<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
GAMMA BIOLOGICALS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
GAMMA BIOLOGICALS, INC.
3700 MANGUM ROAD, HOUSTON, TEXAS 77092
JUNE 28, 1996
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders to be
held August 8, 1996, at 3:00 p.m., Central time, at the offices of the
Company, 3700 Mangum Road, Houston, Texas.
It will be a pleasure for the officers and directors to meet with you and
have an opportunity to answer any questions you may have about Company
affairs. The officers and directors will be available to talk individually
with shareholders before and after the meeting.
Whether or not you plan to attend the meeting, we urge you to sign and
return the enclosed proxy so that your shares will be represented at the
meeting.
Sincerely,
[SIGNATURE APPEARS HERE]
David E. Hatcher
Chairman of the Board
<PAGE>
GAMMA BIOLOGICALS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Gamma Biologicals, Inc. (the
"Company") will be held August 8, 1996, at 3:00 p.m., Central time, at the
offices of the Company, 3700 Mangum Road, Houston, Texas 77092, for the
following purposes:
1.To elect directors; and
2.To transact such other business as may properly come before the meeting or
any adjournments thereof.
The Board of Directors has fixed the close of business on June 17, 1996 as
the record date for the meeting, and only holders of Common Stock of record at
such time will be entitled to vote at the meeting or any adjournments thereof.
Further information regarding the meeting and the nominees for election as
directors is set forth in the accompanying proxy statement.
By order of the Board of Directors,
[SIGNATURE APPEARS HERE]
Lawrence E. Letwin
Secretary
June 28, 1996
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY
AT YOUR EARLIEST CONVENIENCE.
<PAGE>
GAMMA BIOLOGICALS, INC.
3700 MANGUM ROAD, HOUSTON, TEXAS 77092
JUNE 28, 1996
----------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the annual meeting of shareholders (the "Meeting") of Gamma
Biologicals, Inc. (the "Company") to be held at the time and place and for the
purposes set forth in the foregoing Notice of Annual Meeting of Shareholders
(the "Notice") and at any adjournments thereof.
SOLICITATION AND VOTING OF PROXIES
The solicitation will be conducted by mail. The Company will bear the
expense of the solicitation of proxies, including the charges and expenses of
brokerage firms and others incurred in forwarding solicitation material to
beneficial owners of stock. Further solicitation of proxies may be made by
telephone or oral communication with shareholders of the Company following the
original solicitation. All further solicitation will be by regular employees
of the Company who will not be additionally compensated therefor. Copies of
the Proxy, Notice and Proxy Statement are being mailed to shareholders on or
about June 28, 1996.
Proxies in the accompanying form are solicited by the management at the
direction of the Board of Directors. Execution and return of the proxy will
not in any way affect a shareholder's right to attend the Meeting and to vote
in person, and a shareholder giving a proxy has the power to revoke it at any
time before it is exercised by giving written notice to the Company at or
prior to the Meeting. A proxy may also be revoked by execution of a proxy
bearing a later date or by attendance at the Meeting and voting in person by
ballot. Properly executed proxies in the accompanying form, received in due
time and not previously revoked, will be voted as specified. A proxy received
by management which does not withhold authority to vote or on which no
specification has been indicated will be voted for the proposals set forth in
this Proxy Statement and for the nominees for the Board of Directors of the
Company named in Proposal No. 1 of this Proxy Statement. 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 shareholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved.
At the date of this Proxy Statement, management of the Company does not know
of any business to be presented at the Meeting other than those matters which
are set forth in the Notice accompanying this Proxy Statement. If any other
business should properly come before the Meeting, it is intended that the
shares represented by proxies will be voted with respect to such business in
accordance with the judgment of the persons named in the proxy.
1
<PAGE>
COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
Only holders of Common Stock of the Company of record at the close of
business on June 17, 1996 are entitled to notice of and to vote at the
Meeting. At that date, there were outstanding 4,552,802 shares of the
Company's Common Stock, which is the only class of stock that has been issued
by the Company. Each shareholder is entitled to one vote for each share of
Common Stock held of record by the shareholder on that date for all matters
coming before the Meeting and, except as otherwise provided by applicable law,
a favorable vote consists of a simple majority of the votes cast. Shareholders
are not entitled to cumulate their votes in the election of directors, which
means that the holders of more than half of the shares voting for the election
of directors can elect all of the directors if they choose to do so.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of May 7, 1996, the ownership of the
Company's Common Stock by (i) each shareholder, if any, who is known by the
Company to own beneficially more than 5% of the outstanding Common Stock, (ii)
each director, (iii) each named executive officer and (iv) all directors and
executive officers as a group. Except as otherwise indicated, the shareholders
listed in the table have sole voting and investment power with respect to the
shares indicated. All information with respect to beneficial ownership has
been furnished by the shareholders to the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- ----------------- --------
<S> <C> <C>
Betty Francis Hatcher............................ 224,199(1) 4.89%
David E. Hatcher................................. 166,099(2) 3.59%
John J. Moulds................................... 41,725(3) *
Bryan J. Brieden................................. 32,820(4) *
John Case........................................ 18,099(5) *
R. Bruce LaBoon.................................. 12,500(6) *
Hayle B. Randolph................................ 10,100(6) *
All executive officers and directors as a group
(10 persons).................................... 551,789(7) 11.58%
Dimensional Fund Advisors Inc.
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401.......................... 229,400 5.05%
</TABLE>
- --------
*Less than 1.0%.
(1) Includes 37,100 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
(2) Includes 70,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options and 10,000 shares
owned of record by Patsy J. Hatcher, wife of David E. Hatcher, beneficial
ownership of which is disclaimed by Mr. Hatcher.
(3) Includes 31,500 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
(4) Includes 10,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options. Also includes 5,226
shares owned of record by Mrs. Brieden, beneficial ownership of all of
which is disclaimed by Mr. Brieden.
2
<PAGE>
(5) Includes 8,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options and 799 shares owned
of record by Mrs. Case, beneficial ownership of which is disclaimed by Mr.
Case.
(6) Includes 10,000 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
(7) Includes 212,600 shares which can be acquired during the next 60 days
pursuant to the exercise of outstanding stock options.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
INFORMATION CONCERNING DIRECTORS
It is proposed that six directors will be elected at the Meeting, each to
hold office until the annual meeting of shareholders in 1997 and until his or
her successor is duly elected and qualified. The Company has no reason to
believe that any nominee will be unavailable to serve at the time of election.
All the nominees are presently members of the Board of Directors of the
Company. There are no family relationships among any of the directors of the
Company. The names of the nominees, together with information as to their
principal occupations, age, and experience, are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
---- -------------------- --- --------
<C> <S> <C> <C>
Bryan J. Brieden............ Consultant(1) 68 1970
Betty Francis Hatcher....... Executive Vice President-Product 63 1988
Development and Assistant
Secretary of the Company(2)
David E. Hatcher............ Chairman of the Board and Chief 73 1970
Executive Officer of the
Company(3)
R. Bruce LaBoon............. Partner, Law Firm of Liddell, 55 1991
Sapp, Zivley, Hill & LaBoon,
L.L.P.(4)
John J. Moulds.............. President and Chief Operating 52 1991
Officer of the Company(5)
Hayle B. Randolph........... Blood services consultant(6) 65 1991
</TABLE>
- --------
(1) In 1994, Mr. Brieden retired as President of Bryan Biologicals, Inc., a
distributor of laboratory supplies, a position he held for more than five
years. Mr. Brieden now serves as a consultant to Bryan Biologicals, Inc.
(2) Ms. Hatcher served as the Senior Vice President and Secretary of the
Company prior to becoming a consultant to the Company in 1988. Ms. Hatcher
was appointed Assistant Secretary of the Company in February 1989 and was
appointed Director of Product Development of the Company in February 1990.
She was appointed Executive Vice President of the Company in August 1992.
(3) Mr. Hatcher also served as the President of the Company until June 1992.
(4) Mr. LaBoon served as a director of the Company from 1979 through 1986.
(5) Mr. Moulds joined the Company in 1975 and became Vice President-
Consultation and Education in 1980. Mr. Moulds became Executive Vice
President and Chief Operating Officer of the Company in 1989 and was
appointed President and Chief Operating Officer of the Company in June
1992.
(6) Mr. Randolph served as President and Chief Executive Officer of Blood
Systems, Inc. until his retirement in March 1991. Mr. Randolph served as a
consultant on various projects for Blood Systems, Inc. and as the
Executive Director of Blood Systems Research Foundation until January 15,
1993 and is currently an independent consultant to the blood services
industry.
3
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met five times during fiscal 1996. The
Board has established two standing committees, the Audit Committee and the
Compensation/Stock Option Committee, both comprised of Messrs. Brieden, LaBoon
and Randolph. The Audit Committee exercises oversight with respect to the
Company's accounting practices and procedures and its relationship with its
independent auditors, and the Compensation/Stock Option Committee makes
recommendations to the Board of Directors regarding the compensation of
officers and employees of the Company and the granting of options under the
Company's 1991 Employee Stock Option Plan and 1995 Employee Stock Option Plan.
The Audit Committee met one time during fiscal 1996, and the
Compensation/Stock Option Committee met one time during fiscal 1996. There is
no nominating committee. No incumbent director attended fewer than 75% of the
total number of meetings of the Board of Directors and of all committees of
the board on which he or she served in fiscal 1996.
DIRECTOR COMPENSATION
Directors of the Company who are also employees of the Company do not
receive fees for attending meetings of the Board of Directors. Non-employee
directors of the Company receive a retainer of $3,000 per year, payable in
quarterly installments, and a fee of $600 for each meeting of the Board of
Directors and for each meeting of each committee of the Board of Directors
attended by such director.
EXECUTIVE OFFICERS
The following table sets forth the names, ages, length of service as an
officer, and the positions of the persons who are not directors and who are
executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICER SINCE POSITION
---- --- ------------- --------
<S> <C> <C> <C>
John Case.................. 69 1980 Vice President--Regulatory Affairs
Margaret J. O'Bannion...... 41 1989 Vice President--Finance and Chief
Financial Officer
Jimmie L. Turner........... 57 1989 Vice President--Customer Services
Gary L. Parrish............ 59 1994 Vice President--National Sales
</TABLE>
Mr. Case joined the Company in 1976 and became Vice President-Regulatory
Affairs in 1980. Ms. O'Bannion joined the Company in 1978 and was named
Controller of the Company in 1987. Ms. O'Bannion became Vice President-Finance
and Chief Financial Officer in August 1989. Mr. Turner joined the Company in
1976 as a sales representative and became Vice President-Customer Services in
August 1989. Mr. Parrish joined the Company in 1977 as a sales representative
and was named National Sales Manager in 1988. He became Vice President-
National Sales in August 1994.
4
<PAGE>
COMPENSATION/STOCK OPTION COMMITTEE REPORT(1)
The Compensation/Stock Option Committee of the Board of Directors (the
"Committee") is composed entirely of outside directors and is responsible for
developing and making recommendations to the Board with respect to the
Company's executive compensation policies. This Committee Report sets forth
the components of the Company's executive officer compensation and describes
the basis on which the fiscal 1996 compensation determinations were made by
the Committee with respect to the executive officers of the Company.
In designing its executive compensation programs, the Company follows its
belief that executive compensation should reflect the value created for
shareholders while supporting the Company's strategic goals. The following
objectives have been adopted by the Committee:
1. Executive compensation should be meaningfully related to the value
created for shareholders;
2. Executive compensation programs should reflect and promote the Company's
value and reward individuals for outstanding contributions to the
Company's success; and
3. Short and long term executive compensation play a critical role in
attracting and retaining well qualified executives.
The Committee currently implements a compensation program based on three
components: a base salary, a bonus program related to Company and individual
performance during the relevant year, and a stock option program. The
Committee regularly reviews the various components of the Company's executive
compensation to ensure that they are consistent with the Company's objectives.
BASE SALARY. The Committee, in recommending the appropriate base salaries of
the Company's executive officers, generally considers the level of executive
compensation in similar companies in the industry. In addition, the Committee
takes into account (i) the performance of the Company and the roles of the
individual executive officers with respect to such performance and (ii) the
particular executive officer's specific responsibilities, and the long-term
performance of such executive officer in those areas of responsibility.
ANNUAL INCENTIVES. The bonus program provides direct financial incentives,
in the form of an annual cash bonus, to executive officers to achieve and
exceed the Company's annual goals. The Committee recommends cash bonuses based
upon the Committee's evaluation of the contributions of each individual
officer during the applicable fiscal year in achieving the goals of the
Company for that year.
LONG-TERM INCENTIVES. The stock option program is currently the Company's
primary long-term incentive plan for executive officers and key employees. The
objectives of the stock option program are to align executive officer
compensation and shareholder return, and to enable executive officers to
develop and maintain a significant, long-term stock ownership position in the
Company's Common Stock. In addition, grants of stock options to the named
executive officers and others are intended to retain and motivate executives
to improve long-term corporate and stock market performance. Stock options are
granted at the prevailing market value and will only have value if the
Company's stock price increases. Generally, grants of stock options vest in
equal amounts over four years, and executives must be employed by the Company
at the time of vesting in order to exercise a stock option.
- --------
(1) Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this proxy statement) in their entirety, this
Compensation Committee Report shall not be incorporated by reference into
such filings and shall not be deemed to be "filed" with the SEC except as
specifically provided otherwise or to the extent required by Item 402 of
the Regulation S-K.
5
<PAGE>
Consistent with the Company's compensation program outlined above,
compensation for each of the named executive officers, as well as other senior
executives, consists of a base salary, bonus and stock options. The base
salaries for the named executive officers for fiscal 1996 were at levels below
competitive amounts paid to executives with comparable qualifications,
experience and responsibilities of other companies engaged in the same or
similar business as the Company. The Committee has not yet determined the
amount of cash bonuses, if any, to be paid to the named executive officers for
fiscal 1996.
The Committee believes that the compensation of the chief executive officer
("CEO") should be impacted by Company performance. Mr. Hatcher founded the
Company in 1970 and has served as its CEO since that time. During fiscal 1996,
Mr. Hatcher received a base salary of $209,949, which the Committee believes
to be average for the base salary for chief executive officers with comparable
qualifications, experience and responsibilities of other companies engaged in
the same or similar business as the Company. At this time, this Committee has
not made a determination as to the bonus, if any, to be paid to Mr. Hatcher,
for fiscal 1996.
Compensation Committee: Bryan J. Brieden, R. Bruce LaBoon and Hayle B.
Randolph.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except as set forth below, no member of the Compensation/Stock Option
Committee of the Board of Directors of the Company was, during fiscal 1996, an
officer or employee of the Company or any of its subsidiaries, was formerly an
officer of the Company or any of its subsidiaries, or had any relationships
requiring disclosure.
During fiscal 1996, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers
served on the compensation committee of the Board of Directors, (ii) a
director of another entity, one of whose executive officers served on the
Compensation Committee of the Board of Directors, or (iii) a member of the
Compensation Committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served as a
director of the Company.
The Company distributes its products in the State of Michigan through Bryan
Biologicals, Inc. In fiscal 1996, the Company's sales to Bryan Biologicals,
Inc. amounted to approximately $209,186 or 1.2% of the Company's net sales.
Mr. Bryan J. Brieden, a director of the Company, is a consultant to, and
former president and principal owner of, Bryan Biologicals, Inc. As of May 1,
1996, Bryan Biologicals, Inc. owed the Company approximately $105,000 on open
account for product purchases made from November 1995 through April 1996. No
interest is charged by the Company on such obligation. The largest amount owed
to the Company by Bryan Biologicals, Inc. at any time during fiscal 1996 was
approximately $121,000.
During fiscal 1996 the Company retained the law firm of Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P. and proposes to retain the firm in the current
fiscal year. Mr. LaBoon, a director of the Company, is a partner in the firm.
6
<PAGE>
COMPENSATION TABLES
The cash and other compensation paid by the Company and its subsidiaries
during fiscal 1996 to each of the executive officers of the Company as to whom
the total cash compensation exceeded $100,000 were as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENATION
------------------------------------- -----------
SECURITIES
NAME AND PRINCIPAL FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
------------------ ------ ------- ------ --------------- ----------- ------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
David E. Hatcher................. 1996 209,949 0 10,992 7,000 28,265(2)
Chairman of the Board and 1995 207,834 35,000 11,423 0 27,405
Chief Executive Officer 1994 200,125 35,000 20,745 15,000 26,512
John J. Moulds................... 1996 146,680 0 1,896 7,000 6,017(3)
President, Chief Operating 1995 139,757 20,000 1,874 0 6,098
Officer and Director 1994 125,125 20,000 7,915 15,000 5,408
Betty Francis Hatcher............ 1996 106,680 0 6,214 5,000 17,328(4)
Executive Vice President, 1995 102,065 6,500 6,217 0 16,297
Assistant Secretary and Director 1994 95,138 6,500 7,720 10,000 15,436
John Case........................ 1996 106,680 0 0 3,000 0
Vice President-- 1995 102,065 6,500 0 0 0
Regulatory Affairs 1994 95,138 6,500 2,087 5,000 0
</TABLE>
- --------
(1) For each named executive officer in fiscal 1996, represents payments by
the Company for the named executive's taxes on split dollar premium
payment.
(2) Represents the dollar value of premiums paid by the Company with respect
to a split dollar life insurance policy for the benefit of the named
executive.
(3) Includes $4,875 which represents the dollar value of premiums paid by the
Company with respect to a split dollar life insurance policy for the
benefit of the named executive, and $1,142 which represents Company
matching contributions pursuant to the Company's 401(k) Retirement Savings
Plan.
(4) Includes $15,978 which represents the dollar value of premiums paid by the
Company with respect to a split dollar life insurance policy for the
benefit of the named executive, and $1,350 which represents Company
matching contributions pursuant to the Company's 401(k) Retirement Savings
Plan.
7
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENTAGE OF VALUE AT ASSUMED
SECURITIES TOTAL OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES IN PRICE EXPIRATION FOR OPTION TERM
NAME GRANTED FISCAL YEAR (PER SHARE) DATE 5% 10%
---- ---------- ------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
David E. Hatcher........ 7,000 10% $4.25 8/10/05 $18,710 $47,414
John J. Moulds.......... 7,000 10% $4.25 8/10/05 $18,710 $47,414
Betty F. Hatcher........ 5,000 7% $4.25 8/10/05 $13,364 $33,867
John Case............... 3,000 4% $4.25 8/10/05 $ 8,018 $20,320
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT FISCAL YEAR END IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE (EXERCISABLE/ FISCAL YEAR END
NAME ON EXERCISE REALIZED UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
---- ----------- -------- -------------------- ---------------------------
<S> <C> <C> <C> <C>
David E. Hatcher........ 0 0 70,000/17,000 $36,975/0
John J. Moulds.......... 1,500 $1,973 31,500/17,000 0/0
Betty Francis Hatcher... 0 0 37,100/11,875 $ 9,675/0
John Case............... 1,500 $2,254 8,000/6,000 0/0
</TABLE>
8
<PAGE>
PERFORMANCE GRAPH
The following performance graph provided by the Frank Russell Company
compares the performance of the Company's Common Stock to the Russell 2000
Index and a Peer Group Index (as defined below) for the Company's last five
fiscal years. Many of the Company's peers are privately-held companies, or
subsidiaries or divisions of larger publicly-held companies. As a result, there
is only one public company to which the Company may realistically compare
itself. Accordingly, the Peer Group Index consists of Immucor, Inc. The graph
below assumes $100 invested on March 31, 1991 in Company Common Stock or Index
and that any dividends are reinvested.
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
GAMMA BIOLOGICALS, INC., RUSSELL 2000, PEER GROUP
(Performance results through 3/31/96)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
3/31/91 3/31/92 3/31/93 3/31/94 3/31/95 3/31/96
<S> <C> <C> <C> <C> <C> <C>
GBL $100.00 $153.33 $ 88.35 $167.71 $123.85 $119.70
Russell 2000 $100.00 $121.02 $139.00 $154.30 $162.79 $210.07
Peer Group $100.00 $108.34 $ 60.42 $47.92 $58.34 $110.43
</TABLE>
Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in GBL common stock, Russell
2000, and Peer Group.
*Cumulative total return assumes reinvestment of dividends.
Source: Frank Russell Company
9
<PAGE>
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with Mr. Hatcher, Ms.
Hatcher, Mr. Moulds, Ms. O'Bannion, Mr. Turner and Mr. Parrish, which provide
severance benefits upon a change of control of the Company. Under these
agreements, if one of the named employee's employment is terminated without
cause following a change of control, he or she will be compensated by the
Company as described below. The employee will receive a lump sum payment equal
to a specified percentage of his or her average annual compensation for the
five years preceding the change of control. The percentage for Mr. Hatcher is
299% and the percentage for the other named employees is 200%. Stock options
granted to the employee by the Company and not then exercisable will become
immediately exercisable in full. The Company is required to pay the employee
all amounts owed to the employee by the Company under any deferred
compensation arrangements. The Company is also required to reimburse the
employee for all legal fees incurred as a result of termination of employment
following a change of control.
SPLIT-DOLLAR AGREEMENTS
The Company has purchased life insurance policies insuring the lives of Mr.
Brieden, Ms. Hatcher, Mr. Hatcher, Mr. Moulds, Ms. O'Bannion, Mr. Turner, Mr.
Parrish and Mr. Lawrence E. Letwin and has entered into split-dollar
agreements with these persons. The Company is the owner of the policies and by
the terms of the split-dollar agreements is obligated to pay all premiums and
to take all necessary steps, upon the death of the insured, to obtain the
death benefits provided under the policies. The insured is obligated to
reimburse the Company on an annual basis for the value of the economic benefit
of the policy to the insured for that year (as determined for federal income
tax purposes). Upon the death of the insured, the Company is entitled to
receive a portion of the death benefits provided under the policy equal to the
amounts of net premiums and interest on policy loans, if any, to the insured
paid by the Company, plus 3% interest. This amount is payable from the death
benefits. With respect to all policy proceeds in excess of the amounts
required to be paid to the Company, the insured has the right to designate the
beneficiaries of the policy and the right to elect the settlement option with
respect to such proceeds. The Company has the right to obtain loans secured by
the policy. The insured may also obtain loans secured by the policy, with the
Company's consent. With the consent of the Company, interest on policy loans
to the insured may be paid by the Company. All dividends declared by the
issuer of the policy will be first applied to purchase one-year term insurance
on the insured's life in an amount not to exceed the guaranteed cash value of
the policy at the next policy anniversary, with any remaining dividends being
used to purchase additional paid-up insurance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company distributes its products in the State of Michigan through Bryan
Biologicals, Inc. In fiscal 1996, the Company's sales to Bryan Biologicals,
Inc. amounted to approximately $209,186 or 1.2% of the Company's net sales.
Mr. Bryan J. Brieden, a director of the Company, is a consultant to, and
former president and principal owner of, Bryan Biologicals, Inc. As of May 1,
1996, Bryan Biologicals, Inc. owed the Company approximately $105,000 on open
account for product purchases made from November 1995 through April 1996. No
interest is charged by the Company on such obligation. The largest amount owed
to the Company by Bryan Biologicals, Inc. at any time during fiscal 1996 was
approximately $121,000.
During fiscal 1996 the Company retained the law firm of Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P. and proposes to retain the firm in the current
fiscal year. Mr. LaBoon, a director of the Company, is a partner in the firm.
10
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RELATIONSHIP WITH INDEPENDENT AUDITORS
The independent auditors of the Company are Deloitte & Touche LLP who have
acted in that capacity for many years. The Company has requested that Deloitte
& Touche LLP act as the independent auditors for the Company for fiscal 1997.
Representatives of Deloitte & Touche LLP will be present at the Meeting,
having the opportunity to make a statement if they desire to do so, and will
be available to respond to appropriate questions addressed to them.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the 1997 annual
meeting of shareholders must be received by the Company at its principal
executive offices (3700 Mangum Road, Houston, Texas 77092) by February 27,
1997, for inclusion in the Company's proxy materials relating to the annual
meeting.
GENERAL
The management does not intend to present any matter for action at the
Meeting other than the matters described above, and does not know of any other
matters to be brought before the Meeting. However, if any such other matter
should properly come before the Meeting, or if any vacancy in the proposed
slate of directors should be caused by an unexpected occurrence before the
holding of the election, the proxies will vote thereon in accordance with the
recommendations of management or for such other nominee as management may
select.
The information set forth above as to the present principal occupations of
the nominees for directors, as to their beneficial ownership of securities of
the Company, and as to other information not of record with the Company is
based upon information furnished to the Company by those nominees.
By order of the Board of Directors,
[SIGNATURE APPEARS HERE]
Lawrence E. Letwin
Secretary
June 28, 1996
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE ANNUAL
REPORT OF THE COMPANY ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 1996,
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO. REQUESTS FOR COPIES OF THE ANNUAL REPORT
SHOULD BE DIRECTED TO MS. MARGARET J. O'BANNION, GAMMA BIOLOGICALS, INC., 3700
MANGUM ROAD, HOUSTON, TEXAS 77092.
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GAMMA BIOLOGICALS, INC.
PROXY FOR ANNUAL MEETING TO BE HELD AUGUST 8, 1996
The undersigned hereby appoints David E. Hatcher and John J. Moulds, or either
of them, each with power of substitution, the proxies of the undersigned, to
vote the stock of the undersigned at the annual meeting of shareholders of
Gamma Biologicals, Inc., to be held at the offices of the Company at 3700
Mangum Road, Houston, Texas on August 8, 1996, at 3:00 P.M., Central time, or
at any adjournments thereof, as follows:
1. To elect as directors the following persons: Bryan J. Brieden, Betty F.
Hatcher, David E. Hatcher, R. Bruce LaBoon, John J. Moulds and Hayle B.
Randolph.
2. To vote in accordance with the recommendations of management upon
whatever other business may properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS and will be voted as
indicated by the shareholder. Unless a contrary direction is indicated, the
proxies shall vote the shares FOR the election as directors of the Board's
nominees, and in accordance with the recommendations of management on any other
business coming before the meeting.
(continued on reverse side)
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
/X/ Please mark your SHARES IN YOUR NAME
votes as in this
example.
FOR WITHHOLD AUTHORITY FOR AGAINST ABSTAIN
all nominees to vote for all nominees 2. OTHER BUSINESS. To vote in / / / / / /
1. DIRECTORS.: / / / / accordance with the
See reverse side recommendations of management
upon whatever other business may
For, except vote withheld from the following nominee(s): properly comebefore the meeting.
--------------------------------------------------------
PLEASE MARK,
SIGNATURE(S)___________________________ DATE__________ SIGN, DATE AND
RETURN THE PROXY
CARD PROMPTLY
SIGNATURE(S)___________________________ DATE__________ USING THE
NOTE: Please sign your name here exactly ENCLOSED
as it appears hereon. Joint owners must ENVELOPE.
each sign. When signing as attorney, PLEASE DO NOT
executor, administrator, trustee or FOLD, BEND OR
guardian, please give your full title MUTILATE THIS
as it appears hereon. CARD
</TABLE>
