EXHIBIT 99
ROTECH MEDICAL CORPORATION
4506 L. B. McLeod Road, Suite F
Orlando, Florida 32811
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 8, 1995
TO THE SHAREHOLDERS OF ROTECH MEDICAL CORPORATION:
The annual meeting of shareholders of RoTech Medical Corporation (the "Company")
will be held at the Sun Bank, N.A. Tower, located at 200 South Orange Avenue,
second floor, Campus Room, Orlando, Florida 32801 at 10:00 a.m. for the
following purposes:
1. To elect five directors to hold office until the next annual
meeting of shareholders and until their successors are elected and
have qualified;
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on November 3, 1995 will be
entitled to vote at the meeting.
If there is any chance that you may not be able to attend the annual meeting,
please execute the enclosed Proxy and return it promptly in the self-addressed
envelope provided. If you attend the meeting, you may revoke the Proxy and vote
in person.
By Order of the Board of Directors:
/s/ William A. Walker II
- -------------------------
William A. Walker II,
Secretary
Orlando, Florida
November 8, 1995
Mailing Date
November 8, 1995
ROTECH MEDICAL CORPORATION
4506 L.B. MCLEOD ROAD, SUITE F
ORLANDO, FLORIDA 32811
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 8, 1995
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of RoTech Medical Corporation (the "Company") to be used
at the annual meeting of shareholders to be held on December 8, 1995, for the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
Shareholders who execute proxies have the right to revoke them at any time
before they are voted.
Shareholders of record as of November 3, 1995, will be entitled to vote at the
meeting. At the close of business on that day, there were outstanding 11,990,779
shares of the Company's Common Stock. Each share of Common Stock is entitled to
one vote with respect to each matter presented for action at the Meeting. The
affirmative vote of a majority of the shares cast at the Meeting is required for
the election of directors.
Proxies will be voted in accordance with instructions noted on the proxies.
Unless otherwise specifically instructed in the proxies, it is the intention of
the persons named in the proxy to vote all proxies received by them FOR
proposal 1.
The cost of this proxy solicitation will be borne by the Company. It is
contemplated that proxies will be solicited solely by mail. Banks, brokers and
other custodians will be requested to forward proxy soliciting materials to
their customers where appropriate, and the Company will reimburse such banks,
brokers and custodians for their reasonable out-of-pocket expenses in sending
the proxy materials to beneficial owners of shares.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth, as of October 10, 1995, certain information with
respect to all persons known by the Company to beneficially own 5% or more of
its outstanding Common Stock, each director and all directors and officers of
the Company as a group. Unless otherwise indicated, each of the shareholders
listed below has sole voting and investment power with respect to the Common
Stock beneficially owned.
ELECTION OF DIRECTORS
The Board of Directors proposes that the five nominees listed below be elected
as directors to serve until the next annual meeting of shareholders and until
their successors are elected and qualified. All of the nominees are currently
directors. Should any nominee for the office of director become unable to
accept nomination or election, which is not anticipated, it is the intention of
the persons named in the proxy, unless otherwise specifically instructed in the
proxy, to vote for the election in his stead of such other person as the Board
of Directors may recommend.
Name of Nominee and Position with Director
the Company Age Since Principal Occupation Last Five Years
- -----------------------------------------------------------------------------------------------------------
William P. Kennedy, Chairman, Board 51 1981 Chairman, Board of Directors and Chief
of Directors and Chief Executive Executive Officer of the Company; Chairman,
Officer Board of Directors and President of Thayer's.
Stephen P. Griggs, Director, Chief 38 1991 Director, Chief Operating Officer, President
Operating Officer, President and and Assistant Secretary of the Company.
Assistant Secretary
William A. Walker II, Director and 54 1984 Director and Secretary of the Company;
Secretary Practicing attorney in Winter Park and
Orlando, Florida as a shareholder in the law
firm of Winderweedle, Haines, Ward &
Woodman, P.A.
Leonard E. Williams, Director 64 1988 Director of the Company; President and Chief
Executive Officer of Wayne Densch, Inc.;
previously District Sales Manager for Tom's
Foods, Inc.; Director of First Union National
Bank of Orlando, President of Leonard E.
Williams Company.
Jack T. Weaver, D.O., Director 62 1992 Director of Company; Doctor of Osteopathy;
Chairman, Board of Trustees at the University
of Health Sciences, College of Osteopathic
Medicine, Kansas City, Missouri.
There is currently no executive committee, but the Company has established a
Stock Option Plan Committee consisting of William A. Walker II, a Compensation
Committee consisting of William A. Walker II and Leonard E. Williams, an Audit
Committee consisting of William A. Walker II, Leonard E. Williams and Jack T.
Weaver, D.O., and a Nominating Committee consisting of William A. Walker II and
Leonard E. Williams. The Audit Committee will select the Company's independent
certified public accountants for the current fiscal year. During the Company's
fiscal year ended July 31, 1995, its Audit Committee held one (1) meeting and
each committee member attended such meeting. The Nominating Committee has a
current policy of not considering nominees recommended by security holders, a
policy which, however, is currently under review. Also, during the Company's
fiscal year ended July 31, 1995, the Company's Board of Directors held three (3)
meetings, and a quorum of directors was present at each meeting.
3
The following person is an executive officer (but not a director) of the
Company:
Executive
Name of Officer and Position with Officer
the Company Age Since Principal Occupation Last Five Years
- ------------------------------------------------------------------------------------------------------------
Rebecca R. Irish, Chief Financial 33 1991 Chief Financial Officer, Treasurer and
Officer, Treasurer and Assistant Assistant Secretary of the Company;
Secretary Practicing Florida Certified Public
Accountant with Ernst & Young, C.P.A.s,
Orlando, Florida.
MANAGEMENT REMUNERATION AND TRANSACTIONS
EXECUTIVE COMPENSATION
- ----------------------
The following table sets forth the annual and long-term compensation for the
Company's Chief Executive Officer and the four highest paid executive officers
(named executives) whose aggregate salary and bonus compensation exceeded
$100,000, as well as the total compensation paid to each individual for the
Company's previous two fiscal years:
Annual Compensation Long-Term
Name and Principal Position Year Salary Bonus & Other Compensation
- -----------------------------------------------------------------------------------
William P. Kennedy 1995 $151,289 --- ---
Chairman of the Board of Directors 1994 $151,289 --- ---
and Chief Executive Officer 1993 $153,278 --- ---
Stephen P. Griggs, Director, Chief 1995 $110,784 --- ---
Operating Officer, President and 1994 $110,784 --- ---
Assistant Secretary
FISCAL YEAR-END OPTION VALUES
- -----------------------------
The following table summarizes for each of the Named Executive Officers the
total number of unexercised options held at July 31, 1995, and the aggregate
dollar value of in-the-money, unexercised options held at July 31, 1995.
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options at FY-End Options at FY-End
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------
Stephen P. Griggs
Director, Chief Operating Officer, President
and Assistant Secretary 62,500/62,500 $1,085,938/$1,085,938
The Company historically has not compensated Directors, nor reimbursed Directors
for attendance at meetings, but adopted a restrictive stock plan for non-
employee directors, which plan was approved by the Company's shareholders at its
annual meeting on December 4, 1992 and amended on December 9, 1994.
4
KEY MAN LIFE INSURANCE
- ----------------------
The Company currently maintains key man life insurance coverage on the life of
Mr. Kennedy in the face amount of $2,000,000, with the Company named as the sole
beneficiary under such policy. In accordance with its debt covenants, the
Company has assigned $1,000,000 of the proceeds from such policy to Sun Bank,
N.A.
CERTAIN RELATED TRANSACTIONS
- ----------------------------
The Company sub-leases space at 1101 East Colonial Drive, Orlando, Florida, a
building owned by Mr. Kennedy and under lease to Thayer's, a company owned by
Mr. Kennedy, the Company's President and principal shareholder. Such sub-lease
is a month-to-month lease providing for monthly rental payments of approximately
$700. Aggregate payments made by the Company under such sub-lease during fiscal
year 1995 were approximately $8,400.
The Company leases office space in a building located at 942 S.E. 17th Street,
Ocala, Florida, a building in which Mr. Kennedy owns an undivided one-half
interest. Such lease is a month-to month lease providing for monthly rental
payments of approximately $1,500. Aggregate payments made by the Company under
such lease during fiscal 1995 were approximately $18,000.
The Company purchased approximately $28,000 of products from companies owned by
Mr. Kennedy in fiscal 1995.
A & C Business Services, Inc., a Florida corporation, of which Mr. Kennedy is
the sole shareholder, provides certain business services to the Company. The
cost of such services to the Company during fiscal year 1995 amounted to
approximately $608,000.
L&G of Orlando, Inc., a Florida corporation, of which Mr. Griggs is a
shareholder, provides certain business services to the Company. The cost of
such services to the Company during fiscal year 1995 amounted to approximately
$152,000.
Mr. Walker, the Secretary and a Director of the Company, is a shareholder,
director, assistant secretary, assistant treasurer and a member of the Executive
Committee of Winderweedle, Haines, Ward & Woodman, P.A. ("WHWW"), a law firm
with offices in Winter Park and Orlando, Florida. This law firm is general
counsel to the Company and each of its subsidiaries. WHWW entered into a stock
option agreement ("Agreement") with the Company on July 1, 1995. The Agreement
grants WHWW the unassignable and non-transferable right and option to purchase
from the Company up to, but not exceeding in the aggregate, 10,000 shares of the
Company's common stock, par value $.0002, at an option price of $27.75. Any
options not exercised on or before June 30, 2000 terminate on such date and are
null and void.
In the opinion of management, each of the foregoing transactions with officers,
directors, principal shareholders or affiliates were on terms no less favorable
to the Company than terms available from persons not affiliated with the
Company. The terms of any future transactions with officers, directors,
principal shareholders or affiliates will be no less favorable to the Company
than those which could be obtained from unaffiliated parties, and any future
transactions with affiliated parties, including loans to Company officers, will
be approved by a majority of the independent and disinterested members of the
Company's Board of Directors.
5
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- -------------------------------------------------------
The Compensation Committee of the Company's Board of Directors determines cash
and stock option compensation of the Company's employed executive officers,
Messrs. Kennedy and Griggs and Ms. Irish, and maintains administrative oversight
of all stock option plans.
The Compensation Committee consists of Directors Walker and Williams and meets
as circumstances require, but no less frequently than annually.
The Compensation Committee seeks to compensate employee executives at a cash
base salary level which is realistic in terms of minimizing the impact of any
future officer replacement, is adequate to meet living costs appropriate to
persons in the position held, and is appropriate to that customarily paid by
companies of comparable size in the health care industry. The Committee does
take into account that Mr. Kennedy, through his large stockholdings in the
Company, has a material inducement to closely attend to the success of the
Company without the higher cash compensation that might be typical for a Chief
Executive Officer with similar responsibilities.
Likewise, the Compensation Committee has utilized a Stock Option Plan, described
in the 1995 Annual Report on Form 10-K for the fiscal year of the Company ended
July 31, 1995, to align the efforts of key executives and key employees with
those of stockholders. The essential philosophy of the Compensation Committee
is that cash base compensation is not tied to performance factors. Cash bonuses
are not currently paid to executive officers, although the Compensation
Committee retains the option of granting future cash bonuses not exceeding
thirty percent (30%) of base compensation, per annum, based upon extraordinary
performance in enhancing stockholder value.
Current stock options were granted only to Mr. Griggs and Ms. Irish among the
executive officers, the amount of which were determined by factors of longevity,
responsibility, and necessity to compete with similar opportunities granted by
competitors.
STOCK PERFORMANCE GRAPH
- -----------------------
The following graph compares the cumulative total shareholder return of the
Company's common stock with (a) the CRSP Total Return Index for the NASDAQ
Health Services Stocks (the "NASDAQ Health Services Index") and (b) the CRSP
Total Return Index for the NASDAQ Stock Market (U.S.) (the "NASDAQ Composite
Index"). The graph assumes the investment of $100 on August 1, 1990 in the
Company's common stock and in each of the indices.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG ROTECH, NASDAQ HEALTH SERVICES INDEX AND NASDAQ COMPOSITE INDEX
NASDAQ NASDAQ
Measurement period Health Services Composite
(Fiscal year Covered) RoTech Index Index
- ------------------------------------------------------------------------------
Measurement PT--
08/01/90 $100 $100 $100
FYE 08/01/91 $100 $170 $118
FYE 08/01/92 $164 $200 $139
FYE 08/01/93 $144 $225 $169
FYE 08/01/94 $249 $250 $174
FYE 08/01/95 $384 $259 $243
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DEADLINE FOR SUBMITTING
SHAREHOLDERS PROPOSALS
Any proposal by a shareholder for consideration at the 1996 annual meeting of
shareholders must be received at the Company's executive offices at 4506 L.B.
McLeod Road, Suite F, Orlando, Florida 32811, no later than July 14, 1996, if
any such proposal is to be eligible for inclusion in the Company's proxy
materials for its 1996 annual meeting.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The accounting firm of Deloitte & Touche LLP was appointed by the Board of
Directors on June 7, 1994, and has served as the Company's independent certified
public accountants for the fiscal years ended July 31, 1994 and July 31, 1995.
At some point later in the current fiscal year, the Company's audit committee
will designate the Company's auditors for the fiscal year ending July 31, 1996.
OTHER MATTERS
New regulations adopted by the SEC, effective May 1, 1991, require the Company
to identify the names of persons who failed to file or filed late a report
required under Section 16. Generally, the reporting regulations under Section 16
require directors, officers and certain shareholders to report changes in
ownership in Company securities. To the knowledge of the Company, each Form 4
required to be filed was filed on a timely basis.
The management of the Company is not aware of any other matters to be brought
before the annual meeting of shareholders. If other matters are duly presented
for action, it is the intention of the persons named in the enclosed proxy to
vote on such matters in accordance with their judgment.
/s/ William A. Walker II
------------------------
William A. Walker II
Secretary
Orlando, Florida
November 8, 1995
Each shareholder is urged to execute and return the enclosed proxy promptly. In
the event a shareholder decides to attend the meeting, he may, if he wishes,
revoke his proxy and vote his shares in person.
7
PROXY ROTECH MEDICAL CORPORATION
This Proxy is Solicited By The Board of Directors
The undersigned hereby appoints WILLIAM P. KENNEDY, WILLIAM A. WALKER II,
LEONARD E. WILLIAMS, STEPHEN P. GRIGGS AND JACK T. WEAVER, or any of them, as
proxies, each with full power of substitution, acting by a majority or by any
one of them if only one can be present and acting, to vote in the following
manner (according to the number of shares which the undersigned would be
entitled to cast if then personally present) at the Annual Meeting of
Shareholders of ROTECH MEDICAL CORPORATION to be held on December 8, 1995, and
at any adjournment thereof.
(1) ELECTION OF DIRECTORS
[_] FOR all Nominees listed below [_] WITHHOLD AUTHORITY to vote for
[except as marked to the all nominees listed below
contrary below]
WILLIAM P. KENNEDY, WILLIAM A. WALKER II, LEONARD E. WILLIAMS, STEPHEN P.
GRIGGS, JACK T. WEAVER
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(2) In their discretion upon such other business as may properly come before the
meeting.
(Please date and sign reverse side)
ROTECH MEDICAL CORPORATION
This proxy shall be voted as directed. If no direction to this contrary is
indicated, this proxy shall be voted FOR proposal 1. Discretionary authority is
hereby confirmed as to all other matters that may come before the meeting.
WITNESS my name and seal this ________ day of _________________, 1995.
____________________________________________
____________________________________________
Signature of Shareholder
PLEASE SIGN this proxy exactly as your name
or names appear herein, if stock is held
jointly, signatures should appear for both
names. When signing as attorney, executor,
administrator, trustee, guardian or
custodian, please indicate the capacity in
which you are acting. Please fill in date
and sign the proxy and return in the
enclosed postpaid envelope.
(See Proxy On Reverse Side.)