<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 Section 240.14a-11(c) or Section 240.14a-12
READICARE, 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), 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(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>
READICARE, INC.
446 OAKMEAD PARKWAY
SUNNYVALE, CALIFORNIA 94086
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 19, 1995
----------------
Notice is hereby given that the Annual Meeting of Stockholders of ReadiCare,
Inc., a Delaware corporation (the "Company"), will be held at The Center Club,
650 Town Center Drive, Costa Mesa, California, on Wednesday, July 19, 1995, at
1:30 p.m., Pacific Daylight Time.
At the Annual Meeting, the stockholders will consider and act upon the
following proposals:
1. To elect four Directors of the Company to hold office for a one-year
term or until their successors are elected and qualified;
2. To ratify the election of standing committee chairmen for the succeeding
year;
3. To ratify the selection of Price Waterhouse LLP to audit the
consolidated financial statements of ReadiCare, Inc. for the fiscal year
beginning March 1, 1995; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Shares represented by properly executed proxies will be voted in accordance
with the specifications stated therein, and it is the intention of the Board of
Directors that shares represented by proxies, which are not limited to the
contrary, will be voted FOR the election of Directors and FOR each of the
proposals specified. In addition, the shares represented by properly executed
proxies specifying a vote FOR Proposal 1 above regarding the election of
Directors, may be cumulated by the proxy holder(s) to cause the election of as
many of the nominees set forth in Proposal 1 above as possible.
All stockholders are cordially invited to attend the annual meeting in
person. In order to assure that at least 4,102,600 shares are represented and
that a quorum is present, those who cannot attend are urged to complete, sign
and date the accompanying proxy and return it promptly in the enclosed
envelope. If you return your proxy, you may nevertheless attend the meeting and
vote your shares in person or may change your vote by the delivery of a later
dated proxy.
The Board of Directors has fixed the close of business on May 26, 1995, as
the record date for determining stockholders entitled to notice of and to vote
at the annual meeting and at any adjournment thereof.
By order of the Board of Directors,
/s/ DENNIS G. DANKO
-----------------------------------
Dennis G. Danko
Chairman
Sunnyvale, California
June 14, 1995
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY
<PAGE>
READICARE, INC.
446 OAKMEAD PARKWAY
SUNNYVALE, CALIFORNIA 94086
----------------
PROXY STATEMENT
JUNE 14, 1995
ANNUAL MEETING OF STOCKHOLDERS
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of ReadiCare, Inc. (the "Company") of your proxy for use at
the Annual Meeting of Stockholders to be held July 19, 1995, or at any
adjournment thereof (the "Meeting"). This Proxy Statement, Notice of Annual
Meeting of Stockholders and the accompanying proxy card are being mailed to all
stockholders on or about June 14, 1995.
Any stockholder may revoke a proxy at any time prior to its exercise by
filing a later dated proxy or a written notice of revocation with the Secretary
of the Company, or by voting in person at the Meeting. If a stockholder is not
attending the Meeting, any proxy or notice should be returned in time for
receipt no later than the close of business on the day preceding the Meeting.
On May 26, 1995, the date (the "Record Date") fixed by the Board of Directors
for determining the stockholders entitled to notice of, and to vote at, the
Meeting, the Company had outstanding 8,205,199 shares of Common Stock, $.01 par
value. Stockholders have one vote for each share of Common Stock held of record
as of the Record Date on all business of the Meeting, except that stockholders
have cumulative voting rights with respect to the election at the Meeting of
four directors. No stockholders may cumulate votes unless a stockholder has
announced at the Meeting his intention to do so, but if any stockholder makes
such an announcement, all stockholders may cumulate votes. Cumulative voting
rights entitle a stockholder to give one nominee as many votes as is equal to
the number of directors to be elected, multiplied by the number of shares owned
by him, or to distribute his votes on the same principle among two or more
nominees, as he sees fit. The four nominees for Director receiving the highest
number of votes at the Meeting will be elected.
A proxy, if properly executed, duly returned and not revoked, will be voted
in accordance with the instructions contained thereon. As to the proxies for
which no instructions are given, such proxy will be voted FOR the election of
nominees for Director listed and for each of the proposals specified in this
proxy statement. If the notice of cumulative voting is properly given by any
stockholder, votes represented by properly executed proxies with no
instructions specified therein, will be cumulated by the named proxies and will
be distributed among all or fewer than all of the nominees in such manner as
the named proxies in their discretion shall determine. The proxy also confers
discretionary authority on the persons designated therein to vote on other
business, not currently contemplated, which may come before the Meeting.
Votes cast in person or by proxy at the Annual Meeting will be tabulated by
the Inspector of Elections with the assistance of the Company's transfer agent.
A stockholder may indicate on the enclosed proxy or its substitute that it is
abstaining from voting on a particular matter (an "abstention"). A broker may
indicate on the enclosed proxy or its substitute that it does not have
discretionary authority as to certain shares to vote on a particular matter (a
"broker non-vote"). Abstentions and broker non-votes are each tabulated
separately. The Inspector of Elections will determine whether or not a quorum
is present at the Annual Meeting. In general, Delaware law provides that a
majority of the shares entitled to vote, present in person or represented by
proxy constitutes a quorum. Abstentions and broker non-votes of shares that are
entitled to vote are treated as shares that are present in person or
represented by proxy for purposes of determining the presence of a quorum.
Except with respect to the election of directors and except in certain other
specific circumstances, the affirmative vote of a majority of shares entitled
to vote and present in person or represented by proxy at a duly held meeting at
which a quorum is present is required under Delaware law for approval of
<PAGE>
proposals presented to stockholders. In determining whether a proposal has been
approved, abstentions of shares that are entitled to vote are treated as
present in person or represented by proxy, but not as voting for such proposal,
and hence have the same effect as votes against such proposal, while broker
non-votes of shares that are entitled to vote are not treated as present in
person or represented by proxy, and hence have no effect on the vote for such
proposal.
BENEFICIAL SHARE OWNERSHIP
The beneficial share ownership in the Company as of May 26, 1995 of each
director and named executive officer, all directors and executive officers as a
group, and of the stockholders who are known by the Company to own five percent
or more of the outstanding shares of Common Stock, and the percentages of
outstanding shares held by each such person or group were as follows:
<TABLE>
<CAPTION>
NO. OF SHARES PERCENTAGE
OF COMMON STOCK OF COMMON
OWNED STOCK
NAME AND ADDRESS POSITION HELD WITH COMPANY BENEFICIALLY(1)(2) OUTSTANDING
---------------- -------------------------- ------------------ -----------
<S> <C> <C> <C>
Dennis G. Danko.................. Director 999,350 12.2%
Chairman, President and
Chief Executive Officer
Steve E. Busby................... Senior Vice President, Finance 57,500 *
and Secretary
Thomas P. Carey.................. Senior Vice President, Operations 114,650 1.4%
Alfred E. Osborne, Jr............ Director 96,750(3) 1.2%
James M. Hall.................... Director 55,000 *
Harry L. Casari.................. Director -- *
Dimensional Fund Advisors, Inc... 500,900(4) 6.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
All directors and named executive
officer as a group (6 persons).. 1,323,250 16.1%
</TABLE>
- - --------
* Less than 1%
(1) Includes 345,000, 57,500, 62,250, 45,000 and 45,000 shares subject to
options which are exercisable on or within 60 days after May 26, 1995 by
Messrs. Danko, Busby, Carey, Osborne and Hall.
(2) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock.
(3) Includes 10,750 shares for which Mr. Osborne has voting power, but for
which he disclaims beneficial ownership.
(4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 500,900 shares of
ReadiCare, Inc. stock as of December 31, 1994, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered open-
end investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Directors serve for a term of one year or until their successors are duly
elected and qualified. Officers serve at the pleasure of the Board of
Directors.
NOMINEES
Certain information with respect to the nominees for directors is set forth
below. Each nominee is presently a member of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Dennis G. Danko....................... 48 Director, Chairman, President &
Chief Executive Officer
Harry L. Casari....................... 58 Director
James M. Hall......................... 61 Director
Alfred E. Osborne, Jr................. 50 Director
</TABLE>
A brief summary of the business experience for the past five years of the
nominees for directors of the Company is as follows:
DENNIS G. DANKO, the Company's founder and Chairman, has been President,
Chief Executive Officer and Director since the inception of the Company in
1982. Mr. Danko received a bachelor's degree in economics from Clemson
University and a master's degree in health care management from the University
of Pittsburgh. Mr. Danko has over 20 years of management experience in the
health care field, holding executive management positions with various
publicly-held health care organizations, including American Medical
International, Inc., and National Medical Enterprises, Inc.
HARRY L. CASARI joined the Board of Directors in April, 1995. He is a
certified public accountant and private investor. Mr. Casari was associated
with Ernst & Young, LLP from 1969 until 1994 when he retired as a partner. He
is a member of the California Society of Certified Public Accountants and
American Institute of Certified Public Accountants, and serves as a director of
COHU, Inc. and Infrasonics, Inc.
JAMES M. HALL has been a Director since November 1989. Mr. Hall is an
attorney engaged in private practice in San Diego, California. Mr. Hall also
served as the California Secretary of Health and Welfare from 1971 to 1972 in
the Cabinet of former California Governor, Ronald Reagan, and as the California
Secretary of Business, Transportation and Housing in 1970. Mr. Hall served as
the California Superintendent of Banks from 1967 to 1970. Mr. Hall is also a
director of Pinkerton, Inc.
DR. ALFRED E. OSBORNE, JR. has served as a Director since 1986. He is
presently the Director of the Harold Price Center for Entrepreneurial Studies
and an Associate Professor of Business Economics at UCLA. Dr. Osborne has been
employed by UCLA since 1972, except during the two year period between July
1977 and September 1979 during which time he was on leave as a Brookings
Institution Economic Policy Fellow at the Securities and Exchange Commission.
From January 1984 until June 1987 he served as an Associate Dean. Dr. Osborne
is a director of First Interstate Bank of California, Greyhound Lines, Inc.,
Nordstrom, Inc., Seda Specialty Packaging Corporation, The Times Mirror
Company, and United States Filter Corporation. He is an independent General
Partner of Technology Funding Venture Partners V, and a member of Governor
Wilson's Council of Economic Advisors of California.
UNLESS OTHERWISE INSTRUCTED ON THE PROXY CARD, THE SHARES REPRESENTED BY
PROXIES WILL BE VOTED FOR THE FOUR NOMINEES NAMED ABOVE, IN SUCH PROPORTIONS AS
THE PROXY HOLDER SEES FIT. SHOULD ANY NOMINEE DECLINE OR BE UNABLE TO ACCEPT
NOMINATION OR ELECTION, WHICH IS NOT ANTICIPATED, THE PROXIES WILL BE VOTED FOR
SUCH SUBSTITUTE AS MAY BE DESIGNATED BY THE BOARD OF DIRECTORS.
3
<PAGE>
COMMITTEES OF THE BOARD
The Board of Directors has standing Audit, Executive Compensation and Stock
Option, and Strategic Planning Committees. It does not have a nominating
committee or a committee performing the functions of a nominating committee.
The Audit Committee meets at least annually with financial management and the
Company's independent certified public accountants to review the work of each
and to ensure that each is properly discharging its responsibilities. The
independent certified public accountants have free access to the Audit
Committee, without management representatives present, to discuss the results
of their examination and their opinion with respect to the adequacy of internal
controls and the quality of financial reporting of the Company. The Audit
Committee recommends to the Board of Directors the selection of the firm of
independent certified public accountants to audit the financial statements of
the Company. The members of the Audit Committee are Harry L. Casari, acting
Chairman, Alfred E. Osborne, Jr., and James M. Hall.
The Executive Compensation and Stock Option Committee has the responsibility
to meet with management to review the compensation policies and practices of
the Company, to formulate recommendations to the Board of Directors on these
policies and practices, to recommend to the Board the level of compensation of
executive officers, and to make recommendations to the Board concerning
compensation of directors. The members of the Executive Compensation and Stock
Option Committee are James M. Hall, Chairman, Alfred E. Osborne, Jr., and Harry
L. Casari.
The Strategic Planning Committee has the responsibility to meet with
management to review the annual operating plans developed by management, and to
formulate along with management long-term strategic and business plans to
enhance stockholder value. The members of the Strategic Planning Committee are
Alfred E. Osborne, Jr., Chairman, James M. Hall, Harry L. Casari and Dennis G.
Danko.
MEETINGS OF THE BOARD AND COMMITTEES
During the fiscal year ended February 28, 1995, the Board of Directors held
six (6) meetings, the Audit Committee of the Board held one (1) meeting, the
Executive Compensation and Stock Option Committee of the Board held three (3)
meetings, and the Strategic Planning Committee of the Board held three (3)
meetings. Each of the nominees for election at the Annual Meeting attended at
least 75% of the meetings of the Board of Directors and the committees of the
Board of Directors of which they are members.
COMPENSATION TO DIRECTORS
Non-employee directors are paid $1,000 for each Board of Directors meeting
attended, plus reimbursement of reasonable expenses in attending meetings. No
fees or reimbursements are paid for telephonic meetings or committee meetings.
During fiscal year 1992, the stockholders approved a stock option plan, (the
"Directors' Plan"), whereby non-qualified stock options to purchase a total of
200,000 shares of Common Stock may be granted to members of the Company's Board
of Directors. During fiscal year 1994, the stockholders approved an amendment
to the Directors' Plan providing for an automatic grant of options to each non-
employee director to purchase 10,000 shares of Common Stock upon initial
election to the Board of Directors, options to purchase 7,500 shares of Common
Stock annually upon re-election to the Board of Directors, and options to
purchase 5,000 shares of Common Stock annually upon election as the chairman of
a standing committee of the Board of Directors. The options are for a term of
five years and may be exercised six months after the date of grant. During the
fiscal year ended February 28, 1995, options for 37,500 shares were granted at
$1.63 per share, fair market value at date of grant, under the Directors' Plan.
At February 28, 1995, options to purchase 130,000 shares were issued,
outstanding and eligible under the Directors' Plan for exercise, and options to
purchase 70,000 shares were available for future grant.
4
<PAGE>
PROPOSAL 2
RATIFICATION OF ELECTION OF STANDING COMMITTEE CHAIRMEN
FOR THE SUCCEEDING YEAR
The Board of Directors has elected the individuals set forth below to be
chairman of the standing committee of the Board of Directors set forth opposite
such director's name and recommends that the stockholders ratify such election.
Such elections are subject to such individuals being re-elected as directors of
the Company by the stockholders at the Annual Meeting. Biographical information
with respect to such directors is located in this Proxy Statement under the
heading "Election of Directors".
<TABLE>
<S> <C>
Harry L. Casari.................... Chairman of the Audit Committee
James M. Hall...................... Chairman of the Executive Compensation
and Stock Option Committee
Alfred E. Osborne, Jr.............. Chairman of the Strategic
Planning Committee
</TABLE>
This matter is being submitted to the stockholders pursuant to the
requirements of the Directors' Plan. In the event of a negative vote, the Board
of Directors will reconsider its selections.
BOARD RECOMMENDS APPROVAL
The Board of Directors recommends that the stockholders ratify the election
of Messrs. Casari, Hall and Osborne as the chairmen of the standing committees
of the Board of Directors. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF
THE COMPANY'S OUTSTANDING COMMON STOCK REPRESENTED AND ENTITLED TO VOTE IS
REQUIRED TO RATIFY SUCH ELECTIONS.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP, independent
accountants, to audit the financial statements of the Company for the fiscal
year beginning March 1, 1995 and recommends that the stockholders confirm such
selection. In the event of a negative vote, the Board of Directors will
reconsider its selection. Price Waterhouse LLP has audited the Company's
financial statements since the year ending February 28, 1991. Representatives
of Price Waterhouse LLP are expected to be available at the Annual Meeting,
with the opportunity to make a statement if they desire to do so, and are
expected to be available to respond to appropriate questions.
BOARD RECOMMENDS APPROVAL
The Board of Directors recommends that the stockholders ratify the selection
of Price Waterhouse LLP as the Company's independent accountants for the fiscal
year beginning March 1, 1995.
COMPENSATION TO EXECUTIVE OFFICERS
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the Performance
Graph on page 7 and the Report of the Stock Option and Executive Compensation
Committee on page 8 shall not be incorporated by reference into any such
filings.
5
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth for the fiscal years ended February 28, 1995,
1994 and 1993 the compensation paid or accrued by the Company for the Chief
Executive Officer and all other executive officers of the Company (the "Named
Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------
NAME AND PRINCIPAL AWARDS ALL OTHER
POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)*
------------------ ---- ---------- --------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Dennis G. Danko......... 1995 195,000 15,000 60,000 8,624
Chairman, CEO &
President 1994 189,850 -0- 60,000 8,648
1993 164,100 -0- 50,000 7,176
Steve E. Busby.......... 1995 92,333 10,000 25,000 2,296
Senior Vice President,
Finance & Secretary 1994 87,000 4,450 25,000 2,315
1993 77,000 -0- 25,000 1,882
Thomas P. Carey......... 1995 90,333 10,000 25,000 2,292
Senior Vice President,
Operations 1994 85,500 4,350 25,000 2,309
1993 77,500 -0- 10,000 1,884
</TABLE>
- - --------
* For all executive officers, amounts include incremental health and
disability insurance benefits.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES
OF STOCK
PRICE
APPRECIATION
FOR OPTION
INDIVIDUAL GRANTS TERM ($)*
-------------------------------------------- -------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ---------- ------------- -------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Dennis G. Danko..... 60,000 50.0% 2.25 4/99 37,298 82,419
Steve E. Busby...... 25,000 20.8% 2.25 4/99 15,541 34,341
Thomas P. Carey..... 25,000 20.8% 2.25 4/99 15,541 34,341
</TABLE>
The following table sets forth information for the fiscal year ended February
28, 1995, with respect to grants of options to purchase Common Stock of the
Company to the Named Executive Officers.
- - --------
* Potential realizable value is based on an assumption that the stock price of
the common stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the five year option term. These
numbers are calculated based on the requirements promulgated by the
Securities and Exchange Commission and do not reflect the Company's estimate
of future stock price growth.
The ReadiCare option plans, other than the Directors' Plan, are administered
by a Committee of the Board of Directors. The Committee determines the
eligibility of employees and consultants, the number of shares to be granted
and the terms of such grants. All stock options granted in fiscal year 1995 had
an exercise price equal to the fair market value on the date of grant, and had
a term of five (5) years. The Plans also provide for same day sales, i.e.,
cashless exercises.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during fiscal 1995 and
unexercised options held as of the end of fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR IN-THE MONEY OPTIONS
SHARES END AT FISCAL YEAR END
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dennis G. Danko......... -0- -0- 315,000 30,000 -0- -0-
Steve E. Busby.......... -0- -0- 33,750 61,250 -0- -0-
Thomas P. Carey......... -0- -0- 54,750 56,250 -0- -0-
</TABLE>
PERFORMANCE GRAPH
The following graph demonstrates the performance of the cumulative total
return to the stockholders of the Company's Common Stock during the previous
five years in comparison to the cumulative total return of the Standard &
Poor's Health Care Composite Index and the Standard & Poor's 500 Stock Index.
Note that historic stock price performance is not necessarily indicative of
future stock price performance.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ReadiCare Inc., S&P 500 INDEX AND S&P HEALTH CARE CMPST
<TABLE>
<CAPTION>
Measurement Period S&P S&P HEALTH
(Fiscal Year Covered) ReadiCare 500 INDEX CARE CMPST
- - ------------------- --------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
02/28/90 $100 $100 $100
FYE 02/28/91 $286 $115 $146
FYE 02/28/92 $238 $133 $182
FYE 02/28/93 $105 $147 $142
FYE 02/28/94 $ 74 $159 $144
FYE 02/28/95 $ 57 $171 $186
</TABLE>
7
<PAGE>
REPORT OF THE STOCK OPTION & EXECUTIVE COMPENSATION COMMITTEE
The compensation policies of ReadiCare, Inc. (the "Company") are determined
and administered by the Stock Option & Executive Compensation Committee (the
"Committee") of the Board of Directors consisting of Messrs. Hall, Casari, and
Osborne. The policies adopted are structured to link the compensation of the
executive officers and key management of the Company to enhanced stockholder
value, while providing compensation at competitive levels. Through the
establishment of short and long-term incentive plans, the Company has attempted
to align the financial interests of its executive officers and key management
personnel with those of its stockholders.
EXECUTIVE COMPENSATION PHILOSOPHY
In designing its compensation programs, the Company follows the belief that
compensation should reflect the value created for stockholders while supporting
the business strategies and long-range plans of the Company, taking into
consideration, among other factors, the markets and clients the Company serves
and the operating environment faced by the Company. In doing so, the
compensation programs reflect the following themes:
. A competitive compensation program that stresses both the Company's
financial performance and individual performance.
. An annual incentive plan that generates a portion of compensation based
on the achievement of specific performance goals and objectives; and,
superior individual performance resulting in total annual compensation
above competitive levels.
The Committee reviews and determines the compensation of the executive
officers and key management personnel of the Company based on this philosophy
on an annual basis.
EXECUTIVE COMPENSATION COMPONENTS
The Company's executive compensation program consists of three components,
each of which is intended to guide the overall compensation philosophy.
. Base Salary
Base salary is intended to be set at levels within the range of the
competitive amounts paid to executive officers and key management personnel of
companies of similar business structure, size and marketplace orientation.
Salary levels are reviewed by the Committee on an annual basis.
. Annual Incentive Compensation
Under an annual incentive plan, annual incentive awards may be granted to the
executive officers and other key personnel upon the achievement of annual
financial goals and specific objectives established by the Committee or the
Company's President at the beginning of the fiscal year.
. Stock Options
Executive officers and other key employees are eligible to receive periodic
grants, generally on an annual basis, of stock options pursuant to the terms of
the Company's Stock Option Plans. Such grants are intended to retain and
motivate executive officers to improve long-term stock market performance and
thus Company valuation. Stock options are granted at or above the fair market
value of the underlying Common Stock at the date of grant. Generally, stock
options vest in installments over multiple years.
8
<PAGE>
FISCAL 1995 ACTIONS
During fiscal 1995, the Committee reviewed a market analysis of competitive
compensation practices for selected executive positions in several other
companies of similar size and scope. This analysis then was used by the
Committee, in conjunction with its own evaluation of Company performance and
individual executive performance, in making specific decisions with respect to
the compensation level of the Company's executive officers and key management
personnel.
REPORT ON GRANT OF OPTIONS
Stock options are periodically granted to executive officers and key
management personnel of the Company under the Company's Stock Option Plans.
Such grant actions are primarily based on the executive's ability to influence
the Company's long-term growth and profitability. The Committee believes that
stock option grants afford a desirable long-term compensation method because
they closely align the interests of management with stockholder value and that
grants of stock options are the best way to link directly the financial
interests of management with those of stockholders.
In granting stock options to the Named Executive Officers and to other key
employees, the Committee reviewed individual circumstances, taking into account
the respective scope of accountability, strategic and operational goals,
anticipated performance requirements and contributions of each person, the
general market conditions faced by the Company, the performance of the Company
versus its competitors, and the importance of maintaining the long-term
commitment of executive officers and key employees to the Company. During the
first quarter of fiscal 1995, the Committee noted that a number of key
employees of the Company held options having exercise prices substantially in
excess of the market price of the Company's Common Stock. The Committee
believed that one purpose of the stock option plan, to provide equity
incentives, would not be achieved for employees holding such options
exercisable above the market price. As a result, the Committee granted those
holders (other than Named Executive Officers) of 70,000 outstanding options at
or in excess of an exercise price of $3.50 per share new options with an
exercise price was $2.25 per share. The exchanged options were contingent upon,
among other terms, a six month holding period before such options could be
exercised by the holder.
CEO COMPENSATION
Dennis G. Danko, the Chairman, President and Chief Executive Officer of the
Company, was compensated at an annual rate of $195,000 for each of the two
preceding fiscal years. The Committee's review of compensation practices of
other comparable companies indicated that Mr. Danko compensation was at the low
end of the annual compensation level paid to other such chief executive
officers. In view of the Company's improved performance for the most recent
fiscal year compared to operating results for the prior fiscal year, and Mr.
Danko's achievement of several other operating objectives, the Committee
revised his compensation rate to $205,000. Additionally, Mr. Danko received
$15,000 in incentive cash awards for fiscal year 1995.
The foregoing report has been furnished by Committee members Messrs. Hall,
Casari and Osborne.
9
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDE PARTICIPATION
Directors Hall and Osborne comprised the Compensation Committee of the Board
of Directors during the fiscal year ended February 28, 1995. Neither of these
persons has ever been an officer or employee of the Company or any of its
subsidiaries, nor were there any compensation committee interlocks or other
relationships during such fiscal year requiring disclosure under item 402(j) of
Regulation S-K of the Securities and Exchange Commission.
STOCKHOLDER PROPOSALS
Any proposal of a stockholder intended to be presented at the Company's 1996
Annual Meeting of Stockholders must be received by the Company no later than
February 14, 1996 in order to be considered for inclusion in the proxy
statement and form of proxy for that meeting.
SOLICITATION OF PROXIES
The Company bears the cost of this solicitation. Proxies may be solicited by
mail, telephone, telegraph or personally by directors, officers or regular
employees of the Company without remuneration other than normal employees'
salaries. The Company will reimburse persons holding shares in their names or
in the names of their nominees for expenses of forwarding proxy materials to
their principals. Brokerage houses, custodians, nominees and fiduciaries will
be reimbursed by the Company for their expenses in forwarding the Board's
soliciting material to the Company's beneficial stockholders.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity securities
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Officers, directors and greater than ten-
percent stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company and written representation that no other
reports were required, during the fiscal year ended February 28, 1995 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with.
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OTHER MATTERS
The Company does not intend to present any other business for action at the
Meeting and does not know of any other business intended to be presented by
others.
STOCKHOLDERS OF THE COMPANY MAY OBTAIN, WITHOUT CHARGE, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, FOR THE
FISCAL YEAR ENDED FEBRUARY 28, 1995, BY WRITING THE COMPANY AT 446 OAKMEAD
PARKWAY, SUNNYVALE, CALIFORNIA 94086, ATTENTION: STEVE E. BUSBY. THE WRITTEN
REQUEST MUST SPECIFY THE STOCKHOLDER'S GOOD FAITH REPRESENTATION THAT, AS OF
THE RECORD DATE FOR THE 1995 ANNUAL MEETING OF STOCKHOLDERS, SUCH STOCKHOLDER
WAS A BENEFICIAL HOLDER OF SHARES OF THE COMPANY'S COMMON STOCK.
/s/ DENNIS G. DANKO
-----------------------------------
Dennis G. Danko
President and Chief Executive
Officer
Sunnyvale, California
June 14, 1995
11
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PROXY READICARE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD JULY 19, 1995
The undersigned hereby (i) acknowledge(s) receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement each dated June 14, 1995, relating
to the Annual Meeting of Stockholders of ReadiCare, Inc. (the "Company") to be
held July 19, 1995 and (ii) appoint(s) Dennis G. Danko, Steve E. Busby and each
or either of them as proxies, with full power of substitution, and authorizes
them, or either of them, to vote all the shares of Common Stock, $.01 par
value, of the Company standing in the name of the undersigned at the Annual
Meeting of Stockholders of the Company to be held July 19, 1995 or any
adjournment thereof upon the matters specified below.
1. [_] Except as indicated below, FOR the election of the following persons,
who have been nominated for election to the Board of Directors: Dennis G.
Danko, Harry L. Casari, James M. Hall, and Alfred E. Osborne, Jr.
Please enter the names of any nominee(s) for whom you wish to withhold
authority to vote:
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2. TO RATIFY THE ELECTION OF STANDING COMMITTEE CHAIRMEN FOR THE SUCCEEDING
YEAR:
[_] FOR [_] AGAINST [_] ABSTAIN
3. TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE INDEPENDENT
AUDITORS FOR THE COMPANY:
[_] FOR [_] AGAINST [_] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
UNLESS OTHERWISE INDICATED TO THE CONTRARY, THIS PROXY WILL BE TAKEN AS
AUTHORITY TO VOTE FOR THE ABOVE LISTED MATTERS. IN THE EVENT THAT THE
UNDERSIGNED SPECIFIES A CHOICE WITH RESPECT TO THE MATTERS LISTED IN ITEMS 1, 2
AND 3 ABOVE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THAT CHOICE.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
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STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE IN PERSON EVEN THOUGH THEY
PREVIOUSLY MAILED THIS PROXY.
I/We will attend the meeting Yes [_] No [_]
Dated ____________________________________________________________________, 1995
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Signature of Stockholder
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Signature of Stockholder
IMPORTANT: Please date this Proxy and sign exactly as your name(s) appears.
When signing as a fiduciary or as an agent of a corporation, partnership, trust
or other entity, please give your full title. When shares are held by joint
tenants or tenants in common both should sign the proxy. Please return this
Proxy promptly in the enclosed envelope.
PLEASE DATE, SIGN AND MAIL PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED FOR DOMESTIC MAILING.
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