<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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 Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-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)(4) 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.:
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(3) Filing Party:
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(4) Date Filed:
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<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 10, 2000
The Annual Meeting of Shareholders of IOMED, Inc. will be held on Friday,
November 10, 2000, at 10:00 a.m. (Mountain Standard Time) at the Little America
Hotel, located at 500 South Main Street, Salt Lake City, Utah. At the meeting,
shareholders will consider and take action upon the following matters:
1. Election of two Class II directors to serve a term of three years or
until their successors are duly elected and qualified;
2. Approval of proposal for compensation for non-employee directors of the
Company;
3. Ratification of the appointment of Ernst & Young LLP as the Company's
auditors for the fiscal year ending June 30, 2001; and
4. 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 9, 2000,
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 9, 2000
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.
<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 10, 2000
------------------------
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 2000 Annual Meeting of Shareholders. This meeting
will be held on November 10, 2000, at 10:00 a.m. (Mountain Standard Time). The
Annual Meeting will be held at the Little America Hotel, located at 500 South
Main Street, Salt Lake City, Utah.
These proxy solicitation materials, form of proxy and the Annual Report to
shareholders for the fiscal year ended June 30, 2000 (the "Last Fiscal Year"),
including financial statements, were first mailed to all shareholders entitled
to vote at the Annual Meeting on or about October 16, 2000.
RECORD DATE AND VOTING SECURITIES
Our only authorized voting security is common stock, no par value per
share. Shareholders of record as of October 9, 2000 (the "Record Date"), are
entitled to receive notice of, and to vote at, the Annual Meeting. On the Record
Date, 6,542,589 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
A representative from Computershare Trust Company will serve as the
Inspector of Elections for our annual meeting. 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.
<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 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 2001 ANNUAL
MEETING
We must receive by no later than February 3, 2001, all shareholder
proposals intended to be included in the proxy materials for consideration at
the 2001 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 2000 complied on a timely basis with all
applicable filing requirements under Section 16(a) of the Exchange Act, with the
exception of James R. Weersing, John W. Fara, Michael T. Sember, Steven P.
Sidwell, Peter J. Wardle, and Warren Wood, members of the Board of Directors,
who were delinquent in filing a report covering the issuance of options to
purchase shares of common stock. Jamal Yanaki, our General Manager, Clinical
Systems, was delinquent in filing a report establishing himself as a Section 16
employee. We believe that each Reporting Person is now current in all reporting
obligations.
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<PAGE> 5
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 September 1, 2000, 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. Unless
otherwise indicated, the principal address of each shareholder, director and
Named Executive Officer is our principal corporate office address at 3385 West
1820 South, Salt Lake City, Utah 84104.
<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 29.3%
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.................................. 470,231 7.2%
350 Second Street, Suite 8
Los Altos, CA 94022
Laboratoires Fournier, S.C.A. ............................ 368,498 5.6%
42, rue de Longvic
21300 Chenove France
DIRECTORS
James R. Weersing(4)...................................... 75,337 1.2%
John W. Fara, Ph.D.(5).................................... 26,248 *
Michael T. Sember(6)...................................... 20,000 *
Steven P. Sidwell(7)...................................... 26,207 *
Peter J. Wardle(8)........................................ 73,000 1.1%
Warren Wood(9)............................................ 24,166 *
NAMED EXECUTIVE OFFICERS
Steven L. Hamilton(10).................................... 33,900 1.0%
Robert J. Lollini(11)..................................... 70,347 1.1%
W. Tim Miller(12)......................................... 76,004 1.2%
Tim Lucas(13)............................................. 9,598 *
Jamal Yanaki(14).......................................... 10,881 *
Executive officers and directors as a group (10
persons)(15)........................................... 445,688 6.5%
</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 based upon 6,530,659 shares of common stock outstanding on
September 1, 2000, together with any applicable convertible preferred
stock, warrants and options convertible or exercisable within 60 days of
September 1, 2000, 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 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.
(5) Includes 26,248 common shares subject to options held by Dr. Fara.
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<PAGE> 6
(6) Includes 20,000 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.
(7) Includes 26,207 common shares subject to options held by Mr. Sidwell.
(8) Includes 20,000 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.
(9) Includes 24,166 common shares subject to options held by Mr. Wood.
(10) Includes 30,000 common shares subject to options held by Mr. Hamilton.
(11) Includes 60,591 common shares subject to options held by Mr. Lollini.
(12) Includes 66,310 common shares subject to options held by Mr. Miller.
(13) Includes 7,932 common shares subject to options held by Mr. Lucas.
(14) Includes 10,881 common shares subject to options held by Mr. Yanaki.
(15) Includes 302,335 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 three directors,
currently comprised of Messrs. Michael T. Sember and James R. Weersing, expire
at this meeting. The Board has nominated Messrs. Sember and Weersing for
reelection as directors in that class for the term expiring in 2003. We have
included biographies for Messrs. Sember and Weersing 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 President 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 2003)
Michael T. Sember, age 50, 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 61, was named President and Chief Executive Officer
of the Company in January 2000. He served as acting President and Chief
Executive Officer of the Company since November 1998, Chairman of the Company's
Board of Directors from 1992 until January 2000, 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.
DIRECTORS CONTINUING IN OFFICE (TERM EXPIRES 2002)
John W. Fara, Ph.D., age 58, 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.
In March 2000, Dr. Fara was also elected Chairman. Dr. Fara also serves as a
director of
4
<PAGE> 7
AVI Biopharma, a publicly traded pharmaceutical company. 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 60, 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 65, was named Chairman of the Company's Board of
Directors in January 2000 and 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 69, 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.
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 2000, there were three 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.
COMMITTEES OF THE BOARD
The Board of Directors has established two committees, the 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
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 Messrs. Sember, Sidwell and Wood. 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 Dr. Fara and Messrs.
Wardle and Wood. There are no interlocking relationships, as described by the
Securities and Exchange Commission, between the Compensation Committee members.
DIRECTOR COMPENSATION
Since January 2000, and for the first two quarters of our fiscal year 2000,
we have paid each of our non-employee directors $3,000.00 per quarter as a
retainer for their continued services and have reimbursed them
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for their reasonable out-of-pocket expenses incurred in connection with
attendance at meetings. In proposal number 2 of this proxy, we are asking our
shareholders to ratify these payments compensating our non-employee directors in
this manner. All non-employee directors are also 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 (26,248 shares), Mr.
Sember (20,000 shares), Mr. Sidwell (26,207 shares), Mr. Wardle (20,000 shares),
Mr. Weersing (10,000 shares), and Mr. Wood (24,166 shares). In addition to the
options previously granted as a non-employee director, Mr. Weersing has also
been granted options to purchase 200,000 shares pursuant to his appointment in
January 2000 as President and Chief Executive Officer of the Company. 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
NON-EMPLOYEE DIRECTOR'S COMPENSATION
The Board believes that in order to provide an incentive to each of our
non-employee directors, whose continued services are considered essential to our
continued progress, each of our non-employee director's should be paid a
quarterly retainer in the amount of $3,000 as compensation for their services,
such retainer to be paid retroactive to July 1, 1999. In addition, the
non-employee directors are eligible to participate in our stock option plans.
The Board has adopted this program and seeks ratification by our shareholders.
The affirmative vote of the holders of a majority of our common shares entitled
to vote at the Annual Meeting is required to ratify this compensation program.
As of September 1, 2000, we had five non-employee directors.
The Board of Directors recommends a vote FOR the proposal to compensate
non-employee directors.
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, 2001.
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, 2001.
AUDIT COMMITTEE REPORT
The Audit Committee oversees our financial reporting process on behalf of
the Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the committee reviewed
the audited financial statements in the Annual Report with management including
a discussion of the quality, and not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
Our independent auditors, Ernst & Young, are responsible for expressing an
opinion on the conformity of our audited financial statements with generally
accepted accounting principles. Ernst & Young met with the committee and
expressed their judgement as to the quality, not just the acceptability, of our
accounting principles and discussed other matters as required under generally
accepted auditing standards. In addition, Ernst & Young discussed the auditors'
independence from us and our management, including those matters set forth in
written disclosures required by the Independence Standards Board.
The committee discussed with our independent auditors the overall scope and
plan of their audit. The committee meets with the independent auditors, with and
without our management present, to discuss the
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<PAGE> 9
results of their examinations, their evaluations of our internal controls, and
the overall quality of our financial reporting. The committee held two meetings
during fiscal year 2000.
In reliance on the reviews and discussions referred to above, the committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Annual Report on Form 10-K for
the year ended June 30, 2000, for filing with the Securities and Exchange
Commission. The committee and the Board have also recommended, subject to
shareholder approval, the selection of our independent auditors.
Respectfully submitted,
Michael T. Sember Steven P. Sidwell Warren Wood
MANAGEMENT
EXECUTIVE OFFICERS
James R. Weersing, age 61, was named President and Chief Executive Officer
of the Company in January 2000. He served as acting President and Chief
Executive Officer of the Company since November 1998, Chairman of the Company's
Board of Directors from 1992 until January 2000, 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 49, joined the Company in November 1998 and
presently serves as Executive 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 46, has served as Executive 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 49, has served as Executive Vice President, IOMED
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
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<PAGE> 10
Association. Mr. Miller received a Bachelor of Science degree in Life Science
from the University of Southern Indiana.
Timothy B. Lucas, age 37, 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 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, 2000, 1999
and 1998:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL 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.................. 2000 $240,000 $50,000 $ -- -- 200,000
President and Chief Executive 1999 188,000 -- -- -- 10,000
Officer; Board Member(2) 1998 -- -- -- -- --
W. Tim Miller...................... 2000 $181,700 $32,000 $ 5,500 -- --
Executive Vice President, IOMED 1999 163,000 32,000 11,000(3) -- 100,000
Clinical Systems 1998 163,000 -- 11,000(3) -- --
Steven L. Hamilton................. 2000 $173,800 $16,000 $ 5,700 -- --
Executive Vice President,
Business 1999 82,000 14,500 4,000 -- 150,000
Development(4) 1998 -- -- -- -- --
Robert J. Lollini.................. 2000 $167,700 $32,000 $ 5,500 -- --
Executive Vice President,
Finance, 1999 160,000 20,000 5,200 -- 100,000
Chief Financial Officer and
Secretary 1998 160,000 -- 5,000 -- --
Timothy B. Lucas................... 2000 $141,300 $20,000 $13,200(5) -- --
Director of National Sales 1999 129,600 19,500 13,300(5) -- 10,000
1998 124,000 17,600 12,000(5) -- --
</TABLE>
---------------
(1) Represents medical and dental insurance and premiums on group term life
insurance.
(2) In January 2000, the Board of Directors appointed Mr. Weersing President and
Chief Executive Officer.
(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 $7,200.
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STOCK OPTION GRANTS
The following stock options were granted to the Named Executive Officers
during the fiscal year ended June 30, 2000.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
--------------------------- POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION FOR
OPTIONS EMPLOYEES IN EXERCISE OPTION TERM(2)
GRANTED FISCAL PRICE EXPIRATION -----------------------
NAME (#) YEAR(3) ($/SHARE)(4) DATE 5% 10%
---- ---------- ------------ ------------ ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
James R. Weersing............. 200,000 47.79% $3.825 1/28/10 $481,104 $1,219,213
</TABLE>
---------------
(1) The options reflected in this table were all granted under the Company's
1997 Share Incentive Plan (the "Plan"). The date of grant is 10 years prior
to the expiration date listed.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The assumed
5% and 10% rates of stock price appreciation are mandated by rules of the
Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future common stock price.
(3) Based on an aggregate of 418,500 options granted to employees of the Company
in fiscal 2000.
(4) Exercise price is the fair market value on the date of grant as determined
in accordance with the Plan.
FISCAL YEAR-END OPTION VALUES
The following table provides information regarding the number and value of
options held by the Named Executive Officers on June 30, 2000. No options were
exercised by the Named Executive Officers during fiscal 2000.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING OUTSTANDING VALUE OF OUTSTANDING
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END(#) AT FISCAL YEAR-END($)(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James R. Weersing.......................... 10,000 200,000 $30,000 $275,000
W. Tim Miller.............................. 66,138 80,736 78,750 240,000
Steven L. Hamilton......................... 30,000 120,000 90,000 360,000
Robert J. Lollini.......................... 60,245 81,420 74,062 240,000
Timothy B. Lucas........................... 7,828 8,421 7,286 23,520
</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, 2000, ($5.25), minus the exercise
price.
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.
9
<PAGE> 12
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 2000, 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 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 2001 is below the compensation limitation.
Respectfully Submitted,
John W. Fara Peter J. Wardle Warren Wood
10
<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, 2000. 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>
------------------------------------------------------------------------------------------------------------------------
4/27/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99 3/00 6/00
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
IOMED, INC. 100 68 22 29 30 30 32 47 72 70
NASDAQ STOCK MARKET
(U.S.) 100 104 94 122 137 150 153 226 254 221
NASDAQ
PHARMACEUTICAL 100 99 94 124 136 138 158 230 284 311
------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
11
<PAGE> 14
ADDITIONAL INFORMATION
A copy of our Annual Report on Form 10-K, including financial statements,
for the fiscal year ended June 30, 2000, 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
[Signature]
James R. Weersing
President and Chief Executive Officer
Dated: October 9, 2000
12
<PAGE> 15
IOMED, INC.
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 10, 2000
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 9, 2000, 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 10, 2000, 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: Michael T. Sember James R. Weersing
[ ] 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 proposal for compensation of non-employee directors of
the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3.Ratification of the appointment of Ernst & Young LLP as the Company's
auditors for the fiscal year ending June 30, 2001.
CONTINUED AND TO BE DATED AND SIGNED ON THE REVERSE SIDE
<PAGE> 16
[ ] 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: , 2000
RECEIPT OF THE PROXY STATEMENT,
DATED OCTOBER 9, 2000, IS
HEREBY ACKNOWLEDGED.
