<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ICU Medical, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
ICU MEDICAL, INC.
951 CALLE AMANECER
SAN CLEMENTE, CALIFORNIA 92673
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1997
----------------
The Annual meeting of Stockholders of ICU Medical, Inc. (the "Company") will
be held at the Company's offices, 951 Calle Amanecer, San Clemente,
California, Tuesday, May 13, 1997 at 10:00 a.m., Pacific Daylight Saving Time,
for the following purposes:
1. To elect two directors of the Company to serve for a term of three
years and until their successors have been elected and qualified;
2. To consider a proposal to approve the ICU Medical, Inc. Directors'
Stock Award Plan;
3. To ratify the selection of Arthur Andersen LLP, independent certified
public accountants, as auditors for the Company for the year ending
December 31, 1997; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has determined that only holders of Common Stock of
record at the close of business on April 11, 1997 will be entitled to receive
notice of, and to vote at, the Annual Meeting or any adjournment thereof.
The Board of Directors
/s/ FRANCIS J. O'BRIEN
Francis J. O'Brien, Secretary
San Clemente, CA
April 14, 1997
YOUR VOTE IS IMPORTANT
Please complete, sign, date and return the enclosed proxy promptly even
though you plan to attend the meeting in person. If you attend the meeting,
you may withdraw your proxy and vote in person.
THANK YOU FOR ACTING PROMPTLY
<PAGE>
ICU MEDICAL, INC.
951 CALLE AMANECER
SAN CLEMENTE, CALIFORNIA 92673
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ICU Medical, Inc. (the "Company") for use
at the Annual Meeting of Stockholders to be held May 13, 1997, at the
Company's offices, 951 Calle Amanecer, San Clemente, California at 10:00 a.m.,
Pacific Daylight Saving Time, and at any adjournments thereof, for the
purposes set forth herein and in the accompanying Notice. The approximate date
of mailing of this Proxy Statement and the accompanying proxy is April 14,
1997.
PROXY INFORMATION
A stockholder giving a proxy may revoke it at any time before it is
exercised by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date. The powers of the
proxyholders will be suspended if the person executing the proxy is present at
the Annual Meeting and elects to vote in person. Subject to such revocation or
suspension, all shares represented by each properly executed proxy received by
the Company will be voted in accordance with the instructions indicated
thereon, and if instructions are not indicated, will be voted in favor of (i)
the election of the nominees for director named in, or otherwise nominated as
set forth in, this Proxy Statement, (ii) the proposal to approve the ICU
Medical, Inc. Directors' Stock Award Plan and (iii) the proposal to ratify the
selection of independent certified public accountants.
RECORD DATE AND VOTING
As of April 11, 1997, the outstanding voting securities of the Company
consisted of 8,169,861 shares of $.10 par value Common Stock. Each stockholder
of record at the close of business on April 11, 1997, is entitled to one vote
for each share then held on each matter submitted to a vote of stockholders.
The presence in person or by proxy of holders of a majority of the issued and
outstanding Common Stock will constitute a quorum for the transaction of such
business as shall properly come before the meeting.
Generally, stockholder approval of a matter, other than the election of
directors, requires the affirmative vote of a majority of the shares entitled
to vote on the matter present in person or represented by proxy at the
meeting. Directors are elected by a plurality of the votes of the shares
present in person or by proxy and entitled to vote on the election of
directors. Shares voted to abstain on a matter will be treated as entitled to
vote on the matter and will thus have the same effect as "no" votes. Broker
non-votes are not counted as entitled to vote on a matter in determining the
number of affirmative votes required for approval of the matter, but are
counted as present for quorum purposes. The term "broker non-votes" refers to
shares held by a broker in street name which are present by proxy but are not
voted on a matter pursuant to rules prohibiting brokers from voting on non-
routine matters without instructions from the beneficial owner of the shares.
The election of directors and ratification of the selection of independent
certified public accountants are generally considered to be routine matters on
which brokers may vote without instructions from beneficial owners. Approval
of the Directors' Stock Award Plan may be deemed a non-routine matter on which
brokers may not vote without instructions from beneficial owners.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to shares of Common Stock
owned as of April 11, 1997, by (i) each person who, insofar as the Company has
been able to ascertain, beneficially owned more than five percent of the
outstanding Common Stock; (ii) each director, (iii) each nominee for election
as a director; and (iv) all directors and officers as a group. Unless
otherwise indicated in the footnotes following the table, and subject to
community property laws where applicable, the Company believes that the
persons as to whom the information is given have sole voting and investment
power over the shares listed as beneficially owned.
<TABLE>
<CAPTION>
SHARES PERCENT
OWNED OF
BENEFICIALLY CLASS(1)
------------ -------
<S> <C> <C>
Jesus Mejia, Trustee of the Christopher George......... 941,739(2) 11.5%
Lopez Children's Trust and the Nicholas George Lopez
Children's Trust
George A. Lopez, M.D. ............................... -- (3) --
Jack W. Brown........................................ 18,750(4) *
John J. Connors...................................... 12,750(5) *
Michael T. Kovalchik III, M.D. ...................... 10,840(6) *
Richard H. Sherman, M.D. ............................ 87,834(7) 1.1%
All officers and directors as a group (9 persons).... 219,174(8) 2.7%
</TABLE>
- --------
*Less than one percent
(1) Based on total shares of Common Stock outstanding plus outstanding options
to acquire stock currently exercisable or exercisable within 60 days held
by the beneficial owner(s) whose percent of outstanding stock is
calculated.
(2) Mr. Mejia has sole voting and investment power with respect to the
Christopher George Lopez Children's Trust and the Nicholas George Lopez
Children's Trust. Mr. Mejia disclaims any beneficial interest in the
shares held by the Children's Trusts. The Children's Trusts were
established by Dr. Lopez for his minor children; the trusts are
irrevocable, and Dr. Lopez disclaims any beneficial interest in the shares
held by the Children's Trusts.
(3) Does not include 12,006 shares owned by his wife or 941,739 shares held in
his Children's Trusts, as to which Dr. Lopez disclaims beneficial
ownership, and as to which he has no voting and investment power. Also
does not include 250,000 held by Dr. Lopez' wife as Trustee of the Lopez
CRT #1 for the benefit of Dr. Lopez and his wife, as to which shares Dr.
Lopez has no voting or investment power.
(4) Includes options to acquire 11,250 shares.
(5) Includes options to acquire 3,750 shares.
(6) Includes 949 shares held by Dr. Kovalchik as custodian for his children.
Does not include 2,150 shares beneficially owned by his wife. Dr.
Kovalchik disclaims beneficial ownership of all of the shares held as
custodian and the shares beneficially owned by his wife.
(7)Includes options to acquire 11,250 shares.
(8)Includes options to acquire 30,000 shares.
2
<PAGE>
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
Two directors, of the five directors currently constituting the Board of
Directors, are to be elected at the Annual Meeting and to hold office until
the year 2000 Annual Meeting and until their successors are elected and
qualified. The Company's Board of Directors is divided into three classes.
Each year a different class of directors is elected at the Annual Meeting to a
three-year term.
In the election of directors, the proxyholders intend to vote for the
election of Jack W. Brown and Richard H. Sherman, M.D., both of whom are now
members of the Board whose current terms of office are expiring. It is not
anticipated that the nominees will decline or be unable to serve as a
director. If, however, that should occur, the proxyholders will vote the
proxies in their discretion for any nominee designated to fill the vacancy by
the present Board of Directors.
<TABLE>
<CAPTION>
CURRENT
DIRECTOR TERM
NAME AGE SINCE EXPIRES PRINCIPAL OCCUPATION
---- --- -------- ------- --------------------------------------------
<S> <C> <C> <C> <C>
George A. Lopez, M.D. .. 49 1984 1998 Chairman of the Board, President and Chief
Executive Officer of the Company
Jack W. Brown........... 57 1992 1997 Chairman of the Board and President of Gish
Biomedical, Inc., disposable medical devices
John J. Connors......... 57 1992 1999 Patent Attorney
Michael T. Kovalchik
III, M.D. ............. 51 1989 1999 Physician and director of the Dialysis Unit,
Charlotte Hungerford Hospital, Torrington,
Connecticut
Richard H. Sherman,
M.D. .................. 50 1990 1997 Physician and director of the Cardiology
Laboratory and Cardiac Rehabilitation for
Milford Hospital, Milford, Delaware
</TABLE>
One vacancy currently exists on the Board. The Board does not intend to
nominate anyone to fill the vacancy until a suitable candidate is identified.
Dr. Lopez is the founder of the Company and has served as Chairman of the
Board, President and Chief Executive Officer for more than five years. He also
served as Secretary and Chief Financial Officer from January 1994 to October
1994. Dr. Lopez has held various offices and served as a director of the
Company since its founding in 1984 with some interruptions in service.
Messrs. Brown and Connors and Drs. Kovalchik and Sherman have been engaged
in their current occupations for more than five years. Mr. Connors served as
Secretary, Treasurer and Chief Financial Officer of the Company from April 30,
1996 until November 1, 1996 on an interim basis during a search for a
candidate to fill these positions permanently. Mr. Connors previously served
as a director from December 1988 to July 1989.
SPECIAL COMMITTEES AND ATTENDANCE AT MEETINGS
The Board of Directors has an Audit Committee which consisted of Messrs.
Brown and Connors and Dr. Kovalchik. Mr. Connors resigned from the Audit
Committee as of the date he was elected Chief Financial Officer, and returned
to the Audit Committee when his service as Chief Financial Officer concluded.
The Audit Committee makes recommendations regarding the selection of
independent public accountants, reviews reports from the Company's independent
public accountants and reviews with them the scope and results of the audit
engagement. The Audit Committee met once in 1996.
The Board of Directors has a Compensation Committee of the Board, consisting
of Mr. Brown and Drs. Kovalchik and Sherman. The Compensation Committee, as
more fully described in the Compensation Committee Report, approves salary
practices for executive personnel, establishes the compensation of executive
officers and authorizes the grant of stock options. The Compensation Committee
met 11 times in 1996.
3
<PAGE>
During 1996, the Board met 16 times. Each director attended more than 75% of
the total of all meetings of the Board and any committees on which he serves.
EXECUTIVE COMPENSATION
Compensation Committee Report
The Compensation Committee (the "Committee") consists of three directors who
are not employees or former employees of, or consultants to, the Company. The
Committee approves salary practices for executive personnel, reviews the
performance of the Company and the executive officers, sets performance
objectives, establishes the compensation of executive officers, including the
Chief Executive Officer, and authorizes the grant of options under the 1993
Plan.
The Company's policy in compensating executive officers is to establish
methods and levels of compensation that will provide strong incentives to
promote the profitability and growth of the Company and reward superior
performance and that are sufficiently competitive to attract, retain and
motivate highly competent management personnel. Compensation of executive
officers includes base salary, performance-based incentive bonuses and stock-
based programs. For most executive officers, base salary has historically
accounted for approximately 40% to 55% of the executive officer's
compensation.
The Company previously had employment contracts with each of its executive
officers that had generally provided for relatively modest base salaries and
incentive bonuses based on a percentage of net income. The provisions in
employment contracts for bonuses based on a percentage of net income expired
on November 30, 1995, and the employment agreements expired on December 20,
1996. The 1996 cash compensation of the executive officers named in the
Summary Compensation Table below was fixed by the employment agreements except
for a merit increase in salary given to one executive in 1994.
Prior to the expiration of the employment agreements, the Committee and the
Board of Directors began a review of the Company's compensation practices for
executive officers with the assistance of a compensation consultant. The
Committee developed an executive compensation policy which will provide a base
salary and, if certain performance objectives are met, incentive bonuses and
stock options. The Committee will consider total compensation paid to
executive officers holding comparable positions in comparable companies and
set base salaries of the Company's executive officers at low percentiles of
the range of comparable compensation. In addition to the base salary, if
performance objectives established by the Committee are met, officers will
receive bonuses equal to 30% to 40% of their base salaries and will receive
stock options equal in value to an additional 30% to 40%. Options will be
valued based on a valuation model. If performance objectives are achieved and
officers receive the entire amount of incentive compensation available to
them, their compensation could be at the highest percentiles of compensation
for comprable positions. The Committee believes that the emphasis on
performance-based and stock-based compensation serves to align the interests
of the executive officers with the interests of the Company's stockholders.
Stock options to be received by executive officers pursuant to the executive
compensation policy described above will be awarded under the 1993 Plan.
Options granted under the 1993 Plan become exercisable on the achievement of
performance objectives established by the Committee or 10 years from the date
of grant. The 1993 Plan and the performance objectives are designed so that
the options will motivate the officers toward and reward them for achievement
of the performance objectives.
The base salary paid to Dr. Lopez in 1996 was fixed by his employment
agreement. No incentive bonus was paid to Dr. Lopez during 1996 because of the
expiration in 1995 of the incentive bonus provision in his employment
agreement. During 1996, the Committee awarded options to purchase 660,000
shares of the Company's Common Stock to Dr. Lopez. The award was made in
recognition of Dr. Lopez' significant achievements in the development of new
products as well as the fact that no incentive bonus was paid for the year.
The Committee believed that the award of stock options in recognition of new
product development was appropriate in that the future value of the stock
options would ultimately be largely influenced by the success of the new
products.
4
<PAGE>
Dr. Lopez' compensation in the future will be based on the executive
compensation policy described above, except that incentive bonuses and the
value of stock options to be awarded on the achievement of bonus objectives
will be 70% of his base salary instead of the 30% to 40% for which other
officers are eligible. The Committee believes that in view of the Chief
Executive Officer's overall responsibility for the success of the Company, it
is appropriate that a larger portion of his compensation be contingent on
performance.
During 1996, the Committee authorized the cancellation and regrant at lower
exercise prices of options to purchase 90,000 shares and 15,000 shares
previously granted to Dr. Lopez and another executive officer, respectively.
Following the original grant of the options to the two officers, the market
price of the Company's Common Stock had declined significantly so that the
exercise prices of the options were significantly higher than the market price
of the underlying share. The Committee did not believe that the decline in the
market price in the Company's Common Stock reflected any decline in the
Company's performance. The Committee decided to regrant the options at lower
exercise prices because it believed that the disparity between the market
value of the Common Stock and the high exercise price of the options
eliminated the incentive that the options were designed to provide. In January
1997, the Committee authorized the cancellation and regrant at lower exercise
prices of options to purchase an additional 750,000 shares held by Dr. Lopez
for the same reason.
Adjustments to Option Exercise Prices
TEN-YEAR OPTION REPRICINGS
The following table contains information about adjustments to the exercise
prices of outstanding options held by executive officers since the Company's
initial public offering of its Common Stock on March 31, 1992. All adjustments
were done by cancellation of the original options and the grant of a new
option with exercise prices equal to fair market value of the Common Stock on
the date of grant.
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
NUMBER OF OPTION TERM
SECURITIES MARKET PRICE EXERCISE REMAINING
UNDERLYING OF STOCK AT PRICE AT AT DATE OF
OPTIONS TIME OF TIME OF NEW REPRICING
REPRICED OR REPRICING OR REPRICING OR EXERCISE OR
NAME DATE AMENDED(#)(1) AMENDMENT($) AMENDMENT($) PRICE($) AMENDMENT
- ---- -------- ------------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C>
George A. Lopez, M.D.... 10/3/96 90,000 $7.69 $16.25 $7.69 8.3 years
Evelyn L. Foss.......... 12/10/96 15,000 8.19 15.38 8.19 10.5 years
</TABLE>
- --------
(1) Does not include adjustments to the exercise prices in January 1997 of
750,000 options held by Dr. Lopez as follows: 470,000 options with an
original exercise price of $16.25 per share with 8 years to expiration
cancelled and replaced with options with an exercise price of $8.19 per
share; 280,000 options with an original exercise price of $15.38 per share
with 10.4 years to expiration cancelled and replaced with options with an
exercise price of $8.31 per share.
April 11, 1997
COMPENSATION COMMITTEE
Jack W. Brown
Michael T. Kovalchik III, M.D.
Richard H. Sherman, M.D.
5
<PAGE>
Summary of Cash and Certain Other Compensation
The following table shows the compensation earned for the past three years
by each of the Company's executive officers whose 1996 compensation exceeded
$100,000 (the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND POSITION YEAR SALARY COMPENSATION($)(1) OPTIONS(#)
----------------- ---- -------- ------------------ ------------
<S> <C> <C> <C> <C>
George A. Lopez, M.D. .......... 1996 $149,990 $ -- 750,000(2)
Chairman of the Board, 1995 149,990 170,078 --
President and Chief Executive
Officer 1994 149,990 113,496 660,000
Marshall Kerr(3)................ 1996 133,395 -- --
Vice President of Sales 1995 159,886 30,000 --
1994 159,886 5,000
David C. Arnold(4).............. 1996 131,468 -- --
Vice President of Operations 1995 120,000 136,072 --
1994 120,000 88,178 --
</TABLE>
- --------
(1) Represents bonuses earned during the 12 month period ended November 30 of
each year, one-half of which was paid on December 20 of such year and one-
half of which was payable on December 20 of the following year, if the
recipient is employed by the Company on that date. Does not include
amounts paid during any year which represent one-half of the bonuses
earned during the prior year. Such bonuses were not earned after November
30, 1995, and no bonuses were paid to named executives in 1996.
(2) Represents the grant of 660,000 options and the cancellation and granting
of 90,000 options.
(3) Mr. Kerr resigned as an officer effective August 8, 1997.
(4) Mr. Arnold resigned as an officer effective August 16, 1997. 1996 salary
includes accrued vacation.
Stock Option Grants
Options to purchase Common Stock of the Company have been granted to
employees under the Company's 1985 Amended Stock Option Plan (the "1985
Plan"), which provided for the grant of options to purchase up to 780,000
shares, and under the 1993 Plan, which currently provides for the grant of
options to purchase up to 3,275,000 shares. The exercise price of options
granted under the 1985 and 1993 Plans is the fair market value of the Common
Stock on the date of grant. Options could no longer be granted under the 1985
Plan after the approval of the 1993 Plan at the 1993 Annual Meeting.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION
UNDERLYING GRANTED TO OR BASE PRICE FOR OPTION TERM
OPTIONS EMPLOYEES PER SHARE EXPIRATION ----------------------
NAME GRANTED (#) IN 1996 ($/SH) DATE 5%($)(1) 10%($)(1)
---- ----------- ---------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
George A. Lopez, M.D. .. 660,000 69% $15.38 6/26/07 $7,208,169 $18,804,502
George A. Lopez, M.D. .. 90,000(2) 9 7.69 10/3/07 491,466 1,282,125
</TABLE>
- --------
(1) The rates of stock appreciation reflected in the table are assumed solely
for the purpose of compliance with the rules of the Securities and
Exchange Commission relating to the disclosure of executive compensation.
The Company's Common Stock has at times appreciated at rates substantially
different than the assumed rates and at other times the value of the
Common Stock has declined. Neither the assumed appreciation rates nor the
actual changes in the share value since the dates of option grants are
necessarily indicative of any future value of the Common Stock. The actual
realizable value of the options may be substantially greater or less than
that reflected in the table depending on the actual changes in the share
value during the options' terms.
(2) Replacement of cancelled option.
Stock Option Exercises and Holdings
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES
The following table contains information about stock options exercised
during 1996, and stock options held at December 31, 1996, by the named
executive officers of the Company.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE OPTIONS AT YEAR-END(#) YEAR-END($)
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- ---------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
George A. Lopez, M.D. .. 167,850 $2,233,310 0 / 1,320,000 $0 / $16,875
Marshall Kerr(1)........ 11,000 64,625 0 / 0 0 / 0
David C. Arnold(2)...... -- -- 0 / 45,000 0 / 0
</TABLE>
- --------
(1) Mr. Kerr resigned as an officer effective August 8, 1997.
(2) Mr. Arnold resigned as an officer effective August 16, 1997.
7
<PAGE>
Performance Graph
The following graph shows the total stockholder return on the Company's
Common Stock based on the market price of the Common Stock from March 31, 1992,
the date of the Company's initial public offering, to December 31, 1996 and the
total returns of the Nasdaq Stock Market Index and Common Stocks of a peer
group selected by the Company for the same period.
COMPARISON OF TOTAL RETURN FROM MARCH 31, 1992 TO DECEMBER 31, 1996
AMONG ICU MEDICAL, INC., THE NASDAQ STOCK MARKET INDEX AND PEER GROUP
[PERFORMANCE CHART APPEARS HERE]
<TABLE>
<CAPTION>
3/31/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ICU Medical, Inc. 100 139.8 234.9 224.1 245.8 113.9
NASDAQ 100 112.8 129.5 126.6 178.9 220.2
Peer Group 100 72.8 54.9 49.3 75.7 76.6
</TABLE>
8
<PAGE>
Assumes $100 invested on March 31, 1992 in the Company's Common Stock, the
Nasdaq Stock Market Index and the Peer Group.
The companies in the peer group selected by the Company include Gish
Biomedical, Inc., Luther Medical Products, Inc., Marquest Medical Products,
Inc., Medex, Inc. and Utah Medical Products, Inc. The basis for the selection
of the companies in the peer group is that, like the Company, they are all
small to mid-size producers of disposable medical products for use in
intravenous systems.
DIRECTORS' COMPENSATION
The Company had not paid cash compensation to directors who are not
employees of the Company through June 1, 1996. As of that date, the Company
adopted a program to pay directors who are not employees of the Company an
annual retainer of $7,500 plus $750 per day for attendance at meetings of the
Board and committees of the Board, or $375 if the meeting is conducted
telephonically. Under the Company's Directors' Stock Option Plan, non-employee
directors automatically receive options to purchase 7,500 shares of Common
Stock at the time they become directors and every three years thereafter that
they continue to serve. Each non-employee director received options to
purchase 7,500 shares in 1993 upon the approval of the Directors' Stock Option
Plan by the stockholders, and an additional 7,500 shares in 1996. The options
are exercisable at the fair market value of the Common Stock on the date of
grant. The Directors' Stock Option Plan will be cancelled upon the approval of
the Directors' Stock Award Plan by the stockholders at the Annual Meeting.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Dr. Lopez which provides for an
annual base salary of $166,000 and a bonus payable in cash and options to
acquire the Company's Common Stock under the 1993 Option Plan based on
achievement of specified performance goals. Unless earlier terminated, the
employment agreement expires on June 30, 1997, at which time it can be
renewed. The Company also has an employment agreement with Mr. Arnold
providing for payment of $1,000 monthly through December 10, 1997.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
On December 30, 1996, the Company purchased 167,850 shares of its Common
Stock from George A. Lopez, M.D., the Company's President and Chief Executive
Officer, for $1,458,197, equal to their fair market value on the date of
purchase. Dr. Lopez had acquired those shares on exercise of options to
purchase Common Stock granted under the Company's 1985 Amended Stock Option
Plan on June 28, 1996 at a cost of $53,846 when their fair market value was
$2,286,956. At the time of the purchase and since, the Company was and has
been pursuing a program of repurchasing its Common Stock.
APPROVAL OF ICU MEDICAL, INC. DIRECTORS' STOCK AWARD PLAN
INTRODUCTION
On April 8, 1997, the Board of Directors adopted, subject to stockholder
approval, the ICU Medical, Inc. Directors' Stock Award Plan (the "Plan"). The
Plan authorizes the award of shares of Common Stock to non-employee directors
of the Company at times and in amounts fixed by the Plan.
The purpose of the Plan is to assist the Company in attracting and retaining
talented individuals to serve as directors of the Company, to compensate non-
employee directors for their services, and to unify the interests of directors
and stockholders through increased director stock ownership.
9
<PAGE>
The following summary of certain provisions of the Plan is qualified in its
entirety by the full text of the Plan, a copy of which is attached as Exhibit
"A" to this Proxy Statement.
SUMMARY
The Company will automatically award 1,000 shares of Common Stock to each
non-employee director of the Company, which currently number four, on the date
of each Annual Meeting of Stockholders, provided that the director remains in
office following such Annual Meeting, the first such award to be made on the
date of the Annual Meeting at which the Plan is approved by the stockholders.
The Plan provides for adjustments to the number of shares subject to the Plan,
and the number of shares which will be awarded automatically to directors in
the event of any stock dividend, recapitalization, split-up, combination or
exchange of the Common Stock. No awards may be made under the Plan after April
8, 2007.
The Plan is administered by the Board. The Board will interpret the Plan,
adopt any rules and regulations necessary for its proper administration and
take any other action it deems necessary or advisable for the Plan.
For federal income tax purposes, directors will recognize income equal to
the fair market value of the Common Stock awarded on the date of such award
and the Company will receive a deduction in the same amount.
VOTE REQUIRED TO APPROVE THE DIRECTORS PLAN
Approval of the Directors' Plan will require the affirmative vote of a
majority of the votes entitled to vote on such matter present in person or by
proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION OF
THE PLAN.
SELECTION OF AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen LLP,
independent certified public accountants, as auditors of the Company for the
year ending December 31, 1997, and has further directed that management submit
the selection of auditors for ratification by the stockholders at the Annual
Meeting. Arthur Andersen LLP has audited the Company's financial statements
for the last eight years. Representatives of Arthur Andersen LLP are expected
to be present at the Annual Meeting and will have an opportunity to make a
statement if they so desire and respond to appropriate questions.
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other matters are properly presented for action, the persons
named in the accompanying proxy intend to vote on such matters in their
discretion.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 1996, has been
mailed with this Proxy Statement or previously delivered to stockholders. Any
stockholder who has not received a copy may obtain one by writing to the
Company.
THE COMPANY WILL ALSO PROVIDE, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT
ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND RELATED SCHEDULES, FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST IN WRITING FROM ANY PERSON
WHO WAS A HOLDER OF RECORD, OR WHO REPRESENTS IN GOOD FAITH THAT HE OR SHE WAS
A BENEFICIAL OWNER, OF COMMON STOCK OF THE COMPANY ON APRIL 11, 1997. ANY SUCH
REQUEST SHALL BE ADDRESSED TO THE SECRETARY OF THE COMPANY AT 951 CALLE
AMANECER, SAN CLEMENTE, CA 92673.
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NOMINATION OF DIRECTORS AND
SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder who intends to nominate persons for election as directors at
an annual meeting shall, not less than 50 days nor more than 75 days prior to
the date of the annual meeting, deliver a notice to the Secretary of the
Company setting forth (a) as to each nominee whom the stockholder proposes to
nominate for election or reelection as a director, (i) the name, age, business
address and residence address of the nominee, (ii) the principal occupation or
employment of the nominee, (iii) the class and number of shares of capital
stock of the corporation which are beneficially owned by the nominee and (iv)
any other information concerning the nominee that would be required under the
rules of the Securities and Exchange Commission in a proxy statement
soliciting proxies for the election of such nominee; and (b) as to the
stockholder giving the notice, (i) the name and record address of the
stockholder and (ii) the class and number of shares of capital stock of the
Company which are beneficially owned by the stockholder. Such notice shall
include a signed consent of each such nominee to serve as director of the
Company, if elected. The Company may require any proposed nominee to furnish
such other information as may reasonably be required by the Company to
determine the eligibility for such proposed nominee to serve as a director of
the Company. A proposal by a stockholder intended to be presented at the 1997
Annual Meeting must be received by the Company at its principal executive
offices by December 16, 1997, to be included in the Proxy Statement for that
meeting, and all other conditions for such inclusion must be satisfied.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than 10% of the Company's
Common Stock to file reports on prescribed forms regarding ownership of and
transactions in the Common Stock with the Securities and Exchange Commission
and to furnish copies of such forms to the Company. Based solely on a review
of the forms received by it, the Company believes that with respect to 1996
the following Section 16(a) filings were not filed on a timely basis: Form 4s
for George A. Lopez, M.D. and Evelyn L. Foss, for one transaction each; Form
5s for John J. Connors, Michael T. Kovalchik III, M.D., Richard H. Sherman,
M.D.
SOLICITATION OF PROXIES
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made by mail, telephone or telegram and personally by
directors, officers and other employees of the Company, but such persons will
not receive compensation for such services over and above their regular
salaries. The Company will reimburse brokers, banks, custodians, nominees and
fiduciaries holding stock in their names or in the names of their nominees for
their reasonable charges and expenses in forwarding proxies and proxy material
to the beneficial owners of such stock.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ FRANCIS J. O'BRIEN
Francis J. O'Brien, Secretary
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<PAGE>
EXHIBIT A
ICU MEDICAL, INC.
DIRECTORS' STOCK AWARD PLAN
1. PURPOSE
The purpose of the ICU Medical, Inc. Directors' Stock Award Plan is to
assist ICU Medical, Inc. in attracting and retaining talented individuals to
serve as Directors of the Company, to compensate non-employee Directors for
their services and to unify the interests of Directors and stockholders
through increased Director Stock ownership.
2. DEFINITIONS
For purposes of this Plan:
"Annual Meeting" means the annual meeting of stockholders of the Company to
elect Directors.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means ICU Medical, Inc. a Delaware corporation.
"Director" means any person who is a member of the Board.
"Plan" means this ICU Medical, Inc. Directors Stock Award Plan.
"Stock" means the Common Stock of the Company. Unless the context expressly
indicates otherwise, "shares" means shares of Stock.
"Subsidiary Corporation" shall have the meaning set forth in Code Section
424(f).
3. SHARES SUBJECT TO PLAN
Up to 50,000 shares of Stock may be awarded to Directors under this Plan,
subject to adjustment as provided in Section 7 of this Plan.
4. ELIGIBILITY
All Directors who are not employees of the Company or any Subsidiary
Corporation shall be eligible to receive automatic awards of Stock.
5. AWARDS OF STOCK
In consideration of each eligible Director's continuing service, the Company
will automatically award 1,000 shares of Stock to each eligible Director on
the date of each Annual Meeting, provided that such Director remains in office
following such Annual Meeting, the first such award to be made on the date of
the Annual Meeting at which this Plan is approved by the stockholders of the
Company.
6. SECURITIES LAW AND TAX MATTERS
6.1. Investment Representations. The shares of Stock awarded to Directors
under this Plan may be deemed to be "restricted securities" and the Directors
may be deemed to be "affiliates" of the Company (as those terms are defined in
Rule 144 under the Securities Act of 1933, as amended (the "Act")). The
Company may require, as a condition to the award of Stock under this Plan,
such representations as to investment intent and covenants regarding transfer
restrictions as the Board, in its absolute discretion, deems necessary to
effect compliance with the Act, any state securities laws or rules and
regulations thereunder. To insure that any resales are made in compliance with
the Act, and the Certificate of Incorporation and Bylaws of the Company, the
Company may imprint an appropriate legend on certificates representing shares
awarded under this Plan and issue appropriate
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<PAGE>
stop-transfer orders to its transfer agents. Any stock certificate evidencing
shares of Stock issued pursuant to an award under this Plan shall bear such
other legends as the Board, in the exercise of its absolute discretion, shall
require.
6.2. Reporting. Each time the Company awards Stock to a Director under this
Plan, the Company shall report on Form 1099, or such other appropriate form,
the fair market value of such award on the date of such award to the Director
and to the Internal Revenue Service.
For purposes of this Plan, the fair market value of a share on a given date
shall be (a) if the Stock is traded on one or more securities exchanges, the
mean between the high and low sale prices of a share on such date on the
principal exchange on which the shares are traded or, if no shares were traded
on such date, then the next preceding trading day (not more than 10) on which
trading occurred; or (b) if the Stock is not traded on a securities exchange
but is quoted on The Nasdaq Stock Market or a successor interdealer quotation
system, the mean between the high and low sale prices (if a National Market
tier security) or the mean between the representative bid and asked prices (in
all other cases) on such date as reported by The Nasdaq Stock Market or such
successor quotation system or, if no shares were traded or quoted on such
date, then the next preceding day (not more than 10) on which trading or such
quotations occurred; or (c) if the Stock is otherwise traded in the over-the-
counter market, the mean between the high and low bid quotations on such date;
or, if there are no bid quotations on such date, then the next preceding
trading day (not more than 10) on which quotations occurred; or (d) if the
Stock is not publicly traded on a securities exchange or traded or quoted in
the over-the-counter market or, if traded or quoted, there are no transactions
or quotations within the last 10 trading days or trading has been halted for
extraordinary reasons, the fair market value shall be determined in good faith
by the Board with reference to the rules and principles of valuation set forth
in Section 20.2031-2 of the Treasury Regulations (concerning the valuation of
stocks and bonds for purposes of Code Section 2031).
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
In the event of any change in the Stock by reason of any stock dividend,
recapitalization, split-up, combination or exchange of shares, or by reason of
any similar change affecting the Stock (but not the issuance of additional
shares, securities convertible into shares or options or rights to acquire
shares of Stock or the Company's repurchase of shares), (a) the number and
class of shares which thereafter may be awarded under Section 3 of this Plan
and (b) the number and class of shares to be subject to each award thereafter
made under this Plan shall be appropriately adjusted consistent with such
change in such manner as the Board may deem equitable to prevent substantial
dilution or enlargement of the value of the awards made to Directors. Any such
adjustment shall be final and binding on each Director.
8. NO RIGHT TO CONTINUED SERVICE
Neither this Plan nor the prospect of any award to be made under this Plan
shall confer upon any Director or any other person any right to continued
service as a Director.
9. COMPLIANCE WITH LAWS AND REGULATIONS
This Plan, the award of Shares under this Plan and the obligation of the
Company to award shares shall be subject to all applicable federal and state
laws, rules and regulations and to any approvals by any government or
regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificate for shares of Stock either (a) prior to (i)
the listing of such shares on any stock exchange on which the Stock may then
be listed or inclusion, on The Nasdaq Stock Market or any interdealer
quotation system on which the Stock may be quoted, and (ii) the completion of
any registration or qualification of such shares which is required under any
federal or state law, or any ruling or regulation of any government body, and
which the Company shall, in its sole discretion, determine to be necessary or
advisable, or (b) until exemptions from such registration and qualification
requirements are established to the reasonable satisfaction of the Company and
its counsel.
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10. ADMINISTRATION
The Board shall administer this Plan in accordance with its provisions and
shall have full authority to interpret this Plan, prescribe, amend and rescind
any rules and regulations necessary or appropriate for the administration of
this Plan and make such other determinations and take such other action as it
deems necessary or advisable, except as otherwise expressly reserved to the
Board in this Plan.
No Director and no officer of the Company shall be personally liable for any
action, determination or interpretation made in good faith with respect to
this Plan, and all such persons shall be fully indemnified and protected by
the Company, to the full extent the Company is permitted to provide such
indemnification and protection, in respect to any such action, determination
or interpretation.
11. APPROVAL BY STOCKHOLDERS
This Plan will be submitted for the approval by holders of a majority of the
shares of stock entitled to vote thereon at the Annual Meeting next following
the Board's adoption of this Plan.
12. AMENDMENT AND DISCONTINUANCE
The Board may from time to time amend, suspend or discontinue this Plan;
provided, however, that without approval of the holders of a majority of the
shares of stock voting thereon, no action of the Board shall, except as
provided in Section 7 of this Plan, increase the number of shares reserved for
awards pursuant to Section 3 of this Plan.
13. TERM
Unless terminated earlier pursuant to Section 12 of this Plan, this Plan
shall expire on, and no further awards shall be made pursuant to this Plan on
or after, ten years after the date of adoption of this Plan by the Board.
This ICU Medical, Inc. Directors' Stock Award Plan was adopted by the Board
on April 8, 1997 and approved by holders of a majority of the shares of Stock
voting thereon on May , 1997.
<TABLE>
<CAPTION>
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<S> <C>
GEORGE A. LOPEZ FRANCIS J. O'BRIEN
Chairman of the Board and President Secretary and Treasurer
</TABLE>
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<PAGE>
. FOLD AND DETACH HERE .
ICU MEDICAL, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints George A. Lopez, M.D. and Francis J.
O'Brien, and each of them, proxies of the undersigned, each with full power to
act without the other and with power of substitution, to represent the
undersigned and vote as directed on the reverse all shares of stock of ICU
Medical, Inc. (the "Company") which the undersigned may be entitled to vote at
the Annual Meeting of Stockholders to be held on Tuesday, May 13, 1997, or any
adjournments thereof, and in their discretion upon such other business as may
properly come before the Annual Meeting or any adjournments thereof.
- -------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued and to be signed on other side)
<PAGE>
- -------------------------------------------------------------------------------
Please mark
[X] your votes
as indicated
The shares represented by this Proxy will be voted as directed herein, but if
no directions are indicated, will be voted FOR the election of all nominees of
the Board of Directors, and FOR Proposals 2 and 3.
Item 1-Election of directors
Jack W. Brown, and
Richard H. Sherman, M.D.
WITHHELD
FOR FOR ALL
[_] [_]
WITHHELD FOR: (To withhold authority to vote
for one nominee write his name on the line
below.
- --------------------------------------------
Item 2-The proposal to approve the ICU Medical, Inc. Directors' Stock Award
Plan; and
FOR AGAINST ABSTAIN
[_] [_] [_]
Item 3-The proposal to ratify the selection of Arthur Andersen LLP as auditors
for the Company.
FOR AGAINST ABSTAIN
[_] [_] [_]
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
Signature(s) ___________________________ Date _________________________, 1997
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, or guardian, set forth your full
title. When shares are held in more than one name, both parties should sign.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
