<PAGE> 1
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 19, 1999
The Annual Meeting of Shareholders of IOMED, Inc. (the "Company") will be
held Friday, November 19, 1999, 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. Approval of an amendment to the Company's 1997 Share Incentive Plan to
increase the number of shares reserved for issuance.
3. Ratification of the appointment of Ernst & Young LLP as the Company's
auditors for the fiscal year ending June 30, 2000.
4. 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 1, 1999,
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 1, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, WHETHER OR NOT
YOU PLAN TO ATTEND 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.
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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 19, 1999
------------------------
SOLICITATION AND REVOCABILITY OF PROXY
GENERAL
The Board of Directors of IOMED, Inc. ("us" or "we") is soliciting the
enclosed proxy for use at our 1999 Annual Meeting of Shareholders. This meeting
will be held on November 19, 1999, 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, 1999 (the "Last Fiscal Year"),
including financial statements, were first mailed to all shareholders entitled
to vote at the Annual Meeting on or about October 15, 1999.
RECORD DATE AND VOTING SECURITIES
Our only authorized voting security is common stock, no par value per
share. Shareholders of record as of October 1, 1999 (the "Record Date"), are
entitled to receive notice of, and to vote at, the Annual Meeting. At the Record
Date, 6,507,744 shares of common stock were outstanding.
REVOCABILITY OF PROXIES
You may revoke any proxy you give pursuant to this solicitation 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. However, please note that attendance at the Annual
Meeting in and of itself will not constitute a revocation of any proxy you
grant.
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.
We 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 our
directors, officers and regular employees may also solicit proxies personally,
by telephone, facsimile or by special letter.
QUORUM AND ABSTENTIONS; BROKER NON-VOTES
The Inspector of Elections will tabulate votes cast by proxy or in person
at this meeting. 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.
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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 are not counted as votes FOR or AGAINST any matter. If a returned
proxy is not marked as to a particular proposal, the proxy will be voted FOR the
proposal, or, 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 director 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. We
believe 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 2000 ANNUAL
MEETING
We must receive by no later than February 12, 2000, all shareholder
proposals intended to be included in the proxy materials for consideration at
the 2000 Annual Meeting of Shareholders. We suggest that you send to us all such
proposals 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 our directors, executive officers and persons owning
ten percent of our common stock (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 us with copies of
all Section 16(a) forms filed.
Based solely on a review of the copies of such reports furnished to us and
written representations that no other reports were required, we believe that all
Reporting Persons during fiscal year 1999 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, a member of the Board of Directors, whom, we
believe, was delinquent in the filing of a report covering the issuance of
options to purchase shares of common stock; Peter J. Wardle, a member of the
Board of Directors, was delinquent in filing a report covering the purchase of
common stock; Steven L. Hamilton, Vice President, Business Development, was
delinquent in filing a report covering the purchase of common stock and a gift
of common stock from a family member; and Timothy B. Lucas, National Sales
Director, was delinquent in filing a report covering the issuance of options to
purchase shares of common stock. We believe that each Reporting Person is now
current in all reporting obligations.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to us with respect to the
beneficial ownership of our common stock as of October 1, 1999, for (i) each
person who we know owns beneficially more than 5% of our common stock, (ii) each
member of the Board of Directors, (iii) each Named Executive Officer (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)............................... 610,687 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)...................................... 52,860 *
John W. Fara, Ph.D.(6).................................... 16,248 *
Michael T. Sember(7)...................................... 10,000 *
Steven P. Sidwell(8)...................................... 16,207 *
Peter J. Wardle(9)........................................ 53,000 *
Warren Wood(10)........................................... 13,354 *
NAMED EXECUTIVE OFFICERS
Steven L. Hamilton........................................ 3,900 *
Robert J. Lollini(11)..................................... 45,771 *
W. Tim Miller(12)......................................... 48,972 *
Tim Lucas(13)............................................. 6,788 *
Executive officers and directors as a group (10
persons)(14)........................................... 267,100 4.0%
</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 6,507,744 shares of common stock
outstanding on September 1, 1999, together with any applicable convertible
preferred stock, warrants and options convertible or exercisable within 60
days of September 1, 1999, for such shareholder.
(3) Includes 893,801 shares of Series D non-voting convertible preferred stock,
convertible into common stock on a share-for-share basis, and 104,166
common shares subject to outstanding warrants.
(4) Includes 470,231 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. Includes 10,000 common
shares subject to options held by Mr. Weersing. Mr. Weersing is a general
partner of MBW Management, Inc. and disclaims beneficial ownership of the
shares beneficially owned by MBW Management, Inc. and its affiliates.
(6) Includes 16,248 common shares subject to options held by Dr. Fara.
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(7) Includes 10,000 common shares subject to options held by Mr. Sember. Mr.
Sember is an executive officer of Elan Corporation plc and disclaims
beneficial ownership of shares owned beneficially by Elan International
Services Ltd, a subsidiary of Elan.
(8) Includes 16,207 common shares subject to options held by Mr. Sidwell.
(9) Includes 10,000 common shares subject to options held by Mr. Wardle. Mr.
Wardle is a general partner of Newtek Ventures, but disclaims beneficial
ownership of the common shares held by Newtek Ventures.
(10) Includes 13,354 common shares subject to options held by Mr. Wood.
(11) Includes 38,515 common shares subject to options held by Mr. Lollini.
(12) Includes 45,278 common shares subject to options held by Mr. Miller.
(13) Includes 5,122 common shares subject to options held by Mr. Lucas.
(14) Includes 167,724 common shares subject to options.
PROPOSAL 1
ELECTION OF DIRECTORS
Our 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 class two directors,
currently comprised of Dr. John W. Fara and Mr. Steven P. Sidwell, expire at
this meeting. The Board has nominated Dr. Fara and Mr. Sidwell for reelection as
directors in that class for the term expiring in 2002. We have included
biographies for Dr. Fara and Mr. Sidwell 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.
Unless otherwise directed by a proxy, the Chairman and Chief Financial
Officer intend to vote the shares represented by proxies for all of the Board's
nominees.
The Board of Directors recommends a vote FOR the election of both nominees
as a director.
NOMINEES FOR ELECTION AS DIRECTORS (TERM EXPIRES 2002)
John W. Fara, Ph.D., age 57, has served as a director of the Company since
1992. Dr. Fara has served as the President, Chief Executive Officer and a
Director of DepoMed, Inc., a publicly traded pharmaceutical company, since 1996.
Dr. Fara also serves as a director of two other companies, LaFayette Pharma,
Inc. and Cooke Pharma, Inc. 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 Biology from the University of Wisconsin and a
Ph.D. in Physiology from the University of California, Los Angeles.
Steven P. Sidwell, age 59, 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 2001)
Peter J. Wardle, age 64, 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.
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Warren Wood, age 68, 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 2000)
Michael T. Sember, age 49, has served as a director of the Company since
May of 1997. Mr. Sember is Executive Vice President of Business Development for
Elan. Prior to joining Elan, Mr. Sember was with Marion Merrell Dow, Inc. from
1973 to 1991. Mr. Sember also serves as a director of Acorda Therapeutics, Inc.,
Delsys Pharmaceutical Corp., and Bioject Medical Technologies. Mr. Sember
received a Bachelor of Science degree from the University of Pittsburgh and an
MBA from Rockhurst College.
James R. Weersing, age 60, has served as acting President and Chief
Executive Officer of the Company since November 1998, 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 we are incorporated, our business,
property and affairs are managed under the direction of the Board of Directors.
During fiscal year 1999, 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 three committees, the Executive
Committee, Audit Committee, and Compensation Committee. Each of these committees
is responsible to the full Board of Directors, and its activities are subject to
approval of the Board. The Executive Committee is charged with overseeing our
operations, and generally has all of the authority of the full Board, between
regularly scheduled Board meetings. The Executive Committee is comprised of
Messrs. Weersing and Wardle. The Audit Committee reviews the scope and results
of the annual audit of our consolidated financial statements conducted by our
independent accountants, the scope of other services provided by our independent
accountants, proposed changes in our financial and accounting standards and
principles, and our policies and procedures with respect to our internal
accounting, auditing and financial controls. The Audit Committee also examines
and considers other matters relating to our financial affairs and accounting
methods, including the selection and retention of our independent accountants.
The Audit Committee is comprised of Mr. Weersing, Dr. Fara and Mr. Sidwell. The
Compensation Committee administers our compensation programs, reviews and
recommends to the Board compensation arrangements for our senior management and
directors, and performs such other duties as may from time to time be determined
by the Board. In addition, the Compensation Committee is responsible for
administering our stock option plans. The Compensation Committee is comprised of
Mr. Weersing, Dr. Fara and Mr. Wardle. There are no interlocking relationships,
as described by the Securities and Exchange Commission, between the Compensation
Committee members.
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 our stock option plans. Non-qualified options to
purchase shares of common stock have been granted to the directors as follows:
Dr. Fara (16,248 shares), Mr. Sember (10,000 shares), Mr. Sidwell
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(16,207 shares), Mr. Wardle (10,000 shares), Mr. Weersing (10,000 shares), and
Mr. Wood (14,166 shares). The option grants vest over periods ranging from
immediately upon grant to 4 years. All such options are exercisable at an
exercise price equal to the fair market value of the common stock on the date of
grant (as adjusted for stock splits and similar transactions), and some 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
AMENDMENT TO 1997 STOCK INCENTIVE PLAN
We have adopted and approved two incentive compensation plans. Our 1988
Stock Option Plan (the "1988 Plan") was approved and adopted by the Board of
Directors in April 1988 and was approved by the shareholders in November 1988.
Our Share Incentive Plan (the "1997 Plan") was approved and adopted by the Board
of Directors in October 1997 and was approved by the shareholders in November
1997. The 1988 Plan and the 1997 Plan (collectively, the "Plans") provide for
grants to employees, officers, directors and consultants of both non-qualified
stock options and "incentive stock options" (within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code")). The 1997 Plan
also provides for the grant of certain other incentive compensation as set forth
below. The purpose of the Plans is to attract and retain the best available
personnel to the Company and to encourage stock ownership by the Company's
employees, officers, directors and consultants in order to give them a greater
personal stake in the success of the Company.
Administration. The Compensation Committee administers the Plans and is
responsible for determining the type, amount and terms of any consideration
awarded to a recipient. Under the Plans, any options granted to a recipient are
exercisable in accordance with the terms of the agreement governing the grant.
If the option is an incentive stock option, those terms must be consistent with
the requirements of the Code, as amended, and applicable regulations, including
the requirement that the option price not be less than the fair market value of
the common shares on the date of the grant. If the option is not an incentive
stock option, the option price may be any price determined by the Compensation
Committee.
Changes in Capital Structure. The Plans provide that if the number of
outstanding shares of our common stock is increased or decreased or changed into
or exchanged for a different number or kind of securities by reason of any
recapitalization, stock split, merger, consolidation, plan of exchange, sale of
the Company or any similar transaction, then appropriate adjustment will be made
by the Board to the type, amount and terms of any outstanding grants or awards
and in the number and kind of shares available for future grants or awards under
the Plans.
Tax Consequences. Under federal income tax law currently in effect, the tax
consequences vary significantly depending, among other things, on the type,
amount and terms of any particular grant or award. Generally, to the extent that
the recipient is deemed to have received taxable ordinary income, such income is
subject to withholding taxes and the Company is entitled to a compensation
expense deduction in the amount of the ordinary income.
Under the 1988 Plan, options to purchase a total of 155,559 common shares
have been exercised, options to purchase a total of 299,277 common shares at a
weighted average exercise price of $4.93 per share are outstanding and no
options remained available for future grants.
Under the 1997 Plan, no options have been exercised, options to purchase a
total of 568,100 common shares at a weighted average exercise price of $2.32 per
share are outstanding and 744,400 options remained available for future grants
or awards. A total of 1,312,500 common shares are reserved for issuance under
the 1997 Plan, of which 312,500 have been previously approved by the
Shareholders. The Board of Directors has adopted amendments to the 1997 Plan to
increase the number of shares of common stock issuable under the plan from
312,500 to 1,312,500. Under the terms of the 1997 Plan, the Board may amend the
plan at any time. Shareholder approval is required to the extent necessary or
desirable to comply with Rule 16b-3 under the
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Exchange Act, Section 422 of the Code or the Rules of the American Stock
Exchange. This Proposal seeks Shareholder approval of these amendments.
No option may be transferred by the optionee other than by will or the laws
of descent and distribution. During the lifetime of an optionee, only the
optionee may exercise an option. An option is exercisable on or after each
vesting date in accordance with the terms set forth in the option agreement.
Incentive options are exercisable only during the optionee's employment by the
Company, and for a period of up to 90 days after the termination of the
optionee's employment.
Description of the 1997 Plan.
Eligibility. All of our employees, officers and directors are eligible to
participate in the 1997 Plan. Our non-employee agents, consultants, advisors and
independent contractors are also eligible to participate. Currently there are
approximately 75 employees, officers and directors eligible to participate in
the 1997 Plan.
The Share Incentive Plan is also administered by the Compensation
Committee. Shares of common stock awarded under the 1997 Plan may be authorized
and unissued shares or shares acquired in the market. If any award granted under
the 1997 Plan expires, terminates or is cancelled, or if shares sold or awarded
under the 1997 Plan are forfeited to or repurchased by us, the shares again
become available for issuance under the 1997 Plan.
In addition to incentive stock options and non-incentive stock options, the
Compensation Committee may award other types of incentive compensation under the
1997 Plan. Such additional incentive compensation can include stock awards,
stock appreciation rights (which entitle the holder of the right upon exercise
thereof to receive payment from the Company of an amount equal in value to the
excess of the fair market value of the Company's common stock on the date of
exercise over the fair market value of the Company's common stock on the date of
grant or, if granted in connection with an option, the option price per share
under the option to which the stock appreciation right relates), cash bonuses,
performance-based awards (which are intended to qualify as performance-based
compensation under sec. 162(m) of the Code) and common stock which is subject to
a purchase agreement between the Company and the prospective recipient.
The 1997 Plan shall continue in effect until November 6, 2007, subject to
earlier termination by the Board. The Board may suspend or terminate the 1997
Plan at any time.
The Board determines the persons to whom options are granted, the option
price, the number of shares to be covered by each option, the period of each
option, the times at which options may be exercised and whether the option is an
incentive stock option ("ISO"), as defined in Section 422 of the Code, or a
non-statutory stock option ("NSO"). The Company does not receive any monetary
consideration upon the granting of options.
Increase in Number of Shares Authorized for Issuance.
As noted above, the Board has adopted amendments to the 1997 Plan to
increase the number of shares of common stock issuable thereunder from 312,500
to 1,312,500, an increase of 1,000,000 shares. This Proposal seeks your approval
of these amendments.
The Board believes that the number of shares of common stock currently
available under the 1997 Plan may be insufficient in light of the anticipated
continued growth in our operations. Further, the Board believes that increasing
the number of shares reserved for issuance under the 1997 Plan is necessary to
permit us to remain competitive in the industry in order to continue to attract
and retain qualified employees by providing them with appropriate equity
incentives. For this reason, the Board has determined that it is in the
Company's best interests to increase the number of shares available for issuance
under the 1997 Plan.
The Board of Directors recommends a vote FOR the amendment to the 1997
Plan.
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PROPOSAL 3
APPOINTMENT OF INDEPENDENT ACCOUNTANT
The Board has selected Ernst & Young LLP, independent public accountants,
to audit our financial statements for fiscal year ending June 30, 2000.
The Board of Directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP as our auditors for the fiscal year ending June
30, 2000.
MANAGEMENT
EXECUTIVE OFFICERS
James R. Weersing, age 60, has served as acting President and Chief
Executive Officer of the Company since November 1998, 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.
Steven L. Hamilton, age 48, joined the Company in November 1998 and
presently serves as Vice President, Business Development. Mr. Hamilton has held
business development positions at large pharmaceutical companies and at smaller
start-up companies. He was with Baxter International from 1986 through 1994,
where his work resulted in the addition of 10 new products in addition to
divesting Baxter of several non-strategic businesses. As Vice President,
Business Development at Magainin Pharmaceuticals from 1994 through 1996, a
development-stage company, Mr. Hamilton was instrumental in laying the
groundwork for several strategic partnerships with large pharmaceutical
companies. Mr. Hamilton holds a Bachelor of Science degree in Pharmacy from the
University of Utah and an MBA from Northwestern University's Kellogg School of
Management.
Robert J. Lollini, age 45, 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, a wholly owned
subsidiary of the Company. 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.
W. Tim Miller, age 48, 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 and marketing
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 the University of Southern
Indiana.
Timothy B. Lucas, age 36, 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
stimula-
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tors. 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.
Ned M. Weinshenker, Ph.D., age 56, resigned as the Company's President and
Chief Executive Officer effective September 18, 1998.
Thomas M. Parkinson, Ph.D., age 63, resigned as Vice President, Research
and Development of the Company effective December 31, 1998.
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid to or earned by our
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>
James R. Weersing.................. 1999 $188,000 $ -- $ -- -- 10,000
Acting President and Chief
Executive 1998 -- -- -- -- --
Officer; Chairman of the Board(2) 1997 -- -- -- -- --
W. Tim Miller...................... 1999 $163,000 $32,000 $11,500(3) -- 100,000
Executive Vice President, Sales
and 1998 163,000 -- 11,000(3) -- --
Marketing; General Manager, 1997 152,000 25,000 11,000(3) -- --
Clinical Systems
Steven L. Hamilton................. 1999 $ 82,000 $14,500 $ 4,000 -- 150,000
Vice President, Business 1998 -- -- -- -- --
Development(4) 1997 -- -- -- -- --
Robert J. Lollini.................. 1999 $160,000 $20,000 $ 5,200 -- 100,000
Vice President, Finance, Chief 1998 160,000 -- 5,000 -- --
Financial Officer and Secretary 1997 145,000 25,000 5,000 -- --
Timothy B. Lucas................... 1999 $129,600 $19,500 $13,300(5) -- 10,000
Director of National Sales 1998 124,000 17,600 12,000(5) -- --
1997 119,000 16,000 12,000(5) -- --
Ned M. Weinshenker, Ph.D........... 1999 $ 50,800 $ -- $ 1,200 -- --
Former President, Chief Executive 1998 199,000 -- 5,000 -- --
Officer and Director(6) 1997 189,000 25,000 5,000 -- --
Thomas M. Parkinson, Ph.D.......... 1999 $179,000 $ -- $ 3,300 -- 25,000
Former Vice President, R&D; 1998 123,000 -- 3,000 -- --
and General Manager, Dermion(7) 1997 115,000 25,000 5,000 -- --
</TABLE>
- ---------------
(1) Represents medical and dental insurance and premiums on group term life
insurance.
(2) In November 1998, the Board of Directors appointed Mr. Weersing acting
President and Chief Executive Officer pending the appointment of a successor
to Dr. Weinshenker.
(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) Mr. Hamilton joined the Company in November 1998.
(5) Includes automobile reimbursement of $7,000.
(6) Dr. Weinshenker resigned as both an executive officer and a director of the
Company effective September 18, 1998.
(7) Dr. Parkinson resigned from the Company effective December 31, 1998, and
continues to provide services under a consulting agreement. Dr. Parkinson's
compensation includes salary, $56,800 in severance pay, and $56,200 in
consulting fees. The options were granted pursuant to the consulting
agreement.
9
<PAGE> 11
STOCK OPTION GRANTS
The following stock options were granted to the Named Executive Officers
during the fiscal year ended June 30, 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
--------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED(#) YEAR(3) ($/SHARE)(4) DATE 5% 10%
---- ----------- ----------- ------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
James R. Weersing.............. 10,000 1.85% $2.25 11/20/08 $ 14,150 $ 35,859
W. Tim Miller.................. 100,000 18.52% 2.25 11/20/08 141,501 358,592
Steven L. Hamilton............. 150,000 27.78% 2.25 11/20/08 212,252 537,888
Robert J. Lollini.............. 100,000 18.52% 2.25 11/20/08 141,501 358,592
Timothy B. Lucas............... 10,000 1.85% 2.31 05/20/09 14,527 36,815
Thomas M. Parkinson,
Ph.D.(5)..................... 25,000 4.63% 2.50 02/18/09 39,306 99,609
</TABLE>
- ---------------
(1) The options reflected in this table were all granted under the Company's
1997 Share Incentive Plan (the "Plan"). The date of grant is 10 years prior
to the expiration date listed.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The assumed
5% and 10% rates of stock price appreciation are mandated by rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future common stock price.
(3) Based on an aggregate of 540,000 options granted to employees of the Company
in fiscal 1999.
(4) Exercise price is the fair market value on the date of grant as determined
in accordance with the Plan.
(5) Dr. Parkinson resigned effective December 31, 1998. The options were granted
pursuant to a consulting agreement.
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, 1999. No options were
exercised by the Named Executive Officers during fiscal 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING OUTSTANDING VALUE OF OUTSTANDING IN-
OPTIONS AT FISCAL THE-MONEY OPTIONS AT
YEAR-END(#) FISCAL YEAR-END($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James R. Weersing.............................. 10,000 -- -- --
W. Tim Miller.................................. 44,848 102,026 -- --
Steven L. Hamilton............................. -- 150,000 -- --
Robert J. Lollini.............................. 37,650 104,015 -- --
Timothy B. Lucas............................... 4,742 11,507 -- --
Ned M. Weinshenker, Ph.D.(2)................... 49,858 -- $ 281 --
Thomas M. Parkinson, Ph.D.(2).................. 32,980 25,000 1,781 --
</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, 1999, ($2.25), minus the exercise
price.
(2) Drs. Weinshenker and Parkinson resigned from the Company effective September
18 and December 31, 1998, respectively.
10
<PAGE> 12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Program
The objectives of our executive compensation program are to align
compensation with business objectives and individual performance, and to enable
us to attract, retain and reward highly qualified executive officers who
contribute to our long-term success. To ensure that compensation is competitive,
we compare our 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 our 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 our employees.
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 we meet
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 our 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 us on an annual basis.
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 our employees, including our executive officers, and our
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 us and his actual or potential contributions to us in
relation to his overall compensation. The Compensation Committee believes that
stock options have been and remain an excellent vehicle for compensating our
employees. Because the 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 shares of our
common shares. All stock option awards are approved by the Compensation
Committee. Stock options are used to reward substantially all of our employees,
and not just our executive officers.
In determining the total compensation of Mr. Weersing for fiscal 1999, the
Compensation Committee considered numerous factors, including Mr. Weersing's
experience, his role in managing our strategic direction, progress on our
research and product development programs, his oversight in achieving commercial
operating objectives, and his continued management responsibilities as our
Chairman and acting President and Chief Executive Officer.
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. We believe that the compensation expected to be paid during
fiscal year 2000 is below the compensation limitation.
Respectfully Submitted,
John W. Fara Peter J. Wardle James R. Weersing
11
<PAGE> 13
SHAREHOLDER PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total shareholder
return on our common stock 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 our initial public
offering) through the fiscal year ended June 30, 1999. The comparison assumes
that on April 27, 1998, $100 was invested in our common stock 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.
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
NASDAQ STOCK NASDAQ
IOMED, INC. MARKET (U.S.) PHARMACEUTICAL
----------- ------------- --------------
<S> <C> <C> <C>
4/27/98 100 100 100
6/98 68 104 99
9/98 22 94 94
12/98 29 122 124
3/99 30 136 136
6/99 30 149 139
</TABLE>
- ---------------
* $100 INVESTED ON 4/27/98 IN STOCK OR INDEX, INCLUDING REINVESTMENT
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 we specifically incorporate it by reference into such
filing.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1997, we entered into agreements with Elan, an international
developer and manufacturer of advanced drug delivery technologies, and certain
of its affiliates. The agreements provide us 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. We 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 our initial
public offering in April 1998, we repaid the Elan Notes and Elan purchased, in a
private placement transaction, 1,206,391 shares of common stock and 893,801
shares of Series D Preferred Stock. Mr. Sember is an executive officer of Elan
and serves as a member of the Board of Directors.
12
<PAGE> 14
ADDITIONAL INFORMATION
A copy of our Annual Report on Form 10-K, including financial statements,
for the fiscal year ended June 30, 1999, is being furnished to you with this
proxy statement. A portion of the information set forth in the Form 10-K was
incorporated by reference from this Proxy Statement. We will mail an additional
copy, without charge, to you upon written request. Requests should be sent to
Lippert/Heilshorn & Associates, Inc., 800 Third Avenue, New York, NY 10022.
OTHER MATTERS
We do not know of any other matters to be submitted at 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 the extent authorized, 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 1, 1999
13
<PAGE> 15
IOMED, INC.
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 19, 1999
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 1, 1999, 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 19, 1999, 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: John W. Fara, Ph.D. Steven P. Sidwell
[ ] 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. Approval of amendment to Company's 1997 Share Incentive Plan to
increase the number of shares reserved for issuance.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Continued and to be dated and signed on the reverse side
<PAGE> 16
PROPOSAL 3. Ratification of the appointment of Ernst & Young LLP as the
Company's auditors for the fiscal year ending June 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
GENERAL. To act upon any other business that may properly come before the
meeting and any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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: , 1999
Receipt of the Proxy Statement, dated October 1, 1999, is hereby acknowledged.
