<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[x] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
DVI, 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), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(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.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
DVI, INC.
500 HYDE PARK
DOYLESTOWN, PENNSYLVANIA 18901
________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 4, 1996
________________
To the Stockholders of DVI, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
DVI, Inc. (the "Company") will be held at the Hyatt Regency Hotel in Chicago,
Illinois, on Wednesday, December 4, 1996, at 3:00 p.m., local time, for the
following purposes:
1. To elect six directors to constitute the Board of Directors,
each to serve until the next meeting of Stockholders;
2. To consider and act upon a proposal to amend Article Fourth of
the Company's Certificate of Incorporation to decrease the
number of shares of common stock, $.005 par value per share
("Common Stock"), which the Company is authorized to issue
from 75,000,000 shares to 25,000,000 shares;
3. To ratify the appointment of Deloitte & Touche LLP as
independent public accountants for the Company for the fiscal
year ending June 30, 1997; and
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
The close of business on October 7, 1996 has been fixed as the record
date for the determination of all stockholders entitled to receive notice of
the Annual Meeting and to vote at such meeting or any adjournment thereof.
<PAGE> 3
Holders of a majority of the outstanding shares of the Company's
Common Stock must be present either in person or by proxy in order for the
meeting to be held, and it is important that your stock be represented
regardless of the number of shares you hold. If you do not expect to attend
the meeting, or if you do plan to attend but wish to vote by proxy, please
date, sign and mail promptly the enclosed proxy for which a return envelope is
provided.
By Order of the Board of Directors
Melvin C. Breaux
Secretary
Dated: November 8, 1996
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED
ADDRESSED ENVELOPE, EVEN IF YOU PLAN TO ATTEND THE MEETING. IF YOU ATTEND THE
MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE USED.
<PAGE> 4
DVI, INC.
500 HYDE PARK
DOYLESTOWN, PENNSYLVANIA 18901
_____________
PROXY STATEMENT
___________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 4, 1996
________________
The Board of Directors of DVI, Inc., a Delaware corporation (the
"Company"), is soliciting the enclosed proxy for use at the Company's Annual
Meeting of Stockholders, to be held on Wednesday, December 4, 1996, at 3:00
p.m., local time, at the Hyatt Regency Hotel, 151 East Wacker Drive, Chicago,
Illinois 60606 (the "Annual Meeting") and at any adjournment thereof. Whether
or not you plan to attend the Annual Meeting, you are requested to date, sign
and return the proxy to the Company as promptly as possible in the enclosed
envelope. The shares of the Company's common stock, par value $.005 per share
(the "Common Stock"), represented by proxies will be voted in accordance with
the Board of Directors' recommendations unless the proxy indicates otherwise.
Any stockholder giving a proxy may revoke it at any time prior to its use by
filing with the Secretary of the Company a written revocation or a proxy
bearing a later date, or by voting in person at the Annual Meeting.
The close of business on October 7, 1996 has been fixed as the record
date for the determination of the stockholders entitled to receive notice of
and to vote at the Annual Meeting. At such date, the Company had outstanding
10,497,723 shares of Common Stock. Each holder of Common Stock on the record
date will be entitled to one vote for each share registered in such
stockholder's name on each of the matters to come before the meeting. A
majority of the outstanding shares of Common Stock will constitute a quorum. A
list of stockholders entitled to vote will be available for examination by
interested stockholders at the corporate headquarters of the Company, Office of
the Proxy Administrator, 500 Hyde Park, Doylestown, Pennsylvania 18901, during
ordinary business hours from October 7, 1996 to the date of the meeting.
If a stockholder furnishes a proxy but directs the proxy holder to
abstain from voting some or all of the shares covered by the proxy on a
proposal described in this Proxy Statement, that abstention will have the same
effect as voting those shares against the proposal. If shares registered in
the name of a broker or other "street name" nominee are voted only as to
certain matters before the Annual Meeting and not as to others, because the
beneficial owner has not provided voting instructions or the broker has failed
to exercise discretionary voting power (commonly referred to as "broker
non-votes"), that will have the same effect as voting those shares against the
proposal as to which the broker does not vote. The Company expects that under
the rules of the New York Stock Exchange, Inc., brokers who hold shares in
street name for customers will have the authority to vote on all the proposals
described in this Proxy Statement if they do not receive instructions from the
beneficial owners of those shares. Shares that are the subject of abstentions
and broker non-votes are required to be counted for purposes of determining the
presence of a quorum for the transaction of business at the Annual Meeting.
3
<PAGE> 5
The approximate date on which this Proxy Statement and form of proxy
is first being sent or given to the Company's stockholders is November 20,
1996.
The Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1996 accompanies this Proxy Statement. This Annual Report shall not
be deemed to be soliciting material nor incorporated in this Proxy Statement by
reference. Brokerage houses, custodians, nominees and others may obtain
additional copies of the Annual Report or this Proxy Statement by request to
the Company.
4
<PAGE> 6
PROPOSAL 1.
ELECTION OF DIRECTORS
Six Directors are to be elected at the Annual Meeting of Stockholders
to serve one-year terms until the 1997 Annual Meeting of Stockholders and until
their respective successors are elected and shall qualify. The persons named
in the accompanying proxy intend to vote for the election of the nominees
identified below unless authority to vote for one or more of such nominees is
specifically withheld in the proxy. All of the nominees are currently
directors of the Company and, except for Mr. Roberts who was elected to fill a
vacancy on the Board during 1996, were elected Directors at the 1995 Annual
Meeting of Stockholders. The Board of Directors is informed that all the
nominees are willing to serve as Directors, but if any of them should decline
to serve or become unavailable for election as a Director at the meeting, an
event which the Board of Directors does not anticipate, the persons named in
the proxy will vote for such nominee or nominees as may be designated by the
Board of Directors, unless the Board of Directors reduces the number of
Directors accordingly.
Directors shall be elected by a majority of the votes cast, in person
or by proxy, at the Annual Meeting.
THE BOARD OF DIRECTORS
The following table sets forth information concerning the Company's
nominees for Director and information concerning a Director Emeritus:
<TABLE>
<CAPTION>
NAME AND AGE PRESENT POSITION WITH THE COMPANY
------------ ---------------------------------
<S> <C>
Gerald L. Cohn (68) Director since 1986.
John E. McHugh (68) Director since 1990.
Michael A. O'Hanlon (49) Chief Executive Officer since 1995 and Director since 1993.
Nathan Shapiro (60) Director since 1995.
William S. Goldberg (40) Director since 1995.
Harry T. J. Roberts (62) Director since 1996.
</TABLE>
Mr. Cohn is a Director of the Company and has served in that capacity
since 1986. Mr. Cohn is a private investor. Mr. Cohn presently serves as a
director of Niagara Steel Corporation, Diametrics Medical Corporation and SMT
Healthcare Company. In addition to his responsibilities as a Director, Mr.
Cohn also acts as a consultant to the Company and serves on the Company's
senior credit committee. Mr. Cohn is the father of Cynthia J. Cohn, a Company
Vice President.
Mr. McHugh is a Director of the Company and has served in that
capacity since 1990. Mr. McHugh was formerly the President of, and now serves
in a marketing and public relations capacity with, James McHugh Construction
Company, a firm he has been associated with since 1954.
Mr. O'Hanlon is the Company's Chief Executive Officer since November
1995 and the Company's President since September 1994. Mr. O'Hanlon became a
Director in November 1993. From the time Mr. O'Hanlon joined the Company in
March 1993 until September 1994 he served as Executive Vice President of the
Company. Before joining the Company, for nine years, he served as President
and Chief Executive Officer of Concord Leasing, Inc. ("Concord Leasing"), a
major source of medical, aircraft, ship and industrial equipment financing.
Previously, Mr. O'Hanlon was a senior executive with Pitney Bowes Credit
Corporation.
5
<PAGE> 7
Mr. Shapiro is a Director of the Company and has served in that
capacity since 1995. Mr. Shapiro is a founder and President of SF Investments,
Inc., a registered broker/dealer in business since 1972. Since 1979 he has
been a director of Baldwin & Lyons, Inc., a publicly traded property and
casualty insurance company. Mr. Shapiro is also the Chairman of the Investment
Committee. He is a trustee for CT&T Funds, a family of mutual funds sponsored
by Chicago Title and Trust Company. Mr. Shapiro is also a director of Amli
Realty Co.
Mr. Goldberg is a Director of the Company and has served in that
capacity since 1995. Mr. Goldberg is currently Managing Director of GKH
Partners, L.P., a private equity investment and venture capital partnership
with which he has been involved since 1988. Mr. Goldberg is current or former
director and/or executive officer of several public and privately-owned
companies controlled by GKH Partners, L.P.
Mr. Roberts is a Director of the Company and has served in that
capacity since 1996. In addition to his responsibilities as a Director, Mr.
Roberts also acts as a consultant to the Company. Mr. Roberts is President of
Nakebro, Boston, a privately-owned property group and since 1995 has been a
director of Calmar Inc., Los Angeles, the largest manufacturer of non-aerosol
plastic dispensing systems in the world. Prior to these posts, Mr. Roberts
held senior positions in international banking for thirty-five years. Since
1978 he has worked in the United States as General Manager of Midland
International Bank, London and Svenska Handelsbanken, Stockholm. Mr. Roberts
is a Fellow of the Chartered Institute of Bankers.
COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended June 30, 1996, the Company paid $2,500 to
non-employee directors for each meeting attended in person and $100 for each
meeting attended by telephone. During the fiscal year ended June 30, 1996, the
Board of Directors met a total of 12 times, including actions taken by
unanimous written consent.
Each of the incumbent directors attended all meetings of the Board and
committees of which he was a member held during the period he served on the
Board or such committee.
The Board of Directors has a standing Executive Committee, Audit
Committee and a Compensation Committee. The Executive Committee consists of
Messrs. Cohn, Garfinkel, Miller, O'Hanlon, Roberts and Turek and reviews
certain policies and operations of the Company. The Executive Committee met at
least frequently during the fiscal year ended June 30, 1996. The Board has no
nominating committee.
The Audit Committee consists of Messrs. Cohn, McHugh and Roberts and
makes recommendations concerning the engagement of the Company's independent
auditors, consults with the independent auditors concerning the audit plan and
thereafter concerning the auditor's report and management letter. During the
fiscal year ended June 30, 1996, the Audit Committee met one time.
The Compensation Committee consists of the entire Board of Directors
and did not meet at any time other than in the normal course of the Board of
Directors' meetings. The Board of Directors, sitting as the Compensation
Committee, reviews the annual compensation rates of the officers and key
employees of the Company, administers the Company's compensation plans and
makes recommendations in connection with such plans.
6
<PAGE> 8
INDEMNIFICATION OF OFFICERS AND DIRECTORS
As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation limits the personal liability of a Director of the
Company for monetary damages for breach of fiduciary duty of care as a
Director. Liability is not eliminated for (i) any breach of the Director's
duty of loyalty to the Company or its stockholders, (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) unlawful payment of dividends or stock purchases or redemptions
pursuant to Section 174 of the Delaware General Corporation Law, or (iv) any
transaction from which the Director derived an improper personal benefit.
COMPLIANCE WITH REPORTING REQUIREMENTS OF
SECTION 16 OF THE EXCHANGE ACT
Under Section 16(a) of the Exchange Act, the Company's Directors,
executive officers and any persons holding 10% or more of the Company's Common
Stock are required to report their ownership of Common Stock and any changes in
that ownership to the Securities and Exchange Commission (the "SEC") and to
furnish the Company with copies of such report. Specific due dates for these
reports have been established and the Company is required to report in this
Proxy Statement any failure to file on a timely basis by such persons. Based
solely upon a review of copies filed with the SEC during the fiscal year ended
June 30, 1996, all persons subject to the reporting requirements of Section
16(a) filed all required reports on a timely basis.
COMPENSATION COMMITTEE INTERLOCK AND
INSIDER PARTICIPATION
The Compensation Committee consists of the entire Board of Directors.
No Directors other than those currently serving on the Board of Directors
served as members of the Compensation Committee during the last completed
fiscal year. No member of that Committee, other than Messrs. Cohn, O'Hanlon
and Roberts was an officer or employee of the Company or any of its
subsidiaries during the year. None of the executive officers of the Company
has served on the board of directors or on the compensation committee of any
other entity, any of whose officers served either on the Board of Directors or
on the Compensation Committee of the Company.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for the
fiscal years 1996, 1995 and 1994 of the Company's Chief Executive Officer, the
four most highly compensated executive officers who were serving as executive
officers at the end of the 1996 fiscal year and a former executive officer of
the Company who resigned during the 1996 fiscal year, but would have otherwise
been one of the four most highly compensates executive officers.
7
<PAGE> 9
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term
------------------- Compensation Awards All Other
Name and Principal Position Year Salary(1) Bonus Stock Options (Shares) Compensation
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Michael A. O'Hanlon 1996 $279,808 -0- -0- -0-
President Chief Executive 1995 $228,654 -0- 132,000(2) -0-
Officer and Director 1994 $175,000 -0- 75,000 -0-
Richard E. Miller 1996 $267,198(3) -0- 10,000 -0-
Executive Vice President 1995 $256,247(4) -0- -0- -0-
1994 $26,442(5) -0- 70,000 -0-
Anthony J. Turek 1996 $159,038 $35,000 10,000 -0-
Executive Vice President 1995 $142,621 -0- -0- -0-
1994 $124,256 -0- -0- -0-
Cynthia J. Cohn 1996 $124,811 $52,500 10,000 -0-
Vice President 1995 $142,621 -0- -0- -0-
1994 $109,058 -0- 10,000 -0-
Alan J. Velotta 1996 $120,000 $50,000 25,000 -0-
Vice President 1995 $110,000 $40,000 -0- -0-
1994 $ 23,269(6) -0- 10,000 -0-
David L. Higgins(7) 1996 $84,615 -0- -0- $115,385(8)
1995 $200,000 -0- -0- -0-
1994 $176,923 -0- -0- -0-
</TABLE>
__________________
(1) Indicates salary paid through June 30, the last regular payment date
prior to the end of the fiscal year.
(2) Under the terms of Amendment No. 1 to the Stock Purchase Agreement
dated as of June 14, 1995, between the Company and MEFC Partners,
L.P., Mr. O'Hanlon is entitled to receive 132,000 shares of Common
Stock. See "Certain Transactions -- Medical Equipment Finance Corp."
Based on the closing price of $11.00 for the Common Stock on the New
York Stock Exchange ("NYSE") on June 14, 1995 (the date such shares
were granted), the aggregate dollar value of such shares was $1.452
million.
(3) Includes a base salary of $125,000 and commissions earned for
financing transactions of $142,198 for the fiscal year ended June 30,
1996.
(4) Includes a base salary of $125,000 and commissions earned for
financing transactions of $131,248 for the fiscal year ended June
30, 1995.
(5) Mr. Miller's salary for the 1994 fiscal year, if stated on an
annualized basis, would have been $125,000. Mr. Miller also received
70,000 stock options upon joining the Company.
(6) Mr. Velotta's salary, if stated on an annualized basis, would have
been $110,000.
(7) Mr. Higgins resigned his position as Chairman of the Board and Chief
Executive Officer effective on November 20, 1995. However, had Mr.
Higgins not resigned he would have been one of the top five highly
compensated executive officers (see Severance Agreement description
below).
(8) During the 1996 fiscal year Mr. Higgins received $115,385 pursuant to
the terms of a Severance Agreement with the Company.
8
<PAGE> 10
OPTION GRANTS IN 1996 FISCAL YEAR
During the 1996 fiscal year, 55,000 stock options were granted to and
10,000 stock options were exercised by the executive officers listed in the
Summary Compensation Table.
AGGREGATE OPTION EXERCISES IN THE LAST
FISCAL YEAR END AND FISCAL YEAR END OPTION VALUES
The following table sets forth below further information with
respect to previously granted options which were exercised (if any) or which
remain outstanding for the executive officers listed in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Shares Number of Securities Underlying Value of Unexercised
Acquired on Value Unexercised Options at In-The-Money Options at
Name Exercise Realized Fiscal Year-End Fiscal Year-End
- --------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael A. O'Hanlon -0- N/A 43,500 46,500 $334,938 -0-
Richard E. Miller -0- N/A 31,333 48,667 $194,249 -0-
Anthony J. Turek -0- N/A 56,833 18,167 $594,307 -0-
Cynthia J. Cohn -0- N/A 38,333 12,667 $281,244 -0-
Alan J. Velotta -0- N/A 13,333 21,667 $ 54,999 -0-
David L. Higgins 70,000 $580,004 87,500 57,500 $344,375 -0-
</TABLE>
_________________
(1) Represents the difference between the closing price of the Company's Common
Stock on June 30, 1996 and the exercise price of the options.
EMPLOYMENT AGREEMENTS AND INCENTIVE COMPENSATION
The Company has not entered into any employment agreements with any of
its executive officers or employees and, other than the Company's Incentive
Stock Option Plan (the "Plan"), has no long-term incentive compensation plan.
The Company, however, does provide short- term incentive compensation to
certain executive officers through the award of quarterly and/or annual bonuses
based upon certain agreed-upon performance criteria.
On November 20, 1995 the Company entered into a Severance Agreement
(the "Severance Agreement") with David L. Higgins, the Company's former
Chairman and Chief Executive Officer, pursuant to which Mr. Higgins agreed to
continue to perform certain consulting and other services for the Company
through December 1, 1997 (the "Termination Date"). Pursuant to the Severance
Agreement the Company agreed (i) to pay Mr. Higgins an aggregate of $275,000
through the Termination Date, in installments consistent with the Company's
regular payroll schedule; (ii) to provide Mr. Higgins, at the Company's sole
expense, with healthcare and life insurance benefits consistent with those
provided to the Company's executive officers; and (iii) to reimburse Mr.
Higgins for certain expenses incurred by him while performing services for the
Company.
The Board of Directors and stockholders of the Company adopted the
Plan in 1986. The Plan has been amended to increase the number of shares of
Common Stock for which options could be issued. Currently, the total number of
shares of Common Stock pursuant to which options could be issued is 1,250,000,
of which options representing 621,709 shares of Common Stock are outstanding.
9
<PAGE> 11
Under the Plan, the number of shares which may be issued on exercise of the
options is subject to adjustment by reason of stock splits or other similar
capital events.
The Plan provides for the granting of nonstatutory stock options, as
well as incentive stock options to certain key employees and provides that the
option price per share for options granted under the Plan must be at least 100%
of the fair market value of Common Stock on the date such options were granted.
Options are not transferrable under the Plan other than by will or by laws of
descent and distribution, and during the participant's lifetime are exercisable
only by the participant.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The report of the Compensation Committee shall not be deemed
incorporated by reference to any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
OVERVIEW AND PHILOSOPHY
The Board of Directors sitting as the Compensation Committee (the
"Committee") is responsible for developing the Company's executive compensation
policies. The Committee determines the compensation to be paid to the Chief
Executive Officer and each of the other executives of the Company. The
Committee is responsible for setting and administering the policies which
govern annual compensation, the Plan, and determination of bonuses for
executives.
There are three elements in the Company's executive compensation
program:
o Base salary compensation.
o Short-term incentive compensation (bonuses).
o Long-term incentive compensation (stock options).
In designing its compensation programs, the Company believes that executive
compensation should reflect the value created for stockholders and support the
Company's strategic goals. Specifically, the objectives of the program are as
follows:
o Attract and retain key executives important to the
long-term success of the Company.
o Provide incentives for performance with respect to the
goals established for each executive by management.
o Provide incentives for performance with respect to the
Company's goals.
o Align the executive's interests with those of the
Company's stockholders through participation in stock
based plans.
o Reward individuals for outstanding contributions to
the Company's success.
10
<PAGE> 12
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the medical equipment
finance industry. Actual compensation levels may be greater or less than
average competitive levels in other companies based upon annual and long-term
Company performance as well as individual performance.
EXECUTIVE OFFICER COMPENSATION PROGRAM
BASE SALARY AND SHORT-TERM INCENTIVE COMPENSATION
The Company's general approach to base salary and short-term incentive
compensation is to pay salaries which when combined with bonuses are
competitive with the salaries and bonuses paid to executives of other companies
in the medical equipment finance industry based upon the individual's
experience and past and potential contribution to the Company. As described in
the Company's Proxy Statement, the base salary for the Company's executive
officers for fiscal year 1996 reflects levels deemed by the Company to have
been appropriate in view of the prior and expected contribution of the
executives to the Company's development. The Company believes that a
significant part of the overall compensation paid to executives should consist
of bonuses paid annually or quarterly based on the ability of the executive to
achieve specified Company, departmental and individual goals.
STOCK OPTION PLAN
The Board of Directors and the Committee believe that stock ownership
is a significant incentive in building stockholder wealth and aligning the
interest of employees and stockholders. Stock options will only have value if
the Company's stock price increases. Stock options utilize vesting periods to
encourage key employees to continue in the employ of the Company. The Plan
authorizes the committee to award key employees stock options at exercise
prices, vesting schedules and with terms established by the Committee.
____________, 1996
Compensation Committee
Gerald L. Cohn
William S. Goldberg
John E. McHugh
Michael A. O'Hanlon
Harry T. J. Roberts
Nathan Shapiro
11
<PAGE> 13
PRICE PERFORMANCE GRAPH
Set forth below is a line graph comparing the Company's total
stockholder return on Common Stock with the S&P 500 Index, and the Bridge
Leasing Company Index for listed stocks as of the market close on June 30, 1991
through the end of the fiscal year ended June 30, 1996.
PERFORMANCE CHART
<TABLE>
<CAPTION>
06/28/91 06/30/92 06/30/93 06/30/94 06/30/95 06/28/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
DVI Index . . . . . . . . . . 100.000 107.906 64.743 109.344 135.242 181.281
Market Index . . . . . . . . . 100.000 113.297 128.730 130.298 164.517 207.557
Peer Index . . . . . . . . . . 100.000 100.094 146.500 172.860 246.563 325.607
</TABLE>
CERTAIN TRANSACTIONS
DIAGNOSTIC IMAGING SERVICES, INC. The Company owns approximately 4.5
million shares of convertible preferred stock (Series F and Series G) of
Diagnostic Imaging Services, Inc. ("DIS"), a Company that operates diagnostic
imaging equipment. The DIS preferred stock has an aggregate liquidation
preference of approximately $4.5 million, is redeemable at the option of DIS
for approximately $4.5 million plus accrued dividends, and is convertible into
common stock of DIS at $2.42 per share for the Series F convertible preferred
stock and $1.00 per share for the Series G convertible preferred stock. In
addition, the majority shareholder of DIS has the right to repurchase the DIS
convertible preferred stock for approximately $4.5 million plus accrued
dividends through September 2001. The Company does business with DIS from time
to time.
MEDICAL EQUIPMENT FINANCE CORP. In January 1993, the Company acquired
all of the outstanding shares of common stock of Medical Equipment Finance
Corp. ("MEF Corp.") from MEFC Partners L.P., a Delaware limited partnership
("MEFC Partners"). Under the terms of the original purchase agreement, the
purchase price was payable before October 15, 1998 in cash or Common Stock of
the Company, as elected by the Company. As initially structured, the purchase
price was to be determined as a percentage of the after-tax earnings of the MEF
Corp. division of the Company during the sixty-six month period following the
date of acquisition. During the year ended June 30, 1995, management entered
into negotiations with the former shareholders of MEF Corp. to revise certain
terms of the purchase agreement. The Company and the former shareholders of
MEF Corp. agreed in June 1995 to set the purchase price of MEF Corp. at 400,000
shares of Common Stock (the "MEFC Shares"). Michael A. O'Hanlon (President,
Chief Executive Officer and a Director of the Company), Dominic A. Guglielmi
(Vice President of the Company) and Mark H. Idzerda (an employee
12
<PAGE> 14
of DVI Financial Services) are general partners of MEFC Partners and are
entitled to receive 132,000, 88,000 and 80,000 of the MEFC Shares,
respectively. In addition, the MEFC Partners have been granted certain
registration rights with respect to the MEFC Shares.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information regarding beneficial
ownership of shares of Common Stock as of September 30, 1996 by each
stockholder known to the Company to be the beneficial owner of more than 5% of
the outstanding shares of Common Stock, each director, each nominee for
election as director, each of the officers named in the Summary Compensation
Table and all current officers and directors as a group. Persons named in the
following table have sole voting and investment powers with respect to all
shares shown as beneficially owned by them, subject to community property laws
where applicable and other information contained in the footnotes to the table.
Information with respect to beneficial ownership is based upon the Company's
Common Stock records and data supplied to the Company by its stockholders.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- ---------- --------
<S> <C> <C>
Cynthia J. Cohn** 87,333(1) *
Gerald L. Cohn*** 415,471(2)(3)(4) 4.0%
William S. Goldberg*** - -
David L. Higgins** 388,053(5)(6) 3.7%
John E. McHugh*** 50,400(2) *
Richard E. Miller** 31,333(7)(8) *
Michael A. O'Hanlon*** 54,367(9)(10)(11) *
Harry T. J. Roberts*** 2,000 *
Nathan Shapiro*** 4,200 *
Anthony J. Turek** 60,583(12) *
Ronald Baron**** 2,042,254(13) 19.5%
CIBC Trust Company
(Bahamas) Limited***** 2,207,803(14)(15) 21.0%
All directors & officers as a
group (15 persons) 1,134,718(1)(2)(4)(6)(7)
(9)(12)(14)(15) 10.4%(15)(16)(17)(18)
</TABLE>
* Less than 1%
** 4041 MacArthur Boulevard, Suite 401, Newport Beach,
California 92660
*** 500 Hyde Park, Doylestown, Pennsylvania 18901
**** 767 Fifth Avenue, New York, New York 10153
***** P.O. Box N-3933, Nassau, Bahamas
(1) Includes 40,833 shares of Common Stock which may be purchased on
the exercise of stock options granted under the Plan.
(2) Includes 20,000 shares of Common Stock which may be purchased on
the exercise of warrants granted to directors of the Company.
(3) Does not include (a) 46,500 shares of Common Stock held of
record by Cynthia J. Cohn, who is a Vice President of the
Company and one of Mr. Cohn's daughters, in her capacity as
trustee of the Cynthia J. Cohn Revocable Trust and (b) 9,750
shares of Common Stock held of record by a trust established for
the benefit of Clayton Schmidt, Mr. Cohn's grandchild, as to all
of which Mr. Cohn disclaims any beneficial interest.
(4) Includes shares of Common Stock which may be exercised upon
conversion of $800,000 of the Company's 9 1/8% Convertible
Subordinated Notes dues in the 2002.
(5) Based on information last available to the Company.
13
<PAGE> 15
(6) Includes 72,500 shares of Common Stock which may be purchased on
the exercise of stock options granted under the Plan.
(7) Includes 31,333 shares of Common Stock which may be purchased on
the exercise of stock options granted under the Plan.
(8) Includes 96 shares of Common Stock held through the Employee
Savings Plan.
(9) Includes 49,750 shares of Common Stock which may be purchased on
the exercise of stock options granted under the Plan.
(10) Includes 1,617 shares of Common Stock held through the Employee
Savings Plan.
(11) Does not include 132,000 shares of Common Stock which Mr.
O'Hanlon, a former shareholder of MEF Corp., is entitled to
receive in connection with the Company's acquisition of MEF
Corp.
(12) Includes 60,583 shares of Common Stock which may be purchased on
the exercise of stock options granted under the Plan.
(13) According to Amendment No. 3 to a Schedule 13D dated October 9,
1996 (the "Schedule 13D") and a Form 4 dated October 15, 1996
filed with the Securities and Exchange Commission Mr. Baron
holds (i) 1,788,500 shares of Common Stock in his capacity as a
controlling person of BAMCO, Inc., a registered investment
adviser controlled by Mr. Baron, which advises Baron Asset Fund
and Baron Growth & Income Fund; (ii)240,00 shares of Common
Stock in his capacity as the general partner of Baron Capital
Partners; and (iii) 13,754 shares of Common Stock personally.
According to the Schedule 13D, Mr. Baron disclaims beneficial
ownership of the 1,788,500 shares of Common Stock described in
subclause (i) of the preceding sentence.
(14) Held by Canadian Imperial Bank of Commerce Trust Company
(Bahamas) Limited ("CIBC"), as trustee of trusts for the benefit
of the grandchildren of A.N. Pritzker, deceased. Does not
include 56,339 shares of Common Stock owned by a partnership
comprised of trusts for the benefit of members of the Pritzker
Family. CIBC is not the trustee of such trusts. As used
herein, the term "Pritzker Family" refers to the lineal
descendants of Nicholas J. Pritzker, deceased.
(15) Includes 716,981 shares of Common Stock held by CIBC, as trustee
for certain trusts which may be exercised upon conversion of
$7,600,000 of the Company's 9 1/8% Convertible Subordinated
Notes dues 2002.
(16) Includes shares which may be purchased on the exercise of stock
options granted under the Plan, in addition to those shares that
may be purchased on the exercise of options set forth in
footnotes (2), (5), (6), (8) and (11).
(17) Does not include 88,000 shares of Common Stock which Dominic A.
Guglielmi, a vice president of the Company and a former
shareholder of MEF Corp., is entitled to receive in connection
with the Company's acquisition of MEF Corp.
(18) Includes percentage believed owned by person Mr. Higgins which
information is no longer available to the Company.
14
<PAGE> 16
PROPOSAL 2.
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
DESCRIPTION OF PROPOSED AMENDMENT
At the Annual Meeting, there will be presented to the stockholders a
proposal to amend the Company's Certificate of Incorporation to decrease from
75,000,000 to 25,000,000 the number of shares of Common Stock that the Company
is authorized to issue. The Board of Directors believes that the adoption of
the proposed amendment will be advantageous to the Company and its stockholders
as the proposed amendment would decrease the cost of certain taxes which are
derived to the number of shares of authorized Common Stock. The Board of
Directors believes that the number of remaining unreserved shares is sufficient
to provide for the possible needs of the Company for the foreseeable future for
such matters as raising additional capital, making acquisitions and effecting
potential stock splits.
If this proposal is approved, the first paragraph of Article FOURTH of
the Company's Certificate of Incorporation will be amended and restated in its
entirety as follows:
"FOURTH: The corporation is authorized to issue 25,100,000 shares
of capital stock, of which 25,000,000 shares shall be Common Stock,
par value $.005 per share, and 100,000 shares shall be Preferred
Stock, par value $10.00 per share."
VOTE REQUIRED; BOARD RECOMMENDATION
The affirmative vote of a majority of the shares of Common Stock
present and voting in person or by proxy at the Annual Meeting is required for
the proposed amendment to the Certificate of Incorporation. The Board of
Directors unanimously recommends that you vote for this proposal. Proxies
solicited by the Board of Directors will be voted for this proposal unless a
vote against the proposal or abstention is specifically indicated.
15
<PAGE> 17
PROPOSAL 3.
PROPOSAL TO RATIFY APPOINTMENT OF ACCOUNTANTS
The Company proposes to select Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending June 30, 1997. Deloitte &
Touche LLP has been the independent accountants for the Company since May 1987.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and will be available to respond to appropriate questions and to
make such statements as they may desire.
VOTE REQUIRED; BOARD RECOMMENDATION
The affirmative vote of a majority of the outstanding shares of Common
Stock present and voting in person or by proxy at the Annual Meeting is
required to ratify the appointment of Deloitte & Touche LLP as the Company's
independent certified public accountants. The Board of Directors unanimously
recommends that you vote for the ratification of Deloitte & Touche LLP as the
Company's independent certified public accountants. Proxies solicited by the
Board of Directors will be voted for the proposal unless a vote against the
proposal or an abstention is specifically indicated.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1996, which accompanies this Proxy Statement, contains the
consolidated financial statements of the Company. Such Annual Report is not
incorporated in this Proxy Statement and is not considered a part of the proxy
soliciting material.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
The Company has received no stockholder proposals to be voted on at
this meeting. Appropriate stockholder proposals which are intended to be
presented at the 1997 Annual Stockholder's Meeting must be received by the
Company no later than June 30, 1997, in order to be included in the 1997 proxy
materials.
16
<PAGE> 18
OTHER MATTERS
All expenses in connection with the solicitation of proxies will be
paid by the Company. The Company may pay brokers, nominees, fiduciaries or
other custodians for their reasonable expenses in sending proxy materials to,
and obtaining instructions from, persons for whom they hold stock of the
Company. The Company expects to solicit proxies primarily by mail, but
directors, officers and other employees of the Company may also solicit proxies
in person or by telephone, telex or telegraph.
As of the date of this Proxy Statement, the management has no
knowledge of any matters to be presented at the meeting other than those
referred to above. If any other matters properly come before the meeting, the
persons named in the accompanying form of proxy intend to vote such proxy in
accordance with their best judgment.
By Order of the Board of Directors
Melvin C. Breaux
Secretary
November 8, 1996
STOCKHOLDERS MAY OBTAIN WITHOUT CHARGE, A COPY OF THE COMPANY'S 1995 ANNUAL
REPORT ON FORM 10-K BY SENDING A WRITTEN REQUEST TO INVESTOR COMMUNICATIONS,
DVI, INC., 500 HYDE PARK, DOYLESTOWN, PENNSYLVANIA 18901.
17
<PAGE> 19
DVI, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 4, 1996
The undersigned hereby constitutes and appoints Michael A. O'Hanlon
and Melvin C. Breaux, or either of them, attorneys and proxies of the
undersigned with full power of substitution to vote all shares of Common Stock
of DVI, Inc. (the "Company") owned or held by the undersigned at the Annual
Meeting of Stockholders of the Company to be held at Hyatt Regency Hotel, on
Wednesday, December 4, 1996, at 3:00 p.m. and at any adjournment thereof.
The Board of Directors recommends a vote "FOR ALL NOMINEES" in Item 1
and "FOR" Items 2 and 3.
ITEM 1. Election of Directors.
/ / For all nominees listed below (except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees
INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.
G. Cohn, J. McHugh, M. O'Hanlon, N. Shapiro, W. Goldberg, H. Roberts
ITEM 2. To amend Article Fourth of the Company's Certificate of
Incorporation to decrease from 75,000,000 shares to 25,000,000 shares the
number of shares of Common Stock the Company is authorized to issue.
/ / For / / Against
/ / Abstain
ITEM 3. To ratify the appointment of Deloitte & Touche LLP as
independent public accountants for the Company for the fiscal year ending June
30, 1997.
/ / For / / Against
/ / Abstain
ITEM 4. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
<PAGE> 20
PAGE 2
THE PROXY HOLDERS ARE DIRECTED TO VOTE AS SET FORTH ABOVE. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER. IF NO
DIRECTION IS GIVEN WHEN THE DULY EXECUTED AND DATED PROXY IS RETURNED, SUCH
SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1, "FOR" ITEMS 2, 3 AND 4 AND
IN ACCORDANCE WITH THE JUDGMENT OF SUCH PROXY HOLDERS ON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING. IF ANY OF THE NOMINEES FOR
DIRECTOR IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, THE PROXY HOLDERS
WILL VOTE FOR SUCH OTHER PERSON OR PERSONS AS THE BOARD OF DIRECTORS MAY
RECOMMEND.
The undersigned hereby acknowledges receipt of the Company's Annual
Report to Stockholders and of the Notice of Annual Meeting of Stockholders and
Proxy Statement relating to the Annual Meeting
Dated: ____________________________________________, 1996
Signature(s):
Please mark, date and sign as your name appears above and return
in the enclosed envelope. When signing as an agent, attorney,
or fiduciary, or for a corporation or partnership, indicate the
capacity in which you are signing. Shares registered in joint
names should be signed by each joint tenant or trustee.
