<PAGE>
KAUFMAN GOLDSTEIN & GARTNER, P.C.
342 Madison Avenue
New York, New York 10171
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Care Group, Inc.
Definitive Proxy Materials
Gentlemen:
On behalf of our client The Care Group, Inc., we herewith electronically
file our client's definitive proxy statement and proxy card for our client's
1996 annual meeting. Only definitive proxy material is being filed pursuant to
SEC rule 14a-6, because the only matters to be acted upon are election of one
director and ratification of accountants.
Our client intends to release the definitive proxy material to shareholders
on or about May 17, 1996.
Very truly yours,
/s/Michael Harvey
Michael Harvey
<PAGE>
PROXY
THE CARE GROUP, INC.
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Ann T. Mittasch, Gilda G. Schechter and Randolph
J. Mittasch and each of them, proxies, with full power of substitution, to vote
the shares of Common Sock of The Care Group, Inc. ( the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on July 8, 1996, and any adjournments thereof, on the matters set forth in the
Notice of Meeting and Proxy Statement dated April 26, 1996, as follows:
1. Election of one Class III director (check one box only):
( ) For the nominee, Dr. Alex Maurillo
( ) Withhold authority to vote for the nominee, Dr. Alex Maurillo.
2. Proposal to select Deloitte & Touche LLP as the independent public
accountants of the Company for the year ended December 31, 1996.
( ) For ( ) Against ( ) Abstain
In their discretion, the Proxies are authorized to vote (i) on such other
matters as may properly come before the meeting or any such adjournments thereof
and (ii) for the election of any person as a director of the Company replacing
the nominee named in the Proxy Statement if such named nominee is unable to
serve or for good cause will not serve.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, 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 full partnership name by authorized person.
DATED:_______________, 1996 _______________________
Signature
- - ------------------------------------ ------------------------
: PLEASE MARK, SIGN, DATE AND: Signature if held jointly
: RETURN THE PROXY CARD PROMPTLY:
: USING THE ENCLOSED ENVELOPE:
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(X) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to $240.14 a-11(C)or $240.14
a-12
The Care Group, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than
the Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11 (c)(1)(ii), 14a-6(I)(1), or
14a-6(I)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(I)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(I\)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- - --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
1 Set forth the amount on which the filing fee is calculated and
state how it was determined
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- - --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
3) Filing Party:
- - --------------------------------------------------------------------------------
<PAGE>
THE CARE GROUP, INC.
1 Hollow Lane, Suite 110
Lake Success, NY 11042
----------
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
----------
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of The Care Group, Inc. (the "Company")
will be held on Monday, July 8, 1996 at 3:00 P.M., local time, at the Roslyn
Claremont Hotel, 1221 Old Northern Boulevard, Roslyn, New York, 11576 for the
following purposes, all as more fully described in the accompanying Proxy
Statement:
(1) To elect one (1) director of the Company for a period of three years,
and
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants for the Company for the fiscal year ending December 31,
1996.
The Board or Directors has fixed the close of business on May 10, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual meeting.
By order of the Board of Directors:
Randolph J. Mittasch
Secretary and Treasurer
New York, New York
April 26, 1996
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR
NOT YOU EXPECT TO ATTEND IN PERSON. STOCKHOLDERS WHO ATTEND
THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON IF THEY
DESIRE.
<PAGE>
THE CARE GROUP, INC.
1 Hollow Lane, Suite 110
Lake Success, NY 11042
----------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 8, 1996
----------
INTRODUCTION
This Proxy Statement is furnished to the stockholders of The Care Group,
Inc., a Delaware corporation (the "Company"), in connection with a solicitation
of proxies by the Board of Directors of the Company (the "Board of Directors")
for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held
on July 8, 1996 at 3:00 P.M., local time, at the Roslyn Claremont Hotel, 1221
Old Northern Boulevard, Roslyn, New York 11576, for the purposes set forth in
the accompanying Notice of Meeting. This Proxy Statement is first being mailed
to the Company's stockholders on or about May 17, 1996.
Only stockholders of record at the close of business on May 10, 1996 will
be entitled to notice of and to vote at the Annual Meeting. As of April 26, 1996
the outstanding voting securities of the Company consisted of 8,340,385 shares
of common stock, $.001 par value per share (the "Common Stock"), each share of
Common Stock being entitled to one vote with respect to each of the proposals to
be voted at the Annual Meeting. To transact any business at the Annual Meeting,
a quorum (a majority of the total number of outstanding shares of Common Stock
entitled to be voted thereat) must be present or represented by proxy.
Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by either (i) giving written notice to the Company
bearing a later date than the proxy, (ii) by submission of a later dated proxy,
or (iii) by voting in person at the Annual Meeting. The shares of Common Stock
represented by all properly executed proxies received in time for the Annual
Meeting will be voted in accordance with any specification made thereon, and if
no specification is made thereon will be voted (i) FOR the election of the
nominee for director named herein, and (ii) FOR the ratification of the
selection by the Company's Board of Directors of Deloitte & Touche LLP as the
Company's independent public accountants for the year ending December 31, 1996.
The Company's officers and directors hold 22.24% of the total number of
shares of Common Stock that are entitled to vote at the Annual Meeting. The
officers and directors intend to vote their shares FOR each proposal set forth
in this proxy statement.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. Classes I
and II consist of two directors and Class III consists of one director. The
directors designated as Class III (Dr. Alex Maurillo) is to be elected at the
Annual Meeting and shall serve until the annual meeting in 1999 and until his
successor shall have been elected and shall qualify. The directors designated as
Class I and II (who are not to be elected at the Annual Meeting), shall serve
until the Annual Meetings in 1998 and 1997, respectively, and thereafter until
his or her successor shall have been elected and shall qualify.
In order to be elected as a member of the Board of Directors, a nominee
must receive a plurality of the outstanding votes present in person or
represented by proxy at the Annual Meeting (abstentions and broker non-votes
will be disregarded and will have no effect on the outcome of the vote).
Set forth on the following page is the name and age of the nominee, Dr.
Alex Maurillo, his positions with the Company, if any, and his principal
occupation at present and during the past five years. The term of the nominee
will expire upon the election and qualification of the new directors at the
Annual Meeting to be held during 1999. The nominee has advised the Company that
he will serve if elected. The persons named in the enclosed proxy intend, unless
such authority is withheld, to vote for the election as director of the nominee
named below. The Company does not expect that the nominee will be unavailable
for election, but if that should occur before the Annual Meeting, the proxies
will be voted for a substitute nominee who will be recommended by the Board of
Directors.
During 1995, there were a total of five (5) meetings of the Board of
Directors. The Board of Directors has an Audit Committee consisting of Randolph
Mittasch, John Lynch and Dr. Alex Maurillo. The purpose of the Audit Committee
is to review the Company's financial condition and the qualifications of the
Company's independent accountants to serve as auditors. During 1995, there were
a total of two (2) meetings of the Audit Committee.
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information relating to the current directors
and executive officers of the Company.
NAME POSITION WITH THE COMPANY
- - ---- -------------------------
CLASS I DIRECTORS
- - -----------------
Ann T. Mittasch President, Chief Executive
Officer,
Chairman of the Board
Randolph J. Mittasch Secretary/Treasurer,
Director
CLASS II DIRECTORS
- - ------------------
Gilda G. Schechter Executive Vice President,
Director
John J. Lynch Director
CLASS III DIRECTOR
- - ------------------
Dr. Alex Maurillo Director
OTHER EXECUTIVE OFFICER
- - -----------------------
Pat H. Celli Chief Financial Officer,
Assistant Secretary and
Assistant Treasurer
ANN T. MITTASCH, PRESIDENT, CHAIRMAN OF THE BOARD OF DIRECTORS: (Age 65):
- - ---------------------------------------------------------------
Mrs. Mittasch has been President and Chairman of the Company since 1984. Prior
to 1984, Mrs. Mittasch served as President and then Chairman of Superior Care,
Inc. (predecessor to Lifetime Corporation), a national home care corporation
whose securities traded on the New York Stock Exchange, Inc. Mrs. Mittasch is
the mother of Randolph J. Mittasch, Secretary/Treasurer and a director of the
Company.
<PAGE>
RANDOLPH J. MITTASCH, SECRETARY/TREASURER AND DIRECTOR: (Age 34): Mr.
Mittasch has been Secretary/Treasurer of the Company since February, 1989 and
has been a director of the Company since 1985. From 1988 to February, 1992, he
was employed by the American Stock Exchange, Inc. as a Senior Accountant. Mr.
Mittasch received an MBA from Adelphi University in 1987 and in 1989 became a
Certified Public Accountant. Mr. Mittasch is the son of Ann T. Mittasch,
President and Chairman of the Board of the Company.
GILDA G. SCHECHTER, EXECUTIVE VICE PRESIDENT AND DIRECTOR: (Age 64): Ms.
Schechter has been Executive Vice President and a director of the Company since
1985.
JOHN J. LYNCH, DIRECTOR: (Age 72): Mr. Lynch has been a consultant for
special projects from February, 1988 to the present. From November 1, 1989 to
May 1, 1990, Mr. Lynch served as pro-bono health arbitrator for the New York
State Mediation Board. Mr. Lynch has been a director of the Company since 1990
and he is not an officer of the Company.
ALEX MAURILLO, M.D., DIRECTOR: (Age 67): Dr. Alex Maurillo has been a
General Surgeon at St. Clares Hospital since 1962. He is currently on the Board
of Directors of the Central Labor Council of New York City and a Medical
Coordinator of the Workman's Compensation Board & Self Insurance Fund of the
Local 3 of the Electrical Union of New York. Dr. Maurillo has been a director of
the Company since 1992 and he is not an officer of the Company.
PAT H. CELLI, ASSISTANT TREASURER, ASSISTANT SECRETARY AND CHIEF FINANCIAL
OFFICER: (Age 43): Mr. Celli has been Chief Financial Officer of the Company
since 1990. From 1985 to 1990, Mr. Celli was employed as President of
Alternative Health Care Systems, Inc., a health care holding company that owned
physician clinics, a health insurance company and a health maintenance
organization. Prior to that, Mr. Celli was employed as a Certified Public
Accountant with Touche Ross and Co.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned (calculated in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934) as of April 26, 1996 or such other date as
indicated below by (i) owners of more than 5% of the Company's outstanding
Common Stock, (ii) all directors and director nominees of the Company, (iii) the
named executive officers referred to in the "Executive Compensation" section of
this proxy statement and (iv) all officers and directors of the Company as a
group:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF BENEFICIALLY PERCENTAGE OF
BENEFICIAL OWNER OWNED TOTAL SHARES
- - --------------------------------------------------------------------------------
<S> <C> <C>
Ann T. Mittasch (1) 1,460,200 16.93%
1 Hollow Lane
Lake Success, NY 11042
Gilda G. Schechter (2) 265,500 3.18%
1 Hollow Lane
Lake Success, NY 11042
Randolph J. Mittasch (3) 258,500 3.06%
John J. Lynch (4) 3,250 *
Dr. Alex Maurillo (5) 2,000 *
Pat Celli (6) 117,500 1.39%
Anthony J. Esposito (7) -0- -0-
All officers and directors
as a group (total of 7 persons) (8) 1,966,950 22.24%
</TABLE>
*Less then 1%
(1) Mrs. Mittasch, Chairman and President of the Company, directly owns
933,200 Shares of Common Stock for her own account and may be deemed to
beneficially own an additional 245,000 shares of Common Stock subject to a
voting trust (the "Voting Trust") expiring February 27, 1999 of which she is the
sole voting trustee with respect to 140,000 shares of Common Stock directly
owned by Randolph J. Mittasch, and an additional 140,000 shares directly owned
by four other persons. Mrs. Mittasch also holds options totaling 282,000 shares
with an average exercise price of $1.96 that expire February 27,1999.
<PAGE>
(2) Gilda G. Schechter, Executive Vice President and a director of the
Company, directly owns 260,000 shares of Common Stock for her own account. The
shares beneficially owned by Ms. Schechter as of April 3, 1996 include options
expiring February 27, 1999 to acquire 5,500 shares of Common Stock at an average
exercise price of $5.13.
(3) Randolph J. Mittasch directly owns 161,000 shares of Common Stock,
140,000 of which shares are subject to the Voting Trust. Mr. Mittasch also holds
options expiring February 27, 1999 to acquire 97,500 shares of Common Stock at
an exercise price of $1.77. Randolph J. Mittasch disclaims beneficial ownership
of the shares of Common Stock owned by Ann T. Mittasch, except for his 140,000
shares that are subject to the Voting Trust.
(4) John J. Lynch has options expiring February 27, 1999 to acquire 3,250
shares of Common Stock at an exercise price of $2.19.
(5) Dr. Alex Maurillo has options expiring February 27, 1999 to acquire
2,000 shares of Common Stock at an exercise price of $2.07.
(6) Pat Celli, Chief Financial Officer, directly owns 4,500 shares of
Common Stock for his own account. The shares beneficially owned by Mr. Celli as
of April 3, 1996, include options expiring February 27, 1999 to acquire 113,000
shares of Common Stock at an average exercise price of $1.77.
(7) Anthony J. Esposito, Jr. resigned from the Company on February 9, 1996.
(8) Includes options held by all officers and directors of the Company to
acquire a total of 503,250 shares of Common Stock.
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
C G Holdings of New York, Inc., Jordan Belfort and Daniel Porush, filing as
a group, who were beneficial owners of more than 10% of the Common Stock of the
Company, filed one late report on Form 4 in October, 1995 covering 12 sale
transactions that occurred in August and September, 1995 (this last report was
an "exit" report), and failed to file one report on Form 4 with respect to one
sale transaction that occurred in March1995.
<PAGE>
EXECUTIVE COMPENSATION
The following table contains information with respect to all compensation
paid to each of the executive officers of the Company whose total compensation
exceeded $100,000, in all capacities to the Company, during the fiscal year
ended December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY
COMPENSATION TABLE (1) LONG TERM COMPENSATION
ANNUAL
COMPENSATION AWARDS
(A) (B) (C)
(D) (G)
NAME AND YEAR SALARY ($)
BONUS ($) SECURITIES UNDERLYING
PRINCIPAL POSITION
OPTIONS/SAR'S (#) (2)
<S> <C> <C>
<C> <C>
Ann Mittasch 1995 $227,559
$ -0- 235,000
Chairman of the Board 1994 197,877
7,630 -0-
President, Chief 1993 172,154
3,317 40,000
Executive Officer
Pat H. Celli 1995 $127,300
$ 2,500 110,000
Chief Financial Officer 1994 107,808
5,750 -0-
Assistant Secretary & 1993 95,000
1,827 30,000
Assistant Treasurer
Anthony J. Esposito, Jr.(3) 1995 $122,430
$-0- -0-
V.P of Company's 1994 122,430
1,500 -0-
Subsidiaries 1993 116,048
2,354 -0-
</TABLE>
- - ----------------
(1) Certain columns have not been included in this table because the
information called for therein is not applicable to the Company or the
individuals named above for the periods indicated.
(2) Only stock options have been granted; no SARs have been granted. Each
stock option is exercisable to purchase one share of Common Stock at an exercise
price equal to the market value of the Common Stock on the date that the option
is granted.
(3) Anthony J. Esposito, Jr. resigned in all capacities from the Company on
February 9, 1996.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed Annual
Rates Of Stock Price
Appreciation For Option Term
Individual Grants
(a) (b) (c)
(d) (e) (f) (g)
% Of Total
Number Options
Securities Granted To
Underlying Employees Exercise
Options In Fiscal Price
Expiration
Name Granted Year
Per Share Date 5%($) 10%($)
<S> <C> <C>
<C> <C> <C> <C>
Ann Mittasch 235,000(1)
45% $2.75 2/27/99 $118,000 $249,000
Pat Celli 110,000
21% 2.75 2/27/99 55,000 117,000
Anthony J. Esposito (3) -0- -0-
-0- -0- -0- -0-
</TABLE>
- - ----------
(1) Only stock options (no SARs) were granted during 1995 (2) Refers to
shares of Common Stock.
(3) Anthony J. Esposito, Jr. resigned in all capacities from the Company on
February 9, 1996.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
(a) (b) (c) (d)
(e)
Number of
Securities
Value of
Underlying
Unexercised
Unexercised
In-the-Money
Options
Options
at FY-End (#) at
FY - End ($)
Shares Acquired Estimated Exercisable/
Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable(1)
Unexercisable(1)
<S> <C> <C> <C>
<C>
ANN MITTASCH
PRESIDENT, CHIEF 85,500 $235,000 282,000 $
-0-
EXECUTIVE OFFICER
PAT CELLI
CHIEF FINANCIAL OFFICER
ASSISTANT SECRETARY & 45,000 $ 95,000 113,000 $
-0-
ASSISTANT TREASURER
ANTHONY J. ESPOSITO, JR. -0- -0- -0-
-0-
V.P OF COMPANY'S SUBSIDIARIES (2)
</TABLE>
- - ----------
(1) All stock options reflected in columns (d) and (e) are presently
exercisable.
(2) Anthony J. Esposito, Jr. resigned in all capacities form the Company on
February 9, 1996.
<PAGE>
<PAGE>
MANAGEMENT'S REASON FOR STOCK OPTION REPRICING
The Company has repriced its stock options for employees and officers in
order to provide an incentive to improve the performance of the Company using
the current market price of the Common Stock as a base. All options that have
been repriced were repriced from an "out of the money" exercise price to an "at
the money" exercise price at the time of repricing. In addition, the repricing
was based on management's attainment of certain milestones, such as increased
profitability and expansion of the Company's operations during the first quarter
of 1993, and the Company's successful entrance into certain managed care
contracts and the establishment of the subsidiary, Mail Order Meds, Inc., during
1995.
SUBMITTED BY THE COMPANY'S BOARD OF DIRECTORS
Ann. T. Mittasch Gilda G. Schechter Randolph J. Mittasch
John J. Lynch Alex Maurillo
PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Company include in
this proxy statement a line-graph presentation comparing cumulative, five year
stockholder returns on an indexed basis with a broad equity market index and a
published industry or line of business index, or an index of peer companies
selected by the Company. The Board of Directors has approved the use of the
Wilshire Index as the broad equity market index and a group of peer companies
selected by the Company (I). The table below compares the cumulative total
return as of the end of each of the Company's last five fiscal years on $100
invested as of December 31, 1990 in the Common Stock of the Company, the peer
group and the Wilshire 5000 index assuming the reinvestment of all dividends
(the Company has not paid any dividends):
THE CARE GROUP, INC.
FIVE YEAR CUMULATIVE RETURNS
<TABLE>
<CAPTION>
1990 1991 1992
<S> <C> <C> <C>
PEER GROUP $100 $276 $359
CARE GROUP 100 127 60
WILSHIRE 5000 100 134 146
THE CARE GROUP, INC
FIVE YEAR CUMULATIVE RETURNS
1993 1994 1995
<S> <C> <C> <C>
PEER GROUP $393 $485 $452
CARE GROUP 63 75 35
WILSHIRE 5000 163 163 222
</TABLE>
<PAGE>
(I) The members of the peer group, all of which engage in the home care and/or
infusion business, include: American Med Technologies, Amserv Healthcare, Inc.,
Coram Healthcare Corp., Health Management, Health Professionals, Inc., Hospital
Staffing Services, Inc., In Home Health, Inc., Maxicare Health Plans, Medical
Innovations, Inc., Mid Atlantic Medial Services, Oslten Corp., Quantum Health
Resources, Inc.
401 (K) PLAN
In 1992, the Company adopted a defined contribution plan under section
401(k) of the Internal Revenue Code of 1986 to begin operation in 1993. A
substantial portion of the employees of the Company and its subsidiaries are
entitled to participate in this plan. The Company currently has no other
deferred compensation plans. Except as described herein, the Company has no
current plans relating to bonuses and awards that may be granted to management,
although the Company reserves the right in the future to grant such other
bonuses or awards.
EMPLOYMENT AGREEMENTS
Ann T. Mittasch, President and Chairman of the Company, entered into an
employment agreement with the Company pursuant to which she agreed to serve the
Company on a full-time basis. Her employment agreement runs from January 1, 1992
and ends December 31, 1996. Under this agreement, her salary was $227,559 for
1995 with annual increases. Bonuses, awards and other benefits may be granted to
Mrs. Mittasch on a periodic basis by the Board of Directors, including the right
to participate in group life insurance, medical and retirement plans, if any.
The employment agreement also contains non-competition and other covenants.
DIRECTOR COMPENSATION
Ann Mittasch, Gilda Schechter and Randolph Mittasch, each serving as both
directors and officers of the Company, do not receive compensation for serving
as directors. Mr. John Lynch and Dr. Alex Maurillo, who are the Company's two
independent directors, each receive $250 for each Board of Directors meeting
they attend as compensation for serving as directors.
<PAGE>
1990, 1991, 1993 AND 1995 STOCK OPTION PLANS
The Company's currently operative Stock Option Plans consist of the 1990
Stock Option Plan (the "1990 Plan"), the 1991 Stock Option Plan (the "1991
Plan") and the 1993 Stock Option Plan (the "1993 Plan") and the 1995 Stock
Option Plan (the "1995 Plan"), (the 1990 Plan, the 1991 Plan, the 1993 Plan and
the 1995 Plan are sometimes collectively referred to herein as the "Plans").
Under the Plans, a total of 1,525,000 shares of Common Stock have been reserved
for issuance to officers, directors, key employees and consultants who are not
employees of the Company. As of December 31, 1995, options to purchase a total
of 23,000 shares and 1,168,000 shares were granted under the 1990 Plan and the
1991,1993 and 1995 Plans, respectively, of which 490,000 shares were exercised.
The options granted under the 1990 Plan on the one hand, and the 1991,1993 and
1995 Plans on the other hand, as of December 31, 1995 are exercisable at an
average exercise price of $5.17 and $2.93, respectively (although such terms are
subject to modification by the Board of Directors). Each Plan operates
similarly. All Plans permit the issuance of both options that qualify for
treatment as "incentive stock options" ("ISOs") under Section 422 of the
Internal Revenue Code of 1986 ("Section 422") and non-statutory options.
1991 STOCK INCENTIVE PLAN
Effective July 1, 1991, the Company established the 1991 Stock Incentive
Plan (the "Stock Plan") pursuant to which the Board of Directors may from time
to time award up to 50,000 shares of Common Stock under the Stock Plan.
As of December 31, 1995, the Company issued a total of 4,350 shares of
Common Stock under the Stock Plan to 18 employees of the Company in
consideration for their services to the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions on compensation of the Company's executives are generally made by
the Board of Directors in accordance with the General Corporation Law of the
State of Delaware. Ann T. Mittasch, Gilda G. Schechter and Randolph T. Mittasch,
who are three of the five members of the Board of Directors, are also officers
and employees of the Company. Ann T. Mittasch did not participate in any
discussions or decisions of the Board regarding her salary, bonus or option
grants received by her during fiscal 1995.
BOARD COMPENSATION COMMITTEE REPORT
COMPENSATION POLICES TOWARD EXECUTIVE OFFICERS
The Board of Directors' compensation policies are designed to provide
competitive levels of compensation that relate to the Company's annual and
long-term performance goals, reward above-average corporate performance,
recognize individual initiative and achievements, and assist the Company in
attracting and retaining qualified executives.
<PAGE>
Target levels of the executive officers' overall compensation are intended
to be consistent with others in the Company's peer group in the home healthcare
and healthcare services industry. The Company generally targets the low to
mid-range of compensation paid by the peer group companies for comparison,
although the Company reserves the right to change policies based on the
Company's growth or performance. As a result of the implementation of these
policies, the Company's executives may be paid more or less than the executives
of the Company's competitors in any particular year.
The Board of Directors also believes that stock ownership by management and
stock- based performance compensation arrangements are beneficial in aligning
management's and stockholders' interests in the enhancement of stockholder
value. Thus, the Board of Directors has also increasingly utilized the grant of
stock options in the Company's compensation package for its executive officers.
The Board of Directors does not have a separate compensation committee. See
"Executive Compensation-Compensation Committee Interlocks and Insider
Participation."
FISCAL 1995 BONUS AWARDS
Executive performance bonus opportunities are based on objective and
subjective performance criteria such as contribution to the Company's revenue
and the potential for long- term expansion and growth in revenues and earnings
(of which there can be no assurance). Performance criteria vary each year
depending on the Company's changing and evolving issues, challenges and goals.
Performance criteria can include consummation of proposed transactions,
successful completion of financing, increases in revenues and earnings and
attainment of other goals such as commencement of new subsidiaries or areas of
business.
MRS. MITTASCH FISCAL 1995 COMPENSATION
Regulations of the Securities and Exchange Commission require the Board of
Directors to disclose the Board's basis for compensation reported for Mrs.
Mittasch in fiscal 1995 and to discuss the relationship between the Company's
performance during the last fiscal year and Mrs. Mittasch's compensation. Mrs.
Mittasch's base salary was based on an employment agreement entered into with
the Company in February, 1992. The options granted and the option reductions to
Mrs. Mittasch where based on her successful efforts to establish and expand the
Company's subsidiary, Mail Order Meds, her successful efforts at maintaining the
profitability of the Company and her leading the Company into various
arrangements with managed care companies.
SUBMITTED BY THE COMPANY'S BOARD OF DIRECTORS
Ann T. Mittasch Gilda G. Schechter Randolph J. Mittasch
John J. Lynch Dr. Alex Maurillo
<PAGE>
PROPOSAL 2
RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Deloitte & Touche LLP to
act as the independent public accountants to audit and report on the financial
statements of the Company for the year ending December 31, 1996, subject to the
right of the Board of Directors to replace this firm. This selection, subject to
the Board's aforementioned right of replacement, is being submitted for
ratification by stockholders and, to be effective, must be approved by the
holders of a majority of the issued and outstanding shares of the Company's
voting stock present in person or represented by proxy at the Annual Meeting
(abstentions will be counted as an "against" vote and broker non-votes will be
disregarded and will have no outcome on the vote).
A representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting with an opportunity to make a statement if he desires to do so,
and is expected to be available to respond to appropriate questions.
On September 19, 1994, the Company, at the recommendation of its Board of
Directors, replaced Geschwind, Davidson & Company ("GDC") as the Company's
independent auditors and appointed Deloitte & Touche LLP as the new independent
auditors. GDC's report on the financial statements of the Company for the year
ended December 31, 1993 contained no adverse opinion or disclaimer of opinion
and was not otherwise qualified or modified as to uncertainty, audit scope or
accounting principles.
During the year ended on December 31, 1993 and the subsequent interim
period preceding GDC's replacement (the "Prior Period"), there were no
disagreements between the Company and GDC on any matter of accounting principles
or practices, financial statement disclosures or auditing scope or procedure. No
events of the kind described in paragraphs (A) through (D) of Section (a) (1)
(v) of SEC Rule SK, Item 304, occurred with respect to the Company during the
Prior Period.
THE BOARD RECOMMENDS APPROVAL OF THIS PROPOSAL.
<PAGE>
STOCKHOLDER PROPOSALS
Proposals by stockholders intended for inclusion in the proxy statement to
be mailed to all stockholders entitled to vote at the next annual meeting of the
Company must be received by the Company or its principal executive officers no
later than April 1, 1997. The Company will only include proposals by
stockholders who meet the eligibility requirements described in Rule 14a-8 (a)
(1) under the Securities Exchange Act of 1934.
COST OF SOLICITATION
The cost of soliciting proxies on the accompanying proxy form will be borne
by the Company. In addition to solicitation by mail, the Company will request
banks, brokers and other custodians, nominees and fiduciaries to send proxy
material to the beneficial owners and to secure their voting instructions, if
necessary. The Company will reimburse them for their reasonable expenses in so
doing. Directors, officers and regular employees of the Company may solicit
proxies personally, by telephone and by telegram from stockholders if proxies
are not received promptly.
GENERAL
The Board of Directors knows of no business that will be presented for
action at the Annual Meeting in addition to the matters specified in the
accompanying Notice of the Annual Meeting. If other matters do come before the
Annual Meeting, it is intended that proxies will be voted in accordance with the
judgment of the person or persons exercising at the Annual Meeting the authority
conferred by the proxy.
It is important that proxies be returned promptly. Therefore, stockholders
are requested to complete, sign and date the accompanying proxies and to return
them promptly in the enclosed envelope.
New York, New York By order of the Board of
Directors
April 26, 1996
Randolph J. Mittasch
Secretary and Treasurer
