<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MMI MEDICAL, INC
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
MMI MEDICAL, INC.
1611 POMONA ROAD
CORONA, CALIFORNIA 91720
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of MMI
Medical, Inc. (the "Company") will be held at the Harvey Hotel, located at 4545
West John Carpenter Freeway, Irving, Texas 75063, on September 15, 1995 at 1:00
p.m. Central Daylight Time, for the following purposes:
1. To elect directors to hold office until the 1996 Annual Meeting of
Shareholders and until their successors are elected and qualified;
2. To consider and act upon the proposal to amend the Company's
Articles of Incorporation to change the name of the Company from "MMI
Medical, Inc." to "InnoServ Technologies, Inc.";
3. To take action with respect to any other matters which may properly
come before the Annual Meeting.
The Board of Directors' nominees for reelection as directors are: Bernard J.
Korman, Dudley A. Rauch, Michael M. Sachs, Samuel Salen M.D., Michael F. Sandler
and David A. Wegmann.
The enclosed proxy is solicited by the Board of Directors of the
Corporation. Holders of common stock of record at the close of business on
August 14, 1995 are entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof. In order to constitute a quorum for the conduct of
business at the Annual Meeting, holders of a majority of all outstanding shares
of Common Stock must be present in person or be represented by proxy.
Each shareholder is requested to sign and date the enclosed proxy card and
to return it without delay in the enclosed postage-paid envelope. Any
shareholder present at the Annual Meeting may withdraw the proxy and vote
personally on each matter brought before the Annual Meeting.
By the Order of the Board of Directors
Samuel Salen, M.D.
President, Chief Executive Officer and
Secretary
Corona, California
August , 1995
<PAGE>
MMI MEDICAL, INC.
1611 POMONA ROAD
CORONA, CALIFORNIA 91720
-------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 15, 1995
-------------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of MMI Medical, Inc.,
a California corporation (the "Company"), for use at the 1995 Annual Meeting
of Shareholders of the Company to be held at 1:00 p.m. Central Daylight Time,
on September 15, 1995 at the Harvey Hotel, 4545 West John Carpenter Freeway,
Irving, Texas 75063 or at any adjournment or postponement thereof. It
is anticipated that this Proxy Statement, together with the form of proxy,
will first be mailed on or about August 24, 1995 to the Company's
shareholders of record as of the close of business on August 14, 1995.
A shareholder signing and returning the enclosed proxy has the power to
revoke it at any time before it is exercised by (1) attending the Annual Meeting
and voting in person, (2) duly executing and delivering a proxy for the Annual
Meeting bearing a later date, or (3) delivering written notice of revocation to
the Secretary of the Company at 1611 Pomona Road, Corona, California 91720 prior
to use of the enclosed proxy at the Annual Meeting.
The Company will bear the entire cost of this solicitation of proxies,
including expenses in connection with preparing, assembling and mailing the
proxy solicitation materials and the charges and expenses of brokerage firms and
others for forwarding solicitation materials to beneficial owners. In addition
to solicitation by mail, proxies may be solicited personally or by telephone or
telegraph by directors, officers or employees of the Company, who will receive
no additional compensation for such services.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The close of business on August 14, 1995 has been fixed as the record date
for determination of holders of the Company's Common Stock, $.01 par value (the
"Common Stock"), entitled to notice of and to vote at the Annual Meeting and at
any adjournment or postponement thereof. On that date, there were outstanding
and entitled to vote 5,035,833 shares of Common Stock. Except for cumulative
voting rights with respect to the election of directors (see "Election of
Directors"), holders of Common Stock are entitled to one vote per share on each
matter submitted to or acted upon by the shareholders at the Annual Meeting. The
presence, either in person or by proxy, of persons entitled to vote a majority
of the Company's issued and outstanding shares of Common Stock is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Shares represented by all valid proxies will be voted in accordance with the
instructions contained in the proxies. In the absence of instructions, shares
represented by valid proxies will be voted for the election of the Board of
Directors' nominees and the proposal to amend the Company's charter to change
its name, and, with respect to any other matters, in the discretion of the proxy
holders as indicated on the proxy.
The following table sets forth information as of August 1, 1995 with respect
to beneficial ownership of the Company's Common Stock by (i) each director and
nominee for election as director, (ii) each Named
2
<PAGE>
Executive Officer described under "Executive Compensation", (iii) all directors
and executive officers as a group, and (iv) each person known to the Company to
be the beneficial owner of five percent or more of the outstanding shares of
Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS(1) BENEFICIALLY OWNED OWNERSHIP
------------------ ---------
<S> <C> <C>
Dudley A. Rauch................................... 1,049,289(2) 21%
Samuel Salen, M.D................................. 461,605(3)(4) 9%
Michael M. Sachs.................................. 133,412(4)(5) 3%
Bernard J. Korman................................. 2,351,438(6) 47%
Michael F. Sandler................................ 2,351,438(6) 47%
David A. Wegmann.................................. 13,061(4) *
James P. Butler................................... 3,333 *
Citicorp Venture Capital Ltd...................... 247,500 5%
399 Park Avenue, 20th Floor
New York, New York 10043
MEDIQ Incorporated................................ 2,351,438(7) 47%
One MEDIQ Plaza
Pennsauken, NJ 08110
All directors and officers
as a group (7 persons) (9)...................... 4,026,199(8) 79%
<FN>
------------
* Less than one percent
NOTES:
(1) Except as otherwise indicated, the address of each person is c/o MMI
Medical, Inc., 1611 Pomona Road, Corona, California 91720 and each person
has sole voting and investment control with respect to the shares listed.
(2) Includes 52,868 shares held by Cecilia B. Rauch, Mr. Rauch's spouse; 13,743
shares held by the Rauch Family Foundation over which Mr. Rauch exercises
shared voting and investment powers; and, 26,322 shares held by the Henry
E. Rauch Trust of 1994 over which Mr. Rauch exercises sole voting and
investment powers. Mr. Rauch disclaims beneficial ownership of all such
shares. Also includes 7,700 shares of Common Stock subject to outstanding
options, issued pursuant to the 1992 Stock Incentive Plan, which are or
become exercisable within 60 days of August 1, 1995.
(3) Of such shares (i) 2,200 shares of Common Stock are held by his son, (ii)
121,348 are held by the Moehring Charitable Remainder Trust, (iii) 97,105
are owned by MSB Radiology Medical Group, Inc. Profit Sharing Trust, (iv)
96,990 are owned by MSB Radiology Medical Group, Inc. Pension Trust and (v)
11,000 are owned by MSB Radiology Medical Group, Inc. ("MSB"). Dr. Salen,
as a trustee, exercises shared voting and investment control over the
shares held by the Moehring Charitable Remainder Trust, MSB Radiology
Medical Group, Inc. Profit Sharing Trust and MSB Radiology Medical Group,
Inc. Pension Trust. Dr. Salen exercises shared voting and investment
control over the shares held by MSB. Dr. Salen disclaims beneficial
ownership of all such shares.
(4) Includes 11,000 shares of Common Stock subject to outstanding options,
issued pursuant to the 1992 Stock Incentive Plan, which are or become
exercisable within 60 days of August 1, 1995.
(5) Includes 2,860 shares owned by Mr. Sachs' spouse and 1,210 shares of Common
Stock held by Mr. Sachs as trustee of a trust, as to which shares Mr. Sachs
disclaims beneficial ownership.
(6) Shares shown are the shares held by MEDIQ Incorporated ("MEDIQ"). Messrs.
Korman and Sandler are executive officers, directors and shareholders of
MEDIQ and, as such, share voting and investment control over such shares.
However, Messrs. Korman and Sandler disclaim beneficial ownership of such
shares. See note (7) below.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(7) See Note (6) above. Includes 325,000 shares of Common Stock issuable upon
exercise of a warrant held by MEDIQ. Bessie G. Rotko, Michael J, Rotko,
Judith M. Shipon, Lionel Felzer and Provident National Bank, as Trustees
under an Agreement of Trust dated November 18, 1983, are the indirect
beneficial owners of shares of common stock representing approximately 52%
of MEDIQ's outstanding voting power, and may therefore be deemed
"controlling persons" of MEDIQ. The address of the Trustees is c/o Lionel
Felzer, MEDIQ Incorporated, One MEDIQ Plaza, Pennsauken, New Jersey, 08110.
(8) See Notes (2)-(7) above.
</TABLE>
ELECTION OF DIRECTORS
The directors of the Company are elected annually and serve until the next
annual meeting of shareholders or until their successors are elected and
qualified. Shareholders are entitled to a cumulative voting right in the
election of directors. Under cumulative voting, each shareholder is entitled to
a number of votes equal to the number of directors to be elected multiplied by
the number of shares the shareholder is entitled to vote. Such votes may be cast
for one nominee or distributed among two or more candidates. The six nominees
for director receiving the highest number of votes at the meeting will be
elected.
No shareholder shall be entitled to cumulate votes for a candidate unless
such candidate's name has been placed in nomination prior to the voting and the
shareholder has given notice at the Annual Meeting prior to the voting of the
intention to cumulate votes. If any shareholder gives such notice, all
shareholders may cumulate votes. By delivering an executed proxy, a shareholder
gives the persons named in the accompanying proxy discretionary authority to
cumulate votes in the election of directors.
MANAGEMENT
The names of the nominees for election as directors (all of whom are
presently directors) are set forth below. The Company has no reason to believe
that any nominee for election will not be able to serve his prescribed term.
Should any nominee become unavailable to serve, the proxies solicited hereby may
be voted for election of such other person as shall be designated by the Board
of Directors. Also below are the executive officers of the Company.
<TABLE>
<CAPTION>
DIRECTOR OF
THE COMPANY
NAME AGE POSITION SINCE
---------------------------- --- -------------------------------------------------- -----------
<S> <C> <C> <C>
Dudley A. Rauch (1)(2)(3) 54 Director, Chairman of the Board of Directors 1981
Samuel Salen, M.D. (1)(2)(3) 54 President, Chief Executive Officer, Director, Vice 1981
Chairman of the Board of Directors and Secretary
Bernard J. Korman (1)(2) 63 Director 1994
Michael M. Sachs (1)(2) 54 Director 1981
Michael F. Sandler (1)(2) 49 Director 1994
David A. Wegmann (1)(2) 48 Director 1983
James P. Butler 47 Chief Financial Officer
<FN>
------------
NOTES:
(1) Member of the Audit Committee of the Board of Directors.
(2) Member of the Compensation and Stock Option Committee of the Board of
Directors.
(3) Member of the Executive Committee of the Board of Directors.
</TABLE>
The background of the executive officers and directors is as follows:
Mr. Rauch joined the Company as President and Chief Executive Officer in
1981 and was elected Chairman and appointed Chief Executive Officer in 1986. He
resigned as Chief Executive Officer in 1992 and is currently a private investor.
4
<PAGE>
Dr. Salen is a radiologist and prior to becoming Chief Executive Officer of
the Company was the President of MSB Radiology Medical Group, Inc., a private
physician's group practice.
Mr. Korman has been President, Chief Executive Officer and a director of
MEDIQ Incorporated ("MEDIQ"), a healthcare services company since 1980. He has
also served as Chairman of the Boards of Directors of NutraMax Products, Inc., a
consumer health care products company and PCI Services, Inc., a provider of
pharmaceutical packaging services since 1990 and 1991 respectively. Mr. Korman
has served as President, Chief Executive Officer and a director of MEDIQ/PRN
Life Support Services, Inc., a life support and critical care equipment rental
company since June 1992, served as Chairman of the Board of Directors of
MEDIQ/PRN Life Support Services, Inc. from March 1991 to June 1992, and was a
director of MEDIQ/ PRN Life Support Services, Inc. from its inception to January
1989. Mr. Korman also serves as a director of Mental Health Management, Inc., a
provider of outpatient psychiatric services, The New America High Income Fund, a
financial services company, The Pep Boys, Inc., a supplier of automotive part
and supplies, Today's Man, Inc., a retail men's clothing company and Omega
Healthcare Investors, Inc., a real estate investment trust.
Mr. Sachs is the President of Westrec Properties, Inc., which owns and
manages marinas. From 1982 to 1990, Mr. Sachs was Executive Vice President,
Director and General Counsel of Public Storage, Inc., a rental storage
facilities company.
Mr. Sandler, a certified public accountant, has been Senior Vice President
-- Finance and Chief Financial Officer since November 1988, Treasurer since
1991, and director since March 1994, of MEDIQ Incorporated. He has served as
Vice President, and a director of NutraMax Products, Inc. since July 1990, and
as Vice President and Chief Financial Officer of PCI Services, Inc. since
September 1991. He has served as Vice President, Treasurer and a director of
MEDIQ/PRN Life Support Services, Inc. since May 1992, and also served as Chief
Financial Officer of MEDIQ/PRN Life Support Services, Inc. from January 1989 to
September 1992. Mr. Sandler is also a director of Mental Health Management, Inc.
Mr. Wegmann has been a private investor since 1988. Mr. Wegmann serves on
the Board of Directors of Compression Labs, Incorporated, a manufacturer of
digital video compression hardware and Plantronics, Inc., a manufacturer of
telephone headset equipment.
Mr. Butler joined the Company in May, 1994 and was appointed Chief Financial
Officer on July 1, 1994. Previously, Mr. Butler served as the Chief Financial
Officer for InnerSpace, Inc., a manufacturer of medical devices from November,
1992 to May, 1994 and Corus Medical Corporation, a provider of specialized blood
products and services from February 1988 to November 1992.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules promulgated thereunder, officers and directors of the Company and persons
who beneficially own more than 10% of a registered class of the Company's equity
securities are required to file with the Securities and Exchange Commission and
furnish to the Company reports of ownership and changes in ownership of all
classes of the Company's equity securities. Based solely on its review of the
copies of such reports received by it during or with respect to the year ended
April 30, 1995, the Company believes that all reports required to be filed
during or with respect to the 1995 fiscal year, or prior fiscal years, by any
person who was an officer, director or beneficial owner of more than 10% of a
registered class of its equity securities at any time during the 1995 fiscal
year were filed timely.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
From April 30, 1994 through April 30, 1995, the end of the Company's last
fiscal year, the Company's Board of Directors held five meetings. All directors
attended all of the meetings of the Board of Directors and Committees thereof on
which such person served.
The Company has an Audit Committee which held one meeting from April 30,
1994 through April 30, 1995. The Audit Committee makes recommendations to the
Board of Directors concerning the selection of the Company's independent
auditors and reviews with the independent auditors the scope and result of the
annual audit.
5
<PAGE>
The Company has a Compensation and Stock Option Committee which held one
meeting from April 30, 1994 through April 30, 1995. The Committee reviews
salaries, bonuses and other aspects of executive compensation and administers
the Company's Incentive Stock Option Plan.
The Company has an Executive Committee which held four meetings from April
30, 1994 through April 30, 1995. The Executive Committee met with Company
management between quarterly board meetings to review results from operations.
The Executive Committee was dissolved in October 1994.
The Company does not have a Nominating Committee.
DIRECTORS FEES
Directors who are not officers receive $3,500 per quarter and $1,000 for
each Board, or Committee meeting attended. Also, under the 1992 Stock Incentive
Plan, on the first business day following the Company's Annual Meeting of
Shareholders, each nonemployee director is automatically granted options to
purchase shares of Common Stock equal to the lesser of (a) 3,000 shares of
Common Stock and (b) the number of shares of Common Stock that have an aggregate
fair market value of $20,000 on the date of grant. Directors who are officers
receive no additional compensation.
APPROVAL OF AMENDMENT OF THE COMPANY'S
ARTICLES OF INCORPORATION TO CHANGE THE
NAME OF THE COMPANY TO "INNOSERV TECHNOLOGIES, INC."
For a number of years, the Company's mobile imaging operation has been
shrinking while the more significant portion of the Company's business
operations has become embodied in the InnoServ Technologies, Inc. subsidiary.
For this reason, the Company has decided to change its name to InnoServ
Technologies, Inc. Because this change requires an amendment of the Company's
Articles of Incorporation, Shareholder approval is being sought.
The Board of Directors recommends that shareholders vote FOR approval of the
amendment.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation
received by the Company's executive officers, including Mr. Alan Margulis, who
acted as Chief Executive Officer from February 1992 to March 13, 1995, Dr.
Samuel Salen, who has acted as Chief Executive Officer since March 13, 1995, and
James P. Butler, the Chief Financial Officer, (the "Named Executive Officers"),
for the three fiscal years ended April 30, 1995.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
NAME AND --------------------------------- AWARDS OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (SHARES) (1) COMPENSATION
-------------------------- --------- ---------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Samuel Salen, M.D. (2) 1995 $ 37,480 $ 0 3,000(3) $ 22,000(4)
Alan Margulis (5) 1995 223,051 0 0 43,100(6)
1994 205,905 74,832 25,000 5,510(4)(6)
1993 194,250 117,660 22,000 3,790
James P. Butler (7) 1995 100,000 5,000 10,000(3) 0
<FN>
------------
NOTES:
(1) The number of options stated for 1993 have been restated to reflect a 10%
stock dividend declared March 4, 1993 and distributed April 5, 1993.
(2) Dr. Samuel Salen has acted as President and Chief Executive Officer of the
Company since March 13, 1995.
(3) Options granted pursuant to the Company's 1992 Stock Incentive Plan.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(4) Directors fees paid to Dr. Salen prior to his becoming an employee of the
Company on March 13, 1995.
(5) Mr. Alan Margulis acted as President and Chief Executive Officer of the
Company from February 1992 to March 13, 1995.
(6) Includes premiums for a personal life insurance policy in the amount of
$958 and $4,510 in 1995 and 1994, respectively. Also includes contributions
to the InnoServ Technologies Inc. Savings and Retirement Plan in the amount
of $500 in both 1994 and 1993 and accrued vacation payment of $42,600 in
1995.
(7) Mr. Butler has acted as Chief Financial Officer since July 1, 1994.
</TABLE>
STOCK OPTION GRANTS
The following table sets forth certain information concerning option grants
in fiscal 1995 to the Named Executive Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------- VALUE AT ASSUMED
PERCENTAGE ANNUAL
OF TOTAL RATES OF STOCK PRICE
OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO OPTION TERM
GRANTED EMPLOYEES IN EXERCISE PRICE EXPIRATION --------------------
NAME (SHARES) (1) FISCAL YEAR ($ PER SHARE) DATE 5% 10%
------------- --------------- --------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Samuel Salen, M.D................ 3,000(2) 4.4% $ 4.00 10/25/99 $ 3,312 $ 7,332
Alan Margulis.................... 0 -- -- -- -- --
James P. Butler.................. 10,000 14.7% $ 4.38 6/20/99 $ 12,088 $ 26,718
<FN>
------------
NOTES:
(1) Options become exercisable in equal installments over a three year period.
Options may be exercised for cash and/or other shares of the Company's
common stock in the sole discretion of the Company's Compensation
Committee.
(2) Granted to Dr. Salen while a nonemployee director pursuant to 1992 Stock
Incentive Plan.
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES.
The following table sets forth information concerning the fiscal year-end
value of unexercised options held by each Named Executive Officer. No options
were exercised by the Named Executive Officers in fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT YEAR END (1) OPTIONS AT YEAR END (2)
---------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
Samuel Salen, M.D......................................... 11,000 5,200 $ 0 $ 0
Alan Margulis............................................. 128,343 0 0 0
James P. Butler........................................... 3,333 6,667 0 0
<FN>
------------
NOTES:
(1) The number of options granted prior to March 4, 1993 have been adjusted to
reflect a 10% stock dividend declared March 4, 1993, and distributed April
5, 1993.
(2) Calculated using the closing price on August 1, 1995 of $3.25 per share.
</TABLE>
EMPLOYMENT AGREEMENT
Effective March 13, 1995, Mr. Margulis resigned from his positions with the
Company and entered into a separation agreement with the Company which provides
that the Company will pay to Mr. Margulis a severance compensation of
approximately $72,000 on each of January 5, 1996, January 5, 1997 and January 5,
1998. The Separation Agreement also terminates other certain agreements between
Mr. Margulis and the Company.
7
<PAGE>
REPORT OF THE COMPENSATION/STOCK OPTION COMMITTEE
The Company applies a consistent philosophy to compensation for all
employees, including executive officers. This philosophy is based on the premise
that the achievements of the Company result from the coordinated efforts of all
individuals working toward common objectives. The Company strives to achieve
those objectives through teamwork that is focused on meeting the expectations of
customers and shareholders.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance, and to enable the Company to attract,
retain and reward executive officers who contribute to the long-term success of
the Company. The Company's compensation program for executive officers is based
on the same principles applicable to compensation decisions for all employees of
the Company:
- The Company compensates competitively.
- The Company is committed to providing a pay program that helps attract and
retain the best people in the industry.
- The Company pays for relative sustained performance.
- Executive officers are rewarded based upon corporate performance, business
unit performance and individual performance. Individual performance is
evaluated by reviewing organizational and management development progress
against set objectives and the degree to which teamwork and Company values
are fostered.
- The Company strives for fairness in the administration of compensation.
In light of the Company's compensation levels, the provisions of the Revenue
Reconciliation Act of 1993 which, under some circumstances, do not allow
publicly held corporations to take a tax deduction for remuneration of its
executive officers over $1 million per year have no effect on the Company's
compensation philosophy.
COMPENSATION METHODS
The Company utilizes a compensation program that consists of cash and equity
based compensation.
The Company sets base salary for employees by reviewing the aggregate of
base salary for competitive positions in the market. The Company does not have a
defined annual bonus plan, but makes an annual review of each senior management
employee's performance based on the Company's compensation philosophy as well as
the Company's performance to determine any amount to be awarded to such employee
as a bonus.
The Company also has an incentive stock option program, the purpose of which
is to provide additional incentives to employees to work to maximize shareholder
value. The incentive stock option program also utilizes vesting periods to
encourage key employees to continue in the employ of the Company. Senior
management employees of the Company are evaluated annually based upon individual
performance and the performance of the Company to determine if the awarding of
incentive stock options is appropriate.
CHIEF EXECUTIVE OFFICER COMPENSATION
Based upon the Committee's evaluation of Dr. Salen's past contributions and
their expectations with respect to his future contributions to the furtherance
of the Company's goals and objectives, and on other factors, including the pay
levels of former Chief Executive Officers, the Committee set Dr. Salen's
compensation at $19,300 per month. In determining this compensation, the
Committee also recognized Dr. Salen's leadership in refining the Company's
strategic direction in its markets.
8
<PAGE>
CONCLUSION
The Committee believes this executive compensation program serves the
interests of shareholders and the Company effectively. The compensation vehicles
are appropriately balanced to provide increased motivation for executives to
contribute to the Company's overall future success, thereby enhancing the value
of the Company for the shareholders.
COMPENSATION/STOCK OPTION COMMITTEE
Dudley A. Rauch, Chairman
Samuel Salen, M.D.
Bernard J. Korman
Michael F. Sandler
Michael M. Sachs
David A. Wegmann
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There are no interlocks between the Company and other entities involving the
Company's executive officers and directors and those of other entities.
PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Company include in
this Proxy Statement a linegraph presentation comparing cumulative, five-year
shareholder returns with an overall stock market index (Standard & Poors 500
Index) and either a nationally recognized industry standard or an index of peer
companies selected by the Company. The Board of Directors has approved the use
of the Standard & Poors Industrial Index as its peer group index. The table
below compares the cumulative total return as of the end of each of the
Company's last five fiscal years on $100 invested in April 1989 in the Common
Stock of the Company, Standard & Poors 500 Index, and the Standard & Poors
Industrial Index, assuming the reinvestment of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STARTING BASIS MMI MEDICAL INC. S & P 500 S & P INDUSTRIALS
<S> <C> <C> <C>
1990 $100.00 $100.00 $100.00
1991 $140.50 $117.62 $119.09
1992 $69.30 $134.12 $135.35
1993 $144.06 $146.51 $142.31
1994 $135.16 $154.30 $151.61
1995 $91.90 $181.26 $181.21
</TABLE>
9
<PAGE>
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP served as the Company's independent accountants for the
year ended April 30, 1995. A representative of that firm is expected to be at
the Annual Meeting of Shareholders and will have an opportunity to make a
statement, if desired. The representative will also be available to respond to
appropriate questions from shareholders.
SHAREHOLDERS PROPOSALS
Any proposal of a shareholder intended to be presented at the Company's 1996
Annual Meeting of Shareholders must be received by the Company for inclusion in
the Proxy Statement and form of Proxy for that meeting no later than April 27,
1996.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters to be
brought before the Annual Meeting. Should any other matters come before the
Meeting, action may be taken thereon pursuant to the proxies in the form
enclosed, which confer discretionary authority on the persons named therein or
their substitutes with respect to such matters.
10-K ANNUAL REPORT
Concurrently herewith, the Company is providing to each shareholder of
record as of August 14, 1995, a copy of its Annual Report. Shareholders of the
Company may obtain, without charge, a copy of the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission, including the
financial statements and exhibits thereto, for the year ended April 30, 1995, by
writing to Samuel Salen, M.D., Chief Executive Officer, MMI Medical, Inc., 1611
Pomona Road, Corona, California 91720.
By Order of the Board of Directors,
Samuel Salen, M.D.
President, Chief Executive Officer and
Secretary
Corona, California
August , 1995
10
<PAGE>
MMI MEDICAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MMI MEDICAL, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
SEPTEMBER 15, 1995.
The undersigned hereby acknowledges receipt of the Notice of 1995 Annual
Meeting of Shareholders and Proxy Statement (the "Proxy Statement"), each dated
August , 1995 and the Annual Report to Shareholders, and revoking all prior
proxies, hereby constitutes and appoints Samuel Salen, M.D. and James P. Butler,
and each of them, with full power of substitution, attorneys-in-fact and proxies
of the undersigned to represent the undersigned and to vote all the shares of
Common Stock, $.01 par value, of MMI Medical, Inc. (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders at the Harvey Hotel, 4545 West John Carpenter Freeway,
Irving, Texas 75063, on Friday, September 15, 1995 at 1:00 p.m., Central
Daylight Time, or at any adjournment or postponement thereof, in the following
manner:
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C> <C>
1. Election of Directors.
Nominees: Dudley A. Rauch, Samuel Salen, M.D., Bernard J. Korman, Michael M. Sachs, Michael F. Sandler, David A.
Wegmann
/ / FOR all nominees listed above / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed
below) above.
(INSTRUCTION: To withhold authority to vote for any individual, write that nominee's name on the space provided below.) IF
YOU DO NOT WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE, YOUR PROXIES WILL VOTE FOR ALL NOMINEES LISTED ABOVE.
2. Approval of the Amendment to the Company's Articles of Incorporation to change the Company's name to "InnoServ
Technologies, Inc."
/ / FOR / / AGAINST / / ABSTAIN
3. IN ACCORDANCE WITH THEIR BEST JUDGMENT, the proxies are authorized to vote with respect to any matter which may
properly come up before the Annual Meeting.
</TABLE>
<PAGE>
WHEN THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES IT REPRESENTS
WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND IN
ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXY HOLDERS WITH RESPECT TO ANY OTHER
MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
Dated: _____________________, 1995
__________________________________
Signature
__________________________________
Signature
Please date and sign exactly as
your name or names appear herein.
If there is more than one owner of
the shares represented, all owners
should sign. Executors,
administrators, trustees,
guardians, attorneys and corporate
officers should indicate their
fiduciary capacity or full title
in signing.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE SO THAT IT MAY BE COUNTED AT THE ANNUAL MEETING ON SEPTEMBER 15, 1995.
