<PAGE> 1
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Polymedica Industries, Inc.
(Name of Registrant as Specified In Its Charter)
Polymedica Industries, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 (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
POLYMEDICA INDUSTRIES, INC.
11 STATE STREET
WOBURN, MASSACHUSETTS 01801
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 12, 1996
The 1996 Annual Meeting of Stockholders of PolyMedica Industries, Inc. (the
"Company") will be held at the offices of Hale and Dorr, 60 State Street,
Boston, Massachusetts 02109, on Thursday, September 12, 1996, at 9:00 a.m.,
local time, to consider and act upon the following matters:
1. To elect two Class II Directors for three year terms expiring at the
Company's 1999 Annual Meeting of Stockholders.
2. To approve an amendment to the Company's 1990 Stock Option Plan (the
"Stock Option Plan") increasing from 2,000,000 to 2,400,000 the number
of shares of Common Stock available for issuance under the Plan.
3. To approve an amendment to the Company's 1992 Directors' Stock Option
Plan (the "Directors' Plan") increasing from 63,000 to 200,000 the
number of shares of Common Stock available for issuance under the Plan.
4. To ratify the selection by the Board of Directors of Coopers & Lybrand
L.L.P. ("Coopers & Lybrand") as the Company's independent accountants
for fiscal 1997.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on July 28, 1996, are
entitled to notice of, and to vote at, the meeting. The stock transfer books of
the Company will remain open for the purchase and sale of the Company's Common
Stock.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
/s/ ERIC G. WALTERS
ERIC G. WALTERS, Clerk
Woburn, Massachusetts
August 5, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE IN
ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE> 3
POLYMEDICA INDUSTRIES, INC.
11 STATE STREET
WOBURN, MASSACHUSETTS 01801
PROXY STATEMENT FOR THE 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 12, 1996
GENERAL MATTERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PolyMedica Industries, Inc. (the "Company"
or "PolyMedica") for use at the 1996 Annual Meeting of Stockholders to be held
on September 12, 1996, and at any adjournment or adjournments of that meeting.
All proxies will be voted in accordance with the instructions contained therein,
and if no choice is specified, the proxies will be voted in favor of the matters
set forth in the accompanying Notice of Meeting. Any proxy may be revoked by a
stockholder at any time before it is exercised by delivery of written revocation
to the Clerk of the Company.
The Company's Annual Report for the fiscal year ended March 31, 1996, is
being mailed to stockholders with the mailing of this Notice and Proxy Statement
on or about August 5, 1996.
All shares and per share price information set forth in this Proxy
Statement have been restated to give effect to the 5% common stock dividend paid
on October 28, 1994, to holders of record of the Company's Common Stock as of
October 14, 1994.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH
31, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, EXCEPT FOR
EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN
REQUEST TO THE TREASURER, POLYMEDICA INDUSTRIES, INC., 11 STATE STREET, WOBURN,
MA 01801.
VOTING SECURITIES AND VOTES REQUIRED
On July 28, 1996, the record date for the determination of stockholders
entitled to notice of and to vote at the meeting, there were outstanding and
entitled to vote an aggregate of 8,157,417 shares of Common Stock of the
Company, $.01 par value per share ("Common Stock"). Each share of Common Stock
is entitled to one vote.
The holders of a majority of the shares of Common Stock issued and
outstanding and entitled to vote at the Annual Meeting shall constitute a quorum
for the transaction of business at the Annual Meeting. Shares of Common Stock
present in person or represented by proxy (including shares which abstain or do
not vote with respect to one or more of the matters presented for stockholder
approval) will be counted for purposes of determining whether a quorum exists at
the Annual Meeting.
The affirmative vote of holders of a plurality of the shares of Common
Stock present, or represented, and entitled to vote at the Annual Meeting is
required for the election of Directors. The affirmative vote of the holders of a
majority of the shares of Common Stock present, or represented, and entitled to
vote is required to approve the proposals to amend the Company's Stock Option
Plan and Directors' Plan. The affirmative vote of the holders of a majority of
the shares of Common Stock present, or represented, and entitled to vote on the
matter is required for the approval of the ratification of the selection of the
Company's accountants.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter, will not be counted as votes in favor of such matter, and will also not
be counted as votes cast or shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the election of
Directors, the approval of the amendments to the Stock Option Plan and
Directors' Plan or the ratification of the selection of the Company's
accountants.
<PAGE> 4
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of June 30, 1996,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company who beneficially owns more than 5% of the
outstanding shares of Common Stock; (ii) each director and nominee for director;
(iii) each executive officer named in the Summary Compensation Table under the
heading "Compensation of Executive Officers" below and (iv) all directors and
executive officers of the Company as a group.
<TABLE>
The number of shares of Common Stock beneficially owned by each director or
executive officer is determined under the rules of the Securities and Exchange
Commission, and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which the individual has sole or shared voting power or
investment power and also any shares which the individual has the right to
acquire within 60 days after June 30, 1996 through the exercise of any stock
option or other right to acquire stock in the Company. Unless otherwise
indicated, each person has sole investment and voting power (or shares such
power with his or her spouse) with respect to the shares set forth in the
following table. The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares.
<CAPTION>
NUMBER PERCENTAGE
OF SHARES OF SHARES
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OWNED
- -------------------------------------------------------------- ------------ ------------
<S> <C> <C>
John Hancock Mutual Life Insurance Company(2)................. 542,417 6.2%
200 Clarendon Street
Boston, MA 02116
Kennedy Capital Management.................................... 531,900 6.5%
10829 Olive Boulevard
St. Louis, MO 63141
U.S. Bancorp(3)............................................... 516,500 6.3%
111 S. W. Fifth Avenue
Portland, OR 97208
Steven J. Lee(4).............................................. 493,197 5.8%
Michael Szycher Ph.D.(5)...................................... 446,721 5.4%
Arthur A. Siciliano, Ph.D.(6)................................. 225,146 2.7%
Richard H. Bard(7)............................................ 202,213 2.5%
Robert J. Zappa(8)............................................ 163,807 2.0%
Eric G. Walters(9)............................................ 146,093 1.8%
Daniel S. Bernstein, M.D.(10)................................. 18,237 *
Marcia J. Hooper(11).......................................... 11,288 *
Frank W. LoGerfo, M.D.(12).................................... 5,250 *
Thomas S. Soltys, Jr.(13)..................................... 2,625 *
All directors and executive officers as a group (11
persons)(14)................................................ 1,902,248 20.5%
<FN>
- ---------------
* Represents holdings of less than one percent.
(1) The persons named in the table have sole voting and investment power with
respect to all shares shown as beneficially owned by them, subject to the
information contained in the footnotes to this table. Amounts shown include
shares issuable pursuant to the exercise of options that are exercisable
within 60 days of June 30, 1996.
(2) Represents shares of Common Stock issuable upon the exercise of a stock
purchase warrant with an exercise price of $5.19 per share issued in
connection the sale by a subsidiary of the Company of $25 million 10.9%
Guaranteed Senior Secured Notes due January 31, 2003, to John Hancock
Mutual Life Insurance Company.
</TABLE>
2
<PAGE> 5
(3) Based upon a Schedule 13G filed by U.S. Bancorp pursuant to the Exchange
Act and the rules promulgated thereunder reporting the beneficial ownership
by it of 516,500 shares of the Company's Common Stock as of December 31,
1995. U.S. Bancorp has shared voting power and shared investment power with
respect to all shares of Common Stock beneficially owned by it.
(4) Includes 92,084 shares held by a family trust for which Mr. Lee and his
spouse are beneficiaries and 369,147 shares issuable upon exercise of
outstanding stock options held by Mr. Lee. See "Fiscal Year-End Option
Table" below.
(5) Includes 183,047 shares issuable upon exercise of outstanding stock options
held by Dr. Szycher. See "Fiscal Year-End Option Table" below. In
connection with the distribution of the Company's shareholdings in its
subsidiary, CardioTech International, Inc. ("CardioTech") to the Company's
stockholders, Dr. Szycher resigned effective June 12, 1996 as the Company's
Chairman and Chief Technical Officer in order to serve as Chairman and
Chief Executive Officer of CardioTech.
(6) Includes 162,373 shares issuable upon exercise of outstanding stock options
held by Dr. Siciliano. See "Fiscal Year-End Option Table" below.
(7) Includes 179,527 shares owned by Bard & Co. Inc., of which Mr. Bard is the
Chairman and Chief Executive Officer, and 22,687 shares issuable upon
exercise of outstanding stock options held by Mr. Bard. Mr. Bard is the
sole stockholder of Bard & Co., Inc., and has sole investment power and
sole voting power over all shares held by Bard & Co., Inc.
(8) Includes 87,832 shares issuable upon exercise of outstanding stock options
held by Mr. Zappa. See "Fiscal Year-End Option Table" below.
(9) Includes 125,333 shares issuable upon exercise of outstanding stock options
held by Mr. Walters. See "Fiscal Year-End Option Table" below.
(10) Includes 10,500 shares issuable upon exercise of outstanding stock options,
and 4,620 shares held by Dr. Bernstein in an IRA account for his benefit.
(11) Includes 10,500 shares issuable upon exercise of outstanding stock options
held by Ms. Hooper.
(12) Includes 5,250 shares issuable upon exercise of outstanding stock options
held by Dr. LoGerfo.
(13) Includes 2,625 shares issuable upon exercise of an outstanding stock option
held by Mr. Soltys.
(14) Includes 1,106,701 shares issuable upon exercise of outstanding stock
options. See "Fiscal Year-End Option Table" below.
ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of two Class I
Directors, two Class II Directors, and two Class III Directors. The Class I,
Class II, and Class III Directors have been elected to serve until the annual
meetings of stockholders to be held in 1998, 1996, and 1997, respectively, and
until their respective successors are duly elected and qualified. At each annual
meeting of stockholders, one class of directors is elected for a term of three
years. There is currently one vacancy among the Class III Directors due to the
resignation of Dr. Szycher in June 1996 in connection with the spinoff of
CardioTech. The Board of Directors may, at its option, appoint an individual to
fill this vacancy.
The persons named in the enclosed proxy will vote to elect as Class II
Directors Richard H. Bard and Thomas S. Soltys, Jr., the Class II nominees named
below, unless the proxy is marked otherwise. Messrs. Bard and Soltys are
currently Class II Directors of the Company.
Messrs. Bard and Soltys will be elected to hold office until the 1999
Annual Meeting of Stockholders and until their successors are duly elected and
qualified. Messrs. Bard and Soltys have indicated their willingness to serve, if
elected; however, if Messrs. Bard and Soltys should be unable to serve, the
proxies may be voted for a substitute nominee designated by the Board of
Directors. It is not presently contemplated that either of the nominees will be
unavailable to serve as directors.
3
<PAGE> 6
The following table sets forth the name, age, length of service as a
director of each member of the Board of Directors, including the nominees for
Class II Directors, information given by each concerning all positions he or she
holds with the Company, his or her principal occupation and business experience
for the past five years and the names of other publicly-held companies of which
he or she serves as a director. Information with respect to the number of shares
of Common Stock of the Company beneficially owned by him or her on June 30,
1996, and the percentage of all outstanding shares of Common Stock owned by him
or her on such date appears above under the caption "Security Ownership and
Certain Beneficial Owners and Management."
NOMINEES FOR TERM
TO EXPIRE IN 1996
(CLASS II DIRECTORS)
RICHARD H. BARD, age 48, has been a director since 1992.
Mr. Bard is currently the Chief Executive Officer of Bard & Co., Inc., and has
been a director and Chief Executive Officer of Optical Security Group, Inc.
since September 1993. He served as Vice Chairman of ComputerLand Corporation,
and Chief Executive Officer of ComputerLand International, Inc. from 1989 to
1991; Chief Executive Officer of CoastAmerica Corporation from 1986 to 1988;
and President and Chief Operating Officer of FoxMeyer Corporation from 1978 to
1986.
THOMAS S. SOLTYS, JR., age 48, has been a director since March 1996.
Mr. Soltys has served as President of Boston Special Risks Insurance Agency,
Inc. since 1988 and has been its sole owner since 1994.
DIRECTORS WHOSE TERMS
EXPIRE IN 1997
(CLASS III DIRECTORS)
STEVEN J. LEE, age 49, has been a director since 1990.
Mr. Lee has served as Chairman since June 1996 and Chief Executive Officer and
a director of the Company since 1990. He served as President of the Company
from 1990 through June 1996. Before joining the Company, he served as manager
in the Mergers and Acquisitions practice at Coopers & Lybrand from March 1990
to May 1990. Previously, he was President and a director of Shawmut National
Ventures from November 1987 to March 1990, and served as President, Chief
Executive Officer and a director of RepliGen Corporation from 1984 to 1986.
Currently he is a director of Commonwealth BioVentures, Inc. and Fibersense
Technology Corporation.
DANIEL S. BERNSTEIN, M.D., age 69, has been a director since 1992.
Dr. Bernstein has been a physician at Brigham and Women's Hospital, Boston,
Massachusetts, since 1993; a lecturer at Harvard Medical School, Cambridge,
Massachusetts, since 1993; and Clinical Professor of Medicine Emeritus, Boston
University School of Medicine since 1973.
DIRECTORS WHOSE TERMS
EXPIRE IN 1998
(CLASS I DIRECTORS)
FRANK W. LOGERFO, M.D., age 55, has been a director since 1994.
Dr. LoGerfo has been Attending Surgeon; Associate Chairman for Research,
Department of Surgery; and Chief, Division of Vascular Surgery, Deaconess
Hospital since 1987. Dr. LoGerfo has served as Professor of Surgery at Harvard
Medical School since 1991.
4
<PAGE> 7
MARCIA J. HOOPER, age 42, has been a director since 1991.
Ms. Hooper is a Vice President of Advent International, Inc. Ms. Hooper served
as General Partner of three venture capital funds of Ampersand Ventures from
1985 to 1993 and served as General Partner of Viking Capital Limited
Partnership from 1993 to April 1996.
BOARD AND COMMITTEE MEETINGS
The Company has a standing Audit Committee of the Board of Directors which
provides the opportunity for direct contact between the Company's independent
public accountants and the Board. The Audit Committee has responsibility for
recommending the appointment of the Company's independent public accountants,
reviewing the scope and results of audits and reviewing the Company's internal
accounting control policies and procedures. In the year ended March 31, 1996,
the Audit Committee included Mr. Bard and Ms. Hooper and held one meeting.
The Company also has a standing Compensation Committee of the Board of
Directors which provides recommendations to the Board regarding executive and
employee compensation programs of the Company. The Compensation Committee also
administers the Company's Stock Option Plan, the Directors' Plan, and other
employee stock benefits plans. In the year ended March 31, 1996, Compensation
Committee members included Ms. Hooper and Drs. Bernstein and LoGerfo, and held
three meetings.
The Company also has a standing Executive Committee which provides
assistance to the Board of Directors. In the year ended March 31, 1996,
Executive Committee members included Messrs. Lee and Bard and Ms. Hooper.
Because the full Board of Directors had frequent meetings, no meetings of the
Executive Committee were held in the year ended March 31, 1996.
The Board of Directors held eight meetings during the year ended March 31,
1996. All directors attended at least 75% of the total number of meetings of the
Board of Directors except Mr. Bard, who attended 63% of such meetings. All
directors attended at least 75% of all committee meetings on which he or she
served except Mr. Bard who did not attend the Audit Committee meeting.
There are no family relationships between or among any officers or
directors of the Company.
DIRECTORS' COMPENSATION
Outside directors receive: (i) expense reimbursement and (ii) beginning
July 15, 1996, $12,500 in annual cash compensation for attending Board and
Committee Meetings. Directors who are officers or employees of the Company do
not receive any additional compensation for their services as directors.
Outside directors are entitled to participate in the Directors' Plan, which
provides for automatic grants of non-qualified stock options to members of the
Company's Board of Directors who are not employees of the Company. The
Directors' Plan provides that (1) each eligible director will be granted an
option to purchase 2,625 shares of Common Stock upon his or her initial election
as a director and (2) each director will also be granted an option to purchase
2,625 shares in September of each year. Effective July 15, 1996, the Board of
Directors amended the Directors' Plan to increase the annual option grant to
7,500 shares for each director. Under the terms of the Directors' Plan, no
director will be granted more than one such option in any calendar year.
Under the Directors' Plan, Drs. Bernstein and LoGerfo, Ms. Hooper, and Mr.
Bard each were granted an option to purchase 2,625 shares of Common Stock
(exercisable at $9.1875 per share) in September 1995. Mr. Soltys was granted an
option to purchase 2,625 shares of Common Stock (exercisable at $8.00 per share)
upon his appointment to the Board of Directors in March 1996.
The Directors' Plan is administered by the Board of Directors. The exercise
price of options granted under the Plan equals 100% of the fair market value of
Common Stock as of the date of grant. The term of each option is ten years, and
options vest immediately. Options generally are not assignable except by will or
by the laws of descent and distribution.
5
<PAGE> 8
COMPENSATION OF EXECUTIVE OFFICERS
<TABLE>
Summary Compensation Table. The following table sets forth certain
information with respect to the annual and long-term compensation for each of
the last three fiscal years of the Company's President and Chief Executive
Officer and the Company's other four most highly compensated executive officers
who were serving as executive officers on March 31, 1996:
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION -------------------------
---------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION YEAR $ (1)($) ($)(2) (#)(4) (5)
- ---------------------------------- ---- -------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Lee 1996 $246,181 $142,000 $4,500(3) 30,000 $1,043
President and 1995 230,816 187,500 4,500(3) 131,250 965
Chief Executive Officer 1994 209,200 125,000 4,620(3) 13,125 884
Michael Szycher, Ph.D.(6) 1996 229,554 34,000 2,492(3) 30,000 2,619
Former Chairman and 1995 231,785 132,500 4,500(3) 131,250 2,421
Chief Technical Officer 1994 214,048 120,000 4,620(3) 13,125 2,223
Arthur A. Siciliano, Ph.D. 1996 183,414 59,000 4,561(3) 22,000 1,283
Executive Vice President 1995 147,153 57,000 4,819(3) 78,750 874
1994 125,557 55,000 5,130(3) 7,875 768
Eric G. Walters 1996 135,432 50,000 4,579(3) 16,000 295
Chief Financial Officer, 1995 126,841 46,500 4,570(3) 36,750 271
Treasurer and Clerk 1994 117,979 45,000 4,793(3) 6,300 241
Robert J. Zappa 1996 129,387 48,000 4,467(3) 21,000 805
President, PolyMedica 1995 124,672 46,500 4,942(3) 36,750 740
Healthcare, Inc. 1994 112,205 35,000 4,416(3) 7,875 653
<FN>
- ---------------
(1) These amounts were either paid or accrued in the year shown.
(2) Other compensation in the form of perquisites and other personal benefits
has been omitted in those instances where such perquisites and other
personal benefits constituted less than the lesser of $50,000 or 10% of the
total salary and bonus for each named executive officer for such year.
(3) Represents the Company's matching cash contribution paid or accrued under
the Company's 401(k) Plan.
(4) Represents options granted under the 1990 Stock Option Plan.
(5) Represents the taxable portion of group term life insurance paid by the
Company.
(6) Dr. Szycher resigned from his employment with the Company in June 1996 in
connection with the spinoff of CardioTech.
</TABLE>
6
<PAGE> 9
<TABLE>
Option Grant Table. The following table sets forth certain information
regarding options granted during the year ended March 31, 1996 by the Company to
the executive officers in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR OPTION TERM(4)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------------
NAME GRANTED(#)(1) YEAR 1996 ($/SH)(2) DATE(3) 5% 10%
- --------------------------- ------------- ------------- ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Lee.............. 20,000 8.88% $ 5.75 06/08/05 $72,323 $ 183,280
10,000 4.44% 6.13 12/14/05 38,520 97,617
Michael Szycher, Ph.D...... 20,000 8.88% 5.75 06/08/05 72,323 183,280
10,000 4.44% 6.13 12/14/05 38,520 97,617
Arthur A. Siciliano,
Ph.D..................... 12,000 5.33% 5.75 06/08/05 43,394 109,968
10,000 4.44% 6.13 12/14/05 38,520 97,617
Eric G. Walters............ 6,000 2.66% 5.75 06/08/05 21,697 54,984
10,000 4.44% 6.13 12/14/05 38,520 97,617
Robert J. Zappa............ 11,000 4.88% 5.75 06/08/05 39,778 100,804
10,000 4.44% 6.13 12/14/05 38,520 97,617
<FN>
- ---------------
(1) The Company granted options to acquire 30,000 shares to Mr. Lee, 30,000
shares to Dr. Szycher, 22,000 shares to Dr. Siciliano, 16,000 shares to Mr.
Walters and 21,000 shares to Mr. Zappa, of which options 10,000, 10,000,
6,000, 3,000, and 9,000, respectively, vested immediately with the
remainder vesting over twelve equal quarterly installments, commencing with
the date of grant.
(2) The exercise price is equal to the fair market value of the Company's Common
Stock on the date of grant.
(3) Options expire at the end of the option term, which is ten years from the
date of grant.
(4) Amounts represent hypothetical gains that could be achieved for options if
exercised at the end of the option term. These gains are based on assumed
rates of stock price appreciation of 5% and 10% compounded annually from
the date options are granted.
</TABLE>
7
<PAGE> 10
Fiscal Year-End Option Table. The following table sets forth certain
information regarding stock options exercised during the year ended March 31,
1996 and stock options held as of March 31, 1996 by the executive officers named
in the Summary Compensation Table:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
ACQUIRED ON REALIZED ---------------------------- ----------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Lee.............. 0 $0 359,829 42,337 $ 732,262 $ 117,160
Michael Szycher, Ph.D...... 0 0 368,781 42,337 803,007 117,160
Arthur A. Siciliano,
Ph.D..................... 0 0 156,010 30,481 328,901 81,553
Eric G. Walters............ 0 0 121,975 17,852 261,233 42,136
Robert J. Zappa............ 0 0 89,303 17,318 155,759 41,104
<FN>
- ---------------
(1) Total value of "in-the-money" unexercised options is based on the difference
between the last sales price of the Company's Common Stock on the American
Stock Exchange on March 31, 1996 ($7.75 per share) and the exercise price of
the "in-the-money" options, multiplied by the number of "in-the-money"
option shares.
</TABLE>
EMPLOYMENT AGREEMENTS
In 1990, the Company entered into employment agreements with Mr. Lee and
Drs. Szycher and Siciliano, in 1991 with Mr. Walters, and in 1992 with Mr.
Zappa, pursuant to which each individual agreed to serve as an officer of the
Company. Pursuant to the terms of the employment agreements, the officer
receives an annual base salary which is reviewed annually by the Board of
Directors. Each officer is entitled to receive an annual bonus payment in an
amount, if any, to be determined by the Compensation Committee of the Board of
Directors. The employment agreements, as amended to date, extend to November 30,
1997 for Dr. Szycher, to March 31, 1998 for Mr. Zappa, to May 31, 1998 for Dr.
Siciliano and Mr. Walters, and to November 30, 1998 for Mr. Lee. In connection
with the Company's spinoff of its subsidiary, CardioTech, to its stockholders in
June 1996, Dr. Szycher resigned as the Company's Chairman and Chief Technical
Officer and his employment agreement was terminated.
The term of the employment agreements will also be deemed to continue on a
month-to-month basis if not expressly extended while each officer remains
employed by the Company. Both the officer and the Company have the right to
terminate an employment agreement at any time with or without cause upon 30
days' prior written notice. In the event that the Company terminates an
employment agreement without cause or an officer terminates his employment for
good reason (as defined in the agreement) following a change of control (as
defined in the agreement), such officer will be entitled to receive his base
salary at termination for the longer of one year or the remainder of his
employment period up to a maximum of eighteen months. In the event of a change
in control, following which an executive's employment is terminated other than
for cause including, without limitation, the failure to renew an employment
contract within two years following such change in control (as defined in the
agreement), such executive will receive 2.99 times his annual compensation. Each
officer has also agreed not to compete with the Company for one year following
termination of his employment.
Pursuant to these agreements, Mr. Lee, Dr. Siciliano, Mr. Walters, and Mr.
Zappa currently receive a base salary of $235,872, $220,000, $130,889, and
$130,000, respectively.
REPORT OF THE COMPENSATION COMMITTEE
The Company's executive compensation program is administered by a standing
Compensation Committee composed of three non-employee directors. All decisions
by the Compensation Committee relating to the
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<PAGE> 11
compensation of the Company's executive officers are reviewed by the full Board
of Directors. The Company's executive compensation program is designed to retain
and reward senior executives who will lead the Company and achieve business
objectives within the markets in which the Company competes.
Compensation Philosophy
The objectives of the Company's compensation programs are to align business
objectives with a combination of base pay, bonuses and stock options tailored
toward individual performance. In a competitive environment, it is important
that the Company be able to attract, retain and reward executive officers who
contribute to the long-term success of the Company. The Company's executive
compensation philosophy is based upon the following principles:
I. Competitive and Fair Compensation
With respect to fiscal 1996 compensation, the Company based
compensation decisions in part on a 1993 study. In 1993, the Company hired
the accounting firm of Coopers & Lybrand to review the compensation
structure for the Company's executive officers and to make recommendations
to the Compensation Committee with respect to base salary,
performance-based bonuses and stock-based compensation, with the intent to
compensate the Company's executive officers in the highest quartile of
comparable entities.
The Company seeks to achieve a symmetry between the compensation paid
to a particular individual with the contribution made by that individual in
the achievement of the Company's objectives.
II. Business Plan and Goals
The Company holds strategic planning sessions approximately four times
each year to review its strategic and business plan goals including such
factors as achievement of operating budgets, licensing, development of
alliances with third parties, introduction of new processes and products,
manufacturing efficiencies, raising of capital, potential acquisitions and
overall performance relative to its competitors. The performance of each
officer is evaluated by the Board with respect to how that officer can best
contribute to achieving the business plan and goals.
III. Executive Compensation Program
Annual compensation for executive officers consists of the following
three fundamental elements:
- A base salary within an established competitive salary range that is
determined by individual contributions and sustained performance.
- An annual bonus structure tied to the achievement of corporate
financial performance measures as well as the achievement of
individual business-related objectives.
- A long-term incentive program afforded by stock options.
Prior to determining base salary, cash bonuses and stock options for
fiscal 1996, the Compensation Committee reviewed the extent to which each
executive officer had achieved certain business objectives and analyzed its
recommendations in light of companies at comparable stages of development
and similar capitalization. Each of these three elements of compensation is
discussed below.
Base Salary. Coopers & Lybrand provided the Compensation Committee
with a survey of salary levels of competitors in the biotechnology and
healthcare industries and those companies that have recently completed
initial public offerings. Based on this survey, the Company established a
base salary for each of the executive officers effective as of September
1993.
Bonuses. The Company's 1996 Executive Incentive Compensation Plan
(the "Incentive Plan") provided for a cash pool to be paid out on the basis
of achievement of specified individual, financial and strategic targets and
objectives of the Company, including appreciation of the Company's stock,
profitability and revenue targets, research and development activities, and
new product introductions.
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<PAGE> 12
Bonuses may be earned through the achievement of a combination of these
targets and objectives. The bonuses are paid at the beginning of each
fiscal year with respect to the achievement of targets in the prior fiscal
year.
Long-Term Incentive Compensation. The Company's long-term incentive
compensation program is implemented through the periodic grant of stock
options. The Company's stock option program promotes a long-term congruity
of interest between the Company's employees and its stockholders and
assists in the retention of executives. The number of shares to be granted
to each participant generally reflects the position of the executive within
the Company and his or her contributions to the Company's achievement of
the business plan and goals. Stock options are granted at the current
market price and generally vest over a three-year period to encourage key
employees to continue in the employ of the Company.
Benefits. The Company's executive officers are entitled to receive
medical benefits and life insurance benefits. They participate in the
Company's 401(k) plan, to which the Company will make matching cash
contributions and the 1992 Employee Stock Purchase Plan, which allows
participants to purchase shares at a discount of approximately 15% from the
fair market value at the beginning or end of the applicable purchase
period. The above benefits are available to the Company's employees,
including executive officers.
Summary of Compensation of Chief Executive Officer. In fiscal 1996,
the Company's President and Chief Executive Officer, Steven J. Lee,
received salary and bonus compensation of $388,181, including base salary,
beginning on April 1, 1995, at the annual rate of $235,872 and Incentive
Plan bonus compensation of $142,000, the maximum bonus available under the
Incentive Plan. The Compensation Committee has set Mr. Lee's total annual
compensation including compensation derived from the Incentive Plan and the
grant of stock options under the Stock Option Plan at a level it believes
to be competitive. Mr. Lee's bonus compensation for fiscal 1996 reflected
the achievement of a combination of the Company's financial and strategic
goals.
Compensation Committee
Daniel S. Bernstein, M.D.
Frank W. LoGerfo, M.D.
Marcia J. Hooper
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Ms. Hooper and Drs.
Bernstein and LoGerfo. No member of the Compensation Committee was at any time
during fiscal 1996, or formerly, an officer or employee of the Company or any
subsidiary of the Company, nor has any member of the Compensation Committee had
any relationship with the Company requiring disclosure under Item 404 of
Regulation S-K under the Securities Exchange Act of 1934.
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<PAGE> 13
COMPARATIVE STOCK PERFORMANCE
The stock performance graph below compares the cumulative stockholder
return on the Common Stock of the Company for the period from March 5, 1992, to
March 31, 1992, and through the years ended March 31, 1993, 1994, 1995 and 1996
with the cumulative total return on (i) the Total Return Index for the Nasdaq
Stock Market (U.S. Companies) (the "Nasdaq Composite Index"), (ii) the American
Stock Exchange Composite Index (U.S. Companies) (the "AMEX Composite Index"),
and (iii) a peer index determined by the Company (assuming the investment of
$100 in the Company's Common Stock and each index on March 5, 1992, and
reinvestment of all dividends). The peer index consists of Abiomed Inc., Biomet,
Inc., InnerDyne, Inc., Datascope Corp., Electro-Catheter Corp., Gish Biomedical,
Inc., Luther Medical Products, Inc., Cygnus Therapeutic Systems, and Quest
Medical, Inc. Measurement points are on March 5, 1992, and March 31, 1992, 1993,
1994, 1995 and 1996.
The following companies were formerly included in the Company's peer index
and were no longer publicly traded as of March 31, 1995: Advanced Medical
Products, Inc., Advanced Interventional Systems, Inc., Namic U.S.A. Corp., and
Pace Medical, Inc. Heart Technology, Inc. was formerly included in the Company's
peer index and was no longer publicly traded as of March 31, 1996. Accordingly,
data for these companies is unavailable for inclusion in the March 31, 1995 and
1996 peer index, respectively, on the stock performance graph.
Effective March 30, 1995, the Company's Common Stock commenced trading on
the American Stock Exchange under the symbol "PM". Therefore, the stock
performance graph for 1996 includes the AMEX Composite Index.
<TABLE>
<CAPTION>
3/5/1992 3/31/1992 3/31/1993 3/31/1994 3/31/1995 3/31/1996
<S> <C> <C> <C> <C> <C> <C>
NASDAQ COMPOSITE INDEX $100 $97 $112 $120 $134 $182
AMEX COMPOSITE INDEX $100 $97 $106 $111 $120 $147
PEER GROUP $100 $90 $51 $46 $70 $74
POLYMEDICA INDUSTRIES $100 $83 $71 $37 $51 $63
</TABLE>
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<PAGE> 14
CERTAIN TRANSACTIONS
In December 1994, certain executive officers of the Company purchased in
the aggregate 100,000 shares of the Company's common stock on the open market.
The purchases, valued at $415,000, were funded by an interest-free note issued
by the Company to each officer. The terms of the notes provide for each
executive to repay the Company within five years from the date of the note with
Company shares having a market value equal to the original principal of the
note. As required by the Internal Revenue Code, an annual amount equal to the
market rate of interest at the time each note was issued is imputed to each
officer. Amounts loaned to Mr. Lee, Dr. Szycher, Dr. Siciliano, Mr. Walters, Mr.
Zappa, and Andrew M. Reed, Ph.D., were $93,403, $93,403, $78,874, $49,815,
$49,815, and $49,815, respectively. In June 1996, Dr. Szycher tendered Company
shares whose fair market value at the time of tender was equal to his officer
loan as payment in full for that obligation.
Boston Special Risks Insurance Agency, Inc, of which Mr. Soltys is
President and Owner, is the Company's agent for corporate insurance. The Company
paid approximately $560,000 and $535,000 in premiums in connection with these
insurance policies in fiscal 1996 and 1995, respectively. The Company believes
that the terms on which it receives insurance from Boston Special Risks
Insurance Agency, Inc. are at least as favorable as the terms which could be
obtained from an unrelated third party.
APPROVAL OF AMENDMENT TO 1990 STOCK OPTION PLAN
The Board of Directors believes that the future success of the Company
depends on its ability to attract, retain, and motivate key employees with
experience and ability. On November 8, 1990, the Board of Directors adopted, and
on February 2, 1991 the stockholders approved, the Company's Stock Option Plan,
which provides for the grant of stock options to employees, directors, and
consultants of the Company and its subsidiaries. Options granted under the Stock
Option Plan may be either options intended to qualify as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
or non-statutory stock options. On August 2, 1996, the Board of Directors
adopted, subject to stockholder approval, amendments to the Stock Option Plan,
increasing from 2,000,000 to 2,400,000 the number of shares available for
issuance under the Stock Option Plan (the "1990 Plan Amendment"). Under the
Stock Option Plan, the Company is currently authorized to grant options to
purchase up to an aggregate of 2,000,000 shares of Common Stock. As of June 30,
1996, the Company had outstanding options under the Stock Option Plan
(cumulative grants, less lapses and cancellations) totalling 1,630,262.
The Stock Option Plan is administered by the Compensation Committee of the
Board of Directors which selects the recipients of options and determines other
matters such as: (i) the number of shares of Common Stock covered by the option;
(ii) the vesting schedules of options; (iii) the exercise price (which, in the
case of incentive stock options, cannot be less than 100% of the fair market
value on the date of grant); and (iv) the duration of the option (which, in the
case of incentive stock options, cannot exceed ten years). All options are
non-transferable. While the Company may grant options which are exercisable at
different times or within different periods, the Company generally grants
options which vest in quarterly installments over three years. The exercise
price for options issued under the Stock Option Plan is payable in cash. The
Board in its discretion may provide financial assistance to an option holder who
exercises an option. This financial assistance may include, but need not be
limited to, loans, guarantees or installment payment plans.
As option grants under the Stock Option Plan to employees are
discretionary, the Company cannot now determine the number of options to be
received in the future by any particular current executive officer, by all
current executive officers as a group, or by non-executive officer employees as
a group. The number of such options granted to individuals shall be determined
by the Compensation Committee, pursuant to the terms of the Stock Option Plan.
As of June 30, 1996, the Company had 59 employees, 57 of whom had been granted
options under the Stock Option Plan. For additional information regarding the
ownership of options by the named executive officers of the Company, see the
table under the heading "Fiscal Year-End Option Table" above.
Federal Tax Consequences of Participation the Stock Option Plan. Options
granted under the Stock Option Plan may be incentive stock options within the
meaning of Section 422 of the Code or non-statutory options.
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<PAGE> 15
INCENTIVE STOCK OPTIONS. In general, a participant will not recognize
taxable income upon the grant or exercise of an incentive stock option. Instead,
a participant will recognize taxable income with respect to an incentive stock
option only upon the sale of Common Stock acquired through the exercise of the
option ("ISO Stock"). Nevertheless, in the case of a participant who has not
been an employee of the Company at all times between the date on which a
particular option was granted (the "Grant Date") and the date that is three
months before the date on which the option is exercised (the "Exercise Date"),
and for purposes of the alternative minimum tax, an option will be treated as
though it were a non-statutory option and taxed as described below under
"Non-Statutory Options". While a participant will pay alternative minimum tax
only to the extent of the excess of that tax over the participant's regular tax,
the treatment of an option as a non-statutory option for purposes of the
alternative minimum tax could create such an excess.
Generally, the tax consequences of selling ISO Stock will vary with the
length of time that the participant has owned the ISO Stock at the time it is
sold. If the participant sells ISO Stock after having owned it for at least two
years from the Grant Date and one year from the Exercise Date, then the
participant will recognize long-term capital gain in an amount equal to the
excess of the sale price of the ISO Stock over the exercise price.
If the participant sells ISO Stock prior to having owned it for at least
two years from the Grant Date and one year from the Exercise Date (a
"Disqualifying Disposition"), then the participant generally will recognize
ordinary compensation income in an amount equal to the lesser of: (i) the excess
of the fair market value of the ISO Stock on the Exercise Date over the exercise
price; and (ii) the excess of the sale price of the ISO Stock over the exercise
price.
A participant making a Disqualifying Disposition will also recognize
capital gain in an amount equal to the excess of the sale price of the ISO Stock
over the fair market value of the ISO Stock on the Exercise Date. This capital
gain will be a long-term capital gain if the participant has held the ISO Stock
for more than one year prior to the date of the sale and will be a short-term
capital gain if the participant has held the ISO Stock for a shorter period.
If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss equal to the excess of the exercise
price over the sale price of the ISO Stock. This capital loss will be a
long-term capital loss if the participant has held the ISO Stock for more than
one year prior to the date of the sale and will be a short-term capital loss if
the participant has held the ISO Stock for a shorter period.
NON-STATUTORY STOCK OPTIONS. As in the case of an incentive stock option,
a participant will not recognize taxable income upon the grant of a
non-statutory option. Unlike the case of an incentive stock option, however, a
participant will recognize taxable income upon the exercise of a non-statutory
option. In particular, a participant who exercises a non-statutory option
generally will recognize ordinary compensation income in an amount equal to the
excess of the fair market value of the Common Stock acquired through the
exercise of the option (the "NSO Stock") on the Exercise Date over the exercise
price.
With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the excess of the sale price of the NSO Stock over
the participant's tax basis in the NSO Stock. This capital gain or loss will be
a long-term capital gain or loss if the participant has held the NSO Stock for
more than one year prior to the date of the sale and will be a short-term
capital gain or loss if the participant has held the NSO Stock for a shorter
period.
TAX CONSEQUENCES TO THE COMPANY. The grant of a stock option under the
Stock Option Plan will have no tax consequences to the Company. Moreover, in
general, neither the exercise of an incentive stock option acquired under the
Stock Option Plan nor the sale of any Common Stock acquired under the Stock
Option Plan will have any tax consequences to the Company. The Company generally
will be entitled to a business-expense deduction, however, with respect to any
ordinary compensation income recognized by a participant under the Stock Option
Plan. Any such deduction will be subject to the limitations of Section 162(m) of
the Internal Revenue Code.
WITHHOLDING. While a participant's Disqualifying Disposition of ISO Stock
will result in the recognition
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<PAGE> 16
of ordinary compensation income, the Company will have no withholding obligation
with respect to that income. Nevertheless, the Company will have a withholding
obligation with respect to ordinary compensation income recognized upon the
exercise of a non-statutory option by a participant who is employed by the
Company. The Company will require any such participant to provide it with
sufficient cash to satisfy this withholding obligation.
BOARD RECOMMENDATION
The Board of Directors believes that the 1990 Plan Amendment is in the best
interest of the Company and its stockholders and therefore recommends that the
stockholders vote FOR this proposal.
APPROVAL OF AMENDMENT TO 1992 DIRECTORS' STOCK OPTION PLAN
The Board of Directors believes that the future success of the Company
depends on its ability to attract, retain, and motivate directors with
experience and ability. The Directors' Plan was adopted by the Company's Board
of Directors and approved by the Company's stockholders in January 1992. On
August 2, 1996, the Board of Directors adopted, subject to stockholder approval,
amendments to the Directors' Plan, increasing from 63,000 to 200,000 the number
of shares available for issuance under the Directors' Plan (the "Directors' Plan
Amendment"). Under the Directors' Plan, the Company is currently authorized to
grant options to purchase up to an aggregate of 63,000 shares of Common Stock.
As of June 30, 1996, the Company had outstanding options under the Stock Option
Plan totalling 44,625.
The Directors' Plan provides that (1) each eligible director will be
granted an option to purchase 2,625 shares of Common Stock upon his or her
initial election as a director and (2) each director will also be granted an
option to purchase 2,625 shares in September of each year. Effective July 15,
1996, the annual option grant increased to 7,500 shares for each director. No
director will be granted more than one such option in any calendar year.
The Directors' Plan is administered by the Board of Directors. The exercise
price of options granted under the Directors' Plan will equal 100% of the fair
market value of Common Stock as of the date of grant. The term of each option is
ten years, and options vest immediately. Options generally are not assignable
except by will or by the laws of descent and distribution.
FEDERAL INCOME TAX CONSEQUENCES. For a description of federal tax
consequences to participants under the Directors' Plan, see the description of
non-statutory stock options under the heading "Federal Tax Consequences of
Participation in Stock Option Plans," above.
BOARD RECOMMENDATION
The Board of Directors believes that the Directors' Plan Amendment is in
the best interest of the Company and its stockholders and therefore recommends
that the stockholders vote FOR this proposal.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the stockholders, the Board of Directors, on the
recommendation of its Audit Committee, has selected the firm of Coopers &
Lybrand as the Company's independent public accountants for the current year.
Coopers & Lybrand has served as the Company's independent public accountants
since 1990.
Representatives of Coopers & Lybrand are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
If the stockholders do not ratify the selection of Coopers & Lybrand as the
Company's independent public accountants, the selection of such accountants will
be reconsidered by the Board of Directors.
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<PAGE> 17
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise act, in accordance with their judgment on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews and the Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and the Company will reimburse them for their
reasonable out-of-pocket expenses incurred in connection with the distribution
of proxy materials.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Woburn, Massachusetts not later than April 6, 1997, for inclusion in the
proxy statement for that meeting.
By Order of the Board of Directors,
/s/ ERIC G. WALTERS
ERIC G. WALTERS, Clerk
August 5, 1996
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THIS MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
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<PAGE> 18
POLYMEDICA INDUSTRIES, INC.
ANNUAL MEETING OF STOCKHOLDERS -- SEPTEMBER 13, 1996
The undersigned, having received notice of the meeting and management's
Proxy Statement therefor, and revoking all prior proxies, hereby appoint(s)
Steven J. Lee, Arthur A. Siciliano and John K.P. Stone III, and each of them
(with full power of substitution), as proxies of the undersigned to attend the
Annual Meeting of Stockholders of PolyMedica Industries, Inc. (the "Company")
to be held on Thursday September 12, 1996 and any adjourned sessions thereof,
and there to vote and act upon the following matters in respect of all shares
of Common Stock of the Company which the undersigned would be entitled to vote
or act upon, with all powers the undersigned would possess if personally
present.
Attendance of the undersigned at the meeting or at any adjourned session
thereof will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate thereat the intention of the undersigned to vote said
shares in person. If the undersigned hold(s) any of the shares of the Company
in a fiduciary, custodial or joint capacity or capacities, this proxy is signed
by the undersigned in every such capacity as well as individually.
IN THEIR DISCRETION, THE NAMED PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING, OR ANY ADJOURNMENT
THEREOF.
1. To elect Richard H. Bard and Thomas S. Soltys, Jr. as Class II Directors
of the Company:
FOR / / WITHHOLD AUTHORITY / /
_____________________________________
_____________________________________
To withhold authority with respect
to a particular nominee, write his or
her name in the space provided above.
<PAGE> 19
2. To approve the amendment to the Company's 1990 Stock Option Plan, as
described in the accompanying Proxy Statement.
FOR / / AGAINST / / ABSTAIN / /
3. To approve the amendment to the Company's 1992 Directors' Stock Option
Plan, as described in the accompanying Proxy Statement:
FOR / / AGAINST / / ABSTAIN / /
4. To ratify the selection of Coopers & Lybrand L.L.P. as the independent
auditors of the Company for the year ending March 31, 1997.
FOR / / AGAINST / / ABSTAIN / /
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN WITH RESPECT TO ANY ELECTION TO OFFICE OR
ANY PROPOSAL SPECIFIED ABOVE, THIS PROXY WILL BE VOTED FOR SUCH ELECTION TO
OFFICE OR PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
________________________________
________________________________
Signature(s)
Dated: _________________________
Please sign name(s) exactly as appearing hereon. When signing as attorney,
executor, administrator or other fiduciary, please give your full title as
such. Joint owners should each sign personally. If a corporation, sign in full
corporate name, by authorized officer. If a partnership, please sign in
partnership name, by authorized person.
