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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MEDEX, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ROBERT E. BOYD, JR.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:____________________________________
(4) Proposed maximum aggregate value of transaction:_______________________
/ / 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:____________________________________________________________
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[MEDEX INC. LOGO]
3637 LACON ROAD
HILLIARD, OHIO 43026
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 15, 1995
To the Shareholders of Medex, Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Medex,
Inc. will be held at Medex, Inc., 3701 Lacon Road, Hilliard, Ohio 43026, on the
15th day of November, 1995 at 9:00 A.M., Eastern Standard Time, for the
following purposes:
1. To elect three directors of the Company.
2. To approve the appointment of Deloitte & Touche LLP as auditors for the
year ending June 30, 1996.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
All shareholders of record on the books of the Company at the close of
business September 25, 1995, shall be entitled to receive notice of and to vote
at the Meeting.
You are cordially invited to attend the Meeting in person.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND MAIL
THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR
WISHES. NO POSTAGE IS REQUIRED. IF YOU DECIDE LATER TO ATTEND THE MEETING, YOU
MAY REVOKE YOUR PROXY AT THAT TIME AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of
Directors
C. Craig Waldbillig, Chairman
Robert E. Boyd, Jr., Secretary
OCTOBER 18, 1995
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[MEDEX INC. LOGO]
3637 LACON ROAD
HILLIARD, OHIO 43026
------------------------
PROXY STATEMENT
------------------------
GENERAL
This statement is furnished in regard to the Proxy enclosed with the Notice
of Annual Meeting of Shareholders. The Proxy Statement and the enclosed Proxy
will be first sent to shareholders of Medex, Inc. on or about October 18, 1995.
The enclosed Proxy is solicited on behalf of the Board of Directors of
Medex, Inc. (hereinafter "the Company") and the cost will be borne by the
Company. Solicitation will be by mail, except that if necessary, regular
employees of the Company, without additional compensation, may make
solicitations by telephone, telegraph or in person. The Company has retained
Georgeson & Company, Inc., New York, New York, to aid in the solicitation of
proxies for a fee of approximately $5,000, plus expenses.
The Board of Directors has fixed the close of business on September 25,
1995, as the record date for determining shareholders entitled to receive notice
of and to vote at the Meeting.
When the Proxies in the enclosed form are properly executed and returned,
the shares they represent will be voted at the Meeting as specified therein. Any
shareholder giving a Proxy has the power to revoke it at any time before it is
voted at the Meeting by notifying the Secretary of the Company.
On September 25, 1995, there were 6,164,485 shares of the Company's Common
Stock issued and outstanding, each share being entitled to one vote. There were
also 150,590 shares of Common Stock held in the Company's treasury which are not
entitled to vote.
Under Ohio law, in the election of directors, any shareholder may give
written notice to the president, a vice-president or secretary of the Company,
not less than 48 hours before the time
fixed for the meeting, of his desire that the voting in the election of
directors be cumulative and if an announcement of the giving of such notice is
made by or on behalf of the shareholder giving such notice, upon the convening
of the meeting, all shareholders shall have the right to cumulate their votes.
In voting cumulatively, a shareholder may give one candidate that number of
votes determined by multiplying the number of votes to which he is entitled by
the number of directors to be elected, or he may distribute that number of votes
among two or more candidates as he sees fit. Proxies given to the Board of
Directors may in the Board's discretion be voted cumulatively.
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All voting shall be governed by the Code of Regulations and By-Laws of the
Company and the law of the State of Ohio. A majority of the outstanding shares,
represented in person or by Proxy, shall constitute a quorum at the Meeting of
Shareholders. Shares as to which authority to vote is withheld and broker
non-votes will be counted as present for quorum purposes. For purposes of the
Election of Directors, the three directors having the greatest number of votes
cast shall be elected. Shares as to which the authority to vote is withheld and
broker non-votes are not counted toward the election of directors and, thus,
will have no effect. Each other matter to be submitted to the shareholders at
this meeting requires the affirmative vote of the majority of shares represented
at the meeting. Therefore, on all matters other than the election of directors,
abstentions and broker non-votes will have the same effect as votes cast against
the proposal.
BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
The following tables, together with the accompanying footnotes, describe
the beneficial ownership of the Company's Common Stock, $.01 par value per
share, as of September 25, 1995, of each person who at such date was known to be
the beneficial owner of more than five percent of the total shares of Common
Stock then issued and outstanding, each Director and nominee for Director
individually, each of the executive officers named in the Summary Compensation
Table who were currently employed by the Company, as of the above date, and all
Officers and Directors of the Company as a group. The share figures shown below
are based principally upon information supplied by the named individuals and
group members described in the tables.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- -------------------------------------------------------------
BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED OF CLASS
- -------------------------------------------------------------
SAFECO Corporation 474,600(1) 7.70%
SAFECO Plaza
Seattle, Washington 96185
C. Craig Waldbillig 439,548(2) 7.11%
1650 Dolphin Court
Naples, Florida 33962
Neuberger & Berman 434,095(3) 7.04%
605 Third Avenue
New York, New York 10158
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SECURITY OWNERSHIP OF MANAGEMENT
- ------------------------------------------------------------
BENEFICIALLY PERCENT
NAME OWNED OF CLASS
- ------------------------------------------------------------
Robert E. Boyd, Jr. 79,870(4)(5) 1.29%
James L. Ginter 33,383(4) *
Bradley P. Gould 40,400(6) *
Thomas A. Helmrath, M.D. 21,867(4) *
John N. Holscher 28,000(4) *
Thomas M. Jordan, Jr. 24,000(4) *
John B. Joyce, Jr. 32,321(4) *
Georg W. Landsberg 15,540(7) *
J. David Martino, M.D. 29,514(4)(8) *
Phillip D. Messinger 143,593(9) 2.31%
William J. Post 26,300(10) *
Terry L. Sanborn 59,977(11) *
C. Craig Waldbillig 439,548(2) 7.11%
All Directors and Officers
as a group (22 persons) 1,103,340(12) 16.61%
- ------------------------------------------------------------
<FN>
* less than 1%
1. All information related to this shareholder is based upon a report on
Form 13F filed with the SEC as of July 17, 1995. This figure includes 474,600
shares over which the holder has shared investment power.
2. Includes 20,000 shares which Mr. Waldbillig has the right to acquire
within sixty (60) days following September 25, 1995 upon the exercise of stock
options. Includes 15,676 shares which Mr. Waldbillig has sole voting and
investment power; 9,116 shares which Mr. Waldbillig shares such power with his
wife; 344,439 shares held by the Charles Craig Waldbillig Trust; and 50,317
shares held by Mr. Waldbillig's wife's trust.
3. All information related to this shareholder is based upon a report on
Form 13F filed with the SEC as of July 31, 1995. This figure includes 434,095
shares over which the holder has shared investment power.
4. Includes shares in the following amounts which the following
Non-Employee Directors have a right to acquire within sixty (60) days following
September 25, 1995 pursuant to the Non-Employee Director Restricted Stock Option
Plans: Mr. Boyd 36,088; Mr. Ginter 31,006; Dr. Helmrath 16,000; Mr. Holscher
28,000; Mr. Jordan 24,000; Mr. Joyce 30,775; and Dr. Martino 29,400.
5. Includes 8,258 shares owned by Mr. Boyd's wife.
6. Includes 36,900 shares which Mr. Gould has the right to acquire within
sixty (60) days following September 25, 1995 upon the exercise of stock options.
7. Includes 15,540 shares which Mr. Landsberg has the right to acquire
within sixty (60) days following September 25, 1995 upon the exercise of stock
options.
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8. Includes 114 shares of which Dr. Martino is custodian for his minor
children.
9. Includes 49,800 shares which Mr. Messinger has the right to acquire
within sixty (60) days following September 25, 1995, upon the exercise of stock
options; also includes 3,346 shares held by Mr. Messinger's wife.
10. Includes 26,300 shares which Mr. Post has the right to acquire within
sixty (60) days following September 25, 1995 upon the exercise of stock options.
11. Includes 27,400 shares which Mr. Sanborn has the right to acquire
within sixty (60) days following September 25, 1995 upon the exercise of stock
options; also includes 3,231 shares in which Mr. Sanborn shares voting and
investment power with his wife.
12. Includes 479,659 shares which the directors and officers have the right
to acquire within sixty (60) days following September 25, 1995, upon the
exercise of stock options.
Unless otherwise indicated each person named above has sole voting and
investment power over the listed shares.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for inclusion in the proxy statement to
be mailed to all shareholders entitled to vote at the next annual meeting of the
Company must be received at the Company's principal executive offices not later
than June 20, 1996. In order to curtail controversy as to the date on which a
proposal was received by the Company, proponents should submit their proposals
by Certified Mail - Return Receipt Requested.
ELECTION OF DIRECTORS
Directors of the Company are elected at the Annual Meeting of Shareholders.
The Company's Code of Regulations provides for nine directors of the Company.
There are currently nine directors of the Company and following the election of
directors at the Meeting there will be nine directors. The Board of Directors is
divided into three classes of three directors each. In accordance with the
Company's Code of Regulations, directors in each class will be nominated for
election as directors to serve a three year term from the date of their election
or in each case until their respective successors are duly elected and
qualified. The directors standing for election herein are nominated for a full
three year term. All of the nominees will be nominated for election as director
to hold office until his or her successor is elected and qualified at the 1998
Annual Meeting or until his or her earlier resignation or removal. Mr. Boyd, Mr.
Ginter and Mr. Holscher are all currently directors of the Company. At the
present time it is intended that proxies received by management of the Company
which contain no instructions to the contrary will be voted for the three
nominated directors who are standing for election. In the event that any nominee
becomes unavailable for election for any reason, an event which management does
not anticipate, shares of Common Stock represented by proxies will be voted for
any substitute nominees designated by the Board of Directors.
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Information concerning the directors and nominees for director is set forth below:
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PRINCIPAL OCCUPATION DIRECTOR
DURING THE LAST FIVE YEARS OF MEDEX, INC.
NAME AGE AND OTHER DIRECTORSHIPS SINCE:
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NOMINEES FOR DIRECTOR FOR TERMS EXPIRING IN 1998
Robert E. Boyd, Jr. 69 Attorney at Law, Boyd & Boyd Co., 1964
L.P.A.; Secretary and General Counsel
for the Company.
James L. Ginter 50 Professor, Marketing Department, Max 1986
M. Fisher College of Business, The
Ohio State University.
John N. Holscher(1) 70 Business Consultant; Adjunct Assistant 1989
Professor, Max M. Fisher College of
Business, The Ohio State University.
A proxy may not be voted for a greater number of nominees than are named.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
J. David Martino, M.D. 51 Physician; Chairman, Department of 1988
Anesthesiology, Children's Hospital,
Columbus, Ohio.
Phillip D. Messinger 59 Vice Chairman of the Board of 1976
Directors; prior to October 1995,
President and Chief Executive Officer
of the Company; prior to March 1993,
Chief Operating Officer of the
Company.
C. Craig Waldbillig(2) 69 Chairman of the Board of Directors; 1959
prior to March 1993, Chief Executive
Officer of the Company.
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- --------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION DIRECTOR
DURING THE LAST FIVE YEARS OF MEDEX, INC.
NAME AGE AND OTHER DIRECTORSHIPS SINCE:
- --------------------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1996
Thomas A. Helmrath, M.D. 58 Physician; President and Chief 1985
Executive Officer, Physicians of the
Ohio State University; from May 1993
to April, 1994, Healthcare Systems
Management Consultant; from February
1991 until May 1993, Senior Vice
President, Medical Affairs,
MetroHealth System, Cleveland, Ohio
and Associate Dean, School of
Medicine, Case Western Reserve
University; prior to February 1991
served as Medical Director, Riverside
Methodist Hospital, Columbus, Ohio.
John B. Joyce, Jr. 69 First Vice-President, Robert W. Baird 1987
& Co., Incorporated, Columbus, Ohio,
Members of New York Stock Exchange.
Thomas M. Jordan, Jr. 59 Certified Public Accountant, 1990
President, Thomas M. Jordan C.P.A.,
Inc.
<FN>
- ---------------
(1) In accordance with the Company's By-Laws, the Board of Directors has
by resolution waived the age restriction contained in said By-Laws as to Mr.
Holscher's nomination and election as a director. Mr. Holscher has agreed, in
writing, to resign at anytime upon the Board's identifying a suitable
replacement, and being so requested in writing by a majority of the members
currently constituting the Board of Directors.
(2) Mr. Waldbillig is a director of Danninger Medical Technology, Inc.
There are no family relationships between any director or executive officer
and any other director or executive officer of the Company.
There are no arrangements or understandings between any of the executive
officers of the Company and other persons relating to their selection as
officers.
There have been no events under any bankruptcy act, no original
proceedings, and no judgments or injunctions material to the evaluation of the
ability and integrity of any director or executive officer during the past five
years.
SECTION 16(A) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers, directors and persons who are beneficial owners of more
than ten percent of the Corporation's Common Stock ("reporting persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Reporting persons are required by Securities and
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Exchange Commission regulations to furnish the Corporation with copies of all
Section 16(a) forms filed by them.
Based on its review of the copies of Section 16(a) forms received by it,
the Company believes that, during fiscal 1995, all reporting persons fully
complied with the filing requirements applicable to such persons.
COMMITTEES AND MEETINGS
During fiscal 1995, the Board of Directors had an Audit Committee,
Executive Compensation Committee, Finance Committee, Pension Plan Administrative
Committee, Stock Option Committee, Nominating Committee, and an Executive
Committee. The Board of Directors approved amendments to the Company's By-Laws
which, beginning in fiscal 1996, combined the Stock Option Committee, Pension
Committee and Executive Compensation Committee and their functions into a single
Executive Compensation Committee. The members of the Executive Compensation
Committee are Mr. Joyce, Mr. Boyd, Dr. Helmrath and Mr. Holscher. A total of
seven meetings of the Board of Directors of the Company were held during the
fiscal year ended June 30, 1995. During fiscal 1995, all of the directors
attended 75% or more of the total meetings of the Board and of committees of the
Board on which they served, except for Dr. Martino who attended only 70% due to
a brief illness.
The Audit Committee recommends to the Board of Directors the selection of
the independent accountants to be employed by the Company and reviews generally
the scope of the audit and the results thereof. The Audit Committee reviews
generally the Company's internal accounting controls with the auditors and
reviews compliance with the Company's policy on non-audit services provided by
the independent auditors. The members of the Audit Committee are Dr. Helmrath,
Mr. Holscher and Mr. Jordan. The Committee met six times during the year ended
June 30, 1995.
The Executive Compensation Committee reviews and recommends to the Board of
Directors, the compensation of directors and executive officers of the Company
and reviews and recommends to the Board of Directors the adoption of any
compensation plans in which directors and officers are eligible to participate.
The members were Mr. Joyce, Dr. Helmrath and Mr. Holscher. The Committee met
four times during the year ended June 30, 1995.
The Finance Committee is responsible for formulating and presenting
recommendations to the Board of Directors on investment policy, financial
matters, capital structure and allocation, dividends, financing arrangements,
financial planning, budgeting and undertaking such other duties and
responsibilities relating to corporate finance as the Board of Directors may
delegate to the Committee. The members of the Committee are Mr. Jordan, Mr.
Waldbillig, Mr. Holscher and Mr. Messinger. The Committee met twice during the
year ended June 30, 1995.
The Stock Option Committee administers and interprets the Company's stock
option plans except the Non-Employee Director Plans and, subject to the
provisions of the plans, selects the employees who are to participate in such
plans and determines the terms of their participation. The members were Mr.
Boyd, Mr. Joyce, and Dr. Martino. The Committee met five times during the year
ended June 30, 1995.
The Pension Plan Administrative Committee administers and interprets the
Company's Employees' Profit Sharing Plan and Trust Agreement, and acts as the
"Administrative Commit-
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tee" under that Plan, and reports its operations and recommendations to the
Board of Directors. The members were Mr. Ginter, Dr. Martino and Mr. Jordan. The
Committee met once during the year ended June 30, 1995.
The Nominating Committee is responsible for searching out and recommending
to the Board of Directors, for nomination, new candidates for election to the
Board. The Committee will consider nominees recommended by shareholders. Such
recommendations should be made in writing, addressed to the Company's Secretary.
The members are Mr. Joyce, Mr. Holscher and Mr. Messinger. The Committee met
five times during the year ended June 30, 1995.
The Executive Committee is authorized, when it is impractical or not in the
best interest of the Company to wait until a Board of Director's meeting for
approval, to approve contracts, obligations and transactions of the Company up
to $350,000. In addition, the Executive Committee is responsible for choosing
recipients for the Company's annual contributions to charities. The members are
Mr. Ginter, Mr. Waldbillig, Mr. Messinger and Mr. Boyd. The Committee met six
times during the year ended June 30, 1995.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
Each Director of the Company receives $5,000 annually, plus $1,000 for each
regular or special meeting of the Board they attend, plus $400 for each
committee meeting attended by committee members and $500 for each committee
meeting attended by the Committee Chairman.
The Company's By-Laws provide for a non-employee directors' non-qualified
defined benefit retirement plan. Retirement benefits are based on the current
annual director's fee and years of service as a director with a maximum annual
benefit of 50% of the current annual fee. The annual benefit is payable until
death, or 50% of whole years of service, or a maximum of 10 years, whichever
occurs first.
The Company currently has three Non-Employee Director Restricted Stock
Option Plans which were approved by the shareholders in November 1987, November
1989, and November 1993. The initial Plan provides for the one time grants of
options to non-employee directors and directors emeritus. Plans II & III provide
for the one time grant to non-employee directors of options to purchase shares
of the common stock of the Company. The Company has reserved 384,315 shares of
its common stock for issuance under the Plans. Options are granted at prices
equal to the fair market value at the date of grant and expire ten years from
the date of grant. The options are exercisable at the date of grant subject to
certain passage of time vesting restrictions contained in the Plans. The Plans
are to remain in effect for ten years from the date of their approval by the
Board of Directors. During fiscal 1995, no options were granted to non-employee
directors.
During fiscal 1993, the Company entered into a Non-Competition and
Consulting Contract with Mr. Waldbillig, a Director, Chairman of the Board and
former Chief Executive Officer of the Company. Under the terms of the Contract,
Mr. Waldbillig agreed not to engage in any activity or business that is in
competition with the Company for a three year period that began on July 1, 1993
and to provide consulting services to the Company. In exchange for Mr.
Waldbillig's agreement not to compete and to provide consulting services, the
Company will pay Mr. Waldbillig the sum of $220,000 per year over the three year
period. In addition, the contract
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provides that the Company, during the term of the agreement, will keep in force
and continue to pay the premiums on all split dollar life insurance policies
owned by the parties on the life of Mr. Waldbillig. During fiscal 1995, the
Company paid Mr. Waldbillig $220,000 pursuant to the terms of the Agreement and
paid $8,466 representing the P.S.58, and yearly renewable term portion of the
split-dollar life insurance premiums.
INDEMNIFICATION AGREEMENTS
The Company is party to an indemnity agreement (the "Indemnity Agreement")
with each of the directors and Bradley P. Gould, CEO which provides that the
indemnitee will be entitled to receive indemnification, including advancement of
expenses, to the full extent permitted by law for all expenses, judgments,
fines, penalties and settlement payments incurred by the indemnitee in actions
brought against the indemnitee in connection with any act taken in the
indemnitee's capacity as a director or executive officer of the Company. In the
event of a change of control, the Indemnity Agreement provides for the
appointment of independent legal counsel to determine whether a director or
executive officer is entitled to indemnity. It also requires the Company to
maintain its current level of directors' and officers' liability insurance for
so long as the indemnitee may be subject to any possible, threatened or pending
action, unless the cost of such insurance is more than 150% of the annualized
rate of premiums paid by the Company in Fiscal 1995. Additionally, pursuant to
the Indemnity Agreement, the Company retains subrogation rights to recover any
payments paid by a third party to the indemnitee. The Indemnity Agreement is
binding on the Company and any successors thereto.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information for fiscal years ended June 30,
1995, 1994 and 1993 as to compensation paid by the Company and its subsidiaries,
to the Company's Chief Executive Officer and its four other most highly
compensated executives for services to the Company.
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SUMMARY COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
----------------------------------------- LONG TERM
OTHER COMPENSATION ALL
ANNUAL AWARDS OTHER
COMPEN- ------------ COMPEN-
NAME AND PRINCIPAL SALARY BONUS SATION OPTIONS SATION
POSITION YEAR ($) ($)(2) ($)(3) (#) ($)(4)
- ---------------------------------------------------------------------------------------------
Phillip D. Messinger 1995 204,000 0 -- 17,300 20,572
President, 1994 198,421 52,323 -- 20,000 15,592
Chief Executive 1993 192,835 36,731 -- 2,500 18,916
Officer(1)
Bradley P. Gould 1995 242,004 67,000 -- 9,900 120
Senior Vice President, 1994 195,137 30,874 -- 9,000 55
European 1993 191,070 0 -- 40,000 628
Operations(1)
Terry L. Sanborn 1995 178,167 0 -- 9,900 4,912
Executive Vice 1994 160,750 42,389 -- 10,000 4,518
President, Chief 1993 112,350 21,365 -- 1,500 5,120
Operating Officer
William J. Post 1995 143,000 0 -- 19,900 1,240
Senior Vice President, 1994 100,750 26,568 244,849 45,000 143
Sales and 1993 -- -- -- -- --
Marketing(5)
Georg W. Landsberg 1995 141,302 56,464 -- 3,300 117
Vice President, 1994 -- -- -- -- --
European 1993 -- -- -- -- --
Operations(6)
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<FN>
(1) Mr. Gould was elected Chief Executive Officer in October, 1995.
(2) Amounts shown include cash compensation earned by the named executive
during the year covered.
(3) The aggregate amount of such compensation to be reported herein is less
than either $50,000 or 10% of the total of annual salary and bonuses reported
for the named executive officer except for Mr. Post. The amount shown for Mr.
Post includes: $239,449 for payments and reimbursements associated with moving
and relocation expenses, including gross-up payments to offset the effect of
income taxes; and $5,400 for car allowance.
(4) The following items were included under the heading "All Other
Compensation":
(a) The executive officers of the Company, excluding Mr. Gould and Mr.
Landsberg, participate in the Company's deferred profit sharing plan and
trust agreement together with substantially all of the other full-time
domestic employees of the Company. Contributions to the plan are paid from
the profits of the Company at the discretion of the Board of Directors of
the Company. The amounts in the table include: Mr. Messinger $4,534; Mr.
Sanborn $3,526; and Mr. Post $0 paid in fiscal year 1995.
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(b) During fiscal 1995, the following matching contributions were made
to the Company's deferred 401(k) savings plan accounts of: Mr. Sanborn
$1,130; and Mr. Post $1,090.
(c) The following Split Dollar Life Insurance benefits, representing
the P.S.58 portion of the insurance premiums, were paid on behalf of the
following persons: Mr. Messinger $1,858; Mr. Gould $120; Mr. Sanborn $256;
Mr. Post $150; and Mr. Landsberg $117.
(d) Directors fees of $14,180 were received by Mr. Messinger during
fiscal 1995.
(5) Information is only provided for fiscal years 1995 and 1994. Mr. Post
became an executive officer of the Company in fiscal 1994.
(6) Information is only provided for fiscal year 1995. Mr. Landsberg became
an executive officer of the Company in fiscal 1995.
Each of the executive officers named in the Summary Compensation Table,
with the exception of Georg W. Landsberg, have entered into an employment
agreement with the Company. Each agreement becomes operative only upon a change
of control, as defined in the agreement, that occurs when the officer is in the
employ of the Company. If a change in control occurs and the officer's
employment with the Company is involuntarily terminated within one year
thereafter, the officer becomes entitled to the severance benefits described
below. Likewise, the officer shall be entitled to the severance benefits if he
in good faith determines that his status or responsibilities with the Company
have been diminished subsequent to a change in control and shall for that reason
resign within one year after such change in control. Upon such termination the
officer shall be entitled to receive (i) cash equal to two times his annual
salary paid in equal installments over a 24 month period, (ii) cash in the
amount equal to two times his previous year's incentive compensation benefit,
(iii) 24 months of continued coverage under the Company's hospital, medical,
accident, disability and life insurance plans, or the cash equivalent thereof,
and (iv) a paid-up annuity equal to what the officer would have received under
the Company's defined contribution profit sharing plan. The officer is not
required to mitigate the amount of any payments by seeking other employment. The
Company must pay all legal fees, up to $500,000, incurred by the officer as a
result of such officer's seeking to enforce the agreement. There have been no
payments pursuant to said agreements.
The Company has executed a Letter of Employment with Mr. Post which
provides for reimbursement of moving and relocation costs associated with Mr.
Post's move from California to Ohio and also provides for a minimum of nine
months severance pay upon the involuntary termination of his employment by the
Company.
The following tables reflect: (i) the number and value of options granted
in fiscal 1995 to the individuals named in the Summary Compensation Table; and
(ii) the aggregate exercises and number and value of exercisable and
unexercisable options at June 30, 1995.
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OPTION GRANTS IN LAST FISCAL YEAR
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INDIVIDUAL GRANTS
- -------------------------------------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED ANNUAL
OPTIONS RATES OF STOCK PRICE
GRANTED TO EXERCISE APPRECIATION FOR OPTION
OPTIONS EMPLOYEES OR BASE TERM(2)
GRANTED IN FISCAL PRICE EXPIRATION -------------------------
NAME (#)(1) YEAR ($/SH) DATE 5% 10%
- -------------------------------------------------------------------------------------------------------
Phillip D. Messinger 17,300 12.9% $13.75 08/24/99 $ 65,720 $ 145,225
Bradley P. Gould 9,900 7.4% $13.75 08/24/99 $ 37,609 $ 83,106
Terry L. Sanborn 9,900 7.4% $13.75 08/24/99 $ 37,609 $ 83,106
William J. Post 9,900 7.4% $13.75 08/24/99 $ 37,609 $ 83,106
10,000 7.5% $10.00 02/24/00 $ 27,628 $ 61,051
Georg W. Landsberg 3,300 2.5% $17.25 11/16/99 $ 15,727 $ 34,753
- -------------------------------------------------------------------------------------------------------
<FN>
(1) Granted under the Executive Stock Option Plan, in which the
participants, the timing of grants, and the amount of options granted are in the
discretion of the Stock Option Committee subject to terms and conditions of the
Plan. Under the Plan, options are granted at prices equal to the fair market
value at the date of grant and are exercisable six months after date of grant.
Options expire after five years from date of grant.
(2) The amounts represent certain assumed rates of appreciation only, and
assume the options are held until their expiration date. Actual gains, if any,
on stock option exercises will be dependent upon overall market conditions and
on the future performance of the Company and its Common Stock. There can be no
assurance that the Potential Realizable Values reflected in this table will be
achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- -------------------------------------------------------------------------------------------------------------
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
SHARES UNEXERCISED OPTIONS AT
ACQUIRED OPTIONS AT FY-END ($)
ON VALUE FY-END (#)EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- -------------------------------------------------------------------------------------------------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
Phillip D. Messinger 2,000 $ 2,000 53,300/10,000 $ 20,000/-0-
Bradley P. Gould 900 $ 6,525 39,650/16,000 $ 9,000/-0-
Terry L. Sanborn 650 $ 650 29,050/5,000 $ 10,000/-0-
William J. Post -0- -0- 29,900/21,000 $ 35,000/-0-
Georg W. Landsberg -0- -0- 15,540/1,800 $4,240/$1,800
- -------------------------------------------------------------------------------------------------------------
<FN>
(1) Based on the 1995 fiscal year-end closing price of $12.50 per share and
rounded to the nearest whole dollar.
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EXECUTIVE COMPENSATION REPORT AND PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Committee
Report and the information under "COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN" shall not be incorporated by reference into any such filings.
COMBINED REPORT OF THE COMPANY'S EXECUTIVE COMPENSATION
COMMITTEE AND STOCK OPTION COMMITTEE
Salary and bonus compensation of the Company's executive officers were
determined by the Executive Compensation Committee of the Board of Directors.
Long-term incentive compensation in the form of stock options under the
Company's Employee Stock Option plans were awarded and administered by the Stock
Option Committee of the Board of Directors. The Committees were composed
entirely of directors who are not employees of the Company. Following review and
approval by the Compensation Committee, recommendations pertaining to executive
salary, bonus and other forms of compensation, except stock option awards, are
submitted for approval to the full Board of Directors.
EXECUTIVE COMPENSATION PHILOSOPHY
The purpose of the Company's compensation program is to attract and retain
qualified executive officers by providing a total compensation package which is
competitive with comparable companies in the health care manufacturing industry
and to also provide the incentives to create short-term and long-term
improvements in the Company's earnings and net return on shareholders' equity.
During fiscal 1995, the Board of Directors with the assistance of an
independent compensation consultant began implementation of a revised
compensation program designed to: establish competitive salary, bonus and
long-term incentive compensation programs, attribute a greater percentage of
compensation to specific company performance goals and establish appropriate
linkage between executive compensation and creation of shareholder value.
Base salaries for the CEO and executive officers were set by the Committee
based upon individual performance evaluations, the individual executives'
responsibilities, the general overall performance of the Company and a
comparison with compensation of other employers within and outside the Company's
industry with a similar number of employees and revenues.
The base salary rates for the CEO and all but three of the executive
officers were not increased during fiscal 1995.
During fiscal 1995, the Company began the implementation of a revised cash
incentive bonus compensation program designed to provide additional compensation
opportunities which are aligned with the Company's performance. The amount of
incentive compensation is based upon performance in three separate areas:
1. Corporate business results primarily tied to total Company operating
income return on assets employed, with an adjustment based upon revenue versus
budget (target.)
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2. Business unit performance primarily tied to business unit profitability,
modified by business unit revenue versus budget (target.)
3. Executive performance based primarily upon review of each individual
executives' performance in terms of specific objectives as well as identified
competencies.
These measures are weighed differently for different positions and in
particular for the CEO whose incentive compensation is tied primarily to the
overall corporate business results. Target award levels are established for each
position with actual award amounts based upon actual performance levels attained
on the three measures. The program is designed so that, upon achieving maximum
performance, up to 40% of an executive officers' annual cash compensation would
be incentive (performance) based. To date, Mr. Gould and Mr. Landsberg were the
only executive officers to receive incentive bonus compensation for fiscal 1995.
In addition, the domestic executive officers, along with substantially all
the other full-time domestic employees, participate in the Company's Deferred
Defined Contribution Profit Sharing Plan. Contributions to each participating
executive officer and all other participating employees are determined based
upon salary and years of service to the Company and are paid, at the discretion
of the Board of Directors, from profits of the Company calculated upon a formula
directly related to the adjusted operating profit of the Company.
LONG-TERM INCENTIVES
Although the incentive compensation and profit sharing plan in which the
executive officers participate are tied to current performance and
profitability, the Company has found that they also provide longer term
incentives since future compensation for officers will continue to be based in
part on the incentive compensation program and profit sharing plan, thus
providing incentives to maintain the long-term profitability of the Company.
Long-term incentives are also provided under the Company's Stock Option
Plans. The Company views stock options as particularly appropriate long-term
incentives because stock options align the interests of the employee/option
holder with those of the shareholder by providing value to the employee that is
tied directly to stock price increases. During fiscal 1995, the Company's
shareholders approved the 1994 Executive Stock Option Plan in which all of the
Company's executive officers participate. The Company's executive officers also
participate in the Company's Administrative Incentive Plan II, and the Key
Employee Non-Statutory Stock Option Plan. All options granted under these plans
are granted at 100% of the market value on the date of grant. Options granted
under the Key Employee Plan vest 20% per year subject to certain Company wide
and operating division performance goals, established in advance by the Stock
Option Committee, based upon the net sales and net income.
During fiscal 1995, because of the failure to attain the performance goals
established by the Stock Option Committee, no executive officers' Key Employee
Plan options vested with the exceptions of Mr. Gould and Mr. Landsberg whose
operating division met its performance goals.
In fiscal 1995, the Stock Option Committee awarded options from the
Executive Stock Option Plan to the CEO and other executive officers of the
Company. See "Option Grants in Last Fiscal Year" for grants to CEO and "Named
Executive Officers."
The Board of Directors has approved amendments to the Company's By-Laws
which, beginning in fiscal 1996, combines the Stock Option Committee, Pension
Committee and
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Executive Compensation Committee of the Board of Directors into a single
Executive Compensation Committee, with Mr. Joyce, Mr. Boyd, Dr. Helmrath and Mr.
Holscher as its members.
BASIS FOR CHIEF EXECUTIVE OFFICER COMPENSATION
Like the other executive officers of the Company, the Chief Executive
Officer's base salary was determined by the Compensation Committee and
recommended to the Board of Directors based upon: the individual performance
evaluation of the Chief Executive Officer by the Committee; the overall
performance of the Company (as opposed to specific financial performance
criteria for the Company); and a comparison of CEO salaries for comparable
companies in the general and health care manufacturing industries. Mr.
Messinger's base salary rate was not increased in fiscal 1995 and Mr. Messinger
did not earn any incentive bonus compensation for fiscal 1995, primarily as a
result of the financial performance of the Company during fiscal 1995.
TAX DEDUCTIBILITY OF COMPENSATION
Under Section 162(m) of the Internal Revenue Code of 1986, compensation
paid to certain executive officers in excess of $1 million may be
non-deductible, unless it is performance-based compensation or is otherwise
exempt under law or applicable regulations. The Company will continue to review
its existing compensatory plans in light of this section and the regulations
issued thereunder but has not established a policy with respect to the changes
in the law effected by Section 162(m). The Company intends for the Executive
Stock Option Plan, approved by the shareholders in fiscal 1995, to qualify for
the exemption as "performance based compensation." No compensation paid to any
executive officer by the Company to date has exceeded $1 million and it is not
anticipated that compensation paid for the current fiscal year will exceed said
limit.
THE EXECUTIVE COMPENSATION COMMITTEE THE STOCK OPTION COMMITTEE
John B. Joyce, Jr., Chairman Robert E. Boyd, Jr., Chairman
Thomas A. Helmrath, M.D. John B. Joyce, Jr.
John N. Holscher J. David Martino, M.D.
15
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COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph compares the five year cumulative return from investing
$100 at June 30, 1990 in the Company's Common Shares, the NASDAQ Market Index of
companies and the S & P Medical Products and Supplies Index, with dividends
assumed to be reinvested.
S & P MEDI-
Measurement Period MEDEX IN- CAL PROD & NASDAQ STOCK
(Fiscal Year Covered) CORPORATED SUPL MRKT - US
6/90 100 100 100
6/91 163 133 106
6/92 162 152 127
6/93 96 124 160
6/94 83 120 162
6/95 91 184 215
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last fiscal year, the Executive Compensation Committee consisted
of Mr. Joyce, Dr. Helmrath and Mr. Holscher. The Stock Option Committee
consisted of Mr. Boyd, Mr. Joyce and Dr. Martino.
Mr. Robert E. Boyd, Jr., who serves on the Stock Option Committee, is a
Director and Secretary (non-employee) of the Company, and a member of the law
firm of Boyd & Boyd Co., L.P.A. Boyd & Boyd Co., L.P.A. serves as legal counsel
to the Company and rendered legal services in the amount of $294,358 during the
last fiscal year.
RATIFICATION OF AUDITORS
The Board of Directors has selected the firm of Deloitte & Touche LLP,
independent public accountants, to audit the financial statements of the Company
and its subsidiaries for the year ending June 30, 1996. Deloitte & Touche LLP
has been serving as auditors of the Company since the Company's incorporation in
1959. The Board of Directors recommends that the shareholders
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19
ratify its selection of Deloitte & Touche LLP and, accordingly, management will
offer the following resolution at the Annual Meeting.
RESOLVED, that the appointment by the Board of Directors of Deloitte &
Touche LLP, Certified Public Accountants, to audit the financial statements of
the Company and its subsidiaries for the year ending June 30, 1996, be and
hereby is ratified and approved.
It is anticipated that representatives of Deloitte & Touche LLP will be
present at the meeting to respond to appropriate questions and will have an
opportunity, if they desire, to make a statement.
OTHER MATTERS
At the Meeting, the minutes of the preceding annual meeting of the
shareholders will be read and approved as to form. There will also be received
at the Meeting the annual financial statements, as required by law, and the
reports of the President and other officers. It is not contemplated that any
action will be taken constituting approval or disapproval of any matters
referred to in these financial statements or reports.
The management knows of no other business constituting a proper subject for
action by the shareholders which will be represented for consideration at the
Meeting. However, if any other business shall come before the Meeting, the Proxy
Committee will vote said proxy in respect to any such business in accordance
with their best judgment.
The 1995 Annual Report to Shareholders which includes Financial Statements
and information concerning the Company operations during Fiscal 1995,
accompanies this Proxy Statement. The Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1995, including the financial statements and
schedules thereto which is filed with the Securities and Exchange Commission as
well as any other filings with the Commission, interim reports and additional
information about the Company and its products can be obtained without charge.
Requests should be sent to:
Investor Relations
MEDEX, INC.
3637 Lacon Road
Hillard, Ohio 43026
614-529-3899 (Telephone)
614-876-8356 (Fax)
C. Craig Waldbillig, Chairman
Robert E. Boyd, Jr., Secretary
October 18, 1995
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PROXY FOR NOVEMBER 15, 1995 Proxy is Solicited By
ANNUAL MEETING OF SHAREHOLDERS the Board of Directors
[MEDEX INC. LOGO] 3637 Lacon Road
Hilliard, Ohio 43026
The undersigned acknowledges receipt of the Notice and Proxy Statement dated
October 18, 1995, and hereby appoints as the Proxy Committee, C. Craig
Waldbillig, Robert E. Boyd, Jr., and Phillip D. Messinger, or a majority of them
or any of them acting singly in the absence of the others, with full power of
substitution, the attorneys and proxies of the undersigned at the Annual Meeting
of Shareholders of Medex, Inc., to be held at Medex, Inc., 3701 Lacon Road,
Hilliard, Ohio 43026, November 15, 1995, at 9:00 A.M. Eastern Standard Time and
at adjournments thereof, and thereat to vote the shares which the undersigned
would be entitled to vote if personally present:
1. Election of Directors for the terms as detailed in the Proxy Statement.
/ / For all nominees listed below.
/ / Withhold authority to vote for all nominees listed below:
Robert E. Boyd, Jr.; James L. Ginter; John N. Holscher
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below:
- ----------------------------------------------------------------------------
Continued and to be signed on other side
- --------------------------------------------------------------------------------
2. To approve the selection of Deloitte & Touche LLP as auditors for the year
ending June 30, 1996.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may come before the meeting or any adjournment thereof.
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 PROPOSALS 1 and 2.
Signature(s) should agree with name(s)
as printed on this proxy.
If signing as attorney, executor,
administrator, trustee, or guardian,
please give your full title as such.
Please date, sign and return promptly in
the enclosed envelope.
DATE , 1995
------------------------------
----------------------------------------
Signature
----------------------------------------
Signature if held jointly