<PAGE> 1
COHR INC.
21540 PLUMMER STREET
CHATSWORTH, CALIFORNIA 91311-4103
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 14, 1998
------------------------
TO THE STOCKHOLDERS:
The annual meeting of stockholders of COHR Inc., a Delaware corporation
(the "Company"), will be held at the Company's corporate offices at 21540
Plummer Street, Chatsworth, California on Friday, August 14, 1998 at 11:00 a.m.,
California Time, for the following purposes:
1. To elect three directors to serve until the 2001 annual meeting and
until their successors are duly elected and qualified.
2. To ratify the appointment of Deloitte & Touche LLP as independent public
accountants for the Company for the fiscal year ending March 31, 1999.
3. To transact such other business as may properly come before the meeting
or any adjournment or postponement of the meeting.
Only stockholders of record at the close of business on July 22, 1998 will
be entitled to notice of and to vote at the meeting and any and all adjournments
or postponements. Each of these stockholders is cordially invited to be present
and vote at the meeting in person. A list of these stockholders will be
available commencing August 3, 1998 at the offices of the Company for
examination by any stockholder 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. IT IS IMPORTANT TO RETURN YOUR PROXY
CARD 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
Daniel F. Clark
Chief Financial Officer,
Executive Vice President,
Finance and Secretary
The date of this Notice is July 24, 1998.
<PAGE> 2
COHR INC.
21540 PLUMMER STREET
CHATSWORTH, CALIFORNIA 91311-4103
------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 14, 1998
------------------------
Your proxy in the enclosed form is solicited by the Board of Directors of
COHR Inc., a Delaware corporation (the "Company"), for use at the annual meeting
of stockholders (the "Annual Meeting") to be held on Friday, August 14, 1998 at
11:00 a.m., California Time, for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders and at any adjournment or postponement
of that meeting. The Annual Meeting will be held at the Company's corporate
offices at 21540 Plummer Street, Chatsworth, California. The complete mailing
address of the principal executive offices of the Company is indicated above.
This Proxy Statement, the foregoing Notice and the accompanying form of
Proxy were mailed on or about July 24, 1998 to all stockholders entitled to vote
at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
VOTING AND REVOCABILITY OF PROXIES; SOLICITATION
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
Annual 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 and FOR the ratification of the appointment of Deloitte & Touche LLP
as independent public accountants for the Company. A stockholder 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 as to a stockholder if such stockholder executing the proxy is
present at the Annual 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 stockholders may be
solicited by telephone, facsimile 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, at a cost estimated not to exceed $4,500
plus out-of-pocket expenses. In addition to the solicitation of proxies by use
of the mails, officers, directors and employees of the Company may solicit
proxies by written communications, telephone, facsimile or personal contact.
Such persons will receive no special compensation for any solicitation
activities.
RECORD DATE
Stockholders of record at the close of business on July 22, 1998 are
entitled to notice of the Annual Meeting and to vote at the Annual Meeting.
VOTING SECURITIES; QUORUM
The outstanding securities of the Company at July 22, 1998 consisted of
6,433,189 shares of Common Stock, $0.01 par value per share ("Common Stock").
Each stockholder of record at the close of business on July 22, 1998 is entitled
to one vote for each share of Common Stock then held. As permitted under
Delaware law, the Bylaws of the Company do not provide for cumulative voting for
the election of directors.
<PAGE> 3
The presence, in person or by proxy, of a majority of the shares of Common
Stock outstanding on the record date constitutes the quorum required to transact
business at the Annual Meeting. Under Delaware law, abstentions and broker
"non-votes" are counted as present and entitled to vote for purposes of
determining a quorum. 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 three nominees
as directors. Abstentions and broker "non-votes" are not counted for purposes of
the election of directors. The affirmative vote by the holders of the majority
of the Common Stock present in person or represented by proxy and entitled to
vote on the matter is required to approve any other matter to be acted upon at
the Annual Meeting. An abstention is counted as a vote against and a broker
"non-vote" is not counted for purposes of approving such other matters to be
acted upon at the Annual Meeting.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any stockholder desiring to have a proposal included in the management
proxy statement and form of proxy for the 1999 annual meeting of stockholders
must submit that proposal in writing to the corporate offices of the Company by
March 26, 1999. Any stockholder desiring to submit a proposal or director
nomination not for inclusion in the management proxy statement and form of proxy
for the 1999 annual meeting of stockholders must submit the proposal or
nomination not less than 150 days prior to the date of that meeting. 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 director. The Bylaws of
the Company further provide that whether a proposal so submitted shall be
presented for action at a meeting of the stockholders shall be at the sole
discretion of the Board of Directors.
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<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of July 10, 1998 by all persons known to the Company to be the
beneficial owners of more than five percent of the Company's Common Stock, by
each director, by each person who served during the last fiscal year as the
Company's Chief Executive Officer, by each of the four most highly compensated
executive officers other than the Chief Executive Officer and by all directors
and executive officers as a group. Except as noted in the footnotes, such
figures are based upon information furnished by the persons named.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
BENEFICIAL OWNER(1) OWNED(2) TOTAL(3)
------------------- ------------ --------
<S> <C> <C>
Citicorp.................................................... 342,400(4) 5.3%
Citibank, N.A
399 Park Avenue, New York, New York 10043
Wayne M. Cooperman.......................................... 347,700(5) 5.4%
Ricky C. Sandler
c/o Fusion Capital Management
237 Park Avenue, Suite 801, New York, New York 10017
Healthcare Association of Southern California............... 803,030(6) 12.5%
515 S. Figueroa Street, Suite 1300, Los Angeles,
California 90017
Franklin Resources, Inc., Charles B. Johnson, Rupert H.
Johnson, Jr.,............................................. 1,472,900(7) 22.9%
Franklin Advisers, Inc. and Franklin Advisory Services,
Inc.
777 Mariners Island Boulevard, San Mateo, California 94404
Pioneering Management Corporation........................... 520,000(8) 8.1%
60 State Street, Boston, Massachusetts 02109
Strong Capital Management, Inc. and Richard S. Strong....... 1,794,825(9) 27.9%
100 Heritage Reserve, Menomonee Falls, Wisconsin 53051
Raymond E. List............................................. 31,250 *
Lynn P. Reitnouer........................................... 70,000(10) 1.1%
Ronnie J. Messenger......................................... 25,000 *
Stephen W. Gamble........................................... 56,500 *
James D. Barber............................................. 32,000 *
Frederick C. Meyer.......................................... 25,000 *
Louis A. Simpson............................................ 70,000(11) 1.1%
Stephen W. Ritterbush....................................... 22,917 *
David Manigault............................................. 22,938 *
Aviva Truesdell............................................. 17,700 *
Paul Chopra................................................. 191,875 2.9%
Sandy D. Morford............................................ 7,250(12) *
Haresh S. Satiani(13)....................................... 0 *
All directors and executive officers as a group (16
persons).................................................. 429,075(14) 6.3%
</TABLE>
- ---------------
* Less than one percent.
(1) Except as noted below, 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.
(2) Includes shares which may be acquired within 60 days after July 10, 1998
upon exercise of stock options as follows: Mr. List, 31,250 shares; Mr.
Reitnouer, 45,000 shares; Mr. Messenger, 25,000 shares; Mr. Gamble, 52,500
shares; Mr. Barber, 25,000 shares; Mr. Meyer, 25,000 shares; Mr. Simpson,
25,000 shares; Mr. Ritterbush, 22,917 shares; Mr. Manigault, 22,938 shares;
Ms. Truesdell, 17,500 shares; Mr. Chopra, 191,875 shares; Mr. Morford,
6,250 shares.
(3) 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
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<PAGE> 5
60 days of July 10, 1998, are deemed outstanding. However, such shares are
not deemed outstanding for purposes of computing the percentage ownership
of any other person.
(4) Citibank, N.A. is a wholly-owned subsidiary of Citicorp. Citibank, N.A. has
shared voting and dispositive power with respect to these shares. Citicorp
has no voting or dispositive power as to any of these shares. This
information is based on a Schedule 13G filed by Citicorp and Citibank, N.A.
reporting such beneficial ownership as of April 30, 1998.
(5) Wayne M. Cooperman and Ricky C. Sandler have shared voting and dispositive
power with respect to these shares. This information is based on a Schedule
13G filed by Messrs. Cooperman and Sandler on June 30, 1998.
(6) This information is based on a questionnaire completed by the Healthcare
Association of Southern California on May 14, 1998.
(7) Franklin Advisory Services, Inc.'s principal business office address is One
Parker Plaza, Sixteenth Floor, Fort Lee, New Jersey 07024. These shares are
beneficially owned by one or more open or closed-end investment companies
or other managed accounts which are advised by direct and indirect
investment advisory subsidiaries (the "Adviser Subsidiaries") of Franklin
Resources, Inc. ("FRI"). Such advisory contracts grant to such Adviser
Subsidiaries all investment and/or voting power over these shares owned by
such advisory clients. Charles B. Johnson and Rupert H. Johnson, Jr. (the
"Principal Shareholders") are the principal shareholders of FRI. The
Adviser Subsidiaries, FRI and the Principal Shareholders may be deemed to
be the beneficial owner of these shares. FRI, the Principal Shareholders
and each of the Adviser Subsidiaries disclaim any economic or beneficial
ownership in any of these shares. Franklin Advisers, Inc. has sole voting
and sole dispositive power with respect to 830,500 of these shares and
Franklin Advisory Services, Inc. has sole voting power with respect to
300,000 of these shares and sole dispositive power with respect to 642,400
of these shares. This information is based on a Schedule 13G filed by FRI,
the Principal Shareholders, Franklin Advisers, Inc. and Franklin Advisory
Services, Inc. on May 8, 1998.
(8) This information is based on a questionnaire completed by Pioneering
Management Corporation on May 15, 1998.
(9) Richard S. Strong is Chairman of the Board of Strong Capital Management,
Inc. and principal shareholder of Strong Capital Management, Inc. Mr.
Strong may be deemed to be the beneficial owner of these shares. This
information is based on a Schedule 13G filed by Strong Capital Management,
Inc. and Richard S. Strong on March 10, 1998.
(10) Includes 1,270 shares owned by Winslow C. Reitnouer, Mr. Reitnouer's wife.
Mr. Reitnouer disclaims beneficial ownership of such shares.
(11) Includes 6,000 shares held in a trust of which Mr. Simpson is a co-trustee.
(12) Mr. Morford left the Company on June 2, 1998. Any exercisable options held
by Mr. Morford will expire on September 2, 1998 if not exercised on or
before that date.
(13) Mr. Satiani left the Company on June 2, 1998.
(14) Does not include shares beneficially owned by Mr. Chopra, who resigned as a
director effective July 17, 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and the holders of 10% or more of
the Company's Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of equity
securities of the Company. Daniel F. Clark filed his Form 3 approximately two
months late. Michael I. Matsuura, a former member of Board of Directors, filed
his Form 5 three days late. David Roesler reported five transactions on Form 5
and that should have been reported on Form 4. Three of Mr. Roesler's
transactions were reported approximately five months late, one transaction
approximately six months late and one transaction approximately eight months
late. Based upon a review of Forms 3, 4 and 5, and written
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<PAGE> 6
representations of the Company's directors, executive officers and certain 10%
stockholders as to whether Forms 5 were required to be filed by them, the
Company believes that all other reports required pursuant to Section 16(a) with
respect to the fiscal year ended March 31, 1998 were timely filed.
REMUNERATION OF EXECUTIVE OFFICERS
The Company has retained the services of each of Messrs. List, Ritterbush
and Socha in the capacities of President and Chief Executive Officer, Managing
Director, and Executive Vice President, Operations, respectively, pursuant to
arrangements commencing as of June 2, 1998 for a term until September 1, 1998,
at which time the employment arrangements may be extended by mutual agreement or
be terminated by either party. Under these arrangements, Messrs. List and Socha
are full-time employees; Mr. Ritterbush is to devote one half of his time to
Company matters. Each of the three is paid monthly base compensation of $10,000,
and is entitled to other benefits generally afforded officers of the Company,
including medical, health and dental benefits and to reimbursement for all
reasonable business travel.
Additionally, and as an inducement essential to entering into the
employment arrangements with the Company, each of Messrs. List, Ritterbush and
Socha were granted options to purchase 125,000, 91,667 and 108,333, shares
respectively of the Company's Common Stock at an exercise price of $7.00 per
share. The options expire on June 1, 2008 and such options are currently vested
as to 25% and become 50% vested on June 2, 1999, 75% vested on June 2, 2000 and
100% vested on June 2, 2001. In the event of a change of control, as defined in
the Company's 1996 Stock Option Plan (generally, in the event of certain
acquisitions of 40% or more of the Company's outstanding Common Stock, certain
mergers which result in the Company's stockholders owning less than 60% of the
surviving corporation, a sale of all or substantially all of the Company's
assets or certain changes of a majority of the directors of the Company), prior
to the third anniversary of the date of grant the options become 100% vested.
The options are non-transferable, except to certain family members. The options
were not granted under an existing benefit or stock option plan of the Company.
In addition, the Company entered into a management services agreement dated
as of June 3, 1998, between the Company and Fairfax Consulting Company LLC, a
newly formed Delaware limited liability company ("Fairfax Consulting"), pursuant
to which Fairfax Consulting provides the management, executive and consulting
services of certain professionals (the "Professionals"), other than Messrs. List
and Socha, a minimum of two business days each month as requested by the
Company. For such services Fairfax Consulting is paid $15,000 for certain prior
expenses and a fee based on the number of hours spent by certain of the
Professionals multiplied by an hourly rate, which ranges from $100 to $200 per
hour depending on which of the Professionals provided the services. To the
extent Mr. Ritterbush expends more than 50% of his time on Company matters, such
time in excess of 50% is also billed to the Company on an hourly basis. The
management services agreement has a term which expires on September 1, 1998, at
which time it can be extended by mutual agreement or terminated by either party.
Raymond E. List, Chief Executive Officer and a director of the Company, and
Steve Ritterbush, Managing Director and a director of the Company, are two of
the four managing-members of Fairfax Consulting. Louis A. Simpson, a director of
the Company, has invested as a non-manager member with Fairfax Management
Company II, LLC, which has the same managing-members as Fairfax Consulting.
The parties have commenced preliminary discussions regarding extending for
a longer term the arrangements described above with Messrs. List, Ritterbush and
Socha and with Fairfax Consulting.
5
<PAGE> 7
EXECUTIVE OFFICERS
Information listed under the Caption "Executive Officers" under Item 10 of
Part III of the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1998, as filed with the Securities and Exchange Commission, is
incorporated in this Proxy Statement by reference.
SUMMARY OF COMPENSATION
The following table summarizes the compensation paid or accrued during the
three most recent fiscal years to the Company's Chief Executive Officer and the
four most highly compensated executive officers other than the Chief Executive
Officer who were serving as executive officers at the end of fiscal 1998 on
March 31, 1998 and whose remuneration in all capacities to the Company exceeded
$100,000 (the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------------ ----------
---------------------------------- NUMBER OF SHARES
OTHER OF COMMON STOCK
ANNUAL UNDERLYING OPTIONS LTIP ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION GRANTED PAYOUTS(1) COMPENSATION
- --------------------------- ----------- -------- -------- ------------ ------------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
David Manigault, 1998 $244,242 $ 0 * 10,000 $ 0 $13,763(2)
Senior Vice President 1997 204,355 0 $24,562(3) 10,000 0 11,874
and Chief Information 1996 142,507 0 * 27,500 0 9,443
Officer
Aviva Truesdell, 1998 $160,477 $ 0 $20,808(4) 0 $ 0 $13,302(5)
Senior Vice President 1997 171,159 0 * 0 0 12,403
1996 150,921 0 * 20,000 0 10,094
Stephen W. Gamble, 1998 $159,423 $ 16,000 $ 3,341(6) 40,000(7) $ 0 $53,280(8)
Former Interim Chief
Executive Officer
Paul Chopra, 1998 $375,000 $ 0 * 65,000 $ 0 $19,179(10)
Former Chairman of the 1997 295,008 0 * 20,000 212,254 15,699
Board and Chief 1996 265,008 280,000(11) * 230,000 168,645 12,500
Executive Officer(9)
Sandy D. Morford, 1998 $256,645 $ 0 * 25,000 $ 0 $14,522(13)
Former President and 1997 288,838 0 $34,147(14) 10,000 0 13,735
Chief Operating 1996 257,880 0 * 37,500 0 12,800
Officer(12)
Haresh S. Satiani, 1998 $188,449 $ 10,000 $24,507(15) 0 $ 0 $10,158(16)
Former Senior 1997 193,929 0 * 0 0 7,623
Vice President (12) 1996 173,971 0 * 15,000 0 7,327
</TABLE>
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* In accordance with Securities and Exchange Commission regulations, "Other
Annual Compensation" is omitted for each executive officer who received no
such compensation or who received only perquisites and other personal
benefits, securities or property not exceeding the lesser of $50,000 or 10%
of such executive officer's total annual salary and bonus.
(1) The Executive Long-Term Incentive Plan (the "LTIP"), administered jointly
with Healthcare Association of Southern California, 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. Pursuant to the LTIP, $212,254 was
paid to Mr. Chopra in June 1996, at which time the LTIP terminated.
(2) Includes $563, $8,250 and $4,950 for the Company portion of term life
insurance premiums, the Company contribution to the pension plan and the
Company matching contribution to the 401(k) plan, respectively.
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<PAGE> 8
(3) Includes $17,307 for accrued vacation time and $7,255 for personal use of a
Company automobile.
(4) Includes $18,830 for accrued vacation time and $1,978 for personal use of a
Company automobile.
(5) Includes $1,782, $7,200 and $4,320 for the Company portion of term life
insurance premiums, the Company contribution to the pension plan and the
Company matching contribution to the 401(k) plan, respectively.
(6) Automobile allowance.
(7) Options granted to Mr. Gamble in his capacity as a non-employee director
prior to his appointment as interim Chief Executive Officer are not
included.
(8) Consulting fees paid to Mr. Gamble for strategic planning services.
(9) See the discussion of Mr. Chopra's employment agreement and the Standstill
Agreement described in the following section entitled "Employment
Agreements."
(10) Includes $4,779, $9,000 and $5,400 for the Company portion of term life
insurance premiums, the Company contribution to the pension plan and the
Company matching contribution to the 401(k) plan, respectively.
(11) Paid in fiscal 1997 for performance in fiscal 1996.
(12) Messrs. Morford and Satiani left the Company on June 2, 1998.
(13) Includes $1,122, $8,375 and $5,025 for the Company portion of term life
insurance premiums, the Company contribution to the pension plan and the
Company matching contribution to the 401(k) plan, respectively.
(14) Includes $24,230 for accrued vacation time, $6,451 for personal use of a
Company automobile and $3,466 in payments in excess of the maximum
permitted annual Company contributions to the Company's pension and 401(k)
plans.
(15) Includes $17,307 for accrued vacation time, $6,900 for an automobile
allowance and $300 in payments in excess of the maximum permitted annual
Company contributions to the Company's pension and 401(k) plans.
(16) Includes $808, $4,250 and $5,100 for the Company portion of term life
insurance premiums, the Company contribution to the pension plan and the
Company matching contribution to the 401(k) plan, respectively.
EMPLOYMENT AGREEMENTS
On January 1, 1996, Paul Chopra, the Company's then President and Chief
Executive Officer, entered into a five-year employment agreement with the
Company. The agreement is subject to earlier termination by Mr. Chopra or the
Company with or without cause (as cause is defined in the employment agreement).
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 stockholders. If Mr. Chopra is terminated by the
Company without cause, or Mr. Chopra terminates the agreement for cause, or if
the agreement is not renewed by the Company, or Mr. Chopra elects to terminate
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 (the "Severance Payment"). Change of control is defined in the
agreement as any person (other than an employee benefit plan of the Company or
Healthcare Association of Southern California) 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. Should any excise tax be
imposed under Section 4999 of the Internal Revenue Code for "excess parachute
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<PAGE> 9
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 to put Mr. Chopra in the same
after-tax position were no such excise tax paid or incurred.
In November of 1997, Mr. Chopra was replaced as the Chairman of the Board
and as the Chief Executive Officer of the Company. Mr. Chopra resigned as a
director of the Company effective July 17, 1997. Mr. Chopra has made a claim for
the Severance Payment under his Employment Agreement, but the Company has not
made any such payment. Effective as of April 3, 1998, Mr. Chopra and the Company
entered into a Standstill Agreement pursuant to which each party has agreed that
the passage of time will not waive or prejudice the rights of either of the
parties with respect to the termination of Mr. Chopra's employment or the
consequences thereof. Until the termination of the Standstill Agreement, the
Company will continue to pay the premiums on all medical and dental insurance
coverages for Mr. Chopra and his family, pay Mr. Chopra $10,000 per month and
the Company will continue to make the lease payments on his Company car. Except
as provided in the prior sentence, the Company is not obligated to make any
further payments, including the Severance Payment under the Employment
Agreement. The Standstill Agreement shall terminate on the earliest of 14 days
after either party gives written notice of termination or November 10, 1998, at
which time each party will have all rights and obligations it had as of the
effective date of the agreement.
The Company is a party to an employment agreement with Ms. Truesdell as
Senior Vice President effective as of March 1, 1998 (the "Truesdell Agreement").
Pursuant to the Truesdell Agreement, Ms. Truesdell is entitled to an annual base
salary of $144,000 and, at the discretion of the Board of Directors, an annual
bonus. The Truesdell Agreement terminates on February 28, 1999, except that on
February 28, 1999 the term shall be automatically extended for a one-year
period, unless no later than 30 days prior to such expiration date, either party
has provided notice that it does not wish to extend the Truesdell Agreement. If
during the term of the Truesdell Agreement, Ms. Truesdell's employment is
terminated for any reason, other than for cause, or she is permanently relocated
without her consent outside of the Greater Los Angeles area or her
responsibilities and salary are materially reduced and she resigns within three
months of notification of either of the foregoing and executes a mutual release,
she shall be entitled to receive severance benefits as follows -- she shall
receive a minimum of 12 months of base salary and continued health benefits,
although health benefit coverage shall terminate to the extent she is entitled
to such coverage by any subsequent employer. Ms. Truesdell has also agreed not
to solicit Company management to discontinue working for the Company for the
purpose of working for any subsequent employer of Ms. Truesdell which is a
competitor of the Company for a one year period after her termination of
employment.
OPTIONS
The following table sets forth information regarding grants of stock
options in the fiscal year ended March 31, 1998 to the named executive officers.
STOCK OPTION GRANTS IN 1998 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
OPTIONS ASSUMED ANNUAL RATES OF
NUMBER OF SHARES GRANTED TO STOCK PRICE APPRECIATION FOR
OF COMMON STOCK EMPLOYEES IN EXERCISE OPTION TERM (2)
UNDERLYING OPTIONS 1998 FISCAL PRICE EXPIRATION ------------------------------
NAME GRANTED YEAR(1) PER SHARE DATE 5% 10%
---- ------------------ ------------ --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
David Manigault....... 10,000 6.1% $19 5/8 07/29/07 $123,400 $ 312,900
Stephen W. Gamble..... 40,000(3) 24.2% $11 3/4 11/17/07 $296,000 $ 748,800
Paul Chopra........... 65,000 39.4% $19 5/8 07/29/07 $802,100 $2,033,850
Sandy D. Morford...... 25,000 15.2% $19 5/8 09/02/98(4) $308,500 $ 782,250
</TABLE>
- ---------------
(1) Total number of shares subject to options granted to employees in fiscal
1998 was 165,000, which excludes options granted to non-employee directors.
8
<PAGE> 10
(2) The Potential Realizable Value is calculated based on the fair market value
on the date of grant, which is equal to the exercise price of options
granted in fiscal 1998, assuming that the stock appreciates in value from
the date of grant until the end of the option term at the annual rate
specified (5% and 10%). Potential Realizable Value is net of the option
exercise price. The assumed rates of appreciation are specified in rules of
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of future stock price. Actual gains, if any,
resulting from stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall stock
market conditions, as well as the option holder's continued employment
through the exercise/vesting period. There can be no assurance that the
amounts reflected in this table will be achieved.
(3) Options granted to Mr. Gamble in his capacity as a non-employee director
prior to his appointment as interim Chief Executive Officer are not
included.
(4) Mr. Morford's option will expire 3 months from the date his employment with
the Company terminated.
The following table sets forth information regarding the exercise of stock
options by the named executive officers during the fiscal year ended March 31,
1998 and the value of unexercised options at the end of such fiscal year.
AGGREGATED OPTION VALUES AT MARCH 31, 1998
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT
AT MARCH 31, 1998 MARCH 31, 1998(1)
------------------- --------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
---- ------------------- --------------------
<S> <C> <C>
David Manigault............................. 22,938/17,562 $ 51,572/$ 7,366
Aviva Truesdell............................. 17,500/ 2,500 $ 50,312/$ 7,187
Stephen W. Gamble........................... 40,000/0(2) $0/$0
Paul Chopra................................. 191,875/88,125 $490,547/$70,078
Sandy D. Morford(3)......................... 41,563/30,937 $ 94,337/$13,478
Haresh S. Satiani(4)........................ 13,125/ 1,875 $ 37,734/$ 5,391
</TABLE>
- ---------------
(1) Based on the $11.875 closing price of the Company's Common Stock on The
Nasdaq Stock Market on March 31, 1998. The closing price of the Company's
Common Stock on July 14, 1998 was $5.50.
(2) Options granted to Mr. Gamble in his capacity as a non-employee director
prior to his appointment as Interim Chief Executive Officer are not
included.
(3) The vested and unvested portions of Mr. Morford's options to purchase 47,500
shares expired on July 2, 1998, 30 days after he left the Company. Mr.
Morford's remaining exercisable options will expire on September 2, 1998 if
not exercised on or before that date.
(4) Mr. Satiani's options expired on July 2, 1998, 30 days after he left the
Company.
REPORT OF THE COMPENSATION COMMITTEE REGARDING
OFFICER SALARIES IN FISCAL 1998
The Compensation Committee of the Board of Directors reviews and approves
base salaries, cash bonuses and other benefits payable to the Company's named
executive officers and administers the Company's 1995 Stock Option Plan and the
1996 Stock Option Plan. The Compensation Committee is intended to be comprised
of non-employee directors for the purposes of Rule 16b-3 under Section 16(b) of
the Securities and Exchange Act of 1934.
The philosophy used by the Compensation Committee in establishing
compensation for executive officers, including the Chief Executive Officer, is
to attract, motivate and retain qualified executives through the payment of
competitive base salaries and reward contributions toward company performance
and stockholder value through annual bonuses and stock ownership.
9
<PAGE> 11
The Compensation Committee believes that, because the Chief Executive
Officer is responsible for the overall operations of the Company, his
performance and pay should be based on the Company as a whole, determined
primarily by reference to the Company's operating results and net income, and
his contributions to the long-term success and stockholder value of the Company.
Adjustments to the Chief Executive Officer's salary are influenced accordingly.
In addition, the Compensation Committee believes that stock options and
ownership should be a significant aspect of the Chief Executive Officer's total
compensation potential and that his annual bonus should have a quantitative
component, based on such items as earnings per share and return on investment
and a qualitative component based on an assessment of the CEO's leadership
efforts to build the long-term economic value of the corporation, the degree of
difficulty encountered by management in building long-term value posed by
national and local economic conditions generally and other unforeseen
circumstances, the Committee's evaluation of the CEO's skill and judgment in
carrying out his assigned duties and the Company's own historic patterns of
remuneration compared with competitors' practices. The Compensation Committee
also considers the advice of compensation consultants.
Salaries of executive officers, other than the Chief Executive Officer,
have been established by the Chief Executive Officer within parameters discussed
with the Compensation Committee and are influenced by such factors as salaries
paid by similar companies for similar positions, the skills, training and
experience of the individual executive officer, the availability of persons with
similar abilities and historical remuneration levels. Grants of options to
executive officers, other than the Chief Executive Officer, are generally based
on recommendations of the Chief Executive Officer, also within the parameters
discussed with the Compensation Committee.
The companies that the Compensation Committee considers to be similar to
the Company for purposes of making comparisons of competitive remuneration are
principally companies in the medical equipment, supplies and services industry
and other comparable companies that provide services to hospitals, hotels and
other institutions.
The Compensation Committee has traditionally taken a conservative approach
to base salary increases, choosing to provide at risk incentive to executive
officers primarily through the Company's stock option plans. During the
transition period in which COHR had an interim CEO, the Compensation Committee
authorized employment agreements with five executive officers deemed important
to assure needed organizational stability to provide key management motivation
to contribute to the Company's success. Such agreements included salary
continuation in the event of certain termination events and cash incentives,
e.g., a retention bonus payable if the executive is still employed at certain
benchmark dates and a bonus tied to the Company's performance and the
performance of the executive's division. In certain instances, the base salaries
were also increased. The increased salaries were deemed appropriate based upon
comparisons to comparable executive positions at similar organizations and
recognizing the need to offer an incentive to enter into an employment agreement
and thereby retain the services of these key executives.
Options are granted under the Company's 1995 Stock Option Plan and 1996
Stock Option Plan in order to give key managerial employees and non-employee
members of the Company's Board of Directors a stake in the long-term success of
the Company. Awards to executive officers are made from time to time within the
discretion of the Compensation Committee. Factors considered by the Compensation
Committee in determining the timing of grants under the plans and the number of
shares subject thereto are similar to the factors considered by the Compensation
Committee as described above in adjusting base salaries.
The Compensation Committee considers a variety of factors in making
determinations with respect to executive compensation, including the potential
future effects of Section 162(m) of the Internal Revenue Code of 1986, as
amended, which limits the deductibility by corporations of executive
compensation in excess of $1 million per executive per year. The Company
believes that the 1995 Stock Option Plan qualifies for a temporary exemption
from Section 162(m) until the earlier to occur of the year 2000 or a material
modification of the 1995 Stock Option Plan. The Company therefore believes that
the options granted under the 1995 Stock Option Plan should not be subject to
Section 162(m)'s deductibility limits. The Company also believes that the
options that have been or will be granted under the 1996 Stock Option
10
<PAGE> 12
Plan should not be subject to the Section 162(m) deductibility limit. The
non-equity based compensation paid to the Chief Executive Officer and the four
highest paid other executive officers in fiscal 1998, and expected to be paid in
fiscal 1999, does not exceed $1 million for any individual. The Compensation
Committee is intended to be comprised of outside directors for the purposes of
Section 162(m) of the Internal Revenue Code of 1986, as amended.
By the Committee:
Frederick C. Meyer
Louis A. Simpson
COMPARISON OF STOCKHOLDER RETURN ON INVESTMENT
The following graph compares the cumulative total stockholder return on a
$100 investment in the Common Stock of the Company from February 16, 1996, the
first day of trading of the Company's Common Stock on The Nasdaq Stock Market,
through March 31, 1998 (the "Measurement Period") with the cumulative total
return (assuming reinvestment of dividends) of a $100 investment in (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 and consisting of those companies specified
below.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE
COMPANY, THE RUSSELL 2000 INDEX AND PEER GROUP COMPANIES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) COHR INC. PEER GROUP RUSSELL 2000 INDEX
<S> <C> <C> <C>
2/16/96 100.00 100.00 100.00
3/31/96 120.37 102.00 102.04
3/31/97 170.37 97.02 107.25
3/31/98 87.96 156.55 152.28
</TABLE>
Peer Group: Innoserv Technologies, Inc., The ServiceMaster Company, Olsten
Corporation, Transcend Services, Inc. and Steris Corporation.
As used in the foregoing table, the cumulative total stockholder return on
the Common Stock of the Company is measured by dividing 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. The Company did not pay
dividends during the Measurement Period.
11
<PAGE> 13
PROPOSAL ONE:
ELECTION OF DIRECTORS
NOMINEES
Pursuant to the terms of the Certificate of Incorporation of the Company,
the Board of Directors is divided into three classes. One class (Messrs. Gamble,
Messenger and Simpson) holds office for a term expiring at the Annual Meeting, a
second class (Messrs. Reitnouer and Ritterbush) holds office for a term expiring
at the annual meeting of stockholders to be held in 1999 and a third class
(Messrs. Barber, Meyer and List) holds office for a term expiring at the annual
meeting of stockholders to be held in 2000. At each annual meeting of
stockholders of the Company, the successors to the class of directors whose
terms expire at such meeting will be elected to hold office for a term expiring
at the annual meeting of stockholders held in the third year following the year
of their election. It is intended that the proxies received will be voted for
election of Messrs. Gamble, Messenger and Simpson 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. Each
of the three directors elected at the Annual Meeting shall hold office until the
2001 annual meeting and until his successor is elected and qualified.
<TABLE>
<CAPTION>
YEAR FIRST BECAME
CURRENT BOARD OF DIRECTORS A DIRECTOR
-------------------------- -----------------
<S> <C>
James D. Barber, 43 1990
President and Chief Executive Officer since 1994 and
Executive Vice President and Chief Operating Officer (1989
to 1994) of Healthcare Association of Southern California
Stephen W. Gamble, 68 1984
Interim Chief Executive of the Company (November 1997 to
June 1998); Chairman of the Board of the Company (1984 to
1994); Chief Executive Officer of Healthcare Association
of Southern California (1977 to 1994)
Raymond E. List, 54 1998
President, Chief Executive Officer and Director of the
Company since June 1998; one of two Managing General
Partners of the partnership that serves as the general
partner of Fairfax Partners/The Venture Fund of
Washington, L.P., an investment and management firm since
1995; a managing member of Fairfax Management Co. II, LLC,
a venture capital firm, since 1996; various senior
management positions with ICF Kaiser Engineers and others
for approximately twenty years, including President of ICF
Kaiser Engineers from 1989 to 1994. A Director of Ensec.
International, Inc.
Ronnie J. Messenger, 53 1984
Retired; Secretary and Treasurer of the Company (1995 to
1996); Director (1992 to present), President and Chief
Executive Officer (1992 to 1997) and President and Chief
Operating Officer (1984 to 1992) of Paracelsus Healthcare
Corporation, an owner and operator of hospitals and
healthcare systems
Frederick C. Meyer, 58 1988
President and Chief Executive Officer (since 1995) and
Chief Operating Officer (1992 to 1995) of Southern
California Healthcare Systems, an owner and operator of
hospitals, medical groups and ancillary services;
President and Chief Executive Officer of Methodist
Hospital of Southern California (1985 to 1992); Director
of CEC Properties Inc.
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
YEAR FIRST BECAME
CURRENT BOARD OF DIRECTORS A DIRECTOR
-------------------------- -----------------
<S> <C>
Lynn P. Reitnouer, 65 1985
Chairman of the Board of the Company (since November 1997
and 1995-1996); partner, Crowell, Weedon & Co., an
investment banking firm, since 1969; Director of Hollywood
Park, Inc.; Governor of the National Association of
Securities Dealers, Inc. (1986 to 1989); President (since
1985) and Director (since 1975) of Forest Lawn Memorial
Park Association, a privately held company
Stephen W. Ritterbush, 51 1998
A venture capitalist, including since 1989 as one of two
Managing General Partners of the partnership that serves
as the general partner of Fairfax Partners/The Venture
Fund of Washington, L.P., an investment and management
firm and, since 1996, a managing member of Fairfax
Management Co. II, LLC; Director of CollaGenex
Pharmaceuticals, Inc.
Louis A. Simpson, 61 1995
President and Chief Executive Officer, Capital Operations
(since 1993) of GEICO Corporation and Vice Chairman of the
Board (1985 to 1993) of GEICO Corporation; Director of
Potomac Electric Power Company, MediaOne Group, Inc.,
Pacific American Income Shares and Western Asset Trust,
Inc.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
There were 14 meetings of the directors during the fiscal year ended March
31, 1998. Each director, except Paul Chopra, attended at least 75% of the
aggregate number of the meetings of the Board of Directors and Committees.
The Company's Compensation Committee had 9 meetings during the fiscal year
ended March 31, 1998. 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 and review salary parameters with the Chief Executive
Officer for other executive officers. The Compensation Committee also
administers the Company's 1995 Stock Option Plan and 1996 Stock Option Plan.
Messrs. Meyer and Simpson constitute the membership of the Compensation
Committee. Mr. Matsuura, who was a member of the Compensation Committee,
resigned as a director on May 22, 1998.
The Company's Audit Committee had two meetings during the fiscal year ended
March 31, 1998. 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 and Meyer. Mr. Matsuura, who
was a member of the Audit Committee, resigned as a director on May 22, 1998.
The Company does not have a nominating committee.
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 owned approximately 12.5% of the Company's Common Stock as
of July 10, 1998. The member organizations of HASC have been substantial
consumers of the Company's products and services; HASC derives no direct payment
or benefit from the transactions between the members and the Company by virtue
of such membership relationship. HASC and the Company have shared administrative
services since 1976 and shared corporate offices from 1976 until September 1996.
In anticipation of the Company moving its corporate office and certain
operations to separate facilities in September 1996, HASC and the Company
entered into a three-year administrative services agreement, terminable on
ninety days' notice. This agreement provided that HASC will pay the
13
<PAGE> 15
Company a fee for specified administrative services to be provided by the
Company, including accounting and finance, human resources and certain office
services support. This fee is subject to annual adjustment by the cost of living
index. In fiscal 1998, this fee was $311,000. HASC has notified the Company of
its intention to terminate this agreement and the parties have agreed to
continue certain of such services on a month to month basis until HASC
transitions to a new provider of such administrative services.
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. Reitnouer is a partner of Crowell, Weedon & Co., an investment banking
firm, which performed services for the Company during the fiscal year ended
March 31, 1998. The amount of compensation received by Crowell, Weedon & Co. for
such services did not exceed five percent of its consolidated gross revenues for
its last full fiscal year.
CERTAIN LEGAL PROCEEDINGS
The Company, certain of its present and former officers and directors and
others are named as defendants in four purported class action lawsuits which
allege, among other things, false and misleading statements in various public
disclosures in violation of federal and/or state securities laws. Sherleigh
Associates Inc. Profit Sharing Plan v. Cohr, Inc. et al. (Case No. 98-3028 JSL)
was filed in the United States District Court for the Central District of
California on or about April 21, 1998. Zabronsky et al. v. Cohr, Inc. et al.
(Case No. 98-3493 JSL) was filed in the same court on May 6, 1998. Bird v. Cohr,
Inc. et al. (Case No. 98-4177 WMB) was filed in the same court on May 27, 1998.
Leeds v. Malhotra et al. (Case No. BC198490) was filed in the Superior Court of
the State of California, Los Angeles County, on April 16, 1998. The plaintiffs
in each action seek to represent a class of purchasers of the Company's common
stock during various time periods between 1996 and 1998.
The plaintiffs in each of the three federal actions filed in the United
States District Court for the Central District of California assert claims of
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
and of certain regulations promulgated thereunder. The plaintiffs in each of the
three federal actions seek unspecified compensatory damages, interest, attorneys
fees and costs, and injunctive and/or other relief as permitted by law. The
plaintiff in the action filed in California Superior Court asserts claims of
violations of California Corporations Code Sections 25400 and 25500. The
plaintiff in that action seeks unspecified compensatory damages, interest,
attorneys fees and costs, and injunctive and/or other relief as permitted by
law. No class has been certified in any of these actions.
A shareholder of the Company has brought a derivative lawsuit purportedly
on behalf of the Company, alleging breaches of fiduciary duty and related
claims, and naming certain of its present and former officers and directors as
defendants, with the Company as a nominal defendant. This action, which is
entitled Schug v. Chopra et al. (Case No. BC190933) was filed in the Superior
Court for the State of California, Los Angeles County, on May 12, 1998. The
shareholder-plaintiff seeks unspecified compensatory and punitive damages,
disgorgement of profits and gains, attorneys fees and costs, injunctive relief,
and other relief as permitted by law.
The Securities and Exchange Commission (the "SEC") is conducting an
investigation relating to the Company. The Company understands that the
investigation relates to, among other things: (1) the accuracy of the Company's
financial statements and periodic filings with the SEC; (2) the accuracy of the
Company's books and records; (3) the adequacy of the Company's system of
internal accounting controls; and (4) trading of the Company's securities by
certain present or former officers, directors, or employees, or other persons.
The Company intends to cooperate fully with the SEC's investigation.
Management is unable to predict at this time the final outcome of the
matters described above or whether the resolution of such matters will
materially affect the Company's results of operations, cash flows or financial
position.
14
<PAGE> 16
DIRECTORS' COMPENSATION
The Company pays an annual fee of $12,000 to its directors who are not
employees or officers of the Company. The Company's policy is that directors who
are employees or officers of the Company are not paid directors fees. Mr. Chopra
did not receive a fee for serving as Chairman of the Board. During the fiscal
year ended March 31, 1998, in addition to receiving the directors fees described
above, Mr. Reitnouer received $122,500 for serving as Chairman of the Board. The
Company also reimburses directors for expenses incurred in connection with their
activities on behalf of the Company. In addition, each non-employee director
receives $1,000 for attending each meeting of the Board of Directors or a
committee thereof. Directors also participated in the 1995 Stock Option Plan of
the Company and are entitled to participate in the 1996 Stock Option Plan. Each
non-employee director was granted options under the 1995 Stock Option Plan to
purchase 2,500 shares of Common Stock on the first and second anniversary dates
of the effective date of the Company's initial public offering (February 22,
1996). Each non-employee director was granted options under the 1996 Stock
Option Plan, exercisable after six months from the date of grant, to purchase
5,000 and 10,000 shares of Common Stock. Mr. Reitnouer was granted an option
under the 1996 Stock Option Plan to purchase 30,000 shares of Common Stock in
lieu of the grant to purchase 10,000 shares. Such options have vested. See the
table above entitled "Stock Option Grants in 1998 Fiscal Year" regarding grants
made to Mr. Gamble in his capacity as interim Chief Executive Officer.
During the 1998 fiscal year, prior to his appointment as Interim Chief
Executive Officer and President, Stephen W. Gamble performed consulting services
for the Company from time to time. Such services primarily related to strategic
planning. The aggregate remuneration for consulting services paid to Mr. Gamble
in fiscal 1998 was $53,280.
VOTING; RECOMMENDATION OF BOARD OF DIRECTORS
As permitted by Delaware law, the Bylaws of the Company provide that no
stockholder may cumulate votes, that is, cast for any one or more candidates a
number of votes greater than the number of the stockholder's shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH
HEREIN.
15
<PAGE> 17
PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Executive Committee, the Board of Directors has
selected Deloitte & Touche LLP, independent public accountants, to audit the
financial statements of the Company for the fiscal year ending March 31, 1999.
A representative of Deloitte & Touche LLP is expected to attend the annual
meeting, will have an opportunity to make a statement if he or she desires to do
so and is expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE LLP.
OTHER MATTERS
The directors know of no other matters to be presented for action at the
Annual Meeting. As to any matter which may properly come before the Annual
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
Daniel F. Clark
Chief Financial Officer,
Executive Vice President,
Finance and Secretary
July 24, 1998
Chatsworth, California
16
<PAGE> 18
PROXY
COHR INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS AUGUST 14, 1998
The undersigned stockholder of COHR Inc., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated July 24, 1998, and hereby appoints Raymond E. List
and Lynn P. Reitnouer, and each of them individually, proxy and
attorney-in-fact, with full power of substitution, on behalf and in the name of
the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of COHR Inc., to be held on August 14, 1998, at 11:00 a.m., local
time, at the corporate offices of COHR Inc. at 21540 Plummer Street, Chatsworth,
California and at any adjournment(s) or postponement(s) thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED ON THE
REVERSE SIDE AND FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE,
LLP AS INDEPENDENT PUBLIC ACCOUNTANTS AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING. IF ANY NOMINEE FOR DIRECTOR IS
UNABLE OR UNWILLING TO SERVE OR IS OTHERWISE UNAVAILABLE, SAID PROXIES 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.
Either of such attorneys or substitutes shall have and may exercise all
of the powers of said attorneys-in-fact hereunder.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
<PAGE> 19
Please mark
your votes as
indicated in
this example.
/X/
WITHHELD
FOR FOR ALL
1. ELECTION OF DIRECTORS / / / /
Nominees: Stephen W. Gamble,
Ronnie J. Messenger,
Louis A. Simpson
WITHHELD FOR: (Write that nominee's name in the space provided below.)
_______________________________________________________________________
FOR AGAINST ABSTAIN
/ / / / / /
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE &
TOUCHE LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31,
1999
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ACCOMPANYING
ENVELOPE.
SIGNATURE(S) _________________________________________ DATE __________________
NOTE: Please sign exactly as your name appears on this proxy. If signing for an
estate, trust or corporation, your title and capacity should be stated. If
shares are held jointly, each holder should sign.
FOLD AND DETACH HERE
