<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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] 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 Rule 14a-11(c) or Rule 14a-12
JONES MEDICAL INDUSTRIES, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
[COMPANY NAME]
- -------------------------------------------------------------------------------
(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 Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
JONES MEDICAL INDUSTRIES, INC.
1945 CRAIG ROAD
P. O. BOX 46903
ST. LOUIS, MISSOURI 63146
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Jones
Medical Industries, Inc. ("Company"), a Delaware corporation, will be held at
the St. Louis Club, 7701 Forsyth, 16th Floor, Clayton, Missouri, on Wednesday,
May 22, 1996, at 3:30 P.M., local time, and at any adjournment or postponement
thereof, to consider and act upon the following matters as more fully described
in the Proxy Statement:
(1) The election of directors to serve for a term of one year; and
(2) Such other matters as may properly come before the meeting or any
adjournment or postponement thereof.
Only holders of record of Common Stock, $.04 par value ("Common Stock") or
Convertible Preferred Stock, Series A, $.01 par value ("Preferred Stock") at the
close of business on April 15, 1996, are entitled to vote at this meeting or any
adjournment or postponement thereof. The holders of Common Stock and Preferred
Stock will vote together as a single class with respect to the matters specified
above.
The Board of Directors cordially invites you to attend this meeting. If you
cannot attend in person, PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARD AT
ONCE. IF YOU ATTEND, YOU MAY VOTE IN PERSON, EVEN THOUGH YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
By Order of the Board of Directors of
Jones Medical Industries, Inc.
JUDITH A. JONES
Secretary
April 24, 1996
St. Louis, Missouri
<PAGE> 3
JONES MEDICAL INDUSTRIES, INC.
1945 CRAIG ROAD
P. O. BOX 46903
ST. LOUIS, MISSOURI 63146
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1996
PURPOSE OF THE MEETING
The Board of Directors of Jones Medical Industries, Inc. ("Company"), a
Delaware corporation, furnishes this Proxy Statement ("Proxy Statement") in
connection with the solicitation of proxies for use at the Company's Annual
Meeting of Shareholders to be held on May 22, 1996 at 3:30 P.M., local time, at
the St. Louis Club, 7701 Forsyth, 16th Floor, Clayton, Missouri and at any
adjournment or postponement thereof ("Annual Meeting"), for the purposes set
forth in the attached Notice of Annual Meeting of Shareholders and as further
described in this Proxy Statement.
The Board of Directors of the Company ("Board") is soliciting proxies in
the form enclosed with respect to matters to be acted upon at the Annual Meeting
("Proxy"). A shareholder of the Company may revoke a Proxy at any time before it
is exercised by filing a written revocation or a duly executed Proxy bearing a
later date with the Secretary of the Company, either prior to or at the Annual
Meeting. If a Proxy is properly executed and returned, the shares represented by
that Proxy will be voted in accordance with the instructions specified on the
Proxy, or if no contrary instructions are specified, the shares will be voted in
favor of the election of all of the nominees for director. This Proxy Statement
and related form of Proxy are first being sent to shareholders of the Company on
or about April 24, 1996.
The Company anticipates that it will solicit Proxies primarily by mail,
although directors, officers and employees of the Company (who will not receive
any additional remuneration for such solicitation) may solicit Proxies by
letter, personal interview and telephone. The Company will bear the total
expense of the solicitation of Proxies and requests that brokers, nominees,
fiduciaries and other custodians forward soliciting material to the beneficial
owners of shares. The Company will reimburse such parties for their reasonable
expenses incurred in forwarding such soliciting material.
As of the date of this Proxy Statement, the Board does not know of any
matters which may come before the Annual Meeting other than those which are
discussed in this Proxy Statement. If any other matters properly come before the
Annual Meeting, the Proxy holders will vote the shares represented by those
Proxies in accordance with their best judgment on such matters.
SHAREHOLDERS ENTITLED TO VOTE,
RECORD DATE AND VOTE REQUIRED FOR APPROVAL
The Company is authorized to issue 30,000,000 shares of common stock, $.04
par value ("Common Stock") and 1,000,000 shares of preferred stock, $.01 par
value issuable in series. In accordance with the Company's Bylaws, the Board
established April 15, 1996 as the record date for the determination of the
shareholders entitled to notice of, and to vote at, the Annual Meeting ("Record
Date"). As of the Record Date, there were 16,343,276 shares of Common Stock and
115 shares of Convertible Preferred Stock, Series A ("Preferred Stock") issued
and outstanding, together representing all of the shares entitled to notice of
and to vote at the Annual Meeting.
All of the outstanding shares of Preferred Stock constitute the remainder
of a series of Preferred Stock designated and issued in connection with the
Company's acquisition of GenTrac, Inc., a Wisconsin corporation ("GenTrac").
These shares will be converted into shares of Common Stock at the rate of 2.625
shares of Common Stock for each share of Preferred Stock as of April 29, 1996.
1
<PAGE> 4
The holders of Common Stock and Preferred Stock will vote together as a
single class at the Annual Meeting with respect to the election of directors.
The holders of a majority of the aggregate outstanding shares of Common
Stock and Preferred Stock, present either in person or by proxy, will constitute
a quorum for the transaction of business at the Annual Meeting. Each shareholder
is entitled to one vote for each share of Common Stock or Preferred Stock held
by that shareholder on the Record Date. There is no cumulative voting with
respect to the election of directors. Therefore, the vote of a majority of the
shares of Common Stock and Preferred Stock, present at the Annual Meeting either
in person or by proxy, voting together, will be required for the election of
each director.
BOARD OF DIRECTORS
The Company's Certificate of Incorporation, as amended, provides for a
Board constituted of not less than three (3) nor more than nine (9) directors.
The Company's Bylaws currently fix the number of directors at nine (9). The
directors elected at the Annual Meeting will serve a one-year term and until
their successors have been duly elected and shall have qualified. Directors
appointed by the Board to fill vacancies or newly created directorships serve
for the remainder of the term of the directorship which is vacant or the newly
created directorship. From time to time, the Board determines the size of the
Board within the foregoing range.
The Board held four (4) meetings during the fiscal year ended December 31,
1995. All of the directors attended all of the Board meetings except for Stanley
L. Lopata who did not attend the May 15, 1995 meeting. Stanley L. Lopata, L.
John Polite, Jr., Thomas F. Patton and Judith A. Jones were elected as members
of the Company's audit committee. The audit committee acts as a liaison between
the Board and the Company's independent auditors and reviews the results of the
audit, the Company's internal controls, the audit procedures, and the
independent auditor's recommendations to management. The audit committee met one
(1) time during the fiscal year ended December 31, 1995. Stanley L. Lopata, L.
John Polite, Jr. and Edward A. Chod were elected as members of the Company's
compensation committee. The compensation committee administers the Company's
1994 Incentive Stock Plan and periodically advises the Company's chief executive
officer with respect to executive compensation matters. The compensation
committee met one (1) time during the fiscal year ended December 31, 1995. The
Company has no standing nominating committee of the Board or committees
performing similar functions.
The following biographies and other information indicate the principal
occupation or employment for the past five years, the age, and the year first
elected as director with respect to each nominee to become a director.
DENNIS M. JONES, 57, the founder of the Company, has been the Company's
Chairman of the Board, President and Chief Executive Officer since its inception
in March 1981. Mr. Jones has been involved primarily in the pharmaceutical
industry since 1964 in various marketing, management and administrative
positions. He was a co-founder of O'Neal, Jones and Feldman Pharmaceuticals,
which was acquired by Chromalloy American Pharmaceuticals, Inc. in 1978 and
subsequently acquired by Forest Laboratories, Inc., a specialty pharmaceutical
company, in 1984. Mr. Jones has been a director of Mark Twain State Bank, a
subsidiary of Mark Twain Bancshares, Inc., since 1988.
JUDITH A. JONES, 55, joined the Company in October 1981 and has been in
charge of the financial affairs and books of the Company since that time. Mrs.
Jones has been a Director of the Company since December 1981, and the Secretary
and Treasurer since April 1982. Mrs. Jones served as Vice President of the
Company from March 1985 to February 1994 and has been Executive Vice President
of the Company since February 1994.
MICHAEL T. BRAMBLETT, 53, a Director of the Company since 1987, served as
Vice President--Marketing of the Company from January 1991 to February 1994 and
has served as Executive Vice President since February 1994. From May 1988
through December 1990, Mr. Bramblett served as Marketing Director of Carlson
Marketing Group, and from June 1987 until May 1988, he served as Corporate Vice
President of S&H Motivation Company.
2
<PAGE> 5
G. ANDREW FRANZ, 43, a Director of the Company since 1994, became Senior
Vice President--Operations--Pharmaceuticals for the Company in February 1994. He
has served as the Vice President--Operations of JMI-Canton since the facility
was acquired by JMI-Canton from Bowman Pharmaceuticals, Inc. in March 1984.
Prior to March 1984, Mr. Franz held various management positions for 14 years
within Bowman Pharmaceuticals, Inc., including Chief Chemist and Vice
President--Operations.
DAVID A. MCLAUGHLIN, 48, a Director of the Company since 1994, became
Senior Vice President--Operations--Nutritionals in February 1994. He served as
the Vice President--Operations of the Company's subsidiary, American Vitamin
Company from May 1988 until that company's merger into JMI Phoenix in 1993. From
April 1986 to May 1988, Mr. McLaughlin was the Vice President--Sales and
Marketing of JMI Phoenix. Prior to that time, Mr. McLaughlin served as an
independent consultant to a number of health food, chemical and pharmaceutical
companies, including JMI Phoenix. From May 1978 to January 1982 he was a
supervisor of packaging and processing for the Searle Consumer Products Division
of G.D. Searle & Company, a chemical company.
STANLEY L. LOPATA, 81, a Director since 1988, is the President of Lopata
Research and Development Corp. and has served in that capacity since 1988. Prior
to 1988, Mr. Lopata was the Chairman of the Board of Directors and Chief
Executive Officer of Carboline Corporation, a manufacturer of specialty paint
and coating products, from 1960 through 1988. Mr. Lopata has been a director of
Boatmen's Trust Company, a subsidiary of Boatmen's Bancshares, Inc., since 1983.
L. JOHN POLITE, JR., 74, a Director since 1989, is Chairman of Peridot (New
Jersey) Chemicals, Inc., and has served in that capacity since December 1989. He
was the Chairman of the Board, President and Chief Executive Officer of Essex
Chemical Corporation ("Essex") from April 1978 to October 1988 when Essex merged
into Dow Chemical Company, a chemical company. Mr. Polite also serves as a
director of Witco Corporation, a manufacturer and marketer of a wide range of
specialty chemicals, petroleum products and engineered materials.
EDWARD A. CHOD, 43, has been a Director since 1991. Mr. Chod is an officer
and shareholder in the law firm of Greensfelder, Hemker & Gale, P.C. which he
joined in 1978 and which has served as counsel to the Company since 1982.
THOMAS F. PATTON, PH.D., 47, a Director since 1995, is President of the St.
Louis College of Pharmacy and has served in that capacity since June 1994. From
April 1993 until January 1994 and from January 1994 until May 1994, Dr. Patton
served as Executive Director of Pharmaceutical Research and Development and as
Vice President of Pharmaceutical Research and Development, respectively, at
Dupont-Merck Pharmaceutical Co., a pharmaceutical company. From March 1990
through March 1993, Dr. Patton served as Director and Senior Director of
Pharmaceutical Research and Development at Merck and Co., Inc., a pharmaceutical
company. In 1993, Dr. Patton was President of the American Association of
Pharmaceutical Scientists. Dr. Patton's 20 year career also includes tenures as
Professor of Pharmaceutical Chemistry and Pharmacy Practice at the University of
Kansas, Associate Director Control Development at the Upjohn Co., a
pharmaceutical company, and Vice President of Operations at Oread Laboratories,
Inc., a pharmaceutical company.
Dennis M. Jones and Judith A. Jones are husband and wife. G. Andrew Franz
is the son-in-law of Dennis M. and Judith A. Jones.
No employee who is a director receives a director's fee for services
rendered as a director. However, each non-employee director receives
reimbursement for any expenses incurred in his capacity as a director of the
Company and $2,500 per meeting of the Board of Directors attended by such
non-employee director, subject to a minimum (as of December 31, 1995) of $5,000
per year. In addition, non-employee directors who are members of the Company's
compensation committee receive $500 per meeting of the compensation committee
attended by such non-employee director. Finally, the present non-employee
directors of the
3
<PAGE> 6
Company have been granted stock options pursuant to the Company's 1994 Formula
Stock Option Plan for Non-Management Directors, as set forth in the table below:
<TABLE>
<CAPTION>
NO. OF PER SHARE INITIAL
DATE OF OPTIONS EXERCISE EXERCISE EXPIRATION
NAME GRANT GRANTED(1) PRICE(1) DATE DATE
- --------------------------------------------- ------- ---------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Stanley L. Lopata............................ 6/1/94 7,500 $7.00 6/1/94 6/1/99
L. John Polite, Jr. ......................... 6/1/94 7,500 $7.00 6/1/94 6/1/99
Edward A. Chod............................... 6/1/94 7,500 $7.00 5/1/95 5/1/00
Thomas F. Patton............................. 6/1/95 7,500 $6.67 5/1/96 5/1/01
</TABLE>
- ---------
(1) Adjusted to reflect the three-for-two split effected in the form of a 50%
stock dividend paid on March 1, 1996 to holders of record on February 23,
1996.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Dennis M. Jones, Judith A. Jones, Michael T. Bramblett, G. Andrew Franz,
David A. McLaughlin, Stanley L. Lopata, L. John Polite, Jr., Edward A. Chod and
Dr. Thomas F. Patton are nominees for election to membership on the Board for
one year terms. In each instance, the directors are elected to serve until their
successors shall have been duly elected and shall have qualified.
Unless otherwise instructed, the Proxy holders will vote for the election
of the nine (9) nominees. Although the Company does not contemplate that any
nominee will decline or be unable to serve as director, in either such event,
the Proxies will be voted for such other person as may be designated by the
Board.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES.
SELECTION OF INDEPENDENT AUDITORS
The Board reappointed the accounting firm of Ernst & Young LLP ("Ernst &
Young") as independent auditors for the Company for fiscal year 1996.
Ernst & Young has served as the Company's independent auditors since
December, 1985. Audit services performed by Ernst & Young during fiscal year
1995 consisted of the examination of annual financial statements of the Company
and services related to filings with the Securities and Exchange Commission
including, without limitation, the Company's Form S-3 Registration Statement
filed with the Securities and Exchange Commission on February 26, 1996.
A representative of Ernst & Young will be present at the Annual Meeting and
will be given an opportunity to make a statement if he or she so desires and to
respond to appropriate questions.
4
<PAGE> 7
SECURITY OWNERSHIP
OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
COMMON STOCK
The following table sets forth information regarding the record and
beneficial ownership of the Common Stock of the Company on the indicated date by
(i) each director or nominee for director and Named Executive (as such term is
defined in "Executive Compensation -- Summary Compensation Table", below) of the
Company, (ii) all directors or nominees for director and executive officers of
the Company as a group, and (iii) each shareholder owning of record or
beneficially five percent (5%) or more of the outstanding Common Stock:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF APRIL 5, 1996
--------------------------------------------
PERCENTAGE OF SHARES
NAME AND ADDRESS OF SHARES BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER(1) OWNED(2) OWNED(3)
--------------------------------------------------------- --------------------
<S> <C> <C>
Dennis M. Jones(4)(5)............... 2,781,840 17.0%
Chairman of the Board of Directors
and President
Judith A. Jones(4)(6)............... 680,625 4.2%
Executive Vice President, Secretary,
Treasurer and Director
Michael T. Bramblett(7)............. 162,576 1.0%
Executive Vice President and
Director
G. Andrew Franz(8).................. 325,183 2.0%
Senior Vice President--Operations--
Pharmaceuticals and Director
David A. McLaughlin(9).............. 82,500 *
Senior Vice President--Operations--
Nutritionals and Director
Stanley Lopata(10).................. 144,000 *
Director
900 South Hanley Rd.
St. Louis, MO 63106
L. John Polite, Jr.(11)............. 27,000 *
Director
211 Oldwoods Rd.
Franklin Lakes, NJ 07417
Edward A. Chod(12).................. 18,750 *
Director
10 South Broadway, Ste. 2000
St. Louis, MO 63102
Thomas F. Patton, Ph.D.(13)......... 1,500 *
Director
4588 Parkview Place
St. Louis, MO 63110
All Directors and Executive Officers
as a Group (consisting of
nine persons)..................... 4,223,974 25.7%
</TABLE>
- ---------
* Less than one percent.
(1) Except as otherwise indicated, the officers and directors of the Company
named in the above table have sole voting and investment power with respect
to all shares of Common Stock shown as beneficially owned by them and their
respective addresses are 1945 Craig Road, St. Louis, Missouri 63146.
5
<PAGE> 8
(2) Includes shares deemed owned as a result of options to purchase 94,500
shares which are presently or will become exercisable within 60 days of
April 5, 1996.
(3) The number of shares of Common Stock deemed outstanding as of April 5, 1996
includes (i) 16,336,691 shares of Common Stock outstanding, (ii) an
aggregate of 737 shares of Common Stock issuable upon conversion of all of
the shares of the Company's Preferred Stock, Series A outstanding at April
5, 1996 (which conversion will be effected as of April 29, 1996), and (iii)
shares of Common Stock issuable pursuant to options held by the directors
and executive officers that are currently exercisable or will become
exercisable within 60 days of April 5, 1996 by the person or group in
question.
(4) Excludes 90,000 shares owned by the Company's 401(k) Plan (of which Dennis
and Judith Jones are co-trustees) and with respect to which Dennis and
Judith Jones disclaim beneficial ownership.
(5) Only includes shares owned directly by Mr. Jones. Does not include 680,625
shares owned by his spouse, with respect to which he disclaims beneficial
ownership.
(6) Only includes shares owned directly by Mrs. Jones. Does not include
2,781,840 shares owned by her spouse, with respect to which she disclaims
beneficial ownership.
(7) Includes 83,250 shares owned directly by Mr. Bramblett, 2,400 by his IRA,
1,926 shares held by his spouse's IRA and with respect to which he
disclaims beneficial ownership, and vested and unexercised options to
purchase 75,000 shares of Common Stock pursuant to the Company's 1989
Incentive Stock Option Plan.
(8) Includes 114,007 shares owned directly by Mr. Franz, 154,110 shares owned
by his spouse and with respect to which he disclaims beneficial ownership,
34,560 shares held by his spouse as custodian for his children and with
respect to which he disclaims beneficial ownership, 15,006 shares held by
his spouse as trustee for his children and with respect to which he
disclaims beneficial ownership and vested and unexercised options to
purchase 7,500 shares of common stock pursuant to the Company's 1989
Incentive Stock Option Plan.
(9) Only includes shares owned directly by Mr. McLaughlin.
(10) Includes 100,500 shares owned directly by Mr. Lopata, 40,500 shares owned
by Mr. Lopata through his spouse's revocable trust and with respect to
which he disclaims beneficial ownership, and vested and unexercised options
to purchase 3,000 shares of Common Stock pursuant to the Company's 1994
Formula Stock Option Plan for Non-Management Directors.
(11) Includes 22,500 shares owned directly by Mr. Polite and vested and
unexercised options to purchase 4,500 shares of Common Stock pursuant to
the Company's 1994 Formula Stock Option Plan for Non-Management Directors.
(12) Includes 15,750 shares owned directly by Mr. Chod and vested and
unexercised options to purchase 3,000 shares of Common Stock pursuant to
the Company's 1994 Formula Stock Option Plan for Non-Management Directors.
(13) Includes vested and unexercised options to purchase 1,500 shares of Common
Stock pursuant to the Company's 1994 Formula Stock Option Plan for
Non-Management Directors.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth all compensation received in each of the three
fiscal years ended December 31, 1995, 1994 and 1993 for services rendered in all
capacities to the Company and its subsidiaries by the Chief Executive Officer
and the other four (4) highest-compensated Executive Officers of the Company
during the fiscal year ended December 31, 1995 (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS(#) COMPENSATION
- ---------------------------- ---- -------- ------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Dennis M. Jones, 1995 $300,000 $75,000 0 0 $17,401(2)
Chairman of the Board, 1994 250,000 50,000 0 0 13,971(2)
Director and President and 1993 200,000 50,000 0 0 15,204(2)
Chief Executive Officer
Judith A. Jones, 1995 $150,000 $35,000 0 0 $ 9,719(3)
Director, Executive Vice 1994 125,000 25,000 0 0 10,023(3)
President, Secretary and 1993 100,000 25,000 0 0 8,920(3)
Treasurer
Michael T. Bramblett, 1995 $150,000 $35,000 0 0 $ 6,771(4)
Director and Executive Vice 1994 125,000 25,000 0 0 5,990(4)
President 1993 100,000 25,000 0 0 5,750(4)
G. Andrew Franz, 1995 $120,000 $20,000 0 0(5) $ 5,125(4)
Director and Senior Vice 1994 90,000 10,000 0 37,500 4,813(4)
President--Operations-- 1993 72,000 8,000 0 0 3,066(4)
Pharmaceuticals
David A. McLaughlin, 1995 $120,000 $20,000 0 0(5) $ 5,125(4)
Director and Senior Vice 1994 90,000 10,000 0 37,500 4,813(4)
President--Operations-- 1993 80,000 10,000 0 0 4,500(4)
Nutritionals
</TABLE>
- ---------
(1) None of the Named Executives received Other Annual Compensation which is
required to be reported in this column.
(2) Consists of a Company contribution to a 401(k) plan ($9,240 in 1995, $6,264
in 1994 and $8,004 in 1993) and the dollar value of premiums paid by the
Company for a split-dollar life insurance policy on Mr. Jones, of which
$8,161, $7,707 and $7,200 constituted his entire economic benefit in the
years 1995, 1994 and 1993, respectively.
(3) Consists of a Company contribution to a 401(k) plan ($6,771 in 1995, $7,239
in 1994 and $6,160 in 1993) and the dollar value of premiums paid by the
Company for a split-dollar life insurance policy on Mrs. Jones, of which
$2,948, $2,784 and $2,760 constituted her entire economic benefit in the
years 1995, 1994 and 1993, respectively.
(4) Consists of a Company contribution to a 401(k) plan.
(5) As adjusted to reflect the three-for-two stock split effected in the form of
a 50% stock dividend paid on March 1, 1996 to holders of record on February
23, 1996.
7
<PAGE> 10
STOCK OPTION/SAR GRANTS
The Company granted no stock options and no stock appreciation rights
("SARs") to the Named Executives during the fiscal year ended December 31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table provides information with respect to the stock options
exercised during the fiscal year ended December 31, 1995 and the value as of
December 31, 1995 of unexercised in-the-money options held by the Named
Executives. The value realized on the exercise of options is calculated using
the difference between the option exercise price and the fair market value of
the Company's stock on the date of the exercise. The value of unexercised
in-the-money options at fiscal year end is calculated using the difference
between the option exercise price and the fair market value of the Company's
stock at fiscal year end, December 31, 1995. The Named Executives exercised no
SARs during the fiscal year ended December 31, 1995 and held no SARs as of
December 31, 1995. The information in the following table is adjusted to reflect
the three-for-two stock split effected in the form of a 50% stock dividend, paid
on March 1, 1996 to holders of record on February 23, 1996.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS MONEY OPTIONS AT
SHARES AT FY-END FY-END
ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------- ----------- -------- ------------------- -------------------
<S> <C> <C> <C> <C>
Dennis M. Jones.................... 0 0 0/0 N.A.
Judith A. Jones.................... 0 0 0/0 N.A.
Michael T. Bramblett............... 0 0 150,000/0 $2,087,500/0
G. Andrew Franz.................... 6,000 $ 47,000 7,500/30,000 $80,625/322,500
David A. McLaughlin................ 60,000 $670,000 7,500/30,000 $80,625/322,500
</TABLE>
REPORT ON REPRICING OF OPTIONS
The following table summarizes all repricings of options held by any
executive officers of the Company during the last ten (10) completed fiscal
years:
<TABLE>
<CAPTION>
NUMBER MARKET LENGTH OF
OF PRICE OF ORIGINAL
SECURITIES STOCK AT EXERCISE NEW OPTION
UNDERLYING TIME OF PRICE AT TIME EXERCISE TERM REMAINING
OPTIONS REPRICING OF REPRICING PRICE AT DATE
NAME DATE REPRICED ($) ($) ($) OF REPRICING
- --------------------------- ------ ---------- --------- ------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
G. Andrew Franz............ 9/1/94 37,500 $5.33/sh. $8.67/sh. $5.33/sh. 5 years
David A. McLaughlin........ 9/1/94 37,500 $5.33/sh. $8.67/sh. $5.33/sh. 5 years
</TABLE>
COMPENSATION COMMITTEE
Stanley L. Lopata
L. John Polite, Jr.
Edward A. Chod
8
<PAGE> 11
CASH OR DEFERRED PROFIT-SHARING PLAN AND TRUST
Effective as of January 1, 1987, the Company adopted a Cash or Deferred
Profit-Sharing Plan and Trust known as the Employee Retirement 401(k) Plan
("401(k) Plan"). The 401(k) Plan has been amended from time-to-time and was
amended and restated as of January 1, 1995. The 401(k) Plan provides employees
with a convenient way to save on a regular and long-term basis and encourages
employees to make and continue careers with the Company. During 1995, the
Company made matching contributions to the 401(k) Plan of $33,032 to the Named
Executives.
To become eligible to participate in the 401(k) Plan, an employee must have
completed six months of service and have reached his or her eighteenth birthday
("Eligible Employee"). As of January 1, 1996, the Company had approximately 275
Eligible Employees, including the directors who are also Named Executives
(Dennis M. Jones, Judith A. Jones, Michael T. Bramblett, G. Andrew Franz and
David A. McLaughlin). Pursuant to the 401(k) Plan, an Eligible Employee who
participates ("Participant") may direct that a portion of his or her
compensation be contributed to the 401(k) Plan ("Elective Contributions"). The
Company will contribute a matching amount determined by the Company each year
(five percent in each of 1993, 1994 and 1995) of the Participant's compensation
("Company Contributions"). In addition to matching contributions, the Company
may make a discretionary contribution which is allocated among Participants in
proportion to compensation. The Participants are not allowed to make any
voluntary contributions to the 401(k) Plan, other than their Elective
Contributions. The Company Contributions are subject to a vesting schedule
described below and may not be withdrawn from the 401(k) Plan until age 59 1/2,
retirement, termination of employment, or other condition specified in the
401(k) Plan. In addition, Participants may withdraw their Elective Contributions
to the 401(k) Plan at any time after they are made for reasons of hardship as
described in the 401(k) Plan. Elective Contributions are always 100% vested.
Company Contributions become vested according to the following schedule:
<TABLE>
<CAPTION>
YEARS OF PERCENTAGE
SERVICE VESTED
-------- ----------
<S> <C> <C>
2...................................... 20%
3...................................... 40%
4...................................... 60%
5...................................... 80%
6...................................... 100%
</TABLE>
Forfeitures of discretionary Company Contributions will be allocated to the
accounts of other Participants. Forfeitures of matching contributions are
allocated in proportion to matching contributions.
The 401(k) Plan Trustee may invest in investments as described in the
401(k) Plan including stocks, bonds, notes and other property. Participants may
not obtain loans from their accounts under any circumstances. Company
Contributions have, at times, been invested in shares of the Company's Common
Stock acquired in the open market. On February 15, 1996, the 401(k) Plan held
90,000 shares of Common Stock (as adjusted for the three-for-two stock split
effected in the form of a 50% stock dividend paid on March 1, 1996 to holders of
record as of February 23, 1996).
The Company is the 401(k) Plan Administrator and currently pays all
expenses of the 401(k) Plan other than audit fees, which are paid by the 401(k)
Plan. The Company has appointed Dennis M. Jones and Judith A. Jones as
co-trustees of the 401(k) Plan. The 401(k) Plan may be modified by the Board at
any time, provided that no modification shall adversely affect the rights of the
Participants or divert any of the trust fund to purposes other than the benefit
of the Participants.
9
<PAGE> 12
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company has established a compensation committee of the Board which
serves in an advisory capacity to Dennis M. Jones, the President and Chief
Executive Officer of the Company, with respect to compensation decisions
concerning the Company's executive officers. The compensation committee also
administers the Company's 1994 Incentive Stock Plan.
COMPENSATION POLICIES
The guiding principle of the Company is to establish a compensation program
which aligns executive compensation with Company objectives and business
strategies as well as financial and operational performance. In keeping with
this principle, the Company seeks to:
(1) Attract and retain qualified executives who will play a significant
role in, and be committed to, the achievement of the Company's
long-term goals.
(2) Reward executives for strategic management and the long-term
maximization of shareholder value.
(3) Create a performance-oriented environment that rewards performance with
respect to the financial and operational goals of the Company.
An executive officer's performance is reviewed in such areas as quality and
quantity of work, job and professional knowledge, decision making and business
judgment, initiative, analytical skills, communication skills, interpersonal
skills, organizational skills, commercial skills, profit and loss sensitivity,
creativity and leadership.
Executive compensation consists of both cash and equity-based compensation.
Cash compensation is comprised of base salary and bonus. Base salary is
determined with reference to market norms. Bonus compensation is tied to the
Company's success in achieving financial and non-financial performance goals and
an executive's success in attaining personal performance goals. Equity-based
compensation is comprised primarily of stock option grants. In establishing
equity-based compensation, the Company places particular emphasis on the
achievement of the Company's long-term performance goals. The Company believes
that equity-based compensation closely aligns the economic interest of the
Company's executive officers with the economic interests of the Company's
shareholders.
CHIEF EXECUTIVE OFFICER
In establishing Mr. Jones' compensation, the factors described above are
taken into account, as well as the shareholder value which Mr. Jones has played
an instrumental role in creating since the founding of the Company. Mr. Jones
has spearheaded the Company's growth strategy and has been the driving force
behind the Company's success. The Company believes that Mr. Jones' base salary
and bonus are well within industry norms and reflect his commitment to the
Company's long-term success.
COMPENSATION COMMITTEE
Stanley L. Lopata
L. John Polite, Jr.
Edward A. Chod
10
<PAGE> 13
FIVE-YEAR SHAREHOLDER RETURN COMPARISON
The Securities and Exchange Commission ("SEC") requires that the Company
include in this Proxy Statement a line-graph presentation comparing cumulative,
five-year shareholder returns on an indexed basis with a broad-based market
index and either a nationally recognized industry standard or an index of peer
companies selected by the Company. The Company has selected the S & P Midcap 400
Index and the S & P Health Care (Drugs) Index for the purposes of this
performance comparison which appears below. A list of the companies included in
the S & P Health Care (Drugs) Index follows the graph below.
<TABLE>
<CAPTION>
Jones Medi-
cal
Measurement Period Industries, S & P MIDCAP S & P Health
(Fiscal Year Covered) Inc. 400 Care Drugs
<S> <C> <C> <C>
12/90 100 100 100
12/91 115 150 165
12/92 110 168 132
12/93 211 191 121
12/94 105 185 141
12/95 385 242 241
</TABLE>
* $100 INVESTED ON 12/31/90 IN STOCK OR INDEX -- Source: Research
Data Group
INCLUDING REINVESTMENT OF DIVIDENDS,
FISCAL YEAR ENDED DECEMBER 31.
The companies included in the S & P Health Care (Drugs) Index are: Eli
Lilly & Co., Merck & Co., Inc., Pfizer, Inc., Schering Plough Corp., Syntex
Corp. and Upjohn Company. The returns of each company with respect to the S & P
Midcap 400 Index and the S & P Health Care (Drugs) Index have been weighted
according to their respective stock market capitalizations.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
ten-percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1995 all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than ten-percent beneficial owners were complied with,
except that L. John Polite, Jr. filed a Form 4 approximately thirty (30) days
after the required filing date with respect to the sale of 1,000 shares on
November 28, 1995.
11
<PAGE> 14
SHAREHOLDER PROPOSALS
The Company must receive at its principal executive offices, directed to
the attention of the Secretary, any proposal to be presented at next year's
annual meeting of shareholders not later than December 26, 1996 for
consideration for inclusion in the Company's Proxy Statement and form of proxy
relating to the annual meeting of shareholders to be held in 1997. Any such
proposal must comply in all respects with the rules and regulations of the
United States Securities and Exchange Commission.
OTHER MATTERS
The Board knows of no other matters which may come before the Annual
Meeting. If any matters other than those referred to above should properly come
before the Annual Meeting, the persons designated by the Board to serve as
proxies intend to vote such proxies in accordance with their best judgment.
UPON RECEIPT OF A WRITTEN REQUEST, WITHOUT CHARGE, THE COMPANY WILL PROVIDE
ANY BENEFICIAL OWNER OF THE COMMON STOCK (AS OF THE RECORD DATE) WITH A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR. A
BENEFICIAL OWNER WHO IS NOT A RECORD OWNER AS OF THE RECORD DATE SHOULD INCLUDE
IN SUCH A REQUEST A REPRESENTATION THAT THE INDIVIDUAL OR ENTITY WAS A
BENEFICIAL OWNER AS OF THE RECORD DATE. PLEASE DIRECT ALL REQUESTS TO:
Judith A. Jones, Secretary
Jones Medical Industries, Inc.
1945 Craig Road
St. Louis, Missouri 63146
By Order of the Board of Directors of
Jones Medical Industries, Inc.
JUDITH A. JONES
Secretary
April 24, 1996
12
<PAGE> 15
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY JONES MEDICAL INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS--MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints JUDITH A. JONES and DENNIS M. JONES,
and each of them, proxy, with full power of substitution, to vote all
the shares the undersigned is entitled to vote at the Annual Meeting of
Shareholders of JONES MEDICAL INDUSTRIES, INC. to be held at the St.
Louis Club, 7701 Forsyth, Clayton, Missouri 63105 on May 22, 1996 at
3:30 p.m., and at any adjournment or postponement thereof, and to take
action on the proposals listed hereon and any other business that may
lawfully come before the meeting, hereby revoking all proxies as to said
shares heretofore given by the undersigned and ratifying and confirming
all that said proxy may lawfully do by virtue hereof.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED
"FOR" ALL PROPOSALS LISTED BELOW: IF SPECIFIC INSTRUCTIONS ARE
INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
In his/her discretion, each proxy is authorized to vote upon such
other business as may properly come before the meeting or any
adjournment or postponement thereof.
<TABLE>
<CAPTION>
<S> <C>
PROPOSAL 1-- Election of Directors
/ / FOR all nominees listed below. / / WITHHOLD AUTHORITY for all nominees.
</TABLE>
To withhold authority to vote for any individual nominee or nominees,
line through or strike out the nominee's or nominees' name or names
below:
Michael T. Bramblett, Edward A. Chod, G. Andrew Franz, Dennis M. Jones,
Judith A. Jones, Stanley L. Lopata, David A. McLaughlin, L. John Polite,
Jr., Thomas F. Patton
The Board of Directors Recommends a Vote FOR all nominees listed.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The shares represented by this proxy will be voted as directed by
the Shareholder. If no direction is given when the duly executed proxy
is returned, such shares will be voted FOR all proposals listed.
Date , 1996
--------------------------------
Signature
--------------------------------
Signature if held jointly
Please date and sign as your
name appears above and return in
the enclosed envelope. If acting
as attorney, executor,
administrator, trustee or
guardian, you should so indicate
when signing. If the signor is a
corporation, please sign the
full corporate name, by duly
authorized officer. If shares
are held jointly, each
shareholder named should sign.
