|
(1)
|
Title of
each class of securities to which transaction
applies:
|
|
(2)
|
Aggregate
number of securities to which transaction
applies:
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was
determined):
|
|
(4)
|
Proposed
maximum aggregate value of
transaction:
|
|
(5)
|
Total
fee paid:
|
o
|
Fee
paid previously with preliminary
materials.
|
o |
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
|
|
(1)
|
Amount
Previously Paid:
|
|
(2)
|
Form,
Schedule or Registration Statement
No.:
|
|
(3)
|
Filing
Party:
|
|
(4)
|
Date
Filed:
|
1.
|
To
elect three Class III directors to each serve for a three-year term that
expires at the 2013 Annual Meeting of Stockholders and until their
successors have been duly elected and
qualified;
|
2.
|
To
ratify the appointment of PricewaterhouseCoopers LLP as our independent
registered public accounting firm (the “Independent Registered Public
Accounting Firm”) for the fiscal year ending December 31, 2010;
and
|
3.
|
To
transact such other business as may properly come before the Annual
Meeting, including any motion to adjourn to a later date to permit further
solicitation of proxies, if necessary, or before any adjournment
thereof.
|
Pages
|
|
QUESTIONS
AND ANSWERS REGARDING THIS SOLICITATION AND VOTING AT THE ANNUAL
MEETING
|
1
|
Why
am I receiving these proxy materials?
|
1
|
Why
did I receive a notice in the mail regarding the Internet availability of
the proxy materials instead of a paper copy of the proxy
materials?
|
1
|
What
is the purpose of the Annual Meeting?
|
2
|
Who
is entitled to attend the meeting?
|
2
|
Who
is entitled to vote at the meeting?
|
2
|
How
many shares must be present or represented to conduct business at the
meeting (that is, what constitutes a quorum)?
|
2
|
What
items of business will be voted on at the meeting?
|
2
|
How
does the Board recommend that I vote?
|
2
|
What
shares can I vote at the meeting?
|
3
|
What
is the difference between holding shares as a stockholder of record and as
a beneficial owner?
|
3
|
How
can I vote my shares without attending the meeting?
|
3
|
How
can I vote my shares in person at the meeting?
|
3
|
Can
I change my vote?
|
3
|
Is
my vote confidential?
|
4
|
What
vote is required to approve each item and how are votes
counted?
|
4
|
What
is a “broker non-vote”?
|
4
|
How
are “broker non-votes” counted?
|
4
|
How
are abstentions counted?
|
5
|
What
happens if additional matters are presented at the
meeting?
|
5
|
Who
will serve as inspector of election?
|
5
|
What
should I do in the event that I receive more than one set of proxy/voting
materials?
|
5
|
Who
is soliciting my vote and who will bear the costs of this
solicitation?
|
5
|
Where
can I find the voting results of the meeting?
|
5
|
What
is the deadline to propose actions for consideration at next year’s Annual
Meeting of stockholders or to nominate individuals to serve as
directors?
|
6
|
STOCK
OWNERSHIP
|
7
|
Security
Ownership of Certain Beneficial Owners and Management
|
7
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
8
|
CORPORATE
GOVERNANCE AND BOARD MATTERS
|
8
|
Director
Independence
|
8
|
Board
Leadership Structure
|
8
|
Risk
Oversight and Analysis
|
8
|
Committees
of the Board
|
9
|
Meetings
Attended by Directors
|
9
|
Director
Nomination Process
|
10
|
Director
Compensation
|
11
|
Code
of Ethics
|
12
|
Corporate
Governance Committee Guidelines
|
12
|
Compensation
Committee Interlocks and Insider Participation
|
12
|
Certain
Relationships and Related Transactions
|
12
|
Family
Relationships
|
13
|
Communications
with the Board by Stockholders
|
13
|
REPORT
OF THE AUDIT COMMITTEE
|
13
|
PROPOSAL
ONE—ELECTION OF DIRECTORS
|
15
|
Classes
of the Board of Directors
|
15
|
Director
Nominees
|
15
|
Board
of Directors’ Recommendation
|
16
|
Directors
Whose Terms Extend Beyond the 2010 Annual Meeting
|
16
|
PROPOSAL
TWO —RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
|
18
|
Board
of Directors’ Recommendation
|
18
|
Audit
and Non-Audit Services
|
18
|
NAMED
EXECUTIVE OFFICERS
|
19
|
Compensation
Discussion and Analysis
|
19
|
Potential
Payments Upon Termination or Change in Control
|
27
|
Internal
Revenue Code Section 162(m) and Limitations on Executive
Compensation
|
28
|
Securities
Authorized for Issuance Under Equity Compensation Plans
|
28
|
Summary
Compensation Table
|
28
|
Grants
of Plan-Based Awards
|
29
|
Equity
Incentive Awards Outstanding
|
29
|
Options
Exercised and Stock Vested
|
30
|
COMPENSATION
COMMITTEE REPORT
|
31
|
OTHER
MATTERS
|
32
|
Why
am I receiving these proxy materials?
|
You
are receiving these proxy materials from us because you were a stockholder
of record at the close of business on the Record Date (which was
March 24, 2010). As a stockholder of record, you are
invited to attend the meeting and are entitled to and requested to vote on
the items of business described in this proxy statement.
|
Why
did I receive a notice in the mail regarding the Internet availability of
the proxy materials instead of a paper copy of the proxy
materials?
|
Pursuant
to SEC rules, we have elected to provide access to our proxy materials
over the Internet. Accordingly, we are sending a Notice of
Internet Availability of Proxy Materials (the “Notice”) to our
stockholders.
All
stockholders will have the ability to access the proxy materials on a
website referred to in the Notice or request to receive a printed set of
the proxy materials.
Instructions
on how to access the proxy materials over the Internet or to request a
printed copy may be found on the Notice.
In
addition, stockholders may request to receive proxy materials in printed
form by mail or electronically by email on an ongoing
basis. Choosing to receive your future proxy materials by email
will save us the cost of printing and mailing documents to you and will
reduce the impact of our annual stockholders’ meetings on the
environment. If you chose in connection with our 2009 Annual
Meeting of Stockholders to receive future proxy materials by email, you
should receive an email this year with instructions containing a link to
those materials and a link to the proxy voting site. In
connection with our upcoming Annual Meeting, if you choose to receive
future proxy materials by email, you will receive an email next year with
instructions containing a link to those materials and a link to the proxy
voting site. Your election to receive proxy materials by email
will remain in effect until you terminate
it.
|
What
is the purpose of the Annual Meeting?
|
At
our meeting, stockholders of record will vote upon the items of business
outlined in the notice of meeting (on the cover page of this proxy
statement), each of which is described more fully in this proxy
statement. In addition, management will report on the
performance of the Company and respond to questions from
stockholders.
|
Who
is entitled to attend the meeting?
|
You
are entitled to attend the meeting only if you owned our common stock (or
were a joint holder) as of the Record Date or if you hold a valid proxy
for the meeting. You should be prepared to present photo identification
for admittance.
Please
also note that if you are not a stockholder of record but hold shares in
street name (that is, through a broker or nominee), you will need to
provide proof of beneficial ownership as of the Record Date, such as your
most recent brokerage account statement, a copy of the voting instruction
card provided by your broker, trustee or nominee, or other similar
evidence of ownership.
The
meeting will begin promptly at 10:00 a.m., local
time. Check-in will begin at 9:30 a.m., local
time.
|
Who
is entitled to vote at the meeting?
|
Only
stockholders who owned our common stock at the close of business on the
Record Date are entitled to notice of and to vote at the meeting, and at
any postponements or adjournments thereof.
As
of the Record Date, 13,440,720 shares of our common stock were
outstanding. Each outstanding share of our common stock
entitles the holder to one vote on each matter considered at the
meeting. Accordingly, there are a maximum of 13,440,720 votes
that may be cast at the meeting.
|
How
many shares must be present or represented to conduct business at the
meeting (that is, what constitutes a quorum)?
|
The
presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of our common stock entitled to vote at the meeting
will constitute a quorum. A quorum is required to conduct
business at the meeting. The presence of the holders of our
common stock representing at least 6,720,361 votes will be required to
establish a quorum at the meeting. Both abstentions and broker
non-votes are counted for the purpose of determining the presence of a
quorum.
|
What
items of business will be voted on at the meeting?
|
The
items of business scheduled to be voted on at the meeting are as
follows:
1.
the election of three nominees to serve as Class III directors on our
Board; and
2.
the ratification of the appointment of PricewaterhouseCoopers LLP as our
Independent Registered Public Accounting Firm for the 2010 fiscal
year.
These
proposals are described more fully below in this proxy
statement. As of the date of this proxy statement, the only
business that our Board intends to present or knows of that others will
present at the meeting is as set forth in this proxy
statement. If any other matter or matters are properly brought
before the meeting, it is the intention of the persons who hold proxies to
vote the shares they represent in accordance with their best
judgment.
|
How
does the Board recommend that I vote?
|
Our
Board recommends that you vote your shares “FOR” each of the director
nominees and “FOR” the ratification of PricewaterhouseCoopers LLP as our
Independent Registered Public Accounting Firm for the 2010 fiscal
year.
|
What
shares can I vote at the meeting?
|
You
may vote all shares owned by you as of the Record Date, including
(1) shares held directly in your name as the stockholder of record,
and (2) shares held for you as the beneficial owner
through a broker, trustee or other nominee such as a bank.
|
What
is the difference between holding shares as a stockholder of record and as
a beneficial owner?
|
Most
of our stockholders hold their shares through a broker or other nominee
rather than directly in their own name. As summarized below,
there are some distinctions between shares held of record and those owned
beneficially.
Stockholders of
Record. If your shares are registered directly in your
name with our transfer agent, Computershare Trust Company, Inc., you are
considered, with respect to those shares, the stockholder of record,
and these proxy materials are being sent directly to you by
us. As the stockholder of record,
you have the right to grant your voting proxy directly to Cutera or to
vote in person at the meeting. We have enclosed a proxy card
for your use.
Beneficial
Owner. If your shares are held in a brokerage account or
by another nominee, you are considered the beneficial owner of
shares held in street name, and these proxy materials are being forwarded
to you together with a voting instruction card. As the
beneficial owner, you have the right to direct your broker, trustee or
nominee how to vote and are also invited to attend the
meeting. Please note that since a beneficial owner is not the
stockholder of
record, you may not vote these shares in person at the meeting
unless you obtain a “legal proxy” from the broker, trustee or nominee that
holds your shares, giving you the right to vote the shares at the
meeting. Your broker, trustee or nominee has enclosed or
provided voting instructions for you to use in directing the broker,
trustee or nominee how to vote your shares.
|
How
can I vote my shares without attending the meeting?
|
Whether
you hold shares directly as the stockholder of record or beneficially in
street name, you may direct how your shares are voted without attending
the meeting. Stockholders of record of our common stock may
submit proxies by completing, signing and dating their proxy cards and
mailing them in the accompanying pre-addressed envelope. Our
stockholders who hold shares beneficially in street name may vote by mail
by completing, signing and dating the voting instruction cards provided by
the broker, trustee or nominee and mailing them in the accompanying
pre-addressed envelope.
|
How
can I vote my shares in person at the meeting?
|
Shares
held in your name as the stockholder of record may be voted in person at
the meeting. Shares held beneficially in street name may be
voted in person only if you obtain a legal proxy from the broker, trustee
or nominee that holds your shares giving you the right to vote the
shares. Even if you plan to attend the meeting, we recommend
that you also submit your proxy card or voting instructions as described
above so that your vote will be counted if you later decide not to, or are
unable to, attend the meeting.
|
Can
I change my vote?
|
You
may change your vote at any time prior to the vote at the
meeting. If you are the stockholder of record, you may change
your vote by granting a new proxy bearing a later date (which
automatically revokes the earlier proxy), by providing a written notice of
revocation to our Secretary prior to your shares being voted, or by
attending the meeting and voting in person. Attendance at the
meeting will not cause your previously granted proxy to be revoked unless
you specifically so request.
For
shares you hold beneficially in street name, you may change your vote by
submitting new voting instructions to your broker, trustee or nominee, or,
if you have obtained a legal proxy from your broker, trustee or nominee
giving you the right to vote your shares, by attending the meeting and
voting in person.
|
Is
my vote confidential?
|
Proxy
instructions, ballots and voting tabulations that identify individual
stockholders are handled in a manner that protects your voting
privacy. Your vote will not be disclosed either within Cutera
or to third parties, except: (1) as necessary to meet applicable
legal requirements, (2) to allow for the tabulation of votes and
certification of the vote, and (3) to facilitate a successful proxy
solicitation. Occasionally, stockholders provide written
comments on their proxy card, which are then forwarded to our
management.
|
What
vote is required to approve each item and how are votes
counted?
|
The
vote required to approve each item of business and the method for counting
votes is set forth below:
Election of
Directors. The three director nominees receiving the
highest number of affirmative “FOR” votes at the meeting (a plurality of
votes cast) will be elected to serve as Class III
directors. You may vote either “FOR” or “WITHHOLD” your vote
for the director nominees. A properly executed proxy marked
“WITHHOLD” with respect to the election of one or more directors will not
be voted with respect to the director or directors indicated, although it
will be counted for purposes of determining whether there is a
quorum.
Ratification of
PricewaterhouseCoopers LLP as our Independent Registered Public Accounting
Firm. For the ratification of the appointment of our
Independent Registered Public Accounting Firm, the affirmative “FOR” vote
of a majority of the shares represented in person or by proxy and entitled
to vote on the item will be required for approval. You may vote
“FOR,” “AGAINST” or “ABSTAIN” for this item of business. If you
“ABSTAIN,” your abstention has the same effect as a vote
“AGAINST.”
If
you provide specific instructions with regard to certain items, your
shares will be voted as you instruct on such items. If you sign
your proxy card or voting instruction card without giving specific
instructions, your shares will be voted in accordance with the
recommendations of the Board (“FOR” all of the Company’s nominees to the
Board, “FOR” ratification of PricewaterhouseCoopers LLP as our Independent
Registered Public Accounting Firm, and in the discretion of the proxy
holders on any other matters that may properly come before the
meeting).
|
What
is a “broker non-vote”?
|
A
“broker non-vote”
occurs when a broker expressly instructs on a proxy card that it is not
voting on a matter, whether routine or non-routine. Under the
rules that govern brokers who have record ownership of shares that are
held in street name for their clients who are the beneficial owners of the
shares, brokers have the discretion to vote such shares on routine
matters, which includes ratifying the appointment of an independent
registered public accounting firm but does not include the election of
directors. Therefore, if you do not otherwise instruct your
broker, the broker may turn in a proxy card voting your shares “FOR”
ratification of the Independent Registered Public Accounting
Firm. However,
beginning this year, if you do not instruct your broker how to vote with
respect to the election of directors, your broker may not vote with
respect to such proposal and your shares will not be counted as voting in
favor of the election of directors.
|
How
are “broker non-votes” counted?
|
Broker
non-votes will be counted for the purpose of determining the presence or
absence of a quorum for the transaction of business, but they will not be counted in
tabulating the voting result for any particular
proposal.
|
How
are abstentions counted?
|
If
you return a proxy card that indicates an abstention from voting on all
matters, the shares represented will be counted for the purpose of
determining both the presence of a quorum and the total number of votes
cast with respect to a proposal (other than the election of directors),
but they will not be voted on any matter at the meeting. In the
absence of controlling precedent to the contrary, we intend to treat
abstentions in this manner. Accordingly, abstentions will have
the same effect as a vote “AGAINST” a
proposal.
|
What
happens if additional matters are presented at the
meeting?
|
Other
than the two proposals described in this proxy statement, we are not aware
of any other business to be acted upon at the meeting. If you
grant a proxy, the persons named as proxy holders, Kevin P. Connors
(our President, Chief Executive Officer and member of our Board) and
Ronald J. Santilli (our Chief Financial Officer), will have the
discretion to vote your shares on any additional matters that may be
properly presented for a vote at the meeting. If, for any
unforeseen reason, any of our nominees is not available as a candidate for
director, the persons named as proxy holders will vote your proxy for such
other candidate or candidates as may be nominated by our
Board.
|
Who
will serve as inspector of election?
|
We
expect a representative of Computershare Trust Company, Inc., our transfer
agent, to tabulate the votes, and expect Rajesh Madan, our Vice President
of Finance to act as inspector of election at the meeting.
|
What
should I do in the event that I receive more than one set of proxy/voting
materials?
|
You
may receive more than one set of these proxy solicitation materials,
including multiple copies of this proxy statement and multiple proxy cards
or voting instruction cards. For example, if you hold your
shares in more than one brokerage account, you may receive a separate
voting instruction card for each brokerage account in which you hold
shares. In addition, If you are a stockholder of record and
your shares are registered in more than one name, you may receive more
than one proxy card. Please complete, sign, date and return
each Cutera proxy card and voting instruction card that you receive to
ensure that all your shares are voted.
|
Who
is soliciting my vote and who will bear the costs of this
solicitation?
|
Your
vote is being solicited on behalf of the Board, and the Company will bear
the entire cost of solicitation of proxies, including preparation,
assembly, printing and mailing of this proxy statement. In
addition to these mailed proxy materials, our directors and employees may
also solicit proxies in person, by telephone, by electronic mail or by
other means of communication. Directors and employees will not
be paid any additional compensation for soliciting proxies. We
may reimburse brokerage firms, banks and other agents for the cost of
forwarding proxy materials to beneficial owners. We may also
engage the services of a professional proxy solicitation firm to aid in
the solicitation of proxies from certain brokers, bank nominees and other
institutional owners. Our costs for such services, if retained,
will not be material.
|
Where
can I find the voting results of the meeting?
|
We
intend to announce preliminary voting results at the Annual Meeting and
file a Form 8-K with the SEC within four business days after the end
of our Annual Meeting to report the voting
results.
|
What
is the deadline to propose actions for consideration at next year’s Annual
Meeting of stockholders or to nominate individuals to serve as
directors?
|
As
a stockholder, you may be entitled to present proposals for action at a
future meeting of stockholders, including director
nominations.
Stockholder Proposals:
For a stockholder proposal to be considered for inclusion in our proxy
statement for the Annual Meeting to be held in 2011, the written proposal
must be received by our corporate Secretary at our principal executive
offices no later than December 9, 2010, which is the date 120
calendar days before the anniversary of the mailing date of the Notice of
Internet Availability of Proxy Materials. If the date of next year’s
Annual Meeting is moved more than 30 days before or after the anniversary
date of this year’s Annual Meeting, the deadline for inclusion of
proposals in our proxy statement is instead a reasonable time before we
begin to print and mail its proxy materials. Such proposals also must
comply with the requirements of Rule 14a-8 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and any other applicable
rules established by the SEC. Stockholders interested in submitting such a
proposal are advised to contact knowledgeable legal counsel with regard to
the detailed requirements of applicable securities
laws. Proposals should be addressed to:
Secretary
Cutera,
Inc.
3240
Bayshore Blvd.
Brisbane,
California 94005-1021
Nomination
of Director Candidates: You may propose director candidates for
consideration by our Board. Any such recommendations should
include the nominee’s name and qualifications for Board membership and
should be directed to the “Secretary” at the address of our principal
executive offices set forth above. In addition, our Bylaws
permit stockholders to nominate directors for election at an Annual
Meeting of stockholders. To nominate a director, the
stockholder must provide the information required by our Bylaws, as well
as a statement by the nominee consenting to being named as a nominee and
to serve as a director if elected. In addition, the stockholder
must give timely notice to our corporate Secretary in accordance with the
provisions of our Bylaws, which require that the notice be received by our
corporate Secretary no later than December 9, 2010.
Copy of Bylaw
Provisions: You may contact our corporate Secretary at our
principal executive offices for a copy of the relevant bylaw provisions
regarding the requirements for making stockholder proposals and nominating
director candidates.
|
|
·
|
each
stockholder known by us to own beneficially more than 5% of our common
stock;
|
|
·
|
each
of our Named Executive Officers named in the Summary Compensation Table on
page 27 (our Chief Executive Officer and our Chief Financial
Officer);
|
|
·
|
each
of our directors; and
|
|
·
|
all
of our directors and Named Executive Officers as a
group.
|
Name
and Address of Beneficial Owner
|
Number
of Shares Outstanding
|
Warrants
and Options Exercisable Within 60 Days
|
Approximate
Percent Owned
|
|||||||||
Eagle
Asset Management, Inc.
|
1,471,089 | — | 10.9% | |||||||||
Individuals
and entities affiliated with Fidelity Management & Research
Company.
|
1,284,550 | — | 9.6% | |||||||||
Entities
affiliated with American Century Companies, Inc.
|
1,025,800 | — | 7.6% | |||||||||
Individuals
and entities affiliated with GAMCO Investors, Inc.
|
869,000 | — | 6.5% | |||||||||
Dimensional
Fund Advisors LP
|
783,266 | — | 5.8% | |||||||||
BlackRock,
Inc.
|
701,240 | — | 5.2% | |||||||||
David B.
Apfelberg
|
27,308 | 52,000 | * | |||||||||
Annette J.
Campbell-White
|
64,082 | 62,000 | * | |||||||||
Kevin P.
Connors
|
479,761 | 222,310 | 5.1% | |||||||||
David A.
Gollnick
|
177,062 | 41,126 | 1.6% | |||||||||
W. Mark
Lortz
|
9,593 | 62,000 | * | |||||||||
Timothy J.
O’Shea
|
7,308 | 42,000 | * | |||||||||
Jerry P.
Widman
|
7,308 | 62,000 | * | |||||||||
Ronald J.
Santilli
|
12,770 | 120,003 | 1.0% | |||||||||
All
directors and Named Executive Officers as a group
(8 persons)
|
785,192 | 663,439 | 10.3% |
Name
of Director
|
Audit
Committee
|
Compensation
Committee
|
|||||||
Non-Employee
Directors:
|
|||||||||
Jerry P.
Widman
|
X | * | X | ||||||
Timothy J.
O’Shea
|
X | ||||||||
W. Mark
Lortz
|
X | ||||||||
David B.
Apfelberg
|
X | * | |||||||
Annette J.
Campbell-White
|
X | ||||||||
David A.
Gollnick**
|
|||||||||
Employee
Directors:
|
|||||||||
Kevin P.
Connors
|
|||||||||
Number
of Meetings Held During the Last Fiscal Year
|
7 | 4 |
X =
|
Committee
member
|
* =
|
Chairman
of Committee
|
**
=
|
Mr. Gollnick
resigned from the position of Executive Vice President of Research and
Development effective March 20, 2009 and continues to be a member of
our Board and a consultant to our
Company.
|
Name
|
Fees
Earned or Paid in Cash(1)
|
Stock
Awards(2)
|
Total
|
|||||||||
David B.
Apfelberg
|
$ | 55,000 | $ | 60,000 | (3) | $ | 115,000 | |||||
Annette J.
Campbell-White
|
41,000 | 60,000 | (4) | 101,000 | ||||||||
David A.
Gollnick
|
22,500 | — | (5) | 22,500 | ||||||||
W. Mark
Lortz
|
42,500 | 60,000 | (6) | 102,500 | ||||||||
Timothy J.
O’Shea
|
42,500 | 60,000 | (7) | 102,500 | ||||||||
Jerry P.
Widman
|
61,000 | 60,000 | (8) | 121,000 |
(1)
|
Amounts
were earned in connection with serving on our Board and its committees, or
committee Chairman retainers, each as described below.
|
(2)
|
Amounts
shown in this column are the aggregate grant date fair value of fully
vested stock awards granted during the year ended December 31, 2009
calculated in accordance with Accounting Standards Codification
(ASC) Topic 718. See Note 5 of the Notes to
Consolidated Financial Statements included in our Annual Report on
Form 10-K for the year ended December 31, 2009 filed with the
SEC on March 15, 2010 for a discussion of valuation assumptions for
stock-based compensation.
|
(3) |
At
December 31, 2009, David B. Apfelberg held options to purchase
52,000 shares of common stock.
|
(4) | At December 31, 2009, Annette J. Campbell-White held options to purchase 62,000 shares of common stock. |
(5) | David A. Gollnick resigned from the position of Executive Vice President of Research and Development effective March 20, 2009. He continues to be a member of our Board and is a consultant to our Company. At December 31, 2009, Mr. Gollnick held options to purchase 41,126 shares of common stock. |
(6) | At December 31, 2009, W. Mark Lortz held options to purchase 62,000 shares of common stock. |
(7) | At December 31, 2009, Timothy J. O’Shea held options to purchase 42,000 shares of common stock. |
(8)
|
At
December 31, 2009, Jerry P. Widman held options to purchase
62,000 shares of common
stock.
|
|
·
|
The
Audit Committee has reviewed and discussed the audited financial
statements for 2009 with Cutera’s
management.
|
|
·
|
The
Audit Committee has discussed with the Independent Registered Public
Accounting Firm the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standard, AU 380),
SAS 99 (Consideration of Fraud in a Financial Statement Audit) and
SEC rules discussed in Final Releases Nos. 33-8183 and
33-8183a.
|
|
·
|
The
Audit Committee has discussed with the Independent Registered Public
Accounting Firm the overall scope and plans for its
audit.
|
|
·
|
The
Audit Committee has met with the Independent Registered Public Accounting
Firm, with and without management present, to discuss the results of its
examinations, its evaluations of our internal control over financial
reporting, and to discuss the overall quality of our financial
reporting.
|
|
·
|
The
Audit Committee has considered whether the provision by the Independent
Registered Public Accounting Firm of non-audit services is compatible with
maintaining its independence.
|
|
·
|
Based
on the review and discussion referred to above, the Audit Committee has
approved that the audited financial statements and the report of
management on internal control over financial reporting be included in
Cutera’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2009.
|
Name
|
Term
Expires
|
Age
|
Principal
Occupation
|
Director
Since
|
|||||||||
Class I
Directors
|
|||||||||||||
Kevin P.
Connors
|
2011
|
48 |
President
and Chief Executive Officer
|
1998 | |||||||||
David A.
Gollnick(1)
|
2011
|
45 |
Former
Executive Vice President of Research and Development
|
1998 | |||||||||
Class II
Directors
|
|||||||||||||
Timothy J.
O’Shea(3)
|
2012
|
57 |
Managing
Director, Oxo Capital
|
2004 | |||||||||
David B.
Apfelberg(2)
|
2012
|
68 |
Clinical
Professor of Plastic Surgery, Stanford University Medical
Center
|
1998 | |||||||||
Class III
Directors
|
|||||||||||||
W. Mark
Lortz(3)
|
2010
|
58 |
Former
Chief Executive Officer, TheraSense, Inc.
|
2004 | |||||||||
Jerry P.
Widman(2)(3)
|
2010
|
67 |
Former
Chief Financial Officer, Ascension Health
|
2004 | |||||||||
Annette J.
Campbell-White(2)
|
2010
|
63 |
Managing
General Partner, MedVenture Associates I-V
|
1998 |
(1)
|
Mr. Gollnick
resigned from the position of Executive Vice President of Research and
Development effective March 20,
2009.
|
(2)
|
Member
of the Compensation Committee.
|
(3)
|
Member
of the Audit Committee.
|
Service
Category
|
2009
|
2008
|
||||||
Audit
Fees
|
$ | 596,500 | $ | 710,800 | ||||
Audit
Related Fees
|
— | — | ||||||
Tax
Fees
|
— | — | ||||||
All
Other Fees
|
1,500 | 1,500 | ||||||
Total
|
$ | 598,000 | $ | 712,300 |
Name
|
Age
|
Position(s)
|
||||
Kevin P.
Connors
|
48 |
President,
Chief Executive Officer and Director
|
||||
Ronald J.
Santilli
|
50 |
Executive
Vice President and Chief Financial
Officer
|
|
·
|
that
they be fair, objective and consistent across the employee
population;
|
|
·
|
that
compensation be directly and substantially linked to measurable corporate
and individual performance; and
|
|
·
|
that
compensation remains competitive, so that we can attract, motivate, retain
and reward the key employees whose knowledge, skills and performance are
necessary for our success.
|
|
(i)
|
Establishing
the following for the Named Executive Officers and such other officers as
appropriate: (a) annual base salary, (b) annual incentive bonus, which may
include the setting of specific goals and amounts, (c) equity
compensation, (d) agreements for employment, severance and
change-of-control, and (e) any other benefits, compensation or
arrangements, other than benefits generally available to our
employees.
|
|
(ii)
|
Reviewing
and making recommendations to our Board of Directors, at such intervals as
may be decided by the Compensation Committee from time to time, regarding
(a) general compensation goals and guidelines for our employees and the
criteria by which bonuses and stock compensation awards to our employees
are determined; and, (b) other policies and plans for the provision of
compensation to our employees, directors and
consultants.
|
|
(iii)
|
Acting
as Administrator of our 2004 Equity Incentive Plan, 2004 Employee Stock
Purchase Plan, and any other equity compensation plans adopted by our
Board.
|
|
(iv)
|
Reviewing
and making recommendations to our Board with respect to policies relating
to the issuance of equity incentives to employees, consultants and
directors.
|
|
(v)
|
Evaluating
the compensation of the independent members of our
Board.
|
|
(vi)
|
Preparing
the report that follows this Compensation Discussion and
Analysis.
|
|
·
|
Salary
should generally be set at or above the 50th percentile of the Peer
Group;
|
|
·
|
Salary
should be positioned to reflect each individual’s experience, performance
and potential;
|
|
·
|
A
significant portion of cash compensation should be “at risk;”
and
|
|
·
|
The
amount of discretionary bonuses payable in any quarter is based on revenue
growth, compared with the same quarter in the prior year, and the
operating profit before stock-based compensation and non-operational
expenses, or “Adjusted Operating Profit.” Further, discretionary bonuses
are payable only if we have an Adjusted Operating Profit for that
quarter.
|
|
·
|
assessing
the competitiveness of our compensation arrangements for the Named
Executive Officers and making recommendations regarding the 2009 equity
grants to these individuals;
|
|
·
|
assessing
the competitiveness of our compensation arrangements for the members of
our Board and making recommendations regarding the compensation program’s
design and levels; and
|
|
·
|
reviewing
and providing comments on the structure of the stock option exchange
program.
|
|
·
|
Stockholder
and executive interests should be
aligned;
|
|
·
|
Key
and high-performing employees, who have a demonstrable impact on our
performance and /or stockholder value, should be provided this
benefit;
|
|
·
|
The
program should be structured to provide meaningful retention incentives to
participants;
|
|
·
|
The
equity grants should reflect each individual’s experience, performance,
potential and be comparable to what the Peer Group grants for the
respective position; and
|
|
·
|
Actual
awards should be tailored to reflect individual performance and
attraction/retention goals.
|
|
·
|
Health,
dental and vision insurance;
|
|
·
|
Life
insurance;
|
|
·
|
Short-and
long-term disability;
|
|
·
|
401(k)
plan, however, in 2009 we discontinued our discretionary employer match on
employee 401(k) contributions; and
|
|
·
|
Flexible
Spending Accounts.
|
Name
|
Estimated
Total
Value of
Cash
Payment
|
Estimated
Total
Value of
Health
Coverage
Continuation
|
||||||
Kevin
P. Connors
|
$ | 840,000 | $ | 14,616 | ||||
Ronald
J. Santilli
|
$ | 290,000 | $ | 20,652 |
Name
|
Estimated
Total
Value of
Cash
Payment
|
Estimated
Total
Value of
Health
Coverage
Continuation
|
Value
of
Accelerated
Equity(1)
|
|||||||||
Kevin
P. Connors
|
$ | 1,092,000 | $ | 14,616 | $ | 655,099 | ||||||
Ronald
J. Santilli
|
420,500 | $ | 20,652 | $ | 137,413 |
(1)
|
We
estimate the value of acceleration of options and shares held by each of
our Named Executive Officers based on a share price of $8.51 per share as
of December 31, 2009 and the number of options and shares held by
each of our Named Executive Officers that were unvested as of
December 31, 2009.
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
(a)
|
Weighted-average
exercise price of outstanding options, warrants and rights
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
Equity
compensation plans approved by security holders
|
2,692,555 | $ | 10.87 | 1,840,381 | ||||||||
Equity
compensation plan not approved by security holders
|
— | — | — | |||||||||
Total
|
2,692,555 | $ | 10.87 | 1,840,381 |
Name
and Principal Position
|
Salary
|
Bonus(1)
|
Option
and Stock Awards (2)
|
Non-Equity
Incentive Plan Compensation (3)
|
All
Other Compensation (4)
|
Total
|
||||||||||||||||||
Kevin
P. Connors
President and Chief Executive Officer |
||||||||||||||||||||||||
2009
|
$ | 420,000 | $ | 18,454 | $ | 481,284 | $ | ― | $ | ― | $ | 919,738 | ||||||||||||
2008
|
420,000 | 53,086 | 708,145 | 6,852 | 10,817 | 1,198,900 | ||||||||||||||||||
2007
|
390,833 | 258,267 | 444,608 | 7,725 | 10,358 | 1,111,791 | ||||||||||||||||||
Ronald J.
Santilli
Executive Vice President and Chief Financial Officer |
||||||||||||||||||||||||
2009
|
$ | 290,000 | $ | 10,012 | $ | 220,589 | $ | ― | $ | — | $ | 520,601 | ||||||||||||
2008
|
290,000 | 28,513 | 339,765 | — | 10,350 | 668,628 | ||||||||||||||||||
2007
|
267,083 | 134,795 | 244,534 | — | 10,358 | 656,770 |
(1)
|
Amounts
represent a discretionary bonus and profit sharing earned in 2008 and
2009.
|
(2)
|
Amounts
shown in this column are the aggregate grant date fair value of stock
awards granted during the year ended December 31, 2009 calculated in
accordance with ASC Topic 718. See Note 5 of the
Consolidated Notes to Financial Statements included in our Annual
Report on Form 10-K for the year ended December 31, 2009 filed
with the SEC on March 15, 2010 for a discussion of valuation
assumptions for stock-based
compensation.
|
(3)
|
Amounts
represent non-cash benefit associated with a company sponsored,
non-business, event for achieving sales targets in accordance with our
commission incentive plan.
|
(4)
|
Amount
represents 401(k) employer-match contributions and service award, where
applicable. In 2009, we discontinued our discretionary employer match on
employee 401(k) contributions.
|
Estimated
Future Payouts Under Non-Equity Incentive Plan
Awards
|
All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock Option | |||||||||||||||||||||||
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Options
|
Awards
(2)
|
Awards
(1)
|
|||||||||||||||||||
Kevin
P. Connors
President and Chief Executive Officer |
06/08/2009
|
— | — | — | 120,000 | $8.66 | 481,284 | |||||||||||||||||||
Ronald
J. Santilli
Executive Vice President and Chief Financial Officer |
06/08/2009
|
— | — | — | 55,000 | $8.66 | 220,589 |
(1)
|
Amounts
reflect grant date fair value of equity awards calculated in accordance
with ASC Topic 718. See Note 5 of the Notes to
Consolidated Financial Statements included in our Annual Report on
Form 10-K for the year ended December 31, 2009 filed with the
SEC on March 15, 2010 for a discussion of valuation assumptions for
stock-based compensation.
|
(2)
|
The
per-share prices were the closing price of our common stock on the
respective dates of grant.
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Earned
Options
|
Number
of Securities Underlying Unexercised Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Number
of Shares or
Units
of
Stock
that
Have
Not
Vested
|
Market
Value
of
Shares
or
Units
of
Stock
that
Have
Not Vested
|
Date
Awards
Will
be
Fully
Vested
|
||||||||||||||||||
Kevin
P. Connors
|
50,000 | — | $ | 0.50 |
8/4/2010
|
||||||||||||||||||||
President
and
|
40,000 | — | 2.50 |
6/8/2011
|
|||||||||||||||||||||
Chief
Executive Officer
|
3,333 | — | 4.25 |
8/13/2013
|
|||||||||||||||||||||
30,000 | — | 20.25 |
7/28/2015
|
||||||||||||||||||||||
48,125 | 6,875 | (1) | 23.75 |
6/8/2013
|
|||||||||||||||||||||
25,000 | 15,000 | (1) | 24.46 |
6/8/2012
|
|||||||||||||||||||||
12,488 | 20,812 | (1) | 10.43 |
5/28/2015
|
|||||||||||||||||||||
— | 100,000 | (2) | 10.43 |
5/28/2015
|
|||||||||||||||||||||
— | 120,000 | (3) | 8.66 | 6/08/2016 | |||||||||||||||||||||
— | $ | — | — | ||||||||||||||||||||||
Ronald J. Santilli | 20,000 | — | 5.50 |
9/24/2011
|
|||||||||||||||||||||
Executive
Vice President and
|
3,372 | — | 4.25 |
8/7/2012
|
|||||||||||||||||||||
Chief
Financial Officer
|
14,753 | — | 4.25 |
8/13/2013
|
|||||||||||||||||||||
|
10,000 | — | 13.30 |
7/20/2014
|
|||||||||||||||||||||
15,000 | — | 20.25 |
7/28/2015
|
||||||||||||||||||||||
30,625 | 4,375 | (1) | 23.75 |
6/8/2013
|
|||||||||||||||||||||
13,750 | 8,250 | (1) | 24.46 |
6/8/2012
|
|||||||||||||||||||||
5,138 | 8,562 | (1) | 10.43 |
5/28/2015
|
|||||||||||||||||||||
— | 50,000 | (2) | 10.43 |
5/28/2015
|
|||||||||||||||||||||
— | 55,000 | (3) | 8.66 | 6/08/2016 | |||||||||||||||||||||
— | $ | — | — |
(1)
|
One-quarter
(1/4th) of the shares underlying each of these options vest on the one
year anniversary of the vesting commencement date and 1/48th of the
underlying shares vest each month
thereafter.
|
(2)
|
100%
of the shares underlying each of these options vest on the three year
anniversary of the vesting commencement
date.
|
(3)
|
One-third
(1/3rd) of the shares underlying each of these options vest on the one
year anniversary of the vesting commencement date and 1/36th of the
underlying shares vest each month
thereafter.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Name
|
Number
of Shares Acquired on Exercise
|
Value
Realized on Exercise (1)
|
Number
of Shares Acquired on Vesting
|
Value
Realized Upon Vesting (2)
|
||||||||||||
Kevin
P. Connors
President and Chief Executive Officer |
408,333 | 2,396,915 | 2,500 | 20,350 | ||||||||||||
Ronald
J. Santilli
Executive Vice President and Chief Financial Officer |
― | ― | 1,250 | 10,175 |
(1)
|
Represents
the excess of fair market value of the shares exercised on the exercise
date over the aggregate exercise price for such
shares.
|
(2)
|
These
shares were originally issued by us pursuant to performance unit
awards. On each vesting date, the unit had a value equal to the
fair market value of our common stock on the date of
vesting.
|
(1)
|
The
material in this report is not deemed soliciting material or filed with
the SEC and is not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after the date of
this Proxy Statement and irrespective of any general incorporation
language in those filings.
|
Please
mark your votes as indicated
|
x | |||||||
1.Election
of Directors
|
FOR
|
WITHHOLD
|
2. Ratify
the appointment of PricewaterhouseCoopers LLP as the Independent
Registered Public Accounting Firm of the Company for the fiscal year
ending December 31, 2010
|
FOR
|
AGAINST
|
ABSTAIN
|
||
o | o | o | o | o | ||||
CLASS
III NOMINEES:
W. MARK LORTZ
JERRY P. WIDMAN
ANNETTE J.
CAMPBELL-WHITE
|
||||||||
THE
STOCKHOLDER MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY STRIKING OUT
THE INDIVIDUAL’S NAME ABOVE
|
THIS
PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF THE NOMINATED CLASS III
DIRECTORS; (2) FOR THE RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM; AND (3) AS THE PROXY HOLDERS DEEM ADVISABLE ON SUCH OTHER MATTERS AS
MAY COME BEFORE THE MEETING.
|
|||||||
PLEASE
SIGN EXACTLY AS YOUR NAME APPEARS HEREON. IF THE STOCK IS
REGISTERED IN THE NAME OF TWO OR MORE PERSONS, EACH SHOULD
SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS AND
ATTORNEYS-IN-FACT SHOULD ADD THEIR TITLES. IF SIGNER IS A
CORPORATION, PLEASE GIVE FULL CORPORATE NAME AND HAVE A DULY AUTHORIZED
OFFICER SIGN, STATING TITLE. IF SIGNER IS A PARTNERSHIP, PLEASE
SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
|
||||||||
PLEASE
SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE,
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED
STATES.
|
SIGNATURE(S)
|
|
SIGNATURE(S)
|
|
DATE:
, 2010
|