SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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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Item 22(a)(2) of Schedule 14A.
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Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
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[ x ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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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 Radisson Hotel-Utica
Centre, 200 Genesee Street, Utica, New York on Tuesday, May 21, 1996, 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 1996;
(3) To approve an amendment to the Company's 1992 Stock Option
Plan to increase to 2,000,000 from 1,012,500 the number of
shares of Common Stock that may be issued upon the exercise
of options;
(4) To approve an amendment to the Company's Restated
Certificate of Incorporation to increase to 40,000,000 the
number of authorized shares of Common Stock; and
(5) 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 2,
1996 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 12, 1996
CONMED CORPORATION
310 Broad Street
Utica, New York 13501
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 21, 1996
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 21, 1996, at 3:30 P.M. (New York Time), at
the Radisson Hotel-Utica Centre, 200 Genesee Street, Utica, 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 12, 1996 to all shareholders of record on April 2, 1996. 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. The Company has retained
D.F. King, a proxy solicitation firm, to assist in the solicitation of proxies.
The Company estimates that D.F. King's fees for such assistance will be
approximately $7,000, and in addition the Company expects to reimburse D.F. King
for approximately $3,500 in expenses.
VOTING RIGHTS
The holders of record of the 14,901,836 shares of Common Stock
outstanding on April 2, 1996 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. However, because both the proposal
to amend the 1992 Stock Option Plan and the proposal to amend the Company's
Restated Certificate of Incorporation require the affirmative vote of a majority
of all outstanding shares entitled to vote for approval, an abstention on either
of those proposals will have the same legal effect as a vote against such
proposal. 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, 2 and 4
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"). Proposal 3 is considered "non-discretionary,"
and brokers who have received no instructions from their clients do not have
discretion to vote on this item. Such broker non-votes will be treated in the
same manner as abstentions.
ANNUAL REPORT
The annual report for the fiscal year ended December 29, 1995,
including financial statements, is being furnished herewith to shareholders of
record on April 2, 1996. 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 2, 1996,
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) 120,300 (2)
Harry Cone(3) 243,900 1.58
Eugene R. Corasanti(4) 462,400 3.01
Joseph J. Corasanti(5) 40,800 (2)
Bruce F. Daniels(6) 4,875 (2)
Joseph B. Gross(7) 8,250 (2)
Jeffrey H. Palmer(7) 18,250 (2)
Robert E. Remmell(8) 1,950 (2)
Robert D. Shallish, Jr.(9) 36,075 (2)
Directors and officers as a group
(12 persons) (3)(4)(6)(10) 1,072,595 6.97
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner* Ownership of Class
- ------------------------- ----------------- --------
Fenimore Asset Management, Inc.(11)
118 North Grand Street
P.O. Box 310
Cobleskill, New York 12043 1,278,526 8.59
George D. Bjurman & Associates(12)
10100 Santa Monica Boulevard
Suite 1200
Los Angeles, California 90067 1,173,503 7.88
- -----------------------
* 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 96,000 shares subject to options, exercisable within 60 days.
(2) Less than 1%.
(3) Includes an aggregate of 129,900 shares owned beneficially by the wife of
Harry Cone. Mr. Cone disclaims beneficial ownership of these shares. Also
includes an aggregate of 1,500 subject to options, exercisable within 60
days.
(4) Includes 222,000 shares subject to options, exercisable within 60 days.
Includes an aggregate of 42,525 shares owned beneficially by the wife of
Eugene R. Corasanti. Eugene R. Corasanti disclaims beneficial ownership of
these shares.
(5) Includes 6,750 shares subject to options, exercisable within 60 days.
Joseph J. Corasanti is the son of Eugene R. Corasanti. (6) Consists of an
aggregate of 3,375 shares owned beneficially by the wife of Bruce F.
Daniels. Mr. Daniels disclaims beneficial ownership of these shares. Also
includes an aggregate of 1,500 subject to options, exercisable within 60
days.
(7) Consists of shares subject to options, exercisable within 60 days.
(8) Includes an aggregate of 1,500 subject to options, exercisable within 60
days.
(9) Includes 30,650 shares subject to options, exercisable within 60 days.
(10) Includes 505,845 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, Luke A. Pomilio and
Thomas M. Acey, executive officers of the Company. Such 505,845 shares are
equal to approximately 3.29% of the Common Stock outstanding. As of April
2, 1996, the Company's directors and officers as a group (11 persons) owned
390,950 shares, which is approximately 2.63% of the Common Stock
outstanding.
(11) A Schedule 13G filed with the SEC by Fenimore Asset Management, Inc. on
January 31, 1996 indicates that Fenimore Asset Management, Inc.
beneficially owns 1,278,526 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 George D. Bjurman & Associates on
October 10, 1995 indicates that George D. Bjurman & Associates beneficially
owns 1,173,503 shares of Common Stock virtue of having shared voting and
dispositive power over such shares through discretionary accounts owned
economically by clients.
On April 2, 1996 there were 2,125 shareholders of record of the
Company's Common Stock.
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 1996 ANNUAL MEETING
Served As
Director Principal Occupation or
Name Age Since Position with the Company
- ---- --- --------- -------------------------
Harry Cone 75 1981 Certified Public Accountant, retired
Robert E. Remmell 65 1983 Member of Steates Remmell Steates & Dziekan
(Attorneys) and Assistant Secretary of the
Company
Eugene R. Corasanti 65 1970 President, Chief Executive Officer and Chairman
of the Board of Directors of the Company
Bruce F. Daniels 61 1992 Controller, Construction Division, Chicago
Pneumatic Tool Company
Joseph J. Corasanti 32 1994 Vice President-Legal Affairs and General Counsel
of the Company
DIRECTORS AND EXECUTIVE OFFICERS
Eugene R. Corasanti has served as President and Chairman of the
Board 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 64) 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 37) 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 52) 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 47) 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.
Frank R. Williams (age 47) 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 49) 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 31) joined the Company as Controller in
September 1995. Prior to his employment with the Company, Mr. Pomilio served for
two years 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 $57,000 to Steates
Remmell Steates & Dziekan, and has accrued approximately an additional $33,500,
for services rendered during fiscal year 1995. 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, 1996. 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
1995.
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
1995.
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
1995.
The full Board of Directors met twelve times (four of which
meetings were telephonic) during fiscal year 1995. Each incumbent director
attended or acted upon at least 75% of the total fiscal year 1995 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 eight meetings of the
full Board of Directors attended. In addition, under the Company's Stock Option
Plan for Non-Employee Directors each non-employee director (Messrs. Cone,
Daniels and Remmell in 1995 and 1996) 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
President, Chief Executive Officer and Chairman of the Board of Directors 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 29, 1995 (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 29,
1995, except as may otherwise be indicated. Any compensation awarded to or
earned by the Named Executive Officers during fiscal year 1996 will be reported
in the proxy statement for the Company's 1997 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, 1995 249,562 -- 149,000(2) 20,000(3)
President, Chief 1994 203,891 100,000 129,000(2) 112,500(3)
Executive Officer and 1993 203,891 -- 117,000(2) --
Chairman of the Board
William W Abraham, 1995 139,507 -- -- 19,200(3)
Senior Vice President 1994 128,300 65,000 -- --
1993 121,900 -- -- 11,250(3)
Jeffrey H Palmer, 1995 118,707 -- -- 17,500(3)
Vice President-Sales 1994 106,680 54,600 -- --
1993 99,640 -- -- 6,750(3)
Robert D Shallish, Jr., 1995 118,707 -- -- 17,500(3)
Chief Financial Officer 1994 106,050 54,600 -- --
and Vice President- 1993 98,050 -- -- 6,750(3)
Finance
Joseph B Gross, 1995 118,707 -- -- 17,500(3)
Vice President- 1994 105,000 54,600 -- --
Operations 1993 81,800 -- -- 6,750(3)
- ------------------
(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, 1996.
The Employment Agreement, as amended, 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 $200,000, as determined by the Board of Directors. Mr.
Corasanti also receives deferred compensation of $70,000 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 balance of his base annual salary, and shall
continue to receive deferred compensation and other employment benefits, for 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 1996 that Mr. Corasanti's
compensation shall be $250,000.
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 1995, premiums on these policies
paid by the Company aggregated approximately $53,000. 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,
1996 through January 31, 1997, 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 (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 1,012,500
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. If the 1992 Plan is amended as proposed at
the 1996 Annual Meeting, an additional 987,500 shares of Common Stock, for a
total of 2,000,000 shares of Common Stock, will be reserved against the exercise
of stock options under the 1992 Plan. See "Proposal Three: Amendment to the 1992
Stock Option 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 926,776 shares of Common Stock were
granted and not terminated under the 1992 Plan, of which options relating to
830,050 shares of Common Stock are still exercisable. Options relating to 85,724
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. The
1983 Plan provides that the total amount of Common Stock for which options may
be granted shall not exceed 1,012,500 shares, subject to certain adjustments for
changes affecting the Common Stock, such as a merger, consolidation,
reorganization, recapitalization or stock split. Options relating to 1,008,197
shares of Common Stock were granted under the 1983 Plan, of which options for
372,275 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, Daniel and Remmell in 1995 and 1996) 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. Share 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 1995 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 1995; (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 1995
Individual Grants
----------------------------------------------------------------------
(a) (b) (c) (d) (e)
% of Total
Options Options Granted Exercise or
Granted to Employees in Base Price Expiration
Name (#) Fiscal Year 1995 ($/Sh) Date
---- ----- ---------------- -------- ------
Eugene R. Corasanti 20,000 8.20% 25.00 12/27/05
William W. Abraham 7,500 3.10% 12.42 5/23/05
11,700 4.80% 25.00 12/27/05
Jeffrey H. Palmer 7,500 3.10% 12.42 5/23/05
10,000 4.10% 25.00 12/27/05
Robert D. Shallish, Jr. 7,500 3.10% 12.42 5/23/05
10,000 4.10% 25.00 12/27/05
Joseph B. Gross 7,500 3.10% 12.42 5/23/05
10,000 4.10% 25.00 12/27/05
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Option Term
-------------------------------
(a) (f) (g)
Name 5% ($) 10% ($)
---- ------ -------
Eugene R. Corasanti 314,447 796,871
William W. Abraham 58,582 148,457
183,952 466,170
Jeffrey H. Palmer 58,582 148,457
157,224 398,436
Robert D. Shallish, Jr. 58,582 148,457
157,224 398,436
Joseph B. Gross 58,582 148,457
157,224 398,436
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 1995 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 29, 1995, separately identifying the
exercisable and unexercisable options (column (d)); and (v) the aggregate dollar
value of in-the-money, unexercised options held at December 29, 1995, 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 1995 and
December 29, 1995 Option Values
(a) (b) (c) (d) (e)
Value of Unexercised In-
Number of Unexercised the-Money Options at
Options at 12/29/95 (#) 12/29/95 ($)(1)
----------------------- ------------------------
Shares
Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- --------------- ------------ ------------- -------------
Eugene R. Corasanti 53,000 1,328,125 372,000/20,000 2,796,840/ --
William W. Abraham -- -- 83,250/37,200 596,078/252,203
Jeffrey H. Palmer 4,600 108,750 33,750/44,050 360,113/356,634
Robert D. Shallish, Jr. 9,700 240,000 24,650/30,050 187,736/212,553
Joseph B. Gross 17,550 512,438 4,500/30,550 54,990/212,589
- ----------------
(1) Assumes $25.00 per share fair market value on December 29, 1995.
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. Mr. Abraham had accrued benefits under the former plans totalling $20,820
per year at December 31, 1988. 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 October 31, 1995
($1,086,970).
As of December 29, 1995, Mr. Eugene R. Corasanti had two months
of credited service while Messrs. Abraham, Palmer, Shallish and Gross had seven,
six, five and seven 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) 1995 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 three independent, non-employee directors who have no
interlocking relationships as defined by the SEC.
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 $200,000 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. Also in 1995, the
Company agreed to acquire New Dimensions In Medicine, Inc. in a $37.1 million
purchase transaction, which was consummated on February 23, 1996.
In the light of the foregoing, pursuant to the terms of Mr.
Corasanti's Employment Agreement, the Board of Directors (Mr. Corasanti
abstaining) has determined that Mr. Corasanti's base salary shall be $250,000
for 1996.
The Compensation Committee has adopted similar policies with
respect to compensation of the other executive officers of the Company. Using
salary survey data, 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
1995, 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 20,000 stock options to Eugene R.
Corasanti in fiscal year 1995. In fiscal year 1995, the Committee granted
152,750 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 1996 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
- ------------------ ----------------------
Eugene R. Corasanti, Chairman Harry Cone
Harry Cone Robert E. Remmell
Robert E. Remmell Bruce F. Daniels
Bruce F. Daniels
Joseph J. Corasanti
Stock Option Committee
----------------------
Harry Cone
Robert E. Remmell
Bruce F. Daniels
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 Chief
Executive Officer and President 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 $3,175,000 split-dollar
life insurance policies for the benefit of Eugene R. Corasanti. Premiums paid or
accrued by the Company in the fiscal year ended December 29, 1995 were
approximately $53,000. Of such premiums, an aggregate of approximately $11,900
has been reflected as compensation to Mr. Corasanti. The remaining amount of
$41,000 is being treated by the Company as a loan to Mr. Corasanti. At December
29, 1995, the aggregate amount due the Company from Mr. Corasanti related to
these split-dollar life insurance policies is $357,200. 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 MEDICAL PRODUCTS & SUPPLIES INDEX
[Graphic material omitted. Data is presented in tabular form below:
Cumulative Total Return
------------------------------------------------------------
12/90 12/91 12/92 12/93 12/94 12/95
----- ----- ----- ----- ----- -----
CONMED CNMD 100 296 141 92 259 489
CORPORATION
Nasdaq Stock Market-US INAS 100 161 187 215 210 296
S & P Medical Products & IMDP 100 164 140 107 127 214]
Supplies Index
- --------
* $100 invested on 12/31/90 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 $3,175,000
split-dollar life insurance policies for the benefit of Eugene R. Corasanti.
Premiums paid or accrued by the Company in the fiscal year ended December 29,
1995 were approximately $53,000. Of such premiums, an aggregate of approximately
$11,900 has been reflected as compensation to Mr. Corasanti. The remaining
amount of $41,000 is being treated by the Company as a loan to Mr. Corasanti. At
December 29, 1995, the aggregate amount due the Company from Mr. Corasanti
related to these split-dollar life insurance policies is $357,200. 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, 1996 through January 31, 1997 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.
PROPOSAL TWO: INDEPENDENT PUBLIC ACCOUNTANTS
The independent accountants for the Company have been Price
Waterhouse LLP since fiscal year 1982. The Audit Committee has recommended to
the Board of Directors that Price Waterhouse LLP be nominated as independent
accountants for fiscal year 1996, and the Board 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 1996. 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.
PROPOSAL THREE: AMENDMENT TO THE 1992 STOCK OPTION PLAN
The Board of Directors has authorized and approved, subject to
shareholder approval, an amendment to CONMED Corporation 1992 Stock Option Plan
(the "1992 Plan"), increasing to 2,000,000 from 1,012,500 the number of shares
of Common Stock that may be issued upon the exercise of options.
The Board of Directors believes it to be in the best interests of
the Company and its shareholders to have additional stock options authorized
which would be available for grant to attract and retain capable officers and
key employees and to provide an inducement to such personnel to promote the best
interests of the Company and its subsidiaries by enabling and encouraging them
to acquire stock in the Company.
The proposed amendment would amend Section 2 of the 1992 Plan to
read in its entirety as follows:
2. STOCK
Options may be granted under the Plan to purchase
up to a maximum of 2,000,000 shares of the Company's common
stock, par value $.01 per share ("Common Stock"), in the
aggregate and 800,000 shares of Common Stock for any participant,
subject to adjustment as hereinafter provided. Shares issuable
under the Plan may be authorized but unissued shares or
reacquired shares, and the Company may purchase shares required
for this purpose, from time to time, if it deems such purchases
to be advisable. If any option granted under the Plan expires or
otherwise terminates without having been exercised, the shares
subject to the unexercised portion of such option shall continue
to be available for the granting of options under the Plan.
Language deleted by the proposed amendment has been crossed out
and language added by the proposed amendment has been underlined. The rest of
the 1992 Plan, which was approved by shareholders in 1992, will remain
unchanged.
[NOTE - in the paper version of this document, the number
"2,000,000" in section 2 of the 1992 Plan above is underlined. Immediately
following "2,000,000" is the number "1,012,500" in strikeout. The phrase "in the
aggregate and 800,000 shares of Common Stock for any participant" is
underlined.]
Summary Description of the 1992 Plan
The major provisions of the 1992 Plan are summarized below.
Common Stock Subject to the 1992 Plan. If the amendment to the
1992 Plan is approved by the shareholders, a total of 2,000,000 shares of Common
Stock (increased from 1,012,500 shares of Common Stock and subject to adjustment
for stock splits and other changes in the Company's capital structure) will be
reserved against the exercise of options to be granted under the 1992 Plan.
Shares reserved under an option for which any reason expires or is terminated,
in whole or in part, shall again be available for the purposes of the 1992 Plan.
Options to be Granted. 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. 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). As of April 2, 1996, 915,745 shares were reserved for issuance
pursuant to the 1992 Plan and, if the 1992 Plan is amended as proposed, a total
of 1,903,245 shares of Common Stock would be reserved for issuance under the
1992 Plan. Under the existing 1992 Plan, options relating to 85,274 shares of
Common Stock would be available to be granted.
Administration. The 1992 Plan will be administered by the
Committee, which shall consist of two or more members of the Board of Directors
(currently Messrs. Cone, Daniel and Remmell). No member of the Committee shall
be eligible to (i) receive an option under the 1992 Plan while serving on the
Committee or within one year prior to his or her appointment to the Committee or
(ii) receive an award of equity securities under any other plan of the Company
or any of its affiliates while serving on the Committee or at any time within
one year prior to his or her appointment to the Committee, except as permitted
by Rule 16b-3 under the Exchange Act without the member being considered other
than a disinterested person thereunder. The Committee shall have full authority,
subject to the required terms of the 1992 Plan summarized below, to determine
the individuals who are to receive options, the kind of options to be granted,
the date of grant and the other terms of such options, and the number of shares
subject to each option; to establish such rules and regulations, not in
consistent with the provisions of the 1992 Plan, for the proper administration
of the 1992 Plan; and to make all other determinations and interpretations under
the 1992 Plan as it deems necessary or advisable.
Participation. All officers and key employees, as designated by
the Committee, of the Company or its subsidiaries are eligible to participate in
the 1992 Plan. At this time, approximately 125 officers and key employees are
eligible to participate under the 1992 Plan. The 1992 Plan does not limit the
number of options which may be granted to an employee or the number of shares
which may be subject to an option, except that (i) the aggregate fair market
value (determined as of the time the option is granted) of Common Stock with
respect to which incentive stock options are exercisable for the first time by
an employee during any calendar year may not exceed $100,000 except in the event
of the optionee's death or pursuant to a change in control (as described in
"Change of Control" below), and (ii) no incentive stock option may be granted to
an employee who owns (at the time the option is granted) more than 10% of the
total combined voting power of all classes of stock of the Company or any parent
or subsidiary corporation unless the option price is not less than the higher of
110% of the fair market value or the par value of the Common Stock on the date
of grant of the option and such option expires by its terms no later than five
years from the date of grant.
Provisions of Options. Each option shall be granted in such form
as the Committee may, from time to time, determine, subject to the following:
(a) The option price may not be less than the
higher of 100% of the fair market value of the Common Stock or
its par value at the time the option is granted.
(b) The term of each option shall be determined by
the Committee in its discretion, at the time the option is
granted, but in no event shall the term be more than ten years
from the date of grant. Subject to early termination or
acceleration provisions (which are summarized below), an option
is exercisable, in whole or in part, from the date determined by
the Committee until the expiration of the term of the option.
(c) An option may not be transferred by an optionee
otherwise than by will or by the laws of descent and
distribution, and may be exercised during his lifetime only by
the optionee.
(d) The exercise price of any option may be paid,
at the optionee's election, in cash, Common Stock or a
combination thereof. The fair market value of Common Stock used
as payment upon exercise of an option shall be determined by the
Committee.
(e) If an optionee's employment by the Company
(including its subsidiaries) is terminated by either party for
any reason other than death, disability or retirement with the
consent of the Board of Directors, all option rights of such
optionee under any then outstanding option shall terminate
immediately. If an optionee's employment is terminated by reason
of disability or retirement with the consent of the Board of
Directors, his option shall be exercisable at any time prior to
the expiration of the date of the option or within 90 days after
the date of such termination, whichever is the shorter period. If
an optionee's employment is terminated as a result of his death,
the option rights of such optionee shall be exercisable by the
person or persons to whom those rights pass by will or by the
laws of decent and distribution at any time prior to the
expiration date of the option or within 90 days after the date of
such death, whichever is the shorter period.
Change in Control. In the event (i) a tender offer or exchange
offer for 50% or more of the Common Stock remains outstanding for at least five
business days, (ii) a "person", within the meaning of Section 14(d) of the
Exchange Act, other than the Company or any employee benefit plan(s) sponsored
by the Company or a subsidiary, is or becomes the "beneficial owner" directly or
indirectly, of 30% or more of the Common Stock or (iii) of a Change in Control,
as defined in the 1992 Plan, all options shall become exercisable in full. In
addition, in the event of a Change in Control, option holders shall be entitled,
in lieu of the exercise of any option (or portion thereof), which, in any case
where the optionee is an officer or director of the Company who is subject to
the provisions of Section 16(b) of the Exchange Act, has been outstanding for at
least six months, to obtain a cash payment in an amount equal to the excess of
the aggregate value of the Common Stock covered by the option (or portion
thereof), as determined by the Committee, at the time of the Change in Control,
over the option price of such option (or portion thereof). If the Change in
Control is the result of a tender offer or exchange offer, then the final offer
price per share paid for the Common Stock shall, if greater than the value of a
share of Common Stock at the time of the Change in Control, as determined by the
Committee, be used in determining the aggregate value of the Common Stock
covered by the option (or portion thereof) for purposes of determining the
amount of the cash payment described in the preceding sentence.
Federal Tax Treatment of Nonqualified Stock Options. An optionee
will not realize taxable income, and the Company will not be entitled to a
deduction, at the time that a nonqualified stock option is granted under the
1992 Plan. Upon exercising a nonqualified stock option, an optionee will realize
ordinary income, and the Company will be entitled to a corresponding deduction,
in an amount equal to the excess of the fair market value on the exercise date
of the shares subject to the option over the exercise price of the option. The
optionee will have a basis, for purposes of computing capital gain or loss on a
future sale or exchange, in the shares received as a result of the exercise
equal to the fair market value of those shares on the exercise date.
Federal Tax Treatment of Incentive Stock Options. An optionee
will not realize taxable income when an incentive stock option is granted under
the 1992 Plan or when an incentive stock option is exercised, and the Company
will not be entitled to a deduction with respect to the option. If the optionee
of an incentive stock option holds the shares acquired under the option for at
least two years from the date the option is granted and for at least one year
from the date the option is exercised, any gain realized by the optionee when
the shares are sold will be taxable to the optionee as capital gain. If the
optionee does not hold the shares for the one-year and the two-year periods, the
optionee will realize ordinary income in the year of disposition of the shares
in an amount equal to the excess of the fair market value of the shares on the
date of exercise (or the proceeds of the disposition, if lower) over the option
price, and the Company will be entitled to a corresponding deduction. Any
remaining gain will generally be capital gain. If the shares are disposed of at
a loss, the loss will be a capital loss. The difference between the exercise
price of an incentive stock option and the fair market value of the shares
subject to the option at the time of exercise is an item of tax preference which
may result in the optionee being subject to an alternative minimum tax. Whether
an optionee is subject to the alternative minimum tax in lieu of "regular"
income tax will depend on individual facts and circumstances.
Qualification Under Section 162(m) of the Internal Revenue Code.
The proposed amendment to the 1992 Plan limits to 800,000 the aggregate number
of shares subject to stock options that may be granted to any participant in the
1992 Plan. If certain other conditions are met, the Company will not be subject
to the limitations of Section 162(m) of the Internal Revenue Code upon the
exercise of nonqualified stock options.
Benefits to be Received by Participants Under the 1992 Plan
The following chart indicates the amounts that were allocated to
the persons or groups listed below for the last fiscal year under the 1992 Plan
(based upon the $25.00 per share fair market value on December 29, 1995 less per
share fair market value on the date of grant of the option) and the number of
options that the persons or groups listed below received under the 1992 Plan in
the last fiscal year:
Name and Position Dollar Value ($)(1) Number of Options
- -------------------------------------------------------------------------------------------------------
Eugene R. Corasanti -- 20,000
William W. Abraham 94,350 19,200
Jeffrey H. Palmer 94,350 17,500
Robert D. Shallish, Jr. 94,350 17,500
Joseph B. Gross 94,350 17,500
Executive Group (9 persons) 745,995 152,750
Non-Executive Director Group (3 persons) 57,015 4,500
Non-Executive Officer Employee Group 469,660 89,150
- -----------
(1) Based on $25.00 per share fair market value on December 29, 1995 less the
per share fair market value on the date of grant.
The affirmative vote of the holders of a majority of the total
outstanding shares of Common Stock is necessary for adoption of the proposed
amendment to the 1992 Plan.
The Board of Directors unanimously recommends a vote FOR the
proposed amendment to the 1992 Plan.
PROPOSAL FOUR: INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has authorized and approved, subject to
shareholder approval, an amendment to Article FOURTH of the Company's Restated
Certificate of Incorporation (the "Certificate of Incorporation"), increasing
the number of authorized shares of Common Stock to 40,000,000. It is
contemplated that, if the proposed amendment is approved by the Company's
shareholders, a Certificate of Amendment will be filed in accordance with the
laws of the State of New York so as to become effective as soon as practicable
thereafter.
Of the 20,000,000 shares of Common Stock currently authorized, as
of April 2, 1996 there were 14,901,836 shares issued and outstanding. In
addition, 1,292,353 shares were reserved for issuance pursuant to the Company's
existing stock option plans. If the 1992 Plan is amended at the Annual Meeting
as proposed, an additional 987,500 shares of Common Stock would be reserved for
issuance under the 1992 Plan.
The Board of Directors believes it to be in the best interests of
the Company and its shareholders to have additional Common Stock authorized
which would be available for issuance for general corporate purposes, including
raising capital to support business expansion, stock splits, stock dividends,
acquisitions or other developments which might make its issuance desirable. For
example, the Company effected three-for-two stock splits in the form of stock
dividends on December 27, 1994 and November 30, 1995 (issuing an aggregate of
6,680,000 shares of Common Stock). The Company believes that stock splits or
stock dividends broaden the market for, and the liquidity of, the Company's
Common Stock. In addition, the Company issued 1,590,000 shares of Common Stock
in March 1995 in the acquisition of Birtcher Medical Systems, Inc. and issued
3,852,000 shares of Common Stock in March 1996 in a registered public offering
to reduce indebtedness incurred in connection with the Company's acquisitions.
If authorization of any increase in the Common Stock is postponed until a
specific need arises, the delay and expense incident to obtaining approval of
shareholders at that time could impair the Company's ability to meet its
objectives. The Company does not now have any agreement, understanding,
arrangement or commitment which would result in the issuance of any of the
additional shares to be authorized (other than pursuant to stock options) and no
assurance can be given at this time that additional shares will, or as to the
circumstances under which such shares might, in fact be issued. No further
action or authorization by the shareholders would be necessary prior to the
issuance of the additional shares unless applicable laws or regulations or the
rules of the Nasdaq National Market or of any stock exchange on which the
Company's securities may then be listed require such approval.
The additional shares authorized by the proposed amendment will
have the same rights and privileges as the shares of Common Stock currently
authorized and outstanding. Holders of the Company's shares have no preemptive
rights and, accordingly, existing shareholders would not have any preferential
right to purchase any of the additional shares when issued. Issuance of such
shares, depending upon the type of transaction in which the shares are issued,
could have a dilutive effect on the equity and earnings per share attributable
to present shareholders.
The issuance of additional shares of Common Stock could also be
used to impede an unsolicited bid for control of the Company which the Board of
Directors believed was not in the best interests of the Company or its
shareholders. The availability of additional Common Stock as a defensive
response to a takeover attempt was not a motivating factor in the Board's
approval of the proposed amendment to Article FOURTH, and the Board is not aware
of any effort to obtain control of the Company.
The proposed amendment would amend the first paragraph of Article
FOURTH of the Certificate of Incorporation to read in its entirety as follows:
FOURTH. The aggregate number of shares of stock
which the Corporation shall have the authority to issue is
40,500,000 , of which 40,000,000 shares of the par value of $.01
per share shall be designated as Common Stock ("Common Stock"),
and 500,000 shares of the par value of $.01 per share shall be
designated as Preferred Stock ("Preferred Stock").
Language deleted by the proposed amendment has been crossed out
and language added by the proposed amendment has been underlined. The rest of
Article FOURTH will remain unchanged.
[NOTE - in the paper version of this document, in the first
paragraph of Article FOURTH quoted above, the numbers "40,500,000" and
"40,000,000" are underlined, and immediately following those numbers appear the
numbers "20,500,000" and "20,000,000", respectively, each in strikeout.]
The affirmative vote of the holders of a majority of the total
outstanding Common Stock of the Company is necessary for approval of the
proposed amendment to the Certificate of Incorporation.
The Board of Directors unanimously recommends a vote FOR approval
of the proposed amendment to the Certificate of Incorporation.
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 1997 ANNUAL MEETING
Any shareholder desiring to present a proposal to the
shareholders at the 1997 Annual Meeting, which currently is expected to be
scheduled on or about May 20, 1997, 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 13, 1996. All such
proposals should be in compliance with applicable SEC regulations. In addition,
shareholders wishing to propose matters for consideration at the 1997 Annual
Meeting or to propose nominees for election as directors at the 1997 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 12, 1996
REVOCABLE PROXY
CONMED CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1996
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 2, 1996, at the Annual Meeting of
Shareholders to be held May 21, 1996, and at any adjournment thereof.
(1) Election of directors
Harry Cone, Robert E. Remmell, Eugene R. Corasanti, Bruce F. Daniels and
Joseph J. Corasanti.
[ ] For [ ] Withhold [ ] For All Except
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
________________________________________________________________________________
(2) Appointment of Price Waterhouse LLP as Independent Accountants of the
Company for the fiscal year 1996.
[ ] For [ ] Against [ ] Abstain
(3) Approval of an amendment to the Company's 1992 Stock Option Plan to increase
to 2,000,000 from 1,012,500 the number of authorized shares of Common Stock
that may be issued upon exercise of options.
[ ] For [ ] Against [ ] Abstain
(4) Approval of an amendment to the Company's Restated Certificate of
Incorporation to increase to 40,000,000 the number of authorized shares of
Common Stock.
[ ] For [ ] Against [ ] Abstain
(5) 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 12, 1996, relating to such meeting, receipt of which is hereby
acknowledged.
CONMED CORPORATION
310 Broad Street -- Utica, New York 13501
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED BY THE ABOVE SIGNED
SHAREHOLDER. IF NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THIS PROXY WILL BE
VOTED "FOR" ALL PORTIONS OF ITEMS (1), (2), (3) AND (4), 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.
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
duly authorized officer. If executed by a partnership, please sign in
partnership name by authorized persons.
PLEASE ACT PROMPTLY
MARK, SIGN, DATE & MAIL YOUR PROXY CARD TODAY
The Board of Directors recommends a vote "FOR" Proposal 1, 2, 3, and 4.
