SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _____)
Filed by the registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Veterinary Centers of America, Inc.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
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(4) Proposed maximum aggregate value of transaction:
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[ ] 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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(2) Form, Schedule or Registration Statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
VETERINARY CENTERS OF AMERICA, INC.
-----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 29, 1998
-----------
TO OUR STOCKHOLDERS:
Notice is hereby given that the 1998 Annual Meeting of Stockholders of
Veterinary Centers of America, Inc. ("VCA" or the "Company") will be held
at VCA's offices at 3420 Ocean Park Boulevard, Suite 1000, Santa Monica,
California 90405, on July 29, 1998 at 10:00 a.m., Los Angeles time. The
Annual Meeting is being held for the following purposes:
1. To elect two Class III Directors to hold office for three years
and until their respective successors have been elected;
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of
Preferred Stock; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
Only stockholders of record of the Common Stock of the Company at the
close of business on June 2, 1998 are entitled to notice of and to vote
at the Annual Meeting and at any adjournments or postponements thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you
are urged to mark, sign and return the enclosed Proxy as promptly as
possible in the postage prepaid envelope enclosed for that purpose. Any
stockholder attending the Annual Meeting may vote in person, even though he
or she has returned a Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Arthur J. Antin
Arthur J. Antin
SECRETARY
Santa Monica, California 90405
June 29, 1998
IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE AS
PROMPTLY AS POSSIBLE. IF YOU DO ATTEND THE MEETING, YOU MAY, IF YOU
PREFER, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
VETERINARY CENTERS OF AMERICA, INC.
-----------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 29, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Veterinary Centers of America,
Inc., a Delaware corporation (the "Company"), for use at the 1998 Annual
Meeting of Stockholders (the "Annual Meeting") to be held at VCA's offices
at 3420 Ocean Park Boulevard, Suite 1000, Santa Monica, California 90405,
on July 29, 1998 at 10:00 a.m., Los Angeles time, and at any adjournments
or postponements thereof, for the purposes set forth herein and in the
attached Notice of Annual Meeting of Stockholders. Accompanying this Proxy
Statement is the Board of Directors' Proxy for the Annual Meeting, which
you may use to indicate your vote on the proposals described in this Proxy
Statement.
All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will
unless otherwise directed by the stockholder be voted in accordance with
the recommendations of the Board of Directors set forth in this Proxy
Statement. A stockholder may revoke his or her Proxy at any time before it
is voted either by filing with the Secretary of the Company, at its
principal executive offices, a written notice of revocation or a duly
executed proxy bearing a later date, or by attending the Annual Meeting and
expressing a desire to vote his or her shares in person.
The close of business on June 2, 1998 has been fixed as the record
date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting or at any adjournments or postponements of the
Annual Meeting. At the record date, 20,419,025 shares of common stock, par
value $.001 per share (the "Common Stock"), were outstanding held by 670
holders of record. The Common Stock is the only outstanding class of
securities of the Company entitled to vote at the Annual Meeting.
A stockholder is entitled to cast one vote for each share held of
record on the record date on all matters to be considered at the Annual
Meeting. The two nominees for election as Class III directors at the
Annual Meeting who receive the highest number of affirmative votes will be
elected. The amendment to the Certificate of Incorporation to increase the
number of authorized shares of Preferred Stock will require the affirmative
vote of a majority of the shares of the Company's outstanding Common Stock.
Abstentions and broker non-votes will be included in the number of shares
present at the Annual Meeting for the purpose of determining the presence
of a quorum. Abstentions will be counted toward the tabulation of votes
cast on proposals submitted to stockholders and will have the same effect
as negative votes, while broker non-votes will not be counted as votes cast
for or against such matters.
This Proxy Statement and the accompanying Proxy were mailed to
stockholders on or about July 2, 1998.
Page
<PAGE>
ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the Board of Directors
is divided into three classes. At each annual meeting of stockholders,
directors constituting one class are elected, each for a three-year term.
Two Class III directors will be elected at the Annual Meeting.
Unless otherwise instructed, the Proxy holders will vote the Proxies
received by them for the nominees named below. If any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting or any
postponement or adjournment thereof, the Proxies will be voted for such
other nominee(s) as shall be designated by the current Board of Directors
to fill any vacancy. The Company has no reason to believe that any nominee
will be unable or unwilling to serve if elected as a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE NOMINEES LISTED BELOW.
The Board of Directors proposes the election of the following nominees
as Class III directors:
Arthur J. Antin
John A. Heil
If elected, each nominee is expected to serve until the 2001 Annual
Meeting of Stockholders. The two nominees for election as Class III
directors at the Annual Meeting who receive the highest number of
affirmative votes will be elected.
Page 2
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES, CONTINUING DIRECTORS AND EXECUTIVE
OFFICERS
The following table sets forth certain information with respect to the
nominees, continuing directors and executive officers of the Company as of
March 31, 1998:
YEAR FIRST
ELECTED OR
APPOINTED
NAME AGE DIRECTOR PRINCIPAL OCCUPATION
- ---------------------------- --- ---------- --------------------
NOMINEES:
CLASS III DIRECTORS
(terms to expire in 2001)
Arthur J. Antin 51 1986 Chief Operating Officer,
Senior Vice President,
Secretary and Director
John A. Heil 44 1995 Director
CONTINUING DIRECTORS:
CLASS I DIRECTORS
(terms to expire in 2000)
Robert L. Antin(1) 48 1986 Chairman of the Board and
Chief Executive Officer
Richard Gillespie, M.D.(1)(2) 64 1995 Director
CLASS II DIRECTORS
(terms to expire in 1999)
Neil Tauber 47 1992 Senior Vice President of
Development and Director
John B. Chickering, Jr.(1)(2) 49 1988 Director
OTHER EXECUTIVE OFFICERS:
Tomas W. Fuller 40 Chief Financial Officer,
Vice President and
Assistant Secretary
Dawn R. Olsen 39 Vice President,
Controller
- --------------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
The executive officers of VCA are appointed by and serve at the
discretion of the Board of Directors. Robert L. Antin and Arthur J. Antin
are brothers. There are no other family relationships between any director
and/or any executive officer of VCA.
MR. ARTHUR J. ANTIN, a founder of VCA, has served as Chief Operating
Officer, Senior Vice President, Secretary and a Director of VCA since its
inception, and is currently responsible for managing animal hospital and
veterinary laboratory operations for VCA. From October 1983 to September
1986, Mr. Antin served as Director of Marketing/Investor Relations of
AlternaCare Corp. ("AlternaCare"), a publicly held company which owned,
operated and developed free-standing outpatient surgical centers.
AlternaCare was acquired by Medical Care International in 1988. At
AlternaCare, Mr. Antin developed and implemented marketing strategies for a
network of outpatient surgical centers. Mr. Antin received an MA degree in
Community Health from New York University and a Post Graduate Certificate
in Structured Programming and Business Application design from Columbia
University.
Page 3
<PAGE>
MR. JOHN A. HEIL, currently serves as the President - Heinz Specialty
Pet Food. Since 1978, Mr. Heil has served in various capacities with other
affiliates of the H.J. Heinz Company, including Vice President-Marketing
for Heinz Pet Products, General Manager, Marketing of Ore-Ida Foods, Inc.
and Vice President - Marketing and Sales of Star-Kist Foods, Inc. Mr. Heil
holds a BA degree in economics from Lycoming College.
MR. ROBERT L. ANTIN, a founder of VCA, has served as Chief Executive
Officer, President and Chairman of the Board of VCA since its inception.
Mr. Antin is responsible for directing all aspects of VCA's business. From
September 1983 until founding VCA, Mr. Antin was President, Chief Executive
Officer, a director and co-founder of AlternaCare. From July 1978 until
September 1983, Mr. Antin was employed as an officer by American Medical
International, Inc. ("AMI"), an owner and operator of health care
facilities. While at AMI, Mr. Antin initially served as Director of
Marketing of Professional Hospital Services, then as Director of New
Business Development responsible for non-hospital related acquisitions and
development, and most recently as a Vice President of AMI and President of
AMI Ambulatory Center, Inc., a subsidiary of AMI operating a chain of
ambulatory care centers. Mr. Antin received his MBA degree with a
certification in hospital and health administration from Cornell University
in 1975.
RICHARD GILLESPIE, M.D., was elected to the Board of Directors in June
1995. Dr. Gillespie is a private investor who has investments in several
companies in the United States. From 1983 to 1987, Dr. Gillespie was Vice
President, a director and co-founder of AlternaCare. Dr. Gillespie also
has served as a director for several other companies, including Lansinoh
Laboratories, Inc. and Geriatric Medical Center, and as the general partner
of Outpatient Diagnostics Center. Dr. Gillespie holds an MD degree from
the University of Tennessee College of Medicine.
MR. NEIL TAUBER, a founder of VCA, has served as Senior Vice President
of Development and a Director of VCA since its inception and is currently
responsible for identifying and effecting the acquisition of independent
animal hospitals and veterinary diagnostic laboratories. From 1984 to
1986, Mr. Tauber served as the Director of Corporate Development at
AlternaCare, where his responsibilities included the acquisition of new
businesses and syndication to hospitals and physician groups. From 1981 to
1984, Mr. Tauber served as Chief Operating Officer of MDM Services, a
wholly owned subsidiary of Mediq, a publicly held health care company,
where he was responsible for operating and developing a network of retail
dental centers and industrial medical clinics. Mr. Tauber holds an MBA
from Wagner College.
MR. JOHN B. CHICKERING, JR., a certified public accountant, currently
is a private investor and independent consultant. Mr. Chickering served as
the Vice President - Financial Administration for Warner Bros.
International Television Distribution until February 1996. Prior to his
employment at Warner Bros., Mr. Chickering served as a staff accountant at
KPMG Peat Marwick from August 1975 to June 1977. Mr. Chickering holds an
MBA degree with emphasis in accounting and finance from Cornell University.
MR. TOMAS W. FULLER joined VCA in January 1988 and served as Vice
President and Controller until November 1990 when he became Chief Financial
Officer. Prior to joining VCA, from 1980 to 1987, Mr. Fuller served as an
audit manager for Arthur Andersen LLP. Mr. Fuller holds a BA degree in
business/economics from the University of California at Los Angeles (UCLA).
MS. DAWN R. OLSEN joined VCA in January 1997 as Vice President,
Controller. Prior to joining VCA, from November 1993 to March 1996, Ms.
Olsen served as Senior Vice President, Controller of OpTel, Inc., a
privately held telecommunications company. From 1987 to 1993, Ms. Olsen
served as Assistant Controller and later as Vice President, Controller of
Qintex Entertainment, Inc., a publicly held television film distribution
and production company. From 1981 to 1987, Ms. Olsen served as an audit
manager for Arthur Andersen LLP. Ms. Olsen is a certified public
accountant and holds a BS degree from California State University,
Northridge.
BOARD MEETINGS AND COMMITTEES
The Board of Directors has an Audit Committee and a Compensation
Committee. The Audit Committee currently consists of Messrs. Robert L.
Antin, John B. Chickering, Jr. and Richard Gillespie, M.D. The Audit
Committee recommends the engagement of the Company's independent public
accountants, reviews the scope of the
Page 4
<PAGE>
audit to be conducted by such independent public accountants, and meets
periodically with the independent public accountants and the Chief
Financial Officer of the Company to review matters relating to the
Company's financial statements, the Company's accounting principles and its
system of internal accounting controls, and reports its recommendations as
to the approval of the financial statements of the Company to the Board of
Directors. Two meetings of the Audit Committee were held during the year
ended December 31, 1997.
The Compensation Committee currently consists of Messrs. John B.
Chickering, Jr. and Richard Gillespie, M.D. The Compensation Committee is
responsible for considering and making recommendations to the Board of
Directors regarding executive compensation and is responsible for
administering the Company's stock option and executive incentive
compensation plans. Two meetings of the Compensation Committee were held
during the year ended December 31, 1997.
The Board of Directors held four meetings during fiscal 1997. Each
director attended at least 75% of the meetings of the Board of Directors
and those committees on which he served in fiscal 1997.
COMPENSATION OF DIRECTORS
Directors of VCA who are not also employees of VCA receive $1,000 for
each meeting of the Board of Directors that they attend in person plus
reimbursement of all out-of-pocket expenses incurred in attending such
meetings. In addition, the non-employee directors, each were granted
options to purchase 10,000 shares of Common Stock upon appointment or
election to the Board of Directors. On the respective anniversaries of
their joining the Board of Directors, each of the non-employee directors,
if they retain such status, will receive an additional option to purchase
5,000 shares of Common Stock.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no interlocking relationships involving any of its
Compensation Committee members which would be required by the Securities
and Exchange Commission to be reported in this Proxy Statement, and no
officer or employee of the Company serves on its Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is charged with the responsibility of
administering all aspects of the Company's executive compensation programs.
The Compensation Committee, which is currently comprised of two
independent, non-employee directors, also grants all awards under and
otherwise administers the Company's stock incentive plans. Following
review and approval by the Compensation Committee, all determinations
pertaining to executive compensation, other than stock award matters, are
submitted to the full Board of Directors for approval.
COMPENSATION PHILOSOPHY
VCA's executive compensation program is designed to (1) provide levels
of compensation that integrate pay and incentive plans with VCA's strategic
goals so as to align the interests of executive management with the long-
term interests of VCA's stockholders; (2) attract, motivate and retain
executive talent capable of achieving the strategic business goals of VCA;
(3) recognize outstanding individual contributions; and (4) provide
compensation opportunities which are competitive to those offered by other
companies of similar size and performance. To achieve these goals, VCA's
executive compensation program consists of three main elements: (i) base
salary, (ii) annual cash bonus and (iii) long-term incentives. Each
element of compensation has an integral role in the total executive
compensation program.
BASE SALARY
Base salaries for executive officers are determined on an annual basis
by evaluating each executive officer's, including Mr. Robert Antin's,
position, duties, responsibilities, tenure, performance and potential
contribution to VCA. This determination also takes into account the
Committee's assessment of competitive compensation packages
Page 5
<PAGE>
for comparable positions in the Southern California market. The financial
performance of VCA is also considered. Finally, factors consistent with
VCA's overall compensation policy are taken into account.
Effective February 1, 1997, the Company entered into amendments (the
"Amended Agreements") to the employment agreements (the "Original
Agreements") between the Company and each of Robert L. Antin, Arthur J.
Antin and Neil Tauber. The Amended Agreements did not modify the annual
base salaries paid pursuant to the Original Agreements. Effective August
1, 1997, the base salaries of each of Robert Antin, Arthur Antin and Neil
Tauber were increased to $350,000, $250,000 and $190,000, respectively. See
"Employment Agreements."
VCA also provides to its employees (including Mr. Robert Antin and the
other officers) medical insurance and other customary employee benefits.
VCA pays term life insurance premiums for the benefit of Messrs. Robert
Antin, Arthur Antin, Neil Tauber and Tomas Fuller, which amounted in fiscal
1997 to approximately $70,000, $50,000, $35,000 and $38,000, respectively.
ANNUAL BONUSES
Historically, executive officers have been eligible for annual
incentive bonuses in amounts determined at the discretion of the Committee.
Commencing in fiscal 1995, the Committee determined to place greater weight
on long-term incentives represented by stock options than on the award of
annual cash bonuses. Consequently, with the concurrence of the executive
officers, VCA awarded no cash bonuses to the executive officers with
respect to fiscal 1997 and in accordance with the recommendations of the
compensation consulting firm retained by VCA to determine comparable
compensation packages provided to executives in similar companies (see
"Employment Agreements"), issued restricted stock bonuses to each executive
officer of VCA. The Committee intends that annual cash or stock bonuses be
part of VCA's long-term executive compensation. Historically, the
Committee has considered an award of an annual bonus subjectively, taking
into account factors such as the financial performance of VCA, increases in
stockholder value, the enhancement of VCA's image and reputation, expansion
into new markets, and the achievement of corporate goals and individual
performance. The Committee has attributed various weights to these factors
based upon their perceived relative importance to VCA at the time
compensation determinations were made.
LONG-TERM INCENTIVES
The Committee provides VCA's executive officers with long-term
incentive compensation through grants of stock options. The Committee is
responsible for selecting the individuals to whom grants should be made,
the timing of grants, the determination of the per share exercise price and
the number of shares subject to each option awarded. The Committee
believes that stock options provide VCA's executive officers with the
opportunity to purchase and maintain an equity interest in VCA and to share
in the appreciation of the value of the Common Stock. The Committee
believes that stock options directly motivate an executive to maximize
long-term stockholder value. The options incorporate vesting periods in
order to encourage key employees to continue in the employ of VCA. The
Committee considers the grant of each option (including those granted to
Mr. Robert Antin) subjectively, considering factors such as the individual
performance of executive officers and competitive compensation packages in
the industry. The Company has established option grants to the executive
officers that it believes are at an appropriate level to provide long-term
incentive to the executive officers over five years. The Company has
determined that these grants better align the interests of these officers
with the stockholders.
CHIEF EXECUTIVE OFFICER
Effective February 1, 1997, the Company and Mr. Robert Antin entered
into an amended and restated employment agreement (the "Amended Agreement")
(see "Employment Agreements"). Pursuant to the Amended Agreement, Mr.
Robert Antin's base salary initially remained at $265,000. In accordance
with the recommendations of the compensation consulting firm, effective
August 1, 1997, Mr. Robert Antin's base salary was increased to $350,000.
The size of the stock option grant set forth in the Amended Agreement
(options to purchase an aggregate of 900,000 shares of Common Stock) was
determined based upon Mr. Robert Antin's services to VCA and the financial
performance of VCA in the fiscal year ended December 31, 1996. The most
important criteria relied upon by the Compensation Committee was its
assessment on the leadership and vision provided by Mr. Antin in securing
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<PAGE>
substantial progress toward the achievement of VCA's long-term strategic goals.
In particular, the Compensation Committee took into account the expansion of
VCA's presence in the animal hospital business with the acquisition of Pets'
Rx, Inc. in June 1996 and The Pet Practice, Inc. in July 1996 which,
collectively, added approximately 75 hospitals to VCA's network of animal
hospitals, after certain consolidations and closures. In addition, VCA
significantly expanded its laboratory business in northern California and in
the midwestern states with the acquisition of Southwest Veterinary Diagnostics,
Inc. As a result of this strategy, VCA has established itself as the leader in
both pet care and diagnostic laboratory service to animal hospitals in the
United States.
OMNIBUS BUDGET RECONCILIATION ACT IMPLICATIONS FOR EXECUTIVE
COMPENSATION. Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), places a limit of $1,000,000 on the amount of
compensation that may be deducted by the Company in any year with respect
to each of the Company's five most highly paid executive officers. Certain
"performance-based" compensation that has been approved by the Company's
stockholders is not subject to the deduction limit. The Company's 1996
Stock Incentive Plan is qualified so that awards under the plan constitute
performance based compensation not subject to Section 162(m) of the Code.
All compensation paid to the Company's employees in fiscal 1997 will
be fully deductible. With respect to compensation to be paid to the
Company's senior executive officers in 1998 and in future years, in certain
instances such compensation may exceed $1,000,000. However, in order to
maintain flexibility in compensating executive officers in a manner
designed to promote varying corporate goals, the Compensation Committee has
not adopted a policy that all compensation must be deductible.
SUMMARY
The Committee believes that its executive compensation philosophy of
paying VCA's executive officers by means of base salaries, annual cash
bonuses and stock option grants, as described in this report, serves the
interests of VCA and VCA's stockholders.
Compensation Committee: John B. Chickering, Jr.
Richard Gillespie, M.D.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, as to the Chief Executive Officer and
as to each of the other four most highly compensated officers whose
compensation exceeded $100,000 during the last fiscal year (the "Named
Executive Officers"), information concerning all compensation paid for
services to the Company in all capacities for each of the three years ended
December 31 indicated below.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONGTERM
COMPENSATION
----------
ANNUAL NUMBER OF
FISCAL COMPENSATION SECURITIES
YEAR ENDED ----------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION(1) DECEMBER 31, SALARY BONUS(2) OPTIONS COMPENSATION(4)
- ------------------------------- ------------ -------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Robert L. Antin 1997 $296,385 $315,000 900,000 $16,500
Chairman of the Board and 1996 262,404 -- -- 8,800
Chief Executive Officer 1995 241,091 -- 280,000 8,800
Arthur J. Antin 1997 $211,523 $190,000 450,000 $15,700
Chief Operating Officer, 1996 187,039 -- -- 7,200
Senior Vice President and 1995 170,915 -- 140,000 7,200
Secretary
Neil Tauber 1997 $172,338 $104,738 360,000 $14,200
Senior Vice President of 1996 160,038 -- -- 7,200
Development 1995 144,038 -- 120,000 7,200
Tomas W. Fuller 1997 $152,246 $ 78,625 315,000 $12,000
Chief Financial Officer, 1996 134,038 -- -- 7,200
Vice President and Assistant 1995 101,214 -- 110,000 6,000
Secretary
Dawn R. Olsen 1997 $103,231 $ 16,500 15,000 $ --
Vice President and
Controller(5)
<FN>
(1) For a description of the employment contract between each officer
and the Company, see "Employment Agreements," below.
(2) Reflects the fair market value on January 2, 1998 of restricted
stock bonus awards granted in January 1998 for services rendered
during the fiscal year ended December 31, 1997.
(3) All numbers reflect the number of shares of Common Stock subject to
options granted during the fiscal year.
(4) Includes automobile expense.
(5) Ms. Olsen became an executive officer of the Company in January
1997.
</FN>
</TABLE>
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<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding the grant
of stock options made during the fiscal year ended December 31, 1997 to the
Named Executive Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED RATE OF
SECURITIES PERCENT OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED FOR OPTION TERM(1)
OPTION TO EMPLOYEES IN EXERCISE OR EXPIRATION ------------------------
NAME GRANTED(2) FISCAL YEAR(3) BASE PRICE(4) DATE 5% 10%
- ---------------- ---------- --------------- ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Antin 900,000 41.5% $10.25 02/03/07 $5,801,553 $14,702,274
Arthur J. Antin 450,000 20.7% $10.25 02/03/07 2,900,776 7,351,137
Neil Tauber 360,000 16.6% $10.25 02/03/07 2,320,621 5,880,910
Tomas W. Fuller 315,000 14.5% $10.25 02/03/07 2,030,544 5,145,796
Dawn R. Olsen 15,000 0.7% $10.25 02/03/07 96,693 245,038
<FN>
(1) The potential realizable value is based on the assumption that the
Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the expiration of the option
term. These amounts are calculated pursuant to applicable
requirements of the Commission and do not represent a forecast of the
future appreciation of the Company's Common Stock.
(2) Options granted to Messrs. Robert Antin, Arthur Antin, Neil Tauber
and Tomas Fuller vest in 60 equal monthly installments commencing on
July 2, 1997. Options granted to Ms. Olsen vest in four equal annual
installments commencing on February 3, 1998.
(3) Options covering an aggregate of 2,169,500 shares were granted to
eligible persons during the fiscal year ended December 31, 1997.
(4) The exercise price and tax withholding obligations related to
exercise may be paid by delivery of already owned shares, subject to
certain conditions.
</FN>
</TABLE>
STOCK OPTIONS HELD AT FISCAL YEAR END
The following table sets forth, for each of the Named Executive
Officers, certain information regarding the exercise of stock options
during the fiscal year ended December 31, 1997, the number of shares of
Common Stock underlying stock options held at fiscal year end and the value
of options held at fiscal year end based upon the last reported sales price
of the Common Stock on the Nasdaq Stock Market's National Market on
December 31, 1997 ($13.44 per share).
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF SECURITIES VALUE OF
ACQUIRED ON VALUE UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
EXERCISE REALIZED OPTIONS AT DECEMBER 31, 1997 OPTIONS AT DECEMBER 31, 1997
---------- ---------- ---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Antin 134,666 $ 758,597 333,889 871,111 $ 839,757 $2,646,806
Arthur J. Antin 48,000 346,000 244,444 435,556 1,131,122 1,323,403
Neil Tauber 14,666 120,995 241,556 348,444 1,291,428 1,058,722
Tomas W. Fuller -- -- 205,778 304,889 1,074,109 926,382
Dawn R. Olsen -- -- -- 15,000 -- 47,813
</TABLE>
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<PAGE>
EMPLOYMENT AGREEMENTS
On January 1, 1994, VCA entered into employment agreements (the
"Original Agreements") with each of Robert L. Antin, Arthur J. Antin, and
Neil Tauber, which were amended effective February 1, 1997 (the "Amended
Agreements"). Upon amendment to extend the term of each Original
Agreement, base salaries were not modified. Pursuant to the terms of the
Amended Agreements, the Compensation Committee of the Board retained a
compensation consulting firm to determine comparable compensation packages
provided to executives in similarly situated companies. In accordance with
the recommendations of the compensation consulting firm, the Compensation
Committee increased the base salaries of each of Robert Antin, Arthur Antin
and Neil Tauber to $350,000, $250,000 and $190,000, respectively. Pursuant
to the Amended Agreements each of Robert Antin, Arthur Antin and Neil
Tauber were granted options to purchase 900,000, 450,000 and 360,000 shares
of Common Stock of the Company, respectively. These grants of stock
options are expected to serve as long-term compensation for these officers
over the next five years. Accordingly, the Compensation Committee does not
expect to grant additional options to purchase Common Stock to these
officers during the next five years. In addition, the Board has determined
that executive officers of VCA may earn bonuses during each calendar year
based upon management achieving performance goals established by the
Compensation Committee of the Board of Directors on an annual basis.
If employment is terminated due to the death or disability of the
employee, the agreements provide that VCA will pay the affected employee
severance pay equal to five years' base salary. If employment is
terminated by VCA without cause or by the employee for cause, the affected
employee is entitled to severance pay in an amount equal to five years'
base salary plus an amount equal to five times (a) in the event no previous
bonus has been paid or is payable to the affected employee, 20% of the
affected employee's base salary, and (b) in the event at least one bonus
has been paid or is payable to the affected employee, the average bonus
based on all bonuses paid or payable to the affected employee. If
employment is terminated due to a change in control of VCA, the affected
employee is entitled to severance pay in an amount equal to five years'
base salary plus an amount equal to (a) in the event no previous bonus has
been paid or is payable to the affected employee, 20% of the affected
employee's salary, and (b) in the event at least one bonus has been paid or
is payable to the effected employee, the average bonus based on all bonuses
paid or payable to the affected employee. If employment is terminated due
to the scheduled expiration of an employment agreement, the affected
employee is entitled to severance pay in an amount equal to five years'
base salary. In each of these employment agreements, events constituting
"termination by the employee for cause" include (i) the willful breach of
any of the material obligations of VCA to the employee under his employment
agreement; (ii) the relocation of the chief executive offices of VCA
outside of Los Angeles County, California; or (iii) in the case of
employees who also serve as members of the Board, the failure of the
employee to be reelected to, or the removal of the employee from, the
Board. "Change of control" is defined in each of these agreements to
include (a) a consolidation or merger of VCA into another entity in which
VCA is not the continuing or surviving corporation or pursuant to which
shares of Common Stock of the Company would be converted into cash,
securities or other property, other than a merger of VCA in which the
stockholders of VCA immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger, (b) any sale, lease or other transfer of all
or a significant portion of the assets of VCA, (c) the approval by the
stockholders of VCA of any plan or proposal for the liquidation or
dissolution of VCA, (c) the approval by the stockholders of VCA of any plan
or proposal for the liquidation or dissolution of VCA, (d) the ownership by
any person, who at the effective date of the employment agreement owned
less than 10% of the Common Stock of the Company, of 20% or more of the
Common Stock of the Company or (e) during any consecutive two-year periods,
individuals who at the beginning of such period constitute the entire Board
of Directors shall cease for any reason to constitute a majority thereof
unless the election, or the nomination for election by the stockholders of
VCA, 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.
In April 1992, VCA entered into an agreement with Tomas W. Fuller,
Chief Financial Officer, Vice President and Assistant Secretary of VCA,
pursuant to which it agreed that if Mr. Fuller's employment is terminated
without cause (as defined above), VCA will pay to Mr. Fuller severance pay
equal to six months' salary.
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<PAGE>
STOCK INCENTIVE PLANS
The Company has in effect the 1987 Stock Incentive Plan, 1993 Stock
Incentive Plan, 1995 Stock Incentive Plan (collectively, the "Previous
Plans") and the 1996 Stock Incentive Plan (the "1996 Plan" and, together
with the Previous Plans, the "Plans"). The purpose of the Plans is to
advance the interests of VCA and its stockholders by strengthening VCA's
and its subsidiaries' ability to obtain and retain the services of the
types of employees, consultants, officers and directors who will contribute
to VCA's long term success and to provide incentives which are linked
directly to increases in stock value which will inure to the benefit of all
stockholders of VCA. At the date of this Proxy Statement, options to
purchase all 1,500,000 shares of Common Stock underlying the Previous Plans
have been granted. Subject to adjustment for stock splits, stock dividends
and other similar events, the total number of shares of Common Stock
reserved for issuance under the 1996 Plan is 1,500,000 shares.
The 1996 Plan currently is administered by the Compensation Committee
of the Board of Directors, each member of which is a non-employee director,
a Disinterested Person (as defined in Rule 16b-3 promulgated under the
Exchange Act), and an Outside Director (as defined in Section 162(m) of the
Code.) The 1996 Plan provides that options may be granted to non-employee
directors who are designated as eligible persons by the Board of Directors,
other non-employee directors, subject to certain limitations, officers
(including officers who are directors), employees and consultants of VCA
and its subsidiaries. The Compensation Committee will determine the
persons to be selected as optionees, the terms of vesting of options and
the number of shares of Common Stock to be subject to each option. In the
sole and absolute discretion of the Compensation Committee, such options
may be either "incentive stock options" within the meaning of Section 422
of the Code, or non-statutory options. In addition, no participant shall
be granted options with respect to more than 500,000 shares of Common Stock
during any one-year period. Non-employee directors shall be entitled to
receive the following: (i) the nondiscretionary grant of a non-statutory
option to purchase 10,000 shares of Common Stock upon the non-employee
director's election or appointment to the Board of Directors, and (ii) for
so long as the non-employee director remains on the Board of Directors, an
annual nondiscretionary grant on the date of the anniversary of joining the
Board of Directors of a non-statutory option to purchase 5,000 shares of
Common Stock. Unless designated as "eligible persons," non-employee directors
are not eligible for additional grants. All options granted to the non-
employee directors shall have an exercise price equal to 100% of the fair
market value of the shares of Common Stock on the date of grant and shall
vest in 12 equal monthly installments.
CERTAIN TRANSACTIONS WITH
DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the Amended Agreements between the Company and each of
Messrs. Robert Antin and Arthur Antin on January 22, 1997, both of these
officers executed a promissory note in favor of the Company in the amounts
of $459,399 and $86,000, respectively, as payment for the exercise price of
certain stock options. Each note bears interest at the midterm applicable
federal rate and all outstanding principal and interest is due and payable
on January 22, 2001. These officers executed a Security Agreement in favor
of the Company providing that the shares of Common Stock purchased upon
exercise of the options serve as collateral to secure each officer's
obligations under his respective note.
Mr. John A. Heil is a director of VCA and since 1978 has served in
various capacities with affiliates of the H.J. Heinz Company ("Heinz"). In
January 1993, VCA Specialty Pet Products, Inc., a wholly owned subsidiary
of VCA ("VCA Pet Products"), and HPP Specialty Pet Products, Inc., an
affiliate of Heinz ("HPP"), entered into a Partnership Agreement (the
"Partnership Agreement") to develop, manufacture and market a full-line of
premium pet food. Through 1996, VCA Pet Products, as majority owner and
managing general partner, exercised day-to-day operating control for all
aspects of the partnership. In 1997, the parties executed an amendment
(the "Amendment") to the Partnership Agreement pursuant to which HPP was
made managing partner and assumed the day-to-day control of the
partnership. In connection with the Amendment, VCA Pet Products, VCA and
HPP entered into certain consulting and management services agreements
whereby VCA Pet Products and VCA will provide certain consulting and
marketing services and continue to support the SELECT BALANCE and SELECT
CARE products in the veterinary marketplace. Mr. Heil did not participate in
the VCA Board of Directors' discussions regarding the Partnership Agreement,
the Amendment or the related documents and did not vote on any of these
matters. The disinterested
Page 11
<PAGE>
members of the VCA Board of Directors unanimously adopted the Partnership
Agreement, the Amendment and the related documents.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors, and persons who own more than ten
percent of a registered class of the Company's equity securities to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). Executive officers, directors and
greater-than-ten percent stockholders are required by SEC regulations to
furnish the Company with all Section 16(a) forms they file. Based solely
on its review of the copies of the forms received by it and written
representations from certain reporting persons that they have complied with
the relevant filing requirements, the Company believes that, during the
year ended December 31, 1997, all the Company's executive officers,
directors and greater-than-ten percent stockholders complied with all
Section 16(a) filing requirements except for the officers and directors
identified below, each of whom were required to report the identified
transaction earlier on a form 4: (i) Robert Antin, Chief Executive Officer
and Chairman of the Board, filed a form 5 reporting the exercise of options
covering an aggregate of 134,666 shares of Common Stock; (ii) Arthur Antin,
Chief Operating Officer, filed a form 5 reporting the exercise of options
covering an aggregate of 48,000 shares of Common Stock; (iii) Neil Tauber,
Senior Vice President of Development, filed a form 5 reporting the exercise
of options covering an aggregate of 14,666 shares of Common Stock; and (iv)
John Chickering, a director, filed a late form 5 reporting the exercise of
options covering an aggregate of 10,000 shares of Common Stock and the
subsequent sale of such stock.
Page 12
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the percentage change in cumulative
total stockholder return of the Company's Common Stock during the five-year
period from January 1, 1993 to December 31, 1997, compared with the
cumulative returns of the Nasdaq Stock Market (US Companies) Index and the
Russell 2000 Index. The Comparison assumes $100 was invested on January 1,
1993 in the Common Stock and in each of the foregoing indices. The stock
price performance on the following graph is not necessarily indicative of
future stock price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG VETERINARY CENTERS OF AMERICA, INC., THE NASDAQ STOCK
MARKET (U.S.) INDEX AND THE RUSSELL 2000 INDEX
[GRAPH]
<TABLE>
VCAI
CUMULATIVE TOTAL RETURN
<S> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------
12/92 12/92 12/93 12/94 12/95 12/96 12/97
VETERNINARY CTRS AMER INC. VCAI 100.00 100.00 128.85 259.62 169.23 206.73
NASDAQ STOCK MARKET (U.S.) INAS 100.00 114.80 112.21 158.70 195.19 239.53
RUSSELL 2000 IR20 100.00 118.83 116.66 149.79 174.50 213.65
</TABLE>
Page 13
<PAGE>
PROPOSAL TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF
INCORPORATION OF THE COMPANY
TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF
PREFERRED STOCK
THE AMENDMENT
In March 1998, the Board of Directors adopted resolutions
approving and recommending that the stockholders adopt an amendment to
Article Fourth of the Company's Certificate of Incorporation to increase
the authorized Preferred Stock from 1,000,000 shares to 2,000,000 shares.
The relative rights and limitations of the Preferred Stock would remain
unchanged under the amendment. The Preferred Stock does not have
preemptive rights.
At March 31, 1998, the Company had 983,333 shares of Preferred Stock
issued and outstanding. Of these shares, (a) 583,333 shares of Series A
Convertible Preferred Stock were issued in December 1992 and, in October
1997, were converted into 583,333 shares of Common Stock; and (b) 400,000
shares were designated Series B Preferred Stock and are reserved for
issuance upon exercise of the Company's Preferred Stock Purchase Rights
issued pursuant to the Company's Stockholders' Rights Plan. The Company
currently has 16,666 authorized and unissued shares of Preferred Stock.
The Board of Directors believes that the proposed increase in the
authorized shares of Preferred Stock is in the best interests of the
Company and its stockholders and believes that it is advisable to authorize
such additional shares and have them available in connection with the
possible future transactions, such as financings, strategic alliances,
corporate mergers, acquisitions, possible funding of new product programs
or businesses and other uses not presently determinable and as may be
deemed to be feasible and in the best interests of the Company. In
addition, the Board of Directors believes that it is desirable that the
Company have the flexibility to issue shares of Preferred Stock without
further stockholder action, except as otherwise provided by law.
If the Proposal is adopted, the amended portion of Article Fourth of
the Certificate of Incorporation will read as follows:
FOURTH: The total number of shares which the Corporation
shall have authority to issue is 62,000,000, consisting of
60,000,000 shares of common stock, par value $0.001 per
share (the "Common Stock") and 2,000,000 shares of preferred
stock, par value $0.001 per share (the "Preferred Stock").
The only changes in Article Fourth which will be effected if the
Proposal is approved are changes to the two numbers set forth in bold face
type above. Presently, Article Fourth provides that the shares of all
classes of stock which VCA may issue is 61,000,000, 60,000,000 of which are
shares of Common Stock and 1,000,000 of which are shares of Preferred
Stock. All other provisions of Article Fourth will remain unchanged.
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
The Board of Directors believes that approval of the Proposal is
essential for the growth and development of the Company. However, the
following should be considered by a stockholder in deciding how to vote
upon this Proposal.
The additional shares of Preferred Stock will have such designations,
preferences, conversion rights, cumulative, relative, participating,
optional or other rights, including voting rights, qualifications,
limitations or restrictions thereof as are determined by the Board of
Directors. Thus, if this proposal is approved, the Board of Directors
would be entitled to authorize the creation and issuance of up to an
additional 1,000,000 shares of Preferred Stock in one or more series with
such limitations and restrictions as may be determined in the Board's sole
discretion, without further authorization by the Company's stockholders.
Stockholders will not have the preemptive rights to subscribe for shares of
Preferred Stock.
Page 14
<PAGE>
It is not possible to determine the actual effect of the Preferred
Stock on the rights of the stockholders of the Company until the Board of
Directors determines the rights of the holders of a series of the Preferred
Stock. However, such effects might include (i) restrictions on the payment
of dividends to holders of the Common Stock; (ii) dilution of voting power
to the extent that the holders of shares of Preferred Stock are given
voting rights; (iii) dilution of the equity interests and voting power
if the Preferred Stock is convertible into Common Stock; and (iv)
restrictions upon any distribution of assets to the holders of the Common
Stock upon liquidation or dissolution and until the satisfaction of any
liquidation preference granted to the holders of Preferred Stock.
The Proposal is not the result of the Board's knowledge of any
specific effort to accumulate the Company's securities or to obtain control
of the Company by means of a merger, tender offer, proxy solicitation in
opposition to management or otherwise. The Company is not submitting the
Proposal to enable it to frustrate any efforts by another party to acquire
a controlling interest or to seek representation on the Board. The
submission of the Proposal is not a part of any plan by management to adopt
a series of amendments to the Certificate of Incorporation or Bylaws so as
to render the takeover of the Company more difficult.
The additional shares which the Board would be authorized to issue
upon approval of the Proposal, if so issued, would have a dilutive effect
upon the percentage of equity of the Company owned by present stockholders.
The issuance of such additional shares might be disadvantageous to current
stockholders in that any additional issuances would potentially reduce per
share dividends, if any. Stockholders should consider, however, that the
possible impact upon dividends is likely to be minimal in view of the fact
that the Company has never paid dividends, has never adopted any policy
with respect to the payment of dividends and does not intend to pay any
cash dividends in the foreseeable future. The Company instead intends to
retain earnings, if any, for use in financing growth and additional
business opportunities.
RECOMMENDATION AND VOTE
The Board has unanimously approved the amendment of the Certificate of
Incorporation to increase the authorized number of shares of Preferred
Stock. The affirmative vote of a majority of the outstanding shares of
Common Stock is required for the approval of the adoption of such amendment
to the Certificate of Incorporation. Unless marked otherwise, proxies
received will be voted for the adoption of such amendment to the
Certificate of Incorporation.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE AMENDMENT
TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES OF PREFERRED STOCK.
Page 15
<PAGE>
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth as of March 31, 1998 certain
information relating to the ownership of the Common Stock by (i) each
person known by the Company to be the beneficial owner of more than five
percent of the outstanding shares of the Company's Common Stock, (ii) each
of the Company's directors, (iii) each of the Named Executive Officers, and
(iv) all of the Company's executive officers and directors as a group.
Except as may be indicated in the footnotes to the table and subject to
applicable community property laws, each such person has the sole voting
and investment power with respect to the shares owned. The address of each
person listed is in care of the Company, 3420 Ocean Park Boulevard, Suite
1000, Santa Monica, California 90405, unless otherwise set forth below such
person's name.
NUMBER OF SHARES OF
COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED(1) PERCENT(1)
- --------------- ---------------------- ----------
Robert L. Antin(2) 1,245,538 6.0 %
Arthur J. Antin(3) 544,801 2.7
Neil Tauber(4) 357,541 1.7
Tomas W. Fuller(5) 262,331 1.3
Dawn R. Olsen(6) 5,621 *
John B. Chickering, Jr.(7) 2,500 *
Richard Gillespie, M.D.(8) 36,825 *
John A. Heil(9) 16,667 *
Directors and executive officers
as a group(8 persons)(10) 2,421,824 11.2 %
- --------------------
* Less than one percent.
(1) Under Rule 13d-3, certain shares may be deemed to be beneficially
owned by more than one person (if, for example, persons share the
power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of
an option) within 60 days of the date as of which the information is
provided. In computing the percentage ownership of any person, the
amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by
reason of these acquisition rights. As a result, the percentage of
outstanding shares of any person as shown in this table does not
necessarily reflect the person's actual ownership or voting power
with respect to the number of shares of Common Stock actually
outstanding at March 31, 1998.
(2) Includes (i) 101,866 shares held by Mr. Robert Antin's minor
children and (ii) 470,000 shares of Common Stock reserved for
issuance upon exercise of stock options which are or will become
exercisable on or prior to May 30, 1998.
(3) Includes (i) 50,000 shares which Mr. Arthur J. Antin holds as
custodian for Mr. Robert L. Antin's minor children under the
California Uniform Gifts to Minor's Act, (ii) 43,666 shares held by
Mr. Arthur J. Antin's minor children; and (iii) 311,000 shares of
Common Stock reserved for issuance upon exercise of stock options
which are or will become exercisable on or prior to May 30, 1998.
(4) Includes 296,000 shares of Common Stock reserved for issuance upon
exercise of stock options which are or will become exercisable on or
prior to May 30, 1998.
(5) Includes 253,417 shares of Common Stock reserved for issuance
upon exercise of stock options which are or will become exercisable
on or prior to May 30, 1998.
Page 16
<PAGE>
(6) Includes of 3,750 shares of Common Stock reserved for issuance upon
exercise of stock options which are or will become exercisable on or
prior to May 30, 1998.
(7) Consists of 2,500 shares of Common Stock reserved for issuance upon
exercise of stock options which are or will become exercisable on or
prior to May 30, 1998.
(8) Includes 22,500 shares of Common Stock reserved for issuance upon
exercise of stock options which are or will become exercisable on or
prior to May 30, 1998.
(9) Consists of 16,667 shares of Common Stock reserved for issuance upon
exercise of stock options which are or will become exercisable on or
prior to May 30, 1998.
(10) Includes 1,375,834 shares of Common Stock reserved for issuance upon
exercise of stock options which are or will become exercisable on or
prior to May 30, 1998.
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<PAGE>
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the next Annual
Meeting of Stockholders for inclusion in the Company's Proxy Statement and
Proxy form relating to such Annual Meeting must submit such proposal to the
Company at its principal executive offices by March 2, 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, were selected by
the Board of Directors to serve as independent public accountants of the
Company for the year ended December 31, 1997 and have been selected by the
Board of Directors to serve as independent auditors for the fiscal year
ending December 31, 1998. Representatives of Arthur Andersen LLP are
expected to be present at the Meeting, and will be afforded the opportunity
to make a statement if they desire to do so, and to be available to respond
to appropriate questions from stockholders.
SOLICITATION OF PROXIES
It is expected that the solicitation of proxies will be primarily by
mail. The cost of solicitation by management will be borne by the Company.
The Company will reimburse brokerage firms and other persons representing
beneficial owners of shares for their reasonable disbursements in
forwarding solicitation material to such beneficial owners. Proxies may
also be solicited by certain of the Company's directors and officers,
without additional compensation, personally or by mail, telephone, telegram
or otherwise for the purpose of soliciting such proxies.
ANNUAL REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WHICH HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31,
1997, WILL BE MADE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN
REQUEST TO VETERINARY CENTERS OF AMERICA, INC., CHIEF FINANCIAL OFFICER,
3420 OCEAN PARK BOULEVARD, SUITE 1000, SANTA MONICA, CALIFORNIA 90405.
Arthur J. Antin
SECRETARY
ON BEHALF OF THE BOARD OF DIRECTORS
Santa Monica, California 90405
June 29, 1998
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<PAGE>
VETERINARY CENTERS OF AMERICA, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned, a Stockholder of VETERINARY CENTERS OF AMERICA, INC.
a Delaware corporation, (the "Company") hereby appoints ROBERT L. ANTIN and
TOMAS W. FULLER, and each of them, the proxies of the undersigned, each
with full power of substitution, to attend, vote and act for the
undersigned at the Annual Meeting of Stockholders of the Company, to be
held on July 29, 1998, and any postponements or adjournments thereof, and
in connection herewith, to vote and represent all of the shares of the
Company which the undersigned would be entitled to vote, as follows:
The Board of Directors recommends a WITH vote on Proposal 1 and a FOR
vote on Proposal 2.
1. ELECTION OF DIRECTORS, as provided in the Company's Proxy
Statement:
___ WITH ___ WITHOUT Authority to vote for the
nominees listed below.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY FOR THE NOMINEE, LINE
THROUGH OR OTHERWISE STRIKE OUT NAME BELOW)
Arthur J. Antin John Heil
2. The approval of the amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of
Preferred Stock.
___ FOR ___ AGAINST ___ ABSTAIN
The undersigned hereby revokes any other proxy to vote at such
Meeting, and hereby ratifies and confirms all that said attorneys and
proxies, and each of them, may lawfully do by virtue hereof. WITH RESPECT
TO MATTERS NOT KNOWN AT THE TIME OF THE SOLICITATION HEREOF, SAID PROXIES
ARE AUTHORIZED TO VOTE IN ACCORDANCE WITH THEIR BEST JUDGMENT.
This Proxy will be voted in accordance with the instructions set forth
above. THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO VOTE FOR THE
ELECTION OF THE DIRECTORS NAMED, THE APPROVAL OF THE AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION AND AS SAID PROXY SHALL DEEM
ADVISABLE ON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING, UNLESS
OTHERWISE DIRECTED.
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<PAGE>
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated June 29, 1998 relating to the
Meeting.
Date: __________, 1998
___________________________________________
___________________________________________
Signature(s) of Stockholder(s)
(See Instructions Below)
The signature(s) hereon should correspond exactly with the
name(s) of the Stockholder(s) appearing on the Stock
Certificate. If stock is jointly held, all joint owners
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title
as such. If signer is a corporation, please sign the full
corporation name, and give title of signing officer.
THIS PROXY IS SOLICITED BY
THE BOARD OF DIRECTORS OF VETERINARY CENTERS OF AMERICA, INC.
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