<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
ISOMEDIX INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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
ISOMEDIX INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1997
Whippany, New Jersey
March 31, 1997
To the Holders of Common Stock
of ISOMEDIX INC.:
The Annual Meeting of the Stockholders of ISOMEDIX INC. will be held at
the Birchwood Manor, 111 North Jefferson Road, Whippany, New Jersey, on Tuesday,
May 20, 1997 at 10:00 a.m. local time for the following purposes, as more fully
described in the accompanying Proxy Statement:
1. To elect one Class B director 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, 1997.
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 27, 1997 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, 1997 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 20, 1997 (the "Meeting"), 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 27, 1997, the record date stated in
the accompanying Notice, the Company had issued and outstanding 6,425,393 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 entitled to vote 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 (i) such broker or nominee has not
received voting instructions on a particular matter from the beneficial owners
or persons entitled to vote and (ii) such 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, 1997, 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 ........... 641,000 9.97%
201 Main Street, Suite 3200
Fort Worth, Texas 76102
The Kaufmann Fund, Inc. ................ 1,000,000 15.56%
140 East 45th Street, 43rd Floor
New York, New York 10017
Dimensional Fund Advisors Inc. ......... 377,300 5.87%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
</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"), Lee M.
Bass and the Sid R. Bass Management Trust ("SRBMT") has sole voting
power and sole dispositive power with respect to 213,700 shares apiece.
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 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 1,000,000 shares.
(3) This information is based upon a Report on Schedule 13G filed by
Dimensional Fund Advisors Inc. with the Securities and Exchange
Commission. Such Schedule 13G indicates that such entity has sole
voting power with respect to 262,900 shares and sole dispositive power
with respect to 377,300 shares.
<PAGE> 5
-3-
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 28, 1997, 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................................. 302,000 (1) 4.53%
George R. Dietz................................ 126,100 (2) 1.92%
David M. Lank.................................. 113,700 (3) 1.76%
H. Stuart Campbell............................. 36,633 (4) (10)
Thomas M. Haythe............................... 27,500 (5) (10)
Elmer A. Sticco................................ 17,500 (6) (10)
Thomas J. DeAngelo............................. 49,200 (7) (10)
Peter Mayer ................................... 20,000 (8) (10)
Charles P. Truby .............................. 20,000 (9) (10)
All Directors and Executive Officers as a 652,633 (1)(2)(3) 9.32%
Group (nine persons)........................... (4)(5)(6)
(7)(8)(9)
</TABLE>
- -------------------------
(1) Includes 12,000 shares issuable upon exercise of currently exercisable
warrants held by Mr. Masefield, Chairman of the Board of Directors,
President, Chief Executive Officer and a Class C director of the
Company, and 222,900 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 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
22,500 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
22,500 shares issuable upon exercise of currently exercisable stock
options.
(5) Includes 27,500 shares issuable upon exercise of currently exercisable
stock options held by Mr. Haythe, a Class A director of the Company.
(6) Includes 17,500 shares issuable upon exercise of currently exercisable
stock options held by Mr. Sticco, a Class B director of the Company.
Mr. Sticco resigned as a Class B director of the Company on February
28, 1997.
(7) Includes 49,200 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) Includes 20,000 shares issuable upon exercise of currently exercisable
stock options held by Mr. Mayer, a Class B director of the Company.
(9) Includes 10,000 shares issuable upon exercise of currently exercisable
stock options held by Mr. Truby, Executive Vice President and Chief
Operating Officer of the Company, and 10,000 shares issuable upon
exercise of stock options which will be exercisable within 60 days.
(10) 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, 1997.
I. ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for the
division of the Board of Directors of the Company into three classes. The term
of office for the Class B directors expires at the Meeting. Class C directors
and Class A directors will be elected at the Annual Meetings to be held in 1998
and 1999, 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 nominee listed below, H. Stuart Campbell, unless
otherwise instructed in such Proxy. The nominee is currently serving as a Class
B director. In case the nominee 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
<PAGE> 7
-5-
in such nominee's stead. The Board of Directors has no reason to believe that
the nominee will be unable or will decline to serve.
Certain information concerning the nominee and the other directors
of the Company is set forth below. Information concerning ownership of the
Common Stock by the nominee and other directors is set forth in the preceding
table. All of such information was furnished by them to the Company.
NOMINEE FOR ELECTION
H. STUART CAMPBELL (Class B director), age 67; 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),
Biomatrix, Inc. (manufacturer of specialty healthcare products based on
biological material) and Atrix Laboratories, Inc. (research and
development activities relating to new therapeutic products and drug
delivery); Director of the Company since 1984.
OTHER DIRECTORS WHOSE TERM OF OFFICE
WILL CONTINUE AFTER THE MEETING
DAVID M. LANK (Class C director), age 59; Partner, Dorchester
Investment Management (investment counsel) since prior to 1981;
Director of the Company since 1972.
JOHN MASEFIELD (Class C director), age 63; Chairman of the Board of
Directors since 1972; President and Chief Executive Officer of the
Company from 1972 to August 1995 and since February 1997; Director of
the Company since 1972.
THOMAS J. DEANGELO (Class A director), age 42; Vice President-Finance
and Administration of the Company since February 1992; Secretary and
Treasurer of the Company since April 1987; Chief Financial Officer of
the Company since 1992; Chief Operating Officer of the Company from
September 1993 to February 1994; Controller of the Company from April
1983 to April 1987; Director of the Company since 1992.
THOMAS M. HAYTHE (Class A director), age 57; 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), Ramsay
Health Care, Inc. (provider of
<PAGE> 8
-6-
psychiatric healthcare services) and Ramsay Managed Care, Inc.
(provider of managed mental health care services); Assistant Secretary
of the Company from 1983 to 1995; Director of the Company since 1983.
Elmer A. Sticco, formerly a Class B director of the Company,
resigned as a director of the Company on February 28, 1997. The term of Peter
Mayer, formerly President and Chief Executive Officer of the Company, as a Class
B director expires at the Meeting.
The Board of Directors of the Company has a Compensation and Stock
Option Committee whose members are Messrs. Campbell and Lank, 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. DeAngelo, Haythe, Masefield and Mayer. Mr.
Sticco was a member of the Compensation and Stock Option Committee until
February 28, 1997.
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, 1992 Supplemental Stock Option Plan
and 1996 Long Term Incentive Plan and determines the persons who are eligible to
receive options and other awards thereunder, the number of shares to be subject
to each option or award and the other terms and conditions upon which options or
awards under such plans are granted and made exercisable. The Compensation and
Stock Option Committee also administers the Company's 1993 Employee Stock
Purchase Plan, and 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 Acquisition Committee is
authorized to identify and recommend possible acquisition candidates for the
Company.
The Nominating Committee will consider nominees for directors
recommended by stockholders or others. There is no specified formal procedure
for submitting such recommendations. Recommendations may be addressed to the
Secretary, Isomedix Inc., 11 Apollo Drive, Whippany, New Jersey 07981.
The Board of Directors met nine times during the fiscal year ended
December 31, 1996. Each of the Audit Committee and the Nominating Committee met
<PAGE> 9
-7-
one time during the fiscal year ended December 31, 1996. The Acquisition
Committee met five times during the fiscal year ended December 31, 1996. The
Compensation and Stock Option Committee met three times during the fiscal year
ended December 31, 1996. 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 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.
<PAGE> 10
-8-
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years
ended December 31, 1996, 1995 and 1994 concerning the compensation of the Chief
Executive Officer of the Company, and the four other most highly compensated
executive officers of the Company whose total annual salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------- ------------
ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS OPTIONS COMPENSATION (1)
POSITION YEAR ($) ($) (#) ($)
- ----------------------- ------ -------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Peter Mayer 1996 $206,000 $112,000 $ 0 $ 0
President and Chief 1995 69,780 13,800 100,000 0
Executive Officer (2) 1994 -- -- -- --
John Masefield 1996 247,860 33,000 0 1,243
Chairman (3) 1995 219,855 110,100 365,000(5) 1,279
1994 213,451 150,000 0 1,478
Charles P. Truby 1996 144,200 69,000 0 2,385
Executive Vice 1995 105,788 46,000 50,000 0
President and Chief 1994 -- -- -- --
Operating Officer (4)
George R. Dietz 1996 95,000 19,000 0 1,107
Senior Vice President 1995 128,660 25,760 31,000(5) 1,456
1994 120,000 48,000 0 2,073
Thomas J. DeAngelo 1996 138,750 49,000 0 1,390
Vice President-Finance 1995 130,515 42,320 30,000(5) 1,358
and Administration, 1994 130,731 52,000 0 2,299
Secretary and
Treasurer
</TABLE>
================================================================================
(1) Includes contributions made by the Company on behalf of the executive
officers to the Company's 401(k) Plan.
(2) Mr. Mayer served as President and Chief Executive Officer of the Company
from August 1995 until February 1997.
(3) Mr. Masefield served as Chairman, President and Chief Executive Officer of
the Company from prior to 1994 until August 1995, and as Chairman from August
1995 until February 1997, and has served as Chairman, President and Chief
Executive Officer of the Company since February 1997.
(4) Mr. Truby became Executive Vice President and Chief Operating Officer of
the Company in March 1995.
(5) These options were granted in years prior to 1995 but were repriced in
1995.
<PAGE> 11
-9-
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, 1996. None of such executive officers
exercised options or warrants during the fiscal year ended December 31, 1996.
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 1996 FISCAL YEAR END (#) AT 1996 FISCAL YEAR END ($)(1)
----------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Peter Mayer 20,000 80,000 $ 0 $ 0
John Masefield 234,900 150,000 124,823 37,500
Charles P. Truby 10,000 40,000 0 0
George R. Dietz 126,000 0 482,400 0
Thomas J. DeAngelo 49,200 0 72,894 0
</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
1996, 1995 and 1994. At December 31, 1996, for purposes of determining benefits
under the Retirement Plan,
<PAGE> 12
-10-
each of Messrs. Masefield, Dietz and DeAngelo had fifteen years of plan
participation and each of Messrs. Truby and Mayer had one year 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 non-employee directors an annual fee of
$10,000, a fee of $500 for attending each meeting of the Board of Directors and
a fee of $300 for attending each Committee meeting.
The Company has a consulting agreement with Elmer A. Sticco, a
Class B director of the Company, under which Mr. Sticco provides certain
financial and management advisory services to the Company for an annual
consulting fee of $16,000. The agreement expires on December 31, 1999.
Directors of the Company are eligible to receive stock options
under the Company's Stock Option Plans. 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, 1996.
<PAGE> 13
-11-
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with John
Masefield, Chairman, President and Chief Executive Officer of the Company. The
agreement is for a term of seven years commencing as of April 1, 1996. Under the
agreement, Mr. Masefield will perform executive, administrative and consultative
services for the Company for not less than fifteen business days per quarter.
The agreement provides for an annual salary of $250,000 and for bonus payments
for exceptional contributions to the Company as determined by the Board of
Directors. The agreement provides for payment of the aggregate salary payable
through the expiration of the term of the agreement upon termination by the
Company of Mr. Masefield's employment for reasons other than for cause or upon
Mr. Masefield's voluntary termination within one year following certain change
of control events involving the Company, and provides for continued payment of
salary through the expiration of the term, but not more than three years, to Mr.
Masefield's beneficiaries in the event of his death prior to the expiration of
the term.
The Company has entered into an employment agreement effective as
of March 27, 1995 with Charles P. Truby, the Executive Vice President and Chief
Operating Officer of the Company, with a 1996 annual salary of $144,200, subject
to increases at the discretion of the Board of Directors. The agreement provides
for an initial term of one year, with automatic one-year extensions (subject to
two months' notice of non-extension). The agreement provides Mr. Truby with an
annual bonus opportunity of up to 60% of his annual salary. The agreement also
provides for payment of 12 months' salary upon the termination by the Company of
Mr. Truby's employment for reasons other than for cause and for payment of two
years' salary upon Mr. Truby's voluntary termination within one year following
certain change of control events involving the Company.
The Company has entered into employment agreements effective as of
February 1, 1988, with each of George R. Dietz - Senior Vice President and
Thomas J. DeAngelo - Vice President-Finance and Administration, at current
annual salaries of $95,000 and $138,750, 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, 1997. Each of these agreements also provides
for payment of 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.
<PAGE> 14
-12-
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, until his
resignation from the Board of Directors on February 28, 1997, 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 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, 1996, 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 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.
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, 1991 and that all dividends were reinvested.
<PAGE> 15
-13-
FIVE YEAR CUMULATIVE TOTAL RETURN
COMPARISON GRAPH
[COMPARISON OF CUMULATIVE TOTAL RETURN CHART]
<TABLE>
<CAPTION>
--------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Isomedix Inc. $100.00 $113.54 $ 79.17 $ 65.62 $ 59.92 $ 54.17
- ------------------------------------------------------------------------------------------
S&P Midcap 400 $100.00 $111.93 $127.15 $122.59 $157.72 $187.99
- ------------------------------------------------------------------------------------------
S&P 500 $100.00 $107.65 $118.65 $120.06 $165.19 $203.13
- ------------------------------------------------------------------------------------------
</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> 16
-14-
The compensation program for the Company's executives 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 marketplace, 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
1996 annual salary of $247,860 for Mr. Masefield, who served as Chairman of the
Company during 1996 and a 1996 annual salary of $206,000 for Mr. Mayer, who
served as Chief Executive Officer of the Company during 1996.
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 1996 the executive officers of the Company received the
following bonuses under the annual incentive bonus plan: Mr. Masefield -
$33,000; Mr. Mayer - $112,000; Mr. Dietz - $19,000; Mr. DeAngelo - $49,000, and
Mr. Truby - $69,000.
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
<PAGE> 17
-15-
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 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.
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 1996 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> 18
-16-
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, 1997. 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, 1997. 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 nominee
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
<PAGE> 19
-17-
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.
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
$3,000 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 1998 Annual
Meeting of Stockholders of the Company must be received by the Company by
November 30, 1997 in order to be considered for inclusion in the Company's Proxy
Statement relating to such Meeting.
WHIPPANY, NEW JERSEY THOMAS J. DEANGELO, SECRETARY
MARCH 31, 1997
<PAGE> 20
ISOMEDIX INC.
PROXY - ANNUAL MEETING OF STOCKHOLDERS - MAY 20, 1997
COMMON STOCK
The undersigned, a stockholder of ISOMEDIX INC., does hereby appoint
JOHN MASEFIELD and THOMAS J. DEANGELO, 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 20, 1997 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 B Director.
FOR the nominee listed below / / WITHHOLD AUTHORITY / /
to vote for the nominee listed below
Nominee: H. Stuart Campbell
2. Ratification of appointment of Coopers & Lybrand L.L.P. as independent
accountants for fiscal 1997.
FOR / / AGAINST / / ABSTAIN / /
The Board of Directors favors a vote "FOR" each item.
(Continued and to be Completed on Reverse Side)
<PAGE> 21
-2-
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 _______________, 1997
______________________(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)
