<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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 240.14a-11(c) or 240.14a-12
UROMED CORPORATION
- --------------------------------------------------------------------------------
(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)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
UROMED CORPORATION
March 28, 1997
Dear Stockholder:
You are cordially invited to attend the Special Meeting of Stockholders of
UroMed Corporation (the "Company"), to be held at 10:00 a.m. on Friday, May 9,
1997, at the offices of the State Street Bank & Trust Company, 225 Franklin
Street, Boston, Massachusetts (the "Meeting").
The Notice of Special Meeting and Proxy Statement that follow describe the
business to be considered and acted upon by the stockholders at the Meeting.
The Board of Directors of the Company encourages your participation in the
Company's corporate governance and, to that end, solicits your proxy. You may
give your proxy by completing, dating, and signing the enclosed proxy and
returning it promptly in the enclosed envelope. You are urged to do so even if
you plan to attend the Meeting. We hope you will be able to join us on May 9,
1997.
Sincerely,
John G. Simon
CHAIRMAN & CEO
64 A Street, Needham, Massachusetts 02194
<PAGE>
UROMED CORPORATION
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 1997
------------------------
Notice is hereby given that a Special Meeting of Stockholders of UroMed
Corporation (the "Company") will be held at the offices of the State Street Bank
& Trust Company, 225 Franklin Street, Boston, Massachusetts on Friday, May 9,
1997 at 10:00 a.m., local time, to consider and act upon the following matters:
1) A proposal to elect two Class III directors of the Company, each to
hold a three-year term.
2) A proposal to ratify the appointment of Price Waterhouse LLP as
independent accountants of the Company for the current fiscal year.
3) To transact such other business as may properly come before the
Meeting or any adjournments thereof.
This Special Meeting is being held in lieu of an annual meeting of
stockholders in 1997. Stockholders of record at the close of business on March
10, 1997 will receive notice of the Meeting and be entitled to vote at the
Meeting. All stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
March 28, 1997
THE BOARD OF DIRECTORS IS SOLICITING THE ENCLOSED PROXY. WHETHER OR NOT YOU
EXPECT TO BE PRESENT AT THE MEETING, COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT PURPOSE. IF YOU
ATTEND THE MEETING, YOU MAY WITHDRAW THE ENCLOSED PROXY GIVEN BY YOU AND VOTE
YOUR SHARES IN PERSON.
<PAGE>
UROMED CORPORATION
64 A STREET
NEEDHAM, MA 02194
------------------------
PROXY STATEMENT
---------------------
INTRODUCTION. This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of UroMed Corporation, a Massachusetts
corporation (the "Company"), of proxies for use at a Special Meeting of
Stockholders (the "Meeting") to be held at the offices of the State Street Bank
& Trust Company, 225 Franklin Street, Boston, Massachusetts on Friday, May 9,
1997 at 10:00 a.m., local time, and at any adjourned session thereof. This
Special Meeting is being held in lieu of an annual meeting of stockholders in
1997. This Proxy Statement and the enclosed Annual Report to Stockholders for
the Company's fiscal year ended December 31, 1996 are being mailed to
stockholders on or about March 28, 1997. The Annual Report does not constitute
any part of this Proxy Statement.
SOLICITATION. The entire cost of preparing, assembling, and mailing this
proxy material will be borne by the Company. In addition, the Company may
reimburse brokerage firms and other persons representing certain beneficial
owners of shares for their reasonable expenses in sending proxy material to and
obtaining proxies from such beneficial owners.
REVOCATION. A proxy may be revoked by a stockholder at any time prior to
its use by giving written notice of such revocation to the Clerk of the Company,
by appearing at the Meeting and voting in person, or by returning a later dated
proxy in the form enclosed.
QUORUM AND VOTING. Stockholders of record as of the close of business on
March 10, 1997 will be entitled to vote at the Meeting. As of such record date,
there were issued and outstanding and entitled to vote 26,493,426 shares of the
common stock, no par value, of the Company (the "Common Stock"). Holders of
shares of Common Stock are entitled to one vote for each share owned at the
record date on all matters to come before the Meeting and any adjournments
thereof. The presence in person or by proxy of holders of a majority of the
shares of Common Stock entitled to vote at the Meeting constitutes a quorum for
the transaction of business.
TABULATION OF VOTES. All proxies will be voted in accordance with the
instructions contained therein. If no choice is specified for one or more
proposals in a proxy submitted by or on behalf of a stockholder, the shares
represented by such proxy will be voted in favor of such proposals and, in the
discretion of the named proxies, with respect to any other proposals that may
properly come before the Meeting. Broker non-votes (if the broker has voted on
at least one proposal) and proxies that withhold authority to vote for election
of a director or that reflect abstentions will be deemed present for the purpose
of determining the presence of a quorum for the transaction of business. A
broker non-vote will have no effect on the outcome of voting on such proposal.
An abstention with respect to a proposal will have the effect of a vote against
such proposal.
The Board of Directors does not know of any matters that will be brought
before the Meeting other than those matters specifically set forth in the Notice
of Special Meeting of Stockholders. However, if any other matter properly comes
before the Meeting, it is intended that the persons named in the enclosed form
of proxy, or their substitute acting thereunder, will vote on such matter in
accordance with their best judgment.
<PAGE>
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of December 31, 1996 for (i) each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each of the executive officers of the Company named in the Summary Compensation
Table, and (iv) all of the directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(L)
------------------------
<S> <C> <C>
NAME NUMBER PERCENT
- ------------------------------------------------------------ ------------- ----
John G. Simon............................................... 4,229,416(2) 16.0%
Massachusetts Financial Services Company.................... 3,426,700(3) 13.0%
500 Boylston Street
Boston, MA 02116-3741
Steven J. Gilbert........................................... 1,649,347(4) 6.2%
Soros Capital L.P........................................... 1,432,254(5) 5.4%
888 Seventh Avenue
New York, NY 10106
Joanne H. Moon.............................................. 198,070(6) *
Richard A. Sandberg......................................... 11,879(7) *
Thomas E. Tierney........................................... 59,130(8) *
David P. Fialkow............................................ 59,130(9) *
Elizabeth B. Connell, M.D. ................................. 28,750(10) *
Carl J. Wisnosky............................................ 103,052(11) *
Paul J. Murphy.............................................. 48,749(12) *
Stephen A. Guida............................................ 0 *
All directors and executive officers as a group (14
persons).................................................. 6,333,900(13) 24.0%
</TABLE>
- ------------------------
* Less than 1%.
(1) Unless otherwise indicated in these footnotes, each stockholder has sole
voting and investment power with respect to the shares beneficially owned.
Includes shares issuable upon exercise of options exercisable as of December
31, 1996 or within 60 days after such date.
(2) Includes (i) 32,920 shares held by The Clarendon 1993 Irrevocable Trust, of
which Mr. Simon is a Trustee and over which Mr. Simon shares investment and
voting control, (ii) 16,460 shares issuable upon exercise of nonstatutory
stock options, and (iii) 185,329 shares held by UroMed employees and Medical
and Scientific Advisory Board members with respect to which Mr. Simon has
the right to direct the vote pursuant to contractual relationships between
the Company and such persons.
(3) Represents shares beneficially owned by Massachusetts Financial Services
Company ("MFS") and certain other entities. MFS exercises sole voting power
over 3,372,600 of such shares and exercises sole dispositive power over
3,426,700 of such shares. Based on information provided by MFS.
(4) Includes 1,432,254 shares owned by Soros Capital L.P. of which Mr. Gilbert
is managing general partner. Also includes 20,210 shares issuable upon
exercise of nonstatutory stock options.
2
<PAGE>
(5) Based on information provided by Soros Capital L.P.
(6) Includes (i) 38,670 shares issuable upon exercise of incentive stock
options, (ii) an aggregate of 9,400 shares owned by trusts of which Ms. Moon
is a trustee for the benefit of her minor children, and (iii) 150,000 shares
owned by a revocable trust of which Ms. Moon's husband is the sole trustee.
Ms. Moon disclaims beneficial interest in these shares held by trusts for
the benefit of other persons.
(7) Includes 11,710 shares issuable upon exercise of nonstatutory stock options.
(8) Includes (i) 53,130 shares issuable upon exercise of nonstatutory stock
options, and (ii) 6,000 shares held by Mr. Tierney's spouse.
(9) Includes 3,750 shares issuable upon exercise of nonstatutory stock options.
(10) Represents 28,750 shares issuable upon exercise of nonstatutory stock
options.
(11) Includes 34,583 shares issuable upon exercise of incentive stock options.
(12) Includes 48,000 shares issuable upon exercise of stock options.
(13) Includes 269,596 shares issuable upon exercise of incentive and
nonstatutory stock options.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes, with the
members of each such class serving a three year term. Each year the stockholders
have the opportunity to elect the members of one class. At the Meeting, the
terms of the members of Class III, Mr. John G. Simon and Mr. Richard A.
Sandberg, expire. Mr. Simon and Mr. Sandberg are the only nominees for election
as Class III Directors, for a term to expire at the 2000 Annual Meeting of
Stockholders.
Unless authority is withheld, it is the intention of the persons voting
under the enclosed proxy to vote such proxy in favor of the election of Mr.
Simon and Mr. Sandberg to be directors of the Company until the 2000 Annual
Meeting of Stockholders and until their successors are elected and qualified.
The affirmative vote of a majority of the shares of Common Stock present or
represented at the Meeting by proxy is required for the election of Mr. Simon
and Mr. Sandberg as Class III directors.
The Class I directors of the Company, with terms expiring at the 1998 Annual
Meeting of Stockholders, are Steven J. Gilbert and Dr. Elizabeth B. Connell, and
the Class II directors of the Company, with terms expiring at the 1999 Annual
Meeting of Stockholders, are David P. Fialkow and Thomas E. Tierney.
The following table sets forth, with respect to the members of the Board of
Directors, the name, age, length of service as a director and any service on
committees of the Board of Directors of the Company. For information regarding
the number of shares of the Company's Common Stock owned by each nominee
3
<PAGE>
and all directors as of December 31, 1996, see "Stock Ownership of Principal
Stockholders and Management." The address for each person listed below is c/o
the Company at 64 A Street, Needham, Massachusetts 02194.
<TABLE>
<CAPTION>
YEAR FIRST
BECAME POSITIONS AND OFFICES
NAME AGE DIRECTOR WITH THE COMPANY
- ----------------------------------------------- --- ----------- -----------------------------------------------
<S> <C> <C> <C>
John G. Simon.................................. 34 1990 President, Chief Executive Officer, Director
and Chairman of the Board
Elizabeth B. Connell, M.D...................... 71 1994 Director
David P. Fialkow(l)............................ 38 1991 Director
Steven J. Gilbert.............................. 49 1992 Director
Richard A. Sandberg(l)......................... 54 1991 Director
Thomas E. Tierney(l)........................... 69 1991 Director
</TABLE>
- ------------------------
(1) Member of the Compensation Committee and Audit Committee of the Board of
Directors.
BACKGROUND OF DIRECTORS
JOHN G. SIMON, Chairman of the Board of Directors, President, Chief
Executive Officer. Mr. Simon is the founder of the Company and has served as
President, Chief Executive Officer, and Chairman of the Board of Directors of
the Company since its inception in 1990.
ELIZABETH B. CONNELL, M.D., Director. Dr. Connell has served as a Director
of the Company since 1994. Since 1981, she has served as a professor in the
Department of Gynecology and Obstetrics at Emory University School of Medicine
in Atlanta, Georgia and was appointed Professor Emeritus effective January 1,
1997. Dr. Connell also currently serves as a consultant to the U.S. Food and
Drug Administration's OB/GYN Devices Panel and is a member of the FDA's OTC Drug
Advisory Committee. Ms. Connell is also a director of Gynecare, Incorporated.
DAVID P. FIALKOW, Director. Mr. Fialkow has served as a Director of the
Company since 1991. Since October 1996 he has served as Co-Chief Executive
Officer of Retail Growth Systems LLC, a credit card marketing company. He has
served as President of Alliance Development Group (formerly CoBra Marketing,
Inc.), a credit card/co-brand marketing company, since March 1995. Prior to that
time, Mr. Fialkow served as President and co-founder of National Leisure Group,
Inc., a leisure travel company. Mr. Fialkow is also a director of PNC, Bank New
England.
STEVEN J. GILBERT, Director. Mr. Gilbert has served as a Director of the
Company since 1992. He has served as Managing General Partner of Soros Capital
L.P., the principal advisor to Quantum Industrial Holdings Ltd., since 1992. He
is also the Managing Director of Commonwealth Capital Partners, L.P., a private
equity investment fund, and a Limited Partner of Chemical Venture Partners. Mr.
Gilbert is also a director of each of NFO Research, Inc., Digicon Inc.,
GTS-Duratek, Inc., Katz Media Corporation, The
4
<PAGE>
Asian Infrastructure Fund, Peregrine Indonesia Fund Limited, Sidney Harbor
Casino Holdings Limited and Terra Nova (Bermuda) Holdings Limited.
RICHARD A. SANDBERG, Director. Mr. Sandberg has served as a Director of the
Company since 1991. Since 1983, he has served in a variety of positions,
including Chairman of the Board and Chief Executive Officer, of DIANON Systems
Inc., an oncology and gynecology marketing and database firm which he co-
founded. Currently, he serves as a director of DIANON Systems Inc. From 1976 to
1983, Mr. Sandberg served as President of CUC International Inc., a consumer
services membership company.
THOMAS E. TIERNEY, Director. Mr. Tierney has served as a Director of the
Company since 1991. He has served as the Chairman of T. E.T. Associates, a
health care consulting firm, since 1988 and as the Chairman of Warehouse
Products Testing Corp. from 1994 to 1996. He was formerly with Kendall Co., a
health products firm, from 1951 to 1988 where he held numerous positions
including Executive Vice President and General Manager of the Hospital Division
and Group Executive for the Health Care Business. Mr. Tierney is also a Director
of Procyte Corporation.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the Company's fiscal year ended December 31, 1996, the Board of
Directors held five meetings and acted three other times by written consent in
lieu of a meeting. Each of the Company's directors attended at least 75% of all
meetings of the Board held while he or she was a Board member and of all
committees of which he or she was a member.
Each of the Audit Committee of the Board of Directors (the "Audit
Committee") and the Compensation Committee of the Board of Directors (the
"Compensation Committee") presently are composed of three directors: David P.
Fialkow, Richard A. Sandberg, and Thomas E. Tierney. Responsibilities of the
Audit Committee include engagement of independent accountants, review of audit
fees, supervision of matters relating to audit functions, review of internal
policies and procedures regarding audits, accounting and other financial
controls, and reviewing related party transactions. During 1996, the Audit
Committee held two meetings. Responsibilities of the Compensation Committee
include approval of remuneration arrangements for executive officers of the
Company, review and approval of compensation plans relating to executive
officers and directors, including grants of stock options and other benefits
under the Company's Amended and Restated 1991 Stock Option Plan (the "1991 Stock
Option Plan"), and general review of the Company's employee compensation
policies. During 1996, the Compensation Committee held five meetings and acted
one other time by written consent.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of three outside
directors, David P. Fialkow, Richard A. Sandberg and Thomas E. Tierney. No
member of the Compensation Committee is a former or current officer or employee
of the Company. To the Company's knowledge, there were no other relationships
involving members of the Committee or other directors of the Company requiring
disclosure in this Proxy Statement.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain compensation information for the
fiscal years ended December 31, 1996, 1995 and 1994 with respect to the
Company's Chief Executive Officer and the four other highest compensated
executive officers of the Company whose total salary and bonuses for the
Company's 1996 fiscal year exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL -------------
COMPENSATION SECURITIES OTHER
--------------------- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS SATION
- ---------------------------------------------------- --------- ---------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C>
John G. Simon....................................... 1996 $ 159,188 $ 37,332 22,000 $ --
Chairman of the Board, Chief Executive 1995 150,000 30,000 12,000 --
Officer & President 1994 139,583 -- -- --
Joanne H. Moon...................................... 1996 136,687 31,540 11,000 --
Managing Director of Continence Care 1995 123,708 20,000 12,000 --
1994 118,250 -- 30,000 --
Carl J. Wisnosky.................................... 1996 133,718 26,560 11,000 --
Vice President, Research and Development 1995 123,476 10,000 12,000 --
1994 117,333 -- 30,000 --
Paul J. Murphy...................................... 1996 132,656 29,112 11,000 --
Chief Financial Officer and Treasurer 1995 122,500 10,000 12,000 --
1994 68,231 -- 95,000 --
Stephen A. Guida.................................... 1996 143,750 45,954 11,000 60,000(2)
Vice President, Marketing and Sales 1995 46,667 -- 90,000(3) --
</TABLE>
- ------------------------
(1) Bonus amounts reflected in the 1996 columns relate to 1996 but were paid in
February 1997, except $15,000 paid to Mr. Guida in 1996.
(2) Mr. Guida was paid $60,000 in 1996 as reimbursement for his relocation
expenses.
(3) A non qualified option to purchase 65,000 shares of Common Stock at a price
of $5.00 per share and an incentive option to purchase 25,000 shares at
$9.50 per share were both granted on September 1, 1995. The closing market
price of the Common Stock on September 1, 1995 on the NASDAQ National Market
System was $9.50.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES GRANTED ASSUMED ANNUAL RATES OF STOCK
UNDERLYING OPTIONS EXERCISE PRICE APPRECIATION FOR OPTION TERM
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION ----------------------------------
NAME GRANTED (1) FISCAL YEAR ($/SH) DATE 5% 10%
- ------------------------------- ----------- ----------------- ----------- ----------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John G. Simon.................. 22,000 4.76% $ 13.20 6/05/01 $ 46,538 $ 134,775
Joanne H. Moon................. 11,000 2.38% 12.00 6/05/06 83,014 210,374
Carl J. Wisnosky............... 11,000 2.38% 12.00 6/05/06 83,014 210,374
Paul J. Murphy................. 11,000 2.38% 12.00 6/05/06 83,014 210,374
Stephen A. Guida............... 11,000 2.28% 12.00 6/05/06 83,014 210,374
</TABLE>
- ------------------------
(1) Grants under the 1991 Stock Option Plan. The options generally have a
five-year vesting period, with 40% vesting after the first two years and the
remainder monthly at a rate of 1.67% per month for the remaining three
years. Such options are not transferable other than by will or the laws of
descent and distribution.
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY
NUMBER OF VALUE 12/31/96 OPTIONS AT 12/31/96 (2)
SHARES ACQUIRED REALIZED -------------------------- --------------------------
NAME ON EXERCISE (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- --------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John G. Simon..................... -- -- 16,460 34,000 $ 145,485 $ 4,800
Joanne H. Moon.................... 75,000 $ 743,165 37,573 62,327 352,763 275,989
Carl J. Wisnosky.................. -- -- 29,645 93,327 281,585 573,756
Paul J. Murphy.................... -- -- 45,000 73,000 247,500 291,875
Stephen A. Guida.................. -- -- -- 101,000 -- 315,000
</TABLE>
- ------------------------
(1) Value realized is based on the fair market value of the Common Stock as of
the date of exercise ($10.00 per share), minus the exercise price.
(2) Value is based on the closing sale price of the Common Stock as of the last
business day of the year, December 31, 1996 ($9.75), minus the exercise
price.
7
<PAGE>
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The employment agreement between Mr. Simon and the Company, which was
effective as of March 16, 1994, expired in March 1997. On March 17, 1997 the
Company and Mr. Simon entered into a new employment agreement effective as of
such date. The new agreement is renewable at the option of both parties and
provides for (i) an annual base salary of $168,525, subject to annual review and
increase; (ii) such incentive bonus payments as the Company may from time to
time determine; and (iii) a severance payment in the amount of six months of Mr.
Simon's then base salary in the event that Mr. Simon is terminated other than
for cause. Mr. Simon's employment agreement also provides for assignment to the
Company of his rights to inventions and proprietary information and contains
confidentiality and non-competition provisions.
The Company has entered into "at-will" employment agreements with Carl J.
Wisnosky, Paul J. Murphy and Stephen A. Guida for initial terms of five years
each, dated as of February 23, 1993, May 5, 1994 and September 1, 1996,
respectively. The agreements with Mr. Wisnosky, Mr. Murphy and Mr. Guida provide
for such incentive bonus payments as the Company may from time to time
determine. The current semi-monthly salaries are $5,898 for Mr. Wisnosky, $5,852
for Mr. Murphy and $6,469 for Mr. Guida. All of these salaries are subject to
annual review and adjustment.
DIRECTOR COMPENSATION
The Company pays the travel expenses of non-employee directors for
attendance at meetings of the Board of Directors and committees thereof. Cash
compensation of $500 per meeting and a $2,000 annual retainer per person is paid
to the Directors.
In addition, under the terms of the 1991 Stock Option Plan each non-employee
director of the Company receives quarterly grants of options to purchase 750
shares of the Common Stock, and each non-employee director who is first elected
to the Board after September 15, 1995 will receive options to purchase 20,000
shares of Common Stock.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The objectives of the Company's executive compensation program are to align
compensation with business objectives and individual performance, and to enable
the Company to attract, retain and reward executive officers who contribute to
the long-term success of the Company. The Company's executive compensation
philosophy is based on the following principles:
- - COMPETITIVE AND FAIR COMPENSATION
The Company is committed to providing an executive compensation program that
helps attract and retain highly qualified executives. To ensure that
compensation is competitive, the Company compares its compensation practices
with those of comparable medical products and other relevant companies in a
similar stage of development. The Company also seeks to achieve a balance of the
compensation paid to a particular individual and the compensation paid to other
executives both inside the Company and at comparable companies.
- - SHORT-TERM CASH COMPENSATION
Cash compensation consists of two components: annual salary and cash
incentive compensation. The annual salaries of the executive officers are
evaluated based upon corporate and individual performance.
8
<PAGE>
Corporate performance is evaluated by reviewing the extent to which strategic
and business plan goals and milestones are met. Individual performance is
evaluated by reviewing attainment of specified individual objectives and
milestones and the degree to which teamwork and Company values are fostered.
Cash incentive compensation is based upon the achievement of functional,
divisional and corporate goals as well as individual performance.
- - LONG-TERM INCENTIVE COMPENSATION
Because not all short-term management accomplishments are directly related
to changes in short-term stockholder value, the Compensation Committee believes
that management should also have a long-term compensation component related to
increasing stockholder value. To assure that executive officers' goals and
accomplishments are linked with increasing stockholder value, the Compensation
Committee believes that the grant of options to purchase the Company's Common
Stock that become exercisable over an extended period of time should be an
integral part of the overall compensation philosophy.
COMPENSATION PROGRAM COMPONENTS
Annual compensation for the Company's executive officers currently consists
of three elements: salary, cash incentive compensation and equity participation.
Executive officers are also entitled to participate in the same benefit plans
available to other employees. In setting the base salaries of the Company's
executive officers, the Compensation Committee reviews the range of compensation
paid to employees in similar positions of the companies in a similar state of
development in the medical and other relevant industries. While industry-wide
practices are deemed to be important indicators of appropriate compensations
levels, the Compensation Committee believes the most important considerations
are individual and corporate performance in setting an executives base salary
and cash incentive compensation.
On an annual basis, goals for Company performance and individual goals and
objectives for each of the Company's executive officers (including the Chief
Executive Officer) are established by the Compensation Committee. Every six
months, all executive officers other than the Chief Executive Officer are
evaluated by the Chief Executive Officer on their performance with respect to
their individual short-term goals and objectives. At this time, revised
quarterly goals and objectives are established, if appropriate. Based upon their
performance relative to their goals and objectives, the base salary of executive
officers other than the Chief Executive Officer is generally adjusted once per
year by the Compensation Committee.
On an annual basis, the Compensation Committee evaluates the achievement of
the annual goals and objectives established for the Chief Executive Officer and
his contribution to the Company.
In February 1997 the Company paid cash bonuses aggregating $155,498 to its
Chief Executive Officer, Managing Director of Continence Care, Vice President,
Research & Development, Chief Financial Officer and Treasurer and Vice
President, Marketing and Sales. The Compensation Committee intended for these
bonuses to represent compensation for such officers' contributions to the
development and achievements of the Company to December 31, 1996, including
events prior to 1996. For the Company's 1997 fiscal year, the Compensation
Committee has set additional goals and objectives for Company performance, as
well as additional individual goals and objectives. with the intention of
reviewing the appropriateness of additional incentive cash compensation for such
year. Please refer to the table entitled "Summary Compensation" on page 6 of
this Proxy Statement for information relating to the base salaries and cash
bonus payments made during the Company's last three completed fiscal years to
certain of its executive officers.
9
<PAGE>
Stock option awards are designed to promote the identity of long-term
interests between the Company's employees and its stockholders and assist in the
retention of executives. The size of option grants is generally intended by the
Compensation Committee to reflect the executive's position with the Company and
his or her actual or potential contributions to the Company in relation to his
or her overall compensation. The Compensation Committee believes that stock
options have been and remain an excellent vehicle for compensating its
employees. Because the option exercise price of the employee is generally the
fair market value of the stock on the date of grant, employees recognize a gain
only if the value of the stock increases. Thus, employees with stock options are
rewarded for their efforts to improve the long-term value of the Common Stock.
Stock options, moreover, have been used to reward substantially all employees of
the Company, not just at the executive officer level. The option program
typically uses a five-year or greater vesting period to encourage employees to
continue in the employ of the Company. Please refer to the table entitled
"Option Grants in Last Fiscal Year" on page 7 of this Proxy Statement for
information regarding option grants to certain executive officers.
1996 COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The amount and means of determining Mr. Simon's base annual salary for 1996
was fixed by the terms of his employment agreement with the Company, which
expired in March 1997. This employment agreement, which became effective upon
consummation of the Company's initial public offering in March 1994, provided
for an annual base salary of $150,000, subject to yearly review and increase
(but not decrease), and such incentive bonus payments as the Compensation
Committee may from time to time determine. On March 17, 1997 the Company and Mr.
Simon entered into a new employment agreement. This new employment agreement
provides for an annual base salary of $168,525, subject to yearly review and
increase, and such incentive bonus payments as the Compensation Committe may
from time to time determine.
The Compensation Committee elected to pay Mr. Simon a salary of $159,188 for
1996 based on the attainment of certain objectives and a review of comparable
salaries. During 1996, Mr. Simon also accrued a cash incentive payment of
$37,332, as contemplated by his employment agreement. The objectives achieved by
the Company which the Compensation Committee determined to be significant in
determining Mr. Simon's 1996 salary and cash incentive payment included (i)
results in the continued commercial development of the Company, (ii) FDA
clearance for marketing and sale of the Company's first product, (iii) the
acquisition of the Impress Softpatch and other incontinence technology from the
ASI Liquidating Trust, and (iv) the United States launch of the Reliance Insert
in the fourth quarter of 1996. The Compensation Committee expects that it will
continue to review Mr. Simon's salary on an annual basis and will adjust his
compensation based upon the achievement of goals and objectives set for the
Company. The Compensation Committee will also consider the salaries of other
chief executive officers at comparable medical products companies when reviewing
Mr. Simon's compensation.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162 (M)
The Compensation Committee has not yet had the occasion to adopt a policy on
the 1993 amendment to the Internal Revenue Code of 1986, as amended (the
"Code"), disallowing deduction on compensation in excess of $1 million for
certain executives of public companies. The Company believes that options
granted under the 1991 Stock Option Plan are exempt from the limitation, and
other compensation expected to be paid during fiscal year 1997 is below the
compensation limitation.
COMPENSATION COMMITTEE
David P. Fialkow
Richard A. Sandberg
Thomas E. Tierney
10
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the Nasdaq Stock Market Total Return Index for U.S. Companies (the "Nasdaq
Stock Market-U.S. Index") and the Hambrecht & Quist Growth Index ("H&Q Growth
Index") over the period from the time of the Company's initial public offering
of Common Stock on March 16, 1994 to December 31, 1996. The graph assumes that
the value of an investment in the Company's Common Stock and each index was $100
at March 16, 1994 and that all dividends were reinvested.
Graph Placed Here
11
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, have been independent
accountants of the Company since 1991. The Board of Directors has recommended
that the stockholders ratify the reappointment of Price Waterhouse LLP as the
Company's independent accountants for the current year.
A representative of Price Waterhouse LLP is expected to be present at the
Meeting and will be afforded an opportunity to make a statement, if such
representative desires to do so, and will be available to answer any appropriate
questions.
The Board of Directors recommends that the stockholders vote "FOR" the
proposal to ratify the appointment of Price Waterhouse LLP, and the enclosed
proxy will be so voted unless a contrary vote is indicated. The affirmative vote
of the holders of a majority of the shares of Common Stock entitled to vote on
this proposal is required for ratification of the appointment of Price
Waterhouse LLP. In the event the appointment of Price Waterhouse LLP should not
be ratified by the stockholders, the Board of Directors will make another
appointment to be effective at the earliest possible time.
STOCKHOLDER PROPOSALS
The Board will make provision for presentation of proposals by stockholders
at the 1998 Annual Meeting of Stockholders (or special meeting in lieu thereof)
provided such proposals are submitted by eligible stockholders who have complied
with the relevant regulations of the Securities and Exchange Commission. Such
proposals must be received by the Company no later than December 11, 1997 to be
considered for inclusion to the Company's proxy materials relating to that
meeting.
REPORTS OF BENEFICIAL OWNERSHIP
Under the securities laws of the United States, the Company's directors, its
executive (and certain other) officers and any persons holding more than ten
percent of the Common Stock are required to report their ownership of the Common
Stock and any changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been established and the
Company is required to report in this Proxy Statement any failure to file by
these dates during 1996. All of these filing requirements were satisfied by the
Company's directors, officers and ten percent holders, except that (i) the Form
5 of each of Elizabeth B. Connell, David P. Fialkow, Steven J. Gilbert, Richard
A. Sandberg, Thomas F. Tierney, Neil J. Magner, Paul J. Murphy, and Carl J.
Wisnosky, each reporting three transactions required or permitted to be reported
on such form, were filed one day late; (ii) the Form 5 of each of Stephen A.
Guida, Joanne H. Moon and John G. Simon, each reporting two transactions
required to be reported on such form, were filed one day late; and (iii) the
Form 3 for each of Richard A. Epstein and Alan I. West, the latter reporting one
transaction, were filed late. In making these statements, the Company has relied
upon the written representation of its directors, officers and its ten percent
holders and copies of the reports that they have filed with Securities and
Exchange Commission.
12
<PAGE>
GENERAL
The Board of Directors of the Company knows of no matter other than the
foregoing to be brought before the Meeting. However, the enclosed proxy gives
discretionary authority in the event any additional matters should be presented.
THE COMPANY WILL PROVIDE FREE OF CHARGE TO ANY STOCKHOLDER FROM WHOM A PROXY
IS SOLICITED PURSUANT TO THIS PROXY STATEMENT, UPON WRITTEN REQUEST FROM SUCH
STOCKHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE COMPANY'S FISCAL YEAR ENDED DECEMBER
31, 1996. REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO THE MANAGER OF INVESTOR
RELATIONS AT UROMED CORPORATION, 64 A STREET, NEEDHAM, MASSACHUSETTS, 02194.
The Company expects to hold its next stockholder meeting on or about May 15,
1998 and proxy materials in connection with that meeting are expected to be
mailed approximately 30 days prior to the meeting.
John G. Simon
PRESIDENT
13
<PAGE>
Appendix 1
<TABLE>
<S> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. To elect the following persons as Class III With- For All
Directors (except as marked below): For hold Except
------------------------ / / / / / /
UROMED CORPORATION JOHN G. SIMON
------------------------ RICHARD A. SANDBERG
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the nominee's name. Your
shares will be voted for the remaining nominee.
For Against Abstain
2. To ratify the appointment of Price Waterhouse / / / / / /
LLP as independent accountamts of the Company
for the 1997 fiscal year.
3. To transact such other business as may / / / / / /
properly come before the meeting or at any
adjourned sessions of the meeting.
---------------------
Please be sure to sign and date | Date | Mark box at right if an address change or comment has / /
this Proxy. | | been noted on the reverse side of this card.
- ---------------------------------------------------------
| |
| |
|----Stockholder sign here------Co-owner sign here------|
- -----------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
UROMED CORPORATION
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot. There are a number of issues
related to the management and operation of your Corporation that require your immediate attention and approval.
These are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be voted. Then sign the card,
detach it and return you proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Special Meeting of Stockholders of the Company on Friday,
May 9, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
UroMed Corporation
</TABLE>
<PAGE>
UROMED CORPORATION
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 9, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoint(s) John G. Simon
and Paul J. Murphy, and each of them, with full power of substitution, as
proxies to represent and vote as designated herein, all shares of stock of
UroMed Corporation which the undersigned would be entitled to vote if
personally present at the Special Meeting of Stockholders of the Company to
be held at State Street Bank & Trust Company, 225 Franklin Street, Boston,
Massachusetts on Friday, May 9, 1997 at 10:00 a.m., or any adjourned sessions
thereof.
In their discretion, the proxies are authorized to vote upon such other
matters as 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 DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2 OF THE BOARD OF DIRECTORS, AND IN THE DISCRETION
OF THE BOARD OF DIRECTORS ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING. Attendance of the undersigned at the meeting or any adjournment
thereof will not be deemed to revoke this proxy unless the undersigned shall
vote in person at such meeting or revoke this proxy in writing before it is
exercised.
-----------------------------------------------------------
|PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY|
| IN THE ENCLOSED ENVELOPE. |
- ------------------------------------------------------------------------------
| Please sign this Proxy exactly as your name appears on the reverse side |
| hereof. Joint owners should each sign personally. Trustees and other |
| fiduciaries should indicate the capacity in which they sign, and where more |
|than one name appears, a majority must sign. If a corporation, this signature|
| should be that of an authorized officer who should state his or her title. |
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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