<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Intensiva HealthCare Corporation
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
INTENSIVA
HEALTHCARE
Intensiva HealthCare Corporation
7733 Forsyth Boulevard, Suite 800
St. Louis, Missouri 63105
April 17, 1998
To the Stockholders of Intensiva HealthCare Corporation:
You are cordially invited to attend the Intensiva HealthCare
Corporation 1998 Annual Meeting of Stockholders, to be held on Friday, May 22,
1998. The meeting will begin promptly at 10:00 a.m. central daylight savings
time at 7733 Forsyth Boulevard, Second Floor, St. Louis, Missouri.
The matters to be acted on at the meeting are described in detail in
the attached official Notice of the Annual Meeting of Stockholders and Proxy
Statement. Company officers will present reports and stockholders will have an
opportunity to ask questions of general interest. Also enclosed is a copy of the
Company's Annual Report to Stockholders for the fiscal year ended December 31,
1997.
THE VOTE OF EVERY STOCKHOLDER IS IMPORTANT. Your prompt cooperation in
immediately signing and returning your Proxy will be greatly appreciated, and
may save additional solicitation expenses. Please note that returning your
completed Proxy will not prevent you from voting in person at the meeting if you
wish to do so. You may use the enclosed self-addressed stamped envelope to
return your Proxy.
Sincerely,
David W. Cross
President and Chief Executive Officer
<PAGE> 3
INTENSIVA HEALTHCARE CORPORATION
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
April 17, 1998
To the Stockholders of Intensiva HealthCare Corporation
Notice is hereby given that the 1998 Annual Meeting of Stockholders of
Intensiva HealthCare Corporation, a Delaware corporation, will be held on
Friday, May 22, 1998, at 10:00 a.m., at 7733 Forsyth Boulevard, Second Floor,
St. Louis, Missouri.
The Board of Directors has fixed the close of business on April 1, 1998
as the record date for determination of stockholders of the Company entitled to
receive notice of and to vote at the 1998 Annual Meeting of Stockholders. The
following items, described in the attached Proxy Statement, will be on the
agenda:
1. To elect two persons as Class II Directors, each to serve a
three-year term expiring at the Annual Meeting of Stockholders
to be held in 2001;
2. To amend the Intensiva HealthCare Corporation Stock Option
Plan to increase the number of shares which can be issued
under such plan from 785,400 shares to 1,285,400 shares.
3. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company; and
4. To transact such other business as may properly come before
the meeting.
So far as management is aware, no business is expected to come before
the Annual Meeting of Stockholders other than the matters described as items 1,
2, and 3 above.
By order of the Board of Directors
David W. Cross
President and Chief Executive Officer
<PAGE> 4
INTENSIVA HEALTHCARE CORPORATION
1998 ANNUAL MEETING OF STOCKHOLDERS
April 17, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Intensiva HealthCare
Corporation (the "COMPANY") for the Company's 1998 Annual Meeting of
Stockholders, scheduled to be held on May 22, 1998, and any adjournments thereof
(the "ANNUAL MEETING"). Only holders of record of common stock (the only class
of stock of the Company issued and outstanding) at the close of business on
April 1, 1998 (the "RECORD DATE"), are entitled to notice of and to vote at this
meeting. As of the close of business on April 1, 1998, there were 9,969,045
shares of common stock issued and outstanding and entitled to vote.
Stockholders are not entitled to vote cumulatively for the election of
directors. Each stockholder is entitled to a number of votes for the election of
Directors equal to the number of shares held by such stockholder multiplied by
the number of Directors to be elected, but may cast no more votes for any one
nominee than is equal to the number of shares held by the Stockholder. On all
other matters, the stockholders are entitled to one vote per share. Proxies for
shares marked "abstain" and broker non-votes will be considered represented at
the meeting but not voted; shares held in "street name" by brokers and others
for which Proxies are voted on some but not all matters will be considered
represented at the meeting but voted only as to those matters actually marked on
the Proxy.
If you sign and return the enclosed Proxy, the shares represented
thereby will be voted FOR the two nominees for director positions listed under
the heading "Nominees for Class II Directors" and FOR the proposals to amend the
Intensiva HealthCare Corporation Stock Option Plan to increase the number of
shares available for issuance under such plan to 1,285,400 shares and to ratify
the appointment of KPMG Peat Marwick LLP as independent auditors of the Company,
unless otherwise indicated on the Proxy.
Although it is not anticipated that any nominee will not serve as a
Director, or be unable to serve as a Director if elected, in either such event
the Proxies will be voted for such other person or persons as may be designated
by the Board of Directors. Returning your completed Proxy will not prevent you
from voting in person at the meeting should you be present and wish to do so.
Proxies may be revoked by sending written notice of revocation to the Secretary
of the Company, or by signing and delivering a later dated Proxy, or, if you
attend the Annual Meeting in person, by voting at the Annual Meeting. Merely
attending the Annual Meeting will not constitute revocation of your Proxy. You
may revoke your Proxy at any time before it is voted.
Directors, officers, and other employees of the Company may solicit
Proxies by personal interview, telephone, facsimile transmission, and telegram
in addition to the use of the mails. The Company will request persons, such as
brokers, nominees, and fiduciaries holding stock in their name for others, or
holding stock for others who have the right to give voting instructions, to
forward proxy materials to their principals and request authority for the
execution of the Proxy and the Company will reimburse them for reasonable
out-of-pocket expenses in so doing. The total cost of soliciting Proxies will be
borne by the Company.
Proxy Statement Page 1
<PAGE> 5
The Company's principal corporate offices are located at 7733 Forsyth
Boulevard, Suite 800, St. Louis, Missouri 63105. This Proxy Statement and the
enclosed form of Proxy were first mailed to stockholders on or about April 17,
1998.
I. ELECTION OF DIRECTORS
The Board of Directors consists of seven persons. In accordance with
the Company's Certificate of Incorporation and By-laws, Directors are divided
into three classes, and the number of Directors in each class is to be as nearly
equal as possible. Thus, each of Class II and Class III is composed of two
persons and Class I is composed of three persons. The term of office for a
Director position is three years (except that to put into effect the
classification of the Board of Directors in 1996, Directors then designated as
Class I Directors served an initial term of one year and Directors designated as
Class II Directors are serving an initial term of two years). At each Annual
Meeting of Stockholders one class of Directors is to be elected to a three-year
term. Class II Directors will be elected at the 1998 Annual Meeting of
Stockholders.
The names of the nominees, as recommended by the Board of Directors,
and the names of the Directors whose terms will continue after the Annual
Meeting, are listed below. Shares represented by a properly executed Proxy in
the accompanying form will be voted for the two nominees listed below unless
otherwise directed. Should any nominee(s) become unavailable for any reason
before the election, the Proxy will be voted for substitute nominee(s) to be
selected by the Board of Directors of the Company, unless authority to vote for
all of the nominees is withheld.
Set forth under the heading "Security Ownership of Management" is a
table setting forth the beneficial ownership of the Company's common stock of
each Director, certain executive officers, persons known to the Company to
beneficially own five percent or more of the Company's outstanding common stock,
and all Directors and executive officers as a group. No family relationships
exist between any of the nominees, the other Directors, or any of the executive
officers of the Company.
The Board of Directors has nominated the following persons to be
elected as Class II Directors at the 1998 Annual Meeting of Stockholders:
David W. Cross
Jeffrey J. Collinson
The two nominees receiving the highest number of votes will be elected
as Class II Directors. Cumulative voting will not apply for this election. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES AND
PROXIES WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
Page 2 Proxy Statement
<PAGE> 6
INFORMATION ABOUT THE DIRECTORS
DIRECTORS NOMINATED FOR RE-ELECTION IN CLASS II:
DAVID W. CROSS: 51, President, Chief Executive Officer, and Director of the
Company.
Mr. Cross is a founder of the Company and has served as President and
Chief Executive Officer and as a Director since the Company's inception
in 1994. Prior to founding the Company, Mr. Cross was a founder, the
President and Chief Executive Officer, and a Director of Advanced
Rehabilitation Resources, Inc., serving in each of these capacities
from 1990 to 1993. From 1987 to 1990, he was Senior Vice President of
Business Development for RehabCare Group, Inc., a publicly traded
rehabilitation care company, and in 1993 and 1994 served as Executive
Vice President and Chief Development Officer of RehabCare Group, Inc.
Mr. Cross currently serves on the Board of Directors of Odyssey
HealthCare, Inc., a hospice health care company, and he is a Trustee
and President of the Long Term Acute Care Hospital Association of
America, a trade association. Mr. Cross holds a B.A.
from the University of California at Fullerton.
JEFFREY J. COLLINSON: 56, Director of the Company.
Mr. Collinson has served as a Director of the Company since December
1994. Since 1990, Mr. Collinson has served as President of Collinson
Howe Venture Partners, Inc., (formerly named Schroder Venture Advisors,
Inc.), a venture capital management firm, and from 1983 to 1990, was
President of Schroder Venture Managers, Inc., a venture capital firm.
Mr. Collinson is also a director of Incyte Pharmaceuticals, Inc.,
Neurogen Corporation, and Spare, Kaplan, Bischel & Associates.
CONTINUING DIRECTORS
CLASS III DIRECTORS. The terms of the Class III Directors are
scheduled to expire at the 1999 Annual Meeting of Stockholders. The Class III
Directors are:
WILFRED E. JAEGER, M.D.: 42, Director of the Company.
Dr. Jaeger has served as a Director of the Company since December 1994.
Dr. Jaeger is a founding General Partner of the lead venture capital
investor in the Company, Three Arch Partners, a venture capital firm
that focuses exclusively on health care investments. Prior to joining
Three Arch Partners in 1993, he was a partner at Schroder Venture
Advisors, Inc. from 1992 to 1993. From 1991 to 1992, Dr. Jaeger was an
Associate and then General Partner of The Phoenix Partners, a venture
capital firm. Dr. Jaeger received his medical degree from the
University of British Columbia in Vancouver, Canada. He practiced
medicine for six years before earning an M.B.A. from Stanford
University. Dr. Jaeger is also a director of Cell Therapeutics, Inc.,
Prolific Medical, Inc., Spinal Dynamics Corp., Transvascular, Inc.,
Uros Corporation, and Radiant Medical, Inc.
Proxy Statement Page 3
<PAGE> 7
DAVID L. STEFFY: 54, Director of the Company.
Mr. Steffy is a founder of the Company and has served as a Director
since its inception in 1994. From 1985 to 1996, Mr. Steffy was Vice
Chairman and a Director of Community Health Systems, a company he
co-founded. From 1979 to 1985, he held management positions and was a
co-founder of Republic Health Corporation as well as a senior manager
of Hospital Affiliates International. Until 1979, Mr. Steffy served as
Director, Hospital Administration of the Ohio State University. Mr.
Steffy also serves as a director of Province Healthcare, Inc., Odyssey
Healthcare, Inc., and Arcadian Healthcare Management, Inc.
CLASS I DIRECTORS. The terms of the Class I Directors are scheduled
to expire at the 2000 Annual Meeting of Stockholders. The Class I Directors
are:
PHILLIP M. NUDELMAN, PH.D.: 62, Director of the Company.
Dr. Nudelman has served as a Director of the Company since June 1996.
Since 1991, Dr. Nudelman has served as Chairman and President of
Kaiser/Group Health, a not-for-profit managed healthcare system with
10,000 employees that provides health care services to over 650,000
people. Dr. Nudelman joined Kaiser/Group Health in 1973, and has served
in various senior level positions. Dr. Nudelman serves on the
President's Advisory Commission on Consumer Protection and Quality in
the Health Care Industry, serves on the boards of SpaceLabs Medical,
Inc., Advanced Technology Laboratories, Inc., Cell Therapeutics, Inc.,
and Cytran, Inc., and served on the White House Task Force on
Healthcare Reform. He holds degrees in microbiology and pharmacy from
the University of Washington and an M.B.A. and a Ph.D. in Health
Systems Management from Pacific Western University.
JAMES B. TANANBAUM, M.D.: 34, Director of the Company.
Dr. Tananbaum has served as a Director of the Company since December
1994. Since 1993, Dr. Tananbaum has served as a venture partner with
Sierra Ventures, a leading venture capital firm. From 1991 to 1993, Dr.
Tananbaum held various executive positions with Merck, Inc. From 1997
to present, Dr. Tananbaum has served as President and Chief Executive
Officer of Advanced Medicine, Inc. Dr. Tananbaum is also a co-founder
and Director of GelTex Pharmaceuticals, Inc., a biopolymer
pharmaceutical company. Dr. Tananbaum is the founding Chairman of
Orange Coast Managed Care Services, a physician practice management
company in Southern California (acquired by FPAM). Dr. Tananbaum also
serves as a director of NovaMed Eyecare Management, Inc. and Orange
Coast Managed Care Services, Inc. Dr. Tananbaum holds a medical degree
from Harvard Medical School, an M.B.A. from Harvard Business School,
and a B.S.E.E. and B.S. from Yale University.
MICHAEL R. HOGAN: 44, Director of the Company.
Mr. Hogan was appointed as a Director of the Company on May 23, 1997.
Since January 1996, Mr. Hogan has served as Controller of Monsanto
Company. Prior to joining Monsanto, Mr. Hogan served as an Executive
Vice President of General American Life Insurance Company from 1986
until 1996.
Page 4 Proxy Statement
<PAGE> 8
COMMITTEES
The Board of Directors has two standing committees: an Audit Committee
and a Compensation Committee. The Audit Committee has general responsibility for
supervision of financial controls as well as accounting and audit activities of
the Company. The Audit Committee annually reviews the qualifications of the
Company's independent certified public accountants, makes recommendations to the
Board of Directors concerning the selection of the accountants, and reviews the
planning, fees, and results of the accountants' audit. The Compensation
Committee has the authority to (i) administer the Company's stock option plan,
including the selection of optionees and the timing of option grants, and (ii)
review and monitor key employee compensation and benefits policies and
administer the Company's management compensation plans. The current members of
the Audit Committee are Jeffrey J. Collinson, David L. Steffy, and Dr. Wilfred
E. Jaeger. The current members of the Compensation Committee are David L.
Steffy, Dr. Wilfred E. Jaeger, and Dr. James B. Tananbaum.
BOARD AND COMMITTEE MEETINGS
All of the current Directors attended at least 75 percent of the
aggregate of all Board of Directors meetings and committee meetings (of which
such Directors were members) during the fiscal year ended December 31, 1997,
that were held during the period he served on the Board and/or committee.
Michael R. Hogan became a Director in May 1997 and attended all of the meetings
held after his appointment. There were four Board of Directors meetings held
during the fiscal year ended December 31, 1997.
COMPENSATION OF DIRECTORS
All non-employee Directors are entitled to elect to receive cash
compensation for their services or to be paid in stock options pursuant to the
Intensiva HealthCare Corporation Directors Stock Option Plan ("DIRECTORS PLAN").
Directors who elect cash compensation are paid $2,500 for each board meeting
attended. Directors who elect to be compensated under the Directors Plan are
entitled to receive options to acquire 10,000 shares of the Company's common
stock in lieu of cash compensation during each year that they serve as
Directors. The exercise price of options granted under the Directors Plan is the
fair market value of shares of the Company's common stock on the date such
options were granted. Options granted under such plan are not exercisable until
the end of the sixth month following their grant at which time options to
purchase one-fourth of the shares of common stock subject to the option become
exercisable. Thereafter, options to purchase an additional one-twenty-fourth of
the shares of common stock subject to the option become exercisable each month
until all such options are exercisable. Notwithstanding the foregoing, if at any
time a director who holds options under the plan ceases to be a member of the
Company's Board of Directors, any options granted to such person which have not
become exercisable prior to the time such person ceases being a director shall
immediately terminate and be null and void. Directors who elect to be
compensated under the Directors Plan must participate in such plan for a period
of at least two years.
COMPENSATION COMMITTEE REPORT
The purpose of a compensation committee is to consider the levels and
components of executive compensation relative to those generally available in
its marketplace in the context of the overall long-term objectives of the
Company and its stockholders. By maintaining appropriate
Proxy Statement Page 5
<PAGE> 9
balance in these factors, the Compensation Committee believes that it will be
most effective in attracting and retaining well-qualified executives who will be
capable of contributing to the success of the Company.
The paramount objective of the Company is building the long-term value
of the stockholders' investment within the framework of operating the Company in
a safe and sound manner. This is accomplished by achieving substantial
improvements and consistency in earnings and strengthening the Company's
presence in new markets. Consequently, the compensation of executives should be
structured to attract individuals capable of contributing to the achievement of
these objectives and to align the welfare of those individuals with that of the
stockholders.
The Compensation Committee periodically reviews the various components
of the Company's executive compensation programs as outlined below:
Base Salary. In determining the appropriate base salaries of its
executive officers, the Compensation Committee evaluates the performance of the
Company, considering general business and industry conditions, among other
factors, and the contributions of specific executives toward that performance.
The Compensation Committee also evaluates each officer's areas of responsibility
and the Company's performance in those areas. Finally, the Compensation
Committee considers the level of compensation paid comparable executives by
other companies of comparable size in its industry and marketplaces.
Bonus. The Compensation Committee may elect to award bonuses to
selected executive officers based largely upon the same criteria as the
evaluations of base salaries, emphasizing the need to maintain competitive
compensation packages and the desire to recognize outstanding performance by the
officers.
Stock Option Program. The Compensation Committee recognizes that one
way to align the interests of the Company's senior employees with those of its
stockholders is the encouragement of ownership of the Company stock through
stock options granted under its Employee Stock Option Plan. Under this plan,
senior employees are eligible to receive stock options from time to time, giving
them the right to purchase shares of Common Stock of the Company at a specified
price in the future.
STOCK OWNERSHIP AND TRADING REPORTS
To the Company's knowledge, based solely upon the Forms 3 (Initial
Statement of Beneficial Ownership of Securities), Forms 4 (Statement of Changes
in Beneficial Ownership), and Forms 5 (Annual Statement of Changes in Beneficial
Ownership) filed with the Company, no persons failed to file any such form in a
timely manner.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of shares of the Company's outstanding Common Stock as of
April 1, 1998, by (i) each person known by the Company to be the beneficial
owner of more than 5 percent of the outstanding shares of Common Stock, (ii)
each Director or executive officer of the Company, and (iii) all Directors and
executive
Page 6 Proxy Statement
<PAGE> 10
officers of the Company as a group. Except as otherwise indicated, the persons
listed below have sole voting and investment power with respect to all shares of
Common Stock owned by them, except to the extent such power may be shared with a
spouse.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
---------------------------
BENEFICIAL OWNER NUMBER PERCENT(1)
- ---------------- ------ ----------
<S> <C> <C>
Sierra Ventures(2) 1,498,744 15.03%
300 Sand Hill Road
Building Four, Suite 210
Menlo Park, California 94025
James B. Tananbaum, M.D.(3) 1,503,869 15.09%
Schroder(4) 780,994 7.83%
c/o Collinson Howe Venture Partners, Inc.
1055 Washington Boulevard
Stamford, Connecticut 06901
Jeffrey J. Collinson(5) 789,119 7.92%
Weiss, Peck & Greer(6) 715,831 7.18%
555 California Street
Suite 4760
San Francisco, California 94111
Funds Affiliated with Burr, Egan, 751,156 7.53%
DeLeage & Co.(7)
One Embarcadero Center
Suite 4050
San Francisco, California 94111
Three Arch(8) 942,781 9.46%
2800 Sand Hill Road
Suite 270
Menlo Park, California 94025
Wilfred E. Jaeger, M.D.(9) 945,906 9.49%
Mayfield(10) 1,208,233 12.12%
2800 Sand Hill Road
Menlo Park, California 94025
David L. Steffy(11) 360,412 3.62%
Michael R. Hogan(12) 10,625 (17)
</TABLE>
Proxy Statement Page 7
<PAGE> 11
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
---------------------------
BENEFICIAL OWNER NUMBER PERCENT(1)
- ---------------- ------ ----------
<S> <C> <C>
Phillip M. Nudelman(13) 25,125 (17)
David W. Cross(14) 331,737 3.33%
John R. Lewis(15) 342,237 3.43%
John P. Keefe(16) 71,974 (17)
All Directors and Executive Officers 4,381,004 43.95%
(11 persons)
</TABLE>
- -------------
(1) Pursuant to rules of the Securities and Exchange Commission certain
shares of Common Stock which a person has the right to acquire within
60 days pursuant to the exercise of stock options are deemed to be held
and to be outstanding for the purpose of computing the percentage
ownership of such person, but are not deemed outstanding for the
purpose of computing the percentage ownership of any other person. Each
beneficial owner's percentage ownership is based upon 9,969,045 shares
of Common Stock issued and outstanding as of April 1, 1998.
(2) Includes 1,441,044 shares held by Sierra Ventures IV, L.P. and 57,700
shares held by Sierra Ventures IV International, L.P. (collectively
these entities are referred to as "Sierra Ventures"). James B.
Tananbaum, M.D., a Director of the Company, shares voting and
investment powers with respect to such shares. Dr. Tananbaum disclaims
beneficial ownership of shares held by Sierra Ventures, except to the
extent of his proportionate interest therein.
(3) Includes 1,441,044 shares held by Sierra Ventures IV, L.P. and 57,700
shares held by Sierra Ventures IV International, L.P. James B.
Tananbaum, M.D., a Director of the Company, shares voting and
investment powers with respect to such shares. Dr. Tananbaum disclaims
beneficial ownership of shares held by Sierra Ventures, except to the
extent of his proportionate interest therein. Mr. Tananbaum holds
options for 10,000 shares, of which 3,125 are exercisable within 60
days of April 1, 1998 and are included in the shares beneficially
owned. Dr. Tananbaum also holds 2,000 shares in an IRA of which he is
the beneficiary.
(4) Includes 312,400 shares held by Schroders Incorporated, 374,874 shares
held by Schroder Ventures Limited Partnership and 93,720 shares held by
Schroder Ventures U.S. Trust (collectively these entities are referred
to as "Schroder"). Jeffrey J. Collinson, a Director of the Company,
shares voting and investment power with respect to such shares. Mr.
Collinson disclaims beneficial ownership of shares held by the Schroder
entities, except to the extent of his proportionate interest therein.
(5) Includes 312,400 shares held by Schroders Incorporated, 374,874 shares
held by Schroder Ventures Limited Partnership and 93,720 shares held by
Schroder Ventures U.S. Trust. Jeffrey J. Collinson, a Director of the
Company, shares voting and investment power with respect to such
shares. Mr. Collinson disclaims beneficial ownership of shares held by
the Schroder entities, except to the extent of his proportionate
interest therein. Mr. Collinson holds options for 10,000 shares, of
which 3,125 are exercisable within 60 days of April 1, 1998 and are
included in the shares beneficially owned. Mr. Collinson also holds
5,000 shares in an IRA of which he is the beneficiary.
(6) Includes 301,666 shares held by Weiss, Peck & Greer Venture Associates
III, L.P. and 414,165 shares held by WPG Enterprise Fund II, L.P.
Page 8 Proxy Statement
<PAGE> 12
(7) Includes 743,343 shares held by ALTA V Limited Partnership and 7,813
shares held by Customs House Partners. The respective general partners
of these funds exercise sole voting and investment powers with respect
to shares held by these funds.
(8) Includes 769,431 shares held by Three Arch Partners, L.P. and 173,350
shares held by Three Arch Associates, L.P. (collectively these entities
are referred to as "Three Arch"). Wilfred E. Jaeger, M.D. shares voting
and investment power with respect to such shares. Dr. Jaeger disclaims
beneficial ownership of shares held by Three Arch, except to the extent
of his proportionate interest therein. Messrs. Lewis and Steffy are
limited partners of Three Arch Partners, L.P., but do not have voting
or investment power with respect to such shares.
(9) Includes 769,431 shares held by Three Arch Partners, L.P. and 173,350
shares held by Three Arch Associates, L.P. Wilfred E. Jaeger, M.D., a
Director of the Company, shares voting and investment power with
respect to such shares. Dr. Jaeger disclaims beneficial ownership of
shares held by Three Arch, except to the extent of his proportionate
interest therein. Dr. Jaeger holds options for 10,000 shares, of which
3,125 are exercisable within 60 days of April 1, 1998 and are included
in the shares beneficially owned.
(10) Includes 1,147,821 shares held by Mayfield VIII and 60,412 shares held
by Mayfield Associates Fund II (collectively these entities are
referred to as "Mayfield").
(11) Mr. Steffy holds options for 10,000 shares, of which 3,125 are
exercisable within 60 days of April 1, 1998 and are included in the
shares beneficially owned.
(12) Mr. Hogan holds options for 31,000 shares, of which 10,265 are
exercisable within 60 days of April 1, 1998 and are included in the
shares beneficially owned.
(13) Dr. Nudelman holds options for 37,500 shares, of which 25,125 are
exercisable within 60 days of April 1, 1998 and are included in the
shares beneficially owned.
(14) Amount includes 1,500 shares owned by Mr. Cross' spouse, 250 shares
held by Mr. Cross as custodian for John David Cross, and 250 shares
held by Mr. Cross as custodian for Kathleen Cross. Mr. Cross holds
options for 33,000 shares, of which 15,950 are exercisable within 60
days of April 1, 1998 and are included in shares beneficially owned.
(15) Mr. Lewis holds options for 33,000 shares, of which 15,950 are
exercisable within 60 days of April 1, 1998, and are included in the
shares beneficially owned.
(16) Mr. Keefe holds options for 157,800 shares, of which 71,974 are
exercisable within 60 days of April 1, 1998, and are included in the
shares beneficially owned.
(17) Less than one percent.
SUMMARY COMPENSATION TABLE
The following table sets forth for the years ended December 31, 1997,
1996, and 1995 the compensation paid by the Company to Mr. Cross, the Company's
President and Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company (collectively, the "NAMED
EXECUTIVE OFFICERS") who earned salary and bonuses in excess of $100,000 during
1997 for all services rendered in all capacities in which they served:
Proxy Statement Page 9
<PAGE> 13
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Name and Principal Other Annual
Position Compensa Restricted Stock Options LTIP All Other
Year Salary Bonus tion Award(s) (Shares) Payouts Compensation(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David W. Cross 1997 $ 213,297 $ 95,000 -- -- -- -- --
President and Chief 1996 $ 178,142 $ 91,740 -- -- -- -- --
Executive Officer 1995 $ 125,000 $ 93,750 7,800 -- 33,000 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
John R. Lewis 1997 $ 178,300 $ 80,000 -- -- -- -- --
Executive Vice 1996 $ 142,775 $ 73,260 -- -- -- -- --
President and Chief 1995 $ 100,000 $ 75,000 7,800 -- 33,000 -- --
Operating Officer
- ----------------------------------------------------------------------------------------------------------------------------------
John P. Keefe 1997 $ 135,000 $ 70,000 -- -- 50,000 -- --
Chief Financial 1996 $ 138,058 $ 60,000 -- -- -- -- --
Officer 1995 $ 70,000 $ 50,765(1) -- -- 107,800 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Anthony J. Torrente 1997 $ 99,985 -- $ 96,065(2) -- -- -- --
Executive Vice 1996 $ 93,171 -- $ 232,000(2) -- -- -- --
President, Business 1995 $ 90,000 -- $ 46,250(2) -- 100,100 -- --
Development
- ----------------------------------------------------------------------------------------------------------------------------------
James D. Pomeroy 1997 $ 90,000 -- $ 200,500(2) -- -- -- --
Vice President, 1996 $ 92,019 -- $ 100,000(2) -- -- -- --
Business 1995 $ 86,250 -- $ -- -- 80,850 -- --
Development
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
(1) Includes a relocation bonus payment of $36,765. In connection with Mr.
Keefe's relocation to St. Louis, the Company loaned Mr. Keefe $154,000,
without interest, for a bridge loan on his St. Louis home until his prior
home was sold. The loan was secured by deeds of trust on both homes and
was repaid in full upon sale of his prior home which occurred prior to
December 31, 1995.
(2) The dollar amount represents commissions earned during the fiscal years
indicated.
OPTION GRANTS DURING 1997
The following tables set forth, with respect to the Company's Chief Executive
Officer and the Named Executive Officers, certain information about option
grants and exercises in the fiscal year ended December 31, 1997. The Company has
not granted any stock appreciation rights.
Option GRANTS in the Fiscal Year Ended December 31, 1997
<TABLE>
<CAPTION>
Number of Securities Percentage of Total Exercise Expiration
Underlying Options Options Granted to Price Date
Name Granted Employees in Fiscal Year (per share)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David W. Cross -- -- -- --
John R. Lewis -- -- -- --
John P. Keefe 50,000 56.18% $7.00 9/5/07
Anthony J. Torrente -- -- -- --
James D. Pomeroy -- -- -- --
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Page 10 Proxy Statement
<PAGE> 14
Aggregate Option EXERCISES in the Fiscal Year Ended December 31, 1997
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Fiscal Year End Fiscal Year End
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David W. Cross -- -- 13,200/19,800 $ 97,944/$146,916
John R. Lewis -- -- 13,200/19,800 $ 97,944/$146,916
John P. Keefe -- -- 52,103/105,697 $ 386,604/$438,271
Anthony J. Torrente -- -- 56,530/43,570 $ 419,453/$323,289
James D. Pomeroy -- -- 51,205/29,645 $ 379,941/$219,966
- -------------------------------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
The Company has entered into employment agreements with each of Messrs.
Cross, Lewis, and Keefe. All the agreements provide for discretionary bonuses.
Pursuant to Messrs. Cross' and Lewis' employment agreements certain notes made
by each of them and acquired by the Company from RehabCare Group, Inc. were
forgiven on September 22, 1997. Messrs. Cross' and Lewis' agreements must be
renewed annually and provide that if the Company terminates employment without
cause (as defined in the agreements) severance benefits of one year's salary
will be paid. All of the agreements provide that the employee will not compete
with the Company for twelve months following termination of employment.
II. AMENDMENT TO THE INTENSIVA HEALTHCARE
CORPORATION STOCK OPTION PLAN
The Company adopted the Intensiva HealthCare Stock Option Plan (the
"PLAN") in 1995. The purposes of the Plan are to encourage key employees of the
Company to acquire a proprietary and vested interest in the growth and
performance of the Company, to generate increased incentive to contribute to the
Company's future success and prosperity, thus enhancing the value of the Company
for the benefit of its stockholders, and to enhance the ability of the Company
to attract and retain individuals of exceptional talent. In March 1998, the
Board of Directors agreed to amend the Plan to increase from 785,400 to
1,285,400 the aggregate number of shares of common stock of the Company reserved
for issuance under the Plan, subject to stockholder approval. The Board of
Directors believes this change is necessary to permit the Plan to achieve its
purpose.
Proxy Statement Page 11
<PAGE> 15
Pursuant to the Board of Directors' recommendation, it is proposed that
Paragraph 4.0 of the Plan be amended to read as follows:
4.0 SHARES SUBJECT TO THE PLAN. The shares of stock which may
be subject to options under the Plan shall be shares of the Company's
common stock, either authorized and unissued shares or shares issued
and held in its treasury. The stock subject to the options shall be one
million two hundred eighty-five thousand four hundred (1,285,400)
shares of Common Stock $.001 par value, hereinafter sometimes referred
to as "Common Stock."
The increase in the number of authorized shares is subject to approval
by the Company's stockholders who must approve such amendment by majority vote
of those stockholders present at and voting at the Annual Meeting.
As of April 1, 1998, there were 31,550 shares of common Stock available
for future awards under the Plan. The purpose of proposed amendment to the Plan
is to continue the Plan by increasing by 500,000 shares the aggregate number of
shares of common stock that may be issued under the Plan. If the Proposal is
adopted, the employees, directors, independent contractors and consultants of
the Company could receive more benefits under the Plan than they could if the
Proposal is not adopted. All other provisions, terms, and conditions of the Plan
will remain the same.
The affirmative vote of at least a majority of the shares of common
stock of the Company entitled to vote and represented at the Annual Meeting is
required to approve the Proposal to amend the Plan. If not approved, the
amendment will not become effective and there will remain 31,550 shares eligible
for issuance under the Plan. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSAL TO AMEND THE PLAN AND PROXIES WILL BE SO VOTED UNLESS STOCKHOLDERS
SPECIFY OTHERWISE IN THEIR PROXIES.
III. RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as
independent auditors to audit the financial statements of the Company for the
fiscal year ending December 31, 1998, subject to ratification by the
stockholders. A representative of KPMG Peat Marwick is expected to be present at
the meeting to answer questions and make a statement if he desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL AND PROXIES
WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
VOTE REQUIRED
The affirmative vote of a majority of the shares of Common Stock which
are present or represented by proxy at the Annual Meeting and which vote on this
proposal is required for approval. If the stockholders do not approve this
proposal, the selection of independent auditors will be reconsidered by the
Board of Directors.
Page 12 Proxy Statement
<PAGE> 16
IV. OTHER MATTERS
Management does not intend to bring any other matters before the
meeting and, at the date of this Proxy Statement, management is not informed of
any other matters that others may bring before the meeting. However, if any
other matters properly come before the meeting, it is the intention of the proxy
holders to vote such shares for which they hold proxies in accordance with their
judgment on such matters.
MISCELLANEOUS
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must received by the Company no later than December 15,
1998, to be eligible for inclusion in the proxy materials for that meeting.
PERFORMANCE GRAPH
The Company has prepared a table comparing the yearly percentage change
in stockholder return on the Company's Common Stock to the cumulative return on
the S&P 500 and the companies that share the Company's four digit SIC code (the
"PEER GROUP"). The table assumes a $100 investment in the Company, the S&P 500,
and the Peer Group on October 11, 1996, and that all dividends paid have been
reinvested.
[GRAPH]
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
- ----------------------------FISCAL YEAR ENDING--------------------------------
COMPANY 10/11/96 12/31/96 12/31/97
INTENSIVA HEALTHCARE CORP 100.00 166.67 111.11
SIC CODE INDEX 100.00 98.97 80.97
S&P 500 INDEX 100.00 108.34 144.48
ASSUMES $100 INVESTED ON OCT 11, 1996
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 1997
-------------------------
Proxy Statement Page 13
<PAGE> 17
PROXY SOLICITED BY THE BOARD OF DIRECTORS
INTENSIVA HEALTHCARE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS MAY 22, 1998
The undersigned hereby appoints John R. Lewis and David L. Steffy, and
each of them, proxies, with full power of substitution and revocation to vote
the shares of Common Stock of Intensiva HealthCare Corporation (the "Company"),
which the undersigned is entitled to vote at the 1998 Annual Meeting of
Stockholders scheduled to occur on May 22, 1998, and at any adjournment(s)
thereof (the "Meeting"), with all the powers the undersigned would possess if
personally present, including authority to vote on the matters stated below in
the manner directed, upon any other matter which may properly come before the
Meeting in such manner as the proxies may in their discretion determine, and
the authority to substitute and vote for another nominee as described in the
accompanying Proxy Statement. The undersigned hereby revokes any proxy
previously given to vote such shares at the Meeting or any adjournment thereof.
(Continued and to be signed on the reverse side)
FOLD AND DETACH HERE
<PAGE> 18
<TABLE>
<S><C>
Please mark [X]
your votes as
indicated in
this example
ITEM 1. Election of two directors to serve in Class II for a term of three years.
FOR David W. Cross WITHHOLD INSTRUCTION: (To withhold authority to vote for any individual nominee,
and Jeffrey J. Collinson authority to vote for write such nominee's name in the space provided below:)
as Class II Directors both of Messrs.
(except as marked to the Cross and Collinson.
contrary in the space ---------------------------------------------------------------------
provided to the right.)
[ ] [ ]
ITEM 2. Adoption of an amendment to the Intensiva Healthcare ITEM 3. Ratification of the appointment of KMPG Peat Marwick LLP
Corporation Stock Option Plan to increase the number of as independent auditors for Intensiva Healthcare Corporation
shares that can be issued under such plan from 785,400 shares for the year ending December 31, 1998
to 1,285,400 shares.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
THIS PROXIES ARE DIRECTED TO VOTE AS SPECIFIED
ABOVE AND IN THEIR DISCRETION ON ALL OTHER MATTERS
COMING BEFORE THE MEETING. EXCEPT AS SPECIFIED TO
THE CONTRARY ABOVE, THE SHARES REPRESENTED BY THIS
PROXY WILL VOTED FOR ALL NOMINEES LISTED IN ITEM 1
ABOVE AND FOR THE MATTERS REPRESENTED IN ITEMS 2
AND 3 ABOVE.
PLEASE PROMPTLY MARK, SIGN, DATE, AND RETURN THIS
PROXY IN THE ENCLOSED ENVELOPE.
DATED , 1998
-------------------------------------
------------------------------------------------
SIGNATURE
------------------------------------------------
SIGNATURE
Sign exactly as name appears above. Where stock is issued in two or more names, all should sign. If signing as attorney,
administrator, executor, trustee, guardian, or other fiduciary give full titles such. A corporation should sign by authorized
officer and affix seal. If this proxy is executed by two or more persons or entities it shall pertain to all shares of common
stock of the Company held in the individual name of each person or entity as well as all shares of common stock of the Company
held in joint name by any two or more such persons or entities.
- FOLD AND DETACH HERE -
</TABLE>
ANNUAL REPORT OF FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, IS AVAILABLE UPON
REQUEST BY WRITING TO THE COMPANY AT 7733 FORSYTH BOULEVARD, SUITE 800, ST.
LOUIS, MISSOURI 63105, ATTENTION JOHN P. KEEFE. COPIES WITHOUT EXHIBITS WILL BE
PROVIDED WITHOUT CHARGE; TO RECEIVE COPIES OF THE EXHIBITS A REASONABLE CHARGE
WILL BE APPLIED.
