<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
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(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:
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(4) Date Filed:
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<PAGE> 2
[LOGO]
CHEMED CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 1999
The Annual Meeting of Stockholders of Chemed Corporation will be held at
The Phoenix Club, 812 Race Street, Cincinnati, Ohio, on Monday, May 17, 1999, at
2 p.m. for the following purposes:
(1) To elect directors;
(2) To approve and adopt the 1999 Stock Incentive Plan;
(3) To ratify the selection by the Board of Directors of independent
accountants;
(4) To vote on a stockholder proposal that the Board of Directors have a
majority of outside members; and
(5) To transact such other business as may properly be brought before the
meeting.
Stockholders of record at the close of business on March 18, 1999 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
March 31, 1999
<PAGE> 3
[LOGO]
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 17, 1999, 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 March
31, 1999. 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 18, 1999,
will be entitled to vote at the Annual Meeting or any adjournments thereof. On
such date, the Company had outstanding 10,602,225 shares of capital stock, par
value $1 per share ("Capital Stock"), entitled to one vote per share.
ELECTION OF DIRECTORS
Sixteen 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.
<TABLE>
<CAPTION>
NOMINEES
<S> <C>
EDWARD L. HUTTON Mr. Hutton is Chairman and Chief Executive
Director since 1970 Officer of the Company and has held these
Age: 79 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"). Mr. Hutton is a director of
Omnicare. Mr. Hutton is the father of Thomas C.
Hutton, a Vice President and a director of the
Company.
KEVIN J. MCNAMARA Mr. McNamara is President of the Company and has
Director since 1987 held this position since August 1994. Previously,
Age: 45 he served the Company as Executive Vice President,
Secretary and General Counsel from November
1993, August 1986 and August 1986, respectively,
to August 1994. He is a director of Omnicare.
</TABLE>
1
<PAGE> 4
<TABLE>
<S> <C>
RICK L. ARQUILLA Mr. Arquilla is President and Chief Operating
Director Nominee Officer of Roto-Rooter, Inc., a wholly owned
subsidiary of the Company ("Roto-Rooter"), and
Age: 45 -has held this position since January
1999. Previously, he served as a Senior Vice
President of Roto-Rooter Services Company, an
indirectly wholly owned subsidiary of the
Company, from May 1997 to January 1999. From May
1989 to May 1997, he served as Vice President of
Roto-Rooter Services Company.
JAMES H. DEVLIN Mr. Devlin is a Vice President of the Company and has
Director from May 1991 held this position since December 1992. From December 1992
to May 1992 and since to September 1997, he also served as Group Executive of the
February 1993 Company's Omnia Group.
Age: 52
CHARLES H. ERHART, JR. Mr. Erhart retired as President of W.R. Grace and Co.
Director since 1970 (hereinafter "Grace"), Boca Raton, Florida (international specialty
Age: 73 chemicals, construction 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 Omnicare.
JOEL F. GEMUNDER Mr. Gemunder is President of Omnicare and has held this position
Director since 1977 since May 1981. He is also a director of Omnicare and Ultratech
Age: 59 Stepper, Inc.
PATRICK P. GRACE Mr. Grace is President of MLP Capital, Inc. (a managing partner of
Director since 1996 several real estate and mining ventures in the southwestern United
Age: 43 States). From December 1997 to January 31, 1999, Mr. Grace was also
Chief Financial Officer of Compucook, Inc., Westport, Connecticut
(interactive marketing). From 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.
THOMAS C. HUTTON Mr. Hutton is a Vice President of the Company and has held this
Director since 1985 position since February 1988. Mr. Hutton is a director of Omnicare.
Age: 48 He is a son of Edward L. Hutton, the Chairman and Chief Executive Officer
and a director of the Company.
WALTER L. KREBS Mr. Krebs is the Senior Vice President-Finance, Chief Financial Officer
Director from May 1989 of Service America Systems, Inc., a wholly owned subsidiary of the
to April 1991 and since Company ("Service America"), and has held this position since October
May 1995 1997. Previously, he retired in April 1996 as Director - Financial
Age: 64 Services of DiverseyLever, Inc. (formerly known as Diversey Corporation),
Detroit, 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").
SANDRA E. LANEY Ms. Laney is Senior Vice President and the Chief Administrative
Director since 1986 Officer of the Company and has held these positions since November
Age: 55 1993 and May 1991, respectively. She is a director of Omnicare.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
SPENCER S. LEE Mr. Lee is Chairman and Chief Executive Officer of Roto-Rooter and
Director Nominee has held this position since January 1999. Previously, he served as a
Age: 43 Senior Vice President of Roto-Rooter Services Company from May 1997 to
January 1999. From February 1985 to May 1997, he served as a Vice President of
Roto-Rooter Services Company.
JOHN M. MOUNT Mr. Mount is a Vice President of the Company and has held this position
Director from May 1986 since November 1997. He is also President and Chief Executive Officer
to April 1991 and since of Service America and has held these positions since October 1997.
February 1994 Previously, he was a Principal of Lynch-Mount Associates, Cincinnati,
Age: 57 Ohio (management consulting), from November 1993 to October 1997. From April 1991
to November 1993, Mr. Mount was Senior Vice President of Diversey and President of
Diversey's DuBois Industrial division. Previously, from May 1989 to April 1991,
Mr. Mount was an Executive Vice President of the Company and President of DuBois.
He held the latter position from September 1986 to April 1991.
TIMOTHY S. O'TOOLE Mr. O'Toole is an Executive Vice President and the Treasurer of the
Director since August 1991 Company and has held these positions since May 1992. He is also the
Age: 43 Chairman and Chief Executive Officer of Patient Care, Inc., a wholly
owned subsidiary of the Company. He is a director of Vitas Healthcare Corporation.
DONALD E. SAUNDERS Mr. Saunders is President of DuBois, a division of DiverseyLever, Inc.,
Director from May 1981 and has held this position since November 1993. From April 1991 to
to May 1982, May 1983 October 1993, he was Executive Vice President of Diversey and from
to May 1987 and since January 1991 to March 1991, he was Executive Vice President of DuBois.
May 1998
Age: 55
PAUL C. VOET Mr. Voet is an Executive Vice President of the Company and has held
Director since 1980 this position since May 1991. From January 1992 to September 1997,
Age: 52 he also served as President and Chief Executive Officer of the
Company's then majority-owned subsidiary, National Sanitary Supply Company.
GEORGE J. WALSH III Mr. Walsh is a partner with the law firm of Gould & Wilkie, New
Director since November 1995 York, New York, and has held this position since January 1978.
Age: 53
</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 a Director Emeritus, and in
1994, Neal Gilliatt, who served as a director of the Company from 1970 to 1994,
was designated 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.
3
<PAGE> 6
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.
COMPENSATION OF DIRECTORS
Throughout 1998, each member of the Board of Directors who was not a
regular employee of the Company was paid an annual fee of $12,000 and a fee of
$2,000 for each meeting attended. Each member of the Audit Committee of the
Board (other than its chairman) was paid an additional annual fee of $1,600, and
each member of the Compensation/Incentive Committee of the Board (other than its
chairman) was paid an additional annual fee of $3,200. 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.
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 the Compensation/Incentive Committee was paid at the rate of $5,136 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.
In addition, in May 1998 each member of the Board of Directors (other than
those serving on the Compensation/Incentive Committee) 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
Compensation/Incentive Committee were paid the cash equivalent of the 100-share
stock award or $3,813.
The Company has a deferred compensation plan for nonemployee directors
under which certain directors who are not regular employees of the Company or of
a wholly 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 and Compensation/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, Saunders and
Grace. The Audit Committee met on two occasions during 1998.
Effective May 18, 1998, the former Compensation and Incentive Committees
of the Company were merged since, with a larger proportion of compensation being
stock-based, the committees' purposes overlapped.
The Compensation/Incentive 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, (c) adoption and administration of
certain employee benefit plans and programs and (d) additional year-end
contributions by the Company under the Savings and Investment Plan. In addition,
the Compensation/Incentive Committee administers the Company's (a) seven Stock
Incentive Plans and (b) grants of stock options and stock awards to key
employees of the Company. The Compensation/Incentive Committee consists of
Messrs. Erhart, Grace and Walsh. The Compensation/Incentive Committee met on
seven occasions during 1998.
4
<PAGE> 7
During 1998, there were five 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.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION/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, and 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 by the
Compensation/Incentive Committee of the Board of Directors. The membership of
the Compensation/Incentive Committee is composed of three outside directors
(i.e., nonemployees of the Company). The Compensation/Incentive 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/Incentive Committee on such matters must be approved by the full
Board of Directors. The Compensation/Incentive Committee also administers the
Company's stock incentive plans under which it reviews and approves grants of
stock options and restricted stock awards.
The Compensation/Incentive Committee may use its discretion to set
executive compensation where, in its judgment, external, internal or individual
circumstances warrant.
Following is a discussion of the components of the executive officer
compensation program.
In determining base salary levels for the Company's executive officers,
the Compensation/Incentive 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/Incentive Committee to be sufficient to
attract and retain qualified executives when considered along with the other
components of the Company's compensation structure.
The Compensation/Incentive 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 those executives who 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.
5
<PAGE> 8
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/Incentive Committee has considered, and is continuing to
review, the qualifying compensation regulations issued by the Internal Revenue
Service in December 1993. Generally, the Committee structures 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, for 1998 was $590,000, which was the same amount as his base
salary for 1997. His bonus in respect of 1998 services was $274,165, which was
the same amount as his bonus of 1997 and 46.4 percent of his current base
salary. In addition, Mr. Hutton received a special bonus of $308,000 in
connection with the Company's 1998 capital gains. Mr. Hutton received restricted
stock awards having a value of $208,500, and he was granted 23,000 stock
options. Factors considered in establishing the compensation levels in 1998 for
Mr. Hutton were the Company's increase in income from continuing operations,
excluding capital gains, of 32.2 percent and the Company's decrease in operating
profit, less corporate overhead, of 2.9 percent. The Compensation/Incentive
Committee believes that Mr. Hutton's base salary, cash bonus, and special bonus
and stock options granted to Mr. Hutton are consistent with his performance as
measured by these factors and the other criteria discussed above.
Compensation/Incentive Committee
-----------------------------------------------
Charles H. Erhart, Jr., Chairman
Patrick P. Grace
George J. Walsh III
6
<PAGE> 9
SUMMARY COMPENSATION TABLE
The following table shows the compensation paid to the Chief Executive
Officer and the four most highly compensated executive officers of the Company
for the past three years for all services rendered in all capacities to the
Company and its subsidiaries:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
- -------------------------------------------------------------------------------------------------------------------
SECURITIES
CHEMED UNDERLYING
NAME AND RESTRICTED CHEMED ALL OTHER
PRINCIPAL BONUS STOCK STOCK COMPENSATION
POSITION YEAR SALARY ($) ($)(1) AWARDS ($)(2) OPTIONS (#) ($)
-------- ---- ---------- ------ ------------- ----------- ---
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 1998 $590,000 $ 582,165 $208,500 23,000 $174,499 (3)
Chairman and 1997 590,000 1,239,165 156,375 25,000 473,518
CEO 1996 583,333 533,776 966,000 31,000 287,885
K. J. McNamara 1998 325,200 196,579 33,000 14,000 98,766 (4)
President 1997 292,259 496,600 24,750 16,000 237,781
1996 270,167 174,502 362,000 20,000 146,313
P. C. Voet 1998 306,000 57,829 50,000 2,000 71,105 (5)
Executive 1997 296,375 346,867 17,531 3,000 222,251
Vice President 1996 285,333 113,960 54,000 4,000 137,973
T. S. O'Toole 1998 202,000 74,586 20,000 10,500 73,602 (6)
Executive 1997 178,559 270,000 15,000 11,500 135,855
Vice President 1996 161,667 67,304 261,000 14,000 83,676
and Treasurer
S. E. Laney 1998 200,000 187,194 20,000 10,500 54,961 (7)
Senior Vice 1997 179,041 374,211 15,000 11,500 177,811
President 1996 162,583 172,488 261,000 14,000 116,063
and Chief
Administrative Officer
Officer
</TABLE>
7
<PAGE> 10
SUMMARY COMPENSATION TABLE (continued)
(1) Bonuses paid in 1998 include the following amounts which were paid as
special bonuses in connection with the Company's 1998 capital gains: E. L.
Hutton - $308,000; K. J. McNamara - $160,000; P. C. Voet - $9,000; T. S.
O'Toole - $52,000; and S. E. Laney - $156,000.
(2) The number and value of the aggregate restricted shares of Capital Stock
held by the named executives at December 31, 1998 were as follows: E. L.
Hutton - 29,616 shares, $1,055,843; K. J. McNamara - 10,604 shares,
$377,622; P. C. Voet - 1,469 shares, $52,501;_ T. S. O'Toole - 7,904
shares, $281,711; and S. E. Laney - 7,687 shares, $273,456. The restricted
shares with respect to 1996 vest in varying percentages over a seven-year
period. The stock awards granted with respect to 1997 were unrestricted.
The restricted shares with respect to 1998 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) Includes the following amounts: $166,941 allocated to Mr. Hutton's account
under the Company's Savings and Investment Plan ("Investment Plan") and
Employee Stock Ownership Plans ("ESOP") with respect to 1998; a $3,744
premium payment for term life insurance; and $3,813 in the form of an
unrestricted stock award of 100 shares of Capital Stock.
(4) Includes the following amounts: $69,670 allocated to Mr. McNamara's
account under the Investment Plan and ESOP with respect to 1998; a $4,167
premium payment for term life insurance; $21,116, 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"); and $3,813 in the form of an unrestricted stock award of 100
shares of Capital Stock.
(5) Includes the following amounts: $44,331 allocated to Mr. Voet's account
under the Investment Plan and ESOP with respect to 1998; a $4,992 premium
payment for term life insurance; $17,969, which is the value of premium
payments made by the Company for the benefit of Mr. Voet under a Split
Dollar Policy; and $3,813 in the form of an unrestricted stock award of
100 shares of Capital Stock.
(6) Includes the following amounts: $35,471 allocated to Mr. O'Toole's account
under the Investment Plan and ESOP with respect to 1998; a $4,217 premium
payment for term life insurance; $11,460, which is the value of premium
payments made by the Company for the benefit of Mr. O'Toole under a Split
Dollar Policy; and $3,813 in the form of an unrestricted stock award of
100 shares of Capital Stock.
(7) Includes the following amounts: $51,478 allocated to Ms. Laney's account
under the Investment Plan and ESOP with respect to 1998; a $4,167 premium
payment for term life insurance; $14,144, which is the value of premium
payments made by the Company for the benefit of Ms. Laney under a Split
Dollar Policy; and $3,813 in the form of an unrestricted stock award of
100 shares of Capital Stock.
8
<PAGE> 11
STOCK OPTIONS
The table below shows information concerning Chemed stock options granted in
1998 to the named executives in the Summary Compensation Table.
<TABLE>
<CAPTION>
CHEMED STOCK OPTION GRANTS IN 1998
- ------------------------------------------------------------------------------- ----------------------------
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ------------------------------------------------------------------------------- ---------------------------
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED
OPTIONS TO EXERCISE
GRANTED EMPLOYEES PRICE EXPIRATION
NAME (#)(1) IN 1998 ($/SHARE) DATE 5% ($) 10% ($)
---- ------ ------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 23,000 11.5% $39.13 3/4/08 $565,999 $1,434,352
K. J. McNamara 14,000 7.0 39.13 3/4/08 344,521 873,084
P. C. Voet 2,000 1.0 39.13 3/4/08 49,217 124,746
T. S. O'Toole 10,500 5.3 39.13 3/4/08 258,391 654,813
S. E. Laney 10,500 5.3 39.13 3/4/08 258,391 654,813
<FN>
(1) These options, which were granted on March 4, 1998, provide for the
purchase price of option shares equal to the fair market value of Capital
Stock on that date; are transferable by will, by the laws of descent and
distribution, pursuant to a qualified domestic relations order or to
certain family members, if permitted under SEC Rule 16b-3 or any successor
rule thereto; and become exercisable in four equal annual installments
beginning on September 4, 1998.
</TABLE>
The table below shows information concerning Chemed stock options exercised
during 1998 and the year-end number and value of unexercised Chemed stock
options held by the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
AGGREGATED CHEMED STOCK OPTION EXERCISES
IN 1998 AND YEAR-END STOCK OPTION VALUES
- -------------------------------------------------------------------------------------------------------------------
NUMBER
OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT 12/31/98 (#) AT 12/31/98 ($)
NAME ON EXERCISE REALIZED ------------------------------ ----------------------------
(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------- ------------ ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
E. L. Hutton 21,000 $198,750 85,500 37,500 $26,706 $-0-
K. J. McNamara 8,500 80,240 41,500 23,500 6,237 -0-
P. C. Voet -0- -0- 6,000 4,000 1,247 -0-
T. S. O'Toole 19,250 162,405 30,125 17,125 4,054 -0-
S. E. Laney 11,000 111,400 44,875 17,125 26,564 -0-
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
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, 2000, subject to earlier termination under
certain circumstances, at a base salary of $590,000 per annum or such higher
amount 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 12 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, 2003, May 3, 2002, May 3, 2003 and May
3, 2003, respectively, and are identical in all material respects to that of Mr.
Hutton, except their respective agreements provide for a base salary of
$309,648, $289,500, $192,780, and $190,418 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. On November 9, 1998, Mr. Voet filed a lawsuit against
the Company in Court of Common Pleas, Hamilton County, Ohio, in connection with
the Company's sale of its majority-owned subsidiary, National Sanitary Supply
Company, alleging that the Company breached his employment agreement due to a
material reduction in his title, authority or responsibility. Mr. Voet is
seeking a money judgment in the principal amount in excess of $6 million. The
Company disputes these claims and believes that the disposition of this matter
will not have a material effect on the financial position 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, 1993 to December 31, 1998, assuming dividend reinvestment, and (B) the
difference between the Company's share price at December 31, 1993 and December
31, 1998; by (ii) the share price at December 31, 1993) with the cumulative
total return, assuming reinvestment of dividends, of the (1) S & P 500 Stock
Index and (2) Dow Jones Industrial Diversified Index.
10
<PAGE> 13
<TABLE>
<CAPTION>
CHEMED CORPORATION
CUMULATIVE TOTAL STOCKHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING DECEMBER 31, 1998
December 31 . . . 1993 1994 1995 1996 1997 1998
-------------------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Chemed Corporation 100.00 116.29 143.66 142.47 170.94 146.89
S&P 500 100.00 101.32 139.40 171.40 228.59 293.91
Dow Jones Industrial Diversified 100.00 91.72 120.11 155.40 203.69 234.33
</TABLE>
11
<PAGE> 14
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 31, 1998 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 AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Fifth Third Bank 914,520 shares; Trustee of the Company's 8.8%
Fifth Third Center Savings and Investment Plan, Employee Stock
Cincinnati, Ohio Ownership Plans and Excess Benefit Plan (1)
- --------------------------------------------------------------------------------------------------------
<FN>
(1) Shared voting power, 914,520 shares; shared dispositive power, 914,520
shares.
</TABLE>
The following table sets forth information as of December 31, 1998 with
respect to Capital 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 PERCENT OF
NAME OF BENEFICIAL OWNERSHIP (1) CLASS (2)
- -------------------------------------------------------------------------------------------------------
<S> <C>
Edward L. Hutton 39,559 Direct
85,000 Option
7,400 Trustee
Rick L. Arquilla 2,122 Direct
2,000 Option
James H. Devlin 9,911 Direct
12,125 Option
Charles H. Erhart, Jr. 1,500 Direct
Joel F. Gemunder 3,284 Direct
5,000 Option
3,486 Trustee
Lawrence J. Gillis 5,637 Direct
10,000 Option
Patrick P. Grace 200 Direct
Thomas C. Hutton 27,221 Direct
7,000 Option
7,900 Trustee (3)
Walter L. Krebs 3,546 Direct
Sandra E. Laney 34,765 Direct
30,625 Option
Trustee (3)
Spencer S. Lee 2,109 Direct
2,000 Option
Kevin J. McNamara 22,843 Direct
21,500 Option
Trustee (3)
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
AMOUNT AND NATURE PERCENT OF
NAME OF BENEFICIAL OWNERSHIP (1) CLASS (2)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
John M. Mount 10,946 Direct
600 Trustee
Timothy S. O'Toole 23,020 Direct
35,125 Option
Donald E. Saunders 1,072 Direct
Paul C. Voet 27,356 Direct
6,000 Option
Trustee (3)
George J. Walsh III 1,100 Direct
Directors and 227,354 Direct 2.2%
Executive Officers 233,125 Option 2.2%
as a Group 68,139 Trustee (4)
(18 persons)
- -------------------------------------------------------------------------------------------------------
<FN>
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 allocated as of December 31, 1998 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 of December 31, 1998 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, 1998. For purposes of determining the Percent of Class, all
shares subject to stock options which were exercisable within 60 days from
December 31, 1998 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 56,153 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
been counted only once in calculating the aggregate number of shares owned
by Directors and Executive Officers as a Group.
</TABLE>
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 1998,
no reports on Form 5 were required to be filed with the SEC, the Company
believes that, during the period January 1, 1998 through December 31, 1998, the
Company's executive officers and directors and greater-than-10 percent
stockholders have complied with all Section 16(a) reporting requirements.
13
<PAGE> 16
PROPOSAL TO APPROVE AND ADOPT THE
1999 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 1999 Stock Incentive Plan (the "Plan") pursuant to which 450,000
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 17, 1999. 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 17, 2009. 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 18, 1999 was $28.25 per
share.
The Plan authorizes the issuance or transfer of a maximum of 450,000
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 Compensation/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 135,000 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 "Compensation/
Incentive Committee") consisting of no fewer than three persons designated by,
and serving at the pleasure of, the Board of Directors of the Company.
The Compensation/Incentive Committee designates the key employees of the
Company and its subsidiaries who might participate in the Plan and 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 Compensation/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 Compensation/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
14
<PAGE> 17
Compensation/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 Compensation/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
Compensation/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 Compensation/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
Compensation/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.
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 Compensation/Incentive Committee
shall determine.
15
<PAGE> 18
The Board of Directors, upon the recommendation of the Compensation/
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 1998 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 1999 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 17, 1999, 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 non-votes 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 requirement 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.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as independent accountants for the Company and its consolidated subsidiaries for
the year 1999. 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 PricewaterhouseCoopers 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, will be necessary to ratify and broker non-votes the selection
of PricewaterhouseCoopers LLP as independent accountants for the Company and its
consolidated subsidiaries for the year 1999. 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 PricewaterhouseCoopers LLP will be
present at the Company's Annual Meeting. Such representative shall have the
opportunity to make a statement if he so desires and shall be available to
respond to appropriate questions raised at the meeting.
PROPOSAL CONCERNING THE COMPOSITION OF THE
BOARD OF DIRECTORS
Judith A. Toby, 515 E. 88th Street, #3M, New York, New York 10128, who is
the owner of record of 100 shares of Chemed Capital Stock, has given notice that
she intends to present the following resolution at the Annual Meeting:
16
<PAGE> 19
"RESOLVED, the Board of Directors of the Chemed Corporation have a
majority of outside members to more truly represent the interests of its
shareholders."
Discussion: Ten of the fifteen current members of the Board of Directors are
officers of Chemed or its subsidiaries. Although 1997 income from
continuing operations declined 33 percent, net income decreased by 7
percent and return on average equity fell 1.5 percent, still
Chairman Hutton was awarded a bonus equal to 46.5 percent of his
salary. Furthermore, Chemed Corporation under performed its peer
group.
BOARD OF DIRECTORS' STATEMENT IN OPPOSITION TO PROPOSAL
The Board believes that this proposal is unduly restrictive and
inappropriate and would not serve the Company's best interests.
The Company has consistently sought to add to its Board of Directors
qualified individuals who can provide substantial benefit and guidance to the
Company.
Directors who are currently employed by the Company are able to act
objectively and in the best interest of the stockholders. They are often the
most familiar with the Company's operations, and, because they have a financial
stake in the Company, are in fact well suited to protect and advance the
interests of all stockholders.
This proposal would deviate from the Company's long-standing practice of
maintaining management directors. Having senior officers serve alongside
independent directors helps the Board in charting the Company's future. A change
in this practice would interfere with the vital role senior managers play on the
Board.
This proposal also would limit the freedom of choice presently enjoyed
by the Company's stockholders because it would restrict rather than enhance the
Company's ability to locate the most qualified directors. Stockholders
ultimately decide on the composition of the Board. Any stockholder who feels a
particular nominee is not qualified to serve as a director by reason of lack of
independence or objectivity is free to vote against that director.
Furthermore, reducing the percentage of the Board consisting of
management directors will not change the composition of key Board committees,
because all members of the Audit Committee and the Compensation/Incentive
Committee are already non-employees of the Company.
FOR ALL OF THE FOREGOING REASONS, THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST THIS PROPOSAL.
The affirmative vote of the majority of shares represented at the
meeting will be necessary for the adoption of the foregoing proposal, with
abstentions having the effect of negative votes and broker non-votes deemed to
be absent shares.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
VOTED AGAINST THE RESOLUTION UNLESS
STOCKHOLDERS SPECIFY A CONTRARY VOTE.
17
<PAGE> 20
STOCKHOLDER PROPOSALS
Any proposals by stockholders intended to be included in the proxy
materials for presentation at the 2000 Annual Meeting of Stockholders must be in
writing and received by the Secretary of the Company no later than December 1,
1999. Any proposals by stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders, outside of the Company's proxy solicitation process,
shall be considered untimely if notice of such a proposal is not given to the
Secretary of the Company by February 15, 2000. In the case of untimely notice,
persons named in the proxies solicited by the Company for that meeting (or their
substitutes) will be allowed to use their discretionary voting authority when
the proposal is raised at the meeting, without any discussion of the proposal in
the Company's proxy statement for that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the management has not been
notified of any stockholder proposals intended to be raised at the 1999 Annual
Meeting outside of the Company's proxy solicitation process nor does management
know of any other matters which will be presented for consideration at the
Annual Meeting. However, if any other stockholder proposals or 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 $7,500 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
March 31, 1999
18
<PAGE> 21
EXHIBIT A
================================================================================
CHEMED CORPORATION
1999 STOCK INCENTIVE PLAN
================================================================================
A-1
<PAGE> 22
CHEMED CORPORATION
1999 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
Compensation/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.
COMPENSATION/INCENTIVE COMMITTEE: The Compensation/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 Compensation/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 Compensation/Incentive
Committee shall be deemed a determination by the Compensation/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 objec-
A-2
<PAGE> 23
tive or objectives, including, without limitation, objectives determined by
reference to or changes in (a) the Fair Market Value, book value or earnings per
share of Capital Stock, or (b) sales and revenues, income, profits and losses,
return on capital employed, or net worth of the Corporation (on a consolidated
or unconsolidated basis) or of any one or more of its groups, divisions,
Subsidiaries or departments, or (c) a combination of two or more of the
foregoing factors.
PLAN: The 1999 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 Compensation/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 450,000 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 135,000 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
A-3
<PAGE> 24
made subject to Stock Incentives.
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
Compensation/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 Compensation/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 Compensation/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 Compensation/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
Compensation/Incentive Committee (and subject to such terms and conditions as
are specified in the Option or by the Compensation/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 Compensation/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 Compensation/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
A-4
<PAGE> 25
events has occurred, irrespective of the applicability of any limitation on the
number of shares then exercisable under the Option: (1) any person within the
meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"1934 Act"), other than the Corporation or any of its subsidiaries, has become
the beneficial owner, within the meaning of Rule 13d-3 under the 1934 Act, of 30
percent or more of the combined voting power of the Corporation's then
outstanding 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 Compensation/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 Compensation/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 Compensation/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
Compensation/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
A-5
<PAGE> 26
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
Compensation/Incentive Committee and subject to such terms and conditions as are
specified in the Option or by the Compensation/Incentive Committee, the
Corporation may, upon or without the request of the holder of the Option and at
any time or from time to time, cancel all or a portion of the Option then
subject to exercise and either (i) pay the holder an amount of money equal to
the excess, if any, of the Fair Market Value, at such time or times, of the
shares subject to the portion of the Option so canceled over the aggregate
purchase price of such shares, or (ii) issue or transfer shares of Capital Stock
to the holder with a Fair Market Value, at such time or times, equal to such
excess.
(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
Compensation/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 Compensation/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
Compensation/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 Compensation/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 Compensation/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 17, 2009.
A-6
<PAGE> 27
10. ADMINISTRATION:
(a) The Plan shall be administered by the Compensation/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
Compensation/Incentive Committee either in or without consultation with
employees, but, anything in this Plan to the contrary notwithstanding, the
Compensation/Incentive Committee shall have full authority to act in the matter
of selection of all Key Employees and in determining the number of Stock
Incentives to be granted to them.
(b) The Compensation/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 Compensation/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
Compensation/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
Compensation/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 Compensation/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 Compensation/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
Compensation/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 Compensation/Incentive Committee, on the date it is delivered
by the Subsidiary or on such other date between said two dates, as the
Compensation/Incentive Committee shall specify.
A-7
<PAGE> 28
(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.
(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 Compensation/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
Compensation/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> 29
CHEMED
CHEMED CORPORATION
Please detach here
- --------------------------------------------------------------------------------
CHEMED CORPORATION
2600 CHEMED CENTER
255 EAST FIFTH STREET
CINCINNATI, OHIO 45202 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS, MAY 17, 1999.
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 18, 1999,
AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 1999, OR AT ANY
ADJOURNMENT THEREOF.
PLEASE MARK, SIGN, DATE AND RETURN
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 30
CHEMED
CHEMED CORPORATION
Please detach here
- --------------------------------------------------------------------------------
(CONTINUED FROM OTHER SIDE)
1. ELECTION OF DIRECTORS (MARK ONLY ONE BOX):
<TABLE>
<S> <C> <C> <C> <C> <C>
01 EDWARD L. HUTTON 05 CHARLES H. ERHART, JR. 09 WALTER L. KREBS 13 TIMOTHY S. O'TOOLE [ ] FOR ALL [ ] WITHHOLD ALL
02 KEVIN J. MCNAMARA 06 JOEL F. GEMUNDER 10 SANDRA E. LANEY 14 DONALD E. SAUNDERS NOMINEES VOTING
03 RICK L. ARQUILLA 07 PATRICK P. GRACE 11 SPENCER S. LEE 15 PAUL C. VOET LISTED UNLESS AUTHORITY FOR
04 JAMES H. DEVLIN 08 THOMAS C. HUTTON 12 JOHN M. MOUNT 16 GEORGE J. WALSH III INDICATED BELOW. DIRECTORS.
</TABLE>
[INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S),
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED AT THE RIGHT.]
<TABLE>
<CAPTION>
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<S> <C> <C> <C>
2. APPROVAL AND ADOPTION OF THE 1999 STOCK INCENTIVE PLAN. [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFYING THE SELECTION OF INDEPENDENT ACCOUNTANTS [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. STOCKHOLDER PROPOSAL CONCERNING COMPOSITION OF BOARD. [ ] FOR [ ] AGAINST [ ] ABSTAIN
5. 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 ABE VOTED FOR PROPOSALS (1), (2) AND (3)
AND AGAINST PROPOSAL (4).
</TABLE>
<TABLE>
<S> <C>
ADDRESS CHANGE? MARK BOX [ ] INDICATE CHANGES BELOW: DATED _____________________________, 1999
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SIGNATURE(S) IN BOX
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.
</TABLE>
