SCHEDULE 14A
Information Required in Proxy Statement
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ACCUHEALTH,INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Character)
- --------------------------------------------------------------------------------
(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:
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2. Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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|_| Fee paid previously with preliminary materials:
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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 number, or the
form or schedule and the date of its filing.
1. Amount previously Paid:
2. Form, Schedule or Registration Statement no.:
3. Filing Party:
4. Date Filed:
Notes:
<PAGE>
ACCUHEALTH, INC.
1575 Bronx River Avenue
Bronx, New York 10460
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 21, 1999
The Annual Meeting of Shareholders of Accuhealth, Inc. (the
"Company") will be held on October 21, 1999 at 10:00 A.M. local time at the
offices of Proskauer Rose LLP, 1585 Broadway, 27th Floor, New York, New York
10036, for the following purposes:
1. To elect each of two persons to serve as a director of a
class to hold office until the 2002 Annual Meeting of Shareholders;
2. To ratify the selection of Marcum & Kliegman LLP as the
Company's auditors for the fiscal year ending March 31, 2000; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
September 16, 1999, as the record date to determine the shareholders entitled to
notice of, and to vote at, the Annual Meeting of Shareholders.
You are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors
Robert Labra
Secretary
October 8, 1999
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO INSURE THAT YOUR SHARES ARE VOTED.
<PAGE>
ACCUHEALTH, INC.
1575 Bronx River Avenue
Bronx, New York 10460
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying proxy card is furnished in
connection with the solicitation of proxies by the Board of Directors of
Accuhealth, Inc. (the "Company") for the Annual Meeting of Shareholders to be
held at the offices of Proskauer Rose LLP, 1585 Broadway, 27th Floor, New York,
New York 10036, on Thursday, October 21, 1999 at 10:00 A.M. local time (the
"Annual Meeting"), and for any adjournments thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Shareholders (the "Notice of
Meeting"). This proxy statement, the accompanying proxy card and the 1999 Annual
Report are first being sent to holders of the Company's Common Stock and
Preferred Stock on or about October 8, 1999.
In an effort to have as large a representation at the Annual Meeting as
possible, proxy solicitations may be made in person or by telephone by
directors, officers and employees of the Company, without added compensation.
The Company will bear the entire cost of soliciting proxies hereunder and, upon
request, will reimburse nominees for their reasonable out-of-pocket expenses in
sending proxy materials to beneficial owners.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO INSURE THAT YOUR SHARES ARE VOTED.
RECORD DATE AND VOTING SECURITIES
Only shareholders of record as at the close of business on September
16, 1999 (the "Record Date") are entitled to vote at the Annual Meeting. On the
record date there were issued and outstanding 5,136,754 shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), and 105,000 shares
of the Company's 6% Cumulative Convertible Preferred Stock, par value $.01 per
share (the "Preferred Stock"). Each outstanding share of Common Stock and
Preferred Stock is entitled to one vote upon each matter to be acted upon at the
Annual Meeting. The holders of a majority of the aggregate of the outstanding
Common Shares and Preferred Shares (the "Shares") shall constitute a quorum.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth existing ownership as of September 30,
1999, with respect to the beneficial ownership of shares of Common Stock by (i)
each person known by the Company to be the beneficial owner of 5% or more of the
outstanding shares of Common Stock, (ii) each nominee for director, (iii) each
director, (iv) each current executive officer named in the Summary Compensation
Table below and (v) all officers and directors as a group, and the percentage of
the outstanding shares of Common Stock represented thereby.
Amount of Nature
of Beneficial
Name of Beneficial Owner(1) Ownership (1) Percent of Class (2)
- --------------------------- --------------- --------------------
Glenn C. Davis 352,623(3)(4)(5) 6.82
c/o Accuhealth, Inc.
1575 Bronx River Ave.
Bronx, New York, 10460
Stanley Goldstein 335,103(3)(4)(6) 6.57
c/o Accuhealth, Inc.
1575 Bronx River Ave.
Bronx, New York, 10460
E. Virgil Conway 34,229(11)(12) *
Howard C. Landis 0 *
Donald B. Louria, M.D. 31,500(7) *
Sally Hernandez-Pinero 15,500(12) *
Corbett A. Price 29,204(16) *
Mary Comerford 124,072(17) 2.44
Prisco DeMercurio 0(18) *
Special Situation Fund III, L.P. 706,928(8) 13.92
153 East 53rd Street
New York, New York 10022
Penfield Partners, L.P. 324,027(9) 6.38
153 East 53rd Street
New York, New York 10022
Special Situations Cayman Fund, L.P. 244,251(10) 4.81
153 East 53rd Street
New York, New York 10022
CMNY Capital II, L.P. 355,368(13) 7.00
c/o Carl Marks & Company, Inc.
135 East 57th Street
27th Floor
New York, New York 10022
Jeffrey S. Freed, M.D. 521,883(15) 10.15
All Directors and Executive 1,444,064(14) 27.13
Officers as a Group (10 persons)
3
<PAGE>
* Percentage of shares beneficially owned does not exceed 1% of the
class.
(1) As used herein, the term "beneficial ownership" with respect to a
security is defined by Rule 13d-3 under the Securities Exchange Act of
1934 as consisting of sole or shared voting power (including the power
to vote or direct the vote) and/or sole or shared investment power
(including the power to dispose or direct the disposition of the
shares) with respect to the security through any contract, arrangement,
understanding, relationship or otherwise, including a right to acquire
such power(s) during the next 60 days. Unless otherwise noted,
beneficial ownership consists of sole ownership, voting and investment
rights.
(2) Percent of class assumes issuance of the shares subject to currently
exercisable options and shares issuable upon the conversion of 6%
Preferred Stock, as well as an equivalent increase in the number of
shares outstanding.
(3) Includes 40,000 and 20,000 shares issuable pursuant to currently
exercisable stock options for Davis and Goldstein, respectively.
(4) Includes 312,623 and 315,103 shares owned of record and beneficially
for Davis and Goldstein, respectively.
(5) Includes 50,000 shares issuable upon conversion of 50,000 shares of 6%
Preferred Stock.
(6) Includes 3,000 shares issuable upon conversion of 3,000 shares of 6%
Preferred Stock.
(7) Includes 24,500 shares issuable pursuant to currently exercisable stock
options and 7,000 shares owned directly or in trust for the benefit of
members of Dr. Louria's family.
(8) Includes 706,928 shares owned of record and beneficially.
(9) Includes 324,027 shares owned of record and beneficially.
(10) Includes 244,251 shares owned of record and beneficially.
(11) Includes 18,729 shares owned of record and beneficially.
(12) Includes 15,500 shares issuable pursuant to currently exercisable stock
options.
(13) Includes 355,368 shares owned of record and beneficially.
(14) Includes 1,200,064 shares owned of record and beneficially, 191,000
shares issuable pursuant to currently exercisable stock options and
53,000 shares issuable upon conversion of 53,000 shares of 6% Preferred
Stock.
(15) Includes 461,883 shares issued pursuant to the Healix acquisition to
Jeffrey S. Freed, M.D., and 60,000 shares issuable pursuant to
currently exercisable stock options.
(16) Includes 13,704 shares owned of record and beneficially and 15,500
shares issuable pursuant to currently exercisable stock options.
(17) Includes 124,072 shares owned of record and beneficially, Ms. Comerford
resigned on September 15, 1999.
(18) Mr. DeMercurio resigned on April 15, 1999.
4
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3, 4 and 5 (and amendments
thereto) furnished to the Company, and certain written representations
received by it, the Company is not aware of any person who, during the
prior fiscal year, was a director, officer or beneficial owner of more
than 10% of its outstanding Common Stock, during (or with respect to)
the prior or (except as may have been previously reported) previous
fiscal year, who failed to file with the Securities and Exchange
Commission on a timely basis reports required by Section 16 (a) of the
Securities Exchange Act of 1934, except that the following persons
reported changes in their beneficial ownership of the Company's
securities with respect to the following transactions in year-end
filings on Form 5 rather than earlier in the year: the conversion of
the Company's preferred stock to Common Stock on December 1, 1998
(Messrs. Conway and Goldstein); and the issuance of shares of the
Company's common stock in the Healix merger on October 9, 1998 (Dr.
Freed and Ms. Comerford); and the issuance of stock options on October
23, 1997 (Messrs, Conway and Price, Ms. Hernandez-Pinero and Dr.
Louria).
PART III
ITEM 11. EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION AND
NOMINATIONS COMMITTEE ON EXECUTIVE COMPENSATION
Glenn C. Davis, the President and Chief Executive Officer of the
Company, is employed pursuant to an employment agreement (see COMPENSATION OF
DIRECTORS AND OFFICERS -- EMPLOYMENT AGREEMENT). The Board of Directors renewed
Mr. Davis's employment agreement for a three year period commencing September 2,
1999, without an increase to his base compensation or bonus with the renewal of
his employment agreement.
The Company did, upon its renewal of employment with Mr. Davis on
September 2, 1999 grant him 110,000 options to purchase the Company's common
stock at the fair market value on the date of grant. These options were granted
to Mr. Davis to provide an inducement to him to focus on the long-term growth
and profitability of the Company in the discharge of his duties.
SUBMITTED BY
CORBETT A. PRICE AND E. VIRGIL CONWAY
COMPENSATION AND NOMINATIONS COMMITTEE
5
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total return (assuming an
investment of $100 on March 31, 1994) of the Company, the NASDAQ Market Index,
and a group of peer companies selected by the Company (the "Peer Group"). The
members of the Peer Group, all of which engage in the home care and/or infusion
business, include: The Care Group, Inc., Community Care Services, Inc.,
Healthcor Holdings, Inc., Home Health Corporation of American, Inc., Infu-Tech,
Inc., National Home Health Care, Inc., New York Home Health Care, Inc.,
Transworld Healthcare, Inc. and U.S. HomeCare Corp. The price of the Company's
common stock represented as of March 31, 1994 is extrapolated due to the
suspension of trading in the Company's stock on March 1, 1993, which suspension
ended on November 15, 1994.
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
March 1994 March 1995 March 1996 March 1997 March 1998 March 1999
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Accuhealth, Inc...................... 100.00 178 100 167 122 56
Peer Group........................... 100.00 271 220 216 111 42
NASDAQ Stock Market (US)............. 100.00 111 151 168 255 343
</TABLE>
6
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Board consists of eight directors, divided into three
classes, consisting respectively of three, two and three directors. The two
current nominees are proposed to be elected at the Annual Meeting for a term of
three years. Proxies cannot be voted for more than two persons.
The Board of Directors has nominated E. Virgil Conway and Corbett A.
Price (the "Nominees") who currently serve as directors of the class whose term
will expire at the 1999 Annual Meeting.
The Board of Directors has no reason to expect that the Nominees will
be unable to stand for election. In the event that a vacancy among the original
Nominees occurs prior to the Annual Meeting, the persons named as proxies or
their substitutes may nominate and may vote for other persons in their
discretion.
It is the intent of the persons named as proxies to vote Shares
represented by proxies for the election of each Nominee, unless authority to so
vote has been withheld or a contrary specification made. Proxies cannot be voted
for a greater number of persons than the number of Nominees named in this Proxy
Statement.
Listed below are the executive officers and directors of the Company at
September 30, 1999:
<TABLE>
<CAPTION>
Annual meeting
Officer or at which Term
Name Director Since Age Position will Expire
---- -------------- --- -------- --------------
<S> <C> <C> <C> <C>
E. Virgil Conway................. 1994 69 Director 1999
Glenn C. Davis................... 1994 51 President, Chief Executive 2000
Officer and Director
Stanley Goldstein................ 1994 63 Chairman and Director 2001
Howard C. Landis................. 1998 45 Director 2001
Donald B. Louria, M.D............ 1994 70 Director 2000
Sally Hernandez-Pinero........... 1994 46 Director 2000
Corbett A. Price................. 1994 49 Director 1999
Jeffrey S. Freed, M.D............ 1998 54 Executive Vice President -- 2001
Strategy and Director
</TABLE>
7
<PAGE>
Set forth below are brief summaries of the business experience of the
persons who were directors as of September 30, 1999:
E. Virgil Conway chairs the Company's Audit and Stock Option Committees
and was elected a director on April 29, 1994. Mr. Conway is a member of the
Executive and Compensation and Nominations Committees. Since May 16, 1995, he
has served as Chairman of the Board of the Metropolitan Transportation
Administration of the City of New York and, from 1989 to 1996, he served as
Chairman of the Audit Committee of the City of New York. From 1992 until July
1995, Mr. Conway served as Chairman of the Financial Accounting Standards
Advisory Council. From 1968 through 1988, Mr. Conway served as Chairman and
Chief Executive Officer and as a director of the Seamen's Bank for Savings, FSB.
From 1986 until 1989, Mr. Conway also served as Vice Chairman of Seamen's
Corporation. From 1967 to 1968, Mr. Conway served as an Executive Vice President
and Trustee at the Manhattan Savings Bank. From 1964 to 1967, Mr. Conway served
as First Deputy Superintendent of Banks of the State of New York and Secretary
of the New York State Banking Board. Mr. Conway specializes in financial
consulting. Mr. Conway serves on several corporate boards, including Union
Pacific Corporation, Con Edison, Urstadt-Biddle, a real estate investment trust,
Trism, Inc., a specialized trucking firm, and mutual funds managed by Phoenix
Home Life.
Glenn C. Davis became a director, Chief Executive Officer and President
of the Company on February 3, 1994 and since April 15, 1999 has served as acting
Chief Financial Officer. Mr. Davis is a member of the Executive Committee. From
June 1993 until June 30, 1995, Mr. Davis was a general partner of Capstone
Management Company, an investment partnership engaged principally in the
initiation, acquisition and management of businesses in the health care
industry. Mr. Davis is a certified public accountant. From 1980 until January
1993, Mr. Davis was a partner with Coopers & Lybrand, an international
accounting and consulting firm.
Jeffrey S. Freed, M.D. was elected a director on June 25, 1998 in
connection with the merger of Healix Healthcare, Inc. into the Company. Dr.
Freed is a member of the Professional Conduct Committee. Since April 1998, Dr.
Freed has served as Executive Vice President--Strategy and Medical Director for
the Company. From March 1995 to March 1998, Dr. Freed was President and Medical
Director of Healix Healthcare, Inc. He is also a Clinical Associate Professor of
Surgery at the Mount Sinai School of Medicine and a practicing general surgeon.
Stanley Goldstein was elected Chairman of the Company's Board of
Directors on April 29, 1994. Mr. Goldstein has been a private investor from 1981
until the present. Mr. Goldstein is Chairman of the Executive Committee. From
June 1993 until June 30, 1995, Mr. Goldstein was a general partner of Capstone
Management Company, an investment partnership engaged principally in initiation,
acquisition and management of businesses in the health care industry. Mr.
Goldstein is a certified public accountant. From 1964 until 1981, Mr. Goldstein
was the founder and Managing Partner of Goldstein Golub Kessler & Company,
Certified Public Accountants. Mr. Goldstein serves on the boards of directors of
Security Mutual Life Insurance Company and Security Equity Life Insurance
Company.
Howard C. Landis was elected a director of the Company on June 25, 1998
pursuant to agreements executed in connection with the purchase by RFE
Investment Partners V.L.P. of convertible subordinate debt issued by the
Company. Mr. Landis is a member of the Audit Committee. Since 1980 Mr. Landis
has been employed by RFE Management Corp., an investment manager of private
equity investment funds. Since 1983 Mr. Landis has been a general partner of
these private equity funds. Mr. Landis is also a director of a number of
privately owned companies.
Donald B. Louria, M.D., M.A.C.P. was elected a director on April 29,
1994. Dr. Louria chairs the Professional Conduct Committee. Dr. Louria has been
a Professor and Chairman of the Department of Preventive Medicine and Community
Health of the University of Medicine and Dentistry of New Jersey-New Jersey
Medical School from July 1969 until the present. Over the same period, among
other appointments, Dr. Louria has served as a consultant in Infectious Diseases
to Memorial Hospital for Cancer and Allied Diseases and, from 1971 until the
present, has served on the Consultant Medical Staff in Infectious Diseases at
St. Michael's Medical Center in Newark, New Jersey.
8
<PAGE>
Sally B. Hernandez-Pinero was elected a director on September 20, 1994.
On May 1, 1999 Ms. Hernandez-Pinero became a Senior Vice President for Corporate
Affairs for Related Companies LLP, a real estate development, management,
syndication and financing company. Since June 1998 to April 1999 she was the
Managing Director of the Fannie Mae American Communities Fund. Ms.
Hernandez-Pinero previously was a member of the law firm of Kalkines Arky Zall &
Bernstein, where she was primarily engaged in public finance, housing and
economic development projects, low income tax credit syndications and
intergovernmental relations. Ms. Hernandez-Pinero served as Chairwoman of the
New York City Housing Authority from February 1992 to January 1994. In that
position she had direct operational responsibility for the nation's largest
public housing program with 325 developments housing over 600,000 people, a
staff of 16,000 and a budget of $1.45 billion. From January 1990 to February
1992, Ms. Hernandez-Pinero was Deputy Mayor for Finance and Economic
Development, in which position she designed and supervised the development and
implementation of business, industrial and commercial development policies for
the City of New York. From January 1988 to January 1990 she served as
Commissioner/Chairwoman of the Board of Directors of the Financial Services
Corporation of New York City where she developed and implemented the course of
action and priorities for that agency's economic development programs. Prior to
January 1988, Ms. Hernandez-Pinero served as Deputy Borough President of
Manhattan; General Counsel to the State of New York Mortgage Agency, and an
attorney with a number of community development and legal service organizations.
Ms. Hernandez-Pinero is a director of Consolidated Edison Corporation, the Dime
Savings Bank and National Income Realty Trust.
Corbett A. Price was elected a director on September 20, 1994. Mr.
Price chairs the Compensation and Nomination Committee and is a member of the
Stock Option and Audit Committees. He is the Chairman and Chief Executive
Officer of KURRON, a New York based health care management company which Mr.
Price founded in January 1990. KURRON specializes in the rehabilitation of
distressed hospitals and health care systems. Mr. Price began his career in
health care management in 1975 at the Hospital Corporation of America, where he
served as a Vice President from 1983 to 1989. As head of Hospital Corporation of
America's Mid-Atlantic Division, he directed the operations of approximately
twenty hospitals in four states and the District of Columbia. Mr. Price has
advised the governments of Mexico, Barbados and Jamaica on health care delivery
systems and facilities.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended March 31, 1999, the Company had the
following committees of the Board of Directors:
AUDIT COMMITTEE. The Audit Committee is presently comprised of three
non-employee directors: E. Virgil Conway, Corbett A. Price and Howard C. Landis.
The Committee reviews the engagement and independence of the Company's
independent auditors, reviews fees payable to and correspondence with the
auditors, serves as a conduit to the Board for reporting on the conduct and
results of the audit, including any irregularities that may be detected in the
audit, and discusses with the auditors their report and any significant issues
arising in the course of the audit. The Audit Committee met one time during the
fiscal 1999.
COMPENSATION AND NOMINATIONS COMMITTEE. The Compensation and
Nominations Committee, which met one time during fiscal 1999, consists of two
non-employee directors: Corbett A. Price and E. Virgil Conway. The Committee
reviews, approves and makes recommendations to the Board with respect to the
Company's compensation policies, practices and procedures to ensure that such
policies, practices and procedures contribute to the success of the Company. The
Compensation and Nominations Committee also makes recommendations to the Board
with respect to prospective nominees to the Board. The Committee will consider
nominees recommended by security-holders, which recommendations should be
furnished in writing to the Chairman of the Committee at the Company's principal
office. The Compensation and Nominations Committee met two times during the
fiscal 1999.
STOCK OPTIONS COMMITTEE. The members of the Stock Options Committee are
E. Virgil Conway and Corbett A. Price. The Stock Options Committee administers
the Company's 1998 Stock Option Plan. The Stock Option Committee held one
meeting during fiscal 1999.
9
<PAGE>
EXECUTIVE COMMITTEE. The Executive Committee consists of three
directors, Stanley Goldstein, Glenn C. Davis, and E. Virgil Conway. The
Committee meets as necessary between regularly scheduled meetings to take such
action as it may deem advisable for the efficient operation of the Company. The
Committee has the authority to take all actions that could be taken by the full
Board of Directors, with certain exceptions. The Executive Committee met three
times during the 1999 fiscal year.
PROFESSIONAL CONDUCT COMMITTEE. The Professional Conduct Committee
consists of two directors, Donald B. Louria, M.D. and Jeffrey S. Freed, M.D. The
Committee reviews any complaints about the conduct of any employee in
inter-relationships with clients, advises management with respect to the medical
and ethical practices of the Company and makes recommendations as to methods to
ensure that the Company meets the highest standards in the delivery of its
services. The Professional Conduct Committee met one time during fiscal 1999.
During the fiscal year ended March 31, 1999, the Board of Directors
held four meetings. No incumbent director attended fewer than 75% of those
meetings or of meetings of the committees on which he or she served, except for
Sally B Hernandez-Pinero, who attended 50% of the Board of Directors meetings.
VOTE REQUIRED FOR APPROVAL
The affirmative votes of the holders of a plurality of the votes cast
at the meeting by holders of shares of Common Stock and Preferred Stock, voting
together as a single class, who are present in person or represented by proxy
and who are entitled to vote at the Annual Meeting is required to elect each
director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINATED DIRECTORS.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors who are not officers of, or consultants to, the Company are
entitled to a fee of $6,000 per annum plus $1,000 per annum ($2,000 per annum
for the Chair) for each committee on which they serve. Messrs. Conway, Price and
Landis, Dr. Louria and Ms. Hernandez-Pinero are eligible for the foregoing fees.
The Company does not pay directors fees to officers or consultants for serving
as directors.
10
<PAGE>
The following table sets forth all compensation earned, awarded or paid
by the Company to its Chief Executive Officer, Executive Vice President and
Chief Operating Officer and Senior Vice President -- Finance and Chief Financial
Officer for the fiscal year ended March 31, 1999. No other person who was a
director, executive officer or employee at any time during the fiscal year ended
March 31, 1999, received salary and bonus in excess of $100,000 during or
attributable to such fiscal year.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation
Compensation ------------
------------ All Other
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Glenn C. Davis........................ FY1999 $275,000 -- --
President and Chief Executive....... FY1998 $250,000 $25,000 --
Officer............................. FY1997 $200,000 -- --
Mary Comerford........................ FY1999 $175,000 -- --
Executive Vice President and
Chief Operating Officer(2)
Prisco DeMercurio..................... FY1999 $125,000 $25,000
Senior Vice President and Chief
Financial Officer(3)
Dr. Jeffrey S. Freed.................. FY1999 $ 65,000 -- $41,000(1)
Executive Vice President
</TABLE>
- -----------------
(1) Comprised of life insurance premiums of $29,000 per year and an auto
allowance of $12,000 per year.
(2) Resigned September 15, 1999
(3) Resigned April 15, 1999
EMPLOYMENT AGREEMENT
The Board of Directors of the Company has authorized the renewal of its
employment agreement with Glenn C. Davis, its President and Chief Executive
Officer through September 2, 2002. Under the renewed employment agreement, the
Company's President and Chief Executive Officer is entitled to an annual salary
at a rate of $275,000 and 110,000 options to purchase the Company's common stock
at the fair market value on September 2, 1999. The agreement also provides for a
severance payment equal to 150% of his annual compensation at the date of
termination if (i) his employment is terminated by him due to a breach of the
agreement by the Company, (ii) the Company fails to offer to extend his
employment for additional terms of one year on the same terms; or (iii) his
employment terminates due to disability. If the employment is terminated due to
his death, the severance payment is equal to 50% of his Annual Compensation at
the date of death. The agreement further provides that, in the event of a merger
or sale of substantially all of the assets of the Company for consideration
exceeding $15 million, either the successor corporation or he may elect to
terminate his employment and that, if his employment is so terminated, he would
be entitled to receive a severance payment equal to 300% of his Annual
Compensation at the date of termination. In addition, the agreement provides
that he will not compete with the Company for 18 months after a termination of
his employment, except that if such termination is by the Company for cause, the
non-competition period will be for 24 months.
11
<PAGE>
In connection with the Healix merger, Dr. Jeffrey S. Freed entered into
an employment agreement with the Company. Under the employment agreement Dr.
Freed served as Executive Vice-President and is entitled to an annual salary at
a rate of $65,000 and options to purchase 60,000 shares of the Company's common
stock. The agreement also provides for reimbursement for business expenses
incurred in the performance of the employment duties, a $1,000 per month auto
allowance and payment of $28,245 per year of life insurance premiums pursuant to
a Split-Dollar Agreement whereby the cash values of the policies are assigned to
the Company as collateral for the ultimate repayment to the Company for the
premium outlay. The term of this agreement expires on December 31, 2001 with a
two year renewal provision ending December 31, 2003. The agreement also provides
for certain payments for termination due to death or disability equal to the
Executives Base Salary, for termination to Employer's Breach equal to the later
of (A) the remaining term of the agreement or (B) six months and if termination
results from a change in control any unpaid Base Salary and a severance payment
in the amount equal to 2.9 times the Executive's Base Salary. Further, the
agreement contains Non-Solicitation; Non-Competition; and Confidentiality
provisions ranging from one to three years as the circumstances as defined so
warrant.
In connection with the Healix merger, Mary B. Comerford entered into an
employment agreement with the Company. Under the employment agreement, Ms.
Comerford serves as Executive Vice President and is entitled to an annual salary
at a rate of $175,000 a hire-on bonus of 50,000 shares of common stock issued in
three annual installments, an annual bonus based on certain performance criteria
up to 50% of the base salary, and options to purchase 50,000 shares of the
Common Stock pursuant to the terms of an option agreement. The term of this
agreement expires on December 31, 2001 with a two year renewal provision ending
December 31, 2003. The agreement also provides for certain payments for
termination due to death or disability equal to the Executive Base Salary, for
termination due to Employer's Breach equal to the later of (A) the remaining
term of the agreement or (B) six months and if termination results from a change
in control any unpaid Base Salary and a severance payment in the amount equal to
2.9 times the Executive's Base Salary. Further, this agreement contains
Non-Solicitation; Non-Competition; and Confidentiality provisions ranging from
one to three years as the circumstances as defined so warrant.
STOCK OPTIONS
The following tables set forth information concerning exercisable
options during the fiscal year ended March 31, 1999, with respect to the Common
Stock. Stock options totalling 110,000 shares were granted in April, 1998 to two
executive officers. No stock appreciation rights were granted to executive
officers and no stock options or stock appreciation rights were exercised by
executive officers during such year.
<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
Number of Shares Underlying Value of Unexercisable
Unexercised Options at in-the-Money Options
Fiscal Year End at Fiscal Year End (3)
-------------------------------- ----------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Glenn C. Davis 120,000 80,000(1) -- --
Jeffrey S. Freed 60,000 60,000(2) -- --
Mary Comerford 50,000 50,000(2) -- --
Prisco DeMercurio 25,000 25,000(1) -- --
</TABLE>
(1) The option exercise price of such shares is $2.00 per share.
(2) The option exercise price of such shares is $2.875 per share.
(3) Mr. Davis, Freed, DeMercurio or Ms. Comerford do not own any
unexercisable options that, are, or were at fiscal year end, in the
money.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of June 28, 1994, the Company entered into a Consulting Agreement
with Stanley Goldstein, who is Chairman of the Board. Mr. Goldstein does not
receive compensation for services provided as a director of the Company during
the term of his consulting agreement.
Pursuant to such Consulting Agreement, Mr. Goldstein provides
consulting services to the Company in, among other areas, capital financing,
mergers and acquisitions. The Company has agreed to pay consulting fees to Mr.
Goldstein in the amount of $4,000 per month and an office expense reimbursement
of $1,000 per month for use of Mr. Goldstein's offices and support facilities in
the performance of his consulting duties. In further consideration of Mr.
Goldstein's consulting services, the Company granted to Mr. Goldstein an option
to purchase 150,000 shares of Common Stock at prices ranging from $1.625 to
$3.00 per share. During the fiscal year ended March 31, 1999 the Company issued
46,957 of its common stock in consideration of forgiveness of accrued consulting
fees of $135,000 owed Mr. Goldstein.
Effective April 1, 1999 the consulting agreement was amended to have
the monthly consulting fee and expense reimbursement reduced to $3,000 monthly.
During the Fiscal year 1999, the Company granted a loan to Mr. Glenn C.
Davis, President and CEO, in the amount of $100,000 due on demand, bearing
interest of 8%. Such loan is collateralized by 50,000 shares of the Company's 6%
cumulative convertible and Preferred Stock.
PROPOSAL 2. RATIFICATION OF THE APPOINTMENT OF CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Marcum & Kliegman LLP ("Marcum &
Kliegman"), which audited and reported upon the Company's financial statements
for the year ended March 31, 1999 and 1998, to serve as the Company's certified
public accountants for the fiscal year ending March 31, 2000. In the event
selection of Marcum & Kliegman is not ratified by the stockholders, the Board of
Directors will reconsider its selection of such firm.
At a meeting held on March 5, 1998, the Board of Directors of the
Company approved the engagement of Marcum & Kliegman as its independent auditors
for the fiscal year ending March 31, 1998 to replace the firm of Ernst & Young
LLP ("E&Y").
Representatives of Marcum & Kliegman are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
VOTE REQUIRED FOR APPROVAL
The affirmative votes of the holders of a majority of the votes cast on
this proposal by the holders of Common Stock and Preferred Stock, voting
together as a single class, who are present in person or represented by proxy
and who are entitled to vote at the Annual Meeting is required for approval of
this proposal.
13
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
action at the Meeting other than as set forth in this Proxy Statement. If any
other business should properly come before the Meeting, the persons named in the
proxy intend to vote thereon in accordance with their best judgment.
VOTING PROCEDURES
At the Annual Meeting, shareholders will be requested to act upon the
matters set forth in this Proxy Statement. If you are not present at the Annual
Meeting, your shares can by voted only when represented by proxy. The shares
represented by your proxy will be voted in accordance with your directions if
the proxy is properly signed and returned to the Company at or before the Annual
Meeting. If no instructions are specified in the proxy, the shares represented
thereby will be voted for the nominees for the Board of Directors listed in this
Proxy Statement and in favor of each proposal set forth herein with respect to
matters other than election of directors. If any other matters shall properly
come before the Meeting, the enclosed proxy will be voted in accordance with the
best judgment of the persons voting such proxy.
Any proxy may be revoked at any time prior to it being voted by
delivering to the Company a written revocation to the Company to the attention
of the Inspector of Election, by properly executing and delivering to the
Company a later-dated proxy, or by attending the Annual Meeting, requesting the
return of the proxy and voting in person.
Abstentions are counted in tabulations of the votes cast on proposals
presented to stockholders, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved. Abstentions and broker
non-votes will have no effect on the election of directors (Proposal 1), which
is by plurality vote, but abstentions will, in effect, be votes against the
approval of the ratification of the selection of independent public accountants
(Proposal 2), as this items requires the affirmative vote of the shares present
and eligible to vote on such matters.
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Shareholder proposals intended to be presented at the Company's 2000
annual meeting of stockholders must be received by the Company for inclusion in
its proxy statement and form of proxy no later than June 9, 2000. A stockholder
who intends to submit a proposal for the Company's next annual meeting that the
stockholder does not intend to request be included in the Company's proxy
materials in accordance with Securities and Exchange Commission rules must give
notice to the Company prior to August 29, 2000. If the stockholder does not
provide the Company with timely notice of such a proposal, the persons
designated as management proxies on the Company's proxy card may exercise their
discretionary authority to vote on that proposal. If the stockholder does
provide the Company with timely notice of such a proposal, depending upon the
circumstances, management's proxies may not be able to exercise their
discretionary authority to vote on the proposal.
By Order of the Board of Directors
/s/ ROBERT LABRA
----------------
Robert Labra
Secretary
October 8, 1999
<PAGE>
ACCUHEALTH, INC.
1575 BRONX RIVER AVENUE
BRONX, NEW YORK 10460
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Stanley Goldstein and Glenn C. Davis
and each of them as Proxies, each with the power to appoint his substitute and
hereby authorizes them to represent and to vote, as designated below, all the
shares of common stock of Accuhealth, Inc. held of record by the undersigned on
September 16, 1999, at the annual meeting of shareholders to be held on October
21, 1999 or any adjournment thereof.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below for the term indicated WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed below [ ]
Terms will expire at the 2002 Annual Meeting: E. Virgil Conway, Corbett A. Price
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, DRAW A LINE THROUGH OR STRIKE OUT THAT NOMINEE'S NAME.
2. PROPOSAL TO RATIFY THE SELECTION OF MARCUM & KLEIGMAN LLP as the independent public accountants of the corporation
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
<PAGE>
(CONTINUED FROM OTHER SIDE)
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted for election of the Nominees for Director and for Proposals 1 and 2.
Dated:__________________ , 1999
-------------------------------
Signature
-------------------------------
Signature, if held jointly
Please sign exactly as name appears. When shares are held by joint tenants, both
should sign. When signing as attorney, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
INDICATE CHANGE OF ADDRESS ON ATTACHED LABEL.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSING ENVELOPE.
