<PAGE> 1
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SCHEDULE 14A INFORMATION
(Rule 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Section 240.14a-11(c) or Section 240.14a-12
Chemed Corporation
.........................................................................
(Name of Registrant as Specified in its Charter)
Chemed Corporation
.........................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
_________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-ll (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
(5) Total fee paid: ______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
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<PAGE> 2
[CHEMED LOGO]
CHEMED CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1997
The Annual Meeting of Stockholders of Chemed Corporation will be held at The
Phoenix Club, 812 Race Street, Cincinnati, Ohio, on Monday, May 19, 1997 at
1:30 p.m. for the following purposes:
(1) To elect directors;
(2) To approve and adopt the 1997 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 19, 1997 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 4, 1997
<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" or
"Chemed") of proxies to be used at the Annual Meeting of Stockholders ("Annual
Meeting") of the Company to be held on May 19, 1997 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 4,
1997. 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 19, 1997
will be entitled to vote at the Annual Meeting or any adjournments thereof. On
such date, the Company had outstanding 10,032,289 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 a
plurality of the votes cast will be necessary to elect each of the nominees for
director.
NOMINEES
<TABLE>
<S> <C>
EDWARD L. HUTTON Mr. Hutton is Chairman and Chief
Director since 1970 Executive Officer of the Company
Age: 77 and 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 (healthcare products
and services), a public corporation in
which the Company holds a
1-percent-ownership interest
(hereinafter "Omnicare"), and Chairman
of National Sanitary Supply Company,
Cincinnati, Ohio (sanitary and
maintenance supplies distributor), an
83-percent-owned subsidiary of the
Company (hereinafter "National"). Mr.
Hutton is a director of National and
Omnicare. Mr. Hutton is the father of
Thomas C. Hutton, a Vice President and
a director of the Company.
</TABLE>
1
<PAGE> 4
<TABLE>
<S> <C>
KEVIN J. MCNAMARA Mr. McNamara is President of the
Director since 1987 Company and has held this position
Age: 43 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 a
director of National and Omnicare.
JAMES H. DEVLIN Mr. Devlin is a Vice President of the
Director from May 1991 Company and Group Executive of
to May 1992 and since the Company's Omnia Group (formerly
February 1993 known as the "Veratex Group") and has
Age: 50 held these positions since December
1992. 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 W.R.
Director since 1970 Grace and Co. (hereinafter "Grace"),
Age: 71 Boca Raton, Florida (international
specialty chemicals and packaging) in
August 1990, having held that 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 National and Omnicare.
JOEL F. GEMUNDER Mr. Gemunder is President of Omnicare
Director since 1977 and has held this position since May
Age: 57 1981. He is also a director of
Omnicare.
LAWRENCE J. GILLIS Mr. Gillis is a Vice President of the
Director since Company and has held this position
November 1996 since November 1996. He is also
Age: 62 President and Chief Operating Officer
of Roto-Rooter Services Company, an
indirectly wholly owned subsidiary of
the Company, and has held these
positions since October 1994.
Previously, he was Senior Vice
President-Operations of Roto-Rooter
Services Company, from February 1991
to October 1994. From November 1983 to
February 1991, he was a Regional Vice
President of Roto-Rooter Services
Company.
PATRICK P. GRACE Mr. Grace is a consultant and
Director since 1996 investment adviser. Previously, from
Age: 41 February 1991 to October 1995, he was
President of Grace Logistics Services,
Inc., Greenville, South Carolina (a
full-service provider of logistical
support), a subsidiary of Grace. From
March 1988 to February 1991, he served
as Chief Financial Officer at Kascho
GmbH, Berlin, Germany (manufacturer of
chocolate products), a subsidiary of
Grace.
THOMAS C. HUTTON Mr. Hutton is a Vice President of the
Director since 1985 Company and has held this position
Age: 46 since February 1988. Mr. Hutton is a
director of National and Omnicare. 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 retired in April 1996 as
Director from May 1989 Director-Financial Services of
to April 1991 and since DiverseyLever, Inc. (formerly known as
May 1995 Diversey Corporation), Detroit,
Age: 64 Michigan (specialty chemicals)
("Diversey"), having 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").
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
SANDRA E. LANEY Ms. Laney is Senior Vice President and
Director since 1986 the Chief Administrative Officer of the
Age: 53 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 and Omnicare.
JOHN M. MOUNT Mr. Mount is a Principal of Lynch-Mount
Director from May 1986 Associates, Cincinnati, Ohio
to April 1991 and since (management consulting), and has held
February 1994 this position since November 1993. From
Age: 55 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. He is a
director of National and Omnicare.
TIMOTHY S. O'TOOLE Mr. O'Toole is an Executive Vice
Director since August 1991 President and the Treasurer of the
Age: 41 Company and has held these positions
since May 1992. He is also the
Chairman and Chief Executive Officer
of Patient Care, Inc., a 100-
percent-owned subsidiary of the
Company. 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 and Omnicare.
D. WALTER ROBBINS, JR. Mr. Robbins retired as Vice Chairman of
Director since 1970 Grace in January 1987 and thereafter
Age: 77 became a consultant to Grace until July
1995. He is a director of National and
Omnicare.
PAUL C. VOET Mr. Voet is an Executive Vice President
Director since 1980 of the Company and has held this
Age: 50 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.
GEORGE J. WALSH Mr. Walsh is a partner with the law
Director since November 1995 firm of Gould & Wilkie, New York,
Age: 51 New York, and has held this position
since January 1978. He is a director
of National.
</TABLE>
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, 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, each
of Mr. Gilliatt and Dr. Wells will again be designated as a Director Emeritus.
3
<PAGE> 6
COMPENSATION OF DIRECTORS
Throughout most of 1996, each member of the Board of Directors who was not a
regular employee of the Company and Mr. Voet, who is the President and Chief
Executive Officer of National, were paid an annual fee of $5,000, 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 $1,000. 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. Mount also received $13,500
for attending quarterly management meetings, and effective November 1, 1996,
Mr. Mount was retained by the Company as a consultant at a rate of $100,000
per annum.
In addition, in May 1996 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 100 shares of Capital
Stock under the Company's 1993 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 100 share stock award or $3,925.
Throughout 1996, 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.
Effective February 5, 1997, each member of the Board of Directors who is not
a regular employee of the Company and Mr. Voet are paid an annual fee of
$8,750. For each meeting of the Board of Directors attended, a director is paid
$1,750.
The Company has a deferred compensation plan for nonemployee directors under
which certain directors who are nonregular 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
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, Krebs, Mount
and Robbins. The Audit Committee met on two occasions during 1996.
4
<PAGE> 7
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 Messrs. Cunningham, Erhart and Robbins. During 1996, the
Compensation Committee met on six occasions.
The Incentive Committee administers the Company's six 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, Krebs and
Robbins. The Incentive Committee met on three occasions during 1996.
During 1996, there were six meetings of the Board of Directors, and each
director attended at least 75 percent 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
Mr. Mount who served on the Compensation Committee for part of 1996 was
formerly an Executive Vice President 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
interests 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 four
outside directors (i.e., nonemployees of the Company) and the Compensation
Committee is composed of three outside directors. 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.
5
<PAGE> 8
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 units' 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 nonfinancial 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 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 percent to 100 percent 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 ranging from
three- to seven-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 Committee and Incentive Committee have considered, and are
continuing to review, the qualifying compensation regulations issued by the
Internal Revenue Service in December 1993. Generally, the Committees structure
compensation arrangements to achieve deductibility under the tax regulations,
except where the benefit of such deductibility is outweighed by the need for
flexibility or the attainment of other corporate objectives.
The base salary of Mr. E. L. Hutton, Chairman and Chief Executive Officer of
the Company, was increased effective March 1, 1996 at an annual rate of 6.2
percent to a base rate of $590,000. His bonus in respect of 1996 services was
$207,776 which represents a decrease of $33,824 from 1995 and 35 percent of his
current base salary. In addition, Mr. Hutton received a special bonus of
$326,000 in connection with the Company's 1996 capital gains. Restricted stock
awards having a value of $966,000 and vesting over seven years were granted to
Mr. Hutton, and Mr. Hutton was granted 31,000 stock options. Factors considered
in establishing the compensation levels in 1996 for Mr. Hutton were the
Company's growth in net income of 39.5 percent, the Company's decline in sales
of 2.2 percent and the decline of income from continuing operations of 5.2
percent. The Compensation Committee and the Incentive Committee believe that
Mr. Hutton's base salary, the decrease in his cash bonus, his special bonus
and the restricted stock awards and stock options granted to Mr. Hutton are
consistent with his performance as measured by these factors and the other
criteria discussed above.
<TABLE>
<CAPTION>
Compensation Committee Incentive Committee
--------------------- -----------------
<S> <C>
Charles H. Erhart, Jr., Chairman D. Walter Robbins, Jr., Chairman
James A. Cunningham Charles H. Erhart, Jr.
D. Walter Robbins, Jr. James A. Cunningham
Walter L. Krebs
</TABLE>
6
<PAGE> 9
SUMMARY COMPENSATION TABLE
The following table shows the compensation paid to the Chief Executive
Officer and the four most highly compensated executive officers of the Company
for the past three years for all services rendered in all capacities to the
Company and its subsidiaries:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
- -------------------------------------------------------------------------------------------------------------------------------
CHEMED SECURITIES ROTO-ROOTER SECURITIES NATIONAL SECURITIES SECURITIES
RESTRICTED UNDERLYING RESTRICTED UNDERLYING RESTRICTED UNDERLYING UNDERLYING
NAME AND STOCK CHEMED STOCK ROTO-ROOTER STOCK NATIONAL SERVICE AMERICA
PRINCIPAL BONUS AWARDS STOCK AWARDS STOCK AWARDS STOCK STOCK OPTIONS
POSITION YEAR SALARY ($) ($) (1) ($) (2) OPTIONS (#) ($) (3) OPTIONS (#) ($) (4) OPTIONS (#) (#) (5)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E. L. Hutton 1996 $583,333 $533,776 $966,000 31,000 $ -0- 25,000 $ 93,502 20,000 -0-
Chairman and 1995 550,000 532,000 266,200 48,000 115,000 -0- 109,982 40,000 -0-
CEO 1994 500,000 472,000 220,000 42,000 100,000 10,000 79,625 -0- -0-
K. J. McNamara 1996 270,167 174,502 362,000 20,000 -0- 4,000 15,007 2,500 -0-
President 1995 246,000 143,250 72,600 30,000 18,000 -0- 17,496 5,000 -0-
1994 146,000 132,750 60,000 17,000 7,000 1,000 12,625 -0- -0-
P. C. Voet 1996 285,333 113,960 54,000 4,000 -0- -0- 93,502 20,000 -0-
Executive Vice 1995 264,500 141,250 10,000 7,000 -0- -0- 109,982 40,000 -0-
President 1994 244,000 120,000 -0- 5,000 -0- -0- 79,625 -0- -0-
T. S. O'Toole 1996 161,667 67,304 261,000 14,000 -0- 2,000 10,004 1,000 -0-
Executive Vice 1995 150,000 63,000 66,550 21,000 10,000 -0- 11,503 2,000 -0-
President and 1994 105,000 52,300 55,000 19,000 6,000 1,000 9,188 -0- 1,500
Treasurer
S. E. Laney 1996 162,583 172,488 261,000 14,000 -0- 2,500 10,004 1,500 -0-
Senior Vice 1995 148,000 139,000 60,500 21,000 10,000 -0- 11,503 3,000 -0-
President and 1994 105,000 129,500 50,000 17,000 5,000 1,000 9,188 -0- 1,500
Chief
Administrative
Officer
</TABLE>
<TABLE>
<CAPTION>
NAME AND ALL OTHER
PRINCIPAL COMPENSATION
POSITION ($)
- --------------------------------
<S> <C>
E. L. Hutton $287,885(6)
Chairman and 635,003
CEO 175,584
K. J. McNamara 146,313(7)
President 183,863
49,767
P. C. Voet 137,973(8)
Executive Vice 263,211
President 57,278
T. S. O'Toole 83,676(9)
Executive Vice 128,830
President and 23,268
Treasurer
S. E. Laney 116,063(10)
Senior Vice 167,074
President and 27,479
Chief
Administrative
Officer
</TABLE>
7
<PAGE> 10
SUMMARY COMPENSATION TABLE (continued)
(1) Bonuses paid in 1996 include the following amounts which were paid as
special bonuses in connection with the Company's 1996 capital gains: E. L.
Hutton - $326,000; K. J. McNamara - $144,000; P. C. Voet - $42,000; T. S.
O'Toole - $48,000; and S. E. Laney - $144,000.
(2) The number and value of the aggregate restricted shares of Capital Stock
held by the named executives at December 31, 1996 were as follows: E. L.
Hutton - 14,006 shares, $511,219; K. J. McNamara - 3,549 shares, $129,539;
P. C. Voet - 251 shares, $9,162; T. S. O'Toole - 3,267 shares, $119,574;
and S. E. Laney - 2,930 shares, $106,945. Restricted shares granted with
respect to 1994 and 1995 vest evenly over five-year and three-year periods,
respectively. The restricted shares with respect to 1996 vest in varying
percentages over a seven-year period. Recipients receive dividends on the
awarded shares and are entitled to vote them, whether or not vested.
(3) All of the shares of Roto-Rooter Common Stock awarded to Messrs. McNamara
and O'Toole and Ms. Laney with respect to 1994 and 1995 were unrestricted.
As a result of the consummation of the Company's merger with Roto-Rooter,
Inc. ("Roto-Rooter"), effective September 17, 1996, all outstanding
restricted shares of Roto-Rooter Common Stock were converted to cash in the
amount of $41.00 per share.
(4) The number and value of the aggregate restricted shares of National Common
Stock held by the named executives at December 31, 1996 were as follows: E.
L. Hutton - 21,956 shares, $273,748; K. J. McNamara - 3,457 shares,
$43,124; P. C. Voet - 22,056 shares, $274,973; T. S. O'Toole - 2,413
shares, $30,082; and S. E. Laney - 2,413 shares, $30,082. 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.
(5) Service America Systems, Inc. ("Service America"), formerly known as
Convenient Home Services, Inc., is an indirectly-wholly owned subsidiary of
the Company.
(6) Includes the following amounts: $277,818 allocated to Mr. Hutton's account
under the Company's Employee Stock Ownership Plans ("ESOP") with respect to
1996; a $2,304 premium payment for term life insurance; $3,875 in the form
of an unrestricted stock award of 100 shares of Capital Stock; $1,375 in
the form of an unrestricted stock award of 100 shares of National Common
Stock; and $2,513 in the form of an unrestricted stock award of 75 shares
of Roto-Rooter Common Stock.
(7) Includes the following amounts: $107,000 allocated to Mr. McNamara's
account under the ESOP with respect to 1996; a $2,304 premium payment for
term life insurance; $13,721, which is the value of premium payments made
by the Company for the benefit of Mr. McNamara under a split dollar life
insurance policy, which provides for the refund of premiums to the Company
upon termination of the policy ("Split Dollar Policy"); $8,175 in director
fees from National, including an unrestricted stock award of 100 shares of
National Common Stock; $11,238 in director fees from Roto-Rooter, including
an unrestricted stock award of 75 shares of Roto-Rooter Common Stock; and
$3,875 in the form of an unrestricted stock award of 100 shares of Capital
Stock.
(8) Includes the following amounts: $99,203 allocated to Mr. Voet's account
under the ESOP with respect to 1996; a $2,304 premium payment for term life
insurance; $16,816, which is the value of premium payments made by the
Company for the benefit of Mr. Voet under a Split Dollar Policy; $18,275 in
director fees from the Company, including an unrestricted stock award of
100 shares of Capital Stock; and $1,375 in the form of an unrestricted
stock award of 100 shares of National Common Stock.
(9) Includes the following amounts: $55,210 allocated to Mr. O'Toole's account
under the ESOP with respect to 1996; a $1,492 premium payment for term life
insurance; $6,686, which is the value of premium payments made by the
Company for the benefit of Mr. O'Toole under a Split Dollar Policy; $6,375
in director fees from National, including an unrestricted stock award of
100 shares of National Common Stock; $10,038 in director fees from
Roto-Rooter, including an unrestricted stock award of 75 shares of
Roto-Rooter Common Stock; and $3,875 in the form of an unrestricted stock
award of 100 shares of Capital Stock.
(10) Includes the following amounts: $80,699 allocated to Ms. Laney's account
under the ESOP with respect to 1996; a $1,863 premium payment for term life
insurance; $9,763, which is the value of premium payments made by the
Company for the benefit of Ms. Laney under a Split Dollar Policy; $6,375 in
director fees from National, including an unrestricted stock award of 100
shares of National Common Stock; $10,038 in director fees from Roto-Rooter,
including an unrestricted stock award of 75 shares of Roto-Rooter Common
Stock; and $3,875 in the form of an unrestricted stock award of 100 shares
of Capital Stock.
8
<PAGE> 11
STOCK OPTIONS
The table below shows information concerning Chemed stock options granted in
1996 to the named executives in the Summary Compensation Table.
<TABLE>
<CAPTION>
CHEMED STOCK OPTION GRANTS IN 1996
- ---------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF % OF
SECURITIES TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (1) (#) IN 1996 ($/SHARE) DATE 5% ($) 10% ($)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 31,000 17.3% $38.75 5/20/06 $755,460 $1,914,183
K. J. McNamara 20,000 11.1 38.75 5/20/06 487,393 1,235,150
P. C. Voet 4,000 2.2 38.75 5/20/06 97,487 247,030
T. S. O'Toole 14,000 7.8 38.75 5/20/06 341,175 864,605
S. E. Laney 14,000 7.8 38.75 5/20/06 341,175 864,605
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options, which were granted on May 20, 1996, provide for the
Purchase price of option shares equal to the fair market value of Capital
Stock on that date and became exercisable in four equal annual
installments beginning on November 20, 1996.
The table below shows information concerning Chemed stock options exercised
during 1996 and the year-end number and value of unexercised Chemed stock
options held by the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
AGGREGATED CHEMED STOCK OPTION
EXERCISES IN 1996 AND YEAR-END STOCK OPTION VALUES
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT 12/31/96 (#) AT 12/31/96 ($)
ON EXERCISE REALIZED -----------------------------------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 50,000 $539,950 62,250 57,750 $203,721 $119,826
K. J. McNamara 4,000 39,760 24,250 34,250 68,803 68,803
P. C. Voet 5,000 31,503 1,000 7,750 -0- 16,605
T. S. O'Toole -0- -0- 23,000 25,750 86,684 54,333
S. E. Laney 10,250 131,603 40,750 25,250 192,403 52,535
</TABLE>
9
<PAGE> 12
The table below shows information concerning National stock options granted
in 1996 to the named executives in the Summary Compensation Table.
<TABLE>
<CAPTION>
NATIONAL STOCK OPTION GRANTS IN 1996
- ------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (1) (#) IN 1996 (2) ($/SHARE) DATE 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 20,000 20.1% $12.25 3/06/07 $174,000 $454,000
K. J. McNamara 2,500 2.5 12.25 3/06/07 21,750 56,750
P. C. Voet 20,000 20.1 12.25 3/06/07 174,000 454,000
T. S. O'Toole 1,000 1.0 12.25 3/06/07 8,700 22,700
S. E. Laney 1,500 1.6 12.25 3/06/07 13,050 34,050
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options, which were granted on March 6, 1996, provide for the
purchase price of option shares equal to the fair market value of
National Common Stock on that date and became exercisable in four equal
annual installments beginning on September 6, 1996.
(2) Percentage of total options granted to employees is based on the total
number of options granted to Chemed and National employees.
The table below shows information concerning National stock options
exercised during 1996 and the year-end number and value of unexercised National
stock options held by the executive officers named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
AGGREGATED NATIONAL STOCK OPTION EXERCISES
IN 1996 AND YEAR-END STOCK OPTION VALUES
- ---------------------------------------------------------------------------------------------------------------
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT 12/31/96 (#) AT 12/31/96 ($)
ON EXERCISE REALIZED -----------------------------------------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton -0- -0- 53,600 35,000 $163,818 $35,800
K. J. McNamara -0- -0- 5,625 4,375 12,695 4,475
P. C. Voet -0- -0- 72,500 35,000 257,476 35,800
T. S. O'Toole -0- -0- 1,250 1,750 1,350 1,790
S. E. Laney -0- -0- 2,188 2,625 3,943 2,685
</TABLE>
10
<PAGE> 13
The table below shows information concerning the year-end number and value
of unexercised Service America stock options held by the executive officers
named in the Summary Compensation Table.
<TABLE>
<CAPTION>
1996 YEAR-END SERVICE AMERICA STOCK OPTION VALUES
- -----------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12/31/96 (#) AT 12/31/96 ($)
- -----------------------------------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E. L. Hutton 17,000 8,000 $-0- $-0-
K. J. McNamara -0- -0- -0- -0-
P. C. Voet -0- -0- -0- -0-
T. S. O'Toole 2,300 1,200 -0- -0-
S. E. Laney 1,300 1,200 -0- -0-
</TABLE>
The table below shows information concerning Roto-Rooter stock options
granted in 1996 to the named executives in the Summary Compensation Table. In
connection with the consummation of the Company's merger with Roto-Rooter,
effective September 17, 1996, all of the outstanding Roto-Rooter stock options
vested in full. In lieu of receiving stock, holders of Roto-Rooter stock
options received $41.00 for each outstanding option, less the respective option
price.
<TABLE>
<CAPTION>
ROTO-ROOTER STOCK OPTION GRANTS IN 1996
- ----------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED IN 1996 PRICE EXPIRATION
NAME (1) (#) (2) ($/SHARE) DATE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
E. L. Hutton 25,000 17.1% $31.50 2/07/06
K. J. McNamara 4,000 2.7 31.50 2/07/06
P. C. Voet -0- -0- 31.50 2/07/06
T. S. O'Toole 2,000 1.4 31.50 2/07/06
S. E. Laney 2,500 1.7 31.50 2/07/06
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) These options, which were granted on February 7, 1996, provided for the
purchase price of option shares equal to the fair market value of
Roto-Rooter Common Stock on that date and became exercisable in four
equal installments beginning on February 7, 1997.
(2) Percent of total options granted to employees is based on the total
number of options granted to Chemed and Roto-Rooter employees.
11
<PAGE> 14
The table below shows information concerning Roto-Rooter stock options which
were either exercised during 1996 or cashed out in connection with the merger
of the Company and Roto-Rooter by the executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
AGGREGATED ROTO-ROOTER STOCK OPTION EXERCISES AND
STOCK OPTIONS CASHED OUT IN 1996
- --------------------------------------------------------------------------------------------------
NUMBER OF SHARES
ACQUIRED ON EXERCISE VALUE REALIZED
NAME OR CASHED OUT IN 1996 (#) ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
E. L. Hutton 60,750 $815,463
K. J. McNamara 6,500 76,935
P. C. Voet -0- -0-
T. S. O'Toole 6,000 81,620
S. E. Laney 5,000 62,435
</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 $590,000 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 percent
of his then current base salary, 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,
2001 and are identical in all material respects to that of Mr. Hutton, except
their respective agreements provide for a base salary of $275,000, $289,500,
$164,000, and $165,500 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 Capital Stock (as measured by dividing
(i) the sum of (A) the cumulative amount of dividends for the period December
31, 1991 to December 31, 1996, assuming dividend reinvestment, and (B) the
difference between the Company's share price at December 31, 1991 and December
31, 1996; by (ii) the share price at December 31, 1991) with the cumulative
total return, assuming reinvestment of dividends, of the (1) S & P 500 Stock
Index and (2) Dow Jones Industrial Diversified Index.
12
<PAGE> 15
CHEMED CORPORATION
CUMULATIVE TOTAL STOCKHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING DECEMBER 31, 1996
<TABLE>
<CAPTION>
December 31... 1991 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chemed Corporation 100.00 104.52 125.00 145.48 180.02 178.52
S&P 500 100.00 107.62 118.46 120.03 165.13 203.05
Dow Jones Industrial Diversified 100.00 116.37 142.19 130.41 170.78 220.96
</TABLE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 1996 with
respect to the only person who is known to be the beneficial owner of more than
5 percent of Capital Stock:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Stock The Fifth Third Bank 1,267,081 shares; 12.7%
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, 1,267,081 shares; and shared dispositive power,
1,267,081 shares.
13
<PAGE> 16
The following table sets forth information as of December 31, 1996 with
respect to Capital 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> <C>
E. L. Hutton Chemed Capital Stock 38,937 Direct
63,250 Option
3,967 Trustee
National Common Stock 36,067 Direct
53,600 Option
3,194 Trustee
J. A. Cunningham Chemed Capital Stock 1,000 Direct
500 Trustee
National Common Stock 1,000 Direct
J. A. Devlin Chemed Capital Stock 7,083 Direct
2,250 Option
National Common Stock None
C. H. Erhart, Jr. Chemed Capital Stock 1,500 Direct
National Common Stock 5,000 Direct
J. F. Gemunder Chemed Capital Stock 6,451 Direct
5,000 Option
National Common Stock 400 Direct
L. J. Gillis Chemed Capital Stock None
National Common Stock None
P. P. Grace Chemed Capital Stock 100 Direct
National Common Stock None
T. C. Hutton Chemed Capital Stock 18,003 Direct
12,250 Option
4,467 Trustee (3)
National Common Stock 4,556 Direct
3,500 Option
3,194 Trustee
W. L. Krebs Chemed Capital Stock 2,419 Direct
National Common Stock 200 Direct
S. E. Laney Chemed Capital Stock 29,953 Direct
40,750 Option
Trustee (3)
National Common Stock 4,936 Direct
2,188 Option
K. J. McNamara Chemed Capital Stock 14,401 Direct
24,250 Option
Trustee (3)
National Common Stock 4,542 Direct
5,625 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>
J. M. Mount Chemed Capital Stock 7,620 Direct
National Common Stock 100 Direct
T. S. O'Toole Chemed Capital Stock 14,228 Direct
23,000 Option
National Common Stock 3,977 Direct
1,250 Option
D. W. Robbins, Jr. Chemed Capital Stock 2,000 Direct
National Common Stock 2,000 Direct
P. C. Voet Chemed Capital Stock 26,610 Direct
1,000 Option
Trustee (3)
National Common Stock 38,948 Direct
72,500 Option 1.1%
G. J. Walsh III Chemed Capital Stock 1,100 Direct
National Common Stock 1,100 Direct
Directors and Chemed Capital Stock 181,649 Direct 1.7%
Executive Officers 192,750 Option 1.9%
as a Group 70,620 Trustee (4)
(16 persons) National Common Stock 103,026 Direct 1.6%
138,663 Option 2.1%
3,194 Trustee (4)
</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
Capital Stock and National Common Stock allocated as at December 31, 1996
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, 1996
under the Omnicare Employees Savings and Investment 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 December
31, 1996. For purposes of determining the Percent of Class, all shares
subject to stock options which were exercisable within 60 days from
December 31, 1996 were assumed to have been issued.
(2) Percent of Class under 1.0 percent is not shown.
(3) Messrs. T. Hutton, McNamara and Voet and Ms. Laney are trustees of the
Chemed Foundation which holds 66,153 shares of 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.
15
<PAGE> 18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 Capital Stock are required to file
reports with respect to their ownership and changes in ownership of 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 1996,
no reports on Form 5 were required to be filed with the SEC, except for Messrs.
Gemunder and Grace, the Company believes that, during the period January 1,
1996 through December 31, 1996, the Company's executive officers and directors
and greater-than-10 percent stockholders have complied with all Section 16(a)
reporting requirements. Messrs. Gemunder and Grace did not report the grant of
an unrestricted stock award covering 100 shares of Capital Stock.
TRANSACTIONS
During 1996, Mr. Cunningham was a Senior Chemical Adviser for Schroder
Wertheim & Co. Incorporated which has performed investment banking services for
the Company.
PROPOSAL TO APPROVE AND ADOPT THE
1997 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 1997 Stock Incentive Plan (the "Plan") pursuant to which
500,000 shares of 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 19, 1997. 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 19, 2007. 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 19, 1997 was $36.37
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. However, no more than 250,000 shares of
Capital Stock may be issued or transferred pursuant to stock incentives granted
under this Plan in the form of stock awards.
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.
16
<PAGE> 19
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.
Under the 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 six months 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. 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. No more than 50,000 options may be granted to an individual
employee in any calendar year. 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 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 of 1986, as amended.
17
<PAGE> 20
With respect to stock awards in shares of 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 shares of Capital Stock and the Company will be entitled to a deduction for
the same amount. With respect to stock awards that are settled in shares of
Capital Stock that are 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 shares of Capital Stock at the first time
such shares become 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 shares of Capital Stock
over the option price on the date of exercise. Upon the sale of shares of
Capital 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 such shares on the date
of exercise. 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 a gain on previously owned shares of 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, by surrender of shares, or by
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 1996 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
shares 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 1997 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 19, 1997, BE
AND THE SAME HEREBY IS APPROVED AND ADOPTED."
The affirmative vote of the majority of the shares represented at the
meeting, will be necessary for the adoption of the foregoing resolution, with
abstentions having the effect of negative votes and broker nonvotes deemed to
be absent shares. 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 Section 162(m) of the Internal Revenue Code of 1986, as amended,
which provides for the deduction of certain executive compensation in excess of
$1,000,000, and to meet the requirements of the New York Stock Exchange.
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.
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<PAGE> 21
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 1997. 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
shares represented at the meeting, with abstentions having the effect of
negative votes and broker nonvotes deemed to be absent shares, will be
necessary to ratify the selection of Price Waterhouse LLP as independent
accountants for the Company and its consolidated subsidiaries for the year
1997. 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 1998 Annual Meeting of Stockholders must be in writing
and received by the Secretary of the Company no later than December 6, 1997.
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 4, 1997
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<PAGE> 22
EXHIBIT A
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CHEMED CORPORATION
1997 STOCK INCENTIVE PLAN
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A-1
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CHEMED CORPORATION
1997 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 10.
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.
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
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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 1997 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; provided, however, that the maximum aggregate
number of shares of Capital Stock which may be issued or transferred pursuant
to Stock Incentives in the form of Stock Awards, shall not exceed 250,000
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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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 100 percent 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 may 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) The maximum aggregate number of Stock Incentives in the form of Options
which may be granted to an individual employee of the Corporation or a
Subsidiary in any calendar year shall not exceed 50,000 Options.
(b) 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 100 percent of the Fair Market Value of a share of Capital Stock on the
date the Option is granted.
(c) Each Option shall be exercisable in full or in part six months 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. 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. 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
A-4
<PAGE> 26
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 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.
(d) Each Option shall be exercisable during the life of the optionee only
by him or a transferee or assignee permitted by paragraph (g) 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 (g)
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 (d); provided, however, that an Option may not be exercised
during any such leave of absence. Notwithstanding the foregoing provisions of
this paragraph (d) 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.
(e) Options shall be granted for such lawful consideration as the Incentive
Committee shall determine.
(f) 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.
(g) 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.
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
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<PAGE> 27
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.
(h) 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.
(i) 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 19, 2007.
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 granted by the Incentive 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.
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(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.
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(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)
increases the maximum aggregate number of Stock Incentives, in the form of
Options which may be granted to an individual employee as provided in paragraph
(a) of section 6, (iv) withdraws the administration of this Plan from the
Incentive Committee, (v) 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,
(vi) permits any Option to be exercised more than ten years after the date it
is granted, (vii) amends section 9 to extend the date set forth therein or
(viii) 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.
A-8
<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 19, 1997.
The undersigned hereby appoints E. L. Hutton, K. J. McNamara and N. 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 19, 1997, at the Annual Meeting of Stockholders to be held on May 19,
1997, or at any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
(1) Election of Directors (mark only ONE box):
<TABLE>
<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.
</TABLE>
<TABLE>
<S> <C> <C>
Edward L. Hutton Lawrence J. Gillis John M. Mount
Kevin J. McNamara Patrick P. Grace Timothy S. O'Toole
James H. Devlin Thomas C. Hutton D. Walter Robbins, Jr.
Charles H. Erhart, Jr. Walter L. Krebs Paul C. Voet
Joel F. Gemunder Sandra E. Laney George J. Walsh III
</TABLE>
(2) Approval and adoption of the 1997 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:________________________________________, 1997
(Be sure to date Proxy)
SIGNED:____________________________________________
____________________________________________
NOTE: Please sign as name appears hereon.
Joint owners should each sign. 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.
