RESEARCH INDUSTRIES CORPORATION
6864 South 300 West
Midvale, Utah 84047
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 3, 1995
The Annual Meeting (Meeting) of the shareholders of Research Industries
Corporation will be held at the Marriott Hotel, Salon D, 75 South West Temple,
Salt Lake City, Utah, on Friday, November 3, 1995, at 10:00 a.m. local time, to
consider and act upon the following matters:
1.To elect six directors to serve for a one year term
2.To approve an Amendment to the Company's Articles of Incorporation
changing the Company's name to Research Medical, Inc. and,
3. To transact any other such business as may properly come before the
Meeting or any adjournments thereof.
Proxy designations and instructions are being solicited by the Board of
Directors. For the reasons stated herein, your Board of Directors unanimously
recommends that you vote FOR these proposals. A Proxy Statement, Proxy Card and
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a copy of the Annual Report of the Company's operations during the fiscal year
ended June 30, 1995, accompany this notice.
The Board of Directors has fixed the close of business on September 5, 1995, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting or any adjournments thereof.
By Order of the Board of Directors,
V. Kelly Randall
Secretary
October 2, 1995
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN ORDER TO ENSURE REPRESENTATION OF
YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY IS MAILED IN THE UNITED
STATES.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Research Industries Corporation (the "Company") of proxy
designations and instructions ("Proxy" or "Proxies") for voting at the Annual
Meeting of Shareholders of the Company (the "Meeting") to be held on November 4,
1994, at the time, place and for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders, dated October 2, 1995, and at any
adjournments thereof. It is anticipated that this Proxy Statement will be
mailed on or about October 2, 1995. Proxies may be designated and voting
directed on the enclosed Proxy Card.
All duly executed Proxies completed pursuant to this solicitation and received
prior to the Meeting or any adjournments thereof will be voted in accordance
with their terms. Any proxy may be revoked in writing by the person giving it
by sending or delivering a revocation in written form to the Secretary of the
Company at any time before the proxy's exercise, or by the shareholder's vote in
person at the Meeting. In order that a sufficient number of shares may be
represented and voted on the matters to come before the Meeting, you are urged
to execute and return your proxy card promptly.
The cost of the Board's soliciting Proxies will be borne by the Company. In
addition to solicitations by mail, directors, officers or regular employees of
the Company may solicit Proxies on behalf of the Board in person, by telephone
or telegraph. The Company will reimburse brokers, custodians, nominees, and
fiduciaries for their expenses in forwarding proxy material to the beneficial
owners.
VOTING MATTERS / SIGNIFICANT SHAREHOLDERS
Shareholders of record at the close of business on September 5, 1995 (the Record
Date) will be entitled to vote at the Meeting and any adjournments thereof. As
of the record date there were approximately shareholders of record and
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approximately % of the outstanding shares were held by nominees who hold
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shares for many additional shareholders. Shareholders are entitled to one vote
per share of Common Stock, $.50 par value, of the Company ("Common Stock") held
on the Record Date. As of the Record Date, the Company had outstanding
shares of Common Stock entitled to vote. The Company knows of no
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person or group that was the beneficial owner of more than 5% of the Company's
Common Stock as of the Record Date, except for Gary L. Crocker, 6864 South 300
West, Midvale, Utah who is a beneficial owner of 5.64% of the outstanding shares
as of that date.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
It is proposed to elect six persons to the Board of Directors of the Company to
serve until the next Annual Meeting of Shareholders or until their successors
are elected and qualified. All current Directors have been nominated for re-
election. Management recommends a vote FOR all of the nominees for Director.
Management has no reason to believe that any of these nominees will be unwilling
or will be unable to serve. However, in the event that any of the nominees
should not be willing or will be unable to serve as a Director, it is intended
that management-held proxies will be voted for the election of such other person
as shall be nominated by the Board of Directors.
The Board of Directors has established three committees. The Executive
Committee acts through delegated authority from the Board of Directors on
routine matters not deemed to require consideration by the full Board. It also
considers certain matters and makes recommendations to the full Board including
the nomination of prospective Directors. The Compensation Committee has been
established to consider salary and benefit matters for the executive officers
and key personnel of the Company. The Compensation Committee also administers
the Company's stock option plans. The Audit Committee assists the Board in
areas of financial reporting matters, internal controls and compliance with
financial polices of the Company, meeting with its auditors when appropriate.
The Board of Directors met five times during the past fiscal year. The
Executive Committee met six times, the Audit Committee met twice and the
Compensation Committee met once during the year. All the Directors attended
more than 75% of the meetings of the Board of Directors and the Committees on
which they serve. Directors who are not also officers of the Company are paid
$1,000 for attendance at each Board meeting. Each member of the Executive,
Audit and Compensation Committee who is not also an officer receives $250 for
attendance at each committee meeting.
NOMINEES FOR DIRECTOR AND SHARE OWNERSHIP
The following table and footnotes show information about the nominees for
election as Directors of the Company along with information as to the securities
of the Company beneficially owned by each nominee and by all nominees and
officers of the Company as a group as of the Record Date. The information is
furnished by the respective nominees and officers. No nominee or officer
beneficially owned more than 1% of the Common Stock outstanding on the Record
Date, except as follows: Mr. Crocker - 5.64%, Mr. Haynie - 1.58%, and all
nominees, directors and officers as a group 14.51%. Where a nominee or officer
has a right to acquire shares of Common Stock within 60 days of the Record Date,
through the exercise of stock options, these shares of Common Stock are treated
as beneficially owned by the individual and the group.
Common Stock of the
Company Beneficially
Owned Directly or Indirectly
as of Record Date
No.
Director Shares Right
to
Name Ag Principal Occupation Since Owned Acquire
e
*Gary L. 44 Chairman of the Board, President
Crocker and Chief Executive Officer of
the Company 1983 310,111 222,000
*SLouis M. 68 Director and General Counsel of
Haynie the Company; Former Vice
President of the Company (1968-
1991) 1968 71,655 46,831
.Edward M. 53 Partner, William Blair & Co. (an
Blair, Jr. investment firm)
Trustee, Chicago Dock and Canal
Trust 1984 52,232 31,858
*.SSterling 69 Senior Lecturer/Systems
D. Sessions Management, Naval Postgraduate
School; Monterey, California.
Professor of Management Emeritus
and Dean of Business School at
Weber State University; Ogden,
Utah (1975-1990). Director, Daw
Technologies, Inc. 1986 2,169 13,858
.SCharles J. 67 Retired Executive Vice President
Aschauer, Jr. and Director of Abbott
Laboratories, Boston Scientific
Corporation and Quadra Logic
Technologies, Inc. 1989 23,500 5,304
SWilliam A. 59 Professor of Surgery,Chairman of
Gay, Jr. Cardiothoracic Surgery,
Montefiore Hospital; Bronx, New
York (1995-1992). Former
Professor and Chairman,
Department of Surgery, University
of Utah School of Medicine (1984-
1992) 1991 11,482 13,451
All Directors
and Officers
as a Group
(11 persons) 591,435 648,791
* Member of Executive Committee
. Member of Audit Committee
S Member of Compensation Committee
PROPOSAL TO APPROVE A NAME CHANGE FOR THE COMPANY
(ITEM 2 ON PROXY CARD)
The Board of Directors has approved, subject to shareholder ratification,
amending the Articles of Incorporation of Research Industries Corporation to
change the name of the Company to Research Medical, Inc. Management of the
Company and the Board of Directors believe the name Research Medical, Inc. is
more reflective of the Company's primary business purposes and is consistent
with the name under which the majority of its products are being sold. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE ``OR'' THIS PROPOSAL.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS SHAREHOLDERS
SPECIFY TO THE CONTRARY IN THEIR PROXIES.
EXECUTIVE OFFICERS
Name Age Present Office and Experience
Gary L. 44 Chairman of the Board, President and Chief
Crocker Executive Officer since 1983.
Mark W. 45 Vice President and Chief Financial Officer since
Winn 1991. Vice President and Chief Financial Officer
at Gory Associated Industries (A division of Elcor
Corporation) 1985-1991.
Michael N. 60 Senior Vice President of Operations. Vice
Kelly President 1983-1995.
Clyde H. 45 Senior Vice President. Vice President from 1987-
Baker 1994.
James C. 45 Vice President of Technical and Scientific Affairs
McRea since 1989.
V. Kelly 44 Secretary/Treasurer and Corporate Controller.
Randall Corporate Controller from 1991 to 1994. Senior
Manager with Ernst & Young (1986-1991).
A three year contract exists with Mr. Crocker to serve as President and Chief
Executive Officer of the Company. The Board agreed to sponsor Mr. Crocker for
election to the Board, to vote their shares of Common Stock for his election and
to sustain him as a member of the Executive Committee of the Board.
There are no other arrangements or understandings between any of the executive
officers and any other person pursuant to which he was selected as an officer.
Each of the executive officers was elected to serve as such for a term ending at
the meeting of the Board held in conjunction with the Annual Meeting of
Shareholders or until their successor has been elected.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for the
Chief Executive Officer and the Company's other most highly compensated
executive officers during the fiscal year ended June 30, 1995 who were serving
as executive officers on June 30, 1995 which were greater than $100,000..
SUMMARY COMPENSATION TABLE
LONG-
TERM
COMPENS
ANNUAL ATION
COMPENSATION AWARDS
ALL
________________ Other
NAME AND OPTIONS COMPENS
PRINCIPAL POSITION YEAR SALARY1 BONUS (#) ATION2
Gary L. Crocker, 1995 $208,062 $59,277 30,000 $
President & CEO 1994 202,727 57,013 30,000 3,890
1993 189,793 80,033 30,000 3,732
Clyde H. Baker, Sr. VP 1995 142,755 1,546 9,000
1994 105,591 4,539 9,405 2,291
1993 105,953 9,082 5,985 1,376
James C. McRea, VP 1995 90,000 19,047 8,100
1994 65,981 10,439 7,920
1993 63,751 10,751 5,040
1 Mr. Baker's salary includes his sales commission overrides.
2 Represents the Company's contribution to the 401(k) plan on
behalf of the named executive.
OPTION GRANTS IN LAST FISCAL YEAR
The following table lists information concerning the nonqualified stock options
that were granted to the named executives during fiscal 1995 under the
Company's Long-Term Equity Based Incentive Plan and/or the 1994 Supplemental
Equity Based Incentive Plan. No stock appreciation rights (SARs) were granted
during fiscal 1995.
% OF
TOTAL POTENTIAL REALIZABLE
OPTIONS OPTIONS EXERCISE VALUE AT
GRANTED GRANTED PRICE EXPIRAT ASSUMED ANNUAL RATES
NAME (#) TO PER ION OF
EMPLOYEE SHARE DATE STOCK PRICE
S IN APPRECIATION FOR
FISCAL 10 YEAR OPTION TERM AT
YEAR 5% 10%
Gary L. 30,000 23.6% $14.625 1/19/05 $685,187 $1,350,932
Crocker
Clyde H. 9,000 7.0% $14.625 1/19/05 205,556 405,280
Baker
James C. 8,100 6.3% $14.625 1/19/05 185,001 364,752
McRea
The assumed annual rates of appreciation of 5% and 10% would result in stock
prices of $37.46 and $59.66, respectively. Over the past 5 years the market
price of the Company's stock has grown at a compounded average annual rate of
28.75%.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table lists information concerning nonqualified stock options
that were exercised by the named executives shown below during fiscal 1995,
including the aggregate value of gains on the date of exercise. In addition,
the table sets forth the number of shares covered by stock options as of June
30, 1995, and the value of "in-the-money" stock options, which represents the
positive spread between the exercise price of a stock option and the year-end
market price of the shares subject to such option on June 30, 1995.
VALUE OF
UNEXERCISED
IN-THE-MONEY
SHARES OPTIONS
ACQUIRE NUMBER OF UNEXERCISED AT YEAR-END ($)
D VALUE OPTIONS AT YEAR-END (#) 1
ON REALIZED EXERCISABLE UNEXERCISAB EXERCISABLE UNEX
EXERCIS LE ERCI
E SABL
NAME E
Gary L. 60,000 $873,650 222,000 0 $3,168,75 $0
Crocker 8
Clyde H. 0 0 58,125 0 857,923 0
Baker
James C. 0 0 42,165 0 584,038 0
McRea
1Calculated on the basis of the last reported sale price per share for the
Company's Common Stock on the Nasdaq National Market System of $23.00 on
June 30, 1995.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (Committee) is a group of outside directors
responsible for evaluating executive compensation and making recommendations to
the Board of Directors related to such compensation. The Committee has the
primary responsibility for establishing the compensation package for Mr. Gary L.
Crocker, Chief Executive Officer of the Company. Mr. Crocker establishes the
compensation packages for the other executive officers, subject to the
Committee's review and the Board's approval.
The Company's executive compensation policies and programs seek to achieve two
fundamental goals: (1) to increase the Company's performance and shareholder
value by linking a portion of executive officer compensation to the Company's
financial performance, and (2) to reward superior executive performance with pay
incentives adequate to retain them in the future in the face of considerable
competition for executive talent within the biomedical industry.
Compensation for each of the Company's executive officers consists of a base
salary, an annual bonus and long-term incentive compensation in the form of
stock option grants. Mr. Crocker's base salary and annual stock option award
are established in his current employment agreement. The criteria for payment
of an incentive bonus is also specified in his employment agreement and is based
on the achievement of certain health care earnings performance goals as compared
to the Board approved budget and prior year health care results. The level of
bonus varies based the level of achievement of these goals. Mr. Clyde H. Baker,
Senior Vice President, receives the majority of his annual bonus in the form of
overrides on the incremental annual increase in medical product sales. This
override is redefined annually with Mr. Crocker. A portion of Mr. Baker's bonus
is based on his achievement of personal incentive goals. All other executive
officers can obtain a bonus of up to 25% of their base salaries. One half of
these bonuses are based on achievement of specific company earnings objectives
and the other half is based on their achievement of personal incentive goals.
Annual stock option awards under the Long-Term Equity Based Incentive Plan and
the Supplemental Equity Based Incentive Plan for executive officers (excluding
Mr. Crocker) are recommended to the Board by Mr. Crocker based on his assessment
of individual performance in terms of personal goal performance, personal
contribution and initiative and the individual's level of management
responsibility. Mr. Crocker presents his listing of officers and awards to the
Committee for approval.
Mr. Crocker has received the annual bonus and stock option awards provided for
in his employment agreement based on the performance criteria established in
that agreement.
No member of the Committee is a former or current officer or employee of the
Company, except Mr. Haynie, who was an officer and employee prior to 1992.
Members of the Compensation Committee
Sterling D. Sessions, Chairman
Charles J. Aschauer, Jr.
William A. Gay, Jr.
Louis M. Haynie
PERFORMANCE GRAPH
The following chart compares the change in the cumulative total shareholder
return on the Company's Common Stock of a peer group and Nasdaq Stock Market
indices shown below. The comparisons assume $100 invested at the close of
trading on June 30, 1990. The stock price performance shown on the graph below
is not necessarily indicative of future price performance.
To be described in final proxy
INDEPENDENT AUDITORS
The accounting firm of KPMG Peat Marwick LLP, Salt Lake City, Utah, conducted
the audit of the Company's financial statements for the year ended June 30,
1995. The Board of Directors plans to appoint the firm of KPMG Peat Marwick LLP
to perform the same services for the year ending June 30, 1996. Representatives
of KPMG Peat Marwick LLP are expected to be present at the Meeting and will be
available to respond to appropriate questions and will be afforded the
opportunity to make a statement if they wish to do so.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholders' proposals need to be received by July 31, 1996, in order to be
reviewed for inclusion in the Proxy Statement for the 1996 Annual Meeting.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of the
Company's Common Stock (collectively, "Reporting Persons"), to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities. Reporting
Persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms filed.
Based solely on its review of the copies of such reports received or
representations from Reporting Persons that no Forms 5 were required, the
Company believes that during fiscal 1995 all Reporting Persons complied with all
applicable filing requirements, except Mr. Haynie who filed his May report
approximately 7 days late as he was out of town on the date the report was
required to be filed.
OTHER MATTERS
Management does not know of any other business to be presented at the meeting.
Should any matter come before the meeting, however, the persons named in the
proxy will have discretionary authority to vote all proxies with respect to such
matters in accordance with their judgment.
The Company's Annual Report on Form 10-K is being provided to each shareholder
along with this Proxy Statement and the enclosed Proxy Card. Any Shareholder
not receiving a copy of the 1995 Annual Report on Form 10-K should contact V.
Kelly Randall at (801) 562-0200.
By order of the Board of Directors,
V. Kelly Randall
