<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
INTEG INCORPORATED
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
INTEG INCORPORATED
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
June 17, 1999
TO THE SHAREHOLDERS OF INTEG INCORPORATED:
Notice is hereby given that the Annual Meeting of Shareholders of Integ
Incorporated will be held at 10:00 a.m. on Thursday, June 17, 1999, at the
Minneapolis Hilton, 1001 Marquette Avenue, Minneapolis, Minnesota, for the
following purposes:
1. To elect two directors to serve on the Board of Directors for three
year terms.
2. To ratify the selection of Ernst & Young LLP as the independent
auditors of Integ Incorporated for the fiscal year ending December 31,
1999.
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 19, 1999 as
the record date for the determination of shareholders entitled to receive notice
of and vote at the meeting.
We encourage you to take part in the affairs of your Company either in
person or by executing and returning the enclosed proxy.
By Order of the Board of Directors,
/s/ Susan L. Critzer
Susan L. Critzer
President and Chief Executive Officer
Dated: May 6, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS EXERCISED.
<PAGE>
INTEG INCORPORATED
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
June 17, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Integ Incorporated (the "Company") for use
at the Annual Meeting of Shareholders of the Company to be held at 10:00 a.m. on
Thursday, June 17, 1999, at the Minneapolis Hilton, 1001 Marquette Avenue,
Minneapolis, Minnesota, and at any adjournment thereof. A shareholder giving the
enclosed proxy may revoke it at any time before the vote is cast at the annual
meeting by delivering to an officer of the Company either a written notice
terminating the proxy's authority or a proxy bearing a later date, or by
appearing in person and voting at the meeting. Shares of the Company's common
stock, $.01 par value (the "Common Stock"), represented by a proxy will be voted
in the manner directed by a shareholder. If no direction is made, the proxy will
be voted for the election of the nominees for director named in this Proxy
Statement and for the other proposals set forth in this Proxy Statement. This
Proxy Statement and the accompanying form of proxy are being sent or given to
shareholders beginning on or about May 6, 1999, along with the Company's Annual
Report to Shareholders for the year ended December 31, 1998.
Only shareholders of record at the close of business on April 19, 1999 are
entitled to receive notice of and vote at the meeting or at any adjournment
thereof. On April 19, 1999, there were 9,657,284 shares of Common Stock of the
Company outstanding. Each share is entitled to one vote. Cumulative voting is
not permitted. Shares voted as abstentions on any matter (or a "withhold vote
for" as to a director) will be counted as shares that are present and entitled
to vote for purposes of determining the presence of a quorum at the meeting and
as unvoted, although present and entitled to vote, for purposes of determining
the approval of each matter as to which the shareholder has abstained. If a
broker submits a proxy that indicates the broker does not have discretionary
authority as to certain shares to vote on one or more matters, those shares will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum at the meeting, but will not be considered
as present and entitled to vote with respect to such matters.
The Board of Directors knows of no matters other than those that are
described in this Proxy Statement that may be brought before the meeting.
However, if any other matters are properly brought before the meeting, persons
named in the enclosed proxy or their substitutes will vote in accordance with
their best judgment on such matters.
All expenses in connection with the solicitation of proxies will be
paid by the Company. In addition to solicitation by mail, officers, directors
and regular employees of the Company, who will receive no extra compensation for
their services, may solicit proxies by telephone, facsimile or personal calls.
The Company's principal executive offices are located at 2800 Patton Road,
St. Paul, Minnesota 55113.
<PAGE>
ELECTION OF DIRECTORS
(Proposal #1)
The Bylaws of the Company provide that directors of the Company shall be
divided into three classes, as nearly equal in number as reasonably possible.
The term of office of the third class of directors will expire at this Annual
Meeting of Shareholders, the term of the first class of directors will expire at
the annual meeting of shareholders in 2000 and the term of the second class of
directors will expire at the meeting of shareholders in 2001. Directors elected
at each annual meeting of shareholders will be of the same class as the
directors whose terms expire at such annual meeting of shareholders, and shall
be elected to hold office for a term expiring at the third succeeding annual
meeting of shareholders or until their successors are elected and shall qualify.
Vacancies and newly created directorships resulting from an increase in the
number of directors may be filled by the vote of a majority of the directors
then in office. The directors so chosen will hold office until the next election
of the class for which such directors shall have been chosen.
At the Annual Meeting of Shareholders to be held on June 17, 1999, the
terms of office of Robert S. Nickoloff and Winston R. Wallin will expire. Each
of Messrs. Nickoloff and Wallin has been nominated to be elected to the Board of
Directors for an additional three year term that will expire at the annual
meeting of shareholders in 2002. The Board of Directors recommends that the
shareholders elect Messrs. Nickoloff and Wallin as directors of the Company for
the ensuing three year period. The person named as proxy in the enclosed form of
proxy intends to vote the proxies received by the Company for the election of
Messrs. Nickoloff and Wallin, unless otherwise directed. Each of Messrs.
Nickoloff and Wallin has indicated a willingness to serve. If, however, either
of Messrs. Nickoloff and Wallin is not a candidate at the meeting, which is not
presently anticipated, the proxy named in the enclosed form of proxy may vote
for a substitute nominee in his discretion.
The affirmative vote of the holders of a majority of the shares of Common
Stock represented at the meeting is required for the election of each of Messrs.
Nickoloff and Wallin. The Board of Directors recommends a vote FOR each of
Messrs. Nickoloff and Wallin.
Information regarding the directors of the Company is set forth below:
Name Age Expiration of Term
---- --- ------------------
Mark B. Knudson, Ph.D.(1)(3) 50 2000
Frank B. Bennett(1)(2) 42 2001
Susan L. Critzer 43 2000
Robert R. Momsen(3) 52 2001
Robert S. Nickoloff 70 1999
Walter L. Sembrowich, Ph.D.(3) 56 2001
Winston R. Wallin(1) 73 1999
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(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Nominating Committee of the Board of Directors.
Mark B. Knudson, Ph.D., the Company's founder, served as the President of
the Company from its inception in April 1990 through December 1990, and as Chief
Executive Officer from the Company's inception through November 1991. Dr.
Knudson has also served as Chairman of the Company's Board of Directors since
its inception. Dr. Knudson is currently the Chairman and founder of HeartStent
Corporation, a medical device company. Since 1993, Dr. Knudson has been the
Managing Venture Partner of Medical Innovation Partners II, a Limited
Partnership ("MIP II") that serves as the general partner of Medical Innovation
Fund II, a Limited Partnership ("MIF II") and, since 1989,
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<PAGE>
has also been a special limited partner of Medical Innovation Partners, a
Limited Partnership ("MIP"), which is the general partner of Medical Innovation
Fund, a Limited Partnership ("MIF"). MIF and MIF II are institutionally-funded,
medically-focused early stage venture/seed capital partnerships. Dr. Knudson
serves as a director of Diametrics Medical, Inc. ("Diametrics"), a manufacturer
of point of care blood chemistry testing systems, and several private companies.
Frank B. Bennett has been a director of the Company since 1992. Mr. Bennett
is the founder of Artesian Capital Management, Inc. ("Artesian") and Artesian
Management, Inc. ("Artesian Management") and has served as the President of each
of these entities since their inception in 1989 and 1995, respectively. Artesian
is the general partner of Artesian Capital Limited Partnership ("Artesian
Capital"), and Artesian Management is the general partner of Artesian Capital
Limited Partnership II ("Artesian Capital II"), which are seed and start-up
venture investment funds.
Susan L. Critzer has been a director of the Company since April 1999 when
she was appointed by the Board of Directors to fill a vacancy created by the
resignation of Terrance G. McGuire. Ms. Critzer joined the Company in January
1995 as Vice President, Operations, assumed the role of interim President and
acting Chief Financial Officer in June 1998 and became President and Chief
Executive Officer in April 1999. Before joining the Company, Ms. Critzer spent
six years with American Cyanamid Corporation's Davis and Geck (D&G) Division,
where she held a number of management positions, including Director of
Engineering for D&G's start-up endosurgery division. From 1986 to 1989, Ms.
Critzer was with Becton-Dickinson Corporation where she held management
positions in manufacturing, engineering and quality assurance. Prior to her
employment with Becton-Dickinson, Ms. Critzer held a variety of management,
information systems, quality assurance and engineering positions with General
Motors Corporation.
Robert R. Momsen has been a director of the Company since June 1995. Since
1982, Mr. Momsen has been a General Partner of InterWest Partners, L.P.
("InterWest Partners"), a group of venture capital management funds. Mr. Momsen
is also director of ArthroCare Corporation, a manufacturer of arthroscopic
surgical equipment, COR Therapeutics, Inc., a biopharmaceutical company, Coulter
Pharmaceutical, Inc., a developer of drugs and therapies for people with cancer,
Innovasive Devices, Inc., a tissue repair system company, Urologix Inc., a
urology device company, and Progenitor, a biotechnology company that identifies
disease-causing genes.
Robert S. Nickoloff has been a director of the Company since its inception.
Mr. Nickoloff is a General Partner of MIP and MIP II, where he has been active
in the formation and financing of start-up medical device and service companies
since 1987. Mr. Nickoloff has also been Vice-President and counsel of Range
Television Cable Co., Inc. since 1965. He has been Chairman of Medical
Innovation Capital Inc. since 1986 and Chairman of KMN Inc. since 1993. He has
served as Chairman of the Board of Governors of the University of Minnesota
Hospital and Clinic and is a director of Conseco, Inc.
Walter L. Sembrowich, Ph.D., has been a director of the Company since its
inception. Dr. Sembrowich is President and founder of Aviex, Inc., a provider of
investment and management services to start-up and early stage medical
companies. He is a founder of and has held various management positions at
Diametrics through December 1995, including Chief Executive Officer from 1990
through January 1993, Co-Chairman of the Board from January 1993 to March 1995
and Executive Vice President of New Business Development from March 1995 through
December 1995. Dr. Sembrowich serves as a director of St. Jude Medical, Inc., a
developer and marketer of heart valves and other cardiovascular devices, and of
eMed Medical, Neuromotion, Inc. and USArrhythmia Inc., all of which are
early-stage medical companies. Dr. Sembrowich also serves as Chairman of the
Boards of Opticon Medical, Inc., and CuraMED Systems, Inc., each of which is an
early-stage medical product and service company. He has also been a director for
Minnesota Project Innovation and has served as Chairman and review board member
for the National Institutes of Health Small Business Innovative Research
program.
Winston R. Wallin has been a director of the Company since September 1996.
Mr. Wallin also serves as Chairman Emeritus of Medtronic, Inc. He joined
Medtronic as President and Chief Executive Officer in June 1985 and was elected
Chairman of the Board and Chief Executive Officer in January 1986. Mr. Wallin
retired as Chief Executive
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Officer of Medtronic in April 1991 and continued as Chairman of the Board until
August 28, 1996, at which time he was conferred the title of Chairman Emeritus.
Mr. Wallin serves as Chairman of the Board of Trustees of Carleton College and
the Caux Roundtable in Caux, Switzerland, and on the Board of the Minneapolis
Foundation and the Board of Overseers of the Carlson School of Management at the
University of Minnesota. Mr. Wallin is also a director of GalaGen, Inc.
Messrs. Bennett and Momsen were elected to the Board of Directors as
designees of various series of preferred stock pursuant to agreements with the
Company which terminated upon the closing of the Company's initial public
offering.
Meetings of the Board of Directors and Certain Committees
During the fiscal year ended December 31, 1998, the Board of Directors met
nine times. All incumbent directors attended at least 75% of the aggregate of
those meetings of the Board of Directors and meetings of the committees on which
they served that were held while they were serving on the Board or on such
committee.
The Board of Directors of the Company has Compensation, Audit and
Nominating Committees, which have a current membership as indicated in the
footnotes to the table on page 2 of this Proxy Statement. The Compensation
Committee makes recommendations concerning executive salaries and incentive
compensation for employees of the Company, subject to ratification by the full
Board of Directors, and administers the Company's 1990 Incentive and Stock
Option Plan (the "1990 Option Plan"), the 1991 Incentive and Stock Option Plan
(the "1991 Option Plan"), the 1994 Long-Term Incentive and Stock Option Plan (as
amended, the "1994 Option Plan" and together with the 1990 and 1991 Option
Plans, the "Stock Option Plans") and the Company's 1996 Directors' Stock Option
Plan (as amended, the "Directors' Plan"). The Compensation Committee has
delegated authority to the Chief Executive Officer and Chairman of the Board to
grant options in such director's or officer's discretion to employees who are
not executive officers in amounts not exceeding an aggregate of 10,000 shares of
Common Stock per individual in any period of 12 consecutive months pursuant to
the Stock Option Plans. During 1998, the Compensation Committee held one meeting
and also acted by written consent in lieu of meetings.
The Audit Committee reviews the results and scope of the audit and other
services provided by the Company's independent auditors, as well as the
Company's accounting principles and its system of internal controls, and reports
the results of its review to the full Board of Directors and to management.
During 1998, the Audit Committee held no meetings. A 1998 Audit Review by the
Audit Committee was conducted on April 15, 1999.
The Nominating Committee makes recommendations regarding director and
officer nominations. During 1998, the Nominating Committee held no meetings. The
Nominating Committee will consider shareholder recommendations for nominees made
in accordance with the Company's bylaws.
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Compensation of Directors
The Company pays outside directors $3,000 per quarter, $1,000 per meeting
attended in person ($500 if attended by telephone) and $500 per committee
meeting attended, up to a maximum of $20,000 per year. The Company also
reimburses directors for expenses actually incurred in attending meetings of the
Board of Directors and its committees. In addition, the Company has granted to
all of the current non-employee directors options to purchase Common Stock under
the Directors' Plan, which provides for an automatic grant of nonqualified stock
options to purchase 20,000 options to non-employee directors on the date that
such individuals become directors of the Company and an additional 6,000 options
on each subsequent annual shareholder meeting date, subject to certain
limitations. Initial options become vested and exercisable with respect to 6,666
shares on the 12 month anniversary date of such grants and with respect to 6,667
shares on each of the 24 month and 36 month anniversary dates of such grants.
Annual options would become vested and exercisable with respect to 2,000 shares
on each of the 12, 24 and 36 month anniversary dates of such grants. In addition
in February 1998, the Company granted to all of the current non-employee
directors options to purchase 5,000 shares of Common Stock under the 1994 Plan.
These options would become vested and exercisable with respect to 1,667 shares
on each of the 12 and 24 month anniversary dates of such grant and 1,666 shares
on the 36 month anniversary date of such grant.
The Company has reserved 300,000 shares of Common Stock for issuance under
the Directors' Plan. The option price for directors is equal to the fair market
value of one share of Common Stock on the date of grant.
Directors who are employees of the Company do not receive any additional
compensation for serving on the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors and persons who beneficially own more than ten percent
(10%) of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
("SEC"). Executive officers, directors, and greater than ten percent (10%)
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, directors and 10% shareholders were complied with in
1998, except that a statement of change in beneficial ownership on Form 4 was
not timely filed for Dr. Knudson with respect to an open market purchase of
11,000 shares of Common Stock in October 1998.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Common Stock, as of March 1, 1999, by: (i) each person who is
known by the Company to beneficially own more than 5% of the Common Stock, (ii)
each of the Company's directors, (iii) each of the Named Executive Officers and
(iv) all directors and executive officers of the Company as a group. Unless
otherwise noted below, the address of each of the following shareholders is the
same as the Company.
Shares Percentage of
Beneficially Outstanding
Name and Address Owned (1) Shares Owned(1)
- ---------------- ------------ ---------------
MIF and MIF II (2) ......................... 1,498,074 15.1%
9900 Bren Road East
Suite 421
Minnetonka, MN 55343
InterWest Partners V, L.P. ("IWP") (3) ..... 725,263 7.6%
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA 94025
Frank B. Bennett (4)(5) .................... 71,073 *
Mark B. Knudson, Ph.D. (5)(6) .............. 300,220 3.1%
Robert R. Momsen (3)(5)(7) ................. 17,917 *
Robert S. Nickoloff (5)(8) ................. 69,079 *
Walter L. Sembrowich, Ph.D. (5)(9) ......... 57,917 *
Winston R. Wallin (5) ...................... 62,917 *
Susan L. Critzer (5) ....................... 154,477 1.6%
Richard Mussmann (5)(10) ................... 103,349 1.1%
Frank A. Solomon (5)(11)(12) ............... 474,998 4.8%
Katia Breslawec(12) ........................ 1,203 *
All current executive officers and
directors as a group (8 persons) (12) ... 836,949 8.4%
* Less than 1%.
(1) Beneficial ownership is determined in accordance with rules of the SEC, and
includes voting power and/or investment power with respect to securities.
Shares of Common Stock subject to options or warrants currently exercisable
or exercisable within 60 days of March 1, 1999 are deemed outstanding for
computing the percentage of the person holding such options but are not
deemed outstanding for computing the percentage of any other person. Except
as indicated by footnote, the Company believes that the persons named in
this table, based on information provided by such persons, have sole voting
and investment power with respect to the shares of Common Stock indicated.
(2) Includes 732,927 shares of Common Stock held by MIF and 486,161 shares of
Common Stock held by MIF II. Also includes 278,986 shares of Common Stock
issuable upon the exercise of outstanding options and warrants held by MIF
and MIF II. Does not include 1,750 shares held by MIP, the general partner
of MIF, and does not include 1,500 shares held by MIP II, the general
partner of MIF II.
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(3) Disclosure is made in reliance upon a Schedule 13G/A filed with the SEC by
IWP on February 9, 1999. Such Schedule 13G indicates that (i) IWP and
InterWest Management Partners V, L.P. ("IMP"), the general partner of IWP,
have sole voting and investment power with respect to such shares and (ii)
Alan W. Crites, Philip T. Gianos, Wallace R. Hawley, W. Scott Hedrick, W.
Stephen Holmes, Robert R. Momsen and Arnold L. Oronsky each have shared
voting and investment power with respect to such shares. Excludes 4,561
shares of Common Stock with respect to which Messrs. Crites, Hawley,
Hedrick, Holmes, and Momsen hold shared voting and investment power through
their general partner interests in InterWest Investors V ("IWI"), an
affiliate of IWP. Does not include 17,917 shares of Common Stock
beneficially owned by Mr. Momsen, for which shares Mr. Momsen holds sole
voting and investment power.
(4) Includes 14,004 shares of Common Stock held by Mr. Bennett's wife, for
which shares Mr. Bennett disclaims beneficial ownership. Does not include
(i) 17,778 shares of Common Stock held by Artesian Capital L.P., (ii) 2,349
shares of Common Stock held by Artesian Capital Management, (iii) 865
shares held by Artesian Management Inc. and (iv) 49,382 shares of Common
Stock issuable upon the exercise of outstanding warrants held by Artesian
Capital II. Mr. Bennett serves as the President of Artesian, the general
partner of Artesian Capital, and as the President of Artesian Management,
the general partner of Artesian Capital II. Mr. Bennett disclaims
beneficial ownership of such shares, except to the extent of his
proportionate pecuniary interest in such partnership.
(5) Includes the following number of shares of Common Stock issuable upon the
exercise of outstanding options: Dr. Knudson: 51,250 shares; Mr. Bennett:
17,917 shares; Mr. Momsen: 17,917 shares; Mr. Nickoloff: 17,917 shares; Dr.
Sembrowich: 37,917 shares; Mr. Solomon: 291,665 shares; Mr. Wallin: 12,917
shares; Ms. Critzer: 103,417 shares; and Mr. Mussmann: 51,563 shares.
(6) Includes 25,000 shares of Common Stock held by Dr. Knudson's wife, 54,000
shares held by Knudson Family L.P., and 3,000 shares held by Dr. Knudson's
daughters, for which shares Dr. Knudson disclaims beneficial ownership.
Does not include shares of Common Stock held by MIF II or MIP II or shares
of Common Stock issuable upon the exercise of outstanding options and
warrants held by MIF II. Dr. Knudson is a general partner of MIP II, the
general partner of MIF II. Dr. Knudson disclaims beneficial ownership of
the shares held by MIF II and MIP II, except to the extent of his
proportionate pecuniary interest in MIP II.
(7) Does not include shares beneficially owned by IWP and IWI which Mr. Momsen
may be deemed to hold based on his partnership interest in such
partnerships. Mr. Momsen disclaims beneficial ownership of such shares,
except to the extent of his proportionate pecuniary interest in such
partnerships.
(8) Includes 50,635 shares held in an IRA of Mr. Nickoloff. Does not include
shares of Common Stock held by MIF, MIF II, MIP or MIP II or shares of
Common Stock issuable upon the exercise of outstanding options and warrants
held by MIF and MIF II. Mr. Nickoloff is a general partner of MIP and of
MIP II, the general partners of MIF and MIF II, respectively. Mr. Nickoloff
disclaims beneficial ownership of such shares, except to the extent of his
proportionate pecuniary interest in such partnerships.
(9) Does not include shares held by MIF or MIP which Dr. Sembrowich may be
deemed to hold based on his partnership interest in MIP. Dr. Sembrowich
disclaims beneficial ownership of such shares, except to the extent of his
proportionate pecuniary interest in such partnership.
(10) Includes 32,000 shares of Common Stock held by Mr. Mussmann's daughters,
for which shares Mr. Mussmann disclaims beneficial ownership.
(11) Includes 65,000 shares which are held by Mr. Solomon's wife, for which Mr.
Solomon disclaims beneficial ownership. Does not include shares held by MIF
II or MIP II which Mr. Solomon may be deemed to hold based on his
partnership interest in MIP II; Mr. Solomon disclaims beneficial ownership
of such shares, except to the extent of his proportionate pecuniary
interest in such partnership.
(12) See Notes 4, 5, 6, 7, 8, 9, and 10 above. Does not include shares
beneficially owned by Mr. Solomon who resigned from the Company in June,
1998 or by Ms. Breslawec who resigned from the Company in August 1998.
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EXECUTIVE COMPENSATION
Executive Compensation
Summary Compensation. The following table sets forth the cash and noncash
compensation for fiscal years 1998, 1997 and 1996 earned by or awarded to the
Chief Executive Officer and the next four most highly compensated executive
officers of the Company whose salary and bonus earned in 1998 exceeded $100,000
(the "Named Executive Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Fiscal ------------------------- Long-Term Compensation All Other
Name and Principal Position Year Salary Bonus Options (# Shares) Compensation
- ----------------------------- -------- -------- ----------- ---------------------- ------------
<S> <C> <C> <C> <C> <C>
Susan L. Critzer 1998 $169,642 $120,000(1) 211,999(2) $ --
President and Chief 1997 $161,525 $ -- 75,000 $ --
Executive Officer 1996 $140,502 $ -- 26,666 $ --
Richard Mussmann 1998 $186,009 $102,728(4) 280,000(5) $ --
Executive Vice President 1997 $ 90,298 $ 15,000 165,000 $113,604(6)
and Chief Technical
Officer (3)
Frank A. Solomon (7) 1998 $ 99,234 $ -- -- $ --
President, Chief Executive 1997 $219,964 $ -- 125,000 $659,368(8)
Officer and Director 1996 $202,026 $ -- 119,999 $191,378(9)
Katia Breslawec (10) 1998 $101,608 $ -- -- $153,490(11)
Vice President of 1997 $134,890 $ -- 65,000 $ --
Quality and Regulatory 1996 $ 81,372 $ -- 59,999 $ --
</TABLE>
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(1) Includes $50,000 which represents 40,000 shares of the Company's Common
Stock which was paid to Ms. Critzer as bonus on February 17, 1999.
(2) Includes options to purchase 146,999 shares of Common Stock which were
canceled in connection with a repricing of certain stock options of the
Company on September 22, 1999 (the "Repricing").
(3) Mr. Mussmann joined the Company June 30, 1997 as Vice President, Research
and Development and became Executive Vice President and Chief Technical
Officer in April 1999.
(4) Includes $41,363.75 which represents 33,091 shares of the Company's Common
Stock which was paid to Mr. Mussmann as a bonus on February 17, 1999.
(5) Includes options to purchase 8,750 shares of Common Stock which were
granted to Mr. Mussmann in connection with a surrender of options to
purchase 8,750 shares of Common Stock granted in 1997 and options to
purchase 215,000 shares of Common Stock which were canceled in connection
with the Repricing.
(6) Constitutes relocation expense.
(7) Mr. Solomon resigned as President, Chief Executive Officer, Acting Chief
Financial Officer and Director of the Company on June 5, 1998.
-8-
<PAGE>
(8) Includes $654,244 in severance expenses (including wages, medical benefits
and accelerated vesting of options) accrued by the Company in 1997 in
contemplation of the separation agreement with Mr. Solomon, of which
$139,379 was paid in 1998. See "Executive Compensation--Employment
Contracts and Termination of Employment and Change-in-Control Agreements."
Also includes a $5,124 bonus to account for tax consequences resulting from
note forgiveness in 1996.
(9) Includes $102,891 of forgiveness on a note and a $88,487 bonus to account
for tax consequences resulting from such note forgiveness.
(10) Ms. Breslawec resigned as Vice President of Quality and Regulatory of the
Company on August 31, 1998.
(11) Constitutes severance expenses accrued by the Company in 1998 in
contemplation of the separation agreement with Ms. Breslawec of which
$53,170 was paid in 1998.
Option Grants. The following table summarizes options granted during the
year ended December 31, 1998 to the Named Executive Officers:
Option Grants In Year Ended December 31, 1998
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
% of Total Annual Rates of
Options Stock Price Appreciation
Granted to Exercise for Option Term(1)
Options Employees Price Per Expiration ------------------------
Granted(2) in 1998 (3) Share(4) Date 5% 10%
------------- ------------ --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Susan L. Critzer 15,000(5) 1.7% $0.88 8/19/08 $8,303 $21,041
146,999(6)(7) 16.5% $0.81 9/22/08 $74,895 $189,797
50,000(8) 5.6% $3.00 9/22/98 $94,350 $239,100
Richard Mussmann 15,000(5) 1.7% $0.88 8/19/08 $8,303 $21,041
206,250(6)(9) 23.1% $0.81 9/22/08 $105,083 $265,668
8,750(10) 1.0% $5.75 9/22/98 $31,647 $80,198
50,000(8) 5.6% $3.00 9/22/98 $94,350 $239,100
Frank A. Solomon -- -- -- -- -- --
Katia Breslawec -- -- -- -- -- --
</TABLE>
- ----------
(1) The compounding assumes a ten year exercise period for all option grants.
The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the SEC and do not represent the Company's
estimate or projection of the Company's future Common Stock prices. These
amounts represent certain assumed rates of appreciation only. Actual gains,
if any, on stock option exercises are dependent on the future performance
of the Common Stock and overall stock market conditions. The amounts
reflected in this table may not necessarily be achieved.
(2) Each option represents the right to purchase one share of Common Stock. The
options shown in this column were granted pursuant to the 1994 Option Plan.
To the extent not already exercisable, the options become exercisable in
the event of a "change in control" (as defined in the stock option
agreement) involving the Company.
-9-
<PAGE>
(3) In 1998, the Company granted employees options to purchase an aggregate of
889,512 shares of Common Stock.
(4) The exercise price may be paid in cash, in shares of Common Stock with a
market value as of the date of exercise equal to the option price or a
combination of cash and shares of Common Stock.
(5) Options become exercisable with respect to 25% of the shares on the
anniversary date of such grant for each of the four years following such
grant.
(6) Options become exercisable with respect to 25% of the shares immediately
and 25% on the three succeeding anniversaries of the date of grant.
(7) Includes 96,999 options which were issued in the Repricing in connection
with the cancellation of 96,999 options which were previously granted.
(8) These options were canceled in connection with the Repricing.
(9) Includes 156,250 options which were issued in the Repricing in connection
with the cancellation of 156,250 options which were previously granted.
(10) These options were granted in connection with a surrender of 8,750 options
granted in 1997 and were canceled in connection with the Repricing.
Option Values. The following table summarizes the value of options held at
December 31, 1998 by the Named Executive Officers. No options held by such
executive officers were exercised during 1998.
Aggregated Option Values At December 31, 1998
Number of Unexercised Value of Unexercised
Options In-the-Money Options
at December 31, 1998 at December 31, 1998(1)
-------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
Susan L. Critzer 103,417 146,581 $ 31,760 $ 39,029
Richard Mussmann 51,563 178,437 $ 16,369 $ 52,856
Frank A. Solomon 291,665(2) -- -- --
Katia Breslawec -- -- $ -- $ --
- ----------
(1) Value based on the difference between the last sale price of the Common
Stock as reported by the Nasdaq National Market on December 31, 1998 and
the option exercise price per share, multiplied by the number of shares
subject to the in-the-money options.
(2) Pursuant to a separation agreement between Mr. Solomon and the Company, all
unvested stock options previously granted to Mr. Solomon fully vested on
June 5, 1998, the date he executed a general release. See "Employment
Contracts and Termination of Employment and Change-in-Control Agreements"
below.
-10-
<PAGE>
Option Repricing The following table summarizes the number of repriced
options granted during the year ended December 31, 1998 to the Named Executive
Officers:
Ten-Year Option Repricings
<TABLE>
<CAPTION>
Length of
original
Securities option term
underlying remaining at
number of Market price Exercise price date of
options/SARs of stock at time at time of New repricing or
repriced or of repricing or repricing or exercise amendment
Name Date amended (#) amendment ($) amendment ($) price ($) (months)
- ---- -------- ------------- ---------------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Susan L. Critzer 9/22/98 55,000 $ 0.81 $ 4.81 $0.81 109
9/22/98 20,000 $ 0.81 $ 9.50 $0.81 101
9/22/98 50,000 $ 0.81 $ 3.00 $0.81 117
9/22/98 16,666 $ 0.81 $ 1.20 $0.81 85
9/22/98 5,333 $ 0.81 $ 9.75 $0.81 93
Richard Mussmann 9/22/98 50,000 $ 0.81 $ 3.00 $0.81 117
9/22/98 8,750 $ 0.81 $ 5.75 $0.81 112
9/22/98 65,000 $ 0.81 $ 4.81 $0.81 109
9/22/98 7,500 $ 0.81 $ 7.75 $0.81 105
9/22/98 75,000 $ 0.81 $ 7.75 $0.81 105
2/11/98 8,750(1) $ 5.75 $ 7.75 $5.75 119
Frank A. Solomon -- -- $ -- $ -- -- --
Katia Breslawec -- -- $ -- $ -- -- --
</TABLE>
- ----------
(1) This option was canceled in connection with the Repricing.
Report of Compensation Committee on Executive Compensation
Under rules established by the SEC, the Company is required to provide
certain data and information in regard to the compensation and benefits provided
to the Company's Chief Executive Officer and other executive officers
(collectively, the "Executive Officers"). The SEC rules require the Compensation
Committee of the Board of Directors to issue a report explaining the rationale
and considerations that led to fundamental executive compensation decisions
affecting the Executive Officers. In fulfillment of this requirement, the
Compensation Committee of the Board of Directors (the "Committee"), at the
direction of the Board of Directors, has furnished the following report on
executive compensation:
The Committee is responsible for setting salaries for officers and for
granting incentive awards and stock-based compensation to the Company's
executive officers, including the Chief Executive Officer, on behalf of the
Board of Directors and the shareholders. The Committee also oversees the
operation of the Company's executive compensation benefits.
The Committee consists entirely of outside directors of the Company. During
1998, Dr. Knudson and Mr. Bennett and Mr. Wallin served on the Committee. Dr.
Knudson is Chairman of the Committee.
-11-
<PAGE>
Compensation Policies
The Company is committed to attracting, hiring and retaining an experienced
management team that can successfully develop and manufacture the Company's
products in commercial quantities, penetrate target markets, obtain and maintain
required regulatory approvals worldwide, and develop new products. With these
goals in mind, the Committee closely aligns its compensation plan for executive
management to the milestones achieved and the influence that each executive has
as the Company grows and matures. The Committee annually reviews and evaluates
the Company's corporate performance, compensation levels and equity ownership of
its executive officers. The Committee strives to establish competitive levels of
compensation that are consistent with the Company's annual and long-term
performance goals, are appropriate for each officer's scale of responsibility
and performance, recognize individual initiative and achievements, will attract
and retain the highest quality personnel possible consistent with the Company's
resources, and provide an incentive to such executives to focus on the Company's
long-term strategic goals by aligning their financial interests closely with
long-term shareholder interests. The Committee intends to make the executive
compensation program competitive with the marketplace while emphasizing
compensation in the form of equity ownership, the value of which is contingent
on the Company's long-term market performance. It is intended that, in judging
appropriate levels of compensation, the Committee will take into account
internally set performance goals and comparisons with the performance of a
self-selected group of development stage companies with similar business
characteristics and strategies.
Because the Company has yet to begin commercial production and full-scale
marketing of its product, it is difficult to select objective criteria by which
to measure individual and Company performance. As a result, the Committee's
efforts to tie compensation to performance involve a subjective element and take
into account each officer's performance during the past year based on
qualitative standards and the achievement of nonfinancial goals such as reaching
certain milestones in the development and production of the Company's LifeGuide
System and progress towards clinical trials of the Company's LifeGuide System.
In evaluating compensation relative to Company performance, the Committee also
considers the Company's stock performance and progress toward profitability. In
the future, the Committee intends to place more emphasis on objective factors in
determining executive compensation. Factors that the Committee anticipates that
it will consider include maintaining the compensation of the Company's officers
at industry levels, as reflected in surveys of compensation practices in
corporations of comparable size and technology.
The Company's compensation program has three primary components: base
salary, short-term incentives and long-term incentives. The ultimate composition
of executive compensation reflects the Company's goals of attracting and
retaining highly qualified personnel and supporting a performance-oriented
environment that rewards both corporate and personal performance over the long
term. In general, stock option grants are used to enhance the competitiveness of
compensation packages, to reward exceptional performance and provide incentive
for reaching further performance goals. The Compensation Committee also believes
that the use of stock options is important to align the interests of the
officers with the interests of the shareholders.
Base Salaries
The Committee establishes annual base salaries after an analysis of each
executive officer's individual performance during the prior year, the overall
performance of the Company during the prior year and historical compensation
levels within the executive officer group. The Committee believes that executive
salaries must be sufficiently competitive to attract and retain key individuals.
In this regard, salaries for officers are based on experience levels and are
intended to be competitive with median salaries paid to comparable executives in
similar positions at other development stage medical device companies.
Development stage companies continue to be used for comparison purposes because,
in 1998, the Company's products remained in development, and commercial
production of the LifeGuide System had not yet begun. In the absence of revenue
and profitable operations, the Company does not have the financial resources to
match salaries offered by larger or profitable medical device companies. By
augmenting base salary with equity-based compensation, the Company seeks to
continue to attract and retain quality management personnel despite limited
financial resources. Annual increases in base salaries for existing officers are
generally
-12-
<PAGE>
consistent with the merit increase formula used throughout the Company. The
Company grants annual merit increases to all employees in the range of 0-10%
based on performance. Larger increases are given, as appropriate, to reflect
changes in job responsibility and authority or to internally balance the salary
structure among the executive officer group.
Short-Term Incentives
The Committee believes that executive compensation should be based in part
on the achievement of milestones that are important to the short-term success of
the Company. Accordingly, the Committee periodically sets short-term milestones
and then compares the Company's progress against these targets. Members of the
executive team, along with all Company employees, are periodically granted
options to purchase shares of the Common Stock with vesting tied to the
achievement of specified operating and personal objectives. The number of
options granted with these vesting provisions is determined based on the
individual's experience and position within the Company.
In 1998, the Compensation Committee of the Board of Directors of the
Company adopted a 1998 Vice President Bonus Program and a 1998 CEO Bonus Program
to award stock and cash bonuses to its officers. Under the Vice President Bonus
Program, officers were given an opportunity to earn stock and cash bonuses based
on the attainment of certain developmental milestones. Under the CEO Bonus
Program, the Chief Executive Officer of the Company was given an opportunity to
earn stock and cash bonuses based on predetermined goals. No awards were made
under the 1998 CEO Bonus Program.
Long-Term Incentives
The Committee believes that long-term shareholder interests and executive
compensation should be closely aligned. The Committee believes that stock
ownership by management and stock-based performance compensation arrangements
are beneficial in aligning management's and shareholders' interests in enhancing
shareholder value. Stock options are generally granted to executive officers at
the time they are elected. In determining the number of options to be granted at
such time, the Committee takes into consideration job responsibilities,
experience and contributions of the individual and recommendations of the
President. The stock options give the holder the right to purchase shares of the
Common Stock over a ten-year period. Because the options are granted at the fair
market value on the date of grant, they will provide value only when the price
of the Common Stock increases above the share price on the date of the grant.
Options are also subject to vesting provisions designed to encourage executives
to remain employed by the Company. Additional options are granted from time to
time based on individual performance, increased job responsibilities and the
prior level of grants.
Stock Option Repricing
The policy of the Compensation Committee historically has been to grant
stock options to employees and consultants of the Company with an exercise price
equal to the fair market value of the underlying stock on the date of grant. The
stock options provide value to employees and consultants who are granted options
only when the price of the Company's stock increases above the price on the date
of grant.
On September 22, 1998, the Board of Directors determined, at the
recommendation of the Compensation Committee, to grant repriced stock options to
all employees and current consultants for all outstanding stock options granted
under the 1994 Option Plan with an exercise price in excess of $1.00. The
vesting schedules of options held by employees were adjusted so that 25% of such
options vested immediately and 25% vest on the anniversary date of such grant
for each of the three years following such grant.
The Compensation Committee's action was taken in response to the decline in
the market price of the Company's stock during the preceding months which had
minimized the incentive value of options with higher exercise prices. The
decision to reprice was based upon numerous factors including the then current
fair market value of the Common Stock and the need to provide incentives
employees and current consultants to continue to contribute to the integration
of a new
-13-
<PAGE>
measurement technology into the LifeGuide System. The Compensation Committee
determined that the repriced options provided appropriate long-term incentives
for employees and current consultants.
CEO Compensation
The determination of the Chief Executive Officer's salary, bonus and grants
of stock options followed the policies set forth above for all executives'
compensation.
During 1998, Mr. Solomon was Chief Executive Officer until June 5, 1998.
Mr. Solomon's compensation for 1998 was based upon a Separation Agreement which
he and the Company entered into in February 1998 which is described in
"Employment Contracts and Termination of Employment and Change-in-Control
Agreements."
When Ms. Critzer assumed the role of interim President and acting Chief
Financial Officer in June 1998, she received a special cash bonus in the amount
of $20,000 and options to purchase 50,000 shares of Common Stock in recognition
of the additional responsibilities she assumed. The Committee also believes that
stock options granted to Ms. Critzer to date provide a significant and
appropriate tie between overall compensation and the performance of the Company
over the long term.
Compensation Limitations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally limits the corporate deduction for compensation paid to
executive officers to $1.0 million, unless the compensation qualifies as
"performance-based compensation" under the Code. Section 162(m) did not affect
the deductibility of compensation paid to the Company's executive officers in
1998 and will not affect the deductibility of such compensation expected to be
paid in 1999. The Committee will continue to monitor this matter and may propose
changes to the executive compensation program if warranted.
SUBMITTED BY THE COMPENSATION COMMITTEE:
Mark B. Knudson, Chairman
Frank B. Bennett
Winston R. Wallin
-14-
<PAGE>
Stock Performance
The graph below sets forth a comparison of the cumulative shareholder
return of the Common Stock with the cumulative total return of the Nasdaq Stock
Market - U.S. Index and the Standard & Poor's Health Care (Medical Products and
Supplies) Index from June 26, 1996 (the date of the initial public offering of
the Common Stock) to December 31, 1998. The graph assumes the investment of $100
in the Common Stock on June 26, 1996, and in each of the designated indices on
May 31, 1996, and that dividends, if any, were reinvested.
[BAR CHART APPEARS HERE]
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------------------------------------------------------
6/26/96 6/96 9/96 12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTEG INCORPORATED 100 101 109 103 63 82 61 42 46 28 13 12
NASDAQ STOCK MARKET (U.S.) 100 95 99 104 98 116 136 127 149 153 139 179
S & P HEALTH CARE (MEDICAL
PRODUCTS & SUPPLIES) 100 101 112 113 112 134 139 141 162 179 168 203
</TABLE>
-15-
<PAGE>
Employment Contracts and Termination of Employment and Change-in-Control
Agreements
Except as described below, the Company does not have any employment
agreements with its Named Executive Officers. In February 1998, the Company
entered into a separation agreement with Mr. Solomon pursuant to which, among
other things, (i) Mr. Solomon would continue to serve as President, Chief
Executive Officer and Director of the Company until his successor commences
employment with the Company or September 30, 1998, whichever is earlier, (ii)
Mr. Solomon agreed to certain nondisclosure, noncompetition and nonsolicitation
covenants, (iii) Mr. Solomon will receive, after his resignation date, an annual
amount equal to $232,104, for a period of 27 months thereafter, subject to
reduction after 12 months for payment received by Mr. Solomon as a result of any
other employment or consulting work, (iv) all unvested stock options previously
granted to Mr. Solomon will fully vest, and (v) the exercise period for all
stock options held by Mr. Solomon would extend for two years following his
resignation.
Ms. Critzer and Mr. Mussmann have agreements with the Company under which
each such officer is entitled to receive severance pay equal to 12 times his or
her total monthly compensation (including salary and bonus, determined in
accordance with such agreement) if, after a change in control (as defined in
such agreement) of the Company, the Company terminates the officer's employment
without cause, or the officer terminates his or her employment for good reason
(as such terms are defined in such agreement). These agreements also contain
covenants by each such officer not to compete and not to solicit the Company's
customers or employees during the term of each such officer's employment and for
12 months following the termination of his or her employment for any reason.
In June 1998, the Company entered into a separation agreement with Ms.
Breslawec pursuant to which, among other things, (i) Ms. Breslawec would
continue to serve as Vice President, Quality and Regulatory until August 31,
1998, (ii) Ms. Breslawec agreed to certain nondisclosure, noncompetition and
nonsolicitation covenants, and (iii) Ms. Breslawec will receive, after her
resignation date her then current salary for a period of 12 months, subject to
reduction for payments received by Ms. Breslawec as a result of any other
employment or consulting work and a pro rata portion of her bonus under the 1998
Vice President Bonus Program.
In addition, the exercisability of options granted to executive officers is
accelerated in the event of a "change in control" over the Company (as such term
is defined in the stock option agreements entered into by the executive
officers).
Compensation Committee Interlocks and Insider Participation
Dr. Knudson, Mr. Bennett and Mr. Wallin served as members of the Company's
Compensation Committee during 1998. Dr. Knudson, who also served as the
Company's President in 1990 and as the Chief Executive Officer from 1990 to
1991, is a limited partner of MIP and a general partner of MIP II. MIP and MIP
II are the general partners of MIF and MIF II, respectively, which entities
engaged in certain transactions with the Company, as described below.
Laboratory and office furniture and equipment used by the Company with an
original cost of approximately $801,000 as of December 31, 1998 are leased under
sublease arrangements with FIM, Inc. and FIM II, Inc., entities related to the
Company through MIF and MIF II. Under the lease arrangements, MIF and MIF II
have guaranteed the lease payments owing to an unrelated third party. The
liability for future lease payments under these guarantees was $154,128 as of
December 31, 1998. In consideration of such guarantees, the Company issued
options to purchase an aggregate of 42,993 shares of Common Stock at an exercise
price of $0.84 per share to MIF and warrants to purchase shares of Series D
Preferred Stock, convertible into 106,027 shares of Common Stock at an as
converted exercise price of $4.125 per share, to MIF II. Options to purchase
30,523 shares of Common Stock will expire in May 2001. The balance of the Common
Stock options (12,470 shares) will expire in April 2003. The Series D Preferred
Stock warrants expire at various times between February 1999 and June 2005.
-16-
<PAGE>
Beginning in April 1992, the Company entered into a series of annual
consulting agreements with Dr. Knudson. In March 1997, the Company entered into
a three-year consulting agreement with Dr. Knudson, which agreement runs through
April 3, 2000. Under this agreement, Dr. Knudson acts as consultant for the
Company in the area of technical expertise and advisory services, for which he
is paid $6,750 per month. During 1998, Dr. Knudson received an aggregate of
$81,000 for such consulting services.
CERTAIN TRANSACTIONS
Dr. Knudson is a general partner of MIP II, and Mr. Nickoloff is a general
partner of both MIP and MIP II. For a discussion of certain Company transactions
with Dr. Knudson, MIF and MIF II, see "Executive Compensation--Compensation
Committee Interlocks and Insider Participation."
RATIFICATION OF INDEPENDENT AUDITORS
(Proposal #2)
The Board of Directors has appointed Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1999 and recommends that
the shareholders ratify that appointment. Ernst & Young LLP has no relationship
with the Company other than that arising from its employment as independent
auditors. Representatives of Ernst & Young LLP will be present at the 1999
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
shareholders.
The affirmative vote of a majority of the outstanding shares of the Common
Stock represented at the 1999 Annual Meeting is required to ratify the
appointment of Ernst & Young LLP as the Company's independent auditors. The
Board of Directors recommends that you vote FOR this proposal.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal by a shareholder to be presented at the next annual meeting
must be received at the Company's principal executive offices, 2800 Patton Road,
St. Paul, Minnesota 55113, not later than December 31, 1999.
By Order of the Board of Directors,
/s/ Kenneth L. Cutler
Kenneth L. Cutler
Secretary
Dated: April 30, 1999
-17-
<PAGE>
INTEG INCORPORATED
2800 Patton Road
St. Paul, Minnesota 55113
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting and Proxy
Statement dated May 6, 1999, appoints Susan L. Critzer as proxy (with the power
of substitution and revocation) to represent the undersigned and to vote, as
designated below, all shares of Common Stock of Integ Incorporated which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of Integ
Incorporated to be held on Thursday, June 17, 1999 at 10:00 a.m. at the
Minneapolis Hilton, 1001 Marquette Avenue, Minneapolis, Minnesota, and at any
adjournment thereof. Each of the matters set forth below has been proposed by
the Company.
1. ELECTION OF DIRECTORS FOR TERMS EXPIRING IN 2002
[_] FOR all nominees listed below (except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all nominees listed below
(Instruction: To withhold authority for any individual nominee, strike a
line through the nominee's name in the list below.)
Robert S. Nickoloff Winston R. Wallin
P
R
O
X
Y
(continued from other side)
2. RATIFICATION OF INDEPENDENT AUDITORS
[_] FOR the ratification of Ernst & Young LLP as the Company's independent
auditors for the year ending December 31, 1999
[_] WITHHOLD AUTHORITY to vote for the ratification of Ernst & Young LLP as
the Company's independent auditors for the year ending December 31, 1999
3. In his discretion, the proxy is authorized to vote upon such other business
as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted FOR all of the above items.
Please sign exactly as your name
appears hereon. Jointly owned
shares will be voted as directed if
one owner signs unless another
owner instructs to the contrary, in
which case the shares will not be
voted. If signing in a representa-
tive capacity, please indicate ti-
tle and authority.
Date: _______________________ , 1999
____________________________________
Signature
PLEASE SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ADDRESSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.
