<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:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[_] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ROTECH MEDICAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
ROTECH MEDICAL CORPORATION
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] $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>
ROTECH MEDICAL CORPORATION
4506 L. B. MCLEOD ROAD, SUITE F
ORLANDO, FLORIDA 32811
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 9, 1996
TO THE SHAREHOLDERS OF ROTECH MEDICAL CORPORATION:
The annual meeting of shareholders of RoTech Medical Corporation (the "Company")
will be held at the SunTrust, N.A. Tower, located at 200 South Orange Avenue,
second floor, University Room, Orlando, Florida 32801 at 10:00 a.m. on December
9, 1996 for the following purposes:
1. To elect five directors to hold office until the next annual meeting
of shareholders and until their successors are elected and have
qualified;
2. To act upon a proposal to amend the Company's Articles of
Incorporation.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on November 5, 1996 will be
entitled to vote at the meeting.
If there is any chance that you may not be able to attend the annual meeting,
please execute the enclosed Proxy and return it promptly in the self-addressed
envelope provided. If you attend the meeting, you may revoke the Proxy and vote
in person.
By Order of the Board of Directors:
/s/ William A. Walker II
- ------------------------
William A. Walker II,
Secretary
Orlando, Florida
November 8, 1996
<PAGE>
Mailing Date
November 8, 1996
ROTECH MEDICAL CORPORATION
4506 L.B. MCLEOD ROAD, SUITE F
ORLANDO, FLORIDA 32811
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 9, 1996
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of RoTech Medical Corporation (the "Company") to be used
at the annual meeting of shareholders to be held on December 9, 1996, for the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
Shareholders who execute proxies have the right to revoke them at any time
before they are voted.
Shareholders of record as of November 5, 1996, will be entitled to vote at the
meeting. At the close of business on that day, there were outstanding 25,434,101
shares of the Company's Common Stock. Each share of Common Stock is entitled to
one vote with respect to each matter presented for action at the Meeting. The
affirmative vote of a majority of the shares cast at the Meeting is required for
the election of directors.
Proxies will be voted in accordance with instructions noted on the proxies.
Unless otherwise specifically instructed in the proxies, it is the intention of
the persons named in the proxy to vote all proxies received by them FOR
proposals 1 and 2.
The cost of this proxy solicitation will be borne by the Company. It is
contemplated that proxies will be solicited solely by mail. Banks, brokers and
other custodians will be requested to forward proxy soliciting materials to
their customers where appropriate, and the Company will reimburse such banks,
brokers and custodians for their reasonable out-of-pocket expenses in sending
the proxy materials to beneficial owners of shares.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth, as of October 21, 1996, certain information with
respect to all persons known by the Company to beneficially own 5% or more of
its outstanding Common Stock, each director and all directors and officers of
the Company as a group. Unless otherwise indicated, each of the shareholders
listed below has sole voting and investment power with respect to the Common
Stock beneficially owned.
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Beneficial Percent of Shares
Owner or Identity of Group Number of Shares Outstanding
- ---------------------------------------------------------------------------------------
<S> <C> <C>
William P. Kennedy 1,869,166(1) 7.3%
Chairman, Board of Directors and
Chief Executive Officer
4506 L. B. McLeod Road, Suite F
Orlando, Florida 32811
Putnam Investments, Inc. 2,674,458 10.5%
One Post Office Square
Boston, MA 02109
Stephen P. Griggs 206,572(2) 0.8%
Director, President, Assistant Secretary
and Chief Operating Officer
4506 L.B. McLeod Road, Suite F
Orlando, Florida 32811
William A. Walker II 1,000 *
Director and Secretary
250 Park Ave., South, 5th Floor
Winter Park, Florida 32789
Jack T. Weaver, D.O.
Director
3120 Corrine Drive
Orlando, Florida 32803
Leonard E. Williams 10,000(3) *
Director
1603 E. Marks
Orlando, Florida 32853
All Directors and 2,088,103 8.2%
Officers as a Group
(Consisting of 6 persons)
</TABLE>
* - Less than one-half percent.
(1) Includes shares owned by Thayer's Colonial Pharmacy, Inc., a Florida
corporation ("Thayer's"), of which Mr. Kennedy is the sole shareholder.
(2) Includes 1,500 shares held by the wife of Mr. Griggs and 500 shares held by
the minor children of Mr. Griggs and 14,472 shares representing Mr. Griggs
ownership in holdings of L & G of Orlando, Inc.
(3) All 10,000 shares are held by the wife of Mr. Williams.
2
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors proposes that the five nominees listed below be elected
as directors to serve until the next annual meeting of shareholders and until
their successors are elected and qualified. All of the nominees are currently
directors. Should any nominee for the office of director become unable to
accept nomination or election, which is not anticipated, it is the intention of
the persons named in the proxy, unless otherwise specifically instructed in the
proxy, to vote for the election in his stead of such other person as the Board
of Directors may recommend.
<TABLE>
<CAPTION>
Name of Nominee and Director
Position with the Company Age Since Principal Occupation Last Five Years
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
William P. Kennedy, 52 1981 Chairman, Board of Directors and Chief Executive Officer of the Company;
Chairman, Board of Chairman, Board of Directors and President of Thayer's.
Directors and Chief
Executive Officer
Stephen P. Griggs, 39 1991 Director, Chief Operating Officer, President and Assistant Secretary of
Director, Chief Operating the Company.
Officer, President and
Assistant Secretary
William A. Walker II, 55 1984 Director and Secretary of the Company; Practicing attorney in Winter Park
Director and Secretary and Orlando, Florida as a shareholder in the law firm of Winderweedle,
Haines, Ward & Woodman, P.A.
Leonard E. Williams, 65 1988 Director of the Company; President and Chief Executive Officer of Wayne Densch,
Director Inc.; President of Wayne Densch Charities; previously District Sales Manager for
Tom's Foods, Inc.; Director of Orlando Board of Directors, First Union National
Bank of Florida, President of Leonard E. Williams Company.
Jack T. Weaver, D.O., 63 1992 Director of Company; Osteopathy Physician; Chairman, Board of Trustees at the
Director University of Health Sciences, College of Osteopathic Medicine, Kansas City,
Missouri.
</TABLE>
The Company has established an Executive Committee consisting of William P.
Kennedy, Stephen P. Griggs and William A. Walker II; a Stock Option Plan
Committee consisting of William A. Walker II; a Compensation Committee
consisting of William A. Walker II and Leonard E. Williams; an Audit Committee
consisting of William A. Walker II, Leonard E. Williams and Jack T. Weaver,
D.O.; and a Nominating Committee consisting of William A. Walker II and Leonard
E. Williams. The Audit Committee will select the Company's independent
certified public accountants for the current fiscal year. During the Company's
fiscal year ended July 31, 1996, its Audit Committee held one (1) meeting and
each committee member attended such meeting. The Nominating Committee has a
current policy of not considering nominees recommended by security holders, a
policy which, however, is currently under review. Also, during the Company's
fiscal year ended July 31, 1996, the Company's Board of Directors held five (5)
meetings, and a quorum of directors was present at each meeting.
3
<PAGE>
The following person is an executive officer (but not a director) of the
Company:
<TABLE>
<CAPTION>
Executive
Name of Officer and Officer
Position with the Company Age Since Principal Occupation Last Five Years
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rebecca R. Irish, Chief 34 1991 Chief Financial Officer, Treasurer and Assistant Secretary of the Company.
Financial Officer,
Treasurer and Assistant
Secretary
Janet L. Ziomek, Vice 39 1996 Vice President of Finance of the Company, previously Chief Financial Officer
President of Finance and Treasurer of Designed Furniture Associates, Inc., Orlando, Florida
</TABLE>
MANAGEMENT REMUNERATION AND TRANSACTIONS
EXECUTIVE COMPENSATION
- ----------------------
The following table sets forth the annual and long-term compensation for the
Company's Chief Executive Officer and the four highest paid executive officers
(named executives) whose aggregate salary and bonus compensation exceeded
$100,000, as well as the total compensation paid to each individual for the
Company's previous two fiscal years:
<TABLE>
<CAPTION>
Annual Compensation Long-Term
Name and Principal Position Year Salary Bonus & Other Compensation
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William P. Kennedy 1996 $153,137 --- ---
Chairman of the Board of Directors 1995 $151,289 --- ---
and Chief Executive Officer 1994 $151,289 --- ---
Stephen P. Griggs, Director, 1996 $112,263 --- ---
Chief Operating Officer, President 1995 $110,784 --- ---
and Assistant Secretary 1994 $110,784 --- ---
</TABLE>
FISCAL YEAR-END OPTION VALUES
- -----------------------------
The following table summarizes for each of the Named Executive Officers the
total number of unexercised options held at July 31, 1996, and the aggregate
dollar value of in-the-money, unexercised options held at July 31, 1996.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at FY-End at FY-End
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stephen P. Griggs
Director, Chief Operating
Officer, President 187,500/187,500 $1,647,656/$1,647,656
and Assistant Secretary
</TABLE>
4
<PAGE>
The Company historically has not compensated Directors in cash, nor reimbursed
Directors for attendance at meetings, but adopted a phantom stock plan for non-
employee directors, which plan was approved by the Company's shareholders at its
annual meeting on December 4, 1992 and amended on December 9, 1994. Under the
1994 amendment each Director completing a year's service is entitled to a credit
under the phantom stock plan equal to that number of Company shares which
results from dividing the Company's quoted stock price at close of trading on
the date of the annual meeting into the sum of $5,000.
1996 KEY EMPLOYEE STOCK OPTION PLAN
- -----------------------------------
On April 1, 1996, the Board of Directors adopted a non-qualified stock option
plan under the name "1996 Key Employee Stock Option Plan." The provisions of
this plan are identical to the 1993 stock option plan, except that the total
number of shares subject to the 1996 plan, post stock split, is 1,000,000
shares. The 1996 Key Employee Stock Option Plan is intended to not qualify as an
"Incentive Stock Option Plan" as that term is described in the Federal Internal
Revenue Code of 1986, as amended.
KEY MAN LIFE INSURANCE
- ----------------------
The Company currently maintains a split dollar key life insurance policy on the
life of Mr. Kennedy in the face amount of $10,000,000. The beneficiaries of
the policy are Mr. Kennedy's designated heirs pursuant to an irrevocable trust
established by Mr. Kennedy. The Company shall have the unqualified right to
receive a portion of the death benefit equal to the greater of the total amount
of premiums paid by the Company or the cash surrender value of the policy
reduced by any outstanding indebtedness on the policy.
CERTAIN RELATED TRANSACTIONS
- ----------------------------
The Company leases office space in a building located at 942 S.E. 17th Street,
Ocala, Florida, a building in which Mr. Kennedy owns an undivided one-half
interest. Such lease is a month-to month lease providing for monthly rental
payments of approximately $1,500. Aggregate payments made by the Company under
such lease during fiscal 1996 were approximately $18,000.
The Company purchased approximately $74,000 of products from companies owned by
Mr. Kennedy in fiscal 1996. Companies owned by Mr. Kennedy purchased
approximately $46,000 of products from the Company.
A & C Business Services, Inc., a Florida corporation, of which Mr. Kennedy is
the sole shareholder, provides certain business services to the Company. The
cost of such services to the Company during fiscal year 1996 amounted to
approximately $497,000.
L&G of Orlando, Inc., a Florida corporation, of which Mr. Griggs is a
shareholder, provides certain business services to the Company. The cost of
such services to the Company during fiscal year 1995 amounted to approximately
$225,000.
Mr. Walker, the Secretary and a Director of the Company, is a shareholder,
director, assistant secretary, assistant treasurer and a member of the Executive
Committee of Winderweedle, Haines, Ward & Woodman, P.A. ("WHWW"), a law firm
with offices in Winter Park and Orlando, Florida. This law firm is general
counsel to the Company and each of its subsidiaries and was paid approximately
$302,000 in fiscal 1996. WHWW entered into a stock option agreement
("Agreement") with the Company on July 1, 1995. The Agreement grants WHWW the
unassignable and non-transferable right and option to purchase from the Company
5
<PAGE>
up to, but not exceeding in the aggregate, 20,000 shares of the Company's common
stock, par value $.0002, at an option price of $13.88. Any options not
exercised on or before June 30, 2000 terminate on such date and are null and
void.
In the opinion of management, each of the foregoing transactions with officers,
directors, principal shareholders or affiliates were on terms no less favorable
to the Company than terms available from persons not affiliated with the
Company. The terms of any future transactions with officers, directors,
principal shareholders or affiliates will be no less favorable to the Company
than those which could be obtained from unaffiliated parties, and any future
transactions with affiliated parties, including loans to Company officers, will
be approved by a majority of the independent and disinterested members of the
Company's Board of Directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- -------------------------------------------------------
The Compensation Committee of the Company's Board of Directors determines cash
and stock option compensation of the Company's employed executive officers. The
Company's employed officers maintain administrative oversight of all stock
option plans.
The Compensation Committee consists of Directors Walker and Williams and meets
as circumstances require, but no less frequently than annually.
The Compensation Committee seeks to compensate employee executives at a cash
base salary level which is realistic in terms of minimizing the impact of any
future officer replacement, is adequate to meet living costs appropriate to
persons in the position held, and is appropriate to that customarily paid by
companies of comparable size in the health care industry. The Committee does
take into account that Mr. Kennedy, through his large stockholdings in the
Company, has a material inducement to closely attend to the success of the
Company without the higher cash compensation that might be typical for a Chief
Executive Officer with similar responsibilities.
Likewise, the Compensation Committee has utilized a non-qualified Stock Option
Plan, described in the 1996 Annual Report on Form 10-K for the fiscal year of
the Company ended July 31, 1996, to align the efforts of key executives and key
employees with those of stockholders. The essential philosophy of the
Compensation Committee is that cash base compensation is not tied to performance
factors. Cash bonuses are not currently paid to executive officers, although
the Compensation Committee retains the option of granting future cash bonuses
not exceeding thirty percent (30%) of base compensation, per annum, based upon
extraordinary performance in enhancing stockholder value.
Further, the Compensation Committee has recommended to the Board of Directors
and the Board of Directors adopted, effective April 1, 1996, a non-qualified Key
Employee Stock Option Plan.
Current stock options have been granted to Mr. Griggs, Ms. Irish and Ms. Ziomek
among the executive officers, the amount of which were determined by factors of
longevity, responsibility, and necessity to compete with similar opportunities
granted by competitors.
6
<PAGE>
STOCK PERFORMANCE GRAPH
- -----------------------
The following graph compares the cumulative total shareholder return of the
Company's common stock with (a) the CRSP Total Return Index for the NASDAQ
Health Services Stocks (the "NASDAQ Health Services Index") and (b) the CRSP
Total Return Index for the NASDAQ Stock Market (U.S.) (the "NASDAQ Composite
Index"). The graph assumes the investment of $100 on August 1, 1990 in the
Company's common stock and in each of the indices.
<TABLE>
<CAPTION>
ROTECH NASDAQ NASDAQ
YEAR MEDICAL HEALTH COMP
- ---------------- ------- ------ ------
<S> <C> <C> <C>
1990 100 100 100
1991 100 170 118
1992 164 200 139
1993 144 225 169
1994 249 250 174
1995 384 289 243
1996 459 360 271
</TABLE>
APPROVAL OF AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION
- --------------------------------------
Subject to approval by the Company's shareholders, the Company's Board of
Directors adopted, at its meeting of October 14, 1996, the following amendment
to the Company's Articles of Incorporation:
"BE IT RESOLVED THAT Article XI - Amendment to Articles of the Articles of
----------------------------------
Incorporation of the Corporation is hereby amended to read as follows:
'ARTICLE XI - Amendment to Articles
----------------------------------
These Articles of Incorporation may be amended in the manner provided by law.'"
The purpose of this amendment is to provide the Company's Board of Directors
with the flexibility to make amendments to the Company's Articles of
Incorporation, without seeking shareholder approval, to the extent the Board is
permitted to do so under the laws of the State of Florida.
DEADLINE FOR SUBMITTING
SHAREHOLDERS PROPOSALS
- -----------------------
Any proposal by a shareholder for consideration at the 1997 annual meeting of
shareholders must be received at the Company's executive offices at 4506 L.B.
McLeod Road, Suite F, Orlando, Florida 32811, no later than July 14, 1997, if
any such proposal is to be eligible for inclusion in the Company's proxy
materials for its 1997 annual meeting.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- ----------------------------------------
The accounting firm of Deloitte & Touche LLP was appointed by the Board of
Directors on June 7, 1994, and has served as the Company's independent certified
public accountants for the fiscal years ended July 31, 1994, 1995 and 1996. At
some point later in the current fiscal year, the Company's audit committee will
designate the Company's auditors for the fiscal year ending July 31, 1997.
OTHER MATTERS
- -------------
Regulations adopted by the SEC, effective May 1, 1991, require the Company to
identify the names of persons who failed to file or filed late a report required
under Section 16. Generally, the reporting regulations under Section 16 require
directors, officers and certain shareholders to report changes in ownership in
Company securities. To the knowledge of the Company, each Form 4 required to be
filed was filed on a timely basis.
7
<PAGE>
The management of the Company is not aware of any other matters to be brought
before the annual meeting of shareholders. If other matters are duly presented
for action, it is the intention of the persons named in the enclosed proxy to
vote on such matters in accordance with their judgment.
/s/ William A. Walker II
------------------------
William A. Walker II
Secretary
Orlando, Florida
November 8, 1996
Each shareholder is urged to execute and return the enclosed proxy promptly. In
the event a shareholder decides to attend the meeting, he may, if he wishes,
revoke his proxy and vote his shares in person.
8
<PAGE>
P R O X Y ROTECH MEDICAL CORPORATION
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints WILLIAM P. KENNEDY, WILLIAM A. WALKER II,
LEONARD E. WILLIAMS, STEPHEN P. GRIGGS and JACK T. WEAVER, or any of them, as
proxies, each with full power of substitution, acting by a majority or by any
one of them if only one can be present and acting, to vote in the following
manner (according to the number of shares which the undersigned would be
entitled to cast if then personally present) at the Annual Meeting of
Shareholders of ROTECH MEDICAL CORPORATION to be held on December 9, 1996, and
at any adjournment thereof.
(1) ELECTION OF DIRECTORS
FOR all Nominees listed below WITHHOLD AUTHORITY to vote for all
(except as marked to the nominees listed below
contrary below)
WILLIAM P. KENNEDY, WILLIAM A. WALKER II, LEONARD E. WILLIAMS,
STEPHEN P. GRIGGS, JACK T. WEAVER
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below)
(2) AMENDMENT TO ARTICLES OF INCORPORATION
FOR Amendment AGAINST Amendment ABSTAIN
(3) In their discretion upon such other business as may properly come before the
meeting
(please date and sign reverse side)
<PAGE>
ROTECH MEDICAL CORPORATION
This proxy shall be voted as directed. If no direction to the contrary is
indicated, this proxy shall be voted FOR Proposals 1 and 2. Discretionary
authority is hereby confirmed as to all other matters that may come before the
meeting.
WITNESS my hand and seal this ______ day of ____________________, 1996.
----------------------------------
----------------------------------
Signature of Shareholder
PLEASE SIGN this proxy exactly as
your name or names appear hereon.
If stock is held jointly,
signatures should appear for both
names. When signing as attorney,
executor, administrator, trustee,
guardian or custodian, please
indicate the capacity in which you
are acting. Please fill in date and
sign this proxy and return in the
enclosed postpaid envelope.
(See Proxy On Reverse Side.)
