SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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Securities Exchange Act of 1934 (Amendment No. )
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
Schick Technologies, Inc.
--------------------------------------------------------------------------------
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[LOGO]
schick
creating the image
August 18, 2004
Dear Stockholders:
You are cordially invited to attend the 2004 Annual Meeting of
Stockholders of Schick Technologies, Inc. (the "Company"), to be held on
Wednesday, September 22, 2004, beginning at 10:00 a.m. at the Company's offices,
located at 30-00 47th Avenue, 5th floor, Long Island City, New York 11101.
Information about the meeting and the various matters on which the
stockholders will vote is included in the Notice of Meeting and Proxy Statement
which follow. Also included is a proxy card and postage-paid return envelope.
Please sign, date and mail the enclosed proxy card in the return envelope
provided, as promptly as possible, whether or not you plan to attend the
meeting. A copy of the Company's 2004 Annual Report is also enclosed for your
review.
I look forward to greeting you personally at the meeting.
Sincerely,
Jeffrey T. Slovin
Chief Executive Officer and President
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
September 22, 2004
TO THE STOCKHOLDERS OF SCHICK TECHNOLOGIES, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of Schick
Technologies, Inc. (the "Company") will be held on Wednesday, September 22,
2004, beginning at 10:00 a.m., at the Company's offices located on the fifth
floor of 30-00 47th Avenue, Long Island City, New York, for the following
purposes:
1. To elect three (3) directors to serve for three-year terms or until
their respective successors are elected and qualified;
2. To ratify the selection of Grant Thornton LLP as the Company's
independent certified public accountants for the fiscal year ending
March 31, 2005; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of record of Common Stock as of the close of business on
August 18, 2004 are entitled to notice of and to vote at the meeting and any
adjournment thereof.
In accordance with Delaware law, a list of the holders of Common Stock
entitled to vote at the 2004 Annual Meeting will be available for examination by
any stockholder for any purpose germane to the Annual Meeting, during ordinary
business hours, for at least 10 days prior to the Annual Meeting, at the offices
of the Company, 30-00 47th Avenue, Long Island City, New York.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IF YOU LATER DESIRE TO REVOKE YOUR PROXY, YOU
MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
By Order of the Board of Directors,
Zvi N. Raskin
Secretary
Long Island City, New York
August 18, 2004
[LOGO]
schick
creating the image
Schick Technologies, Inc.
30-00 47th Avenue
Long Island City, New York 11101
(718) 937-5765
----------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On September 22, 2004
This Proxy Statement is furnished in connection with the solicitation of
the enclosed proxy by the Board of Directors of Schick Technologies, Inc. (the
"Company") for use at the 2004 Annual Meeting of Stockholders (the "Annual
Meeting") to be held on September 22, 2004, at 10:00 a.m.., New York time, at
the Company's offices, located on the fifth floor of 30-00 47th Avenue, Long
Island City, New York, and at any adjournments thereof, for the purposes set
forth in the Notice of Annual Meeting of Stockholders. This Proxy Statement and
the form of proxy enclosed are being mailed to stockholders with the Company's
Annual Report to Stockholders commencing on or about August 20, 2004.
Only stockholders of record of the common stock, par value $0.01 per
share, of the Company (the "Common Stock") at the close of business on August
18, 2004 will be entitled to vote at the Annual Meeting. As of August 3, 2004, a
total of 15,048,167 shares of Common Stock were outstanding, each share being
entitled to one vote. There is no cumulative voting. The presence at the Annual
Meeting, in person or by proxy, of the holders of a majority of the shares of
Common Stock will constitute a quorum for the transaction of business at the
Annual Meeting. If, however, a quorum is not present or represented at the
Annual Meeting, the stockholders entitled to vote thereat, present in person or
represented by proxy, will have the power to adjourn the Annual Meeting, without
notice other than announcement at the Annual Meeting, until a quorum shall be
present or represented.
Shares of the Company's Common Stock represented by proxies in the
accompanying form, which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in the manner directed by a stockholder. If no direction is given, the
proxy will be voted FOR the election of the nominees for director named in this
Proxy Statement, and FOR ratification of the selection of Grant Thornton LLP as
the Company's independent
1
certified public accountants. A stockholder may revoke a proxy at any time prior
to its exercise by giving to an officer of the Company a written notice of
revocation of the proxy's authority, by submitting a duly elected proxy bearing
a later date, by attending the Annual Meeting and voting in person or by
delivering a written revocation at the Annual Meeting.
If a stockholder returns a proxy withholding authority to vote the proxy
with respect to a nominee for director, then the shares of the Common Stock
covered by such proxy shall be deemed present at the Annual Meeting for purposes
of determining a quorum and for purposes of calculating the vote with respect to
such nominee, but shall not be deemed to have been voted for such nominee. If a
stockholder abstains from voting as to any matter, then the shares held by such
stockholder shall be deemed present at the Annual Meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such matter, but shall not be deemed to have been voted in favor of such matter.
If a broker returns a "non-vote" proxy, indicating a lack of authority to vote
on such matter, then the shares covered by such non-vote shall be deemed present
at the Annual Meeting for purposes of determining a quorum but shall not be
deemed to be present and entitled to vote at the Annual Meeting for purposes of
calculating the vote with respect to such matter. The three nominees for
director for three-year terms receiving the highest number of votes at the
Annual Meeting will be elected. The affirmative vote of a majority of the
outstanding shares of Common Stock present in person or by proxy at the Annual
Meeting is required to ratify the selection of the Company's certified public
accountants.
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no business that will be presented for consideration at the
Annual Meeting other than the matters described in this Proxy Statement. If any
other matters are properly brought before the Annual Meeting, the persons named
in the enclosed form of proxy will vote the proxies in accordance with their
best judgment.
PROPOSAL ONE:
ELECTION OF DIRECTORS
The Board of Directors of the Company is currently composed of seven
members divided into three classes. The members of each class are elected to
serve three-year terms with the term of office of each class ending in
successive years. William K. Hood, Curtis M. Rocca III and Jeffrey T. Slovin are
the directors in the class whose term expires at the Annual Meeting. The Board
of Directors has nominated William K. Hood, Curtis M. Rocca III and Jeffrey T.
Slovin for re-election and the three nominees have indicated a willingness to
serve. The members of the two other classes of directors will continue in office
for their existing terms. Upon the expiration of the term of a class of
directors, the nominees for such class will generally be elected for three-year
terms at
2
the annual meeting of stockholders held in the year in which such term expires.
A plurality of the shares of Common Stock present and voting at the Annual
Meeting is necessary to elect the nominees for director.
The persons named as proxies in the enclosed form of proxy will vote the
proxies received by them for the election of William K. Hood, Curtis M. Rocca
III and Jeffrey T. Slovin, unless otherwise directed. In the event that any of
the nominees become unavailable for election at the Annual Meeting, the persons
named as proxies in the enclosed form of proxy may vote for a substitute nominee
in their discretion as recommended by the Board of Directors.
Information concerning the nominees and incumbent directors whose terms
will continue after the Annual Meeting is set forth below.
Jonathan Blank, Esq. Age 59, has served as a Director of the Company
(Term expires in 2005) and as a member of the Audit Committee of the
Board of Directors since April 2000 and as a
member of the Executive Compensation Committee
since May 2002. Mr. Blank's current term on the
Board expires at the Company's Annual Meeting of
Stockholders in 2005. Since 1979, Mr. Blank has
been a member of the law firm of Preston Gates
Ellis & Rouvelas Meeds LLP, a managing partner
of the firm since 1995. Mr. Blank holds a J.D.
degree from Harvard Law School.
Allen Schick, Ph.D. Age 70, has served as a Director of the Company
(Term expires in 2006) since April 1992 and as a member of the
Executive Compensation Committee since May 2002.
Dr. Schick's current term on the Board expires
at the Company's Annual Meeting of Stockholders
in 2006. Since 1981, Dr. Schick he has been a
professor at the University of Maryland and, in
2000, was elected "Distinguished University
Professor", a title reserved for fewer than 2%
of the faculty. Since 1988, has been a Visiting
Fellow at the Brookings Institution. Dr. Schick
holds a Ph.D. degree from Yale University. Dr.
Schick is the father of David B. Schick, the
Company's former Chairman and Chief Executive
Officer, and the brother-in-law of Dr.
Barrekette.
Uri D. Landesman Age 42, has served as a Director of the Company
(Term expires in 2006) since January 2003 and from April 1992 to June
1997. He also
3
has served as a member of the Nominating
Committee since August 2004. Mr. Landesman's
current term on the Board expires at the
Company's Annual Shareholders Meeting in 2006.
Since January 2004, Mr. Landesman has been a
Senior Vice President and Director of Global
Research at Federated Global Investment
Management Corp. and Senior Portfolio Manager at
Federated since February 2003. From July 2001 to
January 2003, Mr. Landesman was a Principal and
Portfolio Manager at Arlington Capital
Management. From April 1999 to June 2001, he was
a Principal and Chief Investment Officer at
Aaron Fleck & Associates, LLC/A.F.A. Management
Partners, L.P. From June 1993 to March 1999, Mr.
Landesman was employed at J.P. Morgan Investment
Management, as Vice-President and Lead Portfolio
Manager from February 1997 to March 1999, and as
Vice-President and Senior Analyst from June 1993
to January 1997. He holds a B.A. degree from
Yeshiva University.
William K. Hood Age 80, has served as Chairman of the Board of
(Nominee with new term Directors since June 2004, and as a Director of
expiring in 2007) the Company and as Chairman of the Audit
Committee of the Board of Directors since
February 2002. He also has served as a member of
the Executive Compensation Committee since May
2002 and as a member of the Nominating Committee
since August 2004. Mr. Hood's current term on
the Board expires at the Company's Annual
Meeting of Stockholders in 2004. From 1989 to
1996, Mr. Hood served as a Consultant to Harlyn
Products, Inc. and as a member of its Board of
Directors. From 1983 to 1988, he was Senior
Vice-President of American Bakeries Company.
From 1981 to 1983, Mr. Hood served as Dean of
the Chapman University School of Business
Management. From 1972 to 1980, he was President
and Chief Executive Officer of Hunt-Wesson
Foods, Inc. Mr. Hood is a Trustee of Chapman
University.
Curtis M. Rocca III Age 42, has served as a Director of the Company
(Nominee with new term and as a member of the Audit Committee of the
Board of
4
expiring in 2007) Directors since May 2002. He also has served as
a member of the Executive Compensation Committee
since May 2002 and as a member of the Nominating
Committee since August 2004. Mr. Rocca's current
term On the Board expires at the Company's
Annual Meeting Of Stockholders in 2004. Since
2000, Mr. Rocca has been The Chief Executive
Officer of Douglas, Curtis & Allyn, LLC. From
1998 to 2000, he served as Chief Executive
Officer of Dental Partners, Inc. From 1990 to
1998, Mr. Rocca was Chairman and Chief Executive
Officer of Bio- Dental Technologies Corp.
Jeffrey T. Slovin Age 39, has served as the Company's Chief
(Nominee with new term Executive Officer since June 15, 2004 and as its
expiring in 2007) President since December 1999. He also served as
a Director of the Company since December 1999.
In addition, from November 2001 to June 15,
2004, Mr. Slovin served as the Company's Chief
Operating Officer. Mr. Slovin's current term on
the Board expires at the Company's Annual
Meeting of Stockholders in 2004. Since November
2001, Mr. Slovin has been a member of the Board
of Directors of Electronic Global Holding LTD.
From 1999 to November 2001, Mr. Slovin was a
Managing Director of Greystone & Co., Inc. From
1996 to 1999, he served in various executive
capacities at Sommerset Investment Capital LLC,
including Managing Director, and as President of
Sommerset Realty Investment Corp. During 1995,
Mr. Slovin was a Manager at Fidelity Investments
Co. From 1991 to 1994, he was Chief Financial
Officer of SportsLab USA Corp. and, from 1993 to
1994, was also President of Sports and
Entertainment Inc. From 1987 to 1991, Mr. Slovin
was an associate at Bear Stearns & Co.,
specializing in mergers and acquisitions and
corporate finance. Mr. Slovin holds an MBA
degree from Harvard Business School.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MR. WILLIAM K.
HOOD, MR. CURTIS M. ROCCA III AND MR. JEFFREY T. SLOVIN AS DIRECTORS OF THE
COMPANY.
5
Meetings and Committees of the Board of Directors
During fiscal 2004, the Board of Directors held fourteen (14) meetings.
Each Director holding office during the year attended at least 75% of the total
number of meetings of the Board of Directors and committees of the Board on
which he served. The Board of Directors has an Audit Committee, an Executive
Compensation Committee and a Special Litigation Committee, which are described
below. In addition, the Board of Directors has a Nominating Committee, which is
described below in the Section titled "Executive Compensation Committee Report
on Executive Compensation."
Audit Committee
The Audit Committee currently consists of three independent directors. The
Audit Committee requires that all of its members be "independent directors," as
such term is defined in Rule 4200(a) (15) of the Nasdaq Marketplace Rules.
The primary function of the Audit Committee is to serve as an independent
and objective party to oversee the Company's accounting and financial reporting
processes and internal control system; to pre-approve all auditing and
non-auditing services to be provided by the Company's independent certified
public accountants; to review and oversee the audit efforts of the Company's
independent certified public accountants; and to provide an open avenue of
communication among the independent certified public accountants, financial and
senior management and the Board of Directors. The Audit Committee has
responsibility and authority, among other matters, to review with Company
management any financial information filed with the SEC or disseminated to the
public; to establish and maintain procedures for receiving and treating
complaints regarding accounting, internal accounting controls and auditing
matters, and for the confidential anonymous submission by employees of concerns
regarding these matters; to appoint, determine funding for and oversee the
Company's independent certified public accountants; to review, in consultation
with the independent certified public accountants and the Company's accounting
personnel, the integrity of the Company's financial reporting processes; and to
review in advance any proposed transaction between the Company and any related
party. The Audit Committee's Charter was adopted on June 30, 2002 and amended on
April 9, 2003 and on June 2, 2004. A copy of the current Audit Committee
Charter, as amended, is attached to this Proxy Statement as Appendix A.
At present, the members of the Audit Committee are William K. Hood, who
serves as Chairman, Jonathan Blank and Curtis M. Rocca III. The Audit Committee
held five (5) meetings during fiscal 2004.
6
Executive Compensation Committee
The Executive Compensation Committee has oversight responsibility relating
to the Company's compensation of its executive officers and the administration
of, and recommendation of awards under the Company's 1996 Employee Stock Option
Plan. At present, the members of the Executive Compensation Committee are Curtis
M. Rocca III, who serves as Chairman, Euval Barrekette, Jonathan Blank, William
K. Hood, Uri Landesman and Allen Schick.
Special Litigation Committee
In September 2003, the Board of Directors appointed a Special Litigation
Committee, consisting of four independent Directors: Jonathan Blank, who serves
as Chairman, William K. Hood, Uri Landesman and Curtis M. Rocca III. This
Committee has oversight responsibility and authority with respect to the SEC's
civil action against the Company (and various individuals), and the U.S.
Attorney investigation relating to the Company.
Compensation of Directors
Directors who are also paid employees of the Company are not separately
compensated for any services they provide as directors. In fiscal 2004, each
director of the Company who was not a paid employee of the Company received an
annual retainer of $10,000 as well as $1,000 for each Board meeting attended in
person and $1,000 for each committee meeting attended in person. Each committee
chairman also received an additional annual retainer of $5,000 for each such
chairmanship, and each member of the Audit Committee also received an additional
annual retainer of $5,000. Commencing in June 2004, upon William K. Hood's
appointment as Chairman of the Board, Mr. Hood receives a retainer of $7,500
each quarter for his service as Chairman. In addition, Directors who are not
paid employees of the Company are eligible to receive annual grants of stock
options under the Company's Directors Stock Option Plan.
EXECUTIVE OFFICERS
The following table shows the names and ages of all executive officers of
the Company, their positions and offices and the period during which each such
person served as an officer.
7
Officer
Name Age Position Since
-------------------------------------- --- ---------------------------------------- -------
Jeffrey T. Slovin..................... 39 Chief Executive Officer, President and 1999
Director
Michael Stone......................... 51 Executive Vice-President of Sales & 2000
Marketing
Stan Mandelkern....................... 44 Vice President of Engineering 1999
Ari Neugroschl........................ 33 Vice President of Management Information 2000
Systems
Zvi N. Raskin......................... 41 Secretary and General Counsel 1992
Will Autz............................. 50 Vice President of Manufacturing 2003
Ronald Rosner......................... 57 Director of Finance and Administration 2000
The business experience of each of the executive officers who is neither a
nominee for Director nor a Director whose term of office will continue after the
Annual Meeting is set forth below.
MICHAEL STONE has served as the Company's Executive Vice President of Sales and
Marketing since September 2000 and as the Company's Vice President of Sales and
Marketing from January 2000 to September 2000. From September 1993 to January
2000, Mr. Stone was General Manager of the Dental Division of Welch-Allyn
Company, and from October 1989 to September 1993 was Director of Marketing for
Welch-Allyn. Mr. Stone holds an MBA degree from the University of Rochester.
STAN MANDELKERN has served as the Company's Vice President of Engineering since
November 1999. From 1998 to 1999, Mr. Mandelkern was the Company's Director of
Electrical Engineering, and was a Senior Electrical Engineer at the Company from
1997 to 1998. From 1996 to 1997, Mr. Mandelkern was at Satellite Transmission
Systems, where he served as Project Leader for the Digital Video Products Group.
From 1989 to 1996, Mr. Mandelkern held various design and management positions
at Loral Corp. Mr. Mandelkern holds an M.S. Degree in electrical engineering
from Syracuse University.
ARI NEUGROSCHL has served as the Company's Vice President of Management
Information Systems since July 2000. From November 1997 to July 2000, Mr.
Neugroschl was the Company's Director of Management Information Systems, and
from February 1996 to November 1997 he served as the Company's Director of
Customer Service and Support. Mr. Neugroschl holds a B.S. in Economics from
Yeshiva University.
8
ZVI N. RASKIN has served as Secretary of the Company since April 1992 and as
General Counsel of the Company since September 1995. From April 1992 to May
1996, Mr. Raskin was a Director of the Company. Mr. Raskin is admitted to
practice law before the Bars of the State of New York, the United States
District Courts for the Southern and Eastern Districts of New York and the
United States Court of Appeals for the Second Circuit. From 1992 to 1995, Mr.
Raskin was a senior associate at the New York law firm of Townley & Updike. Mr.
Raskin holds a J.D. degree from Yale Law School.
WILL AUTZ has served as the Company's Vice President of Manufacturing since
January 2003. From January 2000 to December 2002, Mr. Autz was the Company's
Director of Manufacturing. From 1996 to 1999, Mr. Autz was the Manager of
Manufacturing Engineering at Trident International Inc., a division of Illinois
Tools Work Inc. From 1991 to 1996, Mr. Autz was the Director of Manufacturing &
Manufacturing Engineering at General Signal Networks, a division of General
Signal Inc. Mr. Autz holds a BS in Electromechanical Technology from the New
York Institute of Technology and is a member of the American Society of
Manufacturing Engineers.
RONALD ROSNER has served as the Company's Director of Finance and Administration
since August 2000. From March 1999 to August 2000, Mr. Rosner served the Company
in several senior accounting and finance capacities. From October 1998 to
February 1999, Mr. Rosner was a consultant at Mercantile Ship Corporation, and
from April 1997 to October 1998 was the Chief Financial Officer of Coast
Manufacturing. Prior to 1997, Mr. Rosner held additional positions in the
accounting field, including serving with the predecessor to Ernst & Young LLP
for a period of approximately twelve years, four years of which as an audit
manager. Mr. Rosner holds a B.S. degree in Accounting from Brooklyn College and
has been a Certified Public Accountant in the State of New York since May 1972.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
received for the fiscal years ended March 31, 2004, 2003 and 2002 by the
Company's chief executive officer and each of the four most highly compensated
executive officers of the Company whose total salary and other compensation
exceeded $100,000 (the "Named Executives") for services rendered in all
capacities (including service as a director of the Company) during the year
ended March 31, 2004.
9
Summary Compensation Table
Annual Compensation Long-Term Compensation Awards
------------------------------- ------------------------------------
Other
Annual Securities All Other
Fiscal Salary Compensa- Underlying Compensa-
Name and Principal Position Year ($) Bonus($) tion(1) Options(2) tion($)(3)
------------------------------------------------------------------------------------------------------------------
David B. Schick 2004 266,185 100,000 -- 7,379 9,041
Former Chief Executive Officer 2003 246,540 90,463 -- 8,572 6,708
and Former Chairman of the Board 2002 225,246 50,000 -- 160,709 4,362
------------------------------------------------------------------------------------------------------------------
Jeffrey T. Slovin 2004 266,378 100,000 -- 7,318 9,690
Chief Executive Officer 2003 246,646 90,463 -- 8,502 6,710
and President 2002 89,430 57,263 -- 150,000 1,846
------------------------------------------------------------------------------------------------------------------
Michael Stone 2004 224,700 68,552 -- 6,851 9,335
Executive Vice President of 2003 212,487 45,232 -- 7,439 5,894
Sales and Marketing 2002 193,577 48,154 -- 135,207 4,491
------------------------------------------------------------------------------------------------------------------
Zvi N. Raskin, Esq. 2004 235,532 13,530 -- 7,111 12,134
General Counsel and 2003 222,690 28,025 -- 7,793 5,078
Secretary 2002 204,154 20,000 -- 36,018 4,527
------------------------------------------------------------------------------------------------------------------
Stan Mandelkern 2004 172,895 35,031 -- 6,606 10,195
Vice President of 2003 163,241 5,952 -- 7,240 4,081
Engineering 2002 154,615 -- -- 30,108 3,865
------------------------------------------------------------------------------------------------------------------
(1) Does not include other compensation if the aggregate amount thereof does
not exceed the lesser of either $50,000 or 10% of the total annual salary
and bonus for the named officer.
(2) Represents options to purchase shares of Common Stock granted during
fiscal 2004, 2003 and 2002, pursuant to the Company's 1996 Employee Stock
Option Plan.
(3) Reflects amounts contributed by the Company in the form of matching
contributions to the Named Executive's Savings Plan account during fiscal
2004, 2003 and 2002.
Stock Option Grants
The following table sets forth information regarding grants of options to
purchase Common Stock made by the Company during the year ended March 31, 2004
to each of the Named Executives.
10
Option Grants in Fiscal 2004
Individual Grants
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees in Exercise
Options Fiscal Price Expiration Grant Date
Name Granted(1) 2004(2) ($/Share) Date Value (3)
---------------------------- ---------- ------------ --------- ---------- ----------
David B. Schick 7,379 4.2% $ 8.25 11/4/08 $ 29,708
Jeffrey T. Slovin 7,318 4.2% $ 7.50 11/4/13 $ 30,648
Michael Stone 6,851 3.9% $ 7.50 11/4/13 $ 28,692
Stan Mandelkern 6,606 3.8% $ 7.50 11/4/13 $ 27,666
Zvi N. Raskin 7,111 4.1% $ 7.50 11/4/13 $ 29,781
(1) All the options listed in the above table have the following vesting
schedule: 25% shall vest on November 3, 2004, 25% shall vest on November
3, 2005, 25% shall vest on November 3, 2006 and the final 25% shall vest
on November 3, 2007.
(2) The Company granted employees options to purchase a total of 175,000
shares of Common Stock in fiscal 2004.
(3) The Company uses the Black-Scholes valuation model to determine the grant
date value. Assumptions used to calculate the grant date value include:
Volatility 75%
Risk-free interest rate 1.29%
Dividend yield None
Time of exercise 4 years
Option Exercises and Year-End Value Table
The following table sets forth information regarding the exercise of stock
options during fiscal 2004 and the number and value of unexercised options held
at March 31, 2004 by each Named Executive.
Aggregated Option Exercises in Fiscal 2004 and Fiscal 2004 Year-End Option
Values
Number of
Securities
Underlying Value of Unexercised
Unexercised Options "In-the-Money" Options
Shares at March 31, 2004 at March 31, 2004
Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable Unexercisable(1)
------------------------ ----------- -------------- ------------------- -----------------------
David B. Schick -- -- 109,639/67,021 $916,958/471,524
Jeffrey T. Slovin -- -- 132,125/63,695 $1,180,713/492,713(2)
Michael Stone -- -- 134,003/40,494 $1,205,126/314,543
Stan Mandelkern -- -- 62,609/20,025 $498,560/131,672
Zvi N. Raskin -- -- 30,909/22,512 $101,792/147,864
(1) Options are "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the options. The amounts set
forth represent the difference between $10.05 per share, the closing price
per share on March 31, 2004, and the exercise price of the option,
multiplied by the applicable number of options.
(3) This chart does not include warrants issued to Mr. Slovin as designee of
Greystone. Such warrants are discussed in Item 13.
11
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
In May 2004, the Company entered into a Consulting and Non-Competition
Agreement with David Schick, effective upon Mr. Schick's resignation in June
2004 as the Company's Chief Executive Officer and Chairman of the Board. The
Agreement provides for the termination of Mr. Schick's previous Employment
Agreement, described below, and that Mr. Schick is to act as a technical
consultant to the Company for a period of three years. As a consultant, Mr.
Schick is responsible for performing certain specified duties, including the
exploration and evaluation of new product ideas and enhancements, evaluating
technical issues relating to potential products or entity acquisitions,
conducting research and development projects, and providing advice with respect
to intellectual property issues. Pursuant to the Agreement, Mr. Schick reports
to the Company's Chief Executive Officer. It also provides that during the term
of the Agreement, and for a period of two years thereafter, Mr. Schick may not
compete with the Company or solicit Company employees, customers or vendors. In
addition, Mr. Schick is required to maintain the confidentiality of the
Company's proprietary information. Pursuant to the Agreement, Mr. Schick is to
be compensated, in full payment for the consulting services to be rendered to
the Company and for his non-competition and other covenants contained in the
Agreement, in the amount of $28,333 per month for a period of 36 months. In
addition, the Agreement provides that 66,307 unvested employee stock options
held by Mr. Schick shall continue to vest. Previously, in December 2001, the
Company had entered into a three-year employment agreement with Mr. Schick,
pursuant to which Mr. Schick was employed as Chief Executive Officer of the
Company until June 2004. The agreement provided for an annual performance bonus
and a grant of 150,000 employee stock options. Effective June 2004, Mr. Schick
resigned as the Company's Chief Executive Officer and Chairman of the Board, and
his December 2001 employment agreement was terminated by mutual consent of the
parties.
In June 2004, the Company entered into a three-year employment agreement
with Jeffrey T. Slovin. Pursuant to the Agreement, Mr. Slovin is employed as the
Company's Chief Executive Officer and President. Mr. Slovin's annual base salary
is $325,000, $337,000 and $350,000, respectively, during each year of the
initial 3-year term of the Agreement. In addition to base salary, Mr. Slovin is
eligible to receive a yearly bonus payment based on the Company's year-over-year
Earnings-Per-Share growth, as defined in the Agreement. Pursuant to the
Agreement, Mr. Slovin was also awarded 400,000 employee stock options which vest
in equal monthly increments over a period of 48 months. Additionally, under the
Agreement, all Company stock options held by Mr. Slovin will immediately vest in
the event that the Company has a change in control
12
or is acquired by another company or entity, or, under certain circumstances, if
Mr. Slovin is terminated from employment without cause. In addition, if Mr.
Slovin is terminated without cause, the Agreement provides that he shall receive
severance payments equal to 12 months' salary and, if applicable, a pro-rated
bonus. Previously, in November 2001, the Company had entered into a three-year
employment agreement with Mr. Slovin, pursuant to which Mr. Slovin was employed
as the Company's President and Chief Operating Officer. The agreement provided
for an annual performance bonus and a grant of 150,000 employee stock options.
Effective June 2004, Mr. Slovin's November 2001 agreement was terminated by
mutual consent of the parties.
In June 2004, the Company entered into a two-year employment agreement
with Michael Stone. Pursuant to the Agreement, Mr. Stone is employed as the
Company's Executive Vice President of Sales and Marketing. Mr. Stone's annual
base salary is $250,000 and $260,000, respectively, during each year of the
2-year term of the Agreement. In addition to base salary, Mr. Stone is eligible
to receive a yearly bonus payment based on the Company's year-over-year
Earnings-Per-Share growth, as defined in the Agreement. Pursuant to the
Agreement, Mr. Stone was also awarded 150,000 employee stock options which vest
in equal monthly increments over a period of 48 months. Additionally, under the
Agreement, all Company stock options held by Mr. Stone will immediately vest in
the event that the Company has a change in control or is acquired by another
company or entity, or, under certain circumstances, if Mr. Stone is terminated
from employment without cause. In addition, if Mr. Stone is terminated without
cause, the Agreement provides that he shall receive severance payments equal to
12 months' salary and, if applicable, a pro-rated bonus. Previously, in January
2002, the Company had entered into a two-year employment agreement with Mr.
Stone, pursuant to which Mr. Stone was employed as the Company's Executive Vice
President of Sales and Marketing. The agreement provided for an annual
performance bonus and a grant of 75,000 employee stock options.
EXECUTIVE COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
This report shall not be deemed incorporated by reference by any general
statement incorporating this Proxy Statement into any filing under the
Securities Act of 1933 or under the Exchange Act, except to the extent that the
Company specifically incorporates the information contained herein by reference,
and shall not otherwise be deemed filed under those acts.
13
Compensation Philosophy: The Company does business in a competitive and
dynamic industry. The Company's continued success in such an environment
depends, in part, on its ability to attract and retain talented senior
executives. The Company must provide executives with long- and short-term
incentives to maximize corporate performance, and reward successful efforts to
do so. As a result, the Committee's compensation policies are designed to:
(i) Provide a competitive level of compensation to attract and retain
talented management;
(ii) Reward senior executives for corporate performance;
(iii) Align the interests of senior executives with the Company's
stockholders in order to maximize stockholder value;
(iv) Motivate executive officers to achieve the Company's business
objectives; and
(v) Reward individual performance.
To achieve these compensation objectives, the Committee has developed
compensation packages for senior executive officers generally consisting of base
salary, awards of stock options and, in certain cases, bonus arrangements.
Base Salary. The Company seeks to pay competitive salaries to executive
officers commensurate with their qualifications, duties and responsibilities. In
conducting salary reviews, the Committee considers each individual executive
officer's achievements during the prior fiscal year in meeting the Company's
financial and business objectives, as well as the executive officer's
performance of individual responsibilities and the Company's financial position
and overall performance.
Option Grants. The Committee believes that equity ownership by executive
officers provides incentive to build stockholder value and aligns the interests
of the Company's officers with its stockholders. The Committee typically
recommends or awards an option grant upon hiring executive officers or within
one year of their date of hire, subject to a maximum four-year vesting schedule.
After the initial stock option grant, the Committee periodically considers
additional grants, under the Company's 1996 Employee Stock Option Plan. Options
are granted at the then-current market price for the Company's Common Stock and,
consequently, have value only if the price of the Common Stock increases over
the exercise price during the period in which the option is exercisable. The
size of the initial grant is usually determined with reference to the seniority
of the officer, his or her level of compensation, the contribution the officer
is expected to make to the Company and comparable equity compensation offered by
others in the industry. In determining the size of the periodic grants, the
Committee
14
considers prior option grants to the officer, independent of whether the options
have been exercised, the executive's performance during the year and his or her
expected contributions in the succeeding year. The Committee also believes that
periodic option grants provide incentives for executive officers to remain with
the Company.
Bonuses. The Committee believes that performance bonuses can serve an
important function by adding a short-term performance-based incentive to an
executive's compensation package.
Modification of Compensation Policies. The Omnibus Budget Reconciliation
Act of 1993 includes potential limitations on tax deductions for compensation in
excess of $1,000,000 paid to the Company's executive officers. The Compensation
Committee has analyzed the impact of this provision of the tax law on the
compensation policies of the Company, has determined that historically the
effect of this provision on the taxes paid by the Company has not and would not
have been significant and has decided for the present not to modify the
compensation policies of the Company based on such provision. In the event that
a material amount of compensation might potentially not be deductible, it will
consider what actions, if any, should be taken to seek to make such compensation
deductible without compromising its ability to motivate and reward excellent
performance.
Executive Compensation. The Committee periodically reviews the performance
of the Chief Executive Officer, and various other executive officers of the
Company. In June 2004, the Company entered into three-year employment agreements
with Jeffrey T. Slovin, President and Chief Executive Officer, and Michael
Stone, Executive Vice President. Prior to entering into these agreements, the
Committee conducted a review of Mr. Slovin's and Mr. Stone's compensation. The
Committee considered, among other items, salary data for other companies and the
Company's earnings and financial position in comparison to preceding years. The
terms of Mr. Slovin's and Mr. Stone's employment agreements are discussed above.
See "Employment Agreements and Termination of Employment Arrangements,"
Curtis M. Rocca III, Chairman
William K. Hood, Jonathan Blank, Euval Barrekette,
Uri Landesman and Allen Schick
Members of the Executive
Compensation Committee
15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee reviews and makes recommendations
regarding the compensation for top management and key employees of the Company,
including salaries, bonuses and stock options. The members of the Executive
Compensation Committee during the fiscal year ended March 31, 2004 were Euval
Barrekette, Jonathan Blank, William K. Hood, Uri Landesman, Curtis M. Rocca III,
who serves as Chairman, and Allen Schick. None of such persons is an officer or
employee, or former officer or employee, of the Company or any of its
subsidiaries. Allen Schick and Euval Barrekette are the father and uncle,
respectively, of the Company's former Chief Executive Officer. No interlocking
relationship existed during the fiscal year ended March 31, 2004 between the
members of the Company's Board of Directors or Compensation Committee and the
board of directors or compensation committee of any other company, nor had any
such interlocking relationship existed in the past.
DIRECTOR NOMINATION PROCESS
The Board of Directors has a Nominating Committee, consisting of Curtis M.
Rocca III, William K. Hood and Uri Landesman. The Nominating Committee was
established by resolution of the Board of Directors on August 3, 2004. The
function of the Nominating Committee is to establish criteria for selecting
candidates for nomination to the Board of Directors, actively seek candidates to
meet those criteria, and to recommend nominees to the Board of Directors of
nominees. The Nominating Committee will consider director candidates who have
relevant business experience, are accomplished in their respective fields and
who possess the skills and expertise to make a significant contribution to the
Board of Directors, the Company and its Shareholders. Director nominees should
have relevant business or other experience, knowledge about issues affecting the
Company and the ability and willingness to apply sound and independent business
judgment.
The Nominating Committee will consider nominees for election or
appointment to the Board of Directors that are recommended by Shareholders,
provided that a complete description of the nominees' qualifications, experience
and background, together with a statement signed by each nominee in which he or
she consents to act as such, accompany the recommendations. Such recommendations
should be submitted in writing to the attention of the Nominating Committee, c/o
Corporate Secretary, Schick Technologies, Inc., 30-00 47th Avenue, Long Island
City, NY 11101 and should not Include self-nominations.
16
The following graph compares the Company's cumulative stockholder
return on its Common Stock with the return on the Russell 2000 Index and the Dow
Jones Advanced Technology Medical Devices Index from March 31, 1999 through
March 31, 2004, the end of the Company's last fiscal year. The graph assumes
investments of $100 on March 31, 1999 in the Company's Common Stock, the Russell
2000 Index and the Dow Jones Advanced Technology Medical Devices Index and
assumes the reinvestment of all dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG SCHICK TECHNOLOGIES, INC., THE RUSSELL 2000 INDEX
AND THE DOW JONES US ADVANCED MEDICAL DEVICES INDEX
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Cumulative Total Return
-------------------------------------------------------------
3/99 3/00 3/01 3/02 3/03 3/04
SCHICK TECHNOLOGIES, INC. 100.00 59.71 19.76 52.12 103.76 243.64
RUSSELL 2000 100.00 137.29 116.25 132.51 96.78 158.55
DOW JONES US ADVANCED MEDICAL DEVICES 100.00 137.55 132.63 140.08 144.42 187.57
* $100 invested on 3/31/99 in stock or index- including reinvestment of
dividends.
Fiscal year ending March 31.
CERTAIN TRANSACTIONS
In connection with the December 1999 loan agreement with Greystone
(amended in March 2000), the Company issued to Greystone 4,250,000 warrants (the
"Warrants") to purchase the Company's Common Stock, and to Jeffrey T. Slovin, as
Greystone's
17
designee, 750,000 warrants to purchase the Company's Common Stock. The Warrants
are exercisable at $0.75 per share and are subject to anti-dilution adjustment.
Mr. Slovin is the Company's President and Chief Executive Officer and serves as
a Director of the Company. In July 2001, the Company repaid the Greystone loan
in full and the Greystone loan agreement was terminated. Certain notes payable
to DVI Financial Services, Inc. ("DVI"), which were assigned to Greystone in
2000, were repaid in full as of June 30, 2003. In connection with such
assignment, DVI transferred warrants to purchase 552,500 shares of Common Stock
to Greystone and warrants to purchase 97,500 shares of Common Stock to Jeffrey
T. Slovin, as Greystone's designee. Such transferred warrants are exercisable at
$0.75 per share and are subject to anti-dilution adjustment. In March 2004,
Greystone exercised all of its outstanding warrants. In one transaction,
Greystone paid $414,000, to acquire 552,500 unregistered shares of common stock.
In a second transaction, Greystone exercised under the cashless provision
governing its grant of 4,250,000 warrants and received 3,975,216 unregistered
shares of common stock. The market price of the Company's common stock was
$11.60 at the date of exercise.
In May 2004, the Company entered into a Consulting and Non-Competition
Agreement with David Schick, effective upon Mr. Schick's resignation in June
2004 as the Company's Chief Executive Officer and Chairman of the Board. The
terms of Mr. Schick's Consulting and Non-Competition Agreement are discussed
above. See "Employment Agreements and Termination of Employment Arrangements."
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of July 30, 2004 by (i) each person
who is known by the Company to own beneficially more than 5% of the Common
Stock, (ii) each director, (iii) each Named Executive of the Company and (iv)
all directors and executive officers of the Company as a group. Unless otherwise
noted, the stockholders listed in the table have sole voting and investment
powers with respect to the shares of Common Stock owned by them.
18
Number of Shares
Beneficially Owned Percentage of
Name (1) Outstanding Shares
------------------------------------------------------------ ------------------ ------------------
Euval S. Barrekette (2) 178,240(3) 1.2%
Jonathan Blank (4) 190,575(5) 1.3%
Greystone Funding Corp. (6) 4,527,716(7) 30.1%
William K. Hood (8) 60,250(9) *
Uri Landesman (10) 119,600(11) *
Stan Mandelkern (12) 63,609(13) *
Zvi N. Raskin (12) 105,911(14) *
Curtis M. Rocca (15) 32,000(16) *
Allen Schick (17) 653,824(18) 4.3%
David B. Schick (19) 1,063,789(20) 7.0%
Robin Schick (21) 1,079,150 (22) 7.2%
Jeffrey T. Slovin (12) 1,004,626(23) 6.6%
Michael Stone (12) 214,429(24) 1.4%
All current executive Officers and Directors as a group (25) 2,766,148 16.9%
o Less than 1%
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission and includes voting power and/or investment
power with respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable or exercisable within 60 days of July 30, 2004
are deemed outstanding for computing the number and the percentage of
outstanding shares beneficially owned by the person holding such options or
warrants but are not deemed outstanding for computing the percentage
beneficially owned by any other person.
(2) Such person's address is 90 Riverside Drive, New York, New York 10024.
(4) Consists of 115,740 shares held by Dr. Barrekette; 2,500 shares issuable
upon the exercise of stock options granted to Dr. Barrekette in July, 1998;
30,000 shares issuable upon the exercise of stock options granted to Dr.
Barrekette in June, 2000, pursuant to the 1997 Directors Stock Option Plan and
30,000 shares issuable upon the exercise of stock options granted to Dr.
Barrekette in December 2001, pursuant to the 1997 Directors Stock Option Plan.
(5) Such person's business address is c/o Preston Gates Ellis & Rouvelas Meeds
LLP, 1735 New York Avenue, N.W., Washington, D.C. 20006.
(6) Consists of 130,575 shares held by Mr. Blank; 30,000 shares issuable upon
the exercise of stock options granted to Mr. Blank in June 2000, pursuant to the
1997 Directors Stock Option Plan and 30,000 shares issuable upon the exercise of
stock options granted to Mr. Blank in December 2001, pursuant to the 1997
Directors Stock Option Plan.
(7) Greystone's address is 152 West 57th Street, New York, New York 10019.
(8) Consists of 3,975,216 restricted shares issued upon the cashless exercise of
4,250,000 warrants in March 2004 and 552,500 restricted shares issued upon the
exercise, for cash, of 552,500 warrants in March 2004, all of which are subject
to a registration rights agreement.
(9) Such person's address is 1221 W Coast Highway, Newport Beach, CA 92663.
(10) Consists of 30,250 shares held by Mr. Hood and 30,000 shares issuable upon
the exercise of stock options granted to Mr. Hood in February 2002, pursuant to
the 1997 Directors Stock Option Plan.
(11) Such person's address is 25 Lovell Road, New Rochelle, New York, NY 10804.
(12) Consists of 89,600 shares held by Mr. Landesman and 30,000 shares issuable
upon the exercise of stock options granted to Mr. Landesman in January 2003,
pursuant to the 1997 Directors Stock Option Plan.
(13) Such person's business address is c/o Schick Technologies, Inc., 30-00 47th
Avenue, Long Island City, New York 11101.
(14) Consists of 1,000 shares held by Mr. Mandelkern; 2,000 shares issuable upon
the exercise of stock options
19
granted to Mr. Mandelkern in April 1998; 5,000 shares issuable upon the exercise
of stock options granted to Mr. Mandelkern in July 1998; 2,560 shares issuable
upon the exercise of stock options granted to Mr. Mandelkern in March 1999;
29,120 shares issuable upon the exercise of stock options granted to Mr.
Mandelkern in January 2000; 15,660 shares issuable upon the exercise of stock
options granted to Mr. Mandelkern in January 2001; 6,459 shares issuable upon
the exercise of stock options granted to Mr. Mandelkern in October 2001 and
1,810 shares issuable upon the exercise of stock options granted to Mr.
Mandelkern in November 2002.
(15) Consists of 75,000 shares (the "Shares") issued by the Company to Mr.
Raskin on February 6, 2000, which were subject to restrictions on their sale or
transfer which have expired; 2,343 shares issuable upon the exercise of stock
options granted to Mr. Raskin in July 1997; 2006 shares issuable upon the
exercise of options granted to Mr. Raskin in April 1998; 5,000 shares issuable
upon the exercise of options granted to Mr. Raskin in July 1998; 10,000 shares
issuable upon the exercise of options granted to Mr. Raskin in October 1998,
3,313 shares issuable upon the exercise of options granted to Mr. Raskin in
October 2001; 6,300 shares issuable upon the exercise of stock options granted
to Mr. Raskin in December 2001 and 1,949 shares issuable upon the exercise of
options granted to Mr. Raskin in November 2002.
(16) Such person's business address is c/o Douglas, Curtis & Allyn, LLC, 2998
Douglas Boulevard, Suite 300, Roseville, CA 95661.
(17) Consists of 2,000 shares held by Mr. Rocca and 30,000 shares issuable upon
the exercise of stock options granted to Mr. Rocca in July 2002, pursuant to the
1997 Directors Stock Option Plan.
(18) Such person's business address is University of Maryland at College Park,
School of Public Policy, Van Munching Hall, College Park, Maryland 20742-182190.
(19) Consists of 546,524 shares held jointly by Dr. Schick and his wife; 44,800
shares held by Dr. Schick as custodian for the minor children of David Schick;
2,500 shares issuable upon the exercise of stock options granted to Dr. Schick
in July 1998; 30,000 shares issuable upon the exercise of stock options granted
to Dr. Schick in June, 2000, pursuant to the 1997 Directors Stock Option Plan
and 30,000 shares issuable upon the exercise of stock options granted to Dr.
Schick in December 2001, pursuant to the 1997 Directors Stock Option Plan. Dr.
Schick disclaims beneficial ownership of the 44,800 shares held as custodian.
(20) Such person's address is 147-48 69th Road, Flushing, New York 11367.
(21) Consists of 954,150 shares held by Mr. Schick, the former Chief Executive
Officer of the Company; 7,496 shares issuable upon the exercise of stock options
granted to Mr. Schick in October 2001; 50,000 shares issuable upon the exercise
of stock options granted to Mr. Schick in December 2001; 50,000 shares issuable
upon the exercise of stock options granted to Mr. Schick in February 2002 and
2,143 shares issuable upon the exercise of stock options granted to Mr. Schick
in November 2002. In July 2003, Mr. Schick transferred 1,079,150 shares to his
then wife, Robin Schick.
(22) Such person's address is 137-40 75th Road, Flushing New York 11367.
(22) Consists of 1,079,150 shares held by Ms. Schick, the ex-wife of David
Schick. Mr. Schick, the former Chief Executive Officer of the Company,
transferred all of these shares to Ms. Schick in July 2003.
(23) Consists of 847,500 shares issuable upon the exercise of warrants held by
Mr. Slovin (which he received as designee of Greystone); 100,000 shares issuable
upon the exercise of stock options granted to Mr. Slovin in November 2001; 2,126
shares issuable upon the exercise of stock options granted to Mr. Slovin in
November 2002; 25,000 shares issuable upon the exercise of stock options granted
to Mr. Slovin in June 2004;and 30,000 shares issuable upon the exercise of stock
options granted to Mr. Slovin in June 2000, pursuant to the 1997 Directors Stock
Option Plan.
(24) Consists of 71,050 shares held by Mr. Stone; 25,000 shares issuable upon
the exercise of stock options
20
granted to Mr. Stone in January 2000; 18,750 shares issuable upon the exercise
of stock options granted to Mr. Stone in January 2001; 18,750 shares issuable
upon the exercise of stock options granted to Mr. Stone in December 2001; 7,144
shares issuable upon the exercise of stock options granted to Mr. Stone in
October 2001; 62,500 shares issuable upon the exercise of stock options granted
to Mr. Stone in January 2002; 1,860 shares issuable upon the exercise of stock
options granted to Mr. Stone in November 2002 and 9,375 shares issuable upon the
exercise of stock options granted to Mr. Stone in June 2004.
(25) Includes the shares underlying warrants described in Note 23 as well as
shares subject to options held by current officers and directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership with the Commission. Such executive officers and
directors and greater than 10% beneficial owners are required by the regulations
of the Commission to furnish the Company with copies of all Section 16(a)
reports they file.
Based solely on a review of the copies of such reports furnished to the
Company and written representations from executive officers and directors, the
Company believes that all Section 16(a) filing requirements applicable to its
executive officers and directors and greater than 10% beneficial owners were
complied with, except that seven Form 5's were filed on May 5, 2004 and one Form
5 was filed on May 11, 2004 for the issuance of employee stock options on
November 3, 2003 by the Board of Directors to the following executive officers,
pursuant to the Company's 1996 Employee Stock Option Plan: Messrs. Mandelkern,
Neugroschl, Raskin, Rosner, David Schick, Slovin, Stone and Autz.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Company's Board of Directors is currently
composed of three Directors, Messrs. Hood (who serves as Chairman), Rocca and
Blank, all of whom are Independent Directors as such term is defined in Rule
4200(a)(15) of the National Association of Securities Dealers' independent
director and audit committee listing standards. In addition, the Company's Board
of Directors has determined that Messrs. Hood and Rocca are "audit committee
financial experts," as those terms are defined by the Securities and Exchange
Commission. The Audit Committee operates under a written charter that was
adopted by the Board of Directors on June 30, 2002 and amended on April 9, 2003
and on June 2, 2004. (A copy of the current Audit Committee charter, as amended,
is annexed to this proxy statement as Appendix A.) The Audit Committee met five
times during fiscal 2004.
21
Pursuant to the Audit Committee charter, the primary functions of the
Audit Committee include: to serve as an independent and objective party to
oversee the Company's accounting and financial reporting processes and internal
control system; to pre-approve all auditing and non-auditing services to be
provided by the Company's independent certified public accountants; to review
and oversee the audit efforts of the Company's independent certified public
accountants; and to provide an open avenue of communication among the
independent certified public accountants, financial and senior management and
the Board of Directors.
The Audit Committee has responsibility and authority, among other matters,
to review with Company management any financial information filed with the
S.E.C. or disseminated to the public; to establish and maintain procedures for
receiving and treating complaints regarding accounting, internal accounting
controls and auditing matters, and for the confidential anonymous submission by
employees of concerns regarding these matters; to appoint, determine funding for
and oversee the Company's independent certified public accountants; to review,
in consultation with the independent certified public accountants and the
Company's accounting personnel, the integrity of the Company's financial
reporting processes; and to review in advance any proposed transaction between
the Company and any related party.
In executing its responsibilities, the Audit Committee has reviewed and
discussed the audited financial statements with Management of the Company. The
Audit Committee has also discussed with the Company's independent certified
public accountants the matters required to be discussed by SAS 61, as amended.
In addition, the Audit Committee has received written disclosures and a letter
from the Company's independent certified public accountants delineating all
relationships between it and the Company, consistent with Independence Standards
Board Standard No. 1 ("Independence Discussions with Audit Committee"), and has
discussed with them matters pertaining to their independence. The Audit
Committee also considered whether the additional services unrelated to Audit
Services performed by Grant Thornton LLP were compatible with maintaining their
independence in performing their Audit Services.
Based upon the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for 2004 for
filing with the Securities and Exchange Commission. The Audit Committee and
Board of Directors have also
22
recommended the selection of Grant Thornton LLP as the Company's independent
accountants for the fiscal year ending March 31, 2005.
William K. Hood, Chair, Jonathan Blank and Curtis M. Rocca III
Members of the Audit Committee
INDEPENDENT ACCOUNTANTS' FEES
The Company incurred the following fees for services performed by Grant
Thornton LLP pertaining to the fiscal years ended March 31, 2004 and March 31,
2003, respectively.
Audit Fees
The aggregate fees billed by our auditors to date, for professional
services rendered for the audit of the Company's annual financial statements for
the years ended March 31, 2004 and March 31, 2003, and for review of the
financial statements included in the Company's quarterly reports on Form 10-Q
during those fiscal years were $249,258 and $233,103, respectively.
Audit-Related Fees
For the year ended March 31, 2004, the aggregate fees billed for assurance
and related services by our auditors that are reasonably related to the
performance of the audit or review of our financial statements were $9,210,
relating to other services traditionally performed by independent accountants;
no such fees were billed for the year ended March 31, 2003.
Tax Fees
Fees billed by our auditors for the preparation of corporate income tax
returns were $29,380 and $16,250 for the years ended March 31, 2004 and 2003,
respectively.
All Other Fees
For the fiscal years ended March 31, 2004 and 2003, there were no fees
incurred by the Company for services rendered by the auditors to the Company,
other than the services reported above, in "Audit Fees," "Audit-Related Fees"
and "Tax Fees."
23
PROPOSAL TWO
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Grant Thornton LLP as independent
accountants for the Company for the fiscal year ending March 31, 2005. A
proposal to ratify the appointment of Grant Thornton LLP will be presented at
the Annual Meeting. Representatives of Grant Thornton LLP are expected to be
present at the Annual Meeting, will have an opportunity to make a statement if
they desire to do so and will be available to answer questions from
stockholders. If the appointment of Grant Thornton LLP is not approved by the
stockholders, the Board of Directors is not obligated to appoint other
accountants, but the Board of Directors will give consideration to such
unfavorable vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF
GRANT THORNTON LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR
FISCAL 2005.
SOLICITATION OF PROXIES
The Company is paying the costs for the solicitation of proxies, including
the cost of preparing and mailing this Proxy Statement. Proxies are being
solicited primarily by mail, but in addition, the solicitation by mail may be
followed by solicitation in person, or by telephone or facsimile, by regular
employees of the Company without additional compensation. The Company will
reimburse brokers, banks and other custodians and nominees for their reasonable
out-of-pocket expenses incurred in sending proxy materials to the Company's
stockholders.
PROPOSALS FOR THE 2005 ANNUAL MEETING
Pursuant to federal securities laws, any proposal by a stockholder to be
presented at the 2005 Annual Meeting of Stockholders and to be included in the
Company's proxy statement must be received at the Company's executive office at
30-00 47th Avenue, Long Island City, New York 11101, no later than the close of
business on April 23,, 2005. Proposals should be sent to the attention of the
Secretary. Pursuant to the Company's By-laws, in order for business to be
properly brought before an annual meeting of stockholders by a Stockholder, the
stockholder must give written notice of such stockholder's intent to bring a
matter before the annual meeting not less than ninety days prior to the date of
such meeting; provided, however, that if less than ninety days' notice or prior
public disclosure of the date of such meeting is given to stockholders or made,
the stockholder must give such written notice no later than the close of
business on the
24
tenth (10th) day following the day on which notice or public disclosure of the
date of such meeting is given or made. Each such notice should be sent to the
attention of the Company's Secretary, and must set forth certain information
with respect to the stockholder who intends to bring such matter before the
meeting and the business desired to be conducted, as set forth in greater detail
in the Company's By-laws.
GENERAL
The Company's Annual Report for the fiscal year ended March 31, 2004 is
being mailed to stockholders together with this Proxy Statement. The Annual
Report is not to be considered part of the soliciting materials.
The information set forth in this Proxy Statement under the captions
"Executive Compensation Committee Report on Executive Compensation", "Report of
the Audit Committee" and "Comparison of 5 year Cumulative Total Return" shall
not be deemed to be (i) incorporated by reference into any filing by the Company
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent that in any such filing the Company expressly incorporates such
information by reference, and (ii) "soliciting material" or to be "filed" with
the SEC.
By Order of the Board of Directors
Zvi N. Raskin
Secretary
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SCHICK TECHNOLOGIES, INC.
PROXY
Annual Meeting of Stockholders
September 22, 2004
(Solicited On Behalf Of the Board of Directors)
The undersigned stockholder of Schick Technologies, Inc. hereby constitutes and
appoints each of Michael Stone and Zvi N. Raskin as the attorney and proxy of
the undersigned, with full power of substitution and revocation, to vote for and
in the name, place and stead of the undersigned at the Annual Meeting of
Stockholders of Schick Technologies, Inc. (the "Company") to be held at the
Company's offices at 30-00 47th Avenue, fifth floor, Long Island City, New York,
on Wednesday, September 22, 2004 at 10:00 a.m., and at any adjournments thereof,
the number of votes the undersigned would be entitled to cast if present.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THREE DIRECTORS AND FOR EACH OF THE FOLLOWING
PROPOSALS.
1. Election of three directors nominated by the Board of Directors.
|_| FOR the nominees listed |_| WITHHOLD AUTHORITY
below(except as indicated to to vote for the nominees
the contrary below) listed below
William K. Hood
Curtis M. Rocca III
Jeffrey T. Slovin
--------------------------------------------------------------------
--------------------------------------------------------------------
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2. Proposal to ratify the selection of Grant Thornton LLP as the
Company's independent accountants for the fiscal year ending March
31, 2005.
|_| FOR |_| AGAINST |_| ABSTAIN
3. In his discretion, upon such other matters as may properly come
before the meeting.
Said attorneys and proxies, or their substitutes (or if only one, that
one), at said meeting, or any adjournments thereof, may exercise all of the
powers hereby given. Any proxy heretofore given is hereby revoked.
Receipt is acknowledged of the Notice of Annual Meeting of Stockholders,
the Proxy Statement accompanying such Notice and the Annual Report to
stockholders for the fiscal year ended March 31, 2004.
__________________________, 2004 _______________________________
Date Stockholder(s) signature(s)
__________________________, 2004 _______________________________
Date Stockholder(s) signature(s)
Note: If shares are held jointly, both holders should sign. Attorneys,
executors, administrators, trustees, guardians or others signing in a
representative capacity should give their full titles. Proxies executed in the
name of a corporation should be signed on behalf of the corporation by its
president or other authorized officer.
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APPENDIX A
CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. PURPOSE
The primary function of the Audit Committee of the Schick Technologies
Board of Directors (the "Audit Committee" or "Committee") is to:
(i) Serve as an independent and objective party to oversee the Company's
accounting and financial reporting processes and internal control system
and complaints or concerns relating thereto.
(ii) Pre-approve all auditing services as well as non-audit services to be
provided by the auditor.
(iii) Review and oversee the audit efforts of the Company's independent
accountants, who shall be accountable and report to the Audit Committee.
(iv) Provide an open avenue of communication among the independent accountants,
financial and senior Management and the Board of Directors.
(v) If deemed necessary and appropriate, make periodic proposals to the Board
of Directors concerning the adoption of changes to the Company's
accounting and internal control environment.
II. COMPOSITION
The Audit Committee shall be appointed by the Board and shall be comprised
of three or more directors (the precise number to be determined by the Board),
all of whom shall be independent, as such term is defined in Nasdaq Marketplace
Rules, Rules 4200(a)(15) The members of the Committee shall be free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of their independent judgment as members of the Audit Committee. All
members of the Audit Committee shall be able to read and understand financial
statements at the time of their appointment and shall have a working familiarity
with basic finance and accounting practices. Additionally, at least one member
of the Audit Committee shall be an Audit Committee "financial expert" as defined
by the SEC in its rules and shall have past employment experience in finance or
accounting, requisite professional certification in
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accounting or any other comparable experience or background which results in the
individual's financial sophistication, including being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.
Committee member may not accept any consulting, advisory, or other
compensatory fee from the Company, other than in his or her capacity as a Board
or Committee member and may not be an "affiliated person" of the Company or any
subsidiary thereof.
Unless a Chair is elected by the full Board, the members of the Audit
Committee may designate a Chair by majority vote of the full Audit Committee
membership.
III. MEETINGS
The Audit Committee shall meet at least four times annually (in person or
telephonically), or more frequently as circumstances dictate, as follows:
(i) Once annually, or more frequently as circumstances dictate, prior to the
release of the Company's Annual Report on Form 10-K (or 10-KSB), with Company
Management, the Company's principal accounting officer, and with the Company's
independent accountants outside the presence of Company Management, consistent
with Section IV (ii) below;
(ii) Once each quarter: (a) prior to the release of the Company's Quarterly
Report on Form 10-Q, with the Company's independent accountants and Company
Management to review the Company's financials, consistent with Section IV(iii)
below. The Audit Committee shall determine, in the exercise of its discretion,
whether to meet with the Company's independent accountants outside the presence
of Company Management. The Chair of the Audit Committee may represent the entire
Committee for purposes of these meetings; (b) with the Company's Chief Executive
Officer; (c) with the Company's Chief Financial Officer ("CFO") or, in the
absence of a CFO, with the Company's principle accounting officer; and (d) with
the Company's Chief Operating Officer.
IV. RESPONSIBILITIES, DUTIES AND AUTHORITY
To fulfill its responsibilities and duties, the Audit Committee shall:
(i) Review and reassess this Charter annually, or more frequently as may be
deemed necessary or appropriate by members of the Audit Committee.
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(ii) Review with Company Management and the independent accountants each Form
10-K Annual Report prior to its filing, and review and consider with the
independent accountants the matters required to be discussed by
Statement of Auditing Standards ("SAS") No. 61 as amended.
(iii) Review with financial Management and the independent accountants each
Form 10-Q quarterly report prior to its filing, and review with the
independent accountants the matters required to be discussed by SAS No.
100. The Chair of the Audit Committee may represent the entire Committee
for purposes of this review.
(iv) Review with Company management any financial information filed with the
S.E.C. or disseminated to the public, including any certification,
report, opinion, or review rendered by the independent accountants.
(v) Establish and maintain procedures for receiving and treating complaints
received by the Company regarding accounting, internal accounting
controls and auditing matters, and the confidential, anonymous
submission by employees of concerns regarding questionable accounting or
auditing matters.
Independent Accountants
(vi) Have the sole authority to appoint, determine funding for, and oversee,
the Company's independent accountants. On an annual basis, the Audit
Committee shall request from the independent accountants a formal
written statement delineating all relationships between it and the
Company, consistent with Independence Standards Boards Standard No. 1,
and shall review and discuss with the accountants all significant
relationships the accountants have with the Company to determine their
impact on the accountants' independence.
(vii) Take appropriate action to oversee the independence of the independent
accountants, including the actions set forth in paragraph "(vi)" above.
(viii) Pre-approve all auditing services as well as non-audit services to be
provided by the auditor.
(ix) Review and evaluate the performance of the independent accountants and,
where appropriate, replace the independent accountants.
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(x) Periodically consult with the independent accountants out of the
presence of Management about internal controls and the fullness and
accuracy of the Company's financial statements.
Financial Reporting Processes
(xi) In consultation with the independent accountants and the Company's
accounting personnel, review the integrity of the Company's financial
reporting processes, both internal and external.
(xii) Consider and approve, if appropriate, major changes to the Company's
accounting principles and practices as suggested by the independent
accountants or Management.
Process Improvement
(xiii) If deemed necessary and appropriate, make periodic proposals to the
Board of Directors concerning the adoption of changes to the Company's
accounting and internal control environment.
(xiv) Establish regular and separate systems of reporting to the Audit
Committee by each of Management and the independent accountants
regarding any significant judgments made in Management's preparation of
the financial statements and the view of each as to appropriateness of
such judgments and additional items as required under the Sarbanes-Oxley
Act including Critical Accounting Policies, alternative treatments of
GAAP relating to material items that have been discussed with
management, the ramifications of such treatment and the preferred
treatment by the accounting firm, and other written communications with
management, i.e. management letter or schedule of material unadjusted
audit differences.
(xv) Following completion of the annual audit, review separately with each of
Management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions
on the scope of work or access to required information.
(xvi) Review and resolve any significant disagreement among Management and the
independent accountants in connection with the preparation of the
financial statements.
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(xvii) Following completion of the annual audit, request from the independent
accountants either a verbal report or a written Management Letter (the
choice of which shall rest with the Audit Committee in the exercise of
its discretion) describing the deficiencies, if any, in the Company's
operational or control procedures as determined by the independent
accountants.
(xviii) Review with the independent accountants and Management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented. (This review
should be conducted at an appropriate time subsequent to implementation
of changes or improvements, as decided by the Audit Committee.)
(xix) Review activities, organizational structure, and qualifications of the
Company's accounting and finance department.
(xx) Review, with the Company's counsel, legal compliance matters including
corporate securities trading policies.
(xxi) Review, with the Company's counsel, any legal proceedings that could
have a significant impact on the Company's financial statements.
(xxii) Perform any other activities consistent with this Charter, the Company's
By-Laws and governing law, as the Audit Committee or the Board deems
necessary or appropriate.
Advisors and Funding
(xxiii) The Committee shall have the authority to engage and the funds to pay
independent counsel and/or other advisors to assist it in carrying out
its duties, and responsibilities, as it deems appropriate.
(xxiv) The Committee shall have the authority to determine the appropriate
amount of funding to be provided by the Company for payment of
compensation to any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other
audit, review or attest services for the Company.
(xxv) The Committee shall have the authority to determine the appropriate
amount of
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funding to be provided by the Company for payment of ordinary
administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.
Related-Party Transaction
(xxvi) The Committee must review, in advance, any proposed transaction between
the Company and any related party. No such related-party transaction may
be consummated by the Company without the approval of the Committee.
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