<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
HEALTHCARE FINANCIAL PARTNERS, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
HEALTHCARE FINANCIAL PARTNERS, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 1997
----------------
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of
HealthCare Financial Partners, Inc., a Delaware corporation (the "Company"),
will be held at the ANA Hotel, 2401 M Street, N.W., Washington, D.C. 20037, on
Friday, May 16, 1997 at 9:00 A.M., local time, for the following purposes:
(1) To elect two Directors to serve for a three-year term expiring at the
2000 Annual Meeting of Stockholders; and
(2) To consider and take action upon any other matters that may properly come
before the 1997 Annual Meeting or any adjournment thereof.
By Order of the Board of Directors
Steven M. Curwin
Secretary
Chevy Chase, Maryland
April 14, 1997
IF YOU CANNOT BE PRESENT IN PERSON, PLEASE MARK, DATE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY.
<PAGE>
HEALTHCARE FINANCIAL PARTNERS, INC.
2 WISCONSIN CIRCLE, SUITE 320
CHEVY CHASE, MARYLAND 20815
----------------
PROXY STATEMENT
----------------
The enclosed proxy is solicited by the Board of Directors of HealthCare
Financial Partners, Inc., a Delaware corporation (the "Company"), in
connection with the 1997 Annual Meeting of Stockholders to be held at the ANA
Hotel, Washington, D.C. on May 16, 1997 at 9:00 am, local time, or any
adjournment thereof (the "Annual Meeting"). The Company's Annual Report to
Stockholders for the year ended December 31, 1996 and a copy of its report on
Form 10-K filed with the Securities and Exchange Commission (the "Commission")
accompany this Proxy Statement. This Proxy statement and the accompanying
Notice of Annual Meeting of Stockholders and the enclosed proxy card were
first sent or given to stockholders of the Company on or about April 16, 1997.
Holders of record of the Company's Common Stock, $.01 par value per share
(the "Common Stock"), as of the close of business on April 9, 1997 will be
entitled to vote at the Annual Meeting, and each holder of record of Common
Stock on such date will be entitled to one vote for each share held. As of
April 9, 1997, there were approximately 6,214,991 shares of Common Stock
outstanding.
Shares of Common Stock cannot be voted at the Annual Meeting unless the
beneficial owner is present or represented by proxy. Any stockholder giving a
proxy may revoke it at any time before it is voted by giving written notice of
revocation to the Company, c/o Steven M. Curwin, Secretary, at the address
shown above, or by executing and delivering prior to the Annual Meeting a
proxy bearing a later date. Any stockholder who attends the Annual Meeting may
revoke the proxy by voting his or her shares of Common Stock in person.
All properly executed proxies, unless previously revoked, will be voted at
the Annual Meeting in accordance with the directions given. With respect to
the election of two Class I Directors to serve until the 2000 Annual Meeting
of Stockholders, stockholders of the Company voting by proxy may vote in favor
of both nominees, may withhold their vote for both nominees or may withhold
their vote as to either nominee. If no specific instructions are given, shares
of Common Stock represented by a properly executed proxy will be voted FOR
both nominees for election as Class I Directors and in the discretion of the
persons named therein as proxies on all other matters that may be brought
before the Annual Meeting.
A majority of the outstanding shares of Common Stock must be represented in
person or by proxy at the Annual Meeting in order to constitute a quorum for
the transaction of business. Abstentions and non-votes will be counted for
purposes of determining the existence of a quorum at the Annual Meeting. The
election of Directors requires the affirmative vote of a plurality of the
shares of Common Stock present in person or by proxy and actually voting at
the Annual meeting. Therefore, abstentions and non-votes will have no effect
on the outcome of the voting to elect the Directors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of March 31, 1997 by:
(i) each person or entity known by the Company to own beneficially five
percent or more of the outstanding Common Stock, (ii) each member of the Board
of Directors of the Company, (iii) each executive officer of the Company, and
(iv) all executive officers of the Company and all members of the Board of
Directors as a group. Unless otherwise indicated, the address of the
stockholders shown as beneficially owning more than five percent of the Common
Stock listed below is that of the Company's principal executive offices. Stock
ownership information has been furnished to the Company by such beneficial
owners or is based upon information contained in filings made by such
beneficial owners with the Commission. Except as indicated in the footnotes to
the table, the persons and entities named in the table have sole voting and
investment power with respect to all shares beneficially owned.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED
NAME OF -----------------
BENEFICIAL OWNER NUMBER PERCENT
---------------- --------- -------
<S> <C> <C>
John K. Delaney......... 731,113 11.76%
Ethan D. Leder.......... 731,113 11.76
Edward P. Nordberg, Jr.. 731,113 11.76
John F. Dealy(1)........ 1,875 *
Geoffrey E. D.
Brooke(2)............... -- --
JMR Capital Partners,
Inc.(3)................. 506,319 8.15
Creative Information
Systems, LLC(4)......... 506,319 8.15
Farallon Capital
Partners, L.P.(5)....... 466,237 7.50
RR Capital Partners,
L.P.(5)................. 83,256 1.34
All directors and
executive officers as a
group (13 persons)...... 2,196,914 35.35
</TABLE>
- --------
*Less than one percent
(1) The business address of Mr. Dealy is 2300 N Street, N.W., Washington, D.C.
20037.
(2) The business address of Mr. Brooke is 1 Collins Street, 10th Floor,
Melbourne, Victoria 3000, Australia.
(3) The business address of JMR Capital Partners, Inc. is 3201 Broad Branch
Terrace, N.W., Washington D.C. 20008.
(4) The business address of Creative Information Systems, LLC is 5151 Beltline
Road, Suite 1201, Dallas, Texas 75240.
(5) The business address of each of these entities is One Maritime Plaza,
Suite 1325, San Francisco, California 94111.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's Directors, executive officers and
persons who beneficially own more than 10% of the Common Stock to file with
the Commission initial reports of beneficial ownership and reports of changes
in beneficial ownership of such Common Stock. Directors, executive officers
and beneficial owners of more than 10% of the Common Stock are required by
Commission rules to furnish the Company with copies of all such reports. To
the Company's knowledge, based solely upon a review of the copies of such
reports furnished to the Company and written representations from the
Company's Directors and executive officers that no other reports were
required, all Section 16(a) filing requirements applicable to the Company's
Directors and executive officers were complied with during the year ended
December 31, 1996.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
Executive officers are elected or appointed by the Board of Directors.
Subject to the provisions of certain employment and non-competition agreements
hereinafter described, each officer holds office until his or her successor is
elected and qualified, until his or her death or until he or she resigns or
has been removed by the Board of Directors. The following sets forth the names
and ages of each executive officer of the Company and the principal positions
and offices he or she holds with the Company.
2
<PAGE>
The executive officers of the Company and their ages as of April 3, 1997 are
as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Chairman of the Board and Chief Executive
John K. Delaney................ 33 Officer
Ethan D. Leder................. 34 Vice-Chairman of the Board and President
Executive Vice President and Chief
Edward P. Nordberg, Jr......... 36 Financial Officer
Hilde M. Alter................. 55 Treasurer and Chief Accounting Officer
Senior Vice President, General Counsel
Steven M. Curwin............... 38 and Secretary
Michael G. Gardullo............ 38 Vice President and Senior Credit Officer
Jeffrey P. Hoffman............. 36 Vice President and Portfolio Manager
Vice President, Deputy General Counsel
Debra M. Van Alstyne........... 45 and Assistant Secretary
Howard T. Widra................ 28 Vice President and Senior Analyst
Vice President and Chief Information
Chris J. Woods................. 46 Officer
James L. Buxbaum............... 41 President of HealthCare Analysis
Corporation (a subsidiary of the Company)
</TABLE>
John K. Delaney serves as Chairman of the Board, Chief Executive Officer and
a Director of the Company. Mr. Delaney co-founded the Company in 1993 and
served as Chairman of the Board, Chief Executive Officer and President since
the formation of the Company until March 1997, when he was elected to his
current positions. From 1990 through 1992, Mr. Delaney co-owned and operated
American Home Therapies, Inc., a provider of home care and home infusion
therapy services, which was sold in 1992. Prior to 1990, Mr. Delaney was a
practicing attorney with Shaw, Pittman, Potts & Trowbridge in Washington, D.C.
Mr. Delaney received his A.B. degree from Columbia University in 1985 and his
J.D. degree from the Georgetown University Law Center in 1988.
Ethan D. Leder serves as Vice-Chairman of the Board, President and a
Director of the Company. Mr. Leder co-founded the Company in 1993 and served
as Vice-Chairman of the Board and Executive Vice President since the formation
of the Company until March 1997, when he was elected to his current positions.
From 1993 through September, 1996, Mr. Leder also served as Treasurer to the
Company. From 1990 through 1992, Mr. Leder co-owned and operated American Home
Therapies, Inc., a provider of home care and home infusion therapy services,
which was sold in 1992. Prior to 1990, Mr. Leder was engaged in the private
practice of law in Baltimore, Maryland and Washington, D.C. Mr. Leder received
his B.A. degree from Johns Hopkins University in 1984 and his J.D. degree from
the Georgetown University Law Center in 1987.
Edward P. Nordberg, Jr. serves as Executive Vice President, Chief Financial
Officer and a Director of the Company. Mr. Nordberg co-founded the Company in
1993 and served as a Senior Vice President and Secretary of the Company since
the formation of the Company until March 1997 when he was elected to his
current positions. From 1993 through April 1996, Mr. Nordberg also served as
General Counsel of the Company. Prior to 1993, Mr. Nordberg was a practicing
attorney with Williams & Connolly in Washington, D.C. Mr. Nordberg received
his B.A. degree from Washington College in 1982, his M.B.A. degree from Loyola
College in 1985, and his J.D. degree from the Georgetown University Law Center
in 1989.
Hilde M. Alter serves as Treasurer and Chief Accounting Officer of the
Company. Ms. Alter joined the Company in September, 1996. From 1981 to joining
the Company, Ms. Alter was a partner with the accounting firm of Keller,
Bruner & Co. in Bethesda, Maryland. Ms. Alter is a certified public
accountant. Ms. Alter received her B.A. degree from American University in
1966.
Steven M. Curwin serves as Senior Vice President, General Counsel and
Secretary of the Company. Mr. Curwin joined the Company in August, 1996, and
has served as a Vice President from August 1996 and as a full-time consultant
to the Company since May, 1996. From September, 1994 to joining the Company,
Mr. Curwin was a practicing attorney with Shulman, Rogers, Gandal, Pordy &
Ecker, P.A. in Rockville, Maryland. From January, 1989 to August, 1994, Mr.
Curwin was a practicing attorney with Dewey Ballantine in Washington, D.C. Mr.
Curwin received his B.A. degree from Franklin & Marshall College in 1980 and
his J.D. degree from the Boston University School of Law in 1985.
3
<PAGE>
Michael G. Gardullo serves as Vice President and Senior Credit Officer of
the Company. Mr. Gardullo joined the Company in February, 1996. From June,
1995 to joining the Company, Mr. Gardullo was a Senior Account
Executive/Manager at The FINOVA Group in King of Prussia, Pennsylvania. From
1993 to 1995, Mr. Gardullo was Vice President and Regional Credit Manager at
LaSalle Business Credit, an affiliate of ABN AMRO Bank, N.V., in Baltimore,
Maryland. From 1991 to 1993, Mr. Gardullo was Vice President and Manager,
respectively, at StanChart Business Credit in Baltimore, Maryland and London,
England. From 1982 through 1991, Mr. Gardullo held various management and
operational positions at several asset-based lending institutions. Mr.
Gardullo received his B.S. degree from Seton Hall University in 1981 and his
M.B.A. degree from Rutgers University in 1982.
Jeffrey P. Hoffman serves as Vice President and Portfolio Manager of the
Company. Mr. Hoffman joined the Company in September, 1996. From 1994 to
joining the Company, Mr. Hoffman was a Vice President-Senior Loan Officer and
from 1990 to 1993, Mr. Hoffman was a Vice President-Senior Underwriter at
Fleet Capital Corporation and its predecessor companies, Shawmut Capital
Corporation and Barclays Business Credit, in Glastonbury, Connecticut and New
York, New York. From 1988 through 1990, Mr. Hoffman was an assistant vice
president with Bankers Trust Company in New York, New York. From 1982 through
1988, Mr. Hoffman held various management positions with Bank of Boston, in
New York, New York. Mr. Hoffman received his B.A. degree from the State
University of New York at Albany in 1982 and his M.B.A. degree from Adelphi
University in 1987.
Debra M. Van Alstyne serves as Vice President, Deputy General Counsel and
Assistant Secretary of the Company. Ms. Van Alstyne joined the Company in
March 1997. From July 1993 through July 1995, Ms. Van Alstyne was an attorney-
advisor, and from August 1995 until joining the Company in March 1997, Ms. Van
Alstyne was a Senior Attorney, with the Division of Corporate Finance of the
Securities and Exchange Commission. From January 1993 until July 1993, Ms. Van
Alstyne was an attorney with the law firm of Gibson Hoffman & Panzione in Los
Angeles, California, and from April 1992 until January 1993 she was an
attorney with the law firm of Aprahamian & Ducote in Newport Beach,
California. Ms. Van Alstyne received her B.A. degree from the University of
California, Irvine, California in 1974 and received her J.D. degree from UCLA
School of Law, Los Angeles, California in 1977.
Howard T. Widra serves as Vice President and Senior Analyst of the Company.
Mr. Widra joined the Company in January 1997. From June 1996 until joining the
Company, Mr. Widra was a consultant to America Long Lines, Inc., a long
distance phone carrier. From October 1993 until May 1996, Mr. Widra was a
practicing attorney with Steptoe & Johnson, L.L.P. in Washington, DC. Mr.
Widra received his B.A. degree from the University of Michigan in 1990 and his
J.D. degree from Harvard Law School in 1993.
Chris J. Woods serves as Vice President and Chief Information Officer of the
Company. Mr. Woods joined the Company in March 1997. From 1991 to the time Mr.
Woods joined the Company, he was an independent technical consultant for
clients primarily in the health care and telecommunications industries. In
1983, Mr. Woods co-founded a technical consulting company and served as
Executive Vice President of such company until his departure until 1991. Prior
to 1983, Mr. Woods worked for Control Data Corporation. Mr. Woods received his
B.S. degrees in Computer Science and Geology from the State University of New
York at Buffalo in 1972.
James L. Buxbaum serves as President of HealthCare Analysis Corporation, a
wholly owned subsidiary of the Company. Mr. Buxbaum became President of that
company in March 1997. From October 1993 until March 1997, Mr. Buxbaum was
President of J.L. Buxbaum, Inc., a mergers and acquisition consulting company
in Baltimore, Maryland. From November 1989 to October 1993, he was a partner
with the accounting firm of Wolpoff & Company in Baltimore, Maryland. Mr.
Buxbaum received his B.B.A. from George Washington University in 1977 and is a
certified public accountant.
4
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers for 1995 and 1996 was
established by the Board of Directors as a whole. In establishing executive
compensation, the Company's goal is to attract, retain and motivate qualified
executive management under a competitive compensation program which rewards
individual performance and increases stockholder value. To achieve this goal,
the Board of Directors evaluated the respective positions, the competitive
market for the required management skills, individual performance and
potential, and the potential for motivating Company and individual
performance. In January 1997, the Board of Directors established a
Compensation Committee. The members of the Compensation Committee are Geoffrey
E.D. Brooke and John F. Dealy, the non-employee Directors of the Company. The
Compensation Committee will have the authority to determine compensation for
the Company's executive officers in the future. In determining such
compensation, the Compensation Committee will take into account existing
contractual arrangements and incentive plans, as well as the competitive
market for the required management skills, individual performance and
potential, and the potential for motivating Company and individual
performance. See "Certain Relationships and Related Transactions" and "Stock
Incentive Plan".
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table presents certain information concerning compensation
earned for services rendered in all capacities shown below to the Company for
the years ended December 31, 1995 and 1996 by the Chief Executive Officer and
each of the other executive officers whose annual compensation exceeded
$100,000 (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION ($) COMPENSATION
------------------------------ ------------
NUMBER OF
SHARES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITIONS YEAR SALARY(1) BONUS COMPENSATION OPTIONS COMPENSATION(2)
------------------ ---- -------- ------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
John K. Delaney......... 1996 $245,400 $ -- $ -- 37,000 $ --
Chairman, Chief
Executive 1995 196,538 94,166 -- -- --
Officer and President
Ethan D. Leder.......... 1996 242,502 -- -- 37,000 --
Vice Chairman of the
Board 1995 196,539 94,166 -- -- --
and Executive Vice
President
Edward P. Nordberg, Jr.. 1996 212,790 -- -- 37,000 --
Senior Vice President 1995 169,038 94,166 -- -- --
and Secretary
</TABLE>
- --------
(1) Includes $60,000, $60,000 and $30,000 paid to Messrs. Delaney, Leder and
Nordberg, respectively, in 1995, pursuant to a certain Support Services
Agreement described in "Certain Relationships and Related Transactions."
(2) Certain of the Company's executive officers receive benefits in addition
to salary and cash bonuses. The aggregate amount of such benefits,
however, do not exceed the lesser of $50,000 or 10% of the total annual
salary and bonus of such executive officer.
BONUS PLANS
Other than certain guaranteed bonuses set in Employment and Non-Competition
Agreements with the Named Executives, all bonuses are made at the discretion
of the Compensation Committee upon recommendation of the Company's management.
See "Certain Relationships and Related Transactions".
5
<PAGE>
STOCK INCENTIVE PLAN
The Company maintains the HealthCare Financial Partners, Inc. 1996 Stock
Incentive Plan (the "Incentive Plan"). The Board of Directors has reserved
750,000 shares of Common Stock for issuance pursuant to awards that may be
made under the Incentive Plan, subject to adjustment as provided therein.
Awards under the Incentive Plan are determined by a committee of no less
than two members of the Board of Directors (the "Committee"), the members of
which are selected by the Board of Directors. Messrs. Dealy and Brooke serve
as members of the Committee.
Key employees, officers, directors and consultants of the Company or an
affiliate are eligible for awards under the Incentive Plan. The Incentive Plan
permits the Committee to make awards of shares of Common Stock, awards of
derivative securities related to the value of the Common Stock and certain
cash awards to eligible persons. These discretionary awards may be made on an
individual basis, or pursuant to a program approved by the Committee for the
benefit of a group of eligible persons. The Incentive Plan permits the
Committee to make awards of a variety of equity-based incentives, including
(but not limited to) stock awards, options to purchase shares of Common Stock
and to sell shares of Common Stock back to the Company, stock appreciation
rights, so-called "cash-out" or "limited stock appreciation rights" (which the
Committee may make exercisable in the event of certain changes in control of
the Company or other events), phantom shares, performance incentive rights,
dividend equivalent rights and similar rights (together, "Stock Incentives").
The number of shares of Common Stock as to which a Stock Incentive is granted
and to whom any Stock Incentive is granted, and all other terms and conditions
of a Stock Incentive, are determined by the Committee, subject to the
provisions of the Incentive Plan. The terms of particular Stock Incentives may
provide that they terminate, among other reasons, upon the holder's
termination of employment or other status with respect to the Company and any
affiliate, upon a specified date, upon the holder's death or disability, or
upon the occurrence of a change in control of the Company. Stock Incentives
may also include exercise, conversion or settlement rights to a holder's
estate or personal representative in the event of the holder's death or
disability. At the Committee's discretion, Stock Incentives that are held by
an employee who suffers a termination of employment may be cancelled,
accelerated, paid or continued, subject to the terms of the applicable Stock
Incentive agreement and to the provisions of the Incentive Plan. Stock
Incentives generally are not transferable or assignable during a holder's
lifetime.
The maximum number of shares of Common Stock with respect to which options
or stock appreciation rights may be granted during any fiscal year of the
Company as to certain eligible recipients may not exceed 100,000, to the
extent required by Section 162(m) of the Code for the grant to qualify as
qualified performance-based compensation.
The number of shares of Common Stock reserved for issuance in connection
with the grant or settlement of Stock Incentives or to which a Stock Incentive
is subject, as the case may be, and the exercise price of each option are
subject to adjustment in the event of any recapitalization of the Company or
similar event, effected without the receipt of consideration. In the event of
certain corporate reorganizations and similar events, Stock Incentives may be
substituted, cancelled, accelerated, cashed-out or otherwise adjusted by the
Committee, provided such adjustment is not inconsistent with the express terms
of the Incentive Plan or the applicable Stock Incentive agreement.
On September 13, 1996, the Company granted incentive stock options to
purchase an aggregate of 189,000 shares of Common Stock at an exercise price
of $11.05 per share. All full-time employees, other than Messrs. Delaney,
Leder and Nordberg were granted these options. Each option is subject to a
maximum 10-year term. The options will vest and become exercisable in 25%
increments on each anniversary of the grant date, commencing on September 13,
1997. In addition, on September 13, 1997, each of Messrs. Delaney, Leder and
Nordberg were granted incentive stock options to purchase 37,000 shares of
Common Stock at an exercise price of $12.50. These options will vest and
become exercisable in 20% increments on each anniversary of the grant date,
commencing on September 13, 1997.
6
<PAGE>
The following table summarizes options granted during 1996 to the Named
Executives. The Company has not granted any stock appreciation rights. No
other Stock Incentives were granted or awarded in 1996.
OPTIONS GRANTED IN 1996
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
-------------------------------------------------- -----------------
PERCENT OF
SHARES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE PRICE EXPIRATION
NAME OPTIONS EMPLOYEES PER SHARE DATE 5% 10%
---- ---------- ------------- -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
John K. Delaney......... 37,000 12.33% $12.50 9/13/06 $290,864 $628,051
Ethan D. Leder.......... 37,000 12.33 12.50 9/13/06 290,864 628,051
Edward P. Nordberg, Jr.. 37,000 12.33 12.50 9/13/06 290,864 628,051
</TABLE>
The following table summarizes options exercised by the Named Executives
during 1996 and presents the value of unexercised options held by the Named
Executives at December 31, 1996.
AGGREGATED OPTION EXERCISES 1996 AND
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John K. Delaney......... None None -- 37,000 -- 9,250
Ethan D. Leder.......... None None -- 37,000 -- 9,250
Edward P. Nordberg, Jr.. None None -- 37,000 -- 9,250
</TABLE>
DIRECTOR COMPENSATION
No remuneration is paid to executive officers of the Company for services
rendered in their capacities as Directors. The Company pays fees to non-
employee Directors of $2,000 per meeting. Pursuant to the Director Plan,
Geoffrey E.D. Brooke and John F. Dealy, the non-employee Directors, each
elected to forego receipt of the fee for 1997 and was granted an option to
acquire 1,255 shares of Common Stock, at an exercise price of $6.375 per
share. In addition, pursuant to the Director Plan, Messrs. Brooke and Dealy
were each granted options to purchase 10,000 shares of Common Stock at an
exercise price of $12.75 per share at the time of their initial appointment to
the Board of Directors in January 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation Committee of the Board of Directors was established in
January 1997 and consists of Geoffrey E.D. Brooke and John F. Dealy, neither
of whom serves as an officer or employee of the Company or any of its
subsidiaries. Compensation for executive officers prior to the establishment
of the Compensation Committee was determined by the Board of Directors acting
as a whole. Prior to January 1997, the members of the Board of Directors
consisted of Messrs. Delaney, Leder and Nordberg who are also executive
officers of the Company.
DIRECTOR PLAN
The Company maintains the HealthCare Financial Partners, Inc. 1996 Director
Incentive Plan (the "Director Plan"). The Board of Directors has reserved
100,000 shares of Common Stock for issuance pursuant to awards that may be
made under the Director Plan, subject to adjustment as provided therein.
7
<PAGE>
Awards under the Director Plan are determined by the express terms of the
Director Plan. Rules, regulations and interpretations necessary for the
ongoing administration of the Director Plan will be made by the full
membership of the Board of Directors.
Only non-employee directors of the Company are eligible to participate in
the Director Plan. The Director Plan contemplates three types of non-statutory
option awards: (a) initial appointment awards that are granted upon a non-
employee director's initial appointment to the Board of Directors providing an
option to purchase 10,000 shares of Common Stock at a per share exercise price
equal to the then fair market value of a share of Common Stock; (b) annual
service awards that are granted to each non-employee director who continues to
serve as a non-employee director as of each annual meeting of the stockholders
of the Company following his or her initial appointment providing an option to
purchase 5,000 shares of Common Stock at a per share exercise price equal to
the then fair market value of a share of Common Stock; and (c) discount awards
under which each non-employee director also has the opportunity to elect
annually, subject to rules established by the Board of Directors, to forego
receipt of cash retainer and fees for scheduled meetings of the Board of
Directors and committees thereof that would otherwise be paid during each
fiscal year of the Company, and in lieu thereof that director be granted an
option to acquire shares of Common Stock with an exercise price per share
equal to 50% of the then fair market value of a share of Common Stock. The
number of shares of Common Stock subject to any option of this type granted
for a fiscal year is determined by taking the amount of cash foregone by the
director for the fiscal year in question and dividing that amount by the per
share option exercise price.
Each option granted pursuant to the Director Plan is immediately vested;
becomes exercisable 12 months following the date of grant; and expires upon
the earlier to occur of the tenth anniversary of the grant date or 18 months
following the director's termination of service upon the Board of Directors
for any reason. The options generally are not transferable or assignable
during a holder's lifetime.
The number of shares of Common Stock reserved for issuance upon exercise of
options granted under the Director Plan, the number of shares of Common Stock
subject to outstanding options and the exercise price of each option are
subject to adjustment in the event of any recapitalization of the Company or
similar event, effected without the receipt of consideration. The number of
shares of stock subject to options granted in connection with initial
appointments or as annual service awards are also subject to adjustment in
such events. In the event of certain corporate reorganizations and similar
events, the options may be adjusted or cashed-out, depending upon the nature
of the event.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Employment and Non-Competition Agreements
Mr. Delaney serves as Chairman of the Board and Chief Executive Officer of
the Company pursuant to the terms of an employment agreement which continues
in effect until January 1, 2001. On the first anniversary of the date of the
employment agreement, and on each anniversary date thereafter, the employment
period is extended for an additional one-year period, unless the Company or
Mr. Delaney notifies the other of its or his intention not to extend the
employment period. Under the terms of the employment agreement, prior to
January 1, 1997, Mr. Delaney received an annual salary of $240,000. Currently,
Mr. Delaney receives an annual salary which is not less than the greater of
(i) $300,000 or (ii) any subsequently established base salary, in either case
increased annually by not less than 50% of the annual increase in the Consumer
Price Index for Urban Wage Earners and Clerical Workers ("CPI-W"). Commencing
on March 31, 1997, and on the last day of each calendar quarter thereafter
during the term of the employment agreement, Mr. Delaney will be paid a
quarterly bonus of $25,000, provided that the Company has achieved
profitability for such quarter. In the event the Company has not achieved
profitability in a quarter in any calendar year but the Company's profits in
any subsequent quarter of that year are equal to the losses in all prior
quarters of that year plus one dollar, Mr. Delaney will be paid his
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<PAGE>
then current quarterly bonus, plus any bonus amount not paid for any prior
unprofitable quarter of that year. In the event the Company terminates Mr.
Delaney's employment without cause, Mr. Delaney will be entitled to receive
his compensation and benefits for the remainder of the term of the employment
agreement. The first three years of such payments of compensation and benefits
is guaranteed and not subject to reduction or offset. In the event Mr.
Delaney's employment is terminated, he will be restricted from competing with
the Company for 18 months.
Mr. Leder serves as Vice-Chairman of the Board and President of the Company
pursuant to the terms of an employment agreement which continues in effect
until January 1, 2001. On the first anniversary of the date of the employment
agreement, and on each anniversary date thereafter, the employment period is
extended for an additional one-year period, unless the Company or Mr. Leder
notifies the other of its or his intention not to extend the employment
period. Under the terms of the employment agreement prior to January 1, 1997,
Mr. Leder received an annual salary of $240,000. Currently, Mr. Leder receives
an annual salary which is not less than the greater of (i) $275,000 or (ii)
any subsequently established base salary, in either case increased annually by
not less than 50% of the annual increase in the CPI-W. Commencing on March 31,
1997, and on the last day of each calendar quarter thereafter during the term
of the employment agreement, Mr. Leder will be paid a quarterly bonus of
$25,000, provided that the Company has achieved profitability for such
quarter. In the event the Company has not achieved profitability in a quarter
in any calendar year but the Company's profits in any subsequent quarter of
that year are equal to the losses in all prior quarters of that year plus one
dollar, Mr. Leder will be paid his then current quarterly bonus, plus any
bonus amount not paid for any prior unprofitable quarter of that year. In the
event the Company terminates Mr. Leder's employment without cause, Mr. Leder
will be entitled to receive his compensation and benefits for the remainder of
the term of the employment agreement. The first three years of such payments
of compensation and benefits is guaranteed and not subject to reduction or
offset. In the event Mr. Leder's employment is terminated, he will be
restricted from competing with the Company for 18 months.
Mr. Nordberg serves as Executive Vice President and Chief Financial Officer
of the Company pursuant to the terms of an employment agreement which
continues in effect until January 1, 2001. On the first anniversary of the
date of the employment agreement, and on each anniversary date thereafter, the
employment period is extended for an additional one-year period, unless the
Company or Mr. Nordberg notifies the other of its or his intention not to
extend the employment period. Under the terms of the employment agreement,
prior to January 1, 1997, Mr. Nordberg received an annual salary of $210,000.
Currently, Mr. Nordberg receives an annual salary which is not less than the
greater of (i) $250,000 or (ii) any subsequently established base salary, in
either case increased annually by not less than 50% of the annual increase in
the CPI-W. In the event the Company terminates Mr. Nordberg's employment
without cause, Mr. Nordberg will be entitled to receive his compensation and
benefits for the remainder of the term of the employment agreement. The first
three years of such payments of compensation and benefits is guaranteed and
not subject to reduction or offset. In the event Mr. Nordberg's employment is
terminated, he will be restricted from competing with the Company for 18
months.
Indemnification Arrangements
The Company has entered into indemnification agreements pursuant to which it
has agreed to indemnify certain of its directors and officers against
judgments, claims, damages, losses and expenses incurred as a result of the
fact that any director or officer, in his capacity as such, is made or
threatened to be made a party to any suit or proceeding. Such persons will be
indemnified to the fullest extent now or hereafter permitted by the Delaware
General Corporation Law (the "DGCL"). The indemnification agreements also
provide for the advancement of certain expenses to such directors and officers
in connection with any such suit or proceeding. The Company's Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws provide
for the indemnification of the Company's directors and officers to the fullest
extent permitted by the DGCL.
Other Agreements
Prior to completion of the Company's initial public offering on November 21,
1996 (the "Offering") the business of the Company was operated through
HealthPartners Funding, L.P. ("Funding") and HealthPartners DEL, L.P. ("DEL"),
both Delaware limited partnerships. Effective as of September 1, 1996, Funding
acquired
9
<PAGE>
all of the assets of DEL consisting principally of client receivables, for
$486,630 in cash, which amount approximated the fair value of DEL's net
assets, and assumed all of DEL's liabilities. DEL subsequently distributed the
remaining proceeds from the sale pro-rata (i) to Messrs. Delaney, Leder and
Nordberg, the sole limited partners of DEL and each a director and officer of
the Company, in the amounts of $197,044, $197,044 and $98,522, respectively,
in respect of their limited partnership interests, and (ii) $1,188 to the
Company in respect of its general partnership interest. DEL was subsequently
dissolved.
The amount paid by Funding for the assets of DEL was equal to the book value
or net investment of DEL in the assets transferred, consisting principally of
client receivables. The objective was for DEL to recognize no gain or loss on
the transaction. The purpose of the transaction was to consolidate the assets
of DEL and Funding in anticipation of the Offering and the acquisition by the
Company of the limited partnership interests of Funding described below. The
cost to the Company and each of Messrs. Delaney, Leder and Nordberg for their
interests in DEL were $7,869, $427,735, $426,897 and $81,400, respectively,
and the Company and such persons each had received, prior to the sale,
distributions from DEL in respect of their interests in the amounts of $6,681,
$230,661, $229,823, and $82,878, respectively.
Upon completion of the Offering the Company acquired from HealthPartners
Investors, LLC ("HP Investors"), the sole limited partner of Funding, all of
the limited partnership interests in Funding. The purchase price for such
limited partnership interests was $21.8 million which was paid from the
proceeds of the Offering. Such purchase price approximated both the fair value
and book value of the net assets. HP Investors paid $24.8 million in cash for
its limited partnership interests and, prior to the sale of its limited
partnership interests to the Company, HP Investors had received income
distributions in respect of its limited partnership interests aggregating $6.8
million and limited partner capital distributions of $3.0 million. Effective
upon the acquisition of the limited partnership interests of Funding, all of
its net assets at the date of transfer, (approximately $16.2 million, net of
cash), were transferred to the Company.
In connection with the liquidation of Funding, Farallon Capital Partners,
L.P. ("Farallon") and RR Capital Partners, L.P. ("RR Partners") exercised
warrants for the purchase of 379,998 shares of Common Stock, which warrants
were acquired by Farallon and a predecessor of RR Partners on December 28,
1994 for an aggregate payment of $500, and subsequently assigned to HP
Investors. HP Investors transferred the warrants to Farallon and RR Partners
in contemplation of the liquidation of Funding. No additional consideration
was paid in connection with the exercise of such warrants. There was no
affiliation between the Company and Farallon and RR Partners other than the
ownership of the warrants and 169,495 shares of Common Stock. The warrants
were issued to provide equity ownership in the Company to the warrant holders
and as a means of further strengthening the business relationship between the
parties. In March 1997, the Company formed HealthCare Financial Partners--
Funding II, L.P. ("Funding II"), a Delaware limited partnership, which
provides secured term loans. An affiliate of Farallon committed to invest up
to $20 million to Funding II.
Pursuant to a Software License Agreement (the "Software License Agreement"),
dated as of August 31, 1993, by and between Ampro Financial Corporation
("Ampro") and the Company, Ampro granted to the Company a non-exclusive
perpetual license to use the Company's Receivables Tracking System (the
"RTS"). In October, 1995, Ampro sold and assigned its rights and obligations
in the Software License Agreement to Creative Information Systems, LLC
("Creative"), a stockholder of the Company. Ampro is controlled by the spouse
of the principal member of Creative. For the fiscal year ended December 31,
1995, the Company paid an aggregate of $100,000 in license fees pursuant to
the Software License Agreement, or $8,333 per month. From January 1, 1996
through August 31, 1996, the Company licensed the RTS from Creative for $8,333
per month. Pursuant to a Software Purchase and License Agreement, dated as of
September 1, 1996, by and between the Company and Creative, the Company
acquired the RTS from Creative for $25,000 in cash, and granted back to
Creative a non-exclusive perpetual license to use the RTS.
Pursuant to a Support Services Agreement (the "Support Services Agreement"),
dated as of October 1, 1994, by and between the Company and The Leddel Group,
a general partnership ("Leddel") (the sole partners of which are Messrs.
Delaney, Leder and Nordberg), Leddel: (i) leased to the Company approximately
2,500 square feet of office space in Washington, D.C. for $7,500 per month;
(ii) rented to the Company the use of
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<PAGE>
certain office equipment for $2,500 per month; and (iii) provided to the
Company certain professional services, including legal and consulting services,
for a fee of $2,500 per month. For the fiscal year ended December 31, 1995, the
Company paid an aggregate of $150,000 to Leddel. Although not the result of
arms-length negotiation, the amounts paid to Leddel represented the parties'
best estimates of market rates for such office space, equipment and services.
The Support Services Agreement expired on December 31, 1995.
On September 15, 1996, the Company entered into an Advisory Services
Agreement with The Dealy Strategy Group ("DSG"), a consulting firm controlled
by John F. Dealy, a director of the Company, for DSG to provide business
advisory services to the Company for the period from January 1, 1997 through
December 31, 1998. In consideration of such services, the Company will pay DSG
$50,000 per year, payable quarterly, and granted DSG options to purchase 15,000
shares of Common Stock at a price of $11.05 per share. Such options vest in
increments of 1,875 shares at the end of each quarter while DSG is furnishing
business advisory services, commencing with the quarter ending March 31, 1997,
and are exercisable for a period of ten years from the date of grant.
STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph compares for the period beginning November 21, 1996, (the
date on which the Company's Common Stock was first listed for quotation on the
NASDAQ National Market) and ending December 31, 1996, the percentage change in
the cumulative total stockholder return on the Company's Common Stock with the
cumulative total return of the NASDAQ Stock Market Index and the cumulative
total return of NASDAQ FINANCIAL STOCKS (SIC 6000-6799, U.S. and foreign
companies), a regularly published index consisting of companies whose lines of
business are comparable to those of the Company.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
COMPARISON OF TOTAL CUMULATIVE RETURN* AMONG HEALTHCARE
FINANCIAL PARTNERS, INC., NASDAQ STOCK MARKET INDEX AND NASDAQ
FINANCIAL STOCKS (SIC 6000-6799, U.S. AND FOREIGN COMPANIES)
11/22/96 12/31/96
-------- --------
<S> <C> <C>
NASDAQ STOCK MARKET (U.S. COMPANIES) $100.00 $101.49
NASDAQ FINANCIAL STOCKS (SIC 6000-6799) $100.00 $102.77
HEALTHCARE FINANCIAL PARTNERS, INC. $100.00 $102.00
* Assumes $100 investment in the common stock of Healthcare Financial Partners,
Inc., Nasdaq Stock Market Index, and Nasdaq Financial Stocks
(SIC 6000-6799), derived from compounded daily returns with dividend
reinvestment on the exdate.
</TABLE>
11
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
BOARD OF DIRECTORS' MEETINGS AND ATTENDANCE
During the last year, the Board of Directors of the Company held a total of
four meetings. No member of the Board of Directors attended fewer than 75% of
the aggregate of (i) the total number of meetings of the Board of Directors,
and (ii) the total number of meetings held by all committees of the Board of
Directors on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has standing Executive, Audit,
Compensation and Incentive Plan Committees. The memberships of the standing
committees of the Board of Directors are listed in the Directors' biographies
set forth below under "Election of Directors." The Company does not have a
nominating committee.
The members of the Executive, Audit, Compensation and Incentive Plan
Committees were initially appointed in January 1997.
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws provide that the Board of Directors of the Company shall
be divided into three approximately equal classes of Directors. The Company's
Board of Directors is currently comprised of five Directors, two classes
consisting of two Directors each and one class consisting of one Director.
Each Director is elected for a three-year term, with one class of Directors
being elected at each annual meeting of stockholders.
The Board of Directors has nominated Edward P. Nordberg, Jr. and Geoffrey
E.D. Brooke for election as Directors at the Annual Meeting. Both nominees
currently are members of the Board of Directors and have consented to serve as
Directors if elected. Each of the Directors elected at the Annual Meeting (and
any Director subsequently appointed to fill the existing vacancy) will service
until the 2000 Annual Meeting and until the election and qualification of his
successor or until his earlier death, resignation or removal.
It is the intention of the persons named as proxies to vote the proxies FOR
the election to the Board of Directors of the two nominees named above, unless
a stockholder directs otherwise. In the event that a vacancy (which is not
anticipated) arises among the nominees prior to the Annual Meeting, the proxy
will be voted for the remaining nominees and may be voted for a substitute
nominee designated by the Board of Directors. The affirmative vote of a
plurality of the votes cast by the holders of Common Stock will be required to
elect each of the nominees as a Director of the Company for the ensuing year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED IN THIS PROPOSAL.
Set forth below is information concerning the nominees for Directors to be
elected at the Annual Meeting for a three-year term expiring at the 2000
Annual Meeting, as well as certain information concerning the Directors whose
terms extend beyond the Annual Meeting.
DIRECTORS TO BE ELECTED AT THE ANNUAL MEETING
Set forth below with respect to each nominee is his name, age, principal
occupation and business experience for the past five years and length of
service as a director.
EDWARD P. NORDBERG, JR. (age 36) serves as Executive Vice President, Chief
Financial Officer and Director of the Company. Mr. Nordberg co-founded the
Company in 1993 and served as Senior Vice President and Secretary of the
Company since the formation of the Company until March 1997 when he as elected
to his
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<PAGE>
current positions. From 1993 through April 1996, Mr. Nordberg also served as
General Counsel of the Company. Prior to 1993, Mr. Nordberg was a practicing
attorney with Williams & Connolly in Washington, D.C. Mr. Nordberg received
his B.A. degree from Washington College in 1982, his M.B.A. degree from Loyola
College in 1985, and his J.D. degree from the Georgetown University Law Center
in 1989. Mr. Nordberg serves on the Executive Committee of the Board of
Directors of the Company.
GEOFFREY E.D. BROOKE (age 40) became a Director of the Company in January
1997. Dr. Brooke is Senior Member, Rothschild Bioscience Unit, a division of
Rothschild Asset Management Limited, and is responsible for its venture
capital operations in the Asian Pacific region. Dr. Brooke resides in
Australia. Prior to joining Rothschild, from June, 1992 to September, 1996,
Dr. Brooke was President of MedVest, Inc., a healthcare venture capital firm
in Washington, D.C. which he co-founded with Johnson & Johnson, Inc. Prior to
co-founding MedVest, Inc., Dr. Brooke managed the life sciences portfolio of a
publically traded group of Australian venture capital funds. Dr. Brooke is
licensed in clinical medicine by the Medical Board of Victoria, Australia. Dr.
Brooke earned his medical degree from the University of Melbourne, Australia
and a M.B.A. from IMD in Lausanne, Switzerland. Dr. Brooke serves on the
Audit, Compensation and Incentive Plan Committees of the Board of Directors of
the Company.
DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING
JOHN K. DELANEY (age 33) serves as Chairman of the Board, Chief Executive
Officer and Director of the Company. Mr. Delaney co-founded the Company in
1993 and has served as Chairman of the Board, Chief Executive Officer and
President since the formation of the Company until March 1997, when he was
elected to his current positions. From 1990 through 1992, Mr. Delaney co-owned
and operated American Home Therapies, Inc., a provider of home care and home
infusion therapy services, which was sold in 1992. Prior to 1990, Mr. Delaney
was a practicing attorney with Shaw, Pittman, Potts & Trowbridge in
Washington, D.C. Mr. Delaney received in A.B. degree from Columbia University
in 1985 and his J.D. degree from Georgetown University Law Center in 1988. Mr.
Delaney's term as Director of the Company will expire at the 1999 Annual
Meeting. Mr. Delaney serves on the Executive Committee of the Board of
Directors of the Company.
ETHAN D. LEDER (age 34) serves as Vice-Chairman of the Board, President and
Director of the Company. Mr. Leder co-founded the Company in 1993 and served
as Vice-Chairman of the Board and Executive Vice President since the formation
of the Company until March 1997, when he was elected to his current positions.
From 1993 through September 1996, Mr. Leder also served as Treasurer of the
Company. From 1990 through 1992, Mr. Leder co-owned and operated American Home
Therapies, Inc., a provider of home care and home infusion therapy services,
which was sold in 1992. Prior to 1990, Mr. Leder was engaged in the private
practice of law in Baltimore, Maryland and Washington, D.C. Mr. Leder received
his B.A. degree from John Hopkins University in 1984 and his J.D. degree from
the Georgetown University Law Center in 1987. Mr. Leder's term as Director of
the Company will expire at the 1998 Annual Meeting. Mr. Leder serves on the
Executive Committee of the Board of Directors of the Company.
JOHN F. DEALY (age 57) became a Director of the Company in January 1997. Mr.
Dealy has been President of The Dealy Strategy Group, a management consulting
firm, since 1983. In addition, Mr. Dealy was Senior Counsel to Shaw, Pittman,
Potts & Trowbridge in Washington, D.C. from 1982 through 1996, as well as a
professor in the Georgetown University School of Business since 1982. Mr.
Dealy is currently a director of the First Maryland Bancorp. From 1976 to
1982, Mr. Dealy was President of Fairchild Industries, Inc. Prior to 1976, Mr.
Dealy held a number of management positions at Fairchild Industries, Inc. Mr.
Dealy received his B.S. degree from Fordham College in 1961 and his L.L.B.
degree from the New York University School of Law in 1964. Mr. Dealy's term as
a Director of the company will expire at the 1999 Annual Meeting. Mr. Dealy
serves on the Audit, Compensation and Incentive Plan Committees of the Board
of Directors of the Company.
13
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Ernst & Young LLP has served as the Company's independent
certified public accountants since June 21, 1996. The appointment of auditors
is a matter of determination by the Audit Committee of the Board of Directors
and is not being submitted to the stockholders for approval or ratification. A
representative of this firm is expected to attend the Annual Meeting, to
respond to questions from stockholders and to make a statement if he so
desires.
Although not dissatisfied with the performance of McGladrey & Pullen, LLP,
the Company's Board of Directors determined that, in contemplation of becoming
a publicly-owned company, the Company would be better served by the engagement
of a big-six accounting firm. Accordingly, on June 21, 1996, the Company
dismissed McGladrey & Pullen, LLP, and subsequently decided to engage Ernst &
Young LLP, as the Company's independent accountants for the year beginning
January 1, 1996. The reports of McGladrey & Pullen, LLP, for the years ended
December 31, 1995 and 1994 did not contain an adverse opinion or disclaimer of
opinion and were not qualified as to uncertainty, audit scope or accounting
principles. During such years and for the period January 1, 1996 through June
21, 1996 there was no disagreement with McGladrey & Pullen, LLP on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure. During the Company's two most recent fiscal years
and during the current fiscal year prior to its engagement, neither the
Company nor anyone acting on its behalf consulted Ernst & Young LLP, regarding
either the application of accounting principles to a specified transaction
(either completed or proposed) or the type of audit opinion that might be
rendered on the Company's financial statements.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any stockholder of the Company wishing to submit a proposal for action at
the Company's annual meeting of stockholders to be held in 1998 and desiring
the proposal to be considered for inclusion in the Company's proxy material
relating thereto must provide a written copy of the proposal to the management
of the Company at its principal executive office not later than December 15,
1997 and must otherwise comply with the rules of the Securities and Exchange
Commission relating to stockholder proposals.
MISCELLANEOUS
The Board of Directors does not intend to present and knows of no other
person who intends to present any matter of business at the Annual Meeting
other than as set forth in the accompanying Notice to Annual Meeting of
Stockholders. However, if other matters properly come before the meeting, it
is the intention of the persons named on the enclosed proxy card to vote in
accordance with their best judgement.
The Company will bear the costs of preparing and mailing the Proxy
Statement, proxy card and other material that may be sent to stockholders in
connection with this solicitation. In addition to solicitations by mail,
officers and other employees of the Company may solicit proxies personally or
by telephone or telegram.
By Order of the Board of Directors
Steven M. Curwin
Secretary
April 14, 1997
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY; THEREFORE, STOCKHOLDERS WHO
DO NOT EXPECT TO ATTEND THE 1997 ANNUAL MEETING IN PERSON ARE REQUESTED TO
FILL IN, SIGN AND RETURN THE PROXY FORM AS SOON AS POSSIBLE.
14
<PAGE>
REVOCABLE PROXY COMMON STOCK
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS
The undersigned hereby appoints John K. Delaney and Steven M. Curwin, and
each of them, proxies, with full power of substitution, to act for and in the
name of the undersigned to vote all shares of Common Stock of HealthCare
Financial Partners, Inc. (the "Company") which the undersigned is entitled to
vote at the 1997 Annual Meeting of Stockholders of the Company, to be held at
the ANA Hotel, 2401 M Street, N.W., Washington, DC 20037, on Friday, May 16,
1997, at 9:00 a.m., local time, and at any and all adjournments thereof, as
indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE BELOW-LISTED
PROPOSALS
(1) Elect as directors the two nominees listed below to serve until the 2000
Annual Meeting of Stockholders and until their successors are elected and
qualified (except as marked to the contrary below):
[_] FOR ALL NOMINEES [_] WITHHOLD AUTHORITY to vote for all
listed below nominees listed below.
(except as marked to the
contrary below).
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.
Edward P. Nordberg, Jr. and Geoffrey E. D. Brooke
In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any and all
adjournments thereof.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-
PAID ENVELOPE.
(Continued, and to be signed and dated, on the reverse side)
<PAGE>
LOGO
(Continued from the other side)
PROXY--SOLICITED BY THE BOARD OF DIRECTORS
THIS PROXY CARD WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY CARD WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED ON THE REVERSE
SIDE OF THIS PROXY CARD. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY CARD WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGMENT.
At the present time, the Board of Directors knows of no other business to be
presented at the Annual Meeting.
The undersigned may elect to withdraw this proxy card at any time prior to its
use by giving written notice to Secretary of the Company, by executing and
delivering to the Secretary a duly executed proxy card bearing a later date, or
by appearing at the Annual Meeting and voting in person.
__________________________________
Signature
__________________________________
Signature, if shares held jointly
Date: ______________________, 1997
Please mark, date and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee, guardian or custodian, please give
your full title. If the holder is a corporation or a partnership, the full
corporate or partnership name should be signed by a duly authorized officer.
Do you plan to attend the Annual Meeting? [_] YES [_] NO
