SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ___)
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Filed by a Party other than the Registrant [ x ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-
12
CELL ROBOTICS INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
Neuman, Drennen & Stone, LLC, 1507 Pine Street, Boulder, Colorado 80302
------------------------------------------------------------------------
(Name of Person Filing Proxy Statement if other than the Registrant)
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CELL ROBOTICS INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 15, 1999
The Annual Meeting of Shareholders of Cell Robotics International, Inc.
("Cell" or the "Company") will be held at the principal executive offices of
the Company, 2715 Broadbent Parkway N.E., Albuquerque, New Mexico 87107 on
June 15, 1999 at 10 o'clock a.m., Mountain Daylight Time, for the purpose of
considering and voting upon the following:
1. To elect six (6) Directors to serve until the next Annual Meeting of
Shareholders or until their successors have been duly elected and
qualified.
2. Any other matters properly brought before said meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement. Only holders of outstanding shares of Cell Common Stock of
record at the close of business on April 30, 1999 will be entitled to vote at
the meeting or any adjournment thereof.
A copy of the Company's Annual Report to Shareholders, including financial
statements for the year ended December 31, 1998, will be mailed to
shareholders concurrently with the mailing of the Proxy Statement.
Shareholders are cordially invited to attend the meeting in person.
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT WOULD BE
APPRECIATED IF YOU WOULD PROMPTLY FILL IN, SIGN AND DATE THE ENCLOSED PROXY
STATEMENT AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. Any proxy may be
revoked at any time before it is voted by written notice mailed or delivered
to the Secretary, by receipt of a proxy properly signed and dated subsequent
to an earlier proxy, and by revocation of a written proxy by request in person
at the Annual Meeting of Shareholders. If not so revoked, the shares
represented by the proxy will be voted in accordance with your instruction on
the proxy form.
CELL ROBOTICS INTERNATIONAL, INC.
------------------------------------------
Craig T. Rogers, Secretary
CELL ROBOTICS INTERNATIONAL, INC.
2715 Broadbent Parkway, N.E.
Albuquerque, New Mexico 87107
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the Shareholders of Cell Robotics
International, Inc. (respectively, the "Shareholders" and the "Company") in
connection with the solicitation by the Company of proxies to be used at the
Annual Meeting of Shareholders on June 15, 1999 (the "Meeting"), at the time,
place and for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders and at any adjournment thereof. When the accompanying
proxy is properly executed and returned, the shares of common stock it
represents will be voted at the Meeting and, where a choice has been specified
on a proxy, will be voted in accordance with such specification. If no choice
is specified on a proxy, the shares it represents will be voted FOR the
election of six (6) Directors of the Company, and according to the judgment of
the persons named in the enclosed proxies as to any other action which may
properly come before the Meeting or any adjournment thereof.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE
MAILED OR DELIVERED TO THE SECRETARY, BY RECEIPT OF A PROXY PROPERLY SIGNED
AND DATED SUBSEQUENT TO AN EARLIER PROXY, AND BY REVOCATION OF A WRITTEN PROXY
BY REQUEST IN PERSON AT THE ANNUAL MEETING OF SHAREHOLDERS. IF NOT SO
REVOKED, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS ON THE PROXY FORM.
This Statement is being mailed on or about May 14, 1999, to Shareholders
eligible to vote at the Meeting. Concurrently with the mailing of this
Statement, the Company is furnishing to Shareholders its Annual Report for its
fiscal year ended December 31, 1998.
The Company is bearing all costs of soliciting proxies, and expressly
reserves the right to solicit proxies otherwise than by mail. The
solicitation of proxies by mail may be followed by telephone, telegraph or
other personal solicitations of certain Shareholders and brokers by one or
more of the Directors or by Officers or employees of the Company. The Company
may request banks and brokers or other similar agents or fiduciaries for the
voting instructions of beneficial owners and reimburse the expenses incurred
by such agents or fiduciaries in obtaining such instructions. As of the date
of this mailing, however, the Company has not made any contracts or
arrangements for such solicitations, hence it cannot identify any parties or
estimate the cost of such solicitation.
Only Shareholders of record as of the close of business on April 30, 1999
(the "Record Date"), will be entitled to vote at the Meeting. Representation
of a majority of the Company's shares of common stock outstanding on such
date, either in person or by proxy, constitutes a quorum for the Meeting.
When a quorum is present, unless otherwise indicated, the vote by the holders
of a majority of the shares represented at the Meeting shall decide the
proposals to be voted upon at the Meeting. As of March 31, 1999, the Company
had outstanding 7,784,593 shares of common stock ("shares"), with each share
being entitled to one vote.
1. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS.
The following table sets forth, as of the date of this Proxy Statement,
and as adjusted for the sale of Option Stock, the stock ownership of each
person known by the Company to be the beneficial owner of five (5%) percent or
more of the Company's common stock, all Directors individually and all
Directors and Officers of the Company as a group. Each person has sole voting
and investment power with respect to the shares shown, except as noted.
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class(1)
- -------- ------------------- -------------------- -----------
Common Ronald K. Lohrding (2) 616,667 7.60%
Stock c/o Cell Robotics, Inc.
2715 Broadbent Parkway, NE
Albuquerque, NM 87107
" Craig T. Rogers (3) 133,767 1.71%
c/o Rockies Fund, Inc.
4465 Northpark Drive
Colorado Springs, CO 80907
" Mark Waller, Director (4) 215,000 2.70%
1820 North Shore Road
Lake Oswego, OR 97304
" Dr. Raymond Radosevich (5) 21,000 .27%
c/o Cell Robotics, Inc.
2715 Broadbent Parkway, NE
Albuquerque, NM 87107
" Dr. Debra Bryant (6) 8,750 .11%
c/o Cell Robotics, Inc.
2715 Broadbent Parkway, NE
Albuquerque, NM 87107
" Mitsui Engineering & (7) 409,406 5.26%
Shipbuilding Company, Ltd.
405 Park Avenue, Suite 501
New York, NY 10022
" All Officers and Directors 1,175,064 13.77%
as a Group (9 persons)
- ------------------
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them within sixty (60) days of the date of
this report are treated as outstanding when determining the percent of
the class owned by such individual and when determining the percent owned
by the group.
(2) Includes Incentive Stock Options exercisable to purchase 150,000 shares
of Common Stock at an exercise price of $1.75 per share, and Incentive
Stock Options exercisable to purchase 25,000 shares of Common Stock at an
exercise price of $1.875 per share, issued under the Company's 1992 Stock
Incentive Plan. Also includes Non-Qualified Stock Options exercisable to
purchase 150,000 shares of Common Stock at an exercise price of $2.0625
per share, issued to Dr. Lohrding as part of the Company's registered
public offering of securities which was declared effective by the
Commission in February, 1998 (the "Public Offering"). Does not include
Lohrding Options exercisable to purchase 300,000 shares of the Company's
Common Stock issued to Dr. Lohrding in anticipation of the Public
Offering which are subject to future vesting.
(3) Mr. Rogers exercises the sole voting and investment power with respect to
67,100 shares of common stock. Also includes 10,000 shares of Common
stock owned of record by Leslie Rogers, Mr. Roger's wife. Also includes
Incentive Stock Options exercisable to purchase 56,667 shares of Common
Stock at an exercise price of $1.375 per share issued under the Company's
1992 Stock Incentive Plan.
(4) Represents Non-Qualified Stock Options exercisable to purchase, in the
aggregate, 200,000 shares of Common Stock at $1.75 per share, and Non-
Qualified Stock Options exercisable to purchase 15,000 shares of Common
Stock at an exercise price of $2.81 per share. Does not include Non-
Qualified Stock Options exercisable to purchase 5,000 shares of Common
Stock which are subject to future vesting.
(5) Reflects Non-Qualified Stock Options exercisable to purchase 6,000 shares
of Common Stock at an exercise price of $1.75 per share, and Non-
Qualified Stock Options exercisable to purchase 15,000 shares of Common
Stock at an exercise price of $2.81 per share. Does not include Non-
Qualified Stock Options exercisable to purchase 5,000 shares of Common
Stock which are subject to future vesting.
(6) Includes Non-Qualified Stock Options exercisable to purchase 3,750 shares
of Common Stock at an exercise price of $3.563 per share. Does not
include Non-Qualified Stock Options exercisable to purchase 11,250 shares
of Common Stock which are subject to future vesting.
(7) Mitsui Engineering & Shipbuilding Company, Ltd., a Japanese corporation
("Mitsui"), is the record owner and exercises the sole power to vote and
invest 409,406 shares of the Company's Common Stock.
2. ELECTION OF DIRECTORS.
The Directors have voted to nominate six (6) Directors for election to
hold office until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Each of the following nominees has
consented to be nominated to serve as a Director of the corporation. All of
the nominees, save and except for Ron E. Ainsworth, are currently Directors of
the Company.
The Company's Articles of Incorporation expressly prohibit cumulative
voting. Therefore, the holders of a majority of the Company's shares could
elect all of the Directors. It is expected that the proxies received by the
Directors' nominees will be voted, except to the extent that authority is
withheld on any proxy as to all or one or more individuals, to elect as
Directors the following nominees, whose principal occupations during the past
five (5) years, directorships and certain other affiliations and information
are set forth below:
Director and/or
Name and Position in the Company Age Executive Officer Since
- -------------------------------- --- -----------------------
Dr. Ronald K. Lohrding 58 1995
CEO, President and
Chairman of the Board
Craig T. Rogers 36 1991
VP of Investor Relations,
Secretary, Treasurer
and Director
Mark Waller 48 1995
Director
Dr. Raymond Radosevich 60 1995
Director
Dr. Debra Bryant 47 1997
Director
Ron E. Ainsworth 47 Nominee
Director nominee
- ----------------------
DR. RONALD K. LOHRDING. Dr. Lohrding has served as the Company's Chief
Executive Officer, President and Chairman of the Board since February 23,
1995. He co-founded the wholly-owned subsidiary, Cell Robotics, Inc. ("CRI"),
in 1988 and has served as the Chairman, President and CEO since incorporation.
He has over 20 years of management experience. He received his Ph.D. in
mathematical statistics from Kansas State University in 1969. Dr. Lohrding
worked at Los Alamos National Laboratory (LANL) as an R&D manager and as a
scientist from 1968 to 1988. He served as LANL's Assistant Director for
Industrial and International Initiatives, Deputy Associate Director for
Environment and Biosystems, as well as Program Director for Energy,
Environment and Technology, among other senior management positions.
Concurrently, he has been a general partner in seven successful real estate
partnerships, two of which are still currently active. Other than the
Company, Dr. Lohrding does not currently serve as a director of any other
reporting company.
CRAIG T. ROGERS. Mr. Rogers has served as the Company's Secretary,
Treasurer and as a Director since 1995, and as Vice President for Investor
Relations since January, 1997. From 1991 until 1995, he served as the Chief
Executive Officer, President and a Director of Intelligent Financial
Corporation ("IFC"). As a result of the acquisition by IFC of Cell Robotics,
Inc., Mr. Rogers resigned as the Chief Executive Officer and President of IFC
and, in February 1995, concurrently was appointed Chief Financial Officer,
Secretary and Treasurer of the Company. Mr. Rogers served as Chief Financial
Officer until January 8, 1997. Mr. Rogers served as Chief Operating Officer
of the Rockies Fund, Inc. from July 1993 to October 1, 1996. The Rockies Fund
Inc., a Colorado Springs, Colorado-based business development company
regulated under the Investment Company Act of 1940, makes investments in and
managerial assistance available to, certain eligible portfolio companies.
From April 1988 to June 1991, he also served as Chief Financial Officer for
DMA Computer Solutions, a general partnership operating four Connecting Point
franchise stores. Mr. Rogers received a Bachelor of Arts Degree in
Business/Economics from Colorado College in 1984. Other than the Company, Mr.
Rogers does not currently serve as a director of any other reporting company.
MARK WALLER. Mr. Waller has served as a Director of the Company since
February 1995. Since 1990, Mr. Waller has been President and founder of
BridgeWorks Capital, a sole proprietorship which arranges public and private
financing for and provides public relations services to client companies.
Mr. Waller was Interim President and Director of Totem Health Sciences, Inc.,
a Canadian medical products and research company, from 1988 to 1990. Other
than the Company, Mr. Waller does not currently serve as a director of any
other reporting company.
DR. RAYMOND RADOSEVICH. Dr. Radosevich was elected to the Board of CRI
in 1992. From 1985 to 1989, he was Dean of the Anderson School of Management
at the University of New Mexico. Dr. Radosevich recently retired from active
teaching. Prior to his retirement, he was a Professor of Management,
specializing in business strategy and the management of technology. In
addition, he taught a course in Technology Entrepreneurship and lectured on
the subject nationally and internationally. Dr. Radosevich earned his Ph.D.
from Carnegie-Mellon University, a B.S. in Mechanical Engineering and an M.S.
in Industrial Engineering from the University of Minnesota. Other than the
Company, Dr. Radosevich does not currently serve as a director of any other
reporting company.
DR. DEBRA BRYANT. Dr. Bryant was elected to the Board in July 1997. She
is President, CEO and majority stockholder of Humagen Fertility Diagnostics,
Inc., which is the largest manufacturer of micropipets for the worldwide in
vitro fertilization market. In 1984, Dr. Bryant joined Humagen, Inc. as a
Senior Scientist. In 1991, Dr. Bryant purchased the fertility diagnostics
division of Humagen, Inc. and founded Humagen Fertility Diagnostics, Inc. Dr.
Bryant received her Ph.D. in Medical Microbiology from Bowman Gray School of
Medicine, Wake Forest University and completed a NIH postdoctoral fellowship
in molecular biology at the University of Virginia.
RON E. AINSWORTH. Mr. Ainsworth is a Founder and Managing Partner of The
Trenwith Group. Formed in 1981, The Trenwith Group has been involved in over
300 corporate financing transactions and in excess of $1 billion dollars in
invested capital. Mr. Ainsworth is also a Managing Director of Trenwith
Securities, Inc., a registered NASD Broker-Dealer. Mr. Ainsworth's duties
with Trenwith Securities, Inc. include management and development of the co-
underwriting programs, initial public offerings, follow-on equity offerings,
and high yield debt offerings. Mr. Ainsworth is also one of three managing
partners of Trenwith Holdings. Ltd, a partnership formed with Rockefeller
Trust and Rockvest Capital, with $100 million of committed capital. Trenwith
Holdings invests in LBOs, MBOs, Relap Mezzanine and Pre IPOs. Mr. Ainsworth's
primary responsibilities with the partnership include developing and investing
in middle market companies. Mr. Ainsworth currently holds equity investments
in 25 operating companies and received his degree from the University of
Northridge.
Each director is elected to serve for a term of one (1) year until the
next annual meeting of shareholders or until a successor is duly elected and
qualified.
There are no family relationships among directors or persons nominated or
chosen by the Company to become a director. The present term of office of
each director will expire at the next annual meeting of shareholders.
The executive officers of the Company are elected annually at the first
meeting of the Company's Board of Directors held after each annual meeting of
Shareholders. Each executive officer will hold office until his successor is
duly elected and qualified, until his resignation or until he shall be removed
in the manner provided by the Company's ByLaws.
During the fiscal year ended December 31, 1998, outside Directors
received no cash compensation for their services as such, however they were
reimbursed their expenses associated with attendance at meetings or otherwise
incurred in connection with the discharge of their duties as Directors of the
Company. No officer of the Company receives any additional compensation for
his services as a Director, and the Company does not contribute to any
retirement, pension, or profit sharing plans covering its Directors. The
Company does, however, maintain a group health insurance plan and retirement
plan for its employees, and those Directors who are also employees of the
Company are eligible to participate in each plan.
During fiscal 1998, the Company did have standing Audit, Compensation and
Nominating Committees of the Board of Directors. The only member of the Audit
Committee was Mark Waller. During 1998, the Audit Committee held no formal
meetings. No member of the Audit Committee receives any additional
compensation for his service as a member of that Committee. The Audit
Committee is responsible for providing assurance that financial disclosures
made by Management reasonably portray the Company's financial condition,
results of operations, plan and long-term commitments. To accomplish this,
the Audit Committee oversees the external audit coverage, including the annual
nomination of the independent public accountants, reviews accounting policies
and policy decisions, reviews the financial statements, including interim
financial statements and annual financial statements, together with auditor's
opinions, inquires about the existence and substance of any significant
accounting accruals, reserves or estimates made by Management, reviews with
Management the Management's Discussion and Analysis section of the Annual
Report, reviews the letter of Management representations given to the
independent public accountants, meets privately with the independent public
accountants to discuss all pertinent matters, and reports regularly to the
Board of Directors regarding its activities.
During fiscal 1998, the Compensation Committee consisted of Dr. Raymond
Radosevich, Dr. Debra Bryant and Mark Waller. During 1998, the Compensation
Committee held no formal meetings. No member of the Compensation Committee
receives any additional compensation for his service as a member of that
Committee. The Compensation Committee is responsible for reviewing pertinent
data and making recommendations with respect to compensation standards for the
executive officers, including the President and Chief Executive Officer,
establishing guidelines and making recommendations for the implementation of
Management incentive compensation plans, reviewing the performance of the
President and CEO, establishing guidelines and standards for the grant of
incentive stock options to key employees under the Company's Incentive Stock
Option Plan, and reporting regularly to the Board of Directors with respect to
its recommendations.
During fiscal 1998, the Nominating Committee consisted of Ronald K.
Lohrding, Ph.D. and Craig Rogers. During 1998, the Nominating Committee held
no formal meetings. No member of the Nominating Committee receives any
additional compensation for his services as a member of that Committee. The
Nominating Committee is responsible for recommending a slate of Director
nominees to be considered for election at the Company's 1999 Annual Meeting of
Shareholders, which recommendation was unanimously approved by the Board of
Directors. While the Nominating Committee has not in the past considered
nominees recommended by securityholders outside of Management, if
securityholders have recommendations regarding nominees for the Board of
Directors, communication should be addressed to Dr. Lohrding at the principal
executive offices of the Company.
During fiscal 1998 three (3) meetings of the Board of Directors of the
Company were held, which meetings were attended by all members of the Board of
Directors.
Significant Employees
JEAN SCHARF. Ms. Scharf was appointed Chief Financial Officer and
Controller of the Company in August 1997. From April 1995 to August 1997, she
served as the Controller for TPL, Inc., a $7 million defense and private
sector contractor. From April 1984 to September 1994, she was employed by
Applied Technology Associates and with SAIC. She has also owned her own
financial software consulting business since 1994. She has a B.A. degree in
business with an accounting specialty from the University of New Mexico and is
currently working on an M.B.A. degree.
H. TRAVIS LEE. Mr. Lee was appointed Vice-President of Sales and
Marketing in January 1997. During 1996, Mr. Lee was responsible for
International Marketing and Business Development at LaserScope Surgical
Systems, San Jose, CA, a $70 million manufacturer of surgical laser systems.
From February 1994 to September 1996, he was Vice President for Marketing at
Heraeus Surgical Inc., a $30 million manufacturer of surgical lasers and other
medical products. He held senior management, marketing and sales positions
with Medasonics, Inc. and Xintec Corporation from 1991 to 1994. Mr. Lee
received his B.S. degree from San Jose State University in Graphic Design.
RICHARD ZIGWEID. Mr. Zigweid, Vice President of Manufacturing, joined
the Company in August 1996. Mr. Zigweid was Manufacturing Manager at Olympus
America from May 1994 to August 1996. He served as engineering manager at
Bausch & Lomb and as engineering manager and manufacturing engineer at Baxter
Healthcare from December 1988 to February 1994. He received his B.S. degree
from the University of Wyoming in Mechanical Engineering.
CONNIE HOY. Ms. Hoy, Regulatory Affairs and Quality Assurance Manager,
joined the Company in January 1997. She served as Compliance Officer for
Tissue Technologies, Inc., a skin resurfacing laser manufacturer and
wholly-owned subsidiary of Palomar Medical Technologies, Inc. during 1995 and
1996, where she achieved FDA Medical Device Quality System compliance,
European market permission, and ISO 9000 registration for Tissue Technologies'
skin resurfacing laser systems. From 1986 to 1995, Ms. Hoy was responsible for
regulatory affairs at the "O" Company, a dental implant company. Ms. Hoy
received her B.A. degree from the University of New Mexico.
MICHAEL WOLF. Mr. Wolf, Vice President of Engineering, joined the
Company in June 1991, and has been principally responsible for designing the
Company's flagship products. He served as Senior Engineer at Amtech Systems
Corp. and spent 24 years at LANL in various technical positions beginning in
1967. He has authored over 30 technical papers, holds 10 United States
patents, and has been the lead designer on three projects that were awarded
the R&D 100 Award, signifying one of the 100 most significant technological
advances of the year.
DR. LARRY KEENAN. Dr. Keenan, Product Manager, Cell Robotics
Workstation, joined the Company in January 1993 and has been Product Manager
for the Cell Robotics Workstation since July, 1997. Dr. Keenan was the
Regional Sales Manager of BioRad for the confocal microscope product line of
BioRad from 1991 through 1992. He received his Ph.D. in Biological Sciences at
the University of California at Irvine and was an Associate Research Scientist
in Neurobiology at Yale University.
DR. JEROME CONIA. Dr. Conia joined the Company in May 1992 as a
Scientist and has been the In Vitro Fertilization Workstation Product Manager
since May 1996 and Chief Scientist since November 1998. He has authored
several scientific papers on optical trapping and scissoring and is the
principal investigator on several SBIR grants. He received his M.S. in
Embryology, Cellular Biology, and Physiology from the University of Paris, and
his Ph.D. in Specialty Life Science from the University of Orsay, Paris,
France. He also was a post-doctoral fellow in the Genetics Group at the LANL
from March 1989 until May 1992.
DAVID COSTELLO. Mr. Costello, Product Manager of the Lasette(-TM-),
joined the Company in August 1996. From February 1994 to September 1995, he
was founder and Executive Vice-President of Tecnal Products, Inc. From May
1992 to February 1994, he was Technology Development Program Manager at
Lovelace Scientific Resources. His qualifications include five patents in
medical optics, experience in regulatory development of new clinical products,
and a M.S. degree in Biomedical Engineering from Texas A&M University.
LEGAL PROCEEDINGS
None of the foregoing Directors or Executive Officers has, during the
past five years:
(1) Had any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time;
(2) Been convicted in a criminal proceeding or subject to a pending
criminal proceeding;
(3) Been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities, futures,
commodities or banking activities; and
(4) Been found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended, or vacated.
In October 1997, TransMedica (formerly "Venisect, Inc.") commenced a
patent infringement action (the "TransMedica Litigation") in which it claimed
the Company's Lasette(-TM-) infringed the U.S. patent underlying TransMedica's
competitive skin perforator. The United States District Court for the Eastern
District of Arkansas (the "Court") subsequently dismissed the TransMedica
Litigation, without prejudice, due to lack of personal jurisdiction and
improper venue. TransMedica subsequently filed a notice indicating that it
had appealed that decision. Oral arguments related to the appeal were
scheduled to be heard on December 7, 1998. However, on December 1, 1998,
TransMedica withdrew its appeal. This action does not prevent TransMedica
from re-filing in a proper jurisdiction at a later date. While the Company has
investigated the TransMedica patent with its advisors, and believes that no
basis for any infringement claim exists, there can be no assurance that the
Company will be able to successfully defend the patent infringement claims
made by TransMedica in the event TransMedica elects to re-file its claims in a
proper jurisdiction.
Cell Robotics Technical Advisory Board
Cell Robotics has voluntarily formed an Advisory Board whose members are
chosen by the Board of Directors based upon their individual technical and
scientific expertise in areas related to the business of Cell Robotics. In
consideration of their services as members of the Advisory Board, each member
has been granted non-qualified stock options exercisable to purchase 6,000
shares of Common Stock at exercise prices ranging from $1.75 per share to
$3.563 per share. Members of the Advisory Board receive no other compensation
for their services, which consist of approximately one (1) day per year
devoted to the business of the Company. The following persons currently serve
as members of the Cell Robotics Technical Advisory Board:
Dr. Michael Berns is President, Beckman Laser Institute and Professor of
Cell Biology at the University of California.
Dr. Steven Chu is Chairman of the Physics Department, Stanford University
and the recipient of the 1997 Nobel Prize in physics.
Dr. Steven Block is Associate Professor of Molecular Biology at Princeton
University.
Dr. Paul Jackson is a Molecular and Plant Biologist at Los Alamos
National Laboratory.
Dr. Wilfried Feichtinger is at the Institute for Fertility in Vienna,
Austria and was the recent chairman of the IXth World Congress on In Vitro
Fertilization and Assisted Reproduction.
Dr. Charles Bracker is the G.B. Cummins Distinguished Professor,
Department of Botany and Plant Pathology, Purdue University.
Dr. Robert Stevenson is a biotech consultant in marketing and
acquisitions.
Dr. Otis Peterson is a laser expert and an inventor of the Alexandrite
Laser.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transaction with President and CEO
In February 1998, the Company sold in a public offering units consisting
of one share of Series A Convertible Preferred Stock, each convertible into
four common shares, and two common stock purchase warrants. Each unit was
sold at a price to the public of $8.25. In conjunction with this offering, the
Company granted a stock option to its President and CEO, Ronald K. Lohrding,
Ph.D., pursuant to which the Company granted to Dr. Lohrding non-qualified
stock options exercisable to purchase, in the aggregate, 450,000 shares of the
Company's common stock at an exercise price equal to 25% of the unit offering
price, or $2.0625 per share. 150,000 of Dr. Lohrding's options vested and
became exercisable on the closing of the public offering. The balance of Dr.
Lohrding's options will vest on December 31, 2002, subject to the following
early vesting criteria:
1. 150,000 options will vest and become exercisable thirty days
after the end of any quarter in which the Company reports pre-tax
income of at least $50,000; and
2. 150,000 options will vest and become exercisable upon the Company
reporting its first fiscal year with net income of at least
$500,000.
The foregoing option is exercisable by Dr. Lohrding to purchase shares of
Company Common Stock at an exercise price of $2.0625 per share for a period of
36 months from each respective vesting date, but in no event later than
December 31, 2002 (the "Expiration Date").
Any transactions between the Company and its officers, directors,
principal stockholders, or other affiliates have been, and will be, on terms
no less favorable to the Company than could be obtained from unaffiliated
third parties on an arms-length basis and will be approved by a majority of
the Company's independent, disinterested directors.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires any person who owns more than ten percent of any class of any equity
security which is registered pursuant to Section 12 of the Exchange Act, or
who is a director or an officer of the issuer of such security, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Directors, officers, and greater than ten-percent
shareholders are also required by SEC regulation to furnish the issuer of such
securities with copies of all Section 16(a) reports filed. Specific due dates
for these reports have been established and the Company is required to report
in this Proxy Statement any failure to file by these dates during 1997.
Based solely on a review of the copies of such reports required by
Section 16(a), the Company believes that its officers, Directors, and
stockholders owning greater than 10% of the Common Stock of the Company
complied with all applicable Section 16(a) filing requirements during 1998
except for the following:
Dr. Lohrding failed to file with the Securities and Exchange Commission,
on a timely basis, three reports relating to his ownership of Common Stock of
the Company. Jean Scharf, Richard Zigweld and Michael Wolf each failed to
file, on a timely basis, two such reports relating to their ownership of
Common Stock of the Company. The remaining officers and directors of the
Company each failed to file, on a timely basis, one such report relating to
his or her ownership of Common Stock of the Company. In making these
statements, the Company has relied upon the representations of its Directors,
Officers and/or ten percent (10%) shareholders, or copies of the reports that
they have filed with the Commission.
3. EXECUTIVE COMPENSATION.
The following tables and discussion set forth information with respect to
all plan and non-plan compensation awarded to, earned by or paid to the Chief
Executive Officer ("CEO"), and the Company's four (4) most highly compensated
executive officers other than the CEO, for all services rendered in all
capacities to the Company and its subsidiaries for each of the Company's last
three (3) completed fiscal years; provided, however, that no disclosure has
been made for any executive officer, other than the CEO, whose total annual
salary and bonus does not exceed $100,000.
TABLE 1
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------------------
Annual Compensation(1) Awards Payouts
-------------------------- --------------------- -------
Other All
Annual Restricted Other
Name and Compen- Stock LTIP Compen-
Principal Salary Bonus sation Award(s) Options/ Payouts sation
Position Year ($) ($) ($)(2) ($) SARs ($) ($)
- --------------- ------- -------- ----- --------- ---------- -------- ------- ------
Ronald K. 1998 $123,125 $-0- $3,843 -0- -0- -0- -0-
Lohrding, 1997 $123,000 $-0- $3,840 -0- -0- -0- -0-
President 1996 $115,000 $-0- $3,623 -0- 25,000 -0- -0-
H. Travis Lee,(1) 1998 $109,579 $-0- $3,570 -0- -0- -0- -0-
Vice President 1997 $109,500 $-0- $3,570 -0- 74,174 -0- -0-
Marketing and
Sales
- ------------------------------
(1) Mr. Lee's employment with the Company began in January, 1997.
Employment Agreements
The Company has entered into written Employment Agreements, having
terms of five (5) years each, with Dr. Lohrding and Craig T. Rogers, the
Company's Vice President of Investor Relations. The Employment Agreement with
Dr. Lohrding provides for Dr. Lohrding to serve the Company as its Chairman,
President and CEO, on a full-time basis, for a minimum base salary of $100,000
per year. During fiscal 1998, Dr. Lohrding was paid a base salary of
$123,125. The Employment Agreement with Mr. Rogers originally provided for
his serving as Chief Financial Officer, Secretary and Treasurer, on a part-
time basis, for a minimum base salary of $27,000 per year. Effective January
9, 1997, Mr. Rogers resigned as Chief Financial Officer; however, he remains
as the Company's Vice President of Investor Relations, Secretary and
Treasurer. Mr. Rogers was paid a base salary of $41,042 during fiscal 1998.
The Company also has a written employment agreement with Mr. H. Travis Lee,
Vice President of Marketing and Sales. Under Mr. Lee's agreement, he receives
a base salary of $110,000 per year; provided, however, that either the Company
or Mr. Lee may terminate the employment relationship upon 45 days' prior
written notice in the event a change in control of the Company occurs. In
such instance, the Company is obligated to pay Mr. Lee his then prevailing
total annual compensation in 12 monthly installments.
Stock Incentive Plan
During fiscal 1992, the Company adopted a Stock Incentive Plan (the
"Plan"). Pursuant to the Plan, stock options granted to eligible participants
may take the form of Incentive Stock Options ("ISO's") under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") or options which do
not qualify as ISO's (Non-Qualified Stock Options or "NQSO's"). As required
by Section 422 of the Code, the aggregate fair market value of the Company's
Common Stock with respect to its ISO's granted to an employee exercisable for
the first time in any calendar year may not exceed $100,000. The foregoing
limitation does not apply to NQSO's. The exercise price of an ISO may not be
less than 100% of the fair market value of the shares of the Company's Common
Stock on the date of grant. The exercise price of an NQSO may be set by the
administrator. An option is not transferable, except by will or the laws of
descent and distribution. If the employment of an optionee terminates for any
reason (other than for cause, or by reason of death, disability, or
retirement), the optionee may exercise his options within a ninety (90) day
period following such termination to the extent he was entitled to exercise
such options at the date of termination. Either the Board of Directors
(provided that a majority of directors are "disinterested") can administer the
Plan, or the Board of Directors may designate a committee comprised of
directors meeting certain requirements to administer the Plan. The
Administrator will decide when and to whom to make grants, the number of
shares to be covered by the grants, the vesting schedule, the type of award
and the terms and provisions relating to the exercise of the awards. An
aggregate of 1,500,000 shares of the Company's Common Stock is reserved for
issuance under the Plan.
At December 31, 1998, the Company had granted a total of 1,031,820
Incentive Stock Options under the Plan consisting of 680,850 Incentive Stock
Options exercisable at prices ranging from $1.375 per share to $1.875 per
share, and 350,970 Non-Qualified Stock Options ("NQSO's"), which NQSO's have
been issued to members of the Advisory Board and other Company advisors, and
to certain members of the Board of directors, and are exercisable at prices
ranging from $1.75 per share to $3.563 per share. All options have been
issued with exercise prices at or above market value on the date of issuance.
The following tables set forth certain information concerning the
granting and exercise of incentive stock options during the last completed
fiscal year by each of the named executive officers and the fiscal year-end
value of unexercised options on an aggregated basis:
TABLE 2
Option/SAR Grants for Last
Fiscal Year - Individual Grants
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
- ---------------------- ------------ ------------ ------------ ----------
Ronald K. Lohrding -0- -0- -0- -0-
H. Travis Lee -0- -0- -0- -0-
- ---------------------
TABLE 3
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
----------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($) (1)
Shares Acquired Value Realized Exercisable Exercisable/
Name on Exercise (#) ($) (Unexercisable) Unexercisable
- ---------------- --------------- -------------- --------------- -----------------
Ronald K. Lohrding -0- -0- 308,333/316,667 $146,016/$198,359
H. Travis Lee -0- -0- 24,725/49,449 $28,582/$57,163
- ------------------------------
(1) Value Realized is determined by calculating the difference between the
aggregate exercise price of the options and the aggregate fair market
value of the Common Stock on the date the options are exercised.
(2) The value of unexercised options is determined by calculating the
difference between the fair market value of the securities underlying the
options at fiscal year end and the exercise price of the options. The
closing bid price of the Company's Common Stock at fiscal year end 1998 was
$2.531.
Employee Stock Purchase Plan
The Board of Directors and shareholders have approved an Employee Stock
Purchase Plan ("ESPP") which has been adopted pursuant to Section 423 of the
Internal Revenue Code of 1986, as amended. The ESPP has an initial term of
three (3) years at which time it will terminate except as to any options
outstanding on the termination date. The ESPP is available to all employees
of the Company and its subsidiaries, except those employees of less than six
months, those employed on a part-time basis (20 hours per week or less), those
customarily employed for not more than five months in any calendar year, and
those persons who are officers, supervisors, or highly-compensated employees.
In addition, no persons owning five percent (5%) or more of the Company's
Common Stock may participate in the ESPP. No employee may purchase any more
than $25,000 worth of stock in any calendar year. The plan is limited to
100,000 shares per year over the three-year term with a maximum aggregate
number of shares which may be purchased by the Company's employees pursuant to
the ESPP being 300,000.
Under the plan, the year is divided into two enrollment periods of six (6)
months each. At the commencement of each six-month enrollment period, an
employee is given the ability to subscribe for and purchase shares of the
Company's Common Stock at the end of the six-month enrollment at a price equal
to 85% of the fair market value of the Company's Common Stock on the
commencement date or the termination date of such enrollment, whichever price
per share is lower. The shares are purchased pursuant to a payroll deduction
program pursuant to which an employee may elect to have up to 10% of that
employee's compensation withheld during each pay period for the purposes of
covering subscriptions made under the plan.
As of the date of this Proxy Statement, no shares of Common Stock have been
issued under the ESPP and there have been no subscriptions of employees to
participate in the plan. The Company expects to begin implementing the ESPP
during fiscal 1999.
4. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
KPMG Peat Marwick LLP, served as the Company's principal accountant for the
fiscal year ended December 31, 1998 and is expected to be retained as the
Company's principal accountant for the fiscal year ending December 31, 1999.
Representatives of KPMG Peat Marwick LLP, are not expected to be present at
the Annual Meeting of Shareholders. However, should representatives of KPMG
Peat Marwick LLP attend the Annual Meeting of Shareholders, said
representatives will have an opportunity to make a statement if they so desire
or to respond to appropriate questions.
5. OTHER MATTERS
The Company's management is not aware of other matters which may come
before the Meeting. The Directors' designees or other persons named in the
accompanying form of proxy will vote said proxy in accordance with their
judgment if any other matter does properly come before the Meeting. A
majority of those votes present at the Meeting cast in favor of any such
matter will result in the passage of such matter.
A copy of Form 10-KSB, the annual report filed by the Company with the
Securities and Exchange Commission, will be furnished without charge to any
person who requests it in writing, from the office of the company at its
address noted on this Proxy Statement.
CELL ROBOTICS INTERNATIONAL, INC.
By: /s/ Craig T. Rogers
-------------------------------------
Craig T. Rogers, Secretary
2000 Annual Meeting
No definitive date for the Annual Meeting of Shareholders in 2000 has been
established. Qualifying shareholders may submit proposals that are consistent
with the Company's Bylaws and federal securities laws to the Company for
inclusion in the Company's proxy material relating to the 2000 Annual Meeting.
The Company must receive such proposals at its business address (set forth at
the beginning of this Proxy Statement) no later than January 31, 2000.
CELL ROBOTICS INTERNATIONAL, INC.
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints Dr. Ronald K. Lohrding or
Craig T. Rogers (SEE NOTE BELOW) or either of them acting in the absence of
the other, with full power of substitution the true and lawful attorneys or
attorney and proxies of the undersigned to attend the Annual Meeting of the
Shareholders of Cell Robotics International, Inc. (the "Company") to be held
at 2715 Broadbent Parkway N.E., Albuquerque, New Mexico 87107 on June 15, 1999
at 10 o'clock a.m., Mountain Daylight Time, or any adjournment or adjournments
thereof, and vote all the shares of the Company standing in the name of the
undersigned with all the powers the undersigned would possess if present at
said meeting.
(1) FOR WITHHOLD AUTHORITY
------------ -------------
To elect all of the nominees listed below:
Dr. Ronald K. Lohrding, Craig T. Rogers, Mark Waller,
Dr. Raymond Radosevich, Dr. Debra Bryant and Ron E. Ainsworth
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name below)
----------------------------------------------------
(2) Upon such other matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEM 1 AND IN THE
DISCRETION OF THE PERSON HOLDING THE PROXY FOR ANY OTHER BUSINESS.
(NOTE: Should you desire to appoint a proxy other than the management
designees named above, strike out the names of management designees and insert
the name of your proxy in the space provided above. Should you do this, give
this proxy card to the person you appoint instead of returning the proxy card
to the Company.)
(PLEASE DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.)
Receipt is acknowledged of Notice of Annual Meeting and Proxy Statement for
the meeting.
Date , 1999
---------------------------------------
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Name (please type or print)
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Signature
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Signature, if held jointly
Please sign exactly as name appears to the left. When shares are held by
joint tenants, both should sign. When signing as executor, administrator,
attorney, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporation name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.