<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. 2)
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 sec. 240.14a-11(c) or sec. 240.14a-12
EUROMED, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies: N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies: N/A
- --------------------------------------------------------------------------------
(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):
N/A
- --------------------------------------------------------------------------------
(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:
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(4) Date Filed:
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<PAGE> 2
EUROMED, INC.
WILHELMINAKANAAL NOORD 6
NL 4902 VR OOSTERHOUT
THE NETHERLANDS
May 9, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Meeting") of EuroMed, Inc., a Nevada corporation ("EuroMed"), to be held at
10:00 a.m., local time, on May 26, 1997, at Grosvenor House London, 86 Park
Lane, London WIA 3AA, England. The attached Notice of Annual Meeting and Proxy
Statement describe the formal business to be transacted at the Meeting. We have
enclosed a copy of EuroMed's Annual Report for the fiscal year ended December
31, 1996.
Directors and officers of EuroMed are expected to be present to help host
the Meeting and to respond to any questions that our stockholders may have. I
hope that you will be able to attend.
EuroMed's Board of Directors believes that a favorable vote on each of the
matters to be considered at the Meeting is in the best interest of EuroMed and
its stockholders and recommends a vote "FOR" each such matter. Accordingly, we
urge you to review the attached material carefully and to return the enclosed
Proxy promptly. Whether or not you plan to attend the Meeting, you may vote in
person if you wish, even though you have previously returned your proxy. It is
important that your shares be represented and voted at the Meeting.
On behalf of your Board of Directors, thank you for your support.
Sincerely,
/s/ ROBERT W. L. VELDMAN
Robert W. L. Veldman,
Chief Executive Officer and President
<PAGE> 3
EUROMED, INC.
WILHELMINAKANAAL NOORD 6
NL 4902 VR OOSTERHOUT
THE NETHERLANDS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of EuroMed, Inc. (the "Company") will be held at 10:00 a.m., local
time, on May 26, 1997, at the Grosvenor House London, 86 Park Lane, London WIA
3AA, England, for the following purposes:
(1) To elect five members of the Board of Directors (constituting the
entire Board of Directors) to serve until the next Annual Meeting of
Stockholders and until their respective successors shall be elected and
qualified.
(2) To ratify the selection of Killman, Murrell & Company, P.C. as
independent public accountants for the Company for the fiscal year ending
December 31, 1997.
(3) Such other business as may properly come before the Meeting or any
adjournments thereof.
The close of business on April 18, 1997 has been fixed as the record date
for determining stockholders entitled to notice of and to vote at the Meeting or
any adjournments thereof. For a period of at least 10 days prior to the Meeting,
a complete list of stockholders entitled to vote at the Meeting will be open for
examination by any stockholder during ordinary business hours at the offices of
EuroMed, Inc. at Wilhelminakanaal Noord 6, NL 4902 VR Oosterhout, The
Netherlands.
Information concerning the matters to be acted upon at the Meeting is set
forth in the accompanying Proxy Statement.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY TO ASSURE THAT
YOUR SHARES ARE REPRESENTED AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES) IS PROVIDED. EVEN IF YOU HAVE GIVEN YOUR
PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE NOTE,
HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
By Order of the Board of Directors,
/s/ RICHARD F. DAHLSON
Richard F. Dahlson
Secretary
Dallas, Texas
May 9, 1997
<PAGE> 4
EUROMED, INC.
WILHELMINAKANAAL NOORD 6
NL 4902 VR OOSTERHOUT
THE NETHERLANDS
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 26, 1997
This Proxy Statement is being first mailed on or about May 12, 1997 to
stockholders of EuroMed, Inc., a Nevada corporation (the "Company"), by the
Board of Directors to solicit proxies (the "Proxies") for use at the Annual
Meeting of Stockholders (the "Meeting") to be held at 10:00 a.m., local time, on
May 26, 1997, at the Grosvenor House London, 86 Park Lane, London WIA 3AA,
England, or at such other time and place to which the Meeting may be adjourned
(the "Meeting Date").
The purpose of the Meeting is to consider and act upon (i) the election of
five directors (constituting the entire Board of Directors) to serve until the
next Annual Meeting of Stockholders and until their respective successors shall
be elected and qualified, (ii) the ratification of the selection of Killman,
Murrell & Company, P.C. as independent public accountants for the Company for
the fiscal year ending December 31, 1997, and (iii) such other matters as may
properly come before the Meeting or any adjournments thereof.
All shares represented by valid Proxies, unless the stockholder otherwise
specifies, will be voted (i) FOR the election of the persons named herein under
"PROPOSAL I -- ELECTION OF DIRECTORS" as nominees for election as directors of
the Company for the term described therein, (ii) FOR the ratification of the
selection of Killman, Murrell & Company, P.C. as independent public accountants
for the Company for the fiscal year ending December 31, 1997 and (iii) at the
discretion of the Proxy holders with regard to any other matter that may
properly come before the Meeting or any adjournments thereof.
Where a stockholder has appropriately specified how a Proxy is to be voted,
it will be voted accordingly. The Proxy may be revoked at any time by providing
written notice of such revocation to American Stock Transfer & Trust Company, 40
Wall Street, 46th Floor, New York, New York 10005, Attention: Donna Ansbro. If
notice of revocation is not received by the Meeting Date, a stockholder may
nevertheless revoke a Proxy if the stockholder attends the Meeting and desires
to vote in person.
RECORD DATE AND VOTING SECURITIES
The record date for determining the stockholders entitled to vote at the
Meeting is the close of business on April 18, 1997 (the "Record Date"), at which
time the Company had issued and outstanding 3,118,000 shares of common stock,
par value $.01 per share (the "Common Stock"). The Common Stock is the only
outstanding voting securities of the Company.
QUORUM
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of Common Stock is necessary to
constitute a quorum to transact all business to come before the Meeting.
<PAGE> 5
PROPOSAL I -- ELECTION OF DIRECTORS
Five directors are to be elected, each director to hold office for a term
of one year or until his successor shall have been elected and qualified. The
Board of Directors has nominated the five persons named below to serve as
directors. Three of the nominees, Messrs. Hinnen, Shelmire and Shuey, are
currently members of the Board of Directors. In order to be elected a director,
a nominee must receive a plurality of the votes of the shares of Common Stock
present in person or represented by Proxy at the Meeting. Votes that are
withheld and broker non-votes will be counted toward a quorum, but will not be
counted in the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
NAMED HEREIN (ITEM NO. 1 ON THE ENCLOSED PROXY CARD).
Each of the nominees has indicated his willingness to serve as a member of
the Board of Directors if elected; however, in case any nominee shall become
unavailable for election to the Board of Directors for any reason not presently
known or contemplated, the Proxy holders have discretionary authority to vote
the Proxy for a substitute nominee or nominees. The following sets forth
information as of April 16, 1997 as to the nominees for election at the Meeting,
including their ages, present principal occupations, other business experience
during the last five years, membership on committees of the Board of Directors
and directorships in other publicly-held companies.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
A. Francois Hinnen....................... 54 Chairman of the Board
Robert W. L. Veldman..................... 48 Chief Executive Officer and President
David Anderson........................... 41 Chief Financial Officer
Jesse Shelmire, IV....................... 40 Director
Robert A. Shuey, III(1).................. 42 Director
</TABLE>
- ---------------
(1) Member of the Audit Committee and the Compensation Committee.
A. Francois Hinnen, MSc has served as Chairman of the Board of the Company
since November 18, 1995. Mr. Hinnen served as Chief Executive Officer of the
Company from November 18, 1995 until October 31, 1996, and as President of the
Company from November 18, 1995 until February 28, 1997, and has served, through
a controlled company, as the Managing Director of Galenica B.V. ("Galenica") and
Confedera B.V. ("Confedera") since January 1991. Mr. Hinnen has also served the
Company as the chief pharmacist for Galenica and Confedera, which are
wholly-owned subsidiaries of the Company organized under the laws of The
Netherlands. Mr. Hinnen has 28 years experience as a certified pharmacist and 24
years business experience as an entrepreneur in the pharmaceutical industry. Mr.
Hinnen graduated first of year in 1967 with a Masters in Mathematics and Natural
Sciences, and in 1968 with a degree in Microbiology and Pharmacy from the
University of Utrecht, The Netherlands. Mr. Hinnen was a member of the staff of
the University of Nijmegen, The Netherlands, from 1969-1970.
Robert W. L. Veldman, MSc has served as Chief Executive Officer of the
Company since February 1997. Mr. Veldman has twenty-three years of related
health care management experience. Before joining EuroMed, Mr. Veldman worked as
director of business development at Merck, Sharp & Dohme B.V. in Haarlem from
1995 to 1997. Prior to that he worked as Pharmaceutical Director and Managing
Director Hospital Division, Brocacef BV -- Maarssen from 1988 to 1995, as
Director of European Operations, Centocor Europe BV -- Leiden from 1987 to 1988
and served as managing director and chief operating officer of Centrafarm Group
NV -- Etten Leur from 1978 to 1987 and as an industrial pharmacist, Organon
International BV -- Oss from 1975 to 1978.
David Anderson has served as the Company's Chief Financial Officer since
February 1997. Mr. Anderson brings fifteen years of healthcare experience in the
United States, including experience in the home infusion pharmaceutical market
as well as the free standing and hospital based home nursing and equipment
service businesses. Mr. Anderson served as western division vice president of
Nurse Finders, Inc., a home health and medical staffing company, from 1995 to
1997 and served as director and senior vice president of operations for
OptionCare, Inc., a home infusion therapy company, from 1993 to 1995. Prior to
that, he founded and was an
2
<PAGE> 6
equity director and chief development officer for Earthstone, a division of EPIC
Health Care Group, from 1990 to 1993, served as executive vice president of ABC
Home Health, a privately held home health care company, from 1987 to 1990 and
served as associate and district director for T-2 Medical Management, a home
infusion therapy provider company, from 1985 to 1987.
Jesse Shelmire, IV has served as a director of the Company since November
27, 1996. Mr. Shelmire has 15 years of experience in the investment banking and
stock underwriting business. Upon graduating from the Warton School of Business
he worked from 1981 to 1989, for Smith Barney, Inc. in their Dallas, Texas
office. From 1989 to 1993, he served as the Portfolio Manager for Stonegates
Securities, Inc. of Dallas, Texas where he managed $250 million of assets in
equity and fixed income accounts, he served at Dillon-Gage Securities Corp. as
Director of Corporate Finance from 1993 to 1995 and he served as Director of
Corporate Finance for LaJolla Securities Corporation from 1994 to 1995. Mr.
Shelmire currently serves as Managing Director of Investment Banking for First
London Securities Corporation in Dallas, Texas.
Robert A. Shuey, III has served as a director of the Company since June
1996. Mr. Shuey is employed by National Securities Corporation of Dallas, Texas
as the Director of Corporate Finance. Prior to that, Mr. Shuey was with LaJolla
Securities Corporation from 1994 to 1995 in the position of Director of
Corporate Finance. Mr. Shuey was employed as Director of Corporate Finance by
Dillon-Gage Securities Corp., an investment banking firm, from 1994 to 1995, and
prior to that held the position of Senior Vice President, Corporate Finance, of
Dickinson & Company, a brokerage firm. Mr. Shuey was Vice President of Rauscher
Pierce Refnes, Inc. from June 1984 to September 1987. From May 1980 until June
1984, he was director of the corporate finance department and a Vice President
of Institutional Equity Corporation. Prior to that time, Mr. Shuey was an
associate in the corporate finance department of Salomon Brothers, Inc.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business of the Company is managed under the direction of the Board of
Directors. The Board of Directors meets on a regularly scheduled basis to review
significant developments affecting the Company and to act on matters requiring
approval of the Board of Directors. It also holds special meetings when an
important matter requires action by the Board of Directors between scheduled
meetings. The Board of Directors met seven times and acted by unanimous written
consent two times during 1996. During 1996, each member of the Board of
Directors participated in at least 75% of all Board of Directors meetings during
the period for which he was a director.
The Board of Directors has two standing committees: the Audit Committee and
the Compensation Committee. The functions of these committees, their current
members, and the number of meetings held during fiscal 1996 are described below.
Audit Committee. The Audit Committee makes recommendations to the Board of
Directors regarding the appointment of independent auditors, reviews the plan
and scope of any audit to the Company's financial statements and reviews the
Company's significant accounting policies and related matters. Mr. Shuey
currently is the sole member of the Audit Committee. The Audit Committee did not
meet in 1996.
Compensation Committee. The Compensation Committee makes recommendations to
the Board of Directors regarding the compensation of executive officers and the
administration of the Company's 1995 Long-Term Incentive Plan. Mr. Shuey
currently is the sole member of the Compensation Committee. The Compensation
Committee did not meet in 1996.
Nominating Committee. The Company does not have a nominating committee. The
functions customarily performed by a nominating committee are performed by the
Board of Directors as a whole.
3
<PAGE> 7
PROPOSAL II -- INDEPENDENT PUBLIC ACCOUNTANTS
On November 19, 1996, KPMG Accountants N.V. ("KPMG") resigned as EuroMed's
independent public accountant. No report of KPMG for EuroMed contained an
adverse opinion or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles. There have been no
disagreements between KPMG and EuroMed as described in Item 304(a)(1)(iv) of
Regulation S-K or events of the kind set forth in Item 304(a)(1)(v) of
Regulation S-K.
EuroMed provided KPMG with the above disclosures prior to filing a Current
Report Form 8-K with the Securities and Exchange Commission. KPMG responded to
the above disclosures by stating that they resigned as principal accountants for
EuroMed because they believed that the control structure of EuroMed was not
adequate to develop reliable financial statements. KPMG did not disclose to
EuroMed specific concerns or problems.
On February 20, 1997, EuroMed engaged Killman, Murrell and Company, P.C.
("Killman") as its independent public accountant. Prior to engaging Killman,
EuroMed discussed with Killman the reason given by KPMG for its resignation.
Killman has told EuroMed that it believes EuroMed has resolved the problems that
led to KPMG's resignation. EuroMed provided Killman with the above disclosures
prior to filing a Current Report on Form 8-K with the Commission and Killman did
not file any response to such disclosures.
The Board of Directors has selected Killman as independent auditors to
examine the Company's accounts for the current fiscal year. It is expected that
representatives of Killman will be present at the Meeting, will be available to
respond to appropriate questions of stockholders and will have an opportunity to
make a statement if they desire.
Ratification of Killman as independent public accountants requires the vote
of a majority of the votes represented and entitled to vote at the Meeting.
Abstentions on this proposal may be specified and will have the same effect as a
vote against such proposal. Broker non-votes will also have the effect as a vote
against this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF KILLMAN, MURRELL & COMPANY, P.C. AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997 (ITEM NO. 2 ON
THE ENCLOSED PROXY CARD).
EXECUTIVE OFFICERS
The executive officers of the Company are Messrs. Hinnen, Veldman and
Anderson. Information regarding such persons is provided above under "Proposal
I -- Election of Directors" above.
4
<PAGE> 8
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information with respect to beneficial
ownership of Common Stock as of April 16, 1997 by (i) all persons known to the
Company to be the beneficial owner of 5% or more of the Common Stock, (ii) each
director of the Company, (iii) the chief executive officer and each of the
Company's four other most highly compensated executive officers whose total
annual compensation for 1996 based on salary and bonus earned during 1996
exceeded $100,000 (the "Named Executive Officers"), and (iv) all the Company
directors and executive officers as a group. This table does not include shares
of Common Stock that may be purchased pursuant to options not exercisable within
60 days of April 18, 1997. All persons listed have sole voting and investment
power with respect to their shares unless otherwise indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------ ----------------- --------
<S> <C> <C>
A. Francois Hinnen,(1)................................... 1,945,130 62.39%
Robert W. L. Veldman,.................................... -- --
David Anderson........................................... -- --
Jesse Shelmire, IV....................................... 14,000(2) *
Robert A. Shuey, III..................................... 20,000(3) *
Gregory A. Gaylor........................................ 125,000 4.00%
Louis van den Reek....................................... -- --
All directors and executive officers as a group (7
persons)............................................... 2,104,130 67.49%
</TABLE>
- ---------------
* Less than 1%
(1) Of the shares beneficially owned by Mr. Hinnen 1,923,130 are owned directly
through B.V. Wisteria, a Netherlands limited liability company, which
company is owned by Pantapharma B.V., which is owned by Mr. Hinnen.
Additionally, Mr. Hinnen holds the voting power over 22,000 shares through
an irrevocable proxy which expires on June 30, 1997. Mr. Hinnen's address is
Beekhuizenseweg 87, 6881 A G Velp, The Netherlands.
(2) Consists of warrants to purchase Common Stock, which warrants were issued in
connection with the Company's initial public offering (the "Representatives
Warrants"). In addition, First London Securities Corporation was issued
20,000 Representative Warrants, of which Mr. Shelmire disclaims beneficial
ownership.
(3) Consists of 20,000 Representative Warrants. In addition, National Securities
Corporation was issued 6,667 Representatives Warrants, of which Mr. Shuey
disclaims beneficial ownership.
LITIGATION
EuroMed, Inc. has filed two separate lawsuits against one of its directors,
Gregory Alan Gaylor. The first, Case No. A366523, was filed against Mr. Gaylor
and Mr. Robert Jansonius, a former director of EuroMed, in the State District
Court of Clark County, Nevada on November 15, 1996. In the suit, the Company
alleges that Mr. Gaylor acted improperly by diverting Company funds to improper
uses, representing himself as having managerial authority over Company affairs,
and making untrue statements regarding Company business. The Company seeks
temporary and permanent injunctive relief prohibiting Mr. Gaylor from taking
certain actions, and the Court has granted a temporary restraining order and has
signed an order granting a preliminary injunction in the Company's favor. The
Company is in the process of negotiating a settlement agreement with Mr.
Jansonius.
The second lawsuit against Mr. Gaylor was initiated on February 18, 1997 in
Dallas, Texas in the United States District Court for the Northern District of
Texas, and bears Civil Action No. 3-97CV0322-H. The lawsuit alleges that Mr.
Gaylor violated Section 13(d) of the Securities Exchange Act of 1934, as
amended, by failing to make necessary federal securities law filings upon his
acquisition of more than a 5% beneficial interest in the Common Stock. In
addition, the Company has requested injunctive relief and damages resulting from
Mr. Gaylor's alleged disparagement of the Company and Mr. Gaylor's alleged
interference with
5
<PAGE> 9
the Company's operations arising from his communications with the Company's
investors, customers, stockholders and accountants.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid during the Company's last completed fiscal year to the Company's Chief
Executive Officer and each of the Company's executive officers (other than the
Chief Executive Officer) whose total annual salary and bonuses earned during the
fiscal year ended December 31, 1996, exceeded $100,000:
MANAGEMENT COMPENSATION AND TRANSACTIONS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------------------------- ----------------------------
SECURITIES
UNDERLYING
OTHER OPTIONS/ ALL OTHER
NAME/TITLE YEAR SALARY($) BONUS($) COMPENSATION($) SARS(#) COMPENSATION($)
---------- ---- --------- -------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
A. Francois Hinnen(1) 1996 $125,000 -- -- -- --
1995 $125,000 -- -- -- --
</TABLE>
- ---------------
(1) Mr. Hinnen contracts his services to Confedera and Galenica through
Pantapharma B.V. See "Employment Agreements."
COMPENSATION OF DIRECTORS
The Company pays $3,500 per quarter to its directors who are not employees
or affiliates of the Company ("Independent Directors"). In addition, Independent
Directors may receive options to purchase Common Stock under the Company's 1995
Long-Term Incentive Plan.
EMPLOYMENT AGREEMENTS
Mr. Hinnen provides his services to Confedera B.V., a wholly-owned
subsidiary of the Company ("Confedera"), through a management agreement ("Hinnen
I Agreement") between Confedera and Pantapharma B.V., a Netherlands private
limited liability company ("Pantapharma"). Pursuant to the Hinnen I Agreement,
Pantapharma has agreed to fulfill the duties assigned to a director of Confedera
for a period commencing on January 1, 1995 through December 31, 1999, for which
Confedera has agreed to pay Pantapharma a management fee of approximately
$62,000, excluding sales tax, subject to review annually (with the understanding
that the management fee shall be annually increased by a percentage equal to the
price index figure for family consumption as determined by the Central Bureau of
Statistics of The Netherlands). In addition, Confedera has agreed to reimburse
Pantapharma for all business expenses incurred by Pantapharma for acting, in
such capacity, including, an automobile allowance of approximately $.37 per
kilometer. The Hinnen I Agreement is terminable by either party on at least one
year prior written notice. In the event Confedera terminates the Hinnen I
Agreement prior to the expiration of the term without cause (with cause being
defined as: (i) failure by Pantapharma to fulfill its duties and obligations
under the Hinnen I Agreement; (ii) Pantapharma has been adjudicated bankrupt or
has been granted suspension of payment; or (iii) Pantapharma for a continuous
period of thirteen weeks or more has not placed any staff at the disposal of
Confedera for the execution of the Hinnen I Agreement), Pantapharma shall be
entitled to continue to receive the management fee for the remainder of the
term. In the event Pantapharma is unable to fulfill its duties and obligations
under the Hinnen I Agreement for any reason, Pantapharma shall be entitled to
receive the management fee for one-year thereafter.
Mr. Hinnen provides his services to Galenica B.V., a wholly-owned
subsidiary of the Company ("Galenica"), through a management agreement ("Hinnen
II Agreement") between Galenica and Pantapharma. Pursuant to the Hinnen II
Agreement, Pantapharma has agreed to fulfill the duties assigned to
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<PAGE> 10
a director of Galenica for a period commencing on January 1, 1995 through
December 31, 1999, for which Galenica has agreed to pay Pantapharma a management
fee of approximately $62,000, excluding sales tax, subject to review annually
(with the understanding that the management fee shall be annually increased by a
percentage equal to the price index figure for family consumption as determined
by the Central Bureau of Statistics of The Netherlands). In addition, Galenica
has agreed to reimburse Pantapharma for all business expenses incurred by
Pantapharma for acting in such capacity, including an automobile allowance of
approximately $.37 per kilometer. The Hinnen II Agreement is terminable by
either party on at least one-year prior written notice. In the event Galenica
terminates the Hinnen II Agreement prior to the expiration of the term without
cause (with cause being defined as: (i) failure by Pantapharma to fulfill its
duties and obligations under the Hinnen II Agreement; (ii) Pantapharma has been
adjudicated bankrupt or has been granted suspension of payment; or (iii)
Pantapharma for a continuous period of thirteen weeks or more has not placed any
staff at the disposal of Galenica for the execution of the Hinnen II Agreement),
Pantapharma shall be entitled to continue to receive the management fee for the
remainder of the term. In the event Pantapharma is unable to fulfill its duties
and obligations under the Hinnen II Agreement for any reason, Pantapharma shall
be entitled to receive the management fee for one-year thereafter.
David Anderson provides his services to EuroMed through a management
agreement between EuroMed and the Anderson Group, a sole proprietorship. This
contractual relationship states that Mr. Anderson will be reimbursed for his
Company related expenses and a $10,000 per month management fee. The term of
this contract is for six months beginning February 15, 1996.
Robert W.L. Veldman is supplying his services to the Company through a
management contract with Beheer-en Beleggingsmaatschappij File B.V. ("Management
Company"). His contract specifies that he will be the managing director of
EuroMed Europe and its subsidiaries. Mr. Veldman is considered an employee of
the Management Company and not of EuroMed. Mr. Veldman's compensation shall be
200,000 Dutch gilders per year (approximately $100,000) for all work done for
the Company. He is also reimbursed 3,000 Dutch gilders (approximately $1,580)
per month for expenses incurred on behalf of the Company. EuroMed Europe is to
pay these amounts in 12 monthly payments upon invoicing by the Management
Company over the term of this contract. The term of the management contract is
one year from January 1, 1997 to December 31, 1997, and may be extended upon
agreement of both parties. The management contract shall terminate if (i)
EuroMed Europe files bankruptcy; (ii) a suspension of payment to the Management
Company occurs; (iii) Mr. Veldman dies; or (iv) Mr. Veldman is ill or unable to
work for 90 consecutive days.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. The Compensation Committee
presently consists of one member, Mr. Shuey, who is an independent, nonemployee
director. The Compensation Committee is committed to a strong, positive link
between business, performance and strategic goals, and compensation and benefit
programs.
OVERALL EXECUTIVE COMPENSATION POLICY
The Company's compensation policy is designed to support the overall
objective of enhancing value for the Company's stockholders by:
- Attracting, developing, rewarding and retaining highly qualified and
productive individuals.
- Relating compensation to both Company and individual performance.
- Ensuring compensation levels that are externally competitive and
internally equitable.
- Encouraging executive stock ownership to enhance a mutuality of interest
with other stockholders.
The following is a description of the elements of the Company's executive
compensation and how each relates to the objectives and policy outlined above.
7
<PAGE> 11
Base Salary
The Committee reviews each executive officer's salary annually. In
determining appropriate salary levels, the Committee considers individual
performance, internal equity, as well as pay practices of other companies
relating to executives of similar responsibility.
By design, the Committee strives to set executives' salaries at competitive
market levels. The Committee believes maximum performance can be encouraged
through the use of appropriate incentive programs. The Company's longterm
compensation philosophy is that long-term incentives should be related to
improvement in long-term stockholder value, thereby creating a mutuality of
interest with stockholders. In furtherance of this objective, the Company
intends to award to its executive officers stock options. Stock options
encourage and reward effective management that results in long-term corporate
financial success, as measured by stock price appreciation.
RATIONALE FOR CEO COMPENSATION
Mr. Hinnen served as Chief Executive Officer of the Company from November
18, 1995 to October 31, 1996. His compensation package was designed to encourage
short and long-term performance in line with the interests of the Company's
stockholders. Mr. Hinnen's large stock ownership percentage as described
elsewhere herein was a substantial incentive to perform in such a way to enhance
stockholders' interest and returns. His base pay was $125,000 for 1995 and
$125,000 for 1996. The Committee believes Mr. Hinnen's total compensation was
competitive in the external marketplace and reflective of Company and individual
performance. The factors which the Committee considered in determining Mr.
Hinnen's base salary for 1996 were those mentioned above for other executive
officers. Mr. Hinnen was not paid an incentive or granted any options under the
Company's 1995 Long-Term Incentive Plan.
Mr. Robert Jansonius, a former director of the Company, and Mr. Shuey
served as temporary Co-Chief Executive Officers of the Company from October 31,
1996 to, in the case of Mr. Jansonius, December 5, 1996, and in the case of Mr.
Shuey, February 28, 1997. Messrs. Shuey and Jansonius were not compensated for
serving in such capacities, but were reimbursed for certain expenses incurred in
connection therewith.
The Compensation Committee Report on Executive Compensation 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,
as amended or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
This report is submitted by the sole member of the Compensation Committee
as of the end of the 1996 fiscal year.
Robert A. Shuey, III
8
<PAGE> 12
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock from March 19, 1996 (the
date of the Company's initial public offering) through December 31, 1996, with
the cumulative total return on the indices. The comparison assumes $100 was
invested immediately prior to such period in Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends. The Company's
classification category is SIC number 512. Dates on the following chart
represent the last day of the indicated fiscal year. The Company paid no
dividends during such period.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) EUROMED, INC. INDUSTRY INDEX BROAD MARKET
<S> <C> <C> <C>
3/31/96 100.00 100.00 100.00
6/31/96 086.79 104.42 104.49
9/30/96 067.92 113.27 107.72
12/31/96 009.43 118.73 116.70
</TABLE>
CERTAIN BUSINESS RELATIONSHIPS
Confedera has had a business relationship with International Procurement
Agency B.V. ("IPA"), a Netherlands based development agency procurer for the
export of pharmaceutical, since July 1994 and entered into a Cooperation
Agreement with IPA on July 10, 1995. Under the Cooperation Agreement, IPA is
primarily responsible for the financial, administrative and logistical
activities concerning the sale of pharmaceutical products and medical consumer
goods and Confedera is responsible for purchasing the pharmaceutical products
and medical consumer goods, quality control and the legal documentation
pertaining thereto. The Cooperation Agreement further provides that (i) the
parties will equally split the profits and losses of their activities, except
that Confedera will receive 66% of the profits (and assume the same percentage
of the losses) for customers located by Confedera, and (ii) as long as
Confedera's prices for goods are competitive, IPA will purchase pharmaceutical
and medical consumer goods exclusively from Confedera, although Confedera shall
be entitled to sell the pharmaceutical and medical consumer goods on a
non-exclusive basis. Mr. Hinnen owns approximately 33% of the capital stock of
Gentrade B.V., which owns 100% of the capital stock of IPA. Mr. Hinnen had
contracted with Gentrade B.V. to acquire an additional 32% of the capital stock
of the Company on or before June 1, 1996, under certain conditions. These
conditions were not met at that time, therefore, Mr. Hinnen did not acquire this
percentage. Further, Mr. Hinnen has a continuing option to
9
<PAGE> 13
purchase another 35% of Gentrade B.V. if offered by the owner of this stock. The
Company believes that all transactions between IPA and Confedera have been, and
will be, on an arms-length basis.
Mr. Hinnen is the sole owner of the Rhedense Apotheek, a pharmacy located
in Rheden, The Netherlands. In 1994, 1995 and 1996, Rhedense Apotheek purchased
an aggregate of $1,096,000, $1,492,000 and $1,365,941, respectively, of
pharmaceutical products from Galenica. The Company believes that all
transactions between Rhedense Apotheek and Galenica have been, and will be, on
an arms-length basis.
Mr. Hinnen's brother is the sole owner of the Apotheek Neede, a pharmacy
located in Neede, The Netherlands. In 1994, 1995 and 1996, Apotheek Neede
purchased an aggregate of approximately $700,000, $994,000 and $1,358,683,
respectively, of pharmaceutical products from Galenica. The Company believes
that all transactions between Apotheek Neede and Galenica have been, and will
be, on an arms-length basis.
Mr. Hinnen's wife is the sole owner of Ariano Voorthuizen Beheer B.V.
("AVP"). On September 1, 1993, Galenica borrowed approximately $219,000 from AVP
("AVP Loan"). Interest on the AVP Loan was equal to the promissory note interest
rate of Nederlandsche Bank N.V., plus 2%. The remaining principal balance of,
and accrued but unpaid interest on, the AVP Loan was paid in full by Galenica in
July 1995.
Pursuant to a loan agreement dated February 1, 1995 between Galenica and
Wisteria ("Wisteria Agreement"), of which Mr. Hinnen is the sole equity owner,
Galenica borrowed approximately $421,000 from Wisteria. As of December 31, 1996,
the principal balance of this loan had been paid in full.
Since 1991, Pantapharma and Confedera have loaned or advanced money to each
other on a "when needed", and "if available" basis. As of December 31, 1995,
Confedera owed Pantapharma approximately $10,000 which has been since paid in
full. Following the pay-off of the outstanding loan balance, Pantapharma and
Confedera agreed to immediately discontinue such loan arrangement. As a
condition to an amendment to the loan agreement between Confedera, Galenica and
Bank MeesPierson, N.V. on November 9, 1995, Pantapharma agreed to loan to
Confedera approximately $125,000.
In February 1997, EuroMed Europe entered into a purchase agreement with
Pantapharma, whereby EuroMed Europe purchased from Pantapharma all of the
outstanding capital stock of Galenica Belgium, S.A., effective January 1, 1996.
It is the policy of the Company that any future transactions with
affiliated individuals or entities will be on terms no less favorable to the
Company than are reasonably available from unrelated third parties, and any such
affiliated transactions will require the approval of a majority of the
independent directors.
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act, requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC").
Such persons are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1996, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
officers, directors and persons who own more than 10% of a registered class of
the Company's equity securities have been complied with, except that one Form 5
was filed to report two late Form 4 transactions for Mr. Hinnen, the late Form 3
filing for Wisteria, the direct owner of shares held indirectly by Pantapharma,
which is owned by Mr. Hinnen, and eight late Form 4 transactions for Wisteria
and Pantapharma. Additionally, Louis van den Reek failed to file a Form 3.
10
<PAGE> 14
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for stockholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Exchange Act. For such proposals to be considered in the
Proxy Statement and Proxy relating to the 1998 Annual Meeting of Stockholders,
such proposals must be received by the Company, Attention: Secretary, at the
address set forth on the first page of this Proxy Statement, no later than
January 9, 1998, in order to be included in the Company's proxy materials and
form of proxy relating to that meeting. Stockholder proposals must also be
otherwise eligible for inclusion.
OTHER BUSINESS
The Company does not intend to bring any business before the Meeting other
than that described herein and at this date the Company has not been informed of
any matters that may be presented at the Meeting by others; however, if any
other matters properly come before the Meeting or any adjournment thereof, it is
intended that the persons named in the accompanying Proxy will vote pursuant to
such Proxy in accordance with their best judgment on such matters.
MISCELLANEOUS
All costs of solicitation of Proxies will be borne by the Company. In
addition to solicitation by mail, the officers and employees of the Company may
solicit Proxies by telephone or personally, without additional compensation. The
Company may also make arrangements with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation materials to the
beneficial owners of shares of Common Stock held of record by such persons, and
the Company may reimburse them for their out-of-pocket expenses incurred in
connection therewith. The Company has engaged American Stock Transfer & Trust
Company as proxy solicitor for approximately $1,500.
The Annual Report to Stockholders of the Company, including financial
statements for the fiscal year ended December 31, 1996 accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, BUT NOT INCLUDING EXHIBITS,
WILL BE FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS
DELIVERED UPON THE WRITTEN REQUEST OF SUCH PERSON ADDRESSED TO EUROMED, INC.,
ATTN: ROBERT W.L. VELDMAN, WILHELMINAKANAAL NOORD 6, NL 4902VR OOSTERHOUT, THE
NETHERLANDS.
By Order of the Board of Directors,
/s/ RICHARD F. DAHLSON
Richard F. Dahlson
Secretary
Dallas, Texas
May 9, 1997
11
<PAGE> 15
EUROMED, INC.
ANNUAL MEETING OF STOCKHOLDERS
COMMON STOCK
The undersigned hereby appoints David Anderson and Richard F. Dahlson,
each with power to act without the other and with full power of substitution, as
Proxies to represent and to vote, as designated on the reverse, all Common Stock
of EuroMed, Inc. owned by the undersigned, at the Annual Meeting of Stockholders
to be held at Grosvenor House London, 86 Park Lane, London WIA 3AA, England on
Monday, May 26, 1997, at 10:00 a.m. local time, upon such business as may
properly come before the meeting or any adjournment thereof including the
following:
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE> 16
- --------------------------------------------------------------------------------
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
FOR ALL NOMINEES NOMINEES: A. Francois Hinnen
LISTED AT RIGHT WITHHELD AUTHORITY Robert W. L. Veldman
(EXCEPT AS MARKED TO THE TO VOTE FOR ALL David Anderson
CONTRARY BELOW) NOMINEES LISTED AT RIGHT Jesse Shelmire, IV
Robert A. Shuey, III
</TABLE>
1. Election [ ] [ ]
of Directors
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEES NAME IN THE SPACE BELOW:
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection of [ ] [ ] [ ]
Killman, Murrell & Company, P.C.
as independent public accountants
to audit the Company's financial
statements for the 1997 fiscal
year.
3. In their discretion on any other
matter that may properly come
before the meeting or any
adjournment thereof.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no specific direction is given, this proxy
will be voted (i) for the election of the nominees for director, (ii) for the
ratification of the selection of Killman, Murrell & Company, P.C. as independent
public accountants to audit the Company's financial statements for the 1997
fiscal year and (iii) at the discretion of the proxy holders with regard to any
other matter that may properly come before the meeting or any adjournment
thereof.
This proxy may be revoked prior to the exercise of the powers conferred by the
proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PLEASE DATE, SIGN EXACTLY AS SHOWN HEREON AND MAIL PROMPTLY THIS PROXY IN THE
ENCLOSED ENVELOPE.
Signature
----------------------------------------------------------------------
DATE , 1997
- ----------------------------------------------------- -----------------
(SIGNATURE IF HELD JOINTLY)
NOTE: Please date, sign exactly as shown hereon and mail promptly this proxy in
the enclosed envelope. When there is more than one owner, each should
sign. When signing as an attorney, administrator, executor, guardian or
trustee, please add your title as such. If executed by a corporation, the
proxy should be signed by a duly authorized officer. If executed by a
partnership, please sign in the partnership name by an authorized person.
