SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
- --------------------------------------------------------------------------------
ZEVEX INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Character)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the 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)(1) 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:
[X] 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:
(SC14A-07/98)
<PAGE>
ZEVEX INTERNATIONAL, INC.
4314 ZEVEX PARK LANE
SALT LAKE CITY, UTAH 84123
PROXY STATEMENT
This proxy statement and accompanying proxy is furnished to the shareholders of
ZEVEX International, Inc., a Delaware corporation (hereafter "ZEVEX," or the
"Company"), by the Company in connection with its annual meeting of shareholders
(the "Annual Meeting"). The Annual Meeting will be held on June 2, 1999, at the
Company's corporate offices, 4314 ZEVEX Park Lane (670 West) Salt Lake City,
Utah, 84123, at 3:00 p.m., Mountain Time, and at any adjournment(s) thereof.
This proxy statement and the notice of Annual Meeting are first being mailed to
shareholders on or about May 3, 1999.
At the Annual Meeting, the shareholders will consider and vote on the
following proposals:
1. To elect Phillip L. McStotts, Darla R. Gill, and Kirk Blosch
as directors of the Company to serve a three-year term, or
until their successors are duly elected and qualified.
2. To ratify the appointment by the Board of Directors of Ernst &
Young LLP, certified public accountants, as independent
auditors for the year ended December 31, 1999.
3. To approve the Company's 1999 Stock Option Plan.
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors recommends that shareholders vote FOR all nominees for
director listed in Proposal Number 1, FOR Proposal Number 2, and FOR Proposal
Number 3.
INFORMATION CONCERNING
PROXY SOLICITATION AND VOTING
Voting Rights
Only holders of record of the 3,418,876 shares of the Company's Common
Stock outstanding as of April 15, 1999 (the "Record Date") are entitled to vote
at the Annual Meeting. Each shareholder has the right to one vote for each share
of the Company's Common Stock owned by the shareholder.
Voting and Revocation of Proxies
By completing and returning the accompanying proxy form, the
shareholder authorizes Dean G. Constantine and Phillip L. McStotts, as
designated on the face of the proxy form (the "Proxy Holders"), to vote all
shares for the shareholder. All returned proxies that are properly signed and
dated will be voted by the Proxy Holders as the shareholder directs. If no
direction is given, valid proxies will be voted by the Proxy Holders FOR the
election of the persons nominated as directors, FOR the appointment of Ernst &
Young LLP as the Company's independent auditors for the year ended 1999, and FOR
approval of the Company's 1999 Stock Option Plan.
Additionally, the shares represented by a valid proxy will be voted by
the Proxy Holders, in their discretion, on any other matters that may properly
come before the Annual Meeting. The Board of Directors does not know of any
matters to be considered at the Annual Meeting other than the proposals
described above. In the event that any director nominee is unwilling or unable
to serve, the Proxies will be voted for a substitute nominee, if any, to be
designated by the Board of Directors. The Board of Directors currently has no
reason to believe that any nominee will be unavailable or unwilling to serve.
A proxy may be revoked at any time before its exercise by (i)
delivering a document to the Secretary of the Company stating that the proxy is
revoked, (ii) delivering to the Secretary of the Company or presenting at the
Annual Meeting a new proxy executed on a later date by or on behalf of the
person or entity executing the prior proxy, or (iii) voting in person at the
Annual Meeting.
A revoked proxy will not be voted.
Quorum and Voting Requirements
A quorum of the voting shares of the Company must be present at the
Annual Meeting for a vote to be taken. Under Delaware law and the Company's
Certificate of Incorporation and Bylaws, a quorum will be present if a majority
of the voting shares outstanding and entitled to vote at the meeting are present
in person or by proxy. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, abstentions and broker non-votes will be counted for
the purposes of determining whether a quorum is present at the Annual Meeting.
With regard to Proposal No. 1, directors are elected by a plurality of
the shares present in person or by proxy and voting at the Annual Meeting. With
regard to the election of directors, votes may be cast in favor or withheld;
votes that are withheld will be excluded entirely from the vote. The appointment
of independent auditors under Proposal No. 2 and approval of the 1999 Stock
Option Plan under Proposal No. 3 separately require the affirmative vote of a
majority of the votes cast at the Annual Meeting. With regard to Proposals No. 2
and 3, abstentions and broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
Adjournment of Annual Meeting
In the event that Proxies representing sufficient votes to constitute a
quorum are not received by the date of the Annual Meeting, the officer presiding
over the meeting or the Proxy Holders may propose one or more adjournments of
the Annual Meeting to permit further solicitation of proxies. At such
adjournments the proxies will continue to be valid and, once a quorum is present
in person or by proxy, directors may be elected by plurality vote and other
proposals can be approved by the affirmative vote of the holders of a majority
of the Company's voting shares present in person or by proxy. The Proxy Holders
will vote in favor of any such proposed adjournments.
Solicitation
The solicitation of proxies pursuant to this Proxy Statement will be
made primarily by mail. In addition, officers, employees, and representatives of
the Company may solicit proxies by telephone, email, facsimile, or personal
interviews, and arrangements will be made with banks, brokerage firms, and
others to forward solicitation materials to the beneficial owners of shares held
of record by them. The total cost of all such solicitation efforts, including
reimbursement of the expenses of brokers and other nominees, will be borne by
the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock (par value $0.001) as of March 15, 1999,
by (i) each person (or group of affiliated persons) who is known by the Company
to beneficially own more than 5% of the outstanding shares of the Company's
Common Stock, (ii) each director and executive officer of the Company, and (iii)
all executive officers and directors of the Company as a group. As of such date,
the Company had a total of 3,418,876 shares of Common Stock outstanding. Unless
indicated otherwise, the address for each officer, director and 5% shareholder
is c/o the Company, 4314 ZEVEX Park Lane, Salt Lake City, Utah 84123.
<TABLE>
<CAPTION>
<S> <C> <C>
Number of Percent
Name Shares Owned Of Class(1)
---------------- ------------ -----------
Kirk Blosch(2) 550,000 14.8%
Jeff Holmes(3) 550,000 14.8%
Blosch & Holmes, L.L.C.(4) 250,000 7.6%
Dean G. Constantine(5) 287,130 8.3%
David J. McNally(6) 270,098 7.8%
Phillip L. McStotts.(7) 179,300 5.2%
Leonard C. Smith(8) 5,000 *
Bradly A. Oldroyd(9) 11,500 *
Darla R. Gill(10) 9,480 *
All Officers and Directors
as a Group (7 persons) 1,312,508 33.8%
</TABLE>
*Less than 1%
(1) For each shareholder, the calculation of percentage of beneficial ownership
is based on 3,418,876 shares of Common Stock outstanding as of March 15, 1999,
and shares of Common Stock subject to options held by the shareholder that are
currently exercisable or exercisable within 60 days, which are deemed to be
outstanding and to be beneficially owned by the shareholder holding such
options. The percentage ownership of any shareholder is determined by assuming
that the shareholder has exercised all options and conversion rights to obtain
additional securities and that no other shareholder has exercised such rights.
Except as indicated otherwise below, the persons and entity named in the table
have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to applicable community property
laws.
(2) Current director and director nominee. Includes 125,000 shares of Common
Stock held directly by Mr. Blosch, 175,000 shares of Common Stock issuable upon
exercise of warrants that are currently exercisable or will become exercisable
within 60 days, and 250,000 shares of Common Stock held by Blosch & Holmes,
L.L.C. of which Mr. Blosch is a principal (and which 250,000 shares are also
reported as beneficially owned by Mr. Holmes and Blosch & Holmes, L.L.C.).
Excludes 10,000 shares of Common Stock issuable upon exercise of options held by
Mr. Blosch that are not currently exercisable and will not become exercisable
within 60 days. Mr. Blosch's address is 2081 S. Lakeline Drive, Salt Lake City,
UT 84109.
(3) Includes 125,000 shares of Common Stock held directly by Mr. Holmes, 175,000
shares of Common Stock issuable upon exercise of warrants that are currently
exercisable or will become exercisable within 60 days, and 250,000 shares of
Common Stock held by Blosch & Holmes, L.L.C. of which Mr. Holmes is a principal
(and which 250,000 shares are also reported as beneficially owned by Mr. Blosch
and Blosch & Holmes, L.L.C.). Mr. Holmes' address is 8555 E. Voltaire Ave.,
Scottsdale, AZ 85260.
(4) Includes 250,000 shares of Common Stock held by Blosch & Holmes, L.L.C. of
which Messrs. Blosch and Holmes are principals (and which 250,000 shares are
also reported as beneficially owned by Mr. Holmes and Mr. Blosch). The address
for Blosch & Holmes, L.L.C.
is 2081 S. Lakeline Drive, Salt Lake City, UT 84109.
(5) Chief Executive Officer, President, and Chairman of the Company. Includes
257,000 shares of Common Stock held directly, 29,900 shares of Common Stock
issuable upon exercise of options held by Mr. Constantine that are currently
exercisable or will become exercisable within 60 days, and 230 shares of Common
Stock owned by his dependent child. Excludes 52,500 shares of Common Stock
issuable upon exercise of options held by Mr. Constantine that are not currently
exercisable and will not become exercisable within 60 days.
(6) Executive Vice President and director of the Company. Includes 240,198
shares of Common Stock held directly and 29,900 shares of Common Stock issuable
upon exercise of options held by Mr. McNally that are currently exercisable or
will become exercisable within 60 days. Excludes 52,500 shares of Common Stock
issuable upon exercise of options held by Mr. McNally that are not currently
exercisable and will not become exercisable within 60 days.
(7) Chief Financial Officer, Secretary, Treasurer, current director and director
nominee of the Company. Includes 149,400 shares of Common Stock held directly
and 29,900 shares of Common Stock issuable upon exercise of options held by Mr.
McStotts that are currently exercisable or will become exercisable within 60
days. Excludes 52,500 shares of Common Stock issuable upon exercise of options
held by Mr. McStotts that are not currently exercisable and will not become
exercisable within 60 days.
(8) President of JTech and director of the Company. Includes 5,000 shares of
Common Stock held directly by Mr. Smith. Excludes 40,000 shares of Common Stock
issuable upon exercise of options held by Mr. Smith that are not currently
exercisable or will not become exercisable within 60 days. Also excludes Common
Stock that may be issuable at $11 per share upon conversion of a debenture held
by Mr. Smith in the principal amount of $1,290,000 that is not convertible
within 60 days.
(9) Director. Includes 11,500 shares of Common Stock issuable upon exercise of
options that are currently exercisable or will become exercisable within 60
days. Excludes 10,500 shares of Common Stock issuable upon exercise of options
held by Mr. Oldroyd that are not currently exercisable and will not become
exercisable within 60 days.
(10) Current director and director nominee. Includes 480 shares of Common Stock
held directly and 9,000 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days.
Excludes 9,000 shares of Common Stock issuable upon exercise of options held by
Ms. Gill that are not currently exercisable and will not become exercisable
within 60 days.
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers, and 10%
shareholders to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock. Based solely
on a review of the copies of such reports furnished to the Company and written
representations that no other reports were required, the Company believes that
all directors, executive officers, and 10% shareholders during 1998 complied on
a timely basis with all applicable filing requirements under Section 16(a) of
the Exchange Act, except as follows: Dean G. Constantine, David J. McNally,
Phillip L. McStotts, Bradly A. Oldroyd, Darla R. Gill, and Kirk Blosch each
filed one late report on Form 5, due in February 1999, for one transaction
involving a repricing in October 1998 of certain options held by such persons.
-----------------------------------------------------------------------------
PROPOSAL 1 - ELECTION OF DIRECTORS
-----------------------------------------------------------------------------
Pursuant to the Company's Delaware Certificate of Incorporation and
Bylaws, the Company's Board of Directors has been divided into three classes,
with only a single class subject to re-election each year. These three classes
contain all seven of the Company's directorships. Class I and Class II each
contain two directorships expiring at the annual meetings of shareholders in
2001 and 2000, respectively. Class III contains three directorships expiring at
the Annual Meeting. At the Annual Meeting, shareholders are being asked to elect
three individuals to serve as Class III directors until the 2002 annual meeting
of shareholders and until their successors are duly elected and qualified. One
Class III nominee, Kirk Blosch, is the nominee of Blosch & Holmes, L.L.C.,
pursuant to a Stock Purchase Agreement between Blosch & Holmes, L.L.C., and the
Company. See Certain Relationships and Related Transactions below. The Board of
Directors is actively seeking non-employee candidates to serve in the future on
the Board.
Current Nominees for Director
The names of the three nominees for Class III director, their ages, the
number of years they have been directors of the Company, and their current
positions with the Company are provided below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Years as
Name Age Position Director
---- --- -------- --------
Phillip L. McStotts 41 Chief Financial Officer, Secretary/Treasurer and Director 12
Darla R. Gill 46 Director 6
Kirk Blosch 43 Director 1
</TABLE>
Certain biographical information with respect to each of the directors,
including the three nominees, is set forth below.
Class III Nominees:
Phillip L. McStotts is a founder of the Company and has served as the
Company's CFO, Secretary, and Treasurer, and as a director since its inception.
He also serves as a director of the Company's three wholly-owned subsidiaries,
ZEVEX, Inc. ("ZEVEX Inc."), JTech Medical Industries, Inc. ("JTech"), and Aborn
Electronics, Inc. ("Aborn"), as CFO, Secretary and Treasurer of ZEVEX Inc., as
Vice President and Secretary of Aborn, and as CFO and Secretary of JTech. In
addition to running his own professional corporation, Phillip L. McStotts, CPA
P.C., since October 1986, Mr. McStotts was employed from May 1985 to September
1986 as an accountant with the Salt Lake City firm of Chachas & Associates,
where he was tax manager. He has also worked in the tax departments of the
regional accounting firms of Pearson, Del Prete & Company, and Petersen,
Sorensen & Brough. Mr. McStotts received a Bachelor of Science Degree in
Accounting from Westminster College in May 1980, and received a Master of
Business Administration Degree in Taxation from Golden Gate University in May
1982.
Darla R. Gill has been a director of the Company since August 1993. She
is the owner of DRG Enterprises, a consulting company specializing in marketing,
sales and new product development. Ms. Gill was also the founder, President and
Chairman of Momentum Medical Corp., a Salt Lake City-based manufacturer and
distributor of home health care products from 1993 to 1998. Ms. Gill was a
founder of Merit Medical Systems, Inc., in Salt Lake City, and served until 1992
as Executive Vice President and Director. She was also previously employed by
Utah Medical Products, Inc., where she served as Vice President of Marketing and
Sales. Ms. Gill also currently serves as a director on the Board of NYB
Corporation in Salt Lake City. Ms. Gill graduated from the University of Phoenix
with a Bachelors Degree in Business Administration in 1988.
Kirk Blosch has been a general partner in the partnership of Blosch &
Holmes, a business consulting and private venture funding general partnership
since 1984. For the past fifteen years, Mr. Blosch has been an advisor for
various public and private companies. During 1995 and 1996, Mr. Blosch provided
bridge financing for private companies prior to their initial offerings. Mr.
Blosch graduated from the University of Utah with a Bachelors Degree in Speech
Communications in 1977.
Class I Directors - Expiration of Term: 2001
Dean G. Constantine is a founder of the Company and has served as the
Company's CEO, President, and Chairman of the Board since its inception in 1986.
He also serves as a director of ZEVEX Inc., JTech and Aborn, and as President
and CEO of ZEVEX Inc. Prior to joining the Company, he was employed by EDO
Corporation, Western Division, in Salt Lake City, Utah, from October 1985 to
September 1987, and from January 1971 to June 1983. During his nearly fifteen
years of employment with EDO Corporation, Mr. Constantine had various
responsibilities including project supervision, management of engineering for
commercial and industrial transducers, and research and development. From July
1983 through October 1985, Mr. Constantine was employed as an engineering
specialist at Northrop Corporation Electro-Mechanical Division, Anaheim,
California, where his responsibilities included engineering project management
and applications engineering.
Leonard C. Smith is a founder of JTech and has served as its President
since 1995. Prior to joining JTech, in 1994 he established "the Charles Group",
a medical marketing company specializing in diagnostic and rehabilitation
products. From 1993 to 1994, Mr. Smith was Vice President with Four Corners, a
large chain of health clubs based in the Southwest. From 1979 to 1993, Mr. Smith
was a partner and Vice President of Sales and Marketing at Hoggan Health
Industries, a manufacturer of commercial fitness equipment. Mr. Smith received a
Bachelor of Science Degree in Business Management from the University of Utah in
June 1977.
Class II Directors - Expiration of Term: 2000
David J. McNally is a founder of the Company and has served as the
Company's Executive Vice President, and as a director since its inception in
1986. He also serves as a director of ZEVEX Inc., JTech, and Aborn, and as a
Vice President of ZEVEX Inc. Prior to joining the Company, he was employed by
EDO Corporation in Salt Lake City, Utah as a marketing manager of transducers
from October 1985 to September 1987. From June 1984 to October 1985, Mr. McNally
was employed by Physical Acoustics Corporation, a Princeton, New Jersey based
manufacturer of acoustic testing systems, as its regional sales manager for the
Southeastern United States. From June 1983 to June 1984, he was employed by
Hercules, Inc., in Magna, Utah, as an advanced methods development engineer. Mr.
McNally received a Bachelor of Science Degree in Mechanical Engineering from
LaFayette College in May 1983 and a Master of Business Administration Degree
from the University of Utah in June 1992.
Bradly A. Oldroyd has been a director of the Company since October
1991. He is the founder and principal shareholder of Pinnacle Management Group,
a Salt Lake City-based personnel services firm, serving as its President since
1986. Mr. Oldroyd is also the founder and CEO of TeamONE Ford and Fuel Centers,
a Salt Lake City-based petroleum and convenience goods retailer. He is also a
member of the faculty of the University of Phoenix campus in Salt Lake City,
where he teaches management and marketing courses in undergraduate and graduate
programs. Mr. Oldroyd received a Bachelor of Science degree in Marketing from
Utah State University in 1981 and a Master of Business Administration Degree
from the University of Utah in 1982.
Executive Officers
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name Age Position
Dean G. Constantine 46 President, Chief Executive Officer and Director
David J. McNally 37 Executive Vice President and Director
Phillip L. McStotts 41 Chief Financial Officer and Secretary/Treasurer
</TABLE>
For the biographies of Messrs. Constantine, McStotts and McNally, see
"NOMINEES FOR DIRECTOR."
Committees of the Board of Directors
The Board of Directors has two committees, the Audit Committee and the
Compensation Committee. The Audit Committee is composed of Ms. Darla R. Gill
and Mr. Bradly A. Oldroyd. The Compensation Committee is also composed of Ms.
Gill and Mr. Oldroyd. The Audit Committee is authorized to review proposals of
the Company's auditors regarding annual audits, recommend the engagement or
discharge of the Company's auditors, review recommendations of such auditors
concerning accounting principles and the adequacy of internal controls and
accounting procedures and practices, review the scope of the annual audit,
approve or disprove each professional service or type of service other than
standard auditing services to be provided by the auditors, and review and
discuss the audited financial statements with the auditors. The Compensation
Committee makes recommendations to the Board of Directors regarding remuneration
of the executive officers and directors of the Company and oversees the
administration of the Company's stock option plan.
Meetings of the Board of Directors
The Board of Directors held seven meetings during the last fiscal year.
The Audit Committee held one meeting during the last fiscal year. The
Compensation Committee held two meetings during the last fiscal year.
Compensation of Directors and Executive Officers
Compensation of Directors
The Company pays each director who is not an employee of the Company or
its subsidiaries a director's fee of $625 per Board of Directors meeting
attended, $250 for any annual meeting attended, and $125 per hour for any
special meeting attended. Additionally, the Company has issued stock options to
the non-employee directors in the past and may do so in the future. Although the
Company may also issue stock options to directors who are employees for their
service as directors, these employee directors currently receive no additional
compensation for serving as directors or attending meetings of directors or
shareholders.
Compensation of Executive Officers
None of the executive officers has an employment agreement with the
Company. The following table sets forth the compensation paid by the Company to
each of the Company's executive officers during the three-year period ended
December 31, 1998.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted All
Name and Annual Stock LTIP Other
Principal Position Year Salary Bonus Comp. Awards Options Payouts Comp.
- ------------------ ---- ------ ----- ----- ------ ------- - ------- -----
Dean G. Constantine 1998 $107,755 $50,000 0 0 0 0 $5,000(1)
CEO and President 1997 $105,000 $11,125 0 0 0 0 $4,207(1)
1996 $77,917 $12,189 0 0 0 0 $6,286(1)
David J. McNally 1998 $107,755 $50,000 0 0 0 0 $5,000(1)
Executive Vice President 1997 $105,000 $11,125 0 0 0 0 $4,207(1)
1996 $77,917 $12,189 0 0 0 0 $6,286(1)
Phillip L. McStotts 1998 $107,755 $50,000 0 0 0 0 $5,000(1)
Secretary/Treasurer 1997 $105,000 $11,125 0 0 0 0 $4,207(1)
1996 $77,917 $12,189 0 0 0 0 $6,286(1)
</TABLE>
(1) Represents the amount paid by the Company as a contribution to the Company's
401(k) Pension and Profit Sharing Plan on the officer's behalf.
Options Grants in Last Fiscal Year
The Company made no grants of stock options to its executive officers
during the last fiscal year. Several grants were made to non-employee directors
of the Company. See Report of the Compensation Committee of the Board of
Directors below.
Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values
The following table sets forth the options exercised during the year
ended December 31, 1998 by each executive officer of the Company and the value
of options held by such persons at such year-end.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares FY-End FY-End
Name and Acquired Value Exercisable/ Exercisable/
Principal Position on Exercise Realized Unexercisable Unexercisable
Dean G. Constantine
CEO, President 0 0 29,900/52,500 $6,300/0
David J. McNally
Executive Vice President 0 0 29,900/52,500 $6,300/0
Phillip J. McStotts
Secretary/Treasurer 0 0 29,900/52,500 $6,300/0
</TABLE>
Of the unexercised options listed above for each of Messrs. Constantine, McNally
and McStotts, 5,400 were granted on December 17, 1992, and expire on December
16, 2001. The exercise price on such options is $5.00. Of the unexercised
options listed above for each of Messrs. Constantine, McNally and McStotts,
7,000 were granted on February 13, 1997, and expire on February 12, 2002. The
exercise price on such options is $3.85. Of the unexercised options listed above
for each of Messrs. Constantine, McNally and McStotts, 70,000 were granted on
September 30, 1997, and expire on September 29, 2002. The exercise price on such
options is $5.00. The value of the unexercised options was determined by
reference to the closing sales price for the Company's Common Stock on the
NASDAQ Stock Market as of the end of 1998.
Report on Repricing of Options
The following table sets forth information with respect to the
repricing of options held by the Company's executive officers. For further
information, see Report of the Compensation Committee of the Board of Directors,
below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Length of
Original
Number Market Orig. Repriced Option Term
Name and Date of of Price at Exercise Exercise Remaining at
Principal Position Repricing Options Repricing Price Price Repricing
Dean G. Constantine 10/22/98 70,000 $4.875 $16.44 $5.00 3yrs 11mo.
CEO and President
David J. McNally 10/22/98 70,000 $4.875 $16.44 $5.00 3yrs 11mo.
Executive Vice Pres.
Phillip L. McStotts 10/22/98 70,000 $4.875 $16.44 $5.00 3yrs 11mo.
Secretary/Treasurer
</TABLE>
Report of the Compensation Committee of the Board of Directors
The Compensation Committee of the Board of Directors reviews and
approves salaries, bonuses, and other benefits payable to the Company's officers
and oversees the administration of the Company's stock option plan. The
Compensation Committee is composed of Ms. Darla R. Gill and Mr. Bradly A.
Oldroyd, both independent non-employee directors.
The goals of the Compensation Committee in establishing compensation
for executive officers are to align executive 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 compensation policies and programs utilized by the Compensation
Committee and endorsed by the Board of Directors generally consist of the
following:
Recommending executive officer total compensation in relation
to Company performance; Providing a competitive compensation program
in order to attract, motivate, and retain qualified personnel;
Providing a management tool for focusing and directing the energies
of the Company's three executives toward achieving individual and
corporate objectives; and Providing long-term incentive compensation
in the form of annual stock option awards and performance-based
stock option awards to link individual success to that of the
Company.
The Company's executive compensation consists of three components: base
salary, annual incentive compensation in the form of cash bonuses, and stock
options, each of which is intended to complement the others, and together to
satisfy the Company's compensation objectives. The Compensation Committee's
policies with respect to each of the three components are discussed below:
Base Salary. The Compensation Committee considers several factors in
determining base salaries for the Company's three executive officers, including
industry averages for comparative positions, responsibilities of the executive
officers, length of service with the Company, and corporate and individual
performance.
Cash Bonuses. Cash bonuses paid to the Company's three executive
officers are discretionary and are based on the relative success of the Company
in attaining certain financial objectives and the three officers' contribution
to the achievement of those financial objectives.
Stock Options. Stock options provide additional incentives to the
Company's three executive officers to maximize long-term shareholder value. The
options that have been granted vest over a defined period to encourage these
officers to continue their employment with the Company. The Company also grants
stock options to all employees, commensurate with their potential contributions
to the Company.
Chief Executive Officer Compensation
Dean G. Constantine has been President and Chief Executive Officer of
the Company since its incorporation in 1986. For fiscal year 1998, Mr.
Constantine received compensation consisting of a salary of $107,755, and a cash
bonus of $50,000. The bonus was awarded because the Company met certain
financial and other corporate goals. Also, options to purchase 70,000 additional
shares of ZEVEX International's Common Stock held by Mr. Constantine were
repriced from $16.44 per share to $5.00 per share. In determining Mr.
Constantine's compensation, the Compensation Committee evaluates corporate
performance, individual performance, compensation paid to the Company's two
other executive officers, and compensation paid to chief executive officers of
comparable companies. Through his equity ownership in the Company, consisting of
257,200 shares of Common Stock and options to purchase 82,400 shares of Common
Stock, Mr. Constantine shares with other shareholders of the Company have a
significant stake in the success of the Company's business.
Committee Meeting Report - October 22, 1998.
It was resolved at a meeting of the Compensation Committee that it is
in the best interest of the Company to motivate several of its current option
holders by reducing the exercise price of their outstanding stock option grants.
Effective October 22, 1998, the Compensation Committee approved the repricing of
the grants of Common Stock purchase options for 70,000 shares each to Messrs.
Constantine, McNally, and McStotts issued on September 30, 1997. The options
vest over a four-year period and are now exercisable at a price of $5.00 per
share. Also, effective October 22, 1998, the Compensation Committee approved the
repricing of grants of Common Stock purchase options to the Company's three
non-employee directors as follows: (1) 15,000 shares to Mr. Oldroyd and 13,000
shares to Ms. Gill, of which 14,000 and 12,000 respectively were issued on June
4, 1998 and vest over a four-year period and, 1,000 each issued on June 19, 1997
which are fully vested and are now exercisable at a price of $5.00, and (2)
10,000 shares to Mr. Blosch which were issued on June 4, 1998 and vest over a
four-year period which are now exercisable at a price of $5.00. Also, effective
January 1, 1999, the Compensation Committee adopted a 1999 Stock Option Plan to
replace the Company's Amended 1993 Stock Option Plan. The new plan will be
submitted to the Company's shareholders for approval at the Company's 1999
annual meeting.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Darla R. Gill
Bradly A. Oldroyd
Certain Relationships and Related Transactions
On December 31, 1998, the Company acquired JTech pursuant to a Stock
Purchase Agreement among the Company and the four shareholders of JTech (the
"JTech Stock Purchase"). Leonard C. Smith one of the selling JTech shareholders,
received $1,257,900 in cash and a convertible debenture in connection with the
JTech Stock Purchase. The convertible debenture, in the principal amount of
$1,290,000, is due January 6, 2002 and is convertible at Mr. Smiths option
during the period from January 6, 2000 to January 6, 2002 at $11 per share.
JTech also entered into an Employment Agreement with Leonard C. Smith
dated December 31, 1998, which provides that Mr. Smith serve as President of
JTech for three years at $100,000 per year. Pursuant to the employment
agreement, Mr. Smith also received an options to purchase 40,000 shares of the
Company's common stock, vesting over four years, at $4.875 per share, the
closing price of such stock on Nasdaq on the date of the JTech Stock Purchase.
Mr. Smith was appointed to fill a vacancy on the Company's Board of Directors
effective April 26, 1999. Mr. Smith's term on the Board will expire at the 2001
annual meeting of shareholders.
The Company has granted demand registration rights, for a two-year
period commencing February 1, 1998, with respect to 350,000 shares of Common
Stock issuable upon the exercise of warrants held by Kirk Blosch and Jeff W.
Holmes, two of the Company's principal shareholders. The Company has agreed to
pay the registration expenses arising in connection with the registration of
these shares. The selling expenses will be paid by Messrs. Blosch and Holmes.
On April 15, 1997, the Company entered into a consulting contract with
DMG Advisors, L.L.C., a Nevada limited liability company ("DMG"). Kirk Blosch
and Jeff W. Holmes, two of the Company's principal shareholders, are members and
managers of DMG. Under the consulting contract, the Company paid an initial fee
of $50,000 and is paying $10,000 per month through April 15, 1999 in exchange
for the consulting services of DMG in the nature of strategic planning, public
relations, advice regarding financings, and the identification and evaluation of
potential acquisitions of new products or companies. The Company is also
obligated to pay reasonable business expenses incurred by DMG.
Pursuant to a Stock Purchase Agreement dated December 31, 1996 between
the Company and Blosch & Holmes, L.L.C., a Utah limited liability company
("Blosch & Holmes"), as amended on September 30, 1997, Blosch & Holmes has the
right to nominate one person to serve on the Company's Board of Directors,
provided that such nominee must be acceptable to the Company. Blosch & Holmes
exercised this right with its nomination of Kirk Blosch in June 1998. Mr. Blosch
is one of the individuals presented to the shareholders for election at the
Annual Meeting to serve as Class III directors until the 2002 annual meeting of
the shareholders. The Board of Directors has determined that Mr. Blosch is an
acceptable nominee as of the date of this proxy statement. Kirk Blosch and Jeff
W. Holmes, principal shareholders of the Company, are the two member/managers of
Blosch & Holmes. The right to nominate an acceptable candidate to serve on the
Company's Board of Directors expires when Blosch & Holmes, together with Kirk
Blosch and Jeff W.
Holmes, no longer holds at least 6.5% of the voting stock of the Company.
For a description of the compensation arrangements between the Company
and its officers and directors, see "COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS."
Company Stock Price Performance
The following graph shows a comparison of the cumulative total
shareholder return on the Company's Common Stock over the past five fiscal years
with the cumulative total return of the Russell 2000 Stock Index and the
Company's Peer Group, consisting of Novametrix Medical, Applied Biometrics,
Inc., Candela Laser Corporation, Invivo Corporation, Zoll Med Corporation,
Lectec Corporation, and Medstone International. The graph assumes $100 is
invested in the Company's Common Stock and in each of the two indices at the
closing market quotation on December 31, 1993 and that dividends are reinvested.
The stock price performance graph depicted below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934. The stock price performance on the graph is
not necessarily an indicator of future price performance.
[OBJECT OMITTED]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997 1998
-------- ------- -------- -------- -------- --------
Russell 2000 100 98 122 143 164 164
Peer Group 100 66 89 90 68 78
ZEVEX 100 75 80 66 183 95
</TABLE>
Vote Required
Each nominee for director will be elected by a plurality of the votes
cast at the Annual Meeting. Votes may be cast or withheld; votes that are
withheld will be excluded from the vote. For further information on the voting
for directors by proxy, refer to "INFORMATION CONCERNING PROXY SOLICITATION AND
VOTING--VOTING AND REVOCATION OF PROXIES".
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO ELECT THE
THREE NOMINEES NAMED ABOVE TO SERVE IN CLASS III OF THE BOARD OF DIRECTORS UNTIL
THE ANNUAL MEETING OF SHAREHOLDERS IN 2002 AND UNTIL THEIR SUCCESSORS ARE DULY
ELECTED AND QUALIFIED.
------------------------------------------------------------------------------
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
------------------------------------------------------------------------------
The Board of Directors has selected Ernst & Young LLP as independent
certified public accountants for the Company to examine the Company's financial
statements for the year ended December 31, 1999. During 1998, Ernst & Young LLP
examined the accounts of ZEVEX and its subsidiaries and also provided other
audit services to ZEVEX in connection with Securities and Exchange Commission
filings. A representative of the auditors will be present at the meeting to
answer questions.
Change in Accountants
In anticipation of the Company's secondary offering of common stock in
the fall of 1997, the Company determined it would be desirable to retain a
national accounting firm as its independent certified public accountants. After
considering various firms, the Company's Board of Directors approved and
appointed Ernst & Young LLP as its certified public accountants as of June 19,
1997, and dismissed its prior accountants, Daines & Rasmussen P.C. The prior
accountants' reports on the financial statements for the two fiscal years prior
to such change (December 31, 1995 and December 31, 1996) did not contain an
adverse opinion or disclaimer of opinion and were not qualified as to
uncertainty, audit scope, or accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
the accountants' satisfaction would have caused the accountants to make
reference to such disagreement in connection with reports.
Vote Required
The affirmative vote of the holders of at least a majority of the
shares of the Company's Common Stock represented at the Annual Meeting in person
or by proxy is required for the approval of the selection of the Company's
independent certified public accountants. Abstentions and broker non-votes are
not counted.
THE BOARD OF DIRECTORS BELIEVES SUCH SELECTION IS IN THE BEST INTEREST
OF THE COMPANY, AND RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
------------------------------------------------------------------------------
PROPOSAL 3 - APPROVAL OF 1999 STOCK OPTION PLAN
------------------------------------------------------------------------------
Effective January 1, 1999, Compensation Committee of the Board of
Directors approved the 1999 Stock Option Plan for the Company (the "Plan"). The
purpose of the Plan is to provide stock option incentives to directors,
officers, other employees, consultants, and advisors of the Company (or any
subsidiary or future parent company of the Company). The Company is seeking
shareholder approval of the Plan because such approval is required under
Internal Revenue Service regulations in order to allow the Company to award
incentive stock options ("ISOs") under the Plan, and under applicable
requirements of The Nasdaq Stock Market, Inc.
Described below are the material features of the Plan.
General
The Plan provides for the grant of ISOs qualified under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") and non-qualified
stock options ("NSOs"). The Plan can be administered either by the Board of
Directors or one or more committees of the Board of Directors (the
"Administrator"). Option grants are made at the discretion of the Administrator
and may be made to Company officers, directors, employees, and other persons as
determined by the Administrator. Presently, there are three (3) executive
officers, three (3) non-employee directors, and approximately 155 other
employees employed by the Company, all of whom (as well as all future employees)
are eligible to participate in the Plan. The Plan will terminate upon the
earlier of December 31, 2008, the date on which all shares available under the
Plan have been issued, or the termination of all outstanding options in
connection with certain transactions involving the Company defined as "Corporate
Transactions" in the Plan.
The Plan provides that a maximum of 600,000 shares of Common Stock may
be issued under the Plan (subject to adjustment in the event of stock splits or
other changes in the Common Stock as provided in the Plan). To the extent that
options granted under the Plan (i) expire or terminate for any reason prior to
exercise, or (ii) are cancelled and replaced by the Administrator, the shares of
Common Stock underlying such options will again be available for award under the
Plan.
The Company's Board of Directors has determined that the Plan will
replace the Company's Amended 1993 Stock Option Plan (the "1993 Plan") and no
additional option grants will be made under the 1993 Plan after 1998. All
options issued under the 1993 Plan will remain outstanding subject to the terms
and conditions of the 1993 Plan.
The Administrator
As mentioned above, the Administrator of the Plan can be the Board of
Directors or one or more committees of the Board of Directors. Such committee,
if it grants options to officers and directors of the Company, must be made up
of two or more "non-employee directors" (as defined under SEC Rule 16(b)(3)).
Currently, the Board of Directors has delegated authority to administer the Plan
to the Company's Compensation Committee. The Administrator has full authority
and discretion in the administration of the Plan, including adopting rules for
administration of the Plan and determining the designation of those persons
receiving option grants, the type of option granted, the number of shares to be
covered by options, the exercise price, and other options terms. The
Administrator's decisions in the administration of the Plan are final and
binding on all persons for all purposes. Option Terms
The Company may grant ISOs under the Plan only to employees of the
Company. Such grants must be at an exercise price per share not less than 100%
of the fair market value of the Common Stock at the date of the grant (110% for
optionees holding 10% or more of the Company's Common Stock). The Plan limits
grants of ISOs that may be exercised for the first time by the holder during any
calendar year to $100,000 in market value. For optionees holding more than 10%
of the Company's Common Stock, ISOs must expire within five years from the date
of grant. ISOs are exercisable during a recipient's lifetime only by such
recipient and are transferable only upon death by will or the laws of descent
and distribution.
The Company may grant NSOs under the Plan to directors, employees,
consultants and advisors. Such NSOs are not subject to the requirements of the
Code and, therefore, may not contain the same restrictions as ISOs issued under
the Plan. NSOs must, however, have an exercise price not lower than the fair
market value of the Common Stock on the date of grant. Additionally, no option,
either ISO or NSO, may have a term of more than 10 years from the date of grant.
The exercise price for options may be paid to the Company in cash, or
at the discretion of the Administrator, in shares of Common Stock, payments over
time, or through a sale and remittance procedure implemented by the Company with
a brokerage firm. Generally, an option right may be exercised only by the holder
within three months after his or her termination of employment (twelve months if
termination is due to disability). An option generally may be exercised no later
than twelve months following an active employee's death. Also, an option usually
is terminated immediately upon termination of an employee for material
misconduct. These general rules regarding exercise following termination may be
varied by the Administrator, but in no event may an option be exercised later
than the date of expiration of the option.
NSOs are transferable, in whole or in part, only (i) during the
recipient's lifetime if a transfer is made in connection with the recipient's
estate plan to one or more members of the recipient's immediate family (spouse
and children) or to a trust established exclusively for the benefit of one or
more such immediate family members, or (ii) by will or the laws of descent and
distribution following the recipient's death.
Options may or may not be subject to a vesting schedule, whereby the
options become exercisable by the recipient in portions. Such vesting may be
based on the passing of time, performance goals, or some other criteria
determined by the Administrator. Generally, such vesting may be accelerated by
the Administrator in its discretion in the event of a major corporation
transaction (such as a merger or sale of all assets) or certain changes in
control of the Company.
Amendments
The Board of Directors has complete and exclusive power and authority
to amend the Plan, subject to (a) approval of the Company's shareholders to the
extent required by applicable laws, regulations, or Nasdaq requirements, and (b)
the rights of the holders of outstanding options as specified in their option
agreements.
Federal Income Tax Consequences of the 1999 Stock Option Plan
The following describes the general federal income tax consequences of
the option grants for grant recipients and the Company. A recipient will not
realize any income at the time an ISO is granted nor upon exercise of an ISO.
However, the difference between the option exercise price and the Common Stock's
fair market value at the time of exercise will be taken into account for
purposes of the recipient's alternative minimum income tax, if any.
Upon the subsequent disposition of shares of Common Stock acquired by
the exercise of an ISO more than (i) two years after the ISO is granted and (ii)
one year after the transfer of shares of Common Stock upon the exercise of such
option, the recipient will realize capital gain or loss upon such disposition.
The option exercise price will be the recipient's basis for determining the gain
or loss. If the subsequent disposition of stock occurs before the special
holding requirements described above are met, the recipient generally will
recognize ordinary income upon such disposition equal to the excess of the fair
market value of the shares at the time the option was exercised over the
exercise price.
A recipient will not realize any income at the time an NSO is granted.
Upon the recipient's exercise of an NSO, the difference between the fair market
value of the Common Stock at the time of exercise and the option price will be
ordinary income to the employee.
At the time the recipient realizes ordinary income from the exercise of
an NSO, the Company will be entitled to a tax deduction in the same amount as
the ordinary income realized by the recipient. No such deduction or other tax
consequence is applicable to the Company upon grant or exercise of an ISO.
The foregoing is only a summary of the effect of federal income
taxation upon a recipient with respect to the grant and exercise of options
under the Plan. This summary does not purport to be complete and does not
discuss the income tax laws of any state or foreign country in which an employee
may reside.
Awards Under the Stock Option Plan
As of March 31, 1999, stock options for 226,000 shares of Common Stock
were outstanding under the Plan. The stock options outstanding under the Plan
are summarized below:
<TABLE>
<CAPTION>
<S> <C>
OPTION HOLDER SHARES SUBJECT TO OPTIONS
Dean G. Constantine
CEO, President and Chairman 30,000
David J. McNally
Executive Vice President, director 30,000
Phillip L. McStotts
Chief Financial Officer, Secretary/Treasurer
And director 30,000
Current Executive Officers As a Group 90,000
Current Directors who are not Executive Officers
As a Group 0
All Employees who are not Executive Officers 136,000
-------
Total 226,000
</TABLE>
All of the Options Shares issued to the Executive Officers become
purchasable by the Optionee on the date which is nine years and nine months
following the Grant Date if the Optionee is continuously in the service of the
Company during that time at a price of $5.00 per share. Additionally, one-third
of the Option Shares shall become purchasable following each of the first three
years from the Grant Date upon the Company achieving certain annual revenues and
earnings in the three fiscal years ending December 31, 1999, 2000, and 2001.
Furthermore, within each target achieved, 25% of the Option Shares shall become
purchasable if 80% of the target is achieved, 50% of the Option Shares shall
become purchasable if 90% of the target is achieved, and 100% of the Option
Shares shall become purchasable if 100% of the target is achieved,
All other Option Shares granted to Non-Executive Officers have a term
of five years and an exercise price of $5.00 per share. Each option vests 25%
for each year of continuous service.
Based on the closing price of the Company's Common Stock on Nasdaq as
of March 31, 1999 ($5.00), the total market value of the 226,000 shares
underlying outstanding grants under the Plan is $1,130,000.
A copy of the Plan is included in the exhibits to the Company's 1998
Form 10-K filed with the Securities and Exchange Commission (the "Commission").
Such report can be inspected and copies made at the public reference facilities
of the Commission as set forth in Additional Information below. Also, the
Company will provide to any shareholder upon written or oral request a copy of
the 1999 Plan upon payment of a small fee of $10.00 to cover the Company's costs
associated with providing such copy.
Vote Required
The affirmative vote of the holders of at least a majority of the
shares of the Common Stock represented at the Annual Meeting in person or by
proxy is required for approval of the Plan. Abstentions and broker non-votes are
not counted.
THE BOARD OF DIRECTORS BELIEVES THAT THE 1999 PLAN IS IN THE BEST
INTEREST OF THE COMPANY AND RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
PROPOSAL.
------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
------------------------------------------------------------------------------
In order for a shareholder's proposal to be considered for inclusion in
the Company's proxy materials for the 2000 Annual Meeting of Shareholders (the
"2000 Annual Meeting"). The proposal must be received by the Company's
Secretary, Phillip L. McStotts, 4314 ZEVEX Park Lane, Salt Lake City, Utah
84123, no later than January 7, 2000, and must otherwise comply with the
requirements of Rule 14a-8 of the Exchange Act.
Proposals of shareholders submitted for consideration at the Company's
2000 Annual Meeting (other than those submitted for inclusion in the Company's
proxy material pursuant to Rule 14a-8) must be delivered to the Company's
Secretary no earlier than April 1, but no later than May 1, 2000. If such timely
notice of a shareholder's proposal is not given, the Company's Proxy Holders may
exercise discretionary voting authority to vote on the proposal when and if it
is raised at the 2000 annual Meeting.
------------------------------------------------------------------------------
ADDITIONAL INFORMATION
------------------------------------------------------------------------------
The Company is subject to the informational requirements of Section
15(d) of the Securities Exchange Act of 1934, Commission File No. 33-19583, and
in accordance therewith files reports on Forms 10-Q, 10-K, and 8-K with the
Securities and Exchange Commission. Such reports and other information can be
inspected, and copies can be obtained at the public reference facilities of the
Commission at Room 1024, 450 Fifth Street, NW, Washington, D.C. 20549, at
prescribed rates. Copies can also be obtained by searching the "EDGAR Archives"
for the Company's name on the Commission's web page at http://www.sec.gov.
By order of the Board of Directors,
Dean G. Constantine
Chairman
<PAGE>
PROXY
ZEVEX INTERNATIONAL, INC.
4314 ZEVEX Park Lane, Salt Lake City, Utah 84123
Annual Meeting of Shareholders, June 2, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned shareholder of ZEVEX International, Inc., a Delaware
corporation (the "Company"), hereby appoints Dean G. Constantine and Phillip L.
McStotts as Proxies, each with the power to appoint his substitute, and hereby
authorizes them, or either of them, to represent and to vote, as designated
below, all the shares of common stock of the Company held of record by the
undersigned on April 15, 1999 (the record date), at the Annual Meeting of
Shareholders to be held on June 2, 1999 or at any continuation(s) or
adjournment(s) thereof. The proposals listed below are made by the Board of
Directors.
1. ELECTION OF DIRECTORS
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
listed below
(To withhold authority to vote for any individual nominee, strike a line through
the nominee's name in the list below.)
Phillip L. McStotts Darla R. Gill Kirk Blosch
2. APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE YEAR
ENDING DECEMBER 31, 1999
[GRAPHIC OMITTED]FOR [GRAPHIC OMITTED]AGAINST [GRAPHIC OMITTED] ABSTAIN
3. APPROVAL OF THE COMPANY'S 1999 STOCK OPTION PLAN
[GRAPHIC OMITTED]FOR [GRAPHIC OMITTED]AGAINST [GRAPHIC OMITTED] ABSTAIN
<PAGE>
(Reverse side of proxy card)
4. IN THEIR DISCRETION, proxy holders are authorized to vote upon such
other business as may properly come before the Annual Meeting.
This Proxy, when properly executed, will be voted in the manner
directed by the undersigned shareholder. If no direction is given, then this
Proxy will be voted FOR all nominees for director listed in Proposal 1, FOR
Proposal 2, and FOR Proposal 3.
Please sign exactly as your name appears on the records of the
Company's transfer agent. When shares are held by joint tenants, both should
sign. When signing as attorney, or as executor, administrator, trustee, or
guardian, please give your full title as such. If a corporation, please sign in
the full corporate name by the President or other authorized officer. If a
partnership, please sign in the partnership name by an authorized person.
Please mark, sign, date, and return this Proxy promptly. By signing below, the
undersigned also acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated May 3, 1999, accompanying this
Proxy.
Dated: _____________________________________________
------------------- ------------------------------
No. of Shares Held No. of Shares Held at Brokerage
of Record or Clearing House
--------------------- ------------------------------
Signature (if held by Name of Brokerage or Clearing
an individual) House
--------------------- ------------------------------
Print Name Name of Entity Shareholder (if
not held by an individual)
--------------------- ------------------------------
Signature (if held Signature of Authorized Signer
jointly) of Entity
--------------------- ------------------------------
Print Name Title of Authorized Signer
RETURN PROXY TO: ZEVEX International, Inc., 4314 ZEVEX Park Lane,
Salt Lake City, Utah 84123
