SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
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BIO-VASCULAR, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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Bio-Vascular, Inc.
January 25, 2002
Dear Shareholder:
You are cordially invited to attend the 2002 Annual Meeting of Shareholders
of Bio-Vascular, Inc. The meeting will be held on Tuesday, February 26, 2002,
at 3:45 p.m., at the Minneapolis Club, 729 Second Avenue South, Minneapolis,
Minnesota.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. Items requiring shareholder
approval at the meeting are the election of directors and a proposal to amend
our restated articles of incorporation to change the Company's name to "Synovis
Life Technologies, Inc."
Whether or not you can attend the meeting, please complete, sign, and mail
the enclosed proxy card promptly so that your shares can be voted at the
meeting according to your instructions.
Sincerely,
/s/ Karen Gilles Larson
Karen Gilles Larson
President and Chief Executive Officer
BIO-VASCULAR, INC.
2575 University Avenue
St. Paul, Minnesota 55114-1024 USA
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 26, 2002
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The Annual Meeting of Shareholders of Bio-Vascular, Inc. (the "Company")
will be held at 3:45 p.m., local time, on Tuesday, February 26, 2002, at the
Minneapolis Club, 729 Second Avenue South, Minneapolis, Minnesota for the
following purposes as described in more detail in the accompanying Proxy
Statement:
1) To elect six (6) directors to hold office until the next Annual Meeting
of Shareholders or until their successors are duly elected and qualified.
2) To consider and act upon a proposal to amend our restated articles of
incorporation to change the Company's name to "Synovis Life
Technologies, Inc."
3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on January 7, 2002 are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
All shareholders are invited to attend the Annual Meeting in person. If you
are unable to do so, please be sure you are represented at the Annual Meeting
by promptly completing and returning the accompanying proxy card. Any
shareholder who executes and returns a proxy may revoke it at any time prior to
the voting of the proxies by giving written notice to the Secretary of the
Company, by executing a later-dated proxy, or by attending the Annual Meeting
and voting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Connie L. Magnuson
Connie L. Magnuson
Vice President of Finance,
Chief Financial Officer and
Corporate Secretary
Dated: January 25, 2002
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND DATE
THE PROXY CARD EXACTLY AS YOUR NAME(S) APPEARS ON THE PROXY CARD AND RETURN IT
IN THE ENCLOSED ENVELOPE.
BIO-VASCULAR, INC.
2575 University Avenue
St. Paul, Minnesota 55114-1024 USA
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PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
FEBRUARY 26, 2002
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INTRODUCTION
The Annual Meeting of Shareholders of Bio-Vascular, Inc. (the "Company")
will be held at 3:45 p.m., local time, on Tuesday, February 26, 2002, at the
Minneapolis Club, Minneapolis, Minnesota, or at any adjournment thereof (the
"Annual Meeting"), for the purposes set forth in the Notice of Meeting.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS TO MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ACCOMPANYING ENVELOPE. No postage is required if mailed within the United
States. The cost of soliciting proxies, including the preparation, assembly and
mailing of the proxies, and soliciting material, as well as the cost of
forwarding such material to the beneficial owners of the Company's common stock
(the "Common Stock"), will be borne by the Company. Directors, officers, and
regular employees of the Company may, without compensation other than their
regular compensation, solicit proxies by telephone, personal conversation,
facsimile or other electronic communication. The Company may reimburse
brokerage firms and others for expenses in forwarding proxy material to the
beneficial owners of Common Stock.
Any shareholder giving a proxy may revoke it any time prior to its use at
the Annual Meeting either by giving written notice of such revocation to the
Secretary of the Company, by filing a duly executed proxy bearing a later date
with the Secretary of the Company, or by attending the Annual Meeting and
voting in person. Proxies will be voted as specified by shareholders. Proxies
that are signed by shareholders, but lack any such specification, will be voted
in favor of the election as directors of the nominees listed in this Proxy
Statement.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF THE DIRECTOR
NOMINEES NAMED HEREIN AND FOR THE AMENDMENT TO THE COMPANY'S RESTATED ARTICLES
OF INCORPORATION TO CHANGE THE COMPANY'S NAME.
The Company expects that this Proxy Statement, the Proxy Card and Notice of
Meeting will first be mailed to shareholders on or about January 25, 2002.
VOTING OF SHARES
Only holders of record of shares of Common Stock at the close of business on
January 7, 2002 will be entitled to vote at the Annual Meeting. On January 7,
2002, the Company had 9,262,648 outstanding shares of Common Stock, each such
share entitling the holder thereof to one vote on each matter to be voted on at
the Annual Meeting. The holders of 33 1/3% of the shares entitled to vote and
represented in person or by proxy at the Annual Meeting will constitute a
quorum for the transaction of business at the Annual Meeting. In general,
shares of Common Stock represented by a properly signed and returned proxy card
will be counted as shares present and entitled to vote at the meeting for
purposes of determining a quorum, without regard to whether the card reflects
abstentions (or is left blank) or reflects a "broker non-vote" on a matter
(i.e., a card returned by a broker because voting instructions have not been
received and the broker has no discretionary authority to vote). Holders of
shares of Common Stock are not entitled to cumulate voting rights.
Shares represented by a proxy card voted as abstaining on any of the
proposals will be treated as shares present and entitled to vote that were not
cast in favor of a particular matter, and thus will be counted as votes against
the matter. Shares represented by a proxy card indicating any broker non-vote
on a matter will be treated as shares not entitled to vote on that matter, and
thus will not be counted in determining whether that matter has been approved.
2
PRINCIPAL SHAREHOLDERS AND BENEFICIAL
OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of our Common Stock as of November 30, 2001, unless otherwise noted,
(a) by each shareholder who is known by the Company to own beneficially more
than 5% of the outstanding Common Stock, (b) by each director and each nominee,
(c) by each executive officer named in the Summary Compensation Table below,
and (d) by all executive officers and directors as a group. Unless otherwise
noted, each of the shareholders listed in the table or included within a group
listed in the table possesses sole voting and investment power with respect to
the shares indicated and the address for each of our principal shareholders is
Bio-Vascular, Inc., 2575 University Avenue, St. Paul, Minnesota, 55114.
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Number of Shares Percentage
Beneficial Owner Beneficially Owned /1/ Ownership
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Dimensional Fund Advisors, Inc. /2/ 550,500 6.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
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Perkins Capital Management, Inc. /3/ 546,200 5.9%
730 East Lake Street
Wayzata, MN 55391-1769
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William G. Kobi /4/ 21,000 *
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Richard W. Perkins /5/ 144,000 1.6%
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Anton R. Potami /6/ 26,000 *
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Timothy M. Scanlan /7/ 27,000 *
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Edward E. Strickland /8/ 295,000 3.2%
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Karen Gilles Larson /9/ 263,021 2.8%
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Fariborz Boor Boor /10/ 49,206 *
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David A. Buche /11/ 52,991 *
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Connie L. Magnuson /12/ 57,368 *
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B. Nicholas Oray /13/ 36,081 *
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All Executive Officers and Directors as a Group
(13 persons) /14/ 1,216,598 12.4%
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* Less than 1%.
/1/ Shares not outstanding but deemed beneficially owned by virtue of the
right of a person or member of a group to acquire them within 60 days
are treated as outstanding only when determining the amount and percent
owned by such person or group. As of November 30, 2001, there were
9,246,170 shares of Common Stock outstanding.
/2/ Based solely on a Schedule 13G dated February 2, 2001, which includes
550,500 shares of Common Stock held of record by Dimensional Fund
Advisors, Inc. ("DFA"), for which DFA has sole voting and dispositive
power.
/3/ Excludes shares beneficially owned by Richard W. Perkins, a director
of the Company and the controlling shareholder of Perkins Capital
Management, Inc. ("PCM"), a registered investment advisor. PCM disclaims
beneficial ownership of the 546,200 shares (the "PCM shares") held for
the account of its clients. Of the 546,200 shares, PCM has sole
investment power with regard to all such shares and sole voting power
over 60,000 of such shares.
3
/4/ Includes 18,000 shares Mr. Kobi has the right to acquire within 60
days upon the exercise of options.
/5/ Includes 5,000 shares held by the Perkins Foundation and 101,000
shares held by various trusts of which Mr. Perkins is the sole trustee.
Also includes 38,000 shares Mr. Perkins has the right to acquire within
60 days upon the exercise of options. Excludes the 546,200 PCM Shares.
Mr. Perkins disclaims beneficial ownership of the PCM shares.
/6/ Includes 25,000 shares Mr. Potami has the right to acquire within 60
days upon the exercise of options.
/7/ Includes 25,000 shares Mr. Scanlan has the right to acquire within 60
days upon the exercise of options.
/8/ Includes 38,000 shares Mr. Strickland has the right to acquire within
60 days upon the exercise of options.
/9/ Includes 215,178 shares Ms. Larson has the right to acquire within 60
days upon the exercise of options.
/10/ Includes 40,943 shares Mr. Boor Boor has the right to acquire within
60 days upon the exercise of options.
/11/ Includes 45,270 shares Mr. Buche has the right to acquire within 60
days upon the exercise of options.
/12/ Includes 38,467 shares Ms. Magnuson has the right to acquire within 60
days upon the exercise of options.
/13/ Includes 27,066 shares Dr. Oray has the right to acquire within 60
days upon the exercise of options.
/14/ Includes 559,991 shares which may be acquired within 60 days upon the
exercise of options.
ELECTION OF DIRECTORS
Nomination
The Bylaws of the Company provide that the Board of Directors (the "Board")
shall consist of one or more members, with the number of directors determined
by the shareholders at each regular meeting of the shareholders, subject to an
increase or decrease by the shareholders or an increase by the Board between
such meetings. The number of directors is currently set at six (6).
The Board has nominated the six (6) individuals named below to serve as
directors of the Company until the next Annual Meeting of Shareholders or until
their respective successors have been elected and qualified. The election of
the six nominees by the shareholders at the Annual Meeting will determine the
number of directors in accordance with the Bylaws. All of the nominees are
members of the current Board.
The election of each nominee requires the affirmative vote of a majority of
the shares of the Common Stock present and entitled to vote in person or by
proxy for the election of directors at the Annual Meeting, and at least a
majority of the minimum number of votes necessary for a quorum to transact
business. The Board recommends a vote FOR the election of each of the nominees
listed below. In the absence of other instructions, the proxies will be voted
FOR the election of the nominees named below. If prior to the Annual Meeting
the Board should learn that any nominee will be unable to serve by reason of
death, incapacity or other unexpected occurrence, the proxies that otherwise
would have been voted for such nominee will be voted for such substitute
nominee as selected by the Board. Alternatively, the proxies, at the Board's
discretion, may be voted for such fewer number of nominees as results from such
death, incapacity or other unexpected occurrence. The Board has no reason to
believe that any of the nominees will be unable to serve.
4
Information About Nominees
The following information has been furnished to the Company, as of November
30, 2001, by the persons who have been nominated by the Board to serve as
directors for the ensuing year.
Director
Name Age Title Since
---- --- ----- --------
Timothy M. Scanlan.. 55 Chairman of the Board and Director 1997
Karen Gilles Larson. 59 President, Chief Executive Officer and Director 1997
William G. Kobi..... 57 Director 1998
Richard W. Perkins.. 70 Director 1987
Anton R. Potami..... 58 Director 1997
Edward E. Strickland 74 Director 1988
Other Information About Nominees
Timothy M. Scanlan. Mr. Scanlan has served on the Board of the Company since
1997 and as Chairman of the Board since 1998. Mr. Scanlan has served as
President and Chief Executive Officer of the Scanlan Group of Companies since
1976. The Scanlan Group of Companies, an 80-year-old organization consisting of
Scanlan International, Inc., Surgical Technologies, Inc., McLean Medical and
Scientific, Inc. and Scanlan Group BV, designs, manufactures and distributes
medical and surgical products and services worldwide. Mr. Scanlan serves on the
Board of Directors of Automated Management Technologies and the Lillehei
Surgical Society.
Karen Gilles Larson. Ms. Larson has served as President and Chief Executive
Officer of the Company since July 1997 and as a Director of the Company since
August 1997. Prior to July 1997, Ms. Larson held the positions of Chief
Financial Officer of the Company from December 1990, Vice President of Finance
from 1989 and Secretary of the Company from November 1991. Ms. Larson served as
the Director of Finance and Administration of the Company from April 1989 to
December 1989.
William G. Kobi. Mr. Kobi has served on the Board of the Company since 1998.
Mr. Kobi has served as President, Chief Executive Officer and a director of
Acumen Healthcare Solutions, Inc. since May 1997. Acumen is a medical software
systems company, founded in 1997, involved in the electronic data collection
for clinical trials, medical device tracking and managed care. From 1988 to
April 1997, Mr. Kobi was owner of Kobi's Karvings and Log Home Supply, a
non-medical business in northern Minnesota. From 1976 to 1988, Mr. Kobi was
employed by SciMed Life Systems Inc., in the positions of Director of Sales,
Director of Marketing, Director of International Sales and as Vice President of
Worldwide Sales for its cardiovascular division.
Richard W. Perkins. Mr. Perkins has served on the Board of the Company since
1987. He has served as President, Chief Executive Officer and a director of
Perkins Capital Management, Inc., an investment management firm, since 1984.
Mr. Perkins also serves on the Board of Directors of the following public
companies: LifeCore Biomedical, Inc., Intelefilm Corporation, CNS, Inc.,
Nortech Systems, Inc., PW Eagle, Inc., Quantech Ltd., Vital Images, Inc. and
Paper Warehouse, Inc.
Anton R. Potami. Mr. Potami has served on the Board of the Company since
1997. Mr. Potami has served as President and Chief Executive Officer of the
William C. Norris Institute since September 1996. The William C. Norris
Institute is a non-profit organization established to operate as a catalyst to
change educational processes and for the development of small, technology-based
businesses. From 1983 to September 1996, Mr. Potami was Associate Vice
President in the Office of Research and Technology Transfer at the University
of Minnesota.
Edward E. Strickland. Mr. Strickland has served on the Board of the Company
since 1988. Mr. Strickland has been an independent financial consultant since
1986. Mr. Strickland serves on the Board of Directors of Quantech Ltd.
5
Information About the Board and its Committees
The Board met four times during the fiscal year ended October 31, 2001. Each
of the directors attended, either in person or by telephonic conference, at
least 75% of the meetings of the Board and all such committees on which such
director served during the 2001 fiscal year. The committees of the Board during
the 2001 fiscal year, and the members of those committees, are listed below:
Audit Compensation Nominating
----- ------------ ----------
Edward E. Strickland Richard W. Perkins (Chair) Timothy M. Scanlan (Chair)
(Chair) William G. Kobi William G. Kobi
William G. Kobi Anton R. Potami Richard W. Perkins
Anton R. Potami Anton R. Potami
Edward E. Strickland
The Audit Committee is responsible for the selection of the Company's
auditors and the review of the services performed by such auditors, including
reviewing the annual financial statements, the scope of the annual audits, the
fees to be paid to the auditors and the adequacy of our internal controls for
compliance with corporate policies and directives. The Audit Committee receives
the auditors' report and may recommend changes in the accounting systems of the
Company, if so warranted.
The Compensation Committee's function is to determine compensation for the
officers of the Company, to provide for management continuity and to administer
the Company's stock-based compensation plans. See "Compensation Committee
Report on Executive Compensation" below for a more detailed discussion of the
function of the Compensation Committee.
The Nominating Committee is responsible for the selection and nomination of
qualified candidates to serve on the Board. While the Nominating Committee will
consider nominees recommended by the Company's shareholders, it has neither
actively solicited nominations nor established any procedures for this purpose.
During the 2001 fiscal year, the Audit, Compensation and Nominating
Committees each met once.
Directors' Compensation
Upon election to the Board and as compensation for their services as
directors, each director who is not an employee of the Company or its
subsidiaries (a "non-employee director") receives an option under the
Bio-Vascular, Inc. 1992 Directors' Stock Option Plan (the "Director Plan") to
purchase 18,000 shares of Common Stock. These options vest in equal one-third
increments on each successive October 31 beginning one year after the date of
grant and are exercisable at a price equal to the fair market value of one
share of Common Stock on the date of grant. On the third and sixth
anniversaries of each non-employee director's election to the Board, such
non-employee director will receive additional options under the Director Plan
to purchase 21,000 and 24,000 shares of Common Stock, respectively, vesting in
one-third increments on each successive October 31 beginning one year after the
date of grant at an exercise price equal to the fair market value on the date
of grant. Options granted under the Director Plan have a maximum term of eight
years and are exercisable for a period of five years after vesting. When a
director's membership on the board terminates for any reason, the unvested
portion of the options granted to that director are cancelled, and the vested
portion of the options continue to be exercisable under the original terms of
the option agreement.
The Board currently meets periodically throughout the year and immediately
prior to and at the annual meeting of the Company's shareholders. Non-employee
directors receive compensation of $1,000 per month for being a member of the
Board and $500 for each Board meeting attended. In addition, all members of the
Board are reimbursed for out of pocket expenses in connection with attending a
Board meeting. Committee members receive additional compensation of $250 for
each Audit and/or Compensation Committee meeting attended. No additional
compensation is received for service on the Nominating Committee.
6
Audit Committee Report
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act or the Exchange Act that
might incorporate this Proxy Statement or future filings with the SEC, in whole
or in part, the following report shall not be deemed to be incorporated by
reference into any such filing.
Membership and Role of the Audit Committee
The Audit Committee consists of the following members of the Company's Board
of Directors: Messrs. Strickland, Kobi and Potami. Each of the members of the
Audit Committee is independent as defined under the National Associations of
Securities Dealers' listing standards. The Audit Committee operates under a
written charter adopted by the Board of Directors.
The primary function of the Audit Committee is to provide advice with
respect to the Company's financial matters and to assist the Board of Directors
in fulfilling its oversight responsibilities regarding finance, accounting, tax
and legal compliance. The Audit Committee's primary duties and responsibilities
are: (1) serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system; (2) review and
appraise the audit efforts of the Company's independent accountants; (3)
evaluate the Company's quarterly financial performance as well as its
compliance with financial and accounting laws and regulations; (4) oversee
management's establishment and enforcement of financial policies and business
practices; and (5) provide an open avenue of communication among the
independent accountants, financial and senior management, counsel, and the
Board of Directors.
Review of the Company's Audited Financial Statements for the Fiscal Year
ended October 31, 2001
The Chair of the Audit Committee participated in an initial meeting to
review and discuss the audited financial statements of the Company for the
fiscal year ended October 31, 2001 with the Company's management and the
Company's independent public accountants. Prior to the Annual Meeting of
Shareholders, the full Audit Committee will review and discuss the audited
financial statements of the Company for the fiscal year ended October 31, 2001
with the Company's management. Further, the Audit Committee will discuss with
Deloitte and Touche LLP ("D&T"), the Company's independent public accountants,
the matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees.
Also, prior to the Annual Meeting of Shareholders, the Audit Committee will
receive the written disclosures and the letter from D&T required by
Independence Standards Board Standard No. 1, Independence Discussion with Audit
Committees, and the Audit Committee will discuss the independence of D&T with
that firm.
Based on the Audit Committee's initial discussions with the Company's
management and D&T, and the planned review and discussions noted above, the
Audit Committee will recommend to the Board of Directors that the Company's
audited financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended October 31, 2001 for filing with the SEC.
Members of the Audit Committee:
Edward E. Strickland (Chair)
William G. Kobi
Anton R. Potami
Audit Fees
Audit fees billed by PricewaterhouseCoopers LLP ("PWC") and D&T for services
rendered in auditing the Company's financial statements for fiscal 2001 and
reviewing the financial statements included in the Company's quarterly reports
on Form 10-Q for fiscal 2001 totaled $59,000. PWC or D&T did not bill the
Company for any financial information systems design and implementation
services during fiscal 2001. Fees billed by PWC and D&T for all other non-audit
services, including tax-related services, provided during fiscal 2001 totaled
$40,000.
7
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth the cash and non-cash compensation paid or
earned during the fiscal years ended October 31, 2001, 2000 and 1999 by the
Chief Executive Officer of the Company and four other executive officers of the
Company whose salary and bonus exceeded $100,000 in the fiscal year ended
October 31, 2001.
Summary Compensation Table
Annual
Compensation Long-Term Compensation
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Restricted Securities
Stock Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Awards ($) /1/ Options (#) Compensation ($)
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Karen Gilles Larson 2001 $ 227,885 $ 40,000 $ -- 25,000 $ --
President and Chief 2000 213,000 42,580 -- -- --
Executive Officer 1999 200,000 32,000 80,110 /2/ 44,138 --
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Fariborz Boor Boor /3/ 2001 $ 140,000 $ 21,800 $ -- 30,000 $ --
Vice President and Chief 2000 101,000 17,175 10,665 /4/ 15,605 --
Operating Officer of Synovis 1999 -- -- -- -- --
Interventional Solutions
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David A. Buche 2001 $ 137,744 $ 26,656 $ -- 15,000 $ --
Vice President of Marketing 2000 130,800 31,160 -- -- --
and Sales 1999 120,000 18,000 -- -- --
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Connie L. Magnuson 2001 $ 134,705 $ 20,429 $ -- 15,000 $ --
Vice President of Finance 2000 127,800 24,448 -- -- --
and Chief Financial Officer 1999 120,000 19,200 -- -- --
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B. Nicholas Oray, Ph.D. 2001 $ 132,680 $ 26,200 $ -- 10,000 $ --
Vice President of Research 2000 126,000 25,200 -- -- --
and Development 1999 120,000 12,000 -- -- 18,501 /5/
/1/ Restricted stock grants are valued at the market price on the day of grant
regardless of whether such shares have vested. To date, the Company has not
paid dividends on its Common Stock, including shares of Common Stock subject
to restricted stock grants.
/2/ As of October 31, 2001, Ms. Larson had aggregate unearned restricted stock
holdings of 5,517 shares valued at $30,068 as of such date. Effective
February 23, 1999, Ms. Larson was granted 22,069 shares of restricted stock,
vesting in one installment of 5,518 shares on October 31, 1999 and three
installments of 5,517 shares on October 31, 2000, 2001 and 2002.
/3/ Mr. Boor Boor was named President of Synovis Interventional Solutions
(Synovis IS) on November 1, 2000, and served as Vice President and Chief
Operating Officer of Synovis IS since March 1, 2000.
/4/ As of October 31, 2001, Mr. Boor Boor had aggregate unearned restricted
stock holdings of 2,832 shares valued at $15,434 as of such date. Effective
November 2, 1998, Mr. Boor Boor was granted 7,724 shares of restricted
stock, vesting in four installments of 1,931 shares at October 31, 1999,
2000, 2001 and 2002. Also, effective March 1, 2000, Mr. Boor Boor was
granted 2,403 shares of restricted stock, vesting in one installment of 601
shares on October 31, 2000 and two installments of 901 shares on October 31,
2001 and 2002.
/5/ "All Other Compensation" paid to Dr. Oray is comprised entirely of
relocation-related expenses.
8
Option Grants and Exercises
The following tables provide information for the year ended October 31, 2001
as to individual grants and aggregate exercises of options to purchase shares
of the Common Stock by each of the executive officers named in the Summary
Compensation Table and the potential realizable value at October 31, 2001 of
the options granted to such persons in fiscal 2001.
Option Grants in Last Fiscal Year
- -------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Appreciation for Option
Individual Grants Term /1/
------------------------------------------ -----------------------
% of Total
Number of Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price Expiration
Name Granted Year ($/Share) Date 5% 10%
- ------------------------------------------------------------------------------------------
Karen Gilles Larson 25,000 /2/ 12% $4.26 4/10/06 $29,500 $ 65,000
- ------------------------------------------------------------------------------------------
Fariborz Boor Boor 30,000 /3/ 14% $5.96 8/27/06 $49,400 $109,200
- ------------------------------------------------------------------------------------------
David A. Buche 15,000 /3/ 7% $5.96 8/27/06 $24,700 $ 54,600
- ------------------------------------------------------------------------------------------
Connie L. Magnuson 15,000 /3/ 7% $5.96 8/27/06 $24,750 $ 54,600
- ------------------------------------------------------------------------------------------
B. Nicholas Oray, Ph.D. 10,000 /4/ 5% $4.63 10/31/05 $12,800 $ 28,200
- ------------------------------------------------------------------------------------------
/1/ Potential realizable value is calculated based on an assumption that the
price of the Company's Common Stock will appreciate at the assumed annual
rates shown (5% and 10%), compounded annually from the date of grant of the
option until the end of the option term. These assumed annual rates are
applied pursuant to Securities and Exchange Commission (the "SEC") rules
and therefore are not intended to forecast possible future appreciation, if
any, of the Common Stock. Actual gains, if any, on stock option exercises
are dependent on the future performance of the Common Stock, overall market
conditions and the continued employment of the named executive by the
Company. There can be no assurance that the amounts reflected in this table
will be realized.
/2/ Reflects a grant of 25,000 stock options to Ms. Larson on April 10, 2001,
exercisable at the fair market value of the underlying stock on the date of
grant under the Company's 1995 Stock Incentive Plan. The options vested in
full on the date of grant and expire five years after the vest date.
/3/ Reflects a grant of 30,000, 15,000 and 15,000 stock options to Mr. Boor
Boor, Mr. Buche and Ms. Magnuson, respectively, on August 27, 2001,
exercisable at the fair market value of the underlying stock on the date of
grant under the Company's 1995 Stock Incentive Plan. The options vested in
full on the date of grant and expire five years after the vest date.
/4/ Reflects a grant of 10,000 stock options to Dr. Oray on November 1, 2000,
exercisable at the fair market value of the underlying stock on the date of
the grant under the Company's 1995 Stock Incentive Plan. The options vested
in full on the date of grant and expire five years after the vest date.
9
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at October 31, 2001 October 31, 2001 /2/
Shares Value --------------------------- -------------------------
Acquired on Realized
Name Exercise (#) /1/ ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------------
Karen Gilles Larson 3,537 $2,120 215,178 11,034 $255,654 $20,137
- --------------------------------------------------------------------------------------------------------
Fariborz Boor Boor -- -- 40,943 16,248 $ 18,139 $36,053
- --------------------------------------------------------------------------------------------------------
David A. Buche 2,831 $6,120 45,270 7,000 $ 30,179 $ 3,150
- --------------------------------------------------------------------------------------------------------
Connie L. Magnuson -- -- 38,467 7,000 $ 39,894 $ 3,150
- --------------------------------------------------------------------------------------------------------
B. Nicholas Oray, Ph.D. -- -- 27,066 7,000 $ 17,261 $ 3,150
- --------------------------------------------------------------------------------------------------------
/1/ The Company's option plans generally provide that the exercise price of
options must be paid in cash, except that the Compensation Committee, in its
sole discretion, may allow payment by delivery of shares of Common Stock
having an aggregate fair market value equal to the exercise price or may
allow the exercise price to be financed by the Company upon such terms and
conditions as the Compensation Committee may determine.
/2/ Based upon the fair market value of the underlying Common Stock on October
31, 2001 of $5.45, as reported by the Nasdaq National Market, less the
exercise price.
Compensation Committee Report on Executive Compensation
Overview and Philosophy
The Compensation Committee is currently composed of three of the Company's
Board of Directors. The Compensation Committee's responsibilities are to:
. Review and recommend compensation policies and compensation levels for
the Company's executive officers to the Board;
. Review and recommend plans to provide management continuity to the
Board; and
. Administer the Company's stock based compensation plans. The
Compensation Committee determines who will participate in such plans and
the extent and terms of such participation, and approves all
transactions involving stock based compensation.
The Compensation Committee's objectives in recommending executive
compensation policies and compensation levels for the Company's executive
officers, including the Chief Executive Officer, are: (i) to attract and retain
qualified executive officers; (ii) to align the interests of those executive
officers with those of the Company's shareholders; and (iii) to encourage the
development of a cohesive management team. The Compensation Committee believes
that base salaries need to be moderately to aggressively competitive to attract
and retain qualified executive officers, that the executive officers need to be
provided with stock ownership opportunities to align their interests with those
of the Company's shareholders and that incentive compensation should be based
primarily on the accomplishment of Company performance in the interest of
building a cohesive management team.
Executive Compensation Program Components
The Company's executive compensation program focuses on Company and
individual performance as measured against goals confirmed by the Compensation
Committee. The Compensation Committee places emphasis on Company performance
and individual performance in order to inspire the Company's executives to work
as a team to accomplish Company objectives. Components of the Company's
executive officer compensation program may include base salary, annual cash
incentive compensation, stock option grants and
10
restricted stock awards, as well as various benefits which are presently
available to all employees of the Company. Each component of the executive
officer compensation program is discussed in greater detail below.
Base Salary
The Compensation Committee's recommendations regarding the base salary of
each of the Company's executive officers, including the Chief Executive
Officer, are based on a number of factors, including the executive officer's
experience and past performance, the level of skill and responsibility required
by the executive's position and his or her qualifications for the position. The
Compensation Committee also considers competitive salary information gathered
by outside consultants and through comparative surveys pertaining specifically
to the medical device industry as well as to companies of similar size in other
industries. As a result, the population of companies for which competitive
salary data is obtained is broader than the industry peer group established to
compare shareholder returns in the Performance Graph set forth below. In
general, the Compensation Committee seeks to set executive officer base salary
at moderately to aggressively competitive levels in relation to the companies
with which the Company competes for executives. Base salaries are determined
prior to the beginning of each fiscal year following a review of the above
factors by the Compensation Committee and may also be adjusted based on Company
performance and the executive officer's impact thereon, cost of living,
promotion or merit factors.
The base salary compensation component for each executive officer, other
than Ms. Larson, was recommended by Ms. Larson and reviewed and approved by the
Compensation Committee based on the factors discussed above. Ms. Larson's base
salary was increased in fiscal 2000 and 2001, as shown in the Summary
Compensation Table, based upon the Compensation Committee's consideration of
the aforementioned factors.
Annual Cash Incentive Compensation
The Company's annual cash incentive compensation program is designed to
provide a direct financial incentive to the Company's executive officers,
including the Chief Executive Officer, for the achievement of specific Company
and individual performance goals.
Under general guidelines established by the Compensation Committee, each of
the Company's executive officers, including the Chief Executive Officer, are
eligible to receive up to 20% of their base salary in annual cash incentive
compensation based on certain criteria established by the Compensation
Committee. Of this amount, the Compensation Committee's guidelines provide that
40% is based on achievement of internal segment net revenue goals, 40% on the
achievement of internal segment operating income goals and the remaining 20% on
a subjective evaluation by the Compensation Committee of the individual
executive officer's performance during the period. At the Compensation
Committee's discretion, the amount of annual cash incentive compensation may be
increased to more than 20% of an executive officer's base salary in the event
of performance by that executive above and beyond what is normally called for
by the executive's position. Cash incentive compensation for Ms. Larson and Ms.
Magnuson is determined according to the above guidelines taking both of the
Company's reporting segments into account equally. Incentive compensation for
fiscal 2001 was earned by all executive officers in accordance with the plan
discussed above and as presented in the Summary Compensation Table.
Stock Option Program
By granting options to purchase Common Stock to the executive officers of
the Company, the Compensation Committee seeks to align the long-term interests
of the Company's executive officers with those of its shareholders by creating
a strong and direct nexus between executive compensation and shareholder return
and enabling executives to develop and maintain a significant ownership
position in the Company.
11
The 1995 Stock Incentive Plan authorizes the Compensation Committee to issue
to executive officers, including the Chief Executive Officer, incentive stock
options having an exercise price not less than the fair market value of the
Common Stock on the date of grant (or, for an incentive option granted to a
person holding more than 10% of the Company's voting stock, at not less than
110% of fair market value), and non-statutory options having an exercise price
not less than 85% of the fair market value of the Common Stock on the date of
grant. Options granted under the 1995 Stock Incentive Plan have a term fixed by
the Compensation Committee at the time of grant, which term may not exceed 10
years. All other terms of options granted under the 1995 Stock Incentive Plan
may be determined by the Compensation Committee and different restrictions may
be established with respect to different recipients of stock options.
The Compensation Committee determines the number of options and the terms
and conditions of such options based on certain factors, including the past
performance of the executive officer, the executive officer's potential impact
on the achievement of the Company's objectives, past grants or awards of
stock-based compensation and on comparative compensation data regarding option
grants by companies within the medical device industry as well as within a
broader group of companies of comparable size and complexity. Additionally,
options may be granted to an executive officer as an incentive at the time the
executive officer joins the Company.
During fiscal 2001, based upon the aforementioned guidelines and factors,
each of the executive officers named in the Summary Compensation Table received
grants of stock options which vested on the date of grant and expire five years
after the vest date.
Restricted Stock Awards
The Compensation Committee may also grant stock-based compensation to the
Company's executive officers in the form of restricted stock awards. In
determining whether to grant shares of restricted stock to an executive officer
of the Company, the Compensation Committee evaluates the past performance of
the executive officer, the executive officer's potential impact on the
achievement of the Company's objectives and past grants or awards of
stock-based compensation to the executive officer.
Benefits
The Company provides medical, dental and life and disability insurance
benefits as well as a 401(k) retirement plan and a stock purchase plan to the
executive officers. The same benefits are available to all Company employees.
The amount of perquisites, as determined in accordance with the rules of the
SEC relating to executive compensation, did not exceed 10% of each executive
officer's annual salary for fiscal 2001.
Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits the deductibility of certain compensation paid to each of the
chief executive officer and the four other most highly compensated executives
of a publicly held corporation to $1,000,000. In fiscal 2001, the Company did
not pay "compensation" within the meaning of Section 162(m) to such executive
officers in excess of $1,000,000 and does not believe it will do so in the near
future. Therefore, the Company does not have a policy at this time regarding
qualifying compensation paid to its executive officers for deductibility under
Section 162(m), but will formulate such a policy if compensation levels ever
approach $1 million.
Members of the Compensation Committee:
Richard W. Perkins (Chair)
William G. Kobi
Anton R. Potami
12
Management Agreements
Each of the executive officers of the Company named in the Summary
Compensation Table has entered into a severance agreement providing severance
benefits upon termination resulting from a change of control with the Company.
These severance agreements provide for certain payments in the event that
within twelve months subsequent to a change in control of the Company or, in
certain circumstances, immediately prior to a change in control of the Company,
the officer's employment is terminated involuntarily by the Company or by the
executive officer due to a material change of position or benefits of the
executive officer (a "Qualifying Termination"). As defined in these agreements,
a "change in control" means: (i) the sale, lease, exchange, or other transfer
of all or substantially all of the assets of the Company (in one transaction or
in a series of related transactions) to any third party; (ii) the approval by
the shareholders of the Company of any plan or proposal for the liquidation or
dissolution of the Company; or (iii) a change in control of a nature that would
be required to be reported (assuming such event has not been "previously
reported") in response to Item 1(a) of a Current Report on Form 8-K pursuant to
Section 13 or 15(d) of the Exchange Act, whether or not the Company is then
subject to such reporting requirement; provided that, without limitation, such
a change in control will be deemed to have occurred at such time as: (A) any
third party is or becomes the beneficial owner, directly or indirectly, of 50%
or more of the combined voting power of the Company's outstanding securities
ordinarily having the right to vote for elections of directors, or (B)
individuals who constitute the Board on the date of the agreement (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board, provided that any individual becoming a director subsequent to the
date of the agreement whose election, or nomination for election, by the
Company's shareholders, was approved by a vote of at least a majority of the
directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such individual is
named as a nominee for director without objection to such nomination) will, for
purposes of this clause (B), be deemed to be a member of the Incumbent Board.
Upon a Qualifying Termination, in addition to salary and benefits then due
and in addition to any other benefits due under the Company's compensation
plans, the terminated executive officer is entitled to: (a) a lump sum payment
equal to the product of the executive officer's highest monthly compensation
for the previous twelve month period multiplied by thirty-six (36); (b)
reimbursement for all legal fees and expenses incurred by the executive officer
as a result of such termination; and (c) for a thirty-six (36) month period
following such termination, life and health insurance benefits substantially
similar to those the executive officer was receiving at the time of termination.
The severance agreements for the executive officers, as amended, provide
that in the event that any payment or benefit received by the executive officer
pursuant to the severance agreement or any other payments the officer has the
right to receive from the Company in connection with a change in control of the
Company would not be deductible by the Company under Section 280G of the Code,
two calculations will be performed. In the first calculation, the payments,
benefits or awards to be received solely pursuant to the severance agreement
(and excluding any benefits to be received from the existing stock option and
incentive plan) will be reduced by the amount the Company deems necessary so
that none of the payments or benefits under the severance agreement (including
those from the existing stock option and incentive plan) are excess parachute
payments. In the second calculation, the payments will not be reduced so as to
eliminate an excess parachute payment, but will be reduced by the amount of the
applicable excise tax that the officer will pay related to all change in
control benefits received as imposed by section 4999 of the Code. The two
calculations will be compared and the calculation providing the largest net
payment to the employee will be utilized to determine the change in control
payments made to the officer.
13
Performance Graph
In accordance with the rules of the SEC, the following performance graph
compares the performance of the Company's Common Stock on the Nasdaq National
Market to an index for the Nasdaq Stock Market (U.S. Companies) prepared by the
Center for Research in Securities Prices and to a self-determined peer group of
five companies/1/ identified at the bottom of the graph.
The following performance graph compares the cumulative total stockholder
return as of the end of each of the Company's last five fiscal years on $100
invested at the beginning of the period and assumes reinvestment of all
dividends.
[LINE CHART BIO-VASCULAR]
-----------------------------------------------
Date Company Index Market Index Peer Index
-----------------------------------------------
10/31/96 100.0 100.0 100.0
-----------------------------------------------
10/31/97 76.5 131.6 87.1
-----------------------------------------------
10/31/98 72.6 147.2 57.2
-----------------------------------------------
10/31/99 45.9 248.8 59.7
-----------------------------------------------
10/31/00 96.9 280.7 76.4
-----------------------------------------------
10/31/01 111.1 141.1 49.7
-----------------------------------------------
The index level for all series was set to 100.0 on 10/31/96.
Companies in Peer Group
------------------------------
ATS Medical Inc.
------------------------------
Possis Medical Inc.
------------------------------
Rochester Medical Corporation
------------------------------
Angeion Corporation
------------------------------
Rehabilicare Inc.
------------------------------
/(1)/ In prior years, the self-determined peer group of companies included
Minntech Corporation, in addition to the five companies noted above.
Minntech Corporation has been omitted from the Company's current year
self-determined peer group since it was acquired during fiscal 2001 and
is no longer operating as an independent, publicly traded company.
14
PROPOSAL TO AMEND BIO-VASCULAR, INC.'S RESTATED ARTICLES OF INCORPORATION TO
CHANGE THE COMPANY'S NAME
The Board of Directors voted to propose an amendment to the Company's
restated articles of incorporation for the purpose of changing the Company's
name from "Bio-Vascular, Inc." to "Synovis Life Technologies, Inc." If the name
change is approved by the shareholders, the name change will become effective
upon the filing of a certificate of amendment of the articles of incorporation
with the Secretary of the State of Minnesota.
If the amendment is approved, the Company's articles of incorporation will
read as follows:
Article 1--Name
1.1 The name of the corporation shall be Synovis Life Technologies, Inc.
Purpose for the Proposed Name Change
The Board of Directors believes it is in the Company's best interests to
change its name to "Synovis Life Technologies, Inc." in order to better align
the name with our business strategy and endeavors. The Company is a diversified
medical device company offering a broad range of surgical and interventional
products to our customers.
The Company's wholly owned subsidiary, Synovis Interventional Solutions
(formerly Jerneen Micro Medical Technologies), changed its name in the Summer
of 2001 to create an identity more representative of the subsidiary's actual
business. The name Synovis is derived from synergy, innovation and vision,
which are key attributes of all the Company's businesses.
We expect the benefit of utilizing the Synovis name across our subsidiaries
and operating units will enhance branding of the name in the markets we serve
and create a clearer image of the size and substance of the Company.
Effects of the Proposed Name Change
If this proposal is adopted, the change of name will not affect in any way
the validity or transferability of stock certificates outstanding or the
Company's capital structure, and it will not be necessary to surrender stock
certificates. Instead, when certificates are presented for transfer, new
certificates bearing the name "Synovis Life Technologies, Inc." will be issued.
Board of Directors Recommendation
The Board of Directors unanimously recommends that the shareholders vote FOR
approval and ratification of the proposal to amend the Company's restated
articles of incorporation to change the name of the Company. The affirmative
vote of the holders of a majority of the shares of the Company's Common Stock
present and entitled to vote in person or proxy on this matter at the annual
meeting, and at least a majority of the minimum number of votes necessary for a
quorum is necessary for approval. Unless a contrary choice is specified,
proxies solicited by the Board of Directors will be voted FOR approval of the
proposal.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of the Company's Common Stock, to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Executive officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) reports they file. To the Company's knowledge, based
solely on review of the copies of such reports furnished to the Company during,
or with respect to, the period ended October 31, 2001, all reports were filed
with the SEC on a timely basis.
15
INDEPENDENT AUDITORS
On April 19, 2001, the Company concluded the services of its prior
independent auditors, PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") and
on May 10, 2001, appointed Deloitte and Touche LLP its new independent
auditors. This determination followed the Company's decision to seek proposals
and competitive bids from independent accounting firms, including
PricewaterhouseCoopers, with respect to the engagement of independent
accountants to audit the Company's consolidated financial statements for the
fiscal year ending October 31, 2001. The decision to appoint Deloitte and
Touche LLP was approved by the Company's Audit Committee of the Board of
Directors.
The reports of PricewaterhouseCoopers on the consolidated financial
statements of the Company for its fiscal years ended October 31, 2000 and
October 31, 1999 did not contain any adverse opinion or disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or accounting
principles. During the Company's two most recent fiscal years and the
subsequent interim period through April 19, 2001, (i) there were no
disagreements between the Company and PricewaterhouseCoopers on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to the satisfaction of
PricewaterhouseCoopers, would have caused PricewaterhouseCoopers to make
reference to the subject matter of the disagreement in connection with its
reports for such periods and (ii) there were no reportable events, as defined
in Item 304(a)(1)(v) of Regulation S-K of the Securities and Exchange
Commission.
The Company initially reported the change in accountants on Form 8-K on
April 26, 2001. The Form 8-K contained a letter from PricewaterhouseCoopers to
the Securities and Exchange Commission stating that it agreed with the
statements concerning their firm made therein.
The Audit Committee has not met to select the independent certified public
accountants to audit the Company's financial statements for the year ending
October 31, 2002. Deloitte and Touche LLP was the Company's independent public
accounting firm for fiscal 2001. The Company has requested and expects a
representative of Deloitte and Touche LLP to be present at the Annual Meeting
to make a statement if he or she so desires and to respond to appropriate
questions.
PROPOSALS FOR THE NEXT ANNUAL MEETING
Shareholder proposals intended to be presented in the proxy materials
relating to the next Annual Meeting of Shareholders must be received by the
Company on or before September 23, 2002 and must satisfy the requirements of
the proxy rules promulgated by the Securities and Exchange Commission.
A shareholder who wishes to make a proposal at the next Annual Meeting
without including the proposal in the Company's proxy statement must notify the
Company by December 4, 2002. If a shareholder fails to give notice by this
date, then the persons named as proxies in the proxies solicited by the Company
for the next Annual Meeting will have discretionary authority to vote on the
proposal.
16
ANNUAL REPORT
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM
10-K (EXCLUSIVE OF EXHIBITS) FOR THE FISCAL YEAR ENDED OCTOBER 31, 2001 TO EACH
PERSON WHO WAS A SHAREHOLDER OF THE COMPANY AS OF JANUARY 7, 2002 UPON RECEIPT
FROM ANY SUCH PERSON OF A WRITTEN REQUEST FOR SUCH AN ANNUAL REPORT. SUCH
REQUEST SHOULD BE SENT TO: BIO-VASCULAR, INC., 2575 UNIVERSITY AVENUE, #180,
ST. PAUL, MINNESOTA, 55114-1024, ATTN: SHAREHOLDER INFORMATION, OR BY
ELECTRONIC MAIL TO INFO@BIOVASCULAR.COM.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Karen Gilles Larson
Karen Gilles Larson
President and Chief Executive Oficer
January 25, 2002
St. Paul, Minnesota
17
BIO-VASCULAR, INC.
This Proxy is solicited by the Board of Directors
The undersigned hereby appoints KAREN GILLES LARSON and CONNIE L. MAGNUSON, and
each of them, as Proxies, each with full power of substitution, and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of Common Stock of Bio-Vascular, Inc. (the "Company") held of record by
the undersigned on January 7, 2002, at the Annual Meeting of Shareholders to be
held on February 26, 2002, or any adjournment thereof.
1. Election of Directors.
[_] FOR all nominees listed below [_] AGAINST all nominees listed
(except as marked to the below.
contrary below).
(INSTRUCTION: To vote against any individual nominee, strike a line through
the nominee's name.)
Karen Gilles Larson Anton R. Potami
William G. Kobi Timothy M. Scanlan
Richard W. Perkins Edward E. Strickland
2. Proposal to amend the Company's restated articles of incorporation to
change the Company's name to "Synovis Life Technologies, Inc."
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR all nominees named in Proposal 1 above and FOR Proposal 2 above.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 2002
----------------------------
-----------------------------------
(Signature)
-----------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.