0001030418-01-500009.txt : 20011019
0001030418-01-500009.hdr.sgml : 20011019
ACCESSION NUMBER: 0001030418-01-500009
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011015
FILED AS OF DATE: 20011015
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BIONX IMPLANTS INC
CENTRAL INDEX KEY: 0001030418
STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
IRS NUMBER: 223458598
STATE OF INCORPORATION: PA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-22401
FILM NUMBER: 1759085
BUSINESS ADDRESS:
STREET 1: 1777 SENTRY PARKWAY WEST
CITY: BLUE BELL
STATE: PA
ZIP: 19422
BUSINESS PHONE: 6102960919
MAIL ADDRESS:
STREET 1: 279B GREAT VALLEY PARKWAY
CITY: MALVERN
STATE: PA
ZIP: 19355
FORMER COMPANY:
FORMER CONFORMED NAME: BIONIX INC
DATE OF NAME CHANGE: 19970109
DEF 14A
1
proxyb.txt
PROXY TEXT, CARD, APPENDIX
BIONX IMPLANTS, INC.
October 12, 2001
Dear Stockholder:
On behalf of the Board of Directors and management, I am pleased to
invite you to the 2001 Annual Meeting of Stockholders of Bionx Implants,
Inc. The meeting will be held on Friday, November 16, 2001 at 10:00 a.m.
at our corporate headquarters, 1777 Sentry Parkway West, Blue Bell,
Pennsylvania. A notice of meeting, proxy statement and proxy card are
enclosed for your review.
I urge you to read the enclosed materials carefully and to
complete, sign and mail promptly the proxy card contained with this
letter to assure that your vote will be counted.
The officers, directors and staff of Bionx Implants sincerely
appreciate your continuing support.
Very truly yours,
Gerard S. Carlozzi
President and Chief Executive Officer
BIONX IMPLANTS, INC.
Notice of Annual Meeting
The Annual Meeting of Stockholders of Bionx Implants, Inc. (the
"Company" or "Bionx") will be held at the Company's corporate
headquarters, 1777 Sentry Parkway West, Blue Bell, Pennsylvania on Friday,
November 16, 2001 at 10:00 a.m. At the meeting you will be asked to
consider and act upon the following proposals:
1. Election of two directors to serve for a term of three
years. See "Election of Directors of the Company" in the
proxy statement.
2. To conduct other business if properly raised at the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on October
8, 2001 are entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors
Drew Karazin
Secretary
Blue Bell, Pennsylvania
October 12, 2001
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY CARD IN THE
RETURN ENVELOPE PROVIDED.
BIONX IMPLANTS, INC.
1777 Sentry Parkway West
Gwynedd Hall, Suite 400
Blue Bell, Pennsylvania 19422
PROXY STATEMENT
The Board of Directors of Bionx Implants, Inc. (the
"Company") is soliciting proxies for use at the Annual Meeting of
Stockholders to be held at the Company's corporate headquarters,
1777 Sentry Parkway West, Blue Bell, Pennsylvania on Friday,
November 16, 2001 at 10:00 a.m., and for use at any adjournments
thereof (the "Annual Meeting"). This Proxy Statement and the
enclosed form of proxy are first being sent to stockholders on or
about October 12, 2001.
Record Date and Quorum. Only stockholders of record at the
close of business on October 8, 2001 (the "Record Date") will be
entitled to vote at the Annual Meeting. On that date, there were
outstanding 10,864,906 shares of the Company's common stock, par
value $.0019 per share ("Common Stock"). Each share of Common Stock
is entitled to one vote on each matter to be voted on at the Annual
Meeting. The presence at the Annual Meeting, in person or by proxy,
of holders of a majority of the issued and outstanding shares of
Common Stock, as of the Record Date, will constitute a quorum.
Voting Procedures. Directors will be elected by a
plurality of the votes cast. Approval of any other matter to be
submitted to the stockholders, will require the affirmative vote of
a majority of the votes cast at the Annual Meeting. Properly
executed proxies will be voted as directed in the proxy; however,
if no direction is given, a properly executed proxy will be voted
FOR the election of the director nominees. Proxies marked
"abstention" on a matter will not be voted on that matter but will
be considered to be represented at the Annual Meeting. Shares
registered in the names of brokers or other "street name" nominees
for which proxies are voted on some but not all matters will be
considered to be represented at the Annual Meeting, but will be
considered to be voted only as to those matters actually voted. If
a quorum is present, abstentions and broker non-votes will not have
any effect on the matters to be presented at the Annual Meeting.
Proxies and Revocation. A proxy card is enclosed. You may
revoke your proxy at any time before it is exercised. In order to
revoke a proxy, you must either give written notice of revocation
to the Secretary of the Company or to the Secretary of the Annual
Meeting, or vote your shares subject to the proxy by a later dated
proxy or by written ballot at the Annual Meeting. Your presence at
the Annual Meeting will not by itself revoke your proxy.
ELECTION OF DIRECTORS OF THE COMPANY
The Company's Board of Directors is divided into three
classes with each class serving staggered terms of three years, so
that only one class is elected in any one year. Presently, there
are five directors on the Board. Two directors are to be elected
at the Annual Meeting to serve until the 2004 Annual Meeting, and
until their respective successors are elected and have qualified.
Each of the nominees for director is presently a director
of the Company. Each has consented to being named as a nominee in
this Proxy Statement and has agreed to serve as a director if
elected at the Annual Meeting. It is the intention of the persons
named as proxies to vote the shares represented by the proxy for
the election of each of the nominees listed below. If either
nominee shall become unable or unwilling to serve as a director,
the persons named as proxies will cast their votes for the
remaining nominee and have discretion to vote for another person
designated by the Board of Directors. The Board of Directors has
no reason to believe that either of the nominees will be
unavailable for election.
The following information contains the current and past
five years' business experience, certain other directorships and
age of each nominee for director and of each director whose term
extends beyond 2000 and thus is continuing in office. The
following information is given as of September 1, 2001, and except
as otherwise noted, the directors have held the occupational
positions listed for at least the past five years:
Nominees for Election for Three Year Terms
- Gerard S. Carlozzi: President and Chief Executive
Officer of the Company (September 1999
to the present); President and Chief Operating
Officer of the Company (May 1999 to September
1999); Vice President of the Company (November
1998 to May 1999); Director of Biotechnology
Development and Director of Marketing and
Product Development for Maxillofacial Surgical
Products of Synthes USA (a leader in Orthopedic
and Maxillofacial Trauma products) (1995 to
1998). From 1986 to 1995, Mr. Carlozzi held
various positions with Acufex Microsurgical, a
pioneer and leader in Arthroscopic orthopedic
surgery, which was acquired by Smith & Nephew.
At Acufex Microsurgical, as the General Manager
for the Spinal Products Group and the Global
Director of Research and Development, he held
positions responsible for Sales and Marketing,
Research & Development, Manufacturing, Quality
Assurance, Clinical and Regulatory Affairs and
other various general management and business
development functions. Director of the Company
since September 1999. Age: 45
- Terry D. Wall: Chairman of the Board of the
Company (1995 to the present); President and
Chief Executive Officer of Vital Signs, Inc.
("Vital Signs") (manufacturer of disposable
anesthesia and respiratory devices). Director
of Vital Signs, Inc. Director of the Company
since 1995. Age: 60.
Continuing Directors Serving Until 2002
- David J. Bershad: Senior Partner, Milberg Weiss
Bershad Hynes & Lerach LLP (law firm). Director
of Vital Signs. Director of the Company since
1995. Age: 61.
- Pertti Tormala: Executive Vice President,
Research and Development, of the Company (1995
to the present); Chief Executive Officer and co-
founder of the Company's foreign subsidiaries
(prior years). Director of the Company since
1995. Age: 55.
Continuing Director Serving Until 2003
- Anthony J. Dimun: Chairman, Nascent Enterprises
LLP (a medical venture advisory company).
Executive Vice President and Chief Financial
Officer of Vital Signs (prior years to May
2001). Director of Vital Signs and Colorado
MEDtech, Inc. Director of the Company since
1995. Age: 57.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's executive officers and directors to file
initial reports of beneficial ownership and reports of changes of
beneficial ownership of the Company's Common Stock with the SEC.
Executive officers and directors are required to furnish the
Company with copies of all Section 16(a) reports that they file.
Based solely upon a review of the copies of the forms or
information furnished to the Company, the Company believes that
during 2000 all such filing requirements were satisfied on a timely
basis.
Meetings of the Board of Directors; Committees of the Board
During 2000, the Board of Directors held 4 meetings. During
2000, no director attended less than 75% of the aggregate number of
meetings of the Board and committees of the Board of which he was a
member. There are no relationships by blood, marriage, or adoption,
between any nominee for director, continuing director or executive
officer of the Company and any other nominee for director,
continuing director or executive officer of the Company.
Audit Committee - During 2000, the Audit Committee of the
Board held 4 meetings. The functions of the Audit Committee are to
review, act on and report to the Board with respect to various
auditing and accounting matters. These matters include the
selection of the Company's independent auditors, the scope of the
annual audits, the fees to be paid to the auditors, the performance
of the Company's auditors and the accounting practices of the
Company. The current members of the Audit Committee are Mr. Dimun,
Chairman, Mr. Bershad and Mr. Wall.
Compensation Committee - During 2000, the Compensation
Committee of the Board held two meetings. The functions of the
Compensation Committee are to determine the salaries and incentive
compensation of the employee-officers of the Company and to provide
recommendations for the salaries and incentive compensation of the
other employees and consultants of the Company. The Compensation
Committee also administers the Company's Stock Option/ Stock
Issuance Plan. The current members of the Compensation Committee
are Mr. Bershad and Mr. Wall, Chairman.
The Board has no nominating committee; the functions of a
nominating committee are performed by the entire Board. No
procedures have been developed with respect to obtaining
nominations from stockholders.
Audit Committee Matters
Audit Committee Charter. The Audit Committee has adopted a
charter which is attached to this Proxy Statement as Appendix A.
Independence of Audit Committee Members. The Company's
Common Stock is listed on the Nasdaq National Market and the
Company is governed by the listing standards applicable thereto.
All members of the Audit Committee of the Board of Directors, other
than Terry D. Wall, have been determined to be "independent
directors" pursuant to the definition contained in Rule
4200(a)(145) of the National Association of Securities Dealers'
Marketplace rules. Mr. Wall may not meet the "independence"
criteria of that Rule as a result of his being considered in the
past to be an executive officer of the Company. Mr. Wall currently
serves as a non-executive Chairman of the Company. The Company's
Board of Directors appointed Mr. Wall to the Audit Committee
because it believes that, notwithstanding his title and
shareholdings in the Company, Mr. Wall's knowledge of the Company
and the industry in which it operates makes him an important asset
to the Committee.
Audit Committee Report. In connection with the preparation
and filing of the Company's Annual Report on Form 10-K for the year
ended December 31, 2000:
(1) the Audit Committee reviewed and discussed
the audited financial statements with the
Company's management;
(2) the Audit Committee discussed with the
Company's independent accountants the
matters required to be discussed by SAS 61;
(3) the Audit Committee received and reviewed
the written disclosures and the letter from
the Company's independent accountants
required by the Independence Standards Board
Standard No. 1 (Independence Discussions
with Audit Committees) and discussed with
the Company's independent accountants any
relationships that may impact their objectivity
and independence and satisfied
itself as to the accountant's independence;
and
(4) based on the review and discussions referred
to above, the Audit Committee recommended to
the Board that the audited financial
statements be included in the 2000 Annual
Report on Form 10-K.
By: The Audit Committee of the Board of Directors:
Anthony J. Dimun
David J. Bershad
Terry D. Wall
Security Ownership of Management and Others
The following table sets forth the beneficial ownership
of shares of Common Stock as of September 1, 2001 by (1) the only
stockholders of the Company known by management to beneficially own
more than 5% of the Company's Common Stock, (2) the directors of
the Company, (3) the executive officers named in the Summary
Compensation Table below and (4) all directors and current
executive officers of the Company as a group. Shares covered by
stock options are included only to the extent that they are
exercisable through November 1, 2001.
Security Ownership of Management and Others
Beneficial Owner (1) Shares of Common Stock Beneficially Owned (1)(2) Percentage Beneficially Owned
Bionix B.V. (3) 2,684,211 24.9
Terry D. Wall (4) 3,232,109 29.9
The Kaufman Fund, Inc. (5) 862,750 8.0
Dimensional Fund Advisors Inc. (6) 712,300 6.6
Gerard S. Carlozzi (7) 80,456 *
David J. Bershad (8) 545,777 5.0
Anthony J. Dimun (9) 292,738 2.7
Pertti Tormala (10) 1,138,697 10.5
James Hogan (11) 22,090 *
Pertti Viitanen (12) 161,981 1.5
Drew Karazin (13) 30,123 *
All directors and current executive
Officers as a group (9 persons) (14) 5,496,881 50.8
_______________________________
* Represents less than 1% of the outstanding Common Stock
(1) Except as otherwise indicated in the footnotes to this table and
pursuant to applicable community property laws, persons and
entities named in the table have sole voting and investment power
with respect to all shares of Common Stock and the address of the
5% stockholders is c/o the Company, 1777 Sentry Parkway West,
Gwynedd Hall, Suite 400, Blue Bell, Pennsylvania 19422.
(2) Applicable percentage ownership is based on 10,819,484 shares of
Common Stock outstanding as of September 1, 2001 together with
applicable stock options for such stockholder. Beneficial
ownership is determined in accordance with the rules of the SEC,
based on factors including voting and investment power with respect
to shares. Shares of Common Stock subject to stock options
currently exercisable, or exercisable within 60 days after
September 1, 2001, are deemed outstanding for computing the
percentage ownership of the person holding such stock options but
are not deemed outstanding for computing the percentage ownership
of any other person. Each owner of an equity interest in Bionix
B.V. (the "Dutch Company") is deemed to beneficially own a
percentage of the shares of the Common Stock owned by the Dutch
Company equal to such owner's proportionate equity interest in the
Dutch Company.
(3) Nearly all of the capital stock of the Dutch Company is owned by
the former stockholders of the Company's operating subsidiaries.
The current Board of Directors of the Dutch Company includes
Gerard S. Carlozzi, David J. Bershad, Anthony J. Dimun, Pertti Tormala,
and Pertti Viitanen, who are directors or executive officers of the
Company. As of September 1, 2001, Bershad, Dimun, and Wall beneficially
owned capital stock of the Dutch Company representing, in the aggregate,
approximately 21.2% of the equity of the Dutch Company's capital stock.
As of September 1, 2001, Messrs. Tormala and Viitanen beneficially owned
capital stock of the Dutch Company representing, in the aggregate,
approximately 47.2% of the equity of the Dutch Company's capital stock.
The remaining equity of the Dutch Company's capital stock is allocated
among several other U.S. and Finnish investors.
(4) Mr. Wall's shares include 28,300 shares of Common Stock issuable
upon the exercise of vested stock options and 484,421 shares of
Common Stock owned by the Dutch Company, representing Mr. Wall's
proportionate equity interest in the shares of Common Stock owned
by the Dutch Company. Mr. Wall has the right to cause the Dutch
Company to transfer such 484,421 shares to him pursuant to an
agreement with the Dutch Company. All of Mr. Wall's shares of
Common Stock and of the Dutch Company's capital stock are held in
an investment partnership which he controls.
(5) The information set forth herein regarding The Kaufman Fund, Inc.'s
beneficial ownership is based on a report on Schedule 13G filed by
The Kaufman Fund with the SEC on May 18, 2000. The address of The
Kaufman Fund, Inc. is 140 E. 45th Street, 43rd Floor, Suite 2624,
New York, New York 10017.
(6) The information set forth herein regarding Dimensional Fund
Advisors Inc.'s beneficial ownership is based upon a report on
Schedule 13G filed by it with the SEC on February 2, 2001. The
address of Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue,
11th Floor, Santa Monica, California 90401.
(7) Includes 52,904 shares issuable to Mr. Carlozzi upon the exercise
of vested stock options.
(8) Mr. Bershad's shares include 28,300 shares of Common Stock issuable
upon the exercise of vested stock options and 50,736 shares of
Common Stock owned by the Dutch Company, representing Mr. Bershad's
proportionate equity interest in the shares of Common Stock owned
by the Dutch Company. Mr. Bershad has the right to cause the Dutch
Company to transfer such 50,736 shares to him pursuant to an
agreement with the Dutch Company. A total of 331,686 of Mr.
Bershad's shares of Common Stock and all of Mr. Bershad's shares of
the Dutch Company's capital stock are held in an investment
partnership which he controls.
(9) Mr. Dimun's shares include 28,300 shares of Common Stock issuable
upon the exercise of vested stock options and 34,679 shares of
Common Stock owned by the Dutch Company, representing Mr. Dimun's
proportionate equity interest in the shares of Common Stock owned
by the Dutch Company. Mr. Dimun has the right to cause the Dutch
Company to transfer such 34,679 shares to him pursuant to an
agreement with the Dutch Company. All of Mr. Dimun's shares of
Common Stock and the Dutch Company's capital stock are held in
entities which he controls.
(10) Mr. Tormala's shares include 16,660 shares of Common Stock issuable
upon exercise of stock options and 1,122,037 shares of Common Stock
owned by the Dutch Company, representing Mr. Tormala's
proportionate equity interest in the shares of Common Stock owned
by the Dutch Company. Professor Tormala has the right to cause the
Dutch Company to transfer such 1,122,037 shares to him pursuant to
an agreement with the Dutch Company. That agreement enables
Professor Tormala to direct the voting by the Dutch Company of a
specified number of shares of the Company's Common Stock held by
the Dutch Company. As of September 1, 2001, that specified number
equals 2,049,854, representing Professor Tormala's proportionate
equity interest in the 2,684,211 shares of Common Stock owned by
the Dutch Company (1,122,037 shares) and the proportionate equity
interest of all other Finnish investors in such 2,684,211 shares
(927,817 shares). The table above excludes from Professor Tormala's
beneficial ownership the 927,817 shares attributable to the equity
interests of such other Finnish investors.
(11) Includes 16,314 shares issuable to Mr. Hogan upon the exercise of
vested stock options.
(12) Mr. Viitanen's shares include 16,202 shares of Common Stock
issuable upon the exercise of vested stock options and 145,779
shares of Common Stock owned by the Dutch Company, representing Mr.
Viitanen's proportionate equity interest in the shares of Common
Stock owned by the Dutch Company.
(13) Includes 8,000 shares issuable to Mr. Karazin upon the exercise of
vested stock options.
(14) Includes 186,666 shares of Common Stock issuable upon the exercise
of vested stock options, and 1,837,652 shares of Common Stock owned
by the Dutch Company, representing the current directors' and
executive officers' proportionate equity interest in the 2,684,211
shares of Common Stock owned by the Dutch Company. As of September
1, 2001, the current directors and executive officers as a group
beneficially owned approximately 68.5% of the equity associated
with the capital stock of the Dutch Company. The current directors
and executive officers of the Company as a group have a right to
vote substantially all of the 2,684,211 shares of Common Stock
owned by the Dutch Company. If all such 2,684,211 shares were
deemed to be beneficially owned by the Company's current directors
and executive officers, such persons as a group would be deemed to
be the beneficial owners of 6,343,440 shares of Common Stock,
representing 58.6% of the shares outstanding on September 1, 2001.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table and accompanying footnotes set forth certain summary information relating to the three years ended December
31, 2000, with respect to each of the Company's Chief Executive Officer and the other four most highly compensated executive
officers at December 31, 2000 (collectively, the "Named Executive Officers"):
Summary of Cash and Certain Other Compensation
Name and Principal Year Salary Bonus(1) Other Annual Long-Term Compensation All Other
Position Compensation(2) Awards Securities Underlying Compensation(3)
Options/SARs(#)
Gerard S. Carlozzi(4) 2000 $160,000 $24,000 $6,300 17,485 $ 1,920
President and Chief 1999 145,417 - 6,000 100,000 1,335
Executive Officer 1998 21,443 - - 20,000 -
Drew Karazin (5) 2000 145,000 - 6,300 38,368 1,305
Vice President, 1999 8,830 - 500 - -
Chief Financial Officer
James Hogan (6) 2000 139,923 7,700 6,150 53,121 1,679
President, Stenting 1999 125,000 20,000 2,500 - 21,903
Division 1998 30,640 - - - -
Pertti Tormala (7) 2000 104,028 21,375 7,081 3,299 -
Executive Vice 1999 122,700 - 8,132 40,000 -
President, Research 1998 119,814 - 8,615 - -
and Development
Pertti Viitanen (7) 2000 77,858 3,412 6,801 1,006 7,764
Managing Director of 1999 91,832 - 7,802 40,000 3,663
Finnish Subsidiary;Vice 1998 90,385 8,608 9,121 - 3,454
President of Manufacturing
_____________________
(1) Bonus amounts are shown in the year in which they are paid.
(2) Represents car allowances.
(3) For 2000 represents (a) employer contributions to the Company's
401(k) plan on behalf of the following individuals: Mr.
Carlozzi: $1,920; Mr. Hogan: $1,679 and Mr. Karazin: $1,305 and (b)
contribution to pension for Mr. Viitanen: $7,764.
(4) Mr. Carlozzi joined the Company in November 1998 and became President
and Chief Executive Officer of the Company in
September 1999.
(5) Mr. Karazin joined the Company in December 1999.
(6) Mr. Hogan joined the Company in November 1998 and ceased serving as
an employee in March 2001.
(7) Where applicable, amounts shown are dollar equivalent of compensation
paid in foreign currency
Employment Agreements
The Company has entered into an employment agreement with
Pertti Tormala. The agreement provides for a term expiring in 2004.
Pursuant to the agreement, Professor Tormala receives a minimum base
salary of 540,000 FIM (approximately $83,000) and is eligible to
receive cash bonuses granted by the Company's Board of Directors.
Professor Tormala is also entitled to a car, certain pension benefits
and reimbursement of all reasonable travel and entertainment expenses.
Under the agreement, all patents, patent applications and other
intellectual property rights developed by Professor Tormala relating to
the Company's research and development activities are the sole property
of the Company.
The Company has entered into an employment agreement with
Pertti Viitanen as Vice President, manufacturing of the corporation and
Managing Director of the Corporation's Finnish operations, Bionx
Implants Ltd. The agreement provides for a term expiring in 2001.
Pursuant to the agreement, Viitanen receives a minimum base salary of
79,992 EUR (approximately $73,300) and is eligible to receive cash
bonuses granted by the Company's Board of Directors. Mr.Viitanen is
also entitled to a car, phone, health care services, statutory pension
benefits, an additional pension policy of EUR 5,000 and reimbursement
of all reasonable travel and entertainment expenses. Under the
agreement, all patents, patent applications and other intellectual
property rights developed by Vitanen relating to the Company's research
and development activities are the sole property of the Company.
Stock Option Information
The following table sets forth certain information concerning
stock options granted during the year ended December 31, 2000 to
the Named Executive Officers. In accordance with the rules of the SEC,
the following table also sets forth the potential realizable
value over the term of the options (the period from the grant date to
the expiration date) based on assumed rates of stock price
appreciation of 5% and 10% compounded annually. These amounts do not
represent the Company's estimate of future stock price performance.
Actual realizable values, if any, of stock options will depend on the
future stock performance of the Common Stock. No stock
appreciation rights were granted during the fiscal year ended
December 31, 2000.
Option Grants in the Fiscal Year Ended December 31, 2000
Name Number of Securities Percent of Total Exercise Price Expiration Date Potential Realizable Value at
Underlying Options Options Granted to per Share Assumed Annual Rates of Stock
Granted(#)(1) Employees in 2000 ($/Share)(2) Price Appreciation for Option
Term (3)
5% 10%
Gerard S. Carlozzi 4,518 1.5 $3.1875 01/02/2010 9,057 22,952
2,137 0.7 $4.678 02/28/2010 6,287 15,933
10,830 3.5 $2.77 11/21/2010 18,866 47,811
Drew Karazin 32,490 10.5 $2.77 11/21/2010 56,599 143,433
5,878 1.9 $4.678 02/28/2010 17,293 43,824
James Hogan(4) 1,569 0.5 $3.1875 01/02/2010 3,145 7,971
11,552 3.7 $2.77 11/21/2010 20,124 50,998
40,000 12.9 $4.13 02/28/2010 103,893 263,286
Pertti Tormala 3,299 1.1 $3.1875 01/02/2010 6,613 16,759
Pertti Viitanen 1,006 0.3 $3.1875 01/02/2010 2,017 5,110
____________________
(1) These options were granted under the Company's Investment Plan,
other than the options which expire on January 2, 2010 and Mr. Hogan's
40,000 share option, which were granted under the Company's Stock
Option/Stock Issuance Plan. Pursuant to the Investment Plan, eligible
participants may purchase shares of the Company's Common Stock during
specified window periods. For each share purchased, the Company grants
the participant one stock option. An employee must continue to be
employed for at least two years by the Company to exercise stock
options granted under the Investment Plan. If the employee retains the
shares purchased during the window period, the option can be exercised
at any time after the initial shares have been held for two years. In
general, if the employee sells any of the shares purchased under the
Investment Plan before the end of the two year holding period or
directs the Company to stop making payroll deductions before all shares
that the employee committed to buy are fully paid for, the employee
will forfeit the options associated with those share purchases. The
Board of Directors is authorized to accelerate stock options related to
fully paid shares in connection with a change in control. Options
granted under the Stock Option/Stock Issuance Plan vest in 20%
installments beginning one year after the grant date.
(2) Pursuant to the applicable Plans, the exercise price per share of
the options granted under the Investment Plan was equal to the average
of the closing sales prices of the Common Stock on Nasdaq during the
window period, and the exercise price per share of the options granted
under the Stock Option/Stock Issuance Plan was equal to the closing
sales price of the Common Stock on Nasdaq on the date of grant.
(3) The potential realizable value is calculated based on the term of
the option at the date of grant (10 years). It is calculated assuming
that the fair market value of the Company's Common Stock on the date of
grant appreciates at the indicated annual rate compounded annually for
the entire term of the options and that the options are exercised and
sold on the last day of their term for the appreciated stock price.
(4) All of the options granted to Mr. Hogan in 2000 have expired
without being exercised.
No stock options were exercised by the Named Executive Officers
during The following table sets forth certain information with
respect to the value of stock options held by the Named
Executive Officers as of December 31, 2000. No stock
appreciation rights were exercised by the Named Executive
Officers during 2000 and no stock appreciation rights were
outstanding as of December 31, 2000.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
Number of Securites Underlying Value of Unexercised
Unexercised Options at December In-the-Money Options at
Shares Acquired Value 31, 2000(#) December 31, 2000 (1)($)
on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
Gerard S. Carlozzi - - 28,000 109,485 - -
Drew Karazin - - 8,000 70,368 - -
James Hogan - - 16,000 37,121 - -
Pertti Tormala - - 8,000 35,299 - -
Pertti Viitanen - - 8,000 33,006 - -
_____________________
(1) Based on a value equal to the closing sale price of the Common Stock on December 29, 2000 (the last trading day of 2000)
($1.375), minus the per share exercise price, multiplied by the number of shares underlying the options.
Director Compensation
The Company has not yet commenced paying cash fees to directors
in connection with their service on the Board of Directors or on
committees of the Board. The Company does grant stock options to non-
employee directors under its Stock Option/Stock Issuance Plan. Under
the Automatic Option Grant Program, which is part of the Company's
Stock Option/Stock Issuance Plan, as amended, each non-employee
director first elected or appointed to the Board of Directors after the
date of the Company's initial public offering will automatically be
granted a non-statutory option for 10,000 shares of Common Stock,
provided that such individual has not been in the prior employ of the
Company. In addition, at each annual stockholders' meeting, each
individual with at least six months service on the Board of Directors
as a non-employee director who will continue to serve as a non-employee
director following the meeting, and each individual who has continued
his or her service as a non-employee director for a period of at least
one year after he or she ceases serving as an employee of the Company
who will continue to serve as a non-employee director following the
meeting, will automatically be granted a non-statutory option for
10,000 shares of Common Stock. Each automatic grant has a term of ten
years, subject to earlier termination following the optionee's
cessation of service on the Board of Directors as provided in the Plan.
Fifty percent of the shares subject to an automatic grant vest on the
date of grant, 25% one year after the date of grant, and the remaining
25% two years after the date of grant.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee consists of Terry D. Wall
and David J. Bershad. Mr. Wall and Mr. Bershad (as well as Anthony J.
Dimun) serve on the Boards of Directors of both the Company and Vital
Signs (which latter company does not have a compensation committee).
For information regarding transactions between the Company and persons
named in this paragraph, see "Certain Relationships and Related
Transactions."
Certain Relationships and Related Transactions
The Company's product development efforts are dependent upon
Dr. Tormala, who is a founder, director and executive officer of the
Company, and is currently an Academy Professor at the Technical
University in Tampere, Finland and as such is permitted by the
University to devote his efforts to developing new products for the
Company. This executive utilizes a group of senior researchers,
graduate students, and faculty at the Technical University to perform
research and development projects involving resorbable polymers and
other topics impacting the Company's technology and processes. This
arrangement, partially funded by the Company and permitted in Finland
as a means of encouraging the commercialization of technological
development, has resulted in substantial cost savings to the Company,
while substantially expanding its product development effort. The
Company's funding obligation, which amounted to $315,000 during the
year ended December 31, 2000, consists of providing the University with
reasonable compensation for University resources (including graduate
students) utilized by the Company.
During 2000, the Company paid certain administrative expenses
on behalf of Bionix B.V., which currently owns 24.9% of the Company's
outstanding shares. Bionix B.V. owed $378,363 to the Company for such
expenses as of April 25, 2001. Certain directors and executive
officers of the Company control Bionix B.V. See "Security Ownership of
Certain Beneficial Owners and Management."
Compensation Committee Report on Executive Compensation
The Compensation Committee is responsible for implementing,
overseeing and administering the Company's overall compensation
policy. The basic objectives of that policy are to
- provide compensation levels that are fair and competitive
with peer companies,
- align pay with performance, and
- where appropriate, provide incentives which link executive
and stockholder interests and long-term corporate objectives
through the use of equity-based incentives.
Overall, the Company's compensation program is designed to
attract, retain and motivate high quality and experienced employees at
all levels of the Company. The principal elements of executive officer
compensation are base pay, bonus and stock options, together with
health benefits. The various aspects of the compensation program, as
applied to the Company's Chief Executive Officer and the Company's
other executive officers, are outlined below.
Executive officer compensation is determined by the Company's
performance and by the individual officer's ability to achieve his or
her individual performance objectives. Corporate performance is
evaluated by reviewing the extent to which strategic and business plan
goals are met, including such factors as increases in sales, gross
profits, net earnings (or the reduction of net losses) and return on
equity. In 2000, corporate performance was also measured by the extent
that management was able to develop and implement initiatives designed
to preserve liquidity and improve overall performance. Each of the
Company's executive officers participates in the development of an
annual business strategy from which individual objectives are
established. Initially, the objectives are proposed by the particular
officer involved. Those objectives are then determined by the Chief
Executive Officer or, in the case of the Chief Executive Officer's
objectives, by the Board of Directors. Individual performance goals
are measured quarterly.
Base Pay. The Company determines base pay for its executive
officers through an evaluation of the Company's performance, the extent
to which these individuals have achieved their performance objectives
and a comparative analysis of total compensation for similar positions
within other companies.
The Chief Executive Officer's performance is analyzed by the
full Board of Directors (other than the Chief Executive Officer)
against overall corporate performance and his individual objectives.
The Chief Executive Officer, in turn, reviews the individual
performance of the other executive officers. Salaries are reviewed on
an annual basis after consideration of corporate and individual
performance achievement and compensation paid by surveyed companies.
The Compensation Committee has not, as of the date of this proxy
statement, approved any increases in salary for 2000 and 2001 for any
of the Named Executive Officers who are currently employed by the
Company.
Bonus. Each executive officer of the Company is eligible to
receive a bonus if such officer achieves his or her individual
performance objectives and the Company achieves its performance goals.
Stock Options. The Compensation Committee believes that a
stock option plan provides capital accumulation opportunities to
participants in a manner that fosters the alignment of the
participants' interests and risks with the interests and risks of the
Company's public stockholders. The Compensation Committee further
believes that stock options can function to assure the continuing
retention and loyalty of employees. The options that have been granted
to executive officers carry long-term (i.e., five year) vesting
schedules. Officers who leave the Company's employ before their
options are fully vested will lose a portion of the benefits that they
might otherwise receive if they remain in the Company's employ for the
entire vesting period. Historically, stock option grants for existing
employees have been based upon a comparative analysis of equity-based
compensation among peer companies and an analysis of the performance of
the employees involved in light of the objectives established for such
employees.
The Compensation Committee believes that an appropriate
compensation program can help in fostering a continuation of profitable
operations if the program reflects a suitable balance between providing
appropriate awards to key employees while at the same time effectively
controlling compensation costs, principally by establishing cash
compensation at competitive levels and emphasizing supplemental
compensation that correlates to the performance of individuals, the
Company and the Company's Common Stock.
This report has been furnished by the Compensation Committee of
Bionx Implants' Board of Directors.
Terry D. Wall, Chairman
David J. Bershad
Performance Graph
The following graph compares the percentage change in the cumulative total stockholder return on the Company's Common Stock
with the cumulative total return of the Nasdaq Market Index and the S&P Health Care Medical Products/Supplies Index for the period
from April 25, 1997 (the date on which the Common Stock was first publicly traded) through December 31, 2000. For purposes of the
graph, it is assumed that the value of the investment in the Company's Common Stock and each index was 100 on April 25, 1997 and
that all dividends were reinvested.
Comparison of Cumulative Total Return Among Bionx Implants, The Nasdaq Market Index and the S&P Health Care Medical
Products/Supplies Index
Fiscal Year Ending
Company/Index/Market 4/25/97 12/31/97 12/31/98 12/31/99 12/31/00
Bionx Implants, Inc. 100.00 214.29 79.17 29.76 13.10
S&P Group Index 100.00 123.38 177.84 164.72 242.70
NASDAQ Market Index 100.00 129.55 182.67 339.02 204.09
Assumes $100 Invested on April 25, 1997, Assumes Dividend Reinvested
OTHER MATTERS
Costs
The Company will pay the costs of soliciting proxies. In
addition to solicitation by mail, proxies may be solicited personally
or by telephone or telegraph by regular employees of the Company and
its subsidiaries. Brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward soliciting material to their
principals, and the Company will, upon request, reimburse them for the
reasonable expense of doing so.
Relationship With Independent Accountants
KPMG Peat Marwick, certified public accountants, have been
selected by the Board of Directors to audit and report on the Company's
financial statements for the year ending December 31, 2001.
A representative of that firm is expected to be present at the Annual
Meeting and will have an opportunity to make a statement if he or she
so desires. The representative is expected to be available to respond
to appropriate questions from stockholders.
Audit Fees and Related Matters
Audit Fees. The Company was billed $86,220 for the audit of the
Company's annual financial statements for the year ended December 31,
2000 and for the review of the financial statements included in the
Company's Quarterly Reports on Form 10-Q filed during 2000.
Financial Information Systems Design Implementation Fees. The
Company was billed $_0_ for the professional services described in
Paragraph (c)(4)(ii) of Rule 2-01 of the SEC's Regulation S-X (in
general, information technology services) rendered by the Company's
principal accountant during the year ended December 31, 2000.
All Other Fees. The Company was billed $55,878 for non-audit
services (other than the non-audit services described above) rendered
by the Company's principal accountant during the year ended December
31, 2000.
Other Matters. The Audit Committee of the Board of Directors
has considered whether the provisions of information technology
services and other non-audit services is compatible with maintaining
the independence of the Company's principal accountant.
Of the time expended by the Company's principal accountant to
audit the Company's financial statements for the year ended December
31, 2000, less than 50% of such time involved work performed by persons
other than the principal accountant's full-time, permanent employees.
Other Matters to be Presented
The Board of Directors does not know of any matters, other
than those referred to in the accompanying Notice of the Annual
Meeting, to be presented at the Annual Meeting for action by
stockholders. However, if any other matters are properly brought before
the Annual Meeting or any adjournment thereof, it is intended that
votes will be cast with respect to those matters, pursuant to the
proxies, in accordance with the best judgment of the persons acting
under the proxies.
Stockholder Proposals
If you wish to have a proposal included in the Company's proxy
statement and form of proxy for next year's annual meeting, the
proposal must be received by the Company at its principal executive
offices by June 14, 2002. The Company will not be required to include
in its proxy statement a stockholder proposal which is received after
that date or which otherwise fails to meet the requirements for
stockholder proposals established by the SEC. Stockholders interested
in submitting a proposal are advised to contact knowledgeable counsel
with regard to the requirements of applicable securities laws. The
submission of a stockholder proposal does not guarantee that it will be
included in the Company's proxy statement. In order for a stockholder
proposal to be considered at next year's Annual Meeting (but not
included in the proxy statement for such meeting), the proposal must be
received by the Company in writing by August 28, 2002.
In addition, under the Company's By-Laws, if you wish to have a
proposal or nomination considered at next year's annual meeting, but
not included in the proxy statement and form of proxy for that meeting,
the proposal or nomination must be received by the Company's Secretary
at the Company's principal executive offices during the period
commencing 90 days prior to the meeting and ending on the later of the
60th day prior to the meeting or the 10th day after the meeting date is
publicly announced. In the event that the Company does not receive
timely notice with respect to such a proposal or nomination, management
of the Company would use its discretionary authority to vote the shares
it represents as the Board of Directors may recommend. Your submission
must include certain specified information concerning the proposal or
nominee and information as to your ownership of Common Stock of the
Company. Proposals or nominations not meeting these requirements will
not be entertained at next year's annual meeting.
By Order of the Board of Directors,
October 12, 2001 Drew Karazin, Secretary
A copy of the Company's Annual Report to Stockholders for the year
ended December 31, 2000, including consolidated financial statements,
accompanies this Proxy Statement. The Annual Report is not to be
regarded as proxy soliciting material or as a communication by means of
which any solicitation is to be made.
BIONX IMPLANTS, INC.
1777 Gwynedd Hall, Suite 400
Blue Bell, PA 19422
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
to be held on November 16, 2001
This Proxy is solicited on Behalf of the Board of Directors
The undersigned hereby appoints Gerard Carlozzi and Drew Karazin,
and each with full power to act without the other, as proxies, with
full power of substitution, for and in the name of the undersigned to
vote and act with respect to all shares of common stock of Bionx
Implants, Inc. (the "Company")standing in the name of the undersigned
on October 8, 2001, or with respect to which the undersigned is
entitled to vote and act, at the Annual Meeting of Stockholders of the
Company to be held on November 16, 2001 and at any and all adjournments
thereof, with all the powers the undersigned would possess if
personally present, and particularly, but without limiting the
generality of the foregoing, the matters described on the reverse side
of this proxy. All shares represented by proxy will be voted in
accordance with the instructions, if any, given in such proxy. A
stockholder may abstain from voting on any proposal or may withhold
authority to vote for any nominee(s) by so indicating on the reverse
side.
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE)
_____________________________________________________________________
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERSBIONX IMPLANTS, INC.
November 16, 2001
[down arrow] Please Detach and Mail in the Envelope Provided [down
arrow]
/x/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
FOR all nominees WITHHOLD NOMINEES:
Listed at right AUTHORITY Gerard S. Carlozzi
(except as marked to vote for all Terry D. Wall
to the contrary below) nominees listed at right
1. Election
of Directors.
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
print that nominee's name on the line provided below.)
_______________________________________________________________________
2. In their discretion, the proxies are authorized to vote upon such
business as may properly come before the Meeting or any adjournment
thereof.
The Shares represented by this proxy will be voted as directed. If no
contrary instruction is given, the shares will be voted FOR the
election of the Board's nominees. On any other matters that may come
before the Meeting the proxy will be voted in the discretion of the
above-named persons.
SIGNATURE DATED ____,2001
___________________ _________________________________
SIGNATURE IF HELD JOINTLY
Note: (Please date, sign as name appears above and return promptly. If
the Shares are registered in the names of two or more persons, each
should sign. When signing as Corporate Officer, Partner, Executor,
Administrator, Trustee or Guardian, please give full title. Please note
any changes in your address alongside the address as it appears in the
proxy.)
Appendix A
Resolution of the Board of Directors of
Bionx Implants, Inc.
Dated June 13, 2000
Resolved:
That the Board of Directors establish an Audit Committee Charter as
follows:
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board of Directors of Bionx
Implants, Inc. ("Bionx") to assist the Bionx Board in fulfilling
its oversight responsibilities regarding (a) the integrity of the
financial statements of Bionx and its subsidiaries (the "Company")
(b) the independence of performance of the Company's external and,
if applicable, internal auditors and the systems of internal
controls which management and the Board of Directors have
established.
The members of the Audit Committee shall meet the independence
and experience requirements of the National Association of Securities
Dealers, Inc., subject to such qualifications and exceptions as may
be permitted by such requirements. The members of the Audit
Committee shall be appointed from time to time by the Bionx Board.
The Bionx Board reserves the right to amend, modify or replace this
Charter in its discretion at any time.
The Audit Committee shall have the authority to retain special
legal, accounting or other consultants to advise the Audit
Committee. The Audit Committee may request any officer or employee
of the Company, the Company's outside counsel or independent
auditor to attend meetings of the Audit Committee or to meet with
any members of, or consultants to, the Audit Committee and will
have unrestricted access to members of management and all
information relevant to its responsibilities.
The primary goals of this Charter are to specify the following:
- the scope of the Audit Committee's responsibilities and the
approaches to be used in carrying out those responsibilities,
including structure, processes and membership requirements;
- the Audit Committee's responsibility for (a) insuring its receipt
from the Company's independent auditor of a formal written
statement delineating all relationships between such auditor
and the Company, consistent with Independence Standards Board
Standard No. 1, (b) actively engaging in a dialogue with such
auditor with respect to any disclosed relationships or services
that may impact the objectivity and the independence of the
auditor and (c) taking, or recommending that the Bionx Board
take, appropriate action to oversee the independence of the
independent auditor; and
- the independent auditor's ultimate accountability, to the Bionx
Board and the Audit Committee, as representatives of the
shareholders of Bionx and the ultimate authority and
responsibility of the Bionx Board and/or the Audit Committee to
select, evaluate and, where appropriate, replace the
independent auditor (or, if applicable, to nominate the
independent auditor to be proposed for shareholder approval in
any proxy statement).
To the extent any statement set forth below is inconsistent with the
three principles set forth above, the three principles set forth above
shall govern.
The Audit Committee shall make regular reports to the Bionx
Board, as required by Pennsylvania law.
Pursuant to this Charter:
1. THE COMMITTEE
The Audit Committee of the Board of Directors of Bionx Implants, Inc.
will consist of at least three members of the Board including a
Chairman designated by the Board. Members of the Audit Committee may
not be employees of the Company. The Committee will meet at least four
times a year, with additional meetings if circumstances require, for
the purpose of satisfying its responsibilities.
2. SCOPE
The Committee serves at the pleasure of and is subject to the control
and direction of the Board of Directors.
3. RESPONSIBILITIES OF THE COMMITTEE
- To assist the Board in fulfilling its fiduciary responsibilities to
the shareholders with respect to matters relating to the Company's
business, accounting, reporting, audit and internal controls
practices.
- To maintain a direct line of communications between the Board and
the Company's independent auditors and internal auditors to provide
for an exchange of views and information.
4. FUNCTIONS OF THE COMMITTEE
The Committee will satisfy its responsibilities by completing the
following functions:
Audit
- Discuss the results of the annual internal and independent audits
with management and the internal and independent auditors.
- Consider the comments from the independent auditors and internal
auditors with respect to internal accounting and management
controls and the consideration given or action taken by management.
- Recommend, for appointment by the Board, the selection of
independent auditors for the coming year.
- Appraise the effectiveness of the independent audit effort through
discussions with the independent auditors regarding their planned
arrangements and scope of the annual audit, including fees.
- Review the anticipated scope and related fees of any non-audit
services to be provided by the independent auditors to ensure that
these services do not detract from the independence of the auditors
in their audit function.
- Consider the comments from the independent auditors with respect to
internal accounting and management controls and the consideration
given or action taken by management.
- Obtain the assessment of management and the independent auditors as
to the adequacy of: the Company's internal accounting procedures
and control and the Company's procedures for complying with SEC
Regulations and The Foreign Corrupt Practices Act.
- Engage in dialogue with the Company's independent auditor with
respect to any disclosed relationships or services that may impact
the objectivity and independence of such firm.
- Recommend to the Bionx Board appropriate actions to ensure the
independence of the Company's independent auditor. Receive from the
Company's independent auditor a formal written statement
delineating all relationships between such auditor and the Company,
consistent with Independence Standards Board Standard No. 1.
- Discuss required communications with the independent auditor as
required by SAS 61 of GAAS.
- Review with the independent auditor any material problems or
difficulties the auditor may have encountered during an audit
including any restrictions on the scope of activities or access to
required information; review any management letter provided by the
auditor and the Company's response to that letter.
- Review the scope of planned activities and budget along with a
review of the effectiveness of the Company's internal auditors, if
any
Review
- Review the Committee's responsibilities and functions, evaluate its
performance, and institute appropriate modifications to reflect
changes in the business environment.
- Monitor the procedures or systems used in preparing the financial
statements of the Company.
- Receive and review the assessment of management as to the quality
and depth of staffing in the accounting and financial departments
worldwide.
- Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Bionx Board for approval.
- Review Year-End financial statements and financial results prior to
filing Form 10-K.
- Review any information submitted to the Audit Committee pursuant to
Section 10A of the Private Securities Litigation Reform Act of
1995.
- Prepare the report to the Company's Board of Directors for
inclusion in the Company's annual proxy statement.
While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee to
plan or conduct audits or to determine that the Company's financial
statements are complete and accurate or are in accordance with
generally accepted accounting principles. This is the responsibility
of the board of directors, management and the independent auditor. Nor
is it the duty of the Audit Committee to conduct investigations, to
resolve disagreements, if any, between management and the independent
auditor or to assure compliance with laws and regulations.
1