<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 240.14a-11(c) or 240.14a-12
</TABLE>
<TABLE>
<C> <S>
UNIVERSAL SELF CARE, INC.
- - - - ------------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BRIAN BOOKMEIER
- - - - ------------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/ / No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
-----------------------------------------------------------------------------------
</TABLE>
<PAGE>
UNIVERSAL SELF CARE, INC.
11585 FARMINGTON ROAD
LIVONIA, MICHIGAN 48150
- - - - --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 18, 1997
- - - - --------------------------------------------------------------------------------
To the Stockholders of
UNIVERSAL SELF CARE, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Annual Meeting") of
Stockholders of Universal Self Care, Inc. (the "Company" or the "Corporation")
will be held at the Corporation's offices located at 11585 Farmington Road,
Livonia, Michigan 48150 on February 18, 1997 at 10:00 a.m. local time for the
following purposes:
1. To elect six (6) directors to hold office until the next Annual
Meeting;
2. To ratify the selection of Feldman Radin & Co., P.C. auditors of the
Company for the Fiscal Year ending June 30, 1997;
3. To authorize an amendment to the Company's certificate of
incorporation to increase the authorized capital of the company by
increasing from 20,000,000 shares of common stock, $.0001 par value (The
"Common Stock") to 40,000,000 shares the Company's authorized Common Stock;
4. To transact such business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed December 26, 1996 as the record of date for
the determination of stockholders entitled to notice of and to vote at the
meeting or any adjournment thereof. The stock transfer books of the Company will
not be closed, but only stockholders of record at the close of business on
December 26, 1996 will be entitled to vote at the meeting or any adjournment or
adjournments thereof.
By Order of the Board of Directors
Brian Bookmeier, President
WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE COMPLETE, SIGN AND RETURN YOUR
PROXY CARD PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE PROVIDED FOR YOUR USE.
<PAGE>
UNIVERSAL SELF CARE, INC.
11585 FARMINGTON ROAD
LIVONIA, MICHIGAN 48150
-------------------
PROXY STATEMENT
-------------------
GENERAL INFORMATION CONCERNING SOLICITATION
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of Universal Self Care, Inc.
(hereinafter referred to as the "Company" or the "Corporation"), for its Annual
Meeting of Stockholders (the "Meeting") to be held on February 18, 1997, or any
adjournments thereof. Shares cannot be voted at the meeting unless their owner
is present in person or represented by proxy. Copies of this proxy statement and
the accompanying form of proxy shall be mailed to the stockholders of the
Company on or about January 18, 1996, accompanied by a copy of the Company's
Annual Report containing financial statements as of and for the fiscal years
ended June 30, 1995 and June 30, 1996, together with other information
respecting the operations of the Company. The principal executive offices of the
Company are located at the address indicated above.
If a proxy is properly executed and returned, the shares represented thereby
will be voted in accordance with the specifications made, or if no specification
is made the shares will be voted to approve each proposition and to elect each
nominee for director identified on the proxy. Any stockholder giving a proxy has
the power to revoke it at any time before it is voted by filing with the
Secretary of the Company a notice in writing revoking it. A proxy may also be
revoked by any stockholder present at the Meeting who expresses a desire in
writing to revoke a previously delivered proxy and to vote his or her shares in
person. The mere presence at the Meeting of the person appointing a proxy does
not revoke the appointment. In order to revoke a properly executed and returned
proxy, the Company must receive a duly executed written revocation of that proxy
before it is voted. A proxy received after a vote is taken at the Meeting will
not revoke a proxy received prior to the Meeting; and a subsequently dated proxy
received prior to the vote will revoke a previously dated proxy.
All expenses in connection with the solicitation of proxies, including the
cost of preparing, handling, printing and mailing the Notice of Annual Meeting,
Proxies and Proxy Statements will be borne by the Company. Directors, officers
and regular employees of the Company, who will receive no additional
compensation therefore, may solicit proxies by telephone or personal call, the
cost of which will be nominal and will be borne by the Company. In addition, the
Company will reimburse brokerage houses and other institutions and fiduciaries
for their expense in forwarding proxies and proxy soliciting material to their
principals.
Under Delaware statutory law stockholders are estopped from bringing any
action against a Delaware Corporation with regard to any matter approved or
ratified by stockholders, on which matter adequate information has been provided
to stockholders, SOLELY for the reason that an interested director is involved
in the transaction. By voting to approve any such matter, however, stockholders
are not estopped from taking action against the Company on the basis of other
objections or under common law principles, such as fraud.
At the close of business on December 26, 1996, there were outstanding
7,889,706 shares of Common Stock, 1,580,000 Shares of Series A Preferred Stock
and 1,000,000 shares of Series B Preferred Stock (all of which Series A and
Series B Preferred Stock is collectively referred to as the "Preferred Stock"),
which constituted the voting securities of the Company. Each stockholder is
entitled to cast one vote for each share of Common Stock and Preferred Stock,
which is present at the Meeting either in person or by proxy. Only holders of
record of the outstanding shares of Common Stock at the close of business on
December 26, 1996, will be entitled to vote at the Meeting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table identifies each person or entity known to the Company to
be the beneficial owner of more than five percent of the Company's Common Stock
on December 26, 1996, each director of the Company, each nominee for director,
and all the directors and officers of the Company as a group, and sets forth the
number of shares of the Company's common stock beneficially owned by each such
person and such group and the percentage of the shares of the Company's
outstanding common stock owned by each such person and such group. In all cases,
the named person has sole voting power and sole investment power of the
securities.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON PERCENTAGE OF
NAME AND ADDRESS STOCK BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER OWNED(1) COMMON STOCK OWNED
- - - - ---------------------------------------------------------------- ------------------------- ---------------------
<S> <C> <C>
Robert M. Rubin................................................. 1,016,298 13.3%
6060 Kings Gate Circle
Delray Beach, FL 33484 (2)
Damon D. Testaverde............................................. 311,914 4.1%
580 Oakdale Street
Staten Island, NY 10312 (2)
Robert Moody, Jr................................................ 600,000 7.8%
2302 Post Office Street
Suite 601
Galvaston, TX 77550 (3)
H. T. Ardinger.................................................. 1,064,600 13.3%
9040 Governors Row
Dallas, TX 75356 (3)
Fred Kassner.................................................... 802,310 10.5%
59 Spring Street
Ramsey, NJ 07446 (3)
Edward T. Buchholz.............................................. 201,358 2.7%
265 Waterside Drive
Moneta, VA 24121 (4)
Alan M. Korby................................................... 625,000 8.0%
24054 Roma Ridge
Novi, MI 48375 (5)
Brian D. Bookmeier.............................................. 630,000 8.1%
37119 Muirfield
Livonia, MI 48150 (5)
Matthew B. Gietzen.............................................. 628,000 8.1%
23307 Mystic Street
Novi, MI 48375 (5)
James Linesch................................................... 130,000 2.0%
3401 Walnut Ave
Manhattan Beach, CA 90266
All officers and directors as a group (8 persons before Offering
(2)(4)(5)..................................................... 3,442,570 38.8%
</TABLE>
2
<PAGE>
- - - - ------------------------
(1) As used herein, the term beneficial ownership with respect to a security is
defined by Rule 13d-3 under the Securities Exchange Act of 1934 as
consisting of sole or shared voting power (including the power to vote or
direct the vote) and/or sole or shared investment power (including the power
to dispose or direct the disposition of) with respect to the security
through any contract, arrangement, understanding, relationship or otherwise,
including a right to acquire such power(s) during the next 60 days. Unless
otherwise noted, beneficial ownership consists of sole ownership, voting and
investment rights.
(2) Includes non-qualified stock options granted on July 28, 1993 to purchase
100,000 shares of common stock at $1.50 per share to Robert M. Rubin under
the Management Stock Option Plan, 100,000 shares of common stock at $1.50
per share granted to Damon Testaverde under the 1992 Employee Stock Option
Plan, and warrants issued to Robert M. Rubin and Damon Testaverde on
December 13, 1995 to purchase 100,000 shares of common stock and 50,000
shares of common stock, respectively, at $1.00 per share.
(3) For Mr. Moody includes Class A Warrants to purchase an aggregate of 300,000
shares of Company Common Stock, for Mr. Ardinger includes Class A Warrants
to purchase an aggregate of 575,550 shares of Company Common Stock and for
Mr. Kassner includes Class A Warrants to purchase an aggregate of 217,655
shares of Company Common Stock, at $3.30 per share.
(4) Includes options to purchase an aggregate of 125,000 shares of Company
Common Stock at $1.25 per share and options to purchase an aggregate of
41,667 shares of Company Common Stock at $1.35 per share. Does not include
options to purchase an aggregate of 50,000 shares of Company Common Stock at
$1.25 per share which have not as yet vested.
(5) Includes (I) 333,334 shares of Common Stock held by Mr. Korby as well as
166,666 shares of Common Stock issuable to Mr. Korby upon conversion of his
333,333 shares of Series B Preferred Stock, (ii) 338,333 shares of Common
Stock held by Mr. Bookmeier as well as 166,667 shares of Common Stock
issuable to Mr. Bookmeier upon conversion of his 333,334 shares of Series B
Preferred Stock and (iii) 336,334 shares of Common Stock held by Mr. Gietzen
as well as 166,667 shares of Common Stock issuable to Mr. Gietzen upon
conversion of his 333,333 shares of Series B Preferred Stock. Also includes
options to purchase 125,000 shares of Common Stock at $1.35 per share,
granted to each of Messrs. Korby, Bookmeier and Gietzen. 39,179 of the
shares of Common Stock issued to each of Messrs. Korby, Bookmeier and
Gietzen (117,537 shares in the aggregate), have been pledged to Barbara
Milinko to secure a $325,000 note payable to Ms. Milinko by Messrs. Korby,
Bookmeier and Gietzen.
3
<PAGE>
DIRECTORS, NOMINEES FOR DIRECTORS AND
EXECUTIVE OFFICERS OF THE COMPANY
OFFICERS AND DIRECTORS
The executive officers and directors of the Company as are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- - - - ------------------------------------------ --- ---------------------------------------------------------------
<S> <C> <C>
Brian D. Bookmeier 38 President, Chief Executive Officer
Director and Nominee for Director
Tod J. Robinson 35 Vice President--National Sales for Diabetes Self Care, Inc.
(formerly Thriftee Group)
Edward T. Buchholz 53 Executive Vice President, Divisional President of Diabetes Self
Care, Inc. (formerly Thriftee Group) Director and Nominee for
Director
Alan M. Korby 39 Vice President, Divisional President of PCS, Director and
Nominee for Director
Matthew B. Gietzen 33 Vice President of Fulfillment, Director and Nominee for
Director
Dr. Steven Leichter 51 Nominee for Director
James Linesch 42 Nominee for Director
</TABLE>
Set forth below is a brief background of the officers, directors and key
employees of the Company, based on information supplied by them.
BRIAN D. BOOKMEIER. Mr. Bookmeier has served as President, Chief Executive
Officer and a director of USC since July 1995. Mr. Bookmeier has also served as
Vice President of USC-Michigan, Inc., the Company's wholly-owned subsidiary,
since July 1995. From September 1989 until its merger into USC-Michigan, Inc.,
Mr. Bookmeier served as Executive Vice President and a Director of PCS
Management, Inc., a home medical equipment supply company that specializes in
diabetes management, equipment and supplies. He is also a Director of the
American Diabetes Association since June 1995.
EDWARD T. BUCHHOLZ. Mr. Buchholz has served as a Vice President and a
director of USC since July 1995. Mr. Buchholz became the President of each of
the corporations comprising The Thriftee Group, wholly-owned subsidiaries of USC
since February 1994, in January 1990. Mr. Buchholz has also served as President
of Diabetes Self Care, Inc., the Company's wholly-owned subsidiary, since July
1995. He started his health care career in 1969 with The Hartford Insurance
Company and has held numerous executive positions in the industry over the past
25 years. From October 1985 to December 1989, Mr. Buchholz served as President
of Shoney's Va/Md Construction Co., Inc., a commercial builder of restaurants
and motels in Virginia, Maryland and Delaware. During that same period he also
served as President of Eastern Commercial Real Estate Services, Inc., an
insurance consulting firm and developer of commercial property.
ALAN M. KORBY. Mr. Korby has served as a Vice President and a director of
USC since July 1995. Mr. Korby has also served as President of USC-Michigan,
Inc., the Company's wholly-owned subsidiary, since July 1995. From its founding
in November 1987 until its merger into USC-Michigan, Inc., Mr. Korby served as
President and a Director of PCS Management, Inc., a home medical equipment
supply company that specializes in diabetes management, equipment and supplies.
4
<PAGE>
MATTHEW B. GIETZEN. Mr. Gietzen has served as a Vice President and a
director of USC since July 1995. Mr. Gietzen has also served as Vice President
of USC-Michigan, Inc., the Company's wholly-owned subsidiary, since July 1995.
From January 1988 until its merger into USC-Michigan, Inc., Mr. Gietzen served
as Executive Vice President and a Director of PCS Management, Inc., a home
medical equipment supply company that specializes in diabetes management,
equipment and supplies.
TOD J. ROBINSON. Mr. Robinson has served with the Company since April 1996
as the National Vice President of Sales for the Thriftee Group Division. From
October 1989 to April 1996, Mr. Robinson held a variety of positions with Home
Diagnostics, Inc. (HDI), a medical device manufacturer that specializes in
diabetes testing equipment, serving as the Director of New Business Development,
National Accounts Manager and finally Sales Manager. From September 1986 to
October 1989, Mr. Robinson was Sales Manager and Product Manager for Friden
Alcatel in their business products division.
JAMES LINESCH. Mr. Linesch has been the Chief Financial Officer and Vice
President of CompuMed, a computer company involved with diagnosing medical
conditions, since April 1996. Mr. Linesch has served as a Vice President, Chief
Financial Officer and Controller of the Company from August 1991 to April 1996.
From May 1988 to August 1991, Mr. Linesch served as the Chief Financial Officer
of Science Dynamics Corp., a corporation involved in the development of computer
software.
DR. STEVEN LEICHTER. Dr. Leichter has been in private endocrinology
practice in Columbus, Georgia since 1995, to that, Dr. Leichter had been on the
faculties of University of California, Davis from 1976 to 1977, at the
Universtiy of Kentucky, from 1977 to 1988 and at the Eastern Virginia Medical
School from 1988 to 1955, where he was Professor of Internal Medicine. He is
also Co-Director of the West Georgia Center of Metabolic Disorders and President
of the Columbus Metabolic Foundation. Dr. Leichter has written 60 published
scientific papers and book chapters. His most recent paper was published in
Diabetes Care in September 1995. He has been a consultant to the World Health
Organization and chaired the Committee that wrote the International Plan for
Diabetes for the United Nations. He is currently a consultant to 5 national
corporations in diabetes, and is on editorial review board for the Archives of
Internal Medicine, a journal of the American Medical Association.
The Company has Audit and Compensation and Stock Option Committees, and it
is the Board's Stock Option Committee which administers the Company's Stock
Option Plans. The responsibilities of the Audit Committee include recommending
to the Board of Directors the firm of independent accounts to be retained by the
Company, reviewing with the company's independent accountants the scope and
results of their audits, and reviewing with the independent accountants and
Management the Company's accounting, financial and operating controls and staff.
The Audit Committee generally meets as a committee of the entire Board of
Directors. The Compensation Committee will have responsibility for establishing
and reviewing employee compensation plans. The Stock Option Committee
administers the Company's stock option plan.
Directors of the Company, including management directors, each receive
annual directors' fees of $25,000 for attendance at Board of Directors meetings,
and are reimbursed for actual expenses incurred in respect of such attendance.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
To the knowledge of the Company, no officers, directors, beneficial owners
of more than 10 percent of any class of equity securities of the Company
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any other person subject to Section 16 of the
Exchange Act with respect to the Company, failed to file on a timely basis
reports required by Section 16(a) of the Exchange Act during the most recent
fiscal year, which ended June 30, 1996.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the amount of all compensation paid by the
Company for services rendered during each of 1994, 1995, and 1996 to the person
serving as the Company's Chief Executive Officer at any time during such periods
and to each of the four (4) highest paid Company current executive officers
whose total salary and bonus compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS
---------------------------------
OTHER ANNUAL
RESTRICTED
SALARY
NAME COMPENSATION PAYOUTS
AND AND/ OR --------------------------------------
PRINCIPAL ---------------- OPTIONS/ LTIP ALL OTHER
POSITION YEAR BONUS AWARDS SARS (#) PAYOUTS COMPENSATION
- - - - -- ---- -------- ------ -------- ------- ------------
<C> <C> <C> <C> <C> <C> <C> <C>
Brian 1994 0 0 $ 0 $0 $0 $0 $0
Bookmeier... 1995 $ 38,834 0 $ 3,250 $0 $0 $0 $0
1996 $179,306 0 $15,000 $0 $0 $0 $0
President
and Chief
Executive
Officer
and
Director
Alan 1994 0 0 0 $0 $0 $0 $0
M. 1995 $ 38,834 0 $ 3,250 $0 $0 $0 $0
Korby... 1996 $179,826 0 $15,000 $0 $0 $0 $0
Executive
V.P.,
Marketing
Matthew 1994 0 0 0 $0 $0 $0 $0
B. 1995 $ 38,834 0 $ 3,250 $0 $0 $0 $0
Gietzen... 1996 $179,969 0 $15,000 $0 $0 $0 $0
Executive
V.P. of
Fulfillment
and
Director
Edward 1994 $ 39,583 2,500 $ 3,250 $0 $0 $0 $0
T. 1995 $ 94,808 5,500 $ 7,800 $0 $0 $0 $0
Buchholz... 1996 $163,900 0 $13,320 $0 $0 $0 $0
Executive
V.P. of
Fulfillment
and
Director
</TABLE>
Officers and key employees of the Company receive employment benefits (e.g.,
health insurance, automobile allowances) other than cash compensation and
interests in the Company's employee stock option plan.
STOCK OPTION GRANTS
The following table sets forth information concerning individual grants of
stock options made during the last completed fiscal year to each of the
executive officers named in the Summery Compensation Table.
Each director of the Company receives a $25,000 annual directors fees for
attendance at Board meetings, as well as reimbursement for the actual expenses
incurred in attending such meetings. Officers and key employees of the Company
receive employment benefits (e.g., health insurance, automobile allowances)
other than cash compensation and interests in the Company's employee stock
option plan.
<TABLE>
<CAPTION>
NUMBER OF POTENTIAL REALIZABLE
SECURITIES PERCENT OF VALUE AT ASSUMED
UNDERLYING TOTAL OPTIONS/ ANNUAL RATES OF
OPTIONS/ SARS GRANTED EXERCISE OR STOCK PRICE
SARS IN FISCAL BASE PRICE APPRECIATION FOR
NAME GRANTED (#) YEAR (S/SH) EXPIRATION DATE OPTION TERM
(A) (B) -C- (D) (E) 5% 10%
- - - - -- ------------ -------------- ----------- --------------- -------------------- -----------
<C> <C> <C> <C> <C> <C>
Brian
D.
Bookmeier... 125,000 30% $1.35 May 1, 2001 $250,828 $360,705
Alan
M.
Korby... 125,000 30% $1.35 May 1, 2001 $250,828 $360,705
Edward
T.
Buchholz... 41,667 10% $1.35 May 1, 2001 $ 83,616 $120,236
Matthew
B.
Gietzen... 125,000 30% $1.35 May 1, 2001 $250,828 $360,705
</TABLE>
6
<PAGE>
The following table sets forth information concerning the number of
unexercised options, and the value of such unexercised options, for each of the
executive officers named in the Summary Compensation Table.
AGGREGATED OPTION/SAR EXERCISED
IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) -C- (D) (E)
<S> <C> <C> <C> <C>
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
ACQUIRED ON VALUE OPTIONS/SARS AT THE-MONEY OPTIONS/SARS AT
EXERCISE REALIZED FISCAL YEAR- FISCAL YEAR-END
NAME (#) ($) END ($)
- - - - --------------------------------------- ----------- --------------- --------------------- --------------------------
<CAPTION>
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Brian Bookmeier........................ 125,000 0 125,000/0 $253,125/0
Alan M. Korby.......................... 125,000 0 125,000/0 $253,125/0
Edward Buchholz........................ 41,667 0 41,677/0 $84,376/0
175,000 0 125,000/50,000 $265,625/$106,250
Matthew Gietzen........................ 125,000 0 125,000/0 $253,125/0
</TABLE>
7
<PAGE>
EMPLOYMENT AND CONSULTING AGREEMENTS
Mr. Edward Buchholz commenced employment with the Company on February 8,
1994 under an employment agreement the term of which ends on December 31, 1996.
Mr. Buchholz's employment agreement provides him with an annual base salary of
$85,000, as well as commission payments equal to one percent (1%) of all gross
revenues of The Thriftee Group from managed care customers. In connection with
his employment agreement, Mr. Buchholz was granted stock options at $1.25 per
share (fair market value on the date of grant). The right to acquire shares
under these options vests as follows: options to acquire 75,000 shares vest on
February 8, 1995, options to acquire 50,000 shares vest on February 8, 1996 and
options to acquire 50,000 shares vest on February 8, 1997. As of September 1995,
Mr. Buchholz's employment agreement was amended and his compensation adjusted by
increasing his salary to $150,000 per annum and eliminating his 1% commission.
In connection with consummation of the PCS Merger, the Company entered into
separate employment agreements expiring June 30, 2000 with each of Messrs. Alan
Korby, Brian Bookmeier and Matthew B. Gietzen. Under the terms of such
agreements, each of Messrs. Korby, Bookmeier and Gietzen will continue to serve
as the President, Vice President and Vice President, respectively, of the PCS
Companies, and they serve as the Vice President, President and Chief Executive
Officer, and Vice President, respectively, of the Company. Under such employment
agreements, they each receive a base salary of $150,000 per annum, plus
customary fringe benefits, including medical insurance and the use of an
automobile paid for by the Company, the aggregate value of which fringe benefits
to each such person is estimated at no more than $18,000.
On April 25, 1996, each of Messrs. Bookmeier, Korby and Gietzen agreed to
waive the payment of installments of their annual compensation from the Company
during the annual period commencing May 1, 1996 in the aggregate amount of
$150,000 for each such person, and Mr. Buchholz agreed to waive the payment of
installments of his annual compensation from the Company during the annual
period commencing May 1, 1996 in the aggregate amount of $50,000. In
consideration for such waiver of compensation, each of Messrs. Bookmeier, Korby
and Gietzen was granted a five-year non-qualified stock option to acquire
125,000 shares of Company Common Stock at an exercise price of $1.35 per share
and Mr. Buchholz was granted a five-year non-qualified stock options to acquire
41,667 shares of Company Common Stock at an exercise price of $1.35 per share.
All of the options granted to Messrs. Bookmeier, Korby, Gietzen and Buchholz
vested in full on May 1, 1996. The closing sale price for a share of Common
Stock on April 25, 1996, as reported by Nasdaq, was $2 5/8.
In March 1996, Mr. Tod Robinson entered into a two-year employment agreement
with Diabetes Self Care, Inc., a wholly-owned subsidiary of the Company. Under
such agreement, Mr. Robinson is to serve as the National Vice President-Sales
for Diabetes Self Care, having responsibility for the marketing and sales
efforts throughout the United States for such company. Mr. Robinson's employment
base salary is $95,000 per annum. He has the opportunity to earn a Performance
Bonus of up to $1,000 based upon achieving performance goals to be identified by
the Company's management, as well as a Commission of $1,000 for each executed
managed care contract covering more than 10,000 lives which he originates. Mr.
Robinson's employment contract also provides for certain profit participation,
pursuant to which he will earn .5% of the net after-tax profits of Diabetes Self
Care for each fiscal year (and prorations thereof) during the term of the
employment agreement. In the event that such net after-tax profits exceed
$500,000 for any fiscal year, the profit participation shall be increased by
$10,000. Mr Robinson may also receive additional discretionary bonuses, and
customary fringe benefits. On March 10, 1996, in connection with commencing his
employment, Mr. Robinson was granted options to acquire 30,000 shares of the
Company's common stock at an exercise price of $1.50 per share. The closing sale
price for a share of common stock on March 11, 1996 (the next business day), as
reported by Nasdaq, was $2 15/16.
8
<PAGE>
CERTAIN TRANSACTIONS
As of June 30, 1994, the Company had made advances to Edward Buchhloz,
President of Diabetes Self Care, Inc. (Formly, The Thrifee Group), in the amount
of $14, 929. Payments on this receivable are made in amounts equivalent to 50%
of Mr. Buchholz's sales commissions. As of September 30, 1996 the balance of
this loan due the Company was approximately $8,300.
Under the terms of the PCS Merger Agreement, each of Messrs. Rubin,
Testaverde, Korby, Bookmeier and Geitzen has agreed to vote all of the shares of
Company Common Stock to be owned by them following the Merger for the election
of Messrs. Rubin, Testaverde, and, for so long as such person(s) shall continue
to hold not less than 73% of the percentage of the outstanding shares of the
Company Common Stock issued to him upon consummation of the Merger, each of
Messrs. Korby, Bookmeier and Geitzen to the Board of Directors of Universal and
of the PCS Companies. In addition, any additional nominee to Universal Board of
Directors must be accepted to Messrs. Rubin and Testaverde and to a majority of
Messrs. Korby, Bookmeier and Geitzen who meet the share ownership criterion set
forth above.
In April 1995 and July 1995, the Company entered into two secured financing
transactions with Fred Kassner pursuant to which Mr. Kassner loaned to the
Company an aggregate of $3,000,000 at an interest rate of 2% above a commercial
lender's fluctuating prime rate. Each such loan extends for a two-year term. One
loan ($1,000,000) is secured by a lien against all of the accounts receivable of
the Company's Home Therapy subsidiary, and the other ($2,000,000) is secured by
a lien against all of the accounts receivable of the Company's wholly-owned
indirect subsidiary, PCS, Inc.-West. In connection with the Kassner Financing,
the Company issued to Mr. Kassner warrents to acquire 450,000 shares of Common
Stock, each exercisable at $1.00 per share.
See "EMPLOYMENT AND CONSULTING AGREEMENT." on page 8.
ACTION TO BE TAKEN UNDER THE PROXY
Unless otherwise directed by the grantor of the proxy, the persons acting
under the accompanying proxy will vote the shares represented thereby: (a) for
the election of the persons named in the next succeeding table as nominees for
directors of the Company; (b) for the proposal to ratify the appointment of
Feldman Radin & Co., P.C. as the Company's auditors for the current fiscal year
ending June 30, 1997; (c) to authorize an amendment to the Company's Certificate
of Incorporation to increase the authorized capital of the Company by increasing
from 20,000,000 shares to 40,000,000 shares the number of authorized shares of
Common Stock; and (d) in connection with the transaction of such other business
that may be brought before the Meeting, in accordance with the judgment of the
person or persons voting the proxy.
I. ELECTION OF DIRECTORS
NOMINEES
At the Meeting six directors are to be elected, each to hold office until
the next Annual Meeting of Stockholders or until his or her successor shall be
elected and shall qualify. The nominees for elections as directors, with the
exception of Steven Leichter, MD, and James Linesch now serve as directors of
the Company, and certain information furnished is to the Company by such
nominees with respect to them, as of December 26, 1996, are set forth below.
Unless authority to vote for one or more nominees is withheld, it is intended
that share represented by proxies in the accompanying form will be voted for the
election of the following nominees. With respect to any such nominee who may
become unable or unwilling to accept nomination or election, it is intended that
the proxies will be voted for the election in his stead of such
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<PAGE>
person as the Board of Directors may recommend, but the Board does not know of
any reason why any nominee will be unable or unwilling to serve if elected.
<TABLE>
<CAPTION>
PRINCIPAL
OCCUPATION
DIRECTOR DURING LAST
NAME AGE SINCE FIVE YEARS
- - - - ------------------------------------------------------------------------------------ --- ----------- -----------------
<S> <C> <C> <C>
Brian Bookmeier..................................................................... 38 1995 *
Edward Buchholz..................................................................... 53 1995 *
Matthew Gietzen..................................................................... 33 1995 *
Alan Korby.......................................................................... 39 1995 *
Steven Leichter, MD................................................................. 51
James Linesch....................................................................... 42
</TABLE>
- - - - ------------------------
* See "DIRECTORS, NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS OF THE
COMPANY"on pages 4 through 5.
COMMITTEES AND MEETINGS OF THE BOARD
At present the Board of Directors has three committees, the Audit,
Compensation and Stock Option Committee which consist of the following
individuals, respectively: Messrs. Brian Bookmeier, Robert Rubin,and Damon
Testaverde (Audit); Edward Buchholz, Brian Bookmeier and Robert Rubin
(Compensation); and Brian Bookmeier, Alan Korby and Damon Testaverde (Stock
Option). During the fiscal year ended June 30, 1996, the Board of Directors met
eight times, including four action taken by unanimous written consent of the
directors. The Audit, Compensation and Stock Option Committees did not meet, but
rather conducted their operations through meetings of the full Board of
Directors. All of the nominated directors who served as directors during the
fiscal year ended June 30, 1996 attended more than 75% of all the meetings of
the Board held during their tenure during such year. *See "DIRECTORS, NOMINEES
FOR DIRECTOR AND EXECUTIVE OFFICERS OF THE COMPANY" at page 4 above for
information concerning fees payable to directors.
II. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING JUNE 30, 1997
At the Meeting a vote will be taken on a proposal to ratify the appointment
by the Board of Directors of Feldman Radin & Co., P.C., independent certified
public accountants, as the independent auditors of the Company for the fiscal
year ending June 30, 1997. Feldman Radin & Co., P.C. has no interest in or any
relationship with the Company except as its auditors.
MANAGEMENT BELIEVES THE APPOINTMENT TO BE IN THE BEST INTEREST OF THE
COMPANY AND RECOMMENDS THAT IT BE RATIFIED.
III. TO AMEND THE CORPORATION'S CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF THE CORPORATION'S AUTHORIZED SHARES BY 20,000,000 SHARES OF
COMMON STOCK
At the Annual Meeting a vote will be taken on a proposal to authorize the
amendment of the Company's Certificate of Incorporation to increase the number
of shares authorized for issuance thereunder from 20,000,000 authorized shares
of Common Stock to 40,000,000 authorized shares of Common Stock. Preemptive
rights will not attach to any of the newly created shares of Common Stock
following approval of this proposal. At the close of business on December 26,
1996, the record date for determining the shareholders entitled to vote at the
Annual Meeting, there were 7,889,706 shares of Common Stock and 2,444,667 shares
of Preferred Stock outstanding, out of a total 20,000,000 shares of Common Stock
and 10,000,000 shares of Preferred Stock included in the Company's authorized
capital. In addition to its outstanding shares, the Company has reserved for
issuance 500,000 shares of Common Stock for issuance upon conversion of
outstanding shares of Series B Preferred Stock, 1,707,875 shares of Common Stock
for
10
<PAGE>
issuance upon exercise of its publicly-traded Class A Warrants, 171,000 shares
of Common Stock reserved for issuance upon full exercise of Class C Warrants
issued to the underwriters of the Company's 1992 initial public offering,
1,050,000 shares of Common Stock for issuance upon exercise of options granted
under its employee stock option plans, and approximately 850,000 options and
warrants issued to Management and other persons outside of the Company's
established stock option plans in exchange for services and other consideration
provided to the Company. As a result, on a fully-diluted basis, the Company
currently has available approximately only 7,830,000 shares of authorized Common
Stock and 7,555,333 shares of authorized Preferred Stock available for issuance.
In reflecting upon the Company's present capital structure, Management of the
Company believes that the current authorized number of common and preferred
shares is inadequate for the Company's purposes. Management believes that the
Company needs more authorized shares of Common Stock in its capital structure in
order to raise additional working capital funds and to support its ability to
consummate potential future acquisitions.
The purpose of the proposal to amend the Company's Certificate of
Incorporation is to enhance the Company's ability to meet the needs of its
acquisitions program, by providing added flexibility for consummation of
potential acquisitions by creating a large pool of unissued shares of Common
Stock to be used as consideration for such acquisitions, as well as for capital
formation. The Common Stock is the only Company capital stock for which a
trading market exists. Due to the fact that the Company's Common Stock currently
trades at approximately $3.00 per share on the Nasdaq SmallCap Market (the
principal market for its shares), and in consummating an acquisition which uses
Company Common Stock or in raising capital in public or private markets the
Common Stock given in consideration will have to be valued at a discount from
the current market price, Management sees the need for the proposed increase in
its capital structure in order to successfully complete acquisitions of any
significant size or in raising significant levels of working capital funds. For
example, were the Company to propose an acquisition of a business in exchange
for shares of Common Stock that required consideration valued at in excess of
approximately $16,000,000, then given a reasonable discount (33.33%) from the
current market value of the Common Stock, the purchase consideration for that
business in shares of Common Stock (8,000,000 shares) would exceed the number of
unreserved shares of Common Stock now available for issuance out of authorized
capital. Furthermore, in the event that the Company were to make smaller
acquisitions in consideration for shares of Common Stock prior to completing a
future significant transaction in consideration for shares of Common Stock, or
if in connection with the hiring of additional management or other personnel, or
if in providing additional incentive employee compensation, the Company either
expanded its existing employee stock option plans or created other stock
ownership plans for employees, the Company would not have sufficient authorized
shares of Common Stock to accomplish those activities absent an increase in its
authorized capital.
Shareholders need to be aware of certain potential adverse effects which may
result from increasing the Company's authorized capital as proposed. Once the
Company's authorized capital is increased, the Company's shareholders will have
very limited ability to vote upon the manner in which the newly created shares
of Common Stock are issued or sold, or to whom those shares are sold or
exchanged, unless stockholder consent is either required under Delaware law
(e.g., certain merger transactions) or sought by Management although not
required (e.g., approval of certain employee benefit plans which include
issuance of Common Stock). In addition, by having a large pool of Common Stock
available for issuance at the discretion of Management following approval of
this proposal, Management could defeat attempts to take control of the Company
or could discourage consideration of such attempts by potential takeover
suitors. Actual or threatened issuance of large blocks of Common Stock to
Management, their affiliates, or persons "friendly" to Management could defeat
such efforts and maintain current Management in place. SUCH ANTITAKEOVER ASPECTS
OF THE CURRENT PROPOSAL, AND ITS POTENTIAL ADVERSE EFFECTS ON THE VALUE OF THE
COMMON STOCK AND ON SHAREHOLDER VALUES RESULTING FROM AN INVESTMENT IN THE
COMMON STOCK, SHOULD BE CONSIDERED BY SHAREHOLDERS IN VOTING ON THIS PROPOSAL.
Issuance of additional shares of Common Stock out of newly created authorized
capital, if issued in consideration for property or at values
11
<PAGE>
below the then current market price per share, would lead to economic dilution
of shareholder investment (e.g., in terms of potentially lower earnings per
share recorded by the Company), as well as to dilution of prior shareholders'
voting power.
Despite the absence of current or immediately foreseeable plans for issuance
of such shares to raise additional working capital funds, or in connection with
any specific acquisitions, Management believes that it is in the best interests
of the Company and its shareholders to increase the Company's authorized capital
as proposed at this time. Management also believes that, insofar as the Company
is seeking stockholder approval at this time for the other proposals identified
in this solicitation material, it is more cost effective for the Company
concurrently to approach stockholders for approval of such increase in its
authorized capital. The affirmative vote of a majority of the outstanding voting
shares will be necessary to approve this proposal.
MANAGEMENT BELIEVES APPROVAL OF THE AMENDMENT OF THE COMPANY'S CERTIFICATE
OF INCORPORATION TO INCREASE THE COMPANY'S AUTHORIZED CAPITAL BY 20,000,000
SHARES OF COMMON STOCK IS IN THE BEST INTEREST OF THE COMPANY AND RECOMMENDS
THAT SUCH AMENDMENT BE AUTHORIZED AND RATIFIED.
IV. OTHER BUSINESS
While management of the Company does not know of any matters which may be
brought before the Meeting, other than as set forth in the Notice of Meeting,
the proxy confers discretionary authority with respect to the transaction of any
other business. It is expected that the proxies will be voted in support of
management on any question which may properly be submitted to the meeting.
INCLUSION OF STOCKHOLDER PROPOSALS IN THE COMPANY'S PROXY STATEMENT
If any stockholder desires to put forth a proposal to be voted on at the
1998 Annual Meeting of Stockholders and wishes that proposal to be included in
the Company's Proxy Statement to be delivered to stockholders in connection with
such meeting, that stockholder must cause such proposal to be received by the
Company at its principal executive office no later than November 30, 1997. The
Company intends to hold its 1998 Annual Meeting of Stockholders on or before
February 28, 1998. Any request for such a proposal, should be accompanied by a
written representation that the person making the request is a record or
beneficial owner of the lesser of at least 1% of the outstanding shares of the
Company's Common Stock or $1,000 in market value of the Company's common shares
and has held such shares for at least one year as required by the Proxy Rules of
the Securities and Exchange Commission.
AVAILABILITY OF FORM 10-KSB
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY STOCKHOLDER, UPON WRITTEN
REQUEST OF SUCH STOCKHOLDER, A COPY OF THE ANNUAL REPORT ON FORM 10-KSB FOR THE
FISCAL YEAR ENDED JUNE 30, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING ALL FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
REQUIRED TO BE FILED THEREWITH.
Any request for a copy of the Form 10-KSB should include a representation
that the person making the request was the beneficial owner, as of the record
date, of securities entitled to vote at the Annual Meeting of Stockholders. Such
requests should be addressed to: Universal Self Care, Inc., 11585 Farmington
Road, Livonia, Michigan 48150- Attention: Robert Ortlieb, Investor Relations.
12
<PAGE>
UNIVERSAL SELF CARE, INC.
PROXY-ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 18, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS IN CONNECTION WITH THE
ANNUAL MEEETING OF SHAREHOLDERS OF UNIVERSAL SELF CARE, INC. TO BE HELD ON
FEBRUARY 18, 1997. ANY SHAREHOLDERS HAS THE RIGHT TO APPOINT AS HIS PROXY A
PERSON (WHO NEED NOT BE A SHAREHOLDER) OTHER THAN ANY PERSON DESIGNATED BELOW,
BY INSERTING THE NAME OF SUCH OTHER PERSON IN ANOTHER PROPER FORM OF PROXY.
THE UNDERSIGNED, A SHAREHOLDER OF UNIVERSAL SELF CARE, INC., (THE
"CORPORATION"), HEREBY REVOKING ANY PROXY HEREIN BERFORE GIVEN, DOES HEREBY
APPOINT BRAIN BOOKMEIER AND ALAN M. KORBY, OR EITHER OF THEM, AS HIS PROXY WITH
FULL POWER OF SUBSTITUTION, FOR AND IN THE NAME OF THE UNDERSIGNED TO ATTEND THE
ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD ON FEBRUARY 18, 1997 AT 11585
FARMINGTON ROAD, LIVONIA, MICHIGAN 48150, AT 10:00 A.M., LOCAL TIME, AND AT ANY
ADJOURNMENTS THEREOF, AND TO VOTE UPON ALL MATTERS SPECIFIED IN THE NOTICE OF
SAID MEETING, AS SET FORTH HEREIN, AND UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING, ALL SHARES OF STOCK OF SAID CORPORATION WHICH THE
UNDERSIGNED WOULD BE ENTITLED TO VOTE IF PERSONALLY PRESENT AT THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, SUCH SHARES
WILL BE VOTED FOR ALL NOMINEES FOR DIRECTOR IDENTIFIED BELOW AND FOR ALL
PROPOSALS.
1. THE ELECTION OF DIRECTORS
ELECTION OF THE FOLLOWING PROPOSED DIRECTORS TO HOLD OFFICE UNTIL THE NEXT
ANNUAL MEETING OF SHAREHOLDERS OR UNTIL THEIR SUCCESSORS SHALL BE ELECTED AND
SHALL QUALIFY: BRIAN BOOKMEIER, ALAN M. KORBY, MATTHEW B. GIETZEN, EDWARD T.
BUCHHOLZ, DR. STEVEN LEICHTER AND JAMES LINESCH.
FOR ALL NOMINEES (EXCEPT AS MARKED TO THE CONTRARY) WITHHOLD ALL NOMINEES
/ / / /
AUTHORITY TO WITHHOLD A VOTE FOR ANY OF THE ABOVE NAMED INDIVIDUALS SHOULD BE
INDICATED BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF THE NOMINEE.
13
<PAGE>
2. RATIFY THE APPOINTMENT OF FELDMAN, RADIN & CO., P.C. AS INDEPENDENT AUDITORS
FOR THE CORPORATION FOR THE FISCAL YEAR ENDING JUNE 30, 1997.
/ / FOR / / AGAINST / / ABSTAIN
3. TO AUTHORIZE AN AMENDMENT TO THE CORPORATION'S CERTIFICATE OF INCORPORATION
TO INCREASE THE COMPANY'S AUTHORIZED CAPITAL BY INCREASING TO 40,000,000
SHARES THE COMPANY'S AUTHORIZED COMMON STOCK.
/ / FOR / / AGAINST / / ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
/ / FOR / / AGAINST / / ABSTAIN
DATED: , 1997.
______________________________________
SIGNATURE
______________________________________
PRINT NAME
______________________________________
SIGNATURE, IF JOINTLY HELD
______________________________________
PRINT NAME
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREIN, IF SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, INDICATE SUCH CAPACITY. ALL JOINT
TENANTS MUST SIGN. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
THE BOARD OF DIRECTORS REQUEST THAT YOU FILL IN THE DATE AND SIGN THE PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF THE PROXY IS NOT DATED IN THE ABOVE SPACE, IT IS DEEMED TO BE DATED ON
THE DAY ON WHICH IT WAS RECEIVED BY THE CORPORATION.
DATED ON THE DAY ON WHICH IT WAS MAILED BY THE CORPORATION.
14
