UNITED
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SECURITIES
AND EXCHANGE COMMISSION
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April 29,
2009
Dear
Stockholders:
On
behalf of the Board of Directors, we cordially invite you to attend the 2009
Annual Meeting of Stockholders of SafeStitch Medical, Inc. to be held at its
executive offices, 4400 Biscayne Blvd., Suite A-100, Miami, Florida 33137 on
Wednesday, June 10, 2009, beginning at 9:30 a.m. local time.
The
attached Notice of Annual Meeting and Proxy Statement describe the matters
expected to be acted upon at the Annual Meeting. At the Annual
Meeting, you will have an opportunity to meet management and ask
questions.
Whether
or not you plan to attend the Annual Meeting, it is important that you vote your
shares of SafeStitch Medical, Inc. common stock. Regardless of the
number of shares you own, please sign and date the enclosed proxy card and
promptly return it to us in the enclosed postage paid envelope. If
you sign and return your proxy card without voting, your shares will be voted in
accordance with the recommendations of the Board of Directors contained in the
attached Proxy Statement.
We
look forward to seeing you on June 10, 2009 and urge you to return your proxy
card as soon as possible.
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Sincerely,
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Jane
H. Hsiao, Ph.D., MBA
Chairman
of the Board
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Jeffrey
G. Spragens
Chief
Executive Officer
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SAFESTITCH
MEDICAL, INC.
4400
Biscayne Blvd.
Miami,
FL 33137
NOTICE
OF 2009 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD JUNE 10, 2009
Notice is
hereby given that the Annual Meeting of Stockholders (the “Annual Meeting”) of
SafeStitch Medical, Inc., a Delaware corporation (the “Company”), will be held
at the Company’s headquarters at 4400 Biscayne Blvd., Suite A-100, Miami,
Florida, 33137, on Wednesday, June 10, 2009, beginning at 9:30 a.m., local time,
for the following purposes:
1. To
elect seven directors for a term of office expiring at the 2010 Annual Meeting
of Stockholders or until their respective successors are duly elected and
qualified; and
2. To
transact such other business as may properly come before the Annual Meeting or
any adjournments thereof.
Only
holders of record of our common stock at the close of business on April 24,
2009, will be entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. The approximate date on which this proxy
statement and the enclosed form of proxy are first sent to stockholders is May
12, 2009.
Whether
or not you expect to attend the Annual Meeting, please sign and date the
enclosed proxy and return it in the postage paid, self-addressed envelope
provided for your convenience. Should you attend, you may, if you
wish, withdraw your proxy and vote your shares in person.
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting to Be Held on
June 10, 2009
. Our proxy statement and annual report on
Form 10-K are available at
www.SafeStitch.com
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By
Order of the Board of Directors,
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Stewart
B. Davis, M.D.
Secretary
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Miami,
Florida
April 29,
2009
PROXY
STATEMENT FOR THE 2009 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD
WEDNESDAY,
JUNE 10, 2009
This
proxy statement is furnished by the Board of Directors (“Board”) of SafeStitch
Medical, Inc. (the “Company” or “we,” “us” or “our”) in connection with the
solicitation of proxies to be voted at the 2009 Annual Meeting of Stockholders
of the Company that will be held at the Company’s headquarters at 4400 Biscayne
Blvd., Suite A-100, Miami, Florida 33137, on Wednesday, June 10, 2009, beginning
at 9:30 a.m., local time, and all adjournments thereof (the “Annual Meeting”),
for the purposes set forth in the accompanying Notice of Annual
Meeting.
Our Board
has fixed the close of business on April 24, 2009, as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof. As of that date, there
were 17,962,718 shares of our common stock issued and
outstanding. The holders of our common stock are each entitled to one
vote for each outstanding share on all matters submitted to our
stockholders. The presence, in person or by proxy, of holders of a
majority of our outstanding common and preferred stock constitutes a quorum at
the Annual Meeting. Shares of our stock represented by proxies that
reflect abstentions and “broker non-votes” (i.e., stock represented at the
Annual Meeting by proxies held by brokers or nominees as to which (i) the
brokers or nominees have not received instructions from the beneficial owners or
persons entitled to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) will be counted for the
purpose of determining the existence of a quorum at the Annual Meeting, but will
not be counted as a vote cast “for” or “against” any given matter.
Any
stockholder giving a proxy may revoke it at any time prior to the time it is
voted. A proxy may be revoked by: (i) written notice to us at or
prior to the Annual Meeting, attention: Secretary; (ii) execution of a
subsequent proxy; or (iii) requesting revocation at the Annual Meeting and
voting in person. Please note that attendance at the Annual Meeting
will not automatically revoke the proxy. All shares of our stock
represented by effective proxies will be voted at the Annual Meeting or at any
adjournment thereof.
Unless otherwise specified in the
proxy, shares of our stock represented by proxies will be voted: (i) FOR
the election of the Board’s nominees for directors and (ii) in the
discretion of the proxy holders with respect to such other matters as may
properly come before the Annual Meeting.
Our
executive offices are located at 4400 Biscayne Blvd., Suite A-100, Miami,
Florida 33137. Mailing to stockholders of record on April 24,
2008 of the Notice of Annual Meeting, this proxy statement, the accompanying
form of proxy and our Annual Report to Stockholders for our fiscal year ended
December 31, 2008 (“fiscal 2008”) will commence on or before May 12,
2009.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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The
following table sets forth certain information as of April 15, 2009 concerning
the beneficial ownership of our common stock by (i) each person known by us
to be the beneficial owner of more than 5% of our outstanding common stock,
(ii) each of our directors (all of whom are nominees for director),
(iii) each Named Executive Officer (as defined in the Compensation
Discussion and Analysis Section below), and (iv) all of our current
executive officers and directors as a group. All holders listed below
have sole voting power and investment power over the shares beneficially owned
by them, except to the extent such power may be shared with such person’s
spouse. Unless noted otherwise, the address of each person listed
below is 4400 Biscayne Boulevard, Suite A-100, Miami, Florida
33137.
Name
and Address of Beneficial Owner
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Percentage
of Outstanding Common
Shares
(1)
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Phillip
Frost, M.D.
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4,900,648
(2)(3)
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26.1%
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Frost
Gamma Investments Trust
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4,900,648(3)
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26.1%
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Jane
H. Hsiao, Ph.D., MBA, Chairman of the Board of Directors
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3,664,348
(4)
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19.5%
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Jeffrey
G. Spragens, Chief Executive Officer, President and
Director
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2,890,188
(5)
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16.1%
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Dr.
Charles J. Filipi, Medical Director and Director
12370
Rose Lane
Omaha,
Nebraska 68154
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2,814,092
(6)
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15.7%
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Dr.
Stewart B. Davis, Chief Operating Officer and Secretary
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46,834
(7)
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*
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Adam
S. Jackson, Chief Financial Officer
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12,500
(8)
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*
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Dr.
Kenneth Heithoff, Director
5775
Wayzata Boulevard
Suite
190
Minneapolis,
Minnesota 55416
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110,000
(9)
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*
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Richard
C. Pfenniger, Jr., Director
7200
Corporate Center Drive
Suite
600
Miami,
Florida 33426
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126,000
(10)
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*
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Steven
D. Rubin, Director
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1,036,511
(11)
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5.5%
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Kevin
Wayne, Director
24
Pine Tree Lane
Lowell,
Massachusetts 01854
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15,000
(12)
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*
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All
Executive Officers and Directors as a group (9 persons)
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9,930,090
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52.6%
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(1)
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Based
on 17,962,718 shares outstanding as of April 15,
2009.
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(2)
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Does
not include options to purchase 10,000 shares of the Company’s common
stock which are not currently exercisable and will not become exercisable
within the next 60 days.
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(3)
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Frost
Gamma Investments Trust holds 4,115,265 shares of the Company’s common
stock. Dr. Phillip Frost is the trustee and Frost Gamma,
Limited Partnership is the sole and exclusive beneficiary of Frost Gamma
Investments Trust. Dr. Frost is one of two limited partners of
Frost Gamma, Limited Partnership. The general partner of Frost
Gamma Limited Partnership is Frost Gamma Inc. and the sole shareholder of
Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is
also the sole shareholder of Frost-Nevada Corporation. The
number of shares included above also includes warrants to purchase 785,383
shares of the Company’s common stock owned directly by The Frost Group,
LLC. Frost Gamma Investments Trust is a principal member of The
Frost Group, LLC. Dr. Frost and Frost Gamma Investments Trust
disclaim beneficial ownership of these warrants to purchase common stock,
except to the extent of any pecuniary interest
therein.
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(4)
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Includes
options to purchase 15,000 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 60,000 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days. Includes warrants to purchase 785,383 shares of the
Company’s common stock held by The Frost Group, LLC. Dr. Hsiao
is a member of The Frost Group, LLC. Dr. Hsiao disclaims
beneficial ownership of the securities held by The Frost Group, LLC,
except to the extent of her pecuniary interest
therein.
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(5)
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Includes
options to purchase 1,250 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 63,750 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days. Includes 562,818 shares owned by each of the Joy Fowler
Spragens Family Trust, and RSLS Investments LLC. The Trust is
an irrevocable trust established by Joy Fowler Spragens, the spouse of Mr.
Spragens, for the benefit of her descendants and relatives who are
unrelated to Mr. Spragens. Although Mr. Spragens is the manager
of RSLS Investments LLC, the LLC is 100% owned by his adult
children. Accordingly, Mr. Spragens disclaims any beneficial
ownership of the shares held by the Joy Fowler Spragens Family Trust and
RSLS Investment LLC. Includes warrants to purchase 20,138
shares of the Company’s common stock held by Mr.
Spragens.
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(6)
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Does
not include options to purchase 10,000 shares of the Company’s common
stock which are not currently exercisable and will not become exercisable
within the next 60 days.
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(7)
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Includes
options to purchase 46,834 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 136,833 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days.
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(8)
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Includes
options to purchase 12,500 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 77,500 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days.
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(9)
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Includes
options to purchase 10,000 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 5,000 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days.
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(10)
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Includes
options to purchase 11,000 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 6,000 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days.
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(11)
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Includes
options to purchase 11,000 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 6,000 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days. Includes warrants to purchase 785,383 shares of the
Company’s common stock held by The Frost Group, LLC. Mr. Rubin
is a member of The Frost Group, LLC. Mr. Rubin disclaims
beneficial ownership of the securities held by The Frost Group, LLC,
except to the extent of his pecuniary interest
therein.
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(12)
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Includes
options to purchase 10,000 shares of the Company’s common stock which are
currently exercisable. Does not include options to purchase an
additional 5,000 shares of the Company’s common stock which are not
currently exercisable and will not become exercisable within the next 60
days.
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(Proposal No. 1)
Nominees for Election as
Director
The Board
of Directors has nominated each of its seven incumbent directors for re-election
as directors to serve until our next Annual Meeting of Stockholders and until
each director’s successor is duly elected and qualified. Although we
anticipate that all of the nominees will be able to serve, if any nominee is
unable or unwilling to serve at the time of the Annual Meeting, proxies
solicited hereunder will be voted in favor of the remaining nominees, if any,
and for such other persons as may be designated by the Board of Directors,
unless directed by a proxy to do otherwise.
The
following table sets forth the names and ages of the director
nominees.
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Jane
H. Hsiao, Ph.D., MBA
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62
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Jeffrey
G. Spragens
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67
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Charles
J. Filipi, M.D.
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68
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Kenneth
Heithoff, M.D.
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65
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Richard
C. Pfenniger, Jr.
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53
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Steven
D. Rubin
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48
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Kevin
Wayne, Ph.D.
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46
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The
following is biographical information for the director nominees.
Jane H. Hsiao,
Ph.D., MBA
. Dr. Hsiao has served as a director of the Company
since April 2005 and became Chairman of the Board in September
2007. Dr. Hsiao has served since May 2007 as Vice-Chairman and Chief
Technical Officer of OPKO Health, Inc. (“OPKO”), a specialty healthcare
company. Dr. Hsiao also serves as Chairman of the Board of
medical device developer Non-Invasive Monitoring Systems, Inc. (“NIMS”), a
position she has held since October 2008, and as a director of Modigene,
Inc., a developmental stage biopharmaceutical company, and Neovasc, Inc. a
developer of vascular devices. Dr. Hsiao is a member of The Frost
Group, LLC (the “Frost Group”), a private investment
firm. Dr. Hsiao previously served as the Vice Chairman-Technical
Affairs and Chief Technical Officer of IVAX Corporation (“IVAX”) from 1995 until
IVAX was acquired in January 2006 by Teva Pharmaceutical Industries Ltd.
Dr. Hsiao also served as Chairman, CEO and President of IVX Animal Health,
IVAX’s veterinary products subsidiary, from 1998 until 2006, and as IVAX’s Chief
Regulatory Officer from 1992 to 1995.
Jeffrey G.
Spragens
. Mr. Spragens has served as our President and Chief
Executive Officer and as a member of our Board of Directors since September
2007, and he has served as Business Manager of SafeStitch LLC, of which he was a
founding member, since August 2005. From January 2002 to December
2006 he was a member of Board of Directors of ETOC, Inc., a privately owned
hotel and lodging company based in Minneapolis, Minnesota. Since
April 2002 he has been a Founding Board of Directors Member and Treasurer of the
Foundation for Peace, Washington, D.C. From 1990 to 1995, he was
Managing Partner, Gateway Associates, Inc., a company that secured full
subdivision and planning approval for properties under its
control. Prior to that and from 1987 to 1993, he was one of three
founding board of directors members of North American Vaccine which was
a public company acquired by Baxter International in
1999. Mr. Spragens also has previous experience as a developer and
attorney.
Charles J. Filipi
M.D.
Dr. Filipi has served as our Medical Director and a
member of our Board of Directors since September 2007. Dr. Filipi was
a founding member of SafeStitch LLC in August 2005 and has served as its Medical
Director since 2006. He is also Professor of Surgery in the
Department of Surgery at Creighton University School of Medicine in Omaha,
Nebraska and has served in this position since 1999. During the last
five years, Dr. Filipi served as president of the American Hernia Society,
editor of the journal Hernia and has published approximately thirty
peer-reviewed articles and ten book chapters. He has been the
inventor of over twenty provisional or utility patents. His primary
areas of interest are intraluminal surgery for the correction of
gastroesophageal reflux disease, obesity, Barrett’s Esophagus, gastrointestinal
bleeding and natural orifice transluminal intraperitoneal surgery.
Kenneth Heithoff,
M.D.
Dr. Heithoff has been a director of the Company since September
2007. Dr. Heithoff is a director of the Center for Diagnostic Imaging
(“CDI”) headquartered in Minneapolis, Minnesota, which he founded in December
1981. CDI now includes 40 clinics throughout six states, representing
one of the largest teleradiology networks in the United States. Prior
to that and from July 1, 1973 to June 1, 1975, Dr. Heithoff served as a Clinical
Associate for the U.S. Public Health Service National Institutes of
Health. Dr. Heithoff has authored or co-authored more than 40
articles and book chapters, and he lectures internationally on topics related to
spine imaging. He serves, and has served, on the editorial boards of
several journals, including Spine and Radiology. His professional
affiliations include the American College of Radiology, the North American Spine
Society, the International Society for the Study of the Lumbar Spine, and the
International Society of Magnetic Resonance in Medicine.
Richard C.
Pfenniger, Jr.
Richard C. Pfenniger, Jr., has been a director of the
Company since April 2005. Mr. Pfenniger has been Chief Executive
Officer and President of Continucare Corporation, a medical service provider,
since October 2003, and the Chairman of Continucare’s Board of Directors since
2002. He served as CEO and Vice Chairman of Whitman Education Group,
Inc., a post-secondary education provider, from 1997 until 2003. Mr.
Pfenniger is a director of GP Strategies, Inc., a corporate training provider,
and of OPKO.
Steven D.
Rubin
. Mr. Rubin has served as a director of the Company since
September 2007. Mr. Rubin has been the Executive Vice President and a
director of OPKO since 2007 and is a member of the Frost
Group. Mr. Rubin currently serves on the Boards of Directors of
OPKO, NIMS, Modigene, Inc., Neovasc, Inc., Kidville, Inc., which operates
upscale learning and play facilities for children, Cardo Medical, Inc., a
producer and distributor of orthopedic and spinal medical devices, Castle
Brands, Inc., a marketer of premium spirits, and Dreams, Inc., a vertically
integrated sports licensing and products company. Mr. Rubin
previously served as the Senior Vice President, General Counsel and Secretary of
IVAX from August 2001 until September 2006.
Kevin Wayne,
Ph.D
. Dr. Wayne is an Associate Professor of Business
Administration at Rivier College in Nashua, New Hampshire and has been with the
College since 2003. Dr. Wayne has been a director of the Company
since September 2007. Prior to this and from 1999 until 2002, he was
co-founder and Vice President of Onux Medical, Inc., a medical device company
acquired by C.R. Bard in 2004. At Onux, Dr. Wayne was responsible for
marketing and business development. He was also an Adjunct Professor
of Marketing at Daniel Webster College from 2002-2003 and a Faculty Associate at
Worcester Polytechnic Institute in 2002. Additionally, he has served
in product development and marketing functions at Smith & Nephew Endoscopy,
Visualization Technology (now part of GE), and Bard’s Endoscopy
Division. His medical and surgical device experience includes work in
general surgery, GI endoscopy, arthroscopy/sports medicine and computer-assisted
spine and neurosurgery applications. He is a member of the Medical
Device Group of Boston, the Association of University Technology Managers and
the Academy of Management.
Vote Required and
Recommendation
Directors
will be elected by a plurality of the votes cast by the shares of our common
stock entitled to vote at the Annual Meeting.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES IDENTIFIED
ABOVE.
Identification of Executive
Officers
The
following individuals are our executive officers:
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Jeffrey
G. Spragens
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67
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Chief
Executive Officer, President and Director
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Dr.
Stewart B. Davis
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29
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Chief
Operating Officer and Secretary
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Dr.
Charles J. Filipi
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68
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Medical
Director and Director
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Adam
S. Jackson
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46
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Chief
Financial Officer
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All
officers serve until they resign or are replaced or removed at the discretion of
the Board of Directors.
Biographical
information for Mr. Spragens and Dr. Filipi is set forth in the section entitled
“Proposal No. 1 - Election of Directors”, beginning on page 3.
Stewart B. Davis
M.D.
Dr. Davis has served as our Chief Operating Officer and Secretary
since September 2007 and had joined SafeStitch LLC as Chief Operating Officer in
June 2007. Prior to that and from July 2003, Dr. Davis was Assistant
Medical Director for Innovia LLC, a privately-held bio medical device company in
Miami, Florida, and its affiliates, including InnFocus LLC, InnoGraft LLC and
InnCardia LLC. Innovia and its affiliates design implantable medical
devices focusing on ophthalmology implants, vascular grafts and percutaneous
heart valves. From 2006 he has also been managing partner and medical
director of Parasol International, LLC, a privately-owned global healthcare
advisory firm. Dr. Davis has authored ten peer-reviewed articles and
three NIH grants and has published a book. Dr. Davis graduated from
the University of Miami School of Medicine in 2003.
Adam S.
Jackson
. Mr. Jackson joined the Company as Vice President,
Finance in March 2008 and was appointed Chief Financial Officer in April
2008. Mr. Jackson also serves as Chief Financial Officer of NIMS, and
as Vice President, Finance of Aero Pharmaceuticals, Inc. a privately-held
pharmaceutical distributor. Prior to joining the Company, Mr. Jackson
served as Senior Vice President, Finance for Levitt Corporation (“Levitt”), a
real estate development company, from 2006 to 2008, where he was responsible for
the Levitt’s financial planning and analysis activities. From 2003 to
2006, Mr. Jackson served as Levitt’s Senior Vice President, Controller, during
which period he supervised Levitt’s accounting and financial reporting
activities. From 2001 to 2003, Mr. Jackson served as Chief Financial
Officer of Romika-USA, Inc., a privately-held consumer goods manufacturing and
distribution concern. From 2000 to 2001, Mr. Jackson served as Chief
Operating Officer of V-Commex.com Corp., a privately-held internet company
developing an international business-to-business web portal. From
1998 to 2000, Mr. Jackson served as Director of Financial Planning and Analysis
at Eclipsys Corporation, a healthcare information technology provider
.
We have
adopted a Code of Business Conduct and Ethics that applies to our principal
executive officer, principal financial officer and other persons performing
similar functions. A copy of our Code of Business Conduct and Ethics
is available on our website at
www.safestitch.com
. We
intend to post amendments to, or waivers from a provision of, our Code of
Business Conduct and Ethics that apply to our principal executive officer,
principal financial officer or persons performing similar functions on our
website. Our website is not part of this proxy
statement.
Section
16(a) Beneficial Ownership Reporting
Compliance
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Under
section 16(a) of the Exchange Act, the Company’s directors, executive officers
and persons who own more than ten percent (10%) of our common stock are required
to file with the SEC initial reports of ownership and reports of changes in
ownership of the common stock and other equity securities of the
Company. To the Company’s knowledge, based solely on a review of
copies of such reports furnished to the Company during and/or with respect to
fiscal 2008, the Company is not aware of any late or delinquent filings required
under Section 16(a) of the Exchange Act in respect of the Company’s common stock
or other equity securities.
Board
of Directors and Committees Thereof
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Independence
The Board
of Directors, in the exercise of its reasonable business judgment, has
determined that each of our directors qualify as independent
directors pursuant to Nasdaq Marketplace Rule 4200(a)(15) and applicable SEC
rules and regulations, except Mr. Spragens, who is employed as our President and
CEO, and Dr. Filipi, who is employed as our Medical
Director. Additionally, each of Dr. Heithoff, Dr. Wayne, Mr.
Pfenniger, Jr. and Mr. Rubin is independent for audit committee purposes under
Nasdaq Marketplace Rule 4350(d).
Board
Committees and Meeting Attendance
The Board
of Directors conducts its business through meetings of the full Board of
Directors and through committees of the Board, including the Audit Committee and
the Compensation Committee. We do not have any other standing
committee of the Board of Directors. The Board and its committees
also act by written consent. During 2008, the full Board of Directors
met on three occasions. During 2008, each of the current directors
attended at least 75% of the aggregate of the Board meetings and the meetings of
each committee on which such director served, with the exception of Dr.
Heithoff, who attended 55% of such meetings.
We do not
have a policy requiring our directors to attend the Annual Meeting.
Compensation
Committee
The
Compensation Committee is composed of the following non-employee directors, all
of whom the Board of Directors, in the exercise of its reasonable business
judgment, has determined to be independent under Nasdaq and applicable SEC rules
and regulations: Steven D. Rubin, Chairman, Dr. Kenneth Heithoff, Richard C.
Pfenniger, Jr. and Kevin Wayne. The Compensation Committee is charged
with discharging the Board of Director’s responsibilities relating to
compensation and evaluation of our executive officers, including establishing
compensation policies and philosophies for the Company and its executive
officers and reviewing and approving corporate goals and objectives relevant to
our Chief Executive Officer’s compensation, as well as overseeing our incentive
compensation plans and equity-based plans that are subject to Board
approval. The Compensation Committee has the power to create
subcommittees with such powers as the Compensation Committee may from time to
time confer to such subcommittees. The Board of Directors has adopted
a charter that sets forth the responsibilities of the Compensation Committee,
which is available on our website located at
www.safestitch.com
. During
2008, the Compensation Committee met on three occasions.
Audit
Committee
We have a
separately-designated standing audit committee, established in accordance with
section 3(a)(58)(A) of the Exchange Act
.
The Board of
Directors has adopted a charter that sets forth the responsibilities of the
Audit Committee, which is available on our website located at
www.safestitch.com
. During
2008, the Audit Committee met on five occasions.
The Audit
Committee is composed of the following non-employee directors: Richard C.
Pfenniger, Jr., Chairman, Dr. Kenneth Heithoff, Steven D. Rubin and Kevin
Wayne. The Company’s Board of Directors has determined that Richard
C. Pfenniger, Jr. is an independent audit committee financial expert as defined
in Item 407 (d)(5)(ii) of Regulation S-K.
Audit
Committee Report
The Audit
Committee has reviewed and discussed with management the Company’s audited
financial statements contained in its Annual Report on Form 10-K for fiscal 2008
and has discussed with the Company’s independent auditors the matters required
to be discussed by the statement on Auditing Standards No. 61, as amended, as
adopted by the Public Company Accounting Oversight Board in Rule
3200T. Additionally, the Audit Committee has received the written
disclosures and the letter from the Company’s independent accountant required by
applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountant’s communications with the Audit Committee
concerning independence, and has discussed with the Company’s independent
accountant its independence.
In
performing its functions, the Audit Committee acts in an oversight
capacity. The Audit Committee relies on the work and assurances of
the Company’s management, which has the primary responsibility for the financial
statements and reports, and of the independent registered public accounting
firm, which, in its report, expresses an opinion on the conformity of the
Company’s annual financial statements to generally accepted accounting
principles. In reliance on these reviews and discussions, and the
report of the independent auditors, the Audit Committee has recommended to the
Board of Directors and the Board of Directors has approved, the audited
financial statements included in the Company’s Annual Report on Form 10-K for
fiscal 2008 as filed with the Securities and Exchange Commission on March 27,
2009.
Richard
C. Pfenniger, Jr., Chairman
Dr.
Kenneth Heithoff
Steven D.
Rubin
Kevin
Wayne
Nominating
Committee
We do not
have a standing nominating committee or a committee performing similar
functions. We believe that, as a result of the role of the
independent directors in the nominations process, it is not necessary at this
time for us to have a separate nominating committee. In connection
with this, our Board of Directors is responsible for evaluating candidates for
nomination to the Board of Directors both for election at an annual meeting and
as necessary from time to time to fill vacancies on the Board between annual
meetings.
The Board
of Directors has no specific minimum qualifications for director
candidates. In general, however, persons considered for membership on
the Board must have demonstrated leadership capabilities, be of sound mind and
high moral character and be willing and able to commit the necessary time for
Board and committee service. In evaluating potential candidates for
service on the Board of Directors, the existing members of the Board will
consider the candidate’s ability to satisfy the Nasdaq’s and SEC’s independence
requirements and the candidate’s ability to contribute to the effective
oversight and management of SafeStitch, taking into account our needs and such
factors as the individual’s experience, perspective, skills and knowledge of the
industry in which we operate. Additionally, the Board will consider
such other factors as it deems appropriate.
Board
Nominations by Security Holders
The Board
will consider candidates recommended by our stockholders pursuant to written
applications submitted to our Corporate Secretary, SafeStitch Medical, Inc.,
4400 Biscayne Boulevard, Suite A-100, Miami, Florida 33137.
There
have been no changes to the procedures by which security holders may recommend
nominees to our Board of Directors.
Our
current Audit Committee and Compensation Committee charters are available on our
website located at
www.safestitch.com
and are available in print to any stockholder upon request sent to SafeStitch
Medical, Inc., 4400 Biscayne Blvd., Suite A-100, Miami, Florida
33137. Our Internet website and the information contained therein,
other than material expressly referred to in this proxy statement, or connected
thereto is not incorporated into this proxy statement.
Communication
with the Board
|
Interested
parties who want to communicate with the presiding director or with the
independent or non-management directors as a group, with the Board as a whole,
any Board committee or any individual Board members should address their
communications to the Board, the Board members or the Board committee, as the
case may be, and send them to c/o Corporate Secretary, SafeStitch Medical, Inc.,
4400 Biscayne Blvd., Suite A-100, Miami, Florida 33137 or call the Corporate
Secretary at (305) 575-4145. The Corporate Secretary will forward all
such communications directly to such Board members. Any such
communications may be made on an anonymous and confidential basis.
For the
year ended December 31, 2008, no cash, stock awards, option awards, non-equity
incentive plan compensation, non-qualified deferred compensation earnings or any
other compensation was paid to any Director in respect of such person’s service
on our Board of Directors or any committee thereof. The table below
contains those option award granted during periods preceding our last completed
fiscal year and which were outstanding at December 31, 2008.
|
Fees
Earned or Paid in Cash ($)
|
|
|
Non-Equity
Incentive Plan Compensation ($)
|
Nonqualified
Deferred Compensation Earnings ($)
|
All
Other Compensation ($)
|
|
Jane
H. Hsiao, Chairman
|
-
|
-
|
28,146
|
(1)
|
-
|
-
|
-
|
28,146
|
Kenneth
Heithoff, MD
|
-
|
-
|
18,764
|
(2)
|
-
|
-
|
-
|
18,764
|
Richard
C. Pfenniger, Jr.
|
-
|
-
|
20,640
|
(3)
|
-
|
-
|
-
|
20,640
|
Steven
D. Rubin
|
-
|
-
|
20,640
|
(4)
|
-
|
-
|
-
|
20,640
|
Kevin
Wayne
|
-
|
-
|
18,764
|
(5)
|
-
|
-
|
-
|
18,764
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
15,000 options, all of which were exercisable at December 31,
2008.
|
(2)
|
Includes
10,000 options, all of which were exercisable at December 31,
2008.
|
(3)
|
Includes
11,000 options, all of which were exercisable at December 31,
2008.
|
(4)
|
Includes
11,000 options, all of which were exercisable at December 31,
2008.
|
(5)
|
Includes
10,000 options, all of which were exercisable at December 31,
2008.
|
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table summarizes the compensation information for the years ended
December 31 2007 and 2008 for our principal executive officer and each of the
other two most highly compensated executive officers. We refer to
these persons as our named executive officers elsewhere in this proxy
statement.
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
(1)
|
|
Jeffrey
G. Spragens
,
Chief
Executive Officer and President (2)
|
2008
|
-
|
-
|
-
|
4,296
|
-
|
-
|
-
|
4,296
|
2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Dr.
Stewart B. Davis, Chief Operating Officer and Secretary
|
2008
|
158,750
|
-
|
-
|
57,043
|
-
|
-
|
6,350
|
222,143
|
2007
|
70,000
|
-
|
-
|
65,318
|
-
|
-
|
-
|
135,318
|
|
|
|
|
|
|
|
|
|
|
Adam
S. Jackson, Chief Financial Officer (3)
|
2008
|
131,042
|
-
|
-
|
42,659
|
-
|
-
|
5,242
|
178,943
|
2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Steven
Katz, Former Chief Executive Officer and Chairman of the Board
(4)
|
2007
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Includes
Company match of employee 401(k) contributions under Safe Harbor Match
guidelines.
|
(2)
|
Jeffrey
G. Spragens, our President and Chief Executive Officer, currently serves
without compensation.
|
(3)
|
Mr.
Jackson joined the Company in March 2008. Pursuant to a cost
sharing arrangement with certain related companies, the Company received
approximately $73,000 in cash and services from the related companies for
Mr. Jackson’s service to such other companies during
2008.
|
(4)
|
Mr.
Katz resigned from all positions held with the Company on September 4,
2007.
|
Outstanding
Equity Awards as of December 31, 2008
The
following table sets forth information with respect to outstanding option awards
as of December 31, 2008 for our named executive officers. We have not
granted any stock awards.
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($/Share)
|
|
Dr.
Stewart B. Davis
|
44,334
|
44,333
|
(1)
|
-
|
$ 2.60
|
9/11/2017
|
-
|
10,000
|
(2)
|
-
|
$ 3.10
|
3/18/2015
|
|
|
|
|
|
|
|
Jeffrey
G. Spragens
|
-
|
5,000
|
(3)
|
-
|
$ 3.10
|
3/18/2015
|
|
|
|
|
|
|
|
Adam
S. Jackson
|
-
|
50,000
|
(4)
|
-
|
$ 3.00
|
3/24/2015
|
(1)
|
Of
the 44,333 unvested options, 22,167 become exercisable on September 11,
2009 and 22,166 become exercisable on September 11,
2010.
|
(2)
|
Of
the 10,000 unvested options, 2,500 become exercisable on March 18
th
of each of 2009, 2010, 2011 and
2012.
|
(3)
|
Of
the 5,000 unvested options, 1,250 become exercisable on March 18
th
of each of 2009, 2010, 2011 and
2012.
|
(4)
|
Of
the 50,000 unvested options, 12,500 become exercisable on March 24
th
of each of 2009, 2010, 2011 and
2012.
|
Potential Payments upon Termination
or Change-in-Control
The named
executive officers do not have employment agreements with us and are all
employed on an “at will” basis. We do not have arrangements with any
of our named executive officers providing for additional benefits or payments in
connection with a termination of employment, change in job responsibility or
change-in-control. Grants of stock options to all employees eligible
to receive such grants under the SafeStitch Medical, Inc. 2007 Incentive
Compensation Plan vest immediately in the event of a change in control;
therefore, no separate disclosure is presented herein with respect to the
acceleration of stock options held by the named executive officers upon a change
of control under the terms of this stock option plan.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
We are
parties to a credit agreement with The Frost Group, LLC and our CEO, Jeffrey G.
Spragens, under which we have access to a line of credit with available
borrowings of $4 million. Members of the Frost Group, LLC include our
Chairman, Jane Hsiao, Ph.D., Steven D. Rubin, a director, and Frost Gamma
Investments Trust, a trust controlled by Dr. Phillip Frost, our largest
beneficial stockholder. We are obligated to pay interest at a 10%
annual rate on the borrowings on the line of credit, and we have granted a
security interest in all present and subsequently acquired collateral in order
to secure prompt, full and complete payment of the amounts due under the credit
agreement. In March 2009, we entered into an amendment to the credit
agreement solely to change the maturity date from December 31, 2009 to June 30,
2010.
In
connection with entering into the line of credit, we granted warrants to
purchase a total of 805,521 shares of common stock to The Frost Group, LLC and
Jeffrey G. Spragens. The warrants held by the Frost Group, LLC and
Mr. Spragens represent approximately 4% of our outstanding voting
securities. Furthermore, Frost Gamma Investments Trust beneficially
owns approximately 26% of our outstanding common stock.
Our
principal corporate office is located at 4400 Biscayne Blvd., Suite A-100,
Miami, Florida. We rent this space from Frost Real Estate Holdings,
LLC, which is a company controlled by Dr. Frost. We currently lease
approximately 3,200 square feet under the lease agreement, as amended, which has
a five-year term that began on January 1, 2008. The lease currently
requires annual rent of approximately $68,000, which amount increases by
approximately 4.5% per year.
Dr. Hsiao
is a director of Great Eastern Bank of Florida, a bank where we maintain a bank
account in the normal course of business. As of December 31, 2008, we
had approximately $260,000 on deposit with Great Eastern Bank of
Florida.
Dr.
Hsiao, Dr. Frost and Mr. Rubin are each significant shareholders, directors
and/or officers of Non-Invasive Monitoring Systems, Inc. (“NIMS”), a
publicly-traded medical device company, and of Aero Pharmaceuticals, Inc.
(“Aero”), a privately-held pharmaceutical distribution
company. Commencing in March 2008, our Chief Financial Officer also
serves as the Chief Financial Officer and supervises the accounting staffs of
NIMS and Aero under a Board-approved cost sharing arrangement whereby the total
salaries of the accounting staffs of the three companies are
shared. We recorded approximately $33,000 of net reductions to
operating costs and expenses for the year ended December 31, 2008 to account for
the sharing of costs under this arrangement.
On
December 30, 2008, we issued 8,197 shares of our common stock to RSLS
Investments, LLC, an entity controlled by Mr. Spragens as repayment in full of a
$10,000 non-interest bearing loan originally made in 2005 by RSLS Investments,
LLC to SafeStitch LLC. The exchange ratio was based upon the average
closing price of our common stock on the OTCBB for the five trading days
immediately preceding the transaction. The issuance of shares in this
transaction was exempt from registration under the Securities Act pursuant to
Section 4(2) thereof.
The Audit
Committee of our Board of Directors reviews and approves all transactions that
are required to be reported under Item 404(a) of Regulation S-K.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
Eisner
LLP (“Eisner”) has served as our independent registered public
accounting firm since 2006. We do not expect representatives of
Eisner LLP to be present at the Annual Meeting. If they do attend,
they will be available to respond to appropriate questions and will be given an
opportunity to make a statement if they so desire. The following
table sets forth the fees billed to the Company by Eisner for its audits of the
Company’s consolidated annual financial statements and other services for the
years ended December 31, 2008 and 2007.
|
|
2008
|
|
|
|
2007
|
|
|
Audit
Fees
|
|
$
|
74,750
|
|
|
|
$
|
145,442
|
|
(1)
|
Audit-Related
Fees
|
|
|
-
|
|
|
|
|
-
|
|
|
Tax
Fees
|
|
|
17,000
|
|
(2)
|
|
|
1,500
|
|
|
All
Other Fees
|
|
|
-
|
|
|
|
|
-
|
|
|
Total
Fees
|
|
$
|
91,750
|
|
|
|
$
|
146,942
|
|
|
(1)
|
Includes
$20,750 related to the audit of the SafeStitch LLC’s 2005 and 2006
financial statements. Includes $62,000 related to review of
financial statements and schedules related to the Share
Exchange.
|
(2)
|
Includes
fees related to the filing of the Company’s 2007 State and Federal tax
returns.
|
Pre-Approval
Policies and Procedures
Our Audit
Committee has a policy in place that requires its review and pre-approval of all
audit and permissible non-audit services provided by our independent
auditors. The services requiring pre-approval by the audit committee
may include audit services, audit related services, tax services and other
services. The pre-approval requirement is waived with respect to the
provision of non-audit services if (i) the aggregate amount of all such
non-audit services provided to us constitutes not more than 5% of the total
amount of revenues paid by us to our independent auditors during the fiscal year
in which such non-audit services were provided, (ii) such services were not
recognized at the time of the engagement to be non-audit services, and (iii)
such services are promptly brought to the attention of the Audit Committee or by
one or more of its members to whom authority to grant such approvals has been
delegated by the Audit Committee. During 2007 and 2008, audit related
services, tax services and all other services provided by Eisner were
pre-approved by the Audit Committee.
The Audit
Committee has considered and determined that the provision of all non-audit
services set forth in the table above is compatible with maintaining Eisner’s
independence.
As of the
date of this proxy statement, the Board of Directors knows of no other business
to be presented at the Annual Meeting. If any other business should
properly come before the Annual Meeting, the persons named in the accompanying
proxy will vote thereon as in their discretion they may deem appropriate, unless
they are directed by a proxy to do otherwise.
Under our
bylaws, only such business shall be conducted as shall have been brought before
the meeting as specified in the meeting notice, by or at the direction of the
Board of Directors or by any stockholder who is a stockholder of record at the
time of giving of the meeting notice, who is entitled to vote at such meeting
and who complies with the notice procedures set forth in Section 2.05 of our
bylaws. Stockholder proposals intended to be included in our proxy
statement and proxy for our 2010 Annual Meeting of Stockholders pursuant to the
provisions of Rule 14a-8 promulgated under the Securities Exchange Act of 1934,
as amended, must be received by us at our executive offices by January 12,
2010. Proposals received after such date, while not included in our
proxy statement or proxy, may still be brought before the 2010 Annual Meeting of
Stockholders, provided that any such proposal is delivered to or mailed and
received at our principal executive office no later than February 11,
2010.
PROXY
SAFESTITCH
MEDICAL, INC.
4400
Biscayne Blvd., Suite A-100
Miami, Florida
33137
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
ANNUAL
MEETING OF STOCKHOLDERS — JUNE 10, 2009
The
undersigned hereby appoints Jeffrey G. Spragens and Adam S. Jackson, and each of
them severally, as proxies of the undersigned, each with full power to appoint
his substitute, to represent the undersigned at the Annual Meeting (the “Annual
Meeting”) of Stockholders of SafeStitch Medical, Inc. (the “Company”) to be held
on June 10, 2009, and at any adjournments thereof, and to vote thereat all
shares of common stock of the Company held of record by the undersigned at the
close of business on April 24, 2009 in accordance with the instructions set
forth on this proxy card and, in their discretion, to vote such shares on any
other business as may properly come before the Annual Meeting and on matters
incident to the conduct of the Annual Meeting. Any proxy heretofore given by the
undersigned with respect to such stock is hereby revoked.
PLEASE MARK, DATE AND SIGN THIS PROXY
ON THE REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE
PLEASE
MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE FOLLOWING
PROPOSALS
1.
|
Election
of seven directors.
|
|
NOMINEES:
|
|
|
(1) Jane H.
Hsiao, Ph.D.
|
|
|
|
(2) Jeffrey G.
Spragens
|
|
|
|
(3) Charles J.
Filipi, M.D.
|
o
WITHHOLD
AUTHORITY FOR ALL NOMINEES
|
|
|
(4) Kenneth
Heithoff, M.D.
|
|
|
|
(5) Richard C.
Pfenniger, Jr.
|
o
FOR ALL
EXCEPT
|
|
|
(6) Steven D.
Rubin
|
|
|
|
(7) Kevin
Wayne, Ph.D.
|
INSTRUCTION:
To withhold
authority to vote for any individual nominee(s), mark
“FOR ALL EXCEPT”
and, in
the list to the left, strike a line through the name of the nominee for
whom you wish to withhold your vote.
|
|
|
|
|
2.
|
In
their discretion, the proxy holders are authorized to vote upon such other
matters as may properly come before the Annual Meeting or any postponement
or adjournment thereof.
|
THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS INDICATED. IF NO
CONTRARY INDICATION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF ELECTING THE
SEVEN NOMINEES TO THE BOARD OF DIRECTORS AND IN ACCORDANCE WITH THE JUDGMENT OF
THE PERSONS NAMED AS THE PROXIES HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY
COME BEFORE THE ANNUAL MEETING.
The undersigned acknowledges receipt
of the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
for the June 10, 2009 meeting.
Signature
of Shareholder ________________________________________
Date:
____________
Signature
of Shareholder ________________________________________
Date:
____________
NOTE:
Please sign exactly as your name or names appears hereon. When shares are held
by joint owners, both must sign. When signing as attorney, executor,
administrator, trustee or guardian, please give title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
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