<PAGE>
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
/ / 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
NORTH AMERICAN SCIENTIFIC, 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)(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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(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:
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(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
7435 GREENBUSH AVENUE
NORTH HOLLYWOOD, CA 91605
March 6, 1998
Notice of Annual Stockholders Meeting:
You are hereby notified that the Annual Meeting of Stockholders of North
American Scientific, Inc. (the "Company") will be held at the Holiday Inn
located at 150 East Angeleno, Burbank, California at 10:00 a.m. local time,
on Friday, April 3, 1998, for the following purposes:
1. To elect 5 directors to hold office until the 1999 Annual Meeting.
2. To consider a proposal to amend the Company's Amended and Restated 1996
Stock Option Plan.
3. To consider a proposal to ratify the selection of Price Waterhouse LLP
as independent auditors of the Company for the fiscal year ending October 31,
1998.
4. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on February 16, 1998
as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting.
You are urged to attend the Meeting in person. Whether or not you expect to
be present in person at the Meeting, please date, sign and return the
enclosed proxy in the envelope provided.
By Order of the Board of Directors
/s/ L. Michael Cutrer
-----------------------------------------
L. Michael Cutrer
PRESIDENT
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
______________________
7435 GREENBUSH AVENUE
NORTH HOLLYWOOD, CA 91605
1998 ANNUAL MEETING OF STOCKHOLDERS
APRIL 3, 1998
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying proxy are furnished to stockholders
of North American Scientific, Inc. (the "Company" ) in connection with the
solicitation of proxies by the Company's Board of Directors for use at the
1998 Annual Meeting of Stockholders (the "Meeting") to be held at the Holiday
Inn located at 150 East Angeleno, Burbank, California at 10:00 a.m. local
time, on Friday, April 3, 1998, for the purposes set forth in the
accompanying Notice of Meeting. This Proxy Statement, the form of proxy
included herewith and the Company's Annual Report for the fiscal year ended
October 31, 1997, are being mailed to stockholders on or about March 6, 1998.
Stockholders of record at the close of business on February 16, 1998 are
entitled to notice of and to vote at the Meeting. On such date, there were
outstanding 4,266,201 shares of common stock, par value $0.01 per share, of
the Company (the "Common Stock"). The presence, in person or by proxy, of
the holders of a majority of the shares of Common Stock outstanding and
entitled to vote at the Meeting is necessary to constitute a quorum. In
deciding all questions, each holder of Common Stock shall be entitled to one
vote, in person or by proxy, for each share held on the record date.
Votes cast by proxy or in person at the Meeting will be tabulated by the
election inspector appointed for the Meeting and will determine whether or
not a quorum is present. The election inspector will treat abstentions as
shares that are present and entitled to vote but not as voted for purposes of
determining the approval of any matter submitted to the stockholders for a
vote. Abstentions will have the same effect as negative votes. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
Properly executed proxies will be voted in the manner directed by the
stockholders. If no direction is made, such proxies will be voted FOR the
election of all nominees named under the caption "Election of Directors" as
set forth herein as directors of the Company, FOR approval of the amendment
to the Company's Amended and Restated 1996 Stock Option Plan and FOR the
ratification of the selection of Price Waterhouse LLP as independent auditors
for the fiscal year ending October 31, 1998. Any proxy may be revoked by the
stockholder at any time prior to the voting thereof by notice in writing to
the Secretary of the Company, either prior to the Meeting (at the above
address) or at the Meeting if the stockholder attends in person. A later
dated proxy will revoke a prior dated proxy. As of the date of this Proxy
Statement, the Board of Directors knows of no other business which will be
presented for consideration at the Meeting. If other proper matters are
presented to the Meeting, however, it is the intention of the proxy holders
named in the enclosed form of proxy to take such actions as shall be in
accordance with their best judgment.
The information contained in this Proxy Statement relating to the occupations
and securities holdings of directors and officers of the Company and their
transactions with the Company is based upon information received from each
individual as of January 12, 1998.
1
<PAGE>
ELECTION OF DIRECTORS
The nominees for election as a director of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
<S> <C> <C>
Irwin J. Gruverman 64 1989
L. Michael Cutrer 42 1989
Larry Berkin 61 1996
Dr. Allan M. Green 53 1996
Michael C. Lee 47 1996
</TABLE>
Irwin J. Gruverman has been the Chairman and a director of the Company since
December 31, 1989. Mr. Gruverman has been a partner in G&G Diagnostics
Limited Partnership, a venture capital limited partnership, since 1990. Mr.
Gruverman founded and has been the Chief Executive Officer and a director of
Microfluidics International Corporation, a company that manufactures process
devices for pharmaceutical and other manufacturing uses and conducts drug
delivery testing, since 1982. Mr. Gruverman founded and served as the
Executive Vice President of New England Nuclear, a radioactive materials
business, from 1961 to 1981. Mr. Gruverman also serves as a director of
InVitro International, Inc., Fiberchem International, Inc. and Endogen, Inc.
L. Michael Cutrer has been the President and Chief Executive Officer and a
director of the Company since November 27, 1989. Prior thereto, Mr. Cutrer
was a Manager of Isotope Products Laboratory, Inc., a radioisotope
manufacturing company, where he was responsible for industrial product
manufacturing research and development from 1982 to 1989.
Larry Berkin has been a director of the Company since May 1996 and has been
a certified public accountant with Berkin Accountancy Corp., a company he
founded, since 1968. His practice focuses primarily on management and
taxation, including providing advice on operations, finances, investments,
negotiations, real estate and taxes.
Dr. Allan M. Green has been a director of the Company since May 1996 and has
been Vice President, Pharmaceutical/Biomedical Products for ML Strategies,
Inc. since 1990. ML Strategies, Inc. is the consulting affiliate of the law
firm of Mintz Levin Cohn Ferris Glovsky and Popeo PC, of which Dr. Green is
of counsel. Dr. Green has formerly served as President of the Biotechnology
Data Group in Cambridge, Massachusetts and as a consultant to many major
pharmaceutical companies and investors in the pharmaceutical industry. Dr.
Green is the author of many scientific papers in biochemistry and drug
development. Dr. Green is a director Neurochem, Inc.
Michael C. Lee has been a director of the Company since May 1996 and has been
the President and Chief Executive Officer of East Coast Food Products, Inc.,
a wholesale food distributor, since 1976. Mr. Lee is a director of Prime
Spot Media, Inc.
The Board of Directors knows of no reason why any of the foregoing nominees
will be unavailable to serve, but, in the event of any such unavailability,
the proxies received will be voted for such substitute nominees as the Board
of Directors may recommend.
2
<PAGE>
HOLDINGS OF STOCKHOLDERS, DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth information regarding the beneficial ownership
of the Company's Common Stock as of February 16, 1998 by (i) each person who
is known by the Company to own more than 5% of the Company's outstanding
Common Stock, (ii) each of the Company's directors and nominees; and (iii)
all existing directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
APPROXIMATE
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS (1) BENEFICIAL OWNERSHIP OWNERSHIP
<S> <C> <C>
Irwin J. Gruverman 296,500(2) 6.9%
L. Michael Cutrer 330,000(3) 7.6%
Larry Berkin 217,800(4) 5.1%
Dr. Allan M. Green 25,000(4) *
Michael C. Lee 104,300(4) 2.4%
Mentor Corporation 250,000 5.9%
5425 Mollister Avenue
Santa Barbara, CA 93111
Tudor Investment Corporation 300,000(5) 7.0%
One Liberty Plaza (51st Floor)
New York, NY 10006
All existing directors and executive 978,600(2)(3)(4) 21.9%
officers as a group
(5 persons)
</TABLE>
_________________________
*Denotes less than 1%
(1) Except where indicated, the address of each five percent stockholder is c/o
the Company, 7435 Greenbush Avenue, North Hollywood, California.
(2) Includes 19,000 shares held in a fund of which the reporting person is
general partner, 50,000 shares subject to outstanding options which are
immediately exercisable and 5,000 shares subject to outstanding options
which are exercisable March 28, 1998. Excludes 20,000 shares owned by
reporting person's spouse, as to which reporting person disclaims
beneficial ownership.
(3) Includes 80,000 shares subject to outstanding options which are immediately
exercisable; also excludes 12,500 shares owned by the reporting person's
spouse and 8,375 shares subject to vested options owned by the reporting
person's spouse over which the reporting person disclaims beneficial
ownership.
(4) Includes 25,000 shares subject to outstanding options which are deemed
exercisable.
(5) Includes 284,700 shares held in investment funds to which the reporting
person provides investment advice. Also includes 15,300 shares in an
investment fund which is under common control with the reporting person.
3
<PAGE>
COMPENSATION OF DIRECTORS
All directors and officers of the Company are elected annually to serve for a
term of one year and until their successors are elected and qualified. All
directors may be reimbursed for certain expenses incurred in connection with
attending Board meetings. Mr. Gruverman does not receive a salary as
Chairman.
Upon their election in 1996, Messrs. Berkin, Green and Lee were granted stock
options exercisable for 40,000 shares of Common Stock at an exercise price
equal to the fair market value of the Common Stock on the date of their
election. Fifty percent (50%) of such stock options vested on the first
anniversary date of the grant, with the remaining options vesting on the
second anniversary date of the grant.
If elected as directors of the Company at each Annual Meeting of Stockholders
of the Company, Messrs. Gruverman, Berkin, Green and Lee shall each receive
stock options exercisable for 10,000 shares of Common Stock with an exercise
price equal to the fair market value of the Common Stock on the business day
prior to the date they are elected. Fifty percent (50%) of such stock
options will vest on the first anniversary date of the grant of the stock
options with the remaining stock options vesting on the second anniversary
date of the grant of such options.
COMMITTEES; BOARD MEETINGS
The Board of Directors of the Company held four meetings during the fiscal
year ended October 31, 1997, and the Board acted twice by unanimous written
consent. The Company has an audit committee comprised of Messrs. Berkin
(Chairman), Lee and Green, and a compensation committee comprised of Messrs.
Gruverman (Chairman), Berkin, Lee and Green. Neither the audit committee nor
the compensation committee met during the fiscal year ended October 31, 1997.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Company's Chief
Executive Officer for the fiscal year ended October 31, 1997. No other
officer of the Company received total annual salary and bonus in excess of
$100,000 for such period.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION
- ------------------ ---- ------ ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
L. Michael Cutrer 1997 $95,000 $0 $6,942(1) 100,000 $0
Chief Executive 1996 $91,404 $2,500 $0 0 $0
Officer 1995 $75,673 $4,000 $0 0 $0
</TABLE>
_________________
(1) Represents payment for Mr. Cutrer's accrued, but unused, vacation days.
STOCK OPTIONS
The following table sets forth certain information concerning individual
grants of stock options made during the fiscal year ended October 31, 1997 to
the Company's Chief Executive Officer under the Company's Amended and
Restated 1996 Stock Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF INDIVIDUAL
SECURITIES GRANTS AS
UNDERLYING % OF TOTAL
OPTIONS/ OPTIONS/SARS
SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) FISCAL YEAR PER SHARE DATE
<S> <C> <C> <C> <C>
L. Michael Cutrer 100,000(1) 72.1% $1.05(2) 11/1/06
</TABLE>
_____________
(1) Sixty percent (60%) of such options vested immediately upon grant, with the
remainder vesting fifty percent (50%) per year over two years.
(2) Such options were granted at the fair market value on the date of grant
determined pursuant to the Amended and Restated 1996 Stock Option Plan.
The following table sets forth certain information concerning the exercise of
stock options during the fiscal year ended October 31, 1997 by the Company's
Chief Executive Officer and the fiscal year-ended value of unexercised
options under the Company's Amended and Restated 1996 Stock Option Plan.
5
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED 10/31/97 10/31/97(1)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
L. Michael Cutrer 0 0 80,000/20,000 $1,516,000/
$379,000
</TABLE>
_________________________
(1) Calculated upon the difference between the exercise price and the fair
market value at fiscal year-end.
CERTAIN TRANSACTIONS
On February 6, 1998, the Company entered into agreements with PracSys
Corp., a privately held Massachusetts corporation ("PracSys"), pursuant to
which (i) PracSys will manufacture and sell to the Company two particle
accelerators (the "Systems") to be used in the production of certain
isotopes, which will be utilized by the Company in connection with its new
brachytherapy product line, and (ii) PracSys will operate the Systems to
produce required isotopes for an initial 2-year period. Irwin J. Gruverman,
the Company's Chairman and a director and significant stockholder of both the
Company and PracSys, was instrumental in introducing the parties but was not
involved in the negotiation or approval of the agreements. The agreements
were negotiated between the parties on an arms-length basis.
The agreements call for total payments to PracSys of approximately $2.7
million, which payments are required to be made upon the achievement of
certain milestones set forth therein. In addition, PracSys will receive a
service fee and also will be entitled to a "royalty" on the Company's sales
of products which incorporate isotopes produced using the Systems. The
Company and PracSys have also entered into an Exclusivity and Purchase
Agreement pursuant to which the Company has been granted certain exclusivity
rights with regard to the PracSys technology. Pursuant to the Exclusivity
Agreement, PracSys also issued to the Company an aggregate of 140,150 shares
of PracSys Common Stock, which is equal to approximately 5% of PracSys total
outstanding shares on a fully-diluted basis. In addition, PracSys granted
the Company a pre-emptive right in the event of certain pre-initial public
offering private financing and a three-year warrant to purchase PracSys
Common Stock equal to 5% of the number of shares of Common Stock issued in an
initial public offering.
PROPOSAL TO AMEND THE AMENDED AND RESTATED 1996 STOCK OPTION PLAN
The Board of Directors recommends that the stockholders approve the amendment
of the Amended and Restated 1996 Stock Option Plan of the Company (the
"Plan")(i) to increase the number of shares that may be issued pursuant to
the Plan from 1,000,000 shares to 1,500,000 shares and (ii) to add provisions
necessary to ensure that options granted under the Plan are not subject to
the $1,000,000 limitation on deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code (the "Code").
Increase Number of Shares Authorized for Issuance Under the Plan
The Board of Directors believes that an increase in the number of shares
authorized for issuance is necessary and desirable in order to maintain the
efficacy of the Plan by allowing further grants to be made thereunder at the
discretion of the Board of Directors. More specifically, the Board
believes that an increase in the number of potentially issuable shares will
allow management of the Company to continue to provide incentives to
employees, directors and consultants of the Company, thus enhancing the value
of the Company for the benefit of stockholders.
Compliance with Section 162(m) of the Code
To ensure compliance with Section 162(m) of the Code with respect to future
grants of options under the Plan, the Company proposes (i) to limit the
number of shares to which options may be granted to each executive officer
whose compensation is required to be reported in the Company's annual proxy
statement (an "Executive Officer") to 300,000 during any fiscal year during
which such person serves as an Executive Officer and (ii) to provide for the
administration of the Plan by a committee of "outside directors" appointed by
the Board of Directors to administer the Plan (the "Stock Option Committee").
Section 162(m) of the Code limits the deductible compensation paid to
Executive Officers of publicly held corporations to $1,000,000. Any taxable
compensation which is recognized by an Executive Officer upon (i) the
exercise of a nonstatutory option or (ii) a disqualifying disposition of
stock acquired under an incentive stock option, is subject to the limit.
However, the limit will not apply if the options are granted under a
stockholder-approved plan document which specifies the maximum number of
option shares that can be granted to an Executive Officer during the
corporation's tax year, provided that each grant is determined by a
directors' committee which is comprised solely of "outside directors."
The amount of compensation that would be subject to the $1,000,000
deduction limit depends in part on the fair market value of the Company's
stock at an indeterminable future date, thus the Company cannot be certain
that any one Executive Officer's compensation will never exceed $1,000,000 in
a given year. Accordingly, in order to comply with the provisions of Section
162(m) of the Code and to protect the Company's deduction for all
compensation to Executive Officers that is otherwise deductible, the Company
is proposing an amendment to the Plan for stockholder approval which
specifies the number of option shares which may be granted to an Executive
Officer. The amendment limits option grants to 300,000 shares during any
fiscal year in which a person serves as an Executive Officer. Furthermore,
the Company is proposing that the Plan be amended to provide for
administration by the Stock Option Committee. Having the Plan administered by
the Stock Option Committee, as proposed, together with the limitation on the
number of shares granted to Executive Officers, would allow the Company to
comply with Section 162(m) of the Code and Rule 16b-3(b)(3)(i) of the
Securities Exchange Act of 1934, as amended.
The amendments, if approved by the stockholders, will allow the Company
to retain a full compensation deduction with respect to future option grants
under the Plan. The Plan was originally approved by the Board of Directors on
April 1, 1996, received stockholder approval at the Company's 1996 Annual
Meeting held on May 14, 1996, and received stockholder approval of an
amendment thereto at the Company's 1997 Annual Meeting. The following summary
of certain provisions of the Plan (as proposed to be amended) is subject to
the complete text of the Plan attached to this Proxy Statement as Exhibit A.
6
<PAGE>
TYPES OF AWARDS
The Plan permits the granting of stock options, including incentive stock
options.
AUTHORITY OF THE BOARD OF DIRECTORS
The Plan is currently administered by the Board of Directors of the Company.
The Board has the authority to make grants and determine their terms, subject
to the provisions of the Plan, and has the authority to interpret the
provisions of the Plan, to adopt any rules, procedures and forms necessary
for the operation and administration of the Plan, and to determine all
questions relating to the eligibility and other rights of all persons under
the Plan. All directors, key employees of the Company, and certain
consultants to the Company and any subsidiaries and affiliates are eligible
to be participants.
SHARES SUBJECT TO PLAN
An aggregate of 1,000,000 shares of Common Stock are currently authorized for
issuance pursuant to the Plan, such number of shares being subject to
adjustment in the event of a merger, consolidation, stock dividend, split-up,
combination, or exchange of shares, recapitalization or change in
capitalization with respect to the shares of Common Stock. The shares of
stock deliverable under the Plan may consist in whole or in part of unissued
shares or reacquired shares. If a grant expires or is canceled, any shares
which were not issued or fully vested under the grant at the time of
expiration or cancellation will again be available for grants. Of the
1,000,000 shares currently authorized, options for 537,250 shares have been
granted as of the date of this Proxy Statement.
STOCK OPTIONS
Options which are issuable under the Plan may be either "Incentive Stock
Options," as defined in section 422 of the Internal Revenue Code, or options
not intended to be so qualified ("Nonstatutory Options"). The Board may
grant more than one option to a participant during the life of the Plan, and
such option may be in addition to an option or options previously granted;
provided, however, that the aggregate fair market value of stock with respect
to which Incentive Stock Options are exercisable for the first time by such
individual during any calendar year (under all stock option plans of the
Company and any subsidiaries) may not exceed $100,000. All options (both
Incentive Stock Options and Nonstatutory Options) are exercisable at no less
than 100% of the fair market value of the shares on the date of grant,
subject to anti-dilution provisions; provided, however, that if any Incentive
Stock Option is granted to an individual who owns more than 10% of the total
combined voting power of all classes of stock of the Company, actually or
constructively under Section 425(d) of the Internal Revenue Code, such option
is exercisable at 110% of the fair market value of the stock subject to the
option.
No option is exercisable following three months after termination of employment
with the Company (or such shorter or longer period as the option may provide)
unless such termination of employment occurs by reason
7
<PAGE>
of disability or death. In the event of the disability or death of an
optionee while an employee of the Company or any subsidiary of the Company,
the options or unexercisable portions thereof, to the extent exercisable on
the date of disability or death, are exercisable at any time for a period not
to exceed the expiration of one year from the date of disability or death (or
such shorter period as the option may provide). In no event, however, may an
option be exercisable after the expiration of ten years from the date such
option was granted (five years in the case of Incentive Stock Options granted
to an optionee owning more than 10% of the voting power of stock of the
Company as contemplated by Section 425(d) of the Internal Revenue Code), or
beyond the term for which it was granted.
Except as provided otherwise by Board of Director resolution, payment for
shares of Common Stock purchased upon exercise of an option granted under the
Plan must be made in full at the time of such exercise, whether in cash,
shares of the Company's Common Stock (valued at fair market value), by a note
payable to the Company, or in a combination of cash, notes, and shares of
stock.
ADJUSTMENTS
If there is a merger, consolidation, stock dividend, split-up, combination or
exchange of shares, recapitalization or change in capitalization with respect
to the shares of Common Stock, or any other corporate action with respect to
the shares of Common Stock which, in the opinion of the Board of Directors,
adversely affects the relative value of a grant, the number of shares and the
exercise price (in the case of an option) of any grant which is outstanding
at the time of that event will be adjusted to the extent necessary to remedy
the adverse effect on the grant's value.
FEDERAL INCOME TAX CONSEQUENCES
With respect to Nonstatutory Options, the difference between the option
price and the fair market value of the stock on the date the option is
exercised is taxable as ordinary income to the optionee and is deductible by
the Company as compensation on such date except as described in the next
paragraph. Any gain or loss on the subsequent sale of such stock is eligible
for capital gain or loss treatment by the optionee and will have no federal
income tax consequences to the Company.
With respect to Nonstatutory Options, the Internal Revenue Code provides
that so long as the sale of the stock at a profit could subject a person to
suit under Section 16(b) of the Securities Exchange Act of 1934, the stock
will be subject to a substantial risk of forfeiture. Accordingly, unless the
election provided by Section 83(b) of the Internal Revenue Code is made, upon
exercise of a Nonstatutory Option by an officer or director or 10%
stockholder of the Company, no income will be recognized (assuming no sale is
made by the optionee during the next six months), nor will the capital gain
holding period begin to run or the Company be allowed a deduction, until the
six month period prescribed by Section 16(b) has lapsed. The income to the
optionee and deduction to the Company will be determined on the basis of the
fair market value of the stock on the date of lapse.
An exchange of Common Stock in payment of the option price in the case of a
Nonstatutory Option is considered a tax-free exchange by the optionee to the
extent of a like number of new shares, with the new shares retaining the
basis and holding period of the old shares. The fair market value of any
additional shares transferred to the optionee (representing the excess of the
fair market value of all of the new shares over the fair market value of all
of the old shares) will constitute ordinary income to the optionee and be
deductible by the Company. This amount then becomes the optionee's basis in
such shares.
8
<PAGE>
With respect to Incentive Stock Options, if the optionee does not make a
disqualifying disposition of stock acquired on exercise of such option, no
income for federal income tax purposes will result to such optionee upon the
granting or exercise of the option (except that the amount by which the fair
market value of the stock at time of exercise exceeds the option price will
be a tax preference item under the expanded alternative minimum tax), and in
the event of any sale thereafter any amount realized in excess of his cost
will be taxed as long term capital gain and any loss sustained will be long
term capital loss. In such case, the Company will not be entitled to a
deduction for federal income tax purposes in connection with the issuance or
exercise of the option. Generally, a disqualifying disposition will occur if
the optionee makes a disposition of such shares within two years from the
date of the granting of the option or within one year after the transfer of
such shares to him. If a disqualifying disposition is made, the difference
between the option price and the lesser of (i) the fair market value of the
stock at the time the option is exercised or (ii) the amount realized upon
disposition of the stock, will be treated as ordinary income to the optionee
at the time of disposition and will be allowed as a deduction to the Company.
An exchange of Common Stock in payment of the option price in the case of an
Incentive Stock Option, if the exchange is not a disqualifying disposition of
the stock exchanged, is considered to be tax-free. Under Internal Revenue
Service proposed regulations, a number of shares received upon exercise equal
to the number of shares exchanged will have a basis equal to the basis of the
shares exchanged and the remaining shares received will have a zero basis.
A portion of the excess of the amount deductible by the Company over the
value of options when issued may be subject to the alternative minimum tax
imposed on corporations.
The described tax consequences are based on current laws, regulations and
interpretations thereof, all of which are subject to change. In addition,
the discussion is limited to federal income taxes and does not attempt to
describe state and local tax effects which may accrue to participants or the
Company.
The following table sets forth the number of stock options issued during the
fiscal year. Awards to the Company's Chief-Executive Officer and to
non-executive officer employees remain at the discretion of the Board of
Directors.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF POSITION UNDERLYING OPTIONS GRANTED
<S> <C>
Chief Executive Officer 100,000
Executive Group 100,000
Non-Executive Director Group 100,000
Non-Executive Officer Employee Group 50,500
</TABLE>
9
<PAGE>
VOTE REQUIRED
The affirmative vote of a majority of outstanding shares of Common Stock at
the Meeting at which a quorum is present, is necessary to approve this
proposal to amend the Company's Amended and Restated 1996 Stock Option Plan.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF THE PROPOSAL TO
AMEND THE AMENDED AND RESTATED 1996 STOCK OPTION PLAN.
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of Price Waterhouse LLP has audited the books and records of the
Company since October 1993 and the Board of Directors desires to continue the
services of this firm for the current fiscal year ending October 31, 1998.
Accordingly, the Board of Directors will recommend at the Meeting that the
stockholders ratify the appointment of the firm of Price Waterhouse LLP to
audit the accounts of the Company for the current fiscal year.
Representatives of that firm are expected to be present at the Meeting with
the opportunity to make a statement if they desire to do so and are expected
to be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF RATIFICATION OF THE
SELECTION OF PRICE WATERHOUSE LLP.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
The Company is required to report to its stockholders those directors,
officers and owners of more than 10% of any class of the Company's equity
securities registered pursuant to Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), who fail to timely file reports of
beneficial ownership and changes in beneficial ownership, as required by
Section 16(a) of the Exchange Act. Upon a review of these reports, the
Company believes that all reports were filed on a timely basis.
MISCELLANEOUS
The Company's Annual Report for the fiscal year ended October 31, 1997 is
being mailed to stockholders contemporaneously with this Proxy Statement.
COST OF SOLICITATION
All expenses incurred in the solicitation of proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited on
behalf of the Company by directors, officers and employees of the Company or
by telephone or telecopy. The Company will reimburse brokers and others
holding Common Stock as nominees for their expenses in sending proxy material
to the beneficial owners of such Common Stock and obtaining their proxies.
10
<PAGE>
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the 1999 Annual
Meeting must be received by the Company for inclusion in the Company's Proxy
Statement and form of proxy relating to that meeting no later than November 6,
1998.
By order of the Board of Directors.
L. Michael Cutrer
PRESIDENT
Dated: March 6, 1998
11
<PAGE>
EXHIBIT A
NORTH AMERICAN SCIENTIFIC, INC.
AMENDED AND RESTATED
1996 STOCK OPTION PLAN
(AS PROPOSED TO BE AMENDED)
1. PURPOSE OF THE PLAN. Under this 1996 Stock Option Plan (the "Plan") of
North American Scientific, Inc. (the "Company") options may be granted
to eligible employees, directors and consultants to purchase shares of
the Company's capital stock. The Plan is designed to enable the Company
to attract, retain, and motivate its employees, directors and
consultants by providing for or increasing the proprietary interests of
such individuals in the Company. The Plan provides for options which
qualify as incentive stock options ("Incentive Options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), as
well as options which do not so qualify ("Nonstatutory Options"). Any
option granted under this Plan shall be clearly identified as either an
Incentive Option or a Nonstatutory Option.
2. STOCK SUBJECT TO PLAN. The aggregate number of shares which may be
issued under options is 1,500,000 shares of the Company's Common Stock,
$0.01 par value ("Common Stock"), subject to the adjustments hereinafter
provided. Such number of shares shall be reserved by the Company for
options granted under this Plan. The shares which may be issued or
delivered under the Plan may be either authorized but unissued shares or
treasury shares or partly each. Shares of stock subject to the
unexercised portions of any options granted under this Plan which expire
or terminate or are canceled may again be subject to options under the
Plan.
3. ELIGIBILITY. The employees eligible to be considered for the grant of
Incentive Options hereunder are all employees (including directors)
regularly employed by the Company. All such employees and all
nonemployed directors or consultants to the Company shall also be
eligible to receive Nonstatutory Options hereunder. The Committee
referred to in Section 13 will designate, from among the eligible
employees, those who will be granted Options and will specify: (i) the
number of shares of the Company's common stock each such employee will
be entitled to purchase pursuant to the option; and (ii) the nature of
an Option as an Incentive Option, a Nonstatutory Option or partly each
type of Option. The Committee may make such grants at any time and in
any amounts that it, in its discretion, may designate, subject to the
other relevant limitations set out in this Plan.
The number of Option shares granted in a fiscal year to each
executive officer whose compensation is subject to reporting on the
Company's annual proxy statement (an "Executive Officer") shall not exceed
300,000 shares for any fiscal year during which he or she serves as an
Executive Officer.
4. $100,000 INCENTIVE OPTION EXERCISE LIMITATION. The aggregate fair
market value of the stock for which Incentive Options granted to any one
eligible employee under this Plan and under all incentive stock option
plans of the Company, its parent(s) and any subsidiaries, may by their
terms first become exercisable during any calendar year shall not exceed
$100,000, determining fair market value of the stock subject to any
option as of the time that option is granted. If the date on which one
or more Incentive Options could be first exercised would be accelerated
pursuant to any other provision of the Plan or any stock option
agreement referred to in Section 10, or an amendment thereto, and the
acceleration of such exercise date would result in a violation of the
restriction set forth in the preceding sentence, then notwithstanding
any such other provision the exercise date of such Incentive Options
shall be accelerated only to the extent, if any, that is permitted under
Section 422 of the Code and the exercise date of the Incentive Options
with the lowest option prices shall be accelerated first. Any exercise
date which cannot be accelerated without violating the $100,000
<PAGE>
restriction of this section shall nevertheless be accelerated, and the
portion of the option becoming exercisable thereby shall be treated as a
nonstatutory option.
5. OPTION PRICE. The purchase price at which each stock option may be
exercised (the "Option Price") shall be such price as the Board of
Directors, in its discretion, shall determine, and, in the case of
Incentive Options, shall not be less than one hundred percent (100%) of
the fair market value per share of the Common Stock covered by the
Incentive Option on the date of grant, except that in the case of an
Incentive Option granted to an employee who, immediately prior to such
grant, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any
subsidiary (a "Ten Percent Employee"), the Option Price shall not be
less than one hundred ten percent (110%) of such fair market value on
the date of grant. For purposes of this Section 5, the fair market
value of the Common Stock shall be determined as provided in Section 11.
For purposes of this Section 5, an individual (a) shall be considered
as owning not only shares of the Common Stock owned individually but
also all shares that are at the time owned, directly or indirectly, by
or for the spouse, ancestors, lineal descendants and brothers and
sisters (whether by the whole or half blood) of such individual, and (b)
shall be considered as owning proportionately any shares owned, directly
or indirectly by or for any corporation, partnership, estate or trust in
which such individual shall be a shareholder, partner or beneficiary.
6. EXERCISE OF OPTION. The option agreement may provide for partial
exercise in installments. Exercisable options may be exercisable in
full or in part. The period of time in which an option may be exercised
shall be the period designated in the option. In the case of an
Incentive Option such period shall not exceed ten (10) years from the
date the option is granted and with respect to a Ten Percent Employee,
such period of time shall not exceed five (5) years from the date the
Incentive Option is granted. No Nonstatutory Option shall be
exercisable after the expiration of ten years from the date of grant.
An option to the extent exercisable at any time may be exercised in
whole or in part.
7. PAYMENT OF OPTION PRICE. Payment for stock purchased under any exercise
of an option granted under this Plan shall be made in full in cash
concurrently with such exercise. Alternatively, such payment may be
made in whole or in part with shares of the same class of stock as that
then subject to the option, delivered in lieu of cash concurrently with
such exercise, the shares so delivered to be valued on the basis of the
fair market value of stock (determined in a manner provided in Section
11 hereof) provided that the Company is not then prohibited from
purchasing or acquiring shares of such stock.
Notwithstanding the foregoing, the Company shall not be obligated to
accept payment of the exercise price pursuant to this Section 7 unless the
stock tendered as payment for the exercise price has been held by the
optionee for at least six months. The Company also has the discretion to
refuse any other method of payment that would cause the Plan or the option
agreements issued thereunder to be treated for accounting purposes as
creating stock appreciation rights or other "variable stock plan"
characteristics which would cause the Company to recognize a charge to
earnings.
8. NONTRANSFERABILITY. Any option granted under this Plan shall by its
terms be nontransferable by the optionee other than by will or the laws
of descent and distribution and is exercisable during the optionee's
lifetime only by him or by his guardian or legal representative.
9. TERMINATION OF OPTION. In the case of Incentive Options:
<PAGE>
a. If the employment or other service to the Company or a subsidiary of
an optionee (whether employee, nonemployed director, or consultant)
who is not disabled within the meaning of Section 422(c)(6) of the
Code (a "Disabled Optionee") is terminated without cause, quits or
retires under any retirement plan of the Company or a subsidiary,
any then outstanding and exercisable stock option held by such an
optionee shall be exercisable, in accordance with the provisions of
the stock option agreement referred to in Section 10, by such
optionee at any time prior to the expiration date of such stock
option or within three months after the date of termination of
employment or service, whichever is the shorter period;
b. If the employment of an optionee who is a Disabled Optionee is
terminated without cause or if the service of a nonemployed director
or consultant terminates because such individual becomes a Disabled
Optionee, any then outstanding and exercisable stock option held by
such an optionee shall be exercisable, in accordance with the
provisions of the stock option agreement referred to in Section 10,
by such an optionee at any time prior to the expiration date of such
stock option or within one year after the date of such termination
of employment or service, whichever is the shorter period;
c. Following the death of an optionee during employment or of a
nonemployed director or consultant while serving as a director or
consultant of the Company or a subsidiary, any outstanding and
exercisable stock option held by such an optionee at the time of
death shall be exercisable, in accordance with the provisions of the
stock option agreement referred to in Section 10, by the person or
persons entitled to do so under the will of the optionee, or, if the
optionee shall fail to make testamentary disposition of the stock
option or shall die intestate, by the legal representative of the
optionee at any time prior to the expiration date of such stock
option or within one year after the date of death, whichever is the
shorter period.
With respect to Nonstatutory Options:
The Committee may specify in the option agreement what restrictions
will apply in the event of termination of employment.
For all options issued hereunder, if the Company terminates the
employment of an optionee for cause, all outstanding stock options held by
the optionee at the time of such termination shall automatically terminate
unless the Board of Directors notifies the optionee that his options will
not terminate. A termination "for cause" shall be defined under each
written option agreement issued pursuant to Section 10.
Whether termination of employment or other service is a termination
"for cause" and whether an optionee is disabled within the meaning of
Section 422(c)(6) of the Code shall be determined in each case, in its
discretion, by the Board of Directors and any such determination by the
Board of Directors shall be final and binding.
10. WRITTEN OPTION AGREEMENT. All options granted pursuant to the Plan
shall be evidenced by written option agreements. Such option agreements
shall comply with and be subject to all of the terms, conditions, and
limitations set forth in this Plan and such further provisions, not
inconsistent with this Plan, as the Board of Directors shall deem
appropriate.
11. DETERMINATION OF FAIR MARKET VALUE. Fair market value of the Common
Stock shall be the closing price of the Common Stock on the NASDAQ
<PAGE>
National Market (or such successor exchange or automated quotation
system upon which the Common Stock becomes listed) on the day prior to
the grant.
12. ADJUSTMENTS. If the outstanding shares of stock of the class then
subject to this Plan are increased or decreased, or are changed into or
exchanged for a different number or kind of shares or securities, as a
result of one or more reorganizations, recapitalization, stock splits,
reverse stock splits, stock dividends or the like, appropriate
adjustments shall be made in the number and/or kind of shares or
securities for which options may thereafter be granted under this Plan
and for which options then outstanding under this Plan may thereafter be
exercised. The Board of Directors shall make such adjustments as it may
deem fair, just and equitable to prevent substantial dilution or
enlargement of the rights granted to or available for optionees. No
adjustment provided for in this Section 12 shall require the Company to
issue or sell a fraction of a share or other security.
If any such adjustment provided for in this Section 12 requires the
approval of stockholders in order to enable the Company to grant Incentive
Options, then no such adjustment shall be made without the required
stockholder approval. Notwithstanding the foregoing, in the case of
Incentive Options, if the effect of any such adjustment would be to cause
the stock option to fail to continue to qualify as an Incentive Option or
to cause a modification, extension or renewal of such stock option within
the meaning of Section 424 of the Code, the Board of Directors may elect
that such adjustment not be made but rather shall use reasonable efforts to
effect such other adjustment of each then outstanding stock option as the
Board of Directors, in its sole discretion, shall deem equitable and which
will not result in any disqualification, modification, extension or renewal
(within the meaning of Section 424 of the Code) of such Incentive Option.
13. ADMINISTRATION. The Plan shall be administered by a committee appointed
by the Board of Directors of the Company (the "Committee") which shall
be comprised of not less than two members who are "Non-Employee Directors"
as defined in Rule 16b-3(b)(3)(i), promulgated under the Securities
Exchange Act of 1934, as amended and who shall each also qualify as an
"outside director" for purposes of Section 162(m) of the Code. An
individual shall not be a member of the Committee if he has received any
options under this Plan during the one year period preceding his proposed
appointment to the Committee. Members of the Committee shall not be
eligible to receive options granted hereunder at any time. Any vacancy on
the Committee shall be filled by appointment by the Board of Directors.
The Committee may interpret the Plan, prescribe, amend and rescind any
rules or regulations necessary or appropriate for the administration of the
Plan, and make all determinations, in its discretion, as to which eligible
employees will receive options, the number of shares subject to the options
and the exercise price. The Committee may make such other determination
and take such other action it deems necessary or advisable. Without
limiting the generality of the foregoing, the Committee may, in its
discretion, treat all or any portion of any period during which a
participant is on military or other approved leave of absence from the
Company or a subsidiary as a period of employment of such participant by
the Company or such subsidiary, as the case may be, for purposes of accrual
of his rights under his awards; provided, however, that no Incentive Option
may be awarded to an employee while he is on leave of absence.
14. LIMITATIONS RESPECTING INCENTIVE OPTIONS. It is the intent of the
Company to conform strictly to the requirements of Code Section 422 with
regard to Incentive Options granted pursuant to this Plan. Therefore,
notwithstanding any other provision of this Plan, nothing herein with
regard to Incentive Options shall contravene any requirement set forth
<PAGE>
in Code Section 422 and if inconsistent provisions are otherwise found
herein, they shall be deemed void and unenforceable or automatically
amended to conform, as the case may be.
15. RIGHTS AS A STOCKHOLDER. An optionee, or his executor, administrator or
legatee if he be deceased, shall have no rights as a stockholder with
respect to any stock covered by his option under the date of issuance of
the stock certificate to him or such stock after receipt of the
consideration in full set forth in the option agreement or as may be
approved by the Board of Directors. Except as provided in Section 12
hereof, no adjustments shall be made for dividends, whether ordinary or
extraordinary, whether in cash, securities, or other property, for
distributions in which the record date is prior to the date for which
the stock certificate is issued.
16. MODIFICATION, EXTENSION AND RENEWAL. Subject to the conditions of, and
within the limitations prescribed in, Section 14, hereof, the Board of
Directors may modify, extend or renew options which are outstanding as
granted under the Plan if otherwise consistent herewith.
Notwithstanding the foregoing, no modification shall, without the prior
written consent of the optionee, alter, impair or waive any rights or
obligations of any option theretofore granted under the Plan.
17. INVESTMENT PURPOSES, ETC. Prior to the issuance or delivery of any
shares of the common stock under the Plan, the person exercising the
stock option may be required to (a) represent and warrant that the
shares of the Common Stock to be acquired upon exercise of the stock
option are being acquired for investment for the account of such person
and not with a view to resale or other distribution thereof, (b)
represent and warrant that such person will not, directly or indirectly,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of any
such shares unless the transfer, sale, assignment, pledge, hypothecation
or other disposition of the shares is pursuant to effective
registrations under the 1933 Act and applicable state or foreign
securities laws or pursuant to appropriate exemptions from any such
registrations, (c) execute such further documents as may be reasonably
required by the Board of Directors upon exercise of the option or any
part thereof, including but not limited to stock transfer restrictions.
The certificate or certificates representing the shares of the common
stock to be issued or delivered upon exercise of a stock option may bear
a legend evidencing the foregoing and other legends required by any
applicable securities laws. Furthermore, nothing herein or any option
granted hereunder shall require the Company or any subsidiary to issue
any stock upon exercise of any option if the issuance would, in the
opinion of counsel for the Company, constitute a violation of the
Securities Act of 1933, as amended, the California securities laws, or
any other applicable rule or regulation then in effect.
18. NO RIGHT TO CONTINUED EMPLOYMENT. This Plan, and any option granted
under this Plan, shall not confer upon any optionee any right with
respect to continued employment by or service to the Company or any
subsidiary, nor shall they alter, modify, limit or interfere with any
right or privilege of the Company or any subsidiary under any employment
or service contract heretofore or hereinafter executed with any
optionee, including the right to terminate any optionee's employment,
directorship, or consultancy service, at any time for or without cause.
19. DISPOSITION OF INCENTIVE OPTION SHARES. Except (a) as provided in
options to the Company and other holders of the stock contained in stock
transfer restriction agreements to which the Company is a party, or (b)
in connection with reorganizations or other transactions described in
Section 12 hereof, no stock acquired by the exercise of an Incentive
Option granted under the Plan shall be transferable, otherwise than by
will or the laws of descent and distribution, within two (2) years after
the date the option was granted or within one (1) year after the
transfer of such share of stock to the optionee pursuant to the exercise
of the option. Each certificate representing the acquired shares may
bear a legend to this effect.
<PAGE>
20. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the options
granted hereunder and the obligation of the Company to sell and deliver
stock under such options, shall be subject to all applicable federal and
state laws, rules, regulations and to such approvals by any government
or regulatory authority or investigative agency as may be required. The
Company shall not be required to issue or deliver any certificates for
shares of stock prior to (a) the listing of any such stock to be
acquired pursuant to the exercise of any option on any stock exchange on
which the stock may then be listed, and (b) the compliance with any
registration requirements or qualification of such shares under any
federal or state securities laws, or obtaining any ruling or waiver from
any government body which the Company or it subsidiaries shall, in their
sole discretion, determine to be necessary or advisable, or which, in
the opinion of counsel to the Company or its subsidiaries, is otherwise
required.
21. CORPORATE REORGANIZATIONS. Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the
Company as a result of which the outstanding securities of the class
then subject to options hereunder are changed into or exchanged for cash
or property or securities not of the Company's issue, or upon a sale of
substantially all the property of the Company to, or the acquisition of
stock representing more than eighty percent (80%) of the voting power of
the stock of the Company then outstanding by another corporation or
person, the Plan shall terminate, and all options theretofore granted
hereunder shall terminate, unless provision be made in writing in
connection with such transaction for the continuance of the Plan and/or
for the assumption of options theretofore granted, or the substitution
for such options of options covering the stock of a successor employer
corporation, or a parent or a subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices, in which
event the Plan and options theretofore granted shall continue in the
manner and under the terms so provided. If the Plan and unexercised
options shall terminate pursuant to the foregoing sentence, all persons
entitled to exercise any unexercised portions of options then
outstanding shall have the right, at such time prior to the consummation
of the transaction causing such termination as the Company shall
designate, to exercise the unexercised portions of their options,
including the portions thereof which would, but for this Section 21, not
yet be exercisable.
22. WITHHOLDING. If, upon exercise of any Nonstatutory Option (or any
Incentive Option which is treated as a Nonstatutory Option because it
fails to meet the requirements set forth herein for Incentive Options),
the optionee fails to tender payment to the Company for any federal
income tax withholding, the Board of Directors shall withhold from the
optionee sufficient shares or fractional shares having a fair market
value (determined under Section 11) equal to any amount which the
Company is required to withhold under the Code.
23. AMENDMENT AND TERMINATION. The Company may alter, amend, suspend or
terminate this Plan, provided that no such action shall deprive an
optionee, without his consent, of any option granted to the optionee
pursuant to this Plan or of any of such optionee's rights under such
option. Except as herein provided no such action of the Company, unless
approved by the shareholders of the Company within twelve months prior
or twelve months after such action, may:
a. increase the maximum number of shares for which options granted
under this plan may be exercised;
b. reduce the minimum permissible exercise price;
c. extend the ten-year duration of this Plan set forth herein; or
<PAGE>
d. alter the class of employees eligible to receive options under the
Plan.
24. PLAN DATE AND DURATION. The Plan shall take effect on the date it is
adopted by the Board of Directors of the Company. Options may not be
granted under this Plan more than ten years after the date of the
adoption of this Plan, or of shareholder approval thereof, whichever is
earlier.
25. GOVERNING LAW. All questions arising with respect to the provisions of
the Plan shall be determined by application of the laws of the state of
Delaware except to the extent that Delaware laws are preempted by any
federal statute, regulation, judgment or court order, including but not
limited to, the Code.
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
7435 GREENBUSH AVENUE
NORTH HOLLYWOOD, CA 91605
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints L. Michael Cutrer and Irwin J.
Gruverman, and each of them, attorney and proxy to represent the undersigned
at the 1998 Annual Meeting of Stockholders of North American Scientific, Inc.
(the "Company") to be held at the Holiday Inn located at 150 East Angeleno,
Burbank, California at 10:00 a.m. local time, on Friday, April 3, 1998, or at
any adjournment thereof, with all power which the undersigned would possess
if personally present, and to vote all shares of stock of the Company which
the undersigned may be entitled to vote at said Meeting as follows:
1. ELECTION OF DIRECTORS
FOR all nominees listed below (unless name of WITHHOLD AUTHORITY / /
nominee is crossed out) / /
Irwin J. Gruverman L. Michael Cutrer Larry Berkin
Dr. Allan M. Green Michael C. Lee
2. PROPOSAL TO AMEND THE AMENDED AND RESTATED 1996 STOCK OPTION PLAN
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO RATIFY THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
AUDITORS
/ / FOR / / AGAINST / / ABSTAIN
4. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING (which the Board of Directors does not know of prior to March 6,
1998)
Management recommends your vote FOR all proposals.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, FOR APPROVAL OF
THE PROPOSED AMENDMENT TO THE AMENDED AND RESTATED 1996 STOCK OPTION PLAN AND
FOR THE RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
AUDITORS, AND WILL CONFER THE AUTHORITY SET FORTH IN PARAGRAPH 4.
Receipt is hereby acknowledged of the Notice of the Meeting and Proxy
Statement dated March 6, 1998, as well as a copy of the Company's Annual
Report for the fiscal year ended October 31, 1997.
Dated: _______, 1998.
------------------------------------------
------------------------------------------
(Signature of stockholder)
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
TITLE. EACH JOINT OWNER IS REQUESTED TO SIGN.
IF A CORPORATION OR PARTNERSHIP, PLEASE SIGN BY
AN AUTHORIZED OFFICER OR PARTNER. PLEASE SIGN
IN THE SAME MANNER AS YOUR CERTIFICATE(S) IS
(ARE) REGISTERED.
PLEASE COMPLETE, DATE, SIGN AND RETURN this proxy in the envelope provided.
