| | Number of shares | | Nature of | | Percentage of |
Name and Address | | Title | | Owned (i) | | Ownership | | Ownership (i) |
The Frost National Bank FBO Renaissance US Growth Investment Trust PLC Trust No. W00740100 | | Common | | 1,000,000 | | Beneficial | | 6.6% |
The Frost National Bank FBO, BFS US Special Opportunities Trust PLC. Trust No. W00118000 | | Common | | 1,000,000 | | Beneficial | | 6.6% |
Bjurman Barry & Associates | | Common | | 790,731 | | Institutional | | 5.2% |
Directors and Officers Andrew Makrides 734 Walt Whitman Road Melville, NY 11746 | | Common | | 850,800(ii) | | Beneficial | | 5.6% |
George Kromer P.O Box 188 Farmingville, NY 11738 | | Common | | 440,000(iii) | | Beneficial | | 2.9% |
J. Robert Saron 7100 30th Avenue North St. Petersburg, FL 33710 | | Common | | 399,681(iv) | | Beneficial | | 2.6% |
Brian Madden 300 Garden City Plaza Garden City, NY 11530 | | Common | | 85,000(vi) | | Beneficial | | .6% |
Mike Norman 410 Jericho Turnpike Jericho, NY | | Common | | 60,000(vii) | | Beneficial | | .4% |
Randy Rossi | | Common | | 50,000(viii) | | Beneficial | | .4% |
Moshe Citronowicz 7100 30th Avenue North St. Petersburg, FL 33710 | | Common Stock | | 639,591(v) | | Beneficial | | 4.2% |
Gary Pickett 7100 30th Avenue North St. Petersburg, FL 33710 | | — | | | | | | |
Vera MacElroy 7100 30th Avenue North St. Petersburg, FL 33710 | | Common | | 16,000(ix) | | Beneficial | | |
Officers and Directors as group (9) persons | | | | 2,541,072(x) | | | | 16.8% |
| |
(1) | On July 16, 2015, 12,000 ten year stock options with an exercise price of $1.80 and calculated option fair value of $0.909 were granted to each member of the Board. |
(i) BasedIn 2016, our Board of Directors consisted of Robert Gershon, J. Robert Saron, Andrew Makrides, John Andres, Larry Waldman, Michael Geraghty, Charles Orsatti, and Scott Davidson. Mr. Davidson tendered his resignation from the board December 19, 2016, and Mr. Orsatti tendered his resignation from the board effective on 15,223,538 outstanding shares of Common Stock and 3,203,700 outstanding options to acquire a like number of shares of Common Stock as of December 31, 2006, of which officers and directors owned a total of 1,737,500 options and 797,572 shares at December 31, 2006. We have calculated the percentages on the basis of the amount of outstanding securities plus, for each person or group, any securities that person or group has the right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights.
PRELIMINARY PROXY MATERIALS
(ii) Includes 385,800 shares reserved and 465,000 ten year options owned by Mr. Makrides to purchase shares of Common Stock of the Company. Exercise prices for his options range from $.50 for 155,000 shares to $3.25 for 25,000 shares.
(iii) Includes 70,000 shares reserved and 370,000 ten year options owned by Mr. Kromer to purchase shares of the Company. Exercise prices for his options range from $.50 for 100,000 shares to $3.25 for 25,000 shares.
(iv) Includes 167,181 shares reserved and 232,500 10 year options owned by Mr. Saron, exercisable at prices ranging from $.50 per share for 155,000 shares, and $3.25 per share for 25,000 shares.
(v) Includes 174,591 shares reserved and 465,000 10 year options owned by Mr. Citronowicz exercisable at prices ranging from $.50 for 155,000 shares to $3.25 for 25,000 shares.
(vi) Includes 85,000 shares reserved pursuant to 10 year options owned by Mr. Madden exercisable at prices ranging from $3.25 for 25,000 to $2.13 for 25,000 options to purchase Common Stock. Mr. Madden has no financial interest in 25,000 shares of Bovie owned by his wife.
(vii) Includes 60,000 shares reserved pursuant to 10 year options owned by Mr. Norman exercisable at prices ranging from $2.13 for 25,000 shares to $2.25 for 35,000 shares.
(viii) Includes 50,000 share reserved pursuant to 10 year options owned by Mr. Rossi exercisable at price ranging from $2.13 for 25,000 to $2.25 for 25,000 shares.
(ix) Includes 11,000 shares reserved and 5,000 10 year options owned by Ms. MacElroy exercisable at $3.25.
(x) Includes 1,727,500 shares reserved for outstanding options owned by all Executive Officers and directors as a group. The last date options can be exercised is May 5, 2015.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Background
In 1998, Maxxim Medical Corporation (“Maxxim”) a then publicly owned corporation, acquired 3,000,000 shares of our common stock from us pursuant to a certain agreement in exchange for assets and equipment, the ownership of the trade name “Bovie” and other future business to be conducted between our corporations. As part of the agreement, Maxxim was granted rights to demand that we register the shares with the SEC. Maxxim later became a privately owned corporation. Maxxim allegedly sold the Bovie common stock to ACMI Corporation (“ACMI”) in 2000. After a continuing dispute between Maxxim and ACMI, in May 2004 a bankruptcy court declared ACMI the owner of the 3,000,000 Bovie shares
Recent Developments
In September 2004, ACMI Corporation privately sold the 3,000,000 shares to a limited number of sophisticated accredited investors. As part of the sale, ACMI Corporation assigned the demand registration rights to the accredited investors. Shortly after completion of the sale by ACMI Corporation, the accredited investors exercised their registration rights and demanded that we file the registration statement with the SEC covering the 3,000,000 shares of common stock. We filed the registration statement as requested for the 3,000,000 shares of common stock and listed the accredited investors as selling stockholders (the “Selling Stockholders”). The registration statement became effective in September 2005. All proceeds from any sale of shares of our Company pursuant to the registration statement are for the benefit of the Selling Stockholders and not Bovie. However, pursuant to separate agreement with ACMI and the Selling Stockholders, we are in the process of being reimbursed for our legal, accounting and other expenses incurred in connection with the offering.2016.
In 2005, Executive Officers, directors, certain consultants and key employees were awarded a total of 442,500 restricted non-statutory options to purchase our Common Stock (of which 225,000 restricted options were granted to Executive Officers and Directors) exercisable at $2.25 per share, the then current market price for our stock on the American Stock Exchange, expiring on May 5, 2015. See Executive Compensation and Proposal Four of this Proxy Statement.
PRELIMINARY PROXY MATERIALS
A former director, Alfred V. Greco Esq., is the principal of Alfred Greco PLLC, a partner of Sierchio, Greco and Greco, LLP the Company’s counsel. Alfred V. Greco PLLC received $87,550, $80,400 and $63,650 in legal fees for the years 2006, 2005 and 2004, respectively. Mr. Greco resigned as a member of2003, the Board of Directors in May, 2005. He still serves as a principal of a partner in Sierchio Greco & Greco, LLP, our legal counsel.
On January 12, 2007 we granted 65,000 options for the balance of available shares reserved under our existing stock option plans to Gary Pickett our CFO (20,000 options)adopted and certain key employees (45,000 options) exercisable at $8.66 per share, the then current market price per share on the American Stock Exchange. In addition, on January 12, 2007, subject to shareholder approval, the Board of Directors granted a total of 35,000 restricted options exercisable at $8.66 per share (the closing price for our common stock on the American Stock Exchange on January 12, 2007) to Messrs, Brian Madden (10,000 options), Michael Norman (10,000 options) and Randy Rossi (10,000 options) for their services as independent directors; and Messrs, Madden and Norman, each received an additional 2,500 restricted options for their services as members of the Audit Committee. If Shareholders approve proposal Three (A), then options for up to 500,000 additional shares may be granted by your company without seeking further approval from shareholders. If shareholders fail to approve Proposal Three (A), then we will be unable to grant any further options under the 2003 Plan.
On March 29, 2007, we granted a total of 30,000 restricted options to two officers, Rick Pfahl, Vice President of Marketing and Business Development (20,000 options) and Gary Pickett, CFO (5,000 options) in acknowledgment for a job well done. These options are exercisable at $7.10 per share, the closing price for our common stock on the American Stock Exchange on March 29, 2007.The granting of options (instead of cash) has been the only manner in which we have compensated our independent directors and rewarded our officers in the past. Cash compensation for the aforesaid services is not deemed by management to be in the best interests of our company because at our stage of growth, all available cash is better utilized operationally for research and expansion of operations. These options are subject to shareholder approval of Proposal Three (B). We are also seeking approval of Proposal Three (A) authorizing an additional 500,000 shares as a reserve for options granted under our 2003 Plan. If Shareholder approval is obtained for Proposal Three (A) then our Company may issue up to 500,000 options or shares under the 2003 Plan without further approval or Shareholders. If approval is not obtained for Proposal Three (A) your Company may not issue any more options under the 2003 Plan, unless shares reserved for outstanding options previously issued under the Plan otherwise become available due to expiration, default, lapse, or failure to exercise such options in a timely manner. Management strongly believes that without the ability to compensate our directors, officers, key employees and consultants adequately with options our company will be placed under a serious competitive handicap in attracting and maintaining quality officers, independent directors, consultants and key employees. If Proposal (A) isstockholders approved management intends that the above options to independent directors and officers shall be covered by the 500,000 share increase authorization under our 2003 Plan. If Shareholder approval is not obtained for Proposal Three (A) or (B), the above options previously granted to the directors and officers will not be covered by our 2003 Plan and will not be exercisable by the recipients for as long as our Company is listed on the American Stock Exchange. If Proposal Three (B) is approved (and not Three (A)) the recipients will receive restricted stock of the Company on exercise, which shares will not be covered by any Plan.
In November 2006, the Board of Directors, including all independent directors, approved 2-year extensions of the outstanding Employment Agreements of Messrs. Makrides, Citronowicz and Saron. Such extensions are historically consistent with prior pattern of extensions in past years.
A director, George Kromer, served as a consultant previous to his employment with us in 2006 and received consulting compensation of $22,906 and $20,751 for 2005 and 2004, respectively.
Two relatives of the chief operating officer of the Company are employed by the Company. Yechiel Tsitrinovich, an engineering consultant received compensation for 2006 and 2005 of $79,776 and $79,776 respectively. The other relative, Arik Zoran, is an employee of the Company in charge of the engineering department. He had a two-year contract providing for a salary of $90,000 per year plus living expenses and benefits which has been extended. For 2006 and 2005 he was paid $162,562 and $157,045 which includes living expenses and benefits. The Company is attempting at this time to secure a permanent work visa for Mr. Zoran.
PRELIMINARY PROXY MATERIALS
Audit Committee:
The Audit Committee has adopted a policy for the pre-approval of services provided by the independent auditors, pursuant to which it may pre-approve any service consistent with applicable law, rules and regulations. Under the policy, the Audit Committee may also delegate authority to pre-approve certain specified audit or permissible non-audit services to one or more of its members. A member to whom pre-approval authority has been delegated must report his pre-approval decisions, if any, to the Audit Committee at its next meeting, and any such pre-approvals must specify clearly in writing the services and fees approved. Unless the Audit Committee determines otherwise, the term for any service pre-approved by a member to whom pre-approval authority has been delegated is twelve months.
Prior to September 29, 2003 the audit committee consisted of the board of directors. On September 29, 2003 the board of directors appointed Brian Madden, George Kromer (then both independent directors) and Andrew Makrides as audit committee members. Mr. Madden was considered the only audit committee financial expert until Mr. Michael Norman CPA was made a board member and audit committee member on September 23, 2004. The audit committee is presently made up of members, Michael Norman, CPA, Brian Madden and August Lentricchia, a recently appointed member of the Board of Directors and the Audit Committee. Mr. Lentricchia is also on management’s slate of proposed directors to be elected at this meeting.
OTHER BUSINESS
Stockholder Proposals for Inclusion in Proxy Statement
Pursuant to the Company's policy, stockholders may present proper proposals for inclusion in the Company's proxy statement and for consideration at the Company's next annual meeting of stockholders. To be eligible for inclusion in the Company's 2008 Proxy Statement, a stockholder's proposal must be received by the Company no later than May 31, 2007 and must otherwise comply with Rule 14a-8 under the Exchange Act.
Stockholder Proposals for Annual Meeting
For business to be properly brought before an annual meeting by a stockholder, in addition to any other applicable requirements, timely notice of the matter must be first given to Bovie. To be timely, written notice must be received by Bovie at its Melville, N.Y. office by the deadline specified in last year's proxy statement. If the proposal is submitted for a regularly scheduled annual meeting, the proposal must be received at Bovie's principal executive offices not less than 120 calendar days before the date of the Company's proxy statement released to stockholders in connection with the previous year's annual meeting; or (b) if the date of this year's annual meeting has been changed by more than 30 days from the date of the previous year's meeting, then the deadline is a reasonable time before the Company begins to print and mail its proxy materials. While the Board of Directors will consider stockholder proposals, the Company reserves the right to omit from the Company's 2007 Proxy Statement any stockholder proposals that it is not required to include under federal regulations.
Stockholder Nominations of Directors
The Board of Directors adopted, as part of the director selection process, a policy for director selection, which includes consideration of potential director nominees recommended by stockholders. The Board will identify, evaluate and select potential director nominees, including nominees recommended by you, using qualitative standards and certain procedures, as described under the Board of Directors, Director Selection above, for recommendation to the Board of Directors for selection. Any stockholder entitled to vote for the election of directors at a meeting may nominate persons for election as directors only if timely written notice of such stockholder's intent to make such nomination is given, either by personal delivery or United States mail, postage prepaid, to Mr. Andrew Makrides, President, Bovie Medical Corporation, 734 Walt Whitman Road, Suite 207, Melville, NY 11747. Refer to the section entitled the Board of Directors, Director Selection above for more information.
PRELIMINARY PROXY MATERIALS
Costs of Solicitation
Bovie is making this solicitation of proxies and is responsible for the payment of all expenses incurred in connection with the solicitation. Management estimates that the cost of solicitation of proxies will be approximately $20,000 to be incurred solely by Bovie.
PRELIMINARY PROXY MATERIALS
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors has nominated all of the current directors for re-election at the Annual Meeting. All directors serve until the next Annual Meeting of stockholders or their resignation or until their successors are duly elected and qualified.
THE NOMINEES
We have previously set forth in this Proxy Statement, information - provided by the nominees - concerning their principal occupation, business experience and other matters. See “Management”.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE FOLLOWING NOMINEES.
ANDREW MAKRIDES
J. ROBERT SARON
RANDY ROSSI
MICHAEL NORMAN
GEORGE W. KROMER, JR.
BRIAN H. MADDEN
AUGUST LENTRICCHIA
PRELIMINARY PROXY MATERIALS
PROPOSAL TWO
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Kingery & Crouse PA, (Kingery”) Certified Public Accountants, as the independent auditors of Bovie for fiscal year ending December 31, 2007. BLOOM & Company LLP, the former independent auditor for the past 23 years has effectively dissolved due to the untimely death of Stephen Bloom. Arrangements have been made for a representative of Kingery to attend the Annual Meeting. The representative will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate stockholder questions. The selection of Kingery as the Company's auditors must be ratified by a majority of the votes cast at the Annual Meeting. Kingery is a member of the Securities and Exchange Division of the American Institute of Certified Public Accountants ("AICPA") duly authorized to perform audits of SEC registrants. The firm is current with its peer review system and has maintained an unqualified quality control status since the inception of the peer review system established by the AICPA.
Audit Fees. The aggregate fees billed by our former auditors for services rendered for the audit of our financial statements for the fiscal year ended December 31, 2006 and the review of the Company's financial statements included in our quarterly filings on Form 10QSB during that fiscal year were $ 124,694. There were no other fees paid for other services performed by our former auditor Bloom & Company, LLP or its employees.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF KINGERY &
CROUSE, PA AS THE COMPANY'S INDEPENDENT AUDITORS FOR 2007.
PRELIMINARY PROXY MATERIALS
PROPOSAL THREE
(A) RATIFY PROPOSED AMENDMENT OF
2003 EXECUTIVE AND EMPLOYEE STOCK OPTION PLAN
And
(B) APPROVE THE GRANT IN JANUARY AND MARCH 2007 OF OPTIONS
TO PURCHASE 65,000 SHARES
Introduction
Management is convinced that in addition to our key employees and operating executives, our Company’s major asset consists of its manufacturing capability, technology and electrosurgical products. If we are to continue to successfully attract, motivate and retain the most qualified key employees, executive officers, non-employee directors and consultants for the Company for our business, it is essential that we continue to be able to offer them a competitive equity incentive program. OurBovie’s 2003 Executive and Employee Stock Option Plan presently has no morecovering a total of 1,200,000 shares reserved for future issuance of options. In this connection, management has proposedcommon stock issuable upon exercise of options to amend itsbe granted under the Plan.
On October 30, 2007, stockholders approved and the Board of Directors adopted an amendment to the 2003 Executive and Employee Stock Option Plan (‘2003 Plan”) to increase the number of shares reserved for issuance under the Plan for incentivizing and/or attracting executives, directors, key employees and consultants
This Proposal seeks (A) Ratification and approval of an increase of 500,000 shares of common stock for our company’s 2003 Plan as a reserve for future options; (B) Approval of the grant of a total of 65,000 restricted options to certain independent directors and officers during 2007.
Amendment
The proposed amendment will modify the 2003 Plan to increase the maximum aggregate number of shares of common stock reserved for issuance under the 2003 Plan from 1.2 Millionmillion shares (already reserved against outstanding options) to 1.7 Millionmillion shares, or an increase of 500,000 shares of common stock for future issuance pursuant to the terms of the Plan.plan. Except for the proposed increase in the number of shares covered by the Plan,plan, the Plan shall remainplan remains otherwise unchanged from its present status.
On January 12, 2007, subject to shareholder approval, In 2011, the Board of Directors granted 25,000 options to purchase a like number of shares of common stock.
In July of 2012, the stockholders approved the 2012 Executive and Employee Stock Option Plan covering a total of 35,000 restricted750,000 shares of common stock issuable upon exercise of options to Messrs, Brian Madden (10,000 options), Randy Rossi (10,000 options)be granted under the plan. At December 31, 2016 approximately 37,000 remain to be issued in this plan.
In July of 2015 the stockholders approved the 2015 Executive and Michael Norman (10,000 options)Employee Stock Option Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2016 approximately 693,078 remain to be issued in this plan.
There have been no changes in the pricing of any options previously or currently awarded.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is responsible for their servicesdetermining the compensation of executive officers of the Company, as well as compensation awarded pursuant to the Company’s equity incentive plans.
In 2016, our Compensation Committee consisted of three independent directors; and Messrs, Madden and Norman, each received an additional 2,500 restricted options for their services as members of the Audit Committee. The foregoing is essentially the only manner in which we compensate our independent directors. These options are exercisable at $8.66 per share, the closing price for our common stock on the American Stock Exchange on the dateBoard of grant. If the shareholders ratify Proposal Three (A) then options for up to 500,000 additional shares may be granted by your company without seeking further approval from shareholders.Directors, Charles Orsatti who served as Chairman, John Andres and Lawrence J. Waldman.
On March 29, 2007,No member of the Compensation Committee is or has been an officer or employee of the Company or any of its subsidiaries. In addition, no member of the Compensation Committee had any relationships with the Company or any other entity that require disclosure under the proxy rules and regulations promulgated by the SEC.
COMPENSATION COMMITTEE REPORT
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in our Annual Report on Form 10-K with management. Based on our Compensation Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, our Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for filing with the SEC. During the majority of 2016, our Compensation Committee consisted of three independent members of the Board of Directors, Charles T. Orsatti, who served as Chairman, John Andres and Lawrence J. Waldman.
The Compensation Committee
Charles T. Orsatti, Compensation Committee Chair
John Andres, Compensation Committee Member
Lawrence J. Waldman, Compensation Committee Member
The foregoing Compensation Committee Report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not otherwise be deemed filed under these acts, except to the extent we grantedspecifically incorporate by reference into such filings.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as of July 27, 2017 with respect to the beneficial ownership of the Company’s common stock by its executive officers, directors, all persons known by the Company to be the beneficial owners of more than 5% of its outstanding shares and by all officers and directors as a group.
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| | | | | | | | | | | |
| | Number of Shares | | | | | |
Name and Address | | Title | | Owned (i) | | | Nature of Ownership | | Percentage of Ownership (i) |
Great Point Partners, LLC | | Common | | 3,084,269 |
| (ii) | | Beneficial | | 9.985 | % |
165 Mason Street 3rd Floor | | | | | | | | | |
Greenwich, CT 06830 | | | | | | | | | |
| | | | | | | | | |
William Weeks Vanderfelt | | Common | | 2,273,249 |
| | | Beneficial | | 7.4 | % |
Coralis 44, Azzuri Village 44 | | | | | | | | | |
Roches Noires, 31201 Mauritius | | | | | | | | | |
| | | | | | | | | |
Andrew Makrides | | Common | | 641,972 |
| (iii) | | Beneficial | | 2.1 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Robert L. Gershon | | Common | | 423,750 |
| (iv) | | Beneficial | | 1.3 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
|
| | | | | | | | | | | |
J. Robert Saron | | Common | | 445,190 |
| (v) | | Beneficial | | 1.4 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Moshe Citronowicz | | Common | | 465,754 |
| (vi) | | Beneficial | | 1.4 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
John Andres | | Common | | 34,500 |
| (vii) | | Beneficial | | 0.1 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Jay D. Ewers | | Common | | 42,500 |
| (viii) | | Beneficial | | 0.1 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Jack McCarthy | | Common | | 284,750 |
| (ix) | | Beneficial | | 0.7 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Michael Geraghty | | Common | | 50,000 |
| (x) | | Beneficial | | 0.1 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Lawrence J. Waldman | | Common | | 101,000 |
| (xi) | | Beneficial | | 0.3 | % |
5115 Ulmerton Rd. | | | | | | | | | |
Clearwater, FL 33760 | | | | | | | | | |
| | | | | | | | | |
Officers and Directors as a group (9 persons) | | | | 2,489,416 |
| (xii) | | | | 7.3 | % |
| |
(i) | Based on 30,859,753 outstanding shares of Common Stock and 4,053,406 outstanding options to acquire a like number of shares of Common Stock as of July 25, 2017, of which officers and directors owned a total of 716,715 options and 1,590,166 shares at July 25, 2017. We have calculated the percentage on the basis of the amount of outstanding securities plus, for each person or group, any securities that person or group has current or future right to acquire pursuant to options, warrants, conversion privileges or other rights. |
| |
(ii) | Consists of (i) 3,055,000 shares of Common Stock owned collectively by Biomedical Value Fund, LP ("BVF"), Biomedical Offshore Value Fund, Ltd. ("BOVF"), Biomedical Institutional Value Fund, LP ("BIVF"), Class D Series of GEF-PS, LP ("GEF-PS"), and WS Investments, II, LLC ("WS"). The shares of common stock are owned of record as follows: BVF: 1,444,921; BOVF: 808,323; BIVF: 371,588; GEF-PS: 379,021; WS: 51,147. Does not include: (i) 975,639 shares of Series B preferred stock convertible into 1,951,278 common shares, collectively owned by each of BVF, BOVF, BIVF, GEF-PS, and WS. The provisions of such preferred stock restrict the conversion of such preferred stock to the extent that, after giving effect to such conversion, the holder of the preferred stock and its affiliates and any other person or entities with which such holder would constitute a group would beneficially own in excess of 9.985% of the number of shares of Common Stock of the Issuer outstanding immediately after giving effect to such conversion or exercise (the "Ownership Cap"). Therefore, the reporting persons could be deemed to beneficially own such number of shares underlying such preferred stock as would result in total beneficial ownership by such reporting persons up to the Ownership Cap. |
| |
(iii) | Includes 611,972 shares and 30,000 vested options out of a total of 30,000 ten year options owned by Mr. Makrides to purchase shares of Common Stock of the Company at an exercise price of $2.54. These options vest equally over a four year period. |
| |
(iv) | Includes 30,000 shares and 393,750 vested options out of a total of 925,000 ten year options owned by Mr. Gershon to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.80 to $3.23. These options vest equally over a four year period. |
| |
(v) | Includes 405,940 shares and 39,250 vested options out of a total of 137,000 ten year options owned by Mr. Saron to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.80 to $3.23. These options vest equally over a four year period. |
| |
(vi) | Includes 426,504 shares and 39,250 vested options out of a total of 137,000 ten year options owned by Mr. Citronowicz to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.80 to $3.23. These options vest equally over a four year period. |
| |
(vii) | Includes 34,500 vested options out of a total of 34,500 ten year options owned by Mr. Andres to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.88 to $3.81. |
| |
(viii) | Includes 42,500 vested options out of a total of 170,000 ten year options owned by Mr. Ewers to purchase shares of Common Stock of the Company. Exercise prices for his options range from $2.13 to $3.63. These options vest equally over a four year period. |
| |
(ix) | Includes 115,750 shares and 169,000 vested options out of a total of 320,000 ten year options owned by Mr. McCarthy to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.80 to $3.90. These options vest equally over a four year period. |
| |
(x) | Includes 50,000 vested options out of a total of 62,000 ten year options owned by Mr. Geraghty to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.88 to $3.81. |
| |
(xi) | Includes 101,000 vested options out of a total of 113,000 ten year options owned by Mr. Waldman to purchase shares of Common Stock of the Company. Exercise prices for his options range from $1.88 to $3.81. |
| |
(xii) | Includes 899,250 vested ten year options out of a total of 1,928,500 ten year outstanding options and 1,590,166 shares owned by all Executive Officers and directors as a group. The last date options can be exercised is April 30, 2027. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten-percent stockholders (the “Reporting Persons”) are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on its review of the copies of such reports received or written representations from certain Reporting Persons that no other reports were required, the Company believes that during its fiscal year ended December 31, 2016 all filing requirements applicable to the Reporting Persons were timely met.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our policy is that employees, non-employees and third parties must obtain authorization from the appropriate department executive manager, for any business relationship or proposed business transaction in which they or an immediate family member has a direct or indirect interest, or from which they or an immediate family member may derive a personal benefit (a “related party transaction”). The maximum dollar amount of related party transactions that may be approved as described above in this paragraph in any calendar year is $120,000. Any related party transactions that would bring the total value of 30,000 restricted optionssuch transactions to two officers, Rick Pfahl,greater than $120,000 must be referred to the Audit Committee to determine the procedure for approval and then have the recommendations presented to the Board of Directors for approval.
Several relatives of Nikolay Shilev, Bovie Bulgaria’s Managing Director, are considered related parties. Teodora Shileva, Mr. Shilev’s spouse is an employee of the company working in the Accounting department. Antoaneta Dimitrova Shileva-Toromanova, Mr. Shilev’s sister is the Manager of Production and Human Resources. Svetoslav Shilev, Mr. Shilev’s son is an Engineer in the Quality Assurance department.
A relative of Moshe Citronowicz, Bovie’s Senior Vice President, is considered a related party. Arik Zoran is a consultant of Marketing and Business Development (20,000 options) and Gary Pickett, CFO (5,000 options) in acknowledgment forthe Company doing business as AR Logic, Inc., a job well done. These options are exercisable at $7.10 per share, the closing price for our common stock on the American Stock Exchange on March 29, 2007.The granting of options (instead of cash)consulting firm owned by Arik Zoran, Mr. Citronowicz’s brother. The Company has been working with AR Logic since 2011 and as of April 14, 2017, the only manner in which we have compensated ourCompany agreed to a renewal contract and terms to continue the consulting arrangement, expiring December 31, 2017. AR Logic was paid consulting fees of approximately $0.2 million, $0.3 million and $0.2 million during 2016, 2015 and 2014, respectively.
Independent Board Members
The Board currently has three independent directorsmembers, John Andres, Michael Geraghty and rewarded our officers inLawrence J. Waldman who meet the past. Cash compensationexisting independence requirements of the NYSE MKT Market and the Securities and Exchange Commission.
PROPOSAL TWO
RATIFICATION OF AUDITORS
Frazier & Deeter, LLC (“F&D”) has acted as the Company's independent registered public accounting firm for the aforesaid servicesfiscal year ending December 31, 2016. Representatives of F&D are expected to be available at the meeting to respond to appropriate questions and will be given the opportunity to make a statement if they desire to do so. Neither the Company's bylaws nor the governing documents or law require stockholder ratification of the selection of F&D as the Company's independent registered public accounting firm. However, this proposal is being submitted to the stockholders as a matter of good corporate practice. If the stockholders do not deemedratify F&D, the appointment of another firm of independent certified public accountants may be considered by management to bethe Audit Committee. Even if F&D is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that doing so is in the best interests of our company because at our stage of growth, all available cash is better utilized operationally for researchthe Company and expansion of operations.its stockholders.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF FRAZIER & DEETER, LLC AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL YEAR ENDING DECEMBER 31, 2017.
The above option grantsfollowing table sets forth the aggregate fees billed to certain independentus by our current accountants, Frazier & Deeter, LLC:
|
| | | | | | | |
| Year Ended December 31, |
(In thousands) | 2016 | | 2015 |
Audit fees (1) | $ | 173 |
| | $ | 141 |
|
Non-Audit fees: | | | |
Audit related fees (2) | 3 |
| | 17 |
|
Tax fees (3) | — |
| | — |
|
All other fees (4) | — |
| | — |
|
Total fees billed | $ | 176 |
| | $ | 158 |
|
| |
(1) | Audit fees consist of fees billed for professional services rendered for the audit of Bovie’s annual financial statements and reviews of its interim consolidated financial statements included in quarterly reports and other services related to statutory and regulatory filings or engagements. |
| |
(2) | Audit related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or reviews of Bovie’s consolidated financial statements and are not reported under “Audit Fees”. |
| |
(3) | Tax fees consist of fees billed for professional services rendered for tax compliance and tax advice (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning. |
| |
(4) | All other fees consist of fees for products and services other than the services reported above. |
AUDIT COMMITTEE REPORT
Our Audit Committee is composed of "independent" directors, and officers are subject to shareholder approvalas determined in accordance with Rule 10A-3 of (Proposal Three (B)). We are also seeking approvalthe Securities Exchange Act of amendment to our 2003 Plan authorizing an additional 500,000 shares as a reserve for options granted under our 2003 Plan. If Shareholder approval is obtained for Proposal Three (A) we will be able to issue up to 500,000 options and shares1934. The Audit Committee operates pursuant to the 2003 Plan without further seeking approval of our shareholder. If Proposal Three A is not ratified, we cannot issue any options under the 2003 Plan, unless shares reserved for outstanding options previously issued under the Plan otherwise become available due to expiration, default, lapse, or failure to exercise such options in a timely manner. Management strongly believes that without the ability to compensate our directors, officers, key employees and consultants with options, our company will be put under a serious competitive handicap in attracting and maintaining quality officers, independent directors and key employees. Management intends that the above options shall be issued and coveredwritten charter adopted by the 500,000 share increase authorization under our 2003 Plan and is seeking approvalBoard of Proposal Three (B). If Shareholder approval for Proposals Three (A) and (B) is obtained, the above options shall be issued and covered by the 500,000 share increase authorization under our 2003 Plan. If Shareholder approval is not obtained for Proposals Three (A) or (B), the above options previously granted to the independent directors and officers will not be covered by our 2003 Plan and will not be exercisable for as long as our Company is listed on the American Stock Exchange. If Proposal Three (B) is approved (and not Three (A)) the recipients will receive restricted stock of the Company on exercise, which shares will not be covered by any Plan.
PRELIMINARY PROXY MATERIALS
Directors.
As of July 2007, there were no shares of common stock remaining available for option awards under the 2003 Plan. In light of historical usage and expected future grants, we anticipate the number of shares of common stock available for awards under the 2003 Plan, if Proposal (A) is ratified and approved, will be adequate to meet our foreseeable requirements.
A description of the principal features of the 2003 Plan, to be amended, is set forth below.
Purpose and Eligibility
As previously indicated,described more fully in its charter, the purpose of the 2003 Plan,Audit Committee is to assist the Board of Directors with its oversight responsibilities regarding the integrity of our financial statements, our compliance with legal and regulatory requirements, assessing the independent registered public accounting firm's qualifications, independence and performance for us. Management is responsible for preparation, presentation and integrity of our financial statements as well as our financial reporting process, accounting policies, internal audit function, internal accounting controls and disclosure controls and procedures. The independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee's responsibility is to monitor and oversee these processes. The following is the Audit Committee's report submitted to the Board of Directors for 2016.
As part of its oversight of the Company's financial statements, the Audit Committee reviews and discusses with both management and the Company's independent registered public accountants all annual and quarterly financial statements prior to their issuance. During fiscal 2016, management advised the Audit Committee that each set of financial statements reviewed had been prepared in accordance with generally accepted accounting principles, and management reviewed significant accounting and disclosure issues with the Audit Committee.
The Audit Committee recognizes the importance of maintaining the independence of the Company's Independent Auditor, both in fact and appearance. Each year, the Committee evaluates the qualifications, performance and independence of the Company's Independent Auditor and determines whether to re-engage the current Independent Auditor. Based on this evaluation, the Audit Committee has retained Frazier and Deeter, LLC as the Company's Independent Auditor for 2017. Although the Audit Committee has the sole authority to appoint the Independent Auditors, the Audit Committee will continue to recommend that the Board ask the stockholders, at the Annual Meeting, to ratify the appointment of the Independent Auditors.
The Committee reviewed with the independent auditor, which is responsible for expressing an opinion on the conformity of those audited financial statements and related schedules with US generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the Committee by the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), including PCAOB Auditing Standard No. 16, Communications with Audit Committees, the rules of the Securities and Exchange Commission, and other applicable regulations. In addition, the Committee has discussed with the Independent Auditor the firm's independence from Company management and the Company, including the matters in the letter from the firm required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the compatibility of non-audit services with the independent auditor's independence.
In addition, the Audit Committee has met separately in executive session with management and with Frazier & Deeter, LLC.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2016 for filing with the Securities and Exchange Commission.
The Audit Committee
Lawrence J. Waldman, Audit Committee Chair
John Andres, Audit Committee Member
Michael Geraghty, Audit Committee Member
August 8, 2017
The foregoing Audit Committee Report shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, and shall not otherwise be deemed filed under these acts, except to the extent we specifically incorporate by reference into such filings.
PROPOSAL THREE
APPROVAL OF ADVISORY RESOLUTION
SUPPORTING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
General
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), and Section 14A of the Securities Exchange Act of 1934, as amended, is to enable the Company is asking its stockholders to continuevote, on an advisory basis, to approve the compensation of its named executive officers as described in this Proxy Statement. This proposal, commonly known as a "say-on-pay" proposal, gives the Company's stockholders the opportunity to express their views on the compensation of the Company's Named Executive Officers. For purposes of this Proxy Statement, the following Company executives are referred to collectively as the "Named Executive Officers": Robert L. Gershon, Andrew Makrides, J. Robert Saron, John J. McCarthy, Moshe Citronowicz, and Jay D. Ewers. We are required to hold a vote regarding the frequency of future non-binding advisory votes relating to future named executive officer compensation once every six years. At our 2013 Annual Meeting of Stockholders, our Stockholders voted to hold an annual non-binding advisory vote relating to the frequency of future non-binding advisory votes on resolutions approving future named executive officers compensation.
Compensation Program and Philosophy
Our executive compensation program is designed to attract, reward and retain key employees, including our Named Executive Officers, who are critical to the Company's long-term success. Stockholders are urged to read the "Executive Compensation" section of this Proxy Statement for greater detail about the Company's executive compensation programs, including information about the fiscal year 2016 compensation of the Named Executive Officers.
The Company is asking the stockholders to indicate their support for the compensation of the Company's Named Executive Officers as described in this Proxy Statement by voting in favor of the following resolution:
RESOLVED, that the stockholders ratify and approve the compensation of the Named Executive Officers of Bovie Medical Corporation, as disclosed in the "Executive Compensation", the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company's 2017 Annual Meeting of Stockholders.
Even though this Say-on-Pay vote is advisory and therefore will not be binding on the Company, the Compensation Committee and the Board of Directors value the opinions of the Company's stockholders. Accordingly, to the extent there is a significant vote against the compensation of the Named Executive Officers, the Board of Directors will consider stockholder concerns and the Compensation Committee will evaluate what actions, if any, may be necessary or appropriate to address those concerns. You may vote "for," "against," or "abstain" from the proposal to approve on an advisory basis the compensation of our Named Executive Officers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" SUPPORTING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
PROPOSAL FOUR
APPROVAL OF THE 2017 SHARE INCENTIVE PLAN
At the Annual Meeting, stockholders will be asked to approve the Company’s 2017 Share Incentive Plan (the “2017 Plan”), which was adopted by the Board of Directors subject to approval by the Company’s stockholders. The Company’s Board of Directors considers the 2017 Plan to be important to: (i) aid in maintaining and developing key employees capable of assuring the future success of the Company and to offer such personal incentives to put forth maximum efforts for the success of the Company's business; (ii) to enhance the Company's ability to attract and retain the services of experienced and knowledgeable executives, non-employee directors,outside directors; and (iii) to afford such key employees and key consultants andoutside directors an opportunity to align furtheracquire a proprietary interest in the Company, thereby aligning their interests with those of the stockholders of the Company by providing for or increasing the proprietary interests of the non-employee directors and consultantsCompany’s stockholders.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE 2017 SHARE INCENTIVE PLAN.
Summary of the New Plan
The following summary of the main features of the 2017 Plan is qualified in its entirety by reference to the complete text of the 2017 Plan, which is set forth as Exhibit A to this Proxy Statement. For purposes of the discussion contained in this Proposal No. 4, all capitalized terms shall have the meaning proscribed to such terms in the Company. The 20032017 Plan, provides for grants of nonqualified and incentive stock options.
Stock Available For Issuance under the 2003 Planexcept as otherwise provided.
The 2017 Plan authorizes the grant and issuance of two different types of Awards: Options (“Stock Options”), which can qualify as “incentive stock options” under the Code, or as “non-qualified stock options;” and Restricted Stock, which is stock that is contingent on an employee satisfying conditions, including without limitation continued employment, passage of time or satisfaction of performance criteria.
The 2017 Plan has a number of special terms and limitations, including:
The exercise price for Stock Options granted under the 2017 Plan must at least equal the Shares’ fair market value at the time the Stock Option is granted;
The 2017 Plan expressly states that Stock Options granted under it cannot be “repriced,” as defined in the 2017 Plan, without stockholder approval;
3,000,000 shares, of common stockare proposed to be reservedavailable for granting any Award under the 20032017 Plan; and
Stockholder approval is required for certain types of amendments to the 2017 Plan.
Eligibility
Any Key Employee, including any Key Employee who is an officer or director of the Company or any Affiliate, any Outside Director or a third party consultant to the Company or any Affiliate shall be eligible to be designated a Participant; provided however, that an Incentive Stock Option shall not be granted to: (1) an Outside Director; or (2) an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code.
Administration
The 2017 Plan are made available, at the discretionmay be administered by a committee of the Board either from authorized but unissued shares of common stockDirectors comprised of non-employee directors (the "Committee"), although the Board of Directors may exercise any authority of the Committee under the 2017 Plan in lieu of the Committee’s exercise thereof.
Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or from reacquired sharestypes of common stock or any combination thereof. PriorAwards to amendingbe granted to each Participant under the 2003 Plan,Plan; (iii) determine the total number of sharesShares to be covered by (or with respect to which payments are to be calculated in connection with) Awards; (iv) determine the terms and conditions of common stock thatany Award or Award Agreement; (v) amend the terms and conditions of any Award or Award Agreement and accelerate the exercisability of Options or the lapse of restrictions relating to Restricted Stock; (vi) determine whether to, to what extent and under what circumstances Awards may be issued pursuantexercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (vii) determine whether, to awardswhat extent and under what circumstances cash or
Shares payable with respect to an Award under the 2003Plan shall be deferred either automatically or at the election of the holder thereof or the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.
Shares Available for Awards
The aggregate number of Shares that can be issued under the 2017 Plan may not exceed 1.2 Million. The proposed amendment3,000,000 (including pursuant to Incentive Stock Options). If any Shares covered by an Award or to which an Award relates are not purchased or are forfeited or if an Award otherwise terminates without the delivery of any shares or cash payments to be received thereunder, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the 2003 Plan will increase the total numberextent of shares of common stock that mayany such forfeiture or termination, shall again be issued pursuant to awardsavailable for granting Awards under the 2003 PlanPlan. In addition, any shares that are used by a Participant as full or partial payment to 1.7 Million shares. If, on or before terminationthe Company of the 2003 Plan,purchase price of Shares acquired upon exercise of an optionOption or satisfy applicable tax withholding requirements (including social insurance requirements) upon the exercise or vesting of an Award shall again be available for granting Awards.
In the event that the Committee shall determine that any reason expiresdividend or otherwise terminates,other distribution (whether in wholethe form of cash, Shares, other securities or in part, without having been exercised in full,other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or if any sharesexchange of common stock subjectShares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an award have been reacquiredadjustment is determined by the Company pursuantCommittee to be appropriate in order to prevent dilution or enlargement of the restrictions imposed on such shares, such optionbenefits or shares, as the case maypotential benefits intended to be will becomemade available for issuance again under the 2003 Plan. The number and kindPlan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of shares issuable under the 2003 Plan,(i) the number and kindtype of sharesShares (or securities or other property) which thereafter may be made the subject of Awards, (ii) the number and type of Shares (or securities or other property) subject to outstanding awards,Awards and (iii) the grant or exercise price with respect to any award,Award; provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number.
Awards
The 2017 Plan authorizes the grant and the repurchase price, if any, with respect to any award, will be appropriately and proportionately adjusted to reflect mergers, consolidations, sales or exchanges of all or substantially allissuance of the propertiesfollowing types of the Company, reorganizations, recapitalizations, reclassifications, stock dividends, stock splits, reverse stock splits, spin-offs or other distributions with respect to such shares of common stock (or any stock or securities received with respect to such common stock).
On September __, 2007, the closing market price of the common stock of the Company on the AmericanAwards: Stock Exchange was $__ per share.Options and Restricted Stock.
Administration, Amendment and TerminationStock Options
The 2003 Plan is administered by the Board and having such powers as specified by the Board, which consists of at least four independent directors, each of whom is a "non-employee director" within the meaning of Rule 16b-3 under the Exchange Act and an "outside director" for purposes of Section 162(m) of the Code (“Administrator”). Subject to the express provisions of the 20032017 Plan and as discussed in this paragraph, the Board determines in itsCommittee has discretion the persons to whom and the times at which awards are granted, the types and sizes of such awards, and all of their terms and conditions. The Board, subject to certain limitations required by Section 162(m) and the express language in the 2003 Plan, may amend, modify, extend, cancel or renew any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or deferdetermine the vesting schedule of any award. The Board may establish rules and policies for administration ofStock Options, the 2003 Plan and adopt one or more forms of agreementevents causing a Stock Option to evidence awards made under the 2003 Plan. The Board interprets the 2003 Plan and any agreement used under the 2003 Plan, and all determinations of the Board will be final and binding on all persons having an interest in the 2003 Plan or any award issued under the 2003 Plan. The 2003 Plan continues in effect until its termination by the Administrator or the date on which all shares available for issuance under the plan have been issued and all restrictions on such shares under the terms of the plan and agreements evidencing awards granted have lapsed. The Board may terminate or amend the plan at any time, provided that without stockholder approval the plan cannot be amended to increase the share reserve or effect any other change that would require stockholder approval under any applicable law. No termination or amendment may affect any outstanding award unless expressly provided by the Board; and, in any event, the Board may not adversely affect an outstanding award without the consent of the participant unless necessary to comply with any applicable law.
PRELIMINARY PROXY MATERIALS
Option Grants
Pursuant to the proposed amendment to the 2003 Plan, executives, non-employee directors, key employees, and consultants may be granted options to purchase shares of common stock of the Company. Subject to appropriate adjustment in the event of any change in our capital structure, we may not grant to any one executive or employee participant in any fiscal year incentive options which exceed $100,000 in value on date of grant. Each option granted under the 2003 Plan must be evidenced by a writing specifyingexpire, the number of shares subject to any Stock Option, the optionrestrictions on transferability of a Stock Option, and the othersuch further terms and conditions, of the option, consistentin each case not inconsistent with the requirements of2017 Plan, as may be determined from time to time by the 2003 Plan.Committee. The 20032017 Plan providedexpressly provides that the options shall not be transferable. Pursuant to Board Resolution and as permitted under SEC rules, the options may now be transferable to family members in connection with a holder’s estate planning activities and pursuant to a matrimonial court order.Company cannot “reprice” Stock Options without stockholder approval. The exercise price of each non-statutory stock optionfor Stock Options may not be less than the fair market value of a share of our common stock on the date of grant. Options become vested and exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the Board. The maximum term of any statutory or non-statutory option granted under the 2003 Plan is ten years. Subject to the term of the option, an option generally will remain exercisable for three months following the Optionee’s termination of service, except that if service terminates as a result of the Optionee’s death or disability, the option generally will remain exercisable for twelve months, or if service is terminated for cause, the option will terminate immediately or as otherwise provided by the Board. All options granted under the Plan may not be assigned or transferred except family members or pursuant to an order in a matrimonial proceeding.
Effect of Option Grants
Each time options are issued and exercised, there is an impact on our book value per share and each shareholder’s percentage ownership of outstanding shares. Due to the current requirement for the Company to expense stock options, issuance of the restricted options may have the effect of decreasing the book value per share of the outstanding shares. The exercise price of the restricted options will have the effect of increasing the book value per share of all outstanding shares, but shall have the simultaneous effect of decreasing the percentage ownership of each outstanding shareholder. In addition, shareholders should also be aware that it is likely that the restricted stock option holder will exercise the option at a time that we would be able to sell our shares at a higher price than the exercise price.
Change in Control
In the event of a “change in control” of the Company, the surviving, continuing, successor or purchasing entity or its parent may, without the consent of any participant, either assume all outstanding options or substitute substantially equivalent options or rights for its stock. If outstanding options are not assumed or replaced, then all unexercised and unvested portions of such outstanding awards will become immediately exercisable and vest in full. Any stock options which are not assumed in connection with a Change in Control or exercised prior to a Change in Control will terminate effective as of the Change in Control. In addition, the Administrator may provide in any stock bonus agreement for acceleration of vesting of an award effective as of the Change in Control. A “change in control” for this purpose occurs if an Ownership Change Event or series of related Ownership Change Events (collectively, a "Transaction") in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, direct or indirect beneficial ownership of more than 50% of the total combined voting power of the outstanding voting securities of the Company or, in the case of an Ownership Change Event, the entity to which the assets of the Company were transferred. An "Ownership Change Event" will be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange by the stockholders of the Company of all or substantially all of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company); or (iv) a liquidation or dissolution of the Company.
PRELIMINARY PROXY MATERIALS
U.S. Federal Income Tax Consequences
The following is a brief description of the U.S. federal income tax treatment that will generally apply to option grants and stock bonuses made under the 2003 Plan, based on U.S. federal income tax laws in effect on the date of this proxy statement. Non-employee directors and consultants who participate in the 2003 Plan are advised to consult with their own tax advisors for particular federal, as well as state and local, income and any other tax advice. The grant of a non-statutory stock option exercisable at the then current market price for the shares generally is not a taxable event for the Optionee. Upon exercise of the option, the Optionee will generally recognize ordinary income in an amount equal to the excess100% of the fair market value of the Common Stock (as determined pursuant to the 2017 Plan) at the time the Stock Option is granted. The term of each Option shall be fixed by the Committee, but such term shall not exceed 10 years from the date on which such Option is granted. The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash and or shares having a Fair Market Value on the exercise date equal to the relevant exercise price) in which payment of the exercise price with respect thereto may be made or deemed to have been made.
Restricted Stock
The Committee may make Awards of restricted stock acquiredto participants, which will be subject to restrictions on transferability and other restrictions as the Committee may impose, including, without limitations on the right to vote restricted stock or the right to receive dividends, if any, on the restricted stock. These Awards may be subject to forfeiture and reacquired by the Company upon exercise (determinedany conditions or criteria established by the Committee, including without limitation termination of employment or upon resignation or removal as an Outside Director during the applicable restriction period.
Amendments and Termination
The Board of Directors of the Company may amend, alter, suspend, discontinue or terminate the Plan; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the stockholders of the Company, no such amendment, alteration, suspension, discontinuation or termination shall be made that:
change the maximum number of shares of Common Stock for which Awards may be granted under this Plan;
extend the term of this Plan; or
change the class of persons eligible to participate in the Plan.
The Committee may amend, alter or discontinue an Award made under the Plan which would impair the rights of any Award holder, without such holder’s consent, under any Award theretofore granted; provided that no such consent shall be required if the Committee determines in its sole discretion and prior to the date of any change in control, recapitalization, stock dividend, stock split, reorganization, merger, consolidation or similar type transaction that such amendment or alteration either is required or advisable in order for the Company, the Plan or any Award granted to satisfy any law or regulation or to meet the requirements of any accounting standard.
No Award granted under the 2017 Plan shall be granted pursuant to the 2017 Plan more than 10 years after the date of the exercise) overCompany’s stockholders' adoption of the 2017 Plan.
Income Tax Withholding; Tax Bonuses
Withholding. In order to comply with all applicable federal, state or foreign income tax or social insurance contribution laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, state or foreign payroll, withholding, income, social insurance contributions or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant. In order to assist a Participant in paying all federal, state and foreign taxes to be withheld or collected upon exercise priceor receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such option,taxes or (ii) delivering to the Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.
Tax Bonuses. The Committee, in its discretion, shall have the authority, at the time of grant of any Award under this Plan or at any time thereafter to approve bonuses to designated Participants to be paid upon their exercise or receipt of (or the lapse of restrictions relating to) Awards in order to provide funds to pay all or a portion of federal, state and foreign taxes due as a result of such exercise or receipt (or the lapse of such restrictions). The Committee shall have full authority in its discretion to determine the amount of any such tax bonus.
Tax Effect to Company
The Company generally will be entitled to a tax deduction equal to such amount. Unless a recipient makesin connection with an electionAward under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), within 30 days after receiving the stock bonus award, the recipient generally will not be taxed on the receipt of the stock until the restrictions on the stock if any, expire or are removed. When the restrictions expire or are removed, the recipient recognizes ordinary income (and the Company is entitled to a deduction)2017 Plan in an amount equal to the fair market value ofcompensation income (ordinary income) realized by a Participant and at the stock at that time. If, however,time the recipient makes a timely Section 83(b) election, he or she will recognize ordinaryParticipant recognizes such income (and the Company will be entitled to a deduction) equal to the fair market value of the stock on the date of receipt (determined without regard to vesting restrictions). A non-employee director or consultant director who makes a Section 83(b) election will ordinarily not be entitled to recognize any loss thereafter attributable to the shares as a result of forfeiture.
We believe the 2003 Plan, as amended, to increase the number of shares of common stock reserved under the 2003 Plan is in the best interests of our stockholders and is necessary in order to compete for and continue to attract and retain qualified executives, key employees, independent or employee directors and consultants. The Plan as amended, authorizes the grant of options to purchase up to an additional __ Million shares of common stock, to incentivize key employees and compensate our directors who are not compensated for their services as such. Although(for example, the exercise of a NQSO). Special rules limit the options would tenddeductibility of compensation paid to increase the book value per share of our company, the future grant and exercisecertain Covered Employees of the options would tend to dilute the percentage ownership of stockholders. Furthermore, the natureCompany (as defined by Section 162(m) of the optionsCode, the annual compensation paid to any of these Covered Employees will be deductible only to the extent that does not exceed $1,000,000 or if the compensation is paid solely on account of attaining one or more pre-established, objective performance goals. The 2017 Plan has been constructed such that some Awards in the optionsCommittee’s discretion may qualify as “performance-based compensation” under Section 162(m) of the Code and thus would be exerciseddeductible even if the total compensation paid to the Covered Employee is in excess of $1,000,000. However, whether an Award will qualify under Section 162(m) as "performance-based compensation" will depend on the terms, conditions and type of the Award issued to the Covered Employee. For example, grants of Stock Options or Restricted Stock often vest only according to the optionee’s or grantee’s length of employment rather than pre-established performance goals. Therefore, the compensation derived from the Awards made to Covered Employees may not be deductible by the option holder at a time that we likely would be ableCompany to derive a higher price for our shares than the exercise price.extent the Covered Employee’s total compensation exceeds $1,000,000.
Required Vote of Adoption
Under Delaware LawVote Required
Assuming a quorum is present at the Annual Meeting, the affirmative vote of a majority of votes cast by the outstandingholders of Common Stock represented and entitled to vote at the Annual Meeting is required to approve the 2017 Plan.
The Board believes that the approval of the 2017 Plan is in the Company’s and the stockholders' best interests. The Company’s non-employee directors have an interest in the proposal to adopt the 2017 Plan since each is an eligible Participant in Awards under the 2017 Plan.
PROPOSAL FIVE
AMEND CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
The Certificate of Incorporation of the Company, as amended (the “Certificate”), currently provides for Fifty Million (50,000,000) shares of capital stock, of which (i) Forty Million (40,000,000) shares are designated common stock, is required for approvalhaving a par value of PROPOSAL THREE (A) AND (B)$.001 per share (“Common Stock”), and (ii) Ten Million (10,000,000) shares are designated "Preferred Stock", having a par value of $.001 per share (“Preferred Stock”). Proposal Three (A) seeksThe Board of Directors believes that an amendment to the Certificate authorizing an increase in the maximum aggregateauthorized number of shares of commonCommon Stock from Forty Million (40,000,000) shares to Seventy-Five Million (75,000,000) shares of Common Stock (the “Common Stock Amendment”) would more appropriately support the present and future needs of the Company. The Common Stock Amendment would afford us flexibility in making acquisitions through the use of stock, reservedstructuring joint ventures and strategic alliances, raising equity capital, reserving additional shares for issuance under employee incentive plans, and facilitating other general corporate purposes, including stock dividends, stock splits and similar uses. It could also have the effect of making it more difficult for a third party to acquire control of the Company. Under our Certificate of Incorporation, our stockholders do not have preemptive rights with respect to our Common Stock. Thus, should our Board of Directors elect to issue additional shares, existing stockholders would not have any preferential rights to purchase any shares.
If our stockholders approve the Common Stock Amendment, we will file a Certificate of Amendment to our Certificate of Incorporation with the Secretary of the State of Delaware. A copy of the proposed Common Stock Amendment is attached hereto as Exhibit B.
Purpose of the Increase in Authorized Number of Shares of Common Stock
The primary purpose of the increase in the number of authorized shares of our Common Stock is to provide us with additional shares of Common Stock for equity sales, acquisitions and other corporate purposes. We presently have no plans, proposals or arrangements to issue any of the newly authorized shares of Common Stock for any purpose whatsoever, including future acquisitions and/or financings. The Common Stock Amendment authorizing the increase in the number of shares of our Common Stock from Forty Million (40,000,000) shares to Seventy-Five Million (75,000,000) shares will provide us with additional shares of Common Stock which could dilute the ownership of the holders of our Common Stock by one or more persons seeking to effect a change in the composition of our Board of Directors or contemplating a tender offer or other transaction for the combination of the Company with another company. The increase in the authorized number of shares of our Common Stock is not being undertaken in response to any specific effort of which our Board of Directors is aware to enable anyone to accumulate shares of our Common Stock or gain control of the Company.
Other than the Common Stock Amendment, our Board of Directors does not currently contemplate the adoption of any other amendments to our Certificate of Incorporation that could be construed to affect the ability of third parties to take over or change the control of the Company. While it is possible that management could use the additional authorized shares of Common Stock to resist or frustrate a third-party transaction that is favored by a majority of the independent stockholders, we have no intent, plans or proposals to use the additional unissued authorized shares of our Common Stock as an anti-takeover mechanism or to adopt other provisions or enter into other arrangements that may have anti-takeover consequences.
While the increase in authorized shares of our Common Stock may have anti-takeover ramifications, our Board of Directors believes that the financial flexibility offered by such authorization will outweigh the disadvantages. To the extent that such authorization may have anti-takeover effects, third parties seeking to acquire us may be encouraged to negotiate directly with our Board of Directors, enabling us to consider the proposed transaction in a manner that best serves the stockholders' interests.
Description of the Securities
The authorized capital stock of the Company presently consists of 40,000,000 shares of Common Stock with a par value of $.001 per share, and 10,000,000 shares of Preferred Stock with a par value of $.001 per share, of which Three Million Five Hundred Thousand (3,500,000) shares are currently designated as “Series A 6% Convertible Preferred Stock” and Three Million Five Hundred Eighty-Eight Thousand One Hundred Thirty-Nine (3,588,139) are designated as “Series B Convertible Preferred Stock. Each outstanding share of our Common Stock is entitled to one vote on all matters submitted to a vote of stockholders. Each outstanding share of our Series A Preferred Stock is entitled to one vote for each share of Common Stock into which each share of Series A 6% Preferred Stock held by them is convertible on all matters submitted to a vote of stockholders. Each outstanding share of our Series B Convertible Preferred Stock is entitled to one vote for each share of Common Stock into which each share of Series B Convertible Preferred Stock held by them is convertible on all matters submitted to a vote of stockholders.
Except as otherwise provided in the Company’s Certificate of Designation or by law, the holders of shares of Series A 6% Preferred Stock, the holders of shares of Series B Convertible Preferred Stock, and the holders of shares of Common Stock shall vote together as One (1) class on all matters submitted to a vote of stockholders of the Corporation. There are no cumulative voting rights. A majority of the total outstanding shares of our Company entitled to vote, represented in person or by proxy, will constitute a quorum at any meeting of our stockholders. Other than the election of directors, when a quorum is present at any meeting of our stockholders, a majority of votes cast by the holders of shares entitled to vote thereon will constitute action by our stockholders. With respect to the election of directors, when a quorum is present at any meeting of our stockholders, a plurality of the votes cast by the holders of shares entitled to vote thereon will constitute action by our stockholders. Our Board of Directors can change the foregoing voting requirement by changing our by-laws to the extent permitted by applicable laws. In addition, any action required to be taken at a meeting of our stockholders, or any other action which may be taken at a meeting of our stockholders, may be taken without a meeting, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
Subject to any preferential rights of any outstanding Preferred Stock created by our Board of Directors from time to time, if our Certificate of Incorporation is amended to authorize the issuance of Preferred Stock, upon liquidation, dissolution or winding up of our Company, the holders of our Common Stock are entitled to share ratably in all net assets available for distribution to our stockholders after payment to creditors.
Subject to any preferential rights of any outstanding preferred stock created by our Board of Directors from time to time, if our Certificate of Incorporation is amended to authorize the issuance of the preferred stock, the holders of our Common Stock are entitled to receive the dividends as may be declared by our Board of Directors out of funds legally available for dividends. Our Board of Directors is not obligated to declare a dividend. Any future issuance from 1.2 Million sharesdividends will be subject to 1.7 Million shares, an increasethe discretion of 500,000 shares; Proposal Three (B) seeks approval forour Board of Directors and will depend upon, among other things, future earnings, the grantoperating and financial condition of 65,000 restricted options to certain independent directorsour company, its capital requirements, general business conditions and officers.other pertinent factors. It is not anticipated that dividends will be paid in the foreseeable future.
PRELIMINARY PROXY MATERIALS
Our Common Stock is not convertible or redeemable and has no preemptive, subscription or conversion rights. There are no conversions, redemption, sinking fund or similar provisions regarding our Common Stock.
THEOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOUSTOCKHOLDERS VOTE “FOR” (A) RATIFYINGTHIS PROPOSAL
AND APPROVING5 TO AMEND THE AMENDMENTCOMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE 2003 PLAN AND “FOR” (B) APPROVING THE
GRANTAUTHORIZED SHARES OF OPTIONS TO CERTAIN INDEPENDENT OFFICERS AND DIRECTORS.COMMON STOCK.
26
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Stockholder proposals intended to be considered for inclusion in the proxy statement for presentation at the Company's 2018 Annual Meeting of Stockholders must be received in writing at the Company's offices at 4 Manhattanville Road, Suite 106, Purchase, New York 10577, Attn: Corporate Secretary, no later than April 10, 2018, for inclusion in the Company's proxy statement and proxy card relating to such meeting. Such proposals must comply with applicable SEC rules and regulations.
In order for any proposal that is not submitted for inclusion in next year's proxy statement (as described in the preceding paragraph) to be presented directly at next year's annual meeting, we must receive written notice of the proposal in a timely manner. If such notice is received, proxies may be voted at the discretion of management if we advise stockholders in next year's proxy statement about the nature of the matter and how management intends to vote on such matter.
PRELIMINARYHOUSEHOLDING OF PROXY MATERIALS
PROPOSAL FOURThe Securities and Exchange Commission permits companies and intermediaries such as brokers to satisfy the delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single set of proxy materials addressed to those stockholders. This process, which is commonly referred to as "householding", potentially provides extra conveniences for stockholders and cost savings for companies.
RATIFY AND APPROVE THE PRIOR GRANT OF 442,500 RESTRICTED
STOCK OPTIONS TO EXECUTIVE OFFICERS, DIRECTORS,
KEY EMPLOYEES AND CONSULTANTS IN 2005.
Although we do not intend to household for our stockholders of record, some brokers household our proxy materials, delivering a single set of proxy materials to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate set of proxy materials, or if you are receiving multiple sets of proxy materials and wish to receive only one, please notify your broker. Stockholders who currently receive multiple sets of the proxy materials at their address and would like to request "householding" of their communications should contact their broker.
Background
In May, 2005, there remained only a limited number of shares reserved for issuance upon exercise of stock options to be granted under our existing Stock Option Plans previously approved by shareholders. At that time it was determined by management that 442,500 options should be granted to the directors for the previous year’s services and the non-director executive officers, a limited number of key employees and consultants as deemed merited for a job well done during the prior year. Of the aforesaid amount, a total of 225,000 options were granted to officers and directors. Inasmuch as there was a negligible amount of shares reserved and remaining under our existing shareholder approved plans, management determined to issue the options in the form of restricted stock options to the aforesaid recipients. These options, under the American Stock Exchange rules (as recently amended), require shareholder approval. Accordingly, we have included such request for shareholder approval as Proposal Four in our current Proxy.
Restricted OptionsOTHER MATTERS
The restricted optionsBoard of Directors is not aware of any other matter other than those set forth in this proxy statement that will be presented for which management is seeking approval were originally granted after much reflection by management and were awardedaction at the Annual Meeting. If other matters properly come before the Annual Meeting, the persons appointed as proxies intend to directors asvote the shares they represent in accordance with their sole form of compensation for their services as suchbest judgment in the preceding fiscal year, and to the executive officers, key employees and selected consultants as an incentive and in recognition for the performance of their services on behalf of our Company. Accordingly, during 2005, for their respective services rendered in 2004, each director and each non-director Executive Officer was granted 25,000 share options and Messrs. Madden and Norman each received additional 10,000 share options for their services on the Audit Committee. As indicated previously, we are very proud of our staff and its capacity to produce and manufacture sophisticated electrosurgical products recognized to be of high quality by our peers in the industry. In order to maintain a high degree of competence, the granting of stock options is oneinterest of the most commonly utilized means by which companies incentivize their key executives, employees and directors, attract potential key employees and otherwise compete with other companies for the best qualified personnel. This form of recognition and reward is deemed by management to be essential to our continuance as a leader in our technological field of production and manufacturing of high quality electrosurgical equipment.Company.
This Proposal Four relates only to the restricted shares underlying the 442,500 options previously granted in May and November, 2005 and does not relate to any shares that may underlie our 2003 Plan as proposed to be amended (Proposal Three (A)) or any of our previously adopted Stock Option Plans, all of which reserved shares have already been approved by shareholders. Proposal Three (A) (which does not in any way relate or pertain to the 2005 options granted) seeks to amend the 2003 Executive and Employees Stock Option Plan, by increasing the number of shares reserved under the Plan from 1.2 million shares to 1.7 millions shares, a total of 500,000 shares of common stock to underlie options or grants for use in the future as incentive grants to officers, directors, key employees and consultants. None of the proposed newly reserved shares of common stock under Proposal Three (A) will be used as a reserve for the restricted options granted in 2005, which are discussed under this Proposal Four.DOCUMENTS INCLUDED WITH THIS PROXY STATEMENT
Management is seeking shareholder approval of this Proposal Four because of an American Stock Exchange Rule which was adopted several months prior to the granting of the restricted stock options by management in May 2005. Although the facts concerning the issuance of the restricted options were disclosed to shareholders in the various Company filings last year, formal approval of shareholders is required in order for the option holders to be able to exercise their option. Accordingly, we have included Proposal Four seeking shareholder approval of the 2005 restricted stock option grants.
WE ARE PROVIDING HEREWITH, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WITHOUT EXHIBITS, FOR THE YEAR ENDED DECEMBER 31, 2016, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES FILED THEREWITH. IF ANY PERSON RECEIVES THIS PROXY MATERIALS WITHOUT THE FOREGOING DOCUMENTS, THE COMPANY UNDERTAKES TO PROVIDE, WITHOUT CHARGE, UPON A WRITTEN OR ORAL REQUEST OF SUCH PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2016, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES FILED THEREWITH. WRITTEN REQUESTS FOR SUCH REPORTS SHOULD BE ADDRESSED TO THE OFFICE OF THE SECRETARY, BOVIE MEDICAL CORPORATION, 4 MANHATTANVILLE ROAD, SUITE 106, PURCHASE, NEW YORK 10577. THE COMPANY'S TELEPHONE NUMBER AT SUCH OFFICE IS (914) 468-4069.
PRELIMINARY PROXY MATERIALS
The restricted stock options are exercisable over a 10-year period and have similar provisions for vesting as those covered by our existing shareholder approved plans. i.e., unless management determines the vesting to be immediate, 20% of each option vests each year or 100% at the end of five years. However, if a recipient has been affiliated or employed with the Company for a total of at least five years, then the options vest immediately for such recipient. Usually options for non-employee directors are vested immediately upon issuance to them regardless of the amount of time they have been affiliated with our Company. The restricted options in Proposal Four each bear an exercise price equal to 100% of the market value for the shares of common stock of our Company as indicated on the American Stock Exchange at the close of business on the date the options were granted, or a price of $2.25 per share. When these restricted options are exercised the owner receives “restricted” common stock which he or she cannot immediately sell or transfer and each certificate will bear a restrictive legend to the effect that the shares represented by the certificate have not been registered under the Securities Act of 1933, as amended, (the ”Act”) and may not be transferred or sold unless such shares are the subject of an effective registration statement duly filed with the SEC or the issuer is furnished with an opinion of counsel, satisfactory to it, that registration is not required under the Act. After at least one year of ownership of the restricted stock, holders of restricted shares that desire to sell usually rely on an exemption from registration found under Rule 144 promulgated under the Act which requires that the owner own the shares for at least one year before selling or transferring them. In addition at the time of sale (a) the seller has to file a form 144 with the SEC, (b) the Company’s filings must be current with the SEC, and (c) the shares are to be sold in ordinary brokerage transactions or directly to market makers. After two years, the owner of the restricted shares, if he is not an affiliate of our Company, may have the legend removed and sell them as he sees fit. Affiliates must continue to observe the requirements of Rule 144 regardless of how long the shares have been held, unless the shares are effectively registered with the SEC under the Act. Reference is made to the discussion under Proposal Three for further details concerning options in general.
In the event shareholders fail to approve Proposal Four, the effect will be that the holders of the options will be deprived of their right to exercise them so long as our Company is a member of the American Stock Exchange.WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.
WHERE YOU CAN FIND MORE INFORMATION
MANAGEMENT UNANIMOUSLY RECOMMENDS THE SHAREHOLDERS VOTE “FOR”We are subject to the information and reporting requirements of the Securities Exchange Act of 1934 and in accordance with that act, we file periodic reports, documents and other information with the Securities and Exchange Commission relating to our business, financial statements and other matters. These reports and other information may be inspected and are available for copying at the offices of the Securities and Exchange Commission, 100 F. Street NE, Washington, DC 20549 or may be accessed at
RATIFICATION AND APPROVAL PROPOSAL FOUR.www.sec.gov.
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| By order of the Board of Directors | |
| | | |
Dated: August 7, 2017 | By: | /s/ Andrew Makrides | |
| | Andrew Makrides | |
| | Chairman of the Board of Directors | |
PRELIMINARY PROXY MATERIALS
BOVIE MEDICAL CORPORATION
PROXY
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 30,2007.SEPTEMBER 14, 2017. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of Notice of Annual Meeting of Stockholders and Proxy Statement of Bovie Medical Corporation in connection with the 20072017 Annual Meeting to be held on October 30, 2007,September 14, 2017, and appoints Andrew Makrides and George W. Kromer, Jr.,Robert L. Gershon, or either of them, proxy with power of substitution, for and in the name of the undersigned, and hereby authorizes each or either of them to represent and to vote, all the shares of common stock of Bovie Medical Corporation, a Delaware corporation ("Company"), that the undersigned would be entitled to vote at our Annual Meeting of Stockholders ("Annual Meeting") on October 30, 2007September 14, 2017 and at any adjournments thereof, upon the matters set forth in the Notice of Annual Meeting, hereby revoking any proxy heretofore given. The proxy holder appointed hereby is further authorized to vote in his discretion upon such other business as may properly come before the Annual Meeting. This proxy will be voted as specified. If no direction is made, this proxy will be voted in favor of all proposals.
THE BOARD RECOMMENDS A VOTE "FOR" EACH NOMINEE AND “FOR” PROPOSALSLISTED ON PROPOSAL 1, "FOR" PROPOSAL 2, 3(A)"FOR" PROPOSAL 3, "FOR" PROPOSAL 4, and (B) and 4.
"FOR" PROPOSAL ONE
Election of Directors (check one box only)
FOR [ ] AGAINST [ ]5.
EACH NOMINEE LISTEDý: Please mark your votes
as in this example using
dark ink only.
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| | | |
1. | The election of the following nominees to the Company's Board of Directors to serve until the 2018 Annual Meeting of Stockholders: Andrew Makrides, Robert L. Gershon, J. Robert Saron, Lawrence J. Waldman, Michael Geraghty and John Andres. |
| | | |
| FOR all nominees (except as marked to the contrary below) | o | |
| | | |
| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE | o | |
| | | |
| WITHHOLD AUTHORITY FOR ALL EXCEPT | o | |
| | | |
| Andrew Makrides | | o |
| Robert L. Gershon | | o |
| J. Robert Saron | | o |
| Lawrence J. Waldman | | o |
| Michael Geraghty | | o |
| John Andres | | o |
J. Robert Saron
Randy Rossi
Michael Norman
George W. Kromer, Jr.
Brian Madden
August Lentricchia
(Instruction:INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark "FOR ALL EXCEPT" and check the box next to each nominee circle that nominee's name in the above list)
(Continued andyou wish to be signed and dated on reverse side)withhold authority.
(Back of Proxy)Please see reverse for additional proposals
PROXY
(Please sign and date below)
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2. | The ratification of Frazier & Deeter, LLC as the Company's independent public accountants for the year ending December 31, 2017. |
| FOR | AGAINST | ABSTAIN |
| o | o | o |
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3. | The approval of a non-binding advisory proposal approving a resolution supporting the compensation of named executive officers. |
| FOR | AGAINST | ABSTAIN |
| o | o | o |
PRELIMINARY PROXY MATERIALS
|
| | | |
4. | The approval of the 2017 Share Incentive Plan. |
| FOR | AGAINST | ABSTAIN |
| o | o | o |
|
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5. | The approval of a an amendment to the Company’s Certificate of Incorporation to increase the authorized number of shares of Common Stock. |
| FOR | AGAINST | ABSTAIN |
| o | o | o |
In their discretion, the proxy holders are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof, all as set out in the Notice and Proxy Statement relating to the Annual Meeting, receipt of which are hereby acknowledged.
Please sign exactly as your name appears and return this proxy card immediately in the enclosed stamped self-addressed envelope.
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Signature(s) | | | Signature | | |
Dated: | | | | | |
NOTE: Please mark, date and sign exactly as name(s) appear on this proxy and return the proxy card promptly using the enclosed envelope. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. Executors, administrators, attorneys, trustees, or guardians should state full title or capacity. Joint owners should each sign. If signer is a partnership, please sign in partnership name by authorized person.
Exhibit A
BOVIE MEDICAL CORPORATION
2017 SHARE INCENTIVE PLAN
Section 1. Purpose.
The purposes of the Bovie Medical Corporation Share Incentive Plan (the “Plan”) are to: (i) aid in maintaining and developing key employees capable of assuring the future success of Bovie Medical Corporation (the “Company”), and to offer such personnel incentives to put forth maximum efforts for the success of the Company’s business; (ii) to enhance the Company’s ability to attract and retain the services of experienced and knowledgeable outside directors; and (iii) to afford such key employees and outside directors an opportunity to acquire a proprietary interest in the Company, thereby aligning their interests with the interests of the Company’s stockholders.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
PROPOSAL TWO(a)“Affiliate” shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, as determined by the Committee.
(b) “Award” shall mean any Option or Restricted Stock granted under the Plan.
(c)“Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan.
(d)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.
(e)“Committee” shall mean a committee of the Board of Directors of the Company designated by such Board to administer the Plan and composed of not less than three (3) directors, each of whom is a “Non-Employee Director” within the meaning of Rule 16b-3.
(f)“Fair Market Value” shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing, for purposes of the Plan, the Fair Market Value of Shares on a given date shall be the closing price of the Shares on such date on the NYSE MKT Exchange (“NYSE”) or any other national securities exchange on which the Company’s Common Stock is listed.
(g)“Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.
(h)“Key Employee” shall mean any employee of the Company or any Affiliate who the Committee determines to be a key employee.
(i)“Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
(j)“Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
(k)“Outside Director” shall mean each member of the Board of Directors of the Company that is not also an employee of the Company or any Affiliate of the Company.
(l)“Participant” shall mean either: (i) a Key Employee, (ii) an Outside Director, or (iii) a third party consultant to the Company or any Affiliate designated to be granted an Award under the Plan.
(m)“Person” shall mean any individual, corporation, partnership, association or trust.
(n)“Restricted Stock” shall mean any Share granted under Section 6(b) of the Plan.
(o)“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation thereto.
(p)“Shares” shall mean shares of Common Stock, $.001 par value, of the Company or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan.
Section 3. Administration.
(a)Power and Authority of the Committee. The Plan shall be administered by the Board of Directors, or if the Board of Directors shall so designate, by the Committee. For purposes of this Plan, references to the Committee shall mean either the Board of Directors or the Committee if the Committee has been designated by the Board of Directors to administer the Plan. Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award or Award Agreement; (v) amend the terms and conditions of any Award or Award Agreement and accelerate the exercisability of Options or the lapse of restrictions relating to Restricted Stock; (vi) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (vii) determine whether, to what extent and under what circumstances cash or Shares payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award and any employee of the Company or any Affiliate.
(b)Meetings of the Committee. The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as the Committee may determine. A majority of the Committee’s members shall constitute a quorum. All determinations of the Committee shall be made by not less than a majority of its members. Any decision or determination reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and may make such rules and regulations for the conduct of its business as it shall deem advisable.
Section 4. Shares Available for Awards.
(a)Shares Available. Subject to adjustment as provided in Section 4(c), the number of Shares available for the granting of Awards under the Plan shall be 3,000,000. If any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates without delivery of any Shares or cash payments to be received thereunder, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan. In addition, any Shares that are used by a Participant as full or partial payment to the Company of the purchase price of Shares acquired upon exercise of an Option or to satisfy applicable tax withholding requirements (including social insurance requirements) upon the exercise or vesting of an Award shall again be available for granting Awards.
(b)Accounting for Awards. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan.
(c)Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or securities or other property) which thereafter may be made the subject of Awards, (ii) the number and type of Shares (or securities or other property) subject to outstanding Awards and (iii) the exercise price with respect to any Award; provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number.
Section 5. Eligibility.
Any Key Employee, including any Key Employee who is an officer or director of the Company or any Affiliate, any Outside Director or a third party consultant to the Company or any Affiliate shall be eligible to be designated a Participant; provided, however, that an Incentive Stock Option shall not be granted to: (1) an Outside Director; or (2) an employee of an Affiliate unless such Affiliate is also a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code.
Section 6. Awards.
(a)Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i)Exercise Price. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, that such purchase price shall not be less than the Fair Market Value of the Shares on the date such option is granted.
(ii)Option Term. The term of each Option shall be fixed by the Committee, but such term shall not exceed 10 years from the date on which such Option is granted.
(iii)Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price) in which payment of the exercise price with respect thereto may be made or deemed to have been made.
(b)Restricted Stock. The Committee is hereby authorized to grant Awards of Restricted Stock to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i)Restrictions. Shares of Restricted Stock shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate.
(ii)Stock Certificates. Any Restricted Stock granted under the Plan shall be evidenced by issuance of a stock certificate or certificates. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock.
(iii)Forfeiture; Delivery of Shares. Except as otherwise determined by the Committee, upon termination of employment or upon resignation or removal as an Outside Director (as determined under criteria established by the Committee) during the applicable restriction period, all Shares of Restricted Stock at such time subject to restriction shall be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock. Shares representing Restricted Stock that are no longer subject to restrictions shall be delivered to the holder thereof promptly after the applicable restrictions lapse or are waived.
(c)General.
(i)No Cash Consideration for Awards. Except as otherwise determined by the Committee, Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.
(ii)Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any plan of the Company or any Affiliate other than the Plan. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any such other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
(iii)Forms of Payment Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in Shares, cash or a combination thereof as the Committee shall determine, and may be made in a single payment, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installments or deferred payments.
(iv)Limits On Transfer of Awards. No Award and no right under any such Award shall be assignable, alienable, salable or transferable by a Participant otherwise than by will or by the laws of descent and distribution; provided, however, that a Participant may, in the manner established by the Committee,
(A)designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award upon the death of the Participant, or
(B)transfer a Non-Qualified Stock Option to any “family member” (as such term is used in Form S-8 under the Securities Act of 1933) of such Participant, provided that (1) there is no consideration for such transfer or such transfer is effected pursuant to a domestic relations order in settlement of marital property rights, and (2) the Non-Qualified Stock Options held by such transferees continue to be subject to the same terms and conditions (including restrictions or subsequent transfers) as were applicable to such Non-Qualified Stock Options immediately prior to their transfer.
Each Award or right under any Award shall be exercisable during the Participant’s lifetime only by the Participant, by a transferee pursuant to a transfer permitted by clause (B) of this Section 6(c)(iv), or, if permissible under applicable law, by the Participant’s or such transferee’s guardian or legal representative. No Award or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.
(v)Term of Awards. Subject to the terms of the Plan, the term of each Award shall be for such period as may be determined by the Committee.
(vi)Restrictions; Securities Exchange Listing. All certificates for Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission and any applicable federal, state or foreign securities laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. If the Shares are traded on a securities exchange, the Company shall not be required to deliver any Shares covered by an Award unless and until such Shares have been admitted for trading on such securities exchange.
Section 7. Amendment and Termination; Adjustments.
Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan:
(a)Amendments to the Plan. The Board of Directors of the Company may amend, alter, suspend, discontinue or terminate the Plan; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the stockholders of the Company, no such amendment, alteration, suspension, discontinuation or termination shall be made that:
(i)absent such approval, would cause Rule 16b-3 to become unavailable with respect to the Plan;
(ii)requires the approval of the Company’s stockholders under any rules or regulations of NYSE MKT Exchange, or, if applicable Financial Industry Regulatory Authority, Inc. or any securities exchange that are applicable to the Company; or
(iii)requires the approval of the Company’s stockholders under the Code in order to permit Incentive Stock Options to be granted under the Plan.
(b)Amendments to Awards. The Committee may waive any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively, subject to Section 7(c) of the Plan. The Committee may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, without the consent of the Participant or holder or beneficiary thereof.
(c)Prohibition on Option Repricing. The Committee shall not reduce the exercise price of any outstanding Option, whether through amendment, cancellation or replacement grants, or any other means, without shareholder approval.
(d)Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
Section 8. Income Tax Withholding; Tax Bonuses.
(a)Withholding. In order to comply with all applicable federal, state or foreign income tax or social insurance contribution laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal, state or foreign payroll, withholding, income, social insurance contributions or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from such Participant. In order to assist a Participant in paying all federal, state and foreign taxes to be withheld or collected upon exercise or receipt of (or the lapse of restrictions relating to) an Award, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Participant to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the Shares otherwise to be delivered upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes or (ii) delivering to the Company Shares other than Shares issuable upon exercise or receipt of (or the lapse of restrictions relating to) such Award with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.
(b)Tax Bonuses. The Committee, in its discretion, shall have the authority, at the time of grant of any Award under this Plan or at any time thereafter to approve bonuses to designated Participants to be paid upon their exercise or receipt of (or the lapse of restrictions relating to) Awards in order to provide funds to pay all or a portion of federal, state and foreign taxes due as a result of such exercise or receipt (or the lapse of such restrictions). The Committee shall have full authority in its discretion to determine the amount of any such tax bonus.
Section 9. General Provisions.
(a)No Rights to Awards. No Key Employee, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Key Employees, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to different Participants.
(b)Delegation. The Committee may delegate to one or more officers of the Company or any Affiliate or a committee of such officers the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to Key Employees who are not officers or directors of the Company for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.
(c)Terms of Awards. The specific terms of an Award pursuant to the Plan shall be set forth in an Award Agreement duly executed (by manual, facsimile or electronic signature) on behalf of the Company.
(d)No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
(e)No Right to Employment or Directorship. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate or any right to remain as a member of the Board of Directors, as the case may be. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment (or remove an Outside Director), free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
(f)Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware, without regard to its conflicts of laws principals.
(g)Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.
(h)No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To ratify the selectionextent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of Kingery & Crouse, PAany unsecured general creditor of the Company or any Affiliate.
(i)No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
(j)Headings.Headings are given to the Sections and subsections of the Plan solely as independent auditors fora convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
Section 10. Effective Date of the Plan.
The Plan shall be effective as of the date of its approval by the stockholders of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL THREESection 11. Term of the Plan.
(A) To ratifyAwards shall be granted under the Plan during a period commencing the date the Plan was approved by the stockholders of the Company, through a date which is ten (10) years from the date of such shareholder approval. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond the ending date of the period stated above, and approve an amendment increasing the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board of Directors of the Company to amend the Plan, shall extend beyond the end of such period.
Exhibit B
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF BOVIE MEDICAL CORPORATION
(Pursuant to Section 242 of the General Corporation Law of the State of Delaware)
The undersigned Chief Executive Officer of Bovie Medical Corporation, a Corporation organized under the laws of the State of Delaware (the “Corporation”), hereby certifies that:
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1. | The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 3, 1982, a Certificate of Amendment of the Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on January 3, 1983, a Certificate of Amendment of the Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on December 22, 1987, a Certificate for Renewal and Revival of Charter was filed with the Secretary of State of the State of Delaware on October 15, 1992, a Certificate of Amendment of the Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on September 8, 1998, a Certificate of Designation, Preferences and Rights of Series A Preferred Stock was filed with the Secretary of State of the State of Delaware on September 8, 1998, a Certificate of Amendment of the Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on September 11, 1998, and a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock was filed with the Secretary of State of the State of Delaware on March 16, 2015. |
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2. | Article Fourth of the Certificate of Incorporation of the Corporation, as amended to date, is hereby further amended whereby Paragraph FOURTH is hereby amended to read as follows: |
FOURTH: The total number of shares reserved under our 2003 Executiveof capital stock of all classifications which the corporation shall have the authority to issues is Eighty-Five Million (85,000,000) shares, of which (i) Seventy-Five Million shares shall be designated “Common Stock”, having a par value of $.001 per share, and Employee Stock Option Plan(ii) Ten Million (10,000,000) shall be designated “Preferred Stock”, having a par value of $.001 per share.
FOR [ ] AGAINST [ ] ABSTAIN [ ](a) All shares of common stock will be equal to each other and shall have all the rights granted to stockholders under the General Corporation Law of the State of Delaware as amended, and the Certificate of Incorporation, including, without limitation, one vote for each share outstanding in the name of each holder, the power to elect directors or consent or dissent to any action to take place at any regular or special meeting of stockholders, and the right to receive dividends and distributions subject to the rights and preferences of any outstanding shares of Preferred Stock authorized hereby,
(B) To approve(b) The Preferred Stock may be issued from time to time in one or more classes and one or more series of each class with specified serial designations, shares of each series of any class shall have equal rights and shall be identical in all respects, and (1) may have specified voting powers, full or limited or may be without voting power; (2) may be subject to redemption at such time or times at designated prices; (3) may be entitled to receive dividends (which may be cumulative or non-cumulative) at designated rates, on such conditions and specified times, and payable on any other class or classes of stock; (4) may have such rights upon the grantdissolution of, 65,000 restricted optionsor upon any distribution of, the assets of the corporation may be made convertible into, or exchangeable for shares of any other class or classes or of any other series of the same or any other class or classes of stock of the corporation, at such price or prices or at specified rates of exchange and with specified designated adjustments; and (5) may contain such other special rights and qualifications, all as shall hereafter be stated and expressed in the resolution or resolutions providing for the issue of such Preferred Stock from time to independent directorstime adopted by the Board of Directors pursuant to the authority so to do which is hereby granted and officersexpressly vested in January and March, 2007.the Board of Directors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL FOUR
To ratifyThe Board of Directors shall have authority to cause the Corporation to issue from time, without any vote or other action by the shareholders, any or all shares of stock of the Corporation of any class or series at any time authorized, and approve 442,500 restrictedany securities convertible into or exchangeable for any such shares, and any options, rights or warrants to purchase or acquire any such shares, in each case to such persons and on such terms (including as a dividend or distribution on or with respect to, or in connection with a split or combination of, the outstanding shares of stock optionsof the same or any other class or series) as the Board of Directors from time to time in its discretion lawfully may determine; provided, that the consideration for the issuance of shares of stock of the Corporation (unless issued as such a dividend or distribution or in 2005connection with such a split or combination) shall not be less than the par value of such shares. Shares so issued shall be fully-paid stock, and the holders of such stock shall not be liable to executives, directors, key employees and certain consultants.any further calls or assessments thereon.
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3. | This amendment to the Certificate of Incorporation was authorized at a meeting of the Shareholders by the majority vote of all the outstanding shares entitled to vote thereon. |
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Dated:_________________________, 2007
(Please Print Name)
(SignatureIN WITNESS HEREOF, this Certificate has been subscribed this ___ day of Stockholder) (Title, if applicable)
(Please Print Name)
(SignatureSeptember, 2017 by the undersigned who affirm that the statements made herein are true under the penalties of Stockholder) (Title, if applicable)
NOTE: PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS SET FORTH HEREON. FOR JOINTLY OWNED SHARES, EACH OWNER SHOULD SIGN. IF SIGNING AS ATTORNEY, EXECUTOR, COMMITTEE, TRUSTEE OR GUARDIAN, PLEASE INDICATE THE CAPACITY IN WHICH YOU ARE ACTING. PROXIES EXECUTED BY CORPORATIONS SHOULD BE SIGNED BY A DULY AUTHORIZED OFFICER. PLEASE DATE AND SIGN THIS PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.perjury.
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| By: | | |
| | Robert L. Gershon | |
| | Chief Executive Officer and Director | |
| | (Principal Executive Officer) | |