<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
SEAFIELD CAPITAL CORPORATION
- --------------------------------------------------------------------------------
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
SEAFIELD CAPITAL CORPORATION
2600 Grand Boulevard, Suite 500
Kansas City, Missouri 64108
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on May 14, 1997
------------------------
The Annual Meeting of Shareholders of Seafield Capital Corporation (the
"Company") will be held on Wednesday, May 14, 1997, at 10:00 a.m., local time at
the Westin Crown Center Hotel -- Shawnee Mission Room, located at One Pershing
Road Kansas City, Missouri, for the following purposes:
1. To elect four (4) directors, each to serve for a term of three (3)
years;
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the year ending December 31, 1997; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors of the Company has established April 4, 1997 as the
record date for the meeting. Shareholders of record at the close of business on
that day will be entitled to vote at the Annual Meeting and any adjournments
thereof.
You are cordially invited to attend this meeting. It is important that your
stock be represented at the meeting. Even if you plan to attend the meeting, you
are urged to complete, sign and return the enclosed proxy card as soon as
possible to ensure that your shares will be represented at the meeting. If you
attend the meeting, you may revoke your proxy by voting in person.
By Order of the Board of Directors,
[SIG]
W. T. GRANT II
CHAIRMAN OF THE BOARD
[SIG]
STEVEN K. FITZWATER
SECRETARY
April 21, 1997
<PAGE>
SEAFIELD CAPITAL CORPORATION
2600 Grand Boulevard, Suite 500
Kansas City, Missouri 64108
------------------------
PROXY STATEMENT
------------------
ANNUAL MEETING OF SHAREHOLDERS
to be held on May 14, 1997
------------------------
INTRODUCTION
This Proxy Statement is being furnished to the shareholders of Seafield
Capital Corporation, a Missouri corporation (the "Company"), in connection with
the solicitation of proxies by the Board of Directors of the Company for use at
the Annual Meeting of Shareholders of the Company to be held on Wednesday, May
14, 1997, and any adjournments thereof. The address of the principal executive
offices of the Company is 2600 Grand Boulevard, Suite 500, Kansas City, Missouri
64108. The telephone number at that address is (816) 842-7000. The distribution
to shareholders of this Proxy Statement, together with the accompanying proxy
materials, will commence on or about April 21, 1997.
At the Annual Meeting, shareholders will be asked to (i) elect four (4)
directors, each to serve for a term of three (3) years, and (ii) ratify the
appointment of KPMG Peat Marwick LLP as the Company's independent auditors for
the year ending December 31, 1997, all as set forth in the Proxy Statement.
VOTING AND PROXIES
The Board of Directors of the Company has established April 4, 1997 as the
record date for the meeting. Only shareholders of record at the close of
business on the record date are entitled to notice of and to vote at the Annual
Meeting, and any adjournments thereof. At the close of business on the record
date, the Company had outstanding 6,489,103 shares of Common Stock, par value
$1.00 per share ("Common Stock" or "Company Common Stock"). Each share of
Company Common Stock outstanding on the record date is entitled to one vote
except in the case of the election of directors wherein cumulative voting
applies. The presence in person or by proxy of the holders of record of a
majority of the shares of Company Common Stock entitled to a vote at the Annual
Meeting shall constitute a quorum for the transaction of business at the
meeting. Shares represented by a proxy which directs that the shares abstain
from voting or that a vote be withheld on a matter shall be deemed to be
represented at the Annual Meeting for quorum purposes.
Shares of Common Stock may be voted cumulatively in the election of
directors and directors are elected by plurality vote. See "ELECTION OF
DIRECTORS." The affirmative vote of the holders of a majority of the shares of
Common Stock present in person or by proxy at the Annual Meeting is required to
ratify the appointment of KPMG Peat Marwick LLP as the Company's independent
auditors for 1997. For purposes of such ratification, shares represented by a
proxy which directs that the shares abstain from voting shall be deemed voted
AGAINST such ratification. Broker non-votes will have no effect upon the
ratification of the appointment of the Company's independent auditor for 1997
and will not be counted as either FOR or AGAINST any other matter that may come
before the Annual Meeting.
All shares of Company Common Stock represented by a properly executed form
of proxy received by the Board of Directors pursuant to this solicitation will
be voted in accordance with the instructions, if any, given in such proxy. If a
form of proxy is duly executed but does not specify the manner in which the
shares should be voted on any matter or matters, the proxy will be voted for
each of the
1
<PAGE>
nominees for director herein referred to (see "ELECTION OF DIRECTORS") and
otherwise in accordance with the recommendations of the Company's Board of
Directors as set forth herein. A proxy may be revoked at any time prior to the
exercise thereof by a notice from the shareholder received in writing by the
Secretary of the Company, by submission of a duly executed form of proxy bearing
a later date, or by voting in person at the Annual Meeting.
The entire cost of this proxy solicitation will be borne by the Company. The
Company will make arrangements with brokerage firms, banks, nominees,
fiduciaries and other custodians to supply proxy materials to beneficial owners
of Company Common Stock and will reimburse them for their expenses in so doing.
In addition to solicitation by mail, proxies may be solicited by the directors,
officers and employees of the Company by personal interview, telegraph,
telephone or additional mailings. Such directors, officers and employees will
not be additionally compensated for such solicitation, but may be reimbursed for
expenses in connection therewith.
ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of ten directors
and is divided into three classes, two having three and one having four
directors. Proxies cannot be voted for a greater number of persons than those
nominated. Generally, one class of directors is elected annually, with each
director of that class elected for a term of three years.
The Board of Directors has nominated for election as directors of the
Company at the 1997 Annual Meeting four (4) nominees indicated below, each to
serve as a director until the Annual Meeting in the year 2000 and until his
successor is duly elected and qualified. All of the nominees presently are
members of the Board of Directors. Each nominee has indicated his willingness to
serve if elected and it is not anticipated that any nominee will become
unavailable for election. In the event that any nominee should become unwilling
or unable to serve as a director, it is intended that all duly executed proxies
will be voted for the election of such other person, if any, as is designated by
the Board of Directors. If no such person is designated as a replacement, the
Board of Directors will make an appropriate reduction in the number of directors
to be elected.
Under Missouri law and the Company's Articles of Incorporation, shares may
be voted cumulatively in the election of directors. Accordingly, a shareholder
is entitled to four votes for each share owned, one for each director to be
elected. A shareholder's votes may be cast equally among all nominees, may be
cast in favor of a single nominee or may be distributed among two or more
nominees.
The enclosed form of proxy provides a method for shareholders to withhold
authority to vote for any one or more of the nominees for director while
granting authority to vote for the remaining nominees. The names of all nominees
are listed on the proxy card. If you wish to grant authority to vote for all
nominees, check the box marked "FOR." If you wish to withhold authority to vote
for all nominees, check the box marked "WITHHELD." If you wish your shares to be
voted for some nominees and not for one or more of the others, check the box
marked "FOR" and indicate the name(s) of the nominee(s) for whom you are
withholding the authority to vote by writing the name(s) on the blank provided
immediately below the "FOR" box.
Unless authority to vote for one or more nominees is withheld, all votes
represented by a properly executed proxy will be cast equally among all of the
nominees listed below. If authority to vote for one or more nominees is
withheld, unless directions to the contrary are stated on the proxy card, votes
represented by a properly executed proxy will be cast equally among the
remaining nominees. Directors are elected by a plurality vote.
The following table sets forth as to each nominee, and as to each director
whose term continues after the 1997 Annual Meeting, such person's age, principal
occupation and business experience during the last five years, positions and
offices with the Company, certain other directorships held, involvement, if any,
in certain legal proceedings and the year such person first became a director.
2
<PAGE>
NOMINEES FOR TERMS TO EXPIRE IN 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTOR
NAME AGE OTHER DIRECTORSHIPS HELD (1) SINCE (2)
- -------------------------- --- --------------------------------------------------------------- ---------
<S> <C> <C> <C>
W.T. Grant II (3)(4) 46 Chief Executive Officer of the Company; Chairman of the Board 1980
since May 1993; President prior to May 1993. Since November
1995, Mr. Grant has also served as President, Chairman of the
Board and Chief Executive Officer of LabONE, Inc. Mr. Grant
also is a director of AMC Entertainment Inc., Commerce
Bancshares, Inc., Kansas City Power & Light Company, Response
Oncology, Inc. and SLH Corporation.
P. Anthony Jacobs (5) 55 President of the Company since May 1993 and Chief Operating 1987
Officer since 1990; Executive Vice President prior to May
1993. Mr. Jacobs also is a director of Trenwick Group, Inc.,
LabONE, Inc., Response Oncology, Inc. and SLH Corporation.
David W. Kemper 46 Chairman of the Board since 1991, President and director since 1982
1982 and Chief Executive Officer since 1986 of Commerce
Bancshares, Inc. (bank holding company) and Chairman and
Chief Executive Officer and director of Commerce Bank, N.A.
(St. Louis). Mr. Kemper also is a director of Ralcorp Hold-
ings, Inc., SLH Corporation, Wave Technologies International,
Inc. and Tower Properties Company.
Dennis R. Stephen 46 Chief Operating Officer since 1994, and prior to that Vice 1993
President -- Life Operations, of Tennessee Farmers Life
Insurance Companies (insurance).
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1999
<S> <C> <C> <C>
Lan C. Bentsen 49 Managing Partner of Remington Partners (Investments) since 1986
1995; Chief Financial Officer of Contera Resources (oil and
gas) since 1996; prior to its sale in 1995, Mr. Bentsen was
Chairman and Chief Executive Officer of Sovereign National
Management, Inc. (property management). Mr. Bentsen also is a
director of SLH Corporation.
W. D. Grant (3)(4) 80 Consultant to the Company since August 1990; Chairman of the 1948
Board until May 1993.Mr. Grant also is a director of LabONE,
Inc., SLH Corporation and NationsBank, N.A. (Midwest), the
successor to Boatmen's First National Bank of Kansas City.
John H. Robinson, Jr. 46 Managing Partner of Black & Veatch (design and construction). 1990
Mr. Robinson also is a director of Commerce Bancshares, Inc.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND DIRECTOR
NAME AGE OTHER DIRECTORSHIPS HELD (1) SINCE (2)
- -------------------------- --- --------------------------------------------------------------- ---------
DIRECTORS WHOSE TERMS EXPIRE IN 1998
<S> <C> <C> <C>
John C. Gamble (3) 51 Managing Partner of the law firm of Allen, Matkins, Leck, 1989
Gamble & Mallory, Irvine, California.
Michael E. Herman 55 Private investments since 1990 (partner Herman Family Trading 1991
Company); President of Kansas City Royals Baseball Team
(major league baseball) since 1993; Chairman of the Finance
Committee of Ewing Marion Kauffman Foundation since 1990. Mr.
Herman also is a director of Agouron Pharmaceuticals, Inc.,
Cerner Corporation, Janus Capital Corporation, SLH
Corporation, and NationsBank, N.A. (Midwest), the successor
to Boatmen's First National Bank of Kansas City.
James R. Seward (5) 44 Executive Vice President of the Company since May 1993; Senior 1990
Vice President from August 1990 to May 1993 and Chief
Financial Officer since 1990. Mr. Seward also is a director
of LabONE, Inc., Response Oncology, Inc. and SLH Corporation.
</TABLE>
- ------------------------
(1) Unless otherwise indicated, each nominee or continuing director who is not
an employee of the Company has held the position indicated as his principal
occupation for at least the past five years, and each nominee and continuing
director who is an officer of the Company has held his present position with
the Company, as his principal occupation for at least the past five years.
LabONE, Inc. and Response Oncology, Inc. are majority-owned subsidiaries of
the Company.
(2) The year shown is the year during which the individual named first became a
director of either the Company or its former subsidiary, Business Men's
Assurance Company of America ("BMA").
(3) Mr. Gamble is the brother-in-law of W. T. Grant II and the son-in-law of W.
D. Grant.
(4) W. T. Grant II is the son of W. D. Grant and the brother-in-law of Mr.
Gamble.
(5) Since March 3, 1997, Messrs. Seward and Jacobs have served as Chairman of
the Board and President/Chief Executive Officer, respectively, of SLH
Corporation, a newly created company which holds certain real estate,
energy, or miscellaneous assets and liabilities formerly owned by the
Company.
BOARD MEETINGS AND ATTENDANCE
During 1996, the Board of Directors held six meetings and took action by
unanimous consent on five occasions. Except for Mr. Bentsen, each of the
nominees and continuing directors attended at least 75% of the aggregate of all
meetings of the Board of Directors and all committees thereof on which he
served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's business is under the general management of the Board of
Directors. Under authority conveyed by the Company's Bylaws to create
committees, the Board of Directors has established, among others, an Executive
Committee, a Nominating and Compensation Committee and an Audit Committee. The
members of each such committee are elected by a majority of the full Board of
Directors.
To the extent provided in the resolution authorizing its establishment and,
except to the extent otherwise limited by law, the Executive Committee is
empowered to exercise all authority of the Board of Directors in the management
of the Company. The Executive Committee reports all actions taken
4
<PAGE>
to the full Board of Directors at its next meeting. The Executive Committee,
which is elected by a majority of the whole Board of Directors, presently
comprises W. T. Grant II, who is the chairman, John C. Gamble, W. D. Grant, P.
Anthony Jacobs, David W. Kemper and James R. Seward. The Executive Committee did
not meet in 1996.
The Nominating and Compensation Committee establishes the compensation of
senior management, approves salary increases for elected officers, administers
the 1984 and 1989 Stock Option and Incentive Plans, monitors the administration
of employee benefit plans and recommends appropriate changes thereto, and
reviews supplementary pension and termination arrangements of highly-paid
employees. It also considers, and recommends to the Board of Directors,
candidates to serve as directors or consulting directors of the Company and
persons to be designated as executive vice presidents or senior vice presidents
of the Company. The Committee will consider suggestions of candidates for
director made by a shareholder if submitted in writing by December 10th of the
year next preceding an annual shareholders' meeting, accompanied by (a)
appropriate biographical material, (b) a description of all arrangements or
understandings between such shareholder and each nominee and any other person or
persons pursuant to which the nomination or nominations are to be made by such
shareholder, (c) such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission ("SEC")
for a person nominated by the Board of Directors and (d) the consent of each
nominee to serve as a director of the Company, if elected. The Nominating and
Compensation Committee presently comprises David W. Kemper, who is the chairman,
Lan C. Bentsen, John C. Gamble, Michael E. Herman, John H. Robinson, Jr. and
Dennis R. Stephen. The Nominating and Compensation Committee held two meetings
in 1996.
The Audit Committee meets periodically with management, the internal
auditing staff and representatives of the Company's independent auditors to
assure that appropriate audits of the Company's affairs are being conducted. In
carrying out these responsibilities, the Audit Committee reviews the scope of
the internal and external audit activities and the results of the annual audit.
The Audit Committee is also responsible for recommending the public accounting
firm to serve as independent auditors for each year. Both the independent
auditors and the internal auditors have direct access to the Audit Committee to
discuss the results of their examinations, the adequacy of internal accounting
controls and the integrity of financial reporting. The Audit Committee comprises
John H. Robinson, Jr., who is the chairman, and David W. Kemper. The Audit
Committee held three meetings in 1996.
COMPENSATION OF DIRECTORS
GENERAL. Each director who is not a regularly compensated employee of the
Company ("Non-Employee Director") is paid a fee of $10,000 per annum for his
services as a director, plus a fee of $750 for each Board of Directors meeting
attended and, if a member of one or more committees, an additional fee of $500
(or $650 if such person is the chairman of the committee) for each committee
meeting attended. Non-Employee Directors also are provided $400,000 business
travel accident insurance coverage ($1,000,000 in the case of Mr. W. D. Grant,
who is also a consultant to the Company) for all business travel and are
reimbursed for expenses incurred in attending meetings. Non-Employee Directors
receive stock option awards under the Company's 1991 Non-Employee Directors'
Stock Option Plan upon becoming a director and are also entitled to participate
in the Stock Purchase Plan.
STOCK PURCHASE PLAN. The Seafield Capital Corporation Stock Purchase Plan
is a stock purchase plan which is open to all current Non-Employee Directors of
the Company who made a one-time irrevocable election to participate. Such
persons contribute an amount equal to all or part of their directors'
compensation, based upon such elections. In the case of any individual who first
becomes a Non-Employee Director in the future, all director compensation would
be contributed to the plan. Employees of the Company, and of participating
Company subsidiaries, who are designated by the Chairman of the Board, may also
participate by contributing the lesser of 2% of their salary or $30,000. The
Company matches each participant's contribution at a rate of 50%. Company Common
Stock is purchased on the open market each month and each participant receives
as many shares as his contribution, plus the Company's matching contribution,
will purchase. No employees presently
5
<PAGE>
are designated by the Chairman of the Board to participate and, accordingly,
none of the individuals or members of the group identified in the Summary
Compensation Table are presently eligible to participate in the Stock Purchase
Plan. For 1996, matching Company contributions for participating Non-Employee
Directors were as follows:
<TABLE>
<CAPTION>
MATCHING
COMPANY
NAME OF DIRECTOR CONTRIBUTIONS
- ------------------------------------ ------------------
<S> <C>
Lan C. Bentsen $ 7,025
W. D. Grant 7,125
Michael E. Herman 7,375
David W. Kemper 7,900
John H. Robinson, Jr. 8,350
Dennis R. Stephen 3,688
</TABLE>
1991 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN ("1991 DIRECTORS'
PLAN"). Under the 1991 Directors' Plan, each Non-Employee Director of the
Company is entitled to a one time grant of options to purchase 15,000 shares of
Company Common Stock at a price per share equal to 100% of the fair market value
of a share of Company Common Stock on the date the option is granted, with the
options becoming exercisable as follows: on and after the first anniversary of
the date of grant, 5,000 shares may be purchased; on and after the second
anniversary of the date of grant, 5,000 additional shares (a total of 10,000
shares) may be purchased and on and after the third anniversary of the date of
grant, 5,000 additional shares (a total of 15,000 shares) may be purchased;
subject, however, to the limitation that no option granted under the 1991
Directors' Plan may be exercised more than ten years after the date of grant.
Upon the termination of an option holder's term as a director, the option is
exercisable only as to those shares as to which the option could be exercised on
the date of termination. All rights under an option terminate to the extent
unexercised ninety (90) days after the date a person ceases to be a director, if
termination is for any reason other than death, and twelve (12) months after a
director's date of death.
Rights under an option also will terminate in the event of the liquidation
or dissolution of the Company or in the event of a merger or consolidation in
which the Company is not the surviving corporation. However, a holder will have
the right, immediately prior to such termination, to exercise an option in whole
or in part without regard to the foregoing installment exercise provisions.
The 1991 Directors' Plan specifies that each person who was a Non-Employee
Director on the date the Company's shareholders approved said Plan (i.e., May
15, 1991) would be granted an option as of the date of such approval. Each
person who is thereafter elected or appointed to serve as a Non-Employee
Director shall be entitled to receive an option as of the date such person is
first elected or appointed.
In accordance with the foregoing and pursuant to the 1991 Directors' Plan,
the following current Non-Employee Directors have been granted options for
15,000 shares of Common Stock. Those held by Dennis R. Stephen were granted
August 11, 1993, the date he was first appointed a director, and had an exercise
price of $32.00 per share. All of the other Non-Employee Director options were
granted May 15, 1991 and all had an exercise price of $21.50 per share:
<TABLE>
<CAPTION>
NAME
- --------------------------
<S> <C>
Lan C. Bentsen
John C. Gamble
Michael E. Herman
W. D. Grant
David W. Kemper
John H. Robinson, Jr.
Dennis R. Stephen
</TABLE>
6
<PAGE>
All options granted to Non-Employee Directors have been exercised. The
following exercises took place in 1996: Mr. Bentsen exercised 15,000 options at
a time when the market price for Company Common Stock was $37.00 per share; Mr.
W.D. Grant exercised 5,000 options at a time when the market price for Company
Common Stock was $34.75; Mr. Herman exercised 15,000 options at a time when the
market price for Company Common Stock was $38.50; Mr. Kemper exercised 5,000
options at a time when the market price for Company Common Stock was $35.00; Mr.
Robinson exercised 15,000 options at a time when the market price for Company
Common Stock was $37.00; and Mr. Stephen exercised 10,000 options and 5,000
options at times when the market price for Company Common Stock was $37.50 and
$37.00, respectively.
CONSULTING AGREEMENT. Mr. W. D. Grant serves as a consultant to the
Company, for which he was paid an annual retainer of $50,000 in 1996. In
addition, pursuant to his consulting agreement, the Company reimbursed Mr. Grant
$5,000 for costs incurred by him in 1996 for financial planning, investment
advisory and tax return preparation services.
CERTAIN TRANSACTIONS AND ARRANGEMENTS
In June 1992, the Company entered into an agreement with, among others, the
1990 purchaser of BMA stock, pursuant to which the Company sold the remaining 5%
of the stock and settled with the purchaser regarding a guaranty of BMA's
mortgage loan portfolio which the Company had given in connection with the 1990
transaction. As a part of the consideration for the June 1992 agreement, the
Company agreed to assume BMA's responsibility for future obligations to W. D.
Grant under his supplemental retirement agreement. The annual amount owing to
Mr. Grant under such agreement was approximately $130,000, payable to Mr. Grant
until death, and thereafter at a reduced level to his spouse until her death. In
January 1997, Mr. Grant and his wife agreed to allow the Company to prepay and
discharge its future obligations under the supplemental retirement agreement.
Pursuant thereto, the Company paid Mr. and Mrs. Grant $1,000,000 in satisfaction
of all future obligations.
SECURITY OWNERSHIP OF MANAGEMENT
The following table and notes thereto indicate the shares of Company Common
Stock and of the common stock of the Company's majority-owned subsidiaries,
LabONE, Inc. ("LabONE") and Response Oncology, Inc. ("ROIX"), known to the
Company to be beneficially owned as of February 28, 1997, by each director
(including the nominees for election as directors) of the Company, each of the
executive officers named in the Summary Compensation Table beginning on page 10,
and by all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON
SHARES OF COMPANY STOCK OF LABONE SHARES OF COMMON
COMMON STOCK BENEFICIALLY STOCK OF ROIX
BENEFICIALLY PERCENTAGE OF OWNED BENEFICIALLY
NAME OWNED (1)(11) CLASS (12) (1)(13)(14) OWNED (1)(15)(16)
- ---------------------- -------------------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Lan C. Bentsen........ 7,890(2) -- -0- -0-
Joseph T. Clark....... -0- -- -0- 231,640
John C. Gamble........ 102,668(3) 1.6% -0- -0-
W. D. Grant........... 1,087,414(4) 16.8% 37,075 -0-
W. T. Grant II........ 146,880(5) 2.3% 29,231 9,400
Michael E. Herman..... 7,270(6) -- -0- -0-
P. Anthony Jacobs..... 50,112(7) -- 23,500 13,400
David W. Kemper....... 2,638(8) -- -0- -0-
John H. Robinson,
Jr................... 9,559 -- -0- -0-
James R. Seward....... 36,779(9) -- 11,800 13,400
Dennis R. Stephen..... 2,662 -- -0- -0-
All directors,
nominees and
executive officers as
a group (12
persons)............. 1,419,606(10) 21.9% 101,611 267,840
</TABLE>
7
<PAGE>
- ------------------------
(1) A beneficial owner of a security includes a person who, directly or
indirectly, has or shares voting or investment power with respect to such
security. Voting power is the power to vote or direct the voting of the
security and investment power is the power to dispose or direct the
disposition of the security. Each person listed has stated that he, either
alone or with his spouse, has sole voting power and sole investment power
with respect to the shares shown as beneficially owned, except as otherwise
indicated.
(2) Includes 1,444 shares held by a family trust for the benefit of Mr.
Bentsen's children, as to which he disclaims beneficial ownership. Mr.
Bentsen is trustee with sole voting and investment powers.
(3) Includes 40,413 shares owned by Mr. Gamble's wife and 10,057 shares held by
his wife as custodian for her children, 45,000 shares held in a trust for
which his wife serves as co-trustee with W. T. Grant II, and in that
capacity shares voting and investment powers, and 12,291 shares held by his
wife's son. Mr. Gamble disclaims beneficial ownership of the foregoing
shares owned by his wife or over which she has trust powers.
(4) Includes 237,960 shares held by a family trust for which W. D. Grant serves
as a co-trustee, and in that capacity shares voting and investment powers
with UMB Bank, Kansas City, N.A.; includes 5,400 shares held by a family
foundation of which W. D. Grant shares voting and investment powers with UMB
Bank, Kansas City, N.A.; also includes 26,850 shares owned by the wife of W.
D. Grant, as to which he disclaims beneficial ownership.
(5) Includes 31,259 shares held by W. T. Grant II as custodian for his
children; includes 45,000 shares held in a family trust for which W. T.
Grant II serves as a co-trustee with Laura Gamble (John C. Gamble's wife)
and in that capacity shares voting and investment powers; also includes
11,870 shares owned by the wife of W. T. Grant II, as to which he disclaims
beneficial ownership.
(6) Includes 200 shares owned by the Herman Family Trading Company of which Mr.
Herman is a general partner and approximately 73% owner.
(7) Includes 1,000 shares owned by the wife of P. Anthony Jacobs as to which he
disclaims beneficial ownership.
(8) Includes 1,956 shares held in a family trust for which Mr. Kemper serves as
a trustee, and in that capacity shares voting power and has sole investment
power.
(9) Includes 1,500 shares held in a family trust for which Mr. Seward serves as
a co-trustee with his mother, and in that capacity shares voting and
investment powers.
(10) Includes an aggregate of 6,848 shares held under the Seafield Capital
Corporation 401(k) Plan and Trust (based upon the Plan statement as of
December 31, 1996) which are held in a trust of which The Investors Services
Trust Company is the trustee, but as to which the trustee is obligated to
grant voting rights to the Plan Administrative Committee, comprising
executive officers of the Company, if requested by said Committee.
(11) Includes as to each of the following individuals, the following numbers of
shares held in their respective accounts under the Seafield Capital
Corporation 401(k) Plan and Trust as of December 31, 1996 (based on a plan
statement of that date), as to which shares the individual shares investment
power but, except in the case of Mr. Seward who shares voting power as to
all 6,848 shares held in the 401(k) Plan, does not have voting power: W. T.
Grant II, 1,190 shares; P. Anthony Jacobs, 2,261 shares and James R. Seward,
665 shares (plus an additional 6,183 shares as to which he shares voting
power as a member of the 401(k) Plan Administrative Committee).
(12) The percentages represent the total number of shares of Common Stock shown
in the adjacent column divided by the number of issued and outstanding
shares of Common Stock as of February 28, 1997 (6,489,103 shares).
Percentages of less than one percent are omitted.
8
<PAGE>
(13) Shares of LabONE stock shown as beneficially owned include shares issuable
upon the exercise of stock options granted under the LabONE Long-Term
Incentive Plan that were exercisable on February 28, 1997 or that become
exercisable within 60 days thereafter, as follows: W. D. Grant, 22,000
shares; W. T. Grant II, 27,431 shares; P. Anthony Jacobs, 22,000 shares;
James R. Seward, 8,800 shares; and all directors and executive officers as a
group, 80,231 shares
(14) Percentages of shares beneficially owned are less than 1% for all directors
and executive officers individually and as a group; the shares shown as
beneficially owned do not include 10,712,200 shares of LabONE owned by the
Company as to which each director of the Company has shared voting and
investment power as a member of the Company's Board of Directors. Each Board
member disclaims beneficial ownership of the LabONE shares owned by
Seafield.
(15) Numbers of shares reflect a 1 for 5 reverse stock split, effective November
1995. Percentages of shares beneficially owned are less than 1% for all
directors and executive officers, except that Joseph T. Clark beneficially
owns 1.9% and all directors and executive officers as a group beneficially
own 2.2% of the number of ROIX shares of common stock outstanding at
February 28, 1997 (11,967,543), plus the number of shares of ROIX common
stock issuable upon the exercise of stock options held by Mr. Clark or
members of the group, as the case may be, which were exercisable on February
28, 1997 or that become exercisable within 60 days thereafter.
(16) Shares of ROIX common stock shown as beneficially owned include shares
issuable upon the exercise of ROIX stock options that were exercisable on
February 28, 1997 or that become exercisable within 60 days thereafter as
follows: Joseph T. Clark, 226,840 shares, W. T. Grant II, 9,000 shares; P.
Anthony Jacobs, 9,000 shares; James R. Seward, 9,000 shares; and all
directors and executive officers as a group, 253,840 shares.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company believes that its officers and directors have timely reported
all 1995 transactions in Company Common Stock required to be reported by Section
16(a) of the Securities Exchange Act of 1934.
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table indicates the shares of Company Common Stock
beneficially owned by the only persons (other than persons set forth in the
preceding table) known to the Company or its management as beneficially owning
more than five percent of the Company's Common Stock as of February 28, 1997.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS (1)
- --------------------------------------------- --------------------------------------------- -----------
<S> <C> <C>
American Century Companies, Inc. Total -- 426,300(2) 6.6%
4500 Main Street sole voting power -- 426,300
P. O. Box 418210 shared voting power -- -0-
Kansas City, Missouri 64141-9210 sole disposition power -- 426,300
shared disposition power -- -0-
</TABLE>
- ------------------------
(1) The percentage represents the total numbers of shares of Common Stock shown
in the adjacent column divided by the number of issued and outstanding
shares of Common Stock as of February 28, 1997.
(2) As reported in a Schedule 13G filing as of December 31, 1996.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received by the Company's Chief
Executive Officer and the only other executive officers holding office at
December 31, 1996 whose salary and bonus for 1996 aggregated $100,000 or more,
for services rendered in all capacities to the Company and its subsidiaries for
the last three years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
AWARDS
-------------
SECURITIES
ANNUAL COMPENSATION (1) UNDERLYING
------------------------ OPTIONS/SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(2) (#) COMPENSATION ($)(7)
- ------------------------------------------ --------- ----------- ----------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
W. T. Grant II 1996 $ 331,000 -0- 4,000(5) $ 25,227
Chairman of the Board and Chief 1995 329,167 -0- 800(5) 24,931
Executive Officer of the Company (3) 1994 320,000 -0- 3,200(5) 24,689
P. Anthony Jacobs 1996 249,590 -0- 4,000(5) 44,110
President and Chief Operating Officer of 1995 247,990 -0- 800(5) 42,220
the Company 1994 238,825 -0- 3,200(5) 39,557
James R. Seward 1996 147,290 -0- 4,000(5) 20,810
Executive Vice President and Chief 1995 146,346 -0- 22,800(6) 21,105
Financial Officer of the Company 1994 140,938 -0- 3,200(5) 21,106
Joseph T. Clark, 1996 205,231 50,800 25,000(5) 1,358
President and Chief Executive Officer of 1995 182,343 135,000 83,400(5) 1,102
Response Oncology, Inc.(4) 1994 155,000 -0- -0- 852
</TABLE>
- ------------------------
(1) Compensation deferred at the election of an executive officer, pursuant to
the Company's or its subsidiaries' 401(k) Plans, is included in the year
earned.
10
<PAGE>
(2) The Company has no cash bonus program. Response Oncology, Inc., which
employed Mr. Clark during the years indicated continues to have a cash bonus
program. Cash bonuses for services rendered have been listed in the year
earned; in some cases they were actually paid in the following year. Bonuses
were paid by the company with whom the individual is or was employed based
upon said company's operating results and the performance of the individual.
(3) Since November 1995, Mr. Grant has also served as President, Chairman of the
Board and Chief Executive officer of LabONE, Inc., an 82% owned subsidiary
of the Company; however, Mr. Grant receives cash compensation only from the
Company.
(4) Response Oncology, Inc. is 67% owned by the Company.
(5) Consists entirely of options to purchase shares of common stock of Response
Oncology, Inc. Numbers have been adjusted to reflect a 1 for 5 reverse stock
split effective November 1995.
(6) Consists of options to purchase 22,000 shares of common stock of LabONE,
Inc. and options to purchase 800 shares of Response Oncology, Inc.
(7) Includes the following contributions paid or accrued to the named
executive's accounts in the Company's, or one of its subsidiaries', as the
case may be, 401(k) Plan ("401(k)") and Money Purchase Pension Plan ("MPP"),
pursuant to a Supplemental Retirement Agreement ("SERP") with said executive
and for term life insurance for said executive:
<TABLE>
<CAPTION>
TERM LIFE
INS.
401(K) MPP SERP PREMIUMS
------------------------------- ------------------------------- ------------------------------- ---------
EXECUTIVE 1996 1995 1994 1996 1995 1994 1996 1995 1994 1996
- ------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WTG................ $ 4,750 $ 4,620 $ 4,620 $ 15,476 $ 15,562 $ 15,596 $ 2,914 $ 2,673 $ 2,453 $ 2,087
PAJ................ 4,750 4,620 4,620 15,476 15,562 15,596 22,309 20,473 17,836 1,575
JRS................ 4,750 4,620 4,620 15,132 15,562 15,596 -0- -0- -0- 928
JTC................ 1,250 1,000 750 -0- -0- -0- -0- -0- -0- 108
<CAPTION>
EXECUTIVE 1995 1994
- ------------------- --------- ---------
<S> <C> <C>
WTG................ $ 2,076 $ 2,020
PAJ................ 1,565 1,505
JRS................ 923 890
JTC................ 102 102
</TABLE>
The initials above are the initials for the following executive officers:
WTG -- W. Thomas Grant II; PAJ -- P. Anthony Jacobs; JRS -- James R. Seward; and
JTC -- Joseph T. Clark.
OPTION GRANTS IN LAST FISCAL YEAR
No Company options were granted in 1996 to any executive officer shown in
the Summary Compensation Table. The following table sets forth information
respecting options granted in 1996 by Response Oncology, Inc. ("ROIX"), a
67%-owned subsidiary of the Company, to ROIX's 1996 President and to Company
corporate officers who are members of the Board of Directors of ROIX. All ROIX
options granted to Company corporate officers are presently exercisable. Twenty
percent of the options granted to ROIX's President vested upon the date of grant
and the remainder vest in four equal installments on the first four
anniversaries of the date of grant. All such options granted in 1996 are
non-statutory options, receiving no special tax benefits, and have a term of ten
years. All such options are entitled to the benefit of cashless exercise
provisions of the option plans pursuant to which
11
<PAGE>
they were granted. None of the option grants in 1996 included tandem SARs,
performance units or other instruments, or any reload or tax reimbursement
features.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES PERCENT OF TOTAL EXERCISE ASSUMED ANNUAL RATES OF STOCK PRICE
UNDERLYING OPTIONS GRANTED OR BASE APPRECIATION FOR OPTION TERM(3)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION -----------------------------------
NAME GRANTED(#) FISCAL YEAR(2) ($/SH) DATE 0%($) 5%($) 10%($)
- ------------------------- ----------- ----------------- --------- ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
W. Thomas Grant II 1,000(1) .13% $ 12.50 01/01/06 -0- $ 7,861 $ 19,922
1,000(1) .13% $ 12.50 04/01/06 -0- 7,861 19,922
1,000(1) .13% $ 15.50 07/01/06 -0- 9,748 24,703
1,000(1) .13% $ 14.00 10/01/06 -0- 8,805 22,312
P. Anthony Jacobs 1,000(1) .13% $ 12.50 01/01/06 -0- $ 7,861 $ 19,922
1,000(1) .13% $ 12.50 04/01/06 -0- 7,861 19,922
1,000(1) .13% $ 15.50 07/01/06 -0- 9,748 24,703
1,000(1) .13% $ 14.00 10/01/06 -0- 8,805 22,312
James R. Seward 1,000(1) .13% $ 12.50 01/01/06 -0- $ 7,861 $ 19,922
1,000(1) .13% $ 12.50 04/01/06 -0- 7,861 19,922
1,000(1) .13% $ 15.50 07/01/06 -0- 9,748 24,703
1,000(1) .13% $ 14.00 10/01/06 -0- 8,805 22,312
Joseph T. Clark 25,000(1) 3.4% $ 12.50 04/19/06 $ 37,500 $ 257,613 $ 595,310
</TABLE>
- ------------------------
(1) Consists entirely of options to purchase shares of ROIX's common stock.
(2) Represents the percentages of options granted by ROIX in 1996.
(3) The dollar amounts under these columns are the result of calculations at the
0%, 5% and 10% rates set by SEC rules and are not intended to forecast
possible future appreciation, if any, in ROIX's stock prices.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
The following table provides information on option exercises in 1996 by the
named executive officers and the values of such officers' unexercised options at
December 31, 1996. Except as noted, the information pertains to options for
Company Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE- MONEY OPTIONS AT
SHARES OPTIONS AT YEAR-END (#) YEAR- END ($)(3)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. T. Grant II -0- -0- 5,000 -0- $ 42,650 $-0-
27,431(1) -0- 236,592(1) -0-
8,000(2) -0- 213(2) -0-
P. Anthony Jacobs 5,000 $36,875 -0- -0- -0- -0-
22,000(1) -0- 179,394(1) -0-
8,000(2) -0- 213(2) -0-
James R. Seward 5,000 $26,400 -0- -0- -0- -0-
4,400(1) 17,600(1) 19,250(1) 77,000(1)
8,000(2) -0- 213(2) -0-
Joseph T. Clark -0- -0- 221,840(2) 53,360(2) 302,150(2) -0-
</TABLE>
- ------------------------
(1) Consists entirely of options to purchase shares of common stock of LabONE,
Inc. ("LabONE") and the value (i.e. market value of underlying securities
minus option exercise price) at December 31, 1996 of such options.
(2) Consists entirely of options to purchase shares of common stock of Response
Oncology, Inc. ("ROIX") and the value (i.e. market value of underlying
securities minus option exercise price) at December 31, 1996 of such
options.
(3) The closing price on December 31, 1996 of Company Common Stock was $38.75;
of LabONE common stock was $18.50; and of ROIX common stock was $9.50.
EMPLOYMENT AGREEMENTS; TERMINATION OF EMPLOYMENT; CHANGE-OF-CONTROL COMPENSATION
ARRANGEMENTS; AND SEVERANCE PAYMENTS
THE COMPANY -- CHANGE-OF-CONTROL. The Company has entered into certain
Termination Compensation Agreements with Messrs. W. T. Grant II, P. Anthony
Jacobs and James R. Seward. Under these Agreements, each such officer could
receive, in the event his employment with the Company is terminated by the
Company (for a reason other than death, normal retirement or permanent
disability) or is terminated by him for good cause, within three years following
a change-of-control of the Company, a lump sum payment up to three times the
officer's average annual gross income for the five tax years preceding the year
of termination.
A "change-of-control" under the Termination Compensation Agreements
generally is deemed to have occurred if, as the result of (i) a tender offer or
other acquisition of securities of the Company any person, entity or group
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 25% or more of the voting power of outstanding Company
securities, or (ii) a contested election of directors, either the persons who
were directors of the Company immediately prior thereto, or new persons whose
nomination was approved by two-thirds of the directors in office immediately
prior thereto, cease to constitute a majority of the Board of Directors.
Had a "change-of-control" taken place on December 31, 1996, the following
executive officers identified in the Summary Compensation Table would have been
entitled to receive, had their employment ceased on that date, lump sum payments
in the following amounts under their Termination Compensation Agreements: W. T.
Grant II -- $3,227,939; P. Anthony Jacobs -- $1,939,054; and James R. Seward --
$1,274,183.
13
<PAGE>
THE COMPANY -- SEVERANCE PAYMENTS. The Company has entered into a certain
Severance Agreements with Messrs. W. T. Grant II, P. Anthony Jacobs and James R.
Seward. Under the Severance Agreements, each such officer would receive a lump
sum severance payment in an amount approximating 250% of his annual base salary
if his employment with the Company is terminated as a result of or within one
(1) year following a "fundamental change" in the Company. A "fundamental change"
would occur if, among other things, the Company were to liquidate, sell
substantially all of its assets, merge with an affiliate wherein the Company is
not the surviving company or engage in some other transaction the result of
which is the termination of the Company's corporate existence or the cessation
of its business, provided that any transaction which constitutes a
"change-of-control" for purposes of the Termination Compensation Agreements,
shall not constitute a "fundamental change" for purposes of the Severance
Agreements.
Had a transaction constituting a "fundamental change" in the Company
occurred December 31, 1996, the following Executive Officers identified in the
Summary Compensation Table would have been entitled to receive, had their
employment terminated on that date, lump sum payments in the following amounts
under their Severance Agreements: W. T. Grant II, $827,500; P. Anthony Jacobs,
$623,975; and James R. Seward, $368,225.
SUBSIDIARIES -- EMPLOYMENT AGREEMENTS; CHANGE-OF-CONTROL. Response
Oncology, Inc. ("ROIX") has an employment agreement, effective July 1, 1995 (the
"Employment Agreement") with Joseph T. Clark, its President and Chief Executive
Officer, who is named in the Summary Compensation Table as a 1996 executive
officer of the Company. The agreement is effective through 1998, subject to
automatic extension of the term from year to year unless either party gives
notice to the other of an intent not to extend. Mr. Clark's current base annual
compensation is $215,000, subject to review each year. Mr. Clark participates in
Response's bonus plan pursuant to which he could earn amounts up to 100% of his
base salary upon achievement by Response of certain predetermined objectives. In
the event his employment is terminated without cause, Mr. Clark is entitled to a
severance payment equal to 300% of his then current base salary (subject to
certain limitations prescribed in the Internal Revenue Code), if within one year
prior thereto there shall have been a change of control of ROIX (as defined in
the Employment Agreement); where no change of control has occurred, Mr. Clark is
generally entitled to continue receiving his base salary for the remaining term
of the Employment Agreement. In the Employment Agreement, Mr. Clark agreed to
refrain from disclosing any information respecting ROIX. He also agreed to
refrain from competing with ROIX during the term of his employment and, if he
voluntarily terminates his employment (other than following a notice from
Response of non-extension of the term) or is terminated by ROIX for cause, for
one year thereafter.
OTHER ARRANGEMENTS. In 1991 the Company's Board of Directors approved a
Supplemental Retirement Agreement with Mr. Jacobs pursuant to which he will be
entitled to either a lump sum payment or actuarially equivalent periodic
payments upon or commencing, respectively, with his retirement at or after age
55 or his earlier death, disability or involuntary termination of employment.
The amount of the lump sum payment is to be determined by assuming (i) the
hypothetical deposit into a fund of $12,000 on January 1 of each year,
commencing with 1991 and ending on the date of his retirement, death, disability
or involuntary termination, and (ii) that amounts deposited earn interest at 9%
per annum. The amount payable to Mr. Jacobs under the agreement, assuming his
retirement at age 55 (his current age), would be $110,766.
REPORT OF THE BOARD OF DIRECTORS -- COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Set forth below under the subheading "The Company -- Executive Compensation"
is the report of the Nominating and Compensation Committee ("Committee") of the
Company's Board of Directors on Executive Compensation. The only executive
officers shown in the Summary Compensation Table, commencing on page 10, to
which this report's discussion of compensation policies is applicable are the
Company's Chief Executive Officer and Messrs. Jacobs and Seward; the other
executive officer
14
<PAGE>
listed in the Summary Compensation Table is a corporate officer of a public
company subsidiary of the Company and is not a corporate officer of the Company.
The Nominating and Compensation Committee of the Company's Board of Directors
does not have responsibility for and in fact does not establish compensation
policy for officers of its publicly held subsidiaries; the Board of Directors of
each such subsidiary has its own compensation committee, which establishes
compensation policies for the executive officers of that subsidiary.
Under the subheading below entitled "Subsidiaries -- Executive
Compensation," there is a discussion of the compensation policies established by
the Compensation Committee of Response Oncology, Inc.'s Board of Directors
respecting Joseph T. Clark, its Chief Executive Officer during 1996 and one of
the Company's 1996 executive officers named in the Summary Compensation Table.
The discussion of compensation policies respecting corporate officers of
Response Oncology, Inc. ("Response") is made over the names of the Company's
entire Board of Directors. It constitutes a summary of the report of executive
compensation submitted to the Company's Board of Directors by the Compensation
Committee of Response. The Company's Board of Directors has taken no action with
respect to this report, nor has it participated in the preparation thereof.
THE COMPANY -- EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Nominating and Compensation Committee of the Board of Directors. The Committee
is composed of six Non-Employee Directors. Following review and approval by the
Nominating and Compensation Committee, all issues pertaining to executive
compensation are reported to the Board of Directors, and, except for awards
under the Company's stock based compensation plans, are approved by the Board of
Directors.
COMPENSATION POLICIES
GENERAL. In early 1995, the Company announced its intention to consider a
new corporate strategy, including the sale or distribution of certain asserts
and a possible merger with its 82%-owned subsidiary, LabONE, Inc. Since then the
Company's compensation program for executive officers has consisted only of base
salary and certain severance arrangements.
BASE SALARY COMPENSATION. The Committee's policy is to establish base
salaries for each of the Company's executive officers at approximately the
median of salaries for comparable positions at non-manufacturing general
industrial and financial services companies. In 1996, executive officer salaries
were based upon a 1990 survey of such comparable positions conducted by
compensation consultants, adjusted in 1995 for market changes since 1990 as
reported to the Company by such consultants. No base salary adjustment was made
in 1996 and none is expected in 1997.
No deliberate effort was made to include companies in the consultants'
surveys which are a part of either of the comparative indices used in the
Performance Graph (see page 19). The Company believes that it generally competes
for executive talent with companies similarly sized, from a market
capitalization and revenue standpoint, regardless of a company's industry or
line of business. Base salary for executive officers is not directly related to
Company performance.
Following the Company's 1995 announcement of an intention to consider a new
corporate strategy, the Committee approved severance arrangements for executive
officers who are corporate officers of the Company. These severance arrangements
were designed to complement the Company's then existing Termination Compensation
Agreements with executive officers and will apply only if an officer's
employment is terminated as a result of a "fundamental change" in the Company
which does not constitute a "change-of-control" as described on page 13 above.
Certain events which constitute a "fundamental change" and thus which could
cause severance payments to be due to executive officers and the magnitude of
those payments are discussed under "The Company -- Severance Payments" on page
14.
15
<PAGE>
CEO COMPENSATION
The compensation of the Company's CEO is determined in accordance with the
policies outlined above for all executive officers; he receives a base salary
targeted at the median of salaries paid for comparable positions at other
non-manufacturing general industrial and financial services companies. He
received a base salary increase effective March 1, 1995 to maintain a salary at
that median. That rate of base salary continued through 1996 and is expected to
continue in 1997. Measurements of Company performance are not a significant
factor in establishing the CEO's base salary.
OTHER COMPENSATION PLANS
During 1996 the Company had certain employee benefit plans in which the
executive officers were permitted to participate on the same terms as all other
employees who meet applicable eligibility criteria, subject to any legal
limitations on the amounts that may be contributed or the benefits that may be
payable under the plans. These plans consisted of a 401(k) Savings Plan and a
Money Purchase Pension Plan, both of which were defined contribution plans. Both
of said plans were terminated at December 31, 1996.
The Company has entered into supplemental retirement agreements ("SERP")
with certain highly paid executive officers to provide tax deferred accruals of
amounts proportionate to the benefits available to non-highly compensated
participants in the Company's plans (as adjusted based upon compensation
levels), but which exceed benefits permitted under the Company's plans due to
certain tax law limitations. Amounts accrued for the benefit of the Company's
CEO and other executive officers under SERPs are shown in footnote 7 to the
Summary Compensation Table on page 11. The SERPs are unfunded; amounts payable
represent unsecured liabilities of the Company subject to the claims of the
Company's other creditors.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code, which took effect January 1,
1994, generally disallows an income tax deduction to public companies for
compensation over $1 million annually paid to the Company's Chief Executive
Officer or to other executive officers named in the Summary Compensation Table.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. The Company believes that all of its
previously outstanding stock options and restricted stock awards respecting
Company Common Stock, as well as the stock option plans pursuant to which such
options and awards have been granted, qualified for an exemption from the
deduction limit. Based upon the current levels of non-performance based
compensation for the Company's executive officers and the fact that no stock
options or restricted stock awards are presently held by any of the Company's
executive officers, the deduction limit is not expected to have a material
impact on the Company in 1997. The Company does not intend to have any
performance-based compensation in the future, but if it does it would expect to
structure it in a manner that complies with Section 162(m) and the regulations
thereunder.
SUBMITTED BY NOMINATING AND COMPENSATION COMMITTEE
David W. Kemper, Chairman
Lan C. Bentsen
John C. Gamble
Michael E. Herman
John H. Robinson, Jr.
Dennis R. Stephen
16
<PAGE>
SUBSIDIARIES -- EXECUTIVE COMPENSATION
RESPONSE ONCOLOGY, INC.
During 1995, Mr. Clark was Chief Executive Officer of Response Oncology,
Inc. ("Response"), which is 67% owned by the Company. Mr. Clark is not a
corporate officer or employee of the Company. His compensation is determined
pursuant to Response's executive compensation program which is administered by
the Compensation Committee of Response's Board of Directors. While two Company
directors serve on Response's Compensation Committee, the Committee's membership
also includes three individuals who are not directors, officers or employees of
the Company; it operates independently of the Company's Board of Directors.
Policies respecting Response executive officer compensation as reported to the
Company's Board of Directors by Response's Compensation Committee, are set forth
below. Compensation decisions by Response's Compensation Committee are entirely
unrelated to the Company's performance, but they are, to the extent described
below, related to Response's performance.
The guiding principle of the Response Compensation Committee is to establish
a compensation program which aligns executive compensation with Response's
objectives, business strategies and financial and operational performance. In
connection with this principle, the Response Committee seeks to:
(1) attract and retain qualified executives in the highly competitive
health care industry who will play a significant role in the achievement of
Response's goals,
(2) create a performance oriented environment that rewards performance
with respect to the financial and operational goals of Response and which
takes into account industry-wide trends and performance levels, and
(3) reward executives for strategic management and the long-term
enhancement of Response's stockholder value.
Compensation for Response's key executives, including Mr. Clark, consists of
three elements: base salary and benefits, a performance-based annual cash bonus
and stock-based compensation. While the Response Compensation Committee seeks to
weigh each element separately, it is their collective value that is considered
in ensuring that Response's executive officers are compensated in a manner that
advances both the short-term and long-term interests of Response's stockholders.
The base salary for each Response executive officer, including Mr. Clark, is
set on the basis of the salary levels in effect for comparable positions in the
industry, adjusted for the executive's experience and performance level and
internal comparability considerations. Response monitors industry salary levels
with the assistance of a compensation consultant. For 1996, base salaries of
Response's executive officers, including Mr. Clark, were competitive with
salaries for individuals in comparable positions, based on an industry survey
commissioned by the Response Compensation Committee. Mr. Clark's base salary is
approximately 90% of the median of the range of salaries for comparable
positions as reflected in the 1996 industry survey data.
The performance-based annual cash bonus for each Response executive officer,
including Mr. Clark, is based upon pre-established financial goals as well as
the achievement of strategic objectives and milestones. The primary financial
goal set by the Response Compensation Committee has been achievement of target
levels of Response's earnings before interest and taxes ("EBIT"). An aggregate
incentive pool is determined by taking a percentage of EBIT and allocating it
among all participants in the Response bonus program. In establishing a minimum
level of EBIT, below which no bonuses are earned, the Response Compensation
Committee considers Response's performance for the prior fiscal year and the
amount of increase budgeted for the ensuing year. The percentage of EBIT
credited to the bonus pool may be increased if Response's actual EBIT exceeds
budgeted EBIT. Response executive officers may earn from 10% to 100% of base
salary through the bonus program.
17
<PAGE>
Achievement of Response strategic objectives and milestones may also be factors
considered in determining the amount of a Response executive officer's
performance-based annual cash bonus; such objectives and milestones may include
the opening of new IMPACT Centers, development of infrastructure necessary to
sustain Response's future growth, obtaining financing on favorable terms, or
more recently with diversification into the physician practice management
business, the number of physicians under management. For 1996, the Response
Compensation Committee placed significant emphasis on the efforts of certain
Response executive officers, including Mr. Clark, in repositioning Response from
a strategic and financial point of view for transition from being a direct
provider of specialized cancer care to management of physician practices
covering a full range of cancer care.
Pursuant to Response's various stock option and incentive plans, the
Response Compensation Committee periodically awards stock options to, among
others, Response's executive officers, including Mr. Clark. Pursuant to
Response's 1996 Stock Incentive Plan, the Response Compensation Committee has
the ability to award shares of restricted stock and stock appreciation rights
(both separate and in tandem with stock options) in addition to stock options,
which Response has granted under previously approved option plans. Such
stock-based compensation provides an incentive for each Response executive
officers to become a meaningful stockholder of Response and provides a mechanism
for aligning the interests of Response's executive officers with those of its
stockholders. The Response Compensation Committee believes that such stock
option grants are the foundation of its overall compensation packages, because
such grants recognize both productivity and profitability, while at the same
time giving recipients a vested long-term interest in the success of Response
through stock ownership.
------------------------
While the foregoing discussion of the compensation policies of Response is
made over the names of the Directors of Seafield Capital Corporation, in
compliance with SEC rules, it has not been prepared by the Company's Board of
Directors; as indicated above, the discussion of Response compensation policies
is a summary of a report submitted to the Company's Board of Directors by
Response's Compensation Committee.
SUBMITTED BY THE
SEAFIELD CAPITAL CORPORATION
BOARD OF DIRECTORS
W. T. Grant II, Chairman
Lan C. Bentsen
John C. Gamble
W. D. Grant
Michael E. Herman
P. Anthony Jacobs
David W. Kemper
John H. Robinson, Jr.
James R. Seward
Dennis R. Stephen
18
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
SEAFIELD CAPITAL CORPORATION, THE RUSSELL 2000 INDEX,
THE NASDAQ COMPOSITE INDEX, A LABONE PEER GROUP AND
THE S&P HEALTH CARE COMPOSITE INDEX
The graph below assumes $100 was invested 12/31/91 and dividends were
reinvested.
NOTE: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SEAFIELD CAPITAL
CORPORATION RUSSELL 2000 INDEX(1) NASDAQ COMPOSITE INDEX LABONE PEER GROUP(2)
<S> <C> <C> <C> <C>
1991 $100 $100 $100 $100
1992 127.65 116.36 115.45 63.12
1993 133.47 136.14 132.48 51.00
1994 133.02 131.81 128.24 45.78
1995 136.49 166.36 179.43 34.38
1996 160.81 190.91 220.18 13.29
<CAPTION>
S&P HEALTH CARE COMPOSITE INDEX(3)
<S> <C>
1991 $100
1992 86.81
1993 76.65
1994 86.55
1995 129.04
1996 152.89
</TABLE>
<TABLE>
<CAPTION>
YEAR END DATA 1991 1992 1993 1994 1995 1996
- ----------------------------------------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Seafield Capital Corporation $ 100 $ 127.65 $ 133.47 $ 133.02 $ 136.49 $ 160.81
Russell 2000 Index (1) 100 116.36 136.14 131.81 166.36 190.91
NASDAQ Composite Index 100 115.45 132.48 128.24 179.43 220.18
LabONE Peer Group (2) 100 63.12 51.00 45.78 34.38 13.29
S&P Health Care Composite Index (3) 100 86.81 76.65 86.55 129.04 152.89
</TABLE>
- ------------------------
(1) The Russell 2000 Index is an index of companies the mean of whose market
capitalizations approximates that of the Company. The Company believes that
an index of companies with similar market capitalizations provides a good
basis for comparing total shareholder returns. Because the Company is a
holding company with subsidiaries operating in difficult industries, the
Company believes that it cannot reasonably identify a peer group of
companies for comparison. The LabONE Peer Group is believed to constitute
some basis for comparison because of the importance of shareholder return on
LabONE, Inc.'s stock to the total shareholder return on Company Common
Stock. However, even a comparison of LabONE, Inc. to the LabONE Peer Group
19
<PAGE>
is suspect because the universe of publicly traded, reporting companies does
not include any whose principal business is laboratory testing for the life
insurance industry; all companies in the LabONE Peer Group are principally
in the clinical testing business. The Company does not use a published
industry or line-of-business index, although the S&P Health Care Composite
Index (the industry index with which Response Oncology, Inc. compares
itself) is believed to constitute some basis for comparison because of the
importance of shareholder return on Response Oncology, Inc.'s stock to the
total shareholder return on Company Common Stock.
(2) The LabONE Peer Group is a group of seven testing laboratories
(Bio-Reference Labs, Laboratory Corp. of America, Oncormed, Pharmchem,
Psychemedics, Unilab and Universal Standard Medical) selected by LabONE,
Inc. for purposes of comparing its cumulative total shareholder return.
LabONE is 82% owned by the Company and is one of the Company's two primary
operating subsidiaries.
(3) The S&P Health Care Composite Index is the line-of-business index with which
Response Oncology, Inc. compares itself. Response is 67% owned by the
Company and is one of the Company's two primary operating subsidiaries.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Nominating and Compensation Committee ("Compensation
Committee") during 1996 comprised Lan C. Bentsen, John C. Gamble, Michael E.
Herman, David W. Kemper, John H. Robinson, Jr. and Dennis R. Stephen. None of
the persons who served as members of the Compensation Committee during 1996 (a)
are employees or officers of the Company or any of its subsidiaries, (b) are
former officers of the Company or any of its subsidiaries, or (c) had any
relationship or transaction with the Company requiring disclosure under the
SEC's rules, except as discussed below.
The Company and certain of its subsidiaries conduct normal banking
transactions in the usual course of business with, among others, Commerce Bank,
N.A. (Kansas City) ("Commerce") and NationsBank, N.A. (Midwest) ("NationsBank").
Mr. Kemper is Chief Executive Officer and Mr. Robinson is a director of
Commerce's holding company. Mr. Herman is a director of NationsBank. In the
Company's opinion, charges for services rendered by these banking institutions
are commensurate with the costs charged by other financial institutions for
similar services. The Company and its subsidiaries may continue to use both of
these banking institutions for certain services in 1997.
Mr. W. T. Grant II, Chairman of the Board and Chief Executive Officer of the
Company, serves as a director of Commerce Bancshares, Inc., a company whose
chief executive officer, David W. Kemper, serves as Chairman of the Company's
Nominating and Compensation Committee.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP has been the independent auditors of the
Company since 1959. The Board of Directors has again appointed KPMG Peat Marwick
LLP to serve as the Company's independent auditors for the year ending December
31, 1997. While not required to do so, the Board of Directors is submitting the
selection of the independent auditors for ratification in order to ascertain the
views of the shareholders. If the selection is not ratified, the Board of
Directors will reconsider its selection. Ratification of the selection requires
the affirmative vote of the holders of a majority of the shares of Company
Common Stock represented in person or by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF
THIS APPOINTMENT.
A representative of KPMG Peat Marwick LLP will be present at the Annual
Meeting to make a statement if he desires to do so and to respond to appropriate
questions.
20
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals intended for inclusion in the proxy materials of the
Company for the 1998 Annual Meeting must be received by the Company at its
executive offices on or before December 20, 1997, in order to be eligible for
inclusion therein.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters to be presented for action at the Annual Meeting other than those
described herein. If any other matters should come before the meeting, it is the
intention of each of the persons named on the enclosed form of proxy to vote all
duly executed proxies in accordance with their best judgment on such matters.
By Order of the Board of Directors
Steven K. Fitzwater,
SECRETARY
Kansas City, Missouri
April 21, 1997
21
<PAGE>
SEAFIELD CAPITAL CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints William D. Grant and W.T.
Grant II, and each of them, jointly and severally, as proxies, with fully power
of substitution and revocation, for and in the name and place of the
undersigned, to vote all of the shares of $1.00 par value common stock of
Seafield Capital Corporation, a Missouri corporation (the "Company"), which the
undersigned is entitled to vote at the Annual Meeting of shareholders of the
Company to be held at the Westin Crown Center Hotel - Shawnee Mission Room, One
Pershing Road, Kansas City, Missouri, on Wednesday, May 14, 1997, at 10:00 a.m.
local time, and at any adjournment or adjournments thereof, as fully and with
the same effect as the undersigned might or could do if personally present, as
indicated on the reverse side of this card.
(TO BE SIGNED ON REVERSE SIDE) [SEE REVERSE SIDE]
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Please mark your
votes as in this
example
FOR WITHHOLD FOR AGAINST ABSTAIN
all Nominees as to all Nominees
Nominees: W.T. Grant II
1. Election of P. Anthony Jacobs 2. Approval of Inde-
Directors David W. Kemper pendent Auditors
Dennis R. Stephen
For, except vote withheld from the each for a three (3) year term. 3. In their discretion
following nominee(s) upon all other
(Cumulative Voting applies - See Proxy Statement) matters
- ----------------------------------
The Board of Directors recommends a vote FOR
each of the nominees for election as directors
and FOR each of the proposals. If you sign and
return this proxy it will be voted in the manner
directed herein. IF YOU DO NOT DESIGNATE HOW
YOUR SHARES ARE TO BE VOTED THE PROXY WILL BE
VOTED FOR EACH NOMINEE AND EACH PROPOSAL.
IF YOU DO NOT MARK ANY BOXES IN ITEMS (1)
THROUGH (3), YOU WILL BE DEEMED TO HAVE GRANTED
AUTHORITY TO THE NAMED PROXIES TO VOTE FOR THE
ELECTION OF THE FOUR NOMINATED DIRECTORS, TO
VOTE FOR THE PROPOSAL IN ITEM 2 AND TO VOTE IN
THEIR DISCRETION ON ALL OTHER MATTERS WHICH MAY
PROPERLY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
SIGNATURE(S) DATE
---------------------------------------------------------------------- -------------------------------------------
Note: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
</TABLE>
