<PAGE>
As filed with the Securities and Exchange Commission on April 13, 1999
SCHEDULE 14A
(RULE 14a-101
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
------------------------
NEXMED, INC.
(Name of Registrant as Specified In Its Charter)
------------------------
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(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:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
NEXMED, INC.
350 CORPORATE BOULEVARD
ROBBINSVILLE, NEW JERSEY 08691
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1999
------------------------
To Our Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of NexMed, Inc. (the "Company") to all of the shareholders of the
Company. The Annual Meeting will be held in the conference room of the Company's
facilities at 350 Corporate Boulevard, Robbinsville, New Jersey on Monday, May
10, 1999 at 10:00 a.m. for the following purposes:
(1) The election of two persons to the Board of Directors of the Company, to
serve a three-year term, or until their respective successors are elected
and qualified;
(2) Ratification of the appointment of PricewaterhouseCoopers LLP,
independent accountants, as the Company's independent accountants for the
ensuing year;
Consideration and action upon such other business as may properly come
before this meeting or any adjournment thereof.
The enclosed Proxy Statement includes information relating to these
proposals.
All shareholders of record of the Company's common stock at the close of
business on March 31, 1999 are entitled to notice of and to vote at the Annual
Meeting or any adjournment or postponement thereof. At least a majority of the
outstanding shares of common stock of the Company present in person or by proxy
is required for a quorum.
By Order of the Board of Directors
/s/ VIVIAN H. LIU
-------------------------------------------------------------------------
Vivian H. Liu
SECRETARY
April 9, 1999
Robbinsville, New Jersey
THE BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN THE
COMPANY'S ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. ACCORDINGLY, PLEASE SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY BY MAIL IN THE POSTAGE-PAID ENVELOPE
PROVIDED, AND FOR INTERNATIONAL REGISTERED OWNERS ONLY, BY MAIL OR BY FACSIMILE
TO NORWEST SHAREOWNER SERVICES PROXY UNIT AT 1-651-450-4026. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY, IF YOU WISH, AND VOTE IN PERSON.
YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE PROXY
STATEMENT.
<PAGE>
MAILED TO SHAREHOLDERS
ON OR ABOUT APRIL 9, 1999
NEXMED, INC.
350 CORPORATE BOULEVARD
ROBBINSVILLE, NEW JERSEY 08691
------------------------
PROXY STATEMENT
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished to Shareholders of NexMed, Inc., a Nevada
corporation (the "Company"), in connection with the solicitation by the board of
directors (the "Board" or "Board of Directors") of the Company of proxies in the
accompanying form for use in voting at the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held on May 10, 1999 at 10:00 a.m., local
time, at the Company's headquarter facilities at 350 Corporate Boulevard,
Robbinsville, New Jersey, and any adjournment or postponement thereof.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised by delivering to the Company (to
the attention of Vivian H. Liu, the Company's Secretary) a written notice of
revocation or a properly executed proxy bearing a later date, or by attending
the Annual Meeting and voting in person.
SOLICITATION AND VOTING PROCEDURES
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy materials for the Annual Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's common stock, par value $.001 per share (the "Common Stock"). The
Company may use the services of Norwest Shareowner Services in soliciting
proxies and, in such event, the Company expects to pay approximately $
1,000, plus out-of-pocket expenses, for such services. The Company may conduct
further solicitation personally, telephonically or by facsimile through its
officers, directors and regular employees, none of whom would receive additional
compensation for assisting with the solicitation.
The presence at the Annual Meeting of a majority of the outstanding shares
of Common Stock of the Company, represented either in person or by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. The
close of business on March 31, 1999 has been fixed as the record date (the
"Record Date") for determining the holders of shares of Common Stock (the
"Shareholders") entitled to notice of and to vote at the Annual Meeting. Each
share of Common Stock outstanding on the Record Date is entitled to one vote on
all matters. As of the Record Date, there were 8,401,703 shares of Common Stock
outstanding.
Shareholder votes will be tabulated by the persons appointed by the Board to
act as inspectors of election for the Annual Meeting. Shares represented by a
properly executed and delivered proxy will be voted at the Annual Meeting and,
when instructions have been given by the Shareholder, will be voted in
accordance with those instructions. If no instructions are given, the shares
will be voted FOR the election of each of the two nominees for director named
below and FOR the ratification of the appointment of PricewaterhouseCoopers LLP,
independent accountants, as the Company's independent accounts for 1999.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Articles of Incorporation divide the
Company's Board of Directors into three classes, the term of office for each
class arranged so that the term of office of one class shall expire at each
successive Annual Meeting of Shareholders. The Board of Directors presently
consists of five members as follows: Class I directors, Robert W. Gracy, Ph.D
and Yu-Chung Wei, whose terms expire in 2001; Class II Director, Gilbert S.
Banker, Ph.D., whose term expires in 2000; and Class III Director, Y. Joseph Mo,
Ph.D., and James L. Yeager, Ph.D., whose term expires in 1999 (and, if
re-elected at the Annual Meeting, in the year 2002).
At the Annual Meeting, the Shareholders will elect two Directors to serve as
Class III Directors. The Directors who are elected at the Annual Meeting will
serve until the Annual Meeting of Shareholders to be held in 2002, and until
such Directors' respective successors are elected or appointed and qualify or
until any such Director's earlier removal. It is intended that, unless
authorization to do so is withheld, the proxies will be voted "FOR" the election
of the Director nominees named below. The Board of Directors believes that
nominees Y. Joseph Mo and James L. Yeager will stand for election and will, if
elected, serve as such Class III Directors. However, in the event any nominee is
unable or unwilling to serve as a Class III Director at the time of the Annual
Meeting, the proxies may be voted for the balance of those nominees named and
for any substitute nominee designated by the present Board of Directors or the
proxy holders to fill such vacancy or for the balance of those nominees named
without nomination of a substitute, or the Board of Directors may be reduced to
no less than three member in accordance with the Amended and Restated Articles
of Incorporation of the Company.
Y. JOSEPH MO, PH.D., nominee for Class III director, age 51. Dr. Mo has been
Chairman of Board of Directors, President and Chief Executive Officer of the
Company since joining the Company in 1995. Prior to joining the Company, Dr. Mo
was president of Sunbofa Group, Inc., an investment consulting company. From
1991 to 1994, he was President of the Chemical Division, and from 1988 to 1994
the Vice President of Manufacturing and Medicinal Chemistry, of Greenwich
Pharmaceuticals, Inc. Prior thereto, he served in various executive positions
with several major pharmaceutical companies, including Johnson & Johnson, Rorer
Pharmaceuticals, and predecessors of SmithKline Beecham. Dr. Mo received his
Ph.D. in Industrial and Physical Pharmacy from Purdue University in 1977.
JAMES L. YEAGER, PH.D., nominee for Class III Director, age 52. Dr. Yeager
has been a Director of the Company since December 1998, and Vice President,
Research and Development and Business Development since June 1996. Prior to
joining the Company, Dr. Yeager was the Vice President of Research and
Development for Pharmedic Company, during which time he specialized in the
building and managing of new product development programs. From 1989 to 1992,
Dr. Yeager held international managerial positions with Abbott Laboratories. Dr.
Yeager received his Ph.D. in Industrial and Physical Pharmacy from Purdue
University in 1978.
REQUIRED VOTE AND RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of all the votes cast at the Annual
Meeting, assuming a quorum is present, is necessary for the election of a
Director.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE TWO NOMINEES NAMED
ABOVE.
2
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
Set forth below is certain information as of the Record Date regarding the
Executive Officers and Directors of the Company.
<TABLE>
<CAPTION>
NAME AGE TITLE
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Y. Joseph Mo, Ph.D................................... 51 Chairman of the Board of Directors, President and
Chief Executive Officer
Joseph M. Warusz..................................... 42 Vice President and Chief Financial Officer
James L. Yeager, Ph.D................................ 52 Vice President, Research & Development and Business
Development, and Director
Vivian H. Liu........................................ 37 Vice President, Corporate Affairs and Secretary
Gilbert S. Banker, Ph.D.............................. 67 Director
Robert W. Gracy, Ph.D................................ 58 Director
Yu-Chung Wei......................................... 36 Director
</TABLE>
Y. JOSEPH MO, PH.D. has been Chairman of the Board of Directors, President
and Chief Executive Officer of the Company since joining the Company in 1995.
Prior to joining the Company, Dr. Mo was President of Sunbofa Group, Inc., an
investment consulting company. From 1991 to 1994, he was President of the
Chemical Division, and from 1988 to 1994 the Vice President of Manufacturing and
Medicinal Chemistry, of Greenwich Pharmaceuticals, Inc. Prior thereto, he served
in various executive positions with several major pharmaceutical companies,
including Johnson & Johnson, Rorer Pharmaceuticals, and predecessors of
SmithKline Beecham. Dr. Mo received his Ph.D. in Industrial and Physical
Pharmacy from Purdue University in 1977.
JOSEPH M. WARUSZ. Mr. Warusz has been Vice President, Chief Financial
Officer and Treasurer of the Company since August 1998. Prior to joining the
Company, Mr. Warusz was for 15 years, in various financial positions at Bristol
Myers Squibb, including Director of International Finance and Assistant
Controller. From 1979 to 1983, Mr. Warusz worked at Peat Marwick Main and
Company. Mr. Warusz received his MBA in Financial Management and a Bachelor of
Science in Business Administration from Drexel University.
JAMES L. YEAGER, PH.D. has been Vice President, Research and Development
and Business Development since June 1996, and a Director of the Company since
December 1998. Prior to joining the Company, Dr. Yeager was the Vice President
of Research and Development for Pharmedic Company, during which time he
specialized in the building and managing of new product development programs.
From 1989 to 1992, Dr. Yeager held international managerial positions with
Abbott Laboratories. Dr. Yeager received his Ph.D. in Industrial and Physical
Pharmacy from Purdue University in 1978. Dr. Yeager is also a member of the
Company's Scientific Advisory Committee.
VIVIAN H. LIU has been Vice President, Corporate Affairs and Secretary of
the Company since September 1995. In 1994, while the Company was in a
transitional period, Ms. Liu served as its Chief Executive Officer. In addition,
from September 1995 to September 1997, Ms. Liu had the title of Treasurer. From
1985 to 1994, she was a business and investment adviser to the government of
Quebec and numerous Canadian companies with respect to product distribution,
technology transfer and investment issues. Ms. Liu received her Masters Degree
in International Finance from the University of Southern California, and a
Bachelor of Arts degree in International Trade from the University of
California, Berkeley.
GILBERT S. BANKER, PH.D. has been a Director of the Company since September
1995 and his current term expires in 2000. Since 1992, Dr. Banker has been Dean
and a distinguished professor of the College of Pharmacy at the University of
Iowa. From 1985 to 1992, he was Dean and Professor of the College of
3
<PAGE>
Pharmacy at the University of Minnesota. Prior to that time, he was the
Department Head of Industrial and Physical Pharmacy at Purdue University for 18
years. Dr. Banker has authored numerous publications, lectures internationally
and consults to several major pharmaceutical companies. Dr. Banker received his
Ph.D. in Industrial Pharmacy from Purdue University in 1957. Dr. Banker is also
a member of the Company's Scientific Advisory Committee.
ROBERT W. GRACY, PH.D. has been a Director of the Company since January
1997 and his current term expires in 2001. Dr. Gracy is the Dean for Research
and Biotechnology and Associate Dean for Basic Science at the University of
North Texas Health Science Center in Fort Worth, Texas. Since 1985, Dr. Gracy
has received over $5 million in research grants and contracts. His current
projects focus on three aspects of the biochemical changes associated with
aging: changes at the cellular level, wound and tissue repair, and vision
impairment. Dr. Gracy is a consultant to number of the major pharmaceutical
companies. Dr. Gracy lectures internationally and has published over 140 papers
regarding his research. Dr. Gracy received his Ph.D. in Biochemistry from the
University of California, Riverside in 1968 and completed a postdoctoral in
Molecular Biology at the Albert Einstein College of Medicine in New York in
1970. Dr. Gracy is also a member of the Company's Scientific Advisory Committee.
YU-CHUNG WEI has been a Director of the Company since March 1997 and his
current term expires in 2001. Mr. Wei is Chairman of the Board of Directors and
Chief Executive Officer of Alfa Romeo (Taiwan) Motor Company. From 1993 to 1994,
he served as Special Advisor to Tai-Lung Holding Co., Ltd., a Taiwan-based
investment conglomerate. From 1989 to 1993, Mr. Wei held various managerial
positions at Kidder, Peabody Incorporated and Merrill Lynch & Co., Inc., in New
York City. Mr. Wei received his MBA in Finance and Management Information
Systems from Pace University in New York.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information, as of the Record Date, with
respect to the beneficial ownership of Common Stock by (a) each person known by
the Company to be the beneficial owner of more than 5% of the Company's
outstanding voting securities, (b) the Directors and executive officers of the
Company, individually, and (c) Directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY
NAME, POSITION AND ADDRESS(1) OWNED(2) PERCENT OF SHARES(%)
- ------------------------------------------------------ ------------------------------------ ---------------------
<S> <C> <C>
Y. Joseph Mo, Ph.D.................................... 1,960,000(3) 21.16
Chairman of the Board of Directors
President and Chief Executive Officer
Joseph M. Warusz...................................... 22,000(4) 0.26
Vice-President & Chief Financial Officer
James L. Yeager, Ph.D................................. 295,000(5) 3.45
Director and Vice President,
R&D and Business Development
Vivian H. Liu......................................... 320,000(6) 3.73
Vice President, Corporate Affairs and Secretary
Gilbert S. Banker, Ph.D.,............................. 140,000(7) 1.67
Director
Robert W. Gracy, Ph.D.,............................... 110,000(8) 1.30
Director
Yu-Chung Wei.......................................... 50,000(9) 0.59
Director
All Executive Officers and Directors as a............. 2,897,000(10) 29.62
Group (seven persons)
Golden Water Investment Corporation................... 854,500(11) 10.17
Number 10, 2F, Alley III
Han-Chou South Road, Taipei, Taiwan
C.D.C. Venture Investment (U.S.A.) Ltd................ 500,000(12) 5.95
Room 103, 43F, Office Tower
Convention Plaza, 1 Harbour Road
Wanchai, Hong Kong
</TABLE>
- ------------------------
1) The address for the Officers and Directors is: 350 Corporate Boulevard,
Robbinsville, New Jersey, 08691.
2) All shares are solely and directly owned, with sole voting and dispositive
power.
3) Includes 860,000 shares issuable upon exercise of immediately exercisable
stock options.
4) Includes 22,000 shares issuable upon exercise of immediately exercisable
stock options.
5) Includes 140,000 shares issuable upon exercise of immediately exercisable
stock options.
6) Includes 175,000 shares issuable upon exercise of immediately exercisable
stock options.
7) Includes 50,000 shares issuable upon exercise of immediately exercisable
stock options.
5
<PAGE>
8) Includes 80,000 shares issuable upon exercise of immediately exercisable
stock options.
9) Represents 50,000 shares issuable upon exercise of immediately exercisable
stock options.
10) Includes 1,377,000 shares issuable upon exercise of immediately exercisable
stock options.
11) Golden Water Investment Corporation is a privately-held investment company
incorporated in the British Virgin Islands and based in Taiwan.
12) C.D.C. Venture Investment (U.S.A.) Limited is a wholly-owned subsidiary of
the China Development Industrial Bank, a publicly-traded investment
institution based in Taipei, Taiwan.
DIRECTOR COMPENSATION
Except for the reimbursement of travel expenses and the provision of
incentive grant awards pursuant to the NexMed Inc. Recognition and Retention
Stock Incentive Plan, there is no arrangement for the compensation of directors.
MEETINGS OF THE BOARD OF DIRECTORS
There were two meetings of the Board of Directors during the fiscal year
ended December 31, 1998. Each director attended or participated in such meeting
of the Board of Directors. The Board of Directors presently has no committees.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Upon effectiveness on May 13, 1997 of the Company's registration statement
on Form 10-SB, filed pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Company voluntarily became a
reporting company. During 1998, Robert W. Gracy did not file a Form 4 Report
that was due on November 10, 1998, until November 16, 1998. Gilbert S. Banker
filed a Form 4 Report on March 11, 1998 that was due on March 10, 1998. In
addition, Gilbert S. Banker filed a Form 4 Report on January 11, 1999 which did
not include one sales transaction that occurred on December 30, 1998. A Form 4A
Report was subsequently filed on March 11, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1998, NBM was issued a $150,000 promissory note from the private
investor who purchased shares of NBM's Common Stock. The note bears interest at
4% per annum and is due on April 11, 1999.
During 1998, Dr. Y. Joseph Mo, an officer and director of the Company,
advanced an aggregate of $600,500 to the Company under an informal agreement.
The advances bear interest at 12% per annum and are due at various intervals in
1999.
At December 31, 1998, $217,441 of an unsecured, uncollateralized revolving
line of credit with the Company's partner in the China joint venture (the "JV")
was outstanding. The line of credit bears interest at 11% per annum and expires
in September 2000.
During 1998, the JV paid approximately $253,000 and $106,000 in rent and
management fees, respectively, to the JV partner.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company during
the fiscal years ended December 31, 1998 and 1997 to the Chief Executive Officer
and its three other most highly compensated executive officers:
<TABLE>
<CAPTION>
NAME AND POSITION FISCAL YEAR ANNUAL SALARY
- ------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
Y. Joseph Mo, Ph.D................................................ 1998 $ 120,000
Chairman of the Board of Directors, 1997 120,000
President and Chief Executive Officer(1)
Joseph M. Warusz.................................................. 1998 34,615
Vice President and 1997 --
Chief Financial Officer(2)
James L. Yeager, Ph.D............................................. 1998 100,000
Director, Vice-President of R&D and 1997 100,000
Of Business Development(3)
Vivian H. Liu..................................................... 1998 88,000
Vice President, Corporate 1997 87,333
Affairs and Secretary(4)
</TABLE>
- ------------------------
(1) Dr Mo has received a salary of $120,000 per year since 1996.
(2) Mr. Warsuz began receiving a salary of $100,000 per year on August 17, 1998
(3) Dr. Yeager began receiving a salary of $100,000 per year in 1997.
(4) Ms. Liu began receiving a salary of $88,000 per year on February 7, 1997.
EMPLOYMENT AGREEMENTS
There are currently no employment agreements between the Company and any of
its executive officers.
7
<PAGE>
STOCK OPTION INFORMATION
The following table sets forth information concerning options granted during
fiscal 1998 to the executives named in the Summary Compensation Table above.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS MARKET
SECURITIES GRANTED TO EXERCISE PRICE OF
UNDERLYING EMPLOYEES PRICE UNDERLYING
OPTIONS IN FISCAL ($ PER SECURITY ON
NAME GRANTED YEAR SHARE) DATE OF GRANT EXPIRATION DATE
- ------------------------------------------------------- ----------- ------------- ----------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Y. Joseph Mo, Ph.D..................................... 100,000 31.6 2.50 2.50(1) 2008
Joseph M. Warusz....................................... 100,000 31.6 3.00 2.50(2) 2008
2,000 0.6 2.50 2.50(1) 2008
James L. Yeager, Ph.D.................................. 30,000 9.5 2.50 2.50(1) 2008
Vivian H. Liu.......................................... 15,000 4.7 2.50 2.50(1) 2008
</TABLE>
- ------------------------
(1) Estimated fair market value on date of grant (December 14, 1998.)
(2) Estimated fair value on the first date of Mr. Warusz' employment (August 17,
1998). Upon his employment with the Company, Mr. Warusz received options to
purchase 100,000 shares of Common Stock, exercisable for a ten-year term at
$3.00 per share, through the NexMed, Inc. Stock Option and Long-Term
Compensation Plan (see "Stock Option and Incentive Award Plans" below). The
options would vest in five equal installments on February 17, 1999, and
August 17 in 1999, 2000, 2001, and 2002.
The following table sets forth information concerning the value of
unexercised options as of December 31, 1998 held by the executives named in the
Summary Compensation Table above. 145,000 options at $0.25 per share were
exercised during 1998.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT FISCAL IN-THE-MONEY
YEAR OPTIONS AT FISCAL YEAR END
END [EXERCISABLE (E)/ EXERCISABLE(E)/UNEXERCISABLE(U)
NAME UNEXERCISABLE (U)] (1)
- ---------------------------------------------- ------------------------------- --------------------------------
<S> <C> <C>
Y. Joseph Mo, Ph.D............................ 860,000 (E) $ 375,000 (E)
400,000 (U) 125,000 (U)
Joseph M. Warusz.............................. 0 (E) 0 (E)
102,000 (U) 0 (U)
James L. Yeager, Ph.D......................... 140,000 (E) 0 (E)
70,000 (U) 0 (U)
Vivian H. Liu................................. 175,000 (E) $ 100,000 (E)
80,000 (U) 37,500 (U)
</TABLE>
- ------------------------
(1) Based on a selling price of $1.50, the estimated fair market value at the
Common Stock, for the three months ended December 31, 1998.
8
<PAGE>
STOCK OPTION AND INCENTIVE AWARD PLANS
On December 4, 1996, the Company adopted the NexMed, Inc. Stock Option and
Long-Term Incentive Compensation Plan (the "Stock Option Plan"), for the purpose
of attracting, retaining and maximizing the performance of executive officers
and key employees, and the NexMed, Inc. Recognition and Retention Stock
Incentive Plan (the "Recognition Plan"), for the purpose of attracting and
retaining individuals with renown, ability and intelligence to serve the Company
as directors and consultants and to provide a direct link between the
compensation of such individuals with shareholder value. 1,500,000 shares of
Common Stock were reserved by the Company for issuance of awards under the Stock
Option Plan and 500,000 shares of Common Stock were reserved for awards under
the Recognition Plan. On May 15, 1998, the shareholders approved an additional
1,500,000 shares of Common Stock for awards under the Stock Option Plan and
500,000 shares of Common Stock for awards under the Recognition Plan.
STOCK OPTION PLAN. The Stock Option Plan provides for the grant of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, non-statutory stock options, stock
appreciation rights and restricted stock awards. The Stock Option Plan will
eventually be administered by a Compensation Committee of the Board of Directors
(the "Compensation Committee"), which Committee has not yet been created. The
exercise price for non-statutory stock options may be equal to or less than 100
percent of the fair market value of shares of Common Stock on the date of grant.
The exercise price for incentive stock options may not be less than 100 percent
of the fair market value of shares of Common Stock on the date of grant (110
percent of fair market value in the case of incentive stock options granted to
employees who hold more than ten percent of the voting power of the Company's
issued and outstanding shares of Common Stock). Options granted under the Stock
Option Plan may not have a term of more than a ten-year period (five years in
the case of incentive stock options granted to employees who hold more than ten
percent of the voting power of the Company's Common Stock) and generally vest
over a three to five year period. Options terminate three months after the
optionee's termination of employment by the Company for any reason other than
death, disability or retirement, and are not transferable by the optionee other
than by will or the laws of descent and distribution.
The plan also provides for grants of stock appreciation rights ("SARs")
which entitle a participant to receive a cash payment, equal to the difference
between the fair market value of a share of Common Stock on the exercise date
and the exercise price of SAR. The exercise price of any SAR granted under the
Stock Option Plan will be determined by the Board of Directors in its discretion
at the time of the grant. SARs granted under the Stock Option Plan may not be
exercisable for more than a ten year period. SARs generally terminate one month
after the grantee's termination of employment by the Company for any reason
other than death, disability or retirement. Although the Board of Directors has
authority to grant SARs, it currently has no plans to grant SARs.
RECOGNITION PLAN. The Recognition Plan provides for incentive award grants
that are substantially similar to those made under the Stock Option Plan. The
Recognition Plan will also eventually be administered by a Compensation
Committee. An eligible director or consultant selected for participation in this
Plan may be granted a non-statutory stock option, a stock appreciation right or
restricted stock award. Incentive stock options will not be granted under this
Plan. Recognition Plan awards have vested immediately or over a three-year
period and may be subject to attainment of performance goals, with all such
terms to be specified in the written grant agreement between the Company and the
award holder.
9
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP served as the Company's independent accountants
for the fiscal year ended December 31, 1998 and has been appointed by the Board
of Directors to continue as the Company's independent accountants for the fiscal
year ending December 31, 1999. In the event that ratification of this
appointment of auditors is not approved by the affirmative vote of a majority of
votes cast on this matter, then the appointment of independent accountants will
be reconsidered by the Board of Directors. Unless marked to the contrary, any
proxy received will be voted for RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1999.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting. The representative will have an opportunity to make a
statement and will be able to respond to appropriate questions.
REQUIRED VOTE AND RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of all the votes cast at the Annual
Meeting, assuming a quorum is present, is necessary for the approval of this
proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE
YEAR ENDING DECEMBER 31, 1999.
10
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SHAREHOLDER PROPOSALS
To be considered for presentation at the annual meeting of the Company's
Shareholders to be held in 2000, a Shareholder proposal must be received by
Vivian H. Liu, Secretary, NexMed, Inc., 350 Corporate Boulevard, Robbinsville,
New Jersey 08691, no later than March 15, 2000.
OTHER MATTERS
The Board of Directors knows of no other business, which will be presented
to the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgment of the persons voting the
proxies.
It is important that the proxies be returned promptly and that your shares
be represented. Shareholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope, and for
international registered owners, by mail or by facsimile to Norwest Shareowner
Services Proxy Unit at 1-651-450-4026.
INCORPORATION BY REFERENCE
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998 is incorporated by reference into this Proxy Statement. A copy
of such Annual Report on Form 10-KSB has been mailed herewith to Shareholders of
the Company on the Record Date.
By Order of the Board of Directors,
/s/ VIVIAN H. LIU
Vivian H. Liu
Secretary
April 9, 1999
Robbinsville, NJ
11
