<PAGE> 1
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
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
ISOMEDIX INC.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Registrant as Specified In Its Charter)
Isomedix 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 transaction 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.
<PAGE> 2
ISOMEDIX INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1995
Whippany, New Jersey
March 31, 1995
To the Holders of Common Stock
of ISOMEDIX INC.:
The Annual Meeting of the Stockholders of ISOMEDIX INC. will be
held at The Parsippany Hilton, 1 Hilton Court, Parsippany, New Jersey, on
Tuesday, May 16, 1995 at 10:00 A.M. local time for the following purposes, as
more fully described in the accompanying Proxy Statement:
1. To elect two Class C directors of the Company for the
ensuing three years.
2. To consider and take action upon a proposal to ratify
the Board of Directors' selection of Coopers & Lybrand L.L.P. to serve as the
Company's independent accountants for the Company's fiscal year ending December
31, 1995.
3. To transact such other business as may properly come
before the Meeting or any adjournment or adjournments thereof.
The close of business on March 24, 1995 has been fixed by the
Board of Directors as the record date for the determination of the stockholders
entitled to notice of, and to vote at, the Meeting. A list of the stockholders
entitled to vote at the Meeting may be examined at the Company's executive
offices located at 11 Apollo Drive, Whippany, New Jersey, during the ten- day
period preceding the Meeting.
By Order of the Board of Directors,
Thomas J. DeAngelo, Secretary
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF
YOU DO NOT EXPECT TO BE PRESENT, PLEASE MARK, SIGN AND DATE THE ENCLOSED FORM
OF PROXY AND MAIL IT IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES, SO THAT YOUR VOTE CAN BE RECORDED.
<PAGE> 3
ISOMEDIX INC.
PROXY STATEMENT
This Proxy Statement, which will be mailed commencing on or
about March 31, 1995 to the persons entitled to receive the accompanying Notice
of Annual Meeting of Stockholders, is provided in connection with the
solicitation of Proxies on behalf of the Board of Directors of Isomedix Inc.
for use at the Annual Meeting of Stockholders to be held on May 16, 1995, and
at any adjournment or adjournments thereof, for the purposes set forth in such
Notice. The Company's executive offices are located at 11 Apollo Drive,
Whippany, New Jersey 07981.
At the close of business on March 24, 1995, the record date
stated in the accompanying Notice, the Company had issued and outstanding
6,995,968 shares of common stock, $.01 par value ("Common Stock"), each of
which is entitled to one vote with respect to each matter to be voted on at the
Meeting. The Company has no class or series of stock outstanding other than
the Common Stock.
A majority of the issued and outstanding shares of Common Stock
present in person or by proxy will constitute a quorum for the transaction of
business at the Meeting. Abstentions and broker non-votes (as hereinafter
defined) will be counted as present for the purpose of determining the presence
of a quorum.
Directors are elected by plurality vote. Adoption of proposal 2
will require the affirmative vote of a majority of the shares of Common Stock
present and voting thereon at the meeting. Shares held by stockholders who
abstain from voting will be treated as "present" and "entitled to vote" on the
matter and, thus, an abstention has the same legal effect as a vote against the
matter. However, in the case of a broker non-vote or where a stockholder
withholds authority from his proxy to vote the proxy as to a particular matter,
such shares will not be treated as "present" and "entitled to vote" on the
matter and, thus, a broker non-vote or the withholding of a proxy's authority
will have no effect on the outcome of the vote on the matter. A "broker
non-vote" refers to shares of Common Stock represented at the Meeting in person
or by proxy by a broker or nominee where such broker or nominee (i) has not
received voting instructions on a particular matter from the beneficial owners
or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on such matter.
<PAGE> 4
-2-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The stockholders (including any "group," as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the knowledge
of the Board of Directors of the Company, owned beneficially more than five
percent of any class of the outstanding voting securities of the Company as of
February 28, 1995, and their respective shareholdings as of such date
(according to information furnished by them to the Company), are set forth in
the following table. Except as indicated in the footnotes to the table, all of
such shares are owned with sole voting and investment power.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT
NAME AND ADDRESS OWNED BENEFICIALLY OF CLASS
---------------- ---------------------- --------
<S> <C> <C>
The Bass Management Trust
Lee M. Bass
Sid R. Bass Management Trust . . . . . . . . . . . 383,500 (1) 5.5%
201 Main Street
Fort Worth, Texas 76102
Delaware Management Company, Inc.
Delaware Group Delcap Fund, Inc. . . . . . . . . . 696,400 (2) 9.9%
2005 Market Street
Philadelphia, Pennsylvania 19103
The Kaufmann Fund, Inc. . . . . . . . . . . . . . . 680,000 (3) 9.7%
140 East 45th Street
New York, New York 10017
Wellington Management Company . . . . . . . . . . . 704,860 (4) 10.0%
75 State Street
Boston, Massachusetts 02109
</TABLE>
(1) This information is based upon a Report on Schedule 13D filed by these
stockholders with the Securities and Exchange Commission. Such
Schedule 13D indicates that each of the Bass Management Trust, ("BMT")
and the Sid R. Bass Management Trust ("SRBMT") has sole voting power
and sole dispositive power with respect to 127,800 shares and that Lee
M. Bass has sole voting power and sole dispositive power with respect
to 127,900 shares. Such Schedule 13D also indicates that Perry R.
Bass, as Trustee and Trustor of BMT, and Nancy L. Bass, as Trustor of
BMT, may be deemed to beneficially own the shares owned by BMT and
that Sid R. Bass, as Trustee of SRBMT, may be deemed to beneficially
own the shares owned by SRBMT.
(2) This information is based upon a Report on Schedule 13G filed by these
stockholders with the Securities and Exchange Commission. Such
Schedule 13G indicates that Delaware Management Company, Inc. has sole
voting power with respect to 89,600 shares and sole dispositive power
with respect to 696,400 shares and that Delaware Group Delcap Fund,
Inc. has sole voting power with respect to 563,300 shares.
(3) This information is based upon a Report on Schedule 13G filed by The
Kaufmann Fund, Inc. with the Securities and Exchange Commission. Such
Schedule 13G indicates that such entity has sole voting power and sole
dispositive power with respect to 680,000 shares.
<PAGE> 5
-3-
(4) This information is based upon a Report on Schedule 13G filed by
Wellington Management Company with the Securities and Exchange
Commission. Such Schedule 13G indicates that such entity has shared
voting power with respect to 372,360 shares and shared dispositive
power with respect to 704,860 shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 28, 1995, the
number of shares of Common Stock of the Company beneficially owned by each of
the Company's directors and nominees for directors, each executive officer
named in the Summary Compensation Table, and all directors and executive
officers as a group, based upon information obtained from such persons.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENT
NAME OWNED BENEFICIALLY OF CLASS
---- ----------------------- --------
<S> <C> <C>
John Masefield . . . . . . . . . . . . . . . 322,000 (1) 4.4%
George R. Dietz . . . . . . . . . . . . . . . 141,000 (2) 2.0%
David M. Lank . . . . . . . . . . . . . . . . 105,200 (3) 1.5%
H. Stuart Campbell . . . . . . . . . . . . . 29,133 (4) (8)
Thomas M. Haythe . . . . . . . . . . . . . . 20,000 (5) (8)
Elmer A. Sticco . . . . . . . . . . . . . . . 10,000 (6) (8)
Thomas J. DeAngelo . . . . . . . . . . . . . 43,200 (7) (8)
All Directors and Executive Officers as a 670,533 (1)(2)(3) 8.9%
Group (seven persons) . . . . . . . . . . . . (4)(5)(6)
(7)
</TABLE>
(1) Includes 12,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Masefield, the Chairman of the Board of
Directors, President, Chief Executive Officer and a Class C director
of the Company, and 242,900 shares issuable upon exercise of currently
exercisable stock options held by Mr. Masefield. Also includes 60,000
shares with respect to which Mr. Masefield holds irrevocable proxies.
(2) Includes 87,500 shares issuable upon exercise of currently exercisable
warrants held by Mr. Dietz, Senior Vice President and a Class A
director of the Company, and 38,500 shares issuable upon exercise of
currently exercisable stock options.
<PAGE> 6
-4-
(3) Includes 30,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Lank, a Class C director of the Company, and
15,000 shares issuable upon exercise of currently exercisable stock
options. Includes 60,000 shares owned by Nanticoke Limited, of which
Mr. Lank is the President. Mr. Masefield has been granted an
irrevocable proxy with respect to the 60,000 shares owned by Nanticoke
Limited.
(4) Includes 14,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Campbell, a Class B director of the Company, and
15,000 shares issuable upon exercise of currently exercisable stock
options.
(5) Includes 20,000 shares issuable upon exercise of currently exercisable
stock options held by Mr. Haythe, a Class A director of the Company.
(6) Includes 10,000 shares issuable upon exercise of currently exercisable
stock options held by Mr. Sticco, a Class B director of the Company.
(7) Includes 43,200 shares issuable upon exercise of currently exercisable
stock options held by Mr. DeAngelo, Vice President- Finance and
Administration, Secretary, Treasurer and a Class A director of the
Company.
(8) Less than one percent.
To the Company's knowledge, there have been no significant
changes in stock ownership or control of the Company since February 28, 1995.
I. ELECTION OF DIRECTORS
Two Class C directors are to be elected at the Meeting, each
to serve for three years and until a successor shall have been chosen and
qualified. This is in accord with the Company's Certificate of Incorporation
which provides for the division of the Board of Directors into three classes.
The term of office for the Class C directors expires at the Meeting. Class A
directors and Class B directors will be elected at the Annual Meetings to be
held in 1996 and 1997, respectively.
It is the intention of each of the persons named in the
accompanying form of Proxy to vote the shares of Common Stock represented
thereby in favor of the two nominees listed below, unless otherwise instructed
in such Proxy. Each such nominee is presently serving as a Class C director.
In case any of the nominees is unable or declines to serve, such persons
reserve the right to vote the shares of Common Stock represented by such Proxy
for another person duly nominated by the Board of Directors in such nominee's
stead or, if no other person is so nominated, to vote such shares only for the
remaining nominee. The Board of Directors has no reason to believe that any
person named will be unable or will decline to serve.
Certain information concerning the nominees for election as
Class C directors and the other directors of the Company is set forth below.
Information
<PAGE> 7
-5-
concerning ownership of the Common Stock by such nominees and other directors
is set forth in the preceding table. All of such information was furnished by
them to the Company.
NOMINEES FOR ELECTION
DAVID M. LANK (Class C director), age 57; Partner, Dorchester
Investment Management (investment counsel) since prior to 1981;
Director of the Company since 1972.
JOHN MASEFIELD (Class C director), age 61; Chairman of the Board of
Directors, President and Chief Executive Officer of the Company since
1972; Director of the Company since 1972.
OTHER DIRECTORS WHOSE TERM OF OFFICE WILL CONTINUE AFTER THE MEETING
THOMAS J. DEANGELO (Class A director), age 40; Vice President-Finance
and Administration of the Company since February 1992; Secretary and
Treasurer of the Company since April 1987; Chief Operating Officer of
the Company from September 1, 1993 to February 18, 1994; Controller of
the Company from April 1983 to April 1987; Director of the Company
since October 1992.
GEORGE R. DIETZ (Class A director), age 64; Vice President of the
Company since 1983; Secretary of the Company from 1983 to 1987;
executive officer of various operating subsidiaries of the Company
since 1972; Director of the Company since 1984.
THOMAS M. HAYTHE (Class A director), age 55; Partner, Haythe & Curley
(attorneys) since February 1982; Director: Novametrix Medical Systems,
Inc. (manufacturer of electronic medical instruments), Guest Supply,
Inc. (distributor of hotel guest room amenities and accessories),
Westerbeke Corporation (manufacturer of marine engine products) and
Ramsay Health Care, Inc. (provider of psychiatric healthcare
services); Assistant Secretary of the Company from 1983 to January 31,
1995; Director of the Company since 1983.
H. STUART CAMPBELL (Class B director), age 65; Vice President and
Owner, Highland Packaging Labs, Inc. (contract packaging) since 1983;
Group Chairman, Johnson & Johnson Company (health care products) from
prior to 1981 to 1982; Director: Mesa Laboratories, Inc. (designer
and manufacturer of pharmaceutical and medical instruments and
systems) and Biomatrix, Inc. (manufacturer of specialty healthcare
products based on biological material); Director of the Company since
1984.
<PAGE> 8
-6-
ELMER A. STICCO (Class B director), age 70; Vice Chairman of the
Company since April 1986; Owner of E/S Investments (management and
financial consulting) since August 1985; President, Chief Executive
Officer and Director, International Controls Corp. (engineering and
manufacturing) from 1978 to August 1985; Director of the Company since
1977.
During the past fiscal year the Board of Directors of the
Company met seven times. Each of the persons named above attended at least 75%
of the meetings of the Board of Directors and meetings of any Committees of the
Board on which such person served which were held during the time that such
person served.
The Board of Directors of the Company has a Compensation and
Stock Option Committee whose members are Messrs. Campbell, Lank and Sticco, an
Audit Committee whose members are Messrs. Campbell, Haythe and Lank, a
Nominating Committee whose members are Messrs. Haythe, Lank and Masefield, and
an Acquisition Committee whose members are Messrs. Dietz, Haythe, Masefield and
DeAngelo.
The Compensation and Stock Option Committee determines the
compensation arrangements for executive officers of the Company. The
Compensation and Stock Option Committee also administers the Company's 1982
Stock Option Plan, 1992 Stock Option Plan and 1992 Supplemental Stock Option
Plan and determines the persons (other than directors) who are eligible to
receive options thereunder, the number of shares to be subject to each option
and the other terms and conditions upon which options under such plan are
granted and made exercisable. The Board of Directors of the Company is
empowered to grant options to directors of the Company. The Compensation and
Stock Option Committee also administers the Company's 1983 and 1993 Employee
Stock Purchase Plans, and also reviews and approves employee benefit plans in
which officers and employees are eligible to participate.
The Audit Committee is authorized to recommend to the Board of
Directors the engaging and discharging of the independent accountants, and to
review with the independent accountants the plans for and the results of the
auditing engagement, the scope and results of the Company's procedures for
internal auditing, the independence of the accountants and the adequacy of the
Company's system of internal accounting controls. The Nominating Committee is
authorized to review, approve and recommend persons for election as directors
and to fill management positions with the Company. The Nominating Committee
will not consider nominees recommended by the Company's stockholders. The
Acquisition Committee is authorized to identify and recommend possible
acquisition candidates for the Company.
The Board of Directors met six times during the fiscal year
ended December 31, 1994. Each of the Audit Committee and the Nominating
Committee met one time during the fiscal year ended December 31, 1994. The
Compensation and Stock Option Committee met six times during the fiscal year
ended December 31, 1994. The Acquisition Committee did not meet during the
fiscal year ended December 31, 1994.
<PAGE> 9
-7-
The Company's Certificate of Incorporation contains a provision,
authorized by Delaware law, which eliminates the personal liability of a
director of the Company to the Company or to any of its stockholders for
monetary damages for a breach of his fiduciary duty as a director, except in
the case where the director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a law,
authorized the payment of a dividend or approved a stock repurchase in
violation of Delaware corporate law, or obtained an improper personal benefit.
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years
ended December 31, 1994, 1993 and 1992 concerning the compensation of the
executive officers of the Company whose total annual salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------- ------------
All Other
Name and Principal Fiscal Salary Bonus Options Compensation (1)
Position Year ($) ($) (#) ($)
------------------- ------ ------- ------- -------- ------------
<S> <C> <C> <C> <C> <C>
John Masefield 1994 213,451 150,000 0 1,478
Chairman of 1993 207,234 239,675 120,000 1,325
the Board of 1992 197,376 165,000 245,000 2,732
Directors,
President and
Chief
Executive
Officer
George R. Dietz 1994 120,000 48,000 0 2,073
Senior Vice 1993 149,919 75,000 6,000 2,395
President 1992 132,296 90,000 25,000 3,491
Thomas J. DeAngelo 1994 130,731 52,000 0 2,299
Vice 1993 116,923 61,695 18,000 1,839
President- 1992 90,101 55,000 12,000 2,530
Finance and
Administration,
Secretary
and Treasurer
</TABLE>
(1) Includes contributions made by the Company on behalf of the executive
officers to the Company's 401(k) Plan.
<PAGE> 10
-8-
The following table sets forth the number and value of options
and warrants held by the executive officers of the Company named in the Summary
Compensation Table at December 31, 1994. None of such executive officers
exercised options or warrants during the fiscal year ended December 31, 1994.
FISCAL YEAR END OPTION AND WARRANT
VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options and Warrants Options and Warrants
at 1994 Fiscal Year End (#) at 1994 Fiscal Year End ($)(1)
----------------------------- ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John Masefield 254,900 130,000 $125,798 $ 0
George R. Dietz 126,000 0 735,900 0
Thomas J. DeAngelo 43,200 6,000 81,444 36,750
</TABLE>
(1) In-the-money options and warrants are those where the fair market
value of the underlying Common Stock exceeds the exercise price of the option
or warrant. The value of in-the-money options and warrants is determined in
accordance with regulations of the Securities and Exchange Commission by
subtracting the aggregate exercise price of the option or warrant from the
aggregate year-end value of the underlying Common Stock.
The Company maintains a Retirement Plan (the "Retirement Plan") which
covers its salaried and hourly employees who have completed one year of service
and attained the age of 21. The Retirement Plan is a defined benefit plan
qualified under the Internal Revenue Code of 1986, as amended (the "Code").
The Retirement Plan provides an employee retiring at age 65 with 25
years of plan participation with a pension beginning at age 65 in an annual
amount equal to 50% of his average compensation during the five consecutive
plan years in which he received the highest average compensation (the "Average
Plan Compensation"). A participant retiring with less than 25 years of service
will receive a reduced pension. An employee's interest in his retirement
benefit under the Retirement Plan vests over a period of years. An employee's
annual retirement benefit under the Retirement Plan is offset by 50% of his
estimated Social Security benefits.
Compensation taken into account in determining benefits under the
Retirement Plan includes salary, bonuses, overtime, commissions and salary
deferrals under the Company's Savings and Protection (401(k)) Plan. In the
case of executive officers of the Company named in the Summary Compensation
Table, compensation covered by the Retirement Plan includes the salary and
bonus reflected in the Summary Compensation Table, but not more than $150,000
for 1994, $235,840 for 1993 and $228,860 for 1992. At December 31, 1994, for
purposes of determining benefits under
<PAGE> 11
-9-
the Retirement Plan, each of Messrs. Masefield, Dietz and DeAngelo had thirteen
years of plan participation.
The following table shows the estimated annual retirement benefit in
the form of a life annuity under the Retirement Plan for employees (including
officers and directors) retiring at age 65 whose Average Plan Compensation and
years of participation would be in the categories shown. The amounts shown in
the table do not reflect the amount of offset for Social Security benefits,
which cannot be ascertained at this time.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Remuneration Years of Service
------------- ---------------------------------------------------------------
11 15 20 25
<S> <C> <C> <C> <C>
$ 25,000 $ 5,500 $ 7,500 $10,000 $ 12,500
50,000 11,000 15,000 20,000 25,000
100,000 22,000 30,000 40,000 50,000
150,000 33,000 45,000 60,000 75,000
200,000 44,000 60,000 80,000 100,000
</TABLE>
COMPENSATION OF DIRECTORS
The Company pays its directors an annual fee of $10,000, a fee of $500
for attending each meeting of the Board of Directors of the Company and a fee
of $300 for attending each Committee meeting.
In December 1992, the Company entered into a three-year consulting
agreement with Elmer A. Sticco, a Class B director of the Company, under which
Mr. Sticco has agreed to provide certain financial and management advisory
services to the Company for an annual consulting fee of $16,000.
Directors of the Company also participate in the special bonus plan
for directors and senior officers of the Company. The purpose of the plan is
to compensate participants for a portion of the additional income tax,
attributable to Federal income tax rate increases enacted in 1993, payable by
participants with respect to long-term compensation awards, such as stock
options and warrants for Common Stock of the Company. No bonuses were paid
under the special bonus plan during the fiscal year ended December 31, 1994.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements commencing February 1,
1988, with each of John Masefield, George R. Dietz and Thomas J.
<PAGE> 12
-10-
DeAngelo, at current annual salaries of $235,000, $120,000 and $125,000,
respectively, subject to increases at the discretion of the Board of Directors.
These agreements provide for an initial term of three years, with automatic
one-year extensions (subject to two months' notice of non-extension). These
agreements were automatically renewed for a one-year term on February 1, 1995.
Each agreement also provides for a cash payment of up to three years' annual
salary upon termination by the Company of the employee's employment for reasons
other than for cause or upon the employee's voluntary termination within one
year following certain change of control events involving the Company.
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee of the Board of Directors
consists of H. Stuart Campbell, David M. Lank and Elmer A. Sticco, all of whom
are independent directors of the Company.
SECTION 16(A) REPORTING REQUIREMENTS
Under Section 16(a) of the Securities Exchange Act of 1934, directors
and executive officers of the Company, and persons who own more than ten
percent of the Company's Common Stock, are required to file reports concerning
their beneficial ownership of securities of the Company with the Securities and
Exchange Commission. Directors, executive officers and greater than ten
percent stockholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on a review of copies of such
reports furnished to the Company and confirmations that no other reports were
required during the fiscal year ended December 31, 1994, its directors,
executive officers and greater than ten percent stockholders complied with all
Section 16(a) filing requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Thomas M. Haythe, a Class A director of the Company, is a partner in
the New York City law firm of Haythe & Curley, which firm has acted as legal
counsel to the Company for many years. It is expected that Haythe & Curley
will continue to render legal services to the Company in the future.
<PAGE> 13
-11-
PERFORMANCE GRAPH
The following performance graph compares the cumulative total
shareholder return on the Company's Common Stock to the S&P 500 Index and to
the S&P Midcap 400 Index for the Company's last five fiscal years. The S&P
Midcap 400 Index is included in the graph because of the absence of an
appropriate published industry or line of business index and the absence of
public information with respect to other companies in the contract
sterilization business. The graph assumes that $100 was invested in the
Company's Common Stock and each Index on December 31, 1989 and that all
dividends were reinvested.
FIVE YEAR CUMULATIVE TOTAL RETURN
COMPARISON GRAPH
<TABLE>
<CAPTION>
Base 1990 1991 1992 1993 1994
---- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
ISOMEDIX INC. $100 $81.9 $165.5 $187.9 $131.0 $108.6
S&P 500 $100 $96.9 $126.4 $136.1 $149.8 $151.7
S&P MIDCAP 400 $100 $94.9 $142.4 $159.4 $181.6 $175.1
</TABLE>
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
The Compensation and Stock Option Committee of the Board of
Directors (the "Committee") determines the compensation arrangements for
executive officers of the Company. In formulating the Company's executive
compensation program, the Committee seeks to provide competitive levels of
compensation which will assist the Company in attracting and retaining
qualified executives, reward individual initiative and achievement and
integrate executive pay with the interests of the Company's stockholders in
achieving the Company's annual and long-term performance goals.
<PAGE> 14
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The compensation program for the Company's executives,
including Mr. Masefield, consists of base salary, an annual incentive bonus
plan, a special bonus plan and stock options. The Company's salary levels are
intended to be consistent with competitive requirements and levels of
responsibility. Salary levels are largely determined through comparisons with
companies of similar size and complexity. Salary adjustments, which are
normally made annually, are determined by monitoring the competitive market
place, the overall financial performance of the Company, the performance of the
individual executive and any increased responsibilities assumed by the
executive. On the basis of the foregoing factors, the Committee established a
1994 salary for Mr. Masefield of $213,451, an increase of approximately 3%
over his 1993 salary.
Awards under the annual incentive bonus plan are based upon a
combination of the level of achievement by the Company of its annual financial
plan as approved by the Board of Directors and achievement by executives of
individual objectives. The financial plan focuses on achievement of certain
levels of revenues and pre-tax income, which the Committee believes are primary
determinants of share price over time. The financial plan is established at
the beginning of each fiscal year by the Board of Directors after consultation
with management. Threshold and maximum levels of revenues and pre-tax income
are established around the target in order to create a range of pre-tax income
that will be used to measure the potential award opportunity for each executive
under the annual incentive bonus plan. A target bonus opportunity equal to a
percentage of annual salary is established for each executive based on his
level of responsibility, potential contribution to the success of the Company
and competitive considerations. Awards for senior executives are more highly
dependent on achievement of Company goals than are awards to lower-level
executives. To determine the actual award to an executive, a year-end
assessment is made of the executive's individual performance including
contributions in specific areas such as leadership, sound decision making,
financial and general management, creativity and achievement of assigned
projects. This individual assessment, combined with the Company's financial
results, insures that individual awards reflect an executive's specific
contribution to the success of the Company. In 1994 the executive officers of
the Company received the following bonuses under the annual incentive bonus
plan: Mr. Masefield - $150,000; Mr. Dietz - $48,000; and Mr. DeAngelo -
$52,000.
The Company periodically grants stock options to its executive
officers and other key employees. Stock option grants are intended to provide
the Company's executives and other key employees with a significant incentive
to work to maximize stockholder value. The Committee strongly believes that by
providing its executives and key employees who have substantial responsibility
for the management and growth of the Company with an opportunity to profit from
increases in the value of the Company's stock, the interests of the Company's
stockholders and executives will be most closely aligned. The number of
options granted to executive officers is based on individual
<PAGE> 15
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performance and level of responsibility and must be sufficient in size to
provide a strong incentive for executives to work for the long term business
interests of the Company. No stock options were granted to the executive
officers of the Company during the 1994 fiscal year.
In the 1993 fiscal year the Company established a special
bonus plan for directors and senior officers of the Company. The purpose of
the plan is to compensate participants for a portion of the additional income
tax, attributable to Federal income tax rate increases enacted in 1993, payable
by participants with respect to long-term compensation awards, such as stock
options and warrants for Common Stock of the Company. Bonuses under the plan
are awarded in the discretion of the Committee and the Board of Directors. No
bonuses were paid under the special bonus plan during the 1994 fiscal year.
Section 162(m) of the Code, which became effective January 1,
1994, limits the deductibility of compensation exceeding $1 million to each of
the Company's Chief Executive Officer and four other most highly compensated
executive officers. Qualifying performance-based compensation meeting the
requirements promulgated by the Internal Revenue Service under Section 162(m)
will not be subject to the deduction limit. The Company intends to qualify its
executive compensation arrangements to comply with such requirements.
The Committee believes that the compensation program for
executives of the Company is competitive with the compensation programs
provided by other companies with which the Company competes for executive
talent and by other companies of similar size in similar industries. The
Committee believes that amounts paid under the incentive and special bonus
plans are appropriately related to Company and individual performance, yielding
awards which are directly linked to the annual and longer term financial
results of the Company. The Committee also believes that the stock option
program provides opportunities to executives that are consistent with the
returns that are generated on behalf of the Company's stockholders.
THE COMPENSATION AND STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
H. Stuart Campbell
David M. Lank
Elmer A. Sticco
<PAGE> 16
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II. RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Coopers &
Lybrand L.L.P. to serve as independent accountants for the Company for the
fiscal year ending December 31, 1995. The Board of Directors considers Coopers
& Lybrand L.L.P. to be eminently qualified.
Although it is not required to do so, the Board of Directors
is submitting its selection of Coopers & Lybrand L.L.P. for ratification at the
Meeting, in order to ascertain the views of stockholders regarding such
selection. If the selection is not ratified, the Board of Directors will
reconsider its selection.
The Board of Directors recommends that stockholders vote FOR
ratification of the selection of Coopers & Lybrand L.L.P. to examine the
financial statements of the Company for the Company's fiscal year ending
December 31, 1995. It is the intention of the persons named in the
accompanying form of Proxy to vote the shares of Common Stock represented
thereby in favor of such ratification unless otherwise instructed in such
Proxy.
A representative of Coopers & Lybrand L.L.P. will be present
at the Meeting, with the opportunity to make a statement if such representative
desires to do so, and will be available to respond to appropriate questions.
III. OTHER MATTERS
The Board of Directors of the Company does not know of any
other matters which may be brought before the Meeting. However, if any such
other matters are properly presented for action, it is the intention of the
persons named in the accompanying form of Proxy to vote the shares represented
thereby in accordance with their judgment on such matters.
MISCELLANEOUS
If the accompanying form of Proxy is executed and returned,
the shares of Common Stock represented thereby will be voted in accordance with
the terms of the Proxy, unless the Proxy is revoked. If no directions are
indicated in such Proxy, the shares represented thereby will be voted FOR the
nominees proposed by the Board of Directors in the election of directors and
FOR the ratification of the Board of Directors' selection of independent
accountants for the Company. Any Proxy may be revoked at any time before it is
exercised. The casting of a ballot at the Meeting by a stockholder who may
theretofore have given a Proxy or the subsequent delivery of a Proxy will have
the effect of revoking the initial Proxy.
<PAGE> 17
-15-
All costs relating to the solicitation of Proxies will be
borne by the Company. Proxies may be solicited by officers, directors and
regular employees of the Company and its subsidiaries personally, by mail or by
telephone, telecopier or telegraph, and the Company may pay brokers and other
persons holding shares of stock in their names or those of their nominees for
their reasonable expenses in sending soliciting material to their principals.
The Company has also engaged Corporate Investor Communications, Inc. to assist
in the solicitation and tabulation of Proxies. The Company estimates that
Corporate Investor Communications, Inc. will receive a fee of approximately
$2,500 in connection with these services.
It is important that Proxies be returned promptly.
Stockholders who do not expect to attend the Meeting in person are urged to
mark, sign and date the accompanying form of Proxy and mail it in the enclosed
return envelope, which requires no postage if mailed in the United States, so
that their votes can be recorded.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1996
Annual Meeting of Stockholders of the Company must be received by the Company
by December 1, 1995 in order to be considered for inclusion in the Company's
Proxy Statement relating to such Meeting.
THOMAS J. DEANGELO, SECRETARY
WHIPPANY, NEW JERSEY
MARCH 31, 1995
<PAGE> 18
ISOMEDIX INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS-MAY 16, 1995
COMMON STOCK
The undersigned, a stockholder of ISOMEDIX INC., does hereby appoint
John Masefield and George R. Dietz, or either of them, each with full
power of substitution, the undersigned's proxies, to appear and vote
at the Annual Meeting of Stockholders to be held on Tuesday, May 16, 1995
at 10:00 A.M., local time, or at any adjournments thereof, upon such matters
as may come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby instructs said proxies or their substitutes to vote
as specified below on each of the following matters and in accordance with
their judgment on other matters which may properly come before the Meeting.
1. Election of Class C Directors.
FOR both nominees listed below / / WITHHOLD AUTHORITY / /
(except as marked to the contrary below) to vote for both nominees
listed below
DAVID M. LANK AND JOHN MASEFIELD
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
______________________________________________________________________
2. Ratification of appointment of Coopers & Lybrand L.L.P. as independent
accountants for fiscal 1995.
FOR / / AGAINST / / ABSTAIN / /
The Board of directors favors a vote "FOR" each item.
(continued and to be completed on reverse side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED AS TO ANY OF ITEMS 1 OR 2 THEY WILL BE VOTED "FOR" THE
ITEM(S) AS TO WHICH NO DIRECTION IS INDICATED.
IMPORTANT: Before returning this Proxy, please sign your name or names on
the line(s) below exactly as shown hereon. Executors, administrators,
trustees, guardians or corporate officers should indicate their full titles
when signing. Where shares are registered in the names of joint tenants or
trustees, each joint tenant or trustee should sign.
Dated_____________________, 1995
__________________________(L.S.)
__________________________(L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued From Other Side)
