<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
COHR 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
COHR INC.
201 NORTH FIGUEROA STREET, FOURTH FLOOR
LOS ANGELES, CALIFORNIA 90012
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 26, 1996
------------------------
TO THE SHAREHOLDERS:
The annual meeting of shareholders of COHR Inc. (the "Company") will be
held at the Holiday Inn at the Long Beach Airport, 2640 Lakewood Boulevard, Long
Beach, California on Friday, July 26, 1996 at 10:00 a.m. for the following
purposes:
1. To elect two directors to serve until the 1999 annual meeting.
2. To receive the report of management.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement of the meeting.
Only shareholders of record at the close of business on June 12, 1996 will
be entitled to vote at the meeting. Each of these shareholders is cordially
invited to be present and vote at the meeting in person. A list of these
shareholders will be available commencing July 16, 1996 at the offices of the
Company for examination by any shareholder for any purpose germane to the annual
meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY. THIS IS IMPORTANT BECAUSE A MAJORITY
OF THE SHARES MUST BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A
QUORUM. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON EVEN THOUGH YOU SEND
IN YOUR PROXY NOW.
By Order of the Directors
/s/ UMESH MALHOTRA
Umesh Malhotra
Chief Financial
Officer and
Assistant
Secretary
The date of this Proxy Statement is July 1, 1996.
<PAGE> 3
COHR INC.
201 NORTH FIGUEROA STREET, FOURTH FLOOR
LOS ANGELES, CALIFORNIA 90012
------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 26, 1996
------------------------
GENERAL INFORMATION
Your proxy in the enclosed form is solicited by the directors of COHR Inc.,
a Delaware corporation (the "Company"), for use at the annual meeting of
shareholders to be held on July 26, 1996 for the purposes set forth in the
accompanying notice and at any adjournment or postponement of that meeting. The
mailing of this Proxy Statement and the accompanying form of proxy to
shareholders of the Company is expected to commence on or about July 2, 1996.
The shares represented by any proxy in the enclosed form will be voted in
accordance with the instructions given on the proxy if the proxy is properly
executed and is received by the Company prior to the close of voting at the
meeting or any adjournment or postponement thereof. Proxies received by the
Company on which no contrary instruction has been given will be voted FOR the
election of directors nominated by management as set forth in this Proxy
Statement. A shareholder giving a proxy has the power to revoke it at any time
before it is exercised. A proxy may be revoked by filing with the Secretary of
the Company an instrument revoking it or a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if the person executing
the proxy is present at the meeting and votes in person.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. Solicitation will be made primarily by mail but shareholders may be
solicited by telephone, telegraph or personal contact. The directors may retain
the services of a proxy-soliciting firm for soliciting proxies from those
entities holding shares in street name.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any shareholder desiring to have a proposal included in the management
proxy statement and form of proxy for the 1997 annual meeting of shareholders
must submit that proposal in writing to the executive offices of the Company by
February 27, 1997. The bylaws of the Company require that such a proposal state
with specificity the nature of the action sought, including the form and text of
proposed resolutions, reasonable explanations of the need for the action to be
taken, and the age and business background and qualifications of a nominee for
directorship. Whether a proposal so submitted shall be presented for action at a
meeting of the shareholders shall be at the sole discretion of the Board of
Directors.
<PAGE> 4
ELECTION OF DIRECTORS AT 1995 ANNUAL MEETING
At the 1995 annual meeting of shareholders of the Company, 100 percent of
the outstanding shares were voted for or withheld from voting for the election
of directors. The following table sets forth the percentages of the total shares
voted or withheld from voting for each of the directors at the 1995 annual
meeting.
<TABLE>
<CAPTION>
PERCENT OF PERCENT
NAME OF DIRECTOR VOTES FOR WITHHELD
-------------------------------------------------------- ---------- --------
<S> <C> <C>
Paul Chopra............................................. 100% 0%
Ronnie J. Messenger..................................... 100% 0%
Lynn P. Reitnouer....................................... 100% 0%
Stephen W. Gamble....................................... 100% 0%
James D. Barber......................................... 100% 0%
Michael I. Matsuura..................................... 100% 0%
Frederick C. Meyer...................................... 100% 0%
Louis A. Simpson........................................ 100% 0%
</TABLE>
VOTING SECURITIES
The outstanding securities of the Company at June 12, 1996 consisted of
4,562,000 shares of Common Stock, $0.01 per value per share. Each shareholder of
record at the close of business on June 12, 1996 is entitled to one vote for
each share of Common Stock then held. As permitted under Delaware law, the
bylaws of the Company provide no cumulative voting for the election of
directors. Shares of the Company are traded on the National Association of
Securities Dealers Automated Quotation system ("NASDAQ"). The following table
sets forth the beneficial ownership of the outstanding shares of Common Stock of
the Company held at June 12, 1996 by the only persons known to management to be
the beneficial owners of more than 5 percent of these shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT
OWNED AS OF OF
BENEFICIAL OWNER JUNE 12, 1996 CLASS
- -------------------------------------------------------------------- ------------------- -------
<S> <C> <C>
Healthcare Association of Southern California....................... 1,053,030 23.1%
201 N. Figueroa Street, Suite 400 Los Angeles, California 90012
</TABLE>
On February 22, 1996 the Company completed an initial public offering of
2,000,000 shares of its Common Stock and Healthcare Association of Southern
California concurrently sold for its own account 946,970 shares of Common Stock
of the Company. Immediately prior to such sale of shares of Common Stock,
Healthcare Association of Southern California owned 94.7% of the outstanding
shares of Common Stock of the Company.
ELECTION OF DIRECTORS
Two directors are to be elected at the 1996 annual meeting of shareholders,
each to hold office until the 1999 annual meeting and until his successor is
elected and qualified. It is intended that the proxies received will be voted
for election of Paul Chopra and Lynn P. Reitnouer unless authority is withheld,
reserving however full discretion to vote such proxies for another person if any
nominee is unable or unwilling to serve, an event that is not anticipated. Any
votes so cast may be distributed among the persons voted for in such proportion
as the persons named in the enclosed proxy shall in their sole judgment
determine. In accordance with Delaware law, the bylaws of the Company provide
that no shareholder may cumulate votes, that is, cast for any one or more
candidates a number of votes greater than the number of the shareholder's
shares.
A plurality of the votes of the shares of Common Stock present in person or
represented by proxy and entitled to vote at the annual meeting at which a
quorum is present shall be sufficient to elect two nominees as directors.
Withheld votes and broker nonvotes shall have the effect of a negative vote.
2
<PAGE> 5
The following table sets forth the shares of Common Stock the Company
beneficially owned at June 12, 1996 by each director, the four most highly
compensated executive officers of the Company, and by all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME, AGE AND PRINCIPAL OCCUPATION DIRECTOR OWNED AS OF PERCENT OF
DURING PREVIOUS FIVE YEARS SINCE JUNE 12, 1996(1) CLASS(2)
- ----------------------------------------------------------- -------- ---------------- ----------
<S> <C> <C> <C>
Paul Chopra, 48; 1984 57,500 1.4%
President and Chief Executive Officer (since 1993),
President and Chief Operating Officer (1991 to 1993) of
the Company; Chief Financial Officer of Healthcare
Association of Southern California, regional healthcare
trade association, 1985 to 1995.
Lynn P. Reitnouer, 63; 1985 5,000 0.1%
Chairman of the Board of the Company since 1995; partner,
Crowell, Weedon & Co., an investment banking firm, since
1969; Director, Hollywood Park, Inc., since 1991.
Ronnie J. Messenger, 51; 1984 5,000 0.1%
Secretary and Treasurer of the Company since 1995;
President and Chief Executive Officer (since 1992),
President and Chief Operating Officer (1984 to 1992),
Paracelsus Healthcare Corporation, owner and operator of
hospitals and healthcare systems.
Stephen W. Gamble, 66; 1984 5,000 0.1%
Chairman of the Board of the Company, 1984 to 1994; Chief
Executive Officer of Healthcare Association of Southern
California, 1977 to 1994.
James D. Barber, 41; 1990 5,000 0.1%
President and Chief Executive Officer (since 1994),
Executive Vice President and Chief Operating Officer
(1989 to 1994) of Healthcare Association of Southern
California.
Michael I. Matsuura, 60; 1993 5,000 0.1%
Senior Vice President, Treasurer and a Director of St.
Francis Healthcare System of Hawaii since 1994;
President, St. Francis Healthcare Enterprises, Inc.,
since 1990; President, Medical Shared Services of Hawaii,
a regional purchasing group, since 1988.
Frederick C. Meyer, 56; 1988 5,000 0.1%
President and Chief Executive Officer (since 1995), Chief
Operating Officer (1993 to 1995), Southern California
Healthcare Systems; President and Chief Executive
Officer, Methodist Hospital of Southern California, 1985
to 1993; Director, Healthcare Association of Southern
California, 1988 to 1992.
Louis A. Simpson, 59; 1995 5,000 0.1%
President and Chief Executive Officer, Capital Operations
(since 1993), Vice Chairman of the Board (1985 to 1993),
GEICO Corporation, insurance services; Director of
Potomac Electric Power Company, Potomac Capital
Investment Corporation, Salomon, Inc., Pacific American
Income Shares, Inc., Western Assets Trust, and Thompson
PBE.
Sandy Morford, 41; * 9,375 0.2%
Executive Vice President (since 1994), Senior Vice
President (1979 to 1994) of the Company.
Lisa Sokol, 39; * 9,375 0.2%
Executive Vice President (since 1995), Senior Vice
President (1989 to 1995) of the Company.
David Manigault, 37; * 6,875 0.2%
Executive Vice President (since 1995) and Chief
Information Officer (since 1984) of the Company.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME, AGE AND PRINCIPAL OCCUPATION DIRECTOR OWNED AS OF PERCENT OF
DURING PREVIOUS FIVE YEARS SINCE JUNE 12, 1996(1) CLASS(2)
- ----------------------------------------------------------- -------- ---------------- ----------
<S> <C> <C> <C>
William J. Greenhouse, 44; * 3,750 0.09%
Senior Vice President, Corporate Development (since
1992), Senior Vice President, Quality Management (1991 to
1992) of the Company.
All directors and officers as a group (13 persons) 128,750 3.1%
</TABLE>
- ---------------
* Not applicable.
(1) Includes shares which may be acquired within 60 days after June 12, 1996
upon the exercise of stock options as follows: Mr. Chopra, 57,500; Mr.
Reitnouer, 5,000; Mr. Messenger, 5,000; Mr. Gamble, 5,000; Mr. Barber,
5,000; Mr. Matsuura, 5,000; Mr. Meyer, 5,000; Mr. Simpson, 5,000; Mr.
Morford, 9,375; Ms. Sokol, 9,375; Mr. Manigault, 6,875; Mr. Greenhouse,
3,750; and all directors and officers as a group (13 persons), 128,750.
(2) In computing the percentage ownership of the shares beneficially owned by a
person, shares of Common Stock subject to options held by that person that
are currently exercisable, or become exercisable within 60 days of June 12,
1996, are deemed outstanding. However, such shares are not deemed
outstanding for purposes of computing the percentage ownership of any other
person.
The directors and officers named in the foregoing table have sole voting
and sole investment power with respect to all shares beneficially owned, subject
to community property laws where applicable. There are no family relationships
among any of the directors and officers.
MEETINGS OF DIRECTORS
There were seven meetings of the directors during the fiscal year ended
March 31, 1996.
COMMITTEE MEETINGS
The Company's Compensation Committee had two meetings during the fiscal
year ended March 31, 1996. The principal functions of this committee are to
review the performance of the chief executive officer of the Company and
recommend to the Board of Directors of the Company annual salary and bonus
amounts for the chief executive officer. The Compensation Committee also
administers the issuance of stock options and other awards under the Company's
1995 Stock Option Plan. Messrs. Messenger, Reitnouer, Gamble and Simpson
constitute the membership of the Compensation Committee.
The Company's Audit Committee had one meeting during the 1996 fiscal year.
This committee makes recommendations to the Board of Directors of the Company
with respect to the Company's financial statements and the appointment of
independent auditors, reviews significant audit and accounting policies and
practices, meets with the Company's independent public accountants concerning,
among other things, the scope of audits and reports and reviews the performance
of overall accounting and financial controls of the Company. The members of the
Audit Committee are Messrs. Barber, Matsuura and Meyer.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Healthcare Association of Southern California, ("HASC") is a regional trade
association comprised of hospitals, integrated health systems, nursing homes and
medical groups. HASC owns approximately 23% of the Company's Common Stock. The
member organizations of HASC have been substantial consumers of the Company's
products and services, accounting for 33% of the Company's revenues for fiscal
1996. HASC and the Company have shared corporate offices and administrative
services since 1976. In anticipation of the Company moving its corporate office
and certain operations to separate facilities, HASC and the Company have entered
into a three-year administrative services agreement, terminable on ninety days'
notice. This agreement provides that HASC will pay the Company a fee for
specified administrative services to be provided by the Company, including
accounting and financing, human resources and certain office services
4
<PAGE> 7
support. This fee is subject to annual adjustment by the cost of living index.
In fiscal 1996, this fee was $299,000.
Mr. Barber, a director of the Company and a member of the Audit Committee,
is the President and Chief Executive Officer and a director of HASC. Mr. Chopra,
the President and Chief Executive Officer of the Company, is also a director of
HASC, and, from 1987 to December 31, 1995, served as the Chief Financial Officer
of HASC. Mr. Chopra received no compensation for his services as a director or
the Chief Financial Officer of HASC.
Three of the Company's directors are also executive officers of entities
which own or control customers of the Company's services. Mr. Meyer is the
president of Southern California Healthcare System, which has three affiliated
hospitals and four skilled nursing facilities. Mr. Matsuura is the senior vice
president of St. Francis Healthcare System of Hawaii. Mr. Messenger is the
president of Paracelsus Healthcare Corporation, which owns and operates 21 acute
care hospitals and four skilled nursing facilities hospitals. The transactions
of the Company with the organizations with which these directors are affiliated
are on the same terms and conditions as those the Company makes available to its
other customers.
On December 5, 1995, the Company entered into a Revolving Credit Agreement
with 1st Business Bank, pursuant to which the Company may borrow an aggregate of
$2,000,000 through June 30, 1996 at the prime interest rate. The Revolving
Credit Agreement provides for monthly payments of interest only until June 30,
1996, at which time all unpaid principal and interest shall become due. The
Company intends to use the revolving credit facility for short-term working
capital purposes. As security for the revolving credit loans, the Company has
granted the bank a lien against all the Company's accounts, equipment, general
intangibles, negotiable collateral, inventory, depository accounts and proceeds
thereof. The bank shall have the right to accelerate the revolving credit loans
upon certain events of default, including failure to pay installments of
principal or interest within five days of being due, failure of the Company to
meet certain net working capital ratios, current asset to current liability
ratios and other periodic financial covenants. HASC had unconditionally
guaranteed the payment of the revolving credit loans when due, whether upon
maturity or acceleration, but was released from such guarantee upon the
consummation of the Company's initial public offering in February 1996.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors, officers and each beneficial owner of more than 10 percent of
the Common Stock of the Company are required by section 16(a) of the Securities
Exchange Act of 1934 to file reports periodically disclosing their transactions
in the Company's securities. Based on a review of such reports, Mr. Gamble
failed to file on a timely basis during the 1996 fiscal year one report relating
to one purchase transaction.
5
<PAGE> 8
REMUNERATION
SUMMARY OF COMPENSATION
The following table summarizes the compensation paid or accrued during the
fiscal year ended March 31, 1996 to the Company's President and Chief Executive
Officer and the four most highly compensated executive officers whose
remuneration in all capacities to the Company exceeded $100,000 (the "named
executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- --------------
OTHER ANNUAL NO. OF OPTIONS LTIP ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION GRANTED PAYOUTS COMPENSATION
- ----------------------------------- ----------- -------- -------- ------------- -------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul Chopra, President and 1996 $265,008 $297,227 $ 0 230,000 $ 0 $ 16,377
Chief Executive Officer 1995 231,667 68,203 0 0 168,645 23,600
1994 200,016 58,740 0 0 0 23,884
Sandy Morford, Executive Vice 1996 $181,671 $ 5,000 $ 0 37,500 $ 0 $ 91,286
President
1995 147,490 47,758 0 0 0 11,696
1994 117,043 0 0 0 0 55,802
Lisa Sokol, Executive Vice 1996 $150,000 $ 8,000 $ 0 37,500 $ 0 $ 74,579
President
1995 125,955 58,692 0 0 0 17,351
1994 115,512 526 0 0 0 71,141
David Manigault, Executive Vice 1996 $163,760 $ 20,000 $ 0 27,500 $ 0 $ 35,172
President and Chief Information 1995 96,912 23,672 0 0 0 9,278
Officer
1994 92,304 15,871 0 0 0 23,693
William J. Greenhouse, Senior Vice 1996 $108,720 $ 35,705 $ 0 15,000 $ 0 $ 15,555
President of Corporate 1995 101,172 18,019 0 0 0 14,994
Development
1994 100,104 19,000 0 0 0 14,158
</TABLE>
EMPLOYMENT AGREEMENT
On January 1, 1996 Paul Chopra, the Company's President and Chief Executive
Officer, entered into a five-year employment agreement with the Company. The
term of the employment agreement will automatically extend for additional
two-year periods on each second anniversary of the effective date, so that at
all times the term of the employment agreement is not less than three nor more
than five years, unless a written notice of non-renewal is delivered by either
party. The agreement is subject to earlier termination by Mr. Chopra or the
Company with or without cause. The agreement provides for a minimum base salary
of $265,000, and annual bonuses conditioned on the Company's achievement of
certain performance criteria established by the Compensation Committee. The
agreement also provides that during the agreement's term the Board will nominate
Mr. Chopra for election to the Board by the Company's shareholders. If Mr.
Chopra is terminated by the Company without cause, or if the agreement is not
renewed by the Company, or Mr. Chopra elects to terminate for cause or following
receipt of the Company's notice of non-renewal, or in the event of a change of
control, the agreement provides that Mr. Chopra will receive as severance (i) a
lump sum payment equal to three years of base salary and bonuses, and (ii)
employee benefits for the period ending three years following termination.
Change of control is defined in the agreement as any person (other than an
employee benefit plan of the Company or HASC) becoming the holder of one-third
or more of the voting power of the Company's securities, a merger or
consolidation whereby the then current stockholders hold less than a majority of
the voting power of the surviving entity, a complete liquidation or agreement
for sale of all or substantially all of the assets of the Company or a change in
the composition of the Board of Directors over any consecutive 36-month period
which results in a majority of the Board being comprised of persons who were not
nominated by the Board of Directors of the Company. Mr. Chopra may terminate the
agreement for cause upon a material reduction of his duties, reporting
relationships or authority, a reduction in compensation or benefits, or a
relocation of the principal executive office of the Company outside of the
Southern California area. Should any excise tax be imposed under Section 4999 of
the Internal Revenue Code for "excess parachute payments" due Mr. Chopra in the
event of certain changes of ownership or control of the Company, the employment
agreement provides that the Company shall pay such additional compensation as is
necessary
6
<PAGE> 9
to put Mr. Chopra in the same after-tax position were no such excise tax paid or
incurred. In the event severance payments are to be paid to Mr. Chopra, the
employment agreement provides for the exchange of complete releases by each of
the Company and Mr. Chopra.
1995 STOCK OPTION PLAN
Pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), certain
officers, directors and other key employees of the Company are eligible to
receive non-qualified options to purchase the Company's Common Stock. The 1995
Plan is administered by the Compensation Committee of the Board (the
"Committee"). The maximum number of shares of Common Stock that may be issued
pursuant to options granted under the 1995 Plan is 600,000. The 1995 Plan may be
terminated at any time by the Board.
Under the 1995 Plan, key employees are eligible to be granted options under
the 1995 Plan if so selected by the Committee in its absolute discretion. The
number of shares subject to option and the term and conditions, including the
exercise price per share, shall be set by the Committee; provided, however, that
the exercise price shall not be less than the fair market value of the Common
Stock as of the date the option is granted. No option granted under the 1995
Plan may be exercised after the expiration of ten years from the date it was
granted. Options granted to non-employee directors vest immediately. Options
granted to key employees vest in accordance with the following schedule: (i) 25%
upon the date of grant, (ii) 50% upon the first anniversary of the date of
grant, (iii) 75% upon the second anniversary of the date of the grant, and (iv)
100% upon the third anniversary of the date of the grant.
Options granted under the 1995 Plan are generally non-transferable. In the
event of any merger, consolidation, sale of all or substantially all of the
assets of the Company or a liquidation involving the Company, all granted
options will immediately vest in the optionee. In the event of an underwritten
public offering of shares of the Company's Common Stock, an option holder shall
automatically become 50% vested in the nonvested portion of any options
previously granted.
The following table sets forth information regarding the grants of stock
options in the fiscal year ended March 31, 1996 to the named executive officers.
STOCK OPTION GRANTS IN 1996 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- ------------------------------------------------------------------------------ VALUE AT
% OF TOTAL ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
GRANTED TO FOR
NO. OF EMPLOYEES IN EXERCISE OPTION TERM
OPTIONS 1996 FISCAL PRICE EXPIRATION ------------------------
NAME GRANTED YEAR PER SHARE DATE 5% 10%
- -------------------------- ------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Paul Chopra............... 230,000 49.5% $9.00 02/22/06 $1,301,800 $3,298,200
Sandy Morford............. 37,500 8.1% $9.00 02/22/06 $ 212,250 $ 537,750
Lisa Sokol................ 37,500 8.1% $9.00 02/22/06 $ 212,250 $ 537,750
David Manigault........... 27,500 5.9% $9.00 02/22/06 $ 155,650 $ 394,350
William J. Greenhouse..... 15,000 3.2% $9.00 02/22/06 $ 84,900 $ 215,100
</TABLE>
7
<PAGE> 10
The following table sets forth information regarding the exercise of stock
options by the named executive officers during the fiscal year ended March 31,
1996 and the value of unexercised options at the end of the 1996 fiscal year.
AGGREGATED OPTION EXERCISES IN 1996 FISCAL YEAR AND
OPTION VALUES AT MARCH 31, 1996
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS MONEY OPTIONS AT
AT MARCH 31, 1996 MARCH 31, 1996
------------------- --------------------
NO. OF SHARES EXERCISABLE/ EXERCISABLE/
NAME ACQUIRED ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
- --------------------- -------------------- -------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Paul Chopra.......... 0 $0 57,500/172,500 $445,625/$1,336,875
Sandy Morford........ 0 $0 9,375/28,125 $72,656/$217,969
Lisa Sokol........... 0 $0 9,375/28,125 $72,656/$217,969
David Manigault...... 0 $0 6,875/20,625 $53,281/$159,844
William J.
Greenhouse......... 0 $0 3,750/11,250 $29,063/$87,188
</TABLE>
Each non-employee director will be granted an option to purchase 2,500 shares of
Common Stock on the first and second anniversary date of the effective date of
the Company's initial public offering provided that each nonemployee director
continues to serve on the Board at the time of grant. Such options will vest
immediately upon the date of grant. Except as stated above, any non-employee
director who serves on the Committee is not eligible to receive grants of
options.
401(K) PLAN
In October 1994 the Company adopted a tax-qualified employee savings and
retirement plan (the "401(k) Plan") covering employees of the Company (excluding
certain hourly and commissioned employees) who have completed three months of
service with the Company. Pursuant to the 401(k) Plan, an eligible employee may
elect to defer from 1% to 15% of the total compensation that would otherwise be
paid to such employees, not to exceed the amount allowed by applicable Internal
Revenue Service regulations. The Company makes annual contributions to the
401(k) Plan on behalf of each participating eligible employee to match the first
3% of compensation deferred by such employee. Contributions made by the employee
are fully vested and are not subject to forfeiture at any time. Company
contributions vest over six years of service. The trustee of the 401(k) Plan
invests aggregate contributions in any of several mutual funds directed by the
employee. The 401(k) Plan is intended to qualify under Section 401 of the
Internal Revenue Code so that contributions by employees to the 401(k) Plan, and
income earned on contributions, will not be taxable to employees until
withdrawn, and so that the contributions by employees will be deductible by the
Company when made. During the fiscal year ended March 31, 1996, the Company made
contributions to the 401(k) Plan on behalf of the named executive officers as
follows: Mr. Chopra, $4,688; Mr. Morford, $4,800; Ms. Sokol, $4,500; Mr.
Manigault, $3,541; Mr. Greenhouse, $3,246.
MONEY PURCHASE PLAN
In January 1989, the Company adopted the Money Purchase Plan (the "Money
Purchase Plan"), a retirement plan intended to qualify under Section 401(a) of
the Internal Revenue Code. The Money Purchase Plan covers all employees of the
Company (other than certain hourly and commissioned employees). The Company
makes monthly contributions to the Money Purchase Plan for each participating
employee ranging from 2.5% of total annual compensation for employees with one
to ten years of service up to 10% of total annual compensation for employees of
30 or more years of service, not to exceed $30,000. The contributions are
invested in any of several mutual funds directed by the employee. No
contributions vest for any employee prior to completion of five years of
service; thereafter, contributions are fully vested and not subject to
forfeiture. During fiscal 1996, the Company made contributions to the Money
Purchase Plan on behalf of the
8
<PAGE> 11
named executive officers as follows: Mr. Chopra, $7,813; Mr. Morford, $8,000;
Ms. Sokol, $7,500; Mr. Manigault, $5,902; Mr. Greenhouse, $5,410.
EXECUTIVE LONG-TERM INCENTIVE PLAN
The Executive Long-Term Incentive Plan (the "LTIP"), administered jointly
with HASC, provided that Mr. Chopra be awarded a bonus to range from $62,008 to
$380,899 if actual cumulative revenues of the Company for the period commencing
April 1, 1993 through March 31, 1996 reached or exceeded certain scheduled
anticipated cumulative revenues. Under the LTIP, at no time could the sum of all
awards paid to all participants in the LTIP be greater than 6.5% of the
Company's earnings before taxes and dividends.
The following table sets forth the minimum and maximum amounts payable
under the LTIP until its termination.
LONG-TERM INCENTIVE PLAN AWARDS IN THE 1996 FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
---------------------------------
NAME PERIOD UNTIL MATURATION MINIMUM AMOUNT MAXIMUM AMOUNT
- --------------------------------------- ----------------------- -------------- --------------
<S> <C> <C> <C>
Paul Chopra............................ April 10, 1996 $ 62,008 $380,899
Sandy Morford.......................... * * *
Lisa Sokol............................. * * *
William J. Greenhouse.................. * * *
David Manigault........................ * * *
</TABLE>
- ---------------
* None of Ms. Sokol and Messrs. Morford, Greenhouse and Manigault were eligible
to participate in the LTIP.
Pursuant to the LTIP, deferred compensation expenses amounted to $80,000
and $88,645 for fiscal years 1994 and 1995, respectively. Such amounts were paid
to Mr. Chopra in November 1995. Pursuant to the LTIP, an additional $212,254
will be paid to Mr. Chopra in June 1996, at which time the LTIP will terminate.
REPORT OF THE COMPENSATION COMMITTEE REGARDING OFFICER SALARIES IN FISCAL 1996
Among the factors considered by the Compensation Committee in setting the
salaries of the executive officers of the Company for the fiscal year ended
March 31, 1996 were the earnings of the Company in the preceding fiscal year
compared to the expectations of the Committee for such fiscal year and the
Committee's evaluation of the degree of difficulty encountered by management in
achieving such earnings posed by national and local economic conditions
generally and other unforeseen circumstances; the Committee's evaluation of each
officer's skill and judgment in carrying out his assigned duties; the salaries
paid to persons in similar positions in other companies in the same geographic
area; and the Company's own historical patterns of remuneration. The salaries
set for fiscal 1996 were also affected by negotiation between the Committee and
the executive officers.
By the Committee:
Ronnie J. Messenger
Lynn P. Reitnouer
Stephen W. Gamble
Louis A. Simpson
9
<PAGE> 12
COMPARISON OF SHAREHOLDER RETURN ON INVESTMENT
The following graph compares the percentage change in the cumulative total
shareholder return on the Common Stock of the Company from February 16, 1996,
the first day of trading on NASDAQ of the Company's Common Stock, through March
31, 1996 (the "Measurement Period"), and June 21, 1996 with the cumulative total
return (assuming reinvestment of dividends) of (i) the Russell 2000 Index, a
broad equity market index, and (ii) a peer group of national outsourcing service
organizations for hospitals, integrated health systems and alternate site
providers believed by the Company's management to be comparable to those of the
Company.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG THE
COMPANY, THE RUSSELL 2000 INDEX AND PEER GROUP COMPANIES
COHR INC. DAILY PRICE-VOLUME ANALYSIS
2/16/96-6/21/96
(CHART)
10
<PAGE> 13
RELATIVE STOCK PRICE PERFORMANCE
2/16/96-6/21/96
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) COHR Composite Russell 2000
<S> <C> <C> <C>
02/16/96 100.00 100.00 100.00
03/05/96 98.1 99.4 101.6
03/20/96 116.2 101.6 102.1
04/04/96 133.3 102.9 104.1
04/22/96 161.1 101.2 106.0
05/07/96 187.0 99.2 107.5
05/22/96 196.3 102.6 113.4
06/07/96 181.5 101.7 111.6
06/21/96 175.9 103.5 107.3
</TABLE>
As used in the foregoing table the cumulative total shareholder return on
the Common Stock of the Company is measured by dividing the sum of (a) the
cumulative amount of dividends assuming dividend reinvestment and (b) the
difference between the share price at the end and the beginning of the
Measurement Period by the share price at the beginning of the Measurement
Period.
DIRECTOR'S CASH COMPENSATION
The Company pays an annual fee of $12,000 to its independent directors
(directors who are not employees or officers of the Company). Directors who are
employees or officers of the Company, except for the Chairman of the Board, are
not paid director's fees. The Chairman of the Board is paid an annual fee of
$24,000 for serving as a director. The Company also reimburses directors for
expenses incurred in connection with their activities on behalf of the Company.
In addition, each independent director receives $1,000 for attending each
meeting of the Board of Directors or a committee thereof not held on the day of
a Board of Directors meeting. Directors also are entitled to participate in the
1995 Stock Option Plan of the Company. See "Remuneration -- 1995 Stock Option
Plan."
From August 1994 to December 31, 1995, Stephen W. Gamble, a director of the
Company, performed consulting services for the Company. Such services included
introductions to potential customers, customer relations and assistance in
selecting media placements for the Company's communications program. The
aggregate remuneration paid to Mr. Gamble for such services was $29,895 in
fiscal 1996. See "Election of Directors -- Certain Relationships and Related
Transactions."
11
<PAGE> 14
INDEPENDENT ACCOUNTANT
The Company's independent accountant for the fiscal year ended March 31,
1996 was Deloitte & Touche LLP. A representative of Deloitte & Touche LLP is
expected to attend the annual meeting, will have an opportunity to make a
statement if he desires to do so and will be available to respond to appropriate
questions. The Company has not yet selected an accounting firm to perform the
audit of the Company's financial statements for the fiscal year ending March 31,
1997 inasmuch as such action is customarily taken by the Audit Committee later
during the fiscal year.
OTHER MATTERS
The directors know of no other matters to be presented for action at the
meeting. As to any matter which may properly come before the meeting, the
proxies confer discretionary authority on the persons named therein and those
persons will vote their proxy in accordance with their best judgment with
respect thereto.
By Order of the Directors
/s/ UMESH MALHOTRA
Umesh Malhotra
Chief Financial Officer and
Assistant Secretary
July 1, 1996
Los Angeles, California
12
<PAGE> 15
PROXY
COHR INC.
FOR ANNUAL MEETING OF SHAREHOLDERS
JULY 26,1996
The undersigned hereby appoints Paul Chopra and Lynn P. Reitnouer, or
either of them, as his agents and proxies with full power of substitution to
vote any and all shares of Common Stock of COHR Inc. which the undersigned is
entitled to vote at the annual meeting of shareholders of said company to be
held July 26, 1996, or any adjournment or postponement thereof, as specified
below.
This proxy will be voted as you specify on the reverse hereof. UNLESS
OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF SOME OR ALL OF
THE PERSONS NAMED IN PROPOSAL 1 ON THE REVERSE HEREOF, ALL OF WHOM WILL BE
NOMINATED BY THE BOARD OF DIRECTORS OF COHR INC. FOR ELECTION AS DIRECTORS. In
the election of directors, the named proxy holders may not cumulate votes. If
any nominee is unable or unwilling to serve or is otherwise unavailable, said
proxy holders shall have discretion and authority to vote in accordance with
their judgment for other nominees or to distribute such votes in such
proportions among other nominees as they in their sole judgment shall determine.
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
(PLEASE SIGN AND DATE THE PROXY ON THE REVERSE SIDE)
- FOLD AND DETACH HERE -
<PAGE> 16
Please mark
your votes as
indicated in
this example.
/X/
FOR
(except as WITHHOLD
indicated to the AUTHORITY
1. Election of the following contrary below) TO VOTE FOR
nominees as directors: / / / /
Nominees: Paul Chopra and Lynn P. Reitnouer.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
2. As they shall in their sole judgment determine on any other matter that may
properly come before the meeting or any adjournment or postponement thereof.
Signature(s)________________________________________Dated:_______________, 1996
Sign exactly as name appears hereon. Give your full title if signing in other
than individual capacity. All joint owners should sign.
- FOLD AND DETACH HERE -
