<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
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 Section 240.14a-11(c) or Section
240.14a-12
Planet Polymer Technologies, Inc.
--------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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
PLANET POLYMER TECHNOLOGIES, INC.
9985 BUSINESSPARK AVENUE, SUITE A
SAN DIEGO, CALIFORNIA 92131
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MAY 22, 1997
TO THE SHAREHOLDERS OF PLANET POLYMER TECHNOLOGIES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Planet
Polymer Technologies, Inc., a California corporation (the "Company"), will be
held on Thursday, May 22, 1997, at 10:00 a.m., local time, at the San Diego
Marriott Hotel & Marina, located at 333 West Harbor Drive, San Diego,
California, 92101 for the following purpose:
1. To elect Directors to serve for the ensuing year and until
their successors are elected.
2. To ratify the selection of Coopers & Lybrand L.L.P. as
independent auditors of the Company for its fiscal year ending
December 31, 1997.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 25, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
REBECCA A. PETCAVICH
Secretary
San Diego, California
May 1, 1997
- --------------------------------------------------------------------------------
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
- --------------------------------------------------------------------------------
<PAGE> 3
PLANET POLYMER TECHNOLOGIES, INC.
9985 BUSINESSPARK AVENUE, SUITE A
SAN DIEGO, CALIFORNIA 92131
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Planet Polymer Technologies, Inc., a California corporation (the "Company"), for
use at the Annual Meeting of Shareholders to be held on Thursday, May 22, 1997
at 10:00 a.m. local time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting. The Annual Meeting will be held at the San Diego
Marriott Hotel & Marina, located at 333 West Harbor Drive, San Diego,
California, 92101. The Company intends to mail this proxy statement and
accompanying proxy card on or about May 1, 1997, to all shareholders entitled to
vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies
including preparation, assembly, printing and mailing of this proxy statement,
the proxy and any additional information furnished to shareholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of Common Stock beneficially owned
by others to forward to such beneficial owners. The Company may reimburse
persons representing beneficial owners of Common Stock for their costs of
forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by Directors, officers or other regular employees of the
Company. No additional compensation will be paid to Directors, officers or other
regular employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on April
25, 1997 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on April 25, 1997 the Company had outstanding and entitled to
vote 5,271,270 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to
one vote for each share held on all matters to be voted upon at the Annual
Meeting. All votes will be tabulated by the inspector of election appointed for
the meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the shareholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 9985
Businesspark Avenue, Suite A, San Diego, California 92131, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
1
<PAGE> 4
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented at the
Company's 1998 Annual Meeting of Shareholders must have been received by the
Company not later than December 31, 1997 in order to be included in the proxy
statement and proxy relating to that Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
There are three nominees for the three Board positions presently
authorized by the Company's Bylaws. Each Director to be elected will hold office
until the next annual meeting of shareholders and until his successor is elected
and has qualified, or until such Director's earlier death, resignation or
removal. All of the nominees listed below are currently Directors of the
Company. All of the nominees listed below were elected by the shareholders.
Shares represented by executed proxies will be voted, if authority to do
so is not withheld, for the election of the three nominees named below, subject
to the discretionary power to cumulate votes. In the event that any nominee
should be unavailable for election as a result of an unexpected occurrence, such
shares will be voted for the election of such substitute nominee as management
may propose. Each person nominated for election has agreed to serve if elected
and management has no reason to believe that any nominee will be unable to
serve.
Under California law and the Company's Bylaws, the Company's
shareholders are entitled to cumulative voting with respect to the election of
Directors, i.e., each shareholder entitled to vote for the election of Directors
may cast a total number of votes equal to the number of Directors to be elected
multiplied by the number of votes to which such shareholder's shares are
entitled, and may cast said total of votes for one or more candidates in such
proportions as such person thinks fit. However, no shareholder shall be entitled
to so cumulate such shareholder's votes unless the candidates for which such
shareholder is voting have been placed in nomination prior to the voting, and
the shareholder, or any other shareholder, has given notice at the meeting,
prior to the vote, of the intention to cumulate votes. Unless the proxyholders
are otherwise instructed, shareholders, by means of the accompanying proxy, will
grant proxyholders discretionary authority to cumulate votes.
In any election of Directors, the nominees receiving the highest number
of votes, up to the number of Directors to be elected, are elected.
NOMINEES
The names of the nominees and certain information about them are set
forth below:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
---- --- --------------------
<S> <C> <C>
Robert J. Petcavich, Ph.D. 42 Chairman of the Board of
Directors, President and
Chief Executive Officer
of the Company
Michael V. Pundeff(1) 42 Attorney
Michael M. Coleman, Ph.D.(1) 59 Professor of Polymer Science
</TABLE>
- -----------------
(1) Member of the Compensation Committee of the Board of Directors.
Brian To, a former Director of the Company, was a member of the
Compensation Committee until April 1997.
Dr. Petcavich is the founder of the Company and has been Chairman since
August 1991. He currently is Chairman of the Board, President and Chief
Executive Officer of the Company. In 1988, Dr. Petcavich founded AlphaScribe
Express Inc., an electronic medical records company, where he served as Chief
Executive Officer until
2
<PAGE> 5
September 1995. He also served as Vice President Corporate Staff at Deposition
Technologies Inc., a high technology polymer materials manufacturer (now a
subsidiary of Material Sciences Corporation), from 1986 until 1988. Dr.
Petcavich is the inventor of fifteen issued United States patents. Dr. Petcavich
has a Ph.D. in Polymer Science, a Master of Science degree in Solid State
Science, and a Bachelor of Science degree in Chemistry from Pennsylvania State
University, and has completed an executive management program (PMD) at the
Harvard University Graduate School of Business.
Mr. Pundeff has been a Director of the Company since April 1996.
He is a senior trial attorney with the San Diego law firm of Robbins & Keehn,
where he has practiced since 1983. Mr. Pundeff received a J.D. from the
University of San Diego in 1981, a Masters of Arts from the University of
California Los Angeles in 1978 and a Bachelor of Arts from the University of
California Santa Barbara in 1976. Mr. Pundeff's duties as a Director do not
include the providing of professional legal services; such services will
continue to be performed by the Company's independent legal counsel.
Dr. Coleman has been a Director of the Company since April 1996.
He has been a Professor of Polymer Science at Pennsylvania State University
since 1982. From 1983 to 1991, Dr. Coleman was the head of the Department of
Materials Science and Engineering at Pennsylvania State University. Dr. Coleman
received a Ph.D. and a Master of Science degree in Macromolecular Science from
Case Western Reserve University, Cleveland, Ohio, in 1973 and 1971,
respectively. He also holds a B.Sc. degree in Polymer Science from Borough
Polytechnic, London.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1996, the Board of Directors held 3
meetings. The Board of Directors has established a Compensation Committee, which
is responsible for reviewing the compensation and benefits of the Company's
executive officers, making recommendations to the Board of Directors concerning
the compensation and benefits of the Company's executive officers and
administering the Company's 1995 Stock Option Plan. During the fiscal year ended
December 31, 1996, the Compensation Committee held 3 meetings. The Company does
not currently have an audit or nominating committee.
During the fiscal year ended December 31, 1996, each Board member attended 75%
or more of the aggregate of the meetings of the Board and of the committees on
which he served held during the period for which he was a director or committee
member, respectively.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act ("Section 16(a)") requires the
Company's Directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
3
<PAGE> 6
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P. as the
Company's independent auditors for the fiscal year ending December 31, 1997, and
has further directed that management submit the selection of independent
auditors for ratification by the shareholders at the Annual Meeting. Coopers &
Lybrand L.L.P. has audited the Company's financial statements since its
inception in 1991. Representatives of Coopers & Lybrand L.L.P. are expected to
be present at the Annual Meeting, will have an opportunity to make a statement
if they so desire and will be available to respond to appropriate questions.
Shareholder ratification of the selection of Coopers & Lybrand L.L.P. as
the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Coopers & Lybrand
L.L.P. to the shareholders for ratification as a matter of good corporate
practice. If the shareholders fail to ratify the selection, the Board will
reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if they determine that
such a change would be in the best interests of the Company and its
shareholders.
The affirmative vote of the holders of a majority of the shares
represented and voting at the meeting will be required to ratify the selection
of Coopers & Lybrand L.L.P.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
ADDITIONAL INFORMATION
MANAGEMENT
Set forth below is information regarding executive officers and key
employees of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Executive Officer
Robert J. Petcavich, Ph.D. 42 Chairman of the Board, Chief Executive
Officer, President and Acting Chief
Financial Officer
Key Employee
Xiaoming Yang, Ph.D. 36 Chief Scientist
</TABLE>
Biographical information about Dr. Petcavich is set forth under Proposal
1 above.
Xiaoming Yang has been Chief Scientist for the Company since January
1995. Prior to joining the Company, Dr. Yang acted as a consultant in the
polymer industry from October until December 1994. Dr. Yang was a visiting
scientist at Pennsylvania State University from May 1990 to December 1992. Dr.
Yang served as an engineer at Chengdu National Biochemical Products Manufactory
from January 1989 to April 1990. Dr. Yang has a Ph.D. in Materials Science and
Engineering from Pennsylvania State University, and a Master of Science degree
in Polymer Engineering and a Bachelor of Science degree in Chemistry from
Chengdu University of Science and Technology, China.
4
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of
the Company's Common Stock as of March 31,1997 by: (i) each nominee for
Director; (ii) the Named Executive Officer; (iii) all executive officers and
Directors of the Company as a group; and (iv) all those known by the Company to
be beneficial owners of more than five percent of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
-----------------------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
- ---------------- --------- ----------
<S> <C> <C>
Robert J. Petcavich, Ph.D.(2) 1,031,281 19.0%
9985 Businesspark Avenue, Suite A
San Diego, CA 92131
Rebecca A. Petcavich(3) 864,599 16.0%
9985 Businesspark Avenue, Suite A
San Diego, CA 92131
Brian To(4) 527,111 9.8%
Tarrenz, Inc.
201 Harrison St., #607
San Francisco, CA 94105
Richard S. Wright(5) 448,721 8.5%
865 Laurel Street, 2nd Floor
San Carlos, CA 94070
Michael V. Pundeff 6,349 *
2400 Union Bank Building
530 B Street
San Diego, CA 92101
Michael M. Coleman, Ph.D. 2,000 *
Department of Materials Science
Pennsylvania State University
University Park, PA 16802
All executive officers and Directors as a 1,566,741 28.0%
group (6) (4 persons)
</TABLE>
- ----------------
* Less than one percent.
<TABLE>
<S> <C>
(1) This table is based upon information supplied by officers, directors
and principal shareholders and Schedules 13D and 13G filed with the
Securities and Exchange Commission (the "SEC"). Unless otherwise
indicated in the footnotes to this table and subject to community
property laws where applicable, the Company believes that each of the
shareholders named in this table has sole voting and investment power
with respect to the shares indicated as beneficially owned. Applicable
percentages are based on 5,271,270 shares outstanding on March 31,
1997, adjusted as required by rules promulgated by the SEC.
(2) Includes 160,682 shares subject to options exercisable within 60 days
of March 31, 1997.
(3) Includes 146,000 shares subject to options exercisable within 60
days of March 31, 1997.
(4) Includes 66,137 shares subject to options exercisable within 60 days of
March 31, 1997. Also included are 66,120 shares issuable upon exercise
of options exercisable by Tarrenz, Inc. within 60 days of March 31,
</TABLE>
5
<PAGE> 8
<TABLE>
<S> <C>
1997, and 72,124 shares held in the name of Tarrenz, Inc. Mr. To is the
Managing Director and a principal shareholder of Tarrenz, Inc., and
disclaims beneficial ownership of such shares except to the extent of
his beneficial interest therein.
(5) Includes 30,955 shares issuable upon exercise of options exercisable
within 60 days of March 31, 1997. Also included are 1,223 shares held by
Mr. Wright's wife as separate property. Mr. Wright disclaims any
beneficial ownership of such shares.
(6) Includes 292,939 shares subject to options exercisable within 60 days
of March 31, 1997.
</TABLE>
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
In the fiscal year ended December 31, 1996, each Director received a
monthly Director's fee of $1,000 for attendance at regularly scheduled Board
meetings. This resulted in an aggregate compensation amount of $46,000 being
paid by the Company to its Directors. In fiscal year 1997, each Director will
receive a monthly Director's fee of $1,000 for attendance at regularly scheduled
Board meetings. Directors are also reimbursed for expenses incurred in
connection with attendance at Board meetings.
Directors are eligible for grants of options under the Company's 1995
Stock Option Plan. See "Stock Option Grants and Exercises" below for a
description of the Option Plan. During 1996, including options granted to the
Chief Executive Officer of the Company, options to purchase an aggregate of
191,620 shares of the Company's Common Stock were granted to the Company's
Directors or to entities affiliated with the Company's Directors.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth, for the fiscal years ended December 31,
1996, 1995, and 1994 certain compensation awarded or paid to, or earned by the
Company's Chief Executive Officer. No other executive officer's total annual
salary and bonus for services to the Company exceeded $100,000 in the fiscal
year ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- -----------------
OTHER ANNUAL SHARES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
- ----------------------------- ---- ------ ------ ---------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Petcavich 1996 $186,999 $15,584 $73,157 121,000(2) $79,995(3)
Chairman of the Board, 1995 $114,958 $0 $52,613 0 $201,084(4)
President and Chief 1994 $ 96,000 $0 $0 39,682(5) $0
Executive Officer
</TABLE>
- ------------------
<TABLE>
<S> <C>
(1) Includes (i) $12,000 paid as Directors fees during each of 1995 and
1996, (ii) $4,529 and $11,157 paid as reimbursement for automobile
expenses during 1995 and 1996, respectively, and (iii) $35,000 and
$50,000 paid as consulting fee during 1995 and 1996, respectively.
(2) Represents an option granted on January 31, 1996. This option was
fully vested at the time of grant and has an exercise price of $8.125
per share.
(3) Includes (i) $50,000 in the Company under a term life insurance policy
insuring Dr. Petcavich and (iii) $28,769 in back vacation pay paid
during 1996.
(4) Includes (i) $200,000 accrued pursuant to an agreement between the
Company and Dr. Petcavich whereby Dr. Petcavich assigned all of his
rights in all technology and trademarks related to the Company's
business (See "Certain Relationships and Related Transactions") and
(ii) $1,084 in insurance premiums paid by the Company under a term
life insurance policy insuring Dr. Petcavich.
(5) Represents an option granted on September 19, 1994. This option was
fully vested at the time of grant and has an exercise price of $3.78
per share.
</TABLE>
6
<PAGE> 9
STOCK OPTION GRANTS AND EXERCISES
The Company's executive officers are eligible for grants of options
under the Company's 1995 Stock Option Plan (the "Option Plan"). As of March 31,
1996, options to purchase a total of 442,620 shares were outstanding under the
Option Plan and options to purchase 57,380 shares remained available for grant
thereunder.
The purposes of the Option Plan are to attract and retain qualified
personnel, to provide additional incentives to employees, officers, directors
and consultants of the Company and to promote the success of the Company's
business. Pursuant to the Option Plan, the Company may grant or issue incentive
stock options and nonstatutory stock options to eligible participants (provided
that incentive stock options may only be granted to employees of the Company).
Option grants under the Option Plan are discretionary. Options granted under the
Option Plan are subject to vesting as determined by the Board, provided that the
option vests as to at least twenty percent (20%) of the shares subject to the
option per year. The maximum term of a stock option under the Option Plan is ten
years, but if the optionee at the time of grant has voting power over more than
10% of the Company's outstanding capital stock, the maximum term is five years.
If an optionee terminates his or her service to the Company, such optionee may
exercise only those option shares vested as of the date of termination, and must
effect such exercise within the period of time after termination set forth in
the optionee's option. The exercise price of incentive stock options granted
under the Option Plan must be at least equal to the fair market value of the
Common Stock of the Company on the date of grant. The exercise price of
nonstatutory stock options granted under the Option Plan may not be less than
85% of the fair market value of the Common Stock of the Company on the date of
the grant. The exercise price of options granted to an optionee who owns stock
possessing more than 10% of the voting power of the Company's outstanding
capital stock must equal at least 110% of the fair market value of the Common
Stock on the date of grant. Payment of the exercise price may be made in cash,
by delivery of other shares of the Company's Common Stock or by any other form
of legal consideration that may be acceptable to the Board.
The following table sets forth certain information regarding options
granted by the Company during fiscal year ended December 31, 1996 to the
Company's Chief Executive Officer:
OPTIONS GRANTED IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR ($/SH) DATE
- --------------------------- --------------------- -------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Robert J. Petcavich 121,000 38% $8.125 1/30/01
</TABLE>
The following table sets forth information with respect to the number of
securities underlying unexercised options held by the Chief Executive Officer as
of December 31, 1996 and the value of unexercised in-the-money options (i.e.,
options for which the current fair market value of the Common Stock underlying
such options exceeds the exercise price):
AGGREGATED OPTION EXERCISES LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED OPTIONS AT FISCAL FISCAL YEAR
ON VALUE YEAR END END($)(1)
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ---------- -------- ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Petcavich -0- -0- 160,682 --- --- ---
</TABLE>
- ----------------------------
(1) Calculated based on the estimated fair market value of the Company's
Common Stock as of December 31, 1996, less the exercise price payable
upon the exercise of such options. Such estimated fair market value as
of December 31, 1996 was $4.00, the last price posted at the close of
trading on December 31, 1996. Because the value of unexercised
in-the-money options at December 31, 1996 was less than zero in all
cases, no amount is shown.
7
<PAGE> 10
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
In January 1996, the Company entered into a three year employment
agreement with Dr. Petcavich. The agreement provides, among other things, for
the payment to Dr. Petcavich of an annual salary of $189,000 and the
reimbursement of certain business expenses. During the term of the agreement, if
Dr. Petcavich's employment is terminated (i) by the Company without cause or as
a result of a Change in Control (as defined in the agreement), or (ii) by Dr.
Petcavich within three (3) months following a Constructive Termination (also as
defined in the agreement), Dr. Petcavich will be entitled to receive a severance
payment equal to twice his then effective annual salary. If, during the term of
the agreement, Dr. Petcavich's employment is terminated as a result of death or
disability, Dr. Petcavich's estate or personal representative will be entitled
to receive an amount equal to Dr. Petcavich's then effective annual salary.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1995, the Company and Dr. Petcavich entered into an agreement
whereby Dr. Petcavich assigned all of his rights in all technology and
trademarks related to the Company's business in exchange for $200,000.
During the fiscal year ended December 31, 1995, the Company paid Richard
S. Wright $35,000 for consulting services rendered. During the fiscal year ended
December 31, 1995, the Company also paid $23,710 to an accounting firm of which
Mr. Wright is a partner. At the time of such transactions, Mr. Wright was a
Director and executive officer of the Company and a beneficial owner of more
than 5% of the Company's Common Stock.
In January 1996, the Company entered into a three year employment
agreement with Dr. Petcavich. This agreement provides for, among other things,
the payment to Dr. Petcavich of an annual salary of $189,000 and the
reimbursement of certain business expenses. The agreement also provides for
severance payments if Dr. Petcavich's services are terminated without cause
during the term of the agreement. See "Employment Agreements and Change in
Control Arrangements."
In addition to the amounts paid pursuant to his Employment Agreement,
during the fiscal years ended December 31, 1995 and 1996, the Company paid Dr.
Petcavich an aggregate of $35,000 and $50,000, respectively, for consulting
services rendered to the Company.
During the fiscal year ended December 31, 1995, the Company paid
Tarrenz, Inc. ("Tarrenz") an aggregate of $582,749 for consulting services
rendered, and reimbursed Tarrenz for an aggregate of $125,600 in expenses
incurred in connection with the provision of such services. Mr. Brian To is the
Managing Director and a principal shareholder of Tarrenz. In October 1995, the
Company purchased an automobile from Mr. To for $11,000. At the time of such
transactions, Mr. To was a Director of the Company and a beneficial owner of
more than 5% of the Company's Common Stock.
In January 1996, the Company entered into a three-year consulting
agreement with Tarrenz (the "Tarrenz Agreement"). The Tarrenz Agreement provided
for, among other things, payment to Tarrenz of annual consultant compensation in
the amount of $189,000 and the reimbursement of certain business expenses.
During the fiscal year ended December 31, 1996, the Company paid Tarrenz an
aggregate of $241,819 for services rendered pursuant to the Tarrenz Agreement,
and reimbursed Tarrenz for an aggregate of $120,800 in expenses incurred by
Tarrenz in connection with the provision of such services. On January 31, 1996,
the Company granted Tarrenz a nonstatutory stock option to purchase 66,120
shares of the Common Stock of the Company for an exercise price of $8.125 per
share. Such option was fully vested upon the date of grant and expires on
January 30, 2004. At the time of such transactions, Mr. To, the Managing
Director and a principle shareholder of Tarrenz, was a Director of the Company
and a beneficial owner of more than 5% of the Company's Common Stock. As allowed
by its provisions, the Tarrenz Agreement was terminated by Tarrenz in April
1997.
8
<PAGE> 11
During the fiscal years ended December 31, 1995 and 1996, the Company
paid Othos Design Limited, Inc. ("Othos") an aggregate of $59,235 and $75,100,
respectively, for consulting services rendered and reimbursed Othos for an
aggregate of $11,435 and $18,913, respectively, in expenses incurred by Othos in
connection with the provision of such services. Mr. Alan To, the brother of
Brian To, is a principal shareholder of Othos. On October 23, 1995, the Company
granted Alan To a nonstatutory stock option to purchase 25,000 shares of the
Common Stock of the Company for an exercise price of $3.875. Such option was
fully vested upon the date of grant and expires on October 22, 2005.
During the fiscal years ended December 31, 1995 and 1996, each Director
of the Company was paid a monthly fee of $1,000. This resulted in an aggregate
compensation amount of $36,000 and $46,000, respectively, being paid by the
Company to its Directors during the fiscal years ended December 31, 1995 and
1996.
On January 31, 1996, the Company granted nonstatutory stock options to
purchase 4,500, 121,000 and 121,000 shares of the Company's Common Stock to
Richard S. Wright, Dr. Petcavich and Rebecca A. Petcavich, respectively. At the
time of such grants, Mr. Wright was a Director and executive officer of the
Company and a beneficial owner of more than 5% of the Company's Common Stock and
Ms. Petcavich was a beneficial owner of more than 5% of the Company's Common
Stock.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
REBECCA A. PETCAVICH
Secretary
May 1, 1997
9
<PAGE> 12
PROXY PLANET POLYMER TECHNOLOGIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1997
The undersigned shareholder of Planet Polymer Technologies, Inc., a
California corporation, hereby acknowledges the receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement with respect to the Annual Meeting
of Shareholders of Planet Polymer Technologies, Inc. to be held at the San Diego
Marriot Hotel & Marina, located at 333 West Harbor Drive, San Diego, California
92101, on Thursday, May 22, 1997, at 10:00 a.m., local time, and hereby appoints
ROBERT J. PETCAVICH and MICHAEL V. PUNDEFF, and each of them, as attorneys and
proxies of the undersigned, each with full power of substitution, to vote all of
the shares of stock of PLANET POLYMER TECHNOLOGIES, INC. which the undersigned
may be entitled to vote at such meeting, and at any and all postponements,
continuations and adjournments thereof, with all powers that the undersigned
would possess if personally present, upon and in respect of the following
matters and in accordance with the following instructions, with discretionary
authority as to any and all other matters that may properly come before the
meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2, AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
PROPOSAL 1: To elect directors to hold office until the next Annual Meeting of
Shareholders and until their successors are elected.
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees listed
(except as marked to the contrary below). below.
</TABLE>
NOMINEES: Robert J. Petcavich, Ph.D., Michael V. Pundeff, Michael M. Coleman,
Ph.D.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE SUCH NOMINEE(S)' NAME(S)
BELOW:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Continued and to be signed on other side)
<PAGE> 13
(continued from other side)
PROPOSAL 2: To ratify the selection of Coopers & Lybrand L.L.P. as independent
auditors of the Company for its fiscal year ending December 31,
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
DATED
--------------------------------------------
--------------------------------------------
Signature(s)
Please sign exactly as your name appears
hereon. If the stock is registered in the
names of two or more persons, each should
sign. Executors, administrators, trustees,
guardians and attorneys-in-fact should add
their titles. If signer is a corporation,
please give full corporate name and have a
duly authorized officer sign, stating title.
If signer is a partnership, please sign in
partnership name by authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
