<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
Chemed Corporation
.........................................................................
(Name of Registrant as Specified in its Charter)
Chemed Corporation
.........................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
....................................................................
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-ll_/
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid: ________________
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Fee previously paid 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
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<PAGE> 2
[CHEMED LOGO]
CHEMED CORPORATION
Notice of Annual Meeting of Stockholders
May 15, 1995
The Annual Meeting of Stockholders of Chemed Corporation will be held at The
Phoenix Club, 812 Race Street, Cincinnati, Ohio, on Monday, May 15, 1995 at
11:30 a.m. for the following purposes:
(1) To elect directors;
(2) To approve and adopt the 1995 Stock Incentive Plan;
(3) To ratify the selection by the Board of Directors of independent
accountants; and
(4) To transact such other business as may properly be brought before the
meeting.
Stockholders of record at the close of business on March 20, 1995 are
entitled to notice of, and to vote at, the meeting.
IF YOU DO NOT PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED AT YOUR EARLIEST
CONVENIENCE. NO POSTAGE IS REQUIRED IF IT IS MAILED IN THE UNITED STATES.
Naomi C. Dallob
Secretary
April 6, 1995
<PAGE> 3
[CHEMED LOGO]
CHEMED CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Chemed Corporation (hereinafter called the "Company") of
proxies to be used at the Annual Meeting of Stockholders ("Annual Meeting") of
the Company to be held on May 15, 1995 and any adjournments thereof. The
Company's mailing address is 2600 Chemed Center, 255 East Fifth Street,
Cincinnati, Ohio 45202. The approximate date on which this Proxy Statement and
the enclosed proxy are being sent to stockholders is April 6, 1995. Each valid
proxy received in time will be voted at the meeting and, if a choice is
specified on the proxy, the shares represented thereby will be voted
accordingly. The proxy may be revoked by the stockholder at any time before the
meeting by providing notice to the Secretary.
Only stockholders of record as of the close of business on March 20, 1995
will be entitled to vote at the Annual Meeting or any adjournments thereof. On
such date, the Company had outstanding 9,932,148 shares of capital stock, par
value $1 per share ("Capital Stock"), entitled to one vote per share.
ELECTION OF DIRECTORS
Fifteen directors are to be elected at the Annual Meeting to serve until the
following annual meeting of stockholders and until their successors are duly
elected and qualified. Set forth below are the names of the persons to be
nominated by the Board of Directors, together with a description of each
person's principal occupation during the past five years and other pertinent
information.
Unless authority is withheld or names are stricken, it is intended that the
shares covered by each proxy will be voted for the nominees listed. Votes that
are withheld will be excluded entirely from the vote and will have no effect.
The Company anticipates that all nominees listed in this Proxy Statement will be
candidates when the election is held. However, if for any reason any nominee is
not a candidate at that time, proxies will be voted for any substitute nominee
designated by the Board of Directors (except where a proxy withholds authority
with respect to the election of directors). The affirmative vote of the holders
of a majority of the voting power of the stockholders represented at the meeting
will be necessary to elect each of the nominees for director.
NOMINEES
J. PETER GRACE Mr. Grace is Chairman of the Board of
Director since 1970 Directors of the Company and is
Age: 81 Chairman and a director of W. R. Grace
& Co. (hereinafter "Grace"), Boca
Raton, Florida (international specialty
chemicals and health care), and served
Grace as its Chief Executive Officer
from 1945 to 1992. He is a director of
Milliken & Company, National Sanitary
Supply Company, Omnicare, Inc.,
Roto-Rooter, Inc., and Stone & Webster,
Incorporated. He is also a trustee
emeritus of Atlantic Mutual Insurance
Company, Atlantic Reinsurance Company
and Centennial Insurance Co. and a
director emeritus of Ingersoll-Rand
Company.
EDWARD L. HUTTON Mr. Hutton is Chairman and Chief
Director since 1970 Executive Officer of the Company and
Age: 75 has held these positions since November
1993. Previously, from 1970 to November
1993, he served the Company as
President and Chief Executive Officer.
Mr. Hutton is also the Chairman of
Omnicare, Inc., Cincinnati, Ohio
(health-care products and services), a
public corpora-
1
<PAGE> 4
tion in which the Company holds a 5.8%
ownership interest (hereinafter
"Omnicare"), Chairman of Roto-Rooter,
Inc., Cincinnati, Ohio (plumbing and
drain cleaning services and service
contracts), a 59%-owned subsidiary of
the Company (hereinafter
"Roto-Rooter"), and Chairman of
National Sanitary Supply Company,
Cincinnati, Ohio (sanitary and
maintenance supplies distributor), an
85%-owned subsidiary of the Company
(hereinafter "National"). Mr. Hutton is
a director of National, Omnicare,
Roto-Rooter and Sonic Corporation. Mr.
Hutton is the father of Thomas C.
Hutton, a Vice President and a director
of the Company.
JAMES A. CUNNINGHAM Mr. Cunningham is a Senior Chemical
Director since 1990 Adviser with Wertheim Schroder & Co.
Age: 50 Incorporated, New York, New York (an
investment banking, asset management
and securities firm), and has held this
position since March 1992. Previously,
he was a Managing Director of Furman
Selz Incorporated, New York, New York
(an institutional investment company),
and held this position from October
1990 to March 1992. From January 1988
to June 1990, he was a Director of The
First Boston Corporation, New York, New
York (an investment banking firm). Mr.
Cunningham is a director of National
and Roto-Rooter.
JAMES H. DEVLIN Mr. Devlin is a Vice President of the
Director from May 1991 Company and Group Executive of the
to May 1992 and since Company's Veratex Group and has held
February 1993 these positions since December 1992.
Age: 48 Previously, Mr. Devlin was an Executive
Vice President of Omnicare from May
1989 to December 1992 and held the same
position with the Veratex Group since
May 1987 when it was owned and operated
by Omnicare.
CHARLES H. ERHART, JR. Mr. Erhart retired as President of
Director since 1970 Grace in August 1990, having held that
Age: 69 position since July 1989. Previously,
he was Chairman of the Executive
Committee of Grace and held that
position from November 1986 to July
1989. He is a director of Grace,
National, Omnicare and Roto-Rooter.
JOEL F. GEMUNDER Mr. Gemunder is President of Omnicare
Director since 1977 and has held this position since May
Age: 55 1981. He is also a director of
Omnicare.
WILLIAM R. GRIFFIN Mr. Griffin is President and Chief
Director since 1981 Executive Officer and a director of
Age: 51 Roto-Rooter and has held these
positions since May 1985. Mr. Griffin
is also an Executive Vice President of
the Company and has held this position
since May 1991. Mr. Griffin is also a
director of Barefoot Inc.
THOMAS C. HUTTON Mr. Hutton is a Vice President of the
Director since 1985 Company and has held this position
Age: 44 since February 1988. Mr. Hutton is a
director of National, Omnicare and
Roto-Rooter. He is a son of Edward L.
Hutton, the Chairman and Chief
Executive Officer and a director of the
Company.
WALTER L. KREBS Mr. Krebs is Director - Financial
Director from May 1989 Services of Diversey Corporation,
to April 1991 Detroit, Michigan (specialty chemicals)
Age: 62 ("Diversey") and has held this position
since April 1991. Previously, from
January 1990 to April 1991, he was a
Senior Vice President and the Chief
Financial Officer of the Company's then
wholly owned subsidiary, DuBois
Chemicals, Inc. ("DuBois").
2
<PAGE> 5
SANDRA E. LANEY Ms. Laney is Senior Vice President and
Director since 1986 the Chief Administrative Officer of the
Age: 51 Company and has held these positions
since November 1993 and May 1991,
respectively. Previously, from May 1984
to November 1993, she was a Vice
President of the Company. Ms. Laney is
a director of National, Omnicare and
Roto-Rooter.
KEVIN J. MCNAMARA Mr. McNamara is President of the
Director since 1988 Company and has held this position
Age: 41 since August 1994. Previously, he
served as Executive Vice President,
Secretary and General Counsel from
November 1993, August 1986 and August
1986, respectively, to August 1994.
From May 1992 to November 1993, he was
a Vice Chairman of the Company and from
August 1986 to May 1992 he was a Vice
President of the Company. He is also
Vice Chairman of Roto-Rooter and
National. He is a director of National,
Omnicare and Roto-Rooter.
JOHN M. MOUNT Mr. Mount is a Principal of Lynch-Mount
Director from May 1986 to Associates, Cincinnati, Ohio
April 1991 and since February (management consulting), and has held
1994 this position since November 1993. From
Age: 53 April 1991 to November 1993, Mr. Mount
was Senior Vice President of Diversey
and President of Diversey's DuBois
Industrial division. Previously, from
May 1989 to April 1991, Mr. Mount was
an Executive Vice President of the
Company and President of DuBois. He
held the latter position from September
1986 to April 1991.
TIMOTHY S. O'TOOLE Mr. O'Toole is an Executive Vice
Director since August 1991 President and the Treasurer of the
Age: 39 Company and has held these positions
since May 1992. From February 1989 to
May 1992, he was a Vice President and
Treasurer of the Company. He is a
director of Vitas Healthcare
Corporation, National, Omnicare and
Roto-Rooter.
D. WALTER ROBBINS, JR. Mr. Robbins is a consultant to W. R.
Director since 1970 Grace & Co. and has held this position
Age: 75 since January 1987. He is a director of
Grace, National, Omnicare and
Roto-Rooter.
PAUL C. VOET Mr. Voet is an Executive Vice President
Director since 1980 of the Company and has held this
Age: 48 position since May 1991. Previously,
from May 1988 to November 1993 he also
served the Company as a Vice Chairman.
Mr. Voet is President and Chief
Executive Officer and a director of
National.
DIRECTORS EMERITI
In May 1983, the Board of Directors adopted a policy of conferring the
honorary designation of Director Emeritus upon former directors who have made
valuable contributions to the Company and whose continued advice is believed to
be of value to the Board of Directors. Under this policy, each Director Emeritus
is furnished with a copy of all agendas and other materials furnished to members
of the Board of Directors generally and is invited to attend all meetings of the
Board; however, a Director Emeritus is not entitled to vote on any matters
presented to the Board. In 1985, Dr. Herman B Wells, who served as a director of
the Company from 1970 until 1985, was designated as a Director Emeritus, in
1991; Leon Levy, who served as a director of the Company from 1982 to 1991, was
designated as a Director Emeritus; and in 1994, Neal Gilliatt, who served as a
director of the Company from 1970 to 1994, was designated as a Director
Emeritus. Each Director Emeritus is paid an annual fee of $6,200, and for each
meeting attended, a Director Emeritus is paid $200.
It is anticipated that at the annual meeting of the Board of Directors, Mr.
Levy, Mr. Gilliatt and Dr. Wells will again be designated as a Director
Emeritus.
3
<PAGE> 6
COMPENSATION OF DIRECTORS
Throughout 1994, each member of the Board of Directors who was not a regular
employee of the Company or of a wholly owned subsidiary of the Company was paid
an annual fee of $3,200 and each member of a Committee of the Board (other than
its chairman) was paid an additional annual fee of $1,600. For each meeting of
the Board of Directors attended, a director was paid $800. A Committee member
was paid $800 for each meeting of a Committee he attended unless the Committee
met on the same day as the Board of Directors met, in which event, the Committee
member was paid $400 for his attendance at the Committee meeting. Mr. Griffin is
the only director who is an employee of a subsidiary which is not wholly-owned
by the Company. Mr. Mount also received $7,000 for attending quarterly
management meetings.
In addition, in May 1994 each member of the Board of Directors (other than
those serving on the Incentive Committee of either the Company or an affiliated
company) was granted an unrestricted stock award covering 50 shares of the
Company's Capital Stock under the Company's 1986 Stock Incentive Plan. Those
directors who are members of the Incentive Committee of either the Company or an
affiliated company were paid the cash equivalent of the 50 share stock award or
$1,712.50.
Throughout 1994, the chairman of each Committee of the Board of Directors was
paid an annual fee in addition to the attendance fees referred to above. The
chairman of the Audit Committee was paid at the rate of $5,350 per annum and the
chairman of each of the Incentive Committee and the Compensation Committee was
paid at the rate of $2,568 per annum. In addition, each member of the Board of
Directors and of a Committee was reimbursed for his reasonable travel expenses
incurred in connection with such meetings.
The Company has a deferred compensation plan for non-employee directors under
which certain directors who are non-regular employees of the Company or of a
wholly- or partially-owned subsidiary of the Company participate. Under the
plan, which is not a tax-qualified plan, an account is established for each
participant to which amounts are credited quarterly at the rate of $4,000 per
annum. Amounts credited to these accounts are used to purchase shares of the
Company's Capital Stock and all dividends received on such shares are reinvested
in such Capital Stock. Each participant is entitled to receive the balance in
his account within 90 days following the date he ceases to serve as a director.
COMMITTEES AND MEETINGS OF THE BOARD
The Company has the following Committees of the Board of Directors: Audit
Committee, Compensation Committee and Incentive Committee. It does not have a
nominating committee of the Board of Directors.
The Audit Committee (a) recommends to the Board of Directors a firm of
independent accountants to audit the Company and its consolidated subsidiaries,
(b) reviews and reports to the Board of Directors on the Company's annual
financial statements and the independent accountants' report on such financial
statements and (c) meets with the Company's senior financial officers, internal
auditors and independent accountants to review audit plans and work and other
matters regarding the Company's accounting, financial reporting and internal
control systems. The Audit Committee consists of Messrs. Erhart, Mount and
Robbins. The Audit Committee met on two occasions during 1994.
The Compensation Committee makes recommendations to the Board of Directors
concerning (a) salary and incentive compensation payable to officers and certain
other key employees of the Company, (b) establishment of incentive compensation
plans and programs generally and (c) adoption and administration of certain
employee benefit plans and programs. The Compensation Committee consists of Ms.
Laney and Messrs. Cunningham, Erhart and Robbins. During 1994, the Compensation
Committee met on six occasions.
The Incentive Committee administers the Company's five Stock Incentive Plans
and its 1983 Incentive Stock Option Plan. In addition, the Incentive Committee
makes (a) grants of stock options and stock awards to key employees of the
Company and (b) recommendations to the Board of Directors concerning additional
year-end contributions by the Company under the Savings and Investment Plan. The
Incentive Committee consists of Messrs. Cunningham, Erhart and Robbins. The
Incentive Committee met on two occasions during 1994.
4
<PAGE> 7
During 1994, there were five meetings of the Board of Directors, and each
director attended at least 75% of the aggregate of (a) the total number of
meetings held by the Board of Directors and (b) the total number of meetings
held by all Committees of the Board of Directors on which he served that were
held during the period for which he was a director or member of any such
Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ms. Laney who served on the Compensation Committee during 1994 is a Senior
Vice President and the Chief Administrative Officer of the Company.
EXECUTIVE COMPENSATION
JOINT REPORT OF THE COMPENSATION COMMITTEE AND INCENTIVE COMMITTEE ON EXECUTIVE
COMPENSATION
The Company believes that executive compensation must align executive
officers' interests with those of the Company's stockholders and that such are
served by having compensation directly and materially linked to financial and
operating performance criteria which, when successfully achieved, will enhance
stockholder value.
The Company attempts to achieve this objective with an executive compensation
package for its senior executives which combines base salary, annual cash
incentive compensation, long-term incentive compensation in the form of stock
options and restricted stock awards along with various benefit plans, including
pension plans, savings plans and medical benefits generally available to the
employees of the Company.
The executive compensation program is administered through the coordinated
efforts of the Compensation Committee and the Incentive Committee of the Board
of Directors. The membership of the Incentive Committee is composed of outside
directors (i.e. non-employees of the Company) and the Compensation Committee is
composed of three outside directors and Ms. Laney, who is an executive officer
of the Company. The Compensation Committee is responsible for the review,
approval and recommendation to the Board of Directors of matters concerning base
salary and annual cash incentive compensation for key executives of the Company.
The recommendations of the Compensation Committee on such matters must be
approved by the full Board of Directors. The Incentive Committee administers the
Company's stock incentive plans under which it reviews and approves grants of
stock options and restricted stock awards.
Both the Compensation and Incentive Committees may use their discretion to
set executive compensation where, in their collective judgment, external,
internal or individual circumstances warrant.
Following is a discussion of the components of the executive officer
compensation program.
In determining base salary levels for the Company's executive officers, the
Compensation Committee takes into account the magnitude of responsibility of the
position, individual experience and performance and specific issues particular
to the Company. In general, base salaries are set at levels believed by this
Compensation Committee to be sufficient to attract and retain qualified
executives when considered with the other components of the Company's
compensation structure.
The Compensation Committee believes that a significant portion of total cash
compensation should be linked to annual performance criteria. Consequently, the
purpose of annual incentive compensation for senior executives and key managers
is to provide a direct financial incentive in the form of an annual cash bonus
to these executives to achieve their business unit's and the Company's annual
goals. Operational and financial goals are established at the beginning of each
fiscal year and generally take into account such measures of performance as
sales and earnings growth, profitability, cash flow and return on investment.
Other non-financial measures of performance relate to organizational
development, product or service expansion and strategic positioning of the
Company's assets.
Individual performance is also taken into account in determining individual
bonuses. It is the Company's belief
5
<PAGE> 8
that bonuses as a percentage of a senior executive's salary should be
sufficiently high to provide a major incentive for achieving annual performance
targets. Bonuses for senior executives of the Company generally range from 25% -
50% of base salary.
The stock option and restricted stock program forms the basis of the
Company's incentive plans for executive officers and key managers. The objective
of these plans is to align executive and long-term stockholder interests by
creating a strong and direct link between executive pay and stockholder return.
Stock options and restricted stock awards are granted annually and are
generally regarded as the primary incentive for long-term performance as they
are granted at fair market value and have vesting restrictions which generally
lapse over three- or four-year periods. The Committee considers each grantee's
current option and award holdings in making grants. Both the amounts of
restricted stock awards and proportion of stock options increase as a function
of higher salary and position of responsibility within the Company.
The Compensation and Incentive Committee have considered, and are continuing
to review, the qualifying compensation regulations issued by the Internal
Revenue Service in December 1993. As compensation for any individual is not
currently expected to exceed the $1 million base, the Company is not presently
affected by these regulations.
The base salary of Mr. E. L. Hutton, Chairman and Chief Executive Officer of
the Company, which was last increased on November 2, 1994, effective January 1,
1995, was increased at an annualized rate of 8.5% to a base rate of $550,000.
His cash bonus in respect of 1994 services was $246,000 which represents an
increase of $22,000 over 1993 and 49% of his current base salary. In addition,
Mr. Hutton received a special one-time bonus of $226,000 in connection with the
Company's net capital gain of $20,972,000 from the sale of 1,570,000 shares of
the common stock of Omnicare in the 1994 fourth quarter. Restricted stock awards
having a value of $220,000, were granted to Mr. Hutton in respect of 1994
services and Mr. Hutton was granted 42,000 stock options. Factors considered in
establishing the compensation levels in 1994 for Mr. Hutton were the Company's
sales growth of 22.8% and net income growth of 125%. The Compensation Committee
and the Incentive Committee believe that Mr. Hutton's base salary, the increase
in his cash bonus and the restricted stock awards granted to Mr. Hutton in
respect of 1994 services are consistent with his performance as measured by
these factors and the other criteria discussed above.
Compensation Committee Incentive Committee
Charles H. Erhart, Jr., Chairman D. Walter Robbins, Jr., Chairman
James A. Cunningham Charles H. Erhart, Jr.
Sandra E. Laney James A. Cunningham
D. Walter Robbins, Jr.
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<PAGE> 9
SUMMARY COMPENSATION TABLE
The following table shows the compensation paid to the Chief Executive
Officer and the four most highly compensated executive officers of the Company
for the past three years for all services rendered in all capacities to the
Company and its subsidiaries:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
-----------------------------------------------------------------------------------------------------------------------------
CHEMED SECURITIES ROTO-ROOTER SECURITIES NATIONAL SECURITIES
RESTRICTED UNDERLYING RESTRICTED UNDERLYING RESTRICTED UNDERLYING
NAME AND STOCK CHEMED STOCK ROTO-ROOTER STOCK NATIONAL
PRINCIPAL BONUS AWARDS STOCK AWARDS STOCK AWARDS STOCK
POSITION YEAR SALARY ($) ($) (1) ($) (2) OPTIONS (#) ($) (3) OPTIONS (#) ($) (4) OPTIONS (#)
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E.L. Hutton 1994 $500,004 $472,000 $220,000 42,000 $100,000 10,000 $79,625 -0-
Chairman and 1993 435,000 224,000 191,000 45,000 120,000 31,500 51,450 -0-
CEO 1992 422,000 195,000 157,500 70,000 57,000 -0- 45,357 -0-
K.J. McNamara 1994 146,000 132,750 60,000 17,000 7,000 1,000 12,625 -0-
President 1993 135,090 32,500 27,000 16,000 4,500 3,000 7,350 -0-
1992 (7) 82,798 1,900 11,000 20,000 -0- -0- 6,600 -0-
P.C. Voet 1994 244,000 120,000 -0- 5,000 -0- -0- 79,625 -0-
Executive Vice 1993 234,956 70,000 -0- 5,000 -0- -0- 55,125 -0-
President 1992 227,196 60,000 -0- 25,000 -0- -0- 45,375 -0-
T.S. O'Toole 1994 105,000 52,300 55,000 19,000 6,000 1,000 9,188 -0-
Executive Vice 1993 84,186 28,300 27,000 16,000 5,500 3,000 7,350 -0-
President and 1992 80,023 13,300 27,000 23,000 -0- -0- 6,600 -0-
Treasurer
S. E. Laney 1994 105,000 129,500 50,000 17,000 5,000 1,000 9,188 -0-
Senior Vice 1993 84,186 23,000 20,000 16,000 3,500 3,000 7,350 -0-
President and 1992 80,023 10,500 18,000 22,000 2,500 -0- 6,600 -0-
Chief
Administrative
Officer
<CAPTION>
-----------------------------------------------
LONG TERM COMPENSATION AWARDS
-----------------------------------------------
SECURITIES
UNDERLYING
NAME AND SERVICE AMERICA ALL OTHER
PRINCIPAL STOCK OPTIONS COMPENSATION
POSITION YEAR (#) (5) ($)
--------------------------------------------------------------------------
<S> <C> <C> <C>
E.L. Hutton 1994 -0- $175,584 (6)
Chairman and 1993 10,000 144,057
CEO 1992 -0- 261,340
K.J. McNamara 1994 -0- 49,767 (8)
President 1993 -0- 40,757
1992 (7) -0- 29,257
P.C. Voet 1994 -0- 57,278 (9)
Executive Vice 1993 -0- 59,113
President 1992 -0- 98,167
T.S. O'Toole 1994 -0- 33,837(10)
Executive Vice 1993 1,500 23,268
President and 1992 -0- 34,864
Treasurer
S. E. Laney 1994 -0- 44,024(11)
Senior Vice 1993 1,500 27,479
President and 1992 -0- 32,819
Chief
Administrative
Officer
</TABLE>
7
<PAGE> 10
SUMMARY COMPENSATION TABLE (continued)
(1) Bonuses paid in 1994 include the following amounts which were paid as
special one-time bonuses in connection with the Company's net capital
gain of $20,972,000 from the sale of 1,570,000 shares of the common
stock of Omnicare on November 30, 1994: E. L. Hutton -- $226,000; K. J.
McNamara --$97,000; P. C. Voet -- $35,000; T. S. O'Toole -- $30,000;
and S. E. Laney -- $97,000.
(2) The number and value of the aggregate restricted shares of Chemed
Capital Stock held by the named executives at December 31, 1994, were
as follows: E. L. Hutton -- 12,815 shares, $427,701; K. J. McNamara --
1,150 shares, $38,381; P. C. Voet -- 139 shares, $4,639; T. S. O'Toole
-- 1,832 shares, $61,143; and S. E. Laney -- 1,241 shares, $41,418.
Restricted shares vest evenly over a three-year or four-year period.
Recipients receive dividends on the awarded shares and are entitled to
vote them, whether or not vested.
(3) All the shares of Roto-Rooter Common Stock awarded to Messrs. McNamara
and O'Toole and Ms. Laney in 1992, 1993 and 1994 were nonrestricted. At
December 31, 1994, Mr. Hutton held, in the aggregate, 5,666 restricted
shares of Roto-Rooter Common Stock having a value of $124,652.
Restricted shares vest evenly over a three-year period. Recipients
receive dividends on the awarded shares and are entitled to vote them,
whether or not vested.
(4) The number and value of the aggregate restricted shares of National
Common Stock held by the named executives at December 31, 1994 were as
follows: E. L. Hutton -- 12,802 shares, $156,825; K. J. McNamara --
1,918 shares, $23,495; P. C. Voet -- 13,002 shares, $159,275; T. S.
O'Toole -- 1,668 shares, $20,433; and S. E. Laney -- 1,668 shares,
$20,433. Restricted shares vest evenly over a three-year or four-year
period. Recipients receive dividends on the awarded shares and are
entitled to vote them, whether or not vested.
(5) Service America Systems, Inc. ("Service America"), formerly known as
Convenient Home Services, Inc., is 30% owned by the Company and 70%
owned by Roto-Rooter.
(6) Includes $120,667 allocated to Mr. Hutton's account under the Company's
Employee Stock Ownership Plans ("ESOP"), a $52,613 premium payment to
purchase term life insurance under the Company's Executive Salary
Protection Plan ("ESP"), and a $2,304 premium payment for term life
insurance.
(7) Does not include compensation Mr. McNamara received as Executive Vice
President and Chief Operating Officer of Omnicare.
(8) Includes $36,977 allocated to Mr. McNamara's account under the ESOP, a
$734 premium payment to purchase term life insurance under the ESP, a
$1,031 premium payment for term life insurance, $6,775 in director fees
from Roto-Rooter and $4,250 in director fees from National.
(9) Includes $48,149 allocated to Mr. Voet's account under the ESOP, a
$3,850 premium payment to purchase term life insurance under the ESP, a
$2,079 premium payment for term life insurance, and $3,200 in director
fees from Roto-Rooter.
(10) Includes $23,681 allocated to Mr. O'Toole's account under the ESOP, a
$924 premium payment to purchase term life insurance under the ESP, a
$757 premium payment for term life insurance, $5,975 in director fees
from Roto-Rooter, and $2,500 in director fees from National.
(11) Includes $29,976 allocated to Ms. Laney's account under the ESOP, a
$1,655 premium payment to purchase term life insurance under the ESP, a
$668 premium payment for term life insurance, $7,475 in director fees
from Roto-Rooter and $4,250 in director fees from National.
8
<PAGE> 11
STOCK OPTIONS
The table below shows information concerning Chemed stock options granted in
1994 to the named executives in the Summary Compensation Table.
CHEMED OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
---------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (1) (#) IN 1994 ($/SHARE) DATE 5% ($) 10% ($)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 42,000 15.6% $32.13 3/2/2004 $847,980 $2,149,140
K. J. McNamara 17,000 6.3 32.13 3/2/2004 343,230 869,890
P. C. Voet 5,000 1.8 32.13 3/2/2004 100,950 255,850
T. S. O'Toole 19,000 7.0 32.13 3/2/2004 383,610 972,230
S. E. Laney 17,000 5.2 32.13 3/2/2004 343,230 869,890
</TABLE>
(1) These options, which were granted on March 2, 1994, provide for the purchase
price of option shares equal to the fair market value of Chemed Capital Stock on
that date, and become exercisable in four equal annual installments beginning on
September 2, 1994.
The table below shows information concerning Chemed stock options exercised
during 1994 and the year-end number and value of unexercised Chemed stock
options held by the executive officers named in the Summary Compensation Table.
AGGREGATED CHEMED STOCK OPTION EXERCISES
IN 1994 AND YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT 12/31/94 (#) AT 12/31/94 ($)
ON EXERCISE REALIZED -----------------------------------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E. L. Hutton 9,778 $482,668 65,500 71,500 $296,375 $287,825
K. J. McNamara 3,047 150,560 4,250 25,750 5,313 94,498
P. C. Voet 2,656 133,520 9,250 12,500 20,123 66,738
T. S. O'Toole 2,614 129,266 5,050 28,500 6,409 104,783
S. E. Laney 3,126 131,912 23,050 26,250 112,127 98,497
</TABLE>
9
<PAGE> 12
The table below shows information concerning Roto-Rooter stock options
granted in 1994 to the named executives in the Summary Compensation Table.
ROTO-ROOTER STOCK OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
-----------------------------------------------------------------------------------------------------------
NUMBER OF % OF
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED IN 1994 PRICE EXPIRATION
NAME (1) (#) (2) ($/SHARE) DATE 5% ($) 10% ($)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 10,000 12.0% $27.00 5/17/2004 $169,802 $430,310
K. J. McNamara 1,000 1.2 27.00 5/17/2004 16,940 42,980
P. C. Voet -0- -0- -0- -- -0- -0-
T. S. O'Toole 1,000 1.2 27.00 5/17/2004 16,940 42,980
S. E. Laney 1,000 1.2 27.00 5/17/2004 16,940 42,980
</TABLE>
(1) These options, which were granted on May 17, 1994, provide for the
purchase price of option shares equal to the fair market value of
Roto-Rooter Common Stock on that date, and become exercisable in four
equal annual installments beginning on May 17, 1995.
(2) Percentage of total options granted to employees is based on the total
number of options granted to Roto-Rooter employees.
The table below shows information concerning Roto-Rooter stock options
exercised during 1994 and the year-end number and value of unexercised
Roto-Rooter stock options held by the executive officers named in the Summary
Compensation Table.
AGGREGATED ROTO-ROOTER STOCK OPTION EXERCISES
IN 1994 AND YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT 12/31/94 (#) AT 12/31/94 ($)
ON EXERCISE REALIZED -----------------------------------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 1 $17 12,875 35,625 $19,820 $9,500
K. J. McNamara -0- -0- 1,625 3,375 1,391 531
P. C. Voet 158 3,828 -0- -0- -0- -0-
T. S. O'Toole -0- -0- 750 3,250 -0- -0-
S. E. Laney -0- -0- 1,125 3,375 1,391 531
</TABLE>
10
<PAGE> 13
The table below shows information concerning the year-end number and value of
unexercised National stock options held by the executive officers named in the
Summary Compensation Table.
1994 YEAR-END NATIONAL STOCK OPTION VALUES
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12/31/94 (#) AT 12/31/94 ($)
--------------------------------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E.L. Hutton 44,723 5,000 $160,951 $25,600
K.J. NcNamara 2,250 250 3,267 1,280
P.C. Voet 55,723 5,000 206,051 25,600
T.S. O'Toole -0- -0- -0- -0-
S.E. Laney 813 250 3,267 1,280
</TABLE>
The table below shows information concerning the year-end number and value of
unexercised Service America stock options held by the executive officers named
in the Summary Compensation Table.
1994 YEAR-END SERVICE AMERICA STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12/31/94 (#) AT 12/31/94 ($)
--------------------------------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E.L. Hutton 7,500 17,500 $-0- $-0-
K.J. NcNamara -0- -0- -0- -0-
P.C. Voet -0- -0- -0- -0-
T.S. O'Toole 1,000 2,500 -0- -0-
S.E. Laney 500 2,000 -0- -0-
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. E. L. Hutton,
McNamara, Voet and O'Toole and Ms. Laney. Mr. Hutton's employment agreement
provides for his continued employment as Chairman and Chief Executive Officer of
the Company through May 3, 1999, subject to earlier termination under certain
circumstances at a base salary of $500,000 per annum or such higher amounts as
the Board of Directors may determine as well as participation in incentive
compensation plans, stock incentive plans and other benefit plans. In the event
of termination without cause, the agreement provides that Mr. Hutton will
receive severance payments equal to 150% of his then current base salary plus
the amount of incentive compensation most recently paid or approved in respect
of the previous year, and the fair market value of all stock awards which have
vested during the twelve months prior to termination for the balance of the term
of the agreement. Messrs. McNamara, Voet and O'Toole and Ms. Laney have
employment agreements which provide for their continued employment as senior
executives of the Company through May 3, 1999 and are identical in all material
respects to that of Mr. Hutton, except their respective agreements provide for a
base salary of $146,000, $230,500, $105,000, and $100,000 per annum or such
higher amounts as the Board of Directors may determine. In addition, each
agreement for Messrs. Hutton, McNamara and Voet and Ms. Laney provides for the
officer's nomination as a director of the Company.
COMPARATIVE STOCK PERFORMANCE
The graph below compares the yearly percentage change in the Company's
cumulative total stockholder return on the Capital Stock (as measured by
dividing (i) the sum of (A) the cumulative amount of dividends for the period
December 31, 1989 to December 31, 1994, assuming dividend reinvestment, and (B)
the difference between the Company's share price at December 31, 1989 and
December 31, 1994; by (ii) the share price at December 31, 1989) with the
cumulative total return, assuming reinvestment of dividends, of the (1) S & P
500 Stock Index and (2) Dow Jones Industrial Diversified Index.
11
<PAGE> 14
CHEMED CORPORATION
CUMULATIVE TOTAL STOCKHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING DECEMBER 31, 1994
[GRAPH]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
December 31... 1989 1990 1991 1992 1993 1994
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chemed 100.00 55.54 92.97 97.28 116.24 135.18
------------------------------------------------------------------------------------------------------------
S&P 500 100.00 96.89 126.28 135.88 149.52 151.55
------------------------------------------------------------------------------------------------------------
Dow Jones Industrial Diversified 100.00 92.95 115.09 133.93 163.65 150.10
------------------------------------------------------------------------------------------------------------
</TABLE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the only persons
who are known to be the beneficial owners of more than 5% of the Capital Stock
of the Company:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
PERCENT
NAME AND ADDRESS OF AMOUNT AND NATURE OF OF CLASS
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP (2)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Stock The Fifth Third Bank 1,416,058 shares; 14%
Par Value Fifth Third Center Trustee of the Company's
$1 Per Share Cincinnati, Ohio Savings and Investment Plan and
Employee Stock Ownership Plans (1)
-----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Shared voting power, 1,416,058 shares; and shared dispositive power,
1,416,058 shares.
(2) For purposes of calculating Percent of Class, all shares subject to stock
options which were exercisable within 60 days from February 1, 1995, were
assumed to have been issued.
12
<PAGE> 15
The following table sets forth information as of February 1, 1995, with
respect to the Capital Stock of the Company, Roto-Rooter Common Stock and
National Common Stock beneficially owned by all nominees and directors of the
Company, the executive officers named in the Summary Compensation Table and the
Company's directors and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME TITLE OF CLASS BENEFICIAL OWNERSHIP (1) CLASS (2)
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
E. L. Hutton Chemed Capital Stock 68,634 Direct
65,500 Option
4,000 Trustee
Roto-Rooter Common Stock 32,763 Direct
15,750 Option
9,372 Trustee
National Common Stock 29,704 Direct
49,723 Option
3,194 Trustee
J.A. Cunningham Chemed Capital Stock 1,000 Direct
500 Trustee
Roto-Rooter Common Stock 1,000 Direct
National Common Stock 1,000 Direct
J.H. Devlin Chemed Capital Stock 4,447 Direct
2,750 Option
Roto-Rooter Common Stock None
National Common Stock None
C.H. Erhart, Jr. Chemed Capital Stock 1,500 Direct
Roto-Rooter Common Stock 6,666 Direct
National Common Stock 5,000 Direct
J.F. Gemunder Chemed Capital Stock 6,351 Direct
3,250 Option
Roto-Rooter Common Stock 1,100 Direct
500 Option
National Common Stock 400 Direct
J.P. Grace Chemed Capital Stock 200 Direct
Roto-Rooter Common Stock 200 Direct
2,000 Option
National Common Stock 400 Direct
1,500 Option
W. R. Griffin Chemed Capital Stock 2,528 Direct
8,000 Option
Roto-Rooter Common Stock 18,168 Direct
34,250 Option
National Common Stock 2,000 Direct
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME TITLE OF CLASS BENEFICIAL OWNERSHIP (1) CLASS (2)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
T.C. Hutton Chemed Capital Stock 14,738 Direct
4,250 Option
4,500 Trustee (3)
Roto-Rooter Common Stock 3,997 Direct
2,500 Option
9,372 Trustee
National Common Stock 3,888 Direct
2,000 Option
3,194 Trustee
Walter L. Krebs Chemed Capital Stock 1,970 Direct
Roto-Rooter Common Stock None
National Common Stock 200 Direct
S.E. Laney Chemed Capital Stock 24,788 Direct
23,050 Option
Trustee (3)
Roto-Rooter Common Stock 1,994 Direct
1,750 Option
National Common Stock 3,346 Direct
1,063 Option
K.J. McNamara Chemed Capital Stock 11,745 Direct
4,250 Option
Trustee (3)
Roto-Rooter Common Stock 1,205 Direct
2,250 Option
National Common Stock 3,367 Direct
2,500 Option
J.M. Mount Chemed Capital Stock 6,820 Direct
Roto-Rooter Common Stock None
National Common Stock None
T.S. O'Toole Chemed Capital Stock 11,381 Direct
5,050 Option
Roto-Rooter Common Stock 1,644 Direct
1,250 Option
National Common Stock 2,913 Direct
D.W. Robbins, Jr. Chemed Capital Stock 2,000 Direct
Roto-Rooter Common Stock 1,000 Direct
National Common Stock 2,000 Direct
P.C. Voet Chemed Capital Stock 23,549 Direct
9,250 Option
Trustee (3)
Roto-Rooter Common Stock 2,024 Direct
1,125 Option
National Common Stock 28,235 Direct
60,723 Option
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME TITLE OF CLASS BENEFICIAL OWNERSHIP (1) CLASS (2)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
H.A. Westbrook Chemed Capital Stock 1,150 Direct
Roto-Rooter Common Stock None
National Common Stock None
Directors and Chemed Capital Stock 189,683 Direct 1.9%
Executive Officers 59,321 Trustee (4) .6%
as a Group 136,945 Option 1.3%
(17 persons) Roto-Rooter Common Stock 72,761 Direct 1.4%
9,372 Trustee (4)
58,875 Option 1.1%
National Common Stock 82,653 Direct 1.3%
3,194 Trustee (4)
117,009 Option 1.9%
----------------------------------------------------------------------------------------------------------
</TABLE>
FOOTNOTES TO STOCK OWNERSHIP TABLE
(1) Includes securities beneficially owned (a) by the named persons or group
members, their spouses and their minor children (including shares of
Chemed Capital Stock, Roto-Rooter Common Stock and National Common Stock
allocated as at December 31, 1994, to the account of each named person or
member of the group under the Company's Savings and Investment Plan and
under the Company's ESOP, or with respect to Mr. Gemunder allocated to
his account as at December 31, 1994, under the Omnicare Employees Savings
and Investment Plan, or with respect to Mr. Griffin, allocated to his
account as at December 31, 1994 under the Roto-Rooter Retirement and
Savings Plan), (b) by trusts and custodianships for their benefit and (c)
by trusts and other entities as to which the named person or group has or
shares the power to direct voting or investment of securities. "Direct"
refers to securities in categories (a) and (b) and "Trustee" to
securities in category (c). Where securities would fall into both
"Direct" and "Trustee" classifications, they are included under "Trustee"
only. "Option" refers to shares which the named person or group has a
right to acquire within 60 days from February 1, 1995. For purposes of
determining the Percent of Class, all shares subject to stock options
which were exercisable within 60 days from February 1, 1995 were assumed
to have been issued.
(2) Percent of Class under 1.0% is not shown.
(3) Messrs. T. Hutton, McNamara and Voet and Ms. Laney are trustees of the
Chemed Foundation which holds 54,821 shares of the Company's Capital
Stock over which the trustees share both voting and investment power.
This number is included in the total number of "Trustee" shares held by
the Directors and Executive Officers as a group but is not reflected in
the respective holdings of the individual trustees.
(4) Shares over which more than one individual holds beneficial ownership
have only been counted once in calculating the aggregate number of shares
owned by Directors and Executive Officers as a group.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
regulations thereunder, the Company's executive officers and directors and
persons who own more than 10 percent of the Company's Capital Stock are required
to file reports with respect to their ownership and changes in ownership of the
Company's Capital Stock with the Securities and Exchange Commission ("SEC"). In
addition, such persons are required to forward copies of such reports to the
Company. Based on a review of the copies of such reports furnished to the
Company and on the written representation of such non-reporting persons that
with respect to 1994, no reports on Form 5 were required to be filed with the
SEC, the Company believes that during the period January 1, 1994 through
December 31, 1994, the Company's officers and directors and greater-than-10
percent stockholders have complied with all Section 16(a) reporting
requirements.
15
<PAGE> 18
TRANSACTIONS
Mr. Westbrook is a director and, on a fully diluted basis, an 18.8% owner of
Vitas Healthcare Corporation, formerly Hospice Care Incorporated ("HCI"). On
December 17, 1991, the Company purchased 270,000 shares of 9% preferred stock of
HCI and two warrants entitling the Company to purchase, on a fully diluted basis
(subject to the terms of the warrants), in the aggregate, up to 22.28% of the
common stock of HCI at a cost of $18,000,000. The Company receives $2,430,000 in
annual cash dividends from its investment in the HCI preferred stock.
During 1994, Mr. Cunningham was a Senior Chemical Adviser for Wertheim
Schroder & Co. Incorporated which has performed investment banking services for
the Company.
PROPOSAL TO APPROVE AND ADOPT THE
1995 STOCK INCENTIVE PLAN
In view of the few remaining shares available for the grant of additional
stock awards or stock options under the previously adopted stock incentive
plans, the Board of Directors has approved, subject to stockholder approval, the
adoption of the 1995 Stock Incentive Plan (the "Plan") pursuant to which 500,000
shares of the Company's Capital Stock may be issued or transferred to key
employees as stock incentives. The full text of the proposed Plan is set forth
as Exhibit A to this Proxy Statement and the following discussion is qualified
in its entirety by reference to such text.
THE PLAN
The Plan will become effective as of the date it is adopted by the
stockholders of the Company, i.e., May 15, 1995. If it is not adopted by the
stockholders, the Plan will be of no force and effect. If it is adopted, no
stock options may be granted under the Plan after May 15, 2005. The Board of
Directors may terminate the Plan at any earlier time, but outstanding options
will continue to be exercisable until they expire in accordance with their
terms. The market value of the Capital Stock as of March 20, 1995 was $31.87 per
share.
The Plan authorizes the issuance or transfer of a maximum of 500,000 shares
of Capital Stock pursuant to stock incentives granted to key employees of the
Company and its subsidiaries under the Plan. For purposes of the Plan, a
"subsidiary" is a corporation or other form of business association of which
shares (or other ownership interests) having 50 percent or more of the voting
power are owned or controlled, directly or indirectly, by the Company and "key
employees" are employees of the Company or a subsidiary, including officers and
directors thereof, who in the opinion of the Incentive Committee (as defined
below) are deemed to have the capacity to contribute significantly to the growth
and successful operations of the Company or a subsidiary.
Stock incentives granted under the Plan may be in the form of options to
purchase Capital Stock ("stock options") or in the form of awards of Capital
Stock in payment of incentive compensation ("stock awards"), or a combination of
stock awards and stock options.
The Plan shall be administered by a Committee (the "Incentive Committee")
consisting of no fewer than three persons designated by, and serving at the
pleasure of, the Board of Directors of the Company.
The Incentive Committee designates the key employees of the Company and its
subsidiaries who might participate in the Plan and as to the form and terms of
the number of shares covered by each stock incentive granted thereunder. In
making such designation, the Committee may consider an employee's present or
potential contribution to the success of the Company or any subsidiary and other
factors which it may deem relevant.
Under the Plan, a stock incentive in the form of a stock award will consist
of shares of Capital Stock issued as incentive compensation earned or to be
earned by the employee. Shares subject to a stock award may be issued when the
award is granted or at a later date, with or without dividend equivalent rights.
A stock award shall be subject to such terms, conditions and restrictions
(including restrictions on the transfer of the shares issued pursuant to the
award) as the Incentive Committee shall designate.
16
<PAGE> 19
Under the 1995 Plan, a stock incentive in the form of a stock option will
provide for the purchase of shares of Capital Stock in the future at an option
price per share which will not be less than 100 percent of the fair market value
of the shares covered thereby on the date the stock option is granted. Each
option shall be exercisable in full or in part one year after the date the
option is granted, or may become exercisable in one or more installments and at
such time or times, as the Incentive Committee shall determine or upon various
circumstances which may result in a change of control; provided, however, that
in no event shall an option be exercisable until one year after the date the
option is granted. Unless otherwise provided in the option, an option, to the
extent it is or becomes exercisable, may be exercised at any time in whole or in
part until the expiration or termination of the option. Any term or provision in
any outstanding option specifying when the option may be exercisable or that it
be exercisable in installments may be modified at any time during the life of
the option by the Incentive Committee, provided, however, no such modification
of an outstanding option shall, without the consent of the optionee, adversely
affect any option theretofore granted to him.
Upon the exercise of an option, the purchase price shall be paid in cash or,
if so provided in the option, in shares of Capital Stock or in a combination of
cash and such shares. The Company may cancel all or a portion of an option
subject to exercise and pay the holder cash or shares equal in value to the
excess of the fair market value of the shares subject to the portion of the
option so canceled over the option price of such shares. Options shall be
granted for such lawful consideration as the Incentive Committee shall
determine.
All stock options granted under the Plan will expire within ten years from
the date of grant. A stock option is not transferable or assignable by an
optionee other than by will, by the laws of descent and distribution, pursuant
to a qualified domestic relations order or to certain family members, if
permitted under SEC Rule 16b-3 or any successor rule thereto, and each option is
exercisable, during his lifetime, only by him or a permitted transferee or
assignee. Unexercised options terminate upon termination of employment, except
that if termination arises from a resignation with the consent of the Incentive
Committee, the options terminate three months after such termination of
employment, and except further that if an optionee ceases to be an employee by
reason of his death while employed, retirement or disability, or if he should
die within three months following his resignation with the consent of the
Incentive Committee, the options terminate fifteen months after an optionee's
termination of employment but may be exercised only to the extent that they
could have been exercised by the optionee, had he lived, three months after he
ceased to be an employee. A leave of absence for military or governmental
service or for other purposes, if approved by the Incentive Committee, does not
constitute a termination of employment, but no options are exercisable during
any such leave of absence.
Exercise of a stock option will be conditioned on an optionee's payment in
full of the purchase price for the shares, in cash or by the transfer to the
Company of shares of the Company's Capital Stock at fair market value on the
date of transfer. An optionee shall not be considered a holder of the shares
subject to a stock option until actual delivery of a certificate representing
such shares is made by the Company.
None of the stock options granted under the Plan will be "restricted",
"qualified" or "incentive" stock options or options granted pursuant to an
"employee stock purchase plan" as the quoted terms are defined in Sections 422
through 424 of the Internal Revenue Code.
With respect to stock awards in Capital Stock that are either transferable or
not subject to a substantial risk of forfeiture, the employee must recognize
ordinary income equal to the cash or the fair market value of the Capital Stock
and the Company will be entitled to a deduction for the same amount. With
respect to stock awards that are settled in Capital Stock that is restricted as
to transferability and subject to substantial risk of forfeiture, the employee
must recognize ordinary income equal to the fair market value of the Capital
Stock at the first time the Capital Stock becomes transferable or not subject to
a substantial risk of forfeiture, whatever occurs earlier, and the Company will
be entitled to a deduction for the same amount.
An optionee realizes no taxable income by reason of the grant of a
nonstatutory option. Subject to insider trading restrictions upon exercise of
the option, an optionee realizes compensation taxable as ordinary income in the
amount of the excess of the fair market value of the stock over the option price
on the date of exercise. Upon the sale of stock acquired pursuant to the
exercise of an option, an optionee realizes either a capital gain or a capital
loss based upon the difference between his selling price and the fair market
value of the stock on the date of exer-
17
<PAGE> 20
cise. Such capital gain or loss, as the case may be, will be either short term
or long term depending on the period elapsed between the date of exercise and
the date of sale. In those instances where the employee receives compensation
taxable as ordinary income, the Company or a subsidiary (except for certain
foreign subsidiaries) will generally be entitled to a Federal income tax
deduction in the amount of such compensation. An employee will not recognize
gain on previously owned shares of the Company's Capital Stock if he exercises
an option and transfers such shares to the Company in payment of the option
price. Taxes payable by an optionee or awardee on exercise of an option or
removal of restrictions on an award may be paid in cash, surrender of shares, or
withholding of shares of Capital Stock as the Incentive Committee shall
determine.
The Board of Directors, upon the recommendation of the Incentive Committee,
may amend the Plan subject, in the case of specified amendments, to stockholder
approval. The Plan may be discontinued at any time by the Board of Directors. No
amendment or discontinuance of the Plan shall, without the consent of the
employee, adversely affect any stock incentive held by him under the Plan.
No determination has been made with respect to any prospective grant of a
stock incentive under the Plan. It is, therefore, not possible at the present
time to indicate specifically the names and positions of key employees to whom
stock incentives may be granted or to whom stock incentives would have been
granted had this Plan been in effect during 1994 or the number of shares to be
subject to stock incentives or any other information concerning the operation of
the Plan as it may affect specific individuals. The proceeds of sale of Capital
Stock under the Plan will be used by the Company for general corporate purposes.
In order to effect the approval and adoption of the Plan, the following
resolution will be presented to the Annual Meeting:
"RESOLVED THAT THE 1995 STOCK INCENTIVE PLAN SET FORTH AS EXHIBIT A TO THE
PROXY STATEMENT ACCOMPANYING THE NOTICE OF THE ANNUAL MEETING OF THE
STOCKHOLDERS OF CHEMED CORPORATION TO BE HELD MAY 15, 1995, BE AND THE
SAME HEREBY IS APPROVED AND ADOPTED."
The affirmative vote of the holders of a majority of the voting power of the
stockholders represented at the meeting will be necessary for the adoption of
the foregoing resolution. The approval and adoption of the Plan is not a matter
which is required to be submitted to a vote of the stockholders of the Company.
The reason for submitting such proposal to a vote of the stockholders is to meet
a condition of Rule 16b-3 of the Securities and Exchange Commission which
provides for an exemption from the operation of Section 16(b) of the Securities
Exchange Act of 1934, as amended. Section 16(b) provides generally that profits
realized by directors and officers from any purchase and sale (or sale and
purchase) of the Company's Capital Stock within a period of less than six months
are recoverable by the Company. Rule 16b-3 exempts from the application of
Section 16(b): (i) the acquisition, expiration, cancellation or surrender to the
Company of a stock option; (ii) the surrender or delivery to the Company of
shares of Capital Stock as payment for the exercise of a stock option for shares
of Capital Stock; and (iii) the acquisition upon the exercise of a stock option
of shares of Capital Stock equal to the number of shares of Capital Stock
surrendered or delivered to the Company as payment for the exercise of the
option. Management has not determined what course of action it intends to take
in the event of a negative vote on the proposal by stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL AND ADOPTION OF THE
PLAN.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of Price Waterhouse LLP as
independent accountants for the Company and its consolidated subsidiaries for
the year 1995. This firm has acted as independent accountants for the Company
and its consolidated subsidiaries since 1970. Although the submission of this
matter to the stockholders is not required by law or by the By-Laws of the
Company, the selection of Price Waterhouse LLP will be submitted for
ratification at the Annual Meeting. The affirmative vote of a majority of the
voting power of the stockholders represented at the meeting will be necessary to
ratify the selection of Price Waterhouse LLP as
18
<PAGE> 21
independent accountants for the Company and its consolidated subsidiaries for
the year 1995. If the selection is not ratified at the meeting, the Board of
Directors will reconsider its selection of independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
It is expected that a representative of Price Waterhouse LLP will be present
at the Company's Annual Meeting. Such representative shall have the opportunity
to make a statement if he desires to do so and shall be available to respond to
appropriate questions raised at the meeting.
STOCKHOLDER PROPOSALS
Any proposals by stockholders intended to be included in the proxy materials
for presentation at the 1996 Annual Meeting of Stockholders must be in writing
and received by the Secretary of the Company no later than December 6, 1995.
OTHER MATTERS
As of the date of this Proxy Statement, the management knows of no other
matters which will be presented for consideration at the Annual Meeting.
However, if any other business should come before the meeting, the persons named
in the enclosed proxy (or their substitutes) will have discretionary authority
to take such action as shall be in accordance with their best judgment.
EXPENSES OF SOLICITATION
The expense of soliciting proxies in the accompanying form will be borne by
the Company. The Company will request banks, brokers and other persons holding
shares beneficially owned by others to send proxy materials to the beneficial
owners and to secure their voting instructions, if any. The Company will
reimburse such persons or institutions for their expenses in so doing. In
addition to solicitation by mail, officers and regular employees of the Company
may, without extra remuneration, solicit proxies personally, by telephone or by
telegram from some stockholders if such proxies are not promptly received. The
Company has also retained D. F. King & Co., Inc., a proxy soliciting firm, to
assist in the solicitation of such proxies at a cost which is not expected to
exceed $7,000 plus reasonable expenses. This Proxy Statement and the
accompanying Notice of Meeting are sent by order of the Board of Directors.
Naomi C. Dallob
Secretary
April 6, 1995
19
<PAGE> 22
EXHIBIT A
================================================================================
CHEMED CORPORATION
1995 STOCK INCENTIVE PLAN
================================================================================
A-1
<PAGE> 23
EXHIBIT A
CHEMED CORPORATION
1995 STOCK INCENTIVE PLAN
1. PURPOSES: The purposes of this Plan are (a) to secure for the Corporation
the benefits of incentives inherent in ownership of Capital Stock by Key
Employees, (b) to encourage Key Employees to increase their interest in the
future growth and prosperity of the Corporation and to stimulate and sustain
constructive and imaginative thinking by Key Employees, (c) to further the
identification of interest of those who hold positions of major responsibility
in the Corporation and its Subsidiaries with the interests of the Corporation's
stockholders, (d) to induce the employment or continued employment of Key
Employees and (e) to enable the Corporation to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
competent executives.
2. DEFINITIONS: Unless otherwise required by the context, the following terms
when used in this Plan shall have the meanings set forth in this section 2.
BOARD OF DIRECTORS: The Board of Directors of the Corporation.
CAPITAL STOCK: The Capital Stock of the Corporation, par value $l.00 per
share, or such other class of shares or other securities as may be applicable
pursuant to the provisions of section 8.
CORPORATION: Chemed Corporation, a Delaware corporation.
FAIR MARKET VALUE: As applied to any date, the mean between the high and
low sales prices of a share of Capital Stock on the principal stock exchange on
which the Corporation is listed, or, if it is not so listed, the mean between
the bid and the ask prices of a share of Capital Stock in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System on such date or, if no such sales or prices were made or quoted
on such date, on the next preceding date on which there were sales or quotes of
Capital Stock on such exchange or market, as the case may be; provided, however,
that, if the Capital Stock is not so listed or quoted, Fair Market Value shall
be determined in accordance with the method approved by the Incentive Committee,
and, provided further, if any of the foregoing methods of determining Fair
Market Value shall not be consistent with the regulations of the Secretary of
the Treasury or his delegate at the time applicable to a Stock Incentive of the
type involved, Fair Market Value in the case of such Stock Incentive shall be
determined in accordance with such regulations and shall mean the value as so
determined.
INCENTIVE COMMITTEE: The Incentive Committee designated to administer
this Plan pursuant to the provisions of section l0.
INCENTIVE COMPENSATION: Bonuses, extra and other compensation payable in
addition to a salary or other base amount, whether contingent or discretionary
or required to be paid pursuant to an agreement, resolution or arrangement, and
whether payable currently or on a deferred basis, in cash, Capital Stock or
other property, awarded by the Corporation or a Subsidiary prior or subsequent
to the date of the approval and adoption of this Plan by the stockholders of the
Corporation.
KEY EMPLOYEE: An employee of the Corporation or of a Subsidiary who in
the opinion of the Incentive Committee can contribute significantly to the
growth and successful operations of the Corporation or a Subsidiary. The grant
of a Stock Incentive to an employee by the Incentive Committee shall be deemed a
determination by the Incentive Committee that such employee is a Key Employee.
For the purposes of this Plan, a director or officer of the Corporation or of a
Subsidiary shall be deemed an employee regardless of whether or not such
director or officer is on the payroll of, or otherwise paid for services by, the
Corporation or a Subsidiary.
OPTION: An option to purchase shares of Capital Stock.
A-2
<PAGE> 24
PERFORMANCE UNIT: A unit representing a share of Capital Stock, subject
to a Stock Award, the issuance, transfer or retention of which is contingent, in
whole or in part, upon attainment of a specified performance objective or
objectives, including, without limitation, objectives determined by reference to
or changes in (a) the Fair Market Value, book value or earnings per share of
Capital Stock, or (b) sales and revenues, income, profits and losses, return on
capital employed, or net worth of the Corporation (on a consolidated or
unconsolidated basis) or of any one or more of its groups, divisions,
Subsidiaries or departments, or (c) a combination of two or more of the
foregoing factors.
PLAN: The 1995 Stock Incentive Plan herein set forth as the same may from
time to time be amended.
STOCK AWARD: An issuance or transfer of shares of Capital Stock at the
time the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to
Performance Units.
STOCK INCENTIVE: A stock incentive granted under this Plan in one of the
forms provided for in section 3.
SUBSIDIARY: A corporation or other form of business association of which
shares (or other ownership interests) having 50% or more of the voting power are
owned or controlled, directly or indirectly, by the Corporation.
3. GRANTS OF STOCK INCENTIVES:
(a) Subject to the provisions of this Plan, the Incentive Committee may
at any time, or from time to time, grant Stock Incentives under this Plan to,
and only to, Key Employees.
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. STOCK SUBJECT TO THIS PLAN:
(a) Subject to the provisions of paragraph (c) and (d) of this section 4
and of section 8, the aggregate number of shares of Capital Stock which may be
issued or transferred pursuant to Stock Incentives granted under this Plan shall
not exceed 500,000 shares.
(b) The maximum aggregate number of shares of Capital Stock which may be
issued or transferred under the Plan to directors of the Corporation or of a
Subsidiary shall not exceed 100,000 shares.
(c) Authorized but unissued shares of Capital Stock and shares of Capital
Stock held in the treasury, whether acquired by the Corporation specifically for
use under this Plan or otherwise, may be used, as the Incentive Committee may
from time to time determine, for purposes of this Plan, provided, however, that
any shares acquired or held by the Corporation for the purposes of this Plan
shall, unless and until transferred to a Key Employee in accordance with the
terms and conditions of a Stock Incentive, be and at all times remain treasury
shares of the Corporation, irrespective of whether such shares are entered in a
special account for purposes of this Plan, and shall be available for any
corporate purpose.
(d) If any shares of Capital Stock subject to a Stock Incentive shall not
be issued or transferred and shall cease to be issuable or transferable because
of the termination, in whole or in part, of such Stock Incentive or for any
other reason, or if any such shares shall, after issuance or transfer, be
reacquired by the Corporation or a Subsidiary because of an employee's failure
to comply with the terms and conditions of a Stock Incentive, the shares not so
issued or transferred, or the shares so reacquired by the Corporation or a
Subsidiary shall no longer be charged against any of the limitations provided
for in paragraphs (a) or (b) of this section 4 and may again be made subject to
Stock Incentives.
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<PAGE> 25
5. STOCK AWARDS: Stock Incentives in the form of Stock Awards shall be
subject to the following provisions:
(a) A Stock Award shall be granted only in payment of Incentive
Compensation that has been earned or as Incentive Compensation to be earned,
including, without limitation, Incentive Compensation awarded concurrently with
or prior to the grant of the Stock Award.
(b) For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Capital Stock subject to such Stock Award shall be valued
at not less than l00% of the Fair Market Value of such shares on the date such
Stock Award is granted, regardless of whether or when such shares are issued or
transferred to the Key Employee and whether or not such shares are subject to
restrictions which affect their value.
(c) Shares of Capital Stock subject to a Stock Award may be issued or
transferred to the Key Employee at the time the Stock Award is granted, or at
any time subsequent thereto, or in installments from time to time, as the
Incentive Committee shall determine. In the event that any such issuance or
transfer shall not be made to the Key Employee at the time the Stock Award is
granted, the Incentive Committee may provide for payment to such Key Employee,
either in cash or in shares of Capital Stock from time to time or at the time or
times such shares shall be issued or transferred to such Key Employee, of
amounts not exceeding the dividends which would have been payable to such Key
Employee in respect of such shares (as adjusted under section 8) if they had
been issued or transferred to such Key Employee at the time such Stock Award was
granted. Any amount payable in shares of Capital Stock under the terms of a
Stock Award may, at the discretion of the Corporation, be paid in cash, on each
date on which delivery of shares would otherwise have been made, in an amount
equal to the Fair Market Value on such date of the shares which would otherwise
have been delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on sale or other disposition of the
Stock Award or of the shares issued or transferred pursuant to such Stock Award,
as the Incentive Committee shall determine; provided, however, that upon the
issuance or transfer of shares pursuant to a Stock Award, the recipient shall,
with respect to such shares, be and become a stockholder of the Corporation
fully entitled to receive dividends, to vote and to exercise all other rights of
a stockholder except to the extent otherwise provided in the Stock Award. Each
Stock Award shall be evidenced by a written instrument in such form as the
Incentive Committee shall determine, provided the Stock Award is consistent with
this Plan and incorporates it by reference.
6. OPTIONS: Stock Incentives in the form of Options shall be subject to the
following provisions:
(a) Upon the exercise of an Option, the purchase price shall be paid in
cash or, if so provided in the Option or in a resolution adopted by the
Incentive Committee (and subject to such terms and conditions as are specified
in the Option or by the Incentive Committee), in shares of Capital Stock or in a
combination of cash and such shares. Shares of Capital Stock thus delivered
shall be valued at their Fair Market Value on the date of exercise. Subject to
the provisions of section 8, the purchase price per share shall be not less than
l00% of the Fair Market Value of a share of Capital Stock on the date the Option
is granted.
(b) Each Option shall be exercisable in full or in part one year after
the date the Option is granted, or may become exercisable in one or more
installments and at such time or times, as the Incentive Committee shall
determine. Unless otherwise provided in the Option, an Option, to the extent it
is or becomes exercisable, may be exercised at any time in whole or in part
until the expiration or termination of the Option. Subject to the first sentence
of this paragraph, any term or provision in any outstanding Option specifying
when the Option is exercisable or that it be exercisable in installments may be
modified at any time during the life of the Option by the Incentive Committee,
provided, however, no such modification of an outstanding Option shall, without
the consent of the optionee, adversely affect any Option theretofore granted to
him. Subject to the preceding provisions of this paragraph, an Option will
become immediately exercisable in full if at any time during the term of the
Option the Corporation obtains actual knowledge that any of the following events
has occurred, irrespective of the applicability of any limitation on the number
of shares then exercisable under the Option: (1) any person within the meaning
of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "1934
Act"), other than the Corporation or any of its subsidiaries, has become the
beneficial owner, within the meaning of Rule 13d-3 under the 1934 Act, of 30
percent or more of the combined voting power of the Corporation's then
outstanding
A-4
<PAGE> 26
voting securities; (2) the expiration of a tender offer or exchange offer, other
than an offer by the Corporation, pursuant to which 20 percent or more of the
shares of the Corporation's Capital Stock have been purchased; (3) the
stockholders of the Corporation have approved (i) an agreement to merge or
consolidate with or into another corporation and the Corporation is not the
surviving corporation or (ii) an agreement to sell or otherwise dispose of all
or substantially all of the assets of the Corporation (including a plan of
liquidation); or (4) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors cease for any
reason to constitute at least a majority thereof, unless the nomination for the
election by the Corporation's stockholders of each new director was approved by
a vote of at least one-half of the persons who were directors at the beginning
of the two-year period.
(c) Each Option shall be exercisable during the life of the optionee only
by him or a transferee or assignee permitted by paragraph (f) of this section
(6), and, after his death, only by his estate or by a person who acquired the
right to exercise the Option pursuant to one of the provisions of paragraph (f)
of this section (6). An Option, to the extent that it shall not have been
exercised, shall terminate when the optionee ceases to be an employee of the
Corporation or a Subsidiary, unless he ceases to be an employee because of his
resignation with the consent of the Incentive Committee (which consent may be
given before or after resignation), or by reason of his death, incapacity or
retirement under a retirement plan of the Corporation or a Subsidiary. Except as
provided in the next sentence, if the optionee ceases to be an employee by
reason of such resignation, the Option shall terminate three months after he
ceases to be an employee. If the optionee ceases to be an employee by reason of
such death, incapacity or retirement, or if he should die during the three-month
period referred to in the preceding sentence, the Option shall terminate fifteen
months after he ceases to be an employee. Where an Option is exercised more than
three months after the optionee ceased to be an employee, the Option may be
exercised only to the extent it could have been exercised three months after he
ceased to be an employee. A leave of absence for military or governmental
service or for other purposes shall not, if approved by the Incentive Committee,
be deemed a termination of employment within the meaning of this paragraph (c);
provided, however, that an Option may not be exercised during any such leave of
absence. Notwithstanding the foregoing provisions of this paragraph (c) or any
other provision of this Plan, no Option shall be exercisable after expiration of
the term for which the Option was granted, which shall in no event exceed ten
years. Where an Option is granted for a term of less than ten years, the
Incentive Committee, may, at any time prior to the expiration of the Option,
extend its term for a period ending not later than ten years from the date the
Option was granted. Such an extension shall not be deemed the grant of an Option
under this Plan.
(d) Options shall be granted for such lawful consideration as the
Incentive Committee shall determine.
(e) Neither the Corporation nor any Subsidiary may directly or indirectly
lend any money to any person for the purpose of assisting him to purchase or
carry shares of Capital Stock issued or transferred upon the exercise of an
Option.
(f) No Option nor any right thereunder may be assigned or transferred by
the optionee except:
(i) by will or the laws of descent and distribution;
(ii) pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code of 1986, as amended, or by the
Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder;
(iii) by an optionee who, at the time of the transfer, is not
subject to the provisions of Section 16 of the 1934 Act,
provided such transfer is to or for the benefit of (including
but not limited to trusts for the benefit of) the optionee's
spouse or lineal descendants of the optionee's parents; or
(iv) by an optionee who, at the time of the transfer, is subject to
the provisions of Section 16 of the 1934 Act, to the extent,
if any, such transfer would be permitted under Securities and
Exchange Commission Rule 16b-3 or any successor rule thereto,
as such rule or any successor rule thereto may be in effect at
the time of the transfer.
A-5
<PAGE> 27
If so provided in the Option or if so authorized by the Incentive
Committee and subject to such terms and conditions as are specified in the
Option or by the Incentive Committee, the Corporation may, upon or without the
request of the holder of the Option and at any time or from time to time, cancel
all or a portion of the Option then subject to exercise and either (i) pay the
holder an amount of money equal to the excess, if any, of the Fair Market
Value, at such time or times, of the shares subject to the portion of the Option
so canceled over the aggregate purchase price of such shares, or (ii) issue or
transfer shares of Capital Stock to the holder with a Fair Market Value, at such
time or times, equal to such excess.
(g) Each Option shall be evidenced by a written instrument, which shall
contain such terms and conditions, and shall be in such form, as the Incentive
Committee may determine, provided the Option is consistent with this Plan and
incorporates it by reference. Notwithstanding the preceding sentence, an Option,
if so granted by the Incentive Committee, may include restrictions and
limitations in addition to those provided for in this Plan.
(h) Any federal, state or local withholding taxes payable by an optionee
or awardee upon the exercise of an Option or upon the removal of restrictions of
a Stock Award shall be paid in cash or in such other form as the Incentive
Committee may authorize from time to time, including the surrender of shares of
Capital Stock or the withholding of shares of Capital Stock to be issued to the
optionee or awardee. All such shares so surrendered or withheld shall be valued
at Fair Market Value on the date such are surrendered to the Corporation or
authorized to be withheld.
7. COMBINATIONS OF STOCK AWARDS AND OPTIONS: Stock Incentives authorized by
paragraph (b)(iii) of section 3 in the form of combinations of Stock Awards and
Options shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of Stock Award
with any form of Option; provided, however, that the terms and conditions of
such Stock Incentive pertaining to a Stock Award are consistent with section 5
and the terms and conditions of such Stock Incentive pertaining to an Option are
consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such other terms
and conditions as the Incentive Committee may determine, including, without
limitation, a provision terminating in whole or in part a portion thereof upon
the exercise in whole or in part of another portion thereof. Such combination
Stock Incentive shall be evidenced by a written instrument in such form as the
Incentive Committee shall determine, provided it is consistent with this Plan
and incorporates it by reference.
8. ADJUSTMENT PROVISIONS: In the event that any recapitalization, or
reclassification, split-up or consolidation of shares of Capital Stock shall be
effected, or the outstanding shares of Capital Stock are, in connection with a
merger or consolidation of the Corporation or a sale by the Corporation of all
or a part of its assets, exchanged for a different number or class of shares of
stock or other securities of the Corporation or for shares of the stock or other
securities of any other corporation, or a record date for determination of
holders of Capital Stock entitled to receive a dividend payable in Capital Stock
shall occur (a) the number and class of shares or other securities that may be
issued or transferred pursuant to Stock Incentives, (b) the number and class of
shares or other securities which have not been issued or transferred under
outstanding Stock Incentives, (c) the purchase price to be paid per share or
other security under outstanding Options, and (d) the price to be paid per share
or other security by the Corporation or a Subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Corporation or a Subsidiary to reacquire such shares or other
securities, shall in each case be equitably adjusted.
9. TERM: This Plan shall be deemed adopted and shall become effective on the
date it is approved and adopted by the stockholders of the Corporation. No Stock
Incentives shall be granted under this Plan after May 15, 2005.
10. ADMINISTRATION:
(a) The Plan shall be administered by the Incentive Committee, which
shall consist of no fewer than three persons designated by the Board of
Directors. Grants of Stock Incentives may be made by the Incentive
A-6
<PAGE> 28
Committee either in or without consultation with employees, but, anything in
this Plan to the contrary notwithstanding, the Incentive Committee shall have
full authority to act in the matter of selection of all Key Employees and in
determining the number of Stock Incentives to be granted to them.
(b) The Incentive Committee may establish such rules and regulations, not
inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to participate in this Plan and for the proper
administration of this Plan, and may amend or revoke any rule or regulation so
established. The Incentive Committee may make such determinations and
interpretations under or in connection with this Plan as it deems necessary or
advisable. All such rules, regulations, determinations and interpretations shall
be binding and conclusive upon the Corporation, its Subsidiaries, its
stockholders and all employees, and upon their respective legal representatives,
beneficiaries, successors and assigns and upon all other persons claiming under
or through any of them.
(c) Members of the Board of Directors and members of the Incentive
Committee acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their duties.
11. GENERAL PROVISIONS:
(a) Nothing in this Plan nor in any instrument executed pursuant hereto
shall confer upon any employee any right to continue in the employ of the
Corporation or a Subsidiary, or shall affect the right of the Corporation or of
a Subsidiary to terminate the employment of any employee with or without cause.
(b) No shares of Capital Stock shall be issued or transferred pursuant to
a Stock Incentive unless and until all legal requirements applicable to the
issuance or transfer of such shares, in the opinion of counsel to the
Corporation, have been complied with. In connection with any such issuance or
transfer, the person acquiring the shares shall, if requested by the
Corporation, give assurances, satisfactory to counsel to the Corporation, that
the shares are being acquired for investment and not with a view to resale or
distribution thereof and assurances in respect of such other matters as the
Corporation or a Subsidiary may deem desirable to assure compliance with all
applicable legal requirements.
(c) No employee (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any right,
title or interest in or to any shares of Capital Stock allocated or reserved for
the purposes of this Plan or subject to any Stock Incentive except as to such
shares of Capital Stock, if any, as shall have been issued or transferred to
him.
(d) The Corporation or a Subsidiary may, with the approval of the
Incentive Committee, enter into an agreement or other commitment to grant a
Stock Incentive in the future to a person who is or will be a Key Employee at
the time of grant, and, notwithstanding any other provision of this Plan, any
such agreement or commitment shall not be deemed the grant of a Stock Incentive
until the date on which the Company takes action to implement such agreement or
commitment.
(e) In the case of a grant of a Stock Incentive to an employee of a
Subsidiary, such grant may, if the Incentive Committee so directs, be
implemented by the Corporation issuing or transferring the shares, if any,
covered by the Stock Incentive to the Subsidiary, for such lawful consideration
as the Incentive Committee may specify, upon the condition or understanding that
the Subsidiary will transfer the shares to the employee in accordance with the
terms of the Stock Incentive specified by the Incentive Committee pursuant to
the provisions of this Plan. Notwithstanding any other provision hereof, such
Stock Incentive may be issued by and in the name of the Subsidiary and shall be
deemed granted on the date it is approved by the Incentive Committee, on the
date it is delivered by the Subsidiary or on such other date between said two
dates, as the Incentive Committee shall specify.
(f) The Corporation or a Subsidiary may make such provisions as it may
deem appropriate for the withholding of any taxes which the Corporation or a
Subsidiary determines it is required to withhold in connection with any Stock
Incentive.
A-7
<PAGE> 29
(g) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan, practice
or arrangement for the payment of compensation or fringe benefits to employees
generally, or to any class or group of employees, which the Corporation or any
Subsidiary or other affiliate now has or may hereafter lawfully put into effect,
including, without limitation, any retirement, pension, group insurance, stock
purchase, stock bonus or stock option plan.
12. AMENDMENTS AND DISCONTINUANCE:
(a) This Plan may be amended by the Board of Directors upon the
recommendation of the Incentive Committee, provided that, without the approval
of the stockholders of the Corporation, no amendment shall be made which (i)
increases the aggregate number of shares of Capital Stock that may be issued or
transferred pursuant to Stock Incentives as provided in paragraph (a) of section
4, (ii) increases the maximum aggregate number of shares of Capital Stock that
may be issued or transferred under the Plan to directors of the Corporation or
of a Subsidiary as provided in paragraph (b) of section 4, (iii) withdraws the
administration of this Plan from the Incentive Committee, (iv) permits any
person who is not at the time a Key Employee of the Corporation or of a
Subsidiary to be granted a Stock Incentive, (v) permits any Option to be
exercised more than ten years after the date it is granted, (vi) amends section
9 to extend the date set forth therein or (vii) amends this section 12.
(b) Notwithstanding paragraph (a) of this section 12, the Board of
Directors may amend the Plan to take into account changes in applicable
securities laws, federal income tax laws and other applicable laws. Should the
provisions of Rule 16b-3, or any successor rule, under the Securities Exchange
Act of 1934 be amended, the Board of Directors may amend the Plan in accordance
therewith.
(c) The Board of Directors may by resolution adopted by a majority of the
entire Board of Directors discontinue this Plan.
(d) No amendment or discontinuance of this Plan by the Board of Directors
or the stockholders of the Corporation shall, without the consent of the
employee, adversely affect any Stock Incentive theretofore granted to him.
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<PAGE> 30
CHEMED CORPORATION
2600 CHEMED CENTER
255 EAST FIFTH STREET PLEASE MARK, SIGN, DATE AND RETURN PROXY
CINCINNATI, OHIO 45202 CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
________________________________________________________________________________
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS, MAY 15, 1995.
The undersigned hereby appoints E. L. Hutton, K. J. McNamara and Naomi C.
Dallob as Proxies, each with the power to appoint a substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side,
all the shares of stock of Chemed Corporation held of record by the undersigned
on March 20, 1995, at the Annual Meeting of Stockholders to be held on May 15,
1995, or at any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<TABLE>
<CAPTION>
(1) Election of Directors (mark only ONE box):
<S> <C> <C>
/ / FOR all nominees / / FOR nominees listed EXCEPT / / WITHHOLD ALL AUTHORITY
listed. THOSE WHOSE NAMES I HAVE to vote in the selection
STRICKEN. of directors.
J. Peter Grace Charles H. Erhart, Jr. Sandra E. Laney
Edward L. Hutton Joel F. Gemunder John M. Mount
Kevin J. McNamara William R. Griffin Timothy S. O'Toole
James A. Cunningham Thomas C. Hutton D. Walter Robbins, Jr.
James H. Devlin Walter L. Krebs Paul C. Voet
</TABLE>
(2) Approve and adopt the 1995 Stock Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
(3) Ratifying the selection of independent accountants.
/ / FOR / / AGAINST / / ABSTAIN
(4) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS (1), (2) AND
(3).
DATED: _______________________________________, 1995
(Be sure to date Proxy)
SIGNED: _____________________________________________
_____________________________________________
(Please sign exactly as names appear at left)
When signed on behalf of a corporation,
partnership, estate, trust, or other
stockholder, state your title or capacity
or otherwise indicate that you are
authorized to sign.
