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
The Med-Design Corporation
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(Name of Registrant as Specified In Its Charter)
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(Names 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.
<PAGE>
1) Amount Previously Paid:
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2) Form, Schedule or Registration No.:
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3) Filing Party:
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4) Date Filed:
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-2-
<PAGE>
[The Med Design Corporation Logo]
2810 Bunsen Avenue
Ventura, California 93003
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
-----------------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of stockholders of The
Med-Design Corporation (the "Company") will be held at The Union League, Broad
and Sansom Streets, Philadelphia, Pennsylvania, on July 30, 1998, for the
following purposes:
1. To elect seven directors of the Company to serve for the following
year, or until their successors have been elected and qualified.
2. To act upon a proposal to ratify the appointment of Coopers & Lybrand
L.L.P. as the Company's independent accountants for the fiscal year
ending December 31, 1998.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
A proxy, if properly executed and received in time for the voting, will be
voted in the manner directed therein. If no direction is made, such proxy will
be voted FOR all proposals therein. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed May 30, 1998, as the record date for
determining stockholders entitled to notice of the Annual Meeting and to vote at
such adjournments thereof. Only stockholders of record as of the close of
business on May 30, 1998, entitled to notice of, and to vote at, such meeting or
any adjournments thereof.
You are cordially invited to attend the Annual Meeting. Whether or not you
plan to attend, you are urged to complete, date and sign the enclosed pxoxy and
return it promptly. If you receive more than one form of proxy, it is an
indication that your shares are registered in more than one account, and each
such proxy must be completed and returned if you wish to vote all your shares
eligible to be voted at the Annual Meeting.
By Order of the Board of Directors
Joseph N. Bongiovanni, III, Secretary
Dated: June 10, 1998
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE.
<PAGE>
[The Med Design Corporation Logo]
2810 Bunsen Avenue
Ventura, California 93003
----------------------
PROXY STATEMENT
----------------------
GENERAL
The enclosed proxy is solicited pursuant to this Proxy Statement (to be mailed
on or about June 10, 1998 by the Board of Directors of The Med-Design
Corporation, a Delaware corporation, [for use at the Annual Meeting of
Stockholders (the "Annual Meeting"] to be held at the time and place shown in
the attached Notice of Annual Meeting of Stockholders and at any adjournment or
adjournments thereof. The Company's telephone number is (805) 339-0375.
INFORMATION CONCERNING VOTING AND PROXIES
Proxies
Shares represented by proxies, if properly signed, dated and received in
time for the voting, will be voted at the Annual Meeting as specified, or, if
not otherwise specified, FOR the election as directors of the nominees named
herein and FOR each other proposal described in the attached Notice of Annual
Meeting of Stockholders. Such proxies are revocable at anytime before they are
exercised by written notice to the Secretary of the Company. Attendance at the
Annual Meeting will not, without delivery of the written notice described in the
immediately preceding sentence, constitute revocation of a proxy. Management is
not aware at the date hereof of any matter to be presented at the Annual Meeting
other than the election of directors and the other proposal described in the
attached Notice of Annual Meeting of Stockholders. If any other matter is
properly presented, the persons named in the proxy will vote thereon according
to their best judgement.
The expense of soliciting proxies for the Annual Meeting, including the
cost of preparing, assembling and mailing the notice, proxy and Proxy Statement,
will be paid by the Company. The solicitation will be made by directors,
officers and regular employees of the Company without additional compensation.
In addition, banks, brokers, and other nominees will be reimbursed for their
customary expenses incurred in connection with the forwarding of such materials.
The Company may employ an outside firm to assist in the solicitation of proxies
and the cost, if any, for such services will be paid by the Company. Proxies may
be solicited by personal interview, mail, telephone or facsimile transmission.
Record Date
The record date for determining the holders of the common stock, $.01 par
value per share, of the Company ("Common Stock"), the only class of capital
stock of the Company that is issued and outstanding, who are entitled to notice
of, and to vote at, the Annual Meeting is May 30, 1998.
Voting Securities
As of the close of business on April 10, 1998, there were 7,951,570 shares
of Common Stock outstanding, each of which will entitle its holder of to one
vote at the Annual Meeting. There is no cumulative voting.
ITEM 1 - ELECTION OF DIRECTORS
1
<PAGE>
At December 31, 1997, the Board of Directors consisted of seven persons,
James M. Donegan, John A. Botich, Joseph N. Bongiovanni, III, Gilbert M. White,
John F. Kelley, William A. Jolly and John S. Marr. The nominating committee,
which has the task of nominating members for the Board, has nominated Messrs.
Donegan, Botich, Bongiovanni, White, Kelley, Marr and Jolly. The Stockholders
are being asked to elect seven directors, who will comprise the Board of
Directors of the Company, to serve for the ensuing year and until their
successors are duly elected and qualified. All of the nominees are currently
directors of the Company. If elected, each nominee will serve until the next
annual meeting of stockholders of the Company or until his successor is elected
and qualified.
The persons named in the proxy intend to vote, unless otherwise instructed,
FOR the election as director of each nominee. Each nominee has expressed his
willingness to serve as a director if elected and the Company knows of no reason
why any nominee would be unable to serve. If any nominee is not available for
election at the time of the Annual Meeting, however, the proxy holders may vote
for any other person in their discretion or may refrain from electing or voting
to elect anyone to fill the position. The directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
and entitled to vote at the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 10, 1998, certain information
with respect to the beneficial ownership of Common Stock by each person known to
the Company to own beneficially five percent or more of the outstanding Common
Stock (the only class outstanding), by each director, and by all officers and
directors as a group.
<TABLE>
<CAPTION>
Number of Shares Percent of Class
Name and Address (1) Beneficially Owned (2) Beneficially Owned
-------------------- ---------------------- ------------------
<S> <C> <C>
James M. Donegan............................................. 1,459,115(3) 18.34%
Thor R. Halseth.............................................. 455,546(4) 5.72%
Michael J. Botich............................................ 401,592(4) 5.05%
John A. Botich............................................... 265,380(5) 3.33%
Joseph N. Bongiovanni, III.................................. 17,000(6) *
Gilbert M. White............................................. 155,700(7) 1.94%
John F. Kelley............................................... 357,750(8) 4.32%
John S. Marr, M.D............................................ 42,000(9) *
William A. Jolly............................................. 5,000(10) *
2
<PAGE>
Hathaway & Associates, Ltd................................... 477,000(11) 6.00%
All Directors and Officers as a Group (12 persons)........... 3,220,683(12) 38.12%
</TABLE>
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*Less than one percent (1%)
3
<PAGE>
(1) Unless otherwise indicated, the address of each named holder is c/o The
Med-Design Corporation, 2810 Bunsen Avenue, Ventura, California 93003.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting on
investment power with respect to securities. Shares of Common Stock subject
to options, warrants and convertible notes currently exercisable or
convertible, or exercisable or convertible within sixty (60) days of April
10, 1998, are deemed outstanding for computing the percentage of the person
holding such securities but are not deemed outstanding for computing the
percentage of any other person. Except as indicated by footnote, and
subject to community property laws where applicable, the person named in
the table have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them.
(3) Includes 1,600 shares of Common Stock held by Mr. Donegan as custodian for
Derek Donegan, his son, under Pennsylvania Uniform Gifts to Minor Act.
(4) Includes options to purchase 6,000 shares of Common Stock granted pursuant
to the Company's Non-Qualified Stock Option Plan ("Option Plan").
(5) Includes 5,446 shares of Common Stock owned by Mr Botich's spouse, Nina
Dominguez and Jacqueline Treguboff as joint tenants and options to purchase
9,400 shares of Common Stock granted pursuant to the Option Plan.
(6) Includes Options to purchase 7,000 shares of Common Stock granted pursuant
to the Company's Option Plan.
(7) Includes 200 shares of Common Stock held by Mr. White's spouse, options to
purchase 8,400 shares of Common Stock granted pursuant to the Option Plan
and warrants to purchase 50,000 shares of Common Stock.
(8) Includes options to purchase 32,000 shares of Common Stock pursuant to the
Company's Option Plan and warrants to purchase 300,000 shares of the
Company's Common Stock granted by the Company.
(9) Includes options to purchase 32,000 shares of Common Stock pursuant to the
Company's Option Plan.
(10) Represents warrants to purchase 5,000 shares of Common Stock owned by Mr.
Jolly.
(11) Based on a Schedule 13G filed with the Securities and Exchange Commission
on January 31, 1997 by Hathaway & Associates, Ltd., whose address is 119
Rowayton Avenue, Rowayton, CT 06853.
(12) Includes options and warrants to purchase 460,800 shares of Common Stock
granted to directors and officers of the Company.
4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Identification and Business Experience
The following table sets forth the names and certain information about each
of the nominees for election as a director of the Company and the executive
officers of the Company.
<TABLE>
<CAPTION>
Director/
Name Age Position(s) Officer Since
- ---- --- ----------- -------------
<S> <C> <C> <C>
James M. Donegan (1)(2)(4) 47 Chairman of the Board, Chief Executive 1994
Officer and President
John A. Botich (1)(4) 74 Director 1994
Lawrence D. Ellis 47 Vice President, Acting Chief Financial 1996
Officer
Joseph N. Bongiovanni, III (1)(4) 53 Vice President, Secretary and Director 1994
Gilbert M. White (3)(4) 62 Director 1994
John J. Osborne 51 Senior Vice President, Marketing 1994
Michael J. Botich 49 Senior Vice President, Research and 1994
Development
Thor R. Halseth 45 Senior Vice President, Design 1994
Donald M. Shea 61 Vice President, Manufacturing and 1994
Automation Engineering
John F. Kelley (1)(2)(3)(4) 54 Director 1995
John S. Marr(1)(2)(3) 57 Director 1995
William A. Jolly(2)(3) 44 Director 1997
</TABLE>
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(1) Member of the Executive Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Compensation Committee of the Board of Directors.
(4) Member of the Nominating Committee of the Board of Directors.
There are no family relationships among any of the Directors, executive
officers and significant employees of the Company, other than John A. Botich and
Michael J. Botich, who are father and son.
Mr. Donegan is the Chairman of the Board of Directors of the Company and is
the Chief Executive Officer and President of the Company. From 1991 to 1995, Mr.
Donegan served as the marketing executive for the Structured Investment Division
of Chase Manhattan Bank and most recently as the Managing Director of Chase
Futures Management, Inc.
Mr. John A. Botich is a director of the Company. From 1995 to 1997, Mr.
Botich served as Executive Vice President and Chief Operating Officer of the
Company. From 1990 to 1995, Mr. Botich served as the Chief Executive Officer of
Med-Design, Inc., the predecessor of the Company.
5
<PAGE>
Mr. Ellis is the Company's Vice President, and Acting Chief Financial
Officer. From 1991 to 1995 Mr. Ellis served as Controller for Phonotics, Inc., a
company engaged in the research and development and manufacturing of fiber optic
test equipment. In addition to Controller and Treasurer experience, Mr. Ellis
has six years of public accounting experience with Ernst & Young, L.L.P.
Mr. Bongiovanni is a director and is a Vice President and the Secretary of
the Company. Since 1978, Mr. Bongiovanni has been the senior partner of the law
firm Bongiovanni & Berger.
Mr. White is a director and is an Executive Vice President of the Company.
Prior to joining the Company in 1995, Mr. White had been a Senior Vice President
of Rollins Hudig Hall, a large international insurance firm, where he designed,
marketed and serviced complex insurance programs for large national and
international clients since 1984.
Mr. Osborne is the Senior Vice President, Marketing of the Company. From
June 1992, to 1995, Mr. Osborne served as President of PRN Medical Associates, a
firm specializing in the sale and marketing of medical devices for selected
manufacturers, where he was responsible for marketing, sales training,
advertising, public relations and the organization and implementation of sales
and distribution networks.
Mr. Michael J. Botich is the Senior Vice President, Research and
Development of the Company, from 1990 to 1995, Mr. Botich was the Senior Vice
President of MDI, where he assisted in developing, engineering and designing the
Company's safety needle technology.
Mr. Halseth is the Company's Senior Vice President, Design. From 1990 to
1995, Mr. Halseth served as President and Director of design for MDI, where he
assisted in developing, engineering and designing the Company's safety needle
technology. In addition, Mr. Halseth was a Senior Product Designer for
Designworks U.S.A. from 1984 to 1995, where he directed and implemented the
design of new and innovative products from the concept phase through models,
prototypes and final product configuration. In addition, he was the principal
designer of various products for the automotive, electronics, computer,
recreational and consumer products industries.
Mr. Shea is the Vice President, Manufacturing and Automation Engineering of
the Company. From October, 1992, to 1995, Mr. Shea was the owner of Cimarron
Automation Services, a manufacturing consulting firm, where he provided
consulting services to MDI and other companies for the planning of manufacturing
processes and automated assembly systems.
Mr. Kelley is a director of the Company. Since January, 1996, Mr. Kelley
has been engaged in consulting services as an independent contractor. From 1988
to January, 1996, Mr. Kelley was employed by Chase Manhattan Bank where he
served as the President and a director of Chase Manhattan Futures Corporation,
the President of Chase Futures Management Inc., and the President of Chase
Futures Advisors Inc.
Dr. Marr is a director of the Company. Since October, 1995, Dr. Marr has
served as Medical Director of MD Health Plan. From 1993 to October, 1995, Dr.
Marr served as the Physician Epidemiologist for the New York State Department of
Health. From 1991 to 1993, Dr. Marr served as the Director of Greenwich Hospital
Outpatient Clinics. He is a Clinical Associate Professor at the Department of
Community and Preventative Medicine at New York Medical College and a lecturer
at State University of New York, Department of Environmental Medicine and
Community Health.
Mr. Jolly is a Director of the Company. Since 1996, Mr. Jolly has served as
Chairman of Fine Equities, Inc., a New York Investment Bank. From 1994 to 1996,
he served as Vice President Worldwide Consumer Products, Asia-Pacific Region,
for Scott Worldwide, Inc., where he was responsible for consumer products
operation in 16 countries with 2,000 employees.
The Board of Directors recommends that stockholders vote FOR the election
of Messrs. Donegan, Botich, Bongiovanni, White, Kelley, Marr and Jolly.
6
<PAGE>
Board Committees and Meetings
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee. The Executive Committee has
all powers of and the authority to exercise all the duties of the Board in the
management of the business of the Company that may lawfully be delegated to it
by the Board. The Audit Committee has the authority and duty to recommend to the
Board the auditors to be engaged as the Company's independent public accountants
and to review the scope and results of the audit and other services provided by
the Company's independent accountants and to take such other action as it deems
appropriate to insure the appropriate safeguarding of the Company's assets and
appropriate accounting of its assets and liabilities. The Compensation Committee
has all powers of and the authority to exercise all duties of the Board in
matters relating to executive compensation and administration of all stock
option and other employee benefit plans of the Company, subject to the terms of
such plans. The Nominating Committee has the authority and duty to nominate
directors of the Company to fill vacancies and to nominate directors of the
Company's various subsidiaries, with such nomination to be approved by the Board
in each case.
During the fiscal year ended December 31,1997, eight meetings of the Board
of Directors were held, at which all directors were present. The Executive
Committee, the Audit Committee and the Compensation Committee each held one
meeting during the fiscal year ended December 31,1997. The Nominating Committee
did not meet during the fiscal year ended December 31, 1997, however, its
functions were performed by the Board as a whole. No Director who was a Director
or member of a committee during 1997 attended fewer that 75% of the the Board
meetings or committee meetings held during fiscal year 1997.
ITEM 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected, subject to the stockholders' approval,
Coopers & Lybrand L.L.P., as independent accountants, to audit the financial
statements of the Company for the fiscal year ending December 31, 1998. Coopers
& Lybrand L.L.P., was the Company's independent accountants for the fiscal year
ended December 31, 1997. A representative of Coopers & Lybrand L.L.P. is
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if he or she desires to do so and to answer appropriate
questions with respect to that firm's examination of the Company's financial
statements and records for the fiscal year ended December 31, 1997.
Vote Required for Approval of Independent Accountant
Under Delaware law, the affirmative vote of a majority of the votes cast by
the holders of the Company's shares present in person or represented by proxy
and entitled to vote at the Annual Meeting is required to approve the
appointment of Coopers & Lybrand L.L.P. as the Company's independent
accountants. Under Delaware law abstentions are counted in determining the
number of votes cast and, thus, will have the effect of a vote against the
proposal. Under Delaware law, a broker non-vote will not be counted in
determining the number of votes cast and, thus, will have no effect on the
outcome of the vote.
The Board of Directors recommends that stockholders vote FOR the approval
of the appointment of Coopers & Lybrand L.L.P. as the Company's independent
accountants.
7
<PAGE>
EXECUTIVE COMPENSATION
Compensation Table
The following table set forth information on the annual compensation of the
Chief Executive Officer whose salary exceeded $100,000 for the fiscal year ended
December 31, 1997 for service rendered in all capacities during the fiscal year
ended December 31, 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
--------------------
Name and Principal Position Year Salary
- --------------------------- ---- ------
<S> <C> <C>
James M. Donegan 1997 182,692
Chairman of the Board, Chief Executive Officer and President 1996 169,615
</TABLE>
Option Grants in Fiscal Year 1997
The following table sets forth the option grants made during the fiscal
year ended December 31, 1997 to the Company's executive officer whose cash
compensation for the fiscal year ended December 31, 1997 exceeded $100,000:
<TABLE>
<CAPTION>
Percentage of Total
Options Granted to
Options Granted Employees in Exercise Price
Name (# of Shares) Fiscal Year ($/Share) Expiration Date
---- ------------- ----------- --------- ---------------
<S> <C> <C> <C> <C>
James M. Donegan 25,000 13% 8.00 2/14/07(1)
</TABLE>
- ----------------
(1) Represents options granted by the Company to Mr. Donegan pursuant to the
Option Plan. Pursuant to the Option Plan, twenty percent (20%) of the options
vest and become exercisable each year on the anniversary date of the grant and
upon vesting, such options will expire five years thereafter. On December 31,
1997, none of the options granted Mr. Donegan were exercisable, and based on the
closing price of the Company's Common Stock on December 31, 1997, those options
had no value.
Compensation of Directors
The Independent Directors receive $500 per meeting attended and annually
receive options to purchase 16,000 shares of Common Stock pursuant to the Plan
as compensation for services on the Board of Directors and any committees
thereof. No other directors receive cash or other compensation for services on
the Board of Directors or any committee thereof. All directors are entitled to
reimbursement for reasonable expenses incurred in the performance of their
duties as Board members.
Employment Agreements
On April 5, 1995, the Company entered into an employment agreement with
James M. Donegan, as Chief Executive Officer and President, for an initial term
of five years. The agreement provided for a base compensation of $160,000 for
the first year and bonuses and additional compensation as may be determined by
the Board of Directors in its sole discretion. The Board of Directors may also
in its sole discretion increase such base compensation, bonuses and additional
compensation in each subsequent year. The agreement may be terminated for cause
and contains a non-competition provision extending for three years after
termination of employment. For the fiscal year ending December 31, 1997, Mr.
Donegan's base compensation has been increased to $185,000, and has not been
increased in 1998.
8
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities ("ten-percent holders") to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors, and ten-percent holders are required by
regulation to furnish the Company with copies of all Section 16(a) forms that
they file.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that, during the fiscal year ended December 31,
1997, all Section 16(a) filing requirements applicable to its officers,
directors, and ten-percent holders were satisfied.
CERTAIN TRANSACTIONS WITH MANAGEMENT,
BOARD MEMBERS AND PROMOTERS
Joseph N. Bongiovanni, III, the senior partner of the law firm Bongiovanni
& Berger, is a director, Vice President and Secretary of the company. During the
fiscal year ended December 31, 1997, Bongiovanni & Berger received $31,830 for
legal services performed for the Company in 1997.
John F. Kelley, a director of the Company, performed consulting services to
the Company during 1997 by evaluating and negotiating strategic alliances on
behalf of the Company as well as provided substantial ongoing administrative
support functions, for which the Company issued to Mr. Kelley warrants on March
19, 1997 to purchase 100,000 shares of Common Stock at an exercise price of
$7.50. On March 19, 1997, the closing price of the Common Stock was $8.50.
In addition, the Company issued to Mr. Kelley warrants to purchase 100,000
shares of the Company's common stock on each of October 10, 1997 and January 14,
1998. The exercise prices of these warrants was $5.44 and $2.88, respectively,
per share. On October 10, 1997 the exercise price of the stock option issued to
Mr. Kelley on June 3, 1996, was reset, pursuant to the action of the Board of
Directors, to $4.50 per share. Further, on January 14, 1998, the exercise price
of the warrants issued to Mr. Kelley on March 19, 1997 and October 10, 1997 were
reset, pursuant to the action of the Board of Directors, to $2.88 per share.
William A. Jolly, a director of the Company, is the Chairman of the Board
of Fine Equities, Inc. ("Fine"). Fine was engaged by the Company to serve as the
placement agent for a private placement of $5,000,000 of the company's Common
Stock (which was consummated on January 23, 1997), for which it received fees
and a reimbursement of expenses approximating $345,000, together with warrants
("Warrants") to purchase 100,000 shares of Common Stock at an exercise price of
$5.50 per share. Fine assigned Warrants to Mr. Jolly to purchase 5,000 shares of
Common Stock.
Gilbert M. White, a director of the Company, resigned as an officer of the
Company on January 30, 1998. In connection with Mr. White's resignation, on
January 14, 1998, the Company granted to Mr. White warrants to purchase 50,000
shares of the Company's stock at an exercise price of $2.88 per share as well as
executed a consulting agreement with Mr. White whereby Mr. White shall provide
insurance-related consulting services to the Company for a one year period at an
hourly rate of $125.00 and a maximum payment to Mr. White of $65,000.
John A. Botich, a director of the Company, resigned as an officer of the
Company on July 31, 1997. In connection with Mr. Botich's retirement, the
Company executed a consulting agreement with him for a six month period, whereby
Mr. Botich would advise the Company on operational issues. In consideration for
these services, Mr. Botich has been paid $50,000. The consulting agreement was
renewed on January 14, 1998 for a six month period.
John S. Marr, a director of the Company, was issued options to purchase
16,000 shares of Common Stock on June 3, 1996 at an exercise price of $20.50.
she exercise price of the stock option was reset on October 10, 1997 pursuant to
the action of the Board of Directors, to $4.50 per share.
9
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next annual meeting
of stockholders, to be held in 1999, must be received by the Company at 2810
Bunsen Ave, Ventura, California 93003, by December 14, 1998.
By Order of the Board of Directors
Joseph N. Bongiovanni, III, Secretary
Dated: June 10, 1998
10
<PAGE>
PROXY
THE MED-DESIGN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -- JULY 30, 1998
The undersigned hereby revokes all previous proxies for his shares and
appoints James M. Donegan, Joseph N. Bongiovanni, III, and Gilbert M. White, and
each of them, proxies of the undersigned with full power of substitution to vote
all shares of the common stock, $.01 par value per share, of The Med-Design
Corporation (the "Company") that the undersigned is entitled to vote at the
Company's Annual Meeting of Stockholders to be held in Philadelphia,
Pennsylvania, on July 30, 1998,including any adjournments thereof, upon the
matters set forth below.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE
VOTED AS SPECIFIED AND IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED
FOR THE PROPOSALS SET FORTH IN ITEMS 1 (INCLUDING ALL NOMINEES FOR DIRECTORS)
AND 2 AND WITHIN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTER
PURSUANT TO ITEM 3.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Directors
NOMINEES: James M. Donegan, John A. Botich, Joseph N. Bongiovanni, III,
Gilbert M. White, John F. Kelley, John S. Marr, and William A. Jolly.
/ / FOR / / WITHHOLD AUTHORITY
all nominees list above to vote for all nominees listed above
________________________________________________________________________________
/ / FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
(Continued and to be signed on reverse side.)
<PAGE>
2. Proposal to ratify the appointment of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the fiscal year ending December 31,
1998.
/ / FOR / / AGAINST / / ABSTAIN
3. To transact such other business as may properly come before the meeting or
any adjournments thereof.
Dated: _________________, 1998
______________________________
Signature
______________________________
Signature
Note: please sign exactly as
your name appears on the
proxy. If signing for estates,
trusts or corporations, title
or capacity should be stated.
If shares are held jointly,
each holder must sign.
PLEASE SIGN AND PROMPTLY RETURN IN THE ACCOMPANYING ENVELOPE.
NO POSTAGE REQUIRED IF MAILED IN THE U.S.
