UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ICU Medical, Inc.
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(Name of Registrant as Specified In Its Charter)
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ICU MEDICAL, INC.
951 CALLE AMANECER
SAN CLEMENTE, CALIFORNIA 92673
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 2001
----------
This Annual meeting of Stockholders of ICU Medical, Inc. (the "Company") will be
held at the Double Tree Hotel 34402 Pacific Coast Highway, Dana Point, CA 92629,
California, Friday, April 27, 2001 at 10:00 a.m., Pacific Daylight Time, for the
following purposes:
1. To elect two directors of the Company to serve for a term
of three years and until their successors have been elected and
qualified;
2. To ratify the selection of Arthur Andersen LLP, independent
certified public accountants, as independent auditors for the Company
for the year ending December 31, 2001; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
The Board of Directors has determined that only holders of Common Stock of
record at the close of business on March 4, 2001 will be entitled to receive
notice of, and to vote at, the Annual Meeting or any adjournment thereof.
The Board of Directors
/s/ Francis J. O'Brien
Francis J. O'Brien, Secretary
San Clemente, CA
March 16, 2001
YOUR VOTE IS IMPORTANT
Please complete, sign, date and return the enclosed proxy promptly even
though you plan to attend the meeting in person. If you attend the meeting, you
may withdraw your proxy and vote in person.
THANK YOU FOR ACTING PROMPTLY
ICU MEDICAL, INC.
951 CALLE AMANECER
SAN CLEMENTE, CALIFORNIA 92673
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ICU Medical, Inc. (the "Company") for use
at the Annual Meeting of Stockholders to be held April 27, 2001, at the Double
Tree Hotel 34402 Pacific Coast Highway, Dana Point, California at 10:00 a.m.,
Pacific Daylight Time, and at any adjournments thereof, for the purposes set
forth herein and in the accompanying Notice. The approximate date of mailing of
this Proxy Statement and the accompanying proxy is March 16, 2001.
PROXY INFORMATION
A stockholder giving a proxy may revoke it at any time before it is
exercised by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date. The powers of the
proxy holders will be suspended if the person executing the proxy is present at
the Annual Meeting and elects to vote in person. Subject to such revocation or
suspension, all shares represented by each properly executed proxy received by
the Company will be voted in accordance with the instructions indicated thereon,
and if instructions are not indicated, will be voted in favor of (i) the
election of the nominees for director named in, or otherwise nominated as set
forth in, this Proxy Statement and (ii) the proposal to ratify the selection of
independent certified public accountants.
RECORD DATE AND VOTING
As of March 4, 2001, the outstanding voting securities of the Company
consisted of 8,424,523 shares of $.10 par value Common Stock. Each stockholder
of record at the close of business on March 4, 2001 is entitled to one vote for
each share then held on each matter submitted to a vote of stockholders. The
presence in person or by proxy of holders of a majority of the issued and
outstanding Common Stock will constitute a quorum for the transaction of such
business as shall properly come before the meeting.
Generally, stockholder approval of a matter, other than the election of
directors, requires the affirmative vote of a majority of the shares present in
person or represented by proxy and entitled to vote on the matter. Directors are
elected by a plurality of the votes of the shares present in person or by proxy
and entitled to vote on the election of directors. Shares voted to abstain on a
matter will be treated as entitled to vote on the matter and will thus have the
same effect as "no" votes. Broker non-votes are not counted as entitled to vote
on a matter in determining the number of affirmative votes required for approval
of the matter, but are counted as present for quorum purposes. The term "broker
non-votes" refers to shares held by a broker in street name which are present by
proxy but are not voted on a matter pursuant to rules prohibiting brokers from
voting on non-routine matters without instructions from the beneficial owner of
the shares. The election of directors and ratification of the selection of
independent certified public accountants are generally considered to be routine
matters on which brokers may vote without instructions from beneficial owners.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to shares of Common Stock
owned as of March 4, 2001, by (i) each person who, insofar as the Company has
been able to ascertain, beneficially owned more than five percent of the
outstanding Common Stock, (ii) each director, (iii) each nominee for election as
a director, and (iv) all directors and officers as a group. Unless otherwise
indicated in the footnotes following the table, and subject to community
property laws where applicable, the Company believes that the persons as to whom
the information is given have sole voting and investment power over the shares
listed as beneficially owned. The business address of the George A. Lopez, M.D.
Second Family Limited Partnership, George A. Lopez, M.D. and Diana K. Lopez,
M.D. is 951 Calle Amanecer, San Clemente, California 92673.
SHARES OF COMMON STOCK OF THE COMPANY
SHARES PERCENT
OWNED OF
BENEFICIALLY CLASS(1)
------------ --------
George A. Lopez, M.D.......................................................... 2,399,742(3) 23.9%
George A. Lopez, M.D. Second Family Limited Partnership ...................... 791,742(2) 9.4%
Diana K. Lopez, M.D. ......................................................... 1,057,048(4) 12.5%
Wasatch Advisors.............................................................. 1,766,563(9) 21.0%
68 South Main Street, Salt Lake City, UT 84101
FMR Corporation............................................................... 854,450(9) 10.1%
82 Devonshire Street, Boston, MA 02109
Arbor Capital................................................................. 609,600(9) 7.2%
120 South Sixth Street, Minneapolis, MN 55402
Lord Abbett & Company......................................................... 590,781(9) 7.0%
90 Hudson Street, Jersey City, NJ 07302
Jack W. Brown................................................................. 8,500(5) *
John J. Connors............................................................... 5,000 *
Michael T. Kovalchik III, M.D................................................. 7,675(6) *
Richard H. Sherman, M.D....................................................... 61,534 *
Robert S. Swinney, M.D........................................................ 5,000(7) *
All officers and directors as a group (9 persons)............................. 2,700,881(8) 26.5%
- ------------------
* Less than one percent
(1) Based on total shares of Common Stock outstanding plus outstanding options
to acquire Common Stock currently exercisable or exercisable within 60 days
held by the beneficial owner whose percent of outstanding stock is
calculated.
(2) George A. Lopez, M.D. and Diana K. Lopez, M.D., his wife, are the general
partners of the George A. Lopez, M.D. Second Family Limited Partnership
(the "Partnership") and hold a one-percent general partnership interest in
the Partnership. As general partners, they share power to vote and power to
dispose of the 791,742 shares owned by the Partnership and may be deemed to
be beneficial owners of such shares. Trusts for the benefit of the Lopez'
children, the Christopher George Lopez Children's Trust and the Nicholas
George Lopez Children's Trust, own a 99% limited partnership interest in
the Partnership. The Drs. Lopez are not trustees of and have no interest in
their children's Trusts. Except to the extent of their undivided one
percent general partnership interest in the assets of the Partnership, the
Drs. Lopez disclaim any beneficial ownership of the shares owned by the
Partnership.
(3) Includes options to acquire 1,608,000 shares. Also includes the 791,742
shares owned by the Partnership, as to which shares Dr. Lopez disclaims any
beneficial ownership except to the extent described in Note (2). Does not
include 15,306 shares owned by his wife, as to which Dr. Lopez disclaims
beneficial ownership, and as to which he has no voting and investment
power. Also does not include 250,000 held by Dr. Lopez' wife as Trustee of
the Lopez CRT #1 for the benefit of Dr. Lopez and his wife, as to which
shares Dr. Lopez has no voting or investment power.
2
(4) Includes 15,306 shares owned by Diana K. Lopez, M.D. and 250,000 shares
held by her as trustee of the Lopez CRT #1 for the benefit of Diana K.
Lopez, M.D. and George A. Lopez, M.D. Also includes 791,742 shares owned by
the Partnership as to which Dr. Lopez disclaims any beneficial ownership
except to the extent described in Note (2).
(5) Includes options to acquire 7,500 shares.
(6) Includes options to acquire 3,500 shares.
(7) Does not include 500 shares owned by his wife as to which Dr. Swinney
disclaims ownership.
(8) Includes options to acquire 1,772,530 shares.
(9) Information included solely in reliance information included in a Statement
on Schedule 13D on Form 13G filed with the Securities and Exchange
Commission by the indicated holder.
SHARES OF COMMON STOCK OF SETFINDER, INC., A WHOLLY OWNED SUBSIDIARY OF THE COMPANY
SHARES PERCENT
OWNED OF
BENEFICIALLY(1) CLASS(2)
--------------- --------
George A. Lopez, M.D.......................................................... 366,666 4.4%
Evelyn L. Foss ............................................................... 13,333 *
Jack W. Brown................................................................. 7,500 *
John J. Connors............................................................... 7,500 *
Michael T. Kovalchik III, M.D................................................. 7,500 *
Richard H. Sherman, M.D....................................................... 7,500 *
Robert S. Swinney, M.D........................................................ 7,500 *
All officers and directors as a group (9 persons)............................. 417,499 5.0%
- ---------------------------
* Less than one percent
(1) All shares owned beneficially consist of options to acquire common stock of
SetFinder, Inc.
(2) Based on total shares of Common Stock outstanding plus outstanding options
to acquire Common Stock currently exercisable or exercisable within 60 days
held by the beneficial owner whose percent of outstanding stock is
calculated.
SHARES OF COMMON STOCK OF BUDGET MEDICAL PRODUCTS, INC., A WHOLLY OWNED SUBSIDIARY OF THE COMPANY
SHARES PERCENT
OWNED OF
BENEFICIALLY(1) CLASS(2)
--------------- --------
George A. Lopez, M.D.......................................................... 366,666 4.4%
Jack W. Brown................................................................. 7,500 *
John J. Connors............................................................... 7,500 *
Michael T. Kovalchik III, M.D................................................. 7,500 *
Richard H. Sherman, M.D....................................................... 7,500 *
Robert S. Swinney, M.D........................................................ 7,500 *
All officers and directors as a group (9 persons)............................. 404,166 4.8%
- ----------------------------
* Less than one percent
(1) All shares owned beneficially consist of options to acquire common stock of
Budget Medical Products, Inc.
(2) Based on total shares of Common Stock outstanding plus outstanding options
to acquire Common Stock currently exercisable or exercisable within 60 days
held by the beneficial owner whose percent of outstanding stock is
calculated.
3
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
Two directors, of the six directors currently constituting the Board of
Directors, are to be elected at the Annual Meeting and to hold office until the
year 2004 Annual Meeting and until their successors are elected and qualified.
The Company's Board of Directors is divided into three classes. Each year a
different class of directors is elected at the Annual Meeting to a three-year
term.
In the election of directors, the proxy holders intend to vote for the
election of George A. Lopez, M.D. and Robert S. Swinney, M.D., who are now
members of the Board and whose current terms of office are expiring. It is not
anticipated that the nominees will decline or be unable to serve as directors.
If, however, that should occur, the proxy holders will vote the proxies in their
discretion for any nominee designated to fill the vacancy by the present Board
of Directors.
CURRENT
DIRECTOR TERM
NAME AGE SINCE EXPIRES PRINCIPAL OCCUPATION
- ------------------------------------ --- ----- ------- -------------------------------------------
George A. Lopez, M.D................ 53 1984 2001 Chairman of the Board, President and Chief
Executive Officer of the Company
Jack W. Brown....................... 61 1992 2003 Former Chairman of the Board and President of
Gish Biomedical, Inc., disposable medical
devices
John J. Connors..................... 61 1992 2002 Patent Attorney
Michael T. Kovalchik III, M.D....... 55 1989 2002 Physician and Director of the Dialysis Unit,
Charlotte Hungerford Hospital, Torrington,
Connecticut
Richard H. Sherman, M.D............. 54 1990 2003 Physician and Chief of Medicine, Bay Health,
Milford, Delaware
Robert S. Swinney, M.D.............. 55 1998 2001 Physician and member of the faculty of the Los
Angeles County-University of Southern
California Medical Center
Dr. Lopez is the founder of the Company and has served as Chairman of
the Board, President and Chief Executive Officer for more than five years. Dr.
Lopez has held various offices and served as a director of the Company since its
founding in 1984 with some interruptions in service.
Messrs. Brown and Connors and Drs. Kovalchik, Sherman and Swinney have
been engaged in their current occupations for more than five years. Mr. Connors
served as Secretary, Treasurer and Chief Financial Officer of the Company from
April 30, 1996 until November 1, 1996 on an interim basis during a search for a
candidate to fill those positions permanently. Mr. Connors previously served as
a director from December 1988 to July 1989. Dr. Swinney previously served as a
director from 1989 to October 1995.
SPECIAL COMMITTEES AND ATTENDANCE AT MEETINGS
The Board of Directors has an Audit Committee, which consists of
Messrs. Brown and Connors and Dr. Swinney. As more fully described in the Audit
Committee Charter, the Audit Committee selects independent public accountants,
reviews reports from the Company's independent public accountants and reviews
with them the scope and results of the audit engagement. The Audit Committee met
six times in 2000.
4
The Board of Directors has a Compensation Committee of the Board,
consisting of Messrs. Brown and Connors, Drs. Kovalchik, Sherman and Swinney.
The Compensation Committee, as more fully described in the Compensation
Committee Report, approves salary practices for executive personnel, establishes
the compensation of executive officers and authorizes the grant of stock
options. The Compensation Committee met eight times in 2000.
During 2000, the Board met 13 times. Each director attended more than
75% of the total of all meetings of the Board and any committees on which he
serves.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
During 2000, the Compensation Committee (the "Committee") consisted of
six directors who are not employees or former employees of, or consultants to,
the Company. The Committee approves salary practices for executive personnel,
reviews the performance of the Company and the executive officers, sets
performance objectives, establishes the compensation of executive officers,
including the Chief Executive Officer, and authorizes the grant of options under
the 1993 Stock Incentive Plan.
The Company's policy in compensating executive officers is to establish
methods and levels of compensation that will provide strong incentives to
promote the profitability and growth of the Company and reward superior
performance and that are sufficiently competitive to attract, retain and
motivate highly competent management personnel. Compensation of executive
officers includes base salary, performance-based incentive bonuses and
stock-based programs.
The Committee has adopted an executive compensation policy which
provides a base salary and, if certain performance objectives are met, incentive
bonuses and stock options which are awarded and paid semi-annually. The
Committee considers total compensation paid to executive officers holding
comparable positions in comparable companies and for 2000 set base salaries of
the Company's executive officers at or above the middle of the range of
comparable compensation. In addition to the base salary, upon achievement of
performance objectives established by the Committee, officers could receive
bonuses in amounts ranging from 22% to 55% of their base salaries. The policy
through 1998 also provided for award of stock options ranging in value from 25%
to 75% of base salary, based on an option valuation model, which were awarded as
described below. If performance objectives are achieved and officers receive the
entire amount of incentive compensation available to them, their compensation
could be at the highest percentiles of compensation for comparable positions.
The Committee believes that performance-based and stock-based compensation serve
to align the interests of the executive officers with the interests of the
Company's stockholders.
Stock options to be received by officers pursuant to the executive
compensation policy described above are awarded under the 1993 Plan. Options
granted under the 1993 Plan through 1999 become exercisable on the achievement
of performance objectives established by the Committee or 10 years from the date
of grant. The 1993 Plan and the performance objectives are designed so that the
options will motivate the officers toward and reward them for achievement of the
performance objectives.
In November 1997, the Committee accelerated option grants to officers
of the Company, other than Dr. Lopez, by a one-time grant of options covering
the estimated number of shares which otherwise would be covered by options that
the Company would expect to award over a five year period under the executive
compensation policy described above. The options were granted with the
understanding that no additional options would be granted to the recipients
under the executive compensation policy for five years. At the time that the
options were granted, the Committee established a series of performance
objectives, which, if met, would cause the options to become exercisable earlier
than 10 years from the date of grant. It is expected that the performance
objectives will not be met until at least several years after the expected
awards normally would have been made. The Committee further provided that
options could not be exercised as to more than 20% cumulatively of the covered
shares each year from 1998 through 2002. A similar award was made to Dr. Lopez
in January 1998, but related only to options that might have been awarded in
1998.
Bonuses were paid to officers who were deemed to have met the
performance objectives for the first and second halves of 2000. No options were
granted to officers, other than Dr. Lopez, as a result of achievement of the
performance objectives for 2000 because of the grants awarded in November 1997
as described above. In January 1999, additional options were granted to Mr.
Costello coincident with a salary adjustment.
5
The base salary paid to Dr. Lopez in 2000 was set by the Committee in
accordance with the Company's executive compensation policy at near the middle
of the range of total compensation paid to Chief Executive Officers of companies
that the Committee deemed to be comparable to the Company. Under the executive
compensation policy, Dr. Lopez received incentive bonuses of 55% of his base
salary. In 1999, the policy as it applies to Dr. Lopez was amended to dispense
with large stock option grants that had been made at two to three year
intervals, and which were not covered by the semi-annual award policy described
above, and to also dispense with the semi-annual award policy, and to grant him
more options during each year than was provided for under the executive
compensation policy as in effect until that time. Accordingly, in 2000, Dr.
Lopez was granted options to purchase 200,000 shares of common stock in
September 2000 and an additional 50,000 options to purchase shares in December
2000. In the future, grants of 50,000 shares are provided for each quarter. In
2000, Dr. Lopez was granted options to purchase 1,100,000 shares of Budget
Medical Products, Inc. and 1,100,000 shares of SetFinder, Inc., both wholly
owned subsidiaries of the Company. These options are outside the policy
concerning options to purchase the Company's common stock, and are in
recognition of Dr. Lopez's substantial efforts and contribution in the
establishment of those subsidiaries. The executive compensation policy sets the
incentive bonuses and the value of stock options to be awarded to Dr. Lopez at a
higher percentage of his base salary than that awarded to other officers. The
Committee believes that in view of the Chief Executive Officer's overall
responsibility for the success of the Company, it is appropriate that a larger
portion of his compensation be contingent on performance.
March 9, 2001
COMPENSATION COMMITTEE
Michael T. Kovalchik III, M.D., Chair
Jack W. Brown
John J. Connors
Richard H. Sherman, M.D.
Robert S. Swinney, M.D.
6
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows the compensation earned for the past three
years by each of the Company's executive officers whose 2000 compensation
exceeded $100,000 (the "named executive officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
-------------------- COMPENSATION
SECURITIES UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY ($) BONUS(1) OPTIONS(#) COMPENSATION ($)
---- ---------- -------- ----------------------- ----------------
George A. Lopez......................... 2000 $325,000 $179,780 250,000 (2) $36,303 (5)
Chairman of the Board, 1,100,000 (3) 33,654 (5)
President and Chief Executive Officer 1,100,000 (4)
1999 225,000 123,750 100,000 (2)
1998 166,000 124,500 750,000 (2)
Francis J. O'Brien...................... 2000 200,000 51,030 685 (2)
Secretary, Treasurer and 1999 200,000 47,500 2,000 (2)
Chief Financial Officer 1998 150,000 65,000 2,000 (2)
Richard A. Costello (4)................. 2000 165,000 56,030 685 (2)
Vice President of Sales 1999 150,000 72,750 37,000 (2)
1998 100,000 115,870 2,000 (2)
Evelyn L. Foss.......................... 2000 110,000 33,000 685 (2)
Vice President of Marketing 40,000 (4)
1999 110,000 41,250 2,000 (2)
1998 95,000 47,500 2,000 (2)
(1) Bonus amounts are included in the year earned rather than the year actually
paid; a portion is paid in the following year.
(2) Options to acquire shares of the Company.
(3) Options to acquire shares of Budget Medical Products, Inc. a wholly owned
subsidiary of the Company.
(4) Options to acquire shares of SetFinder, Inc., a wholly owned subsidiary of
the Company.
(5) Dollar value of life insurance premiums paid by the Company, based on the
cost of term life insurance, plus the dollar value, on an actuarial basis,
of the net cash surrender value accruing to the Diana Lopez Insurance Trust
as owner of the life insurance policy on Dr. Lopez.
STOCK OPTION GRANTS
Options to purchase Common Stock of the Company were granted in 2000 to
employees under the 1993 Plan, which provides for the grant of options to
purchase up to 4,775,000 shares. The exercise price of options granted under the
1993 Plan is the fair market value of the Common Stock on the date of grant. All
options granted under the 1993 Plan through April 2000 expire eleven years from
issuance and are time-accelerated options which vest upon the earlier of the
Company achieving specific operating performance levels or ten years from the
date of grant. Options granted since April 2000 expire eleven years from
issuance and vest in equal annual amounts on the first, second and third
anniversary of issuance. The Company may issue time-accelerated options in the
future.
7
In 2000, two of the Company's wholly owned subsidiaries, Budget Medical
Products, Inc. and SetFinder, Inc. adopted stock option plans. Options expire
ten years from issuance, except Incentive Stock Options which expire five years
from issuance. Options vest in equal annual amounts on the first, second and
third anniversary of issuance. The subsidiary companies have certain rights to
repurchase shares issued under options for as long as the subsidiary is not
subject to the reporting requirements of the Securities Exchange Act of 1934.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
------------------------------------------------------- -----------------------------
NAME NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS OR BASE
UNDERLYING GRANTED TO PRICE
OPTIONS EMPLOYEES PER SHARE EXPIRATION
GRANTED (#) IN 2000 ($/SH) DATE 5% ($) (1) 10% ($) (1)
------------- ---------- --------- ---------- ------------ ------------
ICU Medical, Inc.
- -----------------------------------------
George A. Lopez, M.D. 200,000 46% $ 21.94 9/9/11 $ 3,166,614 $ 8,130,550
50,000 11% 27.94 12/9/11 992,255 2,588,572
Francis J. O'Brien 685 * $ 14.38 1/4/11 $ 6,995 $ 18,247
Richard A. Costello 685 * $ 14.38 1/4/11 $ 6,995 $ 18,247
Evelyn L. Foss 685 * $ 14.38 1/4/11 $ 6,995 $ 18,247
Budget Medical Products, Inc. ("BMP")
- -----------------------------------------
George A. Lopez, M.D. 1,100,000 79% $ 2.51(2) 2/9/10 $ 1,737,243 $ 4,402,514
SetFinder, Inc. ("SetFinder")
- -----------------------------------------
George A. Lopez, M.D. 1,100,000 91% $ 0.11(2) 2/9/10 $ 73,070 $ 185,173
Evelyn L. Foss 40,000 3% $ 0.11(2) 2/9/10 $ 2,657 $ 6,734
- ----------------
* Less than 1%
(1) The rates of stock appreciation reflected in the table are assumed solely
for the purpose of compliance with the rules of the Securities and Exchange
Commission relating to the disclosure of executive compensation. The
Company's Common Stock has at times appreciated at rates substantially
different than the assumed rates and at other times the value of the Common
Stock has declined. Neither the assumed appreciation rates nor the actual
changes in the share value of the Company's common stock since the dates of
option grants are necessarily indicative of any future value of the Common
Stock. The actual realizable value of the options may be substantially
greater or less than that reflected in the table depending on the actual
changes in the share value during the options' terms.
(2) There is no market for the common stock of BMP and SetFinder and there is
no assurance that any trading market will develop in the future. The
exercise price for the BMP and SetFinder options were based upon
determinations of the fair market value of the common stock of those
companies by their respective boards of directors.
8
STOCK OPTION EXERCISES AND HOLDINGS
AGGREGATED OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUES
The following table contains information about stock options exercised
during 2000, and stock options held at December 31, 2000, by the named executive
officers of the Company.
SHARES VALUE OF UNEXERCISED
ACQUIRED NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
ON VALUE OPTIONS AT YEAR-END(#)(1) YEAR-END($)
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------- -------- ------------------------- -------------------------
ICU Medical, Inc.
- --------------------------------
George A. Lopez, M.D.......... 200,000 $1,379,406 1,608,000 / 350,000 $ 29,156,125 / $ 8,988,246
Francis J. O'Brien............ 10,000 158,125 63,139 / 101,205 1,324,509 / 1,922,579
Richard A. Costello........... 8,541 87,647 12,314 / 86,941 236,275 / 1,459,668
Evelyn L. Foss................ --- --- 70,077 / 77,557 1,616,729 / 1,468,833
Budget Medical Products, Inc.
- --------------------------------
George A. Lopez, M.D.......... --- --- --- / 1,100,000 $ --- / $ ---
SetFinder, Inc.
- --------------------------------
George A. Lopez, M.D.......... --- --- --- / 1,100,000 $ --- / $ ---
Evelyn L Foss................. --- --- --- / 40,000 $ --- / $ ---
PERFORMANCE GRAPH
The following graph shows the total stockholder return on the Company's
Common Stock based on the market price of the Common Stock from January 1, 1996
to December 31, 2000 and the total returns of the Nasdaq Stock Market National
Market Tier Index and Common Stocks of a peer group selected by the Company for
the same period.
COMPARISON OF TOTAL RETURN FROM JANUARY 1, 1996 TO DECEMBER 31, 2000
AMONG ICU MEDICAL, INC., THE NASDAQ STOCK MARKET INDEX AND PEER GROUP
[Performance Graph here]
1/1/96 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
ICU Medical, Inc. 100.0 46.3 72.8 129.4 89.7 177.2
Nasdaq 100.0 123.0 150.7 212.5 394.9 237.6
Peer Group 100.0 72.5 41.5 34.2 48.6 49.8
9
Assumes $100 invested on January 1, 1996 in the Company's Common Stock,
the Nasdaq Stock Market National Market Tier Index and the Peer Group.
The companies in the peer group selected by the Company are Gish
Biomedical, Inc., Isolyser Company, Inc., Merit Medical Systems, Inc., Utah
Medical Products, Inc. and Vital Signs, Inc. The basis for the selection of the
companies in the peer group is that, like the Company, they are all small to
mid-size producers of medical products.
DIRECTORS' COMPENSATION
During 2000, the Company paid directors who were not employees of the
Company an annual retainer of $10,000 plus $1,000 per day for attendance at
meetings of the Board and $500 if the meeting is conducted telephonically. Pay
for attendance at meetings of Committees of the Board is $750 per day, and $375
if the meeting is conducted telephonically. In addition, under the Directors'
Stock Award Plan, the Company automatically awards 1,000 shares of Common Stock
to each non-employee director on the date of each Annual Meeting.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with each named executive
officer, which provides for an annual base salary and a bonus payable in cash
and options to acquire the Company's Common Stock under the 1993 Plan based on
achievement of specified performance goals. Unless earlier terminated, the
employment agreements expire on June 30, 2001, at which time they may be renewed
for successive six-month periods. The provisions for bonuses payable in options
to acquire the Company's Common Stock for all except Dr. Lopez were, in effect,
superceded by an award of stock options in November 1997 in place of options
that might have been awarded over the succeeding five years. Options granted
through April 2000 vest only upon the earliest of the Company achieving specific
operating performance levels or ten years from the date of grant. Options
granted after April 2000 vest in equal annual amounts on the first , second and
third anniversary of issuance.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Company has a $200,000 loan outstanding to Richard A. Costello, made
in April, 1999 to assist him in acquiring a home. It is secured by a second
mortgage which bears interest at 6% payable semi-annually and the loan is due
April 28, 2004.
SELECTION OF AUDITORS
The Audit Committee of the Board of Directors of the Company has
selected Arthur Andersen LLP, independent certified public accountants, as
independent auditors of the Company for the year ending December 31, 2001, and
has further directed that management submit the selection of independent
auditors for ratification by the stockholders at the Annual Meeting. Arthur
Andersen LLP has audited the Company's financial statements for the last ten
years. Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting and will have an opportunity to make a statement if they so
desire and respond to appropriate questions.
AUDIT FEES
The aggregate fees billed by Arthur Andersen LLP for the audit of the
Company's consolidated financial statements for the year ended December 31, 2000
and the reviews of the quarterly consolidated financial statements included in
the Company's Forms 10-Q for that year were $90,000.
10
ALL OTHER FEES
During the year 2000, aggregate fees billed by Arthur Andersen LLP,
other than audit fees, were approximately $121,600 for preparation of tax
returns and consulting on tax matters.
The Audit Committee has considered whether the provision of the tax
related services is compatible with maintaining Arthur Andersen LLP's
independence and concluded that there was no incompatibility.
AUDIT COMMITTEE REPORT
During 2000, the Audit Committee ("the Committee") consisted of three
directors who are independent directors as defined by Nasdaq regulations. The
Company's Board of Directors on May 5, 2000 adopted a written Charter for the
Audit Committee, which is attached as Appendix A to this proxy statement.
The Company's audited consolidated financial statements are included in
the Company's Annual Report to Shareholders and Form 10-K. The Audit Committee
has reviewed and discussed those financial statements with management of the
Company, and has discussed with the independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, "Communication with
Audit Committees," as amended. Further, the Committee has received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standards No. 1, "Independence Discussions with
Audit Committees", as amended], and has discussed the independent auditor's
independence with them. Based on these reviews and discussions, the Audit
Committee has recommended to the Board of Directors that the audited
consolidated financial statements be included in the Company's Annual Report to
Shareholders and Form 10-K.
March 9, 2001
AUDIT COMMITTEE
John J. Connors., Chair
Jack W. Brown
Robert S. Swinney, M.D.
OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other matters are properly presented for action, the persons
named in the accompanying proxy intend to vote on such matters in their
discretion.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 2000, is
being mailed to all stockholders together with this Proxy Statement.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND RELATED SCHEDULES, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION UPON REQUEST IN WRITING FROM ANY PERSON WHO
WAS A HOLDER OF RECORD, OR WHO REPRESENTS IN GOOD FAITH THAT HE OR SHE WAS A
BENEFICIAL OWNER, OF COMMON STOCK OF THE COMPANY ON MARCH 4, 2001. ANY SUCH
REQUEST SHALL BE ADDRESSED TO THE SECRETARY OF THE COMPANY AT 951 CALLE
AMANECER, SAN CLEMENTE, CA 92673.
11
NOMINATION OF DIRECTORS AND
SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder who intends to nominate persons for election as
directors at an annual meeting shall give timely written notice to the Secretary
of the Company setting forth (a) as to each nominee whom the stockholder
proposes to nominate for election or reelection as a director, (i) the name,
age, business address and residence address of the nominee, (ii) the principal
occupation or employment of the nominee, (iii) the class and number of shares of
capital stock of the corporation which are beneficially owned by the nominee and
(iv) any other information concerning the nominee that would be required under
the rules of the Securities and Exchange Commission in a proxy statement
soliciting proxies for the election of such nominee; and (b) as to the
stockholder giving the notice, (i) the name and record address of the
stockholder and (ii) the class and number of shares of capital stock of the
Company which are beneficially owned by the stockholder. Such notice shall
include a signed consent of each such nominee to serve as director of the
Company, if elected. The Company may require any proposed nominee to furnish
such other information as may reasonably be required by the Company to determine
the eligibility for such proposed nominee to serve as a director of the Company.
Any stockholder who intends to propose any business at a meeting shall give
timely written notice to the Secretary of the Company setting forth as to each
matter the stockholder proposes to bring before the meeting (i) a brief
description of the business to be brought before the meeting and the reasons for
conducting the business at the meeting, (ii) the name and record address of the
stock holder giving the notice, (iii) the class and number of shares of capital
stock of the Company that are beneficially owned by the stockholder, and by any
other stockholders known by the stockholder giving the notice to be supporting
the proposal and (iv) any material or financial interest of the stockholder in
such business. Either of the notices described above will be timely if it is
delivered to or mailed and received at the Company's executive offices not less
than 50 days nor more than 75 days prior to the date of the annual meeting,
unless the Company has given less than 60 days notice or prior public disclosure
of the date of the meeting, in which case the notice must be received by the
Company not less than 10 days after notice of the meeting was mailed or public
disclosure of the date of the meeting was made. A proposal that a stockholder
wants the Company to include in the Proxy Statement for the 2002 Annual Meeting
must be received by the Company at its principal executive offices by November
16, 2001, to be included in the Proxy Statement for that meeting, and all other
conditions for such inclusion must be satisfied.
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 10% of the
Company's Common Stock to file reports on prescribed forms regarding ownership
of and transactions in the Common Stock with the Securities and Exchange
Commission and to furnish copies of such forms to the Company. Based solely on a
review of the forms received by it, the Company believes that with respect to
2000 the following Section 16(a) filings were not filed on a timely basis: one
filing each on Form 4 for Michael T. Kovalchik, III, M.D. and Robert S. Swinney,
M.D.
SOLICITATION OF PROXIES
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made by mail, telephone or telegram and personally by
directors, officers and other employees of the Company, but such persons will
not receive compensation for such services over and above their regular
salaries. The Company will reimburse brokers, banks, custodians, nominees and
fiduciaries holding stock in their names or in the names of their nominees for
their reasonable charges and expenses in forwarding proxies and proxy material
to the beneficial owners of such stock.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Francis J. O'Brien
Francis J. O'Brien, SECRETARY
12
APPENDIX A
ICU Medical, Inc.
Audit Committee of the Board of Directors
Charter
Audit Committee
There shall be a committee of the Board of Directors to be known as the Audit
Committee. The Audit Committee shall be composed of at least three directors
designated by the Board of Directors.
Each member of the Audit Committee shall be independent of the management of the
corporation and free of any relationship that, in the opinion of the Board of
Directors, would interfere with their exercise of independent judgment as a
committee member. In addition, each member of the Audit Committee shall be an
"independent director" as defined in Rule 4200 of the Nasdaq Stock Market, Inc.
("Nasdaq.")
Each Audit Committee member shall be able to read and understand fundamental
financial statements.
Additionally, at least one member of the Audit Committee shall be financially
sophisticated, that is, has past employment experience in finance or accounting,
requisite professional certification in accounting, or any other comparable
experience or background which results in the members financial sophistication,
including being or have been a Chief Executive Officer, Chief Financial Officer
or other senior officer with financial oversight responsibilities. (The
provisions of this paragraph shall be effective no later than the 2001 annual
meeting of stockholders.)
Unless a Chairperson is designated by the Board of Directors, the Audit
Committee shall appoint a member as Chairperson.
Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling its responsibility to shareholders, potential shareholders and the
investment community relating to corporate accounting, reporting practices of
the corporation and the quality and integrity of the financial reports of the
corporation. In doing so, it is the responsibility of the Audit Committee to
maintain free and open means of communication between the Board of Directors,
the independent auditors and the financial management of the corporation.
Responsibilities
In carrying out its responsibilities, the policies and procedures of the Audit
Committee should be flexible, in order for it to react to changing conditions
and to ensure to the Board of Directors and shareholders that the accounting and
reporting practices of the corporation are in accordance with all requirements.
In carrying out these responsibilities, the Audit Committee:
|X| has the authority and responsibility to select, evaluate and replace
independent auditors. The independent auditors are ultimately accountable
to the Board of Directors and Audit Committee.
1
|X| discusses with the independent auditors any relationship or services that
might affect their objectivity or independence as to the corporation, and
take other appropriate action to oversee the independence of the outside
auditor. In fulfilling this responsibility, the Audit Committee shall
obtain annually from the independent auditors a written statement
delineating all relationships with the corporation, consistent with the
standards of the Independence Standards Board.
|X| meets with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the current year
and the audit procedures to be utilized, and at the conclusion thereof
reviews such audit, including any comments or recommendations of the
independent auditors.
|X| reviews with the independent auditors and financial and accounting
personnel the adequacy and effectiveness of the accounting and financial
controls of the corporation, and elicit any recommendations for the
improvement of such internal control procedures or particular areas where
new or more detailed controls or procedures are desirable.
|X| reviews the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders.
|X| discusses with the independent auditors any matters required to be
discussed by Statement on Auditing Standards No. 61 "Communication with
Audit Committees," as it may be amended, of the American Institute of
Certified Public Accountants, not specifically required elsewhere herein.
In conducting such discussion, the Audit Committee:
- Reviews with the independent auditors and financial management, among
other things, sensitive accounting estimates by management that have a
material effect on the financial statements and the basis for the
independent auditor's conclusions regarding the reasonableness of those
estimates, significant audit adjustments, the independent auditor's
responsibility for information other than the financial statements that
is contained in the annual report including any procedures they
performed and the results of those procedures, and any serious
difficulties encountered in the course of the audit.
- reviews and approves, after discussion with management and the
independent auditors, the initial selection of and any changes in
accounting principles or policies that effect the corporation's
external financial statements, and the accounting for and disclosure of
any significant unusual transaction.
- discusses with the independent auditors any disagreements with
management concerning matters such as application of accounting
policies, management's judgments about accounting estimates,
disclosures in the financial statements, audit scope or the wording of
the audit report.
- discusses with management and the independent auditors the independent
auditor's judgments about the quality of the company's accounting
principles as applied in its financial reporting.
- discusses with management and the independent auditors any consultation
by management with other accountants about significant accounting and
auditing matters, including the independent auditor's views about such
matters.
Such discussions shall take place at least annually, and more often if requested
by the independent auditor.
2
|X| provides opportunity for the independent auditors to meet with members of
the Audit Committee without members of management present.
|X| reviews and approves the Audit Committee Report for inclusion in the annual
report pursuant to the rules of the Securities and Exchange Commission.
(The provisions of this paragraph shall be effective no later than December
15, 2000.)
|X| meets with the independent auditors and financial management prior to
filing the quarterly financial statements with the Securities and Exchange
Commission if the independent auditors request such a meeting to
communicate matters identified in their review of such financial
statements. This responsibility may delegated to the Chairman of the Audit
Committee.
|X| reviews and approves certifications concerning the Audit Committee that are
required by NASDAQ.
|X| reviews accounting and finance personnel resources and succession planning.
|X| keeps the Board of Directors informed as to activities of the Audit
Committee
|X| investigates any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
--------------
The Audit Committee will review and reassess the adequacy of this Charter
annually.
May 5, 2000
3
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The shares represented by this Proxy will be voted as directed herein, but if no Please mark
directions are indicated, will be voted FOR the election of all nominees of the your votes as X
Board of Directors and FOR Proposal 2. indicated in
this example
FOR WITHHELD FOR AGAINST ABSTAIN
FOR ALL
1. Election of Directors +--+ +--+ Item 2 - The proposal to ratify the selection +--+ +--+ +--+
Nominees: | | | | of Arthur Andersen LLP as auditors | | | | | |
01 George A. Lopez, M.D. +--+ +--+ for the Company +--+ +--+ +--+
02 Robert S. Swinney, M.D.
WILL ATTEND
If you plan to attend the Annual Meeting, +--+
please mark the WILL ATTEND box | |
+--+
Withheld for the nominees you list below: (Write that PLEASE COMPLETE, DATE, SIGN AND MAIL THIS
nominee's name in the space provided below.) PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
____________________________________________
Please disregard if you have previously provided your consent
decision. +--+
| |
+--+
By checking the box to the right, I consent to future delivery of
annual reports, proxy statements, prospectuses and other
materials and shareholder communications electronically via
the Internet at a webpage which will be disclosed to me. I
understand that the Company may no longer distribute printed
materials to me from any future shareholder meeting until such
consent is revoked. I understand that I may revoke my consent
at any time by contacting the Company's transfer agent,
Mellon Investor Services LLC, Ridgefield Park, NJ and that
costs normally associated with electronic delivery, such as
usage and telephone charges as well as any costs I may incur
in printing documents, will be my responsibility.
Signature ________________________________________ Signature ______________________________________ Date _______, 2001
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
- --------------------------------------------------------------------------------
* Detach here from proxy voting card. *
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet Telephone Mail
http://www.proxyvoting.com/icui 1-800-840-1208
Use the Internet to vote your Use any touch-tone telephone to Mark, sign and date
proxy. Have your proxy card in vote your proxy. Have your proxy your proxy card
hand when you access the web OR card in hand when you call. You will OR and
site. You will be prompted to enter be prompted to enter your control return it in the
your control number, located in number, located in the box below, enclosed postage-paid
the box below, to create and and then follow the directions given. envelope.
submit an electronic ballot.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
- --------------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ICU MEDICAL, INC.
The undersigned hereby appoints George A. Lopez, M.D. and Francis J. O'Brien,
and each of them, with power to act without the other and with power of
substitution, as proxies and attorneys-in-fact and hereby authorizes them to
represent and vote, as provided on the other side, all the shares of ICU
Medical, Inc. Common Stock which the undersigned is entitled to vote, and, in
their discretion, to vote upon such other business as may properly come before
the Annual Meeting of Stockholders of the Company to be held April 27, 2001 or
any adjournment thereof, with all powers which the undersigned would possess if
present at the Meeting.
(Continued, and to be marked, dated and signed, on the other side)
- --------------------------------------------------------------------------------
* Detach here from proxy voting card. *
YOU CAN NOW ACCESS YOUR ICU MEDICAL, INC. ACCOUNT ONLINE
Access your ICU Medical, Inc. stockholder account online via Investor
ServiceDirect (SM) (ISD).
Mellon Investor Services LLC agent for ICU Medical, Inc. now makes it easy and
convenient to get current information on your stockholder account. After a
simple, and secure process of establishing a Personal Identification Number
(PIN), you are ready to log in and access your account to:
o View account status o View payment history for dividends
o View certificate history o Make address changes
o View book-entry information o Obtain a duplicate 1099 tax form
o Establish/change your PIN
VISIT US ON THE WEB AT HTTP://WWW.MELLON-INVESTOR.COM
AND FOLLOW THE INSTRUCTIONS SHOWN ON THIS PAGE.
STEP 1: FIRST TIME USERS - Establish a PIN
You must first establish a Personal Identification Number (PIN) online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN) available to
establish a PIN.
INVESTOR SERVICEDIRECT(SM) IS CURRENTLY ONLY AVAILABLE FOR DOMESTIC INDIVIDUAL
AND JOINT ACCOUNTS.
o SSN
o PIN
o Then click on the [ESTABLISH PIN] button
Please be sure to remember your PIN, or maintain it in a secure place for future
reference.
STEP 2: LOG IN FOR ACCOUNT ACCESS
You are now ready to log in. To access your account please enter your:
o SSN
o PIN
o Then click on the [SUBMIT] button
If you have more than one account, you will now be asked to select the
appropriate account.
STEP 3: ACCOUNT STATUS SCREEN
You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.
o Certificate History
o Book-Entry Information
o Issue Certificate
o Payment History
o Address Change
o Duplicate 1099
FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN
9am-7pm MONDAY-FRIDAY EASTERN TIME
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