<PAGE> 1
SCHEDULE 14a
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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
SEAMED CORPORATION
(Name of Registrant as specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
(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
SEAMED CORPORATION
14500 NORTHEAST 87TH STREET
REDMOND, WASHINGTON 98052-3431
TELEPHONE: (425) 867-1818
September 30, 1998
Dear SeaMED Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders
of SeaMED Corporation, which is to be held on Thursday, November 5, 1998, at
10:00 a.m., at the Company's facilities located at 21621 30th Ave. S.E.,
Bothell, Washington 98021.
At the meeting, we will report to you on current business conditions and
recent developments at SeaMED. Members of the Board of Directors and our
executive officers will be present to discuss the affairs of SeaMED with you.
The Company has enclosed with this letter a notice of annual meeting of
shareholders, a proxy statement, and a copy of its 1998 Annual Report for the
fiscal year ended June 30, 1998.
It is important that your shares be represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please complete,
sign and date the enclosed proxy card and return it promptly in the enclosed
envelope to ensure your shares will be represented. If you do attend the Annual
Meeting, you may, of course, withdraw your proxy should you wish to vote in
person.
On behalf of the Board of Directors and management of SeaMED, I would like
to thank you for choosing to invest in our Company. We are very excited about
the future opportunities of the Company and are looking forward to the Annual
Meeting after fiscal year 1998's record growth.
Sincerely,
/s/ W. ROBERT BERG
-----------------------------------
W. Robert Berg
President, Chief Executive Officer and
Director
<PAGE> 3
SEAMED CORPORATION
14500 NORTHEAST 87TH STREET
REDMOND, WASHINGTON 98052-3431
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 5, 1998
------------------------
The Annual Meeting of Shareholders of SeaMED Corporation, a Washington
corporation (the "Company"), is to be held on Thursday, November 5, 1998, at
10:00 a.m. (the "Annual Meeting"), at the Company's facilities located at 21621
30th Ave. S.E., Bothell, Washington 98021, for the purpose of:
(1) Electing two (2) directors to serve until the 2001 annual meeting
of Shareholders and until their successors are duly elected and qualified;
(2) Approving the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending June 30, 1999; and
(3) Transacting such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on September 25,
1998, as the record date for the determination of Shareholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ MARK R. BEATTY
----------------------------------
Mark R. Beatty
Secretary
September 30, 1998
The Company's 1998 Annual Report for the fiscal year ended June 30, 1998 is
enclosed. The 1998 Annual Report contains financial and other information about
the Company, but is not incorporated into the Proxy Statement and is not deemed
to be a part of the proxy soliciting material.
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN,
DATE AND MAIL THE ENCLOSED PROXY CARD. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND VOTE IN
PERSON IF THEY SO DESIRE.
<PAGE> 4
SEAMED CORPORATION
14500 NORTHEAST 87TH STREET
REDMOND, WASHINGTON 98052-3431
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 5, 1998
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of SeaMED Corporation, a Washington corporation (the
"Company"), of proxies to be used at the annual meeting of shareholders of the
Company to be held on November 5, 1998 (the "Annual Meeting"). This Proxy
Statement and the related proxy card are being mailed to holders of the
Company's common stock, no par value (the "Common Stock"), commencing on or
about October 8, 1998.
If the enclosed proxy card is executed and returned, the shares represented
by it will be voted and will be voted as directed on all matters properly coming
before the Annual Meeting for a vote. Returning your completed proxy will not
prevent you from voting in person at the Annual Meeting should you be present
and desire to do so. In addition, the proxy may be revoked at any time prior to
its exercise either by giving written notice to the Company or by submission of
a later-dated proxy.
Shareholders of record of the Company's Common Stock at the close of
business on September 25, 1998, are entitled to vote at the Annual Meeting. On
September 25, 1998, the Company had outstanding 5,468,978 shares of Common
Stock. A list of the Company's shareholders will be open to the examination of
any shareholders, for any purpose germane to the meeting, at the Company's
headquarters for a period of ten days prior to the meeting. Each share of Common
Stock entitles the holder thereof to one vote on all matters submitted to
shareholders. At the Annual Meeting, inspectors of election shall determine the
presence of a quorum and shall tabulate the results of the shareholders' voting.
The holders of a majority of the total number of outstanding shares of Common
Stock entitled to vote must be present in person or by proxy to constitute the
necessary quorum for any business to be transacted at the Annual Meeting. In
accordance with the Washington Business Corporation Act (the "Act"), properly
executed proxies marked "abstain" as well as proxies held in street name by
brokers that are not voted on all proposals to come before the Annual Meeting
("broker non-votes"), will be considered "present" for the purposes of
determining whether a quorum has been achieved at the Annual Meeting.
The nominees for director receiving the greatest number of votes cast at
the Annual Meeting in person or by proxy shall be elected. Consequently, any
shares of Common Stock present in person or by proxy at the Annual Meeting but
not voted for any reason have no impact in the election of directors.
Shareholders have no right to cumulative voting as to any matter, including the
election of directors.
The shares represented by all valid proxies received will be voted in the
manner specified on the proxies. Where specific choices are not indicated on a
valid proxy, the shares represented by such proxies received will be voted (i)
for the nominees for director named in this Proxy Statement; (ii) for approval
of the appointment of Ernst & Young LLP as independent certified public
accountants; and (iii) in accordance with the best judgment of the persons named
in the enclosed proxy, or their substitutes, for any other matters which
properly come before the Annual Meeting or any adjournment or postponement
thereof.
The Company's fiscal year consists of the 52/53-week period that ends on
the Thursday nearest to June 30. For convenience of presentation, all fiscal
periods in this proxy statement are shown as ending on a calendar month-end.
<PAGE> 5
PROPOSAL 1.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of a total of seven
directors. At the 1997 annual shareholders meeting, the shareholders of the
Company approved an amendment to the Company's articles of incorporation which
divided the seven directors into three separate classes for the purpose of
staggering future director elections. Pursuant to such amendment, two of the
directors were placed in the "first class," two in the "second class" and three
in the "third class." All seven directors were elected at the 1997 annual
shareholders meeting but, as a result of the amendment to the articles of
incorporation, only the two directors in the first class are up for election at
this year's Annual Meeting. Following their election, these two first class
directors will each serve a term of office which will expire at the third annual
meeting after their election (2001), at which time a total of two directors will
again be elected to serve three-year terms. The two directors who were placed in
the second class following the 1997 annual shareholders meeting will be up for
election at the 1999 annual shareholders meeting and, like the first class
directors, will serve until the third annual shareholders meeting after their
election, at which time two director positions will be filled for three-year
terms. Similarly, the three third class directors will be up for election at the
2000 annual shareholders meeting and will also serve until the third annual
shareholders meeting following their election, at which time three board seats
will be open for election to three-year terms. In this manner, all subsequent
director elections will be staggered so that the terms of no more than two or
three directors will expire at any single annual shareholders meeting.
The names, ages and positions with the Company of the current nominees for
director and of the directors who are not up for election at the Annual Meeting
are listed below.
<TABLE>
<CAPTION>
TERM
NAME EXPIRES AGE POSITION
---- ------- --- --------
<S> <C> <C> <C>
DIRECTOR NOMINEES:
Richard Wohns, M.D. ................. 2001(1) 47 Nominee for Director
Edgar F. Rampy....................... 2001(1) 59 Vice President, Treasurer, Chief Financial
Officer and Director
OTHER DIRECTORS:
William H. Gates, Sr. ............... 1999 72 Director
Richard O. Martin, Ph.D. ............ 1999 58 Director(2)
R. Scott Asen........................ 2000 54 Chairman of the Board(2)(3)
W. Robert Berg....................... 2000 55 President, Chief Executive Officer and
Director
Stephen J. Clearman.................. 2000 47 Director(2)
</TABLE>
- ---------------
(1) Expiration date following election at the Annual Meeting.
(2) Member of Stock Option and Compensation Committee.
(3) Member of Audit Committee.
NOMINEES FOR DIRECTOR (TERM EXPIRING IN 2001)
The Board of Directors has nominated and recommends for election as
director the two nominees set forth below.
Richard Wohns, M.D. is a board certified neurosurgeon who has maintained a
private practice in neurosurgery in Tacoma and Puyallup, Washington since 1983.
Dr. Wohns has served as a director and Vice President of Business Development of
UltraImage LLC since September 15, 1998 and as Vice President of Neurosurgical
Consultants of Washington, Inc., PS since 1997. Dr. Wohns is currently Chief
Consultant of Ambulatory MicroNeuroSurgery Consultants, LLC, which he founded in
1997 to develop an innovative outpatient spine surgery program. Dr. Wohns has
held the position of Associate Clinical Professor of Neurological Surgery at the
University of Washington since 1995 and has served as a director of the
Institute of High Altitude Medicine since 1986. Dr. Wohns was Medical Director
of the Neuro Unit of St. Joseph Hospital from 1990-1992 and of the Ultima Thule
Everest Expedition in 1984.
2
<PAGE> 6
Edgar F. Rampy has been Vice President, Treasurer and Chief Financial
Officer of the Company since 1990 and a director of the Company since 1997. In
1990, Mr. Rampy served as Chief Financial Officer of Quantum Medical Systems and
assisted in its sale to Siemens Corporation. From 1987 to 1989, Mr. Rampy was
Chief Operating Officer of Carver Corporation and, from 1979 to 1987, Chief
Financial Officer of Data I/O Corporation. He became a Certified Public
Accountant in 1967.
There are no family relationships between or among the nominees for
director of the Company.
If any nominee becomes unavailable for any reason or should a vacancy occur
before the election (which events are not anticipated), the persons named on the
enclosed proxy card may substitute another person as a nominee or may add or
reduce the number of nominees to such extent as they shall deem advisable.
OTHER DIRECTORS
William H. Gates, Sr. has been a director of the Company since 1996. From
1983 to 1995, Mr. Gates was the Company's Secretary. From 1964 until 1998, Mr.
Gates was a partner in the law firm Preston Gates & Ellis LLP and its
predecessors, counsel to the Company.
Richard O. Martin, Ph.D. has been a director of the Company since October
1995. Since 1991, Dr. Martin has been the Chief Executive Officer and a director
of Physio-Control International Corporation. Dr. Martin also is a director of
Maxxim Medical, Inc., Encore Orthopedic, Inc., and CardioDynamics, Inc.
R. Scott Asen has been a director of the Company since 1978 and its
Chairman of the Board since 1992. Since 1983, Mr. Asen has been President of
Asen & Co., Inc., an investment management firm. Mr. Asen has been
manager-member of Pioneer III-A LLC and Pioneer III-B LLC (and general partner
of their predecessor), venture capital investment funds which were significant
shareholders of the Company, since 1981 and 1984, respectively. Mr. Asen also is
a director of Davox Corporation and Barringer Laboratories, Inc.
W. Robert Berg has been President, Chief Executive Officer and a director
of the Company since 1988. Mr. Berg was the Company's Vice President, Operations
from 1985 to 1988. Mr. Berg has been involved in the management of
high-technology companies for the last 27 years. Mr. Berg also is a director of
the Washington State Biomedical and Biotechnology Association and the Washington
State Technology Alliance.
Stephen J. Clearman has been a director of the Company since 1984. Since
1984, Mr. Clearman has been a principal of Geocapital Partners, a venture
capital fund that he cofounded and which was a significant shareholder of the
Company, and has formed three other venture capital partnerships. Mr. Clearman
also is a director of MemberWorks Inc., Expert Software, Inc. and World Access,
Inc.
COMPENSATION OF DIRECTORS
The Company's Bylaws permit the Board of Directors to set compensation of
directors. During fiscal year 1998 the Board of Directors adopted a director
compensation policy which allows the Board of Directors to grant stock options
to non-employee directors upon their election and qualification to the Board of
Directors. Pursuant to such policy, the Board of Directors may grant an option
to purchase up to 22,500 shares of Common Stock of the Company to a non-employee
director upon each election to a three-year term on the Board of Directors,
which option shall vest at the rate of one-third upon each of the first, second
and third anniversaries of the grant date. At present, other than participation
in the foregoing stock option policy and reimbursement for expenses incurred in
attending meetings of the Board of Directors and committees of the Board of
Directors, directors do not receive any compensation. Directors who are
employees of the Company do not receive compensation for their service as
director.
COMMITTEES AND DIRECTORS' MEETINGS
The Board of Directors has two standing committees: the Audit Committee and
the Stock Option and Compensation Committee (the "Compensation Committee").
The Audit Committee is composed of two directors, neither of whom is a
current employee of the Company (one position on the Audit Committee will be
vacated upon the retirement of Richard E.
3
<PAGE> 7
Engebrecht from the Board of Directors), and is authorized to make
recommendations to the Board of Directors regarding the independent auditors to
be nominated for election by the shareholders and to review the independence of
such auditors, approve the scope of the annual audit activities of the
independent auditors, approve the audit fee payable to the independent auditors
and review the audit results. The Audit Committee met twice in fiscal year 1998.
The Compensation Committee is composed of three directors, none of whom is
a current employee of the Company, and is authorized to provide a general review
of the Company's compensation and benefit plans to ensure that they meet
corporate objectives. In addition, the Compensation Committee reviews and
approves the Chief Executive Officer's recommendation on (i) compensation of all
officers of the Company and (ii) adopting and changing major Company
compensation policies and practices. The Compensation Committee met once in
fiscal year 1998.
The Board of Directors held four meetings during the Company's preceding
fiscal year. All of the directors attended 75% or more of the aggregate of the
number of meetings of the Board of Directors during their terms and the number
of meetings held by committees of the Board of Directors on which they served.
The Company does not have a nominating committee. The entire Board of
Directors currently is responsible for filling vacancies on the Board as they
occur and recommending candidates for election as Directors at the annual
meetings of shareholders. The Board will consider individuals recommended for
nominations by shareholders of the Company.
EXECUTIVE OFFICERS
The names, ages and positions of the executive officers of the Company as
of August 31, 1998, are listed below.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
W. Robert Berg....................... 55 President, Chief Executive Officer and
Director
Donald Rich.......................... 47 Senior Vice President, Operations
Bengt Svensson....................... 54 Senior Vice President, Project Office
Gene Gerrard......................... 44 Vice President, Human Resources
S. Erik Hagstrom..................... 43 Vice President, Engineering
Thomas F. Mrowca..................... 49 Vice President, Sales and Marketing
Marcia A. Page....................... 39 Vice President, Quality Assurance and
Regulatory Affairs
Edgar F. Rampy....................... 59 Vice President, Treasurer, Chief Financial
Officer and Director
</TABLE>
Officers are elected annually and serve at the discretion of the Board of
Directors. The Company has not entered into employment agreements with any of
its executive officers. There are no family relationships between or among any
directors or executive officers of the Company. Brief biographies of the
Company's executive officers who are not directors or nominees for director are
set forth below:
Donald Rich has been Senior Vice President, Operations of the Company since
1997, and was Vice President, Operations of the Company from 1993 to 1997. From
1989 to 1993, Mr. Rich was employed by Interpoint Corporation, a
microelectronics manufacturer, serving as the Director of Quality Assurance from
1991 to 1993, and the Director of Operations from 1989 to 1991.
Bengt Svensson has been Senior Vice President, Project Office of the
Company since February, 1998. Mr. Svensson owned and operated BMS Electronics,
AB, a Swedish company, from October, 1997 through September, 1998. From 1985
until 1997 Mr. Svensson was employed by Siemens-Elema in Sweden, where he most
recently held the position of Vice President, Quality and Regulatory Affairs.
Prior to his tenure at Siemens-Elema, Mr. Svensson was employed by the Company,
holding the office of Vice President, Research and Development, from 1983 until
1985.
4
<PAGE> 8
Gene Gerrard was appointed Vice President, Human Resources of the Company
in August, 1998. From 1996 until August, 1998, Mr. Gerrard served as head of
human resources at Milgard Tempering Inc., and from 1991 though 1996 was Vice
President of Drake Beam Morin Incorporated, a career counseling and human
resources consulting firm.
S. Erik Hagstrom has been Vice President, Engineering of the Company since
1995. Mr. Hagstrom joined the Company in 1986 as a design engineer, was named a
Project Director in 1989 and a Senior Project Director in 1992. Mr. Hagstrom
also served as Executive Project Director of the Company from 1995 until
February, 1998. From 1984 to 1986, Mr. Hagstrom was an engineer at Biotronik
Cardiac Pacing Systems.
Thomas F. Mrowca has been Vice President, Sales and Marketing of the
Company since 1990. From 1976 to 1990, Mr. Mrowca was employed by Physio-Control
Corporation, where he held sales and marketing positions and was responsible for
research, new product development, new market development, product planning,
forecasting and pricing.
Marcia A. Page has been Vice President, Quality Assurance and Regulatory
Affairs of the Company since 1993. From 1989 to 1993, Ms. Page was the Company's
Manager of Quality Assurance. Ms. Page is the Past-President and Chairwoman and
former co-chair of the Organization of Regulatory and Clinical Associates and is
a member of the American Society of Quality Control and the Regulatory Affairs
Professionals Society.
RELATIONSHIPS AND RELATED CERTAIN TRANSACTIONS
On October 11, 1995, W. Robert Berg, the Company's Chief Executive Officer
and President, received a $75,000 loan from the Company, the proceeds of which
he used to purchase 30,000 shares of Common Stock. The loan is evidenced by an
unsecured promissory note that bears interest at the floating minimum statutory
rate of interest set by the Internal Revenue Service from time to time. Mr. Berg
may prepay principal and interest at any time without penalty; unpaid principal
and interest are due on October 11, 2000. As of June 30, 1998, aggregate
principal and accrued interest on this loan were approximately $85,000.
William H. Gates, Sr., a director of the Company, was a partner in the law
firm Preston Gates & Ellis LLP, the Company's counsel, during fiscal year 1998.
Physio-Control International Corporation, a company of which Richard O.
Martin, a director of the Company, serves as Chief Executive Officer and a
director, has retained the Company to provide engineering and manufacturing
services.
UltraImage LLC, a company for which Richard Wohns, M.D., a nominee for
director of the Company, serves as Vice President for Business Development and a
director, has signed a letter of intent and is negotiating an agreement to
retain the Company to provide engineering and manufacturing services.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's officers, directors and persons who
beneficially own more than ten percent of the Company's Common Stock to file
reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission ("SEC"). Officers, directors and greater than
ten percent beneficial owners also are required by rules promulgated by the SEC
to furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on copies of such reports furnished to the
Company, all of its directors and executive officers made any required filings
on a timely basis.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of August 31, 1998, as to the security ownership of those persons
owning of record or known to the Company to be the beneficial owner of more than
five percent of the voting securities of the Company and the ownership of equity
securities of the Company by (i) each of the directors of the Company, (ii) the
director nominees, (iii) each of the executive
5
<PAGE> 9
officers named in the Summary Compensation Table, and (iv) all directors and
executive officers as a group. All information with respect to beneficial
ownership has been furnished by the respective director, director nominee,
executive officer or five percent beneficial owner, as the case may be. Unless
otherwise indicated, the persons named below have sole voting and investment
power with respect to the number of shares set forth opposite their names.
Beneficial ownership of the Common Stock has been determined for this purpose in
accordance with the applicable rules and regulations promulgated under the
Exchange Act.
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------
DIRECTORS, OFFICERS AND 5% SHAREHOLDERS NUMBER OF SHARES PERCENT OF CLASS
--------------------------------------- ---------------- ----------------
<S> <C> <C>
Gilder, Gagnon, Howe & Co. ........................... 1,170,510(1) 21.4%
R. Scott Asen......................................... 670,348(2) 12.3%
James G. Niven........................................ 341,224(3) 6.2%
W. Robert Berg........................................ 194,088(4) 3.6%
Stephen J. Clearman................................... 35,737 *
Richard E. Engebrecht................................. 15,167 *
William H. Gates, Sr. ................................ 36,500(5) *
Richard O. Martin, Ph.D. ............................. 13,750(6) *
Richard Wohns, M.D. .................................. 900 *
Edgar F. Rampy........................................ 42,087(7) *
Thomas F. Mrowca...................................... 46,335(8) *
S. Erik Hagstrom...................................... 30,766(9) *
Donald Rich........................................... 20,468(10) *
All directors and executive officers as a group (13
persons)............................................ 1,459,442(11) 26.3%
</TABLE>
- ---------------
* Less than one percent.
(1) The address of Gilder, Gagnon, Howe & Co. ("Gilder") is 1775 Broadway, 26th
Floor, New York, NY 10019. Includes 1,015,414 shares of Common Stock held
in customer accounts over which partners and/or employees of Gilder have
discretionary authority to dispose of or direct the disposition of the
shares, 136,536 shares of Common Stock held in accounts owned by the
partners of Gilder and their families, and 18,560 shares of Common Stock
held in the account of the profit-sharing plan of Gilder.
(2) The address of Mr. Asen is c/o Asen & Co., Inc., 224 East 49th Street, New
York, NY 10017.
(3) The address of Mr. Niven is c/o Sotheby's, 1334 York Avenue, New York, NY
10021.
(4) Includes 30,000 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(5) Includes 8,500 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(6) Includes 12,750 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(7) Includes 4,017 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(8) Includes 7,486 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(9) Includes 4,726 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(10) Includes 12,122 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
(11) Includes 89,904 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1998.
6
<PAGE> 10
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth certain information regarding the
compensation earned by the Company's Chief Executive Officer and the Company's
four other most highly compensated executive officers (the "Named Executive
Officers") for the fiscal year ended June 30, 1998.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
-------------------- OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#)(1) ($)(2)
--------------------------- ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
W. Robert Berg............................. 1998 $265,000 $ 55,868 -- 3,200
President and Chief Executive Officer 1997 219,135 187,492 25,550 3,562
1996 175,000 117,544 -- 2,731
Edgar F. Rampy............................. 1998 153,000 22,246 3,509 3,200
Vice President, Treasurer and 1997 134,538 81,596 4,887 2,337
Chief Financial Officer 1996 108,000 36,271 8,867 1,692
Thomas F. Mrowca........................... 1998 153,033 22,250 3,509 3,200
Vice President, Sales and Marketing 1997 134,538 56,596 4,971 2,243
1996 105,000 35,263 9,714 1,676
Donald Rich................................ 1998 160,000 28,304 2,661 3,200
Senior Vice President, Operations 1997 126,423 42,910 17,310 1,989
1996 99,000 24,936 7,095 1,520
S. Erik Hagstrom........................... 1998 132,730 15,439 2,339 3,174
Vice President, Engineering 1997 112,115 37,731 3,411 1,857
1996 92,000 23,173 14,104 1,345
</TABLE>
- ---------------
(1) Represents options granted pursuant to the Company's stock option plans.
(2) Represents matching contributions under the Company's 401(k) plan.
Option Grants
The following table sets forth certain information regarding stock options
granted to the Named Executive Officers during the fiscal year ended June 30,
1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
OPTION GRANTS DURING FISCAL YEAR 1998 VALUE AT ASSUMED
-------------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME GRANTED(#)(1) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
---- ------------- ------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
W. Robert Berg................ 0 0 N/A N/A $ 0 $ 0
Edgar F. Rampy................ 3,509 3.3 16.125 10/30/07 35,585 90,178
Thomas F. Mrowca.............. 3,509 3.3 16.125 10/30/07 35,585 90,178
Donald Rich................... 2,661 2.5 16.125 10/30/07 26,985 68,385
S. Erik Hagstrom.............. 2,339 2.2 16.125 10/30/07 23,720 60,110
</TABLE>
- ---------------
(1) Represents options granted pursuant to the Company's stock option plans. All
options were granted at fair market value at the date of grant. All options
vest 50% on the second anniversary of the date of grant, an additional 25%
on the third anniversary of the date of grant and an additional 25% on the
fourth anniversary of the date of grant.
(2) Represents amounts that may be realized upon exercise of the options
immediately prior to expiration of their terms assuming appreciation of 5%
and 10% over the option term. The 5% and 10% numbers are
7
<PAGE> 11
calculated based on rules required by the SEC and do not reflect the
Company's estimate of future stock price growth. The actual value realized
may be greater or less than the potential realizable value set forth.
Option Values
The following table sets forth certain information regarding the exercise
of stock options during fiscal year 1998 and unexercised stock options held as
of June 30, 1998 by the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. Robert Berg.............. 37,002 613,863 30,000 65,550 333,750 467,356
Edgar F. Rampy.............. 14,834 232,826 3,600 12,829 44,550 65,603
Thomas F. Mrowca............ 9,000 146,025 6,858 13,336 95,513 71,969
Donald Rich................. 8,000 125,500 11,548 23,518 177,777 65,234
S. Erik Hagstrom............ 5,066 71,442 2,400 12,802 29,700 104,807
</TABLE>
- ---------------
(1) Based on a fair market value of $17.375 per share as of June 30, 1998, as
reported in the Wall Street Journal.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such Acts.
The following report has been submitted by the Compensation Committee of
the Board of Directors:
The Company's executive compensation is determined by the Compensation
Committee, which is comprised of three non-employee members of the Board of
Directors. Messrs. Asen, Clearman and Martin are members of the Compensation
Committee. The philosophy of the Company's executive compensation program is
that compensation of executive officers should be directly and materially linked
to both the operating performance of the Company and to the interests of
shareholders. In implementing this philosophy, the Company's policies integrate
annual base compensation with incentive awards based upon the Company's overall
performance. Annual cash compensation, together with incentive compensation and
grants of stock options, is designed to attract and retain qualified executives
and to ensure that such executives have a continuing stake in the long term
success of the Company.
With respect to compensation for Mr. Berg, the Company's CEO, the Board of
Directors approved in early 1995 an arrangement intended to provide Mr. Berg
with the opportunity to own approximately five percent (5%) of the Company's
outstanding shares. The arrangement included granting a series of options
totaling 70,000 shares of Common Stock that vest over seven years in which the
exercise price ranged from then fair market value to four times then fair market
value. In addition, the Compensation Committee offered to allow Mr. Berg to
purchase 30,000 shares at then fair market value using the proceeds of a loan
from the Company that matures in 2000. Mr. Berg accepted the proposal. The
Compensation Committee believes that these arrangements provide assurance that
Mr. Berg's personal financial interests and financial commitments are aligned
with the interests of all shareholders.
The Compensation Committee has increased Mr. Berg's annual cash
compensation in recent years in recognition of the Company's continued
improvements in overall performance, including substantial increases in
revenues, profitability, customer contracts, number of employees and related
measurements of growth. In addition, the Compensation Committee has authorized
cash bonuses for Mr. Berg in recognition of Mr. Berg's achievements and
leadership of the Company.
8
<PAGE> 12
The Compensation Committee evaluates the compensation of Mr. Berg and other
executive officers based on total compensation, including base salary, incentive
bonus and stock option grants. In fiscal year 1998 the compensation committee
engaged a specialist in executive compensation from Ernst & Young LLP, Seattle,
Washington, to complete an analysis of the Company's officer group compensation
plans. The specialist's report compared the executive compensation policies of a
peer group consisting of 15 - 20 contract and medical device manufacturing
companies. As a result of this report, the Compensation Committee has determined
to maintain its prior method for calculating cash and stock option incentives
and to continue to place increasing emphasis on incentive compensation and to
base salaries near the median for comparable companies.
Members of the Compensation Committee
R. Scott Asen, Chairman
Stephen J. Clearman
Richard O. Martin
PERFORMANCE GRAPH
COMPARISON OF 19 MONTH CUMULATIVE TOTAL RETURN*
AMONG SEAMED CORPORATION, THE RUSSELL 2000 INDEX
AND A PEER GROUP(1)
<TABLE>
<CAPTION>
SEAMED
CORPORATION PEER GROUP RUSSELL 2000
<S> <C> <C> <C>
11/19/96 100.00 100.00 100.00
6/97 184.09 137.2 117.77
6/98 161.36 147.32 139.87
</TABLE>
- ---------------
* $100 invested on 11/19/96 in stock or on 10/31/96 in index -- including
reinvestment of dividends. Fiscal year ending June 30.
(1) The companies selected to form the Company's industry peer group index are
ACT Manufacturing, Benchmark Electronics, CMC Industries, DII Group, Inc.,
EFTC Corporation, Flextronics International, IEC Electronics, Jabil Circuit,
Plexus Corp., SCI Systems, Sigmatron International, Selectron Corporation,
XeTel Corporation, Altron Incorporated, Elexsys International and Sanmina
Corporation. Total returns are based on market capitalization.
9
<PAGE> 13
PROPOSAL 2.
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends a vote for approval of the appointment of
Ernst & Young LLP as the independent auditors of the Company to audit the books
and accounts for the Company for fiscal year 1999. During fiscal year 1998,
Ernst & Young LLP examined the financial statements of the Company. It is
expected that representatives of Ernst & Young LLP will attend the Annual
Meeting, with the opportunity to make a statement if they so desire, and will be
available to answer appropriate questions.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters
that are to be presented at the Annual Meeting, and it has not been advised that
any other person will present any other matters for consideration of the
meeting. Nevertheless, if other matters should properly come before the Annual
Meeting, the shareholders present, or the persons, if any, authorized by a valid
proxy to vote on their behalf, shall vote on such matters in accordance with
their judgment.
VOTING PROCEDURES
Votes at the Annual Meeting of Shareholders are counted by Inspectors of
Election appointed by the Board of Directors. If a quorum is present, the
nominees for director receiving the greatest number of votes cast at the Annual
Meeting in person or by proxy shall be elected. If a shareholder returns his
proxy card and withholds authority to vote for any or all of the nominees, the
votes represented by the proxy card will be deemed to be present at the meeting
for purposes of determining the presence of a quorum but will not be counted as
affirmative votes in favor of such nominee or nominees. Shares in the name of
brokers that are not voted on any proposals to come before the Annual Meeting
are treated as not present.
SUBMISSION OF SHAREHOLDERS' PROPOSALS AND ADDITIONAL INFORMATION
Proposals of shareholders intended to be eligible for inclusion in the
Company's proxy statement and proxy card relating to the 1999 annual meeting of
shareholders of the Company must be received by the Company on or before the
close of business on June 5, 1999. Such proposals should be submitted by
certified mail, return receipt requested.
The Company's Bylaws provide that a shareholder wishing to present a
nomination for election of a director or to bring any other matter before an
annual meeting of shareholders must give written notice to the Company's
Secretary not less than 120 calendar days in advance of the one-year anniversary
of the release date of the Company's annual meeting proxy statement for the
previous year, unless the upcoming annual meeting date will be more than 30
calendar days different from the previous year's annual meeting date (in which
case the shareholder must notify the Company of the nomination or matter within
a reasonable time before release of the proxy statement). Any shareholder
interested in making such a nomination or proposal should request a copy of the
Bylaws provisions from the Chief Financial Officer of the Company.
AVAILABILITY OF REPORTS ON FORM 10-K
The Company will furnish without charge to each person whose proxy is being
solicited, upon written request of any such person, a copy of the Annual Report
on Form 10-K of the Company for the fiscal year ended June 30, 1998, as filed
with the SEC, including the financial statements and schedules thereto. Requests
for copies of such Annual Report on Form 10-K should be directed to the Chief
Financial Officer, SeaMED Corporation, 14500 Northeast 87th Street, Redmond,
Washington 98052.
10
<PAGE> 14
OTHER MATTERS
The Company will bear the costs of soliciting proxies from its
shareholders. In addition to the use of the mails, proxies will be solicited by
ChaseMellon Shareholder Services LLC (the "Proxy Agent") pursuant to an
agreement with the Company. The Proxy Agent will provide consultation pertaining
to the planning and organization of the solicitation, identification of and
coordination with important intermediaries in the solicitation process,
dissemination of all proxy materials, and solicitation and collection of proxies
using pre-established calling and reporting procedures. The anticipated cost of
the proxy solicitation service is $4,500 plus expenses. Depending on the
progress of the solicitation, the Company may request additional services from
the Proxy Agent based on a per service rate schedule. In addition, proxies may
be solicited by the directors, officers and employees of the Company by personal
interview, telephone or telegram. Such directors, officers and employees will
not be additionally compensated for such solicitation, but may be reimbursed for
out-of-pocket expenses incurred in connection therewith. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of Common
Stock held of record by such persons, and the Company will reimburse such
brokerage houses, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred in connection therewith.
The directors know of no other matters which are likely to be brought
before the Annual Meeting, but if any such matters properly come before the
meeting the persons named in the enclosed proxy, or their substitutes, will vote
the proxy in accordance with their best judgment.
By Order of the Board of Directors
/s/ MARK R. BEATTY
----------------------------------
Mark R. Beatty
Secretary
September 30, 1998
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. EVEN IF YOU EXPECT
TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN, DATE AND MAIL THE
ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
11
<PAGE> 15
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Scott Asen and W. Robert Berg, and each
of them, as proxies, each with full power of substitution, to represent and
vote for and on behalf of the undersigned the number of shares of common stock
of SeaMED Corporation (the "Company") that the undersigned would be entitled to
vote if personally present at the annual meeting of shareholders to be held on
November 5, 1998, and at any adjournment or postponement thereof. The
undersigned directs that this Proxy be voted as directed on the reverse side.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and at any adjournment or
postponement thereof. This Proxy, when properly executed, will be voted in the
manner directed herein by the undersigned. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" ALL NOMINEES IN ITEM 1 AND "FOR" ITEM 2.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 16
Please mark
your votes as X
indicated in
this example
FOR WITHHOLD
all nominees AUTHORITY
(except as indicated (to vote for all
to the contrary below) nominees listed below)
1. Election of Directors:
Richard Wohns, M.D.
Edgar F. Rampy
2. Approve the appointment of Ernst & Young LLP as independent certified public
accountants.
FOR AGAINST ABSTAIN
INSTRUCTIONS: To withhold authority to vote for one or more individual
nominees, print that nominee's name in the following space:
______________________________________________________________________
YOUR VOTE IS IMPORTANT, PLEASE SIGN AND
RETURN THIS PROXY CARD PROMPTLY.
Signature __________ Signature, if held jointly __________ Dated: ________, 1998
(Signature(s) must be exactly as name(s) appear on this proxy.) (If signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such, and, if signing for a corporation, please give your title. When shares
are in the names of more than one person, each should sign this Proxy.)
FOLD AND DETACH HERE
SeaMED CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 5, 1998
10:00 AM
AT
21621 - 30th Ave. SE
Bothell, WA 98021
Directions from Sea-Tac International Airport
o Take I-405 North to Exit #26 which reads "Bothell/Mill Creek"
o At the end of the exit, turn right
o Turn right at the first stoplight (Canyon Park Blvd. SE)
o Follow this road to the second stop sign where the road comes to a "T".
(This is 26th Ave. SE; however, there is no street sign at this corner.)
o Turn left at the "T" and follow the winding driveway up the hill. SeaMED
will be right in front of you.
