<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))
Zoll Medical Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (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
ZOLL MEDICAL CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, FEBRUARY 10, 1998
------------------------
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of Zoll Medical Corporation (the "Company") will be held on
Tuesday, February 10, 1998 at 10:00 a.m. at State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02110 for the following purposes:
1. To elect two Class III directors of the Company to serve until the
2001 Annual Meeting of Stockholders and until their respective successors
are duly elected and qualified; and
2. To consider and act upon any other matters which may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned, or to which the Annual Meeting
may be postponed.
The Board of Directors has fixed the close of business on December 30, 1997
as the record date for determining the stockholders entitled to notice of and to
vote at the 1998 Annual Meeting and at any adjournments or postponements
thereof. Stockholders of record of the Company's Common Stock at the close of
business on that date will be entitled to notice of and to vote at the Annual
Meeting and at any adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy which is
being solicited by the Board of Directors and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
William H. Gorham, Clerk
Burlington, Massachusetts
January 8, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE> 3
ZOLL MEDICAL CORPORATION
32 SECOND AVENUE
NORTHWEST PARK
BURLINGTON, MASSACHUSETTS 01803
------------------------
PROXY STATEMENT
------------------------
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, FEBRUARY 10, 1998
January 8, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Zoll Medical Corporation (the "Company")
for use at the 1998 Annual Meeting of Stockholders of the Company to be held on
Tuesday, February 10, 1998, and at any adjournments or postponements thereof
(the "Annual Meeting"). At the Annual Meeting, stockholders will be asked to
vote upon (i) the election of two Class III directors of the Company and (ii)
any other matters properly brought before the Annual Meeting.
This Proxy Statement and the accompanying Notice of Annual Meeting and
Proxy Card are first being sent to stockholders on or about January 8, 1998. The
Board of Directors has fixed the close of business on December 30, 1997 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting (the "Record Date"). Only stockholders of record of
the Company's common stock, par value $.02 per share (the "Common Stock"), at
the close of business on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. As of the Record Date, there were 6,191,659 shares
of Common Stock outstanding and entitled to vote at the Annual Meeting. Holders
of Common Stock outstanding as of the close of business on the Record Date will
be entitled to one vote for each share held by them.
The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The affirmative vote of the holders of a plurality of the shares of
Common Stock present or represented at the Annual Meeting is required for the
election of directors. Abstentions and broker non-votes are each included in the
number of shares present at the Annual Meeting for purposes of establishing a
quorum. Abstentions and broker non-votes will have no effect on the outcome of
the election of directors.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO THE
VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL MEETING
AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED AND NO
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE TWO
NOMINEES FOR CLASS III DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT.
IT IS NOT ANTICIPATED THAT ANY MATTER OTHER THAN THOSE SET FORTH IN THIS PROXY
STATEMENT WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER MATTERS ARE
PRESENTED, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY
HOLDERS.
A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Clerk of the Company at the
address of the Company set forth above; by filing a duly
<PAGE> 4
executed proxy bearing a later date; or by appearing in person and voting by
ballot at the Annual Meeting. Any stockholder of record as of the Record Date
attending the Annual Meeting may vote in person whether or not a proxy has been
previously given, but the presence (without further action) of a stockholder at
the Annual Meeting will not constitute revocation of a previously given proxy.
The Company's 1997 Annual Report, including the Company's audited financial
statements for the fiscal year ended September 27, 1997, is being mailed to
stockholders concurrently with this Proxy Statement.
PROPOSAL 1
ELECTION OF A CLASS OF DIRECTORS
The Board of Directors of the Company is comprised of seven members and is
divided into three classes, with the directors in each class serving for a term
of three years and until their successors are duly elected and qualified. As the
term of one class expires, a successor class is elected at each succeeding
annual meeting of stockholders.
At the Annual Meeting, two Class III directors will be elected to serve
until the 2001 Annual Meeting and until their successors are duly elected and
qualified. The Board of Directors has nominated Richard A. Packer and Rolf S.
Stutz for election as Class III directors (the "Nominees"). The Board of
Directors anticipates that each of the Nominees will serve as a director if
elected. However, if any person nominated by the Board of Directors is unable to
accept election, the proxies will be voted for the election of such other person
or persons as the Board of Directors may recommend.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following table sets forth certain information with respect to the two
Nominees for election as directors at the Annual Meeting and those continuing
directors of the Company whose terms expire at the annual meetings of
stockholders in 1999 and 2000 based on information furnished to the Company by
each director. The following information is as of September 27, 1997 unless
otherwise specified.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND PRINCIPAL OCCUPATION DIRECTOR BENEFICIAL OWNERSHIP PERCENT
FOR PAST FIVE YEARS AGE SINCE OF COMMON STOCK(1) OF CLASS
- - ------------------------------------------------------ --- -------- -------------------- --------
<S> <C> <C> <C> <C>
CLASS III NOMINEES FOR ELECTION AT THE 1998 ANNUAL MEETING -- TERM TO EXPIRE IN 2001
Richard A. Packer..................................... 40 1996 35,300(2) *
President and Chief Operating Officer of the Company
since 1996. During 1996, he served as Chief
Financial Officer of the Company. From 1992 to 1996
he served as the Company's Vice President of
Operations. Prior to 1992, he was Vice President of
various functions at Whistler Corporation, a
consumer electronics company.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND PRINCIPAL OCCUPATION DIRECTOR BENEFICIAL OWNERSHIP PERCENT
FOR PAST FIVE YEARS AGE SINCE OF COMMON STOCK(1) OF CLASS
- - ------------------------------------------------------ --- -------- -------------------- --------
<S> <C> <C> <C> <C>
Rolf S. Stutz......................................... 48 1983 130,400(3) 2.1%
Chairman of the Board of Directors and Chief
Executive Officer of the Company. From 1978 until he
joined the Company in 1983, Mr. Stutz held a variety
of domestic and international management positions
with Millipore Corporation, a manufacturer of high
technology membrane filtration and purification
products for the analytical, pharmaceutical and
microelectronics markets. Mr. Stutz is a director of
Hemasure Corporation, Cambridge Heart, Inc. and
Lifecor, Inc.
CLASS I CONTINUING DIRECTORS -- TERM TO EXPIRE IN 1999
Noah T. Herndon....................................... 65 1995 7,500(4) *
Partner of Brown Bothers Harriman & Co. since 1974.
From 1978 to present Mr. Herndon has been the
partner principally in charge of the operations for
Brown Brothers Harriman & Co.'s Boston office. Mr.
Herndon is a director of National Auto Credit, Inc.,
Fieldcrest Cannon, Inc. and Watts Industries, Inc.
and a Trustee of Cabot Industrial Trust.
C. William Zadel...................................... 54 1996 3,500(5) *
Chairman, President and Chief Executive Officer of
Millipore Corporation, a manufacturer of high
technology membrane filtration and purification
products for the analytical, pharmaceutical and
microelectronics markets. Formerly President and
Chief Executive Officer of Ciba Corning Diagnostics
Corp., a leading biotechnology company and supplier
to the clinical laboratory market, where he was
employed since 1983. Mr. Zadel is a director of
Kulicke & Soffa Industries, Inc. and Matritech, Inc.
CLASS II CONTINUING DIRECTORS -- TERM TO EXPIRE IN 2000
Willard M. Bright..................................... 83 1983 170,450(6) 2.8%
Formerly Chairman of the Board of Directors of the
Company. Formerly President and Chief Executive
Officer of The Kendall Company and Boehringer
Mannheim Corporation, medical products
manufacturers, and President and director of
Curtiss-Wright Corp., an aerospace and industrial
products manufacturer. Mr. Bright is a Director of
CSS Industries, Inc., Furman Lumber Company and
MacroChem Corporation.
Thomas M. Claflin, II................................. 56 1980 66,745(7) 1.1%
Principal of Claflin Capital Management, Inc., a
venture capital firm, and General Partner of its
venture capital partnerships. Mr. Claflin is a
Director of Altron Incorporated.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND PRINCIPAL OCCUPATION DIRECTOR BENEFICIAL OWNERSHIP PERCENT
FOR PAST FIVE YEARS AGE SINCE OF COMMON STOCK(1) OF CLASS
- - ------------------------------------------------------ --- -------- -------------------- --------
<S> <C> <C> <C> <C>
M. Stephen Heilman.................................... 63 1996 212,500(8) 3.4%
Founder, Chairman and Chief Executive Officer of
Lifecor, Inc. since 1986. Founder, Chairman and
Chief Executive Officer of Vascor, Inc. since 1986.
Mr. Heilman is a director of SkyMark Corporation,
Actronics, Medrad Inc. and Precision Therapeutics.
All directors and executive officers as a group (12 718,895(9) 11.6%
persons).
</TABLE>
- - ---------------
* Less than 1%.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to the information contained in the other footnotes to this table.
(2) Includes 26,000 shares of Common Stock subject to stock options exercisable
as of September 27, 1997, or which will become exercisable within 60 days
after September 27, 1997.
(3) Includes 45,000 shares of Common Stock subject to stock options exercisable
as of September 27, 1997.
(4) Includes 2,500 shares of Common Stock subject to stock options exercisable
as of September 27, 1997.
(5) Includes 2,500 shares of Common Stock subject to stock options exercisable
as of September 27, 1997.
(6) Represents 166,700 shares of Common Stock held by the Willard M. Bright
Revocable Inter Vivos Trust dated August 2, 1990 and 3,750 shares of Common
Stock subject to stock options exercisable as of September 27, 1997.
(7) Includes 229 shares of Common Stock held by Mr. Claflin's spouse and 3,278
shares held by various Claflin Capital Management, Inc. partnership
entities, as to which Mr. Claflin disclaims beneficial ownership, and 2,500
shares of Common Stock subject to stock options exercisable as of September
27, 1997.
(8) Includes 2,500 shares of Common Stock subject to stock options exercisable
as of September 27, 1997.
(9) Includes 177,250 shares of Common Stock subject to stock options
exercisable as of September 27, 1997, or which will become exercisable
within 60 days after September 27, 1997.
Dr. Paul M. Zoll remains an Emeritus member of the Board.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company held 6 meetings during the fiscal
year ended September 27, 1997. Each of the directors attended more than 75% of
the aggregate of the total number of meetings of the Board of Directors and of
the committees of which he was a member which were held during the period he was
a director or committee member, with the exception of Dr. Zoll.
The Company has standing Audit and Compensation Committees. The members of
the Audit Committee are Messrs. Claflin (as Chairman), Herndon and Heilman. The
Audit Committee reviews the results of the annual audit of the Company's
accounts conducted by the Company's independent auditors and the recommendations
of the auditors with respect to accounting systems and controls. During the
fiscal year ended September 27, 1997, the Audit Committee held 2 meetings.
4
<PAGE> 7
The members of the Compensation Committee are Messrs. Herndon (as Chairman)
and Zadel. The Compensation Committee reviews and approves the Company's
executive compensation and benefit policies, administers the Company's 1992
Stock Option Plan and the Directors' Plan. During the fiscal year ended
September 27, 1997, the Compensation Committee held 1 meeting. The Compensation
Committee's report on executive compensation appears elsewhere in this Proxy
Statement.
The Board of Directors selects nominees for election as directors of the
Company. The Board of Directors will consider a nominee for election to the
Board recommended by a stockholder of record if such recommendation is timely in
accordance with, and is accompanied by the information required by, the
Company's By-laws. The Company does not maintain a standing nominating
committee.
DIRECTOR COMPENSATION
Non-employee directors of the Company receive: (i) an $8,000 annual
retainer payable quarterly; (ii) a $2,000 annual retainer for Committee Chairmen
payable quarterly; and (iii) a $500 meeting fee for each meeting of directors
attended. Dr. Bright has a consulting arrangement with the Company pursuant to
which he provides management, personnel and marketing advice and services to the
Company. During the fiscal year ended September 27, 1997, Dr. Bright received
$50,000 pursuant to this arrangement.
The Company has granted options for shares of the Company's Common Stock as
provided in the Directors' Plan. See "Executive Compensation -- Aggregated
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values".
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the aggregate
cash compensation paid by the Company with respect to the three fiscal years
ended September 27, 1997 to the Company's Chief Executive Officer and each of
the four other most highly compensated executive officers in fiscal 1997 (the
"Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -----------------
----------------------------------------- SHARES UNDERLYING
NAME AND OTHER ANNUAL OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($) GRANTED(#) COMPENSATION($)(2)
------------------ ---- --------- ----------- --------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Rolf S. Stutz...................... 1997 250,000 15,000 4,800(3) -- 1,200
Chairman and Chief 1996 243,667 60,000 4,800(3) -- 720
Executive Officer 1995 231,000 50,000 4,800(3) -- 947
Richard A. Packer.................. 1997 180,000 15,000 -- -- 864
President and Chief 1996 163,333 45,000 -- 20,000 720
Operating Officer 1995 140,000 27,000 -- 12,000 574
Frits J. Borst..................... 1997 128,968 29,328(4) 31,813(5) -- --
Vice President- 1996 146,221 47,922(4) 33,547(5) -- --
International Operations 1995 148,483 31,714(4) 22,682(5) 12,000 --
Patrick A. Maley(6)................ 1997 153,000 5,000 -- -- 734
Vice President- 1996 108,670 39,998 -- 50,000 941
Sales and Marketing
William J. Knight(7)............... 1997 135,000 5,000 -- -- 648
Vice President- 1996 16,364 5,400 -- 30,000 162
Administration and Chief
Financial Officer
</TABLE>
5
<PAGE> 8
- - ---------------
(1) Amounts shown for each fiscal year include bonuses paid during the
succeeding fiscal year. Thus, the 1997 bonus includes an amount paid in
fiscal 1998 for fiscal 1997.
(2) All Other Compensation reflects life insurance premiums paid by the Company
for the executive officers.
(3) This amount reflects an automobile allowance for Mr. Stutz.
(4) These amounts represent a bonus payment of $20,000 and a payment of $9,328
made in lieu of vacation benefits for fiscal 1997, a bonus payment of
$28,973 and payment of $18,949 made in lieu of vacation benefits for fiscal
1996, and a bonus payment of $20,303 and payment of $11,411 made in lieu of
vacation benefits for fiscal 1995.
(5) These amounts reflect an automobile allowance for Mr. Borst of $7,884 for
1997, 1996 and 1995, payments of $14,647, $22,404 and $14,798 made as a
pension contribution for 1997, 1996 and 1995, respectively, and a payment of
$9,282 and $3,259 for disability insurance for 1997 and 1996.
(6) Mr. Maley joined the Company in 1996.
(7) Mr. Knight joined the Company in 1996.
Option Grants in Last Fiscal Year. There were no stock option grants in
fiscal 1997 by the Company to the Named Executive Officers
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values. No stock options were exercised by the Named Executive Officers during
the fiscal year ended September 27, 1997. The following table sets forth certain
information regarding stock options held as of September 27, 1997 by the Named
Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(2)
ACQUIRED -------------------------- -----------------------
ON VALUE EXERCIS- UNEXERCIS- EXERCIS- UNEXERCIS-
NAME EXERCISE(#) REALIZED($)(1) ABLE(#)(3) ABLE(#) ABLE($) ABLE($)
- - ------------------------------ ----------- -------------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Rolf S. Stutz................. -- -- 45,000 15,000 0 0
Chairman and Chief
Executive Officer
Richard A. Packer............. -- -- 26,000 46,000 0 0
President and Chief
Operating Officer
Frits J. Borst................ -- -- 13,500 28,500 0 0
Vice President-
International Operations
Patrick A. Maley.............. -- -- 12,500 37,500 0 0
Vice President-
Sales and Marketing
William J. Knight............. -- -- 7,500 22,500 0 0
Vice
President-Administration
and Chief Financial
Officer
</TABLE>
- - ---------------
(1) Value realized equals the aggregate market value of the shares acquired on
the exercise date(s), less the applicable aggregate option exercise
price(s).
(2) Year-end value is based on the closing market price per share on September
26, 1997 ($7.00), less the applicable aggregate option exercise price(s) of
in-the-money options multiplied by the number of unexercised in-the-money
options which are exercisable and unexercisable, respectively.
(3) Includes options exercisable within 60 days after September 27, 1997.
6
<PAGE> 9
STOCK PERFORMANCE CHART
The following chart provides an annual comparison, from September 30, 1992
of the cumulative total shareholder return (assuming reinvestment of any
dividends) among Zoll Medical Corporation, the NASDAQ National Market ("NASDAQ")
Index and the Hambrecht & Quist ("H&Q") Health Care (Excluding Biotechnology)
Index, an industry index of 43 health care and medical technology companies
(including the Company). The NASDAQ Index has been provided because the Common
Stock is listed on this market. The historical information set forth below is
not necessarily indicative of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ZOLL MEDICAL CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE HAMBRECHT & QUIST HEALTHCARE EXCLUDING BIOTECHNOLOGY INDEX
[GRAPH]
<TABLE>
<CAPTION>
9/92 9/93 9/94 9/95 9/96 9/97
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ZOLL MEDICAL CORPORATION 100 179 46 46 77 35
NASDAQ STOCK MARKET (U.S) 100 131 132 182 216 297
HAMBRECHT & QUIST HEALTHCARE 100 73 88 131 160 192
</TABLE>
* $100 INVESTED ON 9/30/92 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS
FISCAL YEAR ENDING SEPTEMBER 30.
7
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE
Objective of the Company's Compensation Program. The Company's executive
compensation program is intended to attract, retain and reward executives who
are capable of leading the Company effectively and continuing its growth in the
competitive marketplace for cardiac resuscitation equipment. The Company's
objective is to utilize a combination of cash and equity-based compensation to
provide appropriate incentives for executives while aligning their interests
with those of the Company's stockholders.
Like many other public companies, the Company uses a three-pronged approach
to its compensation program. First, the executive's base salary is intended to
create a reasonably competitive minimum level of compensation for each executive
for the following twelve months. Second, the Company maintains an incentive
bonus program for executive officers and certain other members of management
under which discretionary bonuses may be offered based upon the achievement of
corporate and individual performance goals. The objective of the incentive bonus
program is to reward executives for their past twelve months' performance.
Finally, the Company utilizes stock options granted under its 1992 Stock Option
Plan as a long-term incentive for the executive officers as well as for many
other employees of the Company. The Company believes that stock options are
important in aligning management and stockholder interests and in encouraging
management to adopt a longer-term perspective. Accordingly, options generally
provide for incremental vesting over a four-year period.
Compensation Committee Procedures. The Company's executive compensation
program is administered under the direction of the Company's Compensation
Committee, which as of September 27, 1997 was composed of two non-employee
directors. The Compensation Committee meets periodically in connection with
regularly-scheduled Board of Directors' meetings, and may consult by telephone
at other times. The determinations of the Compensation Committee relating to the
compensation of the Company's executive officers and the granting of options are
then approved or ratified by all of the non-employee directors.
With respect to the compensation of Mr. Stutz, the Compensation Committee
exercises its independent discretion in determining his compensation, subject to
review by all of the non-employee directors. With respect to the compensation of
the other executive officers, the Compensation Committee consults other members
of the Board, but generally relies to a significant extent on Mr. Stutz's
recommendations as the Company's Chief Executive Officer.
Compensation of the Chief Executive Officer. The Compensation Committee
considers the Company's financial performance, as measured by sales and earnings
growth, to be a significant determinant in Mr. Stutz's overall compensation
package. In making its determinations, however, the Compensation Committee also
considers a number of other factors which are not subject to precise
quantitative measurement and which the Committee believes can only be properly
assessed over the long term. In fiscal 1997, these factors included development
of the management organization, strategic planning for new products, and the
development of new products and markets through acquisitions and investments.
During fiscal 1997, Mr. Stutz continued to be associated on a part-time basis
with Claflin Capital Management, a venture capital management company managed by
Thomas Claflin. Mr. Stutz intends to continue this association during fiscal
1998. Mr. Stutz retains full responsibility as Chief Executive Officer of the
Company and has agreed with the Board of Directors that if the proper discharge
of his responsibilities as Chief Executive Officer requires him to be physically
present with the Company on a full-time basis, he will do so. Looking to 1998,
the Compensation Committee intends to consider the degree of success achieved by
Mr. Stutz in turning management responsibilities over to Mr. Packer and Mr.
Packer's success in discharging these duties as well as Mr. Stutz's continued
success in the development of the management organization and strategic planning
8
<PAGE> 11
for and development of new products and markets. The Compensation Committee
utilizes its business judgment to evaluate these factors substantively, without
the application of any mechanical formula.
For fiscal 1998, the Compensation Committee determined to raise Mr. Stutz's
base salary by 4% from $250,000 to $260,000, based on the Committee's judgment
that such amount represented a competitive base salary. Mr. Stutz's bonus for
fiscal 1997 was set at $15,000. Mr. Stutz was paid a bonus of $60,000 for fiscal
1996. Mr. Stutz's bonus for fiscal 1998 will be based on 1998 performance.
Compensation of Other Executive Officers. The Company's executive
compensation program utilizes several different subjective performance factors
in determining the compensation of the Company's other executive officers. Each
executive officer's compensation is based upon Mr. Stutz's, and ultimately the
Compensation Committee's, judgment as to the achievement of specific individual
or Company performance goals.
Submitted by the Compensation
Committee for fiscal 1997
NOAH T. HERNDON, Chairman
C. WILLIAM ZADEL
SEVERANCE ARRANGEMENTS
Mr. Stutz and Mr. Packer each have an employment agreement with the Company
providing for a severance payment of twelve months' salary in the event their
employment is terminated by the Company without cause. Each Agreement provides
for non-competition for a period of three years following termination. At his
fiscal 1997 base salary, Mr. Stutz would receive a severance payment of
approximately $250,000 under this provision and Mr. Packer would receive a
severance payment of approximately $180,000.
CERTAIN RELATIONSHIPS
Noah T. Herndon, a director of the Company, is a partner of Brown Brothers
Harriman & Co., with which the Company maintains a working capital line of
credit and other customary, arm's-length banking relationships. M. Stephen
Heilman is Founder, Chairman and Chief Executive Officer of Lifecor, Inc., in
which the Company has made a $2 million investment. Pursuant to an agreement
entered into in connection with such investment, the Company has agreed to Mr.
Heilman serving as a director of the Company, and Mr. Heilman voted in favor of
Mr. Stutz being elected to Lifecor, Inc.'s board of directors.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based on a review of the reports of changes in beneficial ownership of the
Corporation's Common Stock and written representations furnished to the
Corporation, the Corporation believes that its executive officers and directors
filed on a timely basis the reports required to be filed under Section 16(a) of
the Securities Exchange Act of 1934 during the fiscal year ended September 27,
1997, with the following exception: Dr. Bright filed a Form 5 after the deadline
with respect to a gift of shares to family members.
9
<PAGE> 12
OTHER MATTERS
PRINCIPAL STOCKHOLDERS
The following table presents information as to the persons or entities
believed by the Company to be beneficial owners of more than 5% of the Company's
Common Stock on September 27, 1997 based on representations of officers and
directors of the Company and certain filings made under Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All such
information was provided by the stockholders listed and reflects their
beneficial ownership as of the dates specified in the footnotes to the table.
<TABLE>
<CAPTION>
NO. OF SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
OF BENEFICIAL OWNER OWNED OF CLASS
--------------------------------------------------------- ------------- --------
<S> <C> <C>
The Edgemont Asset....................................... 890,000 14.4%
Management Corporation(1)
17 Battery Place
Suite 2624
New York, New York 10004
Kopp Investment Advisors, Inc.(2)........................ 674,926 10.9%
6600 France Avenue South, Suite 672
Edina, MN 55435
</TABLE>
- - ---------------
(1) Based on information set forth in a Schedule 13G filed under the Exchange
Act on May 22, 1997. The Company has been informed by The Edgemont Asset
Management Corporation that it is the investment advisor to the Kaufmann
Fund.
(2) Based on information set forth in a Schedule 13G/A filed under the Exchange
Act on December 9, 1997.
INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP has served as the Company's
independent auditors since 1984. A representative of Ernst & Young LLP will be
present at the Annual Meeting, will be given the opportunity to make a statement
if he so desires and will be available to respond to appropriate questions.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without special compensation for such activities. The
Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
STOCKHOLDER PROPOSALS
For a proposal of a stockholder to be included in the Company's proxy
statement for the Company's 1999 Annual Meeting, it must be received at the
principal executive offices of the Company on or before August 22, 1998. Such a
proposal must also comply with the requirements as to form and substance
established by the Securities and Exchange Commission for such a proposal to be
included in the proxy statement.
10
<PAGE> 13
In addition, the Company's By-laws provide that any stockholder wishing to
nominate a director or have a stockholder proposal considered at an annual
meeting must provide written notice of such nomination or proposal and
appropriate supporting documentation, as set forth in the By-laws, to the
Company at its principal executive offices not less than 75 days nor more than
120 days prior to the anniversary of the immediately preceding annual meeting of
stockholders (the "Anniversary Date"); provided, however, that in the event that
the annual meeting is scheduled to be held more than 30 days prior to the
Anniversary Date, such nominations or proposals must be delivered to the Company
not later than 75 days prior to such earlier date if the Company has given 75
days prior notice or public disclosure of the scheduled date or ten days prior
to the earlier of the date on which notice of the meeting was mailed or the date
on which public disclosure is made, if the Company has not given 75 days prior
notice or public disclosure of the scheduled date, in order to be considered for
inclusion in the Company's proxy statement and form of proxy for that meeting.
Any such proposal should be mailed to: Zoll Medical Corporation, 32 Second
Avenue, Northwest Park, Burlington, Massachusetts 01803, Attention: Clerk.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO THE
COMPANY. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD
TODAY.
11
<PAGE> 14
<TABLE>
<S> <C>
[X] PLEASE MARK VOTE
AS IN THIS EXAMPLE
1. Proposal to elect the following persons as Class III
Directors to serve until the 2001 Annual Meeting and With- For All
ZOLL MEDICAL until their successors are duly elected and qualified. For hold Except
CORPORATION
Richard A. Packer and Rolf S. Stutz [ ] [ ] [ ]
INSTRUCTION: To withhold authority to vote for any nominee, mark the "For All Except"
box and strike a line through the nominee's name in the list above.
RECORD DATE SHARES:
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders, the Proxy Statement with respect
thereto and the Company's 1997 Annual Report and hereby revoke(s) any proxy
or proxies heretofore given. This proxy may be revoked at any time before it is
exercised.
--------------------
Please be sure to sign and date this Proxy. Date
- - ----------------------------------------------------------------- Mark box at right if an address change or comments [ ]
have been noted on the reverse side of this card.
- - ----------------------------------------------------------------
Stockholder sign here Joint-owner sign here
- - ------------------------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
ZOLL MEDICAL CORPORATION
Dear Stockholder,
Please take note of the important information regarding the Company's management and financial results enclosed with this
proxy card.
Your vote on these matters counts, and you are strongly encouraged to exercise your right to vote your shares.
Please mark on box for each proposal on the proxy card above to indicate how your shares should be voted. Then, sign and
date the card, detach it and return your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders to be held on February 10, 1998.
Thank you in advance for your prompt consideration of these matters, which will help the Company avoid the expense of
subsequent mailings.
Sincerely,
ZOLL MEDICAL CORPORATION
</TABLE>
<PAGE> 15
ZOLL MEDICAL CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 10, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Rolf S. Stutz and Richard A.
Packer, and each of them, as Proxies of the undersigned, with full power to
appoint their substitutes, and authorizes each of them to represent and to vote
all shares of Common Stock of Zoll Medical Corporation (the "Company") held by
the undersigned as of the close of business on December 30, 1997, at the Annual
Meeting of Stockholders to be held at State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110 on Tuesday, February 10, 1998, at
10:00 a.m., local time, and at any adjournments and postponements thereof.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE PROPOSALS SET FORTH ON THE REVERSE SIDE HEREOF, AND AT THE PROXIES
DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1. A STOCKHOLDER WISHING TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION NEED ONLY SIGN
AND DATE THIS PROXY AND RETURN IT IN THE ENVELOPE PROVIDED.
----------------------------------------------------------------------------
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
----------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees, custodians, and
other fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If the shareholder is a
corporation, the signature should be that of an authorized officer who should
state his or her title.
- - --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- - ---------------------------------- --------------------------------------
- - ---------------------------------- --------------------------------------
- - ---------------------------------- --------------------------------------
