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Escalon Medical DEF 14A 2007 Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ) Filed by
the Registrant þ
Filed by a Party other than the Registrant o Check the appropriate box:
Escalon Medical Corp.
Payment of Filing Fee (Check the appropriate box):
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To the Shareholders of Escalon Medical Corp.:
The annual meeting of shareholders of Escalon Medical Corp. will
be held at 9:00 a.m., local time, on December 28,
2007, at the offices of Duane Morris LLP, 30 South
17th Street, 12th Floor, Philadelphia, Pennsylvania.
At our annual meeting, our shareholders will act on the
following matters:
All shareholders of record as of the close of business on
November 23, 2007 are entitled to vote at our annual
meeting.
Our 2007 Annual Report is being mailed to shareholders together
with this Notice.
It is important that your shares be voted at our annual meeting.
Please complete, sign and return the enclosed proxy card in the
envelope provided whether or not you expect to attend our annual
meeting in person.
By Order of the Board of Directors,
Richard J. DePiano
Chairman and Chief Executive Officer
November 30, 2007
Wayne, Pennsylvania
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ESCALON
MEDICAL CORP.
This proxy statement contains information relating to the annual
meeting of shareholders of Escalon Medical Corp. to be held on
December 28, 2007, at the offices of Duane Morris LLP, 30
South 17th Street, 12th Floor, Philadelphia,
Pennsylvania at 9:00 a.m., local time, and at any
adjournment, postponement or continuation of the annual meeting.
This proxy statement and the accompanying proxy are first being
mailed to shareholders on or about November 30, 2007.
Unless the context indicates otherwise, all references in this
proxy statement to “we,” “us,”
“our” “Escalon” or the “Company”
mean Escalon Medical Corp. and its subsidiaries.
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At our annual meeting, shareholders will act upon the matters
outlined in the notice of meeting on the cover page of this
proxy statement, including the election of two Class II
directors and any other matters that properly come before our
annual meeting. In addition, our management will report on our
performance during fiscal 2007 and respond to appropriate
questions from shareholders.
Holders of common stock of record at the close of business on
the record date, November 23, 2007, are entitled to receive
notice of and to vote at our annual meeting, and any
adjournment, postponement or continuation of our annual meeting.
As of the record date, 6,344,657 shares of common stock
were outstanding, each of which is entitled to one vote with
respect to each matter to be voted on at our annual meeting.
All shareholders as of the record date, or their duly appointed
proxies, may attend our annual meeting. Even if you currently
plan to attend our annual meeting, we recommend that you also
submit your proxy as described below so that your vote will be
counted if you later decide not to attend our annual meeting.
If you hold your shares in “street name” (that is,
through a broker or other nominee), you will need to bring a
copy of a brokerage statement reflecting your stock ownership as
of the record date and check in at the registration desk at our
annual meeting.
The presence at our annual meeting, in person or by proxy, of
the holders of a majority of the shares of our common stock
outstanding on the record date will constitute a quorum,
permitting the conduct of business at our annual meeting.
Proxies received but marked as abstentions and broker non-votes
will be included in the calculation of the number of shares
present at our annual meeting.
If you or your duly authorized attorney-in-fact complete,
properly sign and return the accompanying proxy card to us, it
will be voted as you direct. If you are a registered shareholder
and attend our annual meeting, you may deliver your completed
proxy card in person. “Street name” shareholders who
wish to vote at our annual meeting will need to obtain a signed
proxy from the institution that holds their shares.
Yes. Even after you have submitted your proxy, you may change
your vote at any time before the proxy is exercised by filing
with our Secretary either a notice of revocation or a duly
executed proxy bearing a later date. The powers of the proxy
holders will be revoked if you attend our annual meeting in
person and request that your proxy be revoked, although
attendance at our annual meeting will not by itself revoke a
previously granted proxy.
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Unless you give other instructions on your proxy card, the
persons named as proxy holders on the proxy card will vote in
accordance with the recommendations of our Board of Directors.
Our Board of Directors recommends a vote:
Election of Class II Directors. The two
persons receiving the highest number of “FOR” votes
cast by the holders of our common stock for election as
Class II directors will be elected. A properly executed
proxy marked “WITHHOLD AUTHORITY” with respect to the
election of one or more directors will not be voted with respect
to the director or directors indicated, although the proxy will
be counted for purposes of determining whether a quorum is
present. Abstentions and shares held by brokers or nominees as
to which voting instructions have not been received from the
beneficial owner of or persons otherwise entitled to vote the
shares and as to which the broker or nominee does not have
discretionary voting power, i.e., broker non-votes, will
not be taken into account in determining the outcome of the
election. We do not permit cumulative voting in the election of
directors.
Other Matters. The affirmative vote of a
majority of the votes cast by the holders of our common stock on
the proposal will be required to approve any other matter that
properly comes before our annual meeting. Abstentions and broker
non-votes do not constitute votes cast and therefore will not
affect the outcome of the vote.
If you sign your proxy card or broker voting instruction card
with no further instructions, your shares will be voted in
accordance with the recommendations of our Board, i.e.,
FOR the election of our nominees for Class II directors.
We are making this solicitation and will pay the cost of
soliciting proxies on behalf of our Board of Directors,
including expenses of preparing and mailing this proxy
statement. In addition to mailing these proxy materials, the
solicitation of proxies or votes may be made in person or by
telephone or telegram by our regular officers and employees,
none of whom will receive special compensation for such
services. Upon request, we will also reimburse brokers,
nominees, fiduciaries and custodians and persons holding shares
in their names or in the names of nominees for their reasonable
expenses in sending proxies and proxy material to beneficial
owners.
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The following table shows the amount and percentage of our
outstanding common stock beneficially owned by each director,
each nominee for director, each executive officer named in the
Summary Compensation Table, persons or groups who beneficially
own more than 5% of our outstanding common stock and all of our
executive officers and directors as a group as of
November 23, 2007.
Information furnished by each individual named. This table
includes shares that are owned jointly, in whole or in part,
with the person’s spouse, or individually by his or her
spouse. No shares held by directors or named executive officers
are pledged.
Section 16(a) of the Securities Exchange Act of 1934 (the
“Exchange Act”) requires that our officers and
directors, as well as persons who own 10% or more of a class of
our equity securities, file reports of their ownership of our
securities, as well as statements of changes in such ownership,
with us and the Securities Exchange Commission (the
“SEC”). Based upon written representations received by
us from our officers, directors and 10% or greater shareholders,
and our review of the statements of beneficial ownership changes
filed with us by our officers, directors and 10% or greater
shareholders during fiscal 2007, we believe all such filings
required during the fiscal year 2007 were made on a timely basis.
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The election of our directors by our shareholders is governed by
the Pennsylvania Business Corporation Law and our Bylaws. The
following discussion summarizes these provisions and describes
the process our Governance and Nominating Committee will follow
in connection with the nomination of candidates for election as
directors by the holders of our common stock.
Our Governance and Nominating Committee is responsible for
recommending to the Board of Directors candidates to stand for
election to the Board of Directors at the annual meeting. Our
Governance and Nominating Committee will also consider director
candidates recommended by shareholders in accordance with the
advance notice procedures in Section 2.3 of our Bylaws.
These procedures are described under “Shareholder
Proposals” in this proxy statement. The Governance and
Nominating Committee may also consider director candidates
proposed by our management. We have not utilized third-party
executive search firms to identify candidates for director.
With the exception of applicable rules of the SEC and the Nasdaq
Stock
MarketSM
(“Nasdaq”), our Governance and Nominating Committee
does not have any specific, minimum qualifications for
candidates for election to our Board of Directors, and our
Governance and Nominating Committee may take into account such
factors as it deems appropriate. Our Governance and Nominating
Committee examines the specific attributes of candidates for
election to our Board of Directors and also considers the
judgment, skill, diversity, business experience, the interplay
of the candidate’s experience with the experience of the
other members of our Board of Directors and the extent to which
the candidate would contribute to the overall effectiveness of
our Board of Directors.
Our Governance and Nominating Committee will utilize the
following process in identifying and evaluating candidates for
election as members of our Board of Directors:
Our Governance and Nominating Committee met once this year, but
our entire Board of Directors performed the functions of the
Governance and Nominating Committee with respect to the
nominating of candidates for election at the 2007 Annual
Meeting. The Board of Directors met on September 19, 2007
for the purpose of nominating candidates for election as
directors by our shareholders at our 2007 annual meeting of
shareholders and approved the nomination of the persons named
below.
Our Board of Directors currently consists of six members, four
of whom are considered independent for purposes of the
applicable Nasdaq rules. The current independent directors are
Anthony J. Coppola, Lisa A. Napolitano, Fred G. Choate and
William L. G. Kwan. Each director is elected for a three-year
term and until
his/her
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successor has been duly elected. The current three-year terms of
our directors expire in the years 2007, 2008 and 2009,
respectively.
Two Class II directors are to be elected at our annual
meeting. Unless otherwise instructed, the proxies solicited by
our Board of Directors will be voted for the election of the
nominees named below. The two Class II nominees are
currently directors of the Company.
If any of the nominees becomes unavailable for any reason, the
proxies intend to vote for a substitute nominee designated by
our Board of Directors. Our Board of Directors has no reason to
believe the nominees named will be unable to serve if elected.
Any vacancy occurring on our Board of Directors for any reason
may be filled by a majority vote of our directors then in office
until the expiration of the term of the class of directors in
which the vacancy exists.
The names of the nominees for Class II directors and the
Class I directors and Class III directors who will
continue in office after our annual meeting until the expiration
of their respective terms, together with certain information
regarding them, are as follows:
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The SEC and Nasdaq have adopted regulations and listing
requirements that relate to our corporate governance. Our Board
of Directors has adopted standards and practices in order to
comply with those regulations that apply to us. We have has
adopted a Code of Ethics, which can be accessed on our web site
at www.escalonmed.com. Our independent directors meet at
regularly scheduled meetings at which only independent directors
are present.
Our Board of Directors met seven times in fiscal 2007. Our Board
of Directors has an Executive Committee, an Audit Committee, a
Governance and Nominating Committee and a Compensation Committee.
Our Audit Committee consists of Anthony J. Coppola, William L.G.
Kwan and Lisa A. Napolitano. The Committee met four times in
fiscal 2007. Each member of the Audit Committee is independent
within the meaning of the rules of Nasdaq and of the SEC.
Consistent with the Sarbanes-Oxley Act of 2002
(“Sarbanes-Oxley”), the Audit Committee has
responsibility for:
Our Audit Committee operates pursuant to a written charter, the
full text of which is available on our website.
6
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Our Governance and Nominating Committee consists of Anthony J.
Coppola, Fred G. Choate and Lisa A. Napolitano. Each member of
the Governance and Nominating Committee is independent within
the meaning of the rules of Nasdaq and of the SEC. Our
Governance and Nominating Committee has responsibility for:
Our Governance and Nominating Committee operates pursuant to a
written charter, the full text of which is available on our
website.
Our Compensation Committee consists of Anthony J. Coppola, Fred
G. Choate and Lisa A. Napolitano. The Committee met one time in
fiscal 2007. Each member of the Compensation Committee is
independent within the meaning of the rules of Nasdaq and of the
SEC. Our Compensation Committee has responsibility for:
Our Compensation Committee operates pursuant to a written
charter, the full text of which is available on our website. Our
Compensation Committee’s charter reflects these
responsibilities, and the Compensation Committee and our Board
of Directors reviews the charter annually.
Our shareholders may communicate with our Board of Directors
through our Secretary. Shareholders who wish to communicate with
any of our directors may do so by sending their communication in
writing addressed to a particular director, or in the
alternative, to “Non-management Directors” as a group,
in care of our Secretary at our headquarters, 565 East
Swedesford Road, Suite 200, Wayne, PA 19087. All such
communications that are received by our Secretary will be
promptly forwarded to the addressee or addressees set forth in
the communication.
We actively encourage our directors to attend our annual
meetings of shareholders because we believe director attendance
at our annual meetings provides our shareholders with an
opportunity to communicate with the members of our Board of
Directors. All of our directors, with the exception of
Mr. Kwan, attended our annual meeting of shareholders in
2006 and, with the exception of Mr. Kwan, intend to be in
attendance at the 2007 annual meeting.
Our executive officers are as follows:
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Mr. DePiano has been a director of the Company since
February 1996 and has served as Chairman and Chief Executive
Officer of the Company since March 1997. Mr. DePiano has
been the Chief Executive Officer of the Sandhurst Company, L.P.
and Managing Director of the Sandhurst Venture Fund since 1986.
Mr. DePiano also serves Chairman of the Board of Directors
of PhotoMedex, Inc.
Mr. DePiano, Jr. was appointed Chief Operating Officer
and General Counsel of the Company December 28, 2006.
Mr. DePiano, Jr. joined the Company in November of
2000 as Vice President Corporate and Legal Affairs. Prior to
joining the Company, Mr. DePiano, Jr. worked with
Forceno & Arangio, L.L.P., from September 1998 until
November 2000 as a Senior Associate representing individual and
business clients in various areas of the law including mergers
and acquisitions, automotive dealership representation, family,
small and emerging businesses, securities law, venture capital
financing, consumer finance and general corporate and commercial
matters. Prior to this Mr. DePiano, Jr. was in private
law practice since 1992. He currently serves as President Elect
and as a member of the Board of Directors of the Delaware Valley
Corporate Counsel Association (“DELVACCA”).
Mr. DePiano, Jr. also serves as the Chairman of the
Nominations Committee, Chairman of the Law School Initiative
Committee and member of the Pro-Bono Committee of DELVACCA. He
also is Vice Chairman of the Board of Directors of the
Montgomery County Industrial Development Authority and is also a
member of the Pennsylvania Bar Association.
Mr. O’Connor was appointed Chief Financial Officer of
the Company on June 30, 2006. Mr. O’Connor joined
the Company from BDO Seidman, LLP where he served as a senior
manager from 2004. His prior experience includes both public and
private accounting roles as a manager at PricewaterhouseCoopers,
LLP where he served in the middle market advisory services group
from 1998 until 2000, and positions of controller and chief
financial officer of Science Dynamics, a manufacturer of high
tech telecom equipment, from 2000 until 2002 and
Ianieri & Giampapa, LLC, a certified public accounting
firm from 2002 until 2004. Mr. O’Connor holds an MBA
from Rutgers University — Graduate School of
Management and a B.S. from Kean University. He is a certified
public accountant and a member of the American Institute of
Certified Public Accountants (AICPA).
The Compensation Committee of our Board of Directors, or our
Compensation Committee, oversees our compensation and policies,
our compensation levels, including reviewing and approving
equity awards to our executive officers, and reviews and
recommends annually for approval by our Board of Directors all
compensation decisions relating to our executive officers.
Our Compensation Committee believes that the primary objectives
of our compensation programs for our executive officers are to:
The most significant component of the compensation policy
administered by our Compensation Committee is that a substantial
portion of the aggregate annual compensation of our named
executive officers should be based on our annual financial
results, our overall sales, growth and our profitability. Our
Compensation Committee also evaluates the achievement of our
other corporate objectives and the contribution of each named
executive officer to those achievements.
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We rely on our judgment in making compensation decisions after
reviewing our performance and the performance of our executives
based on financial and operational objectives. We do not retain
the services of any compensation consultants. Two of our named
executive officers, Richard DePiano, Sr. and Robert
O’Connor, have employment, severance and change-of-control
agreements. (See Employment Agreements below.)
For a number of years, we have maintained a cash incentive
compensation program for our officers, including our named
executive officers. The amount of the bonus is dependent upon
several factors listed below including our financial results,
sales growth and our profitability. Our Compensation Committee
does not assign specific weights to these factors.
Our officers receive the following types of compensation:
Our Compensation Committee recommends all compensation and
equity awards to our executive officers for final discretionary
action by our Board of Directors. Our Compensation Committee, in
recommending the annual compensation of our officers, including
our named executive officers, to be established by our Board of
Directors, reviews the performance and compensation of our
officers. In assessing the performance of our named executive
officers in relation to the objectives established by our Board
of Directors, our Compensation Committee reviews specific
achievements associated with attainment of the objectives, the
degree of difficulty of the objectives and the extent to which
significant unforeseen obstacles or favorable circumstances
affected their performance.
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Our Compensation Committee recommends to our Board of Directors
the base salaries, annual aggregate bonus amount and stock
option grants to the members of our management. As part of its
oversight of the compensation of our named executive officers,
our Compensation Committee recommended the following
compensation adjustments for 2007 for our named executive
officers:
Section 162(m) of the Code generally does not allow us a
deduction for federal income tax purposes to the extent that we
pay annual compensation to any of our executive officers named
in the Summary Compensation Table in this proxy statement that
is in excess of $1 million. However, compensation paid to
such an executive officer that is paid pursuant to a
performance-based plan is generally not subject to the
Section 162(m) limitation. Although our Compensation
Committee is aware of the Section 162(m) limitation, our
Compensation Committee believes that it is equally important to
maintain flexibility and the competitive effectiveness of the
compensation of our named executive officers. Our Compensation
Committee may, therefore, from time to time, authorize
compensation that is not deductible for federal income tax
purposes if our Compensation Committee believes it is in our
best interests and the best interests of our stockholders to do
so.
The following table shows the compensation paid during each of
the three fiscal years ended June 30, 2007 for services
rendered in all capacities to our Chief Executive Officer, our
Chief Financial Officer and our other most highly compensated
executive officer whose compensation exceeded $100,000 in the
fiscal year ended June 30, 2007.
Summary
Compensation Table
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As of June 30, 2007, we granted the following stock options
to the persons named in the Summary Compensation Table:
Grants of
Plan-Based Awards
Salary. Salaries for named executive officers
are determined based on a variety of factors, including the
executive’s scope of responsibilities. Salaries are
reviewed for our named executive officers once each year, and
may be adjusted after considering the factors listed below and
the named executive officer’s performance.
Annual Cash Bonus. In fiscal year 2007, named
executive officers had the opportunity to earn a cash bonus.
Bonuses are provided to reward achieving business results
against individual annual performance commitments and to deliver
cash as part of an overall compensation package that is
competitive in the marketplace.
The Compensation Committee determines bonuses in its discretion
based on performance across a combination of qualitative and
quantitative objectives during the performance period. Working
with our Chief Executive Officer, each named executive officer
establishes these objectives annually. The Chief Executive
Officer establishes his goals in consultation with the Board.
The goals used to determine bonuses vary for each executive
based on his responsibilities and may include financial or
strategic measures, including:
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For named executive officers other than the Chief Executive
Officer, the Chief Executive Officer recommends individual bonus
payments based on the executive’s performance against his
goals for the year. The Compensation Committee considers the
recommendations and makes a final decision on the bonus payments.
For Mr. DePiano, the Compensation Committee recommends a
bonus payment to the independent members of the Board. In making
this recommendation, the Compensation Committee considers the
performance evaluation of Mr. DePiano. The Board considers
the Committee’s recommendation and Mr. DePiano’s
performance evaluation in determining the bonus for
Mr. DePiano.
On May 12, 1998, the Company entered into an employment
agreement with Richard J. DePiano as the Chairman and Chief
Executive Officer of the Company. The initial term of the
employment agreement commenced on May 12, 1998 and
continued through June 30, 2001. The employment agreement
renews on July 1 of each year for successive terms of three
years unless either party notifies the other party at least
30 days prior to such date of the notifying party’s
determination not to renew the agreement. The current base
salary provided under the agreement, as adjusted for yearly cost
of living adjustments, is $317,700 per year, and the agreement
provides for additional incentive compensation in the form of a
cash bonus to be paid by the Company to Mr. DePiano at the
discretion of the Board of Directors. The agreement also
provides for health and long-term disability insurance and other
fringe benefits as well as an automobile allowance of $800 per
month.
On June 23, 2005, the Company entered into a Supplemental
Executive Retirement Benefit Agreement with Mr. DePiano.
The agreement provides for the payment of supplemental
retirement benefits to Mr. DePiano in the event of his
termination of service Mr. DePiano with the Company under
the following circumstances:
During the fourth quarter of fiscal 2005, we recorded as an
expense in our Consolidated Statement of Income, $1,087,000,
which represents the present value of the supplemental
retirement benefits awarded.
As Chief Operating Officer and General Counsel,
Mr. DePiano, Jr. received an annual salary of $127,300.
As Chief Financial Officer, Mr. O’Connor’s annual
base salary is $200,000. Mr. O’Connor has been granted
stock options to purchase 60,000 shares of the
Company’s common stock, which are exercisable in full as of
the June 30, 2006 grant date. The exercise price of these
options is $5.05 per share. Mr. O’Connor, pursuant to
his offer letter, will be entitled to a severance payment equal
to his annual base salary and an increase of his annual base
salary to $250,000 in connection with a change of control.
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No named executive officer exercised options during the year
ended June 30, 2007. No awards were made to any named
executive officer during such fiscal year under any long-term
incentive plan. We do not currently sponsor any defined benefit
or actuarial plans.
The following table the outstanding equity awards as of
June 30, 2007:
The following table shows securities authorized for issuance
under equity compensation plans.
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The following report of our Compensation Committee does not
constitute proxy solicitation material and shall not be deemed
filed or incorporated by reference into any of our filings under
the Securities Act or the Exchange Act, except to the extent
that we specifically incorporate this Compensation Committee
report by reference therein.
Our Compensation Committee held a telephonic joint meeting with
the Board of Directors of the company. The committee reviewed
and discussed the compensation discussion and analysis that
appears under the caption “Executive Compensation”
with management.
Based on the review and discussion by our Compensation Committee
with management, the members of our Compensation Committee then
held a meeting at which they recommended to our Board of
Directors that our Board of Directors approve the inclusion of
the compensation disclosure and analysis in our
Form 10-K/A
annual report for the year ended June 30, 2007 under the
caption “Executive Compensation” for filing with the
SEC.
Compensation Committee:
Anthony J. Coppola
Lisa A. Napolitano
Fred G. Choate
10/29/07
None of our directors were paid any directors fees by us during
the fiscal year ended June 30, 2007. Historically, each
non-employee director was issued stock options to purchase
10,000 shares of our common stock. This year the Board
discussed various alternatives to the issuance of stock options
and has charged the Compensation Committee to present a report
concerning directors’ fees for the fiscal year ending
June 30, 2008. Directors are reimbursed for expenses
incurred in connection with attending meetings of the Board and
Board Committees.
We recognize that related person transactions present a
heightened risk of conflicts of interest and can create the
appearance of a conflict of interest. Therefore, all proposed
related person transactions are disclosed to the Board of
Directors before we enter into the transaction, and, if the
transaction continues for more than one year, the continuation
is reviewed annually by the Board of Directors.
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The Company and a member of the Company’s Board of
Directors, Jay Federman, M.D., are founding and equal
members of Ocular Telehealth Management, LLC (“OTM”).
OTM is a diagnostic telemedicine company providing remote
examination, diagnosis and management of disorders affecting the
human eye. OTM’s initial solution focuses on the diagnosis
of diabetic retinopathy by creating access and providing annual
dilated retinal examinations for the diabetic population. OTM
was founded to harness the latest advances in
telecommunications, software and digital imaging in order to
create greater access and a more successful disease management
for populations that are susceptible to ocular disease. Through
June 30, 2007, Escalon had invested $288,000 in OTM and
owned 45% of OTM. The members of OTM have agreed to review the
operations of OTM after 24 months of operations which began
in April 2004, at which time the members each have the right to
sell their membership back to OTM at fair market value. Such
sale would be subject to OTM’s ability to buy back the
membership. The members met in May 2006 and decided to continue
the operations of OTM, emphasizing that all additional funding
will be provided pro-rata consistent with membership percentage
ownership. The Company will provide administrative support
functions to OTM. For the years ended 2007, 2006 and 2005 the
Company recorded losses of $87,852, $173,844 and $63,613,
respectively.
Two relatives of a senior executive officer have provided legal
services as either an employee or a consultant to the Company.
Richard DePiano, Jr. (son of the Chief Executive Officer
(“CEO”)) is Chief Operating Officer and General
Counsel to the Company, Mr. DePiano’s salary plus
bonus for the fiscal year 2007 was approximately $185,000.
Our Audit Committee approves the fees and other significant
compensation to be paid to our independent public accountants
for the purpose of preparing or issuing an audit report or
related work. We provide appropriate funding, as determined by
our Audit Committee, for payment of fees and other significant
compensation to our independent public accountants. Our Audit
Committee also preapproves all auditing services and permitted
non-audit services, including the fees and terms thereof, to be
performed for us by our independent public accountants. The
Audit Committee does not delegate its responsibilities to
pre-approve services performed by the independent public
auditors to management, but may delegate pre-approval authority
to one or more of its members. The member or members to whom
such authority is delegated is required to report any
pre-approval decisions to the Audit Committee at its next
scheduled meeting.
Our Audit Committee reviewed and discussed with its current
independent public accountants, Mayer Hoffman McCann, the
following fees for services rendered for the 2007 fiscal year
and considered the compatibility of non-audit services with
Mayer Hoffman McCann’s independence. A representative of
the Company’s independent public accountants, Mayer Hoffman
McCann, is expected to attend the 2007 Annual Meeting. A
representative of the Company’s independent public
accountants, Mayer Hoffman McCann, will have an opportunity to
make a statement and respond to questions at the 2007 Annual
Meeting.
Audit Fees. Mayer Hoffman McCann, our
independent public accountants, billed us $147,500 and $106,300
in total for the fiscal years ended June 30, 2007 and 2006,
respectively in connection with the audit of our annual
consolidated financial statements.
Audit Related Fees. We did not pay any audit
related fees to Mayer Hoffman McCann during fiscal years ended
June 30, 2007 and 2006.
Tax Fees. We did not pay any fees to Mayer
Hoffman McCann for tax services during the fiscal years ended
June 30, 2007 and 2006.
All Other Fees. We did not pay any fees to
Mayer Hoffman McCann for all other services during the fiscal
years ended June 30, 2007 and 2006.
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The following report of our Audit Committee shall not be
deemed proxy solicitation material, and shall not be deemed
filed with the SEC or incorporated by reference into any of our
filings under the Exchange Act or the Securities Act of 1933.
The Audit Committee of our Board of Directors was established in
accordance with the Exchange Act and reviews the financial
reporting process, including the overview of our financial
reports and other financial information we provide to
governmental or regulatory bodies, the public and others who
rely thereon; our systems of internal accounting and financial
controls; the selection, evaluation and retention of our
independent public accountants; and the annual independent audit
of our financial statements.
Each of our Audit Committee members satisfies the independence
requirements of the Exchange Act and Nasdaq rules and complies
with the financial literacy requirements thereof. Our Board of
Directors has determined that all members of Audit Committee,
Anthony J. Coppola, Lisa A. Napolitano and William L.G. Kwan,
satisfy the financial expertise requirements and have the
requisite experience as defined by the SEC’s rules. Our
Board of Directors adopted a written charter for our Audit
Committee on May 9, 2000 and amended such charter on
July 8, 2004 to comply with new Nasdaq rules. The full text
of the Audit Committee Charter as currently in effect is
available on our website. Our Audit Committee reviews and
reassesses the adequacy of the charter on an annual basis.
Our Audit Committee has reviewed our audited consolidated
financial statements and discussed those statements with
management. Our Audit Committee has also discussed with Mayer
Hoffman McCann our independent public accountants during fiscal
2007, the matters required to be discussed by Statement of
Auditing Standards No. 61, as amended (AICPA, Professional
Standards, Vol. 1. section 380), as adopted by the Public
Company Accounting Oversight Board in Rule 3200T.
Our Audit Committee received from Mayer Hoffman McCann and
reviewed the written disclosures required by Independence
Standards Board Standard No. 1 (Independence Discussions
with Audit Committees) as adopted by the Public Company
Accounting Oversight Board in Rule 3200T and discussed with
Mayer Hoffman McCann matters relating to its independence. Our
Audit Committee also considered the compatibility of the
provision of non- audit services by Mayer Hoffman McCann with
the maintenance of Mayer Hoffman McCann ’s independence.
On the basis of these reviews and discussions, our Audit
Committee recommended to the Board of Directors that our audited
consolidated financial statements be included in our Annual
Report on
Form 10-K
for the fiscal year ended June 30, 2007 and be filed with
the SEC.
Submitted by:
Audit Committee
Anthony J. Coppola
William L.G. Kwan
Lisa A. Napolitano
November 9, 2007
Any shareholder who, in accordance with and subject to the
provisions of
Rule 14a-8
of the proxy rules of the SEC, wishes to submit a proposal for
inclusion in our proxy statement for our 2008 annual meeting of
shareholders must deliver such proposal in writing to our
Secretary at our principal executive offices at 565 East
Swedesford Road, Suite 200, Wayne, PA 19087 no later than
August 1, 2008.
Pursuant to Section 2.3 of our Bylaws, if a shareholder
wishes to present at our 2008 annual meeting of shareholders
(i) a proposal relating to nominations for and election of
directors for consideration by the Governance and Nominating
Committee of our Board of Directors or (ii) a proposal
relating to a matter other than nominations for and election of
directors, otherwise than pursuant to
Rule 14a-8
of the proxy rules of the SEC, the shareholder must
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comply with the provisions relating to shareholder proposals set
forth in our Bylaws, which are summarized below. Written notice
of any such proposal containing the information required under
our Bylaws, as described herein, must be delivered in person, by
first class United States mail postage prepaid or by
reputable overnight delivery service to the Governance and
Nominating Committee in care of our Secretary, for nomination
proposals only, or to the attention of our Secretary for all
other matters, at our principal executive offices at 565 East
Swedesford Road, Suite 200, Wayne, PA 19087 during the
period commencing on August 1, 2008 and ending on
August 31, 2008.
A written proposal of nomination for a director must set forth:
Only candidates nominated by shareholders for election as a
member of our Board of Directors in accordance with our Bylaw
provisions as summarized herein will be eligible for
consideration by the Governance and Nominating Committee to be
nominated for election as a member of our Board of Directors at
our 2008 annual meeting of shareholders, and any candidate not
nominated in accordance with such provisions will not be
considered or acted upon for election as a director at our 2008
annual meeting of shareholders.
A written proposal relating to a matter other than a nomination
for election as a director must set forth information regarding
the matter equivalent to the information that would be required
under the proxy rules of the SEC if proxies were solicited for
shareholder consideration of the matter at a meeting of
shareholders. Only shareholder proposals submitted in accordance
with the Bylaw provisions summarized above will be eligible for
presentation at our 2008 annual meeting of shareholders, and any
matter not submitted to our Board of Directors in accordance
with such provisions will not be considered or acted upon at our
2008 annual meeting of shareholders.
Our Board of Directors does not know of any matters to be
presented for consideration at our annual meeting other than the
matters described in the notice of annual meeting, but if any
matters are properly presented, proxies in the enclosed form
returned to us will be voted in accordance with the
recommendation of our Board of Directors or, in the absence of
such a recommendation, in accordance with the judgment of the
proxy holder.
By Order of the Board of Directors,
Richard J.
DePiano
Chairman and Chief Executive Officer
November 30, 2007
Wayne, Pennsylvania
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ESCALON MEDICAL CORP.
Annual Meeting of Shareholders To Be Held December 28, 2007 This Proxy is solicited on behalf of the Board of Directors. The undersigned hereby appoints
Richard J. DePiano and Robert O’Connor, and each or either of them, the attorneys, agents and
proxies of the undersigned, with full powers of substitution (the “Proxies”), to attend and act as
Proxy or Proxies of the undersigned at the annual meeting of shareholders (the “Annual Meeting”) of
Escalon Medical Corp. (the “Company”) to be held at the offices of Duane Morris LLP, 30 South 17th
Street, 12th Floor, Philadelphia, Pennsylvania, on December 28, 2007 at 9:00 a.m. or any
adjournment or continuation thereof, and to vote as specified herein the number of shares which the
undersigned, if personally present, would be entitled to vote.
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through the
nominee’s name on the following list:
Lisa A. Napolitano
Fred G. Choate THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR EACH OF THE NOMINEES IN PROPOSAL 1.
2. Other Business. In their discretion, the Proxies are authorized to vote upon such other
business as may come before the Annual Meeting and any and all adjournments thereof. The Board of
Directors at present knows of no other business to be presented by or on behalf of the Company or
the Board of Directors at the Annual Meeting.
IMPORTANT — PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN
THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. This Proxy when properly executed will be voted as specified. If no instruction is specified
with respect to a matter to be acted upon, the shares represented by the Proxy will be voted “FOR”
each nominee for Class II Director. If any other business is presented at the meeting, this Proxy
confers authority to and shall be voted in accordance with the recommendations of the Board of
Directors. This Proxy is solicited on behalf of the Board of Directors and may be revoked prior to
its exercise by filing with the Secretary of the Company a duly executed proxy bearing a later date
or an instrument revoking this Proxy, or by attending the meeting, requesting that your proxy be
revoked and electing to vote in person.
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Please sign exactly as name or names appear on this Proxy. If stock is held jointly, each
holder should sign. If signing as attorney, trustee, executor, administrator, custodian or
corporate officer, please give full title.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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