<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
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
April 23, 1999
Dear Stockholder:
You are cordially invited to attend the Special Meeting of Stockholders
of UroMed Corporation (the "Company"), to be held at 9:00 a.m. on Friday,
May 21, 1999 at the offices of Bingham Dana LLP, 150 Federal 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 21, 1999.
SINCERELY,
John G. Simon
Chairman & CEO
1400 Providence Highway, Norwood, Massachusetts 02062
<PAGE>
UROMED CORPORATION
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On May 21, 1999
--------------------------
Notice is hereby given that a Special Meeting of Stockholders of UroMed
Corporation (the "Company") will be held at the offices of Bingham Dana LLP, 150
Federal Street, Boston, Massachusetts on Friday, May 21, 1999 at 9:00 a.m.,
local time, to consider and act upon the following matters:
1) A proposal to elect two Class II directors of the Company, each to hold
a three-year term.
2) A proposal to ratify the appointment of PricewaterhouseCoopers 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 1999. Stockholders of record at the close of business on
March 26, 1999 will receive notice of the Meeting and be entitled to vote at
the Meeting or any adjournment thereof. All stockholders are cordially
invited to attend the Meeting. Information relating to the matters to be
considered and voted on at the Special Meeting is set forth in the proxy
statement accompanying this Notice.
BY ORDER OF THE BOARD OF DIRECTORS
April 23, 1999
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
1400 Providence Highway
Norwood, MA 02062
---------------
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 Bingham Dana LLP, 150
Federal Street, Boston, Massachusetts on Friday May 21, 1999 at 9:00 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 1999. This Proxy Statement and
the enclosed Annual Report to Stockholders for the Company's fiscal year ended
December 31, 1998 are being mailed to stockholders on or about April 23, 1999.
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 26, 1999 will be entitled to vote at the Meeting. As of such record date,
there were issued and outstanding and entitled to vote 5,184,037 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 March 10, 1999 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 as named in the Summary Compensation Table,
and (iv) all of the directors and officers of the Company as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned (1)
_____________________________
<S> <C> <C>
Name Number Percent
- ------- _________ __________
John G. Simon............................... 845,468(2) 16.3%
Richard A. Sandberg......................... 3,876(3) *
Thomas E. Tierney........................... 12,126(4) *
David P. Fialkow............................ 18,236(5) *
Elizabeth B. Connell, M.D................... 7,250(6) *
Paul J. Murphy **........................... 467 *
Alan West ***............................... 6,106(7) *
Richard Epstein.... ....................... 3,170(8) *
Robert Lorette **........................... 3,644(9) *
All directors and executive officers as a
group (9 persons)........ 863,069(10) 16.6%
</TABLE>
- - ------------------------
* Less than 1%.
** Mr. Murphy and Mr. Lorette resigned as officers of the Company effective
January 1, 1999.
*** Mr. West resigned as an officer of the Company effective April 14, 1999 and
became Chief Executive Officer of Assurance Medical Inc. which was spun-off
by UroMed Corporation on April 14, 1999.
(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 March
10, 1999 or within 60 days after such date.
(2) Includes (i) 6,584 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) 8,579 shares issuable upon exercise of stock options,
and (iii) 37,364 shares held by employees of the Company and Medical and
Scientific Advisory Board members with respect to whom Mr. Simon has the
right to direct the vote pursuant to contractual relationships between the
Company and such persons.
(3) Includes 3,842 shares issuable upon exercise of stock options.
(4) Represents 12,126 shares issuable upon exercise of stock options.
(5) Includes 2,250 shares issuable upon exercise of stock options.
(6) Represents 7,250 shares issuable upon exercise of stock options.
(7) Includes 5,082 shares issuable upon exercise of stock options.
(8) Represents 3,170 shares issuable upon exercise of stock options.
(9) Represents 3,644 shares issuable upon exercise of stock options.
(10) Includes 45,943 shares issuable upon exercise of stock options.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes, with two
classes having two directors each and the third having one director, with the
members of each such class serving a three year term. Each year the Company's
stockholders have the opportunity to elect the members of one class. At the
Meeting, the terms of the members of Class II, Mr. David P. Fialkow and Thomas
E. Tierney, expire. Mr. Fialkow and Mr. Tierney are the only nominees for
election as Class II Directors, for a term to expire at the 2002 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.
Fialkow and Mr. Tierney to be directors of the Company until the 2002 Annual
Meeting of Stockholders and until their successors are elected and qualified.
The affirmative vote of a plurality of the shares of Common Stock present or
represented at the Meeting by proxy is required for the election of Mr. Tierney
and Mr. Fialkow as Class II directors.
The Class III directors of the Company with terms expiring at the 2000
Annual Meeting of Stockholders, are John G. Simon and Richard A. Sandberg. The
sole Class I director of the Company with a term expiring at the 2001 Annual
Meeting of Stockholders is Dr. Elizabeth E. Connell.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL STOCKHOLDERS VOTE
"FOR" EACH OF THE NOMINEES.
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 and all
directors as of March 10, 1999, see "Stock Ownership of Principal Stockholders
and Management." The address for each person listed below is c/o the Company at
1400 Providence Highway, Norwood, MA 02062.
<TABLE>
<CAPTION>
Year First Positions and
Became offices with
Name Age Director the Company
- ----- --- ---------- -------------
<S> <C> <C> <C>
John G. Simon...................... 36 1990 President, Chief
Executive Officer,
Director and Chairman
of the Board
Elizabeth B. Connell, M.D.......... 73 1994 Director
David P. Fialkow(l)................ 40 1991 Director
Richard A. Sandberg(l)............. 56 1991 Director
Thomas E. Tierney(l)............... 71 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, and 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.
<PAGE>
David P. Fialkow, Director. Mr. Fialkow has served as a Director of the
Company since 1991. Since October 1996 he has served as Chief Executive Officer
of Retail Growth Systems LLC, a credit card marketing company. He has served as
Chief Executive Officer 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.
Richard A. Sandberg, Director. Mr. Sandberg has served as a Director of the
Company since 1991. Mr. Sandberg is a private investor and serves as Chairman of
the Board or Director of numerous private companies. From 1983 to 1998, he
served in a variety of positions at DIANON Systems Inc., an oncology and
gynecology marketing and database firm which he co-founded, most recently
serving as Chairman and Chief Executive Officer. 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, 1998, the Board of
Directors held six meetings and acted one other time by written consent in lieu
of a meeting. Each of the Company's directors attended at least 50% of all
meetings of the Board held while he or she was a Board member and of all
committees of which he 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 1998, 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 1998, the Compensation Committee held three meetings. A former
director of the Company, Steven J. Gilbert, resigned from the Board of Directors
on December 18, 1998. The Board has elected not to fill the vacancy at this
time.
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.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain compensation information for the
fiscal years ended December 31, 1998, 1997 and 1996 with respect to the
Company's Chief Executive Officer and the four other highest compensated
executive officers or former executive officers of the Company whose total
salary and bonuses for the fiscal year indicated exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS COMPENSATION
-------------------------- ----- ---------- --------- -------- -------------
John G. Simon
Chairman of the Board,
Chief Executive
Officer & President 1998 $225,000(2) $39,375 12,992 (3) $ --
1997 167,522 -- 2,900 (3) --
1996 159,188 37,332 4,400 (3) --
Paul J. Murphy *
Chief Financial
Officer and Treasurer 1998 140,400 -- 26,680 (4) --
1997 139,602 21,120 3,080 (4) --
1996 132,656 29,112 2,200 (4) --
Richard M. Epstein
Managing Director of
New Product Research,
Development and
Acquisition 1998 134,500 25,150 36,400 (5) --
1997 133,981 28,210 6,340 (5) 47,700 (6)
1996 27,083 -- -- --
Robert C. Lorette *
Vice President,
Corporate Development 1998 131,250 22,950 20,000 (7) --
1997 130,469 25,130 7,640 (7) --
1996 105,128 21,250 -- (7) --
Alan I. West **
Managing Director,
Assurance 1998 131,250 -- 25,000 (8) --
1997 130,469 31,950 25,000 (8) --
1996 113,702 24,250 4,000 (8) --
</TABLE>
- -------------------------
* Mr. Murphy and Mr. Lorette resigned as officers of the Company effective
January 1, 1999.
** Mr. West resigned as an officer of the Company effective April 14, 1999 and
became Chief Executive Officer of Assurance Medical Inc. which was spun-off
by UroMed Corporation on April 14, 1999.
(1) Bonus amounts reflected for 1998, 1997 and 1996 relate to such years but
were paid in February 1999, 1998 and February 1997, respectively, except
for the 1998 amounts, where both Mr. Epstein and Mr. Lorette received
bonuses of $5,000 for 1998 during 1998.
(2) Includes $56,475 of deferred salary for 1998 that was paid in February 1999.
(3) 1998 stock option grants include 12,992 stock options that were granted in
prior years and repriced in 1998. The options repriced were originally
issued as follows 3,292 in 1993, 2,400 in 1995, 4,400 in 1996, and 2,900 in
1997. These options were both canceled and reissued in 1998.
(4) 1998 stock option grants include 26,680 stock options that were granted in
prior years and repriced in 1998. The options repriced were originally
issued as follows: 19,000 in 1994, 2,400 in 1995, 2,200 in 1996, and 3,080
in 1997. These options were both canceled and reissued in 1998.
(5) 1998 stock option grants include 16,400 stock options, originally issued in
1998 and repriced later in 1998. Of these repriced options in 1998, 6,340
options were originally issued in 1997. These options were both canceled
and reissued in 1998.
(6) 1997 amount pertains to relocation and related payments.
(7) 1998 stock option grants include 7,640 stock options, originally issued in
1997 and repriced in 1998. These options were both canceled and reissued
in 1998. 1997 stock option grants include 4,000 stock options, originally
issued in 1996 and repriced in 1997. During 1997, these 1996 options were
canceled and reissued.
(8) 1998 stock option grants include 25,000 stock options, originally issued in
1997 and repriced in 1998. These options were both canceled and reissued
in 1998. 1997 stock option grants include 5,000 stock options, originally
issued in 1996 and repriced in 1997. During 1997, these 1996 options were
canceled and reissued.
<PAGE>
Option Grants in Last Fiscal Year
Individual Grants
<TABLE>
<CAPTION>
Number of % of Total
Securities Options Granted Potential
Underlying to Employees in Realizable
Options Granted Fiscal Year Value at Assumed
Rate of Stock
(1) Exercise Expiration Price Appreciation
Price Date for Option Term
($/sh) 5% 10%
--------------- -------- ---------- --------- --------------------
<S> <C> <C> <C> <C> <C> <C>
John G. Simon
3,292 (2) 0.67% $1.51 10/08/01 $ 260 $ 1,044
2,400 (2) 0.49% 1.51 8/15/00 8 362
4,400 (2) 0.89% 1.51 6/05/01 348 1,395
2,400 (2) 0.49% 1.51 5/01/02 381 1,200
500 (2) 0.10% 1.51 8/05/02 79 250
Paul J. Murphy *
500 (2) 0.10% 11.00 8/05/07 3,459 8,766
18,000 (2) 3.66% 11.00 11/03/04 80,606 187,846
1,000 (2) 0.20% 11.00 11/03/04 4,478 10,436
2,400 (2) 0.49% 11.00 8/15/05 12,605 30,191
2,200 (2) 0.45% 11.00 6/05/06 13,342 32,862
2,580 (2) 0.52% 11.00 5/01/07 17,848 45,230
Richard M. Epstein
20,000 4.07% 1.37 12/15/08 17,232 43,669
6,340 (2) 1.29% 1.37 5/01/07 4,789 11,795
10,060 (2) 2.05% 1.37 3/30/08 8,668 21,965
Robert C. Lorette *
4,000 (2) 0.81% 11.00 9/19/07 27,671 70,125
2,940 (2) 0.60% 11.00 5/01/07 20,338 51,542
700 (2) 0.14% 11.00 8/05/07 4,482 12,272
12,360 2.51% 11.00 3/30/08 85,505 216,685
Alan I. West **
4.580 (2) 0.93% 11.00 5/01/07 31,684 80,293
15,420 (2) 3.13% 11.00 8/05/07 106,673 270,331
5,000 (2) 1.02% 11.00 9/19/07 34,589 87,656
</TABLE>
- -------------------------
* Mr. Murphy and Mr. Lorette resigned as officers of the Company effective
January 1, 1999.
** Mr. West resigned as an officer of the Company effective April 14, 1999 and
became Chief Executive Officer of Assurance Medical Inc. which was spun-off
by UroMed Corporation on April 14, 1999.
(1) Grants under the 1991 Stock Option Plan. These options 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.
(2) Stock option grant was repriced in 1998; see Ten-Year Option Repricings
table.
Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of
Number of Securities Underlying
Shares Unexercised Value of Unexercised
Acquired Options at In-the-money
on Value 12/31/98 Options at 12/31/98
Name Exercise Realized Exercis- Unexercis- Exercis- Unexercis-
able able able able
- -------------- -------- -------- ------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
John G. Simon -- $ -- 7,092 5,900 $ -- $ --
Paul J. Murphy * -- -- 19,517 7,163 -- --
Richard M. Epstein -- -- 2,747 33,653 173 2,120
Robert C. Lorette * -- -- 2,200 17,800 -- --
Alan I. West ** -- -- 2,833 22,167 -- --
</TABLE>
- ------------------------
* Mr. Murphy and Mr. Lorette resigned as officers of the Company effective
January 1, 1999.
** Mr. West resigned as an officer of the Company effective April 14, 1999 and
became Chief Executive Officer of Assurance Medical Inc. which was spun-off
by UroMed Corporation on April 14, 1999.
(1) Value realized is based on the fair market value of the Common Stock as of
the date of exercise 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, minus the exercise price. During March 1998 and
December 1998, the Company elected to reprice common stock options to
reflect the currently declining market value per share of common stock.
These repricing actions canceled the old option and issued a new option
with a lower exercise price.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
Length of
Number of Market Exercise Original
Securities Price of Price of Option Term
Underlying Stock at Stock at New Remaining
Options Time of Time of Exercise at the Date
Name Date Repriced Repricing Repricing Price of Repricing
______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
John G. Simon
Chairman of the
Board, Chief
Executive Officer
& President 12/15/98 3,292 $ 1.37 $ 4.56 $ 1.51 2 years and 9 months
12/15/98 2,400 1.37 46.75 1.51 1 year and 7 months
12/15/98 4,400 1.37 66.00 1.51 2 years and 5 months
12/15/98 2,400 1.37 20.65 1.51 3 years and 4 months
12/15/98 500 1.37 22.00 1.51 3 years and 7 months
Paul J. Murphy *
Chief Financial
Officer and
Treasurer 3/30/98 18,000 11.00 21.25 11.00 6 years and 4 months
3/30/98 1,000 11.00 19.38 11.00 6 years and 7 months
3/30/98 2,400 11.00 42.50 11.00 7 years and 4 months
3/30/98 2,200 11.00 60.00 11.00 8 years and 2 months
3/30/98 2,580 11.00 18.75 11.00 9 years and 1 month
3/30/98 500 11.00 20.00 11.00 9 years and 4 months
Richard M. Epstein
Managing Director
of New Products
Research, Development
and Acquisition 3/30/98 6,340 11.00 18.75 11.00 9 years and 1 month
12/15/98 6,340 1.37 11.00 1.37 8 years and 5 months
12/15/98 10,060 1.37 9.22 1.37 9 years and 3 months
Robert C. Lorette *
Vice President
Corporate
Development 9/19/97 4,000 23.75 50.00 23.75 8 years and 5 months
3/30/98 4,000 11.00 23.75 11.00 9 years and 6 months
3/30/98 2,940 11.00 18.75 11.00 9 years and 1 months
3/30/98 700 11.00 20.00 11.00 9 years and 4 months
Alan I. West **
Managing Director,
Assurance Medical
Division 9/19/97 5,000 23.75 50.00 23.75 8 years and 7 months
3/30/98 4,580 11.00 18.75 11.00 9 years and 1 month
3/30/98 15,420 11.00 20.00 11.00 9 years and 4 months
3/30/98 5,000 11.00 23.75 11.00 9 years and 5 months
* Mr. Murphy and Mr. Lorette resigned as officers of the Company effective
January 1, 1999.
** Mr. West resigned as an officer of the Company effective April 14, 1999 and
became Chief Executive Officer of Assurance Medical Inc. which was spun-off
by UroMed Corporation on April 14, 1999.
(1) All share numbers have been adjusted to reflect the reverse stock split
of the Common Stock in May 1998.
(2) Options repriced in March 1998 and December 1998 expire on the same
terms as the original options. See "Repricing Report of the Compensation
Committee." Options repriced in March 1998 and December 1998 included a
restriction prohibiting the employee from exercising the repriced option for six
months from the date of the repricing. The vesting term on the options repriced
in December 1998 were changed to vest at 25% per year over a four-year period
with the ability to exercise six months into the option term. The original
vesting schedule for such options were over a five-year period at 20% per year
with the ability to exercise on the second-year anniversary of the option term.
</TABLE>
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The Company had entered into an employment agreement with John G. Simon,
which expired on March 17, 1999. The 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, (iii) a cancellation payment in the event that
Mr. Simon's employment with the Company is terminated without cause equal to the
amount of compensation Mr. Simon would otherwise have received from the Company
during the remainder of the term of the employment agreement, and (iv) an
additional severance payment equal to six months' base salary in the event that
Mr. Simon's employment terminates other than for cause whether during or after
the term of the employment agreement. 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 expects to enter shortly into a new agreement with Mr.
Simon upon substantially similar terms.
The Company has entered into "at-will" employment agreements with Richard
M. Epstein and Alan West for initial terms of five years each, dated as of
October 15, 1996 and February 5, 1996, respectively. The agreements with Mr.
Epstein and Mr. West provide for such incentive bonus payments as the Company
may from time to time determine. The current semi-monthly salaries are $5,828
for Mr. Epstein and $5,469 for Mr. West. All of these salaries are subject to
annual review and adjustment. Mr. West resigned as an officer of the Company
effective April 14, 1999 and became Chief Executive Officer of Assurance Medical
Inc. which was spun-off by UroMed Corporation on April 14, 1999.
Mr. Murphy and Mr. Lorette resigned as officers of the Company effective
January 1, 1999.
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 150 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 4,000 shares of Common Stock.
<PAGE>
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. 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 executive's 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 1999, the Company paid cash bonuses aggregating $77,475 to its
Chief Executive Officer, Managing Director of New Product Research, Development
and Acquisition, and Vice President of Corporate Development. 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, 1998, including events prior to 1998. For the Company's 1999 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" elsewhere in 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.
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" elsewhere in this Proxy Statement for
information regarding option grants to certain executive officers.
REPRICING REPORT OF THE COMPENSATION COMMITTEE
In March 1998 and December 1998, the Compensation Committee considered
proposals from management for significant changes to existing employee programs,
including options held by the Company's executive officers.
This proposal arose largely from a broad decline in the price of the Common
Stock of the Company that had resulted in a substantial number of stock options
granted pursuant to the Company's existing option plans having exercise prices
well above the recent historical trading prices of the Common Stock. This
decline together with the resulting equity disparity between new hires who
receive option grants at the current fair market value and existing employees'
exercise prices prompted the proposal. The Committee was advised by management
that management believed that employee and executive turnover was likely to
increase. In large part, this increase was expected because the Company's total
compensation package for long-term employees, which included substantial options
with exercise prices well above the then-current trading price, no longer
provided an effective retention incentive, particularly when combined with job
security concerns in light of the February 1998 reduction in force. In addition,
the Company's existing option grants were not competitive with competing offers
from other companies, since options granted to new hires at other companies
would be granted at current trading prices.
The Committee considered both cash and equity compensation as possibilities
to aid employee and executive retention by the Company. The Committee recognized
that an amendment to existing options with exercise prices higher than fair
market value to provide exercise prices at fair market value would provide
additional incentives to employees because of the increased potential for
appreciation. Such additional incentives were necessary, the Committee decided,
in order for the Company's employee programs to continue to meet their
objectives, including driving operating performance in accordance with the
Company's plans and targets, promoting employee retention, addressing
stockholder concerns for dilution, and preserving the reserved shares for the
employee stock purchase program.
Considering these factors, the Committee determined it to be in the best
interests of the Company and its stockholders to amend outstanding stock options
under its option plans to set exercise prices equal to the current market value
with the same expiration terms as existing options, thus restoring the
incentives for employees to remain as employees of the Company and to exert
their maximum efforts on behalf of the Company and focus on achieving the
Company's operating plans.
Additionally, the Committee determined to include the Chairman of the Board
and Chief Executive Officer of the Company in the repricing, even though this
individual was not included in the proposal from management, based on the
Committee's belief that these individuals should be governed by the same
incentives as the overall employee population. The Committee did not want to
create distinctions among the classes of employees for purposes of the equity
compensation component of compensation.
1998 COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The amount and means of determining Mr. Simon's base annual salary for 1998
was fixed by the terms of his employment agreement with the Company, which was
effective as of March 17, 1997. This employment agreement provided for an annual
base salary of $168,525, subject to yearly review and increase (but not
decrease), and such incentive bonus payments as the Compensation Committee may
from time to time determine. For 1998, Mr. Simon's compensation included an
additional $56,475 of deferred salary for 1998 that was paid in February 1999.
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 1998 is below the
compensation limitation.
Compensation Committee
David P. Fialkow
Richard A. Sandberg
Thomas E. Tierney
<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, 1998. 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.
TABLE OF PLOT POINTS FOR PERFORMANCE GRAPH
<TABLE>
<CAPTION>
NASDAQ STOCK
DATES UROMED CORP. H&Q GROWTH MARKET-U.S.
- - --------- ------------- ------------- -------------
<S> <C> <C> <C>
3/16/94 100 100 100
Mar-94 75.00 88.77 92.93
Apr-94 76.56 86.80 91.73
May-94 78.13 83.09 91.95
Jun-94 56.25 76.07 88.59
Jul-94 59.38 78.06 90.41
Aug-94 53.13 90.02 96.17
Sep-94 45.31 92.13 95.93
Oct-94 46.88 95.04 97.81
Nov-94 62.50 94.77 94.57
Dec-94 68.75 97.85 94.83
Jan-95 74.21 97.30 95.37
Feb-94 89.06 104.06 100.42
Mar-95 85.94 109.14 103.39
Apr-95 87.50 109.82 106.65
May-95 76.56 109.38 109.40
Jun-95 101.56 123.44 118.27
Jul-95 106.25 141.02 126.96
Aug-95 118.75 144.74 129.54
Sep-95 125.00 153.97 132.51
Oct-95 132.81 154.96 131.75
Nov-95 126.56 161.37 134.84
Dec-95 160.94 163.30 134.12
Jan-96 167.19 162.80 134.78
Feb-96 175.00 169.06 139.91
Mar-96 143.75 168.48 140.38
Apr-96 131.25 195.28 152.02
May-96 151.56 206.22 159.00
Jun-96 171.88 184.49 151.83
Jul-96 159.38 153.59 138.29
Aug-96 129.69 166.20 146.04
Sep-96 137.50 184.39 157.21
Oct-96 126.56 170.97 155.47
Nov-96 114.06 168.52 165.08
Dec-96 121.88 170.92 164.93
Jan-97 107.81 179.78 176.66
Feb-97 101.56 160.40 166.89
Mar-97 92.19 137.91 155.99
Apr-97 48.44 130.39 160.86
May-97 59.38 157.86 179.10
Jun-97 43.75 161.07 184.58
Jul-97 46.88 171.51 204.06
Aug-97 72.65 175.69 203.75
Sep-97 82.81 194.16 215.79
Oct-97 72.65 182.46 204.62
Nov-97 62.50 174.67 205.65
Dec-97 44.15 175.54 202.35
Jan-98 07.81 179.78 208.73
Feb-98 101.56 160.40 228.33
Mar-98 92.19 137.91 236.76
Apr-98 48.44 130.39 240.78
May-98 59.38 157.86 227.56
Jun-98 43.75 161.07 243.62
Jul-98 46.88 171.51 241.04
Aug-98 72.65 175.69 193.78
Sep-98 82.81 194.16 220.55
Oct-98 72.65 182.46 229.56
Nov-98 62.50 174.67 252.18
Dec-98 44.14 175.54 284.45
</TABLE>
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP as
the Company's independent accountants for the current year.
A representative of PricewaterhouseCoopers 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 PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP. In the event the appointment of
PricewaterhouseCoopers LLP should not be ratified by the stockholders, the Board
of Directors will make another appointment to be effective at the earliest
possible time.
<PAGE>
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 4, 1999 to be
considered for inclusion to the Company's proxy materials relating to that
meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1998. To the best knowledge of the Company, all of these
filing requirements were satisfied by the Company's directors, officers and ten
percent holders, 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.
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, 1998. REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO THE
MANAGER OF INVESTOR RELATIONS AT UROMED CORPORATION, 1400 PROVIDENCE HIGHWAY,
BUILDING 2, NORWOOD, MASSACHUSETTS, 02062.
The Company expects to hold its next stockholder meeting on May 19, 2000
and proxy materials in connection with that meeting are expected to be mailed
approximately 30 days prior to the meeting.
John G. Simon
President
<PAGE>
<PAGE>
UroMed Corporation
Proxy for the Special Meeting of Stockholders to be held on May 21, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoint(s) John G.
Simon and Domenic C. Micale, 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
Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts on Friday May 21,
1999 at 9:00 a.m., or any adjourned session 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 at 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(s) appear(s) 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 that
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?
------------------------- ------------------------
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. To elect the following persons as Class II Directors (except as marked
below):
David P. Fialkow
Thomas E. Tierney
<TABLE>
<CAPTION>
<S> <C> <C>
FOR ALL NOMINEES WITHHOLD FOR ALL EXCEPT
[ ] [ ] [ ]
</TABLE>
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 name of the
nominee. Your shares will be voted for the remaining nominee.
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company for the 1999 fiscal year.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
</TABLE>
3. To transact such other business as may properly come before the
meeting or at any adjourned session of the meeting.
UROMED CORPORATION
CONTROL NUMBER:
RECORD DATE SHARES:
Please be sure to sign and date this Proxy.
Date ________________
Stockholder sign here -------------------------
Co-owner sign here -------------------------
Mark box at right if an address or comment has been noted on the reverse
side of this card. [ ]
DETACH CARD DETACH CARD
UROMED CORPORATION
Dear Stockholder:
Please take note of the important information enclosed with this Proxy.
There are a number of issues related to the management and operations of your
Company 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 this proxy card to indicate how your shares will
be voted, then sign the card, detach it and return it in the enclosed postage
paid envelope.
Your vote must be received prior to the Special Meeting of Stockholders of
the Company on Friday, May 21, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
UroMed Corporation
