-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PCEmKlYtfXqrUxBBVawkKXokwfLvHH6R8wzFOl7XnTPaiVFaBQhCQTXpX8Lk0D9e Ampw5bv6s71nzf+eztNKnw== 0000950124-96-001757.txt : 19960426 0000950124-96-001757.hdr.sgml : 19960426 ACCESSION NUMBER: 0000950124-96-001757 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960522 FILED AS OF DATE: 19960425 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES MEDICAL INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000793613 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 431229854 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-15098 FILM NUMBER: 96550471 BUSINESS ADDRESS: STREET 1: P.O. BOX 46903 STREET 2: 1945 CRAIG RD CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3145766100 MAIL ADDRESS: STREET 1: 1945 CRAIG ROAD CITY: ST. LOUIS STATE: MO ZIP: 63146 DEF 14A 1 NOTICE & PROXY STATEMENT 1 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 (AMENDMENT NO. ) Filed by the registrant [X] Filed by a party other than the registrant [ ] Check the appropriate box: [ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive proxy statement [ ] Definitive additional materials [ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 JONES MEDICAL INDUSTRIES, INC. - ------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) [COMPANY NAME] - ------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) 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(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $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 (Set forth the amount on which the filing fee is calculated and state how it was determined): - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials. - -------------------------------------------------------------------------------- [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: - -------------------------------------------------------------------------------- (2) Form, schedule or registration statement no.: - -------------------------------------------------------------------------------- (3) Filing party: - -------------------------------------------------------------------------------- (4) Date filed: - -------------------------------------------------------------------------------- 2 JONES MEDICAL INDUSTRIES, INC. 1945 CRAIG ROAD P. O. BOX 46903 ST. LOUIS, MISSOURI 63146 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 22, 1996 NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Jones Medical Industries, Inc. ("Company"), a Delaware corporation, will be held at the St. Louis Club, 7701 Forsyth, 16th Floor, Clayton, Missouri, on Wednesday, May 22, 1996, at 3:30 P.M., local time, and at any adjournment or postponement thereof, to consider and act upon the following matters as more fully described in the Proxy Statement: (1) The election of directors to serve for a term of one year; and (2) Such other matters as may properly come before the meeting or any adjournment or postponement thereof. Only holders of record of Common Stock, $.04 par value ("Common Stock") or Convertible Preferred Stock, Series A, $.01 par value ("Preferred Stock") at the close of business on April 15, 1996, are entitled to vote at this meeting or any adjournment or postponement thereof. The holders of Common Stock and Preferred Stock will vote together as a single class with respect to the matters specified above. The Board of Directors cordially invites you to attend this meeting. If you cannot attend in person, PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY CARD AT ONCE. IF YOU ATTEND, YOU MAY VOTE IN PERSON, EVEN THOUGH YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD. By Order of the Board of Directors of Jones Medical Industries, Inc. JUDITH A. JONES Secretary April 24, 1996 St. Louis, Missouri 3 JONES MEDICAL INDUSTRIES, INC. 1945 CRAIG ROAD P. O. BOX 46903 ST. LOUIS, MISSOURI 63146 PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 1996 PURPOSE OF THE MEETING The Board of Directors of Jones Medical Industries, Inc. ("Company"), a Delaware corporation, furnishes this Proxy Statement ("Proxy Statement") in connection with the solicitation of proxies for use at the Company's Annual Meeting of Shareholders to be held on May 22, 1996 at 3:30 P.M., local time, at the St. Louis Club, 7701 Forsyth, 16th Floor, Clayton, Missouri and at any adjournment or postponement thereof ("Annual Meeting"), for the purposes set forth in the attached Notice of Annual Meeting of Shareholders and as further described in this Proxy Statement. The Board of Directors of the Company ("Board") is soliciting proxies in the form enclosed with respect to matters to be acted upon at the Annual Meeting ("Proxy"). A shareholder of the Company may revoke a Proxy at any time before it is exercised by filing a written revocation or a duly executed Proxy bearing a later date with the Secretary of the Company, either prior to or at the Annual Meeting. If a Proxy is properly executed and returned, the shares represented by that Proxy will be voted in accordance with the instructions specified on the Proxy, or if no contrary instructions are specified, the shares will be voted in favor of the election of all of the nominees for director. This Proxy Statement and related form of Proxy are first being sent to shareholders of the Company on or about April 24, 1996. The Company anticipates that it will solicit Proxies primarily by mail, although directors, officers and employees of the Company (who will not receive any additional remuneration for such solicitation) may solicit Proxies by letter, personal interview and telephone. The Company will bear the total expense of the solicitation of Proxies and requests that brokers, nominees, fiduciaries and other custodians forward soliciting material to the beneficial owners of shares. The Company will reimburse such parties for their reasonable expenses incurred in forwarding such soliciting material. As of the date of this Proxy Statement, the Board does not know of any matters which may come before the Annual Meeting other than those which are discussed in this Proxy Statement. If any other matters properly come before the Annual Meeting, the Proxy holders will vote the shares represented by those Proxies in accordance with their best judgment on such matters. SHAREHOLDERS ENTITLED TO VOTE, RECORD DATE AND VOTE REQUIRED FOR APPROVAL The Company is authorized to issue 30,000,000 shares of common stock, $.04 par value ("Common Stock") and 1,000,000 shares of preferred stock, $.01 par value issuable in series. In accordance with the Company's Bylaws, the Board established April 15, 1996 as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting ("Record Date"). As of the Record Date, there were 16,343,276 shares of Common Stock and 115 shares of Convertible Preferred Stock, Series A ("Preferred Stock") issued and outstanding, together representing all of the shares entitled to notice of and to vote at the Annual Meeting. All of the outstanding shares of Preferred Stock constitute the remainder of a series of Preferred Stock designated and issued in connection with the Company's acquisition of GenTrac, Inc., a Wisconsin corporation ("GenTrac"). These shares will be converted into shares of Common Stock at the rate of 2.625 shares of Common Stock for each share of Preferred Stock as of April 29, 1996. 1 4 The holders of Common Stock and Preferred Stock will vote together as a single class at the Annual Meeting with respect to the election of directors. The holders of a majority of the aggregate outstanding shares of Common Stock and Preferred Stock, present either in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. Each shareholder is entitled to one vote for each share of Common Stock or Preferred Stock held by that shareholder on the Record Date. There is no cumulative voting with respect to the election of directors. Therefore, the vote of a majority of the shares of Common Stock and Preferred Stock, present at the Annual Meeting either in person or by proxy, voting together, will be required for the election of each director. BOARD OF DIRECTORS The Company's Certificate of Incorporation, as amended, provides for a Board constituted of not less than three (3) nor more than nine (9) directors. The Company's Bylaws currently fix the number of directors at nine (9). The directors elected at the Annual Meeting will serve a one-year term and until their successors have been duly elected and shall have qualified. Directors appointed by the Board to fill vacancies or newly created directorships serve for the remainder of the term of the directorship which is vacant or the newly created directorship. From time to time, the Board determines the size of the Board within the foregoing range. The Board held four (4) meetings during the fiscal year ended December 31, 1995. All of the directors attended all of the Board meetings except for Stanley L. Lopata who did not attend the May 15, 1995 meeting. Stanley L. Lopata, L. John Polite, Jr., Thomas F. Patton and Judith A. Jones were elected as members of the Company's audit committee. The audit committee acts as a liaison between the Board and the Company's independent auditors and reviews the results of the audit, the Company's internal controls, the audit procedures, and the independent auditor's recommendations to management. The audit committee met one (1) time during the fiscal year ended December 31, 1995. Stanley L. Lopata, L. John Polite, Jr. and Edward A. Chod were elected as members of the Company's compensation committee. The compensation committee administers the Company's 1994 Incentive Stock Plan and periodically advises the Company's chief executive officer with respect to executive compensation matters. The compensation committee met one (1) time during the fiscal year ended December 31, 1995. The Company has no standing nominating committee of the Board or committees performing similar functions. The following biographies and other information indicate the principal occupation or employment for the past five years, the age, and the year first elected as director with respect to each nominee to become a director. DENNIS M. JONES, 57, the founder of the Company, has been the Company's Chairman of the Board, President and Chief Executive Officer since its inception in March 1981. Mr. Jones has been involved primarily in the pharmaceutical industry since 1964 in various marketing, management and administrative positions. He was a co-founder of O'Neal, Jones and Feldman Pharmaceuticals, which was acquired by Chromalloy American Pharmaceuticals, Inc. in 1978 and subsequently acquired by Forest Laboratories, Inc., a specialty pharmaceutical company, in 1984. Mr. Jones has been a director of Mark Twain State Bank, a subsidiary of Mark Twain Bancshares, Inc., since 1988. JUDITH A. JONES, 55, joined the Company in October 1981 and has been in charge of the financial affairs and books of the Company since that time. Mrs. Jones has been a Director of the Company since December 1981, and the Secretary and Treasurer since April 1982. Mrs. Jones served as Vice President of the Company from March 1985 to February 1994 and has been Executive Vice President of the Company since February 1994. MICHAEL T. BRAMBLETT, 53, a Director of the Company since 1987, served as Vice President--Marketing of the Company from January 1991 to February 1994 and has served as Executive Vice President since February 1994. From May 1988 through December 1990, Mr. Bramblett served as Marketing Director of Carlson Marketing Group, and from June 1987 until May 1988, he served as Corporate Vice President of S&H Motivation Company. 2 5 G. ANDREW FRANZ, 43, a Director of the Company since 1994, became Senior Vice President--Operations--Pharmaceuticals for the Company in February 1994. He has served as the Vice President--Operations of JMI-Canton since the facility was acquired by JMI-Canton from Bowman Pharmaceuticals, Inc. in March 1984. Prior to March 1984, Mr. Franz held various management positions for 14 years within Bowman Pharmaceuticals, Inc., including Chief Chemist and Vice President--Operations. DAVID A. MCLAUGHLIN, 48, a Director of the Company since 1994, became Senior Vice President--Operations--Nutritionals in February 1994. He served as the Vice President--Operations of the Company's subsidiary, American Vitamin Company from May 1988 until that company's merger into JMI Phoenix in 1993. From April 1986 to May 1988, Mr. McLaughlin was the Vice President--Sales and Marketing of JMI Phoenix. Prior to that time, Mr. McLaughlin served as an independent consultant to a number of health food, chemical and pharmaceutical companies, including JMI Phoenix. From May 1978 to January 1982 he was a supervisor of packaging and processing for the Searle Consumer Products Division of G.D. Searle & Company, a chemical company. STANLEY L. LOPATA, 81, a Director since 1988, is the President of Lopata Research and Development Corp. and has served in that capacity since 1988. Prior to 1988, Mr. Lopata was the Chairman of the Board of Directors and Chief Executive Officer of Carboline Corporation, a manufacturer of specialty paint and coating products, from 1960 through 1988. Mr. Lopata has been a director of Boatmen's Trust Company, a subsidiary of Boatmen's Bancshares, Inc., since 1983. L. JOHN POLITE, JR., 74, a Director since 1989, is Chairman of Peridot (New Jersey) Chemicals, Inc., and has served in that capacity since December 1989. He was the Chairman of the Board, President and Chief Executive Officer of Essex Chemical Corporation ("Essex") from April 1978 to October 1988 when Essex merged into Dow Chemical Company, a chemical company. Mr. Polite also serves as a director of Witco Corporation, a manufacturer and marketer of a wide range of specialty chemicals, petroleum products and engineered materials. EDWARD A. CHOD, 43, has been a Director since 1991. Mr. Chod is an officer and shareholder in the law firm of Greensfelder, Hemker & Gale, P.C. which he joined in 1978 and which has served as counsel to the Company since 1982. THOMAS F. PATTON, PH.D., 47, a Director since 1995, is President of the St. Louis College of Pharmacy and has served in that capacity since June 1994. From April 1993 until January 1994 and from January 1994 until May 1994, Dr. Patton served as Executive Director of Pharmaceutical Research and Development and as Vice President of Pharmaceutical Research and Development, respectively, at Dupont-Merck Pharmaceutical Co., a pharmaceutical company. From March 1990 through March 1993, Dr. Patton served as Director and Senior Director of Pharmaceutical Research and Development at Merck and Co., Inc., a pharmaceutical company. In 1993, Dr. Patton was President of the American Association of Pharmaceutical Scientists. Dr. Patton's 20 year career also includes tenures as Professor of Pharmaceutical Chemistry and Pharmacy Practice at the University of Kansas, Associate Director Control Development at the Upjohn Co., a pharmaceutical company, and Vice President of Operations at Oread Laboratories, Inc., a pharmaceutical company. Dennis M. Jones and Judith A. Jones are husband and wife. G. Andrew Franz is the son-in-law of Dennis M. and Judith A. Jones. No employee who is a director receives a director's fee for services rendered as a director. However, each non-employee director receives reimbursement for any expenses incurred in his capacity as a director of the Company and $2,500 per meeting of the Board of Directors attended by such non-employee director, subject to a minimum (as of December 31, 1995) of $5,000 per year. In addition, non-employee directors who are members of the Company's compensation committee receive $500 per meeting of the compensation committee attended by such non-employee director. Finally, the present non-employee directors of the 3 6 Company have been granted stock options pursuant to the Company's 1994 Formula Stock Option Plan for Non-Management Directors, as set forth in the table below:
NO. OF PER SHARE INITIAL DATE OF OPTIONS EXERCISE EXERCISE EXPIRATION NAME GRANT GRANTED(1) PRICE(1) DATE DATE - --------------------------------------------- ------- ---------- --------- -------- ---------- Stanley L. Lopata............................ 6/1/94 7,500 $7.00 6/1/94 6/1/99 L. John Polite, Jr. ......................... 6/1/94 7,500 $7.00 6/1/94 6/1/99 Edward A. Chod............................... 6/1/94 7,500 $7.00 5/1/95 5/1/00 Thomas F. Patton............................. 6/1/95 7,500 $6.67 5/1/96 5/1/01
- --------- (1) Adjusted to reflect the three-for-two split effected in the form of a 50% stock dividend paid on March 1, 1996 to holders of record on February 23, 1996. ELECTION OF DIRECTORS (PROPOSAL NO. 1) Dennis M. Jones, Judith A. Jones, Michael T. Bramblett, G. Andrew Franz, David A. McLaughlin, Stanley L. Lopata, L. John Polite, Jr., Edward A. Chod and Dr. Thomas F. Patton are nominees for election to membership on the Board for one year terms. In each instance, the directors are elected to serve until their successors shall have been duly elected and shall have qualified. Unless otherwise instructed, the Proxy holders will vote for the election of the nine (9) nominees. Although the Company does not contemplate that any nominee will decline or be unable to serve as director, in either such event, the Proxies will be voted for such other person as may be designated by the Board. THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES. SELECTION OF INDEPENDENT AUDITORS The Board reappointed the accounting firm of Ernst & Young LLP ("Ernst & Young") as independent auditors for the Company for fiscal year 1996. Ernst & Young has served as the Company's independent auditors since December, 1985. Audit services performed by Ernst & Young during fiscal year 1995 consisted of the examination of annual financial statements of the Company and services related to filings with the Securities and Exchange Commission including, without limitation, the Company's Form S-3 Registration Statement filed with the Securities and Exchange Commission on February 26, 1996. A representative of Ernst & Young will be present at the Annual Meeting and will be given an opportunity to make a statement if he or she so desires and to respond to appropriate questions. 4 7 SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS COMMON STOCK The following table sets forth information regarding the record and beneficial ownership of the Common Stock of the Company on the indicated date by (i) each director or nominee for director and Named Executive (as such term is defined in "Executive Compensation -- Summary Compensation Table", below) of the Company, (ii) all directors or nominees for director and executive officers of the Company as a group, and (iii) each shareholder owning of record or beneficially five percent (5%) or more of the outstanding Common Stock:
BENEFICIAL OWNERSHIP AS OF APRIL 5, 1996 -------------------------------------------- PERCENTAGE OF SHARES NAME AND ADDRESS OF SHARES BENEFICIALLY BENEFICIALLY BENEFICIAL OWNER(1) OWNED(2) OWNED(3) --------------------------------------------------------- -------------------- Dennis M. Jones(4)(5)............... 2,781,840 17.0% Chairman of the Board of Directors and President Judith A. Jones(4)(6)............... 680,625 4.2% Executive Vice President, Secretary, Treasurer and Director Michael T. Bramblett(7)............. 162,576 1.0% Executive Vice President and Director G. Andrew Franz(8).................. 325,183 2.0% Senior Vice President--Operations-- Pharmaceuticals and Director David A. McLaughlin(9).............. 82,500 * Senior Vice President--Operations-- Nutritionals and Director Stanley Lopata(10).................. 144,000 * Director 900 South Hanley Rd. St. Louis, MO 63106 L. John Polite, Jr.(11)............. 27,000 * Director 211 Oldwoods Rd. Franklin Lakes, NJ 07417 Edward A. Chod(12).................. 18,750 * Director 10 South Broadway, Ste. 2000 St. Louis, MO 63102 Thomas F. Patton, Ph.D.(13)......... 1,500 * Director 4588 Parkview Place St. Louis, MO 63110 All Directors and Executive Officers as a Group (consisting of nine persons)..................... 4,223,974 25.7%
- --------- * Less than one percent. (1) Except as otherwise indicated, the officers and directors of the Company named in the above table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them and their respective addresses are 1945 Craig Road, St. Louis, Missouri 63146. 5 8 (2) Includes shares deemed owned as a result of options to purchase 94,500 shares which are presently or will become exercisable within 60 days of April 5, 1996. (3) The number of shares of Common Stock deemed outstanding as of April 5, 1996 includes (i) 16,336,691 shares of Common Stock outstanding, (ii) an aggregate of 737 shares of Common Stock issuable upon conversion of all of the shares of the Company's Preferred Stock, Series A outstanding at April 5, 1996 (which conversion will be effected as of April 29, 1996), and (iii) shares of Common Stock issuable pursuant to options held by the directors and executive officers that are currently exercisable or will become exercisable within 60 days of April 5, 1996 by the person or group in question. (4) Excludes 90,000 shares owned by the Company's 401(k) Plan (of which Dennis and Judith Jones are co-trustees) and with respect to which Dennis and Judith Jones disclaim beneficial ownership. (5) Only includes shares owned directly by Mr. Jones. Does not include 680,625 shares owned by his spouse, with respect to which he disclaims beneficial ownership. (6) Only includes shares owned directly by Mrs. Jones. Does not include 2,781,840 shares owned by her spouse, with respect to which she disclaims beneficial ownership. (7) Includes 83,250 shares owned directly by Mr. Bramblett, 2,400 by his IRA, 1,926 shares held by his spouse's IRA and with respect to which he disclaims beneficial ownership, and vested and unexercised options to purchase 75,000 shares of Common Stock pursuant to the Company's 1989 Incentive Stock Option Plan. (8) Includes 114,007 shares owned directly by Mr. Franz, 154,110 shares owned by his spouse and with respect to which he disclaims beneficial ownership, 34,560 shares held by his spouse as custodian for his children and with respect to which he disclaims beneficial ownership, 15,006 shares held by his spouse as trustee for his children and with respect to which he disclaims beneficial ownership and vested and unexercised options to purchase 7,500 shares of common stock pursuant to the Company's 1989 Incentive Stock Option Plan. (9) Only includes shares owned directly by Mr. McLaughlin. (10) Includes 100,500 shares owned directly by Mr. Lopata, 40,500 shares owned by Mr. Lopata through his spouse's revocable trust and with respect to which he disclaims beneficial ownership, and vested and unexercised options to purchase 3,000 shares of Common Stock pursuant to the Company's 1994 Formula Stock Option Plan for Non-Management Directors. (11) Includes 22,500 shares owned directly by Mr. Polite and vested and unexercised options to purchase 4,500 shares of Common Stock pursuant to the Company's 1994 Formula Stock Option Plan for Non-Management Directors. (12) Includes 15,750 shares owned directly by Mr. Chod and vested and unexercised options to purchase 3,000 shares of Common Stock pursuant to the Company's 1994 Formula Stock Option Plan for Non-Management Directors. (13) Includes vested and unexercised options to purchase 1,500 shares of Common Stock pursuant to the Company's 1994 Formula Stock Option Plan for Non-Management Directors. 6 9 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The table below sets forth all compensation received in each of the three fiscal years ended December 31, 1995, 1994 and 1993 for services rendered in all capacities to the Company and its subsidiaries by the Chief Executive Officer and the other four (4) highest-compensated Executive Officers of the Company during the fiscal year ended December 31, 1995 (the "Named Executives"). SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ------------ AWARDS ANNUAL COMPENSATION ------------ ---------------------------------------------- SECURITIES OTHER ANNUAL UNDERLYING ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS(#) COMPENSATION - ---------------------------- ---- -------- ------- --------------- ------------ ------------ Dennis M. Jones, 1995 $300,000 $75,000 0 0 $17,401(2) Chairman of the Board, 1994 250,000 50,000 0 0 13,971(2) Director and President and 1993 200,000 50,000 0 0 15,204(2) Chief Executive Officer Judith A. Jones, 1995 $150,000 $35,000 0 0 $ 9,719(3) Director, Executive Vice 1994 125,000 25,000 0 0 10,023(3) President, Secretary and 1993 100,000 25,000 0 0 8,920(3) Treasurer Michael T. Bramblett, 1995 $150,000 $35,000 0 0 $ 6,771(4) Director and Executive Vice 1994 125,000 25,000 0 0 5,990(4) President 1993 100,000 25,000 0 0 5,750(4) G. Andrew Franz, 1995 $120,000 $20,000 0 0(5) $ 5,125(4) Director and Senior Vice 1994 90,000 10,000 0 37,500 4,813(4) President--Operations-- 1993 72,000 8,000 0 0 3,066(4) Pharmaceuticals David A. McLaughlin, 1995 $120,000 $20,000 0 0(5) $ 5,125(4) Director and Senior Vice 1994 90,000 10,000 0 37,500 4,813(4) President--Operations-- 1993 80,000 10,000 0 0 4,500(4) Nutritionals
- --------- (1) None of the Named Executives received Other Annual Compensation which is required to be reported in this column. (2) Consists of a Company contribution to a 401(k) plan ($9,240 in 1995, $6,264 in 1994 and $8,004 in 1993) and the dollar value of premiums paid by the Company for a split-dollar life insurance policy on Mr. Jones, of which $8,161, $7,707 and $7,200 constituted his entire economic benefit in the years 1995, 1994 and 1993, respectively. (3) Consists of a Company contribution to a 401(k) plan ($6,771 in 1995, $7,239 in 1994 and $6,160 in 1993) and the dollar value of premiums paid by the Company for a split-dollar life insurance policy on Mrs. Jones, of which $2,948, $2,784 and $2,760 constituted her entire economic benefit in the years 1995, 1994 and 1993, respectively. (4) Consists of a Company contribution to a 401(k) plan. (5) As adjusted to reflect the three-for-two stock split effected in the form of a 50% stock dividend paid on March 1, 1996 to holders of record on February 23, 1996. 7 10 STOCK OPTION/SAR GRANTS The Company granted no stock options and no stock appreciation rights ("SARs") to the Named Executives during the fiscal year ended December 31, 1995. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES The following table provides information with respect to the stock options exercised during the fiscal year ended December 31, 1995 and the value as of December 31, 1995 of unexercised in-the-money options held by the Named Executives. The value realized on the exercise of options is calculated using the difference between the option exercise price and the fair market value of the Company's stock on the date of the exercise. The value of unexercised in-the-money options at fiscal year end is calculated using the difference between the option exercise price and the fair market value of the Company's stock at fiscal year end, December 31, 1995. The Named Executives exercised no SARs during the fiscal year ended December 31, 1995 and held no SARs as of December 31, 1995. The information in the following table is adjusted to reflect the three-for-two stock split effected in the form of a 50% stock dividend, paid on March 1, 1996 to holders of record on February 23, 1996.
VALUE OF NUMBER OF UNEXERCISED IN-THE- UNEXERCISED OPTIONS MONEY OPTIONS AT SHARES AT FY-END FY-END ACQUIRED VALUE (#) ($) ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/ NAME (#) ($) UNEXERCISABLE UNEXERCISABLE - ----------------------------------- ----------- -------- ------------------- ------------------- Dennis M. Jones.................... 0 0 0/0 N.A. Judith A. Jones.................... 0 0 0/0 N.A. Michael T. Bramblett............... 0 0 150,000/0 $2,087,500/0 G. Andrew Franz.................... 6,000 $ 47,000 7,500/30,000 $80,625/322,500 David A. McLaughlin................ 60,000 $670,000 7,500/30,000 $80,625/322,500
REPORT ON REPRICING OF OPTIONS The following table summarizes all repricings of options held by any executive officers of the Company during the last ten (10) completed fiscal years:
NUMBER MARKET LENGTH OF OF PRICE OF ORIGINAL SECURITIES STOCK AT EXERCISE NEW OPTION UNDERLYING TIME OF PRICE AT TIME EXERCISE TERM REMAINING OPTIONS REPRICING OF REPRICING PRICE AT DATE NAME DATE REPRICED ($) ($) ($) OF REPRICING - --------------------------- ------ ---------- --------- ------------- --------- -------------- G. Andrew Franz............ 9/1/94 37,500 $5.33/sh. $8.67/sh. $5.33/sh. 5 years David A. McLaughlin........ 9/1/94 37,500 $5.33/sh. $8.67/sh. $5.33/sh. 5 years
COMPENSATION COMMITTEE Stanley L. Lopata L. John Polite, Jr. Edward A. Chod 8 11 CASH OR DEFERRED PROFIT-SHARING PLAN AND TRUST Effective as of January 1, 1987, the Company adopted a Cash or Deferred Profit-Sharing Plan and Trust known as the Employee Retirement 401(k) Plan ("401(k) Plan"). The 401(k) Plan has been amended from time-to-time and was amended and restated as of January 1, 1995. The 401(k) Plan provides employees with a convenient way to save on a regular and long-term basis and encourages employees to make and continue careers with the Company. During 1995, the Company made matching contributions to the 401(k) Plan of $33,032 to the Named Executives. To become eligible to participate in the 401(k) Plan, an employee must have completed six months of service and have reached his or her eighteenth birthday ("Eligible Employee"). As of January 1, 1996, the Company had approximately 275 Eligible Employees, including the directors who are also Named Executives (Dennis M. Jones, Judith A. Jones, Michael T. Bramblett, G. Andrew Franz and David A. McLaughlin). Pursuant to the 401(k) Plan, an Eligible Employee who participates ("Participant") may direct that a portion of his or her compensation be contributed to the 401(k) Plan ("Elective Contributions"). The Company will contribute a matching amount determined by the Company each year (five percent in each of 1993, 1994 and 1995) of the Participant's compensation ("Company Contributions"). In addition to matching contributions, the Company may make a discretionary contribution which is allocated among Participants in proportion to compensation. The Participants are not allowed to make any voluntary contributions to the 401(k) Plan, other than their Elective Contributions. The Company Contributions are subject to a vesting schedule described below and may not be withdrawn from the 401(k) Plan until age 59 1/2, retirement, termination of employment, or other condition specified in the 401(k) Plan. In addition, Participants may withdraw their Elective Contributions to the 401(k) Plan at any time after they are made for reasons of hardship as described in the 401(k) Plan. Elective Contributions are always 100% vested. Company Contributions become vested according to the following schedule:
YEARS OF PERCENTAGE SERVICE VESTED -------- ---------- 2...................................... 20% 3...................................... 40% 4...................................... 60% 5...................................... 80% 6...................................... 100%
Forfeitures of discretionary Company Contributions will be allocated to the accounts of other Participants. Forfeitures of matching contributions are allocated in proportion to matching contributions. The 401(k) Plan Trustee may invest in investments as described in the 401(k) Plan including stocks, bonds, notes and other property. Participants may not obtain loans from their accounts under any circumstances. Company Contributions have, at times, been invested in shares of the Company's Common Stock acquired in the open market. On February 15, 1996, the 401(k) Plan held 90,000 shares of Common Stock (as adjusted for the three-for-two stock split effected in the form of a 50% stock dividend paid on March 1, 1996 to holders of record as of February 23, 1996). The Company is the 401(k) Plan Administrator and currently pays all expenses of the 401(k) Plan other than audit fees, which are paid by the 401(k) Plan. The Company has appointed Dennis M. Jones and Judith A. Jones as co-trustees of the 401(k) Plan. The 401(k) Plan may be modified by the Board at any time, provided that no modification shall adversely affect the rights of the Participants or divert any of the trust fund to purposes other than the benefit of the Participants. 9 12 REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION The Company has established a compensation committee of the Board which serves in an advisory capacity to Dennis M. Jones, the President and Chief Executive Officer of the Company, with respect to compensation decisions concerning the Company's executive officers. The compensation committee also administers the Company's 1994 Incentive Stock Plan. COMPENSATION POLICIES The guiding principle of the Company is to establish a compensation program which aligns executive compensation with Company objectives and business strategies as well as financial and operational performance. In keeping with this principle, the Company seeks to: (1) Attract and retain qualified executives who will play a significant role in, and be committed to, the achievement of the Company's long-term goals. (2) Reward executives for strategic management and the long-term maximization of shareholder value. (3) Create a performance-oriented environment that rewards performance with respect to the financial and operational goals of the Company. An executive officer's performance is reviewed in such areas as quality and quantity of work, job and professional knowledge, decision making and business judgment, initiative, analytical skills, communication skills, interpersonal skills, organizational skills, commercial skills, profit and loss sensitivity, creativity and leadership. Executive compensation consists of both cash and equity-based compensation. Cash compensation is comprised of base salary and bonus. Base salary is determined with reference to market norms. Bonus compensation is tied to the Company's success in achieving financial and non-financial performance goals and an executive's success in attaining personal performance goals. Equity-based compensation is comprised primarily of stock option grants. In establishing equity-based compensation, the Company places particular emphasis on the achievement of the Company's long-term performance goals. The Company believes that equity-based compensation closely aligns the economic interest of the Company's executive officers with the economic interests of the Company's shareholders. CHIEF EXECUTIVE OFFICER In establishing Mr. Jones' compensation, the factors described above are taken into account, as well as the shareholder value which Mr. Jones has played an instrumental role in creating since the founding of the Company. Mr. Jones has spearheaded the Company's growth strategy and has been the driving force behind the Company's success. The Company believes that Mr. Jones' base salary and bonus are well within industry norms and reflect his commitment to the Company's long-term success. COMPENSATION COMMITTEE Stanley L. Lopata L. John Polite, Jr. Edward A. Chod 10 13 FIVE-YEAR SHAREHOLDER RETURN COMPARISON The Securities and Exchange Commission ("SEC") requires that the Company include in this Proxy Statement a line-graph presentation comparing cumulative, five-year shareholder returns on an indexed basis with a broad-based market index and either a nationally recognized industry standard or an index of peer companies selected by the Company. The Company has selected the S & P Midcap 400 Index and the S & P Health Care (Drugs) Index for the purposes of this performance comparison which appears below. A list of the companies included in the S & P Health Care (Drugs) Index follows the graph below.
Jones Medi- cal Measurement Period Industries, S & P MIDCAP S & P Health (Fiscal Year Covered) Inc. 400 Care Drugs 12/90 100 100 100 12/91 115 150 165 12/92 110 168 132 12/93 211 191 121 12/94 105 185 141 12/95 385 242 241
* $100 INVESTED ON 12/31/90 IN STOCK OR INDEX -- Source: Research Data Group INCLUDING REINVESTMENT OF DIVIDENDS, FISCAL YEAR ENDED DECEMBER 31. The companies included in the S & P Health Care (Drugs) Index are: Eli Lilly & Co., Merck & Co., Inc., Pfizer, Inc., Schering Plough Corp., Syntex Corp. and Upjohn Company. The returns of each company with respect to the S & P Midcap 400 Index and the S & P Health Care (Drugs) Index have been weighted according to their respective stock market capitalizations. 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 directors and officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten-percent shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended December 31, 1995 all Section 16(a) filing requirements applicable to the Company's officers, directors and greater than ten-percent beneficial owners were complied with, except that L. John Polite, Jr. filed a Form 4 approximately thirty (30) days after the required filing date with respect to the sale of 1,000 shares on November 28, 1995. 11 14 SHAREHOLDER PROPOSALS The Company must receive at its principal executive offices, directed to the attention of the Secretary, any proposal to be presented at next year's annual meeting of shareholders not later than December 26, 1996 for consideration for inclusion in the Company's Proxy Statement and form of proxy relating to the annual meeting of shareholders to be held in 1997. Any such proposal must comply in all respects with the rules and regulations of the United States Securities and Exchange Commission. OTHER MATTERS The Board knows of no other matters which may come before the Annual Meeting. If any matters other than those referred to above should properly come before the Annual Meeting, the persons designated by the Board to serve as proxies intend to vote such proxies in accordance with their best judgment. UPON RECEIPT OF A WRITTEN REQUEST, WITHOUT CHARGE, THE COMPANY WILL PROVIDE ANY BENEFICIAL OWNER OF THE COMMON STOCK (AS OF THE RECORD DATE) WITH A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR. A BENEFICIAL OWNER WHO IS NOT A RECORD OWNER AS OF THE RECORD DATE SHOULD INCLUDE IN SUCH A REQUEST A REPRESENTATION THAT THE INDIVIDUAL OR ENTITY WAS A BENEFICIAL OWNER AS OF THE RECORD DATE. PLEASE DIRECT ALL REQUESTS TO: Judith A. Jones, Secretary Jones Medical Industries, Inc. 1945 Craig Road St. Louis, Missouri 63146 By Order of the Board of Directors of Jones Medical Industries, Inc. JUDITH A. JONES Secretary April 24, 1996 12 15 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROXY JONES MEDICAL INDUSTRIES, INC. PROXY FOR ANNUAL MEETING OF SHAREHOLDERS--MAY 22, 1996 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned hereby appoints JUDITH A. JONES and DENNIS M. JONES, and each of them, proxy, with full power of substitution, to vote all the shares the undersigned is entitled to vote at the Annual Meeting of Shareholders of JONES MEDICAL INDUSTRIES, INC. to be held at the St. Louis Club, 7701 Forsyth, Clayton, Missouri 63105 on May 22, 1996 at 3:30 p.m., and at any adjournment or postponement thereof, and to take action on the proposals listed hereon and any other business that may lawfully come before the meeting, hereby revoking all proxies as to said shares heretofore given by the undersigned and ratifying and confirming all that said proxy may lawfully do by virtue hereof. UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL PROPOSALS LISTED BELOW: IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH. In his/her discretion, each proxy is authorized to vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof.
PROPOSAL 1-- Election of Directors / / FOR all nominees listed below. / / WITHHOLD AUTHORITY for all nominees.
To withhold authority to vote for any individual nominee or nominees, line through or strike out the nominee's or nominees' name or names below: Michael T. Bramblett, Edward A. Chod, G. Andrew Franz, Dennis M. Jones, Judith A. Jones, Stanley L. Lopata, David A. McLaughlin, L. John Polite, Jr., Thomas F. Patton The Board of Directors Recommends a Vote FOR all nominees listed. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The shares represented by this proxy will be voted as directed by the Shareholder. If no direction is given when the duly executed proxy is returned, such shares will be voted FOR all proposals listed. Date , 1996 -------------------------------- Signature -------------------------------- Signature if held jointly Please date and sign as your name appears above and return in the enclosed envelope. If acting as attorney, executor, administrator, trustee or guardian, you should so indicate when signing. If the signor is a corporation, please sign the full corporate name, by duly authorized officer. If shares are held jointly, each shareholder named should sign. -----END PRIVACY-ENHANCED MESSAGE-----