 as well as $1,000 for attendance at each
meeting of the Board of Directors or Committee of the Board of Directors. The
members of the Board of Directors are also reimbursed for their travel expenses
to and from the meetings. The Board of Directors adopted a Non-Employee
Director Stock Option Plan (the "NEDSOP") in 1998, pursuant to which
non-employee directors may be granted stock options to purchase Common Stock.
The amount and exercise price of options granted under the NEDSOP are
determined by a committee appointed by the Board of Directors to administer the
NEDSOP. During 1998, no options were granted under the NEDSOP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE INDIVIDUALS NOMINATED FOR ELECTION AS DIRECTORS
PROPOSAL 2: PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1999
The Board of Directors, upon recommendation of its Audit Committee,
has appointed the firm of Ernst & Young LLP to serve as independent public
accountants of the Company for the fiscal year ending December 31, 1999.
Although stockholder ratification is not required, the Board of Directors has
directed that such appointment be submitted to the stockholders of the Company
for ratification at the Annual Meeting. If the stockholders do not ratify the
appointment of Ernst & Young LLP the Board of Directors may reconsider the
appointment.
On April 15, 1999, the Company advised Arthur Andersen LLP
("Andersen") that the Company intended to retain a different independent
accounting firm for the audit of its financial statements for the year ending
December 31, 1999. Andersen had been engaged as the principal accountant to
audit the Company's consolidated financial statements. Andersen's reports on
the Company's consolidated financial statements for the years ended December
31, 1998 and 1997 contained no adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles. The Audit Committee of the Registrant's Board of Directors
recommended the action taken with respect to Andersen.
There have been no disagreements with Andersen on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure during the years ended December 31, 1998 and 1997 or
-6-
<PAGE> 10
in the subsequent interim period through April 15, 1999, which disagreement(s),
if not resolved to Andersen's satisfaction, would have caused Andersen to make
reference to the subject matter of the disagreement(s) in connection with its
report.
Ernst and Young LLP has been engaged by the Company as its new
independent principal accountant to audit the Company's consolidated financial
statements. This engagement was effective as of April 15, 1999. Prior to
engaging Ernst and Young LLP, the Company had not consulted with Ernst and
Young LLP during the years ended December 31, 1998 and 1997 or in the
subsequent interim period through April 15, 1999
Representatives of Ernst & Young LLP will be present at the Annual
Meeting. They will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions from stockholders.
Representatives of Andersen, the Company's independent public accountants for
the year ended December 31, 1998, will not be present at the Annual Meeting.
Assuming the presence of a quorum, ratification of the appointment of
Ernst & Young LLP requires the affirmative vote of a majority of the votes cast
by the holders of shares of Common Stock and Preferred Stock entitled to vote
in person or by proxy at the Annual Meeting. Abstentions and broker non-votes
will not be considered as a vote for or against the proposal and therefore will
have no effect on the outcome of the proposal. Proxies will be voted for or
against such approval in accordance with specifications marked thereon, and if
no specification is made, the proxies will be voted for such approval.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1999
FURTHER INFORMATION
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is information with respect to each director and
executive officer of the Company as of March 25, 1999. The executive officers
are elected by the Board of Directors and serve at the discretion of the Board.
<TABLE>
<CAPTION>
Name Age Position
- ---- -------- --------------
<S> <C> <C>
Richard A. Woodfield..................................... 56 President, Chief Executive Officer and Director
Randall K. Boatright..................................... 50 Executive Vice President, Chief Financial Officer,
Secretary and Director
William H. Bookwalter.................................... 33 Vice President and Director
Kalford C. Fadem......................................... 40 Vice President and Director
Robert S. Fadem.......................................... 37 Vice President
Robert L. Evans.......................................... 59 Director
Jeffrey H. Berg, Ph.D(1)(2).............................. 55 Director
Robert B. Johnson(1)(2).................................. 68 Director
Robert Pearson........................................... 64 Director
John J. Sickler.......................................... 57 Director
Christopher K. Black..................................... 42 Director
</TABLE>
- ----------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
-7-
<PAGE> 11
RICHARD A. WOODFIELD has served as President and CEO of the Company
since May 1998. Prior to joining the Company, he was managing partner and
active in several ventures: Consultative Partnership, Finishing Equipment
Company of California, and Keystone Group. Mr. Woodfield was formerly President
of TFX Medical, a division of Teleflex Incorporated. He has served on a variety
of for profit and non-profit Boards of Directors: The Crouse Group; Delaware
Valley Industrial Council; Teleflex Incorporated; Tabor Children Services; and
Package Machinery Company. Mr. Woodfield earned a BSME from the University of
Missouri at Rolla.
RANDALL K. BOATRIGHT has served as a director of the Company since
February 1997. Mr. Boatright has also served as Vice President, Chief Financial
Officer and Secretary of the Company since 1992 and in 1998 was named an
Executive Vice President. From 1985 to 1992, Mr. Boatright served as Executive
Vice President, Chief Financial Officer and Director of Abraxas Petroleum
Corporation. Prior to that, Mr. Boatright practiced accounting with the firm of
Coopers and Lybrand LLP. Mr. Boatright is a certified public accountant in
Texas and Virginia.
JEFFREY H. BERG, PH.D. has served as a director of the Company since
March 1995, and has served as the President of Health Care Insights, a
consulting firm specializing in health care companies, since January 1993.
During 1992, Mr. Berg was a financial analyst covering the health care industry
for The Chicago Corp, an investment bank. During 1990 and 1991, Mr. Berg was a
financial analyst covering the health care industry for William K. Woodruff
&Co., a Dallas-based investment bank. From 1987 to January 1990, he was the
Vice President of Research specializing in the health care industry for J. C.
Bradford & Co. Mr. Berg is currently a director of Bio-Imaging Technologies,
Biologix International, IMX Corporation and Allou Health and Beauty Care, Inc.,
each of which is a publicly-held company.
ROBERT B. JOHNSON has served as a director of the Company since 1990.
He has been retired since 1988. From 1973 to 1988, he was employed by Lederle
Laboratories, the pharmaceutical division of American Cyanamid Company, in
various capacities, including President from 1984 to 1988, Vice President from
1978 to 1984 and Director of Manufacturing from 1976 to 1978.
WILLIAM H. BOOKWALTER has been a Vice President and Director of the
Company since September 1997. From 1991 until its acquisition by the Company in
September 1997, Mr. Bookwalter served as President and Chief Executive Officer
of William H. Bookwalter and Associates, Inc.
ROBERT L. EVANS is Manager-Western Operations for GE Fanuc Automation
North America, Inc. GE Fanuc specializes in automation technology and is a
global joint venture between GE Company and Fanuc Ltd. of Japan. Mr. Evans has
been employed by GE Company in various marketing, sales, and management
assignments since 1962.
KALFORD C. FADEM has served as a director of the Company since
February 1997. Mr. Fadem has also served as a Vice President of the Company
since 1996. From 1993 to 1996, Mr. Fadem served as President of Val-U-Med, Inc.
prior to its acquisition by the Company. Previous to that, Mr. Fadem was
employed as an application developer, support engineer, and sales manager for
several computer aided design and computer aided engineering (CAD/CAE) software
developers.
ROBERT S. FADEM has served as a Vice President of the Company since
1996. From 1993 to 1996, Mr. Fadem served as Vice President of Sales for
Val-U-Med, Inc. prior to its acquisition by the Company. Previous to that Mr.
Fadem was employed in medical sales.
ROBERT PEARSON has served as a Director of the Company since December
1998. Mr. Pearson has been Senior Vice President-Corporate Finance for
Renaissance Capital Group, Inc. since April 1997. Previously, Mr. Pearson had
been an independent financial and management consultant specializing in
investments with emerging growth companies. He has performed services for
Renaissance Capital Partners ("RCP") in connection with RCP Investments. From
1990 to 1994, Mr. Pearson served as Executive Vice President and Chief
Financial Officer of Thomas Group, Inc., a publicly-traded consulting firm.
Prior to 1990, Mr. Pearson was Vice President-Finance of Texas Instruments,
Incorporated.
JOHN J. SICKLER has served in various management positions with
Teleflex Incorporated over the last 25 years, including Chief Financial Officer
of the company and President of the Aerospace group. In 1990, he assumed his
present position as President of TFX Equities, Inc., a business development
subsidiary of Teleflex. Mr. Sickler
-8-
<PAGE> 12
graduated from Wilkes University in Pennsylvania. He is a CPA, having joined
Teleflex from an early career at Price Waterhouse.
CHRISTOPHER K. BLACK has served as President of Dexterity Incorporated
from January 1997 until its acquisition by the Company in March of 1999.
Beginning in July 1996, Mr. Black served as Vice President of TFX Equities,
Inc. From 1993 to 1996, Mr. Black served as a Vice President of TFX Medical, a
division of Teleflex Incorporated.
Robert S. Fadem and Kalford C. Fadem are brothers. Robert L. Evans is
the father-in-law of Robert S. Fadem. There are no other family relationships
among the Board of Directors and executive officers. In connection with the
acquisition by the Company of Val-U-Med, Inc., Robert L. Evans and Kalford C.
Fadem were each elected to the Company's Board of Directors. In connection with
the acquisition by the Company of W.H. Bookwalter and Associates, Inc., William
H. Bookwalter was elected to the Company's Board of Directors. In connection
with the private placement of the Company's securities in August 1998, Robert
Pearson was elected to the Company's Board of Directors. In connection with the
acquisition by the Company of Dexterity Incorporated in March 1999, John J.
Sickler and Christopher K. Black were each elected to the Company's Board of
Directors.
All directors of the Company hold office until the next annual meeting
of stockholders and the election and qualification of their successors. Each
officer of the Company was chosen by the Board of Directors and serves at the
pleasure of the Board of Directors until his or her successor is appointed or
until his or her earlier resignation or removal in accordance with applicable
law.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for making all compensation
decisions for the named executives including determining base salary, annual
incentive compensation amounts and granting stock options under the Company's
1989 Stock Option Plan, as amended (the "Option Plan").
Overall Objectives of the Executive Compensation Program
The purpose of the Company's compensation plan is to attract, retain
and motivate key management employees. It is the philosophy of the Company to
pay its executives at levels commensurate with both Company and individual
performance. A primary consideration in developing the Company's executive
compensation programs is to link the long-term financial interests of
executives with those of the Company and its stockholders. The Compensation
Committee reviews compensation for comparable organizations in order to
establish the Company's total compensation program and determine awards under
the Option Plan.
In 1998, the total compensation program for the Company's top
executives, approved by the Company's Board of Directors, consisted of a base
salary, bonus and stock option grants.
Base Salary Program
It is the Company's policy to establish salaries at a level
approximating the average of the competitive levels in comparable organizations
and to provide annual salary increases reflective of the executive's
performance, level of responsibility and position with the Company.
Annual Incentive
Each year, the Compensation Committee evaluates the performance of the
Company as a whole, as well as the performance of each individual executive.
Factors considered include revenue growth, net profitability and cost control.
The Compensation Committee does not utilize formalized mathematical formulae,
nor does it assign weightings to these factors. The Compensation Committee, in
its sole discretion, determines the amount, if any, of incentive payments to
each executive. The Compensation Committee believes that the Company's growth
in revenue and profitability requires subjectivity on the part of the Committee
when determining incentive payments. The Compensation Committee believes that
specific formulae restrict flexibility.
-9-
<PAGE> 13
1989 Stock Option Plan
The Option Plan permits the Company to make grants of stock options to
employees as part of the Company's overall incentive compensation program. The
Option Plan is intended to attract, retain and motivate key management
personnel and to align the interest of the executives with those of
stockholders. The overall long-term incentive grant levels are established by
reviewing the number of shares reserved for such plans by comparable
organizations. Individual long-term incentive grants are based on the
employee's position in the Company and responsibility level.
Compensation of Chief Executive Officer
In 1998, the Compensation Committee structured the compensation
packages of Mr. Herbert H. Spoon, the former Chief Executive Officer of the
Company, Randall K. Boatright, the Interim Chief Executive Officer of the
Company from March 1998 to May 1998, and Richard A. Woodfield, Chief Executive
Officer of the Company since May 1998 in the same manner and based upon the
same criteria as the Company's other executive officers. It is the belief of
the Compensation Committee that the Chief Executive Officer's total
compensation packages for 1998 properly reflected their individual importance
and contributions to the Company.
Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), currently imposes a $1 million limitation on the deductibility of
certain compensation paid to each of the Company's five highest paid
executives. Excluded from this limitation is compensation that is "performance
based." For compensation to be performance based it must meet certain criteria,
including being based on predetermined objective standards approved by
stockholders. In general, the Company believes that compensation relating to
options granted under the Option Plan will not be excluded from the $1 million
limitation calculation. Compensation relating to the Company's incentive
compensation awards do not currently qualify for exclusion from the limitation,
given the discretion that is provided to the Committee in establishing the
performance goals for such awards. The Committee believes that maintaining the
discretion to evaluate the performance of the Company's management is an
important part of its responsibilities and inures to the benefit of the
Company's stockholders. The Committee, however, intends to take into account
the potential application of Section 162(m) with respect to incentive
compensation awards and other compensation decisions made by it in the future.
Conclusion
The Compensation Committee believes these executive compensation
policies serve the interests of the stockholders and the Company effectively.
The Committee believes that the various pay vehicles offered are appropriately
balanced to provide increased motivation for executives to contribute to the
Company's overall future successes, thereby enhancing the value of the Company
for the stockholders' benefit.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Jeffrey H. Berg, Ph.D.
Robert B. Johnson
-10-
<PAGE> 14
EXECUTIVE COMPENSATION
The following table summarizes all compensation awarded to, earned by
or paid for services rendered to the Company in all capacities during the years
ended December 31, 1996, 1997 and 1998 by the Company's Chief Executive Officer
and the Company's other four most highly compensated executive officers who
received in excess of $100,000 in salary and bonus from the Company during
1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- -----------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION(1)
- ----------------------------- --------- --------- ----------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Woodfield(2) 1998 $ 112,740 $ 0 $0 250,000 $ 210
President and Chief 1997 --
Executive Officer 1996 --
Herbert H. Spoon(3) 1998 $ 42,750 $ 0 $0 25,000 $ 211
President and Chief 1997 $ 163,958 $ 10,000 $0 13,800 $ 1,817
Executive Officer 1996 $ 141,600 $ 6,000 $0 31,580 $ 721
Randall K. Boatright 1998 $ 150,481 $ 30,000 $0 100,000 $ 331
Executive Vice President, 1997 $ 102,158 $ 7,000 $0 10,400 $ 1,149
Chief Financial Officer and 1996 $ 99,909 $ 4,000 $0 8,600 $ 484
Secretary
Richard H. Klein(4) 1998 $ 170,794 $ 0 $0 0 $ 225
Vice President 1997 $ 188,711 $ 0 $0 0 $ 0
1996 --
Kalford C. Fadem 1998 $ 218,127 $ 0 $0 0 $ 179
Vice President 1997 $ 166,250 $ 0 $0 0 $ 0
1996 --
Robert S. Fadem 1998 $ 218,127 $ 0 $0 0 $ 179
Vice President 1997 $ 166,250 $ 0 $0 0 $ 0
1996 --
</TABLE>
- -------------------
(1) Represents life insurance premiums paid by the Company.
(2) Mr. Woodfield was elected President and Chief Executive Officer effective
May 11, 1998.
(3) Mr. Spoon resigned from the Company effective March 9, 1998.
(4) Mr. Klein resigned from the Company effective December 31, 1998.
-11-
<PAGE> 15
STOCK OPTION GRANTS IN FISCAL 1998
The following table provides certain information related to options
granted by the Company to the named executive officers during fiscal 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
% OF TOTAL OPTIONS
NUMBER OF SECURITIES GRANTED TO EXERCISE OR
UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL 1998 ($/SHARE) DATE
- ---- ----------- ----------- --------------- ---------
<S> <C> <C> <C> <C>
Richard A. Woodfield 250,000 46.28% $4.00 5/11/08
Herbert H. Spoon(1) 25,000 4.63% $3.25 2/9/08
Randall K. Boatright(2) 25,000 4.63% $3.25 2/9/08
25,000 4.63% $4.25 3/9/08
50,000 9.26% $4.375 4/1/08
Richard H. Klein 0 -- -- --
Kalford C. Fadem 0 -- -- --
Robert S. Fadem 0 -- -- --
</TABLE>
- ----------------------
There were no other grants to executive officers during fiscal 1998.
(1) Mr. Spoon resigned from his positions with the Company effective March
9, 1998.
(2) Mr. Boatright received an aggregate of 18.52% of all option grants to
employees in 1998.
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND FISCAL YEAR-END OPTION VALUES
The following table provides information related to options exercised
by the named executive officers of the Company during fiscal 1998 and the
number and value of options held at fiscal year end.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#) FY-END($)(1)
------------------------------ -----------------------------
SHARES ACQUIRED
UPON OPTION VALUE
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Woodfield 0 0 0 250,000 0 0
Herbert H. Spoon(2) 151,904 $526,671 0 0 0 0
Randall K. Boatright 0 0 41,250 114,150 0 0
Richard H. Klein 0 0 40,000 0 0 0
Kalford C. Fadem 0 0 40,000 20,000 0 0
Robert S. Fadem 0 0 40,000 20,000 0 0
</TABLE>
- -----------------------
(1) Represents the product of (a) the number of shares underlying options
granted multiplied by (b) the difference between (i) the fair market
value of Common Stock on December 31, 1998 ($1.75) and (ii) the
exercise price of the options.
(2) Mr. Spoon resigned from his positions with the Company effective March
9, 1998.
-12-
<PAGE> 16
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative
total stockholder return on its Common Stock from January 1, 1994 through
December 31, 1998, to the NASDAQ Index and to a Peer Group of other public
companies over the same period. The Peer Group is comprised of the following
companies: AMBI, Inc., Aronex Pharmaceuticals, Collagen Loop, CYTRX
Corporation, Immunogen, Inc., IVAX Corporation, Lifecell Corporation, Luther
Medical Products, and VasoMedical, Inc. The graph assumes that the value of the
investment in the Company's Common Stock and each Index was $100 at January 1,
1994, and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
[GRAPH]
FISCAL YEAR ENDING
<TABLE>
<CAPTION>
COMPANY 1993 1994 1995 1996 1997 1998
- ------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dexterity Surgical, Inc. 100 23.46 27.16 33.33 38.89 38.76
Peer Group 100 61.69 87.32 40.32 30.22 38.76
NASDAQ Market Index 100 104.99 136.18 169.23 207.00 291.96
</TABLE>
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), or to the liabilities of Section 18 under the
Exchange Act.
-13-
<PAGE> 17
EMPLOYMENT AGREEMENTS AND CHANGE-OF-CONTROL ARRANGEMENTS
The Company and Richard A. Woodfield are parties to an employment
agreement whereby Richard A. Woodfield receives approximately $175,000 per
annum as well as a bonus based upon the achievement of goals agreed upon by the
parties, the performance of the Company's stock price and the earnings of the
Company. The agreement with Richard A. Woodfield expires May 10, 2002. As an
inducement to enter into such agreement, the Company granted Mr. Woodfield
non-qualified stock options for up to 350,000 shares of Common Stock, which
vest over time.
The Company and Randall K. Boatright are parties to an employment
agreement whereby Randall K. Boatright receives $150,000 per annum as well as a
bonus based upon the achievement of goals agreed upon by the parties, the
performance of the Company's stock price and the earnings of the Company. The
agreement with Randall K. Boatright expires March 31, 2001. As an inducement to
enter into such agreement, the Company granted Mr. Boatright non-qualified
stock options for up to 50,000 shares of Common Stock, which vest over time.
The Company and Kalford C. Fadem are parties to an employment
agreement whereby Kalford C. Fadem receives $100,000 per annum as well as bonus
based upon the gross profits of the Company's Endosurgery Division. The
agreement with Kalford C. Fadem expires December 31, 1999. As an inducement to
enter into such agreement, the Company granted Kalford C. Fadem non-qualified
stock options for up to 60,000 shares of Common Stock, which vest over time.
The Company and Robert S. Fadem have entered into an employment
agreement whereby Robert S. Fadem receives $100,000 per annum as well as bonus
based upon the gross profits of the Company's Endosurgery Division. The
agreement with Robert S. Fadem expires December 31, 1999. As an inducement to
enter into such agreement, the Company granted Robert S. Fadem non-qualified
stock options for up to 60,000 shares of Common Stock, which vest over time.
The Company and William H. Bookwalter have entered into an Employment
Agreement whereby Mr. Bookwalter receives a base salary of $100,000 per annum
as well as a bonus based upon the gross profits of the Company's Med-Service
Division. The Agreement with Mr. Bookwalter expires September 30, 2000. As an
inducement to enter into such Agreement, the Company granted Mr. Bookwalter
non-qualified stock options for up to 60,000 shares of Common Stock, which
vests over time.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following non-employee directors served on the Board of Directors'
Compensation Committee during 1998: Robert B. Johnson and Jeffrey H. Berg,
Ph.D.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's
directors, executive officers and persons who own more than 10 percent of a
registered class of the Company's equity securities file with the Commission
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Directors, executive officers
and greater than 10 percent stockholders are required by Commission regulations
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
the Section 16(a) reports furnished to the Company and written representations
that no other reports were required, during the fiscal year ended December 31,
1998, all Section 16(a) filing requirements applicable to its directors,
executive officers and greater than 10 percent beneficial owners were complied
with.
CERTAIN TRANSACTIONS
On August 11, 1998, pursuant to the terms of a private placement, the
Company issued to Renaissance Capital Growth & Income Fund III, Inc.
("Renaissance Fund") and Renaissance US Growth & Income Trust, PLC
("Renaissance PLC"), an aggregate of 1,000 shares of 8% Series A Cumulative
Convertible Preferred Stock (the "Series A Preferred") at a per share purchase
price of $1,000. The 1,000 shares of Series A Preferred are convertible into an
aggregate of 500,000 shares of Common Stock (subject to adjustment) at a
conversion price not to exceed $2.00. On the date the Company closed such
private placement, August 11, 1998, the closing per share price of Common Stock
on the NASDAQ SmallCap Market was $1.75. Dividends cumulatively accrue on the
Series A Preferred at a rate of $80 per annum per share. So long as any accrued
dividends on Series A Stock are unpaid, no dividends may be declared on Common
Stock. In connection with this private placement, Robert Pearson, a nominee for
reelection as a director at the Annual Meeting
-14-
<PAGE> 18
and an executive officer with the investment advisor to Renaissance Fund and
Renaissance PLC, was elected to the Company's Board of Directors.
On November 19, 1998, pursuant to the terms of a private placement,
the Company issued to Renaissance Fund and Renaissance PLC an aggregate of
1,000 shares of 8% Series B Cumulative Convertible Preferred Stock (the "Series
B Preferred") at a per share purchase price of $1,000. The Series B Preferred
is convertible into an aggregate of 500,000 shares of Common Stock (subject to
adjustment) at a conversion price not to exceed $2.00. On the date the Company
closed such private placement, November 19, 1998, the closing per share price
of Common Stock on the NASDAQ SmallCap Market was $2.125. Dividends
cumulatively accrue on the Series B Preferred at a rate of $80 per annum per
share. Robert Pearson, a director of the Company and a nominee for reelection
as a director at the Annual Meeting, is an executive officer with the
investment advisor to Renaissance Fund and Renaissance PLC.
PROPOSALS FOR NEXT ANNUAL MEETING
The deadline for submission of stockholder proposals pursuant to Rule
14a-8 under the Securities Exchange Act of 1934, as amended ("Rule 14a-8"), for
inclusion in the Company's proxy statement for its 2000 annual meeting of
stockholders is December 21, 1999. After March 6, 2000, notice to the Company
of a stockholder proposal submitted otherwise than pursuant to Rule 14a-8 will
be considered untimely, and the person named in proxies solicited by the Board
of Directors of the Company for its 2000 annual meeting of stockholders may
exercise discretionary authority voting power with respect to any such proposal
as to which the Company does not receive timely notice.
OTHER MATTERS
As of the date of this Proxy Statement, management does not intend to
present any other items of business and is not aware of any matters to be
presented for action at the Annual Meeting other than those described above.
However, if any other matters should come before the Annual Meeting, it is the
intention of the persons named as proxies in the accompanying proxy card to
vote in accordance with their best judgment on such matters.
By order of the Board of Directors,
/s/ RICHARD A. WOODFIELD
RICHARD A. WOODFIELD
President and Chief Executive Officer
San Antonio, Texas
April 20, 1999
-15-
<PAGE> 19
DEXTERITY SURGICAL, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- MAY 18, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark, sign, date and return in the enclosed envelope.
P The undersigned stockholder of Dexterity Surgical, Inc. (the
"Company") hereby appoints Richard A. Woodfield and Randall K.
R Boatright, or each of them, proxies of the undersigned with full power
of substitution to vote at the Annual Meeting of Stockholders of the
O Company to be held on Tuesday, May 18, 1999, at 10:00 a.m., C.D.T. at
the San Antonio Airport Hilton and Conference Center, 611 N.W. Loop
X 410, San Antonio, Texas, and at any adjournment thereof, the number of
votes which the undersigned would be entitled to cast if personally
Y present:
(1) ELECTION OF DIRECTORS
[ ] FOR [ ] WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees
(except as marked below) listed below
<TABLE>
<S> <C> <C>
Randall K. Boatright Richard A. Woodfield Robert B. Johnson
Robert Pearson Robert L. Evans Christopher K. Black
William H. Bookwalter Kalford C. Fadem Jeffrey H. Berg, Ph. D.
John J. Sickler
</TABLE>
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, DRAW A LINE THROUGH OR
STRIKE OUT THAT NOMINEE'S NAME AS SET FORTH
ABOVE.
(2) PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) To consider and act upon any other matter which may properly
come before the meeting or any adjournment thereof; all as
more particularly described in the Proxy Statement dated
April 20, 1999, relating to such meeting, receipt of which is
hereby acknowledged.
This proxy when properly executed will be voted in
the manner directed herein by the undersigned shareholder. If
no direction is made, this proxy will be voted FOR the
nominees listed in Proposal 1 and FOR Proposal 2.
-------------------------------------------
-------------------------------------------
Signature of Stockholder(s)
Please sign your name exactly as it appears
hereon. Joint owners must each sign. When
signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as it appears hereon.
Dated ______________________________, 1999.
