Unassociated Document
DEFINITIVE
PROXY MATERIALS
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION (Rule 14a-101)
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No.)
Filed
by
the Registrant x
Filed by a Party other than the Registrant o Check the appropriate
box:
o
Preliminary Proxy Statement
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o
Confidential, for Use
of the Commission Only (as Permitted by Rule 14a-6(e)
(2))
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x
Definitive Proxy
Statement
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o
Definitive Additional Materials
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o
Soliciting Material Pursuant
to Rule
14a-11(c) or Rule 14a-12
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BOVIE
MEDICAL CORPORATION
(Name
of
the Registrant as Specified In Its Charter)
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x
No fee required
o
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: _____
2.
Aggregate number of securities to which transaction applies:
_________
3.
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): ____________
4.
Proposed maximum aggregate value of transaction: ______________
5.
Total
fee paid: _______________________________
o
Fee paid previously with preliminary
materials
o
Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a) (2) and identify the filing
for
which the offsetting fee was paid previously. Identify the previous filing
by
registration statement number, or the Form or Schedule and the date of its
filing.
1.
Amount
Previously Paid:
2.
Form,
Schedule or Registration Statement No.:
3.
Filing
Party:
4.
Date
Filed:
DEFINITIVE
PROXY MATERIALS
Bovie
Medical Corporation
7100
30th
Avenue North
St.
Petersburg, FL 33710
September
17, 2007
Re: Notice
of
Annual Meeting and Proxy Statement
Dear
Stockholder:
On
behalf
of your Board of Directors and Management, you are cordially invited to attend
the Annual Meeting of Common Stockholders to be held on October 30, 2007 at
5:00
P.M. Eastern Daylight Savings Time at the Holiday Inn, 215 Sunnyside Blvd,
Plainview, New York 11803 (Exit 46 off the Long Island Expressway).
Information
Concerning Solicitation and Voting
The
Board
of Directors is soliciting proxies for the 2007 Annual Meeting of Stockholders
to be held on October 30, 2007. This Proxy Statement contains information for
you to consider when deciding how to vote on the matters brought before the
meeting.
Voting
materials, which include the Proxy Statement, Proxy Card and the 2007 Annual
Report, are being mailed to stockholders on or about September 19, 2007. The
Executive facilities of our Company are located at 734 Walt Whitman Road, Suite
207, Melville, NY 11747, telephone number 631-421-5452.
At
the
meeting, stockholders will be asked to:
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1. |
Elect
Bovie’s Board of Directors;
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2. |
Ratify
the selection of Bovie’s independent auditors for
2007;
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3. |
Ratify
and approve an amendment to our Company’s 2003 Executive and Employee
Stock Option Plan;
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4. |
Ratify
and approve our prior issuance in 2005 of restricted stock options
to
executive officers, directors, key employees and selected
consultants.
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5. |
Transact
such other business that may properly come before the
meeting.
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The
close
of business on September 14, 2007 is the record date for determining
stockholders entitled to vote at the Annual Meeting. Consequently, only
stockholders whose names appear on our books as owning our Common Stock at
the
close of business on September 14, 2007 will be entitled to notice of and to
vote at the Annual Meeting and adjournment or postponement thereof.
PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE PROXY IN THE ENCLOSED ENVELOPE,
SO
THAT YOUR SHARES WILL BE REPRESENTED WHETHER OR NOT YOU ATTEND THE ANNUAL
MEETING.
By
order
of the board of directors
/s/
Andrew Makrides
PRESIDENT
AND CHIEF EXECUTIVE OFFICER
September
17, 2007
DEFINITIVE
PROXY MATERIALS
PROXY
STATEMENT
BOVIE
MEDICAL CORPORATION
DEFINITIVE
PROXY MATERIALS
CONTENTS
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Page
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ABOUT
THE ANNUAL MEETING
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2
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ANNUAL
REPORT
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5
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STOCK
OWNERSHIP
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5
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MANAGEMENT
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6
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MEETINGS
OF THE BOARD OF DIRECTORS
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7
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DIRECTORS'
COMPENSATION
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10
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EXECUTIVE
COMPENSATION
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10
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BENEFICIAL
OWNERSHIP OF SECURITIES
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11
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
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13
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OTHER
BUSINESS
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15
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PROPOSAL
ONE: ELECTION OF DIRECTORS
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17
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PROPOSAL
TWO: RATIFACTION OF SELECTION OF AUDITORS
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18
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PROPOSAL
THREE: (A) RATIFY PROPOSED AMENDMENT OF 2003 EXECUTIVE AND EMPLOYEE
STOCK
OPTION PLAN and
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19
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(B)
APPROVE THE GRANT IN JANUARY AND MARCH 2007 OF OPTIONS TO PURCHASE
65,000
SHARES.
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PROPOSAL
FOUR: RATIFY AND APPROVE THE PRIOR GRANT OF 442,500 RESTRICTED
STOCK
OPTIONS TO EXECUTIVE OFFICERS, DIRECTORS, KEY EMPLOYEES AND
CONSULTANTS IN
2005.
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24
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Information
Concerning Solicitation and Voting
Our
Board
of Directors is soliciting proxies for the 2007 Annual Meeting of Stockholders
to be held at 5:00 pm Eastern Daylight Savings Time on October 30, 2007. This
Proxy Statement contains important information for you to consider when deciding
how to vote on the matters brought before the meeting.
Voting
materials, which include the Proxy Statement, Proxy Card and the 2006 Annual
Report, are being mailed to stockholders on or about September 19, 2007. The
Executive facilities of our Company are located at 734 Walt Whitman Road, Suite
207 Melville, NY 11747.
Bovie
will bear the expense of soliciting proxies. We will reimburse banks, brokers
and other custodians, nominees and fiduciaries for reasonable charges and
expenses incurred in forwarding soliciting materials to their
clients.
DEFINITIVE
PROXY MATERIALS
ABOUT
THE ANNUAL MEETING
WHO
IS SOLICITATING YOUR VOTE?
The
Board
of Directors of Bovie Medical Corporation ("Bovie") is soliciting your vote
at
the Annual Meeting of Bovie's common stockholders being held at 5:00 pm Eastern
Daylight Savings Time on October 30, 2007.
WHAT
WILL YOU BE VOTING ON?
Election
of Bovie's Board of Directors, Ratification of Kingery & Crouse, PA, as
Bovie's auditors for 2007; To approve an amendment to our Company’s 2003
Executive and Employee Stock Option Plan; To ratify and approve managements
issuance in May 2005 of restricted stock options to executive officers,
directors, key employees and selected consultants.
HOW
MANY VOTES DO YOU HAVE?
You
will
have one vote for every share of the Company's common stock you owned of record
on September 15, 2007 (the record date).
HOW
MANY VOTES CAN BE CAST BY ALL COMMON STOCKHOLDERS?
One
vote
for each of the Company's outstanding shares of common stock which were
outstanding on the record date. The common stock will vote as a single class
on
all matters scheduled to be voted on at the Annual Meeting. There is no
cumulative voting.
HOW
MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
A
majority of the votes that can be cast, or a minimum of 7,766,709 votes must
be
present in person or by proxy in order to hold the meeting.
HOW
MAY I VOTE MY SHARES?
You
can
vote either in person at the Annual Meeting or by proxy without attending the
Annual Meeting. We urge you to vote by proxy even if you plan to attend the
Annual Meeting; so that we will know as soon as possible that enough votes
will
be present for us to hold the meeting.
(a) How
may I vote my shares in person at the meeting?
If
your
shares are registered directly in your name with our transfer agent, Manhattan
Transfer Registrar Co., you are considered, with respect to those shares, the
shareowner of record, and the proxy materials and proxy card are being sent
directly to you by Bovie Medical Corp. As the shareowner of record, you have
the
right to vote in person at the meeting. If your shares are held in a brokerage
account or by another nominee, you are considered the beneficial owner of shares
held in street name, and the proxy materials are being forwarded to you together
with a voting instruction card. As the beneficial owner, you are also invited
to
attend the Annual Meeting. Since you are a beneficial owner and not the
shareowner of record, you may not vote these shares in person at the meeting
unless you obtain a “legal proxy” from the broker, trustee or nominee that holds
your shares in its name, giving you the right to vote the shares at the
meeting.
DEFINITIVE
PROXY MATERIALS
(b) How
can I vote my shares without attending the meeting?
Whether
you hold shares directly as a registered shareowner of record or beneficially
in
street name, you may vote without attending the meeting. You may vote by
granting a proxy or, for shares held in street name, by submitting voting
instructions to you stockholder or nominee. In most cases, you will be able
to
do this by telephone, by using the internet or by mail. Please refer to summary
instructions included with proxy materials and on your proxy card. For shares
held in street name, the voting instruction card will be included by stockholder
or nominee. If you have telephone or internet access, you may submit your proxy
by following the instructions with your proxy materials and on your proxy card.
You may submit your proxy by mail by signing your proxy card or, for shares
held
in street name, by following the voting instructions with your proxy materials
and on your proxy card. You may submit your proxy by mail by signing your proxy
card or, for shares held in street name, by following the voting instruction
card included by your stockbroker or nominee and mailing it in the enclosed,
postage paid envelope. If you provide specific voting instructions, your shares
will be voted as you have instructed.
CAN
YOU CHANGE YOUR VOTE?
(a)
Can
a shareholder change his vote?
Yes.
Any
registered shareholder who voted by proxy or in person may change his or her
vote at any time before recording the votes on the date of the Annual Meeting.
(b)How
can I change my vote after I return my proxy card?
Provided
you are the shareowner of record or have legal proxy from your nominee, you
may
revoke your proxy and change your vote at any time before the final vote at
the
meeting. You may do this by signing and submitting a new proxy card bearing
a
later date, or by attending the meeting and voting in person. Attending the
meeting will not revoke your proxy unless you specifically request
it.
WHAT
IF YOU DO NOT VOTE FOR SOME OF THE MATTERS LISTED ON YOUR
PROXY?
If
you
return a signed proxy without indicating your vote for some or all of the
proposals, your shares will be voted "FOR" each of the proposals listed on
the
proxy for which you fail to vote.
WHAT
IF YOU VOTE "ABSTAIN"?
A
vote to
"abstain" on any matter indicates that your shares will not be voted for such
matter and will have the effect of a vote against the proposal.
CAN
YOUR SHARES BE VOTED IF YOU DO NOT RETURN YOUR PROXY AND DO NOT ATTEND THE
ANNUAL MEETING?
That
depends upon whether the shares are registered in your name or your broker's
name ("street name"). If you do not vote your shares held in street name, your
broker can vote your shares on any of the matters scheduled to come before
the
meeting.
If
you do
not vote your shares held in your broker's name, or "street name", and your
broker or its representative does not vote them, the votes will be broker non
votes, which will have no effect on the vote for any matter scheduled to be
considered at the Annual Meeting. If you fill out and sign the proxy card but
give no direction, your shares will be voted “for” the proposals.
If
you do
not attend and vote your shares which are registered in your name or if you
do
not otherwise fill out the proxy card and vote by proxy, your shares will not
be
voted.
DEFINITIVE
PROXY MATERIALS
COULD
OTHER MATTERS BE DECIDED AT THE ANNUAL MEETING?
We
do not
know of any other matters that will be considered at the Annual Meeting. If
a
stockholder proposal that was excluded from this proxy statement is otherwise
properly brought before the meeting, we will vote the proxies against that
proposal. If any other matters arise at the Annual Meeting, the proxies will
be
voted at the discretion of the proxy holders.
WHAT
HAPPENS IF THE MEETING IS POSTPONED OR ADJOURNED?
Your
proxy will still be valid and may be voted at the postponed or adjourned
meeting. You will still be able to change or revoke your proxy until it is
actually voted.
DEFINITIVE
PROXY MATERIALS
ANNUAL
REPORT
The
Company has included herewith a copy of its Annual Report for the fiscal year
ended December 31, 2006 ("2006 Annual Report"). Additional
copies of the 2006 Annual Report may be obtained by stockholders without charge
by writing to Andrew Makrides, President, at the Company's New York offices
at
734 Walt Whitman Road, Melville, NY 11747. Any written request shall set forth
a
good faith representation that the person making the request is a beneficial
owner of the securities of Bovie and entitled to vote as of September 14, 2007,
the record date.
Confidentiality
It
is the
Company's policy that all proxies, ballots and voting materials that identify
the particular vote of a stockholder are kept confidential, except in the
following circumstances:
|
·
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to
allow the election inspector appointed for our Annual Meeting to
certify
the results of the vote;
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·
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as
necessary to meet applicable legal requirements, including the pursuit
or
defense of a judicial action;
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·
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where
we conclude in good faith that a bona fide dispute exists as to the
authenticity of one or more proxies, ballots, or votes, or as to
the
accuracy of the tabulation of such proxies, ballots, or
votes;
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·
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where
a stockholder expressly requests disclosure or has made a written
comment
on a proxy;
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·
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where
contacting stockholders by us is necessary to obtain a quorum, the
names
of stockholders who have or have not voted (but not how they voted)
may be
disclosed to us by the election inspector appointed for the Annual
Meeting;
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·
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aggregate
vote totals may be disclosed to us from time to time and publicly
announced at the meeting of stockholders at which they are relevant;
and
in the event of any solicitation of proxies with respect to any of
our
securities by a person other than us of which solicitation we have
actual
notice.
|
STOCK
OWNERSHIP
We
encourage stock ownership by our directors, officers and employees to align
their interests with the interests of stockholders. Management also offers
incentives and fosters stock ownership by all of its employees through stock
option grants or restricted stock awards. Management further believes that
this
policy, which has in the past played a significant role in the progress of
our
company, will lead to further beneficial returns for its stockholders.
BOARD
OF DIRECTORS
Director
Selection
Bovie
does not have any standing nominating committee or compensation committee.
The
Board has determined that to have the independent directors also acting as
audit, compensation and nominating committee would place and undue financial
burden on the Company to adequately compensate those directors. For the
independent directors to be required to act in those capacities would tend
to
discourage future independent directors from joining the Board. All candidates
for the office of director are determined by the Board of Directors. Given
Bovie's present size and organization and the increasing participation of the
members of the Board in matters relating to expansion of markets for Bovie's
business, development of new technologies and allocation of resources, attention
has not previously been given to the formation of nominating or compensation
committees. Each member of the Board of Directors participates in the
consideration of potential director nominees. The Board of Directors consists
of
seven members, four of which qualify as independent directors as such terms
are
defined under the rules of the American Stock Exchange.
DEFINITIVE
PROXY MATERIALS
The
Board
of Directors has not adopted any policy, code or charter for its nominating
process, but in keeping with the current legislative environment intends to
establish, where practicable and necessary, a nomination policy. Given the
size
of our Company and Board of Directors it is presently impractical for the
independent director set on a number of committees and be adequately
compensated. Furthermore, Management believes that based on the aforesaid facts,
future independent candidates for directors may become disinclined to accept
the
position as director. Presently, the Board considers candidates and especially
skills and qualities of a potential director nominee with experience and
expertise in the areas of finance, management and business as desirable
qualities in a potential director nominee. The Board will consider nominees
provided by a qualified security holder or holders representing at least 5%
of
Bovie's outstanding common stock, and that such shares were owned by the
security holder making the nomination at least one year prior to the nomination.
See Other Business elsewhere in this proxy statement.
Management
The
following table sets forth certain information as of the record date, regarding
each of the executive officers and directors of the Company. The Company's
Executive Officers and directors are as follows:
|
|
Position
|
|
Director
Since
|
Andrew
Makrides
|
|
Chairman
of the Board,
|
|
December,
1982
|
|
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President,
CEO, Director
|
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Moshe
Citronowicz
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Executive
Vice-President
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Chief
Operating Officer
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—
|
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J.
Robert Saron
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Director
and President of
|
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August,
1994
|
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Aaron
Medical Industries, Inc.
|
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Gary
Pickett
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Principal
Accounting Officer (CFO)
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—
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George
W. Kromer, Jr.
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Director
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October,
1995
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|
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Randy
Rossi
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Director
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August,
2004
|
|
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Michael
Norman
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Director
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August,
2004
|
|
|
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Brian
H. Madden
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Director
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September,
2003
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DEFINITIVE
PROXY MATERIALS
CURRENT
DIRECTORS AND NOIMINEES
Andrew
Makrides,
age 65,
Chairman of the Board of Directors, President, and Chief Executive Officer,
received a Bachelor of Arts degree in Psychology from Hofstra University and
a
Doctor of Jurisprudence JD Degree from Brooklyn Law School. He is a member
of
the Bar of the State of New York and practiced law from 1968 until joining
Bovie
Medical Corporation as Executive Vice President and director, in 1982. Mr.
Makrides became President of the Company in 1985 and the CEO in December 1998
and has served as such to date.
J.
Robert Saron,
age 54,
Director, holds a Bachelors degree in Social and Behavioral Science from the
University of South Florida. From 1988 to present Mr. Saron has served as a
president and director of Aaron Medical Industries, Inc. ("Aaron"), Bovie’s
wholly owned marketing subsidiary. Mr. Saron served as CEO and chairman of
the
Board of the Company from 1994 to December 1998. Mr. Saron is presently the
President of Aaron and a member of the Board of Directors of the
Company.
Randy
Rossi, age
47,
has over 14 years of experience in medical manufacturing. Most recently Mr.
Rossi was Executive Vice President at Brewer in Menomee Falls, Wisconsin for
a
period of three years. Prior thereto, he was President of the Patient Care
Division, Kendall/TYCO which specialized in Wound Care, Urology and Incontinent
Care with revenues in excess of $500M.
George
W. Kromer, Jr.,
age
67,
filled a vacancy on the Board of Directors and became a director on October
1,
1995. Mr. Kromer has in the past served as a Senior Financial Correspondent
for
"Today's Investor" and has been employed as a consultant by a number of
companies, both private and public. He received a Master's Degree in 1976 from
Long Island University in Health Administration. He was engaged as a Senior
Hospital Care Investigator for the City of New York Health & Hospital
Corporation from 1966 to 1986. He also holds a Bachelor of Science Degree from
Long Island University's Brooklyn Campus and an Associate in Applied Science
Degree from New York City Community College, Brooklyn, New York.
Michael
Norman,
CPA
age
51, manages a CPA firm specializing in business financial planning as well
as
governmental and financial auditing. Mr. Norman is a member of the Nassau County
Board of Assessors, Treasurer of the Don Monti Memorial Research Foundation
and
a Glen Cove City Councilman, all located on Long Island, New York. He also
serves as the expert member of Bovie’s audit committee.
Brian
H. Madden,
age 53
joined the Board of Directors in September 2003. He is an officer and principal
owner of Liberty Title Agency LLC, a non-affiliated, privately owned full
service title insurance agency located in Garden City, N.Y. He also serves
on a
number of non-affiliated professional, charitable and civic organizations
including, among others, the New York State Land Title Association, National
Federation of Independent Businesses, Long Island Children's Museum, SUNY Old
Westbury Foundation, and Our Lady of Consolation Nursing Home. Mr. Madden is
a
member of our Audit Committee. He graduated Iona College with a BBA Degree
in
1976.
August
Lentricchia,
age 53,
is presently employed by Freedom Tax and Financial Services Bohemia as Register
Representative since 2001. He is also licensed as a Registered Representative
and investment consultant of HD Vest Investment Services, a non-bank subsidiary
of Wells Fargo and Company. Mr. Lentricchia has also served as an investment
consultant for Citibank. Mr. Lentricchia also serves on our audit committee
in
addition to serving as a member of the Board of Directors. He is a graduate
of
the University of Arizona (BA 1970) and has received a Masters degree in
Education from Dowling College (2004).
MEETINGS
OF THE BOARD OF DIRECTORS
The
Board
of Directors (the "Board") had four meetings in 2006, each of which was attended
by all directors, including telephonic meetings of the Board. Our audit
committee was established in 2003, and presently consists of Brian H. Madden,
Michael Norman and Mr. Lentricchia, each of whom qualify as independent
directors under the rules promulgated by the American Stock Exchange. The Board
of Directors continues to manage Bovie's various stock option Plans and the
participation activity requirements for each member of the Board are increasing
as we are aggressively pursuing and implementing new marketing and other
strategies. Due to the limited number of members and the increased degrees
of
activity of the Board of Directors (seven) the Nominees, if elected, intend
to
consider, if practicable, establishment of a Compensation Committee in
accordance with recommendations contained in recent legislation (Sarbanes-
Oxley
Act of 2002) and the procedures set forth in our Company's by-laws.
DEFINITIVE
PROXY MATERIALS
DIRECTORS'
COMPENSATION
Directors'
compensation is determined by the Board of Directors. In the past directors
have
been compensated through option grants. Presently, the Board has not established
a compensation committee nor does it have a standard policy regarding
compensation of members of the Board of Directors. In the past, the Board has
granted directors stock options in order to assure that the directors are
properly incentivized and have an opportunity for an ownership interest in
common with other stockholders. The nominees, if elected, may require the Board
or Compensation Committee, if and when established, among other things, to
adopt
a standard policy regarding compensation of members of the Board.
At
this
meeting shareholders are also requested to approve restricted options previously
granted in 2005 to executives, directors, consultants and key employees and
an
amendment increasing the numbers of shares covered under our 2003 Stock Option
Plan to be used essentially to compensate and incentivize executives, directors,
consultants, and key employees in the future. Management strongly believes
that
the restricted options previously granted in 2005 and the proposed amendment
to
increase the number of shares of common stock under our 2003 Option Plan are
critical for the maintenance of top quality persons serving as officers,
directors, key employees and consultants and urges shareholders to give every
consideration to approve proposals Three and Four (see below).
The
following table sets forth the compensation paid to the executive officers
of
the registrant for the three years ended December 31, 2006:
SUMMARY
COMPENSATION TABLE
Name
And
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-
Equity Incentive Plan Compensation
Earnings
($)
|
|
Change
in Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
Andrew
Makrides
President,
CEO, Chairman of the Board
|
|
|
2006
2005
2004
|
|
$
$
$
|
223,668
186,418
167,326
|
*
(1) |
|
3,685
3,428
3,189
|
|
|
0
0
0
|
|
|
0
56,250
53,250
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
$
$
$
|
227,373
246,096
223,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
D. Pickett
Chief
Financial
Officer
|
|
|
2006
2005
2004
|
|
$
|
66,442
0
0
|
*
(4) |
|
1,731
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
$
|
68,173
0
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.
Robert Saron
President
Aaron
Medical
and Director
|
|
|
2006
2005
2004
|
|
$
$
$
|
287,419
256,173
233,036
|
*
(2) |
|
5,218
4,854
4,515
|
|
|
0
0
0
|
|
|
0
56,250
53,250
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
$
$
$
|
292,637
317,277
290,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moshe
Citronowicz
Vice
President
Chief
Operating Officer
|
|
|
2006
2005
2004
|
|
$
$
$
|
249,257
193,451
170,766
|
*
(3) |
|
3,834
3,567
3,318
|
|
|
0
0
0
|
|
|
0
56,250
53,250
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
$
$
$
|
253,091
253,268
227,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vera
MacElroy
Secretary
Director of
Human
Resources
|
|
|
2006
2005
2004
|
|
$
$
$
|
68,394
62,612
59,817
|
*
(5) |
|
1,350
1,250
1,133
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
|
0
0
0
|
|
$
$
$
|
69,744
63,862
60,950
|
|
In
2004
and 2005, a total of 225,000 options were granted to executive officers and
directors in each of these fiscal years, of which the 225,000 options granted
in
2005 were not pursuant to a qualified shareholder approved plan and are
restricted options. See Proposal Four. No options were granted to executive
officers and directors in fiscal 2006.
*(1)
Includes $27,825 for unused vacation pay, which had been reserved for in
prior
years. This had no effect on the 2006 earnings.
DEFINITIVE
PROXY MATERIALS
*(2)
Includes $13,045 for unused vacation pay, which had been reserved for in prior
years. This had no effect on the 2006 earnings.
*(3)
Includes $49,561 for unused vacation pay, which had been reserved for in prior
years. This had no effect on the 2006 earnings.
*(4)
Includes $865 for unused vacation pay, which had been reserved for in 2006.
*(5)
Includes $2,194 for unused vacation pay, which had been reserved for in prior
years. This had no effect on the 2006 earnings.
Gary
Pickett was chosen CFO to replace Andrew Makrides who the was the acting CFO.
Charles Peabody, the former CFO, resigned on August 9, 2005.
EQUITY
COMPENSATION PLAN INFORMAITON
Plan
category
|
|
Number
of Securities
to
be issued upon
exercise
of
outstanding
options
|
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
|
Number
of securities
remaining
available
for
future issuance
under
equity
compensation
plans
|
|
Equity
compensation Plans approved by Security holders
|
|
|
3,203,700
|
|
$
|
1.49
|
|
|
66,000
|
|
Total
|
|
|
3,203,700
|
|
$
|
1.49
|
|
|
66,000
|
|
The
following table summarizes: 1. The options granted in the last fiscal year
2006
and 2. The aggregated option exercises in the last fiscal year and the fiscal
year-end option values.
Aggregate
Option/SAR Exercises in the Fiscal Year Ended December 31, 2006 Option/SAR
Values
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
|
|
Shares
Acquired on Exercise
|
|
Value
Realized
|
|
Number
of Securities Underlying Unexercised Options/SARs at December 31,
2006
(#)
|
|
Value
of Unexercised In-the Money Options/SARs at December 31,
2006($)
|
|
Name
|
|
(#)
|
|
($)
|
|
Exercisable
|
|
Unexercisable
|
|
Exercisable
|
|
Unexercisable
|
|
Andrew
Makrides
|
|
|
70,000
|
|
$
|
453,300
|
|
|
465,000
|
|
|
-
|
|
$
|
4,217,550
|
|
|
-
|
|
George
Kromer
|
|
|
70,000
|
|
|
372,400
|
|
|
370,000
|
|
|
-
|
|
|
3,355,900
|
|
|
-
|
|
Moshe
Citronowicz
|
|
|
-0-
|
|
|
-
|
|
|
465,000
|
|
|
-
|
|
|
4,217,550
|
|
|
-
|
|
Rob
Saron
|
|
|
34,340
|
|
|
254,603
|
|
|
232,500
|
|
|
-
|
|
|
2,108,775
|
|
|
-
|
|
Brian
Madden
|
|
|
-
|
|
|
-
|
|
|
85,000
|
|
|
-
|
|
|
770,950
|
|
|
-
|
|
Michael
Norman
|
|
|
-
|
|
|
-
|
|
|
60,000
|
|
|
-
|
|
|
544,200
|
|
|
-
|
|
Gary
D. Pickett
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Randy
Rossi
Vera
MacElroy
|
|
|
-
-
|
|
|
-
-
|
|
|
50,000
5,000
|
|
|
-
|
|
|
453,500
45,350
|
|
|
-
|
|
Total
|
|
|
174,340
|
|
$
|
1,080,303
|
|
|
1,727,500
|
|
|
-
|
|
$
|
15,713,775
|
|
|
-
|
|
(1)
Assumes $9.07 per share fair market value on December 31, 2006 which was
the
closing price on December 29, 2006, the last day of trading in 2006.
DEFINITIVE
PROXY MATERIALS
DIRECTOR
COMPENSATION
The
following is a table showing the director compensation for the year ending
December 31, 2006:
Name
|
|
Fees
Earned
Or
Paid
In
Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensa-
tion
($)
|
|
Change
in Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
Other
Compensa-
tion
($)
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
Brian
Madden
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Michael
Norman
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Randy
Rossi
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
In
2003,
the Board of Directors adopted and shareholders approved Bovie’s 2003 Executive
and Employee Stock Option Plan covering a total of one million two hundred
thousand (1,200,000) shares of common stock issuable upon exercise of options
to
be granted under the Plan. In 2005, the Board of Directors granted 25,000
restricted, nonqualified options to each Executive Officer and non-executive
Director totaling 225,000 shares.
Outside
Directors are compensated in their capacities as Board members through option
grants. Our Board of Directors presently consists of J. Robert Saron, Andrew
Makrides, Chairman, CEO, and President, George Kromer, Jr., Randy Rossi, Michael
Norman, Brian Madden and August Lentricchia, a recently appointed director
who
has been added to the nominees for election at this meeting. Previously for
the
past years prior to January 1, 2006, pursuant to a written agreement, Mr. Kromer
had been retained by Bovie Medical Corporation as a business and public
relations consultant on a month-to-month basis at the current average monthly
fee of $2,000. As of January 1, 2006 Mr. Kromer accepted an employment position
of internal auditor with the company.
There
have been no changes in the pricing of any options previously or currently
awarded.
In
January 2004, we extended employment contracts with certain of our officers
for
six years. The employment agreements provide, among other things, that the
Executive may be terminated as follows:
|
(a)
|
Upon
the death of the Executive and the Executive’s estate shall be paid the
basic annual compensation due the Employee pro-rated through the
date of
termination.
|
|
(b)
|
By
the Resignation of the Executive at any time upon at least thirty
(30)
days prior written notice to Bovie; and Bovie shall be obligated
to pay
the Employee the basic annual compensation due him pro-rated to the
effective date of termination,
|
|
(c)
|
By
Bovie, for cause if during the term of the Employment Agreement the
Employee violates the provisions of Paragraph 12 hereof, or is found
guilty in a court of law of any crime of moral
turpitude.
|
|
(d)
|
By
Bovie, without cause, with the majority approval of the Board of
Directors, at any time upon at least thirty (30) days prior written
notice
to the Executive: and Bovie shall be obligated to pay the Executive
compensation currently in effect including all bonuses, accrued or
prorate, and expenses up to the date of termination. Thereafter,
for the
period remaining under the contract, Bovie shall pay the Executive
the
salary then in effect at the time of termination payable weekly.
Employee
shall not have to account for other compensation other sources or
otherwise mitigate his damages due to such
termination.
|
DEFINITIVE
PROXY MATERIALS
|
(e)
|
If
Bovie terminates the agreement, without cause, or fails to meet its
obligations to the Executive on a timely basis, or if there is a
change in
the control of Bovie, the Executive may elect to terminate his employment
agreement. Upon any such termination or breach of any of its obligations
under the Employment Agreement, Bovie shall pay the Executive a lump
sum
severance equal to three times the annual salary and bonus in effect
the
month preceding such termination or breach as well as any other sums
which
may be due under the terms of the Employment Agreement up to the
date of
termination.
|
The
following schedule shows the status of all contracts and terms with officers
of
Bovie as of December 31, 2006.
|
|
Contract
|
|
Expiration
|
|
Current
|
|
Auto
|
|
|
|
Date
|
|
Date(1)
|
|
Base
Pay
|
|
Allowance
|
|
Andrew
Makrides
|
|
|
01/01/98
|
|
|
1/31/2011
|
(1)
|
$
|
186,091
|
|
$
|
6,310
|
|
J.
Robert Saron
|
|
|
01/01/98
|
|
|
1/31/2011
|
(1)
|
|
263,406
|
|
|
6,310
|
|
Moshe
Citronowicz
|
|
|
01/01/98
|
|
|
1/31/2011
|
(1)
|
|
193,507
|
|
|
6,310
|
|
Steve
Livneh
|
|
|
10/02/06
|
|
|
11/01/2009
|
(2)
|
|
150,000
|
|
|
6,310
|
|
(1)
Includes
total extensions for eight years- Salaries increase annually pursuant to a
contract formula. In the event of a change in control, each officer’s contract
contains an option for each respective officer to resign and receive 3 years
salary.
(2) Joined
Bovie on 11/2/06 as President of Bovie Canada, ULC.
Beneficial
Ownership of Securities
The
following table sets forth certain information as of December 31, 2006, with
respect to the beneficial ownership of the Company’s common stock by all persons
known by the Company to be the beneficial owners of more than 5% of its
outstanding shares, by directors who own common stock and/or options to levy
common stock and by all officers and directors as a group.
***
SEE TABLE ON FOLLOWING PAGE ****
DEFINITIVE
PROXY MATERIALS
|
|
Number
of shares
|
|
Nature
of
|
|
Percentage
of
|
Name
and Address
|
|
Title
|
|
Owned
(i)
|
|
Ownership
|
|
Ownership
(i)
|
The
Frost National Bank FBO
Renaissance
US Growth Investment Trust PLC Trust No.
W00740100
|
|
Common
|
|
1,000,000
|
|
Beneficial
|
|
6.6%
|
The
Frost National Bank FBO,
BFS
US Special Opportunities Trust PLC. Trust No.
W00118000
|
|
Common
|
|
1,000,000
|
|
Beneficial
|
|
6.6%
|
Bjurman
Barry & Associates
|
|
Common
|
|
790,731
|
|
Institutional
|
|
5.2%
|
Directors
and Officers
Andrew
Makrides
734
Walt Whitman Road
Melville,
NY 11746
|
|
Common
|
|
850,800(ii)
|
|
Beneficial
|
|
5.6%
|
George
Kromer
P.O
Box 188
Farmingville,
NY 11738
|
|
Common
|
|
440,000(iii)
|
|
Beneficial
|
|
2.9%
|
J.
Robert Saron
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
|
Common
|
|
399,681(iv)
|
|
Beneficial
|
|
2.6%
|
Brian
Madden
300
Garden City Plaza
Garden
City, NY 11530
|
|
Common
|
|
85,000(vi)
|
|
Beneficial
|
|
.6%
|
Mike
Norman
410
Jericho Turnpike
Jericho,
NY
|
|
Common
|
|
60,000(vii)
|
|
Beneficial
|
|
.4%
|
Randy
Rossi
|
|
Common
|
|
50,000(viii)
|
|
Beneficial
|
|
.4%
|
Moshe
Citronowicz
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
|
Common
Stock
|
|
639,591(v)
|
|
Beneficial
|
|
4.2%
|
Gary
Pickett
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
|
—
|
|
|
|
|
|
|
Vera
MacElroy
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
|
Common
|
|
16,000(ix)
|
|
Beneficial
|
|
|
Officers
and Directors as group (9) persons
|
|
|
|
2,541,072(x)
|
|
|
|
16.8%
|
(i)
Based
on 15,223,538 outstanding shares of Common Stock and 3,203,700 outstanding
options to acquire a like number of shares of Common Stock as of December 31,
2006, of which officers and directors owned a total of 1,737,500 options and
797,572 shares at December 31, 2006. We have calculated the percentages on
the
basis of the amount of outstanding securities plus, for each person or group,
any securities that person or group has the right to acquire within 60 days
pursuant to options, warrants, conversion privileges or other
rights.
DEFINITIVE
PROXY MATERIALS
(ii)
Includes 385,800 shares reserved and 465,000 ten year options owned by Mr.
Makrides to purchase shares of Common Stock of the Company. Exercise prices
for
his options range from $.50 for 155,000 shares to $3.25 for 25,000 shares.
(iii)
Includes 70,000 shares reserved and 370,000 ten year options owned by Mr. Kromer
to purchase shares of the Company. Exercise prices for his options range from
$.50 for 100,000 shares to $3.25 for 25,000 shares.
(iv)
Includes 167,181 shares reserved and 232,500 10 year options owned by Mr. Saron,
exercisable at prices ranging from $.50 per share for 155,000 shares, and $3.25
per share for 25,000 shares.
(v)
Includes 174,591 shares reserved and 465,000 10 year options owned by Mr.
Citronowicz exercisable at prices ranging from $.50 for 155,000 shares to $3.25
for 25,000 shares.
(vi)
Includes 85,000 shares reserved pursuant to 10 year options owned by Mr. Madden
exercisable at prices ranging from $3.25 for 25,000 to $2.13 for 25,000 options
to purchase Common Stock. Mr. Madden has no financial interest in 25,000 shares
of Bovie owned by his wife.
(vii)
Includes 60,000 shares reserved pursuant to 10 year options owned by Mr. Norman
exercisable at prices ranging from $2.13 for 25,000 shares to $2.25 for 35,000
shares.
(viii)
Includes 50,000 share reserved pursuant to 10 year options owned by Mr. Rossi
exercisable at price ranging from $2.13 for 25,000 to $2.25 for 25,000
shares.
(ix)
Includes 11,000 shares reserved and 5,000 10 year options owned by Ms. MacElroy
exercisable at $3.25.
(x)
Includes 1,727,500 shares reserved for outstanding options owned by all
Executive Officers and directors as a group. The last date options can be
exercised is May 5, 2015.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Background
In
1998,
Maxxim Medical Corporation (“Maxxim”) a then publicly owned corporation,
acquired 3,000,000 shares of our common stock from us pursuant to a certain
agreement in exchange for assets and equipment, the ownership of the trade
name
“Bovie” and other future business to be conducted between our corporations. As
part of the agreement, Maxxim was granted rights to demand that we register
the
shares with the SEC. Maxxim later became a privately owned corporation. Maxxim
allegedly sold the Bovie common stock to ACMI Corporation (“ACMI”) in 2000.
After a continuing dispute between Maxxim and ACMI, in May 2004 a bankruptcy
court declared ACMI the owner of the 3,000,000 Bovie shares
Recent
Developments
In
September 2004, ACMI Corporation privately sold the 3,000,000 shares to a
limited number of sophisticated accredited investors. As part of the sale,
ACMI
Corporation assigned the demand registration rights to the accredited investors.
Shortly after completion of the sale by ACMI Corporation, the accredited
investors exercised their registration rights and demanded that we file the
registration statement with the SEC covering the 3,000,000 shares of common
stock. We filed the registration statement as requested for the 3,000,000 shares
of common stock and listed the accredited investors as selling stockholders
(the
“Selling Stockholders”). The registration statement became effective in
September 2005. All proceeds from any sale of shares of our Company pursuant
to
the registration statement are for the benefit of the Selling Stockholders
and
not Bovie. However, pursuant to separate agreement with ACMI and the Selling
Stockholders, we are in the process of being reimbursed for our legal,
accounting and other expenses incurred in connection with the offering.
In
2005,
Executive Officers, directors, certain consultants and key employees were
awarded a total of 442,500 restricted non-statutory options to purchase our
Common Stock (of which 225,000 restricted options were granted to Executive
Officers and Directors) exercisable at $2.25 per share, the then current market
price for our stock on the American Stock Exchange, expiring on May 5, 2015.
See
Executive Compensation and Proposal Four of this Proxy Statement.
DEFINITIVE
PROXY MATERIALS
A
former
director, Alfred V. Greco Esq., is the principal of Alfred Greco PLLC, a partner
of Sierchio, Greco and Greco, LLP the Company’s counsel. Alfred V. Greco PLLC
received $87,550, $80,400 and $63,650 in legal fees for the years 2006, 2005
and
2004, respectively. Mr. Greco resigned as a member of the Board of Directors
in
May, 2005. He still serves as a principal of a partner in Sierchio Greco &
Greco, LLP, our legal counsel.
On
January 12, 2007 we granted 65,000 options for the balance of available shares
reserved under our existing stock option plans to Gary Pickett our CFO (20,000
options) and certain key employees (45,000 options) exercisable at $8.66 per
share, the then current market price per share on the American Stock Exchange.
In addition, on January 12, 2007, subject to shareholder approval, the Board
of
Directors granted a total of 35,000 restricted options exercisable at $8.66
per
share (the closing price for our common stock on the American Stock Exchange
on
January 12, 2007) to Messrs, Brian Madden (10,000 options), Michael Norman
(10,000 options) and Randy Rossi (10,000 options) for their services as
independent directors; and Messrs, Madden and Norman, each received an
additional 2,500 restricted options for their services as members of the Audit
Committee. If Shareholders approve proposal Three (A), then options for up
to
500,000 additional shares may be granted by your company without seeking further
approval from shareholders. If shareholders fail to approve Proposal Three
(A),
then we will be unable to grant any further options under the 2003 Plan.
On
March
29, 2007, we granted a total of 30,000 restricted options to two officers,
Rick
Pfahl, Vice President of Marketing and Business Development (20,000 options)
and
Gary Pickett, CFO (5,000 options) in acknowledgment for a job well done. These
options are exercisable at $7.10 per share, the closing price for our common
stock on the American Stock Exchange on March 29, 2007.The granting of options
(instead of cash) has been the only manner in which we have compensated our
independent directors and rewarded our officers in the past. Cash compensation
for the aforesaid services is not deemed by management to be in the best
interests of our company because at our stage of growth, all available cash
is
better utilized operationally for research and expansion of operations. These
options are subject to shareholder approval of Proposal Three (B). We are also
seeking approval of Proposal Three (A) authorizing an additional 500,000 shares
as a reserve for options granted under our 2003 Plan. If Shareholder approval
is
obtained for Proposal Three (A) then our Company may issue up to 500,000 options
or shares under the 2003 Plan without further approval or Shareholders. If
approval is not obtained for Proposal Three (A) your Company may not issue
any
more options under the 2003 Plan, unless shares reserved for outstanding options
previously issued under the Plan otherwise become available due to expiration,
default, lapse, or failure to exercise such options in a timely manner.
Management strongly believes that without the ability to compensate our
directors, officers, key employees and consultants adequately with options
our
company will be placed under a serious competitive handicap in attracting and
maintaining quality officers, independent directors, consultants and key
employees. If Proposal (A) is approved management intends that the above options
to independent directors and officers shall be covered by the 500,000 share
increase authorization under our 2003 Plan. If Shareholder approval is not
obtained for Proposal Three (A) or (B), the above options previously granted
to
the directors and officers will not be covered by our 2003 Plan and will not
be
exercisable by the recipients for as long as our Company is listed on the
American Stock Exchange. If Proposal Three (B) is approved (and not Three (A))
the recipients will receive restricted stock of the Company on exercise, which
shares will not be covered by any Plan.
In
November 2006, the Board of Directors, including all independent directors,
approved 2-year extensions of the outstanding Employment Agreements of Messrs.
Makrides, Citronowicz and Saron. Such extensions are historically consistent
with prior pattern of extensions in past years.
A
director, George Kromer, served as a consultant previous to his employment
with
us in 2006 and received consulting compensation of $22,906 and $20,751 for
2005
and 2004, respectively.
Two
relatives of the chief operating officer of the Company are employed by the
Company. Yechiel Tsitrinovich, an engineering consultant received compensation
for 2006 and 2005 of $79,776 and $79,776 respectively. The other relative,
Arik
Zoran, is an employee of the Company in charge of the engineering department.
He
had a two-year contract providing for a salary of $90,000 per year plus living
expenses and benefits which has been extended. For 2006 and 2005 he was paid
$162,562 and $157,045 which includes living expenses and benefits. The Company
is attempting at this time to secure a permanent work visa for Mr. Zoran.
DEFINITIVE
PROXY MATERIALS
Audit
Committee:
The
Audit
Committee has adopted a policy for the pre-approval of services provided by
the
independent auditors, pursuant to which it may pre-approve any service
consistent with applicable law, rules and regulations. Under the policy, the
Audit Committee may also delegate authority to pre-approve certain specified
audit or permissible non-audit services to one or more of its members. A member
to whom pre-approval authority has been delegated must report his pre-approval
decisions, if any, to the Audit Committee at its next meeting, and any such
pre-approvals must specify clearly in writing the services and fees approved.
Unless the Audit Committee determines otherwise, the term for any service
pre-approved by a member to whom pre-approval authority has been delegated
is
twelve months.
Prior
to
September 29, 2003 the audit committee consisted of the board of directors.
On
September 29, 2003 the board of directors appointed Brian Madden, George Kromer
(then both independent directors) and Andrew Makrides as audit committee
members. Mr. Madden was considered the only audit committee financial expert
until Mr. Michael Norman CPA was made a board member and audit committee member
on September 23, 2004. The audit committee is presently made up of members,
Michael Norman, CPA, Brian Madden and August Lentricchia, a recently appointed
member of the Board of Directors and the Audit Committee. Mr. Lentricchia is
also on management’s slate of proposed directors to be elected at this
meeting.
OTHER
BUSINESS
Stockholder
Proposals for Inclusion in Proxy Statement
Pursuant
to the Company's policy, stockholders may present proper proposals for inclusion
in the Company's proxy statement and for consideration at the Company's next
annual meeting of stockholders. To be eligible for inclusion in the Company's
2008 Proxy Statement, a stockholder's proposal must be received by the Company
no later than May 31, 2007 and must otherwise comply with Rule 14a-8 under
the
Exchange Act.
Stockholder
Proposals for Annual Meeting
For
business to be properly brought before an annual meeting by a stockholder,
in
addition to any other applicable requirements, timely notice of the matter
must
be first given to Bovie. To be timely, written notice must be received by Bovie
at its Melville, N.Y. office by the deadline specified in last year's proxy
statement. If the proposal is submitted for a regularly scheduled annual
meeting, the proposal must be received at Bovie's principal executive offices
not less than 120 calendar days before the date of the Company's proxy statement
released to stockholders in connection with the previous year's annual meeting;
or (b) if the date of this year's annual meeting has been changed by more than
30 days from the date of the previous year's meeting, then the deadline is
a
reasonable time before the Company begins to print and mail its proxy materials.
While the Board of Directors will consider stockholder proposals, the Company
reserves the right to omit from the Company's 2007 Proxy Statement any
stockholder proposals that it is not required to include under federal
regulations.
Stockholder
Nominations of Directors
The
Board
of Directors adopted, as part of the director selection process, a policy for
director selection, which includes consideration of potential director nominees
recommended by stockholders. The Board will identify, evaluate and select
potential director nominees, including nominees recommended by you, using
qualitative standards and certain procedures, as described under the Board
of
Directors, Director Selection above, for recommendation to the Board of
Directors for selection. Any stockholder entitled to vote for the election
of
directors at a meeting may nominate persons for election as directors only
if
timely written notice of such stockholder's intent to make such nomination
is
given, either by personal delivery or United States mail, postage prepaid,
to
Mr. Andrew Makrides, President, Bovie Medical Corporation, 734 Walt Whitman
Road, Suite 207, Melville, NY 11747. Refer to the section entitled the Board
of
Directors, Director Selection above for more information.
DEFINITIVE
PROXY MATERIALS
Costs
of Solicitation
Bovie
is
making this solicitation of proxies and is responsible for the payment of all
expenses incurred in connection with the solicitation. Management estimates
that
the cost of solicitation of proxies will be approximately $20,000 to be incurred
solely by Bovie.
DEFINITIVE
PROXY MATERIALS
PROPOSAL
ONE
ELECTION
OF DIRECTORS
The
Board
of Directors has nominated all of the current directors for re-election at
the
Annual Meeting. All directors serve until the next Annual Meeting of
stockholders or their resignation or until their successors are duly elected
and
qualified.
THE
NOMINEES
We
have
previously set forth in this Proxy Statement, information - provided by the
nominees - concerning their principal occupation, business experience and other
matters. See “Management”.
THE
BOARD RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE FOLLOWING
NOMINEES.
ANDREW
MAKRIDES
J.
ROBERT
SARON
RANDY
ROSSI
MICHAEL
NORMAN
GEORGE
W.
KROMER, JR.
BRIAN
H.
MADDEN
AUGUST
LENTRICCHIA
DEFINITIVE
PROXY MATERIALS
PROPOSAL
TWO
RATIFICATION
OF SELECTION OF AUDITORS
The
Board
of Directors has selected Kingery & Crouse PA, (Kingery”) Certified Public
Accountants, as the independent auditors of Bovie for fiscal year ending
December 31, 2007. BLOOM & Company LLP, the former independent auditor for
the past 23 years has effectively dissolved due to the untimely death of Stephen
Bloom. Arrangements have been made for a representative of Kingery to attend
the
Annual Meeting. The representative will have an opportunity to make a statement
if he or she desires to do so, and will be available to respond to appropriate
stockholder questions. The selection of Kingery as the Company's auditors must
be ratified by a majority of the votes cast at the Annual Meeting. Kingery
is a
member of the Securities and Exchange Division of the American Institute of
Certified Public Accountants ("AICPA") duly authorized to perform audits of
SEC
registrants. The firm is current with its peer review system and has maintained
an unqualified quality control status since the inception of the peer review
system established by the AICPA.
Audit
Fees. The aggregate fees billed by our former auditors for services rendered
for
the audit of our financial statements for the fiscal year ended December 31,
2006 and the review of the Company's financial statements included in our
quarterly filings on Form 10QSB during that fiscal year were $ 124,694. There
were no other fees paid for other services performed by our former auditor
Bloom
& Company, LLP or its employees.
THE
BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF KINGERY &
CROUSE,
PA AS THE COMPANY'S INDEPENDENT AUDITORS FOR 2007.
DEFINITIVE
PROXY MATERIALS
PROPOSAL
THREE
(A)
RATIFY PROPOSED AMENDMENT OF
2003
EXECUTIVE AND EMPLOYEE STOCK OPTION PLAN
And
(B)
APPROVE
THE GRANT IN JANUARY AND MARCH 2007 OF OPTIONS
TO
PURCHASE 65,000 SHARES
Introduction
Management
is convinced that in addition to our key employees and operating executives,
our
Company’s major asset consists of its manufacturing capability, technology and
electrosurgical products. If we are to continue to successfully attract,
motivate and retain the most qualified key employees, executive officers,
non-employee directors and consultants for the Company for our business, it
is
essential that we continue to be able to offer them a competitive equity
incentive program. Our 2003 Executive and Employee Stock Option Plan presently
has no more shares reserved for future issuance of options. In this connection,
management has proposed to amend its 2003 Executive and Employee Stock Option
Plan (‘2003 Plan”) to increase the number of shares reserved for issuance under
the Plan for incentivizing and/or attracting executives, directors, key
employees and consultants
This
Proposal seeks (A) Ratification and approval of an increase of 500,000 shares
of
common stock for our company’s 2003 Plan as a reserve for future options; (B)
Approval of the grant of a total of 65,000 restricted options to certain
independent directors and officers during 2007.
Amendment
The
proposed amendment will modify the 2003 Plan to increase the maximum aggregate
number of shares of common stock reserved for issuance under the 2003 Plan
from
1.2 Million shares (already reserved against outstanding options) to 1.7 Million
shares, or an increase of 500,000 shares of common stock for future issuance
pursuant to the terms of the Plan. Except for the proposed increase in the
number of shares covered by the Plan, the Plan shall remain otherwise unchanged
from its present status.
On
January 12, 2007, subject to shareholder approval, the Board of Directors
granted a total of 35,000 restricted options to Messrs, Brian Madden (10,000
options), Randy Rossi (10,000 options) and Michael Norman (10,000 options)
for
their services as independent directors; and Messrs, Madden and Norman, each
received an additional 2,500 restricted options for their services as members
of
the Audit Committee. The foregoing is essentially the only manner in which
we
compensate our independent directors. These options are exercisable at $8.66
per
share, the closing price for our common stock on the American Stock Exchange
on
the date of grant. If the shareholders ratify Proposal Three (A) then options
for up to 500,000 additional shares may be granted by your company without
seeking further approval from shareholders.
On
March
29, 2007, we granted a total of 30,000 restricted options to two officers,
Rick
Pfahl, Vice President of Marketing and Business Development (20,000 options)
and
Gary Pickett, CFO (5,000 options) in acknowledgment for a job well done. These
options are exercisable at $7.10 per share, the closing price for our common
stock on the American Stock Exchange on March 29, 2007.The granting of options
(instead of cash) has been the only manner in which we have compensated our
independent directors and rewarded our officers in the past. Cash compensation
for the aforesaid services is not deemed by management to be in the best
interests of our company because at our stage of growth, all available cash
is
better utilized operationally for research and expansion of operations.
The
above
option grants to certain independent directors and officers are subject to
shareholder approval of (Proposal Three (B)). We are also seeking approval
of
amendment to our 2003 Plan authorizing an additional 500,000 shares as a reserve
for options granted under our 2003 Plan. If Shareholder approval is obtained
for
Proposal Three (A) we will be able to issue up to 500,000 options and shares
pursuant to the 2003 Plan without further seeking approval of our shareholder.
If Proposal Three A is not ratified, we cannot issue any options under the
2003
Plan, unless shares reserved for outstanding options previously issued under
the
Plan otherwise become available due to expiration, default, lapse, or failure
to
exercise such options in a timely manner. Management strongly believes that
without the ability to compensate our directors, officers, key employees and
consultants with options, our company will be put under a serious competitive
handicap in attracting and maintaining quality officers, independent directors
and key employees. Management intends that the above options shall be issued
and
covered by the 500,000 share increase authorization under our 2003 Plan and
is
seeking approval of Proposal Three (B). If Shareholder approval for Proposals
Three (A) and (B) is obtained, the above options shall be issued and covered
by
the 500,000 share increase authorization under our 2003 Plan. If Shareholder
approval is not obtained for Proposals Three (A) or (B), the above options
previously granted to the independent directors and officers will not be covered
by our 2003 Plan and will not be exercisable for as long as our Company is
listed on the American Stock Exchange. If Proposal Three (B) is approved (and
not Three (A)) the recipients will receive restricted stock of the Company
on
exercise, which shares will not be covered by any Plan.
DEFINITIVE
PROXY MATERIALS
As
of
July 2007, there were no shares of common stock remaining available for option
awards under the 2003 Plan. In light of historical usage and expected future
grants, we anticipate the number of shares of common stock available for awards
under the 2003 Plan, if Proposal (A) is ratified and approved, will be adequate
to meet our foreseeable requirements.
A
description of the principal features of the 2003 Plan, to be amended, is set
forth below.
Purpose
and Eligibility
As
previously indicated, the purpose of the 2003 Plan, as amended, is to enable
the
Company to continue to attract and retain the services of experienced and
knowledgeable executives, non-employee directors, key employees and key
consultants and to align further their interests with those of the stockholders
of the Company by providing for or increasing the proprietary interests of
the
non-employee directors and consultants in the Company. The 2003 Plan provides
for grants of nonqualified and incentive stock options.
Stock
Available For Issuance under the 2003 Plan
The
shares of common stock to be reserved under the 2003 Plan are made available,
at
the discretion of the Board, either from authorized but unissued shares of
common stock or from reacquired shares of common stock or any combination
thereof. Prior to amending the 2003 Plan, the total number of shares of common
stock that may be issued pursuant to awards under the 2003 Plan may not exceed
1.2 Million. The proposed amendment to the 2003 Plan will increase the total
number of shares of common stock that may be issued pursuant to awards under
the
2003 Plan to 1.7 Million shares. If, on or before termination of the 2003 Plan,
an option for any reason expires or otherwise terminates, in whole or in part,
without having been exercised in full, or if any shares of common stock subject
to an award have been reacquired by the Company pursuant to the restrictions
imposed on such shares, such option or shares, as the case may be, will become
available for issuance again under the 2003 Plan. The number and kind of shares
issuable under the 2003 Plan, the number and kind of shares subject to
outstanding awards, the grant or exercise price with respect to any award,
and
the repurchase price, if any, with respect to any award, will be appropriately
and proportionately adjusted to reflect mergers, consolidations, sales or
exchanges of all or substantially all of the properties of the Company,
reorganizations, recapitalizations, reclassifications, stock dividends, stock
splits, reverse stock splits, spin-offs or other distributions with respect
to
such shares of common stock (or any stock or securities received with respect
to
such common stock).
On
September 2007, the closing market price of the common stock of the Company
on the American Stock Exchange was $ per share.
Administration,
Amendment and Termination
The
2003
Plan is administered by the Board and having such powers as specified by the
Board, which consists of at least four independent directors, each of whom
is a
"non-employee director" within the meaning of Rule 16b-3 under the Exchange
Act
and an "outside director" for purposes of Section 162(m) of the Code
(“Administrator”). Subject to the provisions of the 2003 Plan, the Board
determines in its discretion the persons to whom and the times at which awards
are granted, the types and sizes of such awards, and all of their terms and
conditions. The Board, subject to certain limitations required by Section 162(m)
and the express language in the 2003 Plan, may amend, modify, extend, cancel
or
renew any award, waive any restrictions or conditions applicable to any award,
and accelerate, continue, extend or defer the vesting of any award. The Board
may establish rules and policies for administration of the 2003 Plan and adopt
one or more forms of agreement to evidence awards made under the 2003 Plan.
The
Board interprets the 2003 Plan and any agreement used under the 2003 Plan,
and
all determinations of the Board will be final and binding on all persons having
an interest in the 2003 Plan or any award issued under the 2003 Plan. The 2003
Plan continues in effect until its termination by the Administrator or the
date
on which all shares available for issuance under the plan have been issued
and
all restrictions on such shares under the terms of the plan and agreements
evidencing awards granted have lapsed. The Board may terminate or amend the
plan
at any time, provided that without stockholder approval the plan cannot be
amended to increase the share reserve or effect any other change that would
require stockholder approval under any applicable law. No termination or
amendment may affect any outstanding award unless expressly provided by the
Board; and, in any event, the Board may not adversely affect an outstanding
award without the consent of the participant unless necessary to comply with
any
applicable law.
DEFINITIVE
PROXY MATERIALS
Option
Grants
Pursuant
to the proposed amendment to the 2003 Plan, executives, non-employee directors,
key employees, and consultants may be granted options to purchase shares of
common stock of the Company. Subject to appropriate adjustment in the event
of
any change in our capital structure, we may not grant to any one executive
or
employee participant in any fiscal year incentive options which exceed $100,000
in value on date of grant. Each option granted under the 2003 Plan must be
evidenced by a writing specifying the number of shares subject to the option
and
the other terms and conditions of the option, consistent with the requirements
of the 2003 Plan. The 2003 Plan provided that the options shall not be
transferable. Pursuant to Board Resolution and as permitted under SEC rules,
the
options may now be transferable to family members in connection with a holder’s
estate planning activities and pursuant to a matrimonial court order. The
exercise price of each non-statutory stock option may not be less than the
fair
market value of a share of our common stock on the date of grant. Options become
vested and exercisable at such times or upon such events and subject to such
terms, conditions, performance criteria or restrictions as specified by the
Board. The maximum term of any statutory or non-statutory option granted under
the 2003 Plan is ten years. Subject to the term of the option, an option
generally will remain exercisable for three months following the Optionee’s
termination of service, except that if service terminates as a result of the
Optionee’s death or disability, the option generally will remain exercisable for
twelve months, or if service is terminated for cause, the option will terminate
immediately or as otherwise provided by the Board. All options granted under
the
Plan may not be assigned or transferred except family members or pursuant to
an
order in a matrimonial proceeding.
Effect
of Option Grants
Each
time
options are issued and exercised, there is an impact on our book value per
share
and each shareholder’s percentage ownership of outstanding shares. Due to the
current requirement for the Company to expense stock options, issuance of the
restricted options may have the effect of decreasing the book value per share
of
the outstanding shares. The exercise price of the restricted options will have
the effect of increasing the book value per share of all outstanding shares,
but
shall have the simultaneous effect of decreasing the percentage ownership of
each outstanding shareholder. In addition, shareholders should also be aware
that it is likely that the restricted stock option holder will exercise the
option at a time that we would be able to sell our shares at a higher price
than
the exercise price.
Change
in Control
In
the
event of a “change in control” of the Company, the surviving, continuing,
successor or purchasing entity or its parent may, without the consent of any
participant, either assume all outstanding options or substitute substantially
equivalent options or rights for its stock. If outstanding options are not
assumed or replaced, then all unexercised and unvested portions of such
outstanding awards will become immediately exercisable and vest in full. Any
stock options which are not assumed in connection with a Change in Control
or
exercised prior to a Change in Control will terminate effective as of the Change
in Control. In addition, the Administrator may provide in any stock bonus
agreement for acceleration of vesting of an award effective as of the Change
in
Control. A “change in control” for this purpose occurs if an Ownership Change
Event or series of related Ownership Change Events (collectively, a "Transaction")
in
which the stockholders of the Company immediately before the Transaction do
not
retain immediately after the Transaction, direct or indirect beneficial
ownership of more than 50% of the total combined voting power of the outstanding
voting securities of the Company or, in the case of an Ownership Change Event,
the entity to which the assets of the Company were transferred. An "Ownership
Change Event" will
be
deemed to have occurred if any of the following occurs with respect to the
Company: (i) the direct or indirect sale or exchange by the stockholders of
the
Company of all or substantially all of the voting stock of the Company; (ii)
a
merger or consolidation in which the Company is a party; (iii) the sale,
exchange, or transfer of all or substantially all of the assets of the Company
(other than a sale, exchange or transfer to one or more subsidiaries of the
Company); or (iv) a liquidation or dissolution of the Company.
DEFINITIVE
PROXY MATERIALS
U.S.
Federal Income Tax Consequences
The
following is a brief description of the U.S. federal income tax treatment that
will generally apply to option grants and stock bonuses made under the 2003
Plan, based on U.S. federal income tax laws in effect on the date of this proxy
statement. Non-employee directors and consultants who participate in the 2003
Plan are advised to consult with their own tax advisors for particular federal,
as well as state and local, income and any other tax advice. The grant of a
non-statutory stock option exercisable at the then current market price for
the
shares generally is not a taxable event for the Optionee. Upon exercise of
the
option, the Optionee will generally recognize ordinary income in an amount
equal
to the excess of the fair market value of the stock acquired upon exercise
(determined as of the date of the exercise) over the exercise price of such
option, and the Company will be entitled to a tax deduction equal to such
amount. Unless a recipient makes an election under Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), within 30 days after receiving
the stock bonus award, the recipient generally will not be taxed on the receipt
of the stock until the restrictions on the stock if any, expire or are removed.
When the restrictions expire or are removed, the recipient recognizes ordinary
income (and the Company is entitled to a deduction) in an amount equal to the
fair market value of the stock at that time. If, however, the recipient makes
a
timely Section 83(b) election, he or she will recognize ordinary income (and
the
Company will be entitled to a deduction) equal to the fair market value of
the
stock on the date of receipt (determined without regard to vesting
restrictions). A non-employee director or consultant director who makes a
Section 83(b) election will ordinarily not be entitled to recognize any loss
thereafter attributable to the shares as a result of forfeiture.
We
believe the 2003 Plan, as amended, to increase the number of shares of common
stock reserved under the 2003 Plan is in the best interests of our stockholders
and is necessary in order to compete for and continue to attract and retain
qualified executives, key employees, independent or employee directors and
consultants. The Plan as amended, authorizes the grant of options to purchase
up
to an additional __ Million shares of common stock, to incentivize key employees
and compensate our directors who are not compensated for their services as
such.
Although the exercise of the options would tend to increase the book value
per
share of our company, the future grant and exercise of the options would tend
to
dilute the percentage ownership of stockholders. Furthermore, the nature of
the
options is such that the options would be exercised by the option holder at
a
time that we likely would be able to derive a higher price for our shares than
the exercise price.
Required
Vote of Adoption
Under
Delaware Law the affirmative vote of majority of the outstanding shares of
common stock is required for approval of PROPOSAL
THREE (A) AND (B). Proposal
Three (A) seeks to increase the maximum aggregate number of shares of common
stock reserved and available for future issuance from 1.2 Million shares to
1.7
Million shares, an increase of 500,000 shares; Proposal Three (B) seeks approval
for the grant of 65,000 restricted options to certain independent directors
and
officers.
DEFINITIVE
PROXY MATERIALS
THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” (A)
RATIFYING
AND
APPROVING THE AMENDMENT TO THE 2003 PLAN AND “FOR” (B) APPROVING THE
GRANT
OF OPTIONS TO CERTAIN INDEPENDENT OFFICERS AND DIRECTORS.
DEFINITIVE
PROXY MATERIALS
PROPOSAL
FOUR
RATIFY
AND APPROVE THE PRIOR GRANT OF 442,500 RESTRICTED
STOCK
OPTIONS TO EXECUTIVE OFFICERS, DIRECTORS,
KEY
EMPLOYEES AND CONSULTANTS IN 2005.
Background
In
May,
2005, there remained only a limited number of shares reserved for issuance
upon
exercise of stock options to be granted under our existing Stock Option Plans
previously approved by shareholders. At that time it was determined by
management that 442,500 options should be granted to the directors for the
previous year’s services and the non-director executive officers, a limited
number of key employees and consultants as deemed merited for a job well done
during the prior year. Of the aforesaid amount, a total of 225,000 options
were
granted to officers and directors. Inasmuch as there was a negligible amount
of
shares reserved and remaining under our existing shareholder approved plans,
management determined to issue the options in the form of restricted stock
options to the aforesaid recipients. These options, under the American Stock
Exchange rules (as recently amended), require shareholder approval. Accordingly,
we have included such request for shareholder approval as Proposal Four in
our
current Proxy.
Restricted
Options
The
restricted options for which management is seeking approval were originally
granted after much reflection by management and were awarded to directors as
their sole form of compensation for their services as such in the preceding
fiscal year, and to the executive officers, key employees and selected
consultants as an incentive and in recognition for the performance of their
services on behalf of our Company. Accordingly, during 2005, for their
respective services rendered in 2004, each director and each non-director
Executive Officer was granted 25,000 share options and Messrs. Madden and Norman
each received additional 10,000 share options for their services on the Audit
Committee. As indicated previously, we are very proud of our staff and its
capacity to produce and manufacture sophisticated electrosurgical products
recognized to be of high quality by our peers in the industry. In order to
maintain a high degree of competence, the granting of stock options is one
of
the most commonly utilized means by which companies incentivize their key
executives, employees and directors, attract potential key employees and
otherwise compete with other companies for the best qualified personnel. This
form of recognition and reward is deemed by management to be essential to our
continuance as a leader in our technological field of production and
manufacturing of high quality electrosurgical equipment.
This
Proposal Four relates only to the restricted shares underlying the 442,500
options previously granted in May and November, 2005 and does not relate to
any
shares that may underlie our 2003 Plan as proposed to be amended (Proposal
Three
(A)) or any of our previously adopted Stock Option Plans, all of which reserved
shares have already been approved by shareholders. Proposal Three (A) (which
does not in any way relate or pertain to the 2005 options granted) seeks to
amend the 2003 Executive and Employees Stock Option Plan, by increasing the
number of shares reserved under the Plan from 1.2 million shares to 1.7 millions
shares, a total of 500,000 shares of common stock to underlie options or grants
for use in the future as incentive grants to officers, directors, key employees
and consultants. None of the proposed newly reserved shares of common stock
under Proposal Three (A) will be used as a reserve for the restricted options
granted in 2005, which are discussed under this Proposal Four.
Management
is seeking shareholder approval of this Proposal Four because of an American
Stock Exchange Rule which was adopted several months prior to the granting
of
the restricted stock options by management in May 2005. Although the facts
concerning the issuance of the restricted options were disclosed to shareholders
in the various Company filings last year, formal approval of shareholders is
required in order for the option holders to be able to exercise their option.
Accordingly, we have included Proposal Four seeking shareholder approval of
the
2005 restricted stock option grants.
DEFINITIVE
PROXY MATERIALS
The
restricted stock options are exercisable over a 10-year period and have similar
provisions for vesting as those covered by our existing shareholder approved
plans. i.e., unless management determines the vesting to be immediate, 20%
of
each option vests each year or 100% at the end of five years. However, if a
recipient has been affiliated or employed with the Company for a total of at
least five years, then the options vest immediately for such recipient. Usually
options for non-employee directors are vested immediately upon issuance to
them
regardless of the amount of time they have been affiliated with our Company.
The
restricted options in Proposal Four each bear an exercise price equal to 100%
of
the market value for the shares of common stock of our Company as indicated
on
the American Stock Exchange at the close of business on the date the options
were granted, or a price of $2.25 per share. When these restricted options
are
exercised the owner receives “restricted” common stock which he or she cannot
immediately sell or transfer and each certificate will bear a restrictive legend
to the effect that the shares represented by the certificate have not been
registered under the Securities Act of 1933, as amended, (the ”Act”) and may not
be transferred or sold unless such shares are the subject of an effective
registration statement duly filed with the SEC or the issuer is furnished with
an opinion of counsel, satisfactory to it, that registration is not required
under the Act. After at least one year of ownership of the restricted stock,
holders of restricted shares that desire to sell usually rely on an exemption
from registration found under Rule 144 promulgated under the Act which requires
that the owner own the shares for at least one year before selling or
transferring them. In addition at the time of sale (a) the seller has to file
a
form 144 with the SEC, (b) the Company’s filings must be current with the SEC,
and (c) the shares are to be sold in ordinary brokerage transactions or directly
to market makers. After two years, the owner of the restricted shares, if he
is
not an affiliate of our Company, may have the legend removed and sell them
as he
sees fit. Affiliates must continue to observe the requirements of Rule 144
regardless of how long the shares have been held, unless the shares are
effectively registered with the SEC under the Act. Reference is made to the
discussion under Proposal Three for further details concerning options in
general.
In
the
event shareholders fail to approve Proposal Four, the effect will be that the
holders of the options will be deprived of their right to exercise them so
long
as our Company is a member of the American Stock Exchange.
MANAGEMENT
UNANIMOUSLY RECOMMENDS THE SHAREHOLDERS VOTE “FOR”
RATIFICATION
AND APPROVAL PROPOSAL FOUR.
DEFINITIVE
PROXY MATERIALS
BOVIE
MEDICAL CORPORATION
PROXY
PROXY
FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 30,2007. THIS PROXY
IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby acknowledges receipt of Notice of Annual Meeting of
Stockholders and Proxy Statement of Bovie Medical Corporation in connection
with
the 2007 Annual Meeting to be held on October 30, 2007, and appoints Andrew
Makrides and George W. Kromer, Jr., or either of them, proxy with power of
substitution, for and in the name of the undersigned, and hereby authorizes
each
or either of them to represent and to vote, all the shares of common stock
of
Bovie Medical Corporation, a Delaware corporation ("Company"), that the
undersigned would be entitled to vote at our Annual Meeting of Stockholders
("Annual Meeting") on October 30, 2007 and at any adjournments thereof, upon
the
matters set forth in the Notice of Annual Meeting, hereby revoking any proxy
heretofore given. The proxy holder appointed hereby is further authorized to
vote in his discretion upon such other business as may properly come before
the
Annual Meeting. This proxy will be voted as specified. If
no direction is made, this proxy will be voted in favor of all
proposals.
THE
BOARD RECOMMENDS A VOTE "FOR" EACH NOMINEE AND “FOR” PROPOSALS 2, 3(A) and (B)
and 4.
PROPOSAL
ONE
Election
of Directors (check one box only)
FOR
[ ] AGAINST [ ]
EACH
NOMINEE LISTED:
Andrew
Makrides
J.
Robert
Saron
Randy
Rossi
Michael
Norman
George
W.
Kromer, Jr.
Brian
Madden
August
Lentricchia
(Instruction:
To withhold authority to vote for any nominee, circle that nominee's name in
the
above list)
(Continued
and to be signed and dated on reverse side)
(Back
of
Proxy)
PROXY
(Please
sign and date below)
DEFINITIVE
PROXY MATERIALS
PROPOSAL
TWO
To
ratify
the selection of Kingery & Crouse, PA as independent auditors for the
Company.
FOR
[
] AGAINST [ ] ABSTAIN [ ]
PROPOSAL
THREE
(A)
To
ratify and approve an amendment increasing the number of shares reserved under
our 2003 Executive and Employee Stock Option Plan
FOR
[ ] AGAINST [ ] ABSTAIN [ ]
(B)
To
approve the grant of 65,000 restricted options to independent directors and
officers in January and March, 2007.
FOR
[ ] AGAINST [ ] ABSTAIN [ ]
PROPOSAL
FOUR
To
ratify
and approve 442,500 restricted stock options issued in 2005 to executives,
directors, key employees and certain consultants.
FOR
[
] AGAINST [ ] ABSTAIN [ ]
Dated:_________________________,
2007
(Please
Print Name)
(Signature
of Stockholder) (Title, if applicable)
(Please
Print Name)
(Signature
of Stockholder) (Title, if applicable)
NOTE:
PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS SET FORTH HEREON. FOR JOINTLY OWNED
SHARES, EACH OWNER SHOULD SIGN. IF SIGNING AS ATTORNEY, EXECUTOR, COMMITTEE,
TRUSTEE OR GUARDIAN, PLEASE INDICATE THE CAPACITY IN WHICH YOU ARE ACTING.
PROXIES EXECUTED BY CORPORATIONS SHOULD BE SIGNED BY A DULY AUTHORIZED OFFICER.
PLEASE DATE AND SIGN THIS PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.