<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 the Use of the Commission Only (as permitted by rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
IOMEGA CORPORATION
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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.:
3) Filing Party:
4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
IOMEGA CORPORATION
1821 WEST IOMEGA WAY
ROY, UTAH 84067
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON TUESDAY, APRIL 25, 1995
The Annual Meeting of Stockholders of Iomega Corporation (the "Company")
will be held at the principal office of the Company, 1821 West Iomega Way,
Building 1, Roy, Utah 84067 on Tuesday, April 25, 1995 at 1:00 p.m. local time,
to consider and act upon the following matters:
1. To elect nine directors for a one-year term.
2. To approve the Company's 1995 Director Stock Option Plan.
3. To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for the current year.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on February 28, 1995 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
The stock transfer books of the Company will remain open.
By Order of the Board of Directors,
DONALD R. STERLING, Secretary
Roy, Utah
March 7, 1995
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY
IS MAILED IN THE UNITED STATES.
<PAGE> 3
IOMEGA CORPORATION
1821 WEST IOMEGA WAY
ROY, UTAH 84067
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
ON APRIL 25, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Iomega Corporation (the "Company") for use
at the Annual Meeting of Stockholders to be held on April 25, 1995 and at any
adjournment of that meeting. All proxies will be voted in accordance with the
stockholders' instructions, and if no choice is specified, the proxies will be
voted in favor of the matters set forth in the accompanying Notice of Meeting.
Any proxy may be revoked by a stockholder at any time before its exercise by
delivery of written revocation or a subsequently dated proxy to the Secretary of
the Company or by voting in person at the Annual Meeting.
At the close of business on February 28, 1995, the record date for the
determination of stockholders entitled to vote at the Annual Meeting, there were
outstanding and entitled to vote an aggregate of 18,755,119 shares of Common
Stock of the Company (constituting all of the outstanding voting stock of the
Company). Holders of Common Stock are entitled to one vote per share.
The Company's Annual Report for 1994 was mailed to stockholders, along with
these proxy materials, on or about March 7, 1995.
All share and per share price information set forth herein reflects the
5-for-4 stock split effected by the Company in the form of a 25% common stock
dividend paid on November 23, 1994 to stockholders of record at the close of
business on November 9, 1994.
VOTES REQUIRED
The holders of a majority of the shares of Common Stock issued and
outstanding and entitled to vote at the Annual Meeting shall constitute a quorum
for the transaction of business at the Annual Meeting. Shares of Common Stock
present in person or represented by proxy (including shares which abstain or do
not vote with respect to one or more of the matters presented for stockholder
approval) will be counted for purposes of determining whether a quorum exists at
the Annual Meeting.
The affirmative vote of the holders of a plurality of the shares of Common
Stock voting on the matter is required for the election of directors. The
affirmative vote of the holders of a majority of the shares of Common Stock
voting on the matter is required for the approval of each other matter set forth
in the accompanying Notice of Meeting. Shares which abstain from voting as to a
particular matter, and shares held in "street name" by brokers or nominees who
indicate on their proxies that they do not have discretionary authority to vote
such shares as to a particular matter, will not be voted in favor of such
matter, and will also not be counted as shares voting on such matter.
Accordingly, abstentions and "broker non-votes" will have no effect on the
voting on the matters being presented for stockholder action at the Annual
Meeting.
In addition to the vote required to approve the Company's 1995 Director
Stock Option Plan, in order for the plan to qualify under Rule 16b-3, which
provides an exemption from Section 16 of the Securities Exchange Act of 1934, as
amended, for certain employee benefit plans, the plan must be approved by the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented and
<PAGE> 4
entitled to vote at the Annual Meeting. For these purposes, an abstention will
be treated the same as a vote against the proposal.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information, as of January 15, 1995,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock, (ii) each director or nominee for director
of the Company, (iii) each executive officer of the Company named in the Summary
Compensation Table set forth under the caption "Executive Compensation" below
and (iv) all directors and executive officers of the Company as of January 15,
1995 as a group:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) OUTSTANDING(2)
- - ------------------------------------------------------- --------------------- ---------------
<S> <C> <C>
Idanta Partners Ltd.(3)................................ 2,963,226 15.80%
4660 La Jolla Village Drive
Suite 775
San Diego, CA 92122
Subsidiaries of Brinson Holdings, Inc.(4).............. 1,132,624 6.04%
209 South LaSalle
Chicago, Illinois 60604
Dimensional Fund Advisors Inc.(5)...................... 1,108,525 5.91%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Willem H.J. Andersen................................... 0 --
Robert P. Berkowitz(6)................................. 31,250 *
Anthony L. Craig(7).................................... 31,250 *
David J. Dunn(8)....................................... 3,080,763 16.40%
Kim B. Edwards(9)...................................... 143,750 *
Michael J. Kucha(10)................................... 264,181 1.40%
John R. Myers.......................................... 0 --
John E. Nolan, Jr.(11)................................. 6,250 *
The Honorable John E. Sheehan(12)...................... 50,000 *
Leon J. Staciokas(13).................................. 207,296 1.09%
Anton J. Radman, Jr.(14)............................... 266,567 1.41%
Srini Nageshwar(15).................................... 113,483 *
John G. Thompson(16)................................... 90,135 *
Farouk Al-Nasser(17)................................... 991 *
Phillip P. Krumb(18)................................... 205,325 1.09%
All directors and executive officers
as a group (14 persons)(19).......................... 4,304,621 21.92%
</TABLE>
- - ---------------
* Less than 1%
(1) The inclusion herein of any shares of Common Stock deemed beneficially
owned does not constitute an admission of beneficial ownership of those
shares. Unless otherwise indicated, each person listed above has sole
voting and investment power with respect to the shares listed. For purposes
of this table, each person is deemed to beneficially own any shares subject
to stock options held by such person which are
2
<PAGE> 5
currently exercisable or exercisable within 60 days after January 15, 1995
(and any references in these footnotes to shares subject to stock options
refers only to stock options to the extent so exercisable), and any shares
issuable to such person under the Company's 1991 Stock Purchase Plan within
60 days after January 15, 1995.
(2) Number of shares deemed outstanding includes 18,755,374 shares outstanding
as of January 15, 1995 plus any shares subject to options held by the
person in question and any shares issuable to the person in question under
the 1991 Stock Purchase Plan.
(3) David J. Dunn, a director of the Company, and Dev Purkayastha are the
general partners of Idanta Partners Ltd. and share voting and dispositive
power with respect to such shares.
(4) Brinson Holdings, Inc. ("BHI") together with its direct subsidiary Brinson
Partners, Inc. ("BPI"), a registered investment advisor, and its indirect
subsidiary Brinson Trust Company ("BTC"), a bank, have filed a Schedule 13G
reporting the beneficial ownership of Common Stock as of December 31, 1994
and the foregoing information is derived from such Schedule 13G. BPI is the
beneficial owner of 497,987 shares of Common Stock. BTC is the beneficial
owner of 634,637 shares of Common Stock.
(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, has filed a Schedule 13G reporting the beneficial ownership of
Common Stock as of December 31, 1994, and the foregoing information is
derived from such Schedule 13G. Dimensional is deemed to have beneficial
ownership of 1,108,525 shares, all of which are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in a series of DFA Investment Trust Company, a Delaware business trust,
or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, for all of which Dimensional
serves as investment manager. Dimensional disclaims beneficial ownership of
all such shares.
(6) Represents shares subject to a stock option held by Mr. Berkowitz.
(7) Represents shares subject to a stock option held by Mr. Craig.
(8) Includes 2,963,226 shares held by Idanta Partners Ltd., of which Mr. Dunn
is Managing General Partner, 86,287 shares held by a family trust, of which
Mr. Dunn is trustee, and 31,250 shares subject to a stock option held by
Mr. Dunn.
(9) Includes 100,000 shares subject to stock options held by Mr. Edwards.
(10) Includes 1,875 shares held by Mr. Kucha as co-trustee with his wife and 625
shares held as custodian for his children, as to all of which shares Mr.
Kucha disclaims beneficial ownership. Also includes 165,431 shares held as
co-trustee with his wife as to which shares Mr. Kucha has shared voting and
investment power and 96,250 shares subject to stock options held by Mr.
Kucha.
(11) Represents shares subject to a stock option held by Mr. Nolan.
(12) Includes 31,250 shares subject to a stock option held by Mr. Sheehan.
(13) Includes 187,500 shares subject to stock options held by Mr. Staciokas.
Also includes 8,000 shares held by Mr. Staciokas' wife and 5,375 shares
held by his son, as to all of which shares Mr. Staciokas disclaims
beneficial ownership.
(14) Includes 5,565 shares held by Mr. Radman's wife, as to which Mr. Radman
disclaims beneficial ownership. Also includes 45,825 shares held in trusts
as to which Mr. Radman shares voting power, 174,370 shares subject to stock
options held by Mr. Radman and 155 shares issuable under the 1991 Stock
Purchase Plan.
3
<PAGE> 6
(15) Includes 112,500 shares subject to stock options held by Mr. Nageshwar and
38 shares issuable under the 1991 Stock Purchase Plan.
(16) Includes 20,570 shares held jointly by Mr. Thompson and his wife, 60,875
shares subject to stock options held by Mr. Thompson and 127 shares
issuable under the 1991 Stock Purchase Plan.
(17) Mr. Al-Nasser ceased to serve as an executive officer of the Company
effective January 17, 1994. Share ownership is based on the last Form 4
filed by Mr. Al-Nasser and Company records.
(18) Mr. Krumb ceased to serve as an executive officer of the Company effective
October 7, 1994.
(19) Includes 2,963,226 shares of Common Stock held by Idanta Partners Ltd. Also
includes an aggregate of 881,747 shares subject to stock options and an
aggregate of 395 shares issuable under the 1991 Stock Purchase Plan.
Excludes shares and options held by Messrs. Krumb and Al-Nasser. See Notes
(17) and (18).
ELECTION OF DIRECTORS
The persons named in the enclosed proxy will vote to elect as directors the
nine nominees listed below, unless authority to vote for the election of any or
all of the nominees is withheld by marking the proxy to that effect. All of the
nominees are currently directors of the Company. Each director will be elected
to hold office until the next annual meeting of stockholders or until his
successor is duly elected and qualified. All of the nominees have indicated
their willingness to serve, if elected, but if any should be unable or unwilling
to serve, proxies may be voted for a substitute nominee designated by the Board
of Directors.
NOMINEES
Set forth below for each nominee are his name and age, his positions with
the Company, his principal occupation and business experience during the past
five years, and the year of the commencement of his term as a director of the
Company:
WILLEM H.J. ANDERSEN, age 54, has been a director of the Company since
1994. Mr. Andersen has been a consultant to National Semiconductor Corporation,
a semiconductor manufacturer, since its February 1995 acquisition of Comlinear
Corporation, also a semiconductor manufacturer. From June 1992 until February
1995, he was Chief Executive Officer and a director of Comlinear Corporation.
From November 1986 until June 1992, he was Chief Executive Officer of Laser
Magnetic Storage International Company, a designer and manufacturer of optical
and tape mass-storage equipment.
ROBERT P. BERKOWITZ, age 58, has been a director of the Company since 1983.
Mr. Berkowitz has been a private consultant since March 1992. From August 1991
until March 1992, he was President and Chief Executive Officer of CimTelligence
Corp., a developer of process planning software for the manufacturing industry.
Previously, he had been a private investor and a writer since August 1988.
ANTHONY L. CRAIG, age 49, has been a director of the Company since 1990.
Mr. Craig has been Vice President, Worldwide Sales Operations of Digital
Equipment Corporation, a computer manufacturer, since October 1993. He was
Senior Vice President, International of Oracle Systems Corporation, a computer
software company, from June 1992 until June 1993. From March 1992 until June
1992, he was a private investor. Previously, from June 1990 until February 1992,
he was President and Chief Executive Officer of C3, Inc., a manufacturer of
custom computing workstations. He is a director of Bell Industries, Inc.
DAVID J. DUNN, age 64, has been Chairman of the Board of Directors since
1980. Mr. Dunn has been Managing General Partner of Idanta Partners Ltd., a
venture capital firm, since 1971.
4
<PAGE> 7
KIM B. EDWARDS, age 47, has been President, Chief Executive Officer and a
director of the Company since January 1994. Mr. Edwards served as President and
Chief Executive Officer of Gates Energy Products, Inc., a manufacturer of
rechargeable batteries, from March 1993 until December 1993, and previously
served in various other executive positions after joining Gates Energy Products,
Inc. in January 1987.
MICHAEL J. KUCHA, age 53, has been a director of the Company since 1980.
Mr. Kucha has been President of Melvin C. Dill Co., Inc., a manufacturer of
industrial labels, since October 1990. He was a private investor from May 1989
until October 1990. He served as Chief Executive Officer of the Company from
January 1987 until May 1989.
JOHN R. MYERS, age 58, has been a director of the Company since 1994. Since
July 1994, Mr. Myers has been Chairman of Garrett Aviation Services, a provider
of modification and upgrade services for corporate jet aircraft. From December
1993 to July 1994, he was a private consultant. From June 1992 until October
1993, he was an executive officer of Thiokol Corporation, a manufacturer of
rocket motors and specialty fastener devices, initially serving as Chief
Operating Officer and later as Chief Executive Officer. From 1980 until 1992, he
was President of Textron Lycoming, a producer of piston and turbine engines.
JOHN E. NOLAN, JR., age 67, has been a director since 1993. Mr. Nolan has
been a Partner at the law firm of Steptoe & Johnson since 1963. He is a director
of Hooper Holmes, Inc.
THE HONORABLE JOHN E. SHEEHAN, age 65, has been a director of the Company
since 1990. Mr. Sheehan, an entrepreneur since 1976, is a director and the
principal stockholder of several of the privately owned enterprises which he
founded, including the Johnstown Corporation, a producer of specialty steel
products. He is a member of the Board of Trustees for the Harvard Business
School Alumni Association and Vice Chair of the Board of Trustees of the U.S.
Naval Academy Alumni Association. Mr. Sheehan is a former member, Board of
Governors of the Federal Reserve System.
5
<PAGE> 8
BOARD AND COMMITTEE MEETINGS
The Company has a standing Audit Committee of the Board of Directors, which
provides the opportunity for direct contact between the Company's independent
auditors and the Board. The Audit Committee met three times during 1994, to
review the effectiveness of the auditors during the annual audit, to discuss the
Company's internal accounting control policies and procedures and to consider
and recommend the selection of the Company's independent auditors. The current
Audit Committee members are Messrs. Berkowitz (Chairman), Kucha and Nolan.
The Company has a standing Compensation Committee of the Board of
Directors, which is responsible for determining the compensation package of each
executive officer and recommending it to the Board of Directors and for
administering the Company's employee stock option, stock purchase, cash bonus
and other employee benefit plans. The Compensation Committee also authorizes
stock option grants under the 1987 Stock Option Plan. The Compensation Committee
met six times and acted by written consent on fourteen occasions during 1994.
The current members of the Compensation Committee are Messrs. Sheehan
(Chairman), Andersen and Myers.
The Company has a standing Nominating Committee of the Board of Directors,
which provides recommendations to the Board regarding nominees for director. The
Nominating Committee will consider nominees recommended by stockholders.
Stockholders who wish to recommend nominees for director should submit such
recommendations to the Assistant Secretary of the Company, at the principal
offices of the Company, who will forward such recommendations to the Nominating
Committee for consideration. The Nominating Committee did not meet during 1994.
The current members of the Nominating Committee are Messrs. Dunn and Kucha.
The Company has a standing Executive Committee of the Board of Directors,
which reviews certain issues relating to the Company's business between meetings
of the full Board of Directors. The Executive Committee met five times during
1994. The current members of the Executive Committee are Messrs. Dunn
(Chairman), Craig, Edwards, Kucha and Myers.
The Board of Directors met six times and acted by written consent on two
occasions during 1994. Each director attended at least 75% of the aggregate of
the number of Board meetings and the number of meetings held by all committees
on which he then served.
6
<PAGE> 9
DIRECTORS' COMPENSATION
The Chairman of the Board receives an annual director's fee of $58,300.
Other directors who are not employees of the Company receive a director's fee of
$12,720 per year and $530 per meeting attended. In addition, directors who are
members of standing committees receive $5,088 per year and $530 per meeting
attended (unless a standing committee meeting and a one-day Board meeting are
held on the same day, in which case only one $530 payment for attendance is
made); the Chairman of the Audit Committee receives an annual fee of $8,000; and
the Chairman of the Compensation Committee receives an annual fee of $3,180.
Directors who are employees of the Company receive no director's fees. All
directors are reimbursed for certain Company-related out-of-pocket expenses.
In 1994, Fred Wenninger, a former executive officer and director of the
Company, received consulting fees from the Company in the aggregate amount of
approximately $58,000 for services performed by him related to the disposition
of certain discontinued product lines of the Company.
On January 26, 1995, the Board of Directors adopted the 1995 Director Stock
Option Plan (the "1995 Director Plan"). The 1995 Director Plan is intended to
replace the 1987 Director Option Plan (the "1987 Director Plan"), all of the
options under which have been granted. Under both plans, directors are granted
options to purchase shares of Common Stock of the Company upon their initial
election as directors. A total of eight directors received options to acquire
31,250 shares under the 1987 Director Plan, at per share exercise prices ranging
from $1.20 to $3.50. Under the 1995 Director Plan, if approved, an option to
purchase 25,000 shares of Common Stock would be granted to each newly elected
director upon his or her initial election at an exercise price equal to the
then-current fair market value of the Common Stock. No options have been granted
under the 1995 Director Plan. See "APPROVAL OF 1995 DIRECTOR STOCK OPTION PLAN."
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth certain information concerning the
compensation for each of the last three fiscal years of (i) the Company's Chief
Executive Officer during the fiscal year ended December 31, 1994, (ii) the
Company's four other most highly compensated executive officers during the
fiscal year ended December 31, 1994 who were serving as executive officers on
December 31, 1994, and (iii) two former executive officers of the Company who
would have been among the executive officers covered by clause
7
<PAGE> 10
(ii) above but for the fact that they were not serving as executive officers on
December 31, 1994 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------
ANNUAL COMPENSATION
----------------------------------- AWARDS
OTHER -----------------------
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND BONUS COMPENSATION STOCK UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY (1) (2) AWARDS(3) OPTIONS(4) (5)
- - ------------------------------- ----- --------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kim B. Edwards(6).............. 1994 $ 240,000 $160,000 $ 79,569(7) $ 0 312,500 $ 650
President, Chief Executive
Officer
Leon J. Staciokas.............. 1994 $ 219,001 $ 76,650 -- $ 0 0 $ 650
Senior Vice President, Chief 1993 $ 200,542 $ 30,000 -- $ 0 0 $ 650
Internal Operating Officer 1992 $ 194,020 $ 3,267 -- $ 0 0 $ 650
Anton J. Radman, Jr. .......... 1994 $ 168,852 $ 74,090 -- $ 0 0 $ 650
Senior Vice President, 1993 $ 155,605 $ 44,990 -- $ 0 0 $ 650
Sales & Marketing 1992 $ 146,421 $ 2,467 -- $1,617 0 $ 650
Srini Nageshwar................ 1994 $ 157,326 $ 60,561 -- $ 0 0 $ 52,191(8)
Senior Vice President, Europe 1993 $ 150,801 $ 0 -- $ 0 0 $ 51,090(8)
1992 $ 144,789 $ 2,519 $ 20,153(9) $1,501 0 $ 50,301(8)
John G. Thompson............... 1994 $ 143,933 $ 33,750 -- $ 0 0 $ 650
Vice President, Corporate 1993 $ 129,144 $ 0 -- $ 0 0 $ 650
Manufacturing 1992 $ 126,189 $ 1,171 -- $ 628 0 $ 650
Farouk Al-Nasser(10)........... 1994 $ 24,528 $250,168(11) -- $ 0 0 $ 76,430(12)
1993 $ 146,302 $749,832 -- $ 0 0 $ 650
Phillip P. Krumb(13)........... 1994 $ 158,037 $ 0 -- $ 0 0 $ 78,250(12)
1993 $ 150,482 $ 0 -- $ 0 0 $ 650
1992 $ 157,705 $ 2,661 -- $1,739 0 $ 650
<FN>
- - ---------------
(1) Represents, for 1992, amounts paid under the Company's Profit-Sharing Plan
or Executive/Key Contributor Bonus Program and includes profit-sharing
amounts the Named Executive Officer elected to forgo receiving in cash and
instead apply to the acquisition of Common Stock under the Company's 1991
Stock Purchase Plan. No payments were made for 1993 under the Company's
Profit-Sharing Plan or Executive/Key Contribution Bonus Program. The bonus
paid to Mr. Staciokas for 1993 was not part of a formal bonus plan. Amounts
paid to Mr. Radman in 1993 and Mr. Al-Nasser in 1993 and 1994 reflect
payments under the Company's incentive plan for establishing a family of
tape products. See "Employment and Severance Agreements." The bonus paid to
Mr. Radman in 1994 consists of $15,010 paid pursuant to the tape incentive
plan and $59,080 paid pursuant to the 1994 Iomega Incentive Plan. The bonus
to Mr. Edwards was awarded pursuant to his employment agreement. See
"Employment and Severance Agreements." All other bonus amounts for 1994
were paid pursuant to the 1994 Iomega Incentive Plan.
(2) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted in those instances where such perquisites and other
personal benefits constituted less than the lesser of $50,000 or ten
percent of the total of annual salary and bonus for the Named Executive
Officer for such year.
(3) Represents the dollar amount of the fair market value (determined on the
date of grant) of shares of Common Stock issuable to the Named Executive
Officers with respect to the year indicated as a "retention premium" under
the Company's 1991 Stock Purchase Plan. Such shares vest and are issued in
equal annual installments over a period of four years from the date of
grant. The following table sets forth for each of the Named Executive
Officers the number of retention premium shares deemed awarded in 1992
(which is equal to the maximum number of retention premium shares issuable
with
</TABLE>
8
<PAGE> 11
respect to such Named Executive Officer's participation in the 1991 Stock
Purchase Plan for 1992), the number of unvested retention premium shares as
of December 31, 1994 and the value of such shares based on the last
reported sale price of the Company's Common Stock on December 30, 1994
($3.25):
<TABLE>
<CAPTION>
TOTAL UNVESTED
RETENTION
MAXIMUM NUMBER OF PREMIUM SHARES AS OF
RETENTION PREMIUM 12/31/94
SHARES ISSUABLE -----------------------
FOR 1992 NUMBER VALUE
----------------- ------ ------
<S> <C> <C> <C>
Mr. Edwards.......................... 0 0 $ 0
Mr. Staciokas........................ 0 105 $ 341
Mr. Radman........................... 347 522 $1,696
Mr. Nageshwar........................ 323 269 $ 874
Mr. Thompson......................... 128 356 $1,157
Mr. Al-Nasser........................ 0 0 $ 0
Mr. Krumb............................ 0 0 $ 0
<FN>
The number of retention premium shares vesting for Messrs. Staciokas,
Radman, Nageshwar and Thompson in 1995, 1996 and 1997, respectively, are as
follows: Mr. Staciokas (105, 0 and 0); Mr. Radman (281, 198 and 43); Mr.
Nageshwar (151, 80 and 38); and Mr. Thompson (197, 127 and 32). Since the
retention premium shares are not issued until the date they vest, no
dividends are payable with respect to such shares while they are not
vested.
(4) Reflects the number of shares covered by options to purchase Common Stock
granted during 1994. The Company has never granted any stock appreciation
rights ("SARs").
(5) Except as otherwise indicated, represents the Company's matching
contribution under the Iomega Retirement and Investment Savings Plan (the
"IRIS Plan").
(6) Mr. Edwards joined the Company as President and Chief Executive Officer on
January 1, 1994.
(7) Consists of relocation expenses.
(8) Consists of amounts related to overseas assignment and, for 1994 and 1993,
$650 representing the Company's annual matching contribution under the IRIS
Plan.
(9) Consists of relocation expenses of $14,803 and use of a company car valued
at $5,350.
(10) Mr. Al-Nasser, who was initially elected as an executive officer of the
Company in January 1993, served as President, Iotape, an operating division
of the Company, until January 17, 1994.
(11) Represents payments under the Company's incentive plan for establishing a
family of tape products, which was created in 1990. See "Employment and
Severance Agreements."
(12) Represents severance payments.
(13) Mr. Krumb served as Senior Vice President, Chief Financial Officer and
Treasurer of the Company until October 7, 1994.
</TABLE>
9
<PAGE> 12
Option Grants, Exercises and Year-End Values
The following table sets forth certain information regarding options
granted to the Named Executive Officers during the fiscal year ended December
31, 1994:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------- VALUE
PERCENT OF AT ASSUMED ANNUAL
TOTAL RATES
NUMBER OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM(2)
OPTIONS IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME GRANTED YEAR PER SHARE(1) DATE 5% 10%
- - -------------------- ----------- ----------- ------------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Kim B. Edwards...... 243,750(3) 33.17% $ 2.048 01-01-2004 $313,944 $795,596
6,250(3) 0.85% $ 2.048 01-31-2004 $ 8,136 $ 20,676
62,500(4) 8.50% $ 3.40 11-26-2004 $135,082 $343,263
Leon J. Staciokas... 0 -- -- -- -- --
Anton J. Radman,
Jr................ 0 -- -- -- -- --
Srini Nageshwar..... 0 -- -- -- -- --
John G. Thompson.... 0 -- -- -- -- --
Farouk Al-Nasser.... 0 -- -- -- -- --
Phillip P. Krumb.... 0 -- -- -- -- --
<FN>
- - ---------------
(1) The exercise price is equal to the fair market value of the Company's Common
Stock on the date of grant.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% and 10% compounded
annually from the date the respective options were granted to their
expiration date. Actual gains, if any, on stock option exercises will depend
on the future performance of the Common Stock and the date on which the
options are exercised.
(3) Options vest 20% per year beginning with the date of grant.
(4) Option vests 25% per year beginning with the first anniversary the date of
grant.
</TABLE>
None of the Named Executive Officers exercised any stock options during the
fiscal year ended December 31, 1994. The following table sets forth the number
and value of unexercised options held by each of the Named Executive Officers on
December 31, 1994:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ----------------------------------------- ------------------------- -------------------------
<S> <C> <C>
Kim B. Edwards........................... 50,000/262,500 $ 60,100/$240,400
Leon J. Staciokas........................ 187,500/ 12,500 $265,500/$ 0
Anton J. Radman, Jr. .................... 174,370/ 4,375 $183,212/$ 0
Srini Nageshwar.......................... 93,750/ 31,250 $ 0/$ 0
John G. Thompson......................... 60,875/ 3,125 $ 84,101/$ 0
Farouk Al-Nasser......................... 0/ 0 $ 0/$ 0
Phillip P. Krumb......................... 165,625/ 9,375 $275,275/$ 0
<FN>
- - ---------------
(1) Based on the fair market value of the Common Stock on December 30, 1994
($3.25), less the option exercise price.
</TABLE>
10
<PAGE> 13
EMPLOYMENT AND SEVERANCE AGREEMENTS
In connection with his employment as the Company's President and Chief
Executive Officer ("CEO") beginning January 1, 1994, the Company entered into an
employment agreement with Mr. Edwards. Under this agreement, Mr. Edwards'
initial annual base salary was set at $240,000, with the opportunity for a cash
bonus of up to $160,000 contingent on the Company's performance. For 1994, Mr.
Edwards was guaranteed a minimum bonus of $80,000. The agreement also provided
for payment by the Company of relocation-related expenses and the grant of stock
options covering 250,000 shares of the Company's Common Stock. The agreement
provides for severance pay of up to 12 months of Mr. Edwards' base salary if he
is discharged by the Company other than for cause.
The Company's incentive plan for establishing a family of tape products was
created in 1990 when the Company began development of its tape products. In
connection with the initial employment in 1990 of Mr. Al-Nasser, the Company
agreed to pay Mr. Al-Nasser and the other members of the tape development team a
lump sum bonus of approximately $2 million upon the achievement of certain sales
milestones. Of this amount, Mr. Al-Nasser was entitled to receive $1 million,
and the rest was to be divided among other team members. During 1990, Messrs.
Wenninger and Al-Nasser determined the amount of the maximum bonuses payable to
the other team members, including one of the Named Executive Officers, Mr.
Radman, whose maximum bonus was set at $60,000. In April 1993, the terms of this
incentive plan were modified to provide for periodic payments based on
achievement of a percentage of the cumulative sales milestones originally set in
1990, rather than a lump sum payment after attainment of such sales milestone.
The overall size of the bonus pool was unchanged by the April 1993
modifications. As of April 1994, all amounts payable under the incentive plan
had been paid and, accordingly, the incentive plan has terminated.
Mr. Nageshwar's employment agreement with the Company, which was entered
into at the time Mr. Nageshwar became Vice President of European Operations,
provides that if the Company terminates Mr. Nageshwar for any reason other than
cause within the span of his assignment in Europe, he will be entitled to
receive a severance payment equal to six months of his base salary in addition
to the reimbursement of certain relocation expenses.
CERTAIN BUSINESS RELATIONSHIPS
During the year ended December 31, 1994, the Company made payments
totalling approximately $16,000 to Beehawk Aviation, Inc. ("Beehawk") for hangar
fees and aircraft rental fees pursuant to an agreement entered into by the
Company in 1993. Mr. Wenninger is the sole stockholder of Beehawk Aviation, Inc.
The Company believes that the terms of its business relationships with Beehawk
were no less favorable to the Company than could have been obtained from an
unrelated party. The agreement with Beehawk is no longer in effect.
Mr. Nageshwar's spouse is employed by Iomega as a Human Resource Manager.
During 1994, she received salary and other compensation from the Company
totalling approximately $69,000.
In September 1993, the Company made an interest-bearing loan in the amount
of approximately $679,000 to Mr. Wenninger. The loan bears interest at 4.5% per
annum and is payable in two equal installments on January 1, 1995 and January 1,
1996. At January 15, 1995, approximately $340,000 of the loan remained
outstanding.
In January 1995, the Company made an interest-bearing loan to Mr. Krumb in
the principal amount of approximately $283,000. The loan bears interest at 7.75%
per annum, and is payable on January 6, 1996. As of January 15, 1995, the entire
principal amount remained outstanding.
11
<PAGE> 14
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee, which throughout 1994 was comprised of non-employee
directors. From January 1994 to April 1994, the members of the Compensation
Committee were Messrs. Sheehan and Milton Rosenberg, whose term as a director
expired in April 1994. Since April 19, 1994, the members of the Compensation
Committee have been Messrs. Sheehan (Chairman), Andersen and Myers. The
Compensation Committee is responsible for approving the compensation package of
each executive officer and recommending it to the Board of Directors. In making
decisions regarding executive compensation, the Compensation Committee considers
the input of the Company's other directors, including the input of Mr. Dunn,
Chairman of the Board of Directors, who generally attends meetings of the
Compensation Committee, and, with respect to the compensation of the Company's
other executive officers, Mr. Edwards, the Company's Chief Executive Officer and
President.
The Company's executive compensation program consists of a mixture of base
salary, fringe benefits, cash bonuses and stock options. In determining the
total amount and mixture of the compensation package for each executive officer,
the Compensation Committee and the Board subjectively consider the overall value
to the Company of each executive in light of numerous factors such as
competitive position, individual performance, including the expected
contribution to the Company's goals of each executive officer, and the Company's
long-term needs and goals, including attracting and retaining key management
personnel.
The Company determines base salary for all its employees by reference to
grade level rankings based on job content. This system was implemented in 1988
with the assistance of an outside consulting group and is updated annually using
a broad-based salary survey provided by the same consultant. Since the companies
in this salary survey represent a broader cross section of U.S. industrial
companies than are included in the CRSP Index for Nasdaq Computer Manufacturers
Stocks included in the Stock Performance Graph, in setting salaries for 1994 the
Compensation Committee also considered a salary survey, prepared by a second
outside consulting group, of technology companies, many of which are included in
the CRSP Index for Nasdaq Computer Manufacturers Stocks. For executive officers,
the Company targets base salaries to the median of the high technology companies
included in these salary surveys. In 1994, the base salaries for the Named
Executive Officers were approximately equal to or less than the median for
comparable positions (where comparable positions existed) of the companies in
these salary surveys. During 1994, other than in the case of Mr. Edwards, who
joined the Company in January 1994, and Mr. Thompson, whose base salary was
increased in June 1994, the base salaries of the Company's Named Executive
Officers remained unchanged from their designated levels at the end of 1993. The
increases in base salary reflected in the Summary Compensation Table for Messrs.
Staciokas, Radman and Nageshwar for 1994 compared to 1993 reflect the fact that
in 1994 the Company did not reduce each executive officer's base salary by 5% as
it had in 1993, at which time such amount was withheld on the condition that it
would only be paid if the Company met its financial goals for 1993, and also
reflect the full year effect of salary increases made during 1993.
All of the Company's executive officers (other than Mr. Edwards) were
eligible to receive cash bonuses under the Iomega Incentive Plan, which was
adopted in July 1994 to replace all previous cash incentive programs for top
level management. The purpose of the plan was to provide financial incentives
for accomplishing Company goals relating to new product development, cost
reductions for current products, and revenue and profit growth deemed critical
to the Company's restructuring plans. Under the plan, each eligible participant
was assigned a bonus target, which represented a specified percentage of the
participant's base salary as of July 1, 1994, and was assigned to one or more
program goals, each of which had associated with it various payoff percentages
tied to the Company's level of success in achieving the goal. Each of the
Company's executive officers was made part of the "Corporate Sales & Profit"
team, whose goals related to second half pretax profits and sales. In addition,
Mr. Nageshwar was made part of the "Europe" team, whose
12
<PAGE> 15
goals related to second half net operating profit and operating margin of the
Company's European operations, and Mr. Thompson was made part of the "Product
Cost Reduction" team, whose goals related to percentage reduction in product
costs and cumulative dollar savings in product costs during the second half of
1994. Participation for Messrs. Nageshwar and Thompson was weighted 50% for each
of the two teams of which they were a part. The bonus target percentage, which
was based on grade level ranking, was 35% for Messrs. Radman, Staciokas and
Nageshwar and 30% for Mr. Thompson. Payouts under the plan for the Named
Executive Officers, which could range from 0% to 196% of target bonus, were
objectively determined in January 1995 based on the level of achievement of the
specified goals.
As described under the caption "Employment and Severance Agreements", all
of the bonus paid in 1994 to Mr. Al-Nasser and a portion of the bonus paid in
1994 to Mr. Radman were made pursuant to the Company's incentive plan for
establishing a family of tape products, which was originally adopted by the
Company in 1990. Such payments were not made as the result of any decision or
policy of the Committee.
In connection with his employment as the Company's new President and Chief
Executive Officer, the Company entered into an employment agreement with Mr.
Edwards, which provided for an initial base salary of $240,000, a bonus of up to
$160,000, of which $80,000 was guaranteed for 1994, and a grant of options to
acquire 250,000 shares of the Company's Common Stock at an exercise price equal
to the fair market value of the Common Stock on the date of grant. See
"Employment and Severance Agreements." The agreement was the result of
negotiations between Mr. Edwards and Mr. Dunn, and was unanimously approved by
the Company's Board of Directors. The Compensation Committee believes that Mr.
Edwards' employment agreement fairly and reasonably compensates him in relation
to his responsibilities and the Company's compensation practices. In October
1994, the Compensation Committee granted Mr. Edwards an option to acquire an
additional 62,500 shares of common stock at an exercise price equal to the fair
market value of the common stock on the date of grant. In January 1995, the
Compensation Committee awarded Mr. Edwards the maximum bonus he was entitled to
under his employment agreement ($160,000), based on his excellent performance
during 1994. The amount of the bonus and the additional option grant were both
subjectively determined by the Compensation Committee.
In 1994, the Compensation Committee continued its policy, which was adopted
in November 1992, of not granting any stock options except for recruiting key
personnel and in other special circumstances. This decision was made because the
Committee believed granting additional options would have a dilutive effect on
the Company's stockholders which was not in the Company's best interest.
Consistent with this determination, the Company did not grant any new stock
options to the Named Executive Officers during 1994, other than to Mr. Edwards,
who joined the Company in January 1994.
The Company does not believe Section 162(m) of the Internal Revenue Code,
which disallows a tax deduction for certain compensation in excess of $1
million, will generally have an effect on the Company. The Compensation
Committee intends to review the potential affect of Section 162(m) periodically
and in the future may decide to structure the performance-based portion of its
executive officer compensation to comply with Section 162(m).
The Honorable John E. Sheehan
Willem H.J. Andersen
John R. Myers
13
<PAGE> 16
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total return of (i) the CRSP Total Return Index for The Nasdaq Stock Market
(U.S. Companies) (the "CRSP Nasdaq Index") and (ii) the CRSP Index for Nasdaq
Computer Manufacturers Stocks (the "CRSP Computer Index"). This graph assumes
the investment of $100 on December 29, 1989 in the Company's Common Stock, the
CRSP Nasdaq Index and the CRSP Computer Index and assumes dividends are
reinvested. Measurement points are at the last trading day of the fiscal years
ended December 31, 1990, 1991, 1992, 1993 and 1994.
<TABLE>
<CAPTION>
Measurement Period Iomega Cor- CRSP Nasdaq CRSP Com-
(Fiscal Year Covered) poration Index puter Index
<S> <C> <C> <C>
12/29/89 $100.0 $100.0 $100.0
12/31/90 175.5 84.9 106.5
12/31/91 277.6 136.3 149.1
12/31/92 240.8 158.6 200.4
12/31/93 83.7 180.9 189.9
12/30/94 132.7 176.9 208.6
</TABLE>
14
<PAGE> 17
APPROVAL OF 1995 DIRECTOR STOCK OPTION PLAN
On January 26, 1995, the Board of Directors adopted, subject to stockholder
approval, the Company's 1995 Director Stock Option Plan (the "1995 Director
Plan"). The purpose of the 1995 Director Plan is to encourage ownership of stock
of the Company by outside directors whose continued services are essential to
the Company's future progress, and to provide them with an incentive to continue
as directors of the Company. The 1995 Director Plan is intended to replace the
Company's 1987 Director Option Plan, all of the options under which have been
granted.
The Board of Directors believes that the 1995 Director Plan will help the
Company to attract and retain qualified outside directors and will provide
further incentive to directors as a result of their equity interest in the
Company. ACCORDINGLY, THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE
APPROVAL OF THE 1995 DIRECTOR PLAN IS IN THE BEST INTERESTS OF THE COMPANY AND
ITS STOCKHOLDERS, AND RECOMMENDS THAT THE STOCKHOLDERS APPROVE THE 1995 DIRECTOR
PLAN.
SUMMARY OF THE 1995 DIRECTOR PLAN
A total of up to 200,000 shares of Common Stock may be issued upon the
exercise of options granted under the 1995 Director Plan. Any shares subject to
options granted pursuant to the 1995 Director Plan which terminate or expire
unexercised will be available for future grants under the 1995 Director Plan.
Only directors of the Company who are not employees of the Company or any
subsidiary corporation will be eligible to receive options under the 1995
Director Plan. All options granted under the 1995 Director Plan will be
nonstatutory stock options, not entitled to the tax treatment provided for under
Section 422 of the Internal Revenue Code.
If the 1995 Director Plan is approved by the Company's stockholders, each
outside director who is initially elected to the Board of Directors will be
granted, on the date of such election, an option to purchase 25,000 shares of
Common Stock at an exercise price equal to the fair market value of the Common
Stock on the date of grant. On February 28, 1995, the fair market value of the
Common Stock, based on the last reported sales price of the Common Stock on the
Nasdaq National Market on such date, was $6.375 per share. The Company currently
has eight outside directors (which number may change in the future).
Because non-employee directors receive grants under the 1995 Director Plan
only upon initial election to the Board of Directors, no current director will
receive options under the 1995 Director Plan.
Each option will become exercisable (or "vest") on a cumulative basis in
five equal annual installments of 5,000 shares beginning on the first
anniversary of the date of grant, provided the optionee continues to serve as a
director on such dates. In the event of a merger, reorganization or sale of the
Company's assets, the options may be terminated following notice to the holder,
or may be assumed by a surviving entity, if any. Unexercised options expire ten
years after the date of grant. Options will not be transferable or assignable
other than, upon the death of the optionee, to a representative specified by the
optionee in writing to the Company within the term of the option; provided that,
in the event Rule 16b-3 is amended at any time to permit options intended to
qualify under Rule 16b-3 to be transferable to a greater extent than was
permitted on the date the 1995 Director Plan was adopted by the Company's Board
of Directors, then the Board of Directors is authorized, without any further
stockholder approval, to amend the 1995 Director Plan and/or any options then
outstanding thereunder to permit options granted under the 1995 Director Plan to
be transferable to the full extent permitted by Rule 16b-3, as so amended.
The Board of Directors may suspend or discontinue the 1995 Director Plan or
amend it in any respect whatsoever; provided, however, that without approval of
the stockholders of the Company, no amendment may (i) change the number of
shares subject to the 1995 Director Plan, (ii) change the designation of
15
<PAGE> 18
directors eligible to receive options under the 1995 Director Plan or (iii)
materially increase the benefits accruing to participants in the 1995 Director
Plan. Also, the Board may not amend the provisions regarding the directors
eligible to receive options, the number of shares subject to the options, or the
pricing or timing of options more than once in six months, except to comport
with changes in the Internal Revenue Code, the Employee Retirement Income
Security Act, or the rules thereunder.
FEDERAL INCOME TAX CONSEQUENCES
No taxable income is recognized by the optionee upon the grant of an option
granted under the 1995 Director Plan. Generally, the optionee must recognize as
ordinary income in the year in which the option is exercised the amount by which
the fair market value of the purchased shares on the date of exercise exceeds
the option price. The Company will be entitled to a business expense deduction
equal to the amount of ordinary income recognized by the optionee. Any
additional gain or any loss recognized upon the subsequent disposition of the
purchased shares will be a capital gain or loss, and will be a long-term gain or
loss if the shares are held for more than one year.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, at the recommendation of the Audit Committee, has
selected the firm of Arthur Andersen LLP as the Company's independent auditors
for the current fiscal year. Arthur Andersen LLP has served as the Company's
independent auditors since the Company's inception. Although stockholder
approval of the Board of Directors' selection of Arthur Andersen LLP is not
required by law, the Board of Directors believes that it is advisable to give
stockholders an opportunity to ratify this selection. If this proposal is not
approved at the Annual Meeting, the Board of Directors will reconsider its
selection of Arthur Andersen LLP.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will also be available to respond to appropriate questions from
stockholders.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly presented
to the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote, or otherwise act, in accordance with their judgment
on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews, and the Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. The Company has retained
Morrow & Company, Inc. to assist in the solicitation of proxies for this year's
Annual Meeting of Stockholders, at a cost to the Company of approximately $5,000
plus reimbursement of reasonable expenses. Brokers, custodians and fiduciaries
will be requested to forward proxy soliciting material to the owners of stock
held in their names, and, as required by law, the Company will reimburse them
for their out-of-pocket expenses in this regard.
16
<PAGE> 19
Proposals of stockholders intended to be presented at the 1996 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Roy, Utah not later than November 8, 1995 for inclusion in the proxy
statement for that meeting.
By Order of the Board of Directors,
DONALD R. STERLING, Secretary
March 7, 1995
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO ATTEND
THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR
PROXIES.
17
<PAGE> 20
IOMEGA CORPORATION
1995 DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1995 Director Stock Option Plan (the
"Plan") of Iomega Corporation (the "Company") is to encourage
ownership in the Company by outside directors of the Company whose
continued services are considered essential to the Company's
continued progress and thus to provide them with a further
incentive to continue as directors of the Company.
2. ADMINISTRATION
(a) The Board of Directors, or a Committee (the "Committee")
consisting of two or more directors of the Company, shall
supervise and administer the Plan. Grants of stock options under
the Plan and the amount and nature of the awards to be granted
shall be automatic in accordance with Section 5. However, all
questions of interpretation of the Plan or of any options issued
under it shall be determined by the Board of Directors or the
Committee and such determination shall be final and binding upon
all persons having an interest in the Plan.
(b) The Plan is intended to comply with all applicable
conditions of Rule 16b-3 or its successors under Section 16 of the
Securities Exchange Act of 1934, as amended ("Rule 16b-3"). To
the extent any provision of the Plan or action by the Board of
Directors fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Board of
Directors.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not employees of the Company
or any subsidiary of the Company shall be eligible to participate
in the Plan.
4. STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares which may be issued under
the Plan shall be two hundred thousand (200,000) shares of the
Company's Common Stock, subject to adjustment as provided in
Section 9 of the Plan.
<PAGE> 21
(b) If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full,
the shares allocable to the unexercised portion of such option
shall again become available for grant pursuant to the Plan.
(c) All options granted under the Plan shall be nonstatutory
options not entitled to special tax treatment under Section 422 of
the Internal Revenue Code of 1986, as amended to date and as it
may be amended from time to time (the "Code").
(d) Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares.
5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a
written agreement in such form as the Board of Directors or
Committee shall from time to time approve, which agreements shall
comply with and be subject to the following terms and conditions:
(a) OPTION GRANTS. Each person who first becomes a member
of the Board of Directors of the Company from and after the
adoption of the Plan by the Board of Directors of the Company
shall be granted, on the date that he is first elected to serve as
such a director, an option to purchase 25,000 shares of Common
Stock under the Plan.
(b) OPTION EXERCISE PRICE. The option exercise price for
each option granted under the Plan shall equal the last reported
sales price of the Company's Common Stock on the Nasdaq National
Market on the date of grant of such option.
(c) OPTIONS NON-TRANSFERABLE. Subject to Section 10(b),
each option granted under the Plan by its terms shall not be
transferable by the optionee otherwise than by will, or by the
laws of descent and distribution, and shall be exercised during
the lifetime of the optionee only by the optionee. Subject to
Section 10(b), no option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during the
optionee's lifetime, whether by operation of law or otherwise, or
be made subject to execution, attachment or similar process.
(d) PERIOD OF OPTIONS. No option shall be exercisable after
the expiration of ten (10) years from the date upon which such
option is granted. Each option shall be subject to termination
before its date of expiration as hereinafter provided.
-2-
<PAGE> 22
(e) EXERCISE OF OPTIONS. Options shall become exercisable in five
equal annual installments, commencing one year from the date of grant, provided
the holder of such option continues to serve as a director of the Company.
Options may be exercised only by written notice to the Company at its principal
office accompanied by (i) payment in cash or by certified or bank check of the
full consideration for the shares as to which they are exercised, (ii) delivery
of outstanding shares of the Company's Common Stock (which, in the case of
shares acquired from the Company, have been outstanding for at least six
months) having a fair market value on the last business day preceding the date
of exercises equal to the option exercise price, or (iii) an irrevocable
undertaking, in a form satisfactory to the Company, by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price or delivery
of irrevocable instructions, in a form satisfactory to the Company, by the
optionholder to a broker to deliver promptly to the Company cash or a check
sufficient to pay the exercises price.
(f) EXERCISE BY REPRESENTATIVE FOLLOWING DEATH OF DIRECTOR. A
director, by written notice to the Company, may designate one or more persons
(and from time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to
exercise all or a portion of the option. If the person or persons so
designated wish to exercise any portion of the option, they must do do within
the term of the option as provided herein. Any exercise by a representative
shall be subject to the provisions of the Plan.
6. ASSIGNMENTS
The rights and benefits under the Plan may not be assigned except for
the designation of a beneficiary as provided in Section 5.
7. TIME FOR GRANTING OPTIONS
All options for shares subject to the Plan shall be granted, if at all,
not later than ten (10) years after the approval of the Plan by the Company's
stockholders.
8. LIMITATION OF RIGHTS
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a
-3-
<PAGE> 23
director for any period of time, or at any particular rate of
compensation.
(b) NO STOCKHOLDERS' RIGHTS FOR OPTIONS. An optionee shall
have no rights as a stockholder with respect to the shares covered
by such optionee's options until the date of the issuance to such
optionee of a stock certificate therefor, and no adjustment will
be made for dividends or other rights for which the record date is
prior to the date such certificate is issued.
(c) COMPLIANCE WITH SECURITIES LAWS. Each option shall be
subject to the requirement that if, at any time, counsel to the
Company shall determine that the listing, registration or
qualification of the shares subject to such option upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, or the
disclosure of non-public information or the satisfaction of any
other condition is necessary as a condition to, or in connection
with, the issuance or purchase of shares thereunder, such option
may not be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval, or satisfaction
or such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors.
9. CHANGES IN COMMON STOCK
(a) If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or
other securities of the Company, or if additional shares or new or
different shares or other securities of the Company or other non-
cash assets are distributed with respect to such shares of Common
Stock or other securities, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of
the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other
distribution or transaction with respect to such shares of Common
Stock, or other securities, an appropriate and proportionate
adjustment may be made in (i) the maximum number and kind of
shares reserved for issuance under the Plan, (ii) the number and
kind of shares or other securities subject to then outstanding
options under the Plan and (iii) the price for each shares subject
to any then outstanding options under the Plan, without changing
the aggregate purchase price as to which such options remain
exercisable. No fractional shares will be issued under the Plan
on account of any such adjustments.
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<PAGE> 24
(b) In the event that the Company is merged or consolidated into or
with another corporation (in which consolidation or merger the stockholders of
the Company receive distributions of cash or securities of another issuer as a
result thereof), or in the event that all or substantially all of the assets of
the Company are acquired by any other person or entity, or in the event of a
reorganization or liquidation of the Company, the Board of Directors of the
Company, or the board of directors of any corporation assuming the obligations
of the Company, shall, as to outstanding options, either (i) provide that such
options shall be assumed, or equivalent options shall be substituted, by the
acquiring or successor corporation (or an affiliate thereof), or (ii) upon
written notice to the optionees, provide that all unexercised options will
terminate immediately prior to the consummation of such merger, consolidation,
acquisition, reorganization or liquidation unless exercised by the optionee
within a specified number of days following the date of such notice.
10. AMENDMENT OF THE PLAN
(a) The Baord of Directors or Committee may suspend or discontinue the
Plan or revise or amend it in any respect whatsoever; provided, however, that
without approval of the stockholders of the Company no revision or amendment
shall change the number of shares subject to the Plan (except as provided in
Section 9), change the designation of the class of directors eligible to
receive options, or materially increase the benefits accruing to participants
under the Plan and further provided that the provisions of the Plan regarding
the directors eligible to receive options or which state the amount and price
of securities to be awarded under the Plan, specify the timing of awards under
the Plan or set forth a formula that determines the amount, price and timing
may not be amended more than once in any six-month period, except to comport
with changes in the Code, the Employee Retirement Income Security Act, or the
rules thereunder.
(b) In the event Rule 16b-3 shall at any time be amended to permit
options intended to qualify under Rule 16b-3 to be transferable to a greater
extent than is permitted on the date of adoption of the Plan by the Board of
Directors, then the Board of Directors or the Committee shall be authorized,
without any requirement for further stockholder approval, to amend the Plan
and/or any options then outstanding under the Plan to permit options granted
under the Plan to be transferable to the full extent permitted by Rule 16b-3,
as so amended.
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<PAGE> 25
11. NOTICE
Any written notice to the Company required by any of the provisions of
the Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.
12. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware.
Adopted by the Board of Directors
on January 26, 1995.
Approved by the stockholders
on ______________________, 1995.
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<PAGE> 26
PROXY IOMEGA CORPORATION PROXY
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 25, 1995
The undersigned, revoking all prior proxies, hereby appoint(s) Kim B.
Edwards and Donald R. Sterling, and each of them, with full power of
substitution, as proxies to represent and vote, as designated herein, all shares
of Common Stock of Iomega Corporation (the "Company") which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of the Company to be held at the principal office of the Company,
1821 West Iomega Way, Building 1, Roy, Utah 84067 on Tuesday, April 25, 1995 at
1:00 p.m., local time, and at any adjournment thereof.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder(s). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. Attendance of the undersigned at the meeting or
any adjournment thereof will not be deemed to revoke this proxy unless the
undersigned shall revoke this proxy in writing or affirmatively indicate his
intent to vote in person.
1. To elect the following nine directors (except as marked below):
Willem H.J. Andersen, Robert P. Berkowitz, Anthony L. Craig, David J.
Dunn, Kim B. Edwards, Michael J. Kucha, John R. Myers, John E. Nolan,
Jr., The Honorable John E. Sheehan
/ / FOR ALL NOMINEES / / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
/ / FOR ALL NOMINEES EXCEPT THE FOLLOWING (TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME BELOW):
2. To approve the Company's 1995 Director Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for the current year.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 27
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF THE COMPANY.
Please sign exactly as name
appears hereon. When shares held
by joint owners, both should
sign. When signing as attorney,
executor, administrator, trustee
or guardian, please give title
as such. If a corporation or a
partnership, please sign by
authorized person.
Signature:
Date:
Signature:
Date:
