<PAGE> 1
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 [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
IOMED, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if Other Than the Registrant)
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.
(4) Proposed maximum aggregate value of transaction: N/A
(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:
<PAGE> 2
IOMED, INC.
3385 WEST 1820 SOUTH
SALT LAKE CITY, UTAH 84104
TELEPHONE (801) 975-1191
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 1998
The Annual Meeting of Shareholders of IOMED, Inc. (the "Company") will be
held Friday, November 20, 1998, at 10:00 a.m. (Mountain Standard Time) at the
Little America Hotel, located at 500 South Main Street, Salt Lake City, Utah
84101, to consider and take action upon the following matters:
1. Election of two directors to serve a term of three years or until their
successors are duly elected and qualified.
2. Ratification of the appointment of Ernst & Young LLP as the Company's
auditors for the fiscal year ending June 30, 1999.
3. To act upon any other business that may properly come before the meeting
and any adjournment thereof.
The Board of Directors has fixed the close of business on October 16, 1998,
as the record date for the determination of the shareholders entitled to vote at
the meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert J. Lollini
----------------------------
Robert J. Lollini
Secretary
October 16, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, WHETHER OR NOT
YOU PLAN TO BE PERSONALLY PRESENT AT THE MEETING, PLEASE MARK, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
<PAGE> 3
IOMED, INC.
3385 WEST 1820 SOUTH
SALT LAKE CITY, UTAH 84104
TELEPHONE (801) 975-1191
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 1998
------------------------
SOLICITATION AND REVOCABILITY OF PROXY
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
IOMED, Inc. (the "Company"), for use at the 1998 Annual Meeting of Shareholders
(the "Annual Meeting") to be held on November 20, 1998, at 10:00 a.m. (Mountain
Standard Time) or at any adjournment(s) thereof. The Annual Meeting will be held
at the Little America Hotel, located at 500 South Main Street, Salt Lake City,
Utah 84101.
These proxy solicitation materials, form of proxy and the Annual Report to
shareholders for the fiscal year ended June 30, 1998 (the "Last Fiscal Year"),
including financial statements, were first mailed to all shareholders entitled
to vote at the Annual Meeting on or about October 23, 1998.
RECORD DATE AND VOTING SECURITIES
The no par value Common Stock of the Company is the only authorized voting
security of the Company. Shareholders of record as of October 16, 1998 (the
"Record Date") are entitled to receive notice of, and to vote at, the Annual
Meeting. At the Record Date, 6,499,518 shares of the Company's Common Stock were
outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked at any time
before its use by delivering to the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
meeting and voting in person. Attendance at the Annual Meeting in and of itself
will not constitute a revocation of a proxy.
VOTING AND SOLICITATION
Each shareholder is entitled to one vote for each common share held as of
the Record Date. Shareholders will not be entitled to cumulate their votes in
the election of directors.
The Company will reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies are being solicited primarily by
mail, but directors, officers and regular employees of the Company may also
solicit proxies personally, by telephone, facsimile or by special letter.
QUORUM AND ABSTENTIONS; BROKER NON-VOTES
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector"). The Inspector will also determine
whether or not a quorum is present. In general, Utah law provides that a quorum
consists of a majority of shares which are entitled to vote at the meeting.
Except in certain specific circumstances, the affirmative vote of a majority of
shares present (in person or represented by proxy) at a duly held meeting at
which a quorum is present is required under Utah law for approval of proposals
presented to shareholders.
<PAGE> 4
The Inspector will treat shares that are voted WITHHELD or ABSTAIN as being
present and entitled to vote for purposes of determining the presence of a
quorum, but will not treat the shares as votes in favor of or opposed to any
matter submitted to the shareholders for a vote. Any proxy which is returned
using the form of proxy enclosed and which is not marked as to a particular item
will be voted FOR the election of the Company's nominees for director and FOR
the confirmation of the appointment of Ernst & Young, LLP as the Company's
independent auditors and, as the proxy holders deem advisable, on certain other
matters that may properly come before the meeting. The proxy will not confer
authority on the proxy holders to vote for the election of any person to an
office for which no bona fide nominee is named in this proxy statement.
If a broker indicates on the enclosed proxy or its substitute that it does
not have discretionary authority as to certain shares to vote on a particular
matter ("Broker Non-Votes"), those shares will not be considered as present with
respect to that matter for purposes of determining if a quorum is present. The
Company believes that the tabulation procedures to be followed by the Inspector
are consistent with the general statutory requirements in Utah concerning voting
of shares and determination of a quorum.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS TO BE PRESENTED AT 1999 ANNUAL
MEETING
All shareholder proposals intended to be included in the proxy materials
for consideration at the 1999 Annual Meeting of Shareholders must be received by
the Company no later than February 20, 1999. The Company suggests that all such
proposals be sent to the Company by certified mail, return receipt requested.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
persons owning ten percent of the Company's Common Shares (collectively,
"Reporting Persons") to file reports of ownership with the Securities and
Exchange Commission (the "SEC"). Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms filed.
Based solely on a review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that all Reporting Persons during fiscal year 1998 complied on
a timely basis with all applicable filing requirements under Section 16(a) of
the Exchange Act, with the exception of Michael T. Sember who, the Company
believes, was delinquent in the initial filing of a required Form 3 report. Mr.
Sember, a member of the Company's Board of Directors, does not own any Common
Shares, and the Company believes that Mr. Sember has not engaged in any
transaction involving such Common Shares.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to the Company with
respect to the beneficial ownership of its Common Shares as of October 1, 1998,
for (i) each person who is known by the Company to own beneficially more than 5%
of the Common Shares, (ii) each of the Company's directors, (iii) each of the
Named Executive Officers of the Company (as defined below) and (iv) all
directors and Named Executive Officers as a group:
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) TOTAL(2)
------------------------------------ ------------ -----------
<S> <C> <C>
5% SHAREHOLDERS
Elan International Services, Ltd.(3)...................... 2,204,358 29.4%
102 St. James Court
Flatts Smiths FL04 Bermuda
Newtek Ventures........................................... 618,426 9.5%
500 Washington Street, Suite 720
San Francisco, CA 94111
MBW Venture Partners, LP(4)............................... 610,686 9.4%
350 Second Street, Suite 8
Los Altos, CA 94022
Laboratoires Fournier, S.C.A.............................. 368,498 5.7%
42, rue de Longvic
21300 Chenove France
DIRECTORS
James R. Weersing(5)...................................... 2,760 *
John W. Fara, Ph.D.(6).................................... 6,248 *
Steven P. Sidwell(7)...................................... 5,954 *
Peter J. Wardle(8)........................................ -- *
Warren Wood(9)............................................ 2,322 *
Michael T. Sember(10)..................................... -- *
NAMED EXECUTIVE OFFICERS
W. Tim Miller(11)......................................... 46,026 *
Thomas M. Parkinson, Ph.D.(12)............................ 32,873 *
Robert J. Lollini(13)..................................... 41,368 *
Tim Lucas(14)............................................. 5,952 *
Executive officers and directors as a group (10
persons)(15)........................................... 143,503 2.2%
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise indicated in these footnotes, or pursuant to applicable
state community property laws, each shareholder has sole voting and
investment power with respect to the shares beneficially owned.
(2) Percentages are determined based upon 6,499,518 shares of Common Stock
outstanding on October 1, 1998, together with any applicable convertible
preferred stock, warrants and options convertible or exercisable within 60
days of October 1, 1998, for such shareholder.
(3) Includes 893,801 shares of Series D non-voting convertible Preferred
Shares, convertible into Common Shares on a share-for-share basis, and
104,166 Common Shares subject to outstanding warrants.
(4) Includes 470,230 and 140,456 Common Shares held of record by MBW Venture
Partners, LP and Michigan Investment Fund, LP, respectively, which are
managed, and assumed to be controlled, by MBW Management, Inc.
(5) Includes Common Shares held in the name of a revocable trust for which Mr.
Weersing serves as co-trustee along with his spouse. Mr. Weersing is a
general partner of MBW Management, Inc. Mr. Weersing disclaims beneficial
ownership of the shares beneficially owned by MBW Management, Inc. and its
affiliates.
3
<PAGE> 6
(6) Includes 6,248 Common Shares subject to options held by Dr. Fara.
(7) Includes 5,954 Common Shares subject to options held by Mr. Sidwell.
(8) Mr. Wardle is a general partner of Newtek Ventures, but disclaims
beneficial ownership of the Common Shares held by Newtek Ventures.
(9) Includes 2,322 Common Shares subject to options held by Mr. Wood.
(10) Mr. Sember is an executive officer of Elan Corporation plc ("Elan") and
disclaims beneficial ownership of shares owned beneficially by Elan
International Services Ltd, a subsidiary of Elan.
(11) Includes 44,332 Common Shares subject to options held by Mr. Miller.
(12) Includes 32,873 Common Shares subject to options held by Dr. Parkinson.
(13) Includes 36,612 Common Shares subject to options held by Mr. Lollini.
(14) Includes 4,286 Common Shares subject to options held by Mr. Lucas.
(15) Includes 132,627 Common Shares subject to options.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Articles of Incorporation divides the
Board into three classes. Each year, the directors in one of these three classes
are elected to serve a three-year term. The term for the Company's class three
directors, currently comprised of Messrs. Peter J. Wardle and Warren Wood,
expire at the Annual Meeting. The Board has nominated Messrs. Wardle and Wood
for reelection as directors in that class for the term expiring in 2001.
Biographies for each of Messrs. Wardle and Wood are set forth below. If either
nominee for director becomes unavailable for election, the vacancy shall be
filled by a vote of a majority of the directors then in office.
Ned M. Weinshenker, Ph.D., age 56, served as a director of the Company
since 1990 and as the Company's Chief Executive Officer since 1992. Effective
September 18, 1998, Dr. Weinshenker resigned as an executive officer and
director of the Company. The Board of Directors intends to appoint a director to
fill the vacancy created by Dr. Weinshenker's resignation in the near future.
The new director will serve for the remainder of the term, which will expire in
2000.
The Chairman and Chief Financial Officer intend to vote the shares
represented by proxies for all of the Board's nominees, except to the extent
authority to vote for the nominees is withheld.
The Board of Directors recommends a vote FOR the election of both nominees
for director.
NOMINEES FOR ELECTION AS DIRECTORS (TERM EXPIRES 2001)
Peter J. Wardle, age 63, has served as a director of the Company since
1987. Mr. Wardle has been a General Partner of Newtek Ventures, a venture
capital company, since 1983. Mr. Wardle also serves as a director of Laser
Diagnostic Technologies, a medical device company, Microbar, Inc., a software
company, IES Technologies Corporation, a software company, and Sensys
Instruments Corporation, a semiconductor company. Mr. Wardle received a Bachelor
of Arts degree in History and Economics from Dartmouth College.
Warren Wood, age 67, has served as a director of the Company since 1996. In
1996 Mr. Wood retired as Chairman of the Board of Directors, President and Chief
Executive Officer of Cabot Medical Corporation, a medical device company, a
position he held since 1983. Mr. Wood received a Bachelor of Science in
Electrical Engineering from the University of Washington.
DIRECTORS CONTINUING IN OFFICE (TERM EXPIRES 1999)
John W. Fara, Ph.D., age 56, has served as a director of the Company since
1992. Dr. Fara has served as the President and Chief Executive Officer of
DepoMed, Inc., a publicly traded pharmaceutical company, since 1996. Dr. Fara
also serves as a director of two other companies, PediaPharm, Inc. and Cooks
Pharma, Inc.
4
<PAGE> 7
From 1990 to 1996, Dr. Fara was President and Chief Executive Officer of
Anergen, Inc., a biotechnology company. Dr. Fara received a Bachelor of Science
degree in Pharmacy from the University of Wisconsin and a Ph.D. in Physiology
from the University of California, Los Angeles.
Steven P. Sidwell, age 58, has served as a director of the Company since
1993. In July 1998, Mr. Sidwell joined Ansys, Inc. as Executive Vice President
of Operations. Mr. Sidwell served as the Executive Vice President of
SensorMedics, Inc., a cardiopulmonary diagnostic device manufacturer and a
subsidiary of ThermoElectron, Inc. from 1996 to 1998. Mr. Sidwell served as the
Vice President of Operations and as Executive Vice President for SensorMedics
between 1991 and 1996. Mr. Sidwell received a Bachelor of Science degree in
Chemical Engineering from Purdue University and an MBA from the Wharton School
at the University of Pennsylvania.
DIRECTORS CONTINUING IN OFFICE (TERM EXPIRES 2000)
Michael T. Sember, age 48, has served as a director of the Company since
May of 1997. Mr. Sember is Vice President of Planning, Investments and
Development for Elan. Prior to joining Elan, Mr. Sember was with Marion Merrell
Dow, Inc. from 1973 to 1991 and, prior to that, Marion Laboratories. Mr. Sember
also serves as a director of both Acorda Therapeutics, Inc., a pharmaceutical
company, and the Georgia Biomedical Partnership, an industry trade organization,
and as Chairman and Chief Executive Officer of Targon Corporation, a joint
venture company of Elan and CYTOGEN Corp. Mr. Sember received a Bachelor of
Science degree from the University of Pittsburgh and an MBA from Rockhurst
College.
James R. Weersing, age 59, has served as Chairman of the Company's Board of
Directors since 1992, and has been a director of the Company since 1987. Mr.
Weersing has been Managing General Partner of MBW Management, Inc., a venture
capital firm, since 1983. Mr. Weersing also serves as a director of Ventana
Medical Systems, Inc., a publicly traded medical diagnostics company. Mr.
Weersing received a Bachelor of Science degree in Mechanical Engineering and an
MBA degree from Stanford University.
OPERATION OF THE BOARD OF DIRECTORS
Pursuant to Utah law, under which the Company is organized, the Company's
business, property and affairs are managed under the direction of the Board of
Directors. During fiscal year 1998, there were six meetings of the Board. Each
current director attended 75% or more of the aggregate of (i) the meetings of
the Board held when he was a director and (ii) the meetings held by all Board
committees on which he served, except Dr. John Fara, who attended 67% of the
Board meetings.
COMMITTEES OF THE BOARD
The Board of Directors has established four committees, the Executive
Committee, Audit Committee, Compensation Committee and Special Committee. Each
of these committees is responsible to the full Board of Directors, and its
activities are subject to approval of the Board of Directors. The Executive
Committee is charged with overseeing the operations of the Company, and
generally has all of the authority of the full Board of Directors, between
regularly scheduled meetings of the full Board of Directors. The Executive
Committee is comprised of Messrs. Weersing and Wardle. The Audit Committee
reviews the scope and results of the annual audit of the Company's consolidated
financial statements conducted by the Company's independent auditors, the scope
of other services provided by the Company's independent auditors, proposed
changes in the Company's financial and accounting standards and principles, and
the Company's policies and procedures with respect to its internal accounting,
auditing and financial controls. The Audit Committee also examines and considers
other matters relating to the financial affairs and accounting methods of the
Company, including the selection and retention of the Company's independent
auditors. The Audit Committee is comprised of Mr. Weersing, Dr. Fara and Mr.
Sidwell. The Compensation Committee administers the Company's compensation
programs, reviews and recommends to the Board of Directors compensation
arrangements for senior Company management and directors, and performs such
other duties as may from time to time be determined by the Board of Directors.
In addition, the Compensation Committee is responsible for administering the
Company's stock option plans. The Compensation Committee is comprised of Mr.
Weersing, Dr. Fara and
5
<PAGE> 8
Mr. Wardle. There are no interlocking relationships, as described by the
Securities and Exchange Commission, between the Compensation Committee members.
The Special Committee was established during fiscal 1998 and was charged with
overseeing the actions to be taken by the Company with respect to the initial
public offering of its Common Shares, and generally had all of the authority of
the full Board of Directors on issues relating to such offering. The Special
Committee was comprised of Dr. Weinshenker, and Messrs. Weersing and Wood.
DIRECTOR COMPENSATION
Directors are not paid any cash compensation for attendance at directors'
meetings or for attending or participating on any committee. Directors are
reimbursed, however, for the reasonable out-of-pocket expenses they incur in
connection with attendance at meetings. In addition, all non-employee directors
are eligible to participate in the Company's stock option plans. Upon the
approval of the Board of Directors, certain non-employee directors have been
granted non-qualified options to purchase Common Shares. Dr. Fara and Messrs.
Sidwell and Wood have received options to purchase 6,248, 6,207 and 4,166 Common
Shares, respectively. The option grants vest over periods ranging from 1 to 4
years. All such options are exercisable at an exercise price equal to the fair
market value of the Common Shares on the date of grant (as adjusted for stock
splits and similar transactions), and are subject to certain vesting schedules.
The number of shares subject to any such grants, and the exercise price(s) of
the shares underlying those grants, are determined by the Compensation Committee
and approved by the Board of Directors.
PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young LLP, independent public accountants,
to audit the financial statements of the Company for fiscal year ending June 30,
1999. The Board of Directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP as the Company's auditors for the fiscal year
ending June 30, 1999.
MANAGEMENT
EXECUTIVE OFFICERS
Ned M. Weinshenker, Ph.D., age 56, resigned as the Company's President and
Chief Executive Officer effective September 18, 1998.
W. Tim Miller, age 47, has served as Executive Vice President, Sales and
Marketing and General Manager, Clinical Systems since joining the Company in
1994. Between 1991 and 1994, Mr. Miller was the President and Chief Executive
Officer of Sharpe Endosurgical Corporation, a company that designs,
manufactures, and markets specialty endosurgical instruments. From 1990 to 1991,
Mr. Miller was a partner in Kansas Creative Devices, a medical device design
firm. Between 1986 and 1990, Mr. Miller was a Vice President and General Manager
of the Diagnostics Division of Marion Laboratories, where he led the sales
efforts for a variety of diagnostic products including the 10 Minute Strep
Throat ID System. Prior to 1986, Mr. Miller held senior sales positions with
American Home Products Corporation and American Hospital Supply Corporation. Mr.
Miller previously served as a director of the American Social Health Association
and the Biomedical Marketing Association. Mr. Miller received a Bachelor of
Science degree in Life Science from Southern Indiana University.
Thomas M. Parkinson, Ph.D., age 62, joined the Company in 1991 and
presently serves as Vice President, Research and Development and General
Manager, Dermion, a wholly owned subsidiary of
6
<PAGE> 9
IOMED. Prior to joining the Company he was Vice President of Research and
Development for Sequus, Inc., where he was responsible for biopharmaceutics,
clinical testing, and developing regulatory strategy for new liposome drug
delivery systems. Prior to that, Dr. Parkinson was Director of Medical Affairs
for Collagen Corporation, a chemical technology company, and Vice President of
Dynapol, Inc., a chemical technology company. From 1968 to 1974 he also was head
of the Atherosclerosis Research Section of Upjohn Company, a pharmaceutical
manufacturer, where he developed Colestid, Upjohn's first cholesterol-lowering
drug. Dr. Parkinson received a Bachelor of Science degree in Chemistry from
Providence College and a Ph.D. in Biochemistry and Medical Sciences from the
University of Florida College of Medicine.
Robert J. Lollini, age 44, has served as Vice President, Finance, Chief
Financial Officer and Secretary since joining the Company in 1993. Mr. Lollini
also serves as Vice President, Secretary and Treasurer, Dermion. Between 1989
and 1992, Mr. Lollini worked for R.P. Scherer Corporation, an international drug
delivery company, as Vice President, Finance, Chief Financial Officer and
Secretary, and between 1981 and 1989, as its Corporate Controller and Chief
Accounting Officer and in various other management capacities. Between 1978 and
1981, Mr. Lollini was with the accounting firm of Arthur Andersen & Co. Mr.
Lollini is a Certified Public Accountant and received a Bachelor of Arts degree
in Accounting from Michigan State University and an MBA in Finance/Economics
from the University of Detroit.
Timothy B. Lucas, age 35, joined the Company in 1991 and presently serves
as the Director of National Sales for the Company's products. From 1989 to 1991,
Mr. Lucas served in various national and regional sales capacities with the
Nortech Division of Medtronic, Inc., a manufacturer of external neuromuscular
stimulators. Prior to joining Medtronic, Mr. Lucas was a Field Sales Manager
with SePro Healthcare, Inc., a manufacturer of orthopedic products. Mr. Lucas
received a Bachelor of Science degree in Marketing from York College of
Pennsylvania.
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid to or earned by the
Company's Chief Executive Officer and the four other most highly compensated
executive officers whose total salary and bonus exceeded $100,000 (collectively,
the "Named Executive Officers") during the fiscal years ended June 30, 1998,
1997 and 1996:
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------ -----------------------
OTHER RESTRICTED AWARDS
ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS OPTIONS
--------------------------- ---- -------- ------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ned M. Weinshenker, Ph.D........... 1998 $199,000 $ -- $ 5,000 -- --
President, Chief Executive
Officer 1997 189,000 25,000 5,000 -- --
and Director(2) 1996 182,000 32,500 5,000 -- 13,541
W. Tim Miller...................... 1998 $163,000 $ -- $11,000(3) -- --
Executive Vice President, Sales
and 1997 152,000 25,000 11,000(3) -- --
Marketing; General Manager,
Clinical 1996 144,000 25,000 11,000(3) -- 5,208
Systems
Thomas M. Parkinson, Ph.D.......... 1998 $123,000 $ -- $ 3,000 -- --
Vice President, Research and 1997 115,000 25,000 5,000 -- --
Development; General Manager, 1996 107,000 20,000 5,000 -- 5,208
Dermion
Robert J. Lollini.................. 1998 $160,000 $ -- $ 5,000 -- --
Vice President, Finance, Chief 1997 145,000 25,000 5,000 -- --
Financial Officer and Secretary 1996 135,000 25,000 5,000 -- 10,416
Timothy B. Lucas................... 1998 $124,000 $ 5,000 $12,000(4) -- --
Director of National Sales 1997 119,000 16,000 12,000(4) -- --
1996 113,000 16,000 12,000(4) -- 4,583
</TABLE>
7
<PAGE> 10
- ---------------
(1) Represents medical and dental insurance and premiums on group term life
insurance.
(2) Dr. Weinshenker resigned as both an executive officer and a director of the
Company effective September 18, 1998.
(3) Includes principal and interest payment of $6,000 due on a $25,000 bridge
loan made by the Company to Mr. Miller in connection with his relocation,
and which was forgiven by the Company.
(4) Includes automobile reimbursement of $7,000.
STOCK OPTION GRANTS/EXERCISES
There were no stock options granted to or exercised by the Named Executive
Officers during the fiscal year ended June 30, 1998.
FISCAL YEAR-END OPTION VALUES
The following table provides information regarding the number and value of
options held by the Named Executive Officers on June 30, 1998:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF OUTSTANDING
OUTSTANDING OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ned M. Weinshenker, Ph.D............. 48,112 8,970 $45,559.32 $ 342.55
W. Tim Miller........................ 40,342 6,532 12,412.40 1,129.05
Thomas M. Parkinson, Ph.D............ 31,802 3,613 61,885.15 180.38
Robert J. Lollini.................... 35,019 6,646 9,975.56 180.38
Timothy B. Lucas..................... 3,830 2,419 822.25 180.38
</TABLE>
- ---------------
(1) Value is based on the closing sale price of the Common Stock as of the last
business day of the fiscal year, June 30, 1998, ($5.125), minus the exercise
price.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Program
The objectives of the Company's executive compensation program are to align
compensation with business objectives and individual performance, and to enable
the Company to attract, retain and reward highly qualified executive officers
who contribute to the long-term success of the Company. To ensure that
compensation is competitive, the Company compares its compensation practices
with those of comparable pharmaceutical products companies and other relevant
U.S. companies in a similar stage of development. The annual compensation for
the Company's executive officers currently consists of three elements: salary,
incentive bonus and equity participation. Executive officers are also entitled
to participate in the same medical and other benefit plans available to
employees of the Company.
Annual salaries and incentive bonuses for executive officers are determined
based upon corporate and individual performance. While industry-wide practices
are deemed to be important indicators of appropriate compensation levels, the
Compensation Committee believes the most important considerations in setting an
executive's base salary and incentive bonus are individual and corporate
performance.
Corporate performance is evaluated by reviewing the extent to which the
Company meets strategic and business planning goals and objectives. Individual
performance is evaluated by reviewing attainment of specific individual
objectives and the degree to which teamwork and Company values are fostered.
Incentive bonuses are discretionary and based upon the achievement of
functional, departmental and corporate goals as well as individual performance.
The Compensation Committee evaluates the achievement of the annual goals and
objectives established for the executive officers and their contribution to the
Company on an annual basis.
8
<PAGE> 11
Equity participation has traditionally been in the form of stock option
awards. Such awards are designed to promote the integration of the long-term
interests of the Company's employees, including its executive officers, and its
shareholders, and to assist in the retention of executives. The size of option
grants is generally intended by the Compensation Committee to reflect the
employee's position with the Company and his actual or potential contributions
to the Company in relation to his overall compensation. The Compensation
Committee believes that stock options have been and remain an excellent vehicle
for compensating the Company's employees. Because the option exercise price of a
stock option is generally the fair market value of the stock on the date of
grant, employees recognize a gain only if the value of the stock increases.
Thus, employees with stock options are rewarded for their efforts to improve the
long-term value of the Common Shares. All stock option awards are approved by
the Compensation Committee. Stock options are used to reward substantially all
employees of the Company, not just executive officers.
In evaluating the performance and determining the total compensation of Dr.
Weinshenker for fiscal 1998, the Compensation Committee considered numerous
factors, including: Dr. Weinshenker's role in managing the Company's strategic
relationships; progress on the Company's internal research and product
development efforts; the level of success in achieving commercial operating
objectives; completion of the Company's initial public offering; and his
continued management responsibilities as President and Chief Executive Officer
of the Company.
Compliance with Internal Revenue Code Section 162(m)
The Compensation Committee has not yet adopted a policy on amendments to
Section 162 of the Internal Revenue Code of 1986, as amended, which disallow
deductions for compensation in excess of $1 million for certain executives of
public companies. The Company believes that the compensation expected to be paid
during fiscal year 1999 is below the compensation limitation.
Respectfully Submitted,
John W. Fara Peter J. Wardle James R. Weersing
9
<PAGE> 12
SHAREHOLDER PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total shareholder
return on the Company's Common Shares with the cumulative total return on the
Nasdaq Stock Market (US Companies) and the Nasdaq Total Return Index for
Pharmaceutical Stocks over the period beginning April 23, 1998 (the date of the
Company's initial public offering) through the fiscal year ended June 30, 1998.
The comparison assumes $100 was invested on April 23, 1998, in the Company's
shares and in each of the foregoing indices and, where applicable, assumes
reinvestment of dividends. The stock price performance shown on the graph below
is not necessarily indicative of future stock price performance.
COMPARISON OF 2 MONTH CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY THE NASDAQ STOCK MARKET (U.S.)
AND THE NASDAQ PHARMACEUTICAL
<TABLE>
<CAPTION>
NASDAQ STOCK NASDAQ
IOMED, INC. MARKET (U.S.) PHARMACEUTICAL
<S> <C> <C> <C>
4/27/98 100.00 100.00 100.00
4/98 101.67 101.69 97.54
5/98 86.67 96.12 94.18
6/98 68.33 102.88 92.69
</TABLE>
- ---------------
* $100 INVESTED ON 4/27/98 IN STOCK OR ON 3/31/98 IN INDEX (INCLUDING
REINVESTMENT OF DIVIDENDS) THROUGH THE FISCAL YEAR ENDING JUNE 30, 1998.
The information contained in the Stock Performance Graph should not be
deemed to be "soliciting material", nor should such information be incorporated
by reference into any future filing under the Securities Act or the Exchange
Act, except to the extent the Company specifically incorporates it by reference
into such filing.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1997, the Company entered into agreements with Elan, an
international developer and manufacturer of advanced drug delivery technologies,
and certain of its affiliates. The agreements provide the Company with
exclusive, worldwide licenses to certain of Elan's iontophoretic drug delivery
technology, including over 250 issued and 47 pending United States and foreign
patents, as well as a significant body of know-how and clinical study results.
The Company acquired the Elan technology by issuing two promissory notes, a
$10.0 million note and a $5.0 million note (the "Elan Notes"). Concurrently with
the closing of its initial public offering in April 1998, the Company repaid the
Elan Notes and Elan purchased, in a private
10
<PAGE> 13
placement transaction, 1,206,391 Common Shares and 893,801 Series D Preferred
Shares of the Company. Mr. Sember is an executive officer of Elan and serves as
a member of the Company's board of directors.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report on Form 10-K, including financial
statements, for the fiscal year ended June 30, 1998, is being furnished to each
shareholder with this proxy statement. A portion of the information set forth in
the Form 10-K was incorporated by reference from this Proxy Statement. The
Company will mail an additional copy, without charge, to any shareholder upon
written request. Requests should be sent to Lippert/Heilshorn & Associates,
Inc., 800 Third Avenue, New York, NY 10022.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the shares they
represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/James R. Weersing
--------------------------
James R. Weersing
Chairman
Dated: October 16, 1998
11
<PAGE> 14
IOMED, INC.
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 20, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF IOMED, INC.
The undersigned shareholder of IOMED, Inc. (the "Company") hereby appoints
Robert J. Lollini and James R. Weersing, and each of them with full power of
substitution to each, the true and lawful attorneys, agents and proxyholders of
the undersigned, and hereby authorizes them to represent and vote, as specified
herein, all of the Common Shares of the Company held of record by the
undersigned on October 16, 1998, at the Annual Meeting of Shareholders of the
Company to be held at the Little America Hotel, 500 South Main Street, Salt Lake
City, Utah, on Friday, November 20, 1998, at 10:00 a.m., Mountain Standard Time,
and any adjournment thereof.
PROPOSAL 1. Election of the following nominees as Directors of the Company, to
serve a term of three years or until their successors are duly
elected and qualified: Peter J. Wardle Warren Wood
[ ] FOR [ ] WITHHOLD AUTHORITY to vote for all
nominees
(Instruction: To withhold authority to vote FOR any individual
nominee, strike a line through the nominee's name in the list
above.)
PROPOSAL 2. Ratification of the appointment of Ernst & Young LLP as the
Company's auditors for the fiscal year ending June 30, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
GENERAL . To act upon any other business that may properly come before the
meeting and any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Continued and to be dated and signed on the reverse side
<PAGE> 15
(Continued from other side)
PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY, USING THE ENCLOSED ENVELOPE. NO
POSTAGE REQUIRED.
THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER IF NO
DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSALS.
--------------------------------
Signature
--------------------------------
Signature
(Please sign exactly and as
fully as your name appears on
your stock certificate. If
shares are held jointly, each
shareholder must sign.)
Dated:
-------------------------------- ,
1998
RECEIPT OF THE PROXY STATEMENT, DATED OCTOBER 16, 1998, IS HEREBY ACKNOWLEDGED.
