SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
[ ] Confidential, for Use of the [ ] Definitive Additional Materials
Commission Only (as permitted [ ] Soliciting Material Pursuant to
by Rule 14a-6(e)(2)) Rule 14a-11(c) or Rule 14a-12
FIRST AMERICAN HEALTH CONCEPTS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
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 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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<PAGE>
FIRST AMERICAN HEALTH CONCEPTS, INC.
7776 S. POINTE PARKWAY WEST, SUITE 150
PHOENIX, ARIZONA 85044-5424
-----------------------------------------------
NOTICE OF MEETING AND PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 11, 1998
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To Our Shareholders:
The Annual Meeting of Shareholders of FIRST AMERICAN HEALTH CONCEPTS,
INC. (the "Company") will be held at The Pointe Hilton Resort on South Mountain,
7777 S. Pointe Parkway, Phoenix, Arizona 85044 on Friday, December 11, 1998 at
10:00 A.M., Arizona Time, for the following purposes:
1. To elect directors.
2. To ratify the Board of Directors= recommendation that KPMG Peat
Marwick be appointed the Company's independent public accountants
for fiscal year 1999.
3. To approve the Company's 1998 Stock Option Plan.
4. To transact such other business as may properly come before the
meeting. Management is presently aware of no other business to
come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 2 AND 3.
The Board of Directors has fixed the close of business on October 5,
1998 as the record date for the determination of shareholders entitled to
receive notice of and to vote at the meeting or any adjournment thereof and only
holders of record of issued and outstanding shares of the Company's Common Stock
at that time will be entitled to such notice or so to vote.
Management of the Company cordially invites you to attend the meeting.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND PERSONALLY ARE REQUESTED TO SIGN AND
DATE THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE
PREPAID ENVELOPE.
Details of the matters to be acted on by the shareholders are set forth
in the following Proxy Statement, which is hereby incorporated as a part of this
Notice of Meeting.
By Order of the Board of Directors
John R. Behrmann
Chairman of the Board
MAILED TO SHAREHOLDERS ON OR ABOUT NOVEMBER 12, 1998
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of FIRST AMERICAN HEALTH CONCEPTS, INC.
(the "Company") to be used at the Annual Meeting of Shareholders which will be
held on December 11, 1998, and at any adjournment thereof with respect to the
matters referred to in the preceding Notice of Meeting. The Company's 1998
Annual Report, containing financial statements reflecting the financial position
and results of operations of the Company for the fiscal year ended July 31,
1998, and this Proxy Statement and the preceding Notice of Meeting are being
mailed on or about November 12, 1998, to shareholders of record at the close of
business on October 5, 1998. As of the record date, there were 2,604,736 shares
of the Company's Common Stock outstanding. Shareholders of record are entitled
to one vote for each share held of record on each matter of business to be
considered at the meeting other than the election of directors. See "Cumulative
Voting Rights" under Proposal 1 for information on voting with respect to the
election of directors.
VOTING; PROXIES; REVOCATION OF PROXIES
A shareholder desiring to vote at the Annual Meeting may do so by (i)
attending the meeting and voting in person; (ii) signing and dating the proxy
which accompanies this Notice of Meeting and Proxy Statement and returning it to
the Company; or (iii) duly executing and giving a proxy to a person of the
shareholder's choosing. Any proxy so given may be revoked by the person giving
it at any time before its use by delivering to the Company a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
meeting and voting in person.
In determining whether a quorum exists at the meeting all shares
represented in person or proxy will be counted. Presence of holders of a
majority of the outstanding stock entitled to vote shall constitute a quorum.
Votes will be tabulated by inspectors. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting. Each
is tabulated separately. Abstentions are counted in tabulations of the votes
cast on proposals presented to shareholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
Adoption of Proposals 2 and 3 will require the affirmative vote of a
majority of the shares of the Company's Common Stock present and entitled to
vote at the Annual Meeting, assuming a quorum is present. For information with
respect to election of directors, see "Proposal 1 - Cumulative Voting Rights."
1999 PROXY STATEMENT PROPOSALS
Each year the Board of Directors submits to the shareholders at the
Annual Meeting its nominations for election of directors. Other proposals may be
submitted by the Board of Directors or shareholders for inclusion in the Proxy
Statement for action at the Annual Meeting. Any proposal submitted by a
shareholder for inclusion in the 1999 Annual Meeting Proxy Statement must be
received by the Company not later than June 25, 1999.
PROPOSAL 1
ELECTION OF DIRECTORS
CUMULATIVE VOTING RIGHTS
Each shareholder present either in person or by proxy at the Annual
Meeting will have cumulative voting rights with respect to the election of
directors; that is the shareholder will have an aggregate number of votes in the
election of directors equal to the number of directors to be elected multiplied
by the number of shares of Common Stock of the Company held by such shareholder
on the record date. The resulting aggregate number of votes may be cast by the
shareholder for the election of any single nominee, or the shareholder may
distribute such votes among any number of all of the nominees. The seven
nominees receiving the highest number of votes will be elected to the Board of
Directors. The cumulative voting rights may be exercised in person or by proxy
and there are no conditions precedent to the exercise of such rights. The form
of proxy which accompanies this Notice of Meeting and Proxy Statement confers
discretionary authority on the proxyholders to vote the shares represented
thereby cumulatively in certain cases described immediately below under
"Nominees."
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<PAGE>
NOMINEES
A board of seven directors is to be elected at the Annual Meeting.
Unless otherwise instructed in any proxy, the persons named in the form of proxy
which accompanies this Notice of Meeting and Proxy Statement (the
"proxyholders") will vote the proxies received by them for the Company's seven
nominees whose names are set forth in the following table, all are presently
directors of the Company. In the event that any such nominee is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxyholders intend, unless otherwise
instructed in any proxy, to vote all proxies received by them in such manner in
accordance with cumulative voting as will assure the election of as many of the
following nominees as possible, and, in such event, the specific nominees to be
voted for will be determined by the proxyholders. In the event that authority to
vote for any nominee whose name is set forth in the following table is withheld
in any proxy, the proxyholders intend, unless otherwise instructed in such
proxy, to vote the shares represented by such proxy, in their discretion,
cumulatively for one or more of the other nominees named in such table. The
Company is not aware of any nominee who will be unable or will decline to serve
as a director. The term of office of each person elected as a director will
expire upon the election and qualification of his or her successor, expected to
be at the next Annual Meeting of Shareholders.
The names of the nominees, their ages, position(s) with the Company,
and periods during which they have held such positions are as follows:
Name and Year
First Held Position Age Position(s)
------------------- --- -----------
John R. Behrmann 63 Director (1)
(1993)
Robert J. Delsol 49 Director (1)
(1993)
John W. Heidt 50 Director (1)
(1989)
James J. Meenaghan 60 Director
(1997)
Thomas B. Morgan 73 Director (1)
(1988)
John A. Raycraft 51 Director, President, and CEO
(1997)
Robert M. Topol 73 Director (1)
(1989)
(1) Member of the Executive Committee, which Committee has all powers
of the entire Board of Directors other than powers denied by law or by
resolution of the entire Board of Directors.
INFORMATION CONCERNING NOMINEES
Information furnished to the Company by such persons, with respect to
the business experience of the above nominees for election as directors of the
Company, is set forth below.
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<PAGE>
JOHN R. BEHRMANN has been a director since November 1993 and Chairman
since January 1997. Mr. Behrmann is chairman of the board of Preston Reynolds &
Co., Inc., a management company with special emphasis on the oil and gas
industry and chairman of Redstone Resources, Inc., a company engaged in natural
gas exploration. Mr. Behrmann is also chairman and president of Behrwood Capital
Services, Inc., an investment management company; and Evergreen Industries,
Inc., a commercial deer farm; and director and president of Venison America,
Inc., a meat processor and distributor. Mr. Behrmann, a CPA, holds a B.S. degree
in Commerce and Finance from Bucknell University, Lewisburg, Pennsylvania.
ROBERT J. DELSOL has been a director of the Company since June 1993.
Mr. Delsol is a graduate of California State University, Hayward, with a B.A.
degree in accounting. He received his CPA certificate in 1972. He currently
serves as President and Chief Executive Officer of Pacific Steel Casting
Company; President, Tri-Pacific, Inc., a personal holding company; President,
Alpha Capital Company, which he co-founded in 1977; and Executive Vice
President, Caron Compactor Company.
JOHN W. HEIDT has been a director of the Company since November 1989.
Mr. Heidt is currently working as a private consultant. He was formerly Vice
President and a director of Alpha Capital Company, an investment advisory firm
located in Oakland, California, and an employee of Pacific Steel Casting
Company, a steel foundry based in Berkeley, California. Prior to these positions
Mr. Heidt was a stockbroker in the San Francisco Bay area. Mr. Heidt holds a
B.S. degree in Financial Management from California State University in Hayward,
California.
JAMES J. MEENAGHAN has been a director since December 1997. Mr.
Meenaghan is currently a private investor residing in Paradise Valley, Arizona
and New York City. Mr. Meenaghan retired in 1993 from The Home Insurance Company
after serving as Chairman of the Board and Chief Executive Officer for seven
years. From 1984 to 1986, he served as President and Chief Executive Officer
with the John F. Sullivan Company. Mr. Meenaghan held various positions with the
Fireman=s Fund Insurance Co. (San Francisco) from 1964 to 1984. He is currently
a Trustee of the Heard Museum (Phoenix) and Chairman/Founder of the POSSE
Scholarship Program. Mr. Meenaghan holds a B.S. degree in Mathematics and
Philosophy from Fordham University.
THOMAS B. MORGAN has been a director of the Company since October 1988.
Mr. Morgan is currently the President of Citizen Auto Stage Co. and Gray Line
Tours, Inc., bus and trucking companies operating in Phoenix and southern
Arizona and Secretary/Treasurer, American Bus Association, Washington, D.C. Mr.
Morgan is also Past Chairman of Holy Cross Hospital, Nogales, Arizona, and Gray
Line Worldwide, Denver, Colorado.
JOHN A. RAYCRAFT has been a director since December 1997 and previously
served as a director from August 1993 to July 1995. Mr. Raycraft began his
association with the Company in May 1991 as Executive Vice President. He became
the President in August 1992 and the Chief Executive Officer in May 1993. Prior
to joining the Company, Mr. Raycraft was associated with California Vision
Service Plan and AVP Vision Plan for more than ten years. He holds a B.S. degree
in Economics from the California State University in Sacramento.
ROBERT M. TOPOL has been a director of the Company since November 1989.
In June 1994, Mr. Topol retired from Smith Barney Shearson, Inc. after serving
as Executive Vice President since 1976, and Director of Unit Trusts since 1980.
Mr. Topol serves as Director of E-Z-EM, Inc., a medical products company in
Westbury, New York and is a member of the Board of Directors of the American
Health Foundation, City Meals and Wheels, Purchase College, and Redstone
Resources, Inc.
The Company maintains a standing Audit Committee currently comprised of
John R. Behrmann, Robert J. Delsol, John W. Heidt and James J. Meenaghan. The
Audit Committee met one time during fiscal 1998. The basic function of the Audit
Committee is to review the financial statements of the Company and to consider
such other matters in relation to the internal and external audit of the
financial affairs of the Company as may be necessary or appropriate in order to
facilitate accurate financial reporting.
The Board of Directors maintains both a Nominating Committee and
Compensation and Options Committee currently comprised of John R. Behrmann,
Robert J. Delsol, John W. Heidt, Thomas B. Morgan, and Robert M. Topol.
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<PAGE>
During the fiscal year ended July 31, 1998, the Board of Directors met
on four occasions. During the last fiscal year, no incumbent director, during
the period that he was a director, attended fewer than 75% of the aggregate of
(i) the total number of meetings of the Board of Directors and (ii) the total
number of meetings held by all committees of the Board on which he served.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
During the fiscal year ended July 31, 1998, a Form 4 for John R.
Behrmann reflecting one transaction was not filed on a timely basis.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. As of October 5,
1998, the following persons were known by the Company to be the beneficial
owners of more than 5% of the Company's Common Stock:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class (1)
- - -------------- ---------------- -------------------- ---------
<S> <C> <C> <C>
No par value John R. Behrmann, Chairman of the Board 138,506 5.1%
common 105 Leader Heights Road, Ste. #100 (2)(4)(6)
York, PA 17404
No par value Robert J. Delsol, Director 749,284 27.4%
common 1425 E. Leimert Blvd., Ste. #400 (2)(4)(8)
Oakland, CA 94602
No par value Robert M. Topol, Director 136,000 5.0%
common 825 Orienta Avenue (2)(11)
Mamaroneck, NY 10543
</TABLE>
(b) SECURITY OWNERSHIP OF MANAGEMENT. The stock beneficially owned by
all directors, nominees, and executive officers of the Company as of October 5,
1998, is set forth below:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class (1)
- - -------------- ---------------- -------------------- ---------
<S> <C> <C> <C>
No par value John R. Behrmann, Chairman of the Board 138,506 5.1%
common 105 Leader Heights Road, Ste. #100 (2)(4)(6)
York, PA 17404
No par value Bruce T. Davidson, V.P. Corporate Development 10,000 .4%
common 6130 N. 31st Ct. (6)
Phoenix, AZ 85016
No par value Robert J. Delsol, Director 749,284 27.4%
common 1425 E. Leimert Blvd., Ste. #400 (2)(4)(8)
Oakland, CA 94602
No par value John W. Heidt, Director 44,700 1.6%
common 1425 Leimert Blvd., Ste. #400 (2)(4)(9)
Oakland, CA 94602
No par value James J. Meenaghan, Director 19,000 .7%
common 6200 N. 61st Place (2)(3)
Paradise Valley, AZ 85253
No par value Thomas B. Morgan, Director 114,510 4.2%
common 67 East Baffert Drive (2)(10)
Nogales, AZ 8562
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
No par value John A. Raycraft, Director 41,643 1.5%
common President and Chief Executive Officer (2)(5)
7776 S. Pointe Parkway West, #150
Phoenix, AZ 85044
No par value Robert M. Topol, Director 136,000 5.0%
common 825 Orienta Avenue (2)(11)
Mamaroneck, NY 10543
Officers, directors and nominees 1,270,617 46.5%
as a group (13 persons) (3)(7)
</TABLE>
(1) Percentage is calculated on the basis that all director and officer shares
under stock options presently exercisable are deemed outstanding. The total
Common Stock outstanding under this basis was 2,731,353 shares.
(2) A Director.
(3) Includes shares held by officers, directors, nominees, and owners of 5% or
more, as community property, in joint tenancy with spouses or having other
shared voting rights.
(4) Includes 20,000 shares which may be acquired within 60 days of the record
date (10/05/98) upon exercise of stock options.
(5) Includes 39,643 shares which may be acquired within 60 days of the record
date (10/05/98) upon exercise of stock options.
(6) Includes 5,000 shares which may be acquired within 60 days of the record
date (10/05/98) upon exercise of stock options.
(7) Includes an additional 16,974 exercisable options held by other officers
for a total of 121,617 shares which may be acquired within 60 days of the
record date (10/05/98) upon exercise of stock options.
(8) Includes 390,722 shares owned by Pacific Steel Casting, a corporation of
which Mr. Delsol is President and a major shareholder; with shared voting
and investment power; 151,086 shares owned by Pacific Steel Casting Pension
Plan and 105,704 by Pacific Steel Casting Profit Sharing Plan, of which Mr.
Delsol is a trustee with shared voting and investment power; 23,257 shares
owned by Piece of the Pebble, L.P., of which Mr. Delsol as the general
partner has sole voting and investment power; 12,000 shares owned by
Tri-Pacific, Inc., a personal holding company of which Mr. Delsol as
President has sole voting and investment power; and 46,515 shares owned by
Alpha Capital Company, Inc., a corporation in which Mr. Delsol as an owner,
officer, and director, has shared voting and investment power.
(9) Includes 1,200 shares owned by children over which Mr. Heidt has sole
voting and investment power.
(10) Includes 15,000 shares owned by spouse. Mr. Morgan has no voting or
investment power with regard to these shares.
(11) Includes 28,000 shares owned by spouse and 60,000 owned by children. Mr.
Topol has no voting or investment power with regard to these shares.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation paid or accrued to each
person who was an executive officer of the Company at any time during the fiscal
year ended July 31, 1998 whose cash compensation from the Company for services
in all capacities during such fiscal year exceeded $100,000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Name Other
and Annual
Principal Compen- Options/
Position Year Salary Bonus sation SARS
- - -------- ---- ------ ----- ------ ----
John A. Raycraft 1998 $159,800 $28,144 $1,999(1) - 0 -
President/CEO 1997 154,800 16,954 1,999(1) - 0 -
1996 154,800 10,585 1,999(1) - 0 -
Bruce T. Davidson 1998 139,800 - 0 - - 0 - - 0 -
V.P. of Corporate Development 1997 139,800 - 0 - - 0 - - 0 -
1996 92,780 2,709 52,500(2) 50,000
(1) Life insurance policy with spouse as beneficiary.
(2) Consulting fees prior to employment.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
Percent of Total
Options/SARS
Options/ Granted to
SARS Employees in Exercise or Expiration
Name Granted Fiscal Year Base Price Date
- - ---- ------- ----------- ---------- ----
None
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-money
Options/SARS Options/SARS
at FY-End at FY-End
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- - ---- ----------- -------------- ------------- -------------
None
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<PAGE>
DIRECTORS' COMPENSATION
Directors who are not employees receive $500 per meeting of the Board of
Directors attended and an additional $200 per meeting for attending any
committee meeting of the Board of Directors of which they are a member.
Nonstatutory options for 10,000 shares of the Company's Common Stock were
granted to one director during the fiscal year ended July 31, 1998, at $3.3125
per share. Nonstatutory options for 20,000 shares each of the Company=s Common
Stock have been granted to directors previously as follows: Two during fiscal
year ended July 31, 1994, one at $5.4375 per share and one at $8.00 per share;
one during the fiscal year ended July 31, 1993, at $4.625 per share; two during
the fiscal year ended July 31, 1990, at $2.1875 per share, and one during the
fiscal year ended July 31, 1989, at $1.6256 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1993, the Company made a $101,395 loan to John A. Raycraft,
President and Chief Executive Officer of the Company, in exchange for an
interest bearing note receivable. The agreement provided for quarterly loan
payments amounting to 50% of the profit sharing payment due to the officer, with
payments applied first to accumulated interest due and then to principal, until
paid in full. The note was secured by an insurance policy on the life of the
officer. The balance of the note on August 1, 1994 was $65,525.
During fiscal 1995, the Company loaned the officer an additional $28,000
and agreed to repayment of principal and interest in five annual installments
through August 1, 1999. Other terms of the note receivable remain unchanged. The
balance of the note on July 31, 1998 was $43,903. During August 1998 a repayment
of $18,621 was received from the officer.
PROPOSAL 2
SELECTION OF AUDITORS
The Board of Directors will request that the shareholders ratify its
selection of KPMG Peat Marwick as the Company's independent public accountants
for fiscal year 1999. If the shareholders do not ratify the selection of KPMG
Peat Marwick, another firm of certified public accountants will be selected as
the Company=s independent auditors by the Board of Directors.
Representatives of KPMG Peat Marwick will be present at the Annual
Meeting, will have an opportunity to make a statement, and will be available to
respond to appropriate questions.
The Board of Directors recommends a vote FOR Proposal 2.
PROPOSAL 3
APPROVAL OF THE
FIRST AMERICAN HEALTH CONCEPTS, INC.
1998 STOCK OPTION PLAN
The Board of Directors of the Company has approved, and recommends that
the shareholders approve, the adoption of the First American Health Concepts,
Inc. 1998 Stock Option Plan (the "Plan") for employees, officers and executives
of, and consultants and advisors to, the Company and any subsidiary. The Plan
authorizes grants of Non-Qualified Stock Options ("NQSOs").
The Board believes that using long-term incentives under the Plan will be
beneficial to the Company as a means to promote the success and enhance the
value of First American Health Concepts, Inc. by linking the personal interests
of its employees, officers, executives, directors, consultants and advisors to
those of its shareholders and by providing such individuals with an incentive
for outstanding performance. These incentives also provide the Company
flexibility in its ability to attract and retain the services of individuals
upon whose judgement, interest, and special effort the successful conduct of the
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<PAGE>
Company's operation is largely dependent. The Plan, if approved by shareholders,
will have an effective date of April 1, 1998. The following summary of the Plan
is qualified in its entirety by reference to the Plan, a copy of which in
included at the end of this Proxy Statement as Exhibit A.
ADMINISTRATION
The Plan will be administered by either the Board or a committee
appointed by the Board consisting of at least two (2) non-employee directors who
also qualify as "outside directors" under section 162(m) of the Internal Revenue
Code of 1986, as amended "Code". If the Board does not appoint a Committee, any
reference herein to the Committee shall be to the Board.
This Committee will have the exclusive authority to administer the Plan,
including the power to determine eligibility, the types and sizes of awards, the
price and timing of awards and the acceleration or waiver of any vesting
restriction.
ELIGIBILITY
Persons eligible to participate in the Plan include all employees,
officers, executives and directors of, and consultants and advisors to, the
Company and its subsidiaries, as determined by the Committee. As of October 5,
1998, there were approximately 17 officers and key employees of the Company and
its subsidiaries.
LIMITATION ON AWARDS AND SHARES AVAILABLE
An aggregate of 300,000 shares of the Company's Common Stock are
available for grant under the Plan. The maximum number of shares of Stock that
may be subject to one or more awards to a single participant under the Plan
during any fiscal year is 50,000. As of October 5, 1998, the closing price of
the Company's Common Stock on NASDAQ was $4.25 per share.
DESCRIPTION OF THE AVAILABLE AWARDS
NON-QUALIFIED STOCK OPTIONS
A NQSO is any stock option that does not qualify as an Incentive Stock
Option under Section 422 of the Code.
No taxable income will be realized by an optionee upon the grant of a
NQSO, nor is the Company entitled to a tax deduction by reason of such grant.
Upon the exercise of a NQSO, the optionee will realize ordinary income in an
amount equal to the excess of the fair market value of the common stock on the
date of exercise over the exercise price and the Company will be entitled to a
corresponding tax deduction.
Upon a subsequent sale or other disposition of common stock acquired
through exercise of a NQSO, the optionee will realize capital gain or loss to
the extent of any intervening appreciation or depreciation. Such a resale by the
optionee will have no tax consequence to the Company.
RECENT TAX CHANGES
Section 162(m) of the Code, adopted as part of the Revenue Reconciliation
Act of 1993, generally limits to $1 million the deduction that can be claimed by
any publicly-held corporation for compensation paid to any covered employee in
any taxable year. Performance-based compensation is outside the scope of the $1
million limitation, and, hence, generally can be deducted by a publicly-held
corporation without regard to amount; provided that, among other requirements,
such compensation is approved by shareholders. Among the items of
performance-based compensation that can be deducted without regard to amount
(assuming shareholder approval and other applicable requirements are satisfied)
is compensation associated with the exercise price of a stock option so long as
the option has an exercise price equal to or greater than the fair market value
of the underlying stock at the time of the option grant. All options granted
under the Plan and that are intended to qualify as performance-based
compensation will have an exercise price at least equal to the fair market value
of the underlying stock on the date of grant.
8
<PAGE>
AMENDMENT AND TERMINATION
The Committee, subject to approval of the Board, may terminate, amend, or
modify the Plan at any time; provided, however, that shareholder approval is
required for any amendment to the extent necessary or desirable to comply with
any applicable law, regulation, or stock exchange rule.
CHANGE OF CONTROL
In the event of a change of control of the Company, all options granted
under the Plan shall become immediately exercisable unless the surviving entity
agrees to assume the Awards in a manner that substantially preserves the
participants' rights and benefits. Under the Plan, a change in control occurs
upon any of the following events: (a) any person (other than a current
shareholder or any employee benefit plan) becoming the beneficial owner of 20%
or more of the Company's Common Stock; (b) during any two-year period, the
persons who are on the Company's Board of Directors at the beginning of such
period and any new person elected by two-thirds of such directors cease to
constitute a majority of the persons serving on the Board of Directors; or (c)
the Company's shareholders approve (1) a merger or consolidation of the Company
with another corporation where the Company is not the surviving entity other
than a merger in which the Company's shareholders before the merger have the
same proportionate ownership after the merger, (2) a plan of complete
liquidation or dissolution, or (3) any sale, lease, or other transfer of 40% or
more of the Company's assets, other than pursuant to a sale-leaseback,
structured finance or other form of financing transaction.
VOTE REQUIRED
Adoption of the Plan requires approval by holders of a majority of the
outstanding shares of Stock who are present, or represented, and entitled to
vote thereon, at the Annual Meeting of Shareholders.
The Board of Directors recommends a vote FOR Proposal 3.
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GENERAL
As of the date of this Proxy Statement, the Board of Directors knows of
no other matter which will come before the meeting. In the event that any other
matter legally comes before the meeting, the persons named in the accompanying
form of Proxy intend to vote all proxies in accordance with their judgment on
such matters.
Shares represented at the Annual Meeting by properly executed and dated
proxies in the accompanying form will be voted and, where the shareholder
specifies by means of the ballot set forth in the form of Proxy a choice with
respect to any matter to be acted upon, the shares will be voted in accordance
with the specifications so made. In the absence of any specification with
respect to Proposals 2 and 3, proxies will be voted FOR such Proposals.
The cost of soliciting proxies relating to the Annual Meeting will be
borne by the Company. Directors, officers and regular employees of the Company
may solicit proxies from the larger shareholders, which solicitation may be made
by telephone, telegram or personal interview. In addition, the Company will,
upon the request of brokers, dealers, voting trustees and banks and other
entities that exercise fiduciary powers, and their nominees, who are holders of
record of shares of the Company's Common Stock on the record date referred to
above, pay their reasonable expenses for completing the mailing of copies of
this Notice of Meeting and Proxy Statement, of the enclosed form of Proxy, and
of the Company's 1998 Annual Report to the beneficial owners of such shares of
Common Stock.
FIRST AMERICAN HEALTH CONCEPTS, INC.
John R. Behrmann
Chairman of the Board
November 12, 1998
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"EXHIBIT A"
FIRST AMERICAN HEALTH CONCEPTS, INC.
1998 STOCK OPTION PLAN
ARTICLE 1 PURPOSE
1:1 GENERAL The purpose of the First American Health Concepts, Inc. 1998
Stock Option Plan (the "Plan") is to promote the success, and enhance the value,
of First American Health Concepts, Inc. (the "Company") by linking the personal
interests of selected employees, officers, executives, and directors of, and
consultants and advisors to, the Company to those of Company shareholders and by
providing such individuals with an incentive for outstanding performance in
order to generate superior returns to shareholders of the Company. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of employees, officers, executives,
and directors of, and consultants and advisors to, the Company upon whose
judgment, interest, and special effort the successful conduct of the Company's
operation is largely dependent.
ARTICLE 2 EFFECTIVE DATE
2.1 EFFECTIVE DATES. The Plan is effective as of April 1, 1998 (the
"Effective Date"), subject to the subsequent approval of the Plan by the
Company's shareholders at its next regularly scheduled meeting after the
Effective Date and shall terminate on April 30, 2003.
ARTICLE 3 DEFINITIONS AND CONSTRUCTION
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:
(a) "Award" means any Option granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means any of the following:
(1) any merger of the Company in which the Company or a wholly
owned subsidiary of the Company is not the continuing or surviving entity, or
pursuant to which Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Stock immediately prior to the merger have the same proportionate
ownership of beneficial interest of common stock or other voting securities of
the surviving entity immediately after the merger; (2) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
assets or earning power aggregating more than 40% of the assets or earning power
of the Company and its subsidiaries (taken as a whole), other than pursuant to a
sale-leaseback, structured finance or other form of financing transaction;
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(3) any plan or proposal for liquidation or dissolution of the
Company that the shareholders of the Company shall approve,
(4) any person (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act), other than any current shareholder of the Company
or affiliate thereof or any employee benefit plan of the Company or any
subsidiary of the Company or any entity holding shares of capital stock of the
Company for or pursuant to the terms of any such employee benefit plan in its
role as an agent or trustee for such plan, shall become the beneficial owner
(within the meaning of Rule 1 3d-3 under the Exchange Act) of 20% or more of the
Company's outstanding Stock; or
(5) during any period of two consecutive years, individuals who
at the beginning of such period shall fail to constitute a majority thereof,
unless the election, or the nomination for election by the Company's
shareholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the committee of the Board described in Article 4.
(g) "Covered Employee" means an Employee who is a "covered employee"
within the meaning of Section 162(m) of the Code.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(i) "Fair Market Value" means, as of any given date, the fair market
value of Stock or other property on a particular date determined by such methods
or procedures as may be established from time to time by the Committee.
(j) "Non-Employee Director" means a member of the Board who qualifies as
a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor definition adopted by the Board.
(k) "Non-Qualified Stock Option" means an Option that is not intended to
be an Incentive Stock Option under Section 422 of the Code.
(l) "Option" means a right granted to a Participant under Article 7 of
the Plan to purchase Stock at a specified price, under specified conditions,
during specified time periods. An Option is a Non-Qualified Stock Option.
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(m) "Participant" means a person who, as an employee, officer, executive
or director of, or as a consultant or advisor to, the Company or any Subsidiary,
has been granted an Award under the Plan.
(n) "Plan" means the First American Health Concepts, Inc. 1998 Stock
Option Plan, as amended from time to time.
(o) "Stock" means the common stock of the Company and such other
securities of the Company that may be substituted for Stock pursuant to Article
9.
(p) "Subsidiary" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.
ARTICLE 4 ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by the Board or a Committee
appointed by, and which serves at the discretion of, the Board. If the Board
appoints a Committee, the Committee shall consist of at least two individuals,
each of whom qualifies as (i) a Non-Employee Director, and (ii) an "outside
director" under Code Section 162(m) and the regulations issued thereunder.
Reference to the Committee shall refer to the Board if the Board does not
appoint a Committee.
4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall constitute
a quorum. The acts of a majority of the members present at any meeting at which
a quorum is present and acts approved in writing by a majority of the Committee
in lieu of a meeting shall be deemed the acts of the Committee. Each member of
the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of
the Company or any Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan. No member
of the Committee shall be able to take action with respect to any Award granted
to that particular member.
4.3 AUTHORITY OF COMMITTEE. The Committee has the exclusive power,
authority and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the number of Awards to be granted and the number of shares
of Stock to which an Award will relate;
(c) Determine the terms and conditions of any Award granted under the
Plan including but not limited to, the exercise price, grant price, or purchase
price, any restrictions or limitations on the Award, any schedule for lapse of
forfeiture restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, based in each case on such considerations as
the Committee in its sole discretion determines;
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(d) Amend, modify, or terminate any outstanding Award, with the
Participant's consent unless the Committee has the authority to amend, modify or
terminate Award without the Participant's consent under any other provision of
the Plan;
(e) Determine whether, to what extent, and under what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in, cash,
Stock, other Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(g) Decide all other matters that must be determined in connection with
an Award;
(h) Establish, adopt or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan; and
(i) Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to administer
the Plan.
4.4 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5 SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 9.1, the
aggregate number of shares of Stock reserved and available for grant under the
Plan shall be 300,000.
5.2 LAPSED AWARDS. To the extent that an Award terminates, expires or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan and shares settled in cash
will again be available for grant under the Plan.
5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS. Notwithstanding any
provision in the Plan to the contrary, and subject to the adjustment in Section
9.1, the maximum number of shares of Stock with respect to one or more Awards
that may be granted to any one Participant during the Company's fiscal year
shall be 50,000.
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ARTICLE 6 ELIGIBILITY AND PARTICIPATION
6.1 ELIGIBILITY.
(a) GENERAL. Persons eligible to participate in this Plan include all
employees, officers, executives, and directors of, and consultants and advisors
to, the Company or a Subsidiary, as determined by the Committee, including such
individuals who are also members of the Board.
(b) FOREIGN PARTICIPANTS. In order to assure the viability of Awards
granted to Participants employed in foreign countries, the Committee may provide
for such special terms as it may consider necessary or appropriate to
accommodate differences in local law, tax policy, or custom. Moreover, the
Committee may approve such supplements to, or amendments, restatements, or
alternative versions of the Plan as it may consider necessary or appropriate for
such purposes without thereby affecting the terms of the Plan as in effect for
any other purpose; provided, however, that no such supplements, amendments,
restatements, or alternative versions shall increase the share limitations
contained in Section 5.1 of the Plan.
6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No individual shall have any right to be granted an Award under
this Plan.
ARTICLE 7 STOCK OPTIONS
7.1 GENERAL. The Committee is authorized to grant Options to Participants
on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock under an Option
shall be determined by the Committee and set forth in the Award Agreement. It is
the intention under the Plan that the exercise price for any Option shall not be
less than the Fair Market Value as of the date of grant; provided, however that
the Committee may, in its discretion, grant Options with an exercise price of
less than Fair Market Value on the date of grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part. The
Committee shall also determine the performance or other conditions, if any, that
must be satisfied before all or part of an Option may be exercised.
(c) PAYMENT. The Committee shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including, without
limitation, cash, shares of Stock (through actual tender or by attestation), or
other property, and the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants. With Committee's concurrence, the
Participant may elect to pay income taxes on the shares at the time they are
exercised by surrendering to the Company optioned shares with aggregate market
value equal to or less than the applicable taxes.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a written Award
Agreement between the Company and the Participant. The Award Agreement shall
include such additional provisions as may be specified by the Committee.
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ARTICLE 8 PROVISIONS APPLICABLE TO AWARDS
8.1 STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
8.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 8.1), based on the terms and conditions the Committee
determines and communicates to the Participant at the time the offer is made.
8.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee.
8.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, Stock, other Awards, or other property, or any
combination, and may be made in a single payment or transfer, in installments,
or on a deferred basis, in each case determined in accordance with rules adopted
by, and at the discretion of, the Committee.
8.5 LIMITS ON TRANSFER. No right or interest of a Participant in any
Award may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee, no Award
shall be assignable or transferable by a participant other than by will or the
laws of descent and distribution.
8.6 BENEFICIARIES. Notwithstanding Section 8.5, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50
percent of the Participant's interest in the Award shall not be effective
without the written consent of the Participant's spouse. If no beneficiary has
been designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.
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8.7 STOCK CERTIFICATES. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with Federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.
8.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control occurs,
all outstanding Options shall become fully exercisable and all restrictions on
outstanding Awards shall lapse, except in the event that the surviving or
resulting entity agrees to assume the Awards on terms and conditions that
substantially preserve the Participant's rights and benefits of the Award then
outstanding. Upon, or in anticipation of, such an event, the Committee may cause
every Award outstanding hereunder to terminate at a specific time in the future
and shall give each Participant the right to exercise Awards during a period of
time as the Committee, in its sole and absolute discretion, shall determine,
except in the event that the surviving or resulting entity agrees to assume the
Awards on terms and conditions that substantially preserve the Participant's
rights and benefits of the Award then outstanding.
ARTICLE 9 CHANGES IN CAPITAL STRUCTURE
9.1 GENERAL. In the event a stock dividend is declared upon the Stock the
shares of Stock then subject to each Award (and the number of shares subject
thereto) shall be increased proportionately without any change in the aggregate
purchase price therefor. In the event the Stock shall be changed into or
exchanged for a different number or class of shares of Stock or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, there shall be substituted for
each such share of Stock then subject to each Award the number and class of
shares of Stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the shares
then subject to each Award.
ARTICLE 10 AMENDMENT, MODIFICATION AND TERMINATION
10.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate amend or
modify the Plan provided, however, that to the extent necessary and desirable to
comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain shareholder approval of any Plan amendment in such a manner and to
such a degree as required.
10.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant.
ARTICLE 11 GENERAL PROVISIONS
11.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person shall
have any claim to be granted any Award under the Plan, and neither the Company
nor the Committee is obligated to treat Participants, employees, and other
persons uniformly.
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11.2 NO SHAREHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a shareholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award
11.3 WITHHOLDING. The Company or any Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan.
11.4 NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.
11.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.
11.6 INDEMNIFICATION. To the extent allowable under applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her
provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or By-Laws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.
11.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
11.8 EXPENSES. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.
11.9 TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
11.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.
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11.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on
the relevant date, obligated to file reports under Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be void to the extent permitted by law and voidable as deemed advisable by
the Committee.
11.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act of 1933, as amended (the "1933 Act"), any of the shares of Stock
paid under the Plan. If the shares paid under the Plan may in certain
circumstances be exempt from registration under the 1933 Act, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.
11.13 GOVERNING LAW. The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of Arizona.
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FRONT OF CARD
FIRST AMERICAN HEALTH CONCEPTS, INC.
7776 S. Pointe Parkway West, Suite 150, Phoenix, Arizona 85044-5424
ANNUAL MEETING OF SHAREHOLDERS -- DECEMBER 11, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John A. Raycraft and Carolyn Hall and each
or either of them (with full power of substitution) to vote and represent all
shares of Common Stock registered in the name of the undersigned of record at
the close of business on October 5, 1998, at the Annual Meeting of Shareholders
of FIRST AMERICAN HEALTH CONCEPTS, INC. (the "Company") to be held at The Pointe
Hilton Resort on South Mountain, 7777 S. Pointe Parkway, Phoenix, Arizona, on
December 11, 1998, at 10:00 A.M., Arizona Time, and at any adjournment. Without
otherwise limiting the generality of the foregoing, said proxies are directed to
vote as follows:
1. ELECTION OF [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
DIRECTORS (except as withheld in the vote for all of the
space provided below) nominees listed below
John R. Behrmann, Robert J. Delsol, John W. Heidt, James J. Meenaghan, Thomas B.
Morgan, John A. Raycraft, and Robert M. Topol.
(INSTRUCTION: To withhold authority to vote for any nominee, write that
nominee's name on the following line.)s
________________________________________________________________________________
This proxy also grants to the proxyholders the discretionary power to vote the
proxy for a substitute nominee in the event any nominee becomes unavailable, to
vote the shares cumulatively for one or more, but less than all of the nominees
named above if additional persons are nominated for election as directors and to
vote such shares cumulatively for one or more of the nominees named above other
than those (if any) for whom authority to vote is withheld.
2. To ratify the Board of Directors' recommendation
to appoint KPMG Peat Marwick the Company's
independent public accountants for fiscal year
1998........................................[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the Company's Stock Option Plan...[ ] FOR [ ] AGAINST [ ] ABSTAIN
BACK OF CARD
(Continued from other side)
This proxy when properly executed will be voted as specified above, but if no
specification is made, it will be voted FOR the proposals listed above. The
proxyholders are also authorized to vote in their discretion upon such other
business as may properly come before the meeting or any adjournment thereof
(unless this sentence is stricken).
Dated_____________________________________
__________________________________________
Signature
__________________________________________
Signature if held jointly
This proxy must be signed exactly as name
appears. When shares are held by joint
tenants, both should sign. When signing as
attorney or as trustee, executor or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
