<PAGE>
SCHEDULE 14A INFORMATION
------------------------
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT
OF 1934 (AMENDMENT NO. )
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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:
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(2) Aggregate number of securities to which transaction applies:
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(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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<PAGE>
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
20200 SUNBURST STREET
CHATSWORTH, CA 91311
February 18, 1999
NOTICE OF ANNUAL STOCKHOLDERS MEETING
To the Stockholders of North American Scientific, Inc.:
You are hereby notified that the Annual Meeting of Stockholders of North
American Scientific, Inc. (the "Company") will be held on March 19, 1999, at
10:00 a.m. at the Hilton Woodland Hills located at 6360 Canoga Avenue, Woodland
Hills, California, for the following purposes:
1. To elect 5 directors to hold office until the 2000 Annual Meeting;
2. To consider a proposal to ratify the selection of
PricewaterhouseCoopers LLP as independent accountants of the Company
for the fiscal year ending October 31, 1999; and
3. To transact such other business as may properly come before the
Meeting or any adjournment thereof; all as set forth in the
accompanying Proxy Statement.
The Board of Directors has fixed the close of business on February 10, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting or any adjournment thereof.
Whether or not you expect to attend the Meeting, please mark, sign, date
and return the enclosed proxy promptly in the accompanying envelope. It is
important that your shares be represented at the Meeting, whether your holdings
are large or small.
By Order of the Board of Directors
L. Michael Cutrer
PRESIDENT
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
----------------------
20200 SUNBURST STREET
CHATSWORTH, CA 91311
1999 ANNUAL MEETING OF STOCKHOLDERS
MARCH 19, 1999
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 1999
Annual Meeting of Stockholders (the "Meeting") to be held at the Hilton Woodland
Hills located at 6360 Canoga Avenue, Woodland Hills, California at 10:00 a.m.
local time, on Friday, March 19, 1999, 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,
1998, are being mailed to stockholders on or about February 18, 1999.
Stockholders of record at the close of business on February 10, 1999 are
entitled to notice of and to vote at the Meeting. On such date, there were
outstanding 6,788,575 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 and FOR the ratification of the
selection of PricewaterhouseCoopers LLP as independent accountants for the
fiscal year ending October 31, 1999. 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
<PAGE>
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 February 10, 1999.
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 65 1989
L. Michael Cutrer 43 1989
Larry Berkin 62 1996
Dr. Allan M. Green 54 1996
Michael C. Lee 48 1996
</TABLE>
Irwin J. Gruverman has been the Chairman and a director of the Company since
December 31, 1989. Mr. Gruverman has been General 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, since 1982. Mr.
Gruverman served as the Executive Vice President of New England Nuclear, a
radioactive materials business, during the later years of his tenure 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 of Neurochem, Inc., Spectral Dimensions, Inc., Select Therapeutics,
Inc., and Argil Management, Inc. and is Chairman of the Board of Directors and
President of Theseus Imaging Corporation.
<PAGE>
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.
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 10, 1999 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. The information in
this Proxy Statement has been adjusted, where applicable, to reflect a 3:2 stock
split of the Company's Common Stock, which was effected as a stock dividend to
holders of Common Stock on April 30, 1998.
<TABLE>
<CAPTION>
Approximate
Amount and Nature of Percent of
Name and Address (1) Beneficial Ownership Ownership
- -------------------- -------------------- -----------
<S> <C> <C>
Irwin J. Gruverman 460,600 (2) 6.7%
L. Michael Cutrer 555,000 (3) 8.0%
Alan I. Edrick 15,000 (4) *
Larry Berkin 379,200 (5) 5.6%
Dr. Allan M. Green 91,000 (6) 1.3%
Michael C. Lee 201,450 (7) 3.0%
Mentor Corporation 375,000 5.5%
5425 Hollister Avenue
Santa Barbara, CA 93111
All existing directors and
executive officers as a group
(6 persons) 1,701,250 23.97%
(2)(3)(4)(5)(6)(7)
</TABLE>
- -------------------------
*Denotes less than 1%
(1) Except where indicated, the address of each five percent stockholder is c/o
the Company, 20200 Sunburst Street, Chatsworth, CA 91311.
(2) Includes 31,000 shares held by G&G Diagnostics Limited Partnership, a
Delaware limited partnership, of which reporting person is the sole general
partner and 45,000 shares subject to outstanding options which are
immediately exercisable. Excludes 30,000 shares owned by reporting
person's spouse, as to which reporting person disclaims beneficial
ownership.
(3) Includes 180,000 shares subject to outstanding options which are deemed
exercisable. Excludes 3,750 shares owned and 25,125 shares subject to
outstanding options which are deemed exercisable and which are held by the
reporting person's spouse, over which he disclaims beneficial ownership.
(4) Consists of 15,000 shares subject to outstanding options which are deemed
exercisable.
(5) Includes 262,200 shares in investment funds to which the reporting person
is trustee. Includes 24,000 shares held by the reporting person for his
minor sons. Also includes 22,500 shares subject to outstanding options
which are deemed exercisable. Excludes 1,700 shares owned by reporting
person's spouse, as to which reporting person disclaims beneficial
ownership.
(6) Includes 22,500 shares subject to outstanding options which are deemed
exercisable.
(7) Includes 22,500 shares subject to outstanding options which are deemed
exercisable.
<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. In addition, Mr. Gruverman receives a salary of
$5,000 per month in his position as Chairman of the Company's Board of
Directors.
COMMITTEES; BOARD MEETINGS
The Board of Directors of the Company held eight meetings during the fiscal year
ended October 31, 1998, 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. During the fiscal year ended October 31,
1998, the Audit Committee met once and the Compensation Committee met twice.
Each member of the Board attended at least 75% of Board and applicable committee
meetings.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Company's Chief
Executive Officer for the fiscal year ended October 31, 1998. No other officer
of the Company received total annual salary and bonus in excess of $100,000 for
such period.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation Awards
----------------------------------------------------------- -------------------
Other Annual Securities All Other
Name and Compensation Underlying Compensation
Principal Position Year Salary ($) Bonus ($) ($) Options ($)
------------------ ---- ---------- -------- --- ------- ---
<S> <C> <C> <C> <C> <C> <C>
L. Michael Cutrer, Chief 1998 120,962 0 8,654(1) 30,000 0
Executive Officer 1997 95,000 0 6,942(1) 150,000 0
1996 91,404 2,500 0 0 0
</TABLE>
- ------------------
(1) Represents payment for Mr. Cutrer's accrued, but unused, vacation days.
<PAGE>
STOCK OPTIONS
The following table sets forth certain information concerning individual grants
of stock options made during the fiscal year ended October 31, 1998 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 Securities Individual Grants as % of Total
Underlying Options/ Options/SARs Granted to Exercise or Base
Name SARs Granted Employees in Fiscal Year Price Per Share Expiration Date
---- ------------ ------------------------ --------------- ---------------
<S> <C> <C> <C> <C>
L. Michael Cutrer 30,000 (1) 15.7% $23.50 04/03/08
</TABLE>
- -------------
(1) 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, 1998 by the Company's
Chief Executive Officer and the fiscal year-end value of unexercised options
under the Company's Amended and Restated 1996 Stock Option Plan.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Securities
Shares Underlying Unexercised Value of Unexercised In-the-
Acquired Value Options at 10/31/98 Money Options at 10/31/98(1)
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
L. Michael Cutrer 0 $0 150,000/30,000 $756,000/$189,000
</TABLE>
- -------------------------
(1) Calculated upon the difference between the exercise price and the fair
market value at fiscal year-end.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
Based upon a review of such reports, the Company believes that all reports were
filed on a timely basis, except as follows: Mr. Gruverman failed to file on a
timely basis one report required by Section 16(a) of the Securities Exchange Act
of 1934, with regard to three transactions in the Company's securities and Dr.
Green failed to timely file one report with respect to one transaction.
<PAGE>
CERTAIN TRANSACTIONS
PRACSYS TRANSACTION
On February 6, 1998, the Company entered into agreements with PracSys Corp., a
privately held Massachusetts corporation ("PracSys"), pursuant to which PracSys
will (i) manufacture and sell to the Company two particle accelerators (the
"Systems") to be used in the production of certain isotopes, which the Company
intends to utilize in connection with its brachytherapy product line, and (ii)
operate the Systems to produce required isotopes for an initial 2-year period.
Irwin J. Gruverman, the Company's Chairman, who is 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.
THESEUS TRANSACTION
In October 1998, the Company signed a letter of intent to acquire Theseus
Imaging Corporation ("Theseus"). Theseus was established to develop and
commercialize nuclear medicine diagnostic agents useful in imaging the response
to therapeutic interventions. Dr. Allan M. Green, a director of the Company, is
the Chairman of the Board of Directors and President of Theseus. Dr. Green took
no part in the deliberations of the Company's Board of Directors with respect to
the proposed Theseus transaction, which actions were approved by a unanimous
vote of the disinterested members of the Company's Board.
The aggregate consideration to be paid by the Company in the merger is
$3,000,000, payable at the Company's option in cash, stock, or a combination
thereof. As of January 1999, Theseus is developing two products, Apomate-TM-
and Leukomate-TM-, using technology which is the subject of third party license
agreements. In addition to the merger consideration, the Company anticipates
paying an ongoing commission on sales of the Apomate-TM- and Leukomate-TM-
products.
Pending completion of the transaction, the Company anticipates advancing Theseus
up to $3.5 million in operating funds to be used towards the completion of phase
II activities for Apomate-TM- and Leukomate-TM-, and for other operating and
research purposes. Advances made prior to closing will be in the form of notes
secured by Theseus' intellectual property.
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending October 31, 1999 and has
further directed that management submit the selection of independent accountants
for ratification by the stockholders at the Annual Meeting.
PricewaterhouseCoopers LLP has audited the Company's financial statements since
1993. A representative of PricewaterhouseCoopers LLP is expected to be present
at the Annual Meeting, will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
VOTE REQUIRED. Stockholder ratification of the selection of
PricewaterhouseCoopers LLP as the Company's independent accountants is not
required by the Company's Bylaws or otherwise. However, the Board is submitting
the selection of PricewaterhouseCoopers LLP to the stockholders for ratification
as a matter of good corporate practice. If the stockholders fail to ratify the
selection, the Board and the Company's Audit Committee will reconsider whether
or not to retain that firm. Even if the selection is ratified, the Board and
the Audit Committee in their discretion may direct the appointment of a
different independent accounting firm at any time during the year if they
determine that such a change would be in the best interests of the Company and
its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting will be
required to ratify the selection of PricewaterhouseCoopers LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE PROPOSAL TO RATIFY THE
SELECTION OF INDEPENDENT ACCOUNTANTS.
OTHER INFORMATION
The Company's Annual Report for the fiscal year ended October 31, 1998 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.
<PAGE>
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the 2000 Annual
Meeting must be received by the Company for inclusion in the proxy relating to
that meeting (expected to be mailed in late February, 2000) no later than
October 21, 1999.
Proposals of security holders intended to be presented at the 2000 Annual
Meeting which will not be included in the proxy must be received by the Company
by January 2, 2000.
By order of the Board of Directors
L. Michael Cutrer
PRESIDENT
Dated: February 18, 1999
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
20200 SUNBURST STREET
CHATSWORTH, CA 91311
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 1999
Annual Meeting of Stockholders of North American Scientific, Inc. (the
"Company") to be held at the Hilton Woodland Hills located at 6360 Canoga
Avenue, Woodland Hills, California at 10:00 a.m. local time, on Friday, March
19, 1999, 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 WITHHOLD AUTHORITY / /
name of nominee is crossed out) / /
Irwin J. Gruverman L. Michael Cutrer Larry Berkin Dr. Allan M. Green
Michael C. Lee
2. FOR ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants for the fiscal year ending October 31, 1999.
FOR / / AGAINST / / ABSTAIN / /
3. 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 February
18, 1999)
Management recommends your vote FOR all proposals.
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 AND WILL CONFER THE
AUTHORITY SET FORTH IN PARAGRAPH 3.
Receipt is hereby acknowledged of the Notice of the Meeting and Proxy
Statement dated February 18, 1999, as well as a copy of the Company's Annual
Report for the fiscal year ended October 31, 1998.
Dated: , 1999.
-------------------------
--------------------------------------------
--------------------------------------------
(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.
