<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
RAMSAY HEALTHCARE, INC.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
PAUL J. RAMSAY
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- - - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - - --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- - - --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- - - --------------------------------------------------------------------------------
(3) Filing party:
- - - --------------------------------------------------------------------------------
(4) Date filed:
- - - --------------------------------------------------------------------------------
- - - ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
RAMSAY HEALTH CARE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 28, 1994
The Annual Meeting of Stockholders of RAMSAY HEALTH CARE, INC. ("RHC"
or the "Company") will be held at The Peninsula New York, 700 Fifth Avenue, New
York, New York at 2:00 P.M., local time, on November 28, 1994, for the
following purposes, as more fully described in the accompanying Proxy
Statement:
1. To elect nine directors of RHC for the ensuing year;
2. To consider and take action upon a proposal to ratify
the Board of Directors' selection of Ernst & Young
LLP to serve as the Company's independent auditors
for the fiscal year ending June 30, 1995; and
3. To transact such other business as may properly come
before the meeting or any adjournment or adjournments
thereof.
Only RHC stockholders of record at the close of business on October
17, 1994 will be entitled to notice of and to vote at the meeting, or any
adjournment or adjournments thereof. A list of the stockholders entitled to
vote at the meeting may be examined at the offices of Haythe & Curley, 237 Park
Avenue, New York, New York during the ten-day period preceding the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN,
DATE AND RETURN THE ENCLOSED PROXY. NO POSTAGE IS REQUIRED WHEN MAILED IN THE
UNITED STATES. THE PROXY IS REVOCABLE AT ANY TIME. IF YOU ARE PRESENT AT THE
MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON IF YOU SO DESIRE. YOUR
BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF THE NOMINEES FOR DIRECTORS AND FOR
THE OTHER PROPOSALS TO BE CONSIDERED AT THE MEETING.
By Order of the Board of Directors,
Paul J. Ramsay
Chairman of the Board
October 24, 1994
<PAGE> 3
RAMSAY HEALTH CARE, INC.
One Poydras Plaza
639 Loyola Avenue, Suite 1700
New Orleans, Louisiana 70113
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
To Be Held
November 28, 1994
General
- - - -------
This statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Ramsay Health Care, Inc. ("RHC" or the
"Company") for use at the Annual Meeting of Stockholders (the "Meeting") to be
held at the time and place and for the purposes specified in the accompanying
Notice of Annual Meeting of Stockholders and at any adjournment or adjournments
thereof. When the enclosed proxy (the "Proxy") is properly executed and
returned, the shares that it represents will be voted at the Meeting in
accordance with the instructions thereon. In the absence of any such
instructions, the shares represented thereby will be voted IN FAVOR of the
nominees for directors listed on the Proxy and FOR the ratification of the
Board of Directors' selection of independent auditors for the Company.
Management does not know of any other business to be brought before the Meeting
not described herein, but it is intended that as to such other business, a vote
may be cast pursuant to the Proxy in accordance with the best judgment of the
person or persons acting thereunder. It is anticipated that the proxy
materials will be mailed to the stockholders of the Company on or about October
24, 1994.
It is important that Proxies be returned promptly. Stockholders who do
not expect to attend the Meeting in person are urged to mark, sign and date the
accompanying form of Proxy and mail it in the enclosed return envelope, which
requires no postage if mailed in the United States, so that their votes can be
recorded.
Any stockholder who executes and delivers a Proxy may revoke it at any
time prior to its use by (i) giving written notice of such revocation to the
Company, care of the Secretary, One Poydras Plaza, 639 Loyola Avenue, Suite
1700, New Orleans, Louisiana 70113 prior to the Meeting; (ii) executing and
delivering a Proxy bearing a later date to the Company, care of the Secretary,
One Poydras Plaza, 639 Loyola Avenue, Suite 1700, New Orleans, Louisiana 70113
prior to the Meeting; or (iii) appearing at the Meeting and voting in person.
1994 Annual Report
- - - ------------------
The Company's 1994 Annual Report on Form 10-K for the fiscal year
ended June 30, 1994 is enclosed with this Proxy Statement.
<PAGE> 4
2
Expenses of Solicitation
- - - ------------------------
The cost of soliciting Proxies will be borne by the Company. Officers,
directors, and employees of the Company may solicit Proxies by telephone,
telegram, or personal interview. The Company has also engaged the services of
Corporate Communications, Inc. to assist in the solicitation and tabulation of
Proxies. The Company estimates that Corporate Communications, Inc. will
receive a fee of approximately $3,000, plus expenses, in connection with these
services.
Voting
- - - ------
Holders of record of issued and outstanding shares of (i) common
stock, $.01 par value ("Common Stock"), of the Company and (ii) class B
convertible preferred stock, Series C, $1.00 par value ("Series C Preferred
Stock"), of the Company, in each case as of October 17, 1994 (the "Record
Date"), will be entitled to notice of and to vote at the Meeting as described
below. On the Record Date, there were issued and outstanding 7,723,799 shares
of Common Stock and 142,486 shares of Series C Preferred Stock.
Each share of Common Stock is entitled to one vote with respect to
each matter to be voted on at the Meeting. Each share of Series C Preferred
Stock is entitled to ten votes with respect to each matter to be voted on at
the Meeting.
Directors are elected by plurality vote. Adoption of proposal 2 will
require the affirmative vote of a majority of the shares of Common Stock and
Series C Preferred Stock present and voting thereon at the Meeting.
Abstentions will be counted as present for the purpose of determining the
presence of a quorum. For the purpose of determining the vote required for
approval of matters to be voted on at the Meeting, abstentions will be treated
as being "present" and "entitled to vote" on the matter and, thus, an
abstention has the same legal effect as a vote against the matter.
Ramsay Holdings HSA Limited ("Ramsay Holdings") and Paul Ramsay
Holdings Pty. Limited ("Holdings Pty.") are the holders of all of the 142,486
issued and outstanding shares of Series C Preferred Stock and Ramsay Holdings
is the holder of 1,404,035 shares of Common Stock. Accordingly, as of the
Record Date, Ramsay Holdings and Holdings Pty. had an approximate 30.9% voting
interest in the Company. To the best of the Company's knowledge, Ramsay
Holdings and Holdings Pty. will vote their shares of Common Stock and Series C
Preferred Stock in favor of each of the proposals presented at the Meeting.
See "Certain Relationships and Related Transactions", "Security Ownership of
Certain Beneficial Owners" and "Security Ownership of Management", below.
<PAGE> 5
3
1. ELECTION OF DIRECTORS
Nine directors will be elected at the Meeting. It is the intention
of each of the persons named in the accompanying Proxy to vote the shares
represented thereby in favor of the nine nominees listed in the following
table, unless contrary instructions are given. All of the nominees are
presently serving as directors. In case any nominee is unable or declines to
serve, such persons reserve the right to vote the shares represented by such
Proxy for another person duly nominated by the Board of Directors in his stead
or, if no other person is so nominated, to vote such shares only for the
remaining nominees. The Board of Directors has no reason to believe that any
persons nominated will be unable or will decline to serve. The directors
elected by the stockholders will serve until the next Annual Meeting of
Stockholders and until their respective successors are duly elected and
qualified.
Certain information concerning the nominees for election as directors
is set forth below. Such information was furnished by them to the Company.
<TABLE>
<CAPTION>
Principal Occupation for Past Five
Name and Age Years and Certain Other Directorships
- - - ------------ -------------------------------------
<S> <C>
Aaron Beam, Jr. (50) Executive Vice President and Chief Financial Officer of HEALTHSOUTH Corporation (provider
of medical rehabilitation services) since prior to 1989; Director of HEALTHSOUTH
Corporation since 1993; Director of the Company since 1991.
Gregory H. Browne (41) Chief Executive Officer of the Company since January 1992; President of the Company from
January 1992 to September 1994; Vice-Chairman of the Company since August 1991. Vice-
Chairman of the Board of Ramsay-HMO, Inc. (operator of a health maintenance organization)
from November 1989 to May 1994; Chief Executive Officer of Ramsay-HMO, Inc. from November
1989 to January 1992; Chief Financial Officer of Ramsay-HMO, Inc. from January 1989 to
January 1992; various executive positions with corporations controlled by Paul J. Ramsay
from July 1988 to November 1989; Director of the Company since 1990.
Peter J. Evans (45) Financial consultant to a number of Australian companies; Partner, P.J. Evans & Co., a
chartered accounting firm in Australia, since prior to 1989; Former partner in big six
accounting firm; Director of Ramsay Health Care Pty. Limited and Prime Television
Limited; Director of the Company since 1989.
</TABLE>
<PAGE> 6
4
<TABLE>
<S> <C>
Robert E. Galloway (49) Healthcare consultant with Galloway Consulting Group since December 1989; Financial
consultant to Graduate Health System (regional health care network of not-for-profit
hospitals and a health maintenance organization) and Interim Chief Financial Officer of
Franciscan Sisters of Allegany, New York from July 1991 to January 1992; Senior Vice
President and Chief Financial Officer of Graduate Health System from December 1989 to
July 1991; President of Iberville Properties, Inc. (a medical office property company)
since 1989; President of Sacred Heart Medical Center (Chester, Pennsylvania hospital)
since 1992; various executive positions with corporations controlled by Paul J. Ramsay
since prior to 1989 to December 1989; Director of the Company since 1987.
Thomas M. Haythe (55) Partner, Haythe & Curley (attorneys) since prior to 1989; Director of Novametrix Medical
Systems Inc. (manufacturer of electronic medical instruments), Isomedix Inc. (provider of
sterilization services), Guest Supply, Inc. (provider of hotel guest room amenities,
accessories and products), and Westerbeke Corporation (manufacturer of marine engine
products); Director of the Company since 1987.
Paul J. Ramsay (58) Chairman of the Board of the Company since July 1988; President of the Company from
February 1988 to July 1988; Chairman of the Board of the Company from November 1987 to
February 1988; involved in the health care industry for more than 25 years; Director of
the Company since 1987.
Steven J. Shulman (43) Executive Vice President of Value Health, Inc. (provider of specialty managed care
programs) since prior to 1989; President and Chief Executive Officer of American
PsychManagement, Inc. (wholly-owned subsidiary of Value Health, Inc.) from October 1990
to June 1991; various managerial positions at CIGNA Healthplan, Inc. prior to 1989;
Director of Value Health, Inc.; Director of the Company since 1991.
Michael S. Siddle (45) Managing Director (Chief Executive Officer) of Ramsay Health Care Pty. Limited (or its
predecessors) and Paul Ramsay Hospitals Pty. Limited since prior to 1989;
</TABLE>
<PAGE> 7
5
<TABLE>
<S> <C>
various executive positions with corporations controlled by Paul J. Ramsay since prior to
1989; Director of the Company since 1987.
Bruce R. Soden (40) Senior Vice President of the Company since October 1988; Vice President of the Company
from January 1988 to October 1988; Chief Financial Officer of the Company from September
1991 to September 1993 and from January 1988 to October 1988; Director of the Company
since September 1993.
</TABLE>
Meetings and Committees of the Board of Directors
- - - -------------------------------------------------
The Board of Directors of the Company met five times and acted once by
means of unanimous written consent in fiscal 1994. All of the directors named
above (other than Mr. Shulman) attended at least 75% of the meetings of the
Board of Directors and meetings of the Committees on which such director served
held during the time that such person served. Mr. Shulman attended 60% of such
meetings.
The Company had six standing committees during fiscal 1994: the
Executive Committee, the Audit Committee, the Compensation and Conflict of
Interest Committee, the Quality Assurance Committee, the Independent Directors
Committee and the Operations Committee.
The Executive Committee presently is composed of Messrs. Browne,
Haythe and Ramsay. The Committee's function is to act in the place and stead
of the Board to the extent permitted by law on matters which require Board
action between meetings of the Board of Directors. The Executive Committee did
not meet during fiscal 1994.
The Audit Committee presently is composed of Messrs. Beam, Evans and
Haythe. The Audit Committee's functions include reviewing the results of the
reports and audits by the Company's independent public accountants and making
recommendations to the Board of Directors with respect to accounting practices
and procedures and internal controls. The Audit Committee of the Company met
once during fiscal 1994.
The Compensation and Conflict of Interest Committee (the "Compensation
Committee") presently is composed of Messrs. Beam, Evans and Haythe. The
Compensation Committee's functions include reviewing and recommending
remuneration arrangements for senior officers and for members of the Board of
Directors, adopting compensation plans in which officers and directors are
eligible to participate, granting stock options under the Company's stock
option plans, establishing personnel policies and other important personnel
matters, nominating senior officers, resolving matters involving possible
conflicts of interest, and providing for management succession. The
Compensation Committee met three times during fiscal 1994.
<PAGE> 8
6
The Quality Assurance Committee presently is composed of Messrs.
Galloway and Shulman. The Committee's functions are to review and monitor the
clinical functions of the Company, to administer peer review and a case
management system, and to implement a professional education program. The
Quality Assurance Committee did not meet during fiscal 1994.
The Independent Directors Committee presently is composed of Messrs.
Beam, Galloway, Haythe and Shulman. The Committee's function is to review all
transactions between the Company and persons affiliated with Paul J. Ramsay or
any entity in which Paul J. Ramsay directly or indirectly has an equity
interest. See "Security Ownership of Certain Beneficial Owners" and "Security
Ownership of Management" below for information concerning Mr. Ramsay's
beneficial ownership of the stock of the Company. The Independent Directors
Committee did not meet during fiscal 1994.
The Operations Committee presently is composed of Messrs. Browne,
Evans, Ramsay, Siddle and Soden. The Committee's function is to review the
Company's operations on a divisional and hospital-by-hospital basis. The
Operations Committee met five times during fiscal 1994.
The Company does not have a nominating committee and has established
no procedures whereby nominees for director may be recommended by stockholders.
Compensation of Directors
- - - -------------------------
The Company pays directors who are not employees of the Company an
annual fee of $12,000 and a fee of $3,000 for each of the first four meetings
of the Board of Directors attended during the year, with no additional
compensation to be paid for attendance at additional meetings. Additionally,
the Company reimburses directors for out-of-pocket expenses incurred in
connection with attending meetings of the Board of Directors and committees of
the Board of Directors.
During the fiscal year ended June 30, 1994, Messrs. Beam, Evans,
Galloway, Haythe, Shulman, Siddle and Soden each received options to purchase
7,500 shares of Common Stock. Options granted to directors have a ten year
term and an exercise price of 100% of the fair market value of the Common Stock
on the date of grant.
<PAGE> 9
7
Executive Compensation
The following table sets forth information for the fiscal years ended
June 30, 1994, 1993 and 1992 concerning the compensation paid or awarded to the
Chief Executive Officer and the other most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------------------- -------------
Fiscal
Year Other Annual All Other
Ended Salary Bonus Compensation Stock Options Compensation
Name and Principal Position June 30 ($) ($) ($) (#) ($)
- - - --------------------------- ------- ------ ----- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gregory H. Browne 1994 206,472 -- 27,860(8) -- --
Chief Executive Officer 1993 217,413 -- 29,024(8) 250,000(2) --
1992 83,734 -- -- 208,334 --
Reynold J. Jennings (1) 1994 141,162 -- 12,150(8) 100,000(3) 7,319(4)
President and 1993 -- -- -- -- --
Chief Operating Officer 1992 -- -- -- -- --
Bruce R. Soden 1994 117,335 20,000 44,653(10) 7,500 66,668(11)
Senior Vice President 1993 125,517 -- 26,878 (8) 50,000(5) --
1992 -- -- -- 33,334 --
Wallace E. Smith 1994 164,708 -- -- 5,000 836
Senior Vice President - 1993 142,063 27,761 -- 50,000(5) 1,273
Regional Operations 1992 109,057 49,159 -- 23,334 1,071
Rea A. Oliver (9) 1994 108,554 32,500 -- -- 627
Vice President - Regional 1993 102,198 37,697 -- 30,000(6) 813
Operations 1992 -- -- -- -- --
John A. Quinn 1994 131,623 17,500 -- 5,000 481
Vice President - Regional 1993 117,032 -- -- 30,000(7) --
Operations 1992 91,737 8,016 -- 25,000 --
</TABLE>
(1) Mr. Jennings commenced employment with the Company as Chief
Operating Officer on November 8, 1993. Mr. Jennings was
appointed President in September 1994.
(2) Includes repricing of options to purchase an aggregate of
215,000 shares of Common Stock.
(3) Grant and subsequent repricing of options to purchase an
aggregate of 100,000 shares of Common Stock.
(4) Represents the benefit to Mr. Jennings of premiums paid by the
Company with respect to a split-dollar insurance arrangement,
which benefit was determined by calculating the time value of
money of the premiums paid by the Company during fiscal year
1994 from the date premiums were paid until the date (March
1999) premiums are expected to be repaid to the Company.
(5) Includes repricing of options to purchase an aggregate of
40,000 shares of Common Stock.
(6) Includes repricing of options to purchase an aggregate of
20,000 shares of Common Stock.
(7) Includes repricing of options to purchase an aggregate of
25,000 shares of Common Stock.
(8) Includes housing allowance for Mr. Browne of approximately
$20,000, for Mr. Jennings of approximately
$9,000, and for Mr. Soden of approximately $18,000.
(9) Mr. Oliver terminated employment with the Company in March 1994.
(10) Includes housing allowance of approximately $28,000 and other
living expenses of approximately $16,000.
(11) Represents payment for consulting services rendered while Mr.
Soden was a director of the Company.
<PAGE> 10
8
The following table sets forth the grants of stock options to the
executive officers named in the Summary Compensation Table during the fiscal
year ended June 30, 1994. The Table also includes options which were repriced
during the fiscal year. The amounts shown for each of the named executive
officers as potential realizable values are based on arbitrarily assumed
annualized rates of stock price appreciation of five percent and ten percent
over the exercise price of the options during the full terms of the options.
No gain to the optionees is possible without an increase in stock price which
will benefit all stockholders proportionately. These potential realizable
values are based solely on arbitrarily assumed rates of appreciation required
by applicable Securities and Exchange Commission regulations. Actual gains, if
any, on option exercises and holdings of Common Stock are dependent on the
future performance of the Common Stock and overall stock market conditions.
There can be no assurance that the potential realizable values shown in this
table will be achieved.
STOCK OPTION GRANTS IN FISCAL 1994
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Individual Price Appreciation
Grants for Option Term
------------------------------------------------------- ---------------------
% of Total
Options
Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ----------- ------------ ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Gregory H. Browne None -- -- -- -- --
Reynold J. Jennings 100,000(1) 23.3% $6.875 2003 $379,000 $934,000
Bruce R. Soden 7,500(2) 1.8% $6.875 2004 32,500 82,200
Wallace E. Smith 5,000(2) 1.2% $6.875 2004 21,600 54,800
Rea A. Oliver (3) None -- -- -- -- --
John A. Quinn 5,000(2) 1.2% $6.875 2004 21,600 54,800
</TABLE>
(1) Options for 100,000 shares were granted to Mr. Jennings on November 9,
1993 at $7.875 per share and were repriced to $6.875 per share on May
26, 1994. Options are exercisable in increments of 25%, beginning
November 9, 1993 and include a reload feature.
(2) Options are exercisable beginning May 26, 1994 and include a reload
feature.
(3) Mr. Oliver resigned from the Company in March 1994.
<PAGE> 11
9
The following table summarizes stock options exercised during fiscal
1994 and the number and value of options held by the executive officers named
in the Summary Compensation Table at June 30, 1994.
STOCK OPTION EXERCISES IN FISCAL 1994 AND
STOCK OPTION VALUES AT JUNE 30, 1994
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at June 30, 1994 In-the-Money Options
(#) at June 30, 1994 ($) (1)
--------------------------- ---------------------------
Shares
Acquired
on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gregory H. Browne -- -- 150,000 100,000 $251,650 $175,000
Reynold J. Jennings -- -- 25,000 75,000 -- --
Bruce R. Soden -- -- 50,000 7,500 84,400 --
Wallace E. Smith -- -- 50,000 5,000 84,400 --
Rea A. Oliver (2) 26,666 $76,900 -- -- -- --
John A. Quinn -- -- 30,000 5,000 50,950 --
</TABLE>
(1) In-the-money options are those where the fair market value of the
underlying Common Stock exceeds the exercise price of the option.
The value of in-the-money options is determined in accordance with
regulations of the Securities and Exchange Commission by subtracting
the aggregate exercise price of the option from the aggregate
year-end value of the underlying Common Stock.
(2) Mr. Oliver resigned from the Company in March 1994.
<PAGE> 12
10
As noted previously, the stock options granted to Mr. Jennings in
November 1993 were repriced in May 1994. In accordance with applicable
Securities and Exchange Commission regulations, the following table sets forth
information as to the repricings of all options held by each executive officer
of the Company named in the Summary Compensation Table during the past ten
fiscal years.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
Length of
Original
Option
Market Term
Price Exercise Remaining
Number of of Stock at Price at at
Options Time of Time of Date of
Repriced Repricing Repricing New Repricing
or or or Exercise or
Name Date Amended Amendment Amendment Price Amendment
---- ---- ------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Gregory H. Browne November 16, 1992 6,666 $5.00 $7.50 $5.00 3 years
8,334 5.00 7.00 5.00 8 years
200,000 5.00 7.00 5.00 9 years
April 7, 1992 8,334 7.00 9.75 7.00 9 years
100,000 7.00 8.75 7.00 10 years
November 11, 1991 8,334 9.75 14.13 9.75 10 years
Reynold J. Jennings May 26, 1994 100,000 6.88 7.88 6.88 9 years
Bruce R. Soden November 16, 1992 6,666 5.00 7.50 5.00 3 years
18,334 5.00 7.00 5.00 8 years
15,000 5.00 7.00 5.00 9 years
April 7, 1992 18,334 7.00 9.75 7.00 9 years
15,000 7.00 8.75 7.00 10 years
November 11, 1991 18,334 9.75 14.56 9.75 10 years
Wallace E. Smith November 16, 1992 16,666 5.00 7.00 5.00 3 years
23,334 5.00 7.00 5.00 8 years
April 7, 1992 16,666 7.00 9.75 7.00 4 years
23,334 7.00 9.75 7.00 9 years
November 11, 1991 23,334 9.75 14.13 9.75 10 years
Rea A. Oliver (1) November 16, 1992 15,000 5.00 7.00 5.00 9 years
5,000 5.00 7.00 5.00 8 years
April 7, 1992 5,000 7.00 9.75 7.00 10 years
5,000 7.00 8.75 7.00 10 years
5,000 7.00 9.75 7.00 9 years
November 11, 1991 5,000 9.75 14.13 9.75 10 years
John A. Quinn November 16, 1992 15,000 5.00 7.00 5.00 9 years
10,000 5.00 7.00 5.00 8 years
April 7, 1992 15,000 7.00 9.75 7.00 10 years
10,000 7.00 9.75 7.00 9 years
November 11, 1991 10,000 9.75 14.13 9.75 10 years
</TABLE>
_________________________
(1) Mr. Oliver resigned from the Company in March 1994.
<PAGE> 13
11
Employment Agreements
- - - ---------------------
In January 1992, the Company entered into an employment agreement with
Gregory H. Browne, Chief Executive Officer of the Company, providing for the
payment of an initial annual base salary of $200,000, subject to annual
increases determined by the Company's Board of Directors and minimum annual
increases based on the Consumer Price Index. The agreement was for an initial
term of two years with annual renewals. Mr. Browne's agreement was renewed in
January 1994 and his salary in fiscal 1994 totalled approximately $206,000.
Pursuant to the employment agreement, the Company has agreed to provide Mr.
Browne with housing and automobile allowances and reimbursement of certain
travel expenses. The agreement also provides for the payment to Mr. Browne of
an annual bonus equal to the product of Mr. Browne's base salary multiplied by
the positive percentage change in earnings per share of the Company from the
earnings per share of the Company for the immediately preceding calendar year.
Pursuant to the agreement, Mr. Browne's employment by the Company may be
terminated by either the Company or Mr. Browne, provided, that if the Company
terminates his employment without due cause, Mr. Browne will be entitled to
receive a severance payment to be determined by the Board of Directors. The
agreement also provides for a lump sum cash payment to Mr. Browne of his base
salary for the remaining term of the agreement upon the termination of his
employment for any reason following certain change of control events involving
the Company.
On October 2, 1993, the Company entered into a three-year employment
agreement with Reynold J. Jennings, President and Chief Operating Officer of
the Company. The agreement was amended in May 1994 and June 1994. The
agreement provides for a base salary of $225,000 per annum and a bonus in an
amount equal to 2% of any increase in operating income, as defined in the
agreement, of the Company between fiscal years (or portion thereof in the case
of the fiscal years corresponding with the year of employment and termination).
The agreement provides for an additional bonus in an amount determined by the
Board of Directors and based in part on additional activities of Mr. Jennings
and quality matters, a $25,000 bonus on the first anniversary of the
commencement of Mr. Jennings' employment and a $50,000 bonus in the event that
Mr. Jennings remains in the Company's employ until December 31, 1994. The
agreement also provides for a split-dollar insurance arrangement, pursuant to
which the Company will pay semi-annual premium costs of up to $50,000 (up to a
maximum of $300,000) on life insurance for Mr. Jennings. Mr. Jennings'
employment agreement gives him the right to cause the Company to purchase from
him, beginning on May 31, 1998 or the date of termination of his employment (if
other than by reason of death, disability or for due cause), the options to
purchase 100,000 shares of Common Stock granted to him pursuant to his
employment agreement at a price of $4.00 per share (as adjusted for stock
dividends or splits). The agreement also provides for an automobile allowance.
Pursuant to the agreement, Mr. Jennings' employment by the Company may be
terminated by either the Company or Mr. Jennings; however, in the event the
Company terminates Mr. Jennings' employment without due cause, the Company must
provide Mr. Jennings with 9 months' notice. The agreement also provides for a
lump sum cash payment to Mr. Jennings of his bonus and twelve months base
salary upon the termination of his employment for any reason following certain
change of control events involving the Company.
In January 1992, the Company entered into employment agreements with
Wallace E. Smith, Vice President - Regional Operations and John A. Quinn, Vice
President - Regional Operations, for the payment of initial base salaries to
Mr. Smith and Mr. Quinn of $125,000 and $115,000,
<PAGE> 14
12
respectively, subject to annual review by the Board of Directors. Effective
June 1992, Mr. Smith was named Senior Vice President - Regional Operations and
his salary was increased to $140,000. In July 1993, Mr. Smith's and Mr.
Quinn's salaries were increased to $160,000 and $126,500, respectively. The
agreements also provide for the payment to Mr. Smith and Mr. Quinn of a bonus
of up to 30% of their respective base salaries based upon the attainment of
certain performance targets, as well as for the reimbursement of reasonable
expenses incurred by them in the performance of their duties, an automobile
allowance and the reimbursement of certain relocation expenses. Pursuant to the
agreements, if the Company terminates either of the agreements for any reason
other than due cause or because of the death of the employee, the employee will
be entitled to receive his base salary for a period of six months.
In October 1992, the Company entered into an employment agreement with
Rea A. Oliver, Vice President - Regional Operations, providing for the payment
of an initial base salary of $105,000, subject to review by the Board of
Directors. In July 1993, Mr. Oliver's salary was increased to $120,000. The
agreement also provided for the payment of a bonus of up to 100% of Mr.
Oliver's base salary in the event the Company and Mr. Oliver achieve certain
performance targets and provided for an automobile allowance and the
reimbursement of certain relocation expenses. Mr. Oliver resigned from the
Company in March 1994.
Compliance with Section 16(a) of the
Securities Exchange Act of 1934
- - - ------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's Common Stock, to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock. Officers,
directors and greater than ten percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports
they file.
The Company notes that each of Willian N. Nyman and Aaron Beam, Jr.
inadvertently filed one late report relating to their exercise of stock options
and sale of the underlying shares of Common Stock. The Company believes that
for the period ending June 30, 1994, except as provided above, its executive
officers, directors and greater than ten percent stockholders complied with all
Section 16(a) filing requirements.
Certain Relationships and Related Transactions
- - - ----------------------------------------------
At August 1, 1994, Ramsay Holdings and Holdings Pty. owned of record
approximately 18.2% of the issued and outstanding shares of Common Stock, and
100% of the issued and outstanding shares of Series C Preferred Stock, and had
an approximate 30.9% voting interest in the Company.
As a result of certain financing transactions involving Ramsay
Holdings, other corporations (not including the Company) affiliated with Paul
J. Ramsay and an Australian bank lender, the Common Stock and the Series C
Preferred Stock held by Ramsay Holdings, and the Series C Preferred Stock held
by Holdings Pty., have been pledged to the Australian bank lender.
In June 1992, the Company entered into a management agreement (the
"Management Agreement") with Ramsay Health Care Pty. Limited, an affiliate of
Paul J. Ramsay. The term
<PAGE> 15
13
of the Management Agreement commenced on November 1, 1992 and will terminate
upon the earlier of (i) October 31, 1997 or (ii) one year after written notice
of termination is given by either party. The Management Agreement provides for
the payment of an annual management fee of $677,422, subject to increases based
on increases in the Consumer Price Index and subject to certain restrictions
set forth in certain loan agreements to which the Company is party. For
services under the Management Agreement, Ramsay Health Care Pty. Limited
received approximately $698,000 for the year ended June 30, 1994.
Thomas M. Haythe, a director of the Company, is a partner of the New
York City law firm of Haythe & Curley, which firm rendered legal services to
the Company during fiscal year 1994 and will continue to render legal services
to the Company in the future.
Robert E. Galloway, a director of the Company, rendered consulting
services to the Company during fiscal year 1994 and will continue to render
such services to the Company in the future. Mr. Galloway received $90,650 for
his services. During the period that Bruce R. Soden was a director of the
Company, Mr. Soden rendered consulting services to the Company. See "Executive
Compensation" above.
Compensation Committee Interlocks
and Insider Participation
- - - ---------------------------------
The members of the Compensation Committee of the Board of Directors
are Aaron Beam, Jr., Peter J. Evans and Thomas M. Haythe. Mr. Evans is a
director of Ramsay Health Care Pty. Limited, which provides management services
to the Company for which it receives an annual management fee. Mr. Haythe is a
partner of the New York City law firm of Haythe & Curley, which firm rendered
legal services to the Company during the last fiscal year and will continue to
render legal services to the Company in the future. See "Certain Relationships
and Related Transactions" above.
Compensation Committee Report
on Executive Compensation
- - - -----------------------------
The Compensation Committee of the Board of Directors determines the
compensation arrangements for executive officers of the Company. The Company's
executive compensation program is designed to attract, motivate, reward and
retain individuals with the executive and management skills needed to achieve
the Company's business objectives. The compensation program accomplishes this
goal by providing the Company's executives with incentives which reward
achievement of both short- and long-term objectives that contribute to the
growth and profitability of the Company, and which link executive pay with the
interests of the Company's stockholders.
The Company's executive compensation program consists of base salary,
bonuses and stock options. The Company's salary levels are determined by
comparisons with companies of similar size and complexity in the behavioral
health care industry. Salary increases are determined in light of the
financial performance of the Company, the individual performance of the
executive and any increased responsibilities assumed by the executive. The
salary for Mr. Browne is determined pursuant to the terms of his employment
agreement with the Company, which in turn was based on the foregoing
considerations.
<PAGE> 16
14
Mr. Browne's employment agreement provides for a bonus equal to the
product of Mr. Browne's base salary multiplied by the positive percentage
change in earnings per share of the Company for the calendar year from the
earnings per share of the Company for the immediately preceding calendar year.
Mr. Browne did not receive a bonus for the last calendar year.
The Company may also award bonuses to other executives based on the
level of financial performance achieved by the Company and the individual
accomplishments of the executive, as evaluated by the Chief Executive Officer
of the Company. The chief executive officer of each hospital is entitled to an
annual bonus if operating income for the hospital improves over operating
income of the hospital for the previous year, with a stipulation that no bonus
is payable if certain quality of care levels are not attained.
The Company periodically grants stock options to its executive
officers and other key employees. Stock option grants are intended to provide
the Company's executives and other key employees with a significant incentive
to work to maximize stockholder value. The Committee believes that by
providing its executives and key employees who have substantial responsibility
for the management and growth of the Company with an opportunity to profit from
increases in the value of the Company's stock, the interests of the Company's
stockholders and executives will be most closely aligned.
Over the past several years, pressure from payors to contain and
reduce costs has lead to decreased lengths of hospital stays and a reduction in
hospital occupancy levels in the psychiatric health care industry. These cost
pressures, combined with negative publicity about the psychiatric health care
industry, have caused the industry to fall out of favor in the investment
community. Given these adverse conditions in the industry, and the relatively
substantial amount by which the exercise price of stock options held by the
Chief Executive Officer and other executives exceeded the market price of the
Common Stock, the Compensation Committee determined that the stock option
component of the Company's executive compensation program was not having its
intended effect of giving the Company's executives a significant incentive to
accomplish the Company's business objectives. Accordingly, on May 26, 1994,
the exercise price of options held by the President and Chief Operating Officer
and one other executive was reduced from $7.875 to $6.875 per share. This
repricing was intended to restore the incentive of the stock option element of
the Company's compensation program by providing these individuals with a
financial opportunity consistent with the returns expected to be generated by
them on behalf of the Company's stockholders as the industry recovers.
THE COMPENSATION AND CONFLICT OF INTEREST
COMMITTEE OF THE BOARD OF DIRECTORS
Aaron Beam, Jr.
Peter J. Evans
Thomas M. Haythe
<PAGE> 17
15
Performance Graph
- - - -----------------
The following performance graph compares the cumulative total return
on the Company's Common Stock to the NASDAQ Composite Index, a 1994 peer group
and a 1993 peer group. The 1994 peer group consists of Community Psychiatric
Centers, Charter Medical Corporation, Comprehensive Care Corporation, and
Mental Health Management, Inc. The Company believes that these peer companies,
which are engaged in the behavioral health services industry are most
comparable to the Company, within the parameters set by the Securities and
Exchange Commission. The 1993 peer group consisted of Community Psychiatric
Centers, National Medical Enterprises, Inc. and Comprehensive Care Corporation.
National Medical Enterprises, Inc. was not included in the peer group this year
due to its divestiture of its psychiatric healthcare operations. Charter
Medical Corporation and Mental Health Management, Inc. were included in the
peer group this year because of changes made in the Company's operations in
fiscal 1994 (e.g., the Company's expansion into managed mental health care)
which more closely align the Company with these entities. The graph assumes
that $100 was invested in the Common Stock, the NASDAQ Composite Index, the
1994 peer group and the 1993 peer group on June 30, 1989 and that all dividends
were reinvested.
<PAGE> 18
16
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG RAMSAY HEALTH CARE, INC., THE NASDAQ STOCK MARKET-US INDEX,
A 1994 PEER GROUP AND A 1993 PEER GROUP
(GRAPH)
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------------------------
6/89 6/90 6/91 6/92 6/93 6/94
<S> <C> <C> <C> <C> <C> <C>
Ramsay Health Care Inc 100 85 135 60 62 67
1994 PEER GROUP 100 92 106 42 42 48
1993 PEER GROUP 100 116 136 81 65 91
NASDAQ STOCKMRKT - US 100 108 114 137 172 173
</TABLE>
* $100 INVESTED ON 06/30/89 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
<PAGE> 19
17
Security Ownership of Certain Beneficial Owners
- - - -----------------------------------------------
The stockholders (including any "group," as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the knowledge
of the Board of Directors of the Company, owned beneficially more than five
percent of any class of the outstanding voting securities of the Company as of
August 1, 1994, and their respective shareholdings as of such date (according
to information furnished by them to the Company), are set forth in the
following table. Except as indicated in the footnotes to the table, all of
such shares are owned with sole voting and investment power.
<TABLE>
<CAPTION>
Name and Address Title Number of Percentage
Beneficial Owner of Class Shares Owned of Class
----------------- -------- ------------ ----------
<S> <C> <C> <C>
Paul J. Ramsay Common 3,078,895 (1) 32.7%
Paul Ramsay Group
156 Pacific Highway Series C
Greenwich, NSW 2065 Preferred 142,486 (2) 100.0%
Australia
Ramsay Holdings HSA Limited Common 2,117,065 (3) 25.1%
c/o Haythe & Curley
237 Park Avenue Series C
New York, New York 10017 Preferred 71,303 50.0%
Paul Ramsay Holdings Pty. Limited Common 711,830 (4) 8.4%
c/o Haythe & Curley
237 Park Avenue Series C
New York, New York 10017 Preferred 71,183 50.0%
UBS Asset Management (New York) Inc. Common 453,700 (5) 5.9%
1211 Avenue of the Americas
New York, New York 10036-8796
</TABLE>
<PAGE> 20
18
<TABLE>
<CAPTION>
Name and Address Title Number of Percentage
Beneficial Owner of Class Shares Owned of Class
----------------- -------- ------------ ----------
<S> <C> <C> <C>
Brinson Holdings, Inc. Common 757,900 (6) 9.8%
Brinson Partners, Inc.
Brinson Trust Company
209 South LaSalle
Chicago, Illinois 60604-1295
David B. Heller Common 751,000 (7) 9.7%
Advisory Research, Inc.
Two Prudential Plaza
180 N. Stetson, Suite 5780
Chicago, Illinois 60601
Marvin C. Schwartz Common 403,500 (8) 5.2%
c/o Neuberger & Berman
605 Third Avenue
New York, New York 10158-3658
</TABLE>
(1) Mr. Ramsay's beneficial ownership of Common Stock is based on
2,117,065 shares of Common Stock beneficially owned by Ramsay Holdings
and 711,830 shares of Common Stock beneficially owned by Holdings
Pty., which entities Mr. Ramsay indirectly controls, and 250,000
shares of Common Stock issuable upon the exercise of currently
exercisable options to purchase shares of Common Stock granted
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(2) Ramsay Holdings, a company Mr. Ramsay indirectly controls, owns 71,303
shares of Series C Preferred Stock and Holdings Pty., a company which
Mr. Ramsay indirectly controls, owns 71,183 shares of Series C
Preferred Stock.
(3) Based on 1,404,035 shares of Common Stock currently owned of record by
Ramsay Holdings and 713,030 shares of Common Stock issuable upon the
conversion of the 71,303 shares of Series C Preferred Stock currently
outstanding and owned by Ramsay Holdings.
(4) Based on 711,830 shares of Common Stock issuable upon the conversion
of the 71,183 shares of Series C Preferred Stock currently outstanding
and owned by Holdings Pty.
(5) Information as to the holdings of UBS Asset Management (New York) Inc.
("UBS") is based upon a report on Schedule 13G filed with the
Securities and Exchange Commission. Such report indicates that 405,500
shares were owned with sole voting power and 453,700 shares
<PAGE> 21
19
were owned with sole dispositive power. Such report indicates
that UBS is an investment adviser registered under the Investment
Advisers Act of 1940.
(6) Information as to the holdings of Brinson Holdings, Inc. ("BHI"),
Brinson Partners, Inc. ("BPI") and Brinson Trust Company ("BTC") is
based upon a report on Schedule 13G filed with the Securities and
Exchange Commission. Such report indicates that 345,803 shares were
owned by BPI with sole voting and sole dispositive power and 412,097
shares were owned by BTC with sole voting and sole dispositive power.
Such report indicates that BTC is a bank and the wholly-owned
subsidiary of BPI, an investment adviser registered under the
Investment Advisers Act of 1940, which in turn is a wholly-owned
subsidiary of BHI, a parent holding company.
(7) Information as to the holdings of David B. Heller and Advisory
Research, Inc. ("Advisory") is based upon a report on Schedule 13G
filed with the Securities and Exchange Commission. Such report
indicates that 751,000 shares were owned with shared voting and
dispositive power. Such report indicates that Advisory is an
investment adviser registered under the Investment Advisers Act of
1940 and that Mr. Heller is the President of Advisory.
(8) Information as to the holding of Marvin C. Schwartz is based upon a
report on Schedule 13D filed with the Securities and Exchange
Commission. Such report indicates that 148,000 shares were owned with
sole voting and dispositive power; 127,500 shares were held with
shared voting power and 255,500 shares were owned with shared
dispositive power.
<PAGE> 22
20
Security Ownership of Management
- - - --------------------------------
The following table sets forth, as of August 1, 1994, the number of
shares of Common Stock of the Company beneficially owned by each of the
Company's directors and nominees for directors, each executive officer named in
the Summary Compensation Table, and all directors and executive officers as a
group, based upon information obtained from such persons.
<TABLE>
<CAPTION>
Percentage
Name and Address Title of Number of of
Beneficial Owner Class Shares Owned(1) Class(1)
----------------- -------- ----------------- ----------
<S> <C> <C> <C>
Paul J. Ramsay Common 3,078,895 (2) 32.7%
Series C
Preferred 142,486 (3) 100.0%
Aaron Beam, Jr. Common 10,000 (4) *
Gregory H. Browne Common 152,000 (5) 1.9%
Peter Evans Common 25,000 (6) *
Robert E. Galloway Common 25,250 (7) *
Thomas M. Haythe Common 25,000 (6) *
Steven J. Shulman Common 25,000 (6) *
Michael S. Siddle Common 51,667 (8) *
Bruce R. Soden Common 51,000 (9) *
</TABLE>
<PAGE> 23
21
<TABLE>
<CAPTION>
Percentage
Name and Address Title of Number of of
Beneficial Owner Class Shares Owned(1) Class(1)
----------------- -------- ----------------- ----------
<S> <C> <C> <C>
Reynold J. Jennings Common 31,300 (10) *
Rea A. Oliver (14) Common --- *
John A. Quinn Common 30,000 (11) *
Wallace E. Smith Common 50,400 (12) *
All directors, executive
officers and other officers
as a group (16 persons) Common 3,612,180 (2) (4) 36.6%
(5) (6)
(7) (8)
(9) (10)
(11) (12)
(13)
Series C
Preferred 142,486 (3) 100.0%
</TABLE>
(*) Indicates ownership percentage of less than one percent (1%).
(1) Includes all shares that each named person is entitled to receive
within 60 days, through the exercise of any option, warrant,
conversion right, or similar arrangement. Such shares are deemed to be
owned and outstanding by such person individually, and by all
directors and officers as a group, for purposes of calculating the
number of shares owned and the percentage of class for each such named
person and the group, but are not deemed to be outstanding for
purposes of such calculations for any other named person.
(2) Mr. Ramsay's beneficial ownership of Common Stock is based on
2,117,065 shares of Common Stock beneficially owned by Ramsay Holdings
and 711,830 shares of Common Stock beneficially owned by Holdings
Pty., which entities Mr. Ramsay indirectly controls (see "Security
Ownership of Certain Beneficial Owners"), and 250,000 shares of Common
Stock issuable upon the exercise of currently exercisable options to
purchase shares of Common Stock granted pursuant to the Company's 1990
Stock Option Plan and 1991 Stock Option Plan.
<PAGE> 24
22
(3) Ramsay Holdings, a company which Mr. Ramsay indirectly controls, owns
71,303 shares of Series C Preferred Stock and Holdings Pty., a company
which Mr. Ramsay indirectly controls, owns 71,183 shares of Series C
Preferred Stock.
(4) Includes 10,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1991 Stock Option Plan.
(5) Includes 150,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(6) Consists of 25,000 shares of Common Stock issuable upon the exercise
of currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(7) Includes 25,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(8) Consists of 51,667 shares of Common Stock issuable upon the exercise
of currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(9) Includes 50,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(10) Includes 25,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1991 Stock Option Plan.
(11) Consists of 30,000 shares of Common Stock issuable upon the exercise
of currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(12) Includes 50,000 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
pursuant to the Company's 1990 Stock Option Plan and 1991 Stock Option
Plan.
(13) Includes 56,668 shares of Common Stock issuable upon the exercise of
currently exercisable options to purchase shares of Common Stock
granted pursuant to the Company's 1990 Stock Option Plan and 1991
Stock Option Plan to officers of the Company not listed in the above
table.
<PAGE> 25
23
(14) Mr. Oliver resigned from the Company in March 1994.
2. RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP to serve
as independent auditors for the Company for the fiscal year ending June 30,
1995. The Board of Directors considers Ernst & Young LLP to be eminently
qualified.
Although it is not required to do so, the Board of Directors
is submitting its selection of the Company's auditors for ratification at the
Meeting, in order to ascertain the views of stockholders regarding such
selection. If the selection is not ratified, the Board of Directors will
reconsider its selection.
The Board of Directors recommends that stockholders vote FOR
ratification of the selection of Ernst & Young LLP to examine the financial
statements of the Company for the Company's fiscal year ending June 30, 1995.
It is the intention of the persons named in the accompanying form of Proxy to
vote the shares represented thereby in favor of such ratification unless
otherwise instructed therein.
A representative of Ernst & Young LLP will be present at the
Meeting with the opportunity to make a statement if such representative desires
to do so and will be available to respond to appropriate questions.
3. OTHER MATTERS
The Board of Directors of the Company does not know of any
other matters that may be brought before the Meeting. However, if any such
other matters are properly presented for action, it is the intention of the
persons named in the accompanying form of Proxy to vote the shares represented
thereby in accordance with their best judgment on such matters.
Stockholder Proposals
- - - ---------------------
Stockholder proposals intended to be presented at the next
Annual Meeting of Stockholders of the Company must be received by the Company
by June 27, 1995, in order to be considered for inclusion in the Company's
proxy statement relating to such meeting.
October 24, 1994
<PAGE> 26
RAMSAY HEALTH CARE, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- NOVEMBER 28, 1994
The undersigned, a stockholder of RAMSAY HEALTH CARE, INC., does hereby
appoint Paul J. Ramsay and Gregory H. Browne, or either of them, with full power
of substitution, the undersigned's proxies, to appear and vote all shares of
Common Stock or Class B Convertible Preferred Stock, Series C of the Company
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
to be held on Monday, November 28, 1994 at 2:00 P.M., local time, or at any
adjournment thereof, upon such matters as may properly come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby instructs said proxies or their substitutes to vote as
specified below on each of the following matters and in accordance with their
best judgment on any other matters which may properly come before the Meeting.
<TABLE>
<S> <C>
1. Election of Directors / / FOR all the nominees listed (except as marked
to the contrary below).
/ / WITHHOLD AUTHORITY to vote for the nominees
listed below.
</TABLE>
Aaron Beam, Jr., Gregory H. Browne, Peter J. Evans, Robert E. Galloway, Thomas
M. Haythe, Paul J. Ramsay, Steven J. Shulman, Michael S. Siddle and Bruce R.
Soden
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
________________________________________________________________________________
2. Ratification of appointment of Ernst & Young LLP as independent auditors for
the fiscal year ending June 30, 1994.
FOR / / AGAINST / / ABSTAIN / /
The Board of Directors favors a vote "FOR" each item.
<PAGE> 27
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED AS TO ANY OF ITEMS 1, OR 2 THEY WILL BE VOTED IN FAVOR OF
THE ITEM(S) FOR WHICH NO DIRECTION IS INDICATED.
IMPORTANT: Before returning this Proxy,
please sign your name or names on the
line(s) below exactly as shown thereon.
Executors, shareholders, trustees,
guardians or corporate officers should
indicate their full titles when signing.
Where shares are registered in the name
of joint tenants or trustees, such joint
tenant or trustee should sign.
Dated: ______________________________ 1994
__________________________________________
Entity Name
___________________________________ (L.S.)
___________________________________ (L.S.)
Stockholder(s) Sign Here
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
