SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Innovex, Inc.
(Name of Registrant as Specified in Its Charter)
Innovex, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $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 transactions applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] 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:
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JANUARY 23, 1996
Notice is hereby given that the Annual Meeting of Shareholders of Innovex, Inc.
will be held at the Lutheran Brotherhood Building, Minneapolis, Minnesota on
Tuesday, January 23, 1996 at 3:30 p.m., Central Standard Time, for the following
purposes:
1. To elect seven directors to hold office until the next Annual Meeting of
Shareholders or until their successors are elected.
2. To ratify and approve an amendment to the Company's 1994 Stock Plan to
increase the total number of shares of Common Stock available for issuance
under such Plan by 300,000 shares to 600,000.
3. To approve the selection of the Company's independent auditors for the
current fiscal year.
4. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on December 15, 1995 as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting.
By Order of the Board of Directors,
R.J. FitzGerald, Secretary
Hopkins, Minnesota
December 19, 1995
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON.
SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON
IF THEY SO DESIRE. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY.
INNOVEX, INC.
PROXY STATEMENT
This Proxy Statement is furnished to the shareholders of Innovex, Inc. (the
"Company") in connection with the solicitation of proxies by the Board of
Directors of the Company to be voted at the Annual Meeting of Shareholders to be
held on January 23, 1996. The cost of this solicitation will be borne by the
Company. In addition to the solicitation by mail, officers, directors and
employees of the Company may solicit proxies by telephone, telegraph or in
person. The Company may also request banks and brokers to solicit their
customers who have a beneficial interest in the Company's Common Stock
registered in the names of nominees and will reimburse such banks and brokers
for their reasonable out-of-pocket expenses.
Any proxy may be revoked at any time before it is voted by written notice to the
Secretary, by receipt of a proxy properly signed and dated subsequent to an
earlier proxy, or by revocation of a written proxy by request in person at the
Annual Meeting. If not so revoked, the shares represented by such proxy will be
voted.
The Company has outstanding only one class of stock, $.04 par value Common
Stock, of which 7,074,127 shares were issued and outstanding and entitled to
vote at the close of business of December 15, 1995. Each share of Common Stock
is entitled to one vote. Only shareholders of record at the close of business on
December 15, 1995 will be entitled to vote at the meeting. The presence in
person or by proxy of the holders of a majority of the shares of stock entitled
to vote at the Annual Meeting of Shareholders constitutes a quorum for the
transaction of business.
Under Minnesota law, each item of business properly presented at a meeting of
shareholders generally must be approved by the affirmative vote of the holders
of a majority of the voting power of the shares present, in person or by proxy,
and entitled to vote on that item of business. However, if the shares present
and entitled to vote on that item of business would not constitute a quorum for
the transaction of business at the meeting, then the item must be approved by a
majority of the voting power of the minimum number of shares that would
constitute a quorum. Votes cast by proxy or in person at the Annual Meeting of
Shareholders will determine whether or not a quorum is present. Abstentions will
be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the approval of the matter submitted to the shareholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
The Company's corporate offices are located at 1313 Fifth Street, Hopkins,
Minnesota 55343, and its telephone number is (612) 938-4155. The mailing of this
Proxy Statement to shareholders of the Company commenced on or about December
19, 1995.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table includes information as of December 15, 1995 concerning the
beneficial ownership of Common Stock of the Company by (i) all persons who are
known to the Company to beneficially hold more than five percent of the Common
Stock of the Company, (ii) each of the directors of the Company, (iii) each
current executive officer named in the Summary Compensation Table on page 5, and
(iv) all directors and officers of the Company as a group. Unless otherwise
indicated, all shares represent sole voting and investment power.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
Thomas W. Haley(1)(2) 801,850(3) 11.3%
2421 Crowne Hill Road
Minnetonka, MN 55305
Michael C. Slagle(1) 13,003(4) *
Bernt M. Tessem(1) 11,910 *
Gerald M. Bestler(1) 9,727(4)(5) *
Willis K. Drake(1) 9,000 *
Mary E. Curtin(1) 6,075(6)(7) *
William J. Miller(1) -- *
Allan Chan(2) 2,700(4) *
Dale R. Johnson(2) 17,700(4) *
Douglas W. Keller(2) 3,500(4) *
All Directors and Officers 890,465(4) 12.5%
as a Group (12 persons)
*Less than 1%
(1) Serves as a director of the Company and has been nominated for election.
(2) Serves as an executive officer of the Company and appears in the Summary
Compensation Table on page 5 hereof.
(3) Excludes 6,075 shares beneficially owned by Ms. Curtin, Mr. Haley's spouse.
(4) Includes the following number of shares which may be purchased pursuant to
the exercise of stock options within sixty days from the date hereof: Mr.
Slagle, 3,283 shares; Mr. Bestler, 1,736 shares; Mr. Chan, 2,400 shares;
Mr. Johnson, 13,200 shares; Mr. Keller, 3,500 shares; and all directors and
officers as a group, 31,139 shares.
(5) Includes 5,551 shares owned by Mr. Bestler's spouse.
(6) Excludes 801,850 shares beneficially owned by Mr. Haley, Ms. Curtin's
spouse.
(7) Includes 3,000 shares indirectly owned through a self-directed pension
plan.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company has a Board of Directors consisting of seven persons elected
annually to serve until the next annual meeting of stockholders or until their
successors are elected. The Board of Directors has nominated for election the
seven persons named below. Proxies cannot be voted for a greater number of
persons than the number of nominees named below. All of the nominees are
currently members of the Board of Directors and were elected by the shareholders
except for Mary E. Curtin and William J. Miller who were appointed by the Board
of Directors on December 7, 1995 to fill two vacant positions. It is intended
that proxies solicited will be voted for such nominees. The Board of Directors
believes that each nominee named below will be able to serve, but should any
nominee be unable to serve as a director, the persons named in the proxies have
advised that they will vote for the election of such substitute nominee as the
Board of Directors may propose.
The names, ages and principal occupations of the nominees are set forth below,
based upon information furnished to the Company by the nominees.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE OTHER DIRECTORSHIPS SINCE
<S> <C> <C>
Thomas W. Haley* (59) Chairman and Chief Executive Officer of the Company. 1972
Michael C. Slagle (60) Owner of Minnesota Benefit Planners, an insurance brokerage and 1972
consulting firm.
Bernt M. Tessem (65) Sales Consultant for Contractor Instruments, a manufacturer of 1976
building controls since October 1992. Sales consultant for Stride
Control Systems, Inc., computer and process control systems, from
June 1988 to October 1992.
Gerald M. Bestler (66) Retired; formerly Executive Vice President of BMC Industries 1988
Inc., an optical and electronic components manufacturer, and
President of the Precision Etched Products Group of BMC
Industries Inc. Mr. Bestler is also a Director of ANCOR
Communications.
Willis K. Drake (72) Retired; formerly President and Chief Executive Officer of Data Card 1988
Corporation, a manufacturing company. Mr. Drake is also a director of
Analysts International, Inc., Digi International, Inc. and Telident,
Inc.
Mary E. Curtin* (48) Ms. Curtin has practiced law for 23 years as an attorney with the 1995
United States Department of Justice, the Board of Governors of the
Federal Reserve System, as a partner at Lindquist & Vennum, and for
the last eight years as a partner at Curtin and Barnes in
Minneapolis. Effective January 2, 1996, she has accepted the
position of Vice President and General Counsel to the Company.
William J. Miller (50) Chairman and Chief Executive Officer of Quantum Corporation from 1995
August 1993 until October 1995. From March 1992 until
August 1993, Mr. Miller served as Chief Executive Officer of
Quantum Corporation. Prior to 1992, Mr. Miller served in various
executive capacities for Control Data Corporation and its
Imprimis Technology, Inc. subsidiary including Executive Vice
President, Control Data and President, Information Services
Group; Executive Vice President and Chief Financial Officer; and
President and Chief Executive Officer, Imprimis.
</TABLE>
*Mr. Haley and Ms. Curtin are spouses.
OTHER INFORMATION REGARDING THE BOARD
Meetings. The Board of Directors met four times during fiscal year 1995. Each
director attended more than 75% of the meetings of the Board of Directors and
any committee on which he served.
Board Committees. The Company has an Audit Committee, a Compensation Committee
and a Stock Option Committee, all established by the Board of Directors and each
of which consists of members of the Board of Directors. The Audit Committee,
which during the last fiscal year consisted of Messrs. Slagle, Tessem and Drake,
met one time during fiscal year 1995. The Audit Committee recommends the
selection of independent accountants and reviews the activities and reports of
the independent accountants, as well as the internal controls of the Company.
The Compensation Committee, which during the past fiscal year consisted of
Messrs. Bestler, Drake and Slagle, met one time during fiscal year 1995. The
Compensation Committee assists management in making recommendations to the Board
with respect to officers' and key employees' salaries and bonuses. The Stock
Option Committee, which during the past fiscal year consisted of Messrs. Haley,
Bestler and Tessem, met one time during fiscal year 1995. The Stock Option
Committee is responsible for awarding stock options to the Company's key
personnel. It also administers the Company's stock option plans. The Company
does not have a nominating committee.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ending September 30, 1995, 1994
and 1993, the cash compensation paid by the Company, as well as certain other
compensation paid or accrued for those years, to Thomas W. Haley, the Company's
Chief Executive Officer, and each of the other individuals who served as
executive officers of the Company during the fiscal year ending September 30,
1995 (together with Mr. Haley, the "Named Executives"), whose total cash
compensation exceeded $100,000 during fiscal year 1995 in all capacities in
which they served:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
<S> <C> <C> <C> <C> <C>
Thomas W. Haley 1995 $178,500 $150,000 -- $ 4,518
Chairman and Chief 1994 166,425 80,000 -- 4,429
Executive Officer 1993 166,254 85,000 -- 5,449
Dale R. Johnson 1995 124,000 150,000 -- 3,720
Executive Vice President, 1994 115,857 120,000 10,500 4,487
and Chief Operating Officer 1993 115,669 110,000 -- 4,762
Allan J. Chan 1995 89,966 62,500 15,000 2,699
Vice President and 1994 82,136 50,000 7,500 3,964
General Manager/ 1993 78,288 35,000 12,000 3,399
Precision Products Div.
Douglas W. Keller 1995 64,453 40,000 5,000 3,134
Corporate Controller 1994 61,390 25,000 6,000 2,592
1993 57,846 15,000 4,500 2,185
Steven C. Waldron(2) 1995 145,753 -- -- 25,826(3)
1994 155,210 60,000 15,000 --
1993 151,684 40,000 -- --
</TABLE>
(1) These amounts represent Company matching contributions to the Company's
401(k) plan on behalf of such employees.
(2) Mr. Waldron resigned as President on April 26, 1995.
(3) Mr. Waldron's other compensation includes an automobile and certain
computer equipment.
STOCK OPTIONS
The following table contains information concerning the grant of stock options
under the Company's stock option plans to the Named Executive Officers during
fiscal year 1995:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE
SECURITIES GRANTED APPRECIATION FOR OPTION
UNDERLYING TO EMPLOYEES EXERCISE PRICE EXPIRATION TERM
NAME OPTIONS GRANTED IN FISCAL YEAR PER SHARE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Haley -- -- -- -- -- --
Dale R. Johnson -- -- -- -- -- --
Allan J. Chan 15,000 8.0% $17.4375 8-15-05 $164,438 $416,888
Douglas W. Keller 5,000 2.7 17.4375 8-15-05 54,800 138,950
Steven C. Waldron -- -- -- -- -- --
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named Executives
concerning the exercise of options during fiscal year 1995 and the unexercised
options held as of September 30, 1995:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FY-END AT FISCAL YEAR-END(1)
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Haley -- -- -- -- -- --
Dale R. Johnson 81,000 $1,122,375 13,200 6,300 $237,199 $ 94,236
Allan J. Chan 10,200 81,999 -- 24,300 -- 217,274
Douglas W. Keller 3,700 43,354 2,600 10,400 39,374 107,311
Steven C. Waldron 66,000 897,750 -- -- -- --
</TABLE>
(1) Based on a per share price of $21.875, which was the closing sale price for
the Company's Common Stock on September 29, 1995, the last trading day of
the Company's fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Haley, the Chairman and Chief Executive Officer of the Company, served on
the Board of Directors' Stock Option Committee during fiscal year 1995. Mr.
Haley was not granted any stock options during fiscal year 1995.
JOINT REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
The Compensation Committee of the Board of Directors consists of Messrs.
Bestler, Drake and Slagle, each of which is an independent outside Director. The
Compensation Committee meets as required and is responsible for setting the
salaries and levels of incentive awards for the officers and key personnel of
the Company. The Stock Option Committee of the Board of Directors consists of
Mr. Haley, the Chairman and Chief Executive Officer of the Company, and Messrs.
Bestler and Tessem, each of which is an outside Director. Mr. Haley serves on
the Stock Option Committee as a disinterested party as he has not been granted
any Company stock options in the past year and will not be granted any options
while he serves on this Committee. The Stock Option Committee meets as required
and is responsible for awarding stock options based compensation to the
Company's key personnel.
Compensation Philosophy. The Compensation and Stock Option Committees' governing
philosophy for determining compensation levels is designed to attract and retain
the highest quality personnel possible consistent with the Company's resources
and capabilities. Executive compensation is broken into the following
components:
1. Base Salaries. Base salaries for executive management and officers of
the Company are intended to be competitive with companies of similar market
capitalization and revenue levels. The base salaries are also intended to
recognize individual achievements and assist the Company in attracting and
retaining qualified executives.
2. Bonus Program. Cash bonuses are awarded annually as appropriate.
The bonus awards are based on both Company and divisional performance with
consideration given to the individual's contribution to the Company's
performance.
3. Stock Options. Stock options encourage and reward effective management
that results in long-term corporate financial success, as measured by stock
price appreciation. Stock options only have value for the executive officers
if the price of the Company's stock appreciates in value from the date the
options are granted. The Company has three stock option plans currently in
effect: the 1983 Employee Incentive Stock Option Plan, the 1987 Employee
Stock Option Plan and the 1994 Stock Option Plan.
Chief Executive Officer Compensation. The salary and bonus of the Chief
Executive Officer is set by and subject to the discretion of the Compensation
Committee with Board of Director approval. The compensation for Thomas W. Haley,
the Chief Executive Officer, was determined by using a process and philosophy
similar to that used for all executives. Mr. Haley has not been and will not be
granted any stock options while he serves as a member of the Stock Option
Committee.
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEES OF THE COMPANY'S BOARD
OF DIRECTORS:
Compensation Committee: Stock Option Committee:
Gerald M. Bestler, Chairman Thomas W. Haley, Chairman
Willis K. Drake Gerald M. Bestler
Michael C. Slagle Bernt M. Tessem
The preceding report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 (the "1933 Act") or the Securities
Exchange Act of 1934 (the "1934 Act"), except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under the 1933 Act or the 1934 Act.
STOCK PERFORMANCE
The graph below sets forth a comparison of the cumulative shareholder return of
the Company's Common Stock over the last five fiscal years with the cumulative
total return over the same periods for the NASDAQ Stock Market (U.S. and Foreign
Companies) Index and the NASDAQ Non-Financial Index. The graph compares the
cumulative total return of the Company's Common Stock as of the end of each of
the Company's last five fiscal years on $100 invested as of September 30, 1990,
assuming the reinvestment of all dividends and after giving effect to a 3 for 2
stock split on May 31, 1995:
[GRAPH]
<TABLE>
<CAPTION>
FISCAL YEAR ENDING SEPTEMBER 30
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Innovex, Inc. $100.00 $ 89.29 $100.00 $283.28 $304.10 $985.19
NASDAQ Non-Financial 100.00 156.66 165.70 215.76 214.66 294.44
NASDAQ Stock Market 100.00 155.78 173.89 229.10 230.54 311.99
</TABLE>
DIRECTOR COMPENSATION
Directors who are not employees of the Company (currently all directors except
Mr. Haley) are paid a retainer fee of $7,000. Directors may elect to receive, in
lieu of retainer fees, stock options pursuant to the 1987 Stock Option Plan.
During fiscal year 1995, Messrs. Bestler and Slagle received options to purchase
686 shares of Company Common Stock in lieu of retainer fees. No retainer fee
will be paid to Ms. Curtin for her service as a director. Curtin and Barnes, of
which Ms. Curtin is a partner, was paid for legal services rendered to the
Company during fiscal year 1995. It is not anticipated that Curtin and Barnes
will continue to perform legal services for the Company after January 2, 1995,
the time at which Ms. Curtin will join the Company as Vice President and General
Counsel. No compensation for serving as Secretary was paid to Mr. FitzGerald.
Lindquist & Vennum P.L.L.P., of which Mr. FitzGerald is a partner, was paid for
legal services rendered to the Company during fiscal year 1995. It is
anticipated that Lindquist & Vennum P.L.L.P. will continue to perform legal
services for the Company.
In order to receive stock options in lieu of retainer fees, the director must,
six months prior to the date that such director is elected or re-elected to the
Board of Directors, file with the Secretary of the Company an irrevocable
election to receive a stock option in lieu of retainer fees to be paid in the
following year. Options are granted automatically on the date each such director
is elected or re-elected to the Board of Directors. The number of options
granted to eligible directors is determined by a formula which provides that
each director will receive an option equal to the nearest number of whole
shares equivalent to the director's Annual Retainer divided by the difference
between the market value of the stock and $1.00. "Annual Retainer" is defined as
the amount which the director will be entitled to receive for serving as a
director during the year, but does not include fees associated with service on
any committee of the Board of Directors nor with any other services to be
provided to the Company. For example, if the fair market value of the Company's
stock on the date of grant is $15.00, each participating director will receive
an option to purchase 500 shares, which equals the amount of the Annual Retainer
($7,000) divided by $14.00 (the difference between $15.00 and $1.00). The per
share option price is $1.00. Each option granted to a non-employee director will
be exercisable in full from its date of grant and will not expire upon
termination of service as a director. No option can be exercised after the
expiration of fifteen years from the date the option was granted.
CERTAIN TRANSACTIONS
The Company purchases life, disability, and dental insurance for its employees
through Minnesota Benefit Planners, an insurance brokerage and consulting firm
owned by Michael C. Slagle, a director of the Company. The Company provides
medical benefits on a self-insurance basis for its employees and procures
administrative services and excess individual and aggregate stop loss insurance
for this program through Minnesota Benefit Planners. The Company paid
approximately $357,000 in gross insurance premiums and administrative fees in
fiscal year 1995 for such coverage. Mr. Slagle earned approximately $40,000 in
commissions during fiscal year 1995 on these services.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. The
insiders are required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file, including
Forms 3, 4, and 5.
To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended September 30, 1995, all Section 16(a)
filing requirements applicable to its insiders were complied with.
AMENDMENT OF THE 1994 STOCK OPTION PLAN
(PROPOSAL 2)
GENERAL INFORMATION
On April 21, 1994, the Company's Board of Directors adopted the Innovex, Inc.
1994 Stock Option Plan (the "1994 Plan") and such action was approved by the
shareholders on March 7, 1995. The purpose of the 1994 Plan is to provide a
continuing, long-term incentive to selected eligible officers, key employees and
consultants of the Company and of any subsidiary corporation of the Company and
to provide a means of rewarding outstanding performance and to enable the
Company to maintain a competitive position and to attract and retain key
personnel necessary for continued growth and profitability.
PROPOSED PLAN AMENDMENT
The 1994 Plan authorized issuance of 200,000 shares of Common Stock (adjusted to
300,000 after the 3 for 2 stock split on May 31, 1995) pursuant to options
granted under the 1994 Plan. On November 30, 1995, the Board of Directors
amended the Plan, subject to ratification and approval of the shareholders, to
increase the total number of shares available under the 1994 Plan by 300,000
shares to a total of 600,000. There were outstanding on December 15, 1995
options to purchase 254,500 shares under the 1994 Plan and 42,000 shares have
been exercised. Therefore, without shareholder approval of this amendment to the
1994 Plan, only 3,500 shares remain available under the 1994 Plan for awards. As
of December 15, 1995, the 1987 Plan had 128,102 shares available for awards. The
Board of Directors has deemed it prudent to increase the shares available for
grant under the 1994 Plan by 300,000 to facilitate future option grants.
Shares Available Under 1994 Plan. The maximum number of shares of common stock
reserved and available for stock options under the 1994 Plan, as amended by the
Board of Directors, is 600,000 (subject to possible adjustment in the event of
stock splits or other similar changes in the common stock). Shares of common
stock covered by expired or terminated stock options may be used for subsequent
grants under the 1994 Plan.
Eligibility and Administration. Officers and other key employees of the Company
and its subsidiaries who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company and its subsidiaries,
as well as consultants, are eligible to be granted options under the 1994 Plan.
The number of options granted and the terms and conditions of such options need
not be uniform among participants, even as to options granted at the same time,
whether or not the participants are similarly situated. The 1994 Plan shall be
administered by the Board or, in its discretion, by a committee, as defined in
the 1994 Plan, who shall be appointed by the Board of Directors. The term
"Committee" as used in this proposal refers to the Board or, if the Board has
delegated its authority, the Stock Option Committee. The Committee will have the
power to make grants, determine the number of shares covered by each grant and
other terms and conditions of such grants, interpret the 1994 Plan, and adopt
rules, regulations and procedures with respect to the administration of the 1994
Plan. The Committee's recommendations regarding option grants and the terms and
conditions of those grants shall be conclusive.
Grants Under 1994 Plan. The Committee may grant stock options that either
qualify as "incentive stock options" under Section 422 of the Internal Revenue
Code of 1986, as amended ("Code"), or as "non-qualified stock options" in such
form and upon such terms as the Committee may approve from time to time. Stock
options granted under the 1994 Plan may be exercised during their respective
terms as determined by the Committee. The purchase price may be paid by
tendering cash or, in the Committee's discretion, by tendering promissory notes
or common stock or any other form of legal consideration deemed sufficient by
the Committee and consistent with the 1994 Plan's purpose and applicable law. No
shares of stock shall be issued until full payment therefor has been made. Upon
notification of the amount due and prior to, or concurrently with, the delivery
to the optionee of a certificate representing any shares purchased pursuant to
the exercise of an option, the optionee shall promptly pay to the Company any
amount necessary to satisfy applicable federal, state or local withholding tax
requirements. If the terms of the option so permit, the optionee may elect to
pay all or part of the option exercise price by having the Company withhold upon
exercise of the option a number of shares with a fair market value equal to the
aggregate option exercise price for the shares with respect to which such
election is made. No stock option shall be transferable or assignable by the
optionee or exercised by anyone else during the optionee's lifetime.
Stock options may be exercised during varying periods of time after a
participant's termination of employment, dependent upon the reason for
termination. Following a participant's death, the participant's stock options
may be exercised by the legal representative of the estate or the optionee's
legatee for a period of six months or until the expiration of the stated term of
the option, whichever is less, without installment exercise restrictions. The
same time periods apply if the participant is terminated by reason of permanent
disability. If the participant's employment is terminated for any other reason,
the participant's stock options may be exercised, to the extent they were
exercisable at the time of termination, for a period of one month from the date
of termination or until the expiration of the stated term of the option,
whichever is less; provided, if the participant's employment is terminated as a
result of the participant's deliberate, willful or gross misconduct, the
participant's stock options immediately terminate.
No incentive stock options shall be granted under the 1994 Plan after April 21,
2004. The term of an incentive stock option may not exceed 10 years (or 5 years
if issued to a participant who owns or is deemed to own more than 10% of the
combined voting power of all classes of stock of the Company, any subsidiary or
affiliate) and non-qualified options shall not have a term exceeding ten years.
Non-qualified options granted to consultants shall not have a term exceeding
five years. The aggregate fair market value of common stock with respect to
which an incentive stock option is exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000. The exercise price under an
incentive stock option may not be less than the fair market value of the common
stock on the date the option is granted (or, in the event the participant owns
more than 10% of the combined voting power of all classes of stock of the
Company, the option price shall be not less than 110% of the fair market value
of the stock on the date the option is granted). The exercise price for
non-qualified options granted under the 1994 Plan may be less than 100% of the
fair market value of the common stock on the date of grant.
FEDERAL INCOME TAX CONSEQUENCES
An optionee will not realize taxable compensation income upon the grant of an
incentive stock option. In addition, an optionee generally will not realize
taxable compensation income upon the exercise of an incentive stock option if he
or she exercises it as an employee or within three months after termination of
employment (or within one year after termination if the termination results from
a permanent and total disability). The amount by which the fair market value of
the shares purchased exceeds the aggregate option price at the time of exercise
will be alternative minimum taxable income for purposes of applying the
alternative minimum tax. If stock acquired pursuant to an incentive stock option
is not disposed of prior to the date two years from the option grant date or
prior to one year from the option exercise date (the "Applicable Holding
Periods"), any gain or loss realized upon the sale of such shares will be
characterized as capital gain or loss. If the Applicable Holding Periods are not
satisfied, then any gain realized in connection with the disposition of such
stock will generally be taxable as ordinary compensation income in the year in
which the disposition occurred, to the extent of the difference between the fair
market value of such stock on the date of exercise and the option exercise
price. The Company is entitled to a tax deduction to the extent, and at the
time, the participant realizes compensation income. The balance of any gain will
be characterized as a capital gain. Under current law, net capital gains are
taxed at a maximum federal rate of 28% while compensation income may be taxed at
higher federal rates.
An optionee will not realize taxable compensation income upon the grant of a
non-qualified stock option. As a general matter, when an optionee exercises a
non-qualified stock option, he or she will realize taxable compensation income
at the time equal to the difference between the aggregate option price and the
fair market value of the stock on the date of exercise. The Company is entitled
to a tax deduction to the extent, and at the time, the participant realizes
compensation income.
REGISTRATION WITH THE SEC
Upon the approval of the amendment to the 1994 Plan by the shareholders, the
Company intends to file a registration statement covering the offering of the
additional 300,000 shares of common stock issuable under the 1994 Plan with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended.
VOTE REQUIRED
Shareholder approval of the amendment to the 1994 Plan requires the affirmative
vote of the holders of a majority of the shares of common stock represented at
the meeting and entitled to vote on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO THE
1994 STOCK OPTION PLAN.
APPROVAL OF INDEPENDENT AUDITORS
(PROPOSAL 3)
SHAREHOLDER VOTE
Grant Thornton LLP has been reappointed by the Board of Directors as the
Company's auditors for the current year. Although shareholder approval is not
required, it is the policy of the Board of Directors to request shareholder
ratification of the appointment or reappointment of auditors.
A representative of Grant Thornton LLP will be present at the Annual Meeting of
Shareholders, will have an opportunity to make a statement and will be available
to respond to appropriate questions. The Board of Directors recommends that the
shareholders vote "for" the proposal to approve the reappointment of Grant
Thornton LLP, and the endorsed proxy will be so voted unless a contrary vote is
indicated. In the event the reappointment of Grant Thornton LLP should not be
approved by the shareholders, the Board of Directors will make another
appointment to be effective at the earliest possible time.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" REAPPOINTMENT OF GRANT THORNTON
LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
SHAREHOLDER PROPOSALS
The rules of the Securities and Exchange Commission permit shareholders of a
company, after notice to the company, to present proposals for shareholder
action in the company's proxy statement where such proposals are consistent with
applicable law, pertain to matters appropriate for shareholder action and are
not properly omitted by company action in accordance with the proxy rules. The
Innovex, Inc. 1997 Annual Meeting of Shareholders is expected to be held on or
about January 22, 1997 and proxy materials in connection with that meeting are
expected to be mailed on or about December 18, 1996. Shareholder proposals
prepared in accordance with the proxy rules must be received by the Company on
or before August 16, 1996.
GENERAL
The Board of Directors of the Company knows of no matters other than the
foregoing to be brought before the meeting. However, the enclosed proxy gives
discretionary authority in the event that any additional matters should be
presented. The Annual Report of the Company for the past fiscal year is enclosed
herewith and contains the Company's financial statements for the fiscal year
ended September 30, 1995. A copy of Form 10-K, the annual report filed by the
Company with the Securities and Exchange Commission, will be furnished without
charge to any shareholder who requests it in writing from the Company at the
address noted on the first page of this Proxy Statement.
By Order of the Board of Directors,
R.J. FitzGerald, Secretary
INNOVEX, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 23, 1996
The undersigned hereby appoints Thomas W. Haley and Michael C. Slagle, or either
of them, as proxies with full power of substitution to vote all shares of stock
of Innovex, Inc. of record in the name of the undersigned at the closeof
business on December 15, 1995, at the Annual Meeting of Shareholders to be held
in Minneapolis, Minnesota on January 23, 1996, or at any adjournment or
adjournments thereof, hereby revoking all former proxies.
1. ELECTION OF DIRECTORS.
[ ] FOR all nominees listed below (except as indicated to the contrary).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
GERALD M. BESTLER, MARY E. CURTIN, WILLIS K. DRAKE, THOMAS W. HALEY,
WILLIAM J. MILLER, MICHAEL C. SLAGLE, AND BERNT M. TESSEM
2. PROPOSAL TO RATIFY AND APPROVE AN AMENDMENT TO THE COMPANY'S 1994 STOCK
PLAN TO INCREASE THE TOTAL NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR
ISSUANCE UNDER THE PLAN FROM 300,000 TO 600,000 SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Must be signed on other side)
(Continued from other side)
3. PROPOSAL TO RATIFY APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER
MATTERS COMING BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED ON PROPOSALS (1), (2) AND (3)
IN ACCORDANCE WITH THE SPECIFICATIONS MADE AND "FOR" SUCH PROPOSALS IF THERE IS
NO SPECIFICATION.
Dated: __________________ , 19__
________________________________
(Signature)
________________________________
(Signature)
Please sign name(s) exactly as
shown at left. When signing as
executor, administrator, trustee
or guardian, give full title as
such; when shares have been
issued in names of two or more
persons, all should sign.
