SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| 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 Rule 14a-11(c) or Rule 14a-12
PALOMAR MEDICAL TECHNOLOGIES, INC.
----------------------------------
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
--------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
* * * * *
PALOMAR
MEDICAL
- --------------------------------------------------------------------------------
Palomar Medical Technologies, Inc.
68 Cherry Hill Drive
Beverly, MA 01915 USA
508-921-9300 Tel
508-921-5801 Fax
October 11, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders (the "Meeting") of Palomar Medical Technologies, Inc. (the
"Company") to be held on Thursday, November 14, 1996 at 10:00 a.m. at the Bank
of Boston Auditorium, 100 Federal Street, Boston, Massachusetts 02110, and
thereafter as it may be adjourned from time to time.
At the Meeting, you will be asked to elect the directors of the Company
and to ratify the selection of the Company's independent auditors.
Details of the matters to be considered at the Meetings are contained
in the Proxy Statement, which we urge you to consider carefully.
Whether or not you plan to attend the Meeting, please complete, date,
sign and return your proxy card promptly in the enclosed envelope, which
requires no postage if mailed in the United States. If you attend the Meeting,
you may vote in person if you wish, even if you have previously returned your
proxy.
Sincerely,
/s/Steven Georgiev
----------------------------------
Steven Georgiev
Chief Executive Officer
Chairman of the Board of Directors
PALOMAR MEDICAL TECHNOLOGIES, INC.
66 CHERRY HILL DRIVE
BEVERLY, MA 01915
NOTICE OF THE
1996 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of PALOMAR MEDICAL TECHNOLOGIES, INC.:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders
(the "Meeting") of PALOMAR MEDICAL TECHNOLOGIES, INC. (the "Company"), a
Delaware corporation, will be held on THURSDAY, NOVEMBER 14, 1996 at 10:00 A.M..
at the BANK OF BOSTON AUDITORIUM, 100 FEDERAL STREET, BOSTON, MASSACHUSETTS
02110, and thereafter as it may be adjourned from time to time.
At the Meeting, the Stockholders will be asked:
1. To elect four members of the Board of Directors;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending December 31, 1996; and
3. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on October 7,
1996 as the record date for the determination of Stockholders entitled to notice
of and to vote at the Meeting and any adjournment or adjournments thereof.
We hope that all Stockholders will be able to attend the Meeting in
person. In order to assure that a quorum is present at the Meeting, please date,
sign and promptly return the enclosed Proxy whether or not you expect to attend
the Meeting. A postage prepaid envelope, addressed to American Stock Transfer &
Trust Company, the Company's transfer agent and registrar, has been enclosed for
your convenience. If you attend the meeting, you may revoke your Proxy and vote
your shares in person.
- ------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY.
PLEASE FILL IN, DATE AND SIGN THE PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE PROXY
MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE PRESENT AT THE
MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND EXERCISE THE
RIGHT TO VOTE YOUR SHARES PERSONALLY.
- ------------------------------------------------------------------------------
By Order of the Board of Directors
/s/Steven Georgiev
-----------------------------------
Steven Georgiev
Chief Executive Officer
Chairman of the Board of Directors
October 11, 1996
PALOMAR MEDICAL TECHNOLOGIES, INC.
PROXY STATEMENT
The enclosed Proxy is solicited by the Board of Directors of PALOMAR
MEDICAL TECHNOLOGIES, INC. (the "Company") for use at the 1996 Annual Meeting of
Stockholders (the "Meeting") to be held at the Bank of Boston Auditorium, 100
Federal Street, Boston, Massachusetts 02110, at 10:00 a.m. on Thursday, November
14, 1996, and at any adjournment or adjournments thereof.
Management intends to mail this proxy statement, the accompanying form
of proxy and the Annual Report on Form 10-KSB/A-1 for the fiscal year ended
December 31, 1995 to all stockholders entitled to vote, on or about October 11,
1996. The costs of soliciting proxies will be borne by the Company.
Only stockholders of record at the close of business on October 7,
1996, will be entitled to vote at the Meeting or any adjournment thereof. As of
October 1, 1996, 28,352,062 shares of common stock, $.01 par value, ("Common
Stock") of the Company were issued and outstanding. Each share entitles the
holder to one vote with respect to all matters submitted to stockholders at the
Meeting. There is no other class of voting securities of the Company entitled to
vote at the meeting.
To establish a quorum to transact business at the Meeting, there must
be present at the Meeting, in person or by proxy, a majority of the shares of
Common Stock issued, outstanding, and entitled to vote at the Meeting. Shares
represented by executed proxies received by the Company will be counted for
purposes of establishing a quorum, regardless of how or whether such shares are
voted on any specific proposal.
To be elected, a director must receive a plurality of the votes of the
Common Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of directors. The affirmative vote of a
majority of the Common Stock, present in person or represented by proxy, at the
Annual Meeting and entitled to vote thereon, is necessary to ratify the
selection of the independent auditors.
Execution of a Proxy will not in any way affect a stockholder's right
to attend the Meeting and vote in person. The Proxy may be revoked at any time
before it is exercised, by written notice to the Secretary prior to the Annual
Meeting, or by giving to the Secretary a duly executed Proxy bearing a later
date than the Proxy being revoked, at any time before such Proxy is voted, or by
appearing at the Annual Meeting and voting in person. The shares represented by
all properly executed Proxies received in time for the Meeting will be voted as
specified therein.
-1-
Proxies which are executed, but which do not contain any specific instructions
will be voted in favor of the election of those persons named in this Proxy
Statement as Directors and in favor of all other items set forth herein.
In accordance with Delaware law, abstentions and "broker non-votes"
(i.e. proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owner or other persons entitled to
vote shares as to a matter with respect to which the brokers or nominees do not
have discretion to vote) will be treated as present for purposes of determining
the presence of a quorum. For purposes of determining approval of a matter
presented at the Meeting, abstentions will be deemed present and entitled to
vote and will, therefore, have the same legal effect as a vote against a matter
presented at the Meeting. Broker non-votes will be deemed not entitled to vote
on the subject matter as to which the non-vote is indicated and will therefore,
have no legal effect on the vote on that particular matter.
The Board of Directors knows of no other matter to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote may be taken, such shares represented by all Proxies received by the Board
of Directors will be voted with respect thereto in accordance with the judgment
of the persons named as attorneys in the Proxies.
-2-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of October 2, 1996, the number of
shares of the Company's Common Stock owned by each director, by each executive
officer named in the Summary Compensation Table appearing on page 10, by all
directors and executive officers as a group, and by any persons (including any
"group" as used in Section 13(d)(3) of the Securities Exchange Act of 1934),
known by the Company to own beneficially 5% or more of the outstanding Common
Stock. Except as otherwise indicated, the stockholders listed in the table below
have sole voting and investment power with respect to the shares indicated.
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percentage of
Beneficial Owner Beneficially Owned(1) Class (1)(2)(3)(4)
- ------------------------------------ ---------------------------- --------------------
<S> <C> <C>
Michael H. Smotrich (5) 1,207,590 4.16%
66 Cherry Hill Drive
Beverly, MA 01915
Steven Georgiev (6) 1,004,154 3.46%
66 Cherry Hill Drive
Beverly, MA 01915
Joseph P. Caruso (7) 733,493 2.53%
66 Cherry Hill Drive
Beverly, MA 01915
Joseph E. Levangie (8) 632,485 2.20%
66 Cherry Hill Drive
Beverly, MA 01915
Buster C. Glosson (9) 53,333 .19%
66 Cherry Hill Drive
Beverly, MA 01915
Sanford R. Lane 170,158 .60%
66 Cherry Hill Drive
Beverly, MA 01915
Maurice E. Needham, Jr. (10) 150,000 .53%
66 Cherry Hill Drive
Beverly, MA 01915
All Directors and Executive Officers 3,951,213 12.75%
As A Group (seven persons) (11)
</TABLE>
(1) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within 60 days
pursuant to the exercise of options or warrants are deemed to be outstanding for
the purpose of computing the number and percentage of shares owned by such
individual or group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in the table.
-3-
(2) Does not include 101,900 shares reserved for issuance pursuant to the
Company's 1991 Stock Option Plan, 325,000 shares reserved for issuance under the
Company's 1993 Stock Option Plan, 997,500 shares reserved for issuance under the
Company's 1995 Stock Option Plan, 2,500,000 shares reserved for issuance under
the Company's 1996 Stock Option Plan, and 1,000,000 shares reserved for issuance
under the Company's Employee Stock Purchase Plan, except as indicated in notes
5, 6, 7 and 10.
(3) Does not give effect to an aggregate of up to 5,413,256 shares issuable upon
exercise of (i) a warrant issued to H.J. Meyers & Co., Inc. (the
"Representative") in connection with the Company's initial public offering,
including the warrants included in the units issuable upon exercise of the
Representative's warrant; (ii) warrants issued or to be issued to certain
lenders; and (iii) warrants issued to certain investors, consultants, principal
stockholders, and employees, but does include shares issuable upon exercise of
the warrants discussed in notes 5, 6, 7, 8, 9 and 10.
(4) Does not give effect to an aggregate of up to 4,673,891 shares issuable upon
the (i) conversion of certain convertible debentures and (ii) conversion of
certain preferred stock.
(5) Includes options to purchase 70,000 shares of Common Stock issuable upon
exercise of five-year options expiring April 6, 1999, at an exercise price of
$2.375 per share; 100,000 shares of Common Stock issuable upon exercise of
five-year options expiring October 6, 1999, at an exercise price of $2.375;
150,000 shares of Common Stock issuable upon exercise of five-year options
expiring July 4, 2000, at an exercise price of $2.375; 100,000 shares issuable
upon exercise of five-year warrants granted in August 1995, at an exercise price
of $2.125 per share; 250,000 shares issuable upon exercise of five-year warrants
granted in February 1996, at an exercise price of $6.75 per share; and 8,000
shares held by family members.
(6) Includes options to purchase 100,000 shares of Common Stock issuable upon
exercise of five-year options expiring August 26, 2001, at an exercise price of
$8.00 per share; 157,000 shares issuable upon exercise of five-year warrants
granted in July 1995, at an exercise price of $2.00 per share; 80,000 shares
issuable upon exercise of five-year warrants granted in August 1995, at an
exercise price of $2.125 per share; and 300,000 shares issuable upon exercise of
five-year warrants granted in February 1996, at an exercise price of $6.75 per
share.
(7) Includes 30,000 shares of Common Stock issuable upon the exercise for
five-year options expiring June 14, 1998, at an exercise price of $3.50 per
share; 70,000 shares of Common Stock issuable upon exercise of five-year options
expiring April 6, 1999, at an exercise price of $2.375 per share; 100,000 shares
of Common Stock issuable upon exercise of five-year options expiring October 6,
1999, at an exercise price of $2.375 per share; 150,000 shares of Common Stock
issuable upon exercise of five-year options expiring July 4, 2000, at an
exercise price of $2.00 per share; 66,666 shares of Common Stock issuable upon
exercise of five-year options expiring August 26, 2001, at an exercise price of
$8.00 per share; 100,000 shares issuable upon exercise of five-year warrants
granted in August 1995, at an exercise price of $2.125 per share; and 150,000
shares issuable upon exercise of five-year warrants granted in February 1996, at
an exercise price of $6.75 per share.
(8) Includes 60,000 shares issuable upon exercise of five-year warrants granted
in March 1992, at an exercise price of $.60 per share; 150,000 shares issuable
upon exercise of five-year warrants granted in July 1995, at an exercise price
of $2.00 per share; 100,000 shares issuable upon exercise of five-year warrants
granted in August 1995, at an exercise price of $2.125 per share; and 150,000
shares issuable upon exercise of five-year warrants granted in February 1996, at
an exercise price of $6.75 per share.
(9) Includes 20,000 shares issuable upon exercise of four-year warrants granted
in August 1996, at an exercise price of $2.125; and 33,333 shares issuable upon
exercise of five-year warrants granted in August 1996, at an exercise price of
$8.00 per share.
(10) Includes 50,000 shares issuable upon exercise of five-year warrants granted
in February 1996, at an exercise price of $6.75 per share; and 100,000 shares of
Common Stock issuable upon exercise of five-year options expiring October 6,
1999, at an exercise price of $2.375 per share.
-4-
(11) For purposes of this calculation, total issued and outstanding shares
include an aggregate of 2,664,999 shares issuable upon exercise of the warrants
and options described in footnotes 5, 6, 7, 8, 9 and 10 above.
ELECTION OF DIRECTORS
The Directors of the Company are elected annually and hold office until
the next annual meeting of stockholders and until their successors shall have
been elected and qualified. In general, vacancies and newly created
directorships resulting from any increase in the authorized number of directors
may be filled by a majority vote of the directors then in office. For his
services as a Director, Mr. Glosson received a warrant to purchase 100,000
shares of Common Stock at an exercise price of $8.00 per share. This warrant
vests over a period of three years. In addition, Mr. Glosson is paid $60,000 per
year for his services as a Director. The other members of the Board of Directors
do not receive any compensation for their services as directors. Shares
represented by all Proxies received by the Board of Directors and not so marked
as to withhold authority to vote for an individual Director, or for all
Directors, will be voted (unless one or more nominees are unable or unwilling to
serve) for fixing the number of Directors for the ensuing year at four (4) and
for the election of the nominees named below. The Board of Directors knows of no
reason why any such nominee should be unable or unwilling to serve, but if such
should be the case, Proxies will be voted for the election of some other person
or for fixing the number of Directors at a lesser number.
The following table sets forth the age of each nominee, the year each
nominee was elected a Director and the positions with the Company currently held
by each nominee. Each of the nominees currently serves as a Director. For
information about ownership of the Company' Common Stock by each nominee, see
"Security Ownership of Certain Beneficial Owners and Management."
<TABLE>
<CAPTION>
Positions and Offices Director
Name Age With the Company Since
- ---- --- ---------------- -----
<S> <C> <C> <C>
Steven Georgiev* 62 Chief Executive Officer and 1991
Chairman of the Board
Michael H. Smotrich* 63 President, Secretary and 1991
Chief Operating Officer
Joseph E. Levangie* 51 Director 1991
Buster C. Glosson 51 Director 1996
</TABLE>
* Each of those persons may be deemed a parent and/or promoter of
the Company as these terms are defined in the Rules and
Regulations promulgated under the Securities Act of 1933, as
amended.
All Directors will hold office until the 1997 Annual Meeting of
Stockholders or special meeting in lieu thereof (and thereafter until their
respective successors have been duly elected and qualified).
-5-
STEVEN GEORGIEV. Mr. Georgiev has served as Chief Executive Officer of
the Company since November 1993, and became a full time employee of the Company
in January 1995. Mr. Georgiev was a consultant to Dymed from June 1991, until
the September 1991 merger at which time he became the Company's Chairman of the
Board of Directors. Mr. Georgiev is a financial and business consultant to a
variety of emerging, high-growth companies. Mr. Georgiev has been a Chairman of
the Board of Directors of American Materials & Technologies, Inc., a
publicly-held company, since November 1995; a director of Excel Technology,
Inc., a publicly-held company located in Hauppauge, New York, since October
1992; and was a director of Cybernetics Products, Inc., a publicly-held company,
from August 1988 until January 1992. Mr. Georgiev was Chairman of the Board of
Directors of Dynatrend, Inc., a publicly-traded consulting firm that he
co-founded in 1972, until February 1989 (Dynatrend, Inc. was subsequently
acquired by EG&G, Inc., a New York Stock Exchange company). Mr. Georgiev has a
B.S. in Engineering Physics from Cornell University and an M.S. in Management
from the Massachusetts Institute of Technology (Sloan Fellow).
MICHAEL H. SMOTRICH. Dr. Smotrich was a consultant to Dymed from May
1991 until its merger into the Company in September 1991, at which time he
became the Company's Executive Vice President, Chief Operating Officer,
Secretary and a director. In August 1994, Dr. Smotrich became the Company's
President. From July 1988 until May 1991, Dr. Smotrich was an independent
consultant specializing in the development and manufacture of laser-based
medical products. Dr. Smotrich was Vice President of Operations at Candela Laser
Corp. from June 1987 to June 1988, where he was responsible for medical laser
production and product development. From July 1984 to June 1987, as Corporate
Vice President of Research and Development, Dr. Smotrich was responsible for the
design and development of surgical laser products at Merrimack Laboratories,
Inc., which was acquired by the LaserSonics division of Cooper Laboratories,
Inc. From 1972 to 1984, Dr. Smotrich was Vice President in charge of the
Electro-Optics Group at Avco Everett Research Laboratory, Inc., working in the
laser technology field. Dr. Smotrich received a certificate from the Advanced
Management Program at Harvard Graduate School of Business Administration and has
a B.S. in Physics from the Massachusetts Institute of Technology and an M.S. and
Ph.D. in Physics from Columbia University.
JOSEPH E. LEVANGIE. Mr. Levangie has been a director of the Company
since August 1991 and in February 1996 became the Company's Vice Chairman. Mr.
Levangie was a consultant to Dymed from June 1991 until the September 1991
merger, at which time he became the Company's part-time Chief Financial Officer,
a position he held until December 1992. He is currently a part-time consultant
to the Company. Mr. Levangie also serves as a director for GreenMan
Technologies, Inc., a publicly-held company. Mr. Levangie has an S.B. in
Chemical Engineering from the Massachusetts Institute of Technology and an
M.B.A. from the Harvard Graduate School of Business Administration.
-6-
BUSTER C. GLOSSON. Mr. Glosson has been a director of the Company since
August 1996. From 1965 until June 1994, he was an officer in the United States
Air Force ("USAF"), most recently as a Lieutenant General and Deputy Chief of
Staff for Operations, Plans and Requirement, USAF, Washington, D.C., where he
led the USAF's post-Cold War restructuring and downsizing. Mr. Glosson is a
veteran of combat missions in Vietnam and, during the Gulf War, he commanded the
14th Air Force Division and was the architect of the Gulf War Air Campaign. In
1994, he founded and has since served as President of Eagle Ltd., a consulting
firm concentrating on international business opportunities in the
high-technology area. He is also the Chairman and CEO of Alliance Partners,
Inc., an investment holding company developing international oil and power
projects. He has served as a director of GreenMan Technologies, Inc., a
publicly-held company, since August 1994. He has served as a director of
American Materials & Technologies, Inc. and Skysat Communication Network
Corporation, both publicly-held companies, since June and July 1996,
respectively.
None of the persons nominated to serve as directors of the Company is
related by blood, marriage or adoption to any of the Company's Directors or
executive officers. All of the Directors then in office attended at least 75% of
the Meetings of Board of Directors and the committees on which they served
during the year ended December 31, 1995. The Board of Directors met six times
during the year ended December 31, 1995.
The Audit Committee, consisting of Mr. Levangie, held one meeting
during the year ended December 31, 1995. The Audit Committee's functions include
making recommendations to the Board of Directors relative to the appointment of
independent public accountants, and conferring with the Company's independent
public accountants regarding the scope and the results of the audit of the
Company's books and accounts and reporting the same to the Board of Directors.
The Compensation Committee, composed of Messrs. Georgiev and Levangie,
held one meeting during the year ended December 31, 1995. The Compensation
Committee's functions include the administration of the Company's stock option
plans and stock purchase plan and making recommendations to the Board of
Directors relative to the compensation of officers and employees.
The Company does not have a standing nomination committee of the Board
of Directors or a committee performing similar functions.
EXECUTIVE OFFICERS
Executive officers are elected annually by the Board of Directors and
serve at the discretion of the Board. Set forth below is information regarding
executive officers of the Company who are not directors of the Company.
-7-
The following table sets forth the age of each executive officer, the
positions with the Company currently held by each executive officer and the year
each executive officer was elected to his current position.
<TABLE>
<CAPTION>
Positions and Offices Officer
Name Age With the Company Since
- ---- --- ---------------- -----
<S> <C> <C> <C>
Joseph P. Caruso 37 Treasurer, Vice President and 1993
Chief Financial Officer
Maurice E. Needham, Jr. 56 Chief Executive Officer and Chairman of the 1994
Board of Dynaco Acquisition Corp., a
wholly-owned subsidiary of the Company
Sanford R. Lane 46 President and Chief Executive Officer of 1995
SPMT Acquisition Corp., a wholly-owned
subsidiary of the Company
</TABLE>
JOSEPH P. CARUSO. Mr. Caruso joined the Company in March 1992 as
Controller in a part-time capacity and became a full-time employee in June 1992.
Effective January 1993, Mr. Caruso became Vice President and Chief Financial
Officer; effective February 1996, Mr. Caruso became Treasurer. From October 1989
to June 1992, Mr. Caruso was the Chief Financial Officer of Massachusetts
Electrical Manufacturing Co., Inc., a privately held manufacturer of power
distribution equipment. From September 1987 to October 1989, Mr. Caruso was a
manager with Robert Half, an international consulting firm. From December 1982
to September 1987, Mr. Caruso was a manager with Pannell Kerr Forster, an
international public accounting firm. Mr. Caruso became a Certified Public
Accountant in 1984 and has a B.S. in accounting from Merrimack College.
MAURICE E. NEEDHAM, JR. Mr. Needham is Chairman of the Board of Dynaco
Acquisition Corporation, the Company's wholly-owned subsidiary. From March 1980
to January 1987, Mr. Needham was President, Chief Operating Officer, and in 1987
became Vice Chairman of the Board of Directors, of Hadco Corporation, one of the
largest publicly-held suppliers of printed circuit boards and technical support
service. Since 1993, Mr. Needham has served as Chairman of the Board of GreenMan
Technologies, Inc., a publicly-held company. Mr. Needham attended Northeastern
University from 1962 to 1966, concentrating in Industrial Engineering.
SANFORD R. LANE. Mr. Lane founded Spectrum Medical Technologies, Inc.
in August 1989, and served as President and Chairman until April 1995, when he
became President and Chief Executive Officer of SPMT Acquisition Corp., the
Company's wholly-owned subsidiary. From March 1987 to June 1989, Mr. Lane served
as Vice President of Marketing at Candela Laser Corporation. From August 1977 to
March 1987, Mr. Lane held various positions with Cavitron and Cooper
Lasersonics, including Product Manager and Manager, Technical Services. Mr. Lane
has a B.S. in Electrical Engineering from the DeVry Institute of Technology.
-8-
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT
OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock ("10% Stockholders"), to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership of the Company's
Common Stock and other equity securities on Form 3 and reports of changes in
such ownership on Form 4 and Form 5. Officers, directors and 10% Stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company during, and with respect to, its most
recent fiscal year, and written representations that no other reports were
required, all Section 16(a) filing requirements applicable to its officers,
directors and 10% Stockholders were complied with, except as follows:
Mr. Georgiev sold shares of the Company's Common Stock in April 1995
and was granted warrants underlying shares of the Company's Common Stock in July
1995 and August 1995 and failed to make timely filings on Form 4. Mr. Georgiev
subsequently filed a Form 4 in January 1996 with the SEC reporting both the sale
and the grants.
Dr. Smotrich was granted options to purchase shares of the Company's
Common Stock in July 1995 and warrants underlying shares of the Company's Common
Stock in August 1995 and failed to make timely filings on Form 4. Dr. Smotrich
subsequently filed a Form 4 in January 1996 with the SEC reporting the grants of
such options and warrants.
Mr. Levangie was granted warrants underlying shares of the Company's
Common Stock in July 1995 and August 1995 and failed to make timely filings on
Form 4. Mr. Levangie subsequently filed a Form 4 in January 1996 with the SEC
reporting the grants of such warrants.
Mr. Caruso exercised options to purchase shares of the Company's Common
Stock and simultaneously sold such shares of Common Stock in May, June and July
1995. He also was granted options to purchase shares of the Company's Common
Stock in July 1995 and was granted warrants underlying shares of the Company's
Common Stock in August 1995. He failed to make timely filings on Form 4 for the
above transactions. Mr. Caruso subsequently filed a Form 4 in January 1996 with
the SEC reporting such transactions.
-9-
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the
Company to each executive officer of the Company who earned $100,000 or more for
the year ended December 31, 1995:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------
Long Term
---------------------------
Annual Compensation Awards
- -------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Other
Annual Restricted
Compen- Stock
Name and sation(1) Award(s)(2) Options/
Principal Position Year Salary ($) Bonus ($) ($) ($) SARs(#)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Steven Georgiev 12/31/95 $161,800 $ 50,000 $ -- $ -- 450,000
Chief Executive Officer 12/31/94 $ -- $ -- $ 80,000 $237,500 --
3/31/94 $ -- $ -- $ 70,500 $ -- --
Dr. Michael H. Smotrich 12/31/95 $149,400 $ 50,000 $ -- $ -- 250,000
President, Chief 12/31/94 $ 92,000 $ 20,000 $ -- $415,625 170,000
Operating Officer, 3/31/94 $110,000 $ -- $ -- $ -- --
Secretary
Joseph P. Caruso 12/31/95 $109,600 $ 75,000 $ -- $ -- 250,000
Treasurer, Vice President 12/31/94 $ 70,400 $ 20,000 $ -- $154,375 170,000
and Chief Financial Officer 3/31/94 $ 96,300 $ -- $ -- $ -- 30,000
Maurice E. Needham Jr. 12/31/95 $155,000 $ -- $ -- $ -- --
Chairman of the Board 12/31/94 $119,200 $ -- $ -- $ -- 100,000
of Palomar Electronics 3/31/94 $ 17,900 $ -- $ 12,000 $ -- --
Corp. and CEO of Dynaco
Acquisition Corporation
Sanford R. Lane 12/31/95 $101,250 $ 25,300 $ -- $ -- --
President and CEO, Spectrum 12/31/94 $ -- $ -- $ -- $ -- --
Medical Technologies, Inc., 3/31/94 $ -- $ -- $ -- $ -- --
Financial Officer
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) With respect to Mr. Georgiev, includes $80,000 and $70,500 paid by
the Company to Mr. Georgiev during the years ended December 31, 1996 and March
31, 1994, respectively, pursuant to consulting arrangements between the Company
and Mr. Georgiev. With respect to Mr. Needham, includes $12,000 paid by the
Company to Mr. Needham during the year ended March 31, 1994 pursuant to a
consulting arrangement between the Company and Mr. Needham.
(2) In October 1994, the Company issued to certain officers, directors
and consultants shares of Common Stock at par. Upon issuance of all these
shares, the Company recorded compensation expense, representing the fair market
value of the stock on the date of grant.
-10-
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the option grants by the Company to each
executive officer of the Company who earned $100,000 or more for the year ended
December 31, 1995:
<TABLE>
<CAPTION>
OPTION GRANTS
- ------------------------------------------------------------------------------------------------------------
Number of Percent of
Securities Total Options/
Underlying SARS Granted Exercise or
Options/SARs to Employees Base Price Expiration
Granted (#) in Fiscal Year ($/Sh) Date
(a) (b) (c) (d) (e)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven Georgiev
Chief Executive Officer 350,000 (1) 28.1% $2.00 7/4/00
100,000 (1) 8.0% $2.125 8/18/00
Michael H. Smotrich
President, Chief 150,000 (2) 12.1% $2.00 7/4/00
Operating Officer, 100,000 (2) 8.0% $2.125 8/18/00
Secretary
Joseph P. Caruso
Treasurer, Vice President 150,000 (3) 12.1% $2.00 7/4/00
and Chief Financial Officer 100,000 (3) 8.0% $2.125 8/18/00
Maurice E. Needham Jr.
Chairman of the Board
of Palomar Electronics
Corp. and CEO of Dynaco
Corporation -- -- -- --
Sanford R. Lane
President and CEO
Spectrum Medical
Technologies, Inc.
Financial Officer -- -- -- --
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Georgiev was granted 350,000 shares issuable upon exercise of
five-year warrants granted in July 1995, at an exercise price of $2.00
per share; and 100,000 shares issuable upon exercise of five-year
warrants granted in August 1995, at an exercise price of $2.125 per
share.
(2) On July 5, 1995, the Company granted to Dr. Smotrich incentive
stock options expiring July 5, 2000, to purchase 150,000 shares of
Common Stock at an exercise price of $2.00 per share, pursuant to its
1995 Stock Option Plan. Options to purchase 75,000 shares vested
immediately and options to purchase 75,000 shares vested on July 5,
1996. In addition, Dr. Smotrich was granted 100,000 shares issuable
upon exercise of five-year warrants granted in August 1995, at an
exercise price of $2.125 per share.
-11-
(3) On July 5, 1995, the Company granted to Mr. Caruso incentive stock
options expiring July 5, 2000, to purchase 150,000 shares of Common
Stock at an exercise price of $2.00 per share, pursuant to its 1995
Stock Option Plan. Options to purchase 75,000 shares vested immediately
and options to purchase 75,000 shares vested on July 5, 1996. In
addition, Mr. Caruso was granted 100,000 shares issuable upon exercise
of five-year warrants granted in August 1995, at an exercise price of
$2.125 per share.
AGGREGATED OPTION EXERCISES IN LAST YEAR AND FISCAL YEAR-END; OPTION/SAR VALUES
The following table sets forth information on an aggregated basis
regarding the exercise of stock options during the last completed fiscal year by
each of the executive officers named in the Summary Compensation Table and the
value of unexercised options at December 31, 1995:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Shares Options/SARs Options/SARs
Acquired Value at FY-End (#) at FY-End ($)
Name and on Exercise Realized Exercisable/ Exercisable/
Principal Position (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven Georgiev
Chief Executive Officer -- -- 517,000/-0- $2,900,370/$-0-
Michael H. Smotrich
President, Chief -- -- 345,000/75,000 $1,935,450/$420,750
Operating Officer,
Secretary
Joseph P. Caruso
Treasurer, Vice President 75,000 $90,378 275,000/75,000 $1,542,750/$420,750
and Chief Financial Officer
Maurice E. Needham Jr.
Chairman of the Board
of Palomar Electronics
Corp. and CEO of Dynaco
Corporation -- -- -- --
Sanford R. Lane
President and CEO, Spectrum
Medical Technologies, Inc.,
Financial Officer -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
-12-
LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
The Company does not maintain any long-term compensation plans for its
officers, directors or employees.
COMPENSATION OF DIRECTORS
For his services as a Director, Mr. Glosson received a warrant to
purchase 100,000 shares of Common Stock at an exercise price of $8.00 per share.
This warrant vests over a period of three years. In addition, Mr. Glosson is
paid $60,000 per year for his services as a Director. The Company does not
provide any compensation to its other Directors for their services as Directors.
For a discussion of the compensation arrangements between the Company and Mr.
Georgiev, Dr. Smotrich and Mr. Levangie, refer to the discussions set forth
under the headings below entitled "Employment Agreements" and "Consulting
Agreements".
EMPLOYMENT AGREEMENTS
Effective January 1, 1995, the Company entered into two-year key
employment agreements with Mr. Georgiev, Dr. Smotrich and Mr. Caruso. Pursuant
to these agreements, Mr. Georgiev serves as Chief Executive Officer, Dr.
Smotrich serves as President and Chief Operating Officer and Mr. Caruso serves
as Vice President of Finance and Chief Financial Officer. Effective January 1,
1996, the Company amended its employment agreements with Mr. Georgiev, Dr.
Smotrich and Mr. Caruso to increase their base salaries to $275,000, $215,000
and $180,000 per annum, respectively. Effective February 9, 1994, the Company
entered into a two-year key employment agreement with Mr. Needham. Pursuant to
this agreement, Mr. Needham serves as Chief Executive Officer of Dynaco
Corporation, at a base salary of $155,000 per annum. Effective April 5, 1995,
the Company entered into a five-year key employment agreement with Mr. Lane.
Pursuant to this agreement, Mr. Lane serves as President and CEO of Spectrum
Acquisition Corporation at a base salary of $135,000 per annum. The agreements
provide for bonuses as determined by the Board of Directors or Executive
Committee, and employee benefits, including vacation, sick pay and insurance in
accordance with the Company's policies. Upon termination of employment without
cause, the agreements provide for lump sum severance payments equal to six to
twelve months of base salary, or, if the termination is the result of a change
of control of the Company, the lesser of six to twelve months of base salary or
the remaining payments due under the Agreement.
CONSULTING AGREEMENTS
Effective June 1, 1995, the Company entered into a Consulting Agreement
with Mr. Levangie, pursuant to which Mr. Levangie provides certain financial
management and consulting services for a monthly fee of $7,000.
-13-
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The persons named in the enclosed Proxy will vote to ratify the
selection of Arthur Andersen LLP as independent public accountants for the
fiscal year ending December 31, 1996 unless otherwise directed by the
stockholders. That firm also served as the Company's independent public
accountants in 1995. A representative of Arthur Andersen LLP is expected to be
present at the Meeting of Stockholders, and will have the opportunity to make a
statement and answer questions from stockholders if he so desires.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of October 2, 1996, the Company's Chief Executive Officer, Steven
Georgiev, owes the Company net amounts totaling $290,322. The Company's advances
to Mr. Georgiev are evidenced by demand promissory notes which bear interest at
7% and are collateralized by stock in the Company at a 75% loan to value ratio.
As of October 2, 1996, the Company's Chief Operating Officer, Michael
H. Smotrich, owes the Company net amounts totaling $170,567. The Company's
advances to Mr. Smotrich are evidenced by demand promissory notes which bear
interest at 7% and are collateralized by stock in the Company at a 75% loan to
value ratio.
As of October 2, 1996, the Chairman of the Board of Palomar Electronics
Corporation and Chief Executive Officer of Dynaco, Maurice E. Needham, Jr., owes
the Company net amounts totaling $475,000. The Company's advances to Mr. Needham
are evidenced by demand promissory notes which bear interest at 7% and are
collateralized by stock in the Company at a 75% loan to value ratio.
The Company has loaned net amounts totaling $1,200,000 to GreenMan
Technologies, Inc., a publicly-traded company. These loans bear interest at 10%.
Messrs. Levangie, Glosson and Needham are directors of both GreenMan
Technologies, Inc. and the Company.
The Company believes the foregoing transactions were on terms no less
favorable to the Company than could be obtained from unaffiliated third parties.
As a matter of policy, in order to reduce the risks of self-dealing or a breach
of the duty of loyalty to the Company, all future transactions between the
Company and any of its officers, directors or principal stockholders must be for
bona fide purposes and will be subject to approval by a majority of the
disinterested members of the Board of Directors of the Company.
For a description of other material transactions during the last two
years in which the Company was a party to any transaction with any of the
directors, nominees, executive officers and persons named in the table entitled
"Security Ownership of Certain Beneficial Owners and Management" set forth above
in this Proxy Statement, refer to the discussions above under the headings
entitled "Employment Agreements" and "Consulting Agreements."
-14-
DEADLINE FOR SUBMISSION OF
1997 STOCKHOLDER PROPOSALS AND NOMINATIONS
Stockholders who wish to present proposals appropriate for
consideration at the Company's Annual Meeting of Stockholders to be held in 1997
must submit the proposals in proper form to the Company at its address set forth
on the first page of this proxy statement not later than December 31, 1996 in
order for the proposals to be considered for inclusion in the Company's proxy
statement and form of proxy relating to such Annual Meeting.
OTHER INFORMATION
Proxies for the Annual Meeting will be solicited by mail, telephone and
through brokerage institutions and all expenses involved, including printing and
postage, will be paid by the Company.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB/A-1 FOR THE YEAR
ENDED DECEMBER 31, 1995 IS BEING FURNISHED HEREWITH TO EACH STOCKHOLDER OF
RECORD AS OF THE CLOSE OF BUSINESS ON OCTOBER 7, 1996. ADDITIONAL COPIES OF THE
ANNUAL REPORT WILL BE PROVIDED FOR A NOMINAL CHARGE UPON WRITTEN REQUEST TO:
PALOMAR MEDICAL TECHNOLOGIES, INC.
66 CHERRY HILL DRIVE
BEVERLY, MA 01915
ATTN: DEBORAH R. RANDAZZA
IN ADDITION, COPIES OF ANY EXHIBITS TO THE ANNUAL REPORT ON FORM
10-KSB/A-1 WILL BE PROVIDED FOR A NOMINAL CHARGE TO STOCKHOLDERS WHO MAKE A
WRITTEN REQUEST TO THE COMPANY AT THE ABOVE ADDRESS.
The Board of Directors is aware of no other matters, except for those
incidental to the conduct of the Meeting, that are to be presented to
stockholders for formal action at the Meeting. If however, any other matters
properly come before the Meeting or any adjournments thereof, it is the
intention of the persons named in the proxy to vote the proxy in accordance with
their judgment.
By Order of the Board of Directors
/s/Steven Georgiev
------------------------------------
Steven Georgiev
Chief Executive Officer
Chairman of the Board of Directors
October 11, 1996
-15-
PALOMAR MEDICAL TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- NOVEMBER 14, 1996
The undersigned stockholder of Palomar Medical Technologies, Inc. (the
"Company") hereby appoints Steven Georgiev, Michael H. Smotrich and Joseph P.
Caruso, and each or any of them, proxies, with full power of substitution to
each and to each substitute appointed pursuant to such power, of the undersigned
to vote all shares of stock of the Company which the undersigned may be entitled
to vote at the Annual Meeting of Stockholders of the Company to be held on
Thursday, November 14, 1996, and at any and all adjournments thereof, with all
powers the undersigned would possess if personally present. The proxies are
authorized to vote as indicated below and on the reverse side upon the matters
set forth herein and in their discretion upon all other matters which may
properly come before said Meeting. The undersigned hereby acknowledges receipt
of a copy of the accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement for the Annual Meeting of Stockholders and hereby revokes all proxies,
if any, heretofore given by him to others for said Meeting.
If this proxy is properly executed and returned, the shares represented
hereby will be voted. If a choice is specified below or on the reverse side by
the stockholder with respect to any matter to be acted upon, the shares will be
voted upon that matter in accordance with the specification so made. IN THE
ABSENCE OF ANY SPECIFICATION, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
- ---
1. Election of Directors.
Nominees: Steven Georgiev, Michael H. Smotrich,
Joseph E. Levangie, Buster C. Glosson
|_| FOR ALL NOMINEES |_| WITHOLD AUTHORITY
EXCEPT AS MARKED BELOW FOR ALL NOMINEES
2. Proposal to ratify the selection of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending December 31,
1996.
|_| FOR |_| AGAINST |_| ABSTAIN
Please date, sign exactly as name
appears hereon and return promptly.
If the shares are registered in the
names of two or more persons, each
should sign. Executors,
administrators, trustees, guardians,
custodians, attorneys and corporate
officers should add their titles.
....................................
Signature
Date: ..............................
....................................
Signature
Date: ..............................
-2-
