<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 Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CONCENTRA MANAGED CARE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NOTICE OF 1998 ANNUAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
[CONCENTRA LOGO
AND ADDRESS]
<PAGE>
YOUR VOTE IS IMPORTANT
TO INSURE THAT YOUR SHARES WILL BE REPRESENTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY MAIL YOUR PROXY CARD IN THE ENCLOSED ENVELOPE
AT YOUR EARLIEST CONVENIENCE. IF YOU ARE A STOCKHOLDER OF RECORD, YOU MAY USE
THE TOLL-FREE TELEPHONE NUMBER ON THE PROXY CARD TO VOTE YOUR SHARES.
IF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER HOLDER OF
RECORD, YOU WILL RECEIVE INSTRUCTIONS FROM THE HOLDER OF RECORD THAT YOU MUST
FOLLOW IN ORDER FOR YOUR SHARES TO BE VOTED. TELEPHONE VOTING WILL ALSO BE
OFFERED TO STOCKHOLDERS OWNING STOCK THROUGH CERTAIN BANKS AND BROKERS.
<PAGE>
CONCENTRA MANAGED CARE, INC.
312 UNION WHARF
BOSTON, MASSACHUSETTS 02109
----------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------------------
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TIME................. 10:00 a.m. E.S.T. Wednesday, May 13, 1998
PLACE................ 1 Federal Street, 8th Floor
Boston, Massachusetts 02106
ITEMS OF BUSINESS.... To elect four Class I members of the Board
of Directors, whose terms are described
herein
RECORD DATE.......... Holders of Common Stock of record at the
close of business, March 16, 1998, are
entitled to vote at the Meeting.
ANNUAL REPORT........ The Annual Report of the Company for 1997,
which is not a part of the proxy
soliciting material, is enclosed.
PROXY VOTING......... It is important that your Shares be
represented and voted at the Meeting.
Please use the TOLL-FREE TELEPHONE NUMBER
on the enclosed proxy card OR MARK, SIGN,
DATE AND PROMPTLY RETURN the enclosed
proxy card in the postage-paid envelope
furnished for that purpose. Any proxy may
be revoked in the manner described in the
accompanying Proxy Statement at any time
prior to its exercise at the Meeting.
Richard A. Parr II
EXECUTIVE VICE
PRESIDENT,
GENERAL COUNSEL AND
April 7, 1998 CORPORATE SECRETARY
</TABLE>
<PAGE>
TABLE OF CONTENTS
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROXY STATEMENT........................................................... 1
Proxies................................................................. 2
Stockholders Entitled to Vote........................................... 2
Required Vote........................................................... 2
Cost of Proxy Solicitation.............................................. 3
Stockholder Account Maintenance......................................... 3
Section 16(a) Beneficial Ownership Reporting Compliance................. 3
Relationship with Independent Public Accountants........................ 3
GOVERNANCE OF THE COMPANY................................................. 4
Committees of the Board of Directors.................................... 4
Compensation of Directors............................................... 5
Voting Agreement........................................................ 5
ELECTION OF DIRECTORS..................................................... 5
Nominees for Terms Expiring in 2001..................................... 7
Directors Whose Terms Will Expire in 1999............................... 8
Directors Whose Terms Will Expire in 2000............................... 10
EXECUTIVE OFFICERS OF THE COMPANY......................................... 12
EXECUTIVE COMPENSATION.................................................... 14
Summary Compensation Table.............................................. 14
Option and Restricted Stock Grants in 1997.............................. 15
Option Grants in Last Fiscal Year....................................... 15
Long Term Incentive Plans--Awards in Last Fiscal Year................... 16
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Option and Restricted Stock Values.................................... 16
Other Compensation Arrangements......................................... 17
COMPENSATION PLANS........................................................ 18
1997 Long-Term Incentive Plan........................................... 18
Other Outstanding Options and Warrants.................................. 22
401(k) Plan............................................................. 23
Employee Stock Purchase Plan............................................ 23
OPTION AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION........ 24
Executive Compensation Philosophy....................................... 24
Executive Compensation Components....................................... 24
Compensation of Chief Executive Officer................................. 26
Summary................................................................. 26
PERFORMANCE GRAPH......................................................... 27
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............ 28
CERTAIN TRANSACTIONS...................................................... 30
STOCKHOLDER PROPOSALS..................................................... 31
OTHER MATTERS............................................................. 31
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Concentra Managed Care, Inc.
Executive Offices
312 Union Wharf [LOGO]
Boston, Massachusetts 02109
</TABLE>
PROXY STATEMENT
- ----------------------------------------------------------
To Our Stockholders:
These proxy materials are furnished in connection with the solicitation by
the Board of Directors of Concentra Managed Care, Inc. ("Concentra" or the
"Company"), a Delaware corporation, of proxies to be voted at the 1998 Annual
Meeting of Stockholders of the Company (the "Annual Meeting" or "Meeting") and
at any meeting following adjournment thereof.
You are cordially invited to attend Concentra's Annual Meeting of
Stockholders on Wednesday, May 13, 1998, beginning at 10:00 a.m. E.S.T. The
Meeting will be held at 1 Federal Street, 8th Floor, Boston, Massachusetts
02106.
The Company was formed by the mergers of CRA Managed Care, Inc. ("CRA") and
OccuSystems, Inc. ("OccuSystems") which were completed August 29, 1997. The
Company's 1997 fiscal year ended December 31, 1997. All references in this Proxy
Statement to the year 1997 or fiscal 1997 refer to the twelve-month period from
January 1, 1997 through December 31, 1997 for the Company and its predecessors.
This Proxy Statement, 1997 Annual Report of the Company, and accompanying
forms of proxy and voting instructions are being mailed to holders of the
Company's common stock ("Common Stock" or "Stock") on April 7, 1998. The record
date (the "Record Date") for determining stockholders entitled to notice of and
to vote at the Annual Meeting is March 16, 1998.
The Board of Directors appreciates your interest in the Company. Regardless
of whether you plan to attend the meeting, it is important that your shares be
represented. Please sign, date, and mail the enclosed proxy in the envelope
provided at your earliest convenience.
<TABLE>
<S> <C>
Sincerely,
Donald J. Larson
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
</TABLE>
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
PROXIES
YOUR VOTE IS IMPORTANT. If the proxy is properly signed, returned to the
Company, and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the proxy will be
voted in favor of approval of all of the proposals to be considered at the
Annual Meeting, and as recommended by the Board of Directors with regard to all
other matters or, if no such recommendation is given, in the discretion of the
proxy holders on such other business as may properly come before the Annual
Meeting.
A person giving their enclosed proxy has the power to revoke it at any time
before it is exercised. However, such revocation must be made in writing and
received by the Secretary of the Company at its principal executive offices at
312 Union Wharf, Boston, Massachusetts 02109, at or before the time and date of
the Annual Meeting. A stockholder may also attend the Annual Meeting and vote in
person, in which event any prior proxy given by the stockholder will be
automatically revoked.
STOCKHOLDERS ENTITLED TO VOTE
Only stockholders of record at the close of business on March 16, 1998, are
entitled to vote at the meeting or any adjournments thereof. A list of all
stockholders entitled to vote at the Annual Meeting will be available for
inspection by any stockholder for any purpose reasonably related to the Annual
Meeting during ordinary business hours for a period of ten days prior to the
Annual Meeting at the Company's principal executive offices at 312 Union Wharf,
Boston, Massachusetts 02109. At the record date, 46,126,831 shares of the
Company's common stock, par value $.01 per share ("Common Stock") were
outstanding.
REQUIRED VOTE
A majority of the outstanding shares present in person or by proxy is
required to constitute a quorum to transact business at the meeting. If a quorum
is not present, the stockholders entitled to vote who are present in person or
represented by proxy at the Annual Meeting have the power to adjourn the Annual
Meeting from time to time, without notice other than an announcement at the
Annual Meeting, until a quorum is present. At any adjourned Annual Meeting at
which a quorum is present, any business may be transacted that might have been
transacted at the Annual Meeting as originally notified.
Each share of Common Stock entitles the owner to one vote. Abstentions and
broker non-votes will be counted as present for purposes of determining
2
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
whether a quorum exists, but as not voted for purposes of determining the
approval of any matter submitted to the stockholders for a vote.
COST OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. Such
solicitation will be made by mail and in addition may be made personally or by
telephone by directors, officers, and employees of the Company, none of whom
will receive additional compensation for these services. The Company has engaged
the firm of Georgeson & Company Inc. ("Georgeson") to assist the Company in the
distribution and solicitation of proxies. The Company has agreed to pay
Georgeson a fee of $7,500 plus expenses for these services.
Forms of proxies and proxy materials will also be distributed through
brokers, custodians, and other like parties to the beneficial owners of Common
Stock. The Company will reimburse such parties for their reasonable out-of-
pocket expenses incurred in connection with the distribution.
STOCKHOLDER ACCOUNT MAINTENANCE
The Company's Transfer Agent is ChaseMellon Shareholder Services, LLC
("ChaseMellon"). All questions concerning accounts of stockholders of record,
including address changes, name changes, inquiries as to requirements to
transfer Common Stock and similar issues can be handled by contacting
ChaseMellon at Overpeck Center, 85 Challenger Road, Ridgefield Park, New Jersey
07660, or by calling the toll-free telephone number 1-800-635-9270.
For other Company information, stockholders can visit
Concentra's Web site at
HTTP://WWW.CONCENTRAMC.COM.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers and persons who own more than 10% of the
Company's Common Stock to file reports of holdings and transactions in Stock
with the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc. Based on Company records and other information, the
Company believes that all applicable Section 16(a) reporting requirements were
complied with for all transactions which occurred in 1997.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee of the Board of Directors, the
Board has reappointed Arthur Andersen LLP ("Arthur Andersen") as the independent
public accounting firm to audit the Company's financial
3
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
statements for the fiscal year beginning January 1, 1998 and ending December 31,
1998.
Representatives of Arthur Andersen will be present at the Annual Meeting.
They will be given the opportunity to make a statement if they desire to do so,
and they will be available to respond to appropriate questions.
GOVERNANCE OF THE COMPANY
- ----------------------------------------------------------
Pursuant to the Delaware General Corporation Law, as implemented by the
Company's Certificate of Incorporation and Bylaws, the business, property, and
affairs of the Company are managed under the direction of the Board of
Directors. Members of the Board are kept informed of the Company's business
through discussions with the Chairman and officers, by reviewing materials
provided to them, and by participating in meetings of the Board and its
committees.
Since the Company's inception, the Board of Directors held a total of 2
meetings, including 2 regular meetings and no special meetings. Each director
attended more than 75% of the aggregate of (i) the total number of meetings held
by 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
During 1997, the Board of Directors of the Company had two standing
committees: an Audit Committee and an Option and Compensation Committee.
The Audit Committee held no meetings during 1997. The Audit Committee held
its first formal meeting in February 1998. The Audit Committee reviews the
adequacy of the Company's system of internal controls and accounting practices.
In addition, the Audit Committee reviews the scope of the annual audit of the
Company's independent public accountants, Arthur Andersen, prior to its
commencement, and reviews the types of services for which the Company retains
Arthur Andersen.
The Option and Compensation Committee held 2 meetings in 1997. The functions
of the Option and Compensation Committee are to: (1) establish annual salary
levels, approve fringe benefits, and administer any special compensation plans
or programs for officers of the Company, (2) review and approve the salary
administration program for the Company, and (3) administer the
4
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
Company's incentive and stock option plans.
Paul B. Queally, Mitchell T. Rabkin, M.D., and Lois E. Silverman currently
serve on the Audit Committee. George H. Conrades, Robert W. O'Leary, and Robert
A. Ortenzio currently serve on the Option and Compensation Committee.
COMPENSATION OF DIRECTORS
Concentra pays each non-employee Director for his services as a director an
annual fee of $15,000 in restricted stock (subject to pro-rata forfeiture in the
event a director fails to attend at least 75% of board meetings in such year)
and grants each non-employee Director options each year to acquire 5,000 shares
of Concentra Common Stock. Each annual grant of options vests, and the
restrictions with respect to each annual grant of restricted stock lapses, after
one year. In addition, each of the Company's Directors receives reimbursement of
all ordinary and necessary expenses incurred in attending any meeting of the
Board of Directors or any committee of the Board of Directors. The Company does
not otherwise compensate, and does not anticipate compensating, its Directors
for their services as Directors.
VOTING AGREEMENT
Pursuant to an agreement entered into between Lois E. Silverman and Donald J.
Larson, Mr. Larson has agreed to vote his shares in favor of Ms. Silverman or
her designee as a member of the Board for as long as Ms. Silverman, her family,
and trusts established by her, hold at least 519,113 shares of Common Stock.
ELECTION OF DIRECTORS
- ----------------------------------------------------------
The Board of Directors is divided into three classes and is presently
comprised of nine members. The directors of each class are elected for
three-year terms, with terms of the three classes staggered so that directors
from a single class are elected at each annual meeting of stockholders.
Paul B. Queally, Mitchell T. Rabkin, M.D., and Daniel J. Thomas are Class I
directors whose terms of office expire at this Annual Meeting. George H.
Conrades, Robert A. Ortenzio, and Lois E. Silverman, are Class II directors
whose terms of office expire at the annual meeting of stockholders in 1999. John
K. Carlyle, Donald J. Larson, and Robert
5
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
W. O'Leary are Class III directors whose terms of office expire at the annual
meeting of stockholders in 2000.
The persons named in the enclosed proxy intend to vote such proxy FOR the
election of each of the four nominees named below, unless you indicate on the
proxy card that your vote should be withheld from any or all of such nominees.
If you are voting by telephone, you will be instructed how to withhold your vote
from any or all of such nominees. Each nominee elected as a Director will
continue in office until his successor has been duly elected and qualified, or,
if earlier, until his death, resignation, or removal.
The Board of Directors has proposed the following nominees for election at
the Annual Meeting as Class I Directors of the Company with terms expiring 2001:
NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD IN
THE YEAR 2001:
HON. WILLIS D. GRADISON, JR.
MITCHELL T. RABKIN, M.D.
RICHARD D. REHM, M.D.
DANIEL J. THOMAS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF
EACH OF THE NOMINEES NAMED ABOVE.
The affirmative vote of a plurality of the shares of Common Stock cast at the
1998 Annual Meeting by the holders of Common Stock entitled to vote thereon is
required to elect each of the four nominees. It is expected that the nominees
will serve, if elected, but if for any unforeseen reason a nominee should
decline or be unable to serve, the proxies will be voted to fill any such
vacancy in accordance with the discretionary authority of the persons named in
the proxies. The proxies cannot be voted for a greater number of persons than
the number of named nominees.
Beginning on page 7, certain information is set forth regarding the nominees
named above and regarding other Directors whose terms of office will continue
after the Annual Meeting. Information about the Stock ownership of the Directors
can be found on page 28.
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
----------------------------------------------------------------
NOMINEES FOR TERMS EXPIRING IN 2001
----------------------------------------------------------------
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[PICTURE] HON. WILLIS D. GRADISON, JR. currently serves as
President of the Health Insurance Association of
America ("HIAA"), the trade group representing
the nation's commercial health insurance
companies, and has served in that capacity since
1993. Prior to assuming his current position
with HIAA, Mr. Gradison served in the United
States House of Representatives for 18 years
where, most recently, he was ranking Minority
Member of the House Budget Committee and the
Health Subcommittee of the House Ways and Means
Committee. Mr. Gradison also serves on the Board
of Directors of the Life and Health Insurance
Medical Research Fund and on the Board of
Governors of the National Hospice Foundation.
Age: 69.
- ----------------------------------------------------------------
[PICTURE] MITCHELL T. RABKIN, M.D. has served as a
Director of the Company since August 1997. He
served as a director of CRA from February 1995
until August 1997. From 1966 to September 1996,
Dr. Rabkin served as Chief Executive Officer of
Boston's Beth Israel Hospital. He currently
holds the rank of Professor of Medicine at
Harvard Medical School. Since October 1, 1996,
Dr. Rabkin has been Chief Executive Officer of
CareGroup, Inc., parent corporation of Beth
Israel Deaconess Medical Center. Dr. Rabkin is a
graduate of Harvard College and received his
M.D. from Harvard Medical School. Age: 67.
- ----------------------------------------------------------------
[PICTURE] RICHARD D. REHM, M.D. founded OccuSystems in
1990 and served as its Chairman of the Board
from 1991 through December 1996 and as a
director through August 1997. Dr. Rehm has
owned, operated, and developed occupational
healthcare centers since 1979. Age: 52.
- ----------------------------------------------------------------
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
<TABLE>
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- ----------------------------------------------------------------
[PICTURE] DANIEL J. THOMAS has served as a Director and
President and Chief Operating Officer of the
Company since January 1998. He served as
Executive Vice President and President of
Practice Management Services of the Company from
August 1997 until January 1998. He served as a
director of OccuSystems and its President and
Chief Operating Officer from January 1997 to
August 1997. From April 1993 through December
1996, Mr. Thomas served as OccuSystems'
Executive Vice President and Chief Operating
Officer. Prior to joining OccuSystems in 1993,
Mr. Thomas served as controller of Medical Care
International, Inc. from 1987 to 1990 and as its
Senior Vice President and Divisional Director
from 1990 to 1993. Mr. Thomas is a certified
public accountant. Age: 39.
- ----------------------------------------------------------------
</TABLE>
----------------------------------------------------------------
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1999
----------------------------------------------------------------
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<C> <S>
[PICTURE] GEORGE H. CONRADES has served as a Director of
the Company since August 1997. He served as a
director of CRA from July 1994 until August
1997. Mr. Conrades has been President and Chief
Executive Officer of BBN Corporation, a provider
of internetworking services, products and
application solutions, since 1994 and has been
Chairman of the Board of BBN Corporation since
November 1995. From 1992 to 1994, Mr. Conrades
was a partner in Conrades/Reilly Associates, a
business consulting company. From 1961 to 1992,
Mr. Conrades held a number of management
positions with International Business Machines
Corp., most recently as Senior Vice President
for Corporate Marketing and Services. Mr.
Conrades is also a director of CBS Corporation
and Cubist Pharmaceuticals, Inc. Age: 59.
- ----------------------------------------------------------------
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
<TABLE>
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- ----------------------------------------------------------------
[PICTURE] ROBERT A. ORTENZIO has served as a Director of
the Company since August 1997. He served as
director of OccuSystems from May 1992 until
August 1997. Mr. Ortenzio currently serves as
the President of Select Medical Corporation, a
private healthcare company based in
Mechanicsburg, Pennsylvania, and has served in
such capacity since August 1996. From 1986 to
1996, Mr. Ortenzio was employed by Continental
Medical Systems, Inc., a nationwide provider of
rehabilitation services, from 1986 until 1988 as
its Senior Vice President, from 1988 until June
1995 as its President and Chief Operating
Officer and from July 1995 to August 1996 as its
President and Chief Executive Officer. Mr.
Ortenzio also served as the Executive Vice
President and a director of Horizon/ CMS
Healthcare Corporation from July 1995 to August
1996. Age: 40.
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
[PICTURE] LOIS E. SILVERMAN has served as a Director of
the Company since August 1997. She co-founded
CRA in 1978 and served as Chairman of the Board
of Directors of CRA from March 1994 until August
29, 1997 and as Chief Executive Officer of CRA
from 1988 to December 31, 1995. Prior to
founding CRA, Ms. Silverman held the position of
Northeast Regional Manager at IntraCorp., a
Division of Cigna Corporation. Ms. Silverman is
a director of Sun Healthcare Group, Inc., and
CareGroup, Inc., parent corporation of Beth
Israel Deaconess Medical Center, and serves as a
Trustee of Simmons College and Overseer of Tufts
Medical Schools. Age: 57.
- ----------------------------------------------------------------
</TABLE>
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
----------------------------------------------------------------
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2000
----------------------------------------------------------------
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[PICTURE] JOHN K. CARLYLE has served as a Director of the
Company since August 1997. Mr. Carlyle served as
Chairman of the Board of Directors of the
Company from August 1997 to January 1998. Mr.
Carlyle is currently President and CEO of
MAGELLA Healthcare Corporation, a private
physician practice management company devoted to
the area of neonatology and perinatology. Mr.
Carlyle served as OccuSystems' Chairman and
Chief Executive Officer from January 1997 until
August 1997. He joined OccuSystems in 1990 as
its President and served in that capacity until
December 1996. Mr. Carlyle served as the Chief
Executive Officer and a director of OccuSystems
from 1991 until August 1997. Mr. Carlyle has
served as a director of National Surgery
Centers, Inc., an owner and operator of free
standing, multi-specialty ambulatory surgery
centers, since 1991. He also serves as a
director of several private companies. Mr.
Carlyle is a certified public accountant. Age:
43.
- ----------------------------------------------------------------
[PICTURE] DONALD J. LARSON has served as a Director and
Chief Executive Officer of the Company since
August 1997 and as Chairman of the Board of
Directors since January 16, 1998. Mr. Larson
also served as President of the Company from
August 1997 until January 1998. Mr. Larson
co-founded CRA in 1978 and served as President
and Chief Executive Officer of CRA from January
1996 until August 1997 and as President and
Chief Operating Officer of CRA from 1988 until
August 1997. Age: 47.
- ----------------------------------------------------------------
</TABLE>
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
<TABLE>
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- ----------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
[PICTURE] ROBERT W. O'LEARY has served as a Director of
the Company since August 1997. He served as a
director of OccuSystems from July 1995 until
August 1997. Since March 1995, Mr. O'Leary has
served as Chairman and Chief Executive Officer
of Premier, Inc., a national healthcare
alliance. From 1991 until 1995, Mr. O'Leary
served as Chairman and Chief Executive Officer
of American Medical International, Inc., a
healthcare facilities management company. From
1989 to 1991, Mr. O'Leary served as President
and Chief Executive Officer of Voluntary
Hospitals of America, a national hospital
alliance. Previously, Mr. O'Leary served as the
Chairman of i-STAT Corporation, a medical device
manufacturer. Mr. O'Leary also serves as a
director of Smiths Industries plc, a British
aerospace company. Age: 54.
- ----------------------------------------------------------------
</TABLE>
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
EXECUTIVE OFFICERS OF THE COMPANY
- ----------------------------------------------------------
Executive officers are generally elected annually by the Board of Directors
to serve, subject to the discretion of the Board of Directors, until their
respective successors are elected. Tabular information and a brief biography of
each executive officer of the Company follow.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------- --- -----------------------------------------------
<S> <C> <C>
Donald J. Larson 47 Chairman and Chief Executive Officer
Daniel J. Thomas 39 President and Chief Operating Officer, Director
James M. Greenwood 36 Executive Vice President of Corporate
Development
Richard A. Parr II 39 Executive Vice President, General Counsel and
Secretary
Joseph F. Pesce 49 Executive Vice President, Chief Financial
Officer and Treasurer
W. Tom Fogarty, M.D. 50 Senior Vice President and Chief Medical Officer
Kenneth Loffredo 40 Senior Vice President of Marketing and Sales
</TABLE>
DONALD J. LARSON has served as a Director and Chief Executive Officer of the
Company since August 1997 and as Chairman of the Board of Directors since
January 16, 1998. Additional information regarding Mr. Larson appears on page
10.
DANIEL J. THOMAS has served as a director and President and Chief Operating
Officer of the Company since January 1998. Additional information regarding Mr.
Thomas appears on page 8.
JAMES M. GREENWOOD has served as Executive Vice President of Corporate
Development since February 1998 and as Senior Vice President of Corporate
Development of the Company from August 1997 to February 1998. He served as
OccuSystems' Chief Financial Officer from 1993 when he joined OccuSystems as a
Vice President until August 1997.
Mr. Greenwood served as a Senior Vice President of OccuSystems since May 1994.
From 1988 until he joined OccuSystems in 1993,
12
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
Mr. Greenwood served in numerous positions with Bank One, Texas, N.A., and its
predecessors, most recently as Senior Vice President and Manager of Mergers and
Acquisitions. Mr. Greenwood is a certified public accountant.
RICHARD A. PARR II has served as Executive Vice President, General Counsel
and Secretary of the Company since August 1997. He served as OccuSystems'
Executive Vice President, General Counsel and Secretary from August 1996 to
August 1997. Prior to joining OccuSystems, Mr. Parr served as Vice President and
Assistant Gen-
eral Counsel of OrNda HealthCorp, a national hospital management company, from
April 1993 through August 1996 and as Associate General Counsel of OrNda
HealthCorp from September 1991 through March 1993.
JOSEPH F. PESCE has served as Executive Vice President, Chief Financial
Officer and Treasurer of the Company since August 1997. He served as Senior Vice
President-Finance and Administration of CRA from August 1996 to August 1997 and
as Chief Financial Officer and Treasurer of CRA from October 1994 to August
1997. Mr. Pesce served as Vice President-Finance and Administration of CRA from
October 1994 to August 1996. From October 1981 to September 1994, Mr. Pesce held
various financial positions with Computervision Corporation and its predecessor,
Prime Computer, Inc., including Director of Corporate Planning and Analysis,
Director of Leasing, Corporate Controller, Treasurer and, most recently, Vice
President-Finance and Chief Financial Officer. Mr. Pesce is a certified public
accountant.
W. TOM FOGARTY, M.D. has served as Senior Vice President and Chief Medical
Officer of the Company since August 1997. He served as OccuSystems' Senior Vice
President and Chief Medical Officer from September 1995 to August 1997. From
1993 to September 1995, Dr. Fogarty served as Vice President and Medical
Director of OccuSystems. From 1992 to 1993, he served as a Regional Medical
Director of Occu-Systems and, from 1985 until 1992, as a medical director of one
of OccuSystems' centers.
KENNETH LOFFREDO has served as Senior Vice President of Marketing and Sales
since August 1997. Mr. Loffredo served as Vice President of Sales of CRA from
February 1995 to August 1997. From July 1993 to January 1995 he was CRA's
Regional Sales Manager for the New England states. Mr. Loffredo joined CRA in
July of 1981, and from 1981 to June 1993, he held positions of Case Manager,
Account Manager and Regional Manager.
13
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
EXECUTIVE COMPENSATION
- ----------------------------------------------------------
The following table summarizes the compensation paid to the Company's Chief
Executive Officer and to the Company's four most highly compensated executive
officers other than the Chief Executive Officer who were serving as executive
officers at the end of fiscal year 1997 (the "Named Executive Officers") during
(a) fiscal year 1997 by the Company and its predecessors, CRA or OccuSystems,
and (b) fiscal years 1996 and 1995 by the Company's predecessors.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION ALL OTHER
------------------------ AWARDS- OPTIONS COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) (1)(#) SATION (2)($)
- ---------------------------------- --------- ----------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Donald J. Larson 1997 320,204(3) 116,500 100,000 3,200(4)
CHAIRMAN AND CHIEF 1996 250,000 161,000 178,600 3,000(4)
EXECUTIVE OFFICER 1995 250,000 87,500 -- 4,620(4)
John K. Carlyle 1997 340,000(6) 85,000 100,000 306(7)
DIRECTOR (5) 1996 301,666 85,000 -- 306(7)
1995 233,333 100,000 160,000 318(7)
Daniel J. Thomas 1997 260,000(8) 65,000 130,000 198(7)
PRESIDENT AND CHIEF 1996 225,000 60,000 -- 198(7)
OPERATING OFFICER 1995 193,333 75,000 100,000 214(7)
Joseph F. Pesce 1997 245,096(9) 86,500 130,000 12,720(10)
EXECUTIVE VICE PRESIDENT, CHIEF 1996 235,000 108,100 160,740 17,955(10)
Financial Officer and Treasurer 1995 225,000 134,375 17,324 3,825(10)
JOHN A. MCCARTHY, JR. 1997 245,096(11) 86,500 80,000 7,952(12)
EXECUTIVE VICE PRESIDENT-- 1996 203,692 108,100 160,740 9,767(12)
MANAGED CARE SERVICES 1995 144,192 56,250 50,901 2,070(12)
</TABLE>
FOOTNOTES
(1) For fiscal year 1997, represents Long-Term Awards of options and restricted
stock. See the table "Long-Term Incentive Plans--Awards in Last Fiscal Year"
on page 16. For previous years, represents awards of options only.
(2) Amount represents premiums paid by the Company for group term life insurance
that is taxable compensation to the Named Executive Officers.
(3) Mr. Larson's salary at December 31, 1997 was $350,000.
(4) Represents amount received under the Company's 401(k) plan's matching
provision.
(5) Mr. Carlyle served as Chairman of the Board of Directors until January 16,
1998.
(6) Mr. Carlyle is currently compensated as a director of the Company on the
terms disclosed in "Governance of the Company--Compensation of Directors."
(7) Represents payment of insurance premium by the Company.
(8) Mr. Thomas' salary at December 31, 1997 was $260,000.
14
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
(9) Mr. Pesce's salary at December 31, 1997 was $260,000.
(10) Represents (i) a purchase discount on shares of the Company's Common Stock
purchased pursuant to the Company's Employee Stock Purchase Plan of $9,520
for fiscal year 1997, $14,955 for fiscal year 1996 and $1,575 for fiscal
year 1995 and (ii) an amount received under the Company's 401(k) plan's
matching provision of $3,200 for fiscal year 1997, $3,000 for fiscal year
1996 and $2,250 for fiscal year 1995.
(11) Mr. McCarthy was an employee of the Company until January 22, 1998. At the
time of his departure, his salary was $260,000.
(12) Represents (i) a purchase discount on shares of the Company's Common Stock
purchased pursuant to the Company's Employee Stock Purchase Plan of $4,752
for fiscal year 1997, $6,767 for fiscal year 1996 and $586 for fiscal year
1995 and (ii) an amount received under the Company's 401(k) plan's matching
provision of $3,200 for fiscal year 1997, $3,000 for fiscal year 1996 and
$1,484 for fiscal year 1995.
OPTION AND RESTRICTED STOCK GRANTS IN 1997
The following table sets forth certain information concerning grants by the
Company and its predecessors of stock options and restricted stock to each of
the Company's Named Executive Officers during 1997. In accordance with the rules
of the Securities and Exchange Commission, the potential realizable values under
such options are shown based on assumed rates of annual compound stock price
appreciation of 5% and 10% over the full option term from the date the option
was granted.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM(2)
OPTIONS GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION ----------------------------
(#)(1) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
----------------- --------------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Larson -- -- -- -- -- --
John K. Carlyle -- -- -- -- -- --
Daniel J. Thomas 50,000 1.96% $ 33.88 11/21/07 $ 1,065,190 $ 2,699,401
Joseph F. Pesce 50,000 1.96% $ 33.88 11/21/07 $ 1,065,190 $ 2,699,401
John A. McCarthy -- -- -- -- -- --
</TABLE>
FOOTNOTES
(1) The vesting of each option is cumulative and no vested portion will expire
until the expiration of the option. These options vest over a four-year
period beginning on the January 1 subsequent to the date of the grant, with
25% of the options vesting and becoming exercisable on each subsequent
January 1. All options will vest immediately upon the occurrence of a change
in control triggering event, which includes a consolidation or merger of the
stock of the Company, or a sale of substantially all of the assets of the
Company.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises will depend upon the future
performance of the Common Stock.
15
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
AGGREGATE
POTENTIAL
REALIZABLE
VALUE AT
NUMBER OF SECURITIES ASSUMED ANNUAL
RATES OF STOCK
PRICE
UNDERLYING AWARDS APPRECIATION
PERFORMANCE GRANTED(#) % OF TOTAL EXERCISE FOR OPTION
PERIOD UNTIL ------------------------- OPTIONS GRANTED PRICE OF TERM(2)
MATURATION OR RESTRICTED TO EMPLOYEES IN OPTIONS ---------------
PAYOUT(1) OPTIONS STOCK FISCAL YEAR ($/SHARE) 5%($)
---------------- ----------- ------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Larson 1997-2004 70,000 30,000 3.91% $ 32.63 $ 3,030,219
John K. Carlyle 1997-2004 70,000 30,000 3.91% $ 23.13 $ 2,117,610
Daniel J. Thomas 1997-2004 56,000 24,000 3.13% $ 23.13 $ 1,693,987
Joseph F. Pesce 1997-2004 56,000 24,000 3.13% $ 32.63 $ 2,424,174
John A. McCarthy, Jr. 1997-2004 56,000 24,000 3.13% $ 32.63 $ 2,424,174
<CAPTION>
10%($)
---------------
<S> <C>
Donald J. Larson $ 6,178,034
John K. Carlyle $ 4,316,136
Daniel J. Thomas $ 3,452,910
Joseph F. Pesce $ 4,942,427
John A. McCarthy, Jr. $ 4,942,427
</TABLE>
FOOTNOTES
(1) The awards listed in the table relate to the performance period beginning
January 1, 1998 and ending December 31, 2005. The vesting of awards for each
officer will be based on the level of attainment of an earnings per share
growth objective.
(2) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises will depend upon the future
performance of the Common Stock of the Company.
OPTION EXERCISES AND FISCAL YEAR END VALUES
The following table provides information about option exercises by the Named
Executive Officers during 1997 and the value realized by them (whether through
the Company or one of its predecessors). The table also provides information
about the number and value of options held by the Named Executive Officers at
December 31, 1997.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION AND RESTRICTED STOCK VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
SHARES VALUE AT FISCAL YEAR END (#)(3) AT FISCAL YEAR END ($)(2)
ACQUIRED ON REALIZED ----------------------------- ------------------------------
NAME EXERCISE (#) ($)(1)/ EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------- ------------- ------------ --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Larson -- -- 35,720 242,880 $ 235,395 $ 2,032,529
John K. Carlyle 227,250 $ 4,983,157 50,000 100,000 $ 712,500 $ 1,755,950
Daniel J. Thomas -- -- 287,500 117,500 $ 6,856,250 $ 1,404,760
Joseph F. Pesce 36,327 595,421 64,902 253,735 $ 979,221 $ 2,805,190
John A. McCarthy, Jr. 34,649 557,327 50,723 221,272 $ 928,095 $ 2,958,566
</TABLE>
FOOTNOTES
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on the Nasdaq National Market on the date of
exercise, minus the exercise price.
(2) Market value of securities underlying in-the-money options based on the
closing price of the Company's Common Stock on December 31, 1997 (the last
trading day of the fiscal year) on the Nasdaq National Market of $33.75,
minus the exercise price.
(3) Of the unexercisable shares, Mr. Carlyle will be vested in an additional
100,000 shares on or before June 30, 1998.
16
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
OTHER COMPENSATION ARRANGEMENTS
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Donald J. Larson,
Daniel J. Thomas, James M. Greenwood, Richard A. Parr II, Joseph F. Pesce, and
W. Tom Fogarty, M.D. Each of the agreements provides for the payment of base
salary amounts, bonuses at the discretion of the Company's Board of Directors,
and participation in any employee benefit plan adopted by the Company for its
employees. The term of each of the agreements is two years, subject to automatic
renewal for additional terms of one year each. Each of the agreements entitles
each such individual to receive severance payments if the Company terminates
such individual's employment without cause or the individual terminates his
employment for good reason. Such severance payments shall equal two years' base
salary for Mr. Larson and one year's base salary for Messrs. Thomas, Greenwood,
Parr, Pesce, and Fogarty.
INDEMNITY AGREEMENTS AND LIMITATIONS ON DIRECTORS' LIABILITY
The Company has entered into indemnity agreements with each of its Directors
and executive officers. Pursuant to these agreements, the Company will, to the
extent permitted under applicable law, indemnify these persons against all
expenses, judgments, fines, and penalties incurred in connection with the
defense or settlement of any actions brought against them by reason of the fact
that they are or were Directors or officers of the Company or that they assumed
certain responsibilities at the direction of the Company.
In addition, the Company's Certificate of Incorporation provides for certain
limitations on Director liability. The Company's Certificate of Incorporation
provides that no Director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the Director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or repurchases, or (iv) for any transaction from which the Director derived an
improper personal benefit. The effect of these provisions is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a Director
for breach of fiduciary duty as a director (including breaches resulting from
grossly negligent behavior), except in the situations described above.
17
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
COMPENSATION PLANS
- ----------------------------------------------------------
1997 LONG-TERM INCENTIVE PLAN
GENERAL
The Company may grant awards with respect to shares of Common Stock under the
Company's 1997 Long-Term Incentive Plan (the "Incentive Plan") to officers,
directors, employees and certain consultants and advisors. The awards under the
Incentive Plan include (i) incentive stock options qualified as such under U.S.
Federal income tax laws, (ii) stock options that do not qualify as incentive
stock options, (iii) stock appreciation rights ("SARs"), (iv) restricted stock
awards, and (v) performance units.
The number of shares of Common Stock that may be subject to outstanding
awards under the Incentive Plan at any one time is equal to ten percent of the
total number of outstanding shares of Common Stock (treating as outstanding all
shares of Common Stock issuable within 60 days upon exercise of stock options or
conversion or exchange of outstanding, publicly-traded convertible or
exchangeable securities of the Company) minus the total number of shares of
Common Stock subject to outstanding awards under the Incentive Plan and any
stock-based plan for employees or directors of the Company adopted after the
adoption of the Incentive Plan. The number of shares authorized under the
Incentive Plan and the number of shares subject to an award under the Incentive
Plan will be adjusted for stock splits, stock dividends, recapitalizations,
mergers and other changes affecting the capital stock of the Company.
The Board of Directors or any committee designated by it may administer the
Incentive Plan (the "Committee"). The Option and Compensation Committee of the
Board of Directors is currently designated as the Committee to administer the
Incentive Plan. The Committee has broad discretion to administer the Incentive
Plan, interpret its provisions, and adopt policies for implementing the
Incentive Plan. This discretion includes the ability to select the recipient of
an award, determine the type and amount of each award, establish the terms of
each award, accelerate vesting or exercisability of an award, extend the
exercise period for an award, determine whether performance conditions have been
satisfied, waive conditions and provisions of an award, permit the transfer of
an award to family trusts and other persons, and otherwise modify or amend any
award under the Incentive Plan. Nevertheless, no awards for more than 250,000
shares or more than $2.5 million in cash may be granted to any one employee in a
calendar year.
18
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
AWARDS
The Committee determines the exercise price of each option granted under the
Incentive Plan. The exercise price for an incentive stock option must not be
less than the fair market value of the Common Stock on the date of grant, and
the exercise price of non-qualified stock options must not be less than 85% of
the fair market value of the Common Stock on the date of grant. Stock options
may be exercised as the Committee determines, but not later than ten years from
the date of grant in the case of incentive stock options. At the discretion of
the Committee, holders may use shares of stock to pay the exercise price,
including shares issuable upon exercise of the option. Under the Incentive Plan,
each non-employee Director who is a director of the Company as of both the day
immediately preceding the annual meeting of stockholders and the day immediately
following that annual meeting shall automatically be granted a Nonstatutory
Option for the purchase of 5,000 shares of Common Stock and a Restricted Stock
Award having a fair market value of $15,000 effective on the date of the first
meeting of the Board of Directors following that annual meeting, whether or not
that director is in attendance at that Board meeting.
An SAR may be awarded in connection with or separate from a stock option. An
SAR is the right to receive an amount in cash or stock equal to the excess of
the fair market value of a share of the Common Stock on the date of exercise
over the exercise price specified in the agreement governing the SAR (for SARs
not granted in connection with a stock option) or the exercise price of the
related stock option (for SARs granted in connection with a stock option). An
SAR granted in connection with a stock option will require the holder, upon
exercise, to surrender the related stock option or portion thereof relating to
the number of shares for which the SAR is exercised. The surrendered stock
option or portion will then cease to be exercisable. Such an SAR is exercisable
or transferable only to the extent that the related stock option is exercisable
or transferable. An SAR granted independently of a stock option will be
exercisable as the Committee determines. The Committee may limit the amount
payable upon exercise of any SAR. SARs may be paid in cash or stock, as the
Committee provides in the agreement governing the SAR.
A restricted stock award is a grant of shares of Common Stock that are
nontransferable or subject to risk of forfeiture until specific conditions are
met. The restrictions will lapse in accordance with a schedule or other
conditions as the Committee determines. During the restriction period, the
holder of a restricted stock award may, in the Committee's discretion, have
certain
19
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
rights as a stockholder, including the right to vote the stock subject to the
award or receive dividends on that stock. Restricted stock may also be issued
upon exercise or settlement of options, SARs or performance units.
Performance units are performance-based awards payable in cash, stock or a
combination of both. The Committee may select any performance measure or
combination of measures as conditions for cash payments or stock issuances under
the Incentive Plan, except that performance measures for executive officers must
be objective measures chosen from among the following choices: (a) total
stockholder return (Common Stock appreciation plus dividends); (b) net income;
(c) earnings per share; (d) cash flow per share; (e) return on equity; (f)
return on assets, (g) revenues; (h) costs; (i) costs as a percentage of
revenues; (j) increase in the market price of Common Stock or other securities;
(k) the performance of the Company in any of the items mentioned in clause (a)
through (j) in comparison to the average performance of the companies included
in the Nasdaq Health Services Stocks Index; or (1) the performance of the
Company in any of the items mentioned in clause (a) through (j) in comparison to
the average performance of the companies used in a self-constructed peer group
established before the beginning of the performance period. The Committee may
choose different performance measures if the stockholders so approve, if tax
laws or regulations change so as not to require stockholder approval of
different measures in order to deduct the compensation related to the award for
federal income tax purposes, or if the Committee determines that it is in the
Company's best interest to grant awards not satisfying the requirements of
Section 162(m) of the Internal Revenue Code or any successor law.
OTHER PROVISIONS
At the Committee's discretion and subject to conditions that the Committee
may impose, a participant's tax withholding with respect to an award may be
satisfied by the withholding of shares of Concentra Common Stock issuable
pursuant to the award or the delivery of previously owned shares of Concentra
Common Stock, in either case based on the fair market value of the shares.
The Committee has discretion to determine whether an award under the
Incentive Plan will have change-of-control features. The Committee also has
discretion to vary the change of control features as its deems appropriate. The
following describes the change of control features that the Company generally
expects may apply to additional awards, if any such feature applies. An award
agreement under the Incentive Plan may provide that, upon a change of control of
the Company with respect to Awards
20
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
held by Participants who are employees or directors at the occurrence of the
change of control, (1) all outstanding SARs and options will become immediately
and fully vested and exercisable in full, (2) the restriction period on any
restricted stock award will be accelerated and the restrictions will expire, and
(3) the target payout opportunity attainable under the performance units will be
deemed to have been fully earned for all performance periods as of the effective
date of the change in control and the holder will be paid a pro rata portion of
all associated targeted payout opportunities (based on the number of complete
and partial calendar months elapsed as of the change of control) in cash within
thirty days following the change of control or in stock effective as of the
change of control, for cash and stock-based performance units, respectively. The
award may also provide that it will remain exercisable for its original term
whether or not employment is terminated at or following a change in control. In
general, a change in control of the Company occurs in any of four situations:
(1) a person other than the Company or certain affiliated companies or benefit
plans becomes the beneficial owner of 20% or more of the voting power of the
Company's outstanding voting securities (except acquisitions from the Company or
in a transaction meeting the requirements of the parenthetical exception in
clause (3) below); (2) a majority of the Board of Directors is not comprised of
the members of the Board immediately following August 29, 1997 and persons whose
elections as directors were approved by those directors or their approved
successors; (3) the Company merges or consolidates with another corporation or
entity (whether Concentra or the other entity is the survivor), or the Company
and the holders of the voting securities of such other corporation or entity (or
the stockholders of Concentra and such other corporation or entity) participate
in a securities exchange (other than a merger, consolidation or securities
exchange in which the Company's voting securities are converted into or continue
to represent securities having the majority of voting power in the surviving
company, in which no person other than that surviving company owns 20% or more
of the outstanding shares of common stock or voting shares of the surviving
corporation, and in which at least a majority of the board of directors of the
surviving corporation were members of the incumbent board of Concentra); or (4)
Concentra liquidates or sells all or substantially all of its assets, except
sales to an entity having substantially the same ownership as Concentra.
If a restructure of Concentra occurs that does not constitute a change in
control of Concentra, the Committee may (but need not) cause Concentra to take
any one or more of the following
ac-
21
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
tions: (1) accelerate in whole or in part the time of vesting and exercisability
of any outstanding stock options and stock appreciation rights in order to
permit those stock options and SARs to be exercisable before, upon or after the
completion of the restructure; (2) grant each optionholder corresponding cash or
stock SARS; (3) accelerate in whole or in part the expiration of some or all of
the restrictions on any restricted stock award; (4) treat the outstanding
performance units as having fully or partially met their targets and pay, in
full or in part, the targeted payout; (5) if the restructure involves a
transaction in which Concentra is not the surviving entity, cause the surviving
entity to assume in whole or in part any one or more of the outstanding awards
under the Incentive Plan upon such terms and provisions as the Committee deems
desirable; or (6) redeem in whole or in part any one or more of the outstanding
awards (whether or not then exercisable) in consideration of a cash payment,
adjusted for withholding obligations. A restructure generally is any merger of
the Company or the direct or indirect transfer of all or substantially all of
the Company's assets (whether by sale, merger, consolidation, liquidation, or
otherwise) in one transaction or a series of transactions.
Without stockholder approval, the Board of Directors may not amend the
Incentive Plan to increase materially the aggregate number of shares of Common
Stock that may be issued under the Incentive Plan (except for adjustments
pursuant to the terms of the Incentive Plan). Otherwise, the Concentra Board of
Directors may at any time and from time to time alter, amend, suspend or
terminate the Incentive Plan in whole or in part and in any way, subject to
requirements that may exist in stock exchange rules or in securities, tax and
other laws from time to time. No award may be issued under the Incentive Plan
after August 29, 2007.
OTHER OUTSTANDING OPTIONS AND WARRANTS
In addition to the options and awards granted under the Incentive Plan and
warrants to purchase 350,000 shares of Common Stock for $7.00 per Warrant
granted
to Creditanstalt-Bankverein (of which 200,000 were unexercised as of March 31,
1998), the Company has issued or assumed from its predecessors or acquired
companies options or warrants to purchase an aggregate of 3,570,598 shares of
Common Stock pursuant to separate agreements between the Company and the holders
thereof. The 3,770,598 options and warrants that are currently outstanding have
an average exercise price of $15.00 per share, and are subject to various
vesting provisions. As of March 31, 1998, 1,852,676 of such options and warrants
were vested and outstanding and the remaining
22
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
1,917,922 options are scheduled to vest by January 1, 2004.
Unexercised options and warrants, and the exercise price thereof, are subject
to adjustment if the Company issues Common Stock for a consideration per share
less than the exercise price or if there is a subdivision or consolidation of
the Company's Common Stock, the payment of a stock dividend or other increase or
decrease in the number of shares of Common Stock outstanding, and the Company
does not receive compensation therefor. In addition, the number (and type) of
securities subject to an option or warrant are subject to adjustment if the
Company is party to a merger or consolidation.
401(K) PLAN
The Company has two defined contribution retirement plans which comply with
Section 401(k) of the Internal Revenue Code.
Substantially all employees of the managed care division of the Company,
including certain officers and Directors of the Company, who have completed
three months of service are eligible to participate in the 401(k) plan formerly
maintained by CRA (the "Managed Care Division Plan"). Employees may contribute
amounts up to a maximum of 15% of the employee's compensation. Under the Managed
Care Division Plan, the Company has the option of matching up to 50% of
participants' pretax contributions up to a maximum of 6% of compensation. For
fiscal year 1997, the Company elected to match 50% of up to 4% of compensation.
Substantially all employees of the health services division of the Company,
including certain officers and Directors of the Company, who have completed
three months of service are eligible to participate in the 401(k) plan formerly
maintained by OccuSystems (the "Health Services Division Plan"). Employees may
contribute amounts up to a maximum of 15% of the employee's compensation. Under
the Health Services Division Plan, the Company has the option of matching
participants' pretax contributions in stock or in cash. The Company has not made
any matching contributions to the Health Services Plan.
EMPLOYEE STOCK PURCHASE PLAN
The Company has an Employee Stock Purchase Plan that permits substantially
all employees to acquire the Company's Common Stock at the end of each specified
period at a purchase price of 85% of the lower of the fair market value at the
beginning or the end of the participation period. Periods are semi-annual and
begin on January 1 and July 1 of each year. Employees may designate up to 15% of
their base compensation for the purchase of Common Stock. The Option and
Compensation Committee administers the Employee Stock Purchase Plan.
23
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
OPTION AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
- ----------------------------------------------------------
EXECUTIVE COMPENSATION PHILOSOPHY
The Option and Compensation Committee of the Board of Directors is composed
entirely of outside directors. The Committee is responsible for setting and
administering the policies and programs that govern both annual compensation and
stock ownership programs for the executive officers of the Company. The
Company's executive compensation policy is based on principles designed to
ensure that an appropriate relationship exists between executive pay and
corporate performance, while at the same time motivating and retaining executive
officers.
EXECUTIVE COMPENSATION COMPONENTS
The key components of the Company's compensation program are base salary, an
annual incentive award and equity participation. These components are
administered with the goal of providing total compensation that is competitive
in the marketplace, rewards successful financial performance and aligns
executive officers' interests with those of stockholders. The Option and
Compensation Committee reviews each component of executive compensation on an
annual basis.
BASE SALARY
Base salaries for executive officers are set at levels believed by the Option
and Compensation Committee to be sufficient to attract and retain qualified
executive officers. Base pay increases are provided to executive officers based
on an evaluation of each executive's performance, as well as the performance of
the Company as a whole. While the Committee does not establish a specific
formula or target to determine base salaries, the Committee considers the
financial performance of the Company as compared to service industry companies
with similar earnings.
In this regard, the Committee primarily considers earnings growth and to a
lesser degree asset growth. The Committee also considers the success of the
executive officers in developing and executing the Company's strategic plans,
developing management employees and exercising leadership.
The Committee does not currently intend to award compensation that would
result in a limitation on the deductibility of a portion of such compensation
pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended;
however, this Committee may in the future decide to authorize compensation in
excess of the limits of Section 162(m) if it
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
determines that such compensation is in the best interests of the Company.
ANNUAL BONUS
The Option and Compensation Committee believes that a significant proportion
of total cash compensation for executive officers should be subject to
attainment of specific Company earnings criteria. This approach creates a direct
incentive for executive officers to achieve desired performance goals and places
a significant percentage of each executive officer's compensation at risk.
Consequently, at the beginning of each year, the Option and Compensation
Committee establishes potential bonuses for executive officers based on the
Company's achievement of certain earnings per share criteria. The Option and
Compensation Committee established annual bonuses for 1997 varying from 25% to
33% of base salaries, based upon the successful completion of the
CRA/OccuSystems merger transaction and the Company's achievement of
predetermined earnings per share criteria and including a discretionary
component. The Committee established the potential bonuses and earnings per
share criteria based on the Committee's judgment as to desirable financial
results for the Company and the appropriate percentage of compensation which
should be based on the attainment of such results. The bonus awards are included
in the Summary Compensation Table under "Executive Compensation."
STOCK OPTIONS AND OTHER EQUITY PARTICIPATION
The Option and Compensation Committee believes that equity participation is a
key compo-nent of its executive compensation program. Stock options and other
equity participation are granted to executive officers primarily based on the
officer's actual and potential contribution to the Company's growth and
profitability and the practices of service industry companies with similar
earnings. Option grants are designed to retain executive officers and motivate
them to enhance stockholder value by aligning the financial interests of
executive officers with those of stockholders. Stock options also provide an
effective incentive for management to create shareholder value over the long
term since the full benefit of the compensation package cannot be realized
unless an appreciation in the price of the Company's Common Stock occurs over a
number of years.
Options to purchase the Company's Common Stock, and awards of shares of
restricted stock coupled with other option awards (the "Long-Term Awards"), were
granted to certain of the Company's Named Executive Officers in 1997 and are
reflected in the information provided under "Compensation of Executive
Officers." The options vest cumulatively in four annual installments
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<PAGE>
of 25% and expire ten years from the date of grant. With respect to the
Long-Term Awards, the restrictions on the shares of restricted stock lapse and
the options vest over a period of five to seven years upon the achievement of
certain Company performance goals. The Committee granted options and Long-Term
Awards based on its judgment that the amount was appropriate and desirable
considering the executive officer's potential contribution to the Company, as
well as the number of options and Long-Term Awards granted in previous years.
The assessment of potential contribution was based on the Committee's subjective
evaluation of such executive officer's ability, skills, efforts, and leadership.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Consistent with the executive compensation policy and components described
above, the Option and Compensation Committee determined the salary, bonus and
stock options received by Donald J. Larson, Chairman and Chief Executive Officer
of the Company, for services rendered in 1997. Mr. Larson received a base salary
of $320,204 for 1997. The Committee did not establish a specific target or
formula to determine Mr. Larson's salary. Mr. Larson earned a $116,500 bonus
under the 1997 Program adopted by the Option and Compensation Committee. Mr.
Larson also received a Long-Term Award comprised of options to purchase 70,000
shares of the Company's Common Stock and a restricted stock award with respect
to 30,000 shares of Common Stock. The Committee determined the salary and bonus
granted to Mr. Larson based on its judgment that the amounts were appropriate
and desirable in light of his actual and potential contribution to the Company.
The assessment of actual and potential contribution was based on the Committee's
subjective evaluation of Mr. Larson's abilities, skills, efforts, and
leadership.
SUMMARY
The Option and Compensation Committee believes that the executive
compensation policies and programs described in this Report serve the interests
of the stockholders and the Company. Pay delivered to executives is intended to
be linked to, and to be commensurate with, Company performance and stockholder
expectations. We will continue to monitor the effectiveness and appropriateness
of each of the compensation components to reflect changes in the business
environment.
The Option and Compensation
Committee
Robert W. O'Leary, Chairman
George H. Conrades
Robert A. Ortenzio
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
PERFORMANCE GRAPH
- ----------------------------------------------------------
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total stockholder return on the Common Stock of the Company and its
direct predecessor, OccuSystems, with the cumulative total return of The Nasdaq
Stock Market (U.S. Companies) Index and an index of peer Nasdaq Health Services
companies selected by the Company for the period beginning May 8, 1995, the date
of the initial public offering of OccuSystems, and ending December 31, 1997. The
comparison assumes $100 was invested on May 8, 1995, in the Common Stock of
OccuSystems and in each of the foregoing indices and assumes reinvestment of
dividends. For purposes of the peer group index, the returns of the component
issuers were weighted according to each issuer's stock market capitalization.
CONCENTRA MANAGED CARE, INC.
- ----------------------------------------------------------
<TABLE>
<CAPTION>
5/8/95* 12/31/95 12/31/96 12/31/97
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Concentra Managed Care, Inc. $ 100 $ 143 $ 167 $ 209
Nasdaq Stock Market (U.S. Companies) $ 100 $ 126 $ 155 $ 190
Nasdaq Health Services Stocks $ 100 $ 137 $ 137 $ 140
</TABLE>
*Initial public offering of OccuSystems, Inc. completed May 8, 1995.
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ----------------------------------------------------------
The following table sets forth certain information regarding the amount and
nature of the beneficial ownership of the Common Stock as of March 31, 1998, by
(i) each person known by the Company to own beneficially more than 5% of any
class of the Company's outstanding voting securities, (ii) each of the Company's
directors, (iii) each officer of the Company named in the Summary Compensation
Table under the heading "Compensation of Executive Officers," and (iv) all
current directors and executive officers of the Company as a group. Unless
otherwise indicated, the Company believes that each person or entity named below
has sole voting and investment power with respect to all shares shown as
beneficially owned by such person or entity, subject to community property laws
where applicable and the information set forth in the footnotes to the table
below.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF
NAME OWNED(1) CLASS
- ------------------------------------------------------ ------------ -------------
<S> <C> <C>
Putnam Investments, Inc. (2).......................... 5,336,135 11.6%
One Post Office Square
Boston, MA 02109
Donald J. Larson (3).................................. 1,707,609 3.7%
John K. Carlyle (4)................................... 150,000 *
Daniel J. Thomas (5).................................. 287,867 *
Joseph F. Pesce (6)................................... 70,073 *
John A. McCarthy, Jr. (7)............................. 50,723 *
George H. Conrades (8)................................ 41,971 *
Robert W. O'Leary (9)................................. 10,000 *
Robert W. Ortenzio (10)............................... 25,469 *
Paul B. Queally....................................... 3,034 *
Mitchell T. Rabkin (11)............................... 42,328 *
Lois E. Silverman..................................... 640,543 1.4%
All directors and executive officers as a group (14
persons)............................................ 3,182,394 6.9%
</TABLE>
- ------------------------
* Less than 1%
(1) A person is considered to beneficially own any shares (a) over which such
person exercises sole or shared voting or investment power, or (b) of which
such person has the right to acquire beneficial
owner-
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
ship at any time within 60 days of March 31, 1998 (i.e. through the
conversion of securities or the exercise of stock options). Shares of Common
Stock which a person has the right to acquire within 60 days of March 31,
1998 are deemed to be outstanding for the purposes of computing the
percentage ownership of the person holding such shares, but are not deemed
outstanding for purposes of computing the percentage of any other person
shown on the table. Unless otherwise indicated, voting and investment power
relating to the above shares is exercised solely by the beneficial owner or
shared by such owner and such owner's spouse or children.
(2) Includes 4,942,987 shares held of record by Putnam Investment Management,
Inc. and 393,148 shares held of record by Putnam Advisory Company, Inc.,
each of which are subsidiaries of Putnam Investments, Inc.
(3) Includes 33,488 shares held of record by trusts created for the benefit of
Mr. Larson's children and 35,720 shares that may be acquired within 60 days
pursuant to stock options awarded under incentive compensation plans.
(4) Consists of 150,000 shares that may be acquired within 60 days pursuant to
stock options and restricted stock awarded under incentive compensation
plans.
(5) Includes 287,500 shares that may be acquired within 60 days pursuant to
stock options awarded under incentive compensation plans.
(6) Includes 64,902 shares that may be acquired within 60 days pursuant to stock
options awarded under incentive compensation plans.
(7) Consists of 50,723 shares that may be acquired within 60 days pursuant to
stock options awarded under incentive compensation plans.
(8) Consists of 41,971 shares that may be acquired within 60 days pursuant to
stock options awarded under incentive compensation plans.
(9) Consists of 10,000 shares that may be acquired within 60 days pursuant to
stock options awarded under incentive compensation plans.
(10) Includes 11,250 shares that may be acquired within 60 days pursuant to
stock options awarded under incentive compensation plans.
(11) Includes 41,971 shares that may be acquired within 60 days pursuant to
stock options awarded under incentive compensation plans.
29
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CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
CERTAIN TRANSACTIONS
- ----------------------------------------------------------
Lois E. Silverman, a Director of the Company, and Donald J. Larson, Chairman
of the Board of Directors and Chief Executive Officer, are the trustees and
beneficiaries of Colonial Realty Trust, which leases thirteen offices to the
Company for an annual aggregate consideration of $726,000. The Company believes
that the rental rates paid to Colonial Realty Trust are fair market rental
rates.
The Company is party to a Registration Rights Agreement with Comprehensive
Rehabilitation Associates Inc., J.H. Whitney & Co., Whitney 1990 Equity Fund,
L.P., Whitney Subordinated Debt Fund, L.P., First Union Corporation, Ms.
Silverman and Mr. Larson, which was entered into on March 8, 1994. Pursuant to
the Registration Rights Agreement, the holders of at least 25% of the shares of
Common Stock of the Company subject to the Agreement (excluding Ms. Silverman
and Mr. Larson) may require the Company to effect the registration of the shares
of Common Stock of the Company held by such parties for sale to the public on
three occasions, subject to certain conditions and limitations. In addition,
under the terms of the Registration Rights Agreement, if the Company proposes to
register any of its securities under the Securities Act of 1933, whether for its
own account or otherwise, the parties to the Registration Rights Agreement
(including Ms. Silverman and Mr. Larson) are entitled to receive notice of such
registration and to include their shares therein, subject to certain conditions
and limitations. The Company has agreed to pay fees, costs and expenses of any
registration effected on behalf of the parties to the Registration Rights
Agreement (other than underwriting discounts and commissions).
W. Tom Fogarty, M.D., an executive officer of the Company, is the President,
a director and a member of Occupational Health Centers of the Southwest, P.A.
("OHCSW"), and several other professional associations which provide services at
Company facilities (the "Professional Associations"). The Company has entered
into a 40 year management agreement with each of the Professional Associations.
OHCSW paid approximately $103,990,000 in management fees to the Company in 1997
under its management agreement.
The Company has entered into employment agreements with Mr. Larson, Daniel J.
Thomas, James M. Greenwood, Richard A. Parr II, Joseph F. Pesce, and W. Tom
Fogarty, M.D. See "Executive Compensation--Other
Com-
30
<PAGE>
CONCENTRA MANAGED CARE, INC. NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
pensation Arrangements" for a discussion of the terms of these agreements.
STOCKHOLDER PROPOSALS
- ----------------------------------------------------------
Any stockholder proposal intended to be presented at the next Annual Meeting
must be received by the Company by December 1, 1998, in order to be considered
for inclusion in the Company's proxy material for such meeting.
OTHER MATTERS
- ----------------------------------------------------------
As of the date of this Proxy Statement, the Company does not intend to bring
any other matters before the Annual Meeting requiring action of the
stockholders, not does it have any information that other matters will be
brought before the meeting. However, if any other matters requiring the vote of
the stockholders properly come before the Annual Meeting, it is the intention of
the persons named in the enclosed form of proxy to vote the proxy in accordance
with their best judgment in the interest of the Company.
By Order of the Board of
Directors,
Richard A. Parr II
Secretary
Boston, Massachusetts
April 7, 1998
31
<PAGE>
P R O X Y
CONCENTRA MANAGED CARE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 13, 1998
The undersigned hereby appoints Donald J. Larson, Joseph F. Pesce and Richard
A. Parr II or any of them, with full power of substitution of each, proxies
(and if the undersigned is a proxy, substitute proxies) to vote all Common
Stock of the undersigned of Concentra Managed Care, Inc. at the Annual
Meeting of Stockholders to be held at 1 Federal Street, 8th Floor, Boston,
Massachusetts 02106, on Wednesday, May 13, 1998 at 10:00 a.m. E.S.T. and at
any adjournments thereof, as specified on the reverse side of this card.
(PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY)
<PAGE>
/X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES FOR CLASS I DIRECTORS.
- ------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
- ------------------------------------------------------------------------------
1. ELECTION OF CLASS I DIRECTORS:
NOMINEES:
HON. WILLIS D. GRADISON FOR NOMINEES
MITCHELL T. RABKIN, M.D. LISTED ON THE LEFT WITHHOLD
RICHARD D. REHM, M.D. / / / /
DANIEL J. THOMAS
______________________________________________
FOR ALL LISTED NOMINEES EXCEPT AS NOTED ABOVE
2. DISCRETIONARY PROXY. IN THEIR DISCRETION, THE PROXIES (AND IF THE
UNDERSIGNED IS A PROXY, ANY SUBSTITUTE PROXIES) ARE AUTHORIZED TO VOTE UPON
ANY OTHER BUSINESS THAT MAY BE PROPOSED TO COME BEFORE THE MEETING.
DATE: ________________________________________________________________, 1998
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S)
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) HEREON.
WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHAREHOLDERS SHOULD SIGN ABOVE.
IF YOU ARE ACTING AS ATTORNEY-IN-FACT, CORPORATE OFFICER OR IN A FIDUCIARY
CAPACITY, PLEASE INDICATE THE CAPACITY IN WHICH YOU ARE SIGNING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
