SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ x ]
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Check the appropriate box:
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CONMED CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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CONMED CORPORATION
310 Broad Street
Utica, New York 13501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
CONMED Corporation (the "Company") will be held at the Holiday Inn, 1777
Burrstone Road, New Hartford, New York, on Tuesday, May 20, 1997, at 3:30 P.M.
(New York time), for the following purposes:
(1) To elect five Directors to serve on the Company's
Board of Directors;
(2) To appoint independent accountants for the Company
for fiscal year 1997; and
(3) To transact such other business as may properly be
brought before the meeting or any adjournment
thereof.
The shareholders of record at the close of business on April 1,
1997 are entitled to notice of and to vote at this Annual Meeting or any
adjournment thereof.
Even if you plan to attend the meeting in person, we request that
you mark, date, sign and return your proxy in the enclosed self-addressed
envelope as soon as possible so that your shares may be certain of being
represented and voted at the meeting. Any proxy given by a shareholder may be
revoked by that shareholder at any time prior to the voting of the proxy.
By Order of the Board of Directors,
Thomas M. Acey
Secretary
April 21, 1997
CONMED CORPORATION
310 Broad Street
Utica, New York 13501
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 20, 1997
The enclosed proxy is solicited by and on behalf of the Board of
Directors of CONMED Corporation (the "Company") for use at the Annual Meeting of
Shareholders to be held Tuesday, May 20, 1997, at 3:30 P.M. (New York time), at
the Holiday Inn, 1777 Burrstone Road, New Hartford, New York, and any
adjournment thereof. The matters to be considered and acted upon at such meeting
are described in the foregoing notice of the meeting and this proxy statement.
This proxy statement and the related form of proxy are being mailed on or about
April 21, 1997 to all shareholders of record on April 1, 1997. Shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock"),
represented in person or by proxy will be voted as hereinafter described or as
otherwise specified by the shareholder. Any proxy given by a shareholder may be
revoked by the shareholder at any time prior to the voting of the proxy by
delivering a written notice to the Secretary of the Company, by executing and
delivering a later-dated proxy or by attending the meeting and voting in person.
The persons named as proxies are Eugene R. Corasanti and Robert
E. Remmell, each of whom is presently a director and an officer of the Company.
The cost of preparing, assembling and mailing the proxy, this proxy statement
and other material enclosed, and all clerical and other expenses of
solicitations will be borne by the Company. In addition to the solicitation of
proxies by use of the mails, directors, officers and employees of the Company
and its subsidiaries may solicit proxies by telephone, telegram or personal
interview. The Company also will request brokerage houses and other custodians,
nominees and fiduciaries to forward soliciting material to the beneficial owners
of Common Stock held of record by such parties and will reimburse such parties
for their expenses in forwarding soliciting material.
VOTING RIGHTS
The holders of record of the 15,013,574 shares of Common Stock
outstanding on April 1, 1997 will be entitled to one vote for each share held on
all matters coming before the meeting. The holders of a record of a majority of
the outstanding shares of Common Stock present in person or by proxy will
constitute a quorum for the transaction of business at the meeting. Under the
rules of the Securities and Exchange Commission (the "SEC"), boxes and a
designated blank space are provided on the proxy card for shareholders if they
wish either to abstain on one or more of the proposals or to withhold authority
to vote for one or more nominees for director. In accordance with New York State
law, such abstentions are not counted in determining the votes cast in
connection with the selection of accountants. Votes withheld in connection with
the election of one or more of the nominees for director will not be counted as
votes cast for such individuals.
Under the rules of the New York Stock Exchange, which effectively
govern the voting by any brokerage firm holding shares registered in its name or
in the name of its nominee on behalf of a beneficial owner, Proposals 1 and 2
are considered "discretionary" items upon which brokerage firms may vote in
their discretion on behalf of their clients if such clients have not furnished
voting instructions within ten days prior to the Annual Meeting (shares held by
such clients, "broker non-votes"). Such broker non-votes will be treated in the
same manner as abstentions.
ANNUAL REPORT
The annual report for the fiscal year ended December 31, 1996,
including financial statements, is being furnished herewith to shareholders of
record on April 1, 1997. The annual report does not constitute a part of the
proxy soliciting material and is not deemed "filed" with the SEC.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect
to the beneficial ownership of the Company's Common Stock as of April 1, 1997,
by each shareholder known by the Company to be the beneficial owner of more than
5% of its outstanding Common Stock, by each director, by each of the Named
Executive Officers (as defined below) and by all directors and executive
officers as a group.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner* Ownership of Class
- ------------------------- --------- --------
William W. Abraham(1) 137,550 (2)
Harry Cone(3) 239,100 1.59
Eugene R. Corasanti(4) 485,900 3.18
Joseph J. Corasanti(5) 58,000 (2)
Bruce F. Daniels(6) 7,875 (2)
Joseph B. Gross(7) 26,600 (2)
Jeffrey H. Palmer(7) 32,000 (2)
Robert E. Remmell(8) 3,450 (2)
Robert D. Shallish, Jr.(9) 53,375 (2)
Directors and officers as a group
(13 persons) (1)(3)(4)(5)(6)(7)(8)(9)(10) 1,168,194 7.47
Fenimore Asset Management, Inc.(11)
118 North Grand Street
P.O. Box 310
Cobleskill, New York 12043 1,119,817 7.46
Chancellor LGT Asset Management, Inc.(12)
Chancellor LGT Trust Company
1166 Avenue of the Americas
New York, New York 10036
LGT Asset Management, Inc.
50 California Street
San Francisco, California 94111 889,500 5.9
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner* Ownership of Class
- ------------------------- --------- --------
Fred Alger Management, Inc.(13)
Fred M. Alger III
75 Maiden Lane
New York, New York 10038 842,000 5.6
- -----------------------
* Unless otherwise set forth above, the address of each of the
above listed shareholders is c/o CONMED Corporation, 310 Broad
Street, Utica, New York 13501.
(1) Includes 116,450 shares subject to options, exercisable within 60 days.
(2) Less than 1%.
(3) Includes 129,900 shares owned beneficially by the wife of Harry Cone. Mr.
Cone disclaims beneficial ownership of these shares. Also includes 3,000
shares subject to options, exercisable within 60 days.
(4) Includes 42,525 shares owned beneficially by the wife of Eugene R.
Corasanti. Eugene R. Corasanti disclaims beneficial ownership of these
shares. Also includes 252,000 shares subject to options, exercisable within
60 days.
(5) Includes 22,950 shares subject to options, exercisable within 60 days.
Joseph J. Corasanti is the son of Eugene R. Corasanti.
(6) Consists of 4,875 shares owned beneficially by the wife of Bruce F.
Daniels. Mr. Daniels disclaims beneficial ownership of these shares. Also
includes 3,000 shares subject to options, exercisable within 60 days.
(7) Consists of shares subject to options, exercisable within 60 days.
(8) Includes 3,000 shares subject to options, exercisable within 60 days.
(9) Includes 49,000 shares subject to options, exercisable within 60 days.
(10) Includes 618,694 shares subject to options, exercisable within 60 days,
held by William W. Abraham, Harry Cone, Eugene R. Corasanti, Joseph J.
Corasanti, Bruce F. Daniels, Joseph B. Gross, Jeffrey H. Palmer, Robert E.
Remmell, Robert D. Shallish, Jr., Frank R. Williams, John J. Stotts, Luke
A. Pomilio and Thomas M. Acey, executive officers of the Company. Such
618,694 shares are equal to approximately 3.96% of the Common Stock
outstanding. As of April 1, 1997, the Company's directors and officers as a
group (13 persons) are deemed to have beneficially owned 549,500 shares,
which is approximately 3.52% of the Common Stock outstanding.
(11) A Schedule 13G filed with the SEC by Fenimore Asset Management, Inc. on
January 22, 1997 indicates that Fenimore Asset Management, Inc.
beneficially owns 1,119,817 shares of Common Stock by virtue of having
shared voting and dispositive power over such shares through discretionary
accounts owned economically by clients.
(12) A Schedule 13G filed with the SEC by these entities on February 7, 1997
indicates that such entities beneficially own 889,500 shares of Common
Stock by virtue of having sole voting and dispositive power over such
shares through discretionary accounts owned economically by fiduciary
accounts.
(13) A Schedule 13G filed with the SEC by these entities on January 10, 1997
indicates that such entities beneficially own 842,400 shares of Common
Stock by virtue of having sole or shared voting and sole dispositive power
over such shares.
On April 1, 1997 there were 2,446 shareholders of record of the
Company's Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated by the Securities and
Exchange Commission, the Company is required to identify, based solely on a
review of reports filed under Section 16(a) of the Securities Exchange Act of
1934, each person who, at any time during its fiscal year ended December 31,
1996, was a director, officer or beneficial owner of more than ten percent of
the Company's Common Stock that failed to file on a timely basis any such
reports. Based on such reports, the Company is aware of no such failure other
than, with respect to William W. Abraham, a Form 4 due November 10, 1996, for
which a Form 5 was filed February 28, 1997 and a Form 5 due February 14, 1997,
for which a Form 5 was filed February 28, 1997.
PROPOSAL ONE: ELECTION OF DIRECTORS
At the meeting, five directors are to be elected to serve on the
Company's Board of Directors. The shares represented by proxies will be voted as
specified by the shareholder. If the shareholder does not specify his choice,
the shares will be voted in favor of the election of the nominees listed on the
proxy card, except that in the event any nominee should not continue to be
available for election, such proxies will be voted for the election of such
other persons as the Board of Directors may recommend. The Company does not
presently contemplate that any of the nominees will become unavailable for
election for any reason. The director nominees who receive the greatest number
of votes at the meeting will be elected to the Board of Directors of the
Company. Votes against, and votes withheld in respect of, a candidate have no
legal effect. Shareholders are not entitled to cumulative voting rights.
The Board of Directors recommends a vote FOR this proposal.
Pursuant to the Company's By-laws, the Board of Directors
consists of five directors. Directors hold office for terms expiring at the next
annual meeting of shareholders and until their successors are duly elected and
qualified. Each of the nominees proposed for election at the Annual Meeting is
presently a member of the Board of Directors and has been elected by the
shareholders.
The following table sets forth certain information regarding the
members of and nominees for the Board of Directors:
NOMINEES FOR ELECTION AT THE 1997 ANNUAL MEETING
Served As
Director Principal Occupation or
Name Age Since Position with the Company
- ---- --- ----- -------------------------
Harry Cone 76 1981 Certified Public Accountant, retired
Robert E. Remmell 66 1983 Member of Steates Remmell Steates & Dziekan
(Attorneys) and Assistant Secretary of the Company
Eugene R. Corasanti 66 1970 Chairman of the Board of Directors, President and
Chief Executive Officer of the Company
Bruce F. Daniels 62 1992 Controller, Construction Division, Chicago
Pneumatic Tool Company
Joseph J. Corasanti 33 1994 Vice President-Legal Affairs and General Counsel
of the Company
DIRECTORS AND EXECUTIVE OFFICERS
Eugene R. Corasanti has served as Chairman of the Board and
President of the Company since its incorporation in 1970. Mr. Corasanti is also
the Company's Chief Executive Officer. Prior to that time he was an independent
public accountant. Mr. Corasanti holds a B.B.A. degree in Accounting from
Niagara University. Mr. Corasanti is also Chairman of the Board of Directors of
the Company. Eugene R. Corasanti's son, Joseph J. Corasanti, is a Director, Vice
President-Legal Affairs and General Counsel of the Company.
William W. Abraham (age 65) joined the Company in May 1977 as
General Manager. He has served as the Company's Vice President-Manufacturing and
Engineering since June 1983. In November 1989 he was named Executive Vice
President and in March 1993, he was named Senior Vice President of the Company.
Mr. Abraham holds a B.S. degree in Industrial Management from Utica College.
Joseph B. Gross (age 38) joined the Company as Manager of
Manufacturing Engineering in April 1988 and became Vice President-Operations in
May 1992. Prior to his employment with the Company, Mr. Gross was employed at
Oneida Ltd. Silversmiths. Mr. Gross holds a B.S. degree from the State
University of New York-College of Technology and a Master's degree in Business
Administration from Rensselaer Polytechnic Institute.
Jeffrey H. Palmer (age 53) joined the Company as National Sales
Manager in October 1988 and became Vice President-Sales in September 1989. Prior
to his employment with the Company, Mr. Palmer served as Director of Sales for
the Medical Products Division of AMSCO International for ten years. Mr. Palmer
holds a B.A. degree from Eastern Michigan University.
Robert D. Shallish, Jr. (age 48) joined the Company as Chief
Financial Officer and Vice President-Finance in December 1989 and has also
served as Assistant Secretary since March 1995. Prior to this he was employed as
Controller of Genigraphics Corporation in Syracuse, New York since 1984. He was
employed by Price Waterhouse LLP as a certified public accountant and senior
manager from 1972 through 1984. Mr. Shallish graduated with a B.A. degree in
Economics from Hamilton College and holds a Master's degree in Accounting from
Syracuse University.
Joseph J. Corasanti has served as Director and Vice
President-Legal Affairs of the Company since 1994 and as General Counsel of the
Company since March 1993. Prior to that time he was an Associate Attorney with
the law firm of Morgan, Wenzel & McNicholas, Los Angeles, California from 1990
to March 1993. Mr. Corasanti holds a B.A. degree in Political Science from
Hobart College and a J.D. degree from Whittier College School of Law. Joseph J.
Corasanti is the son of Eugene R. Corasanti, Chairman, President and Chief
Executive Officer of the Company.
John J. Stotts (age 41) joined the Company as Vice President -
Marketing and Sales for Patient Care in July 1993 and became Vice President -
Marketing in December 1996. Prior to his employment with the Company, Mr. Stotts
served as Director of Marketing and Sales for Medtronic Andover Medical, Inc.
Mr. Stotts holds a B.A. degree in Business Administration from Ohio University.
Frank R. Williams (age 48) joined the Company in 1974 as Sales
Manager and Director of Marketing and became Vice President-Marketing and Sales
in June 1983. In September 1989 he became Vice President-Business Development
and became Vice President-Technology Assessment in November 1995. Mr. Williams
graduated with a B.A. degree from Hartwick College in 1970 as a biology major
and did his graduate study in Human Anatomy at the University of Rochester
College of Medicine.
Thomas M. Acey (age 50) has been employed by the Company since
August 1980 and has served as the Company's Treasurer since August 1988 and as
the Company's Secretary since January 1993. Mr. Acey holds a B.S. degree in
Public Accounting from Utica College and prior to joining the Company was
employed by the certified public accounting firm of Tartaglia & Benzo in Utica,
New York.
Luke A. Pomilio (age 32) joined the Company as Controller in
September 1995. Prior to his employment with the Company, Mr. Pomilio served as
Controller of Rome Cable Corporation, a wire and cable manufacturer. He was also
employed as a certified public accountant for seven years with Price Waterhouse
LLP where he served most recently as an audit manager. Mr. Pomilio graduated
with a B.S. degree in Accounting and Law from Clarkson University.
Harry Cone has served as a Director of the Company since May
1981. Mr. Cone is a certified public accountant and was a partner in the firm of
Sugarman & Cone (and its predecessor), Utica, New York, from 1958 until 1986
when he became semi-retired. Mr. Cone graduated with a B.B.A. degree in
Accounting from Syracuse University.
Robert E. Remmell has served as a Director and Assistant
Secretary of the Company since June 1983. Mr. Remmell has been a partner since
January 1961 of Steates Remmell Steates & Dziekan, New Hartford, New York, the
Company's corporate counsel. The Company paid approximately $267,000 to Steates
Remmell Steates & Dziekan, and has accrued approximately an additional $2,400,
for services rendered during fiscal year 1996. Mr. Remmell holds a B.A. degree
from Utica College and an L.L.B. from Syracuse University School of Law.
Bruce F. Daniels has served as a Director of the Company since
August 1992. Since 1993 Mr. Daniels has been the Controller of the Construction
Division of Chicago Pneumatic Tool Company, where he has been employed since
1974. From 1991 until 1993, he was the Controller of the International Division
of Chicago Pneumatic Tool Company and from 1981 until 1991, he was the
Controller of the Tool Division of Chicago Pneumatic Tool Company. Mr. Daniels
holds a B.S. degree in Business from Utica College.
The Company's Directors are elected at each annual meeting of
shareholders and serve until the next annual meeting and until their successors
are duly elected and qualified. Eugene R. Corasanti's employment is subject to
an employment agreement which expires December 31, 2001. The Company's other
officers are appointed by the Board of Directors and hold office at the will of
the Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors has three standing committees:
the Audit Committee, the Stock Option Committee and the Compensation Committee.
The Company has no nominating committee.
The Audit Committee presently consists of Messrs. Cone, Daniels
and Remmell. The Audit Committee is charged with evaluating accounting and
control procedures and practices of the Company and reporting on such to the
Board of Directors. The Audit Committee also serves as direct liaison with the
Company's independent public accountants and recommends the engagement or
discharge of such auditors. The Audit Committee met two times during fiscal year
1996.
The Stock Option Committee presently consists of Messrs. Cone,
Daniels and Remmell. The Stock Option Committee administers the Company's
employee stock option plans and has authority to grant options to officers and
key employees, as designated by the Stock Option Committee, and to determine the
terms of such options in accordance with such plan. The Stock Option Committee
voted by unanimous written consent on resolutions five times during fiscal year
1996.
The Compensation Committee presently consists of Messrs. Cone,
Daniels and Remmell. The Compensation Committee is charged with reviewing and
establishing levels of salary, bonuses, benefits and other compensation for the
Company's officers. The Compensation Committee met two times during fiscal year
1996.
The full Board of Directors met seven times (two of which
meetings were telephonic) during fiscal year 1996. Each incumbent director
attended or acted upon at least 75% of the total fiscal year 1996 board meetings
or unanimous consents and committee meetings or unanimous consents held or acted
upon during periods that he was a member of the Board or such committees.
Each Director was paid $1,000 for each of five meetings of the
full Board of Directors attended and, commencing in the fourth fiscal quarter of
1996, each non-employee director was paid $1,500 per fiscal quarter of service
on the Board of Directors. In addition, under the Company's Stock Option Plan
for Non-Employee Directors each non-employee director (Messrs. Cone, Daniels and
Remmell in 1995, 1996 and 1997) elected, reelected or continuing as a director
receives 1,500 options with an option price equal to the fair market value of
the Company's Common Stock on the business day following each annual meeting of
the shareholders.
COMPENSATION OF EXECUTIVE OFFICERS
The following information relates to all plan and non-plan
compensation awarded to, earned by, or paid to (i) Eugene R. Corasanti, the
Chairman of the Board of Directors, President and Chief Executive Officer of the
Company (the "CEO"), and (ii) William W. Abraham, Jeffrey H. Palmer, Robert D.
Shallish, Jr. and Joseph B. Gross, the Company's four most highly compensated
executive officers, other than the CEO, who were serving as executive officers
of the Company at December 31, 1996 (the CEO and such officers, the "Named
Executive Officers").
The following information does not reflect any compensation
awarded to or earned by the Named Executive Officers subsequent to December 31,
1996, except as may otherwise be indicated. Any compensation awarded to or
earned by the Named Executive Officers during fiscal year 1997 will be reported
in the proxy statement for the Company's 1998 Annual Meeting of Shareholders,
unless such compensation has been previously reported.
Summary Compensation Table
The following table sets forth for the Named Executive Officers
for each of the last three years: (i) the name and principal position of the
executive officer (column (a)); (ii) the year covered (column (b)); (iii) annual
compensation (columns (c), (d) and (e)), including: (A) base salary earned
during the year covered (column (c)); (B) bonus earned during the year covered
(column (d)); and (C) other annual compensation not properly categorized as
salary or bonus (column (e)); and (iv) long-term compensation, including the sum
of the number of stock options granted (column (f)).
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
(a) (b) (c) (d) (e) (f)
Other Annual
Name and Principal Fiscal Salary Bonus Compensation Options
Position Year ($) ($)(1) ($) (#)
-------- ---- --- ------ --- ---
Eugene R. Corasanti, 1996 250,523 - 165,000(2) 62,000
President, Chief 1995 249,562 - 149,000(2) 20,000(3)
Executive Officer and 1994 203,891 100,000 129,000(2) 112,500(3)
Chairman of the Board
William W. Abraham, 1996 152,107 - - 7,000
Senior Vice President 1995 139,507 - - 19,200(3)
1994 128,300 65,000 - -
Jeffrey H. Palmer, 1996 134,307 - - 7,000
Vice President-Sales 1995 118,707 - - 17,500(3)
1994 106,680 54,600 - -
Robert D. Shallish, Jr., 1996 134,307 - - 7,000
Chief Financial Officer 1995 118,707 - - 17,500(3)
and Vice President- 1994 106,050 54,600 - -
Finance
Joseph B. Gross, 1996 134,307 - - 7,000
Vice President- 1995 118,707 - - 17,500(3)
Operations 1994 105,000 54,600 - -
- ------------------
(1) Includes cash bonuses in year earned even if paid after the fiscal year
end.
(2) Amounts represent deferred compensation and accrued interest for Mr.
Corasanti. See the discussion of Mr. Corasanti's employment agreement,
below.
(3) Adjusted to give effect to the Company's three-for-two stock splits in the
form of stock dividends paid on December 27, 1994 and November 30, 1995.
Eugene R. Corasanti has a five-year employment agreement (the
"Employment Agreement") with the Company, extending through December 31, 2001.
The Employment Agreement provides for Mr. Corasanti to serve as president and
chief executive officer of the Company for five years at an annual salary, not
less than $300,000, as determined by the Board of Directors. Mr. Corasanti also
receives deferred compensation of $100,000 per year with interest at 10% per
annum, payable in 120 equal monthly installments upon his retirement or to his
beneficiaries at death, and is entitled to participate in the Company's employee
stock option plan and pension and other employee benefit plans and such bonus or
other compensatory arrangements as may be determined by the Board of Directors.
In the event that the Board of Directors should fail to reelect Mr. Corasanti as
president and chief executive officer or should terminate his employment for
reasons other than just cause, Mr. Corasanti will become entitled to receive the
greater of three years' base annual salary or the balance of his base annual
salary plus the average of the bonuses, deferred compensation, and incentive
compensation awarded to Mr. Corasanti during the three years prior to such
termination for the five-term employment term, and shall continue to receive
other employment benefits, for the greater of three years or the balance of the
Employment Agreement's five-year term. In the event of Mr. Corasanti's death or
disability, Mr. Corasanti or his estate or beneficiaries will be entitled to
receive 100% of his base annual salary and other employment benefits (other than
deferred compensation) for the balance of the Employment Agreement's term. If,
during the term of Mr. Corasanti's employment under the Employment Agreement and
within two years after a Change in Control his employment with the Company is
terminated by the Company other than for Cause or by him for Good Reason (as
such capitalized terms are defined in the Employment Agreement), Mr. Corasanti
will be entitled to receive (a) a lump sum payment equal to three times the sum
of (i) his base salary on the date of such termination or his base salary in
effect immediately prior to the Change in Control, whichever is higher, plus
(ii) the average of the bonuses, deferred compensation, and incentive
compensation awarded to Mr. Corasanti during the three years prior to such
termination; (b) continued coverage under the benefit plans in which he
participates for a period of two years from the date of such early termination;
(c) a lump sum payment equal to the aggregate amount credited to his deferred
compensation account; and (d) awards for the calendar year of such termination
under incentive plans maintained by the Company as though any performance or
objective criteria used in determining such awards were satisfied. The Board of
Directors has determined for 1997 that Mr. Corasanti's compensation shall be
$300,000.
The Company is paying the premiums on three split-dollar life
insurance policies for Eugene R. Corasanti as described under "Certain
Relationships and Related Transactions." In 1996, premiums on these policies
paid by the Company aggregated approximately $49,000. As described more fully
under "Certain Relationships and Related Transactions," the Company entered into
a directors and officers insurance policy covering the period from January 31,
1997 through January 31, 1998, which covers all directors and officers of the
Company and its subsidiaries.
STOCK OPTION PLANS
The 1992 Plan
In April 1992, the shareholders approved the CONMED Corporation
1992 Stock Option Plan (as amended and approved by the shareholders on May 21,
1996, the "1992 Plan"). Under the 1992 Plan, in the discretion of the Stock
Option Committee of the Board of Directors (the "Committee"), options may be
granted to officers and key employees of the Company and its subsidiaries for
the purchase of shares of Common Stock. The Committee presently consists of
Messrs. Cone, Daniels and Remmell.
Options may be granted which are (i) incentive stock options
within the meaning of Internal Revenue Code Section 422 or (ii) options other
than incentive stock options (i.e., non-qualified options). A total of 2,000,000
shares of Common Stock (subject to adjustment for stock splits and other changes
in the Company's capital structure) are reserved against the exercise of options
to be granted under the 1992 Plan. Shares reserved under an option which for any
reason expires or is terminated, in whole or in part, shall again be available
for the purposes of the 1992 Plan. Options relating to 1,117,385 shares of
Common Stock have been granted and not terminated under the 1992 Plan, of which
options relating to 1,018,145 shares of Common Stock are still exercisable.
Options relating to 882,615 shares of Common Stock remain available to be
granted.
The 1983 Plan
In June 1983, the shareholders of the Company approved an
employee stock option plan (the "1983 Plan"), which was subsequently amended by
the shareholders on June 30, 1987 and April 10, 1992. The 1983 Plan calls for
the grant of both "incentive stock options" intended to qualify for special tax
treatment under the Internal Revenue Code of 1986 and other stock options.
Pursuant to the 1983 Plan, officers and key employees of the Company are
eligible for grants of stock options at the fair market value of the Company's
Common Stock on the date of grant, exercisable commencing one year after grant.
The 1983 Plan is administered by the Committee.
No additional options may be granted under the 1983 Plan. Options
relating to 1,008,197 shares of Common Stock were granted under the 1983 Plan,
of which options for 138,038 shares of Common Stock are still exercisable.
Stock Option Plan for Non-Employee Directors
In May 1995, the shareholders of the Company approved the Stock
Option Plan For Non-Employee Directors of CONMED Corporation (the "Non-Employee
Directors Plan"). All members of the Company's Board of Directors who are not
current or former employees of the Company or any of its subsidiaries
("Non-Employee Directors") are eligible to participate in the Non-Employee
Directors Plan. Under the Non-Employee Directors Plan, each Non-Employee
Director (Messrs. Cone, Daniels and Remmell in 1995, 1996 and 1997) elected,
reelected or continuing as a director receives 1,500 options with an option
price equal to the fair market value of the Company's Common Stock on the
business day following each annual meeting of the shareholders.
A total of 75,000 shares of Common Stock (subject to adjustment
for stock splits and other changes in the Company's capital structure) are
reserved against the exercise of options to be granted under the Non-Employee
Directors Plan, of which options for 9,000 shares of Common Stock have been
granted and are still exercisable. Shares issuable under the Non-Employee
Directors Plan may be authorized but unissued shares or treasury shares. Shares
reserved under an option which for any reason expires or is terminated, in whole
or in part, shall again be available for the purposes of the Non-Employee
Directors Plan.
Option Grants Table
The following table sets forth, with respect to grants of stock
options made during fiscal year 1996 to each of the Named Executive Officers:
(i) the name of the executive officer (column (a)); (ii) the number of options
granted (column (b)); (iii) the percent the grant represents of the total
options granted to all employees during fiscal year 1996; (iv) the per share
exercise price of the options granted (column (d)); (v) the expiration date of
the options (column (e)); and (vi) the potential realizable value of each grant,
assuming the market price of the Common Stock appreciates in value from the date
of grant to the end of the option term at a rate of (A) 5% per annum (column
(f)) and (B) 10% per annum (column (g)).
Option Grants in Fiscal Year 1996
Potential Realizable Value
at Assumed Annual Rates
of Stock Price
Appreciation for
Individual Grants Option Term
----------------- -----------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options Options Granted Exercise or
Granted to Employees in Base Price Expiration
Name (#) Fiscal Year 1996 ($/Sh) Date 5% ($) 10% ($)
---- ----- ---------------- -------- ------ ------ -------
Eugene R. Corasanti 10,000 4.99 30.75 5/21/06 193,385 490,076
2,000 0.99 16.50 7/23/06 20,754 52,594
50,000 24.95 19.75 12/16/06 621,033 1,573,821
William W. Abraham 5,000 2.49 30.75 5/21/06 96,693 245,038
2,000 0.99 16.50 7/23/06 20,754 52,594
Jeffrey H. Palmer 5,000 2.49 30.75 5/21/06 96,693 245,038
2,000 0.99 16.50 7/23/06 20,754 52,594
Robert D. Shallish, Jr. 5,000 2.49 30.75 5/21/06 96,693 245,038
2,000 0.99 16.50 7/23/06 20,754 52,594
Joseph B. Gross 5,000 2.49 30.75 5/21/06 96,693 245,038
2,000 0.99 16.50 7/23/06 20,754 52,594
Aggregated Option Exercises and Year-End Option Value Table
The following table sets forth, with respect to each exercise of
stock options during fiscal year 1996 by each of the Named Executive Officers
and the year-end value of unexercised options on an aggregated basis: (i) the
name of the executive officer (column (a)); (ii) the number of shares received
upon exercise, or, if no shares were received, the number of securities with
respect to which the options were exercised (column (b)); (iii) the aggregate
dollar value realized upon exercise (column (c)); (iv) the total number of
unexercised options held at December 31, 1996, separately identifying the
exercisable and unexercisable options (column (d)); and (v) the aggregate dollar
value of in-the-money, unexercised options held at December 31, 1996, separately
identifying the exercisable and unexercisable options (column (e)). The
Company's stock option plans do not provide for stock appreciation rights.
Aggregated Option Exercises in Fiscal Year 1996 and
December 31, 1996 Option Values
(a) (b) (c) (d) (e)
Value of Unexercised In-
Number of Unexercised the-Money Options at
Options at 12/31/96 (#) 12/31/96 ($)(1)
----------------------- ---------------
Shares
Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- --------------- ------------ ------------- -------------
Eugene R. Corasanti 150,000 3,135,000 242,000/62,000 2,207,010/45,500
William W. Abraham _ _ 109,950/17,500 1,266,330/122,720
Jeffrey H. Palmer 28,350 600,750 20,500/24,700 100,590/184,694
Robert D. Shallish, Jr. _ _ 42,000/20,200 393,763/132,459
Joseph B. Gross 2,250 55,688 19,600/20,200 94,857/132,459
- ----------------
(1) Assumes $20.50 per share fair market value on December 31, 1996.
Pension Plans
The Company maintains a broadly based defined benefit pension
plan (the "Pension Plan") for all CONMED employees. The Pension Plan entitles a
participant to a normal monthly retirement benefit equal to 1 1/2% of the
participant's average monthly earnings over the period of employment times years
of service. Eugene R. Corasanti's deferred compensation is not included in the
calculation of his retirement benefits. Benefits are fully vested after five
years of service, starting from date of hire. Upon reaching normal retirement
age, generally age 65 with five years of credited service, participants are
entitled to receive vested benefits under the Pension Plan either in the form of
a lump sum payment or a monthly retirement benefit.
The Pension Plan represents a "fresh start" as of January 1,
1989, replacing the three pension plans formerly in place. The three former
plans have been merged into the Pension Plan, which is the former broadly based
plan with the benefit formula increased from 1/2% of pay to 1 1/2% of pay.
Benefits accrued by participants under the former plans became fully vested as
of December 31, 1988 and are paid, when due, from this "fresh start" Pension
Plan. Benefits accrued under the former plans are payable from the Pension Plan
in addition to the benefits to be received under the Pension Plan. During 1995,
Mr. Eugene R. Corasanti reached normal retirement age under the Pension Plan and
elected to receive a lump sum payment of the actuarial equivalent value of his
accrued benefits as of October 31, 1995. During 1996, Mr. William W. Abraham
reached normal retirement age under the Pension Plan and elected to receive a
lump sum payment of the actuarial equivalent value of his accrued benefits, as
of October 31, 1996 ($519,998).
As of December 31, 1996, Messrs. Corasanti, Abraham, Palmer,
Shallish and Gross had one, zero, eight, seven and nine years of credited
service, respectively. The following table presents information concerning the
annual pension payable under the Pension Plan based upon various assumed levels
of annual compensation and years of service.
CONMED Pension Plan
Years of Service
------------------------------------------------------------------------------------------------
Average
Pay 15 20 25 30 35
--- -- -- -- -- --
$125,000 $28,125 $37,500 $46,875 $56,250 $65,625
$150,000 33,750 45,000 56,250 67,500 78,750
$175,000(1) 33,750 45,000 56,250 67,500 78,750
$200,000(1) 33,750 45,000 56,250 67,500 78,750
$225,000(1) 33,750 45,000 56,250 67,500 78,750
$250,000(1) 33,750 45,000 56,250 67,500 78,750
$300,000(1) 33,750 45,000 56,250 67,500 78,750
$400,000(1) 33,750 45,000 56,250 67,500 78,750
$450,000(1) 33,750 45,000 56,250 67,500 78,750
$500,000(1) 33,750 45,000 56,250 67,500 78,750
- ------------
(1) 1996 statutory limits are $120,000 for straight life annuity benefit
payable at age 65 and $150,000 for annual compensation taken into account
in determining average pay.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Board of Directors, pursuant to the terms of the
Employment Agreement, establishes the annual salary of Eugene R. Corasanti. The
Compensation Committee establishes the compensation plans and specific
compensation levels for the Company's other officers. The Stock Option Committee
administers the Company's stock option plans. The Compensation Committee and the
Stock Option Committee are composed of Robert E. Remmell, Harry Cone and Bruce
F. Daniels.
The Board of Directors believes that the compensation of Eugene
R. Corasanti, the Company's President and Chairman ("CEO"), should be heavily
influenced by company performance, long-term growth and strategic positioning.
Therefore, although there is necessarily some subjectivity in setting the CEO's
salary, major elements of the compensation package are directly tied to company
performance, long-term growth and strategic positioning. This philosophy is
reflected in Mr. Corasanti's current five-year employment contract, which
provides for a base annual salary of $300,000 and permits the Board of Directors
to determine a higher salary in their discretion. The Board of Directors
establishes the CEO's salary by considering the salaries of CEO's of
comparably-sized companies and their performance.
In fiscal 1993, while the Company consummated the $21.8 million
acquisition of certain assets and the business of Medtronic Andover Medical,
Inc. from Medtronic Inc., the Company incurred a net loss of $1.4 million,
primarily as a result of a $5.0 million charge relating to patent infringement
litigation. In fiscal 1994, the Company returned to profitability, recording net
income of $5.4 million, or $0.56 per share. In fiscal 1995, the Company acquired
Birtcher Medical Systems, Inc. (in a $21.2 million stock-for-stock exchange) and
The Master Medical Corporation (in a $10.0 million purchase transaction) and
recorded net income of $10.9 million, or $0.94 per share. In fiscal 1996, the
Company acquired New Dimensions In Medicine, Inc. in a $34.9 million purchase
transaction and continued to increase the level of net income to $16.3 million,
or $1.12 per share.
In the light of the foregoing, the Board of Directors approved
Mr. Corasanti's current employment agreement, which extends Mr. Corasanti's
employment through December 31, 2001, and the Board of Directors (Mr. Corasanti
abstaining) has determined that Mr. Corasanti's base salary shall be $300,000
for 1997.
The Compensation Committee has adopted similar policies with
respect to compensation of the other executive officers of the Company. Using
comparative salary information available, the Compensation Committee establishes
base salaries that are within the range for persons holding
similarly-responsible positions at other companies. In addition, factors such as
relative company performance, long-term growth and strategic positioning and the
individual's past performance and future potential are considered in
establishing the base salaries of executive officers. The policy regarding other
elements of the compensation package for executive officers is similar to the
CEO's in that the package is tied to achievement of performance targets. As
discussed below, in fiscal year 1996, the Company granted each of the Company's
executive officers stock options.
Stock options are granted to the Company's executive officers,
including Eugene R. Corasanti, primarily based on the executive's ability to
influence the Company's long-term growth and profitability. The number of
options granted is determined by using the same subjective criteria. All options
are granted at the current market price. Since the value of an option bears a
direct relationship to the Company's stock price it is an effective incentive
for managers to create value for stockholders. The Committee therefore views
stock options as an important component of its long-term, performance-based
compensation philosophy. The Committee granted 62,000 stock options to Eugene R.
Corasanti in fiscal year 1996. In fiscal year 1996, the Committee granted
122,000 options to executive officers.
The Board of Directors has not yet adopted a policy with respect
to qualification of executive compensation in excess of $1 million per
individual for deduction under Section 162(m) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder. The Board of Directors does
not anticipate that the compensation of any executive officer during 1997 will
exceed the limits for deductibility. In determining a policy for future periods,
the Board of Directors would expect to consider all relevant factors, including
the Company's tax position and the materiality of the amounts likely to be
involved.
Board of Directors Compensation Committee Stock Option Committee
- ------------------ ---------------------- ----------------------
Eugene R. Corasanti, Chairman Harry Cone Harry Cone
Harry Cone Robert E. Remmell Robert E. Remmell
Robert E. Remmell Bruce F. Daniels Bruce F. Daniels
Bruce F. Daniels
Joseph J. Corasanti
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors, which is composed of Eugene R.
Corasanti, Harry Cone, Robert E. Remmell, Bruce F. Daniels and Joseph J.
Corasanti, establishes the compensation plans and specific compensation levels
for Eugene R. Corasanti directly (with Mr. Corasanti abstaining) and for other
executive officers through the Compensation Committee and administers the
Company's stock option plans through the Stock Option Committee. As disclosed
above, Eugene R. Corasanti, the Chairman of the Board of Directors, is the
President and Chief Executive Officer of the Company and also serves as an
officer of the Company's subsidiaries. Joseph J. Corasanti, a director of the
Company, is the Vice President-Legal Affairs and General Counsel of the Company
and is the son of Eugene R. Corasanti.
The Company pays all premiums on three split-dollar life
insurance policies totalling $3,175,000 for the benefit of Eugene R. Corasanti.
Premiums paid or accrued by the Company in the fiscal year ended December 31,
1996 were approximately $48,000. Of such premiums, an aggregate of approximately
$2,600 has been reflected as compensation to Mr. Corasanti. The remaining amount
of $45,400 is being treated by the Company as a loan to Mr. Corasanti. At
December 31, 1996, the aggregate amount due the Company from Mr. Corasanti
related to these split-dollar life insurance policies is $402,600. This amount
(and subsequent loans for future premiums) will be repaid to the Company on Mr.
Corasanti's death and the balance of the policy will be paid to Mr. Corasanti's
estate or beneficiaries.
PERFORMANCE GRAPH
The graph below compares the yearly percentage change in the
Company's Common Stock with the cumulative total return of the Center for
Research for Stock Performance ("CRSP") Total Return Index for the NASDAQ Stock
Market and the cumulative total return of the Standard & Poor's Medical Products
and Supplies Industry Group Index. In each case, the cumulative total return
assumes reinvestment of dividends into the same class of equity securities at
the frequency with which dividends are paid on such securities during the
applicable fiscal year.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG CONMED CORPORATION, THE NASDAQ STOCK MARKET-US INDEX
AND THE S & P HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) INDEX
[Graphic material omitted. Data is presented in tabular form below:]
Cumulative Total Return
12/91 12/92 12/93 12/94 12/95 12/96
CONMED ................. CNMD 100 48 31 88 165 136
CORPORATION
Nasdaq Stock Market-US . INAS 100 116 134 131 185 227
S & P Medical Products & IMDP 100 86 65 77 131 150]
Supplies Index
- --------
* $100 invested on 12/31/91 in stock or index - including reinvestment of
dividends. Fiscal year ending December 31.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As discussed above under "Board of Directors Interlocks and
Insider Participation," the Company pays all premiums on three split-dollar life
insurance policies totalling $3,175,000 for the benefit of Eugene R. Corasanti.
Premiums paid or accrued by the Company in the fiscal year ended December 31,
1996 were approximately $48,000. Of such premiums, an aggregate of approximately
$2,600 has been reflected as compensation to Mr. Corasanti. The remaining amount
of $45,400 is being treated by the Company as a loan to Mr. Corasanti. At
December 31, 1996, the aggregate amount due the Company from Mr. Corasanti
related to these split-dollar life insurance policies is $402,600. This amount
(and subsequent loans for future premiums) will be repaid to the Company on Mr.
Corasanti's death and the balance of the policy will be paid to Mr. Corasanti's
estate or beneficiaries.
The Company has entered into a directors and officers insurance
policy covering the period from January 31, 1997 through January 31, 1998 at a
total cost of $145,000, which covers directors and officers of the Company and
its subsidiaries.
All transactions with officers, directors, and affiliates of the
Company have been on terms that the Company believes were no less favorable to
the Company than those that could be obtained from an unaffiliated third party
or negotiated in good faith on an arm's-length basis.
Robert E. Remmell, Assistant Secretary, director and shareholder
of the Company, is a partner of Steates Remmell Steates & Dziekan, the Company's
corporate counsel. The Company paid approximately $267,000 to Steates Remmell
Steates & Dziekan, and has accrued approximately an additional $2,400, for
services rendered during fiscal year 1996.
PROPOSAL TWO: INDEPENDENT PUBLIC ACCOUNTANTS
The independent accountants for the Company have been Price
Waterhouse LLP since 1982. The Audit Committee recommended to the Board of
Directors that Price Waterhouse LLP be nominated as independent accountants for
1997, and the Board has approved the recommendation.
Unless otherwise specified, shares represented by proxies will be
voted for the appointment of Price Waterhouse LLP as independent accountants for
fiscal year 1997. Representatives of Price Waterhouse LLP are expected to be
present at the meeting. Such representatives will have the opportunity to make a
statement if they desire to do so and are expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote FOR this proposal.
OTHER BUSINESS
Management knows of no other business which will be presented for
consideration at the Annual Meeting, but should any other matters be brought
before the meeting, it is intended that the persons named in the accompanying
proxy will vote such proxy at their discretion.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any shareholder desiring to present a proposal to the
shareholders at the 1998 Annual Meeting, which currently is expected to be
scheduled on or about May 19, 1998, and who desires that such proposal be
included in the Company's proxy statement and proxy card relating to that
meeting, must transmit such to the Company so that it is received by the Company
at its principal executive offices on or before December 12, 1997. All such
proposals should be in compliance with applicable SEC regulations. In addition,
shareholders wishing to propose matters for consideration at the 1998 Annual
Meeting or to propose nominees for election as directors at the 1998 Annual
Meeting must follow specified advance notice procedures contained in the
Company's By-laws, a copy of which is available on request to the Secretary of
the Company, c/o CONMED Corporation, 310 Broad Street, Utica, New York 13501.
By Order of the Board of Directors,
Thomas M. Acey
Secretary
April 21, 1997
CONMED CORPORATION
310 Broad Street--Utica, New York 13501
Annual Meeting of Shareholders--May 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Eugene R. Corasanti and Robert E.
Remmell, and either of them, proxies of the undersigned, with full power of
substitution, to vote all the shares of Common Stock of CONMED Corporation (the
"Company") held of record by the undersigned on April 1, 1997, at the Annual
Meeting of Shareholders to be held May 20, 1997, and at any adjournment thereof.
(1) Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as indicated otherwise for all nominees listed below
below)
NOMINEES: Harry Cone, Robert E. Remmell, Eugene R. Corasanti, Bruce F. Daniels
and Joseph J. Corasanti.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
such nominee's name on the space provided below.
- --------------------------------------------------------------------------------
(2) Appointment of Price Waterhouse LLP as Independent Accountants of the
Company for the fiscal year 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion the proxies are authorized to vote upon such
other matters as may come before the meeting or any adjournment
thereof.
All as more particularly described in the Company's Proxy Statement,
dated April 21, 1997, relating to such meeting, receipt of which is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED BY THE
UNDER SIGNED SHAREHOLDER. IF NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THIS
PROXY WILL BE VOTED "FOR" ALL PORTIONS OF ITEMS (1) AND (2), AND IN THE PROXIES'
DISCRETION ON ANY OTHER MATTERS COMING BEFORE THE MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given
to vote upon or act with respect to such stock and hereby ratifies and confirms
all that said proxies, their substitutes or any of them may lawfully do by
virtue hereof.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Please date this Proxy Card and sign your name exactly as it appears
hereon. Where there is more than one owner, each should sign. When signing as an
attorney, administrator, executor, guardian, or trustee, please add your title
as such. If executed by a corporation, this Proxy Card should be signed by a
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Please promptly mark, date, sign and mail this Proxy Card in the
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