SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
REGENERATION TECHNOLOGIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / 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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applies:
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(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):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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REGENERATION TECHNOLOGIES, INC.
ONE INNOVATION DRIVE
ALACHUA, FLORIDA 32615
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Regeneration Technologies, Inc., to be held on Thursday, May 24, 2001 at
11:00 A.M., Eastern Standard Time, at the Tampa Airport Marriott, Tampa
International Airport, Tampa Florida.
The formal Notice of Meeting and the accompanying Proxy Statement sets forth
proposals for your consideration this year. You are being asked to elect one
director and to ratify the appointment of Deloitte & Touche LLP as our
independent certified public accountants for the fiscal year ending
December 31, 2001.
At the meeting, the board of directors will also report on our affairs and
we will provide a discussion period for questions and comments of general
interest to stockholders.
We look forward to personally greeting those of you who are able to be
present at the meeting. However, whether or not you are able to be with us at
the meeting, it is important that your shares be represented. Accordingly, we
request that you sign, date and mail, at your earliest convenience, the enclosed
proxy in the envelope provided for your use.
Thank you for your cooperation.
Very truly yours,
/s/ James M. Grooms
James M. Grooms
President and Chief Executive Officer
April 24, 2001
REGENERATION TECHNOLOGIES, INC.
ONE INNOVATION DRIVE
ALACHUA, FLORIDA 32615
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice Is Hereby Given that the Annual Meeting of Stockholders of
Regeneration Technologies, Inc. will be held on Thursday, May 24, 2001 at
11:00 A.M., Eastern Standard Time, at the Tampa Airport Marriott, Tampa
International Airport, Tampa, Florida for the following purposes:
(1) To elect one director to serve for the ensuing three years;
(2) To consider and act upon a proposal to ratify the appointment of
Deloitte & Touche LLP as independent certified public accountants for the
fiscal year ending December 31, 2001; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 10, 2001 will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
We cordially invite all stockholders to attend the Annual Meeting in person.
HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, WE URGE
YOU TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY
IN THE ENVELOPE PROVIDED. No postage is required if you mail the proxy in the
United States. Stockholders who attend the Annual Meeting may revoke their proxy
and vote their shares in person.
By Order of the Board of Directors
/s/ James M. Grooms
James M. Grooms
Chairman of the Board
April 24, 2001
REGENERATION TECHNOLOGIES, INC.
ONE INNOVATION DRIVE
ALACHUA, FLORIDA 32615
PROXY STATEMENT
GENERAL INFORMATION
GENERAL
This Proxy Statement (first mailed on or about April 26, 2001) is furnished
to the holders of our common stock of as part of the solicitation by our board
of directors of proxies for use at the Annual Meeting of Stockholders or at any
adjournment thereof. The Annual Meeting will be held on Thursday, May 24, 2001,
at 11:00 A.M., Eastern Standard Time, at the Tampa Airport Marriott, Tampa
International Airport, Tampa, Florida.
We are holding the Annual Meeting in order to: (1) elect one director for
the ensuing three years, and (2) ratify the appointment of Deloitte & Touche LLP
as our independent certified public accountants for the fiscal year ending
December 31, 2001.
Our management is not currently aware of any other matters to come before
the Annual Meeting. If any other matters properly come before the Annual
Meeting, the persons designated as proxies intend to vote in accordance with
their best judgment on these matters.
Proxies for use at the Annual Meeting are being solicited by our board of
directors. Proxies will be solicited chiefly by mail; however, certain of our
officers, directors, employees and agents, none of whom will receive additional
compensation for their efforts, may solicit proxies by telephone, telegram or
other personal contact. We will bear the cost of the solicitation of the
proxies, including postage, printing and handling, and will reimburse the
reasonable expenses of brokerage firms and others for forwarding material to
beneficial owners of shares of our common stock.
REVOCABILITY AND VOTING OF PROXY
We are enclosing a form of proxy for use at the Annual Meeting and a return
envelope for the proxy. You may revoke the authority granted by the execution of
a proxy at any time before the effective exercise of the powers conferred by
that proxy by: (1) filing with the Secretary a written notice of revocation or a
duly executed proxy bearing a later date, or (2) by voting in person at the
Annual Meeting. Shares of our common stock represented by properly executed and
unrevoked proxies will be voted in accordance with the instructions specified in
such proxies.
RECORD DATE AND VOTING RIGHTS
On April 10, 2001, there were 21,669,663 shares of our common stock
outstanding, each of which is entitled to one vote upon each of the matters to
be presented at the Annual Meeting. Only stockholders of record at the close of
business on April 10, 2001 are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof. The holders of a majority of the outstanding
shares of our common stock, present in person or by proxy and entitled to vote,
will constitute a quorum at the Annual Meeting. If you do not vote for a nominee
or proposal, or you indicate "withholding authority" or "abstain" on your proxy
card, your vote will not count either for or against the nominee or proposal.
Also, if your broker does not vote on either or both of the proposals, it will
have no effect on the vote with respect to that proposal. However, abstentions
and broker non-votes will be counted for purposes of determining the presence or
absence of a quorum.
The affirmative vote of the holders of a plurality of the shares of our
common stock present in person or represented by proxy and entitled to vote at
the Annual Meeting is required for the election of directors and for the
ratification of the appointment of Deloitte & Touche LLP.
The following table sets forth information as of April 2, 2001 regarding the
beneficial ownership of our common stock by: (1) each person known by us to own
beneficially more than 5% of our outstanding common stock; (2) each of our
directors and nominees for director; (3) each executive officer named in the
Summary Compensation Table below; and (4) all of our directors and executive
officers as a group. Except as otherwise specified, the named beneficial owner
has the sole voting and investment power over the shares listed. Unless
otherwise indicated, the address of the beneficial owner is: c/o Regeneration
Technologies, Inc., One Innovation Drive, Alachua, Florida 32615.
SHARES BENEFICIALLY
OWNED (1)
--------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
------------------------------------ --------- --------
James M. Grooms (2)......................................... 2,400,000 11.1
Richard R. Allen............................................ 480,000 2.2
David Bilyeu................................................ -- *
James P. Abraham (3)........................................ 23,200 *
Thomas E. Brewer (3)........................................ 61,400 *
Frederick C. Preiss (3)..................................... 26,400 *
Philip R. Chapman (4)....................................... 1,014,395 4.7
Peter F. Gearen (3)......................................... 14,400 *
Michael J. Odrich (5)....................................... 1,629,485 7.5
Anthony C. Phillips (3)..................................... 14,400 *
Daniel L. Weber (6)......................................... 12,600 *
The University of Florida Research Foundation (7)........... 3,500,000 16.2
LB I Group Inc.............................................. 1,624,685 7.5
c/o Lehman Brothers Inc.
3 World Trade Center
New York, New York 10285(5)
All executive officers and directors as a group 5,676,280 26.2
(11 persons) (8)..........................................
------------------------
* Represents beneficial ownership of less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities.
(2) Represents shares held by James M. Grooms Trust. Mr. Grooms is the trustee
and beneficial owner. Also includes 792,000 shares held by the Lisa
Wasshausen Limited Trust over which Mr. Grooms may be deemed to hold
beneficial ownership.
(3) Represents options to purchase shares of our common stock.
(4) Includes options to purchase 2,978 shares of our common stock and includes
962,558 shares held by Euro-America-II, L.P. and options to purchase 7,800
shares also held by Euro-America-II, L.P., which Mr. Chapman may be deemed
to beneficially own by virtue of his interest in the general partner of
Euro-American-II, L.P. Mr. Chapman disclaims beneficial ownership of all
shares other than those held in his name.
(5) Includes an option to purchase 4,800 shares of our common stock. We have
been advised that Michael J. Odrich has investment control with respect to
shares of our common stock held by LB I Group Inc., a wholly-owned
subsidiary of Lehman Brothers Holdings Inc. The LB I holding includes
options to purchase 9,600 shares of our common stock. Mr. Odrich disclaims
beneficial ownership of all shares other than those held in his name.
(6) Includes an option to purchase 9,600 shares of our common stock.
(7) The University of Florida Research Foundation is a charitable foundation
operated on behalf of the University of Florida to maintain investments of
gifts and bequests to the University of Florida.
(8) Includes options to purchase 174,578 shares of our common stock.
2
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Our board is divided into three classes with each director serving a
three-year term and one class being elected each year. Messrs. Weber and Grooms
are in the class of directors whose term expires in 2001. Mr. Weber is resigning
effective with the expiration of his term. Dr. Gearen and Mr. Odrich are in the
class of directors whose term expires in 2002. Messrs. Phillips and Chapman are
in the class of directors whose term expires in 2003. Each of these individuals
will serve as a director until his term ends, subject to his earlier death,
resignation or removal.
At the Meeting, one director is to be elected to serve a three-year term
until the 2004 annual meeting of stockholders and until such director's
successor shall be elected and qualified. It is the intention of the persons
named in the accompanying form of proxy to nominate as a director and, unless
otherwise specified in a proxy by a stockholder, to vote such proxy for the
election of the person named below. In the event the nominee should become
unable to serve as a director, an eventuality which management has no reason to
believe will occur, proxies may be voted for another nominee. Each person named
below is presently serving as a director of the Company. The nominee has
consented to be named and has indicated his intent to serve if elected.
The nominee and our continuing directors, their respective ages, the year in
which each first became one of our directors and their principal occupations or
employment during the past five years are as follows:
YEAR
FIRST
BECAME
NOMINEE AGE DIRECTOR EMPLOYMENT HISTORY
------- -------- -------- ------------------
DIRECTOR FOR ELECTION
FOR A TERM ENDING 2004
James M. Grooms........................ 40 1998 Mr. Grooms has been our President, Chief
Executive Officer and Chairman since we began
operations in February 1998. From 1995 until
joining us, he served as President and Chief
Executive Officer of University of Florida
Tissue Bank, Inc. Mr. Grooms was the inventor
of certain of our intellectual property
rights to key aspects of our allograft
technology. Mr. Grooms holds a B.S. in
Biology from Old Dominion University.
CONTINUING DIRECTORS
TERM ENDING 2002
Peter F. Gearen........................ 39 1998 Dr. Gearen has served as a member of our
board of directors since we began operations
in February 1998. Dr. Gearen was Chief of
Staff at the Shands Hospital at the
University of Florida and served as Assistant
Dean of Clinical Affairs at the University of
Florida College of Medicine from 1992 until
1999. He also has been an Associate Professor
at the University of Florida College of
Medicine since 1993. Dr. Gearen is also a
director of Motion Engineering, Inc. He holds
a B.A. from Spring Hill College and an M.D.
from the Stritch Loyola Medical School.
3
YEAR
FIRST
BECAME
NOMINEE AGE DIRECTOR EMPLOYMENT HISTORY
------- -------- -------- ------------------
Michael J. Odrich...................... 36 1998 Mr. Odrich has served as a member of our
board of directors since we began operations
in February 1998. Mr. Odrich is a Managing
Director of Lehman Brothers Inc. and Head of
the Firm's Private Equity Division. He also
is a member of the Lehman Brothers Operating
Committee and Investment Committee. Mr.
Odrich is a director of Tachion Networks,
Inc. Mr. Odrich holds a B.A. from Stanford
University and received an M.B.A. from
Columbia University.
TERM ENDING 2003
Philip R. Chapman 39 1998 Mr. Chapman has served as a member of our
board of directors since we began operations
in February 1998. He is the President of
Venad Administrative Services, Inc. and has
been a General Partner of Adler & Company
since 1995. Mr. Chapman is also a director of
Shells Seafood Restaurants, Inc. He holds a
B.S. and an M.B.A. from Columbia University.
Anthony C. Phillips.................... 54 1998 Mr. Phillips has served as a member of our
board of directors since 1998. Mr. Phillips
has served as President, Chief Executive
Officer and a director of Raymedica, Inc.
since 1995. Mr. Phillips holds a B.S. from
the University of Tennessee.
TERM ENDING 2001
Daniel L. Weber........................ 69 1999 Mr. Weber has served as a member of our board
of directors since 1999. He has served as a
President and Chief Executive Officer of
Marley Manufacturing Corporation since 1986.
Our board of directors met three times and acted by written consent six
times in fiscal year 2000 with each director attending at least 75% of the total
number of meetings.
Our board of directors has an Audit Committee and a Compensation Committee.
Our Compensation Committee is currently comprised of Messrs. Chapman and
Phillips. This committee is charged with reviewing and approving the
compensation and benefits of our key executive officers, administering our
employee benefits plans and making recommendations to the full board of
directors regarding these matters.
Our Audit Committee is currently comprised of Messrs. Chapman, Phillips and
Gearen and was formed on April 25, 2000. The functions performed by our Audit
Committee include recommending to our board of directors the engagement of
independent accountants for both audit functions and for advisory and other
consulting services and reviewing our audited financial statements and
accounting practices. We have adopted an Audit Committee Charter, a copy of
which is attached to this proxy statement as Exhibit A. The Audit Committee met
two times during 2000. Messrs. Chapman, Phillips and Gearen are independent
directors as "independence" is defined in the rules of the Nasdaq Stock Market.
4
VOTE REQUIRED
The nominee receiving the highest number of affirmative votes of the shares
present in person or represented by proxy and entitled to vote shall be elected
as director. If you do not vote for a nominee, or you indicate "withholding
authority" on your proxy card, your vote will not count either for or against
the nominee. Also, if your broker does not vote on this proposal it will have no
effect on the election.
THE BOARD OF DIRECTORS DEEMS THE ELECTION OF THE NOMINEE LISTED ABOVE AS
DIRECTORS TO BE IN THE COMPANY'S BEST INTERESTS AND IN THE BEST INTERESTS OF ITS
STOCKHOLDERS AND RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEE.
5
EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and non-cash
compensation awarded to, earned by or paid to our chief executive officer and
each of our executive officers whose total annual compensation during the fiscal
year ended December 31, 2000 for services rendered to us was $100,000 or
greater.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
--------------------------------- ---------------------------------------
NUMBER OF SECURITIES
RESTRICTED STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR (1) SALARY ($) BONUS ($) AWARDS ($) OPTIONS (#)
--------------------------- -------- ---------- --------- ---------------- --------------------
James M. Grooms..................................... 2000 $225,342 -- -- --
President, Chief Executive Officer and Chairman 1999 202,304 -- -- --
1998 164,770 -- $19,254 --
Richard R. Allen.................................... 2000 150,246 -- -- --
Chief Financial Officer, Secretary and Treasurer 1999 131,733 -- -- --
1998 113,114 -- 102,000 --
David Bilyeu (2).................................... 2000 96,107 -- -- 240,000
Vice President--Administrative Services 1999 -- -- -- --
1998 -- -- -- --
James P. Abraham.................................... 2000 156,281 $50,309 -- 132,000
Vice President of Sales 1999 150,000 56,362 -- --
1998 18,697 -- -- 84,000
Thomas E. Brewer.................................... 2000 155,831 -- -- --
Vice President of Marketing 1999 155,400 -- -- --
1998 105,029 -- -- 216,000
Frederick C. Preiss................................. 2000 157,446 -- -- --
Vice President of Operations 1999 131,733 -- -- 132,000
1998 -- -- -- 84,000
------------------------------
(1) Compensation for 1998 is for the period from February 12, 1998, the date we
began operations, through December 31, 1998.
(2) Mr. Bilyeu joined us as Vice President--Administrative Services on
October 2, 2000.
6
The following table sets forth information on option grants in the fiscal
year ended December 31, 2000 to the persons named in the Summary Compensation
Table.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
NUMBER OF % OF OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM (1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------
NAME GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
---- ---------- ------------- ----------- ---------- ------------ ------------
James M. Grooms................... -- -- -- -- -- --
Richard R. Allen.................. -- -- -- -- -- --
David Bilyeu...................... 240,000 22.8 $14.00 10-1-10 $2,113,086 $5,354,975
James P. Abraham.................. 132,000 12.5 3.80 2-1-10 315,454 799,421
Thomas E. Brewer.................. -- -- -- -- -- --
Frederick C. Preiss............... -- -- -- -- -- --
------------------------
(1) Amounts reflected in these columns represent hypothetical values that may be
realized upon exercise of the options immediately prior to the expiration of
their term, assuming the specified annually compounded rates of appreciation
of our common stock over the term of the options. These numbers are
calculated based on rules adopted by the Securities and Exchange Commission.
Actual gains, if any, on stock option exercises and common stock holdings
are dependent on the timing of such exercise and the future performance of
our common stock.
The following table sets forth information with respect to: (1) exercises of
stock options during fiscal year 2000 and (2) unexercised stock options held at
December 31, 2000 by the persons named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
OPTION EXERCISES HELD AT FISCAL YEAR END AT FISCAL YEAR END($) (2)
------------------------- --------------------------- ---------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
James M. Grooms.................. -- -- -- -- -- --
Richard R. Allen................. -- -- -- -- -- --
David Bilyeu..................... -- -- -- 240,000 -- $ 60,000
James P. Abraham................. -- -- 56,000 160,000 $ 435,120 1,175,280
Thomas E. Brewer................. -- -- 86,400 129,600 1,118,880 1,678,320
Frederick C. Preiss.............. -- -- 60,000 156,000 728,688 1,826,952
------------------------
(1) The "value realized" represents the difference between the exercise price of
the option and the closing price of our common stock on The Nasdaq Stock
Market on the date of exercise.
(2) The value for an "in-the-money" option represents the difference between the
exercise price of the option and the closing price of our common stock on
The Nasdaq Stock Market on December 29, 2000 of $14.25.
7
EMPLOYMENT AGREEMENTS
We entered into an employment agreement with Mr. Grooms in February 1998.
Mr. Grooms' current annual base salary is $302,225. The agreement expires in
February 2003. The agreement provides for Mr. Grooms' reimbursement for
automobile expenses and a $1,000,000 life insurance policy for Mr. Grooms'
beneficiaries. Under the employment agreement, Mr. Grooms agreed to devote 100%
of his working time to our business and affairs. Mr. Grooms also received
108,730 shares of our common stock. If we terminate Mr. Grooms' employment
without "cause," within the meaning of the employment agreement, he will be
entitled to severance pay in an amount equal to his then-current annual salary
and will be precluded from competing with us for a period of one year following
the termination of employment. If we terminate Mr. Grooms' employment for
"cause," he will not be entitled to any severance pay, and will still be
precluded from competing with us for the same one-year period.
We entered into an employment agreement with Mr. Allen in February 1998.
Mr. Allen's current annual base salary is $176,600. The agreement expires in
February 2003. Under the employment agreement, Mr. Allen agreed to devote 100%
of his working time to our business and affairs. Under the agreement, Mr. Allen
also received 576,000 shares of our common stock. These shares are subject to a
stock restriction agreement. If we terminate Mr. Allen's employment without
"cause," within the meaning of the employment agreement, he will be precluded
from competing with us in the southeastern United States for a period of
one-year following the termination. If we terminate Mr. Allen's employment for
"cause," he will be precluded from competing with us for a period of two years
following the termination.
We entered into an employment agreement with Mr. Bilyeu in September 2000.
Mr. Bilyeu's current annual base salary is $215,600. The agreement expires in
September 2002. Under the employment agreement, Mr. Bilyeu agreed to devote 100%
of his working time to our business and affairs. When he entered into the
employment agreement with us, Mr. Bilyeu received an option to purchase 240,000
shares of our common stock, which vests over time. The option is subject to a
stock option restriction agreement under which one fifth of the options vest on
each anniversary of the date of the grant. If we terminate Mr. Bilyeu's
employment without "cause," within the meaning of the employment agreement, he
will be entitled to receive severance pay in an amount equal to one-half of his
then-current annual salary and will be precluded from competing with us for a
period of two years following the termination. In the event of termination for
"cause," Mr. Bilyeu will not be entitled to severance pay, and will be precluded
from competing with us for two years following the termination.
We entered into an employment agreement with Mr. Abraham in November 1998.
Mr. Abraham's current annual base salary is $178,325. Mr. Abraham is eligible to
receive an annual bonus in an amount to be determined by the board of directors
provided we achieve certain specified revenue levels. The agreement expires in
November 2003. Under the employment agreement, Mr. Abraham agreed to devote 100%
of his working time to our business and affairs. When he entered into the
employment agreement with us, Mr. Abraham received an option to purchase 84,000
shares of our common stock, which vests over time. The option is subject to a
stock option restriction agreement under which one fifth of the options vest on
each anniversary of the date of the grant. If we terminate Mr. Abraham's
employment without "cause," within the meaning of the employment agreement, he
will be entitled to receive severance pay in an amount equal to one-half of his
then-current annual salary and will be precluded from competing with us for a
period of one year following the termination. In the event of termination for
"cause," Mr. Abraham will not be entitled to severance pay, and will be
precluded from competing with us for three years following the termination.
We entered into an employment agreement with Mr. Brewer in June 1998.
Mr. Brewer's current annual base salary is $177,800. The agreement expires in
June 2003. Under the employment agreement, Mr. Brewer agreed to devote 100% of
his working time to our business and affairs. When he entered
8
into the employment agreement with us, Mr. Brewer received an option to purchase
216,000 shares of our common stock, which vests over time. This option is
subject to a stock option agreement under which one fifth of the options vest on
each anniversary of the date of the grant. If we terminate Mr. Brewer's
employment without "cause," within the meaning of the employment agreement, he
will be entitled to severance pay in an amount equal to one-half of his then
current annual salary and he will be precluded from competing with us for a
period of two years following the termination. In the event of termination for
"cause," Mr. Brewer will not be entitled to severance pay, and will be precluded
from competing with us for the two years following the termination.
We entered into an employment agreement with Mr. Preiss in November 1998.
Mr. Preiss' current annual base salary is $183,400 for serving as our Vice
President of Operations. The agreement expires in November 2003. Under the
employment agreement, Mr. Preiss agreed to devote 100% of his working time to
our business and affairs. When he entered into the employment agreement with us,
Mr. Preiss received an option to purchase 84,000 shares of our common stock,
which vests over time. If we terminate Mr. Preiss' employment without "cause,"
within the meaning of the employment agreement, he will be entitled to severance
pay in an amount equal to one-half of his then-current annual salary, to be paid
out monthly, and he will be precluded from competing with us for a period of one
year following the termination. If we terminate Mr. Preiss' employment with us
for "cause," Mr. Preiss will not be entitled to severance pay, and will be
precluded from competing with us for the three years following the termination.
YEAR 2000 INCENTIVE COMPENSATION PLAN
In January 2000, our board of directors and stockholders adopted the
Regeneration Technologies, Inc. Year 2000 Incentive Compensation Plan. If we
achieve certain profit levels, the plan allows for the creation of an incentive
pool and eligible employees receive cash awards from the pool on the basis of
the achievement of individual and departmental goals. The board of directors
reviews and approves this plan annually and our Chief Financial Officer
administers the plan.
At the profit levels we achieved for 2000, we accrued $587,502 in the
incentive pool at year-end to pay awards to employees below the officer and
executive management level. We paid these awards to the recipients during 2001.
The awards were based on the achievement of individual goals by the recipients,
as well as the achievement of departmental goals. No awards were paid to officer
and executive management level employees for 2000.
COMPENSATION OF DIRECTORS
Our directors who are also our employees or officers do not receive any
compensation specifically related to their activities as directors, other than
reimbursement for expenses incurred relating to their attendance at meetings of
the board of directors. Beginning January 1, 2001, our non-employee directors
are eligible to receive an annual retainer of $12,000, to be paid in advance
quarterly. In addition, our non-employee directors are eligible to receive a
stipend of up to $1,000 per meeting, as well as reimbursement for their expenses
incurred relating to their attendance at meetings of the board of directors.
Under our Omnibus Stock Plan, at the discretion of our board of directors or
Compensation Committee, our directors also are eligible to receive awards of
non-qualified stock options. In 1999, each of our non-employee directors
received a grant of an option to purchase 14,400 shares of our common stock. In
2000, four of our non-employee directors received a grant of an option to
purchase 14,400 shares of our common stock and one of our non-employee directors
received a grant of an option to purchase 4,325 shares of our common stock.
9
OMNIBUS STOCK PLAN
In July 1998, our board of directors and stockholders adopted the
Regeneration Technologies, Inc. Omnibus Stock Plan. A maximum of 4,406,400
shares have been authorized for issuance pursuant to that plan. Through
December 31, 2000, we issued options to purchase 2,277,518 shares of our common
stock to our directors, officers, employees and various third parties which
provide services to us. Of these options 450,276 currently are exercisable. The
exercise prices of the options granted under the Omnibus Stock Plan range from
$1.30 to $14.00. The purposes of the plan are to promote our long-term growth
and profitability by providing key personnel with incentives to improve
stockholder value and to enable us to attract, retain and reward skilled
employees. There are an additional 2,128,882 shares of our common stock
available for issuance under the plan.
The plan permits the granting of stock options (including incentive stock
options qualifying under Section 422 of the Internal Revenue Code of 1986 and
non-qualified stock options), stock appreciation rights, restricted or
unrestricted stock awards, phantom stock, performance awards, or any combination
of the foregoing.
The plan is administered by our board of directors or any committee it may
designate for this purpose. The board of directors makes the determination with
respect to awards under the plan, including which eligible individuals are to
receive awards under the plan and the specific terms, vesting conditions, if
any, and number of shares of stock to which each award relates. Additionally,
the board of directors may grant awards with different terms and conditions and
also may accelerate the vesting of outstanding awards and options at any time.
At the time the options are granted, the board of directors will set the price
at which options can be exercised. However, options intended to qualify as
incentive stock options as defined in Section 422 of the Internal Revenue Code
of 1986 must have an exercise price at least equal to fair market value.
Option holders do not and will not have any rights as stockholders until
they have exercised their options. The number of shares of our common stock
covered by awards will be adjusted in the event of any stock split, merger,
recapitalization or similar corporate event. This plan has a term of ten years,
and expires in July 2009.
GENERAL. The Compensation Committee, presently consisting of
Messrs. Chapman and Phillips, was established on April 3, 1998 and is
responsible for the planning, review and administration of Regeneration
Technologies' executive compensation program. Prior to the establishment of the
Compensation Committee, the board of directors administered the executive
compensation programs, monitored corporate performance and its relationship to
compensation of executive officers and made appropriate decisions concerning
matters of executive compensation.
Our objective is to provide a superior return to stockholders. To support
this objective, we believe we must attract, retain and motivate top quality
executive talent. The executive compensation program we adopt is a critical tool
in this process. The executive compensation program is designed to link
executive compensation to Regeneration Technologies' performance through at-risk
compensation opportunities, providing significant reward to executives based on
Regeneration Technologies' success. The executive compensation program consists
of base salary, annual cash incentive opportunities and long-term incentives
represented by stock options.
BASE SALARY. The Compensation Committee recognizes the importance of a
competitive compensation structure in retaining and attracting senior
executives. The Compensation Committee annually reviews and establishes
executive salary levels. The salaries received by executives generally reflect
their levels of responsibility and other factors such as assessments of
individual performance.
As described above, the compensation of Mr. Grooms, Chief Executive Officer,
was $225,342 during 2000. This, along with the other compensation provided for
in Mr. Grooms' employment agreement, reflected the board of directors' agreement
on Mr. Grooms' contributions during 1999 and
10
2000, including Mr. Grooms' performance in strategically positioning
Regeneration Technologies for future growth.
YEAR 2000 INCENTIVE COMPENSATION PLAN. Executive officers are eligible for
annual cash performance bonuses under the Year 2000 Incentive Compensation Plan,
as described above. The Year 2000 Incentive Compensation Plan is designed to
create an additional incentive for certain executive officers and employees to
grow Regeneration Technologies' business while continuing to focus on operating
income. The Compensation Committee believes that this form of compensation helps
to more closely align the interests of employees with the interests of
stockholders. For 2000, no payments were made under the Year 2000 Incentive
Compensation Plan.
STOCK OPTIONS. Stock option grants have historically been used by
Regeneration Technologies as part of its compensation program for employees,
including executives and management team members. The stock option program
permits employees to buy a specific number of shares of common stock in the
future. Since stock options gain value only if the price of the common stock
increases above the option exercise price, the use of stock option grants
reflects our philosophy of linking compensation to performance. In addition, the
Compensation Committee believes that stock option grants to executives and
management team members help to provide an incentive for their continued
employment and otherwise more closely align their interests with the interests
of stockholders. We also have used stock options as part of compensation
packages developed to attract highly qualified employment candidates.
Option grants made by the Compensation Committee during 2000 to executive
officers included the grant of performance options for the purchase of 372,000
shares of the common stock. These option grants were part of the Compensation
Committee's program to provide executives with an added long-term incentive
through stock-based compensation. The options vest over the next 5 years, at 20%
annually on the anniversary date of the grant.
The Compensation Committee believes that linking executive compensation to
individual accomplishments as well as corporate performance results in a better
alignment of compensation with corporate business goals and stockholder value.
As strategic and performance goals are met or exceeded, resulting in increased
value to stockholders, executives are rewarded commensurately. The Compensation
Committee believes that compensation levels during fiscal year 2000 adequately
reflect Regeneration Technologies' compensation goals and policies.
Compensation Committee,
Philip R. Chapman
Anthony C. Phillips
REPORT OF AUDIT COMMITTEE
The Audit Committee of the board of directors reviews Regeneration
Technologies' financial reporting process, its system of internal controls, its
audit process and the process for monitoring compliance with laws and
regulations. All of the Audit Committee members satisfy the definition of
independent director as established in the rules of the Nasdaq Stock Market. The
board of directors adopted a written charter for the Audit Committee on
October 20, 2000, which is attached to this proxy statement as Exhibit A.
The Audit Committee reviewed Regeneration Technologies' audited consolidated
financial statements with the board of directors and management, and discussed
with Deloitte & Touche LLP, our independent auditors during the 2000 fiscal
year, the matters required to be discussed by Statement of Auditing Standard
No. 61. The Audit Committee received from Deloitte & Touche LLP the written
disclosures and the letter required by Independence Standards Board Standard
No. 1 and discussed with them their independence.
11
After reviewing and discussing the audited consolidated financial
statements, the Audit Committee recommended that these audited consolidated
financial statements be included in Regeneration Technologies' annual report on
Form 10-K. The Audit Committee also recommended the reappointment, subject to
stockholder approval, of Deloitte & Touche LLP and the full board of directors
concurred.
This report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that Regeneration Technologies
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under these Acts.
Audit Committee,
Philip R. Chapman
Anthony C. Phillips
Peter F. Gearen
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of our Compensation Committee has been an employee of ours. None
of our executive officers serves as a member of the board of directors or the
Compensation Committee of any other entity that has one or more executive
officers serving as a member of our board of directors or our Compensation
Committee.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
To our knowledge, our directors, executive officers and beneficial owners of
more than ten percent of our common stock are in compliance with the reporting
requirements of Section 16(a) under the Securities Exchange Act of 1934.
12
COMPARATIVE PERFORMANCE BY THE COMPANY
The Securities and Exchange Commission requires us to present a chart
comparing the cumulative total stockholder return on our common stock with the
cumulative total stockholder return of: (1) a broad equity market index, and
(2) a published industry or line-of-business index. We selected the Chase H & Q
Medical Products Index based on our good faith determination that this index
fairly represent the companies which compete in the same industry or
line-of-business as we do. The chart below compares our common stock with both
the Nasdaq Composite Index and the Chase H & Q Medical Products Index and
assumes an investment of $100 on August 10, 2000 (the date our shares began
trading on The Nasdaq Stock Market) in each of the common stock, the stocks
comprising the Nasdaq Composite Index and the stocks comprising the Chase H & Q
Medical Products Index.
REGENERATION TECHNOLOGIES, INC.
COMPARISON OF CUMULATIVE TOTAL RETURN (AUGUST 10, 2000 -- DECEMBER 31, 2000)
COMPARISON OF 4 MONTH CUMULATIVE TOTAL RETURN*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Dollars
8/10/00 12/31/00
REGENERATION TECHNOLOGIES, INC. 100 101.79
NASDAQ STOCK MARKET (U.S.) 100 65.2
CHASE H&Q MEDICAL PRODUCTS 100 106.83
* $100 INVESTED ON 8/10/00 IN STOCK OR ON 7/31/00.
IN INDEX - INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LEGAL RELATIONSHIPS WITH THE UNIVERSITY OF FLORIDA TISSUE BANK
SEPARATION FROM UFTB
We began operations on February 12, 1998 when the University of Florida
Tissue Bank, contributed to us its allograft manufacturing and processing
operations, related equipment and technologies, distribution arrangements,
research and development activities and certain other assets. We also assumed
certain liabilities of UFTB that were related to the transferred business.
Various agreements relating to the transferred business to which UFTB was a
party also were assigned to us at that time, including one of our two current
management services agreements with Medtronic Sofamor Danek. At approximately
the same time, we sold shares of our preferred stock to a number of unrelated
investors and issued additional shares of our preferred stock to UFTB in
exchange for the assets it contributed to us.
At approximately the same time as our separation from UFTB, James M. Grooms,
our President, Chief Executive Officer, and Chairman, who served as an officer
of UFTB prior to our separation, contributed his royalty rights in certain
intellectual property to us in exchange for shares of our preferred stock. We
recorded the assets acquired from UFTB and Mr. Grooms and the liabilities
assumed from UFTB at their historical cost basis since these were deemed to be
transactions between entities under common control.
UFTB is our largest tissue supply source. The tax-exempt status of UFTB
requires our relationship with UFTB to be conducted at arm's length. For this
reason, our relationship with UFTB is pursuant to a Tissue Recovery Agreement,
which is designed to provide for arm's-length charges for services between the
two companies. Under the agreement, UFTB supplies certain of its tissues
exclusively to us. Additionally, we have a right of first refusal on other
tissues, which UFTB is not currently providing to us. We pay UFTB recovery fees
as reimbursement for expenses it incurs in tissue recovery procedures. The
amount of the recovery fee depends upon the type and amount of tissue recovered.
We incurred charges of approximately $2.4 million during 1998, $5.3 million
during 1999 and $6.7 million during 2000 under this agreement. This agreement
expires in April 2009.
Nancy R. Holland, our former Vice President of Donor Services, served as the
Chief Executive Officer and a director UFTB. Ms. Holland resigned from UFTB
effective July 2000 and from Regeneration Technologies, Inc. effective
August 2000. We paid Ms. Holland $70,756 in 1998, $75,000 in 1999 and $116,390
in 2000. UFTB paid Ms. Holland $90,276 in 1998, $75,000 in 1999 and $39,233 in
2000.
ASSUMPTION OF CONVENTIONAL ALLOGRAFT DISTRIBUTION BUSINESS OF UFTB
On April 15, 1999, we entered into a Programs Transfer Agreement with UFTB
under which UFTB transferred to us its recovery operations outside of Florida
and Georgia, conventional allograft distribution services, and its interests in
agreements with various tissue recovery programs in exchange for the offset of
amounts owed to us by UFTB on that date. We also entered into a Tissue Recovery
Agreement with UFTB under which UFTB functions as one of our tissue recovery
agencies, supplying to us the majority of the tissue it recovers. Under the
terms of the agreements, UFTB transferred to us its unprocessed donor tissue and
conventional tissue with a fair value of approximately $3.0 million and
equipment and fixtures with a fair value of approximately $0.1 million as a
partial offset against the existing amounts owed to us by UFTB. UFTB paid us the
remaining amounts by offsetting recovery fees from April 15, 1999 through
June 30, 1999 against the outstanding balance, which fees, net of administrative
costs, were approximately $0.7 million, and made monthly payments through the
end of 1999 to repay the remaining balance of approximately $1.2 million. Prior
to this transfer to us of
14
UFTB's tissue recovery operations, we charged UFTB approximately $3.5 million
during 1998 and approximately $2.6 million during 1999 for tissue processing
services.
We also share facilities, overhead and various personnel with UFTB, the
terms of which we believe are no less favorable than those we would obtain in an
arms-length relationship.
LEGAL RELATIONSHIP WITH MEDTRONIC SOFAMOR DANEK
The two management services agreements between us and Medtronic Sofamor
Danek grant to that company exclusive worldwide rights to provide management
services to assist in the distribution of our bone pastes for spinal uses and
our current line of spinal allografts, including our MD-Series threaded and
non-threaded dowels, tapered dowels and other spinal allografts. We pay to
Medtronic Sofamor Danek management services fees as a percentage of the amount
charged to customers for the allografts we distributed into these markets. We
incurred charges under these agreements aggregating approximately $24.1 million
during 1998, $40.0 million during 1999 and $64.6 million during 2000. These
agreements terminate in May 2018 and July 2021. During 1999, Medtronic Sofamor
Danek purchased shares of our preferred stock for an aggregate purchase price of
$5.0 million. Following their conversion into shares of our common stock during
our initial public offering, these shares represent approximately 4.6% of our
outstanding common stock. E. Ronald Pickard, one of our former directors, served
as President of Medtronic Spinal and Neurological Group, a division of Medtronic
Sofamor Danek until July 2000. Mr. Pickard served as a member of our board of
directors until July 14, 2000. Prior to the merger of Sofamor Danek Group and
Medtronics, Mr. Pickard served in various executive capacities at Sofamor Danek
Group, including as Chairman of the Board and Chief Executive Officer.
15
PROPOSAL NO. 2--RATIFICATION OF APPOINTMENT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Stockholders will be asked to ratify the appointment of Deloitte & Touche
LLP as our independent certified public accountants for the fiscal year ending
December 31, 2001. Deloitte & Touche LLP audited our consolidated financial
statements for the fiscal year ended December 31, 2000. A representative of
Deloitte & Touche LLP is expected to be present at the Annual Meeting, will have
an opportunity to make a statement if he or she desires to do so and is expected
to be available to respond to appropriate questions from stockholders.
AUDIT FEES
The aggregate fees billed by Deloitte & Touche LLP, the member firms of
Deloitte Touche Tohmatsu, and their respective affiliates (collectively,
"Deloitte") for professional services rendered for the audit of the Company's
annual financial statements for the fiscal year ended December 31, 2000 and for
the reviews of the financial statements included in the Company's Quarterly
Reports on Form 10-Q for that fiscal year were $253,373.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Deloitte rendered no professional services for information technology
services relating to financial information systems design and implementation for
the fiscal year ended December 31, 2000.
ALL OTHER FEES
The aggregate fees billed by Deloitte for services rendered to the Company,
other than the services described above under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees", for the fiscal year ended
December 31, 2000 were $417,201.
The Audit Committee has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's independence.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of our
common stock present in person or represented by proxy and entitled to vote at
the Annual Meeting is required for the ratification of the appointment of
Deloitte & Touche LLP. If you do not vote for on this proposal or you indicate
"abstain" on your proxy card, your vote will not count either for or against
this proposal. Also, if your broker does not vote on this proposal it will have
no effect on the votes cast regarding this proposal.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE COMPANY'S BEST
INTERESTS AND IN THE BEST INTERESTS OF ITS STOCKHOLDERS AND RECOMMENDS A VOTE
"FOR" APPROVAL THEREOF.
16
STOCKHOLDER PROPOSALS
All stockholder proposals intended to be presented at the Annual Meeting of
Stockholders of the Company to be held in 2002 must be received by us no later
than December 17, 2001 for inclusion in the board of directors' proxy statement
and form of proxy relating to the Annual Meeting.
OTHER BUSINESS
Our board of directors knows of no other business to be acted upon at the
Annual Meeting. However, if any other business properly comes before the Annual
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the Annual
Meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
/s/ James M. Grooms
James M. Grooms,
Chairman of the Board
Dated: April 24, 2001
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2000, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, HAS BEEN PROVIDED WITH THIS PROXY STATEMENT. ADDITIONAL
COPIES OF THE FORM 10-K ARE AVAILABLE, FREE OF CHARGE, UPON REQUEST DIRECTED TO
INVESTOR RELATIONS, REGENERATION TECHNOLOGIES, INC., ONE INNOVATION DRIVE,
ALACHUA, FLORIDA 32615, TELEPHONE: 386-418-8888.
17
EXHIBIT A
REGENERATION TECHNOLOGIES, INC.
AUDIT COMMITTEE CHARTER
I. COMPOSITION
The Audit Committee (the "Committee") of Regeneration Technologies, Inc.
(the "Company") is a standing committee of the Board of Directors (the "Board")
established to assist the Board in fulfilling its statutory, regulatory and
fiduciary responsibilities. The Committee shall consist of at least three
"independent" directors who shall meet the "membership requirements" of Nasdaq
(as both those terms are defined by Nasdaq). At least one of the directors on
the Committee shall have past employment experience in finance or accounting,
the requisite professional certification in accounting or other comparable
experience or background required by Nasdaq, as the same may be amended from
time to time. The Board shall appoint the members of the Committee.
II. AUTHORITY
The Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Committee may request any
officer or employee of the Company or the Company's outside counsel or
independent public accountants to attend a meeting of the Committee or to meet
with any members of, or consultants to, the Committee.
III. PURPOSE
The purpose of the Committee shall be to assist the Board in fulfilling its
oversight responsibilities. The Committee will review the financial reporting
process, systems of internal control, the audit process and the Company's
process for monitoring compliance with the laws, regulations and the Company's
code of conduct. In performing its duties, the Committee will maintain effective
working relationships with the Board, management, and the internal and external
auditors.
IV. MEETINGS
The Committee will have four regularly scheduled meetings each fiscal year.
In addition, the Committee will meet at other times if deemed necessary to
completely discharge its duties and responsibilities as outlined in this
charter. As part of its job to foster open communication, the Committee should
meet at least annually with management and the independent public accountants,
in separate executive sessions, to discuss any matters that the Committee or
each of these groups believe should be discussed privately.
V. RESPONSIBILITIES AND DUTIES
The Board delegates to the Committee the following specific duties and
responsibilities in addition to those in the preceding paragraphs:
DOCUMENTS/REPORTS REVIEW
1. Review and reassess the adequacy of the Audit Committee Charter annually
and submit the Charter to the Board for approval.
2. Review the Company's annual audited financial statements and any reports
or other financial information submitted to any governmental body, or the
public, including any certification, report, opinion or review rendered by the
independent public accountants. Discuss major issues and significant
1
changes regarding accounting and auditing principles and practices as well as
the adequacy of internal controls that could significantly affect the Company's
financial statements.
3. Review any internal reports to management prepared by the internal
auditing department, if one is created, and management's response. Review with
management and the independent public accountants significant financial
reporting issues and judgments made in connection with the preparation of the
Company's financial statements.
- Review with management and the independent public accountants the Company's
annual report on Form 10-K and the Company's quarterly report on Form10-Q
prior to its filing or prior to the release of earnings. The chair of the
Committee may represent the entire Committee for purposes of this review.
- Review the Company's major financial risk exposures and the steps management
has taken to monitor and control such exposures.
INDEPENDENT PUBLIC ACCOUNTANTS
1. Recommend to the Board the selection, or dismissal when appropriate, of
the independent public accountants, which firm is ultimately accountable to the
Board. Consider independence and effectiveness and approve the fees and other
compensation to be paid to the independent public accountants. On an annual
basis, the Committee should review and discuss with the accountants all
significant relationships the accountants have with the Company to confirm the
accountants' independence.
2. Meet with the independent public accountants to review the scope,
accuracy, completeness and overall quality of the annual financial statements.
3. Receive from the independent public accountants the information they are
required to communicate to the Committee under generally accepted auditing
standards, including, without limitation:
a. A formal written statement delineating all relationships between the
independent public accountants and the Company, consistent with
Independence Standards Board Standard No. 1, and
b. Engage in a dialogue with the independent public accountants with
respect to any disclosed relationships or services that may impact the
objectivity and independence of the independent public accountants, and
recommend that the Board take appropriate action to enhance the
independence of the independent public accountants.
FINANCIAL REPORTING PROCESS
- In consultation with the independent public accountants, review the integrity
of the Company's financial reporting processes, both internal and external.
- Meet with management and the independent public accountants prior to the audit
to review the planning and staffing of the audit.
- Obtain from the independent public accountants assurance that Section 10A of
the Private Securities Litigation Reform Act of 1995 has not been implicated.
- Discuss with the independent public accountants the matters required to be
discussed by Statement on Auditing Standards No. 61, as modified or amended,
relating to the conduct of the audit.
2
- Review with the independent public accountants any problems or difficulties
the accountants may have encountered and any management letter provided by the
accountants and the Company's response to that letter. Such review should
include:
- Any difficulties encountered in the course of the audit work, including any
restrictions on the scope of activities or access to required information.
- Any changes required in the planned scope of the audit.
- The Committee shall make regular reports to the Board of Directors. The
Committee shall also prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's annual
proxy statement.
VI. OTHER
1. While the Committee has the responsibility and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent public accountants. Nor is it
the duty of the Committee to conduct investigations, to resolve disagreements,
if any, between management and the independent public accountants, or to assure
compliance with laws and regulations.
3
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 24, 2001
The undersigned, a stockholder of Regeneration Technologies, Inc. (the
"Corporation"), hereby constitutes and appoints James M. Grooms and Richard R.
Allen and each of them, the true and lawful proxies and attorneys-in-fact of the
undersigned, with full power of substitution in each of them, to vote all shares
of common stock of the Corporation which the undersigned is entitled to vote at
the Annual Meeting of Stockholders of the Corporation to be held on Thursday,
May 24, 2001, and at any and all adjournments or postponements thereof, as
follows:
(1) ELECTION OF DIRECTOR
[ ] FOR the nominee listed below (except as marked to the contrary below)
[ ] WITHHOLDING AUTHORITY to vote for the nominee listed below
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Nominee: James M. Grooms
(2) PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, upon such other business as may properly come before
the meeting and any and all adjournments or postponements thereof.
(Continued on reverse side.)
Shares of Common Stock represented by this Proxy will be voted in accordance
with the instructions indicated in items 1, 2 and 3 above. If you do not vote
for a nominee or proposal, or you indicate "withholding authority" or "abstain"
on your proxy card, your vote will not count either for or against the nominee
or proposal. Also, if your broker does not vote on either or both of the
proposals it will have no effect on the vote with respect to that proposal.
However, abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum.
Any and all proxies heretofore given by the undersigned are hereby revoked.
Please sign exactly as your name(s) appear hereon. If shares are held by two
or more persons each should sign. Trustees, executors and other fiduciaries
should indicate their capacity. Shares held by corporations, partnerships,
associations, etc. should be signed by an authorized person, giving full title
or authority.
Please Date, Sign and Mail in the Enclosed Reply Envelope
Dated: -------------------------------------- , 2001
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(Signature)
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(Signature if held jointly)