[SYNCOR INTERNATIONAL CORPORATION LETTERHEAD]
May 10, 1996
NOTICE OF MEETING
DEAR STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of
Stockholders of Syncor International Corporation on Wednesday, June
26, 1996, beginning at 1:00 p.m. local time. The meeting will be
held at the Warner Center Marriott Hotel, 21850 Oxnard Street,
Woodland Hills, California 91367.
Enclosed you will find the proxy statement and the Annual
Report for the year ended December 31, 1995. This Notice of the
Annual Meeting and the proxy statement on the following pages cover
the formal business of the meeting which includes the election of
two of the eight Directors for a three-year term.
We look forward to welcoming you at the forthcoming Annual
Meeting. We urge all Syncor stockholders to vote using the
enclosed proxy card. Thank you for your continued confidence and
support.
Sincerely,
/S/ MONTY FU
__________________________
MONTY FU
CHAIRMAN OF THE BOARD
/S/ GENE R. MCGREVIN
__________________________
GENE R. MCGREVIN
VICE CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
/S/ ROBERT G. FUNARI
__________________________
ROBERT G. FUNARI
PRESIDENT AND CHIEF
OPERATING OFFICER
<PAGE>
SYNCOR INTERNATIONAL CORPORATION
20001 PRAIRIE STREET
CHATSWORTH, CALIFORNIA 91311
___________________________________
PROXY STATEMENT
FOR ANNUAL MEETING ON JUNE 26, 1996
___________________________________
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited by the Board of Directors of Syncor
International Corporation ("SYNCOR" OR THE "COMPANY") for use at
the annual meeting of stockholders of the Company ("ANNUAL
MEETING") to be held June 26, 1996 at the Warner Center Marriott
Hotel, 21850 Oxnard Street, Woodland Hills, California 91367,
beginning at 1:00 p.m. local time, and any postponement(s) or
adjustment(s) thereof. The Company's proxy statement and form of
proxy/voting instruction card are being mailed to the stockholders
commencing May 10, 1996. Syncor will bear all expenses incurred in
connection with the solicitation. In addition to solicitation by
mail, proxies may be solicited by Directors, executive officers or
employees of Syncor in person or by telephone or otherwise. They
will not be specifically compensated for such services.
GENERAL INFORMATION
Votes cast by proxy or in person at the Annual Meeting will be
counted by the persons appointed by the Board of Directors of
Syncor to act as election inspectors at the meeting. The election
inspectors will treat shares represented by proxies that reflect
abstentions as shares that are present and entitled to vote for
purposes of determining the presence of a quorum and for purposes
of determining the outcome of any matter submitted to the
stockholders for a vote. Abstentions, however, do not constitute
a vote "for" or "against" any matter.
The election inspectors will treat shares referred to as "broker
non-votes" (i.e., shares held by brokers or nominees as to which
instructions have not been received from the beneficial owners or
other persons entitled to vote and that the broker or nominee does
not have discretionary power to vote on a particular matter) as
shares that are present and entitled to vote for purposes of
determining the presence of a quorum. However, for purposes of
determining the outcome of any matter as to which the broker has
indicated on the proxy that it does not have discretionary
authority to vote, those shares will be treated as not present and
not entitled to vote (even though the same shares are present for
quorum purposes and may be entitled to vote on other matters).
Any unmarked proxies, including those submitted by brokers or
nominees, will be voted as indicated in any marked proxy
accompanying any such unmarked proxies and as summarized elsewhere
in this proxy statement.
Your executed proxy may be revoked at any time before it is
exercised by filing with the Secretary of Syncor at the principal
executive office of Syncor, 20001 Prairie Street, Chatsworth,
California 91311, a duly executed written revocation or a duly
executed proxy bearing a later date. The execution of the enclosed
proxy will not affect your right to vote in person should you find
it convenient to attend the Annual Meeting.
<PAGE>
VOTING SECURITIES
The number of shares of the Company's $.05 par value common stock
("COMMON STOCK") outstanding and entitled to vote at the Annual
Meeting is 10,412,509 shares. Each share is entitled to one vote,
and the stockholders are not entitled to cumulate their votes in
the election of Directors. Only stockholders of record at the
close of business on April 29, 1996, are entitled to notice and to
vote at the Annual Meeting. Shares represented by all valid
proxies will be voted according to the instructions contained in
the proxies. IN THE ABSENCE OF INSTRUCTIONS, SHARES REPRESENTED BY
VALID PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS
OF THE BOARD OF DIRECTORS AS SHOWN ON THE PROXY. WITH RESPECT TO
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING, THE PROXY
HOLDERS WILL VOTE THE PROXY IN ACCORDANCE WITH THEIR BEST JUDGMENT.
The presence, either in person or by proxy, of the persons entitled
to vote a majority of Syncor's shares are necessary for a quorum
for the transaction of business at the Annual Meeting. A plurality
of the votes cast will elect the Directors. Approval of each other
proposal to be brought before the Annual Meeting (not including the
election of the Directors) will require the affirmative vote of at
least the majority in voting interests of the stockholders present,
in person or by proxy, at the Annual Meeting and entitled to vote
thereon.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Based upon information available to the Company as of March 31,
1996, the following table sets forth certain information concerning
persons known to Syncor to own beneficially more than five percent
of the outstanding Syncor Common Stock (the only class of Syncor's
voting securities). All ownership is direct except as otherwise
noted.
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class (1)
_____________________________________________________________________________________________
<S> <C> <C>
MONTY FU (2)
20001 Prairie Street, Chatsworth, CA 91311 685,610 6.6%
WELLINGTON MANAGEMENT COMPANY (3)
75 State Street, Boston, MA 02109 1,267,759 12.2%
BZW GLOBAL INVESTORS, N.A. (4)
Syncor International Corporation ESSOP
420 Montgomery Street, San Francisco, CA 94163 1,416,117 13.6%
HEARTLAND ADVISORS, INC.
790 North Milwaukee Street, Milwaukee, WI 53202 599,900 5.8%
VANGUARD SPECIALIZED PORTFOLIOS, INC.-HEALTH CARE PORTFOLIO
Post Office Box 2600, Valley Forge, PA 19482-2600 856,559 8.2%
DEERFIELD CAPITAL, L.P. AND DEERFIELD MANAGEMENT COMPANY(5)
450 Lexington Avenue, Suite 1930, New York, NY 10017 525,000 5.0%
<FN>
_______________
<PAGE>
(1) Calculated on the basis of 10,412,509 shares of Syncor Common
Stock outstanding. Percentages are calculated including shares
not outstanding which the beneficial owner has a right to
acquire within 60 days of March 31, 1996.
(2) Includes 5,700 shares not outstanding which Mr. Fu has the
right to acquire pursuant to options that are currently
exercisable, 8,499 shares owned by Mr. Fu by virtue of his
participation in the Employee's Savings and Stock Ownership
Plan ("ESSOP") as of March 31, 1996, and 11,600 shares held as
trustee for his children.
(3) Includes 856,559 shares reported by Vanguard Specialized
Portfolios, Inc.-Health Care Portfolio.
(4) BZW Global Investors is the trustee for Syncor's ESSOP and has
the right to vote the shares according to the plan and in
proportion to the vote of the beneficial owners.
(5) Deerfield Capital, L.P. is the beneficial owner of 500,850
shares of Common Stock and Deerfield Management Company is the
beneficial owner of 24,150 shares of Common Stock. Arnold H.
Snider is the sole stockholder, president and director of
Snider Capital Corp., a Delaware corporation which serves as
the general partner of Deerfield Capital. Mr. Snider is also
the sole stockholder, president and director of Snider
Management Corporation, a Delaware corporation which serves as
the general partner of Deerfield Management.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 31, 1996, the
beneficial ownership of Syncor Common Stock (the only class of
Syncor's equity securities) by each Syncor Director, by each
nominee and by each of the executive officers named in the "SUMMARY
COMPENSATION TABLE." All ownership is direct unless otherwise
noted.
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (1)
__________________________________________________________________
<S> <C> <C>
Monty Fu 685,610 (2) 6.6%
Gene R. McGrevin 602,861 (3) 5.8%
Arnold E. Spangler 24,100 (4) (*)
George S. Oki 16,450 (5) (*)
Dr. Steven B. Gerber 27,000 (6) (*)
Dr. Henry N. Wagner, Jr. 24,966 (7) (*)
Dr. Gail R. Wilensky 9,999 (8) (*)
Robert G. Funari 40,497 (9) (*)
Jack L. Coffey 24,562 (10) (*)
Michael E. Mikity 31,011 (11) (*)
All Directors and
executive officers as a
Group (13 Individuals) 1,791,455 (12) 17.2%
<FN>
_________________
(1) Calculated on the basis of 10,412,509 shares of Syncor Common
Stock outstanding. Percentages and amounts are calculated
including shares not outstanding which the individual has a
right to acquire pursuant to options exercisable within 60
days of March 31, 1996, if any. Exceptions are noted for each
individual. The executive officers' 34,192 ESSOP shares are
included and separately noted for named executive officers in
the following notes. The ESSOP total number is as of March
31, 1996 but does not include matching shares for the first
quarter of 1996.
(2) Includes 5,700 shares not outstanding which the person has the
right to acquire pursuant to options, 8,499 shares under the
ESSOP as of March 31, 1996 and 11,600 shares held as trustee
for his children.
(3) Includes 592,250 shares not outstanding which the person has
the right to acquire pursuant to options and 5,611 shares
under the ESSOP as of March 31, 1996.
(4) Includes 18,100 shares not outstanding which the person has
the right to acquire pursuant to options.
(5) Includes 12,450 shares not outstanding which the person has
the right to acquire pursuant to options and 3,000 shares held
as trustee for his children.
(6) Includes 25,000 shares not outstanding which the person has
the right to acquire pursuant to options.
(7) Includes 24,966 shares not outstanding which the person has
the right to acquire pursuant to options on March 31, 1996 or
within 60 days thereafter.
(8) Includes 9,999 shares not outstanding which the person has the
right to acquire pursuant to options on March 31, 1996 or
within 60 days thereafter.
(9) Includes 33,875 shares not outstanding which the person has
the right to acquire pursuant to options and 1,622 shares
under the ESSOP as of March 31, 1996.
(10) Includes 17,850 shares not outstanding which the person has
the right to acquire pursuant to options and 5,712 shares
under the ESSOP as of March 31, 1996.
(11) Includes 23,500 shares not outstanding which the person has
the right to acquire pursuant to options and 6,011 shares
under the ESSOP as of March 31, 1996.
(12) Includes 779,036 shares not outstanding which the individuals
as a group have the right to acquire pursuant to options and
34,192 shares under the ESSOP as of March 31, 1996 or within
60 days thereafter.
(*) Less than 1%.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
IDENTIFICATION OF DIRECTORS AND NOMINEES
ELECTION OF DIRECTORS
In 1986, Syncor stockholders approved staggered three-year terms
for Directors. The two nominees named below are successors to the
class whose term expires at this Annual Meeting and, if elected,
will serve until the Annual Meeting in 1999 when their respective
successors are duly elected and qualified. The third director in
this class was Joseph Kleiman who died in January 1996. Thereafter
the Board of Directors unanimously adopted a resolution pursuant to
which the number of Directors was fixed at eight (8).
The nominees are described below with brief statements setting
forth their present principal occupations, their current ages, the
lengths of time they have served as Directors of Syncor (including
as a Director of a Syncor predecessor) and their business
experience during at least the last five years. Both of the
nominees are currently Directors of Syncor. There are no family
relationships between any of the nominees, Directors or executive
officers except that Mr. Oki is a brother-in-law of Mr. Fu. Oki
Nursery Company, Inc., where Mr. Oki served as Chief Financial
Officer until March 1993, and continues to serve as a Director,
filed Chapter 7 on December 1, 1994 in connection with the
dissolution of such company. Iko Land, Inc., where Mr. Oki serves
as President, acquired a general partner's interest in a
partnership. Subsequent to such acquisition, the partnership
elected to restructure under a Chapter 11 plan.
Both of the nominees have indicated their willingness to serve.
However, in the event that either of them should be unable to
serve, the proxies named on the enclosed proxy card will vote in
their discretion for such other persons as the Board of Directors
may recommend, unless the Board of Directors reduces the number of
Directors to eliminate any vacancies. Unless otherwise instructed,
the proxies will vote for both of the nominees. The shares
represented in person and by proxy cannot be voted for more than
two nominees.
<PAGE>
NOMINEES FOR ELECTION (CURRENT TERMS EXPIRE IN 1996)
MONTY FU Director since May 17, 1985
Age: 49
Mr. Fu is the Chairman of the Board of Directors of Syncor. Mr. Fu
was Chairman of the Board and a Vice President of Syncor
International Corporation, a California corporation, commencing
1982 until it merged into a predecessor of Syncor. Mr. Fu was co-
founder of Pharmatopes, Inc., and served as Secretary-Treasurer and
Director from its inception in 1975 until July 1982 when it was
acquired by the Syncor California corporation. Mr. Fu has a B.S.
degree in Pharmacy with a specialization in Nuclear Pharmacy.
HENRY N. WAGNER, JR., M.D. Director since August 3, 1992
Age: 68
Dr. Wagner has spent more than 30 years at The Johns Hopkins
University, pioneering radioactive diagnostics and treatments. He
is currently a Professor of Medicine, Radiology and Radiological
Science and Environmental Health Sciences, as well as the Director
of the Divisions of Nuclear Medicine and Radiation Health Sciences.
At The Johns Hopkins Hospital, he is Director of the Division of
Nuclear Medicine. Dr. Wagner and his work have been nationally and
internationally recognized with numerous honors and awards,
including the prestigious American Medical Association's Scientific
Achievement Award. Dr. Wagner is a member of many professional
societies, including the National Academy of Medicine, and serves
on several research committees for such organizations as the
National Institutes of Health, National Research Council and the
Nuclear Regulatory Commission.
ADDITIONAL DIRECTORS
TERMS EXPIRING IN 1997
STEVEN B. GERBER, M.D. Director since May 1, 1990
Age: 42
Dr. Gerber has been a Managing Director and pharmaceutical industry
analyst for Oppenheimer & Co., Inc. for the past five years. He
was a health care industry analyst with Bateman Eichler, Hill
Richards, Inc. from 1988 to September 1990. Dr. Gerber has an
M.B.A. in Finance from the University of California, Los Angeles,
and is a board-certified internist and cardiologist with
subspecialty training in Nuclear Cardiology. He received his M.D.
from Tufts University and a B.A. in Psychology from Brandeis
University.
ARNOLD E. SPANGLER Director since August 9, 1985
Age: 47
Mr. Spangler is a Managing Director of Mancuso & Company, a private
merchant banking firm, since 1993. Previously, he was a financial
consultant and private investor from 1991 to 1993. From 1989 to
1991, Mr. Spangler was a Managing Director of PaineWebber
Incorporated and a Co-Director of its mergers and acquisitions
department. From 1983 to 1989, Mr. Spangler was a General Partner
in the investment banking firm of Lazard Freres & Co., where he
worked primarily in the areas of mergers and acquisitions and
financial advising. Mr. Spangler has a B.S. in Economics and an
M.B.A.
DR. GAIL R. WILENSKY Director since July 12, 1993
Age: 52
Dr. Wilensky's professional career spans 25 years of policy
analysis, management, and university-level teaching. She is
currently the John M. Olin Senior Fellow at Project HOPE, an
international health foundation and chair of the Physician Payment
Review Commission. Previously, she served in the White House as
Deputy Assistant to the President for Policy Development. Before
joining the White House staff, she was the Administrator of the
Health Care Financing Administration ("HCFA") in the Department of
Health and Human Services for two years. As Administrator, she
directed the Medicare and Medicaid programs. Dr. Wilensky is a
nationally recognized expert on a wide range of health policy and
financing issues and has published extensively on health economics
and other policy issues. Dr. Wilensky has received numerous honors
and awards and is an elected member of the Institute of Medicine of
the National Academy of Sciences. She is a member of many
professional societies and serves on several professional
committees and boards and currently serves as a Trustee of the
Combined Benefits Fund of the United Mine Workers of America.
TERMS EXPIRING IN 1998
GENE R. MCGREVIN Director since February 1, 1989
Age: 53
Mr. McGrevin was elected Director, Vice Chairman and Chief
Executive Officer in January, 1996, having served as Director,
President and Chief Executive Officer since February 1, 1989.
Previously, he founded Everest Health Care Inc. in 1987 where, as
its President and Chief Executive Officer, he concentrated on
management consulting and investment opportunities in start-up and
growth companies. Prior to that, he was Executive Vice President
and Board member of VHA Enterprises Inc., Dallas, Texas, where he
established a long-term strategic direction for the Home
Healthcare, Ambulatory Medical Care, Physician Services and
Consulting Services businesses. Mr. McGrevin also held the
position of President of Health Care Product Group at Kimberley-
Clark Corp., key management positions with Danline Inc., Johnson
and Johnson, Citicorp Systems Inc. and Cummins Engine Company. Mr.
McGrevin has an M.B.A. from the Wharton Graduate School of Finance
and Commerce at the University of Pennsylvania.
GEORGE S. OKI Director since May 17, 1985
Age: 45
Mr. Oki has been the Chairman of the Board of Meta Information
Services Inc. since April 1, 1993. Previously, he was the Chairman
of the Board of Oki Nursery, Inc., where he was employed since
1975. Mr. Oki was a Director of a predecessor corporation from
July 1982 to August 1983 and from December 1984 until its merger
into Syncor. Mr. Oki has a B.S. degree in Horticulture from
Colorado State University and an M.B.A. from the University of
Southern California.
ROBERT G. FUNARI Director since January 23, 1995
Age: 48
Mr. Funari was elected Director on January 23, 1995. Mr. Funari
joined Syncor on August 9, 1993, and was appointed Executive Vice
President and Chief Operating Officer for Syncor. Prior to joining
Syncor, Mr. Funari was an Executive Vice President and General
Manager for McKesson Drug Company. From 1975 to 1992, Mr. Funari
held a number of key management positions with Baxter International
and its subsidiaries. His last position with Baxter was as
President of its Pharmaseal Division. Mr. Funari received a
Bachelor of Science degree in Mechanical Engineering from Cornell
University and an M.B.A. from Harvard Business School.
IDENTIFICATION OF EXECUTIVE OFFICERS
The following persons are all of the executive officers of Syncor.
The respective executive officers hold the same or similar
positions for Syncor Management Corporation and other wholly owned
subsidiaries of Syncor. The executive officers serve at the
discretion of the Board of Directors.
<PAGE>
<TABLE>
<CAPTION>
Director and/or
Name Age Officer Since Position(s)
____________________________________________________________________________________________
<S> <C> <C> <C>
Monty Fu 49 May 1985 Director, Chairman of the Board
Gene R. McGrevin 53 February 1989 Director, Vice Chairman of the Board and Chief
Executive Officer (1)
Robert G. Funari 48 August 1993 Director, President and Chief Operating Officer
(2)
Michael E. Mikity 48 November 1985 Vice President, Treasurer and Chief Financial
Officer
Haig S. Bagerdjian 39 January 1995 Vice President, Secretary and General Counsel
Jack L. Coffey 44 April 1989 Vice President, Field Operations for the Eastern
Area
Sheila H. Coop 55 November 1992 Vice President, Human Resources
Charles A. Smith 43 November 1992 Vice President, Corporate Development
<FN>
___________________
<PAGE>
(1) Mr. McGrevin was elected Vice Chairman of the Board and Chief
Executive Officer effective January 14, 1996. Previously he
was President and Chief Executive Officer.
(2) Mr. Funari was elected President and Chief Operating Officer
effective January 14, 1996. Previously he was Executive Vice
President and Chief Operating Officer.
</TABLE>
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
HAIG S. BAGERDJIAN is Vice President, Secretary and General Counsel
for Syncor. Mr. Bagerdjian joined Syncor in 1991 as an Associate
General Counsel and Assistant Secretary. Prior to joining Syncor,
from 1987 to 1991, Mr. Bagerdjian worked for Calmark Holding
Corporation in various management positions, including the General
Counsel for one of its subsidiaries, American Adventure, Inc. Mr.
Bagerdjian received a Bachelor of Arts degree from the University
of Southern California in International Relations and Slavic
Languages and Literature; Certificates in Russian Studies,
Strategic Defense and National Security in 1983, and a J. D. from
Harvard Law School in 1986. He is admitted to the State Bar of
California.
JACK L. COFFEY is Vice President, Field Operations for the Eastern
area of Syncor, effective March 20, 1995, and previously served as
Vice President of Quality and Regulatory. He joined Nuclear
Pharmacy, Inc., a predecessor of Syncor, in 1984 as Director of
Radiation Services. Mr. Coffey received a Bachelor of Science
degree from Cumberland College in 1973 and a Master's Degree in
Radiation Biology in 1978, from the University of Tennessee.
SHEILA H. COOP is Vice President, Human Resources, for Syncor. Ms.
Coop joined Syncor in July 1991, as Director of Human Resources.
Prior to joining Syncor, Ms. Coop was a Senior Human Resources
Consultant with Jorgensen and Associates. From 1988 to 1990, Ms.
Coop was Director, Human Resources for Daylight Transport, Inc., a
national transportation company. Ms. Coop received a Bachelor of
Science degree from the University of California, Los Angeles, and
a Certificate of Professional Designation in Human Resources
Management awarded by the University of California, Los Angeles,
School of Law and Graduate School of Business in 1983.
MICHAEL E. MIKITY is Vice President, Treasurer and Chief Financial
Officer for Syncor. From June 1993 until August 1994, Mr. Mikity
served as Vice President and Chief Information Officer for Syncor.
From 1983 until June 1993, Mr. Mikity served as Chief Financial
Officer and Treasurer of Syncor. Mr. Mikity is a certified public
accountant and received his Bachelor of Science degree in
Accounting in 1973, from the University of Southern California.
CHARLES A. SMITH is Vice President, Corporate Development, for
Syncor. Mr. Smith joined Nuclear Pharmacy, Inc., a predecessor of
Syncor, in 1979 as a Staff Pharmacist. In 1985, he was named a
Director of Operations for Syncor. From June 1988 to November
1992, Mr. Smith was the Director, Business Development. Mr. Smith
received a Pharm. B.S. degree from Drake University, College of
Pharmacy in 1977, an M.S. in Pharmaceutical Sciences with emphasis
in Clinical Pharmacy in 1979, from the University of the Pacific,
and an M.B.A. from Pepperdine University in 1988.
INFORMATION CONCERNING OPERATION OF THE
BOARD OF DIRECTORS AND ITS COMMITTEES
In order to facilitate the handling of various functions of the
Board of Directors, the Board has appointed a standing Audit
Committee, Compensation Committee, Nominating Committee, Quality
Committee and Stock Option Committee.
AUDIT COMMITTEE. The current members of the Audit Committee are
George S. Oki, Chairperson, Dr. Steven B. Gerber, Dr. Henry N.
Wagner, Jr. and Arnold E. Spangler. Such committee met once during
the year ended December 31, 1995. The functions of the Audit
Committee include review of those matters that primarily relate to
a financial audit of Syncor and its subsidiaries including (i) the
findings of the independent auditors, (ii) the accounting
principles used by Syncor and actual or impending changes in
financial accounting requirements, (iii) the financial and
accounting controls, and (iv) the recommendations by the
independent auditors.
COMPENSATION COMMITTEE. The current members of the Compensation
Committee are Arnold E. Spangler, Chairperson, Dr. Steven B.
Gerber and Dr. Gail R. Wilensky. Such committee met twice during
the year ended December 31, 1995. The functions of the
Compensation Committee include (i) the review with the Chief
Executive Officer, of his performance and the performance of the
executive officers whose compensation is the subject of review,
(ii) annual review, examination and approval, as needed of salary
ranges and salaries for the executive officers and compensation for
non-employee Directors and (iii) the review of compensation
arrangements involving major acquisitions, salary administration
policy, fringe benefit policy and other compensation matters as
requested by the Board of Directors.
QUALITY COMMITTEE. The current members of the Quality Committee
are Dr. Gail R. Wilensky, Chairperson, Gene R. McGrevin and Robert
G. Funari. Such committee met once during the year ended December
31, 1995. The functions of the Quality Committee include
establishing strategic priorities for quality, assessment and
evaluation of quality standards and who will carry out the process.
Also, it establishes expectations and reviews plans and procedures
that improve the quality of Syncor.
NOMINATING COMMITTEE. The current members of the Nominating
Committee are Dr. Steven B. Gerber, Chairperson, Monty Fu, George
S. Oki and Robert G. Funari. Such committee met once during the
year ended December 31, 1995. The functions of the Nominating
Committee include (i) setting-up procedures for locating nominees
for the Director positions, (ii) reviewing prospective new members
of the Board of Directors and nominations for successive terms of
current Board members, and (iii) making recommendations to the
Board of Directors for nominees for Director positions. The
Nominating Committee will consider the possible nomination as
Directors of persons recommended by stockholders. Any such
recommendations should be in writing and should be mailed or
delivered to the Company, marked for the attention of the
Nominating Committee, on or before the date for receipt of
stockholder proposals for the next annual meeting (see "STOCKHOLDER
PROPOSALS").
STOCK OPTION COMMITTEE. The current members of the Stock Option
Committee are Dr. Henry N. Wagner, Jr., Chairperson, Arnold E.
Spangler and George S. Oki. Such committee was created by the
Company's Board of Directors in January 1995 and met four times
during the year ended December 31, 1995. The purposes of the Stock
Option Committee are to administer the Company's 1990 Master Stock
Incentive Plan and award of stock options.
BOARD OF DIRECTORS. During the year ended December 31, 1995, the
Board of Directors held six meetings, two of which were telephonic.
All of the Directors attended more than 75 percent of the total
number of meetings of the Board of Directors and no Director
attended fewer than 75 percent of the total number of meetings held
by all Committees of the Board of Directors on which he or she
served.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS. Each non-employee Director is paid an
annual retainer of $20,000, paid in quarterly payments of $5,000
and $1,000 per day for Board meetings, including one travel day per
meeting if traveling from out-of-state. In addition, reasonable,
out-of-pocket expenses of a Director incurred in connection with
his or her service as a Director is reimbursed by the Company. For
the year ended December 31, 1995, including the annual retainer and
expenses, non-employee Directors were paid as follows: Dr. Gerber,
$30,803; Mr. Oki, $30,124; Mr. Spangler, $32,696; Dr. Wagner,
$31,094 and Dr. Wilensky $30,326. Commencing July 11, 1989, each
newly elected non-employee Board member receives on his or her date
of election, 10,000 options to purchase shares of the Company's
Common Stock and, subject to certain restrictions, an additional
5,000 options following each subsequent Annual Meeting of
Stockholders attended by such Director up to a total of 25,000
options, exercisable within a ten year period. As of June 21,
1995, Dr. Wilensky has received 20,000 options at the exercise
price equal to the closing price at the date of the grant. The
remaining non-employee Board members have each received 25,000
options. In addition, in 1995, pursuant to non-qualified 1995
Stock Incentive Award Agreements outside of the 1990 Master Stock
Incentive Plan, Mr. Oki received 4,200 options, Mr. Wagner received
16,600 options and Mr. Spangler received 4,200 options.
1990 MASTER STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED (the
"1990 MSIP"). The 1990 Master Stock Incentive Plan, amended and
restated on November 15, 1993, provides long term incentives for
high levels of performance from Directors and employees through the
grant of (a) options and (b) other awards such as stock
appreciation rights, restricted stock awards and performance share
awards ("AWARDS"). The options granted to the non-employee
Directors are fixed in the 1990 MSIP as described above in the
paragraph captioned "Compensation of Directors." In July 1993, the
Board of Directors delegated its discretion and administrative
authority under the 1990 MSIP to the Compensation Committee, which
duties were transferred in January 1995 to the newly formed Stock
Option Committee (the "ADMINISTRATOR"). Options are granted to
executive officers and other key employees under the 1990 MSIP at
the discretion of the Administrator. The purchase price per option
is determined by the Administrator, but in the case of incentive
stock options, it must be at least fair market value on the date of
grant. The purchase price per option purchased may be paid in cash
or by check, by a promissory note if authorized by the
Administrator upon terms it determines, or by shares of the
Company's Common Stock under certain limitations. Options are
subject to a vesting schedule and period determined by the
Administrator. However, vesting cannot occur in less than six
months from the date of grant and the option period cannot exceed
ten years. The 1990 MSIP is qualified under the Internal Revenue
Code (the "CODE"). To date, no Awards have been granted under the
1990 MSIP, and although the 1990 MSIP permits tandem rights, none
of the options granted to date thereunder have tandem rights.
EMPLOYEE'S SAVINGS AND STOCK OWNERSHIP PLAN ("ESSOP"). Eligible
employees may participate in the Company's ESSOP, as amended
November 22, 1995, and as administered pursuant to Section 401(k)
of the Code, by contributing up to two percent of their pay through
pre-tax payroll deductions for the purchase of the Company's Common
Stock. The Company matches such contributions on a share-for-share
basis. In addition, participating employees may contribute up to
an additional 14 percent of their pay, subject to a maximum dollar
amount, to an account with several investment fund choices. The
Company will match these additional contributions at the rate of
$.50 on the dollar up to the first four percent of such
contributions.
EXECUTIVE LIFE INSURANCE PLAN. All executive officers are part of
Syncor's life insurance plan receiving coverage computed on the
same basis as all salaried employees. In addition, the executive
officers each have term life insurance of $250,000, premiums for
which are paid by Syncor, except for Mr. Fu for whom the amount is
$400,000. In addition, on July 10, 1993 the Board of Directors
approved a split ownership/split dollar plan for Mr. McGrevin.
Under that plan, Syncor has an ownership right in a certain life
insurance policy of $2,000,000 purchased by Mr. McGrevin. For that
right Syncor agreed to contribute an annual premium equal to
$62,000 per year for the first two years of the plan and $77,000
per year for the remaining eight consecutive years of the plan. In
the event of Mr. McGrevin's death, the Company shall be reimbursed
in an amount equal to the cumulative premium payments made by the
Company. In the event that Mr. McGrevin elects to surrender or
cancel the policy, the Company shall receive an amount equal to the
lesser of the cumulative premiums paid by it or the policy's cash
surrender value.
EXECUTIVE DEFERRAL PLAN. All executive officers, members of the
Board of Directors and senior management are eligible to
participate in the Executive Deferral Plan (the "DEFERRAL PLAN").
The Deferral Plan allows each participant to defer up to 25
percent, and in the case of non-employee Directors, 100 percent, of
his or her annual compensation. The Deferral Plan is designed to
defer the payment of taxes on the deferred income until such time
as the deferments are distributed to the participants. At
retirement (or termination), Syncor makes a contribution on behalf
of the participant up to the first 15 percent (100% for non-
employee Directors) of the deferred compensation toward the payment
of taxes on the value of such deferral distribution. This amount
is calculated by applying a 30 percent "gross-up" rate on the
amount to be distributed. The Deferral Plan is secured with a
"Rabbi Trust" which is responsible for plan investments.
Currently, assets are invested in a selection of separate and fixed
accounts made available through flexible variable life insurance
policies owned by the trust. The Deferral Plan participants select
from up to five accounts including stock, aggressive stock, bond,
total return (managed) and fixed. The investment performance of
each account selected will determine the returns credited to the
individual participant's deferral account value. Syncor bears no
investment risk under the Deferral Plan. Each individual policy
bears its own investment and policy expenses. It is the total
surrender value of each underlying insurance policy that is
"grossed-up" for the participant under the circumstances described
above.
BENEFITS AGREEMENT. The Company entered into a Benefits Agreement,
the form of which was approved by the Board of Directors in
November 1989 and amended by the Board on June 20, 1995, with all
of its Directors and certain of its employees which provides for
accelerated vesting of stock options, deferred incentive earnings
and all other awards under the Company's incentive plans in the
event of a "change in control" as defined in such Benefits
Agreement.
1995 MANAGEMENT INCENTIVE PLAN. The 1995 Management Incentive Plan
(the "1995 MIP") is designed to be consistent with (a) overall
Company performance, measured as earnings per share ("EPS") and (b)
the employee's individual performance, measured by successfully
achieving specific performance goals known as Management By
Objectives ("MBO's"). Any amounts payable under the 1995 MIP are
subject to several conditions: an eligible employee must have an
acceptable performance appraisal; be actively employed by the
Company at the end of the year to receive an annual payout; and
must successfully achieve Management By Objectives ("MBO's"). The
1995 MIP is a three year plan with separate thresholds and targets
for each year as described below.
Based upon an individual's position, he/she may be eligible for one
or more of the following components of the 1995 MIP: (1) Local
Achievement Incentive, (2) EPS Incentive, (3) EPS Over-Achievement
Incentive and (4) Long Term Incentive. Only Pharmacy Managers and
Senior Pharmacy Managers are eligible for the Local Achievement
Incentive. The executive officers are eligible for the EPS
Incentive which is calculated by multiplying an employee's salary
by a designated percentage, which shall not exceed 45%, based upon
employee's position. There is one designated percentage if the
Company's EPS reaches the threshold (the "Threshold") of $.40 in
1995, $.50 in 1996 and/or $.60 in 1997 and an additional designated
percentage if the EPS reaches the target (the "Target") of $.45 in
1995, $.55 in 1996 and/or $.70 in 1997. Payment of the EPS
Incentive to the eligible employee is made within two months of the
end of the calendar year in which such EPS Incentive was earned,
subject to confirmation by the Company's independent certified
public accountants. The EPS Over-Achievement Incentive is in
addition to the EPS Incentive and is paid to eligible employees
when the EPS exceeds the Target for the year. For every dollar
earned above the Target, $.30 will be contributed to an incentive
pool to be distributed pro rata amongst all participants. Payment
is made together with the EPS Incentive. There were no incentives
earned in 1995 under this component. The Long Term Incentive
component of the 1995 MIP is described below in the footnotes to
the Long-Term Incentive Plans--Awards in Last Fiscal Year table.
EXECUTIVE VACATIONS AND DISABILITY INSURANCE. Each executive
officer receives four weeks of vacation annually and is covered by
disability insurance paying up to 75 percent or $15,000 per month,
whichever is less, of the Executive Officer's cash compensation,
upon total disability, until the age of 65.
SUMMARY COMPENSATION OF EXECUTIVE OFFICERS. The following tables
and accompanying notes show the compensation for the Chief
Executive Officer and the four next highest paid executive officers
of Syncor and its subsidiaries during the fiscal year ended
December 31, 1995, the fiscal year ended December 31, 1994, the
seven-month period ending December 31, 1993 (resulting from a
change in the Company's fiscal year end from May 31 to December 31)
and the fiscal year ended May 31, 1993. In addition to the
Management Incentive Plan described above, the Company has one
additional long term incentive plan, the McGrevin Deferred
Compensation Plan, Amended and Restated, effective October 23,
1995.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
______________________________
Annual Compensation Awards Payouts
________________________________ __________________ ________
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secu-
rities
Other Rest- Under- All
Annual ricted lying Other
Bonus Compen- Stock Options/ LTIP Compen-
Name and Salary (2)(3) sation Awards SARs Payout sation
Principal Position Year (1)($) (4)($) (5)($) ($) (#) (2)($) (7)($)
_______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GENE R. MCGREVIN 1995 310,000 173,600 124,000 8,437
Vice Chairman and 1994 310,000 -0- 69,000(6) 7,077
Chief Executive Officer 1993* 179,125 125,000 7,755
1993 310,000 295,000 18,830
_______________________________________________________________________________________________________________
MONTY FU 1995 210,000 117,600 84,000 4,335
Chairman of the Board 1994 222,876 -0- 11,400(6) 9,532
1993* 121,356 75,000 7,890
1993 210,000 200,000 15,490
_______________________________________________________________________________________________________________
ROBERT G. FUNARI 1995 210,000 117,600 84,000 4,335
President and 1994 210,000 -0- 3,821 85,500(6) 4,394
50,000
Chief Operating Officer 1993* 79,154 75,000 41,515 100,000 843
_______________________________________________________________________________________________________________
JACK L. COFFEY 1995 150,000 82,992 21,464 59,280 2,929
Vice President 1994 152,307 -0- 35,700(6) 2,855
1993* 80,814 50,000 370
1993 140,000 132,000 50,000 462
_______________________________________________________________________________________________________________
MICHAEL E. MIKITY 1995 140,000 78,400 56,000 3,594
Vice President, Treasurer 1994 139,808 -0- 10,000 6,004
& Chief Financial Officer 1993* 75,000 50,000 1,989
1993 130,000 121,000
<FN>
__________________
<PAGE>
(1) Amounts shown include cash and non-cash compensation earned
and received by executive officers as well as amounts earned
but deferred at the election of those executive officers under
the Deferral Plan.
(2) The bonuses shown for 1995 were earned pursuant to the 1995
MIP but were not paid until February 1996. With respect to
column (h), for details of the amounts shown above, see Long-
Term Incentive Plans--Awards in Last Fiscal Year below.
(3) The amounts for the seven-month period ended December 31, 1993
(marked as 1993*), include the portion of the bonuses accrued
under the Officer Incentive Plan for the old fiscal year 1994,
ending May 31, 1994. At the Board of Directors meeting held
on January 10, 1994, the Chief Executive Officer recommended
to the Compensation Committee to pay a bonus to each eligible
employee including the executive officers. The
recommendations were based on the rationale that: (i) Syncor
achieved a sufficient level of sales and earnings for the
first two quarters of the seven-month period; and (ii) Syncor
management was able to create, develop and execute a strategic
alliance with the DuPont Merck Pharmaceutical Company. The
Compensation Committee and the Board approved the
recommendations and the bonus was paid in March 1994. Amounts
shown include amounts earned but deferred at the election of
those executive officers.
(4) The 1995 amounts are bonuses earned in 1995 but not paid until
1996. The 1993 amounts include bonuses accrued under the
fiscal year 1993 Executive Officer Incentive Plan. Pursuant
to the plan adopted by the Board of Directors on August 2,
1992, in the event the budgeted net profit before tax ("NPBT")
amount was achieved, each executive officer could receive a
varying incentive payout from 56 percent to 70 percent of his
or her salary. If the budgeted NPBT was exceeded by at least
11 percent, the executive officers could receive an incentive
payout of 100 percent of the executive officer's salary.
Actual payout, except for the Chairman of the Board and Chief
Executive Officer, however, would be based 40 percent on
achieving the NPBT amount and 60 percent on the individual
executive officer achieving individual objectives agreed upon
with the Chief Executive Officer. To the extent such
objectives were not achieved, the payout would be reduced.
Actual payouts were subject to approval by the Board of
Directors. The payout was accrued in fiscal year 1993, and
occurred in August, 1993. Amounts shown include amounts
earned but deferred at the election of those executive
officers.
(5) Other Annual Compensation in the form of the value of certain
perquisites did not, in the aggregate, exceed the amount of
$50,000 or 10 percent of the aggregate salary and bonus
compensation for the reported period, except as otherwise
reported. Syncor accrues amounts for the "grossed-up"
component under the Deferral Plan, however, those amounts are
not shown as other compensation for the following reasons: (i)
each individual policy bears its own investment and policy
expenses; (ii) amounts accrued by Syncor are not invested on
behalf of the participants; (iii) the actual "grossed-up"
component could be zero at the time of retirement or
termination. The amount reported for Mr. Funari represents
relocation allowance according to Syncor's Homeowners' Full
Relocation Package, available to all employees, which included
for the seven-month transition period ended December 31, 1993
and year ended December 31, 1994: (i) $23,204 paid directly to
Mr. Funari for relocation; (ii) $22,132 paid to third parties
on his behalf; and (iii) purchase and subsequent resale of his
residence in Northern California in February 1994, according
to his employment agreement. The amount reported for Mr.
Coffey represents relocation allowance according to the
Company's Homeowners' Full Relocation Package, available to
all employees, which included: (i) $20,140 paid directly to
Mr. Coffey for relocation and (ii) $1,324 paid to third
parties on his behalf.
(6) Exchanged under the repricing offered by the Company on July
14, 1994 when current employees holding stock options under
the Company's 1990 Master Stock Incentive Plan had the
opportunity to exchange all of their unexercised options with
exercise prices of $9.125 and higher for a reduced number of
new options with an exercise price equal to the then-current
fair market value of $8.50. The exchange formula reduced the
number of options, but reestablished motivation at market
prices more in keeping with current market conditions. The
vesting status of the new option shares was based on the
percentage of option shares vested immediately preceding the
exchange with all new options having a 10-year expiration
date. Certain named executive officers participated in the
exchange program.
(7) The amounts represent premiums paid for term life and
disability insurance and the dollar value of Syncor's
contribution under the ESSOP, (see "EXECUTIVE LIFE INSURANCE
PLAN"). Under the ESSOP named executive officers received the
following number of shares of Syncor Common Stock as matching
contributions: (i) for the year ended December 31, 1995,
valued at an average of $6.75 per share: Mr. McGrevin, 325;
Mr. Fu, 511; Mr. Funari, 693; Mr. Coffey, 499 and Mr. Mikity,
541; (ii) for the year ended December 31, 1994, valued at
$7.00 per share as of December 31, 1994: Mr. McGrevin, 332;
Mr. Fu, 268; Mr. Funari, 239; Mr. Coffey, 272 and Mr. Mikity,
204; (iii) for the seven-month period ended December 31, 1993,
valued at $22.375 per share as of December 31, 1993: Mr.
McGrevin, 241; Mr. Fu, 260; Mr. Funari, zero; Mr. Coffey, 242
and Mr. Mikity, 220; and (iv) for the year ended May 31, 1993,
valued at $20.50 per share as of June 1, 1993: Mr. McGrevin,
762; Mr. Fu, 626; Mr. Coffey, 501 and Mr. Mikity, 501.
* Syncor changed its fiscal year end from May 31 to December 31.
The amounts represent the seven-month period ended December
31, 1993. Mr. Funari first joined Syncor during this period.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts
Under Non-Stock Price-Based Plans
_________________________________________________________________________________________________
(a) (b) (c) (d) (e) (f)
Performance or
Number of Shares, Other Period Until
Units or Other Maturation or Threshold Target Maximum
Name Rights (#) Payout (1) ($ or #) (2) ($ or #) (3) ($ or #) (4)
_________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
GENE R. MCGREVIN n/a 12/31/97 $62,000 $62,000 $124,000
MONTY FU n/a 12/31/97 42,000 42,000 84,000
ROBERT G. FUNARI n/a 12/31/97 42,000 42,000 84,000
JACK L. COFFEY n/a 12/31/97 29,640 29,640 59,280
MICHAEL E. MIKITY n/a 12/31/97 28,000 28,000 56,000
</TABLE>
<PAGE>
(1) Pursuant to the 1995 MIP described above, (i) amounts earned
under the Long Term Incentive component are not paid until the
earlier of an employee's termination from the Company or
December 31, 1997 and (ii) all amounts earned under the
Company Match element of the Long Term Incentive component are
not paid until December 31, 1997.
(2) Pursuant to the Long Term Incentive component of the 1995 MIP,
program directors, operational directors, general managers,
and executive officers of the Company are eligible for
incentive compensation in addition to the EPS Incentive.
There are two elements of the Long Term Incentive: (i) An
eligible employee's salary is multiplied by a designated
percentage if the EPS reaches the Threshold of $.40 in 1995,
$.45 in 1996 and/or $.50 in 1997. Such employee's salary is
multiplied by an additional designated percentage if the EPS
reaches the Target of $.45 in 1995, $.55 in 1996 and/or $.70
in 1997. If the Company exceeds its Target in 1996 or 1997
(not applicable to 1995 because the Company did not exceed its
Target), a designated multiplier will be used to calculate an
additional Long Term Incentive amount. Payment to the
eligible employee of the Long Term Incentive is deferred until
the earlier of such employee's termination or December 31,
1997. (ii) To encourage employment longevity, there is an
additional element of the Long Term Incentive known as the
Company Match. The Long Term Incentive is multiplied by one-
third if the Threshold was met or two-thirds if the Target was
met. An eligible employee forfeits all of the Company Match
earned in any year if such employee leaves the Company before
December 31, 1997.
Since the Company met the Threshold in 1995, to calculate the
EPS Incentive component, each of the above named executive
officers' base salary was multiplied by the Company designated
percentage of 45%. To calculate the first element of the Long
Term Incentive, each executive officer's salary was multiplied
by the Company designated percentage of 12%; that product was
multiplied by 2/3 to calculate the Company Match element.
Messrs. McGrevin, Fu, Funari and Mikity achieved 100% of their
individual MBO's, as described in the section below captioned
"REPORT OF THE COMPENSATION COMMITTEE", therefore they earned
the full incentives, resulting in the following:
<PAGE>
<TABLE>
<CAPTION>
Gene R. McGrevin Monty Fu/Robert G. Funari Michael E. Mikity
________________ _________________________ _________________
<S> <C> <C> <C> <C>
Long Term Incentive
First Element $310,000 x 12% = $37,200 $210,000 x 12% = $25,200 $140,000 x 12% = $16,800
Company Match Element $37,200 x 2/3 = 24,800 $25,200 x 2/3 = 16,800 $16,800 x 2/3 = 11,200
_________ ________ _________
$ 62,000 $ 42,000 $ 28,000
</TABLE>
Mr. Coffey achieved 98.8 percent of his MBO's. Therefore, his
Threshold calculation was $150,000 x 12% x 98.8% = $17,784 for
the first element of the Long-Term Incentive component plus
$17,784 x 2/3 = $11,856 for the Company Match element of the
Long-Term Incentive component, resulting in his total Threshold
compensation of $29,640.
(3) As described above in footnote (2) once the Threshold has
been attained, additional amounts are earned if the Company
reaches the Target in any year. Since the Company reached
$.45 EPS in 1995, the executive officers earned the Target
amounts, calculated in the same manner as the Threshold
amounts above.
(4) The Maximum is the sum of the Threshold and the Target.
<PAGE>
<TABLE>
<CAPTION>
OPTION EXERCISES AND YEAR-END VALUES TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercisable In-the-Money
Options/SARs Options/SARs
at FY-End at FY-End
(#) ($)
______________ ______________
Shares Value Exercisable/ Exercisable/
Acquired on Realized(1) Unexercisable Unexercisable
Name Exercise(#) ($) (2)(3) (3)
______________________________________________________________________________
<S> <C> <C> <C> <C>
GENE R. MCGREVIN 592,250/51,750 $642,000/0
MONTY FU 5,700/5,700 (4) 0/0
ROBERT G. FUNARI 33,875/101,625 0/0
JACK L. COFFEY 17,850/17,850 0/0
MICHAEL E. MIKITY 23,500/7,500 0/0
<PAGE>
<FN>
________________
(1) Market value of underlying securities at exercise date or year-end,
as the case may be, minus the exercise or base price of "in-the-
money" options/SARs.
(2) Each of the outstanding options were granted with an exercise price
of 100 percent of fair market value on the date of grant, for a
term (subject to earlier termination following a termination of
employment) of five to ten years. The options are exercisable no
earlier than six months of the grant date for repriced stock
options, and no earlier than the first anniversary of the grant
date for all other stock options. The options vest over the course
of up to four years. The options were granted under Syncor's 1990
MSIP, or earlier 1981 Master Stock Option Plan (established by the
predecessor of Syncor, the "1981 MSOP"), at the discretion of the
Board of Directors. The 1981 MSOP is not qualified under the
Internal Revenue Code. No options under the 1981 MSOP have tandem
rights. After the adoption of the 1990 MSIP, no options were
granted under the 1981 MSOP. All options that expire or lapse
under the 1981 MSOP become available for grant under the 1990 MSIP.
(3) Based solely upon a market value of $6.75 (the closing price of the
Company's Common Stock as reported by NASDAQ for December 29,
1995), all of the unexercisable options listed herein and 92,250 of
the exercisable options held by Mr. McGrevin are "out-of-the-money"
and 500,000 of the exercisable options held by Mr. McGrevin are in-
the-money.
(4) In the Company's 1994 Proxy Statement, a typographical error
resulted in a report of 11,400/0 for Mr. Fu instead of 0/11,400.
Since then, 5700 options have vested, resulting in the above report
of 5700/5700.
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR. For the year ended December 31,
1995, no options or SARs were granted to the executive officers named in
the Summary Compensation Table above.
EMPLOYMENT, SEVERANCE, INDEMNITY AND CHANGE OF CONTROL ARRANGEMENTS
GENE MCGREVIN'S EMPLOYMENT AGREEMENT. The Company is currently
____________________________________
negotiating the terms of a new employment agreement with Mr. McGrevin.
Until the execution thereof, the employment agreement entered into
between the Company and Mr. McGrevin dated as of May 11, 1994 (the
"McGrevin Agreement") is in effect for a term of three years and eight
months expiring on December 31, 1997, and provides for a negotiation
period from January 1, 1997, to June 30, 1997, for extension of the
term. The McGrevin Agreement provides for various benefits including a
current annual salary of $310,000 which is subject to periodic review
and increase. The McGrevin Agreement provides for various payments to
Mr. McGrevin or his beneficiaries in the event of his death, disability
or termination and in the event of change of control of Syncor. In the
event of his death or termination due to disability, Mr. McGrevin or his
beneficiaries would be entitled to a payment equal to the prorated
portion of Mr. McGrevin's then current salary and bonus. In the event
of a termination without cause, Mr. McGrevin would receive his salary,
at the time of such termination, for the remaining term of the McGrevin
Agreement and a full or partial bonus payment for the year of
termination. He would also be entitled to continuation of certain other
benefits for the same period, and full and immediate vesting of all
stock options and other employee benefits. If such termination occurred
following a change of control as defined below, the salary payments as
described above would be made in a lump-sum payment upon the effective
date of termination. If such termination occurs during the last two
years of the term, such lump-sum payment shall be in the amount of two
years' compensation. In the event of change of control, a material
reduction of Mr. McGrevin's duties and responsibilities, a relocation of
his office or a change in the support personnel will be considered
termination without cause. A change of control occurs under the
agreement when either (i) 20 percent or more of Syncor's outstanding
voting stock is acquired by a person, or group of related persons not
affiliated with Syncor, or (ii) Syncor sells more than 50 percent of
Syncor's assets not in the ordinary course of business.
ROBERT FUNARI'S EMPLOYMENT AGREEMENT. The Company is currently
____________________________________
negotiating the terms of a new employment agreement with Mr. Funari that
will reflect his recent promotion to President of the Company. Until
the execution thereof, the Company and Mr. Funari are operating under an
oral agreement that is consistent with the employment agreement entered
into between the Company and Mr. Funari dated as of July 21, 1993 (the
"Funari Agreement") that expires on August 31, 1995. The terms under
which the Company and Mr. Funari are operating include an annual salary
of $210,000. If the Company and Mr. Funari do not enter into a new
written agreement and Mr. Funari leaves Syncor or continues to be
employed by Syncor and subsequently he is terminated and such
termination is not for cause, due to death or mutual agreement, then
Syncor will be obligated to pay Mr. Funari all salary payments for one
year from the expiration date or the termination date at the salary rate
in effect on such date and all stock options shall immediately vest.
INDEMNITY AGREEMENT. Each non-employee Director and executive
___________________
officer has an Indemnity Agreement which under certain conditions,
provides for indemnification of the Directors or executive officers for
the duties performed for Syncor or its subsidiaries and affiliates.
BENEFITS AGREEMENT. In addition, each non-employee Director and
__________________
executive officer has a Benefits Agreement which, under certain limited
conditions in the event of a change in control, each receives
compensation for one year and all stock options fully vest immediately.
DEFINED BENEFIT. On July 10, 1993, the Board of Directors approved
_______________
a deferred compensation plan for Mr. McGrevin, by establishing a non-
funded termination or retirement benefit effective June 10, 1993. The
plan was amended and restated effective October 23, 1995. The term of
the plan is for ten years. For each year of participation under the
plan, Mr. McGrevin will be credited with a benefit equal to $65,000 for
the first two years and $77,000 thereafter.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the year ended December
31, 1995 were Joseph Kleiman, Chairman, Dr. Steven B. Gerber and Dr.
Gail R. Wilensky, all of whom were non-employee Directors. The
Compensation Committee, from time to time, for the purpose of gathering
information or recommendations includes executive officers, including
the Chief Executive Officer, in its deliberations. During the year
ended December 31, 1995, none of the Compensation Committee members had
a relationship requiring disclosure under any paragraph of Item 404 of
Regulation S-K. In addition to the Compensation Committee, the Board of
Directors of the Company created a Stock Option Committee to administer
the 1990 MSIP and award of stock options. The members of such committee
during the year ended December 31, 1995 were Joseph Kleiman, Chairman,
Dr. Gail R. Wilensky and Dr. Steven B. Gerber, and none of such members
had a relationship requiring disclosure under any paragraph of Item 404
of Regulation S-K.
FINANCIAL STATEMENTS AND INFORMATION
Syncor's consolidated financial statements for the year ended December
31, 1995 and management's discussion and analysis of financial condition
and results of operations appear in Syncor's Annual Report to
Stockholders which accompanies this proxy statement.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP was appointed by the Board of Directors as
Syncor's independent auditor for the year ending December 31, 1996.
KPMG Peat Marwick LLP was Syncor's independent auditor for the year
ended December 31, 1995.
A representative from KPMG Peat Marwick LLP will be present at the
Annual Meeting, will have the opportunity to make statements, and will
be available to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 ACT"),
requires Syncor's Directors and executive officers to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Additionally, Item 405 of Regulation S-K under the 1934 Act
requires the Company to identify in its proxy statement those
individuals for whom one of the above-referenced reports was not filed
on a timely basis during the most recent fiscal year or prior fiscal
years. Based solely upon its review of Forms 3, 4 and 5 furnished to
the Company, the Company believes that all reports required to be filed
during 1995 pursuant to Section 16(a) of the Act were timely filed. In
addition, the Company did not become aware during 1995 of any delinquent
filings for prior fiscal years.
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPH INCLUDED IN THIS PROXY STATEMENT SHALL NOT BE DEEMED TO BE
INCORPORATED BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS
PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE
1934 ACT, EXCEPT TO THE EXTENT SYNCOR SPECIFICALLY INCORPORATES THIS
REPORT OR THE PERFORMANCE GRAPH BY REFERENCE THEREIN, AND SHALL NOT BE
DEEMED SOLICITING MATERIAL OR OTHERWISE DEEMED FILED UNDER EITHER OF
SUCH ACTS.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee reviews management's suggestions and
recommends to the Board of Directors the base salary compensation and
the annual incentive compensation of the executive officers and
evaluates the executive officers' performance.
In determining the compensation recommendations for all executive
officers which the Compensation Committee makes to the Board of
Directors, it is the policy and practice of the Compensation Committee
to consider the contributions of individual executive officers, the
performance and prospects of Syncor over time, and the desirability of
attracting and retaining a highly capable and experienced executive
officer group. The Internal Revenue Service's regulations, limiting the
corporate deductions to $1,000,000 per executive officer, will be taken
into consideration in determining total compensation of the executive
officers.
In recent years, it has been Syncor's policy to pay to each executive
officer a compensation package consisting of a base salary which is
relatively low based upon industry comparisons, and annual incentive
compensation in the form of a discretionary bonus based upon the
performance of the Company and the individual executive officer. The
annual incentive compensation is based upon performance levels which
include achievement of budgeted net profit before tax and individual
objective factors established each year on recommendations of the Chief
Executive Officer and approved by the Compensation Committee and the
Board of Directors. Such incentive compensation can account for
approximately 45 percent of total compensation. Annual incentive
compensation for Syncor's executive officers can increase or decrease
significantly if individual contribution or Syncor's performance
exceeds, or fails to achieve, targeted performance levels.
Mr. McGrevin's compensation and related benefits are based principally
on his rights under his employment agreement with Syncor.
In addition, Mr. McGrevin and others are eligible to participate in the
1995 MIP, as described above in the section captioned "COMPENSATION OF
DIRECTORS AND EXECUTIVE OFFICERS", which is designed to support the
achievement of the Company's profit objectives by awarding incentive
compensation to executives at or above the manager level who have direct
influence in accomplishing the Company's business objectives for 1995.
In creating the 1995 MIP, the Compensation Committee wanted it to be
consistent with (a) overall Company performance, measured as earnings
per share and (b) the employee's individual performance, measured by
successfully achieving specific performance goals. Departing from the
Company's former approach of paying an annual lump sum bonus, the
Compensation Committee decided that it is important to divide the
incentive compensation resulting in a reduced annual bonus but offering
the challenge and opportunity of a long term incentive component. The
long term incentive is intended (x) to achieve longer term
accountability for planning and execution; (y) to encourage
overachievement; and (z) to enhance the retention of highly effective
management personnel. In connection therewith, the 1995 MIP was
designed as a three year plan with separate thresholds and targets for
each year based upon Company performance, measured by EPS and individual
performance, measured by MBO's, a goal-oriented method used to evaluate
the performance of managers against established objectives. MBO's
include three steps: (1) establishing objectives; (2) setting
performance standards for each objective; and (3) comparing actual goal
attainment against the established objectives. Any amounts calculated
for any of the components of the 1995 MIP must be multiplied by the
degree to which MBO's were attained by each eligible employee.
The annual incentive compensation is summarized for the seven-month
transitional period ended December 31, 1993, and the fiscal years 1993,
1994 and 1995 in the "SUMMARY COMPENSATION TABLE" and the footnotes
thereto. The long term incentive compensation is summarized for fiscal
year 1995 in the "LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR"
table and the footnotes thereto.
Joseph Kleiman, the chairman of the Compensation Committee for the year
ended December 31, 1995, died in January 1996.
Dated: May 10, 1996 Compensation Committee of
the Board of Directors,
Syncor International Corporation
Arnold E. Spangler, Chairperson
Dr. Gail R. Wilensky
Dr. Steven B. Gerber
SYNCOR STOCK PRICE PERFORMANCE
The following chart compares the value of $100 invested in Syncor Common
Stock from May 31, 1988, through December 31, 1995, with the similar
investment in the NASDAQ Composite (U.S. companies) and with the S&P
Health Care Composite. The NASDAQ Composite (U.S. companies) is an
index comprised of all domestic common shares traded on the NASDAQ
National Market and the NASDAQ Small-Cap Market. The S&P Health Care
Composite is a composite index which is weighted between the following
S&P indices: Health Care Diversified (44.1%); Health Care Drugs (39.3%);
Health Care Miscellaneous (3.6%); Hospital Management (2.0%) and Medical
Products and Supplies (11%). The table below shows the value of each
such investment on May 31, of each year and December 31, 1993, 1994 and
1995, assuming reinvestment of dividend.
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF $100 BEGINNING MAY 31, 1990
[GRAPH]
At December 1995
________________
Syncor International = approximately $ 79
NASDAQ Stock Market (U.S.) = approximately $246
S&P(R) Health Care Composite Index = approximately $230
(Source: Georgeson & Co., Inc.)<PAGE>
<TABLE>
<CAPTION>
May-90 May-91 May-92 May-93 Dec-93 Dec-94 Dec-95
__________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Syncor International $100 $179 $221 $238 $263 $82 $79
NASDAQ Stock $100 $114 $133 $160 $178 $174 $246
Market (U.S.)
S&P(R) Health Care $100 $135 $147 $127 $129 $146 $230
Composite Index
</TABLE>
<PAGE>
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to Stockholders concerning the operations of Syncor
for the year ended December 31, 1995 including consolidated financial
statements for that period, has been enclosed with this proxy statement.
STOCKHOLDER PROPOSALS
Stockholder proposals for consideration at the Annual Meeting expected
to be held on June 10, 1997, must be received by The Company no later
than April 11, 1997 in order for such proposals to be included in the
proxy materials for the 1997 Annual Meeting. To be included, proposals
must be proper under law and must comply with the Rules and Regulations
of the Securities and Exchange Commission and the By-Laws of The
Company. All such proposals should be addressed to the Secretary of the
Company.
OTHER MATTERS
The Board of Directors is not aware of any other matters which are to be
presented at the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, the persons named in the proxy
will vote on such matters in accordance with their judgment.
The above notice and proxy statement are sent by order of the Board of
Directors.
/S/ HAIG S. BAGERDJIAN
_______________________
May 10, 1996 HAIG S. BAGERDJIAN
Chatsworth, California Secretary
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST, SYNCOR WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS
ANNUAL REPORT ON FORM 10-K, EXCEPT FOR EXHIBITS THERETO, FOR THE PERIOD
ENDED DECEMBER 31, 1995 FILED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION, TO ANY STOCKHOLDER OF RECORD AT THE CLOSE OF
BUSINESS ON APRIL 29, 1996. ANY EXHIBIT WILL BE PROVIDED ON REQUEST
UPON PAYMENT OF THE REASONABLE EXPENSES OF FURNISHING THE EXHIBIT.
REQUESTS SHOULD BE ADDRESSED TO SYNCOR, TO THE ATTENTION OF INVESTOR
RELATIONS, 20001 PRAIRIE STREET, CHATSWORTH, CALIFORNIA 91311, OR
TELEPHONE (818) 886-7400.
SYNCOR INTERNATIONAL CORPORATION
20001 Prairie Street
Chatsworth, California 91311
THIS PROXY IS SOLICITED BY THE The undersigned hereby appoints Monty Fu
BOARD OF DIRECTORS FOR THE and Gene R. McGrevin, and each of them,
ANNUAL MEETING OF STOCKHOLDERS proxies for the undersigned to vote all the
ON JUNE 26, 1996. stock of Syncor International Corporation
owned by the undersigned at the Annual
The Meeting will be held at the Meeting of its Stockholders to be held on
Warner Center Marriott Hotel, June 26, 1996, and at any adjournment(s)
21850 Oxnard Street, Woodland thereof, for the election of two of the
Hills, California 91367, and eight Directors, and any other matters
will begin at 1:00 p.m. local which may properly come before the meeting,
time. as indicated on this card and as set forth
in the Proxy Statement, subject to any
directions indicated on this card.
IF NO DIRECTIONS ARE GIVEN, THE PROXIES
_______________________________________
INTEND TO VOTE THE SHARES REPRESENTED BY
________________________________________
THIS PROXY AS RECOMMENDED BY THE DIRECTORS
__________________________________________
ON THE MATTERS DESCRIBED ON THE REVERSE SIDE
____________________________________________
THIS PROXY REVOKES ALL PROXIES PREVIOUSLY
_________________________________________
GRANTED BY THE UNDERSIGNED FOR ANY PURPOSE.
___________________________________________
If you do not sign and return a Proxy, or
attend the Meeting, your shares cannot be
voted.
(Please date and sign on reverse side.)
[FRONT]
<PAGE>
SYNCOR INTERNATIONAL CORPORATION'S Directors recommend a vote "FOR" the
nominees, and SHARES WILL BE SO VOTED UNLESS OTHERWISE INDICATED. The Board
of Directors knows of no other proposed matters to be brought before the
meeting.
1. ELECTION OF DIRECTORS /___/FOR both nominees /___/WITHHOLD AUTHORITY
listed below to vote for both
(except as nominees listed
marked to the below
contrary below)
Monty Fu and Henry N. Wagner, Jr., M.D. for the three year term expiring
in 1999.
(INSTRUCTION: To withhold authority to vote for either individual nominee
listed above, write that nominee's name in the space provided below.)
_______________________________________________________________________
2. If any other matters are properly brought before the Meeting, or any
adjournment(s) thereof, the persons named on the reverse side as Proxies
or their substitutes are authorized to vote in accordance with their best
judgment.
SIGN HERE AS NAME(S) APPEAR IN PRINT
X______________________________________ DATE:__________________, 1996
X______________________________________ DATE:__________________, 1996
Please sign and date this Proxy and return it promptly. If signing for a
corporation or partnership or as agent, attorney or fiduciary, indicate
the capacity in which you are signing. Joint owners should both sign.
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