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
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Check the appropriate box:
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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)
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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 10, 1999
----------------------------------------------------
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 10, 1999 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 2000.
3. 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 PROPOSAL 2.
The Board of Directors has fixed the close of business on October 4,
1999 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 15, 1999
<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 10, 1999, and at any adjournment thereof with respect to the
matters referred to in the preceding Notice of Meeting. The Company's 1999
Annual Report, containing financial statements reflecting the financial position
and results of operations of the Company for the fiscal year ended July 31,
1999, and this Proxy Statement and the preceding Notice of Meeting are being
mailed on or about November 15, 1999, to shareholders of record at the close of
business on October 4, 1999. 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 Proposal 2 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."
2000 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 2000 Annual Meeting Proxy Statement must be
received by the Company not later than June 30, 2000.
1
<PAGE>
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 five 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."
NOMINEES
A board of five 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 five
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 64 Director (1)
(1993)
Robert J. Delsol 50 Director (1)
(1993)
Thomas B. Morgan 74 Director (1)
(1988)
John A. Raycraft 52 Director, President and CEO
(1997)
Robert M. Topol 74 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.
2
<PAGE>
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.
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.
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 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.
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<PAGE>
The Company maintains a standing Audit Committee currently comprised of
John R. Behrmann, Robert J. Delsol, and Robert M. Topol. The Audit Committee met
four times during fiscal 1999. 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, Thomas B. Morgan, and Robert M. Topol.
During the fiscal year ended July 31, 1999, the Board of Directors met
on six 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, 1999, 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 4,
1999, 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 169,883 6.4%
common 105 Leader Heights Road, Ste. #100 (2)(3)
York, PA 17403
No par value Robert J. Delsol, Director 795,634 30.3%
common 1425 E. Leimert Blvd., Ste. #400 (2)(4)(5)
Oakland, CA 94602
</TABLE>
(b) SECURITY OWNERSHIP OF MANAGEMENT. The stock beneficially owned by
all directors, nominees, and executive officers of the Company as of October 4,
1999, 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 169,883 6.4%
common 105 Leader Heights Road, Ste. #100 (2)(3)
York, PA 17403
No par value Robert J. Delsol, Director 795,634 30.3%
common 1425 E. Leimert Blvd., Ste. #400 (2)(4)(5)
Oakland, CA 94602
No par value Thomas B. Morgan, Director 114,510 4.4%
common 67 East Baffert Drive (2)(6)
Nogales, AZ 85621
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
No par value John A. Raycraft, Director 44,643 1.7%
common President and Chief Executive Officer (2)(7)
7776 S. Pointe Parkway West, #150
Phoenix, AZ 85044
No par value Robert M. Topol, Director 100,003 3.8%
common 825 Orienta Avenue (2)(8)
Mamaroneck, NY 10543
Officers, directors and nominees 1,236,647 45.7%
as a group (7 persons) (9)(10)
</TABLE>
(1) A person is deemed to be the beneficial owner of securities that can be
acquired within 60 days from October 4, 1999 through the exercise of any
option, warrant or right. Shares of Common Stock subject to options,
warrants or rights which are currently exercisable or exercisable within 60
days are deemed outstanding for computing the percentage of the person
holding such options, warrants or rights, but are not deemed outstanding
for computing the percentage of any other person. The amounts and
percentages are based upon 2,604,736 shares of Common Stock outstanding as
of July 31, 1999.
(2) A Director.
(3) Includes 30,000 shares which may be acquired within 60 days of the record
date upon exercise of stock options.
(4) Includes 20,000 shares which may be acquired within 60 days of the record
date upon exercise of stock options.
(5) Includes 395,722 shares owned by Pacific Steel Casting, a corporation of
which Mr. Delsol is President and a major shareholder; with shared voting
and investment power; 163,086 shares owned by Pacific Steel Casting Pension
Plan and 135,054 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.
(6) Includes 15,000 shares owned by spouse. Mr. Morgan has no voting or
investment power with regard to these shares.
(7) Includes 39,643 shares which may be acquired within 60 days of the record
date upon exercise of stock options.
(8) Includes 36,001 shares owned by spouse. Mr. Topol has no voting or
investment power with regard to these shares.
(9) 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.
(10) Includes an additional 11,974 exercisable options held by other officers
for a total of 101,617 shares which may be acquired within 60 days of the
record date upon exercise of stock options.
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, 1999 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 1999 $167,300 $26,248 $1,999(1) -0-
President/CEO 1998 159,800 28,144 1,999(1) -0-
1997 154,800 16,954 1,999(1) -0-
James D. Hyman 1999 $110,000 $15,229 -0- -0-
V.P/Sales and Marketing 1998 110,000 6,558 -0- -0-
1997 23,750 -0- -0- -0-
(1) Life insurance policy with spouse as beneficiary.
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
6
<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.
No nonstatutory options of the Company's Common Stock were granted to
directors during the fiscal year ended July 31, 1999. 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 were granted to directors
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; one 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. In 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 remained unchanged. The balance of the note on July
31, 1999 was $28,304.56. During August 1999 the loan was paid in full.
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 2000. 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.
7
<PAGE>
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 Proposal 2, proxies will be voted FOR such Proposal.
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 1999 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 15, 1999
