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 Section 240.14a-11(c)
or Section 240.14a-12
LABONE, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Gregg R. Sadler - Secretary
10310 W. 84th Terrace
Lenexa, Kansas 66214
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6 (i)(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 14-a(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:*
4) Proposed maximum aggregate value of transaction:
*Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
LabOne, Inc.
10310 W. 84th Terrace
Lenexa, Kansas 66214
(913) 888-8397
--------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 9, 1996
--------------------------------------------------
The annual meeting of the stockholders of LabOne, Inc. (LabOne), a
Delaware corporation, will be held at the offices of LabOne, 10310 W. 84th
Terrace, Lenexa, Kansas, on Thursday, May 9, 1996, at 3:00 P.M., Central
Daylight Time, for the following purposes:
1. To elect 14 directors as set forth in the accompanying Proxy
Statement.
2. To ratify the appointment of KPMG Peat Marwick LLP as
independent certified public accountants of the corporation
and its subsidiary for the present fiscal year.
3. To transact such other business as may properly come before
the meeting and any adjournment thereof.
Stockholders of record at the close of business on March 11, 1996 are
entitled to vote at the meeting.
YOUR VOTE IS IMPORTANT. PLEASE DATE, SIGN AND RETURN THE ACCOMPANYING PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU INTEND TO BE PRESENT AT
THE MEETING. Sending in your Proxy now will not interfere with your rights to
attend the meeting or to vote your shares personally at the meeting if you
wish to do so.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
GREGG R. SADLER
Secretary
Dated: March 30, 1996
LabOne, Inc.
10310 W. 84th Terrace
Lenexa, Kansas 66214
(913) 888-8397
--------------------------------------------------
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is furnished to the stockholders of LabOne, Inc.
(LabOne), a Delaware corporation, in connection with solicitation of proxies
by the Board of Directors of LabOne for use at the Annual Meeting of
Stockholders to be held on Thursday, May 9, 1996, at 3:00 P.M., Central
Daylight Time, at the offices of LabOne, 10310 W. 84th Terrace, Lenexa,
Kansas, and at any adjournment thereof (the Annual Meeting). This Proxy
Statement, the Notice and the accompanying form of Proxy were first mailed
to the stockholders of LabOne on or about March 30, 1996.
A copy of LabOne's annual report for the fiscal year ended December 31,
1995, is enclosed herewith. Such report is not incorporated in the Proxy
Statement and is not to be deemed a part of the proxy soliciting material.
VOTING
Stockholders of record at the close of business on March 11, 1996, are
entitled to notice of and to vote at the meeting. There were 13,066,262
shares of common stock outstanding at the close of business on that date.
Stockholders are entitled to one vote per share on all matters submitted at
the Annual Meeting.
When a Proxy in the accompanying form is properly executed and returned,
the shares represented by the Proxy will be voted at the Annual Meeting in
accordance with the instructions thereon. If no instructions are specified,
such shares will be voted for (1) the nominees for directors named herein,
and (2) the ratification of the selection of the independent public
accountants. Abstentions and broker nonvotes are counted for purposes of
determining whether there is a quorum for the transaction of business at the
meeting. In tabulating the votes cast on proposals presented to stockholders,
abstentions are counted and broker nonvotes are not counted for purposes of
determining whether a proposal has been approved.
A stockholder may revoke his or her Proxy at any time before it is voted
by giving to the Secretary of LabOne written notice of revocation bearing a
later date than the Proxy, by submitting a later-dated Proxy, or by revoking
the Proxy and voting in person at the Annual Meeting. Attendance at the
Annual Meeting will not in and of itself constitute a revocation of a Proxy.
Any written notice revoking a Proxy should be sent to Mr. Gregg R. Sadler,
Secretary, LabOne, 10310 W. 84th Terrace, Lenexa, Kansas 66214.
-1-
PROPOSAL 1
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ELECTION OF DIRECTORS
INFORMATION CONCERNING NOMINEES
FOR ELECTION AS DIRECTORS
The stockholders will be asked to elect 14 directors at the Annual
Meeting. Each of the persons listed below will be nominated to hold office
for a one-year term and until his successor is elected and qualified, or until
his earlier death, resignation or removal. It is expected that each of such
nominees will be available for election, but in the event that any of them
should become unavailable, the persons named in the accompanying Proxy will
vote for a substitute nominee or nominees designated by the Board of
Directors. The terms of office of the present Directors will expire upon the
election of their successors at the Annual Meeting.
Principal Occupation,
Five-Year Employment
History and Other A Director
Name (Age) Directorships (1) of LabOne Since
- ------------- ----------------------------------- ---------------
Giorgio Balzer (56) Chairman of the Board of Directors 1990
and Chief Executive Officer of
Business Men's Assurance Company
of America (BMA), Kansas City,
Missouri, an insurance company.
Mr. Balzer is also the Chairman of
the Board of Directors and Chief
Executive Officer of the U.S.
Branch of Generali-Assicurazioni
Generali, S.p.A., Rome, Italy,
("Generali"), an international
insurance company. He is also a
director of Commerce Bancshares,
Inc. and Jones & Babson.(2)
Joseph H. Brewer, Infectious Disease Specialist, St. 1988
M.D. (44) Luke's Hospital, Kansas City, Missouri.
Dr. Brewer is also an Assistant
Clinical Professor of Medicine at
the University of Missouri-Kansas
City.
William D. Grant Chairman Emeritus of the Board of 1989
(79) Directors of Seafield Capital
Corporation (Seafield), formerly
BMA Corporation, Kansas City,
Missouri, a holding company which
owns 82% of the outstanding stock
of LabOne. Mr. Grant is also a
director of Boatmen's First
National Bank of Kansas City, N.A.(3)
-2-
W. Thomas Grant II Chairman of the Board of Directors, 1983
(45) President and Chief Executive
Officer of LabOne. Mr. Grant is
also Chairman of the Board of
Directors and Chief Executive
Officer of Seafield. He is a
director of Commerce Bancshares, Inc.,
Kansas City Power & Light Company and
Response Oncology, Inc.(4)
Thomas J. Hespe Executive Vice President - Sales 1995
(39) and Marketing of LabOne.(5)
P. Anthony Jacobs President, Chief Operating Officer 1987
(54) and a director of Seafield. Mr.
Jacobs is also a director of
Trenwick Group, Inc. and Response
Oncology, Inc.(6)
Neal L. Patterson Chairman, Chief Executive Officer 1987
(46) and a director of Cerner Corporation,
Kansas City, Missouri, a developer
of clinical and management
information systems that support
relationships between providers,
purchasers, payors and consumers
of health services.
Richard A. Rifkind, Chairman of the Sloan-Kettering 1987
M.D. (65) Institute, New York, New York, a
medical research institution.
Gregg R. Sadler, Executive Vice President - 1985
FSA (45) Administration and Secretary of
LabOne and President-Insurance
Laboratory Division of LabOne.(7)
Richard S. Schweiker Retired. Formerly President of 1995
(69) the American Council of Life
Insurance, Washington, D.C., a
life insurance trade association.
Mr. Schweiker is also a director
of Tenet Healthcare Corporation.
James R. Seward Executive Vice President, Chief 1995
(43) Financial Officer and a director
of Seafield. Mr. Seward is also
a director of Response Oncology,
Inc.(8)
Robert D. Thompson Executive Vice President - Finance, 1995
(34) Chief Financial Officer and
Treasurer.(9)
-3-
John E. Walker Retired. Formerly Managing 1984
(57) Director-Reinsurance of BMA.(10)
R. Dennis Wright, Member of Hillix, Brewer, Hoffhaus, 1987
Esq. (53) Whittaker & Wright, L.L.C., Kansas
City, Missouri and its Executive
Committee.(11)
- ---------------------
(1) Unless otherwise indicated, each Director has had the same
principal occupation during the last five years.
(2) Mr. Balzer was appointed Chairman of the Board and Chief Executive
Officer of BMA in 1990 and Chairman of the Board and Chief Executive
Officer of Generali in 1993. Prior to 1993 he served as President of
Generali.
(3) Mr. W. D. Grant was appointed Chairman Emeritus of Seafield in 1993.
Prior thereto he served as Chairman of the Board of Seafield. He is
the father of W. Thomas Grant II.
(4) Mr. W. Thomas Grant II was appointed Chairman of the Board of
Directors, President and Chief Executive Officer of LabOne in October
1995. He was appointed Chairman of the Board of Seafield in 1993.
Prior thereto he was President of Seafield and Chairman of the Board
of LabOne. He is the son of W. D. Grant.
(5) Mr. Hespe was appointed Executive Vice President - Sales and Marketing
in November 1995. From 1990 to 1995, Mr. Hespe was Executive Vice
President Sales and Marketing of Allscrips Pharmaceuticals, Vernon
Hills, Illinois, a distributor of managed care pharmaceutical products
and services with annual revenues of approximately $70 million.
Mr. Hespe's responsibilities with Allscrips included developing
strategies for market expansion and developing business with managed
care organizations, including hospitals, physicians, HMO organizations,
third party administrators, consulting firms, self-insured employers
and insurance companies.
(6) Mr. Jacobs was appointed President of Seafield in 1993 and Chief
Operating Officer in 1990. Prior to 1993 he served as Executive
Vice President of Seafield.
(7) Mr. Sadler was appointed President - Insurance Laboratory Division
of LabOne in August 1994. He was appointed Executive Vice
President-Administration of LabOne in 1993. Prior thereto he was
Executive Vice-President of LabOne. He has served as Secretary of
LabOne since 1988.
-4-
(8) Mr. Seward was appointed Executive Vice President of Seafield in
1993. He has served as Chief Financial Officer of Seafield since
1990.
(9) Mr. Thompson was appointed a Director of LabOne in May 1995. He
was appointed Executive Vice President - Finance, Chief Financial
Officer and Treasurer in December 1993. He was Vice President -
Business Development Planning from August 1993 to December 1993.
He was an independent financial consultant from 1992 to 1993.
From 1991 to 1992, he was Chief Financial Officer of MetWest, a
division of Unilab Corporation, a collection of five formerly
separate clinical testing laboratories in the Western United
States.
(10) Mr. Walker retired as Managing Director-Reinsurance of BMA in
January 1996. Mr. Walker also served as Vice Chairman of the
Board of Directors of LabOne prior to 1994.
(11) Hillix, Brewer, Hoffhaus, Whittaker & Wright, L.L.C., provides
legal services to LabOne, for which it was paid $404,639 in fees
during 1995.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
There were four meetings of the Board of Directors during 1995. The
Board of Directors has an Audit Committee, a Compensation Committee and an
Executive Committee. During 1995, the Audit Committee met three times and
the Compensation Committee and Executive Committee each met once. All
Directors attended 75 percent or more of the total number of all meetings
of the Board and of Committees of which they are members during 1995, with
the exception that Mr. Balzer was unable to attend the February 10 meetings
of the Board and Audit Committee.
The Audit Committee consists of Mr. Wright, Chairman, and Messrs.
Balzer, W. D. Grant, Patterson, Rifkind, Walker and Seward. The Audit
Committee reviews LabOne's financial statements with the independent
auditors, determines the effectiveness of the audit effort through meetings
with the independent auditors and officers of LabOne, inquires into the
effectiveness of LabOne's internal controls through discussions with
the independent auditors, reports to the Board on its activities and
recommendations, and recommends to the Board the appointment of independent
auditors for the ensuing year.
The Compensation Committee consists of Mr. W. Thomas Grant II,
Chairman, and Messrs. Brewer, Jacobs, Schweiker and Wright. The purpose
of the Compensation Committee is to oversee LabOne's compensation
structure, incentive plans and other employee benefits. The Compensation
Committee reviews and recommends adjustments to the officers' salary
structure. It approves cash awards to nonofficer employees and recommends
to the Board amounts to be set aside and cash awards to be paid to
officers under LabOne's cash bonus plan. The Committee recommends to the
Board compensation for nonofficer directors, monitors the administration
of employee benefit plans and reviews significant employee supplementary
pension or termination arrangements.
-5-
The Executive Committee consists of Mr. W. Thomas Grant II, Chairman,
and Messrs. Jacobs, Patterson, Seward and Sadler. The purpose of the
Executive Committee is to act on behalf of the Board of Directors and to
serve in an advisory capacity to management. The Executive Committee also
develops, recommends and reviews policy guidelines for all investments and
borrowings of LabOne and recommends outside investment management firms to
provide services to LabOne. The Executive Committee exercises all the
powers and authority of the Board in interim periods between meetings of
the Board, except as limited by Delaware law, and reports all of its actions
to the Board.
LabOne does not have a standing nominating committee of the Board
of Directors or a committee performing a similar function.
EXECUTIVE OFFICERS
<TABLE>
The executive officers of LabOne are as follows:
Five-Year An Executive
Employment of LabOne
Name (Age) Position History Since
<S> <C> <C> <C>
W. Thomas Grant II Chairman of the (1) 1995
(45) Board of Directors,
President and Chief
Executive Officer
Carl W. Ludvigsen Executive Vice President- Dr. Ludvigsen was appointed Executive 1989
Jr., M.D., Ph.D., Operations and Chief Vice President-Operations in December
J.D., FCAP, FCLM Operating Officer 1993. He was Executive Vice President
(43) from August 1993 to December 1993.
Prior thereto he was Senior Vice
President and Chief Pathologist.
Roger K. Betts Executive Vice President- Mr. Betts was appointed Executive Vice 1983
(53) Sales-Insurance President-Sales-Insurance Laboratory
Laboratory Division Division in August 1994. He was
Senior Vice President-Sales of the
Division from 1993 to 1994. Prior
thereto he was Senior Vice President-
Technical Sales & Support.
Gregg R. Sadler, Executive Vice President- (2) 1988
FSA (45) Administration and
Secretary and President-
Insurance Laboratory
Division
Thomas J. Hespe Executive Vice President- (3) 1995
(39) Sales and Marketing of
LabOne.
Robert D. Thompson Executive Vice President- (4) 1993
(34) Finance, Chief Financial
Officer and Treasurer
-6-
Robert F. Thompson Executive Vice President- Mr. Thompson was appointed Executive 1985
(60) Insurance Laboratory Vice President-Insurance Laboratory
Division Division in August 1995. Prior thereto
he was President of Lab One Canada Inc.
(formerly Head Office Reference
Laboratory Limited), LabOne's wholly-
owned Canadian subsidiary.
Kurt E. Gruenbacher, Vice President-Finance Mr. Gruenbacher was appointed Vice 1994
CPA, CMA (36) and Chief Accounting President-Finance and Chief Accounting
Officer Officer in May 1995. From 1994 to 1995
he was Corporate Controller. From 1993
to 1994 he was Director, Financial
Analysis and Budgets. Prior thereto he
was Manager, Financial Analysis and
Budgets.
</TABLE>
- --------------------------
(1) See footnote (4) on page 4 hereof for Mr. W. Thomas Grant II's
five-year employment history.
(2) See footnote (7) on page 4 hereof for Mr. Sadler's five-year
employment history.
(3) See footnote (5) on page 4 hereof for Mr. Hespe's five-year
employment history.
(4) See footnote (9) on page 5 hereof for Mr. Thompson's five-year
employment history.
PROPOSAL 2
----------
SELECTION OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP to examine
the accounts of LabOne and its subsidiary for the fiscal year ending
December 31, 1996.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS.
Representatives of KPMG Peat Marwick LLP are expected to be present
at the Annual Meeting to make any statement they may desire and to
respond to appropriate questions concerning the audit report.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning
compensation paid or accrued by LabOne to or on behalf of (i) the two persons
who served as its chief executive officer during 1995, (ii) the four most
highly compensated executive officers other than the chief executive officer
serving as of December 31, 1995 and (iii) one former executive officer, for
services rendered in all capacities to LabOne and its subsidiaries for each
of the last three completed fiscal years.
-7-
* * Long-Term *
* Annual Compensation * Compensation* All
Name and Fiscal* ------------------- * ------------* Other
Principal Position Year * *Stock Option *Compensation
------------------ ------* * Shares * ($) (1)
* Salary ($) Bonus ($)* Granted (#) *
* ---------- ---------* -----------*------------
W. Thomas Grant II 1995 0 0 0 0
Chairman of the 1994 0 0 0 0
Board of Direc- 1993 0 0 0 0
tors, President
and Chief Execu-
tive Officer since
November 1995
Bert H. Hood 1995 211,769 0 20,000 484,815(2)
Chairman of the 1994 200,641 0 0 26,667
Board of Direc- 1993 83,333 100,000 200,000 76,903(3)
tors, President
and Chief
Executive Officer
through October
1995
Carl W. Ludvigsen 1995 227,539 0 20,000 20,507
Jr. 1994 214,686 0 0 20,541
Executive Vice 1993 197,333 30,143 45,000 28,103
President-
Operations and Chief
Operating Officer
Robert D. Thompson 1995 157,173 50,000 70,000 19,330
Executive Vice 1994 125,401 0 0 13,039
President-Finance, 1993 45,059 30,263 80,000 27
Chief Financial
Officer and
Treasurer
Gregg R. Sadler 1995 146,308 0 24,000 20,038
Executive Vice 1994 126,404 0 0 20,486
President-Admin- 1993 128,800 23,164 6,000 22,651
istration and
Secretary, of
LabOne and Presi-
dent-Insurance
Laboratory
Division
Roger K. Betts 1995 120,816 59,636 0 20,460
Executive Vice 1994 102,014 13,331 10,000 16,505
President-Sales- 1993 90,200 22,812 5,000 14,404
Insurance Lab-
oratory Division
Daniel J. Roberts 1995 72,116 0 0 120,613(4)
Executive Vice 1994 125,401 0 0 13,039
President-Sales & 1993 45,059 30,263 80,000 2,893(5)
Marketing through
July 1995 (4)
-8-
(1) The amounts shown in this column consist of contributions by LabOne
to the accounts of the named executive officers under LabOne's defined
contribution pension plan, 50% matching contributions by LabOne to
the accounts of such persons under LabOne's profit-sharing 401(k)
plan and insurance premium payments by LabOne with respect to group
term life insurance for the benefit of such persons.
(2) Includes a lump sum severance payment of $464,308 made in connection
with the termination of Mr. Hood's employment under his Employment
Agreement with LabOne.
(3) A $60,000 signing bonus was paid to Mr. Hood upon the execution of
his Employment Agreement with LabOne in 1993 and $16,849 in
relocation expenses were paid in connection with Mr. Hood's move
to Lenexa, Kansas.
(4) Includes a lump sum severance payment of $110,096 made in connection
with the termination of Mr. Roberts's employment under his
Employment Agreement with LabOne.
(5) Payment of relocation expenses in connection with Mr. Robert's move
to Lenexa, Kansas.
OPTION GRANTS IN 1995
The following table provides information related to options granted to
each of the named executive officers during 1995
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation For
Ten-Year Option Term($)
% of Total --------------------------
Options Exercise At 0% At 5% At 10%
Granted Price Annual Annual Annual
Options Employees Per Expiration Growth Growth Growth
Name Granted(#)(1) in 1995 Share($) Date Rate Rate Rate
- --------------------- ------------ --------- -------- ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Bert H. Hood 20,000 4.0 14.125 02/10/05 0 177,663 450,232
Carl W. Ludvigsen Jr. 20,000 4.0 11.625 11/10/05 0 146,218 370,545
Robert D. Thompson 20,000 4.0 14.125 02/10/05 0 177,663 450,232
50,000 10.1 11.625 11/10/05 0 365,545 926,363
Gregg R. Sadler 24,000 4.8 14.125 02/10/05 0 213,195 540,279
(1) All options granted in 1995 to the named executive officers are
exercisable cumulatively in 20% annual installments commencing one
year from the date of grant, provided that the options shall become
fully exercisable if a change of control of LabOne (as defined in
the stock option agreements) shall occur.
-9-
AGGREGATE OPTION EXERCISES AND DECEMBER 31, 1995 OPTION VALUE TABLE
The following table provides certain information concerning the exercise
of stock options during 1995 by each of the named executive officers and the
number and value of unexercised options held by such persons at December 31,
1995.
</TABLE>
<TABLE>
<CAPTION> Number of Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1995(#) at December 31, 1995($)
Shares
Acquired on Value Options Options Options Options
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------- ----------- -------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
W. Thomas Grant II 0 0 27,431 0 133,726 0
Bert H. Hood 0 0 200,000 0 75,000 0
Carl W. Ludvigsen Jr. 0 0 64,979 24,021 121,921 66,201
Robert D. Thompson 0 0 80,000 70,000 30,000 168,750
Gregg R. Sadler 0 0 61,143 38,857 230,087 55,806
Roger K. Betts 0 0 11,440 14,160 32,196 11,455
Daniel J. Roberts 0 0 0 0 0 0
</TABLE>
COMPENSATION OF DIRECTORS
Directors who are not employees of LabOne or Seafield receive an
annual retainer fee of $5,000 in cash and a grant of a number of shares
of common stock of LabOne having a value equal to $10,000, plus $500 for
each Board and Committee meeting attended and reimbursement for reasonable
expenses in attending meetings.
Richard S. Schweiker, a Director of LabOne, has agreed to attend
national meetings of insurance underwriters on LabOne's behalf and to make
selected contacts in furtherance of LabOne's business, for which services
LabOne will pay Mr. Schweiker additional fees of $30,000 annually.
EMPLOYMENT AGREEMENTS
In 1993, LabOne entered into an Employment Agreement with Bert H. Hood,
formerly Chairman of the Board of Directors, President and Chief Executive
Officer of LabOne, providing for the employment of Mr. Hood for a three-year
term ending in 1996 and renewable annually thereafter for successive one-year
terms unless LabOne elected not to extend the Agreement. Mr. Hood's
compensation under the Agreement consisted of a signing bonus of $60,000, an
annual base salary of not less than $200,000, an annual incentive bonus to be
established by the Compensation Committee of the Board of Directors after
consultation with Mr. Hood, the purchase by LabOne of Mr. Hood's Texas
residence for a purchase price net to Mr. Hood equal to the average of the
fair market values of the residence established by two independent appraisers,
the granting of a nonqualified stock option to Mr. Hood for 200,000 shares
of LabOne common stock, and participation in LabOne's other fringe benefit
programs for executives. In the event of the termination of Mr. Hood's
employment without cause (as defined in the Agreement), the Agreement provided
for the payment to Mr. Hood of a lump sum severance payment equal to his base
salary due for the balance of the term of the Agreement, plus one year's
-10-
annual base salary. If a change of control of LabOne (as defined in the
Agreement) occurred at any time during which Mr. Hood was in LabOne's
full-time employment, and within one year after such a change in control
Mr. Hood's employment was terminated for any reason other than permanent
disability, death or normal retirement, the Agreement provided for the
payment to Mr. Hood of termination compensation equal to three times his
average annual compensation for the most recent five taxable years (subject
to certain limitations prescribed in the Internal Revenue Code) and for
the cancellation of any remaining term of the Agreement. Under the
Agreement, Mr. Hood agreed not to compete with LabOne for a period of
two years after the termination of his employment with LabOne.
On September 7, 1994 LabOne loaned $150,000 to Mr. Hood. Mr.
Hood delivered to LabOne his unsecured promissory note evidencing the
indebtedness, payable September 7, 1995. The note was renewed by LabOne
on September 7, 1995, with the new note being payable on the earlier of
September 7, 1996 or the termination of Mr. Hood's employment under his
Employment Agreement with LabOne. Interest accrued on the note at a rate
of 7.75% per annum, payable quarterly.
Mr. Hood resigned his position as Director and executive officer
of LabOne on October 24, 1995, at which time he was paid a lump sum
severance payment of $464,308 under his Employment Agreement with LabOne.
The outstanding principal balance of $150,000 on LabOne's loan to Mr. Hood
and accrued interest thereon was paid in full by deducting Mr. Hood's
indebtedness to LabOne from the lump sum severance payment due to Mr. Hood.
LabOne also has Employment Agreements with Robert D. Thompson, Carl W.
Ludvigsen Jr. and Gregg R. Sadler. Mr. Thompson's 1995 Agreement provides
for his employment for an eighteen month term ending in May 1997 and
renewable annually thereafter for successive one-year terms unless LabOne
elects not to extend the Agreement. Messrs. Ludvigsen's and Sadler's 1993
Agreements provide for their employment for two-year terms ending in 1995
and renewable annually thereafter for successive one-year terms unless
LabOne elects not to extend the Agreements. Mr. Thompson's Agreement
provides for compensation consisting of an annual base salary of $200,000,
a one-time 1995 bonus payment of $50,000, a stock option for 50,000 shares
of LabOne common stock granted in 1995, an annual incentive bonus
established by the Compensation Committee of the Board of Directors and
participation in LabOne's other executive fringe benefit programs. Messrs.
Ludvigsen's and Sadler's Agreements provide for compensation consisting of
annual base salaries of $214,000 to Mr. Ludvigsen and $126,000 to Mr.
Sadler, annual incentive bonuses established by the Compensation Committee
and participation in LabOne's other executive fringe benefit programs. Mr.
Ludvigsen also received in 1993 under his Agreement a stock option for
40,000 shares of LabOne common stock. In the event that LabOne terminates
any of the foregoing executive officers without cause (as defined in the
Agreements), LabOne will pay the terminated officer a lump sum severance
payment equal to his base salary for the balance of the term of the
Agreement, plus 50% of one year's annual base salary. If a change of
control of LabOne (as defined in the Agreements) occurs at any time during
which the executive officer is in LabOne's full-time employment, and
-11-
within one year after such a change in control the executive officer's
employment is terminated for any reason other than permanent disability,
death or normal retirement, LabOne will pay the officer as termination
compensation a lump sum amount equal to three times the officer's average
annual compensation for the most recent five taxable years (subject to
certain limitations prescribed in the Internal Revenue Code) and any
remaining term of the officer's Agreement shall be cancelled. Under each
Agreement, the executive officer agrees not to compete with LabOne for a
period of two years after the termination of his employment with LabOne.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. W. Thomas Grant II is Chairman of the Compensation Committee of
the Board of Directors of LabOne. Mr. Grant was appointed Chairman of
the Board of Directors, President and Chief Executive Officer of LabOne
in October 1995. Mr. Grant is also Chairman of the Board of Directors
and Chief Executive Officer of Seafield.
LabOne believes that Mr. Grant is qualified to act independently
as Chairman of the Compensation Committee of LabOne's Board of Directors
notwithstanding his positions as an executive officer of LabOne, as he
serves as an executive officer of LabOne without cash compensation.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
LabOne's executive compensation program is administered by the
Compensation Committee, a Committee of the Board of Directors composed
of the nonemployee Directors listed at the end of this report. As
noted earlier in this Proxy Statement, all issues pertaining to
executive compensation are reviewed by the Compensation Committee and
recommendations are submitted by the Committee to the full Board of
Directors for approval.
Compensation Philosophy
The philosophy governing executive compensation is based on a
belief that management and stockholders have a common goal -- increasing
the value of LabOne. The business strategy for achieving this goal is
expressed in LabOne's mission statement:
"LabOne is dedicated to maximizing the return on investment for
our stockholders . . . to providing the lowest-cost, highest-
quality laboratory testing services for our clients . . . to
providing a working environment that emphasizes accountability
for results and rewards employees based on their contribution
to the Company's success."
Three principal elements of executive compensation -- base salary,
annual incentive plan, and stock options -- are used to motivate and
reward the accomplishment of annual corporate objectives, reinforce a
strong orientation toward operating excellence, provide variability in
individual awards based on contributions to business results, and
maintain a competitive compensation package to attract, retain and
motivate individuals of the highest professional quality.
-12-
Base Salary
Salary ranges were developed based on a survey initially conducted
in 1986 by an independent consultant and updated in 1989. Base salaries
are targeted at the 60th to 65th percentile of pay for comparable
positions in "All Industrial Base Salaries" surveyed by the consultant.
In determining base salary levels, the Committee considers individual
performance evaluations for each executive officer. Measurements
related to LabOne's performance are not a significant factor in base
salary decisions since they are the sole factors in determining
incentive awards and the value of stock options.
Annual Incentive Plan
The Annual Incentive Plan is designed to motivate and reward
the accomplishment of targeted operating results. Prior to the
beginning of each fiscal year, the Committee establishes an earnings
per share goal under the Plan based upon the Committee's judgment of
reasonable earnings per share growth over the previous fiscal year.
No incentive payments are made if the minimum net earnings threshold
is not met. The size of the incentive pool increases pursuant to a
formula established by the Committee as net earnings increase over the
minimum threshold. The incentive pool is distributed in cash ratably
to designated officers and managers at year end according to a pre-
established weighting. The weighting is based upon senior management's
subjective evaluations of each individual's potential contribution to
the Company's financial and strategic goals for the year, and is
reviewed and approved by the Committee. No bonuses were paid under
the Plan for 1995.
Stock Options
The Compensation Committee, as well as the Board of Directors,
believes that significant stock ownership through stock options by key
employees and directors is a major incentive in aligning the interests
of employees and stockholders, because value is only provided if the
stock price increases, and because stock options have an effective long-
term reward and retention function.
The stockholders approved the Long-Term Incentive Plan in 1987
and increases in the number of shares which may be issued under the
Plan were approved by stockholders in 1991, 1994 and 1995. Under the
Plan, ten-year nonqualified stock options are granted to executive
officers and other key employees when they are hired or promoted into
eligible positions. These grants are made on a one-time basis with
vesting to occur over periods from three months to five years. In
addition to executive officers and employees, each nonemployee Director
of the Company has also received a ten-year nonqualified stock option
grant to vest over four years.
LabOne also has a Stock Plan for Nonemployee Directors under which
each nonemployee Director receives annual retainer fees of $5,000 in cash
and a grant of a number of shares of LabOne stock having a value equal to
$10,000. The purpose of the plan is to provide nonemployee Directors
with an additional proprietary interest in LabOne's success and progress.
-13-
Chief Executive Officer's Compensation
Mr. Bert H. Hood's compensation as Chief Executive Officer was
determined by negotiation of an Employment Agreement at the time of
his employment in 1993. See "Executive Compensation-Employment
Agreements" for a description of the agreement. A significant portion
of Mr. Hood's compensation under the Employment Agreement was
represented by stock options which tied his level of compensation to
LabOne's future stock performance. Upon the termination of Mr. Hood's
employment with LabOne in October 1995, Mr. Hood was paid a lump sum
severance payment of $464,308 under his Employment Agreement. No
annual incentive bonus was paid to Mr. Hood for 1995. All of the
stock options granted to Mr. Hood have expired unexercised.
Mr. W. Thomas Grant II, who was appointed as Chairman of the
Board of Directors, President and Chief Executive Officer of LabOne
in October 1995, serves in such capacities without cash compensation
from LabOne.
Deductibility Cap on Compensation Exceeding $1,000,000
The Committee does not believe that proposed Internal Revenue Service
regulations regarding nondeductibility of annual compensation in excess
of $1,000,000 will have any material impact upon LabOne given the current
salary and bonus levels of officers of the corporation, and given the
proposed treatment in the regulations of compensation under the corporation's
Long-Term Incentive Plan. However, the Committee will continue to consider
the effect of the new regulations upon LabOne's executive compensation
policies.
Submitted by the Compensation Committee
W. T. Grant II, Chairman
Joseph H. Brewer
P. Anthony Jacobs
Richard S. Schweiker
R. Dennis Wright
-14-
Comparison of Five Year Cumulative Total Return Among LabOne, Nasdaq
Composite Index, Peer group and Russell 2000 Index
THE GRAPHICAL FORM OF THE "PERFORMANCE CHART" IS REPRESENTED BY THE TABLE
BELOW. THE DATA POINTS IN THE TABLE ACCURATELY PRESENT THE INFORMATION FROM
THE PERFORMANCE CHART.
1990 1991 1992 1993 1994 1995
-----------------------------------------------------
LabOne, Inc. 100.00 158.71 150.05 211.68 184.15 184.93
Nasdaq US CRSP Index 100.00 160.56 186.87 214.51 209.69 296.30
Peer Group 100.00 225.86 160.61 125.25 112.44 83.31
Russell 2000 Index 100.00 146.05 172.94 205.64 201.89 259.31
The table assumes the investment at the close of business on December
31, 1990, of $100 in LabOne's common stock and in the portfolio represented
in each index, and assumes that all dividends were reinvested.
LabOne is in the process of changing from the Russell 2000 index to
a peer group index of nine testing laboratories (Bio-Reference Labs,
Laboratory Corp of America, Meris Labs, Oncormed, Pharmchem, Psychemedics,
RX Medical, Unilab and Universal Standard Medical). The Russell 2000 was
used to represent companies with similar market capitalizations. The Company
feels that the peer group index provides a more appropriate comparison.
-15-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows as of March 11, 1996, the total number of
shares of common stock of LabOne beneficially owned by persons known to
be beneficial owners of more than 5% of the outstanding stock.
Percentage of
Shares of LabOne Outstanding Shares
Beneficially Owned of LabOne Beneficially
Beneficial Owner March 11, 1996(1) Owned March 11, 1996
---------------- ----------------- --------------------
Seafield Capital Corporation, 10,712,200 82.0%
2600 Grand, Suite 500,
Kansas City, Missouri 64141
(1) Seafield has sole voting and investment power with respect to the
shares listed.
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows for each director, each of the executive
officers named in the Summary Compensation Table on page 8 hereof, and
all directors and executive officers of LabOne as a group, the total
number of shares of common stock of LabOne as of March 11, 1996, and
the total number of shares of common stock of Seafield as of February
15, 1996, beneficially owned by such persons.
Percentage of Percentage of
Outstanding Outstanding
Shares of Shares Shares of Shares of
LabOne Bene- of LabOne Seafield Seafield
ficially Beneficially Beneficially Beneficially
Beneficial Owner Owned(1)(2) Owned(6) Owned(1)(7) Owned(13)
- ---------------- --------- ----------- ----------- ----------
Giorgio Balzer 24,514 * 0 *
Roger K. Betts 17,756(3) * 0 *
Joseph H. Brewer, M.D. 25,514 * 0 *
William D. Grant 10,748,714(4) 82.1% 1,272,315(8) 19.7%
W. Thomas Grant II 10,741,431(4) 82.0% 156,141(9) 2.4%
Thomas J. Hespe 0 * 0 *
Bert H. Hood 0 * 0 *
P. Anthony Jacobs 10,737,700(4) 82.0% 49,867(10) *
Carl W. Ludvigsen 68,292(3) * 0 *
Jr., M.D.
Neal L. Patterson 24,514 * 0 *
Richard A. Rifkind, 25,417 * 0 *
M.D.
Daniel J. Roberts 516(3) * 0 *
-16-
Gregg R. Sadler, 83,791(3) * 266 *
FSA
Richard S. Schweiker 697 * 0 *
James R. Seward 10,719,600(4) 82.0% 44,940(11) *
Robert D. Thompson 85,630(3) * 0 *
John E. Walker 25,514 * 7,099(12) *
R. Dennis Wright, 24,714 * 0 *
Esq.
All directors and 11,358,763(3)(4) 83.2% 1,530,628(7) 23.6%
executive officers
of LabOne as a group
(20 persons)
(1) Unless otherwise indicated, each person has sole voting and
investment power with respect to the shares listed.
(2) Includes the following numbers of shares which such persons have
the right to acquire within 60 days pursuant to options granted
under the LabOne Long-Term Incentive Plan: Giorgio Balzer,
22,000 shares; Roger K. Betts, 15,600 shares; Joseph H. Brewer,
22,000 shares; William D. Grant, 22,000 shares; W. Thomas Grant II,
27,431 shares; P. Anthony Jacobs, 22,000 shares; Carl W. Ludvigsen
Jr., 67,000 shares; Neal L. Patterson, 22,000 shares; Richard A.
Rifkind, 22,000 shares; Gregg R. Sadler, 78,400 shares; James R.
Seward, 4,400 shares; Robert D. Thompson, 84,000 shares; John E.
Walker, 22,000 shares; R. Dennis Wright, 22,000 shares; and all
directors and executive officers as a group, 584,031 shares.
(3) Includes the following numbers of shares held in individually
directed accounts of the named persons under LabOne's 401(k)
profit-sharing plan, as to which each of such persons has sole
investment power only: Roger K. Betts, 2,156 shares; Carl W.
Ludvigsen Jr., 1,292 shares; Daniel J. Roberts, 516 shares;
Gregg R. Sadler, 3,891 shares; Robert D. Thompson, 1,630 shares;
and all directors and executive officers as a group, 20,034
shares.
(4) Includes 10,712,200 shares of LabOne common stock owned by
Seafield (see "Security Ownership of Certain Beneficial Owners"
above), as to which William D. Grant, W. Thomas Grant II,
P. Anthony Jacobs and James R. Seward each has shared voting
power and investment power as a member of the Board of
Directors of Seafield. Each of such persons disclaims
beneficial ownership of the LabOne shares owned by Seafield.
-17-
(5) Mr. Roberts filed with the Securities and Exchange Commission
six days late a Form 5 reporting on his exempt transactions
in LabOne common stock during 1995.
(6) For purposes of determining this percentage, the outstanding
shares of LabOne include shares which such persons have the
right to acquire within 60 days pursuant to options granted
under LabOne's Long-Term Incentive Plan.
(7) Includes the following numbers of shares which such persons
have the right to acquire within 60 days pursuant to options
granted under Seafield's 1984, 1989 and 1991 Stock Option and
Incentive Plans: W. D. Grant, 5,000 shares; W. Thomas Grant II,
5,000 shares; James R. Seward, 5,000 shares; and all directors
and executive officers of LabOne as a group, 15,000 shares.
(8) Includes 237,960 shares held by a family trust for which
William D. Grant serves as a co-trustee with UMB Bank, N.A.,
and in that capacity shares voting and investment power;
30,817 shares held by a family foundation of which William D.
Grant shares voting and investment power with UMB Bank, N.A.;
and 26,850 shares owned by the wife of William D. Grant, as
to which he disclaims beneficial ownership.
(9) Includes 30,293 shares held by W. Thomas Grant II as custodian
for his children; 45,000 shares held in a family trust for which
W. Thomas Grant II serves as a co-trustee with Laura Gamble, and
in that capacity shares voting and investment power; 11,585
shares owned by the wife of W. Thomas Grant II, as to which
he disclaims beneficial ownership; and 1,066 shares held in Mr.
Grant's account under the Seafield Capital Corporation 401(k)
Plan and Trust as of December 31, 1995 (based on a plan
statement of that date), as to which Mr. Grant shares
investment power, but has no voting power.
(10) Includes 1,000 shares owned by the wife and 200 shares owned
by the son of P. Anthony Jacobs, as to which he disclaims
beneficial ownership; and 1,786 shares held in Mr. Jacobs'
account under the Seafield Capital Corporation 401(k) Plan
and Trust, as to which Mr. Jacobs shares investment power,
but has no voting power.
(11) Includes 1,500 shares held in a family trust of which Mr.
Seward serves as a co-trustee with his mother, and in that
capacity shares voting and investment power; 640 shares held
in Mr. Seward's account under the Seafield Capital Corporation
40l(k) Plan and Trust, and 9,706 shares held by Mr. Seward
as a Plan Administrative Committee member of the Seafield
Capital Corporation 401(k) Plan and Trust, as to which he
shares voting and investment power with The Investors Services
Trust Company, the trustee of the Trust. The trustee is
obligated to grant voting rights to the Plan Administrative
Committee if requested by the Committee.
-18-
(12) Includes 5,278 shares held by the wife of John E. Walker, as
to which he disclaims beneficial ownership.
(13) For purposes of determining this percentage, the outstanding
shares of Seafield include shares which such persons have the
right to acquire within 60 days pursuant to options granted
under Seafield's 1984, 1989 and 1991 Stock Option and Incentive
Plans.
* Less than 1% of outstanding shares
RELATIONSHIP WITH SEAFIELD
As of March 11, 1996, Seafield beneficially owned 10,712,200
shares, or 82.0%, of the outstanding common stock of LabOne.
Seafield, by virtue of its ownership of a majority of LabOne's
common stock, has control of LabOne and is able to elect all of
the members of LabOne's Board of Directors. Seafield has permitted
LabOne to operate independently of Seafield in the past and intends
to do so in the future. The officers of LabOne have direct
responsibility for LabOne's management and operations. During 1995
none of the officers of LabOne other than W. Thomas Grant II were
employed in any capacity by Seafield or any of its subsidiaries.
Mr. Grant serves as Chairman of the Board of Directors, President
and Chief Executive Officer of LabOne and as Chairman of the
Board of Directors and Chief Executive Officer of Seafield.
In February 1995 LabOne was advised by Seafield that Seafield
had retained Alex. Brown & Sons Incorporated as financial advisor
to assist Seafield in considering strategic alternatives to maximize
Seafield shareholder value. LabOne was informed that one
alternative Seafield expects to pursue is a cash-option merger of
Seafield into LabOne, in which Seafield shareholders would have the
option of receiving cash as well as shares of LabOne. The merger
would most likely be preceded by Seafield's distribution to its
shareholders or other disposition by Seafield of its other assets.
Seafield's Board has also announced that it will consider other
business combination proposals that are presented to it. LabOne has
appointed a special committee of independent directors to consider
any merger or other proposal that may be presented to it by Seafield.
LabOne has been advised by Seafield that if a definitive merger
agreement is reached, it is anticipated that such a merger would
not occur until late 1996 because of the time required to complete
anticipated Seafield asset sales as well as shareholder and other
approvals.
-19-
During 1995, Seafield charged LabOne for certain services,
including advice and assistance provided by senior Seafield
officers, pursuant to a Services Agreement (the Services
Agreement). For the year ended December 31, 1995, the total
charges to LabOne by Seafield for these services were $75,223.
The Services Agreement is automatically renewable for successive
one-year terms until terminated. LabOne has its own personnel
responsible for operations, marketing, data processing, finance,
accounting and other support functions, and, except as provided for
in the Services Agreement, does not rely on Seafield for such
services. Under the Services Agreement, LabOne retains the services
of certain of Seafield's senior management to provide policy advice
to LabOne and to attend on behalf of LabOne various marketing and
client development functions in order to promote LabOne's laboratory
testing services. In consideration for these services, LabOne
pays Seafield a percentage of LabOne's annual sales equal to 0.20%
of sales up to $50 million, plus 0.125% of sales of $50 million up
to $100 million, plus 0.0625% of sales of $100 million or more.
LabOne also reimburses Seafield for all direct travel expenses
reasonably incurred by its employees in providing these services.
Seafield also makes certain administrative services available
to LabOne, including financial and investment advice, and the advice
and assistance of Seafield's corporate secretary. LabOne is under
no obligation to rely on Seafield for these services and is free to
obtain the services from any other source. To the extent that LabOne
utilizes these services, LabOne reimburses Seafield for costs incurred
in providing these services.
Seafield and LabOne are also parties to a Transition Agreement
(Transition Agreement) pursuant to which they have agreed to an
allocation of certain corporate opportunities and to mutual
indemnification for certain liabilities and expenses. Under the
Transition Agreement, so long as Seafield, directly or indirectly,
owns at least 20% of the outstanding voting shares of LabOne, Seafield
agrees to refer to LabOne any product, service, idea or other corporate
opportunity that is within the scope of LabOne's business. For
purposes of this Agreement, LabOne's business is defined as providing
laboratory testing services for the insurance and health care industry
and the development and implementation of data processing and
communications facilities for receiving test-related instructions
from clients, for conducting laboratory operations and for the collection,
use, storage, retrieval and transmission of test results data by both
LabOne and its clients.
In the event that a majority of the independent, disinterested
Directors of LabOne informs Seafield that LabOne does not intend to
pursue, or LabOne within a reasonable time fails to pursue, the
consideration and development of any product, service, idea or other
business opportunity referred to it by Seafield, Seafield is entitled
under the Transition Agreement to consider and develop the product,
service, idea or business opportunity for its own benefit. Under the
-20-
Agreement, LabOne also agrees to indemnify and hold harmless Seafield,
and any controlling person of Seafield, with respect to certain civil
liabilities, including any and all claims, losses, damages, liabilities,
costs and expenses that arise from or are based on operations of LabOne.
Similarly, Seafield agrees to indemnify and hold harmless LabOne and
any controlling person of LabOne (other than Seafield), with respect
to certain civil liabilities, including any and all claims, losses,
damages, liabilities, costs and expenses that arise from or are based
on the operations of Seafield (other than the business of LabOne).
STOCKHOLDER PROPOSALS
Any proper stockholder proposal intended to be presented for
action at the 1997 annual stockholders' meeting must be received by
LabOne by November 29, 1996, for inclusion in the proxy material
relating to such meeting.
GENERAL
The Board of Directors knows of no other matters which will be
presented for consideration at the Annual Meeting other than those
stated in the Notice of Annual Meeting which is part of this Proxy
Statement. If any other matter does properly come before the meeting,
it is intended that the persons named in the accompanying proxy will
vote thereon in accordance with their judgment.
In addition to the solicitation of proxies from stockholders
by mail, proxies may be solicited by LabOne's Directors, officers
and other employees, by personal interview, telephone or telegram.
Such persons will receive no additional compensation for such services.
LabOne requests that brokerage houses and other custodians, nominees
and fiduciaries forward the soliciting material to the beneficial
owners of the shares of LabOne common stock held of record by such
persons and will pay such brokers and other fiduciaries their
reasonable out-of-pocket expenses incurred in connection therewith.
All costs of solicitation, including the costs of preparing,
assembling and mailing this Proxy Statement and all papers which
now accompany or may hereafter supplement the same, will be borne
by LabOne.
By Order of the Board of Directors
GREGG R. SADLER
Secretary
March 30, 1996
-21-
Appendix A
Form of Proxy
LabOne, Inc.
10310 W. 84th Terrace, Lenexa, Kansas 66214
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS MAY 9, 1996
The undersigned hereby appoints W. Thomas Grant II and Gregg R. Sadler,
and each of them, as proxies for the undersigned at the Annual Meeting of
Stockholders of LabOne, Inc. at 10310 W. 84th Terrace, Lenexa, Kansas, on
May 9, 1996, at 3:00 p.m. C.D.T., and at any adjournment, to vote the shares
of common stock the undersigned would be entitled to vote, if personally
present, upon the election of Directors, the proposal stated on the reverse,
and any other matter brought before the meeting, all as set forth in the
March 30, 1996, Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "GRANTED" FOR ELECTION OF DIRECTORS
AND "FOR" PROPOSAL 2.
1. The election of the following nominees Giorgio Balzer
as Directors, as set forth in the Proxy Joseph H. Brewer, M.D.
Statement or a substitute nominee or William D. Grant
nominees designated by the Board of W. Thomas Grant II
Directors if any of them becomes Thomas J. Hespe
unavailable. P. Anthony Jacobs
Neal L. Patterson
/ / Authority GRANTED to vote for all nominees Richard A. Rifkind, M.D.
/ / Authority WITHHELD to vote for all nominees Gregg R. Sadler
James R. Seward
(INSTRUCTIONS: To withhold authority to Richard S. Schweiker
vote for any individual nominee, line Robert D. Thompson
through that nominee's name in the John E. Walker
list at right.) R. Dennis Wright
2. Ratification of the appointment of KPMG Peat Marwick LLP, as
independent certified public accountants.
/ / FOR / / AGAINST / / ABSTAIN
Unless otherwise marked, the Proxy will be deemed marked "GRANTED" on
Proposal 1 and marked "FOR" on Proposal 2 and voted accordingly.
This Proxy is solicited by the Board of Directors.
(Please sign, date and return this Proxy in the enclosed envelope.)
SIGNATURE DATED: , 1996
---------------------------------------------- --------
SIGNATURE DATED: , 1996
---------------------------------------------- --------
(SIGNATURE IF JOINTLY HELD)
(Note: Please sign exactly as name appears hereon. Executors, administrators,
trustees, etc., should so indicate when signing, giving full title as such.
If a signer is a corporation, execute in full corporate name by authorized
officer. If shares are held in the name of two or more persons, all should
sign.)
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