<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
/x/ Filed by the Registrant
/ / Filed by a Party other than the Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SCHERER HEALTHCARE, INC.
(NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(1):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
(1)Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
SCHERER HEALTHCARE, INC.
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
<PAGE>
SCHERER HEALTHCARE, INC.
2859 PACES FERRY ROAD, SUITE 300
ATLANTA, GEORGIA 30339
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 22, 1996
NOTICE HEREBY IS GIVEN that the 1996 Annual Meeting of Stockholders of
Scherer Healthcare, Inc. (the "Company") will be held in the second floor
Boardroom, Overlook II, 2839 Paces Ferry Road, Atlanta, Georgia, on Thursday,
August 22, 1996, at 9:30 a.m., local time, for the purposes of considering and
voting upon:
1. A proposal to elect four directors to serve until the 1997 Annual
Meeting of Stockholders.
2. Such other business as properly may come before the Annual Meeting or
any adjournments thereof. The Board of Directors is not aware of any
other business to be presented to a vote of the stockholders at the
Annual Meeting.
Information relating to the above matters is set forth in the attached
Proxy Statement. Stockholders of record at the close of business on July 15,
1996, are entitled to receive notice of and to vote at the Annual Meeting and
any adjournments thereof.
By Order of the Board of Directors.
/s/ ROBERT P. SCHERER, JR.
ROBERT P. SCHERER, JR.
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
Atlanta, Georgia
July 23, 1996
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN PROMPTLY COMPLETE, EXECUTE AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE THE PROXY CARD AND VOTE IN PERSON
IF YOU SO DESIRE.
<PAGE>
SCHERER HEALTHCARE, INC.
2859 PACES FERRY ROAD, SUITE 300
ATLANTA, GEORGIA 30339
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 22, 1996
This Proxy Statement is furnished to the stockholders of Scherer
Healthcare, Inc. (the "Company") in connection with the solicitation of proxies
by the Board of Directors of the Company to be voted at the 1996 Annual Meeting
of Stockholders and at any adjournments thereof (the "Annual Meeting"). The
Annual Meeting will be held in the second floor Boardroom, Overlook II, 2839
Paces Ferry Road, Atlanta, Georgia, on Thursday, August 22, 1996, at 9:30 a.m.,
local time.
The approximate date on which this Proxy Statement and form of proxy card
are first being sent or given to stockholders is July 23, 1996.
VOTING
GENERAL
The securities that can be voted at the Annual Meeting consist of Common
Stock of the Company, $.01 par value per share, with each share entitling its
owner to one vote on each matter submitted to the stockholders. The record date
for determining the holders of Common Stock who are entitled to receive notice
of and to vote at the Annual Meeting is July 15, 1996. On the record date,
4,291,716 shares of Common Stock were outstanding and eligible to be voted at
the Annual Meeting.
QUORUM AND VOTE REQUIRED
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum at the
Annual Meeting. In counting the votes to determine whether a quorum exists at
the Annual Meeting, all votes "for" and instructions to withhold authority to
vote will be used.
In voting with regard to the proposal to elect directors, stockholders may
vote in favor of all nominees, withhold their votes as to all nominees or
withhold their votes as to specific nominees. The vote required to approve the
proposal to elect directors is a plurality of the votes cast by the holders of
shares entitled to vote, provided a quorum is present. As a result, votes that
are withheld will not be counted and will have no effect.
Under the rules of the New York and American Stock Exchanges (the
"Exchanges") that govern most domestic stock brokerage firms, member firms that
hold shares in street name for beneficial owners may, to the extent that such
beneficial owners do not furnish voting instructions with respect to any or all
proposals submitted for stockholder action, vote in their discretion upon
proposals which are considered "discretionary" proposals under the rules of the
Exchanges. Member brokerage firms that have received no instructions from their
clients as to "non-discretionary" proposals do not have discretion to vote on
these proposals. Such "broker non-votes" will not be considered in determining
whether a quorum exists at the Annual Meeting and will not be considered as
votes cast in determining the outcome of any proposal.
1
<PAGE>
As of July 15, 1996 (the record date for the Annual Meeting), the current
directors and executive officers of the Company owned or controlled
approximately 2,592,168 shares of Common Stock of the Company eligible to be
voted at the meeting, constituting approximately 60% of the outstanding Common
Stock. The Company believes that the holders of more than a majority of the
Common Stock outstanding on the record date will vote all of their shares of
Common Stock in favor of the election of the director nominees and, therefore,
that the presence of a quorum and the election of the director nominees is
reasonably assured.
PROXIES
Stockholders should specify their choices with regard to the election of
the director nominees on the enclosed proxy card. All properly executed proxy
cards delivered by stockholders to the Company in time to be voted at the Annual
Meeting and not revoked will be voted at the Annual Meeting in accordance with
the directions noted thereon. IN THE ABSENCE OF SUCH INSTRUCTIONS, THE SHARES
REPRESENTED BY A SIGNED AND DATED PROXY CARD WILL BE VOTED "FOR" THE ELECTION OF
ALL DIRECTOR NOMINEES. If any other matters properly come before the Annual
Meeting, the persons named as proxies will vote upon such matters according to
their judgment.
Any stockholder delivering a proxy has the power to revoke it at any time
before it is voted by giving written notice to the Secretary of the Company, at
2859 Paces Ferry Road, Suite 300, Atlanta, Georgia 30339, by executing and
delivering to the Secretary of the Company a proxy card bearing a later date or
by voting in person at the Annual Meeting; provided, however, that under the
rules of the Exchanges, any beneficial owner of the Company's Common Stock whose
shares are held in street name by a member brokerage firm may revoke his proxy
and vote his shares in person at the Annual Meeting only in accordance with
applicable rules and procedures of the Exchanges.
In addition to soliciting proxies through the mail, the Company may solicit
proxies through its directors, officers and employees in person and by telephone
or facsimile. Brokerage firms, nominees, custodians and fiduciaries also may be
requested to forward proxy materials to the beneficial owners of shares held of
record by them. All expenses incurred in connection with the solicitation of
proxies will be borne by the Company.
SHARE OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1996, by (i) each person
known to the Company to be the beneficial owner of more than 5% of the Company's
Common Stock, (ii) each director of the Company, (iii) each of the executive
officers of the Company named in the Summary Compensation Table herein and (iv)
all current directors and executive officers of the Company as a group, based in
each case on information furnished to the Company by such persons or entities.
The Company believes that each of the named individuals and group has sole
voting and investment power with regard to the shares shown except as otherwise
noted.
2
<PAGE>
SHARES PERCENT
BENEFICIAL BENEFICIALLY OF
OWNER OWNED (1) CLASS
---------- ------------ -------
Robert P. Scherer, Jr. . . . . . . . . . 2,607,968 (2) 60.5%
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND PRINCIPAL STOCKHOLDER
RPS Investments, Ltd.. . . . . . . . . . 2,207,106 51.4%
PRINCIPAL STOCKHOLDER
RPS Investments, Inc.. . . . . . . . . . 2,250,956 (2)(3) 52.5%
PRINCIPAL STOCKHOLDER
Robert P. Scherer III. . . . . . . . . . 2,349,370 (4) 54.8%
PRINCIPAL STOCKHOLDER
SunTrust Bank. . . . . . . . . . . . . . 340,212 (5) 7.9%
PRINCIPAL STOCKHOLDER
William J. Thompson. . . . . . . . . . . 55,000 (6) 1.3%
DIRECTOR AND PRESIDENT
Kenneth H. Robertson . . . . . . . . . . 1,000 *
DIRECTOR
Stephen A. Lukas, Sr.. . . . . . . . . . - -
DIRECTOR
Robert W. Naismith, Ph.D.
FORMER VICE PRESIDENT. . . . . . . . . . 165,000 3.8%
All current directors and executive
officers as a group (6 persons). . . . 2,663,968 (7) 61.1%
- ---------------
* Less than one percent.
(1) Beneficial ownership as reported in the table has been determined in
accordance with Securities and Exchange Commission regulations and, as a
result, certain outstanding shares are deemed to be beneficially owned by
more than one person.
(2) The shares shown as owned by Mr. Scherer, Jr. include 43,850 shares owned
by RPS Investments, Inc. and 2,207,106 shares owned by RPS Investments,
Ltd. RPS Investments, Inc. is the general partner
3
<PAGE>
of RPS Investments, Ltd. As Chairman of RPS Investments, Inc.,
Mr. Scherer, Jr. is deemed to be the beneficial owner of the shares. The
shares shown as owned by Mr. Scherer, Jr. also include 340,212 shares that
Mr. Scherer, Jr. holds as co-trustee with SunTrust Bank of a residuary
trust for the benefit of his family. See Note (5) below. Voting and
investment power is shared with regard to such shares. The shares shown as
owned by Mr. Scherer, Jr. also include 16,800 shares that Mr. Scherer, Jr.
may acquire upon exercise of outstanding stock options. The address of Mr.
Scherer, Jr., RPS Investments, Ltd. and RPS Investments, Inc. is 2859 Paces
Ferry Road, Suite 300, Atlanta, Georgia 30339.
(3) The shares shown include 2,207,106 shares owned by RPS Investments, Ltd.
As the general partner of RPS Investments, Ltd., RPS Investments, Inc. is
deemed to be the beneficial owner of those shares.
(4) The shares shown include 43,850 shares owned by RPS Investments, Inc. and
2,207,106 shares owned by RPS Investments, Ltd. See Notes (2) and (3)
above. Mr. Scherer III is deemed to beneficially own such shares by virtue
of his position as a director of RPS Investments, Inc. Mr. Scherer III's
address is 217 Goldenrod Avenue, Corona del Mar, California 92625.
(5) The shares shown are held as co-trustee of a residuary trust for the
benefit of Mr. Scherer, Jr.'s family, and voting and investment power is
shared with Mr. Scherer, Jr., co-trustee of the residuary trust. See
Note (2) above. SunTrust Bank's address is 25 Park Place, N.E., Atlanta,
Georgia 30303.
(6) Mr. Thompson may acquire the shares shown upon exercise of outstanding
stock options.
(7) The shares shown include 2,591,168 shares with respect to which voting or
investment power is shared and 71,800 shares that may be acquired upon
exercise of outstanding stock options, as described in the Notes above.
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
The Board of Directors has set the authorized number of directors of the
Company at four and nominated Stephen A. Lukas, Sr., Kenneth H. Robertson,
Robert P. Scherer, Jr. and William J. Thompson for re-election as directors at
the 1996 Annual Meeting. Each of the nominees is currently a director of the
Company. If re-elected as directors at the Annual Meeting, each of such persons
would serve until the 1997 Annual Meeting of Stockholders and until their
successors are duly elected and qualified.
Each of the nominees has consented to serve another term as a director if
re-elected. If any of the nominees should be unavailable to serve for any
reason (which is not anticipated), the Board of Directors may designate a
substitute nominee or nominees (in which event the persons named on the enclosed
proxy card will vote the shares represented by all valid proxy cards for the
election of such substitute nominee or nominees), allow the vacancies to remain
open until a suitable candidate or candidates are located, or by resolution
provide for a lesser number of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE PROPOSAL TO RE-ELECT STEPHEN A. LUKAS, SR., KENNETH H. ROBERTSON,
ROBERT P. SCHERER, JR. AND WILLIAM J. THOMPSON AS DIRECTORS UNTIL THE 1997
ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS HAVE BEEN DULY ELECTED
AND QUALIFIED.
4
<PAGE>
INFORMATION REGARDING NOMINEES FOR DIRECTOR
Set forth below is certain information as of March 31, 1996, regarding the
four nominees for Director, including their ages and principal occupations
(which have continued for at least the past five years unless otherwise noted).
Stephen A. Lukas, Sr. Mr. Lukas, 70, has been President, Chief Executive
Officer, and a Director of Goldcaps, Inc., a subsidiary
of IVAX Corporation since 1992. Goldcaps, Inc. is
engaged in the production and marketing of soft gelatin
capsules. Mr. Lukas also serves as Vice President,
Business Development of IVAX Corporation and is a
Director of Galena A.S., a pharmaceutical manufacturing
company located in the Czeck Republic. Since 1974, Mr.
Lukas has been President and Director of Vienna Woods
Limited, a family holding company located in Ontario,
Canada. He was President and a Director of Capsule
Technology, a soft gelatin capsule manufacturing and
distribution company, from its formation in 1981 until
his retirement in 1991. Mr. Lukas has been a Director
of the Company since 1989. He also is a Director of
Marquest Medical Products, Inc., a 51% owned subsidiary
of the Company.
Kenneth H. Robertson Mr. Robertson, 61, has been Chairman of Conference-Call
USA, Inc. and Vice President of Business Development of
DIAL Services, Ltd. since 1988. These companies derive
their revenue from conference call services, video
conferencing, voice messaging and reselling
international long distance. Since 1984, Mr. Robertson
has been Managing Partner of Print Marketing Concepts
which publishes and prints T.V. guides for newspapers.
In addition, Mr. Robertson has been the principal owner
and developer of a self-storage warehouse and business
incubator operation in Chicago since 1977. He has been
a Director of the Company since 1980 and served as Vice
President of the Company in 1980 and as President from
July 1981 until June 1983. He also is a Director of
Marquest Medical Products, Inc.
Robert P. Scherer, Jr. Mr. Scherer, Jr., 63, has been Chairman of the Board of
Directors and Chief Executive Officer of the Company
since February 1995. Mr. Scherer, Jr. has been a
Director of the Company since 1977. He has been
Chairman of the Board and Chief Executive Officer of
RPS Investments, Inc., the general partner of Scherer
Scientific, Ltd., since its formation in July 1986 and
of RPS Investments, Inc. since its formation in January
1980. He has been Chairman of the Board of Directors
and Chief Executive Officer of Marquest Medical
Products, Inc. since February 1995. Mr. Scherer, Jr.
was a Director of IRT Corporation, which filed a
petition for bankruptcy under the federal bankruptcy
laws in 1993.
William J. Thompson Mr. Thompson, 62, has been a Director and the President
and Chief Operating Officer of the Company since 1984.
Mr. Thompson has been a Director of Marquest Medical
Products, Inc. since 1993 and its President and Chief
Operating Officer since February 1995.
5
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the Board
and through its committees. In accordance with the Bylaws of the Company, the
Board of Directors has established an Executive Committee, a Compensation
Committee, an Audit Committee and a Nominating Committee.
The Executive Committee, during intervals between meetings of the Board,
may exercise the powers of the Board of Directors except with regard to a
limited number of matters which include amending the Certificate of
Incorporation or Bylaws of the Company, declaring a dividend or authorizing the
issuance of capital stock of the Company, adopting an agreement of merger or
consolidation on behalf of the Company, and recommending to the stockholders of
the Company a sale of substantially all of the assets of the Company or the
dissolution of the Company. All actions of the Executive Committee are
submitted for review and ratification by the full Board. Currently, the Board
of Directors has not established an Executive Committee.
The Compensation Committee is responsible for determining the compensation
of the Directors, officers and employees of the Company and for administering
the Company's employee benefit plans. See "Executive Compensation - Stock
Option Plans" herein. The Compensation Committee is composed of Messrs. Lukas
and Robertson.
The Audit Committee is responsible for reviewing the adequacy of the
Company's system of internal financial controls, recommending to the Board of
Directors the appointment of the independent auditor and evaluating the proposed
scope of the independent auditor's audit, evaluating the independent auditor's
performance and fee arrangement, conducting a post-audit review of the Company's
financial statements and audit findings in advance of publication, and reviewing
in advance proposed changes in the Company's accounting methods. The Audit
Committee is comprised of Messrs. Lukas and Robertson.
The Nominating Committee identifies individuals as nominees for election as
Directors and officers of the Company. The full Board of Directors currently
serves as the Nominating Committee.
During the fiscal year ended March 31, 1996, the Board of Directors met
three times, the Compensation Committee and the Audit Committee did not meet.
Each of the current Directors of the Company attended at least 75% of the total
number of meetings of the Board of Directors and committees on which he served
except that Mr. Lukas attended 33% of such meetings.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid $500 for each Board
of Directors or committee meeting actually attended, and all directors are
reimbursed for reasonable expenses incurred in attending meetings.
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EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table summarizes the compensation paid or accrued by the
Company during the three fiscal years ended March 31, 1996, to the Company's
Chief Executive Officer and each of the Company's other executive officers whose
compensation for fiscal 1996 exceeded $100,000 (the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION
- --------------------------- ---- ------ ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Scherer, Jr. (1) 1996 $ - $ - $ - - $ -
CHAIRMAN OF THE BOARD, 1995 - - - 20,000 (2) -
CHIEF EXECUTIVE OFFICER 1994 - - - - -
AND A DIRECTOR
William J. Thompson 1996 $180,000 $ - $ - - $ 6,500 (3)
PRESIDENT AND A DIRECTOR 1995 180,000 - - 25,000 9,100 (3)
1994 170,000 60,000 - - 13,800 (3)
Robert W. Naismith, Ph.D. 1996 $59,100 $ - $ - - $145,900 (4)
FORMER VICE PRESIDENT 1995 160,000 - - 35,000 (5) 15,200 (4)
1994 153,000 30,0000 - - 16,800 (4)
- ----------------
</TABLE>
(1) The Board of Directors elected Mr. Scherer, Jr. as Chairman of the Board of
Directors and Chief Executive Officer in February 1995. Mr. Scherer, Jr.
did not receive salary or bonus compensation from the Company during the
fiscal years reported. However, during the 1996, 1995 and 1994 fiscal
years, Mr. Scherer, Jr. was compensated by Scherer Scientific, Ltd.
Scherer Scientific, Ltd. charged the Company $150,000, $688,000 and
$613,000 during fiscal 1996, 1995 and 1994 , respectively, for
administrative, accounting, professional, and corporate facilities costs.
Scherer Scientific is an affiliate of, and is under common control with,
RPS Investments, Inc., which is the beneficial owner of 52.5% of the
Company's Common Stock. See "Certain Transactions."
(2) The Company and Mr. Scherer, Jr. canceled these options by mutual agreement
as of July 1, 1995.
(3) The amounts shown as paid or accrued in fiscal 1996, 1995 and 1994
represent the Company's contributions to Mr. Thompson's account in the
Scherer Healthcare, Inc. 401(k) Retirement and Savings Plan.
(4) Dr. Naismith served as a Vice President of the Company until August 1995.
The amount shown as paid in fiscal 1996 includes an aggregate of $142,000
in compensation paid by Biofor, Inc., a subsidiary of the Company, to Dr.
Naismith pursuant to a Separation Agreement and General Release between
Biofor, Inc. and Dr. Naismith. The amounts shown as paid or accrued in
each of fiscal 1995 and 1994 includes $6,100 in life insurance premiums
paid by the Company on policies owned by Dr. Naismith. The amounts shown
as paid in fiscal 1996, 1995 and 1994 include $3,900, $9,100 and $10,700,
respectively, in contributions by the Company to Dr. Naismith's account in
the Scherer Healthcare, Inc. 401(k) Retirement and Savings Plan.
(5) These options expired on November 7, 1995 without being exercised.
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The Company's executive officers also participate in the Company's
Incentive Stock Option Plans. See "Stock Option Plans" below.
STOCK OPTION PLANS
The Company maintains the Scherer Healthcare, Inc. 1987 Stock Option Plan,
1987 Long-Term Incentive Plan, 1988 Stock Option Plan and 1994 Stock Incentive
Plan (collectively, the "Stock Option Plans") to attract and retain key
executive personnel, directors and advisors, and to encourage their continued
employment with and service to the Company. The Company did not grant any stock
options during the fiscal year ended March 31, 1996.
The following table sets forth information as of March 31, 1996 regarding
(i) the number of exercisable and unexercisable stock options held by each of
the individuals named in the Summary Compensation Table above and (ii) the
respective estimated current values of such stock options. No stock options
were exercised by such individuals during the fiscal year ended March 31, 1996.
AGGREGATED OPTION GRANTS AND FISCAL YEAR END OPTION VALUES
NUMBER
OF SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
YEAR-END(#) YEAR-END($)(1)
----------- --------------
EXERCISABLE/ EXERCISABLE/
NAME AND POSITION UNEXERCISABLE UNEXERCISABLE
- ----------------- ------------- -------------
Robert P. Scherer, Jr. 16,800 /- $ -
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND A DIRECTOR
William J. Thompson 55,000/20,000 $ -
PRESIDENT AND A DIRECTOR
Robert W. Naismith, Ph.D. - $ -
FORMER VICE PRESIDENT
- ----------------------
(1) The dollar value is determined by subtracting the option exercise prices
from the per share fair market value of the Company's Common Stock as of
March 31, 1996 as reported on The Nasdaq National Market.
8
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed of Stephen
A. Lukas, Sr. and Kenneth H. Robertson. Prior to July 1, 1995, all of the
Company's executive officers other than William J. Thompson were compensated by
Scherer Scientific, Ltd. and did not receive separate cash compensation from the
Company. However, Scherer Scientific, Ltd. charged the Company annual fees for
administrative, accounting, payroll and professional services and corporate
facilities costs. As a result, during periods prior to July 1, 1995, the
Compensation Committee's responsibilities with respect to executive compensation
for all executive officers other than Mr. Thompson has been limited to
compensation under the Stock Option Plans. Beginning July 1, 1995, the Company
assumed direct responsibility for the compensation of its executive officers,
other than Mr. Scherer, Jr. and Amy M. Murphy, Vice President of the Company, as
determined by the Compensation Committee. Scherer Scientific, Ltd. continues to
provide direct compensation to Mr. Scherer, Jr. and Ms. Murphy and the Company
reimburses Scherer Scientific, Ltd. for a portion of their compensation. The
Compensation Committee is responsible for developing and making recommendations
to the Board of Directors with respect to compensation policies generally. The
Committee approves the compensation of executive officers paid by the Company
and, on an annual basis, determines their compensation. The Compensation
Committee is also responsible for the granting and administration of stock
options.
The Compensation Committee has furnished the following report for fiscal
1996:
COMPENSATION PHILOSOPHY
The objectives of the Company's executive compensation program are to
provide a level of compensation which will attract, retain, and motivate
executives capable of achieving long-term success for the Company's stockholders
in terms of increasing Company and stockholder value.
EXECUTIVE OFFICER COMPENSATION
There are three main components of the executive compensation program: (i)
base salary; (ii) potential annual cash bonus; and (iii) periodic awards of
stock options or other equity participation to encourage achievement over time
and to align executive officer and stockholder interests. Executive officers
are eligible for the same benefits, including group health, life, and disability
insurance and participation in the Scherer Healthcare, Inc. 401(k) Retirement
and Savings Plan, as are available generally to the Company's and its
subsidiaries' non-union employees. Perquisites provided to executive officers
are not material.
ANNUAL SALARY. The Compensation Committee determines the salary of the
executive officers, with the objective of assuring that salary levels are
competitive. They are determined by considering duties and responsibilities of
the officers and their impact upon the operations and the growth in value of the
Company. The level of equity or potential equity participation in the Company
is considered in establishing compensation levels.
INCENTIVE COMPENSATION. Incentive compensation is provided on an annual
basis. Bonus awards are determined by the Compensation Committee on a
subjective basis, taking into account activities and accomplishments for the
fiscal year.
STOCK OPTION AWARDS. Stock options are granted to executive officers and
to other employees on a periodic basis, with vesting over several years. Awards
are made at a level which is considered to provide a meaningful incentive to the
executive officers.
9
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PRESIDENT'S COMPENSATION
William J. Thompson, President and Chief Operating Officer, is the most
senior executive officer compensated directly by the Company during fiscal 1996.
The amount of Mr. Thompson's annual salary is established by the Compensation
Committee using the criteria for executive officers discussed above. Mr.
Thompson did not receive an increase in salary for fiscal 1996.
Mr. Thompson's bonus is determined in the discretion of the Compensation
Committee. The Committee considers the accomplishments of the operating units
which report directly to Mr. Thompson in determining the bonus amount. It also
considers the accomplishments of Marquest Medical Products, Inc., of which the
Company owns a 51% percent interest and to which Mr. Thompson devotes a
substantial amount of his effort. Mr. Thompson did not receive a bonus for
fiscal 1996.
Due to the amount of time Mr. Thompson dedicates to Marquest Medical
Products, Inc., Marquest reimburses the Company for 66% of Mr. Thompson's salary
benefits and other employment related expenses.
Compensation Committee
Stephen A. Lukas, Sr.
Kenneth H. Robertson
CERTAIN TRANSACTIONS
INDEBTEDNESS TO RELATED PARTIES. Prior to fiscal 1996, Scherer Scientific,
Ltd., Scherer Capital, L.L.C. and RPS Investments, Ltd. made loans (the
"Affiliate Loans") to the Company and its subsidiaries the proceeds of which
were used for working capital and business and equipment acquisitions. RPS
Investments, Inc., which beneficially owns approximately 52.5% of the
outstanding Common Stock of the Company, is under common control with Scherer
Scientific, Ltd., RPS Investments, Ltd. and Scherer Capital L.L.C. Robert P.
Scherer, Jr., the Chairman of the Board and Chief Executive Officer of the
Company, has a controlling interest in Scherer Scientific, Ltd., RPS
Investments, Ltd. and Scherer Capital, L.L.C. and is the controlling stockholder
and a director and executive officer of RPS Investments, Inc. and its
affiliates. Additionally, Amy M. Murphy, who is an executive officer of the
Company, serves as an executive officer of RPS Investments, Inc. and its
affiliates.
The Affiliate Loans are payable on demand and bear interest at prime rate
plus .5%. At March 31, 1996 and 1995, approximately $2,286,000 and $7,601,000,
respectively, in Affiliate Loans were payable by the Company and its
subsidiaries. The Company, Scherer Scientific, Ltd., Scherer Capital L.L.C. and
RPS Investments, Ltd. intend to restructure the Affiliate Loans to include fixed
payment terms and uniform interest rates and provide for cross collateralization
and guarantees.
In December 1995, Scherer Capital, L.L.C. and Marquest signed a short-term
promissory note enabling Marquest to borrow a maximum of $1,800,000, of which
$1,100,000 was borrowed in December 1995. The note was secured by Marquest's
inventory and accounts receivable and was due February 1996. Marquest repaid
$400,000 of the borrowings in January 1996 and the balance of $700,000 was
refinanced under a Loan and Security Agreement (the "Loan Agreement") signed by
Marquest and Scherer Capital, L.L.C. on March 28, 1996. The Loan Agreement
enables Marquest to borrow a maximum of $1,500,000 at an interest rate of 1.5%
over prime, adjusted quarterly. Any amounts borrowed under the Loan Agreement
are represented by Convertible
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Notes due April 1, 2001 (the "Notes"). Pursuant to the Loan Agreement, which
expires February 28, 2001, the Notes are convertible at the option of Scherer
Capital, L.L.C. into shares of Marquest's Common Stock at a conversion price of
$.70 per share. As of March 31, 1996, Marquest had borrowed $700,000 under the
Loan Agreement and the Notes. Additionally, on March 29, 1996, Scherer Capital,
L.L.C. purchased 2,061,856 shares of Marquest Common Stock for an aggregate
purchase price of $1,000,000. Robert P. Scherer, Jr., the Chairman of the Board
and Chief Executive Officer of the Company is also the Chairman of the Board and
Chief Executive Officer of Marquest. Additionally, William J. Thompson, a
director and the President and Chief Operating Officer of the Company, serves as
a director and the President and Chief Operating Officer of Marquest.
ADMINISTRATIVE SERVICES ARRANGEMENT. During the first quarter of fiscal
1996 and prior periods, Scherer Scientific, Ltd. provided to the Company and its
subsidiaries administrative, accounting, management oversight and payroll
services (collectively, the "Administrative Services") and facilities costs.
Scherer Scientific, Ltd. charged the Company $150,000 for these services during
the first quarter of fiscal 1996. Effective July 1, 1995, Scherer Scientific,
Ltd. and the Company terminated the administrative services arrangement and
approximately 14 employees of Scherer Scientific, Ltd. became employees of the
Company. As a result, the Company currently provides its own administrative,
accounting, management and payroll services. Further, Robert P. Scherer, Jr.,
the Chairman of the Board and Chief Executive Officer of the Company, continues
to be compensated by Scherer Scientific, Ltd. and presently does not receive
cash compensation from the Company for his services to the Company.
STOCKHOLDER RETURN PERFORMANCE GRAPH
The Company's Common Stock is listed for trading on The Nasdaq National
Market under the symbol "SCHR." The price information reflected for the
Company's Common Stock in the following performance graph and accompanying table
is based upon the closing sales prices of the Common Stock on the dates
indicated assuming a $100.00 investment on March 31, 1991. The performance
graph compares the Company's cumulative total stockholder return with the Nasdaq
Stock Market Total Return Index and the Nasdaq Health Services Stock Index. The
graph assumes that the value of the investment in each index was $100 on March
31, 1991. The stockholder return reflected below for the five year historical
period may not be indicative of future performance.
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COMPARISON OF CUMULATIVE FIVE-YEAR STOCKHOLDER RETURN
[GRAPH]
MARCH 31
-------------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Scherer Healthcare $100 $234 $188 $186 $ 45 $ 44
Nasdaq Stock Market (US) $100 $127 $147 $158 $176 $239
Nasdaq Health Services $100 $136 $133 $175 $202 $244
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COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
regulations of the Securities and Exchange Commission thereunder require the
Company's directors and executive officers and persons who own more than 10% of
the Company's Common Stock, as well as certain affiliates of such persons, to
file initial reports of their ownership of the Company's Common Stock and
subsequent reports of changes in such ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Directors,
executive officers and persons owning more than 10% of the Company's Common
Stock are required by Securities and Exchange Commission regulations to furnish
the Company with copies of all Section 16(a) reports they file. Based solely on
its review of the copies of such reports received by it and written
representations that no other reports were required for those persons, the
Company believes that during the fiscal year ended March 31, 1996, all filing
requirements applicable to its directors, executive officers and owners of more
than 10% of its Common Stock were complied with in a timely manner except that
Amy M. Murphy, Vice President of the Company, filed a late Form 3.
STOCKHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of stockholders, including nominations for the Board of
Directors, intended to be presented at the 1997 Annual Meeting of Stockholders
should be submitted by certified mail, return receipt requested, and must be
received by the Company at its executive offices in Atlanta, Georgia, on or
before March 25, 1997 to be eligible for inclusion in the Company's proxy
statement and form of proxy relating to that meeting and to be introduced for
action at the meeting. Any stockholder proposal must be in writing and must set
forth (i) a description of the business desired to be brought before the meeting
and the reasons for conducting the business at the meeting, (ii) the name and
address, as they appear on the Company's books, of the stockholder submitting
the proposal, (iii) the class and number of shares that are beneficially owned
by such stockholder, (iv) the dates on which the stockholder acquired the
shares, (v) documentary support for any claim of beneficial ownership, (vi) any
material interest of the stockholder in the proposal, (vii) a statement in
support of the proposal and (viii) any other information required by the rules
and regulations of the Securities and Exchange Commission.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Stockholders which
may properly come before the Annual Meeting. However, if any other matter
should be properly presented for consideration and voting at the Annual Meeting
or any adjournments thereof, it is the intention of the persons named as proxies
on the enclosed form of proxy card to vote the shares represented by all valid
proxy cards in accordance with their judgment of what is in the best interest of
the Company.
Atlanta, Georgia
July 23, 1996
------------------------------------
The Company's 1996 Annual Report, which includes audited financial
statements, has been mailed to stockholders of the Company with these proxy
materials. The Annual Report does not form any part of the material for the
solicitation of proxies.
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REVOCABLE PROXY COMMON STOCK
SCHERER HEALTHCARE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1996 ANNUAL MEETING OF
STOCKHOLDERS
The undersigned hereby appoints Amy M. Murphy and Gary W. Ruffcorn, and
each of them, proxies, with full power of substitution, to act for and in the
name of the undersigned to vote all shares of Common Stock of Scherer
Healthcare, Inc. (the "Company") which the undersigned is entitled to vote at
the 1996 Annual Meeting of Stockholders of the Company, to be held in the second
floor Boardroom, Overlook II, 2839 Paces Ferry Road, Atlanta, Georgia, on
Thursday, August 22, 1996, at 9:30 a.m., local time, and at any and all
adjournments thereof, as indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL LISTED BELOW
1) Elect as directors the four nominees listed below to serve until the 1997
Annual Meeting of Stockholders and until their successors are elected and
qualified (except as marked to the contrary below):
/ / FOR ALL NOMINEES listed below / / WITHHOLD AUTHORITY to vote
(except as marked to the contrary below). for all nominees listed below.
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.
Stephen A. Lukas, Sr., Kenneth H. Robertson, Robert P. Scherer, Jr. and
William J. Thompson
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting and any and all
adjournments thereof.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-
PAID ENVELOPE
(CONTINUED, AND TO BE SIGNED AND DATED, ON THE REVERSE SIDE)
<PAGE>
(CONTINUED FROM THE OTHER SIDE)
PROXY - SOLICITED BY THE BOARD OF DIRECTORS
This proxy card will be voted as directed. If no instructions are specified,
this proxy card will be voted "FOR" each of the proposals listed on the reverse
side of this proxy card. If any other business is presented at the Annual
Meeting, this proxy card will be voted by the proxies in their best judgment.
At the present time, the Board of Directors knows of no other business to be
presented at the Annual Meeting.
The undersigned may elect to withdraw this proxy card at any time prior to its
use by giving written notice to the Secretary of the Company, by executing and
delivering to the Secretary of the Company a duly executed proxy card bearing a
later date, or by appearing at the Annual Meeting and voting in person.
Signature
Signature, if shares held jointly
Date:
Please mark, date and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer.
Do you plan to attend the Annual Meeting? / / YES / / NO
