MEDICAL ACTION INDUSTRIES INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AUGUST 9, 1995
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To the Stockholders of
MEDICAL ACTION INDUSTRIES INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MEDICAL
ACTION INDUSTRIES INC. will be held on August 9, 1995 at Ernst & Young LLP, 395
N. Service Road, Melville, New York at 3:00 p.m. (the 'Annual Meeting'), for the
following purposes:
1. To elect two directors to serve in Class II until the 1998 Annual
Meeting of Stockholders;
2. To consider and act upon the ratification of Ernst & Young LLP as
independent public auditors of the Company for the fiscal year ending March 31,
1996; and
3. To consider and act upon such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on June 23, 1995 shall
be entitled to vote at the Annual Meeting.
IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND RETURN
THE ENCLOSED PROXY IN ORDER THAT YOUR SHARES MAY BE VOTED FOR YOU AS SPECIFIED.
By Order of the Board of Directors,
Richard G. Satin
Vice President -- Operations
and General Counsel
Dated: Hauppauge, New York
July 1, 1995
MEDICAL ACTION INDUSTRIES INC.
150 MOTOR PARKWAY
HAUPPAUGE, NEW YORK 11788
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ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, AUGUST 9, 1995
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PROXY STATEMENT
The Annual Meeting of Stockholders of MEDICAL ACTION INDUSTRIES INC. (the
'Company') will be held on Wednesday, August 9, 1995 at Ernst & Young LLP, 395
N. Service Road, Melville, New York at 3:00 p.m. for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders. This statement is
furnished in connection with the solicitation by the Board of Directors of
proxies to be used at the Annual Meeting and at any and all adjournments of such
meeting.
If a proxy in the accompanying form is duly executed and returned, the
shares represented by such proxy will be voted as specified. Any person
executing the proxy may revoke it prior to its exercise either by letter
directed to the attention of the Corporate Secretary of the Company or in person
at the Annual Meeting.
VOTING RIGHTS
On June 23, 1995 (the 'Record Date'), the Company had outstanding one class
of voting securities, namely 8,038,030 shares of Common Stock, $.001 par value.
Stockholders are entitled to one vote for each share registered in their names
at the close of business on the Record Date. A majority of the outstanding
shares will constitute a quorum at the meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved. The
following table sets forth as of the Record Date certain information with regard
to ownership of the Company's Common Stock by (i) each beneficial owner of 5% or
more of the Company's Common Stock; (ii) each director; and (iii) all executive
officers and directors of the Company as a group:
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
- ----------------------------------------------------------------------------
Common Stock Joseph R. Meringola 1,919,684(2) 23.9%
$.001 par value 150 Motor Parkway
Hauppauge, New York
Common Stock Paul D. Meringola 364,000(2) 4.4%
$.001 par value 150 Motor Parkway
Hauppauge, New York
Common Stock Richard G. Satin 162,150(2) 2.0%
$.001 par value 150 Motor Parkway
Hauppauge, New York
1
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) CLASS
- ----------------------------------------------------------------------------
Common Stock Dr. Philip F. Corso 18,000 --
$.001 par value 1200 Post Road East
Westport, Connecticut
Common Stock Dr. Thomas A. Nicosia 1,000 --
$.001 par value 1615 Northern Blvd.
Manhasset, New York
Common Stock Bernard Wengrover 50,000 --
$.001 par value 111 Great Neck Road
Great Neck, New York
Common Stock Grover A. Cox 100,000(2) 1.2%
$.001 par value 5156 N. Placita Barra
Tucson, Arizona
Common Stock Directors and Officers 2,769,334(2) 32.4%
$.001 par value as a Group (8 Persons)
- ------------------
(1) Unless otherwise indicated, no director beneficially owns more than 1% of
the Company's Common Stock.
(2) Includes shares (i) awarded under the Company's Restricted Management Stock
Bonus Plan, and (ii) exercisable under the Company's Non-Qualified Stock
Option Plan and Incentive Stock Option Plan.
This Proxy Statement has been mailed on or about July 1, 1995 to all
stockholders as of the Record Date.
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of seven directors,
classified into three classes as nearly equal in number as possible, whose terms
of office expire in successive years. The two directors named below in Class II,
all of whom are presently directors of the Company, have been nominated for
election as directors of the Company until the Annual Meeting of Stockholders in
1998 or until their respective successors are chosen and qualified. Shares
represented by executed proxies in the form enclosed will be voted, unless
otherwise indicated, for the election as directors of the aforesaid nominees,
unless they shall be unavailable, in which event such shares may be voted for
substitute nominee(s) designated by the Board of Directors. The Board of
Directors has no reason to believe that the nominees will be unavailable or, if
elected, will decline to serve. The following table sets forth the directors of
the Company.
CLASS I CLASS II CLASS III
(TO SERVE UNTIL THE (TO SERVE UNTIL THE (TO SERVE UNTIL THE
ANNUAL MEETING OF ANNUAL MEETING OF ANNUAL MEETING OF
STOCKHOLDERS IN 1997) STOCKHOLDERS IN 1995) STOCKHOLDERS IN 1996)
- --------------------------------------------------------------------------------
Dr. Thomas A. Nicosia Bernard Wengrover Joseph R. Meringola
Grover A. Cox Paul D. Meringola Dr. Philip F. Corso
Richard G. Satin
2
The Board of Directors held five meetings during the fiscal year ended
March 31, 1995. Except for Dr. Nicosia, all directors attended 75% or more of
the aggregate number of meetings of the Board and its committees, on which they
serve. Non-employee directors receive $500 for each board meeting they attend.
In addition, Mr. Wengrover is compensated pursuant to a separate consulting
agreement.
BOARD COMMITTEES
The Board of Directors has established the following committees, all of
which consist of three non-employee directors, Mr. Wengrover, Dr. Corso and Dr.
Nicosia, to perform certain specific functions. Included among the committees
are an Audit Committee, a Compensation Committee and a Stock Option Committee.
There is no Nominating Committee of the Board of Directors.
AUDIT COMMITTEE. This Committee reviews the plan for and the results of
the independent audit, reviews the Company's financial information and internal
accounting and management controls, and performs other related duties. The Audit
Committee held one meeting during the last fiscal year.
COMPENSATION COMMITTEE. This Committee makes recommendations to the Board
of Directors with respect to compensation for the officers of the Company and
the Chief Executive Officer. This Committee met one time during fiscal year
1995.
STOCK OPTION COMMITTEE. This Committee has reviewed and approved the grant
of options pursuant to the Company's stock option plans for the Company's
directors and officers. The Committee held one meeting during the last fiscal
year.
PRESENT OCCUPATION OF DIRECTORS
Mr. Joseph R. Meringola has been Chairman of the Board and Chief Executive
Officer of the Company since its inception in 1977. Mr. Meringola has served in
various executive management and operating positions for the Company, including
President and Chief Operating Officer. Mr. Meringola received a Bachelor of
Science degree in business administration from C.W. Post College of Long Island
University.
Mr. Paul D. Meringola, a director and President of the Company since
November, 1992, has been employed by the Company for more than the past fifteen
years in various executive positions. He previously served the Company as Vice
President -- Operations from March, 1989 to October, 1991 and Senior Vice
President (Chief Operating Officer) from October, 1991 to November, 1992.
Mr. Richard G. Satin, previously a director of the Company from October,
1987 to February, 1992, was reappointed to the Board of Directors in February,
1993. Mr. Satin has been employed by the Company as Vice President and General
Counsel since January, 1993 and has been Corporate Secretary of the Company
since October, 1991. In February, 1994, Mr. Satin was appointed Vice
President -- Operations. Mr. Satin, a practicing attorney in the State of New
York for more than the past ten years, was associated with the law firm of Blau,
Kramer, Wactlar, Lieberman & Satin, P.C. from May, 1983 to January, 1993.
Mr. Grover A. Cox, a director of the Company since February, 1993, was Vice
President -- Corporate from February, 1992 until December, 1993. Since April,
1994, Mr. Cox has been employed by Manzi Medical as Vice President -- Sales.
Prior to joining the Company, Mr. Cox was employed by the Kendall Corporation
for thirty years in various sales and marketing positions including Vice
President--Corporate Accounts (Healthcare Products). Mr. Cox received a Bachelor
of Arts degree in economics from Colgate University.
3
Dr. Philip F. Corso, a director of the Company since March, 1984, has been
associated with the Yale University School of Medicine for more than the past
ten years and is presently Assistant Clinical Professor. In addition, Dr. Corso
is Senior Attending and Chief of Plastic Surgery at Bridgeport and Norwalk
Hospitals in Connecticut. Dr. Corso has also published numerous articles in
professional journals on plastic and reconstructive surgery.
Dr. Thomas A. Nicosia, a director of the Company since November, 1985, has
been a practicing cardiologist for more than the past five years. Dr. Nicosia is
a fellow of the American College of Cardiology and is affiliated with St.
Francis Hospital in Roslyn, New York and North Shore University Hospital in
Manhasset, New York.
Mr. Bernard Wengrover, a director of the Company since October, 1990, has
been a certified public accountant in the State of New York for more than twenty
years and is a partner in the accounting firm of Schneider, Ehrlich & Wengrover.
Mr. Wengrover was the Company's independent auditor from 1977 until March 31,
1989.
MANAGEMENT
OFFICERS OF THE COMPANY
The Company's executive officers are as follows:
NAME AGE POSITION HELD WITH THE COMPANY
- --------------------------------------------------------------------------------
Joseph R. Meringola... 52 Chairman of the Board (Chief Executive Officer)
Paul D. Meringola..... 37 President (Chief Operating Officer)
Richard G. Satin...... 40 Vice President -- Operations, General Counsel
and Corporate Secretary
Daniel Marsh.......... 37 Vice President -- Sales and Marketing
All of the executive officers of the Company hold office at the pleasure of
the Board of Directors. Joseph R. and Paul D. Meringola are brothers.
Mr. Daniel Marsh has been employed by the Company for more than the past
five years in various sales and marketing positions. Mr. Marsh was appointed
Vice President of Sales and Marketing in February, 1994 and since April 1, 1993
served as Vice President -- International.
4
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation of the Company's Chief Executive Officer and each of the
Company's four most highly compensated executive officers (referred to
collectively with the Chief Executive Officer as the 'named executives') during
the years ended March 31, 1993, 1994 and 1995.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------- ------------------------------ ALL OTHER
FISCAL RESTRICTED STOCK COMPENSATION
NAME AND PRINCIPAL POSITION(1) YEAR SALARY($) BONUS($) AWARDS($)(2) OPTIONS(#) ($)(4)
- -------------------------------------------------------------------------------------------------------------------
Joseph R. Meringola............ 1995 208,000 -- -- -- 5,969
Chairman of the Board 1994 209,695 -- -- -- 4,497
and CEO 1993 210,050 -- -- -- 5,804
Paul D. Meringola(3)........... 1995 172,593 -- 13,281 -- 7,105
President and Chief Operating 1994 158,046 10,000 112,500 50,000 17,865
Officer 1993 140,008 -- -- 25,000 4,772
Richard G. Satin(3)(5)......... 1995 127,692 -- 12,750 -- 5,036
Vice President -- Operations 1994 119,772 7,500 45,000 25,000 1,477
and General Counsel
Daniel Marsh(3)(5)............. 1995 139,666 -- 12,750 -- 1,811
Vice President -- Sales 1994 131,244 7,500 33,750 15,000 3,931
and Marketing
- ------------------
(1) Includes Chairman of the Board and Chief Executive Officer and the other
most highly compensated executive officers as measured by salary and bonus.
(2) Represents the dollar value of restricted shares granted during the year in
question, calculated by multiplying the closing market price of the
Company's Common Stock on the date of grant by the number of shares
awarded. The aggregate number of shares of restricted stock held by each
named executive as of March 31, 1995, together with the value of those
shares is as follows: Mr. Joseph R. Meringola -- 50,000 shares/$53,125; Mr.
Paul D. Meringola -- 99,500 shares/$105,719; Richard G. Satin -- 52,000
shares/$55,250 and Daniel Marsh -- 27,000 shares/$28,688. The shares of
restricted stock vest in four equal installments (25% increments) on the
second, third, fourth and fifth anniversaries of the date of issuance.
Dividends are paid in shares of restricted stock if and to the extent paid
on the Company's Common Stock generally.
(3) The Company has entered into an Employment Agreement with Mr. Paul D.
Meringola and Change of Control Agreements with Messrs. Paul D. Meringola,
Satin and Marsh that may result in payments to each of them upon a change
of control of the Company. These arrangements are described under
'Management -- Employment Agreement' and 'Change of Control Arrangements'.
(4) Includes, among other things, matching contributions under the Company's
401(K) Retirement Plan, the cost to the Company of the nonbusiness use of
Company automobiles and amounts payable to Mr. Paul D. Meringola under his
Employment Agreement.
(5) Messrs. Satin and Marsh became executive officers in February, 1993 and
February, 1994, respectively.
5
STOCK OPTIONS
During the fiscal year ended March 31, 1995, there were no individual
grants of stock options made to the named executives.
The following table sets forth with respect to the named executives,
information concerning the exercise of options during the last fiscal year and
unexercised options held as of March 31, 1995:
OPTION EXERCISES AND FISCAL YEAR-END VALUES
VALUE OF UNEXERCISED IN-THE-
SHARES NUMBER OF UNEXERCISED MONEY OPTIONS AT YEAR END
ACQUIRED ON OPTIONS AT YEAR END 1995 1995
EXERCISE VALUE ---------------------------- --------------------------------
NAME (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------
Joseph R. Meringola... -- -- -- -- -- --
Paul D. Meringola..... -- -- 192,500 25,000 $18,844 --
Richard G. Satin...... -- -- 95,000 12,500 $ 3,488 --
Daniel Marsh.......... -- -- 127,500 7,500 $11,988 --
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Pursuant to Section 16(a) of the Exchange Act of 1934, directors, certain
officers, and beneficial owners of 10% or more of the Company's Common Stock
('reporting persons') are required from time to time to file with the Securities
and Exchange Commission (the 'Commission') reports on Forms 3, 4 or 5, relating
principally to transactions in Company securities by such persons. Based solely
upon its review of the copies of such reports furnished to the Company, or
written representations received by the Company that no other reports were
required, the Company believes during fiscal 1995 that the reporting persons
filed on a timely basis the reports required by Section 16(a) of the Securities
Act of 1934.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for developing and making
recommendations to the Company with respect to executive officer compensation
policies, addressing such matters as salaries, incentive plans, benefits and
over-all compensation. The Compensation Committee determines the compensation to
be paid to the Chief Executive Officer and each of the other executive officers
of the Company.
The objectives of the Compensation Committee in determining the type and
amount of executive officer compensation are to provide a level of base
compensation which allows the Company to attract and retain superior talent and
to align the executive officers' interests with the success of the Company
through the payment of a bonus based upon Company performance and participation
in stock option and other stock ownership plans which provide the executive
officers with the opportunity to build a substantial ownership interest in the
Company.
The compensation of an executive officer of the Company includes cash
compensation consisting of a base salary plus performance bonus, long-term
incentive compensation in the form of stock options and restricted stock awards,
and participation in various benefit plans generally available to employees of
the Company.
Although the compensation paid to each of the Company's executive officers
is well below the $1 million deduction limit under the Internal Revenue Code of
1986 (the 'Code'), the Company intends to take the necessary steps to conform
its compensation to comply with the Code.
6
Base Salary. Compensation for each of the named officers consists of a
base salary and annual and longer-term incentive compensation. In the setting of
base salaries, consideration is given to national and local salary surveys and
review of salaries paid to senior executives with comparable qualifications,
experience and responsibilities at other companies in the particular geographic
area. Annual and longer-term incentive compensation is tied to the Company's and
the executive's success in achieving significant financial and non-financial
goals.
The Committee weighs the value of achievement of subjective factors such as
demonstrated management ability, initiative and contributions toward the
Company's goal of leadership within the industry in which it competes. The
Committee also weighs, when appropriate, the value of the individual's actions
during times when progress towards predetermined goals was hindered by elements
outside the Company's and the executive's control. The Committee recognizes that
the operational challenges faced during unforeseen times or events are often
valid reasons to modify what may otherwise be a negative result to the base
salary decision.
Finally, the Committee considers the individual executive's impact on those
elements that contribute to increased stockholder value. The Committee's
discretion usually determines the weighing of these various factors in its final
determination of base salary development or adjustment.
Incentive Compensation. In evaluating the performance and setting the
incentive compensation of the executive officers of the Company, the Committee
developed an incentive program predominantly predicated on the attainment of
specific levels of revenue and pre-tax income for the Company. To a lesser
extent, the Committee considers other managerial goals stated as objectively as
possible. For the fiscal year ended March 31, 1995, no incentive compensation
was awarded to the named executives.
Stock Options and Grants. The Committee periodically considers the
desirability of granting senior executives, including the named executives,
awards under the Company's stock plans. The Committee believes that its past
grants of stock options and restricted stock awards have successfully focused
the Company's senior management on building profitability and stockholder value.
In determining the amount and nature of awards under such plans to be
granted to the senior management group, including the named executives, the
Committee reviews with the Chief Executive Officer awards recommended by him,
taking into account the respective scope of accountability, strategies and
operational goals and anticipated performance requirements and contributions of
each member of the senior management group. The award to the Chief Executive
Officer is established separately and is based, among other things, on the
Committee's analysis of his past and expected future contributions to the
Company's achievement of its long-term performance goals.
CEO COMPENSATION
Determination of the Company's compensation of its Chief Executive Officer
and founder, Joseph R. Meringola, takes into account the factors described above
as pertinent to the remainder of the Company's executives, while also taking
into consideration the nature of the Company's business and efforts expended in
connection with development of the Company's strategy and product development
activities.
The Committee has concluded that Mr. Meringola's performance warrants the
compensation for 1995 as reflected in the Summary Compensation table on page 5.
The Compensation Committee
Bernard Wengrover
Dr. Philip Corso
Dr. Thomas Nicosia
7
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
the Company's Common Stock against the cumulative total return of the Standard &
Poor 500 Stock Index and a Peer Group Index for the period of five years
commencing April 1, 1990 and ending March 31, 1995.
The Peer Group Index is comprised of the following publicly traded
companies, all of whom are contained within the Standard Industry Code 3841:
Acme UTD Corp. Alliance Imaging Inc.
Allied Healthcare Products, Inc. Electromedics Inc.
Graham Field Health Products Namic USA Corp.
Personal Diagnostics Inc. Protocol Systems Inc.
Quest Medical Inc. Survival Technology Inc.
[PERFORMANCE GRAPH]
None of the companies in the Peer Group offers a fully comparable range of
products and services. The returns of each company have been weighed according
to their respective stock market capitalization for purposes of arriving at a
peer group average.
8
The line graph assumes that $100 was invested on April 1, 1990 in each of
the companies' common stock, the Standard & Poor 500 Stock Index and the Peer
Group Index and that all dividends were reinvested.
EMPLOYMENT AGREEMENT
In February, 1993, the Company entered into an Employment Agreement with
Paul D. Meringola for the period April 1, 1993 through March 31, 1996. The
Agreement provides for a salary at an annual rate of $150,000, together with
cost of living increments and the reimbursement of medical expenses not
otherwise covered by the Company's medical plans, up to a maximum of $5,000. The
Agreement further provides that in the event there is a change in control of the
Company, as defined therein, or in any person directly or indirectly controlling
the Company, as also defined therein, Mr. Meringola has the option, exercisable
within six months of becoming aware of such event, to terminate his Employment
Agreement. Upon such termination, Mr. Meringola has the right to receive as a
lump sum payment an amount equal to the compensation remaining to be paid for
the balance of the term of the Agreement.
1989 NON-QUALIFIED STOCK OPTION PLAN
The Company's Board of Directors and stockholders approved a Non-Qualified
Stock Option Plan (the 'Plan') which presently covers 1,150,000 shares of the
Company's Common Stock. The Plan, which expires in 1999, permits the granting of
non-qualified options to the Company's officers, directors and other senior
executives and management and supervisory personnel and consultants. The Plan is
administered by the Stock Option Committee, who determine, among other things,
the individuals to whom, and the time or times at which, options shall be
granted, the number of shares to be subject to each option, the purchase price
of the shares and the term of each option, with the exception that no option can
be granted at less than 85% of the market value at the time of grant and options
may only be exercised before the expiration of five years from the date of
grant. Each option granted under the Plan may be exercised only during the
continuance of an Optionee's employment or service with the Company.
1994 STOCK INCENTIVE PLAN
The Company's Board of Directors and stockholders have approved the 1994
Stock Incentive Plan (the 'Incentive Plan'), which presently covers 500,000
shares of the Company's Common Stock. The Incentive Plan, which expires in 2004,
permits the granting of incentive stock options, shares of restricted stock and
non-qualified stock options. All officers and key employees of the Company and
its affiliates are eligible to participate in the Incentive Plan. The Incentive
Plan is administered by the Stock Option Committee, who determine the persons to
whom, and the times at which, awards will be granted, the type of awards to be
granted and all other related terms and conditions of the awards. The per share
exercise price of any options may not be less than the fair market value of a
share of Common Stock at the time of grant. As of March 31, 1995, no issuances
have been made under the Incentive Plan.
INCENTIVE STOCK OPTION PLAN
The Company's Incentive Stock Option Plan (the 'Option Plan'), which
covered 350,000 shares of the Company's Common Stock, $.001 par value per share,
expired in May, 1994. The option price was the fair market value on the date of
grant, unless the employee owns, as defined in the applicable sections of the
Internal Revenue Code of 1954, as amended, 10% of the total combined voting
power or value of the Common Stock of the Company immediately before the grant
of any option, in which case the option price was at least 110% of the fair
market value at the date of grant. Options expire five years from date of grant
unless the employment is
9
terminated, in which event, subject to certain exceptions, the options terminate
three months subsequent to date of termination.
RESTRICTED MANAGEMENT STOCK BONUS PLAN
The Company's Restricted Management Stock Bonus Plan (the 'Bonus Plan'),
which covered 500,000 shares of the Company's Common Stock, $.001 par value per
share, expired in May, 1994. Shares issued under the Bonus Plan vest in four
equal installments on the second, third, fourth and fifth anniversaries of the
date of issuance. Except for those shares which have vested, shares issued under
the Bonus Plan may not be sold, transferred or otherwise disposed of unless they
are first offered to the Company for the same amount paid by the recipient.
MEDICAL ACTION INDUSTRIES INC. RETIREMENT PLAN
The Company has adopted, effective April 1, 1988, the Medical Action
Industries Inc. Retirement Plan (the 'Retirement Plan') for certain employees
pursuant to Section 401(k) of the Internal Revenue Code. All employees of the
Company and its subsidiaries are eligible to participate in the Retirement Plan.
Subject to the terms and conditions of the Retirement Plan, each eligible
employee may contribute up to 15% of his compensation, as defined therein. Each
participant's contribution vests immediately.
In addition, the Retirement Plan provides for discretionary Company
contributions, up to a maximum of 3% of such participant's compensation. Each
participant's portion of the discretionary contribution vests over a period of
four years.
For the fiscal year ended March 31, 1995, contributions under the
Retirement Plan for Messrs. Joseph R. Meringola, Paul D. Meringola, Richard G.
Satin and Daniel Marsh were approximately $1,920, $1,994, $1,397 and $1,507,
respectively, and $6,818 for all officers as a group.
CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into agreements with three of its executive
officers, Messrs. Paul D. Meringola, Satin and Marsh, which provide certain
benefits in the event of a change in control of the Company. A 'change in
control' of the Company is defined as, in general, the acquisition by any person
of beneficial ownership of 20% or more of the voting stock of the Company,
certain business combinations involving the Company or a change in a majority of
the incumbent members of the Board of Directors, except for changes in the
majority of such members approved by such members. If, within two years after a
change in control, the Company or, in certain circumstances, the executive,
terminates his employment, the executive is entitled to a severance payment
equal to three times (i) such executive's highest annual salary within the
five-year period preceding termination plus (ii) a bonus increment equal to the
average of the two highest of the last five bonuses paid to such executive. In
addition, the executive is entitled to the continuation of all employment
benefits for a three-year period, the vesting of all stock options and certain
other benefits, including payment of an amount sufficient to offset any 'excess
parachute payment' excise tax payable by the executive pursuant to the
provisions of the Internal Revenue Code or any comparable provision of state
law.
Prior to a change in control, the rights and obligations of the executive
with regard to his employment by the Company shall be determined in accordance
with the policies and procedures adopted from time to time by the Company. The
agreements deal only with certain rights and obligations of the executive
subsequent to a change in control, and the existence of the agreement shall not
be treated as raising any inference with respect to what rights and obligations
exist prior to a change in control.
10
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders approve the
appointment of Ernst & Young LLP as the Company's independent auditors to
examine the financial statements of the Company for the fiscal year ending March
31, 1996. A representative of the firm plans to be present at the Annual
Meeting, with the opportunity to make a statement if he desires to do so, and
will be available to respond to appropriate questions.
CERTAIN TRANSACTIONS
During fiscal 1995, the Company's Chairman of the Board, Joseph R.
Meringola, satisfied in full previously outstanding loans made to him in the
aggregate amount of $150,000.
ADDITIONAL INFORMATION
The Board of Directors does not intend to present to the meeting any
matters not referred to in the form of proxy. If any proposal not set forth in
this Proxy Statement should be presented for action at the meeting, and is a
matter which should come before the meeting, it is intended that the shares
represented by proxies will be voted with respect to such matters in accordance
with the judgment of the persons voting them.
The cost of soliciting proxies in the accompanying form has been or will be
paid by the Company. In addition to solicitation by mail, arrangements may be
made with brokerage houses and other custodians, nominees and fiduciaries to
send proxy material to their principals, and the Company may reimburse them for
their expenses in so doing. To the extent necessary in order to assure
sufficient representation, officers and regular employees of the Company may
request the return of proxies personally, by telephone or telegram. The extent
to which this will be necessary depends entirely upon how promptly proxies are
received, and stockholders are urged to send in their proxies without delay.
Stockholder proposals with respect to the Company's next Annual Meeting of
Stockholders must be received by the Company no later than April 1, 1996 to be
considered for inclusion in the Company's next Proxy Statement.
A copy of the Annual Report has been mailed to every stockholder of record.
The Annual Report is not to be considered proxy soliciting material.
By Order of the Board of Directors,
Richard G. Satin
Vice President -- Operations
and General Counsel
Dated: Hauppauge, New York
July 1, 1995
11
MEDICAL ACTION INDUSTRIES INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Paul D. Meringola and Richard G. Satin, or
either of them with full power of substitution, proxies to vote at the Annual
Meeting of Stockholders of Medical Action Industries Inc. (the 'Company') to be
held on August 9, 1995 at 3:00 p.m., local time, and at any adjournment or
adjournments thereof, hereby revoking any proxies heretofore given, to vote all
shares of common stock of the Company held or owned by the undersigned as
directed below, and in their discretion upon such other matters as may come
before the meeting.
/x/ Please mark your votes as in this example.
1. Election of Directors:
FOR / / WITHHELD / /
FOR, EXCEPT VOTE WITHHELD FOR THE FOLLOWING NOMINEE(S): ____________________
NOMINEES: Bernard Wengrover, Paul D. Meringola
2. Approval of the ratification of Ernst & Young LLP as independent public
auditors of the Company for the fiscal year ending March 31, 1996.
FOR / / AGAINST / / ABSTAIN / /
(To be Signed on Reverse Side)
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN HEREIN.
IF NO INSTRUCTIONS ARE INDICATED, THE PERSONS NAMED PROXY HEREIN WILL VOTE ALL
SHARES IN THE NAME OF THE UNDERSIGNED FOR THE MATTERS SET FORTH HEREIN AND, IN
THEIR DISCRETION, FOR ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT(S) THEREOF.
Please mark, date, sign and promptly return this proxy in the accompaning
envelope. No postage is required if mailed within the United States.
Date ____________________________________
Signature _______________________________
Signature _______________________________
NOTE: Please sign as name appears hereon.
Joint owners should each sign. When
signing as attorney, executor,
administrator or guardian, please give
full title as such.