VIVRA INC, SC 14D9/A, 1997-05-13

VIVRA INC
SC 14D9/A, 1997-05-13
MISC HEALTH & ALLIED SERVICES, NEC

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

------------------------

SCHEDULE 14D-9

(RULE 14D-101)

SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO

SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO. 1)

------------------

VIVRA INCORPORATED

(NAME OF SUBJECT COMPANY)

VIVRA INCORPORATED

(NAME OF PERSON FILING STATEMENT)

--------------------------

COMMON STOCK, PAR VALUE $.01 PER SHARE

(TITLE OF CLASS OF SECURITIES)

--------------------------

92855M104

(CUSIP NUMBER OF CLASS OF SECURITIES)

--------------------------

KENT J. THIRY

PRESIDENT AND CHIEF EXECUTIVE OFFICER

VIVRA INCORPORATED

1850 GATEWAY DRIVE, SUITE 500

SAN MATEO, CALIFORNIA 94404

(415) 577-5700

(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE

NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING THIS STATEMENT)

--------------------------

COPIES TO:

JOHN W. LARSON, ESQ.

ALEXANDER D. LYNCH, ESQ.

BROBECK, PHLEGER & HARRISON LLP

TWO EMBARCADERO PLACE

2200 GENG ROAD

PALO ALTO, CALIFORNIA 94303

(415) 421-0160

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<PAGE>

ITEM 9. MATERIALS TO BE FILED AS EXHIBITS

<TABLE>
<S> <C>
(a)(1) Offer to Purchase, dated May 9, 1997.*
(a)(2) Letter of Transmittal.*
(a)(3) Press release issued by the Company on May 5, 1997.*
(a)(4) Opinion of Goldman, Sachs & Co., dated May 5, 1997.*
(a)(5) Letter to Stockholders, dated May 9, 1997, from Kent J .Thiry, President and Chief
Executive Officer of the Company.*
(c)(1) Agreement and Plan of Merger, dated as of May 5, 1997, among Parent, Purchaser and
the Company.*
(c)(2) Relevant Portions of the Company's Information Statement filed with the Securities
and Exchange Commission on May 9, 1997 pursuant to Section 14(f) of the Securities
Exchange Act of 1934, as amended.
(c)(3) Sections 1 and 2 of the Services Agreement, dated May 5, 1997, by and between the
Company and VSP.*
(c)(4) Agreement and Plan of Reorganization, dated as of May 5, 1997, by and between VSP
Holdings, Inc., VSP Holdings II, Inc., VSP Acquisition, Inc., Vivra Specialty
Partners, Inc. and Vivra Incorporated.*
(c)(5) Vivra Incorporated Retention Arrangement.
(c)(6) Vivra Specialty Partners, Inc. Retention Arrangement.
(c)(7) Article 8 of the Company's Certificate of Incorporation, as amended to date.
(c)(8) Revised and Restated Employment Contract, dated December 15, 1996, between the
Company and Mr. Thiry.*
(c)(9) Employment Contract dated October 31, 1995, between the Company and Ms. Zumwalt.*
</TABLE>

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* Previously filed.

<PAGE>
SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.

VIVRA INCORPORATED

By: /s/ KENT J. THIRY
-----------------------------------------
Kent J. Thiry
PRESIDENT AND CHIEF EXECUTIVE OFFICER

Dated: May 13, 1997

<PAGE>
SCHEDULE I

VIVRA INCORPORATED
1850 GATEWAY DRIVE, SUITE 500
SAN MATEO, CALIFORNIA 94404
(415) 577-5700

INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED,
AND RULE 14F-1 PROMULGATED THEREUNDER

------------------------

This Information Statement is being mailed on or about May 9, 1997 as a part
of the Solicitation/ Recommendation Statement of the Company on Schedule 14D-9
(the "Schedule 14D-9") to the holders of record of the Shares at the close of
business on or about May 5, 1997. You are receiving this Information Statement
in connection with the possible election of persons designated by the Purchaser
to a majority of the seats on the Company's Board of Directors. The Merger
Agreement requires the Company, at the request of Purchaser, to take all action
necessary to cause Purchaser Designees (as hereinafter defined) to be elected to
the Board of Directors under the circumstances described therein. This
Information Statement is required by Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. See "Board of Directors and Executive Officers --
Right to Designate Directors; Purchaser Designees" below. You are urged to read
this Information Statement carefully. You are not, however, required to take any
action in this regard.

Pursuant to the Merger Agreement, Purchaser commenced the Offer on May 9,
1997. The Offer is scheduled to expire at 12:00 midnight, New York City time, on
June 6, 1997, unless the Offer is extended in accordance with the terms of the
Merger Agreement.

The information contained in this Information Statement concerning Parent,
Purchaser and the Purchaser Designees has been furnished to the Company by
Parent, and the Company assumes no responsibility for the accuracy or
completeness of such information. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Schedule 14D-9.

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

GENERAL

Each Share has one vote. As of the close of business on May 5, 1997, there
were 41,991,547 Shares issued and outstanding, which is the only class of voting
securities of the Company outstanding having a right to vote for the election of
directors, each share of which entities its record holder to one vote. The Board
of Directors currently consists of eight members, and there are currently no
vacancies on the Board of Directors. Following the 1997 Annual Meeting, the
Board of Directors will consist of six members, and there are expected to be no
vacancies on the Board of Directors immediately following such meeting. Each
director holds office until such director's successor is elected and qualified
or until such director's earlier resignation, death or removal.

RIGHT TO DESIGNATE DIRECTORS; PURCHASER DESIGNEES

BOARD REPRESENTATION BY PURCHASER. Pursuant to the Merger Agreement, the
Company agreed that, promptly upon the purchase by Purchaser of Shares pursuant
to the Offer, and from time to time thereafter, Purchaser shall be entitled to
designate up to such number of directors (the "Purchaser Designees"), rounded up
to the next whole number, on the Board of Directors as shall give Purchaser

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representation on the Board of Directors equal to the product of the total
number of directors on the Board of Directors (giving effect to the directors
elected pursuant to this sentence) multiplied by the percentage that the
aggregate number of Shares beneficially owned by Purchaser or any affiliate of
Purchaser following such purchase bears to the total number of Shares then
outstanding. In furtherance thereof, the Company agreed that at such time it
shall promptly take all actions necessary to cause the Purchaser Designees to be
elected as directors of the Company, including increasing the size of the Board
of Directors or securing the resignations of its incumbent directors, or both.
The Merger Agreement further provides that at such times, the Company shall,
upon the written request of Purchaser, use its reasonable efforts to cause
persons so designated by Purchaser to constitute the same percentage as persons
designated by Purchaser shall constitute of the Board of Directors of (i) each
committee of the Board of Directors, (ii) each board of directors of each
domestic Dialysis Subsidiary of the Company and (iii) each committee of each
such Dialysis Subsidiary's board of directors, in each case only to the extent
permitted by applicable law. Notwithstanding the foregoing, until the earlier of
(i) the time Purchaser acquires a majority of the then outstanding Shares on a
fully diluted basis and (ii) the Effective Time, the Company shall use its
reasonable efforts to ensure that all members of the Board of Directors and each
committee of the Board of Directors and such boards of directors and committees
of the domestic Dialysis Subsidiaries as of the date of the execution of the
Merger Agreement who are not employees of the Company shall remain members of
the Board of Directors and of such boards of directors and committees, except
for the members who do not stand for re-election at the 1997 Annual Meeting.

It is expected that the Purchaser Designees may assume office at any time
following the purchase by Purchaser of a majority of the Shares outstanding on a
fully diluted basis pursuant to the Offer, which purchase cannot be earlier than
12:00 midnight on June 6, 1997 and that, upon assuming office, the Purchaser
Designees will thereafter constitute at least a majority of the Board of
Directors. To the extent the Company's Board of Directors will consist of
persons who are not Purchaser Designees, the remainder of the Board of Directors
is expected to consist of those persons who are currently directors of the
Company who have not resigned.

As of the date of this Information Statement, Purchaser has not determined
who will be the Purchaser Designees. However, the Purchaser Designees shall be
selected from among the directors and executive officers of Parent or Purchaser.
Certain information regarding the list of candidates as Purchaser Designees is
contained in Schedule A annexed hereto.

None of the persons from among whom the Purchaser Designees will be selected
or their associates is a director of, or holds any position with, the Company.
To the best knowledge of the Company, except as set forth on Schedule A annexed
hereto, none of the Purchaser Designees or their associates beneficially owns
any equity securities, or rights to acquire any equity securities, of the
Company or has been involved in any transactions with the Company or any of its
directors or executive officers that are required to be disclosed pursuant to
the rules and regulations of the Commission.

DIRECTORS OF THE COMPANY

The members of the Board of Directors of the Company are classified into
three classes, one of which is elected at each Annual Meeting of Stockholders to
hold office for a three-year term and until successors of such class have been
elected and qualified. The following table sets forth, as of May 9, 1997, as to
each

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current director of the Company, his or her age and principal occupation and
business experience and the period during which each has served as a director of
the Company.

<TABLE>
<CAPTION>
DIRECTOR
OCCUPATION AND CONTINUOUSLY TERM
NAME AGE BUSINESS EXPERIENCE SINCE EXPIRES
- ------------------------------------ --- --------------------------------------------- --------------- -----------
<S> <C> <C> <C> <C>
David G. Connor, M.D. .............. 56 Physician in private practice in Daly City, 1989 1997
California, since 1973, specializing in
nephrology and internal medicine; Medical
Director of the Company's dialysis center in
Daly City, California, since 1977; 1986-1988,
President of the Medical Staff of Seton
Medical Center, a general hospital in Daly
City, California, not affiliated with the
Company.
Richard B. Fontaine................. 53 Independent health care consultant since 1992 1997
1992; 1988-1992, Senior Vice President of
CR&R Incorporated, a waste management
company; 1984-1988, Vice President, Business
Development of Caremark, Inc., a health care
company, neither of which corporations is
affiliated with the Company.
Stephen G. Pagliuca................. 41 Managing General Partner of Information 1992 1998
Partners, a venture capital firm since 1989;
1986-1989, Vice President of Bain & Company,
a management consulting company, neither of
which entities is affiliated with the
Company.
Kent J. Thiry....................... 41 President and Chief Executive Officer of the 1991 1998
Company since September 1992; April-August
1992, President and Co-Chief Executive
Officer of the Company; September 1991-March
1992, President and Chief Operating Officer
of the Company; 1983-1991, Consultant, then
Vice President, Director of U.S. Health Care
Consulting, Bain & Company, Inc., San
Francisco, California. Mr. Thiry is also a
director of Summit Medical Services, Inc., a
medical information services company, of
which the Company owns approximately two
percent of the Common Stock.
</TABLE>

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<TABLE>
<CAPTION>
DIRECTOR
OCCUPATION AND CONTINUOUSLY TERM
NAME AGE BUSINESS EXPERIENCE SINCE EXPIRES
- ------------------------------------ --- --------------------------------------------- --------------- -----------
<S> <C> <C> <C> <C>
LeAnne M. Zumwalt................... 38 Chief Financial Officer of the Company since 1994 1998
May 1996 and Treasurer and Secretary since
March 1995; August 1995 through May 1996,
Executive Vice President of the Company;
November 1993-1995, Vice President, Finance
of the Company; joined the Company in 1991;
prior thereto Audit Senior Manager with Ernst
& Young.
Alan R. Hoops....................... 48 Chief Executive Officer and Director of 1995 1999
PacifiCare Health Systems, a healthcare
company which is not affiliated with the
Company, since 1993; 1991-1993, Chief
Operating Officer of PacifiCare Health
Systems.
David L. Lowe....................... 37 Chairman and Chief Executive Officer of ADAC 1995 1999
Laboratories, Inc., a medical imaging and
healthcare information company, which is not
affiliated with the Company, since 1994;
1992-1994, Chief Executive Officer of ADAC
Laboratories, Inc. and 1988-1994 President of
ADAC Laboratories, Inc.
John M. Nehra....................... 48 General Partner of New Enterprise Associates, 1989 1999
a venture capital partnership since December
1993; Managing General Partner of Catalyst
Ventures L.P., a venture capital partnership
since 1989; 1983-1989, Managing Director of
Alex. Brown & Sons, Inc., an investment
banking firm, responsible for its Capital
Markets Group, including health care
corporate finance, neither of which entities
is affiliated with the Company.
</TABLE>

BOARD MEETINGS AND COMMITTEES

During the fiscal year ended November 30, 1996, the Board of Directors met
seven times. All of the Company's directors attended at least 75 percent of the
scheduled Board of Directors meetings and meetings held by committees of the
Board of Directors of which they were members. In addition to attending Board of
Directors and committee meetings, the directors of the Company meet their
responsibilities through communication with the Chief Executive Officer and
other members of management on matters affecting the Company.

The Audit Committee currently consists of Stephen G. Pagliuca, Chair, John
M. Nehra and David G. Connor, M.D. The Audit Committee met once in fiscal 1996.
The Audit Committee recommends the appointment of the Company's independent
accountants; reviews the scope and results of the audit plans of the independent
accountants; oversees the scope and adequacy of the Company's internal
accounting

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control and record-keeping systems; confers independently with the independent
accountants; and determines the appropriateness of fees for audit and non-audit
services performed by the independent accountants.

The Compensation Committee currently consists of Richard B. Fontaine, Chair,
David L. Lowe and Stephen G. Pagliuca. The Compensation Committee met three
times in fiscal 1996. The Compensation Committee reviews and recommends to the
Board of Directors salary and incentive compensation for the Chief Executive
Officer, including bonus, stock options and restricted stock; reviews salaries
and incentive compensation for all corporate officers and senior executives;
reviews incentive compensation to be allocated to employees; and administers and
authorizes awards under the Company's 1989 Stock Incentive Plan. The Chair of
the Compensation Committee also conducts annual reviews of the Company's
executive officers, including collecting feedback from subordinates of the
executives.

The Governance Committee currently consists of John M. Nehra, Chair, and
Richard B. Fontaine. The Governance Committee met once in fiscal 1996. Its
purpose is to create policies for and make recommendations to the Board of
Directors regarding the organization and structure of the Board of Directors;
the role and effectiveness of the Board of Directors and each of the Board of
Directors' committees in the Company's corporate governance process; and the
qualifications of and candidates for directorships.

The Clinical Quality Committee currently consists of David L. Lowe, Chair,
and David G. Connor, M.D. In fiscal 1996, the Clinical Quality Committee held
numerous meetings with physicians and others concerning the Company's Clinical
Quality Initiative. Its purpose is to monitor quality of care issues, oversee
progress in the improvement of clinical care and review and measure outcomes of
care in comparison to medical guidelines and industry standards.

DIRECTOR REMUNERATION

Those directors who are not employed by the Company receive a fee of $1,500
for each Board of Directors meeting attended, plus travel expenses, if any.
Nonemployee directors also receive an annual automatic grant of an option to
purchase 5,062 shares of Common Stock, and a related limited stock appreciation
right ("LSAR") under the Company's Revised 1989 Stock Incentive Plan. During
fiscal 1996 and fiscal 1997, nonemployee directors also received fees payable in
grants of stock, options or cash ranging from (i) an annual retainer of $40,000,
with $20,000 in restricted stock and $20,000 in cash, for the Chair of the
Compensation Committee, with cash fees of $2,000 and $1,500 for each meeting
attended in person by the Chair and committee members, respectively; (ii) an
annual retainer of $20,000 in restricted stock for the Chair of the Audit
Committee, with cash fees of $2,000 and $1,000 for each meeting attended in
person by the Chair and committee members, respectively; (iii) an annual
retainer of $20,000 in restricted stock for the Chair of the Governance
Committee, with cash fees of $2,000 and $1,000 for each meeting attended in
person by the Chair and committee members, respectively; and (iv) an annual
retainer of $10,000 in restricted stock for the Chair of the Clinical Quality
Committee, with cash fees of $2,000 and $1,000 for each meeting attended in
person by the Chair and committee members, respectively. Additionally, each
Chair and committee member receives cash fees of $500 for each meeting attended
telephonically, except that the Chair of the Governance Committee receives cash
fees of $1,500 for each meeting attended telephonically. Officers of the Company
who serve as directors receive no fee, but are reimbursed for expenses incurred
in attending meetings. If the amendment and restatement of the Company's 1989
Stock Incentive Plan is approved at the 1997 Annual Meeting, the annual retainer
for the Chair of the Compensation Committee will increase to $55,000 with
$27,500 in restricted stock and $27,500 in cash.

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During fiscal 1996, each of the outside directors received, in addition to
the amounts set forth above, options to purchase shares in certain subsidiaries
of the Company at the fair market value of such shares on the date of grant as
follows:

<TABLE>
<CAPTION>
VIVRA ASTHMA &
ALLERGY CAREAMERICA VIVRA HEALTH VIVRA SPECIALTY
------------------------- ADVANTAGE, INC. PARTNERS, INC.
STRIKE ---------------------------- ---------------------------
DIRECTOR NAME # OF OPTIONS PRICE # OF OPTIONS STRIKE PRICE # OF OPTIONS STRIKE PRICE
- ---------------------------------------- ------------ ----------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
David G. Connor, M.D.(1)*............... 57,564 $ 0.5625 9,853 $ 0.79 28,227 $ 1.65
Richard B. Fontaine*.................... 287,820 $ 0.5625 49,265 $ 0.79 141,135 $ 1.65
Alan R. Hoops*.......................... 115,128 $ 0.5625 19,706 $ 0.79 56,454 $ 1.65
David L. Lowe*.......................... 57,564 $ 0.5625 9,853 $ 0.79 28,227 $ 1.65
John M. Nehra(2)*....................... 287,820 $ 0.5625 49,625 $ 0.79 141,135 $ 1.65
Stephen G. Pagliuca*.................... 201,474 $ 0.5625 34,486 $ 0.79 98,795 $ 1.65
</TABLE>

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* The subsidiary options granted to each of Dr. Conner, Mr. Fontaine, Mr.
Hoops, Mr. Lowe, Mr. Nehra and Mr. Pagliuca will terminate upon the closing
of the Specialty Merger Transaction without any payment being made in
connection with such termination.

(1) In fiscal 1995, David G. Connor, M.D. was granted options to purchase 2,500
shares of Vivra Heart Services, Inc., a subsidiary of the Company ("VHS"),
at $.50 per share.

(2) In connection with consulting services provided to the Company in fiscal
1995, John M. Nehra was granted options to purchase 60,000 shares of VHS at
$.50 per share and options to purchase 50,000 shares of VHS at $1.00 per
share.

No other compensation is paid to the nonemployee members of the Board of
Directors with respect to their service on the Board of Directors.

EXECUTIVE OFFICERS OF THE COMPANY

The identity of the current executive officers of the Company (excluding
those executive officers who are directors, as discussed in the section above
entitled "Directors of the Company") and certain biographical information is set
forth below.

<TABLE>
<CAPTION>
PERIOD OF SERVICE AND
NAME AGE TITLE BUSINESS EXPERIENCE
- -------------------------------------- --- -------------------- ---------------------------------------------
<S> <C> <C> <C>
David P. Barry........................ 38 President of Vivra Appointed March 1996. May 1992, Vice
Renal Care, Inc. President; August 1995, President, VRC,
("VRC") responsible for operations; December 1993,
President, Specialty CareAmerica, Inc.,
responsible for specialty dialysis services;
May 1992-November 1993, President, Personal
Care Health Services, Inc., a former
subsidiary of the Company, responsible for
operations of the home health care business;
1984-1992, District Manager for California
Homedco, an infusion therapy company, since
1990.
</TABLE>

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<PAGE>
<TABLE>
<CAPTION>
PERIOD OF SERVICE AND
NAME AGE TITLE BUSINESS EXPERIENCE
- -------------------------------------- --- -------------------- ---------------------------------------------
<S> <C> <C> <C>
Terry Gilpin.......................... 49 Executive Vice Appointed September 1996. 1995, Vice
President of VRC President of VRC; December 1994, Vice
President of Nephrology Services Group, a
subsidiary of the Company; 1993-1994, Chief
Operating Officer of Medical Resources, Inc.,
a diagnostic imaging company; 1992-1993, Vice
President, Sales of Home Nutritional
Services, Inc.; 1982-1992, Vice President of
Glasrock Home Healthcare, Inc.

Gregory M. Holcomb.................... 46 Vice President, Appointed Vice President, Finance November
Finance of VRC 1993. Prior thereto, Director of Finance for
the Company.

Charles McAllister, M.D............... 49 Vice President, Appointed Vice President, Clinical Affairs at
Clinical Affairs of VRC 1992; Medical Director, VRC of Clearwater
VRC and Palm Harbor, Florida, since 1987; Private
Medical Practice, Nephrology--Clearwater,
Florida, with specialty in dialysis, clinical
Nephrology and transplantation from 1988
-Present.

Richard Pozen, M.D.................... 49 Vice President, Appointed 1996. 1996, Vice President, Vivra
Medical Director Heart Services, a subsidiary of the Company;
1992-1995, owner and founder of Cardiology
Networks, Inc.; 1983-1995, co-owner and
co-founder of Sokolowica & Pozen, M.D.s, P.A.

Thomas O. Usilton..................... 45 Executive Vice Appointed September 1995 and also appointed
President, Vivra Executive Vice President of Vivra Specialty
Specialty Partners Partners, Inc.; 1990-1994, founder and Chief
Executive Officer of Premier Allergy, Inc.
</TABLE>

COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Exchange Act, requires the Company's directors,
executive officers and persons who own more than 10 percent of a registered
class of the Company's equity securities to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than 10
percent beneficial owners are required by Commission regulations to furnish the
Company with copies of all Section 16(a) reports they file.

Based solely on the Company's review of the copies of such forms it has
received and written representations from certain reporting persons that they
are not required to file Form 5 for the fiscal year ended November 30, 1996, the
Company believes that all of its officers, directors and greater than 10 percent
beneficial owners complied with all filing requirements applicable to them with
respect to transactions during fiscal year 1996, except Messrs. Fontaine,
Pagliuca, Nehra, Lowe, Holcomb, Bilt and

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Barry and Dr. Connor each of whom filed his or her Form 5 for fiscal 1996
approximately two months late with respect to the grant of Stock and/or options
pursuant to the Revised 1989 Stock Incentive Plan.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the annual and long-term compensation paid by
the Company during fiscal 1996, 1995 and 1994 to the Company's Chief Executive
Officer and the four other executive officers of the Company whose total
compensation during fiscal 1996 exceeded $100,000 (collectively, the "Named
Executive Officers"):

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
UNDERLYING
-------------------- OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SARS(#)(1) COMPENSATION($)
- ---------------------------------------------- --------- --------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Kent J. Thiry................................. 1996 275,000 625,000(2) -- 16,733(3)
President and Chief Executive Officer 1995 250,000 275,000 150,000 24,546(3)
1994 225,000 200,000 150,000 17,072(3)

LeAnne M. Zumwalt............................. 1996 160,625 215,000 -- 119,183(4)
Chief Financial Officer, Secretary and 1995 124,200 75,000 84,000 8,956(3)
Treasurer 1994 107,725 60,000 18,000 5,770(3)

David P. Barry................................ 1996 165,000 300,000 90,000 15,576(3)
Executive Vice President 1995 127,000 225,000 141,000 8,519(3)
1994 115,000 120,725 10,500 7,893(3)

Thomas O. Usilton............................. 1996 137,150 210,000 -- --
Vice President 1995 102,000 29,300 -- --

Jacob Lazarovic, M.D.......................... 1996 197,250 -- -- --
Vice President 1995 196,500 32,000 41,250 --
</TABLE>

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(1) Excludes the value of subsidiary options granted.

(2) Includes a contingent bonus of $300,000 for fiscal 1993, which was paid
after November 30, 1996, upon Board of Director approval, because the
Company's earnings per share as of that date was in excess of $1.25, which
represented a 17.5 percent compound annual growth rate over earnings per
share reported for fiscal 1992.

(3) Includes share of Company's contribution to the Company's Profit Sharing
Plan and/or car allowance.

(4) Includes share of Company's contribution to the Company's Profit Sharing
Plan, a bonus payment made with respect to Ms. Zumwalt's loan with the
Company and moving cost reimbursements related to Ms. Zumwalt's relocation
from Aliso Viejo, California.

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OPTION GRANTS IN LAST FISCAL YEAR

The following table shows, with respect to the Named Executive Officers,
certain information concerning the grant of stock options in fiscal 1996. No
stock appreciation rights were granted during fiscal 1996.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK
NUMBER OF OPTIONS/SARS PRICE APPRECIATION
SECURITIES GRANTED TO EXERCISE FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM
OPTIONS/SARS IN FISCAL PRICE EXPIRATION --------------------
NAME GRANTED YEAR ($/SH) DATE 5%($) 10%($)
- -------------------------------------------- ------------- ----------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kent J. Thiry............................... -- -- -- -- -- --
LeAnne M. Zumwalt........................... -- -- -- -- -- --
David P. Barry.............................. 45,000(1) 8.0 29.75 08/29/01 369,872 817,320
45,000(2) 8.0 29.38 11/21/01 365,210 807,018
Thomas O. Usilton........................... -- -- -- -- -- --
Jacob Lazarovic, M.D........................ -- -- -- -- -- --
</TABLE>

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(1) Vests 20 percent on August 29, 1996 and 20 percent each year on August 29,
1997 through 2000 and 100% in the event of a change of control. Consummation
of the Offer will constitute a change of control for purposes of these
option grants.

(2) Vests 20 percent on November 21, 1996 and 20 percent each year on November
21, 1997 through 2000 and 100% in the event of a change of control.
Consummation of the Offer will constitute a change of control for purposes
of these option grants.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following table sets forth certain information with respect to the Named
Executive Officers regarding the exercise of options and/or limited SARs during
the last fiscal year and unexercised options and limited SARs held as of
November 30, 1996:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS AT FISCAL
SHARES YEAR-END YEAR-END($)(1)
ACQUIRED VALUE -------------------------- -------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------- ----------- ---------- ----------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kent J. Thiry............................ 227,000 4,886,363 452,500 232,500 7,654,862 2,313,750
LeAnne M. Zumwalt........................ 39,638 627,314 28,350 78,450 289,429 706,575
David P. Barry........................... 81,600 1,363,788 52,650 182,250 307,525 1,025,825
Thomas O. Usilton........................ 10,100 139,479 1,000 21,900 8,833 217,251
Jacob Lazarovic, M.D..................... -- -- 16,500 24,750 152,625 228,937
</TABLE>

- ------------------------

(1) The closing price of the Company's Common Stock on the New York Stock
Exchange on November 30, 1996 was $30.75 per share.

SUBSIDIARY OPTIONS

The Company has granted options to employees and other individuals in
various operating subsidiaries. The purpose of such option grants is to motivate
individuals directly responsible for each such subsidiary's success. Under the
subsidiary option programs, options are granted pursuant to a stock option plan
adopted by the subsidiary. Each option is reflected by an option agreement which
provides for the grant of options at fair market value on the date of grant
typically with a term of the earlier of five years or a period after death,
disability or termination of employment. The subsidiary may also compel the
exercise

I-9
<PAGE>

of options under certain circumstances. The options generally vest over a
four-year term in equal annual installments. All of the subsidiary options were
granted at exercise prices in excess of the Per Share Amount. Option holders are
also required to be bound by the terms of a stockholders' agreement (the
"Stockholders' Agreement"). The Stockholders' Agreement contains rights of first
refusal on transfers of Stock issued pursuant to the exercise of such option
grants by stockholders, a right of the subsidiary to repurchase such shares (the
"Call Right") in the event the employee is no longer employed by the subsidiary,
and a right of the employee to compel the subsidiary to repurchase (a "Put
Right") the shares in 1999. The Call Right and the Put Right may be satisfied by
the Company by the payment of cash, a promissory note, or, in some cases, an
equivalent value of the Company's Common Stock. The Stockholders' Agreement also
contains various other rights and restrictions, including "piggyback"
registration rights to include shares in certain registration statements filed
by the subsidiary under the Securities Act of 1933, as amended. As a condition
to the closing of the Specialty Merger Transaction, the Stockholders' Agreements
relating to subsidiaries of VSP will be terminated.

SUBSIDIARY OPTION GRANTS TO DIRECTORS AND EXECUTIVE OFFICERS AS OF 11/30/96

<TABLE>
<CAPTION>
VIVRA
SPECIALTY
VIVRA ASTHMA & VIVRA HEALTH VIVRA HEART PARTNERS,
FISCAL ALLERGY CAREAMERICA ADVANTAGE, INC. SERVICES, INC. INC.
YEAR --------------------- ---------------------- -------------------- ----------
OF # OF STRIKE # OF STRIKE # OF STRIKE # OF
DIRECTOR NAME GRANT OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE OPTIONS
- ------------------------------------ ----------- ---------- --------- --------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Barry*........................ 1995 -- -- -- -- 10,000 $ .50 60,000
1996 -- -- -- -- -- -- 95,000

David G. Connor, M.D.*.............. 1995 -- -- -- -- 2,500 $ .50 --
1996 57,564 $ .5625 9,853 $ .79 -- -- 28,227

Richard B. Fontaine*................ 1996 287,820 $ .5625 49,625 $ .79 -- -- 141,135

Alan R. Hoops*...................... 1996 115,128 $ .5625 19,706 $ .79 -- -- 56,454

Jacob Lazarovic, M.D................ 1995 -- -- -- -- -- -- 270,000
1996 -- -- -- -- -- -- 78,000
10,000

David L. Lowe*...................... 1996 57,564 $ .5625 9,853 $ .79 -- -- 28,227

John M. Nehra*...................... 1995 -- -- -- -- 60,000 $ .50 --
50,000 $ 1.00
1996 287,820 $ .5625 49,625 $ .79 -- -- 141,135

Stephen G. Pagliuca*................ 1996 201,474 $ .5625 34,486 $ .79 -- -- 98,795

Richard Pozen, M.D.................. 1995 -- -- -- -- 220,000 $ .50 --
1996 60,000 $ 1.00 60,000

Kent J. Thiry....................... 1996 2,302,560 $ .5625 197,060 $ .79 -- -- 1,129,080

Thomas O. Usilton................... 1995 -- -- -- -- 30,000 $ 1.00 180,000
1996 20,000 $ .3750 -- -- -- -- 110,000
223,900

LeAnne Zumwalt...................... 1995 -- -- -- -- 15,000 $ .50 70,000
1996 863,460 $ .5625 73,898 $ .79 -- -- 353,405
111,367

STRIKE
DIRECTOR NAME PRICE
- ------------------------------------ ---------
<S> <C>
David Barry*........................ $ 1.65
$ 1.65
David G. Connor, M.D.*.............. --
$ 1.65
Richard B. Fontaine*................ $ 1.65
Alan R. Hoops*...................... $ 1.65
Jacob Lazarovic, M.D................ $ 1.65
$ 1.65
$ 2.94
David L. Lowe*...................... $ 1.65
John M. Nehra*...................... --

$ 1.65
Stephen G. Pagliuca*................ $ 1.65
Richard Pozen, M.D.................. --
$ 1.65
Kent J. Thiry....................... $ 1.65
Thomas O. Usilton................... $ 1.65
$ 1.65
$ 2.94
LeAnne Zumwalt...................... $ 1.65
$ 1.65
$ 2.94
</TABLE>

* The subsidiary options granted to each of Mr. Barry, Dr. Conner, Mr.
Fontaine, Mr. Hoops, Mr. Lowe, Mr. Nehra and Mr. Pagliuca will terminate
upon the closing of the Specialty Merger Transaction without any payment
being made in connection with such termination.

I-10
<PAGE>

EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS

The following is a summary of the material provisions of the employment
agreement between the Company and Mr. Thiry and of employment agreements between
the Company and the other Named Executive Officers, which are substantially
identical to one another except for salary.

Mr. Thiry's employment agreement (which was entered into in March 1996)
provides for an annual salary of at least $275,000 and expires on January 31,
2000. A copy of Mr. Thiry's employment agreement is filed as Exhibit (c)(8) to
the Schedule 14D-9 and is incorporated herein by reference in its entirety. The
Company may award discretionary bonuses under the agreement. Mr. Thiry received
a previously granted contingent bonus of $300,000 because the Company's earnings
per share reached $1.25 for the fiscal year ending November 30, 1996, and such
bonus was approved by the Board of Directors. Mr. Thiry's agreement contains
certain nondisclosure, noncompetition and nonsolicitation covenants. The Company
may terminate Mr. Thiry's employment upon 30 days' written notice (i) upon Mr.
Thiry's breach of the agreement or neglect of his duties; (ii) for cause; or
(iii) upon his permanent disability. The agreement terminates immediately upon
his death. If Mr. Thiry's employment terminates due to his permanent disability
or death, the Company will be obligated to pay him or his estate an amount equal
to one year's salary computed at a rate of at least $300,000. If Mr. Thiry
terminates the agreement due to the Company's breach of the contract, he will be
entitled to receive an amount equal to one and one-half of his annual salary
computed at a rate of at least $300,000 per annum, plus one and one-half of the
discretionary bonuses actually awarded during the fiscal year prior to such
termination. If his employment terminates within one year of a change of control
other than for Mr. Thiry's breach or neglect or termination for cause, Mr. Thiry
will receive payments and benefits, which include (a) a payment equal to 2.99
times the sum of his annual salary computed at a rate of at least $300,000 per
annum and any discretionary bonus paid for the fiscal year immediately preceding
the change of control; (b) continuation of existing or comparable life and
health insurance coverage for three years; (c) acceleration of the
exercisability of stock options and related stock appreciation rights and
vesting of any other stock-related awards; and (d) use of office facilities for
one year. Under the contract, a "change of control" means a change of control
that would be required to be reported pursuant to Item 6(e) of Schedule 14A
under the Securities Exchange Act of 1934, as amended. A "change of control" is
deemed to have occurred if (i) any Person (as defined in the employment
agreement) becomes the beneficial owner, directly or indirectly, of at least 30
percent of the combined voting power of the Company's outstanding securities, or
(ii) during any consecutive two-year period individuals who at the beginning of
such period constitute the Board of Directors cease to constitute at least a
majority thereof, unless the election of other directors has been approved in
advance by at least two-thirds of the directors at the beginning of such period.
The consummation of the Offer will constitute a "change of control" under Mr.
Thiry's employment agreement thereby entitling him, upon a termination of
employment within one year following such change in control, to receive a
severance payment of $1,800,000.

The Company also has employment agreements with each of Messrs. Barry,
Usilton, Lazarovic and Ms. Zumwalt that provide for salaries, which are subject
to annual review by the Board of Directors. A copy of Ms. Zumwalt's employment
agreement is filed as Exhibit (c)(9) to the Schedule 14D-9 and is incorporated
herein by reference in its entirety. The Company may terminate employment at any
time by giving not less than 30 days' written notice and immediately for cause
(as defined in the agreements). Under the agreements, the executives are
eligible to receive bonuses, stock options and other forms of incentive
compensation and will also be eligible to participate in employee benefit and
fringe benefit programs. The executives' agreements contain nondisclosure,
nonsolicitation and noninterference covenants. If the employment of Mr. Barry or
Ms. Zumwalt terminates within two years after a change in control of the
Company, other than for cause, such executive will be entitled to receive
certain payments and benefits which include a payment equal to 2.99 times the
sum of base compensation being paid at the time of the change of control and the
cumulative bonuses received by the executive in the preceding 24 months, and
acceleration of the exercisability of stock options and related stock
appreciation rights. For

I-11
<PAGE>

purposes of the contracts, a "change in control" means (1) any person becoming
the beneficial owner, directly or indirectly, of at least 20 percent of the
combined voting power of the Company's voting securities; (2) a change in the
composition of the Board of Directors as a result of which fewer than two-thirds
of incumbent directors had been directors 24 months prior to such change or were
elected or nominated with the affirmative votes of directors who had been
directors 24 months prior to such change; or (3) a change in control required to
be reported pursuant to Item 6(e) of Schedule 14A under the Exchange Act. The
consummation of the Offer will, upon a termination of employment within two
years following such change of control, constitute a "change of control" under
Ms. Zumwalt's employment agreement thereby entitling her to receive a severance
payment of $870,000. In addition, Mr. Barry and Ms. Zumwalt will receive up to
$2,880,000 (plus a tax gross-up not to exceed approximately $1,344,000) and
$1,920,000 (plus a tax gross-up not to exceed approximately $1,344,000),
respectively, pursuant to the Retention Arrangements. In addition, Mr. Terry
Gilpin, Mr. Gregory Holcomb, Dr. Charles McAllister and Mr. Thomas O. Usilton
will receive $650,000, $250,000, $700,000 and $480,000, respectively, pursuant
to the Retention Arrangements.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables show beneficial ownership as of February 28, 1997 of
the Company's Common Stock, $.01 par value, by the directors and executive
officers and the greater than 5% stockholders:

<TABLE>
<CAPTION>
SHARES OWNED PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY CLASS
- ------------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
David G. Connor, M.D................................................................ 32,097(1) *
Richard B. Fontaine................................................................. 36,818(2) *
Alan R. Hoops....................................................................... 10,124(1) *
David L. Lowe....................................................................... 11,041(3) *
John M. Nehra....................................................................... 25,644(4) *
Stephen G. Pagliuca................................................................. 26,394(5) *
Kent J. Thiry....................................................................... 452,500(1) 1.1%
David P. Barry...................................................................... 52,650(1) *
LeAnne M. Zumwalt................................................................... 28,351(6) *
Thomas O. Usilton................................................................... 1,000(1) *
Putnam Investments, Inc.(7)......................................................... 5,163,405(8) 12.9%
One Post Office Square
Boston, MA 02109
RCM Capital Management(9)........................................................... 3,764,250(10) 9.3%
RCM Limited, L.P.
RCM General Corporation
Four Embarcadero Center
San Francisco, CA 94111
Nichols Company, Inc................................................................ 2,385,194(11) 6.0%
700 North Water Street
Milwaukee, WI 53202
All directors and executive officers as a group (14 persons)........................ 690,644(12) 1.7%
</TABLE>

- ------------------------

* Denotes ownership less than 1% of the outstanding shares of Common Stock.

(1) All shares are subject to options which are currently exercisable.

(2) Includes 31,310 shares subject to options which are currently exercisable.

(3) Includes 10,874 shares subject to options which are currently exercisable.

(4) Includes 25,310 shares subject to options which are currently exercisable.

(5) Includes 26,060 shares subject to options which are currently exercisable.

(6) Includes 28,350 shares subject to options which are currently exercisable.

I-12
<PAGE>

(7) Certain Putnam investment managers (together with their parent corporation,
Putnam Investments, Inc.), are considered "beneficial owners" in the
aggregate of 5,163,405 shares, or 7.2 percent of shares outstanding of the
Company's voting Common Stock, which shares were acquired for investment
purposes by such investment managers for certain of their advisory clients.

(8) Shared voting and investment power, 98,500 and 5,163,405 shares,
respectively.

(9) The parent company of RCM Capital Management, L.L.C., Dresdner Bank AG
("Dresdner"), has beneficial ownership of 3,764,250 shares only to the
extent Dresdner may be deemed to have beneficial ownership of securities
deemed to be beneficially owned by RCM Capital management, L.L.C.

(10) Sole investment power.

(11) Sole voting and investment power, 2,455,950 and 3,661,250 shares,
respectively; shared investment power, 103,000 shares.

(12) Includes 802,015 shares subject to options which are currently exercisable
or will become exercisable within 60 days.

CERTAIN TRANSACTIONS

In connection with Ms. Zumwalt's relocation from Aliso Viejo, California, to
San Mateo, California, in July 1996, the Company loaned Ms. Zumwalt $400,000 to
acquire a new residence. The loan bears interest at an annual interest rate of
6.74 percent. Interest payments are due each year on the last day of the year
and all unpaid interest and principal are due on July 24, 2002. The loan is
secured by a second deed of trust on Ms. Zumwalt's residence. The Company has
agreed to pay Ms. Zumwalt bonuses at least equal to the amount of interest due
on the loan each year.

During the first quarter of 1997, the Board of Directors established the
Special Committee consisting of John M. Nehra, Chair and Richard B. Fontaine,
Member. The Special Committee, working with Goldman Sachs, designed and managed
the process which led to the Merger Agreement and the Specialty Merger
Agreement. The Committee also contacted various parties which expressed interest
in the Company or VSP and ultimately negotiated the terms of the Merger
Agreement, the Offer and the Specialty Merger Agreement. In consideration of the
substantial efforts of the Special Committee, the Board of Directors authorized
payments to be made to Mr. Nehra and Mr. Fontaine in amounts equal to $466,667
and $233,333, respectively. In addition, Mr. Nehra and Mr. Fontaine are also
entitled to approximately $73,500 and $60,000, respectively, for cash fees to be
received for attending meetings of the Special Committee in person or
telephonically and the reimbursement of out-of-pocket expenses incurred in
attending meetings relating to the objectives of the Special Committee.

I-13
<PAGE>
SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND PURCHASER

1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Parent. Unless otherwise indicated, the
current business address of each person is Incentive AB, Hamngatan 2, Box 7373,
S-10391 Stockholm, Sweden. Unless otherwise indicated, each such person is a
citizen of Sweden and has held his or her present position as set forth below
for the past five years and each such person does not beneficially own Shares.
Unless otherwise indicated, each occupation set forth opposite an individual's
name refers to employment with Parent.

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Anders Scharp Chairman since 1992; Chairman of the Boards of:
Electrolux, S-105 45, Stockholm, Sweden since 1991;
Saab-Scania AB, S-581-88 Linkoping, Sweden from 1990 to
1995; Saab AB, S-581-88 Linkoping, Sweden since 1995;
Scania AB, S-151 87 Sodertalje, Sweden since 1995; SKF,
S-415 50 Gothenburg, Sweden since 1992; and Atlas Copco,
S-105 23 Stockholm, Sweden since 1996. Vice Chairman of
the Boards of Investor, S-103 32 Stockholm, Sweden since
1992 and Atlas Copco, S-105 23 Stockholm, Sweden from
1992 to 1996; Director of Email Ltd. (Australia),
Waterloo, NSW 2017, Australia since 1986; Chairman of
Swedish Employers' Confederation, S. blasieholmshamnen
4A, S-103 30 Stockholm, Sweden since 1996 and a director
from 1987 to 1996. Director of Federation of Swedish
Industries, Storgatan 19, S-114 85 Stockholm, Sweden
since 1992.

Casimir Ehrnrooth Director since 1991. Chairman of the Board of Nokia
(Finnish) Group, P.O. Box 226, FIN-00101 Heksinki, Finland since
1992; Director of UPM-Kymmene Corporation, P.O. Box 203,
FIN-00171 Helsinki, Finland since 1996; Director of
Merita Bank Ltd, Alek-Santerinkatu 30, FIN-00100
Helsinki, Finland since 1992; Director of Continental
AG, Postfach 169, D-3001 Hannover, Germany since 1995.
</TABLE>

A-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Mikael Lilius Director since 1991; President and Chief Executive
(Finnish) Officer since 1991; Chairman of Gambro, S-220 10 Lund,
Sweden since 1995; Chairman of Garphyttan Industrier,
P.O. Box 7200, S-103 88 from 1992 to 1996; Chairman of
Orrefors Kosta Boda, S-380 40 Orrefors, Sweden from 1991
to 1995. Director of the Boards of Huhtamaki Oy,
Elelaranta 8, SF-00130 Helsinki, Finland since prior to
1992; Perlos Oy, P.O. Box 9, FIN-01901 Nurmijjarvi,
Stockholm, Sweden since 1997; Westinghouse Air Brake
Company, Wilmerding, PA 15148, USA from 1995 to 1997.

Hakan Mogren Director since 1996. President and CEO of Astra, S-151
85 Sodertalje, Sweden since prior to 1992. Director of
the Boards of Astra, S-151 85 Sodertalje, Sweden since
prior to 1992; Investor, S-103 32 Stockholm, Sweden
since prior to 1992; STORA, S-791 80 Falun, Sweden since
prior to 1992 and the Federation of Swedish Industries
since prior to 1992.

Karl-Erik Sahlberg Director since 1995; Chairman of the Boards of Cardo,
P.O. Box 486, S-201 24 Malmo, Sweden since 1992; S-E
Bank Group, S-106 40 Stockholm, Sweden since 1996,
Vattenfall, S-162 87 Vallingby, Sweden since 1992 and
Lund Institute of Technology since prior to 1992. Vice
Chairman of Skoogs AB, S-205 70 Malmo, Sweden since
prior to 1990. Director of the Board of Tetra Laval
Group, S-221 86 Lund, Sweden since prior to 1992.

Bjorn Svedberg Director since 1997. Chairman of the Board of Ericsson,
S-126 25 Stockholm, Sweden since prior to 1992 and ABB
AB, S-103 91 Stockholm, Sweden since 1996. President and
CEO of Skandinaviska Enskilda Banken, S-104 60
Stockholm, Sweden from 1992 to 1997. Director of the
Boards of STORA, S-791 80 Falun, Sweden since prior to
1992 and Volvo, S-405 08 Goteborg, Sweden since prior to
1992.
</TABLE>

A-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Sven Soderberg Director since 1991. Chairman of Skandia, S-103 50
Stockholm, Sweden since prior to 1992; Chairman of
Ratos, P.O. Box 1661, S-111 96 Stockholm, Sweden since
1994; Director of ABB AB, S-103 91 Stockholm, Sweden
since 1992. Director of the Board of STORA, S-791 80
Falun, Sweden since prior to 1992; Counsel General of
Norway since prior to 1992.

Marcus Wallenberg Director since 1994; Executive Vice President of
Investor, S-103 32 Stockholm, Sweden since 1993; Vice
Chairman of Astra, S-151 85 Sodertalje, Sweden since
1993; Vice Chairman of Saab AB, S-581 88 Linkoping,
Sweden since 1993; Director of Investor, S-103 32
Stockholm, Sweden since 1990; Director of SKF, S-415 00,
Gothenburg, Sweden from 1993 to 1996. Director of Saab
Automobile, S-461 80 Trollhattan, Sweden from 1992 to
1996. Director of Scania AB, S-151 87 Sodertalje, Sweden
since 1994; Director of S-E Banken, S-106 40 Stockholm,
Sweden since 1995. Director of Ericsson, S-126 25
Stockholm, Sweden since 1996 and Director of the Knut
and Alice Wallenberg Foundation, S-104 60 Stockholm,
Sweden since prior to 1992.

Bengt-Ola Nygren Employee Representative on Board since 1991 (the Swedish
Confederation of Trade Unions); Employee of Munters
Component AB, P.O. Box 29, S-740 61 Tobo, since prior to
1992.

Nicolaus Malmgren Employee Representative on Board since 1996 (the Swedish
Confederation of Trade Unions); Employee of Gambro, P.O.
Box 10101, S-220 10 Lund, Sweden since prior to 1992.

Ann-Christine Adamsson Employee Representative on Board since 1996 (the Swedish
Confederation of Trade Unions); Employee of TA Control
AB, Fabriksvagen 1, S-137 37 V asterhaninge, Sweden
since prior to 1992.

Dan Nilsson Employee Representative on Board since 1991 (the Swedish
Federation of Salaried Employees in Industry and
Service), Employee of Hagglunds Vehicle AB, S-891 81
Ornskoldsvik, Sweden since prior to 1992.
</TABLE>

A-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Stig Fristad Employee Representative on Board since 1996 (the Swedish
Federation of Salaried Employees in Industry and
Service); Employee of Munters Dry Air AB, S-191 24
Sollentuna, Sweden since prior to 1992.

Lars-Ake Johansson(*) Employee Representative on Board since 1995 (Swedish
Federation of Salaried Employees in Industry and
Services); Employee of Gambro AB, Box 10101 S-22010
Lund.

Lars Fahlen Senior Vice President Human Resources since 1992.

Anders Jagraeus Executive Vice President since 1995; President of AB
Carl Munters, P.O. Box 430, S-191 24 Sollentuna, Sweden
from 1991 to 1995; Director of Garphyttan Industries AB,
P.O. Box 7200, S-103 88 Stockholm, Sweden from 1995 to
1996.

Sverker Lundkvist Senior Vice President, Finance, since 1993; Executive
Vice President, Skandia International, S-103 50
Stockholm, Sweden from prior to 1992 to 1993.

Soren Mellstig Executive Vice President since 1997; Senior Vice
President, Corporate Control from 1994 to 1997; Director
and Controller of Akzo Nobel B.V. (Chemicals), Postbus
9300, NL-6800 SB Arnhem, the Netherlands since 1994;
Senior Vice President Nobel Industries (Chemicals), P.O.
Box 11500, S-100 61 Stockholm, Sweden from 1993 to 1994;
Senior Vice President EKA Nobel (chemicals), S-445 80
Bohus, Sweden prior to 1993. Director of Gambro, P.O.
Box 10101, S-220 10 Lund, Sweden since 1995.

Bengt Modeer Senior Vice President, Corporate Communications since
1991.
</TABLE>

- ------------------------

2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, material occupations, positions, offices or
employments and business addresses thereof for the past five years, and
beneficial ownership interest, if any, in the Shares of each director and
executive officer of Purchaser. Unless otherwise indicated, the current business
address of each person is 1185 Oak Street, Lakewood, Colorado 80215. Unless
otherwise indicated, each such person is a citizen of the United States of
America, each occupation set forth opposite an individual's name refers to
employment with Purchaser, and each such person does not beneficially own
Shares.

A-4
<PAGE>

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Mats L. Wahlstrom Mr. Wahlstrom has served on the Board of Directors and
as President of Purchaser since its incorporation in May
1997. He is the Chief Executive Officer and President of
Gambro Healthcare, Inc. and on its Board of Directors.
Mr. Wahlstrom has served in these capacities from
December 1990 to the present. Mr. Wahlstrom has served
as Director of Gambro Healthcare Patient Services, Inc.,
formerly known as REN-Corporation-USA, from May 1991 to
the present. He served as Chief Financial Officer of
Gambro, AB from 1985 until becoming its Executive Vice
President in March 1993. In June 1990, he was elected a
director of COBE and was appointed its Executive Vice
President; in May 1991 he became its President. Mr.
Wahlstrom beneficially owns 1,800 Shares, which
represents less than 1% of the issued and outstanding
Shares, based upon 41,991,547 Shares issued and
outstanding as of May 5, 1997, as advised by the
Company.

Herbert S. Lawson Mr. Lawson has been Vice President and Treasurer, as
well as a director of Purchaser since May 1997. Mr.
Lawson has served as Chief Financial Officer and
director of Gambro Healthcare, Inc. since 1996 and as a
director of Gambro Healthcare Patient Services, Inc.
since 1992. In 1996, he became an executive officer of
Gambro Healthcare Patient Services, Inc. From 1981 to
June 1992, he served as Director of Taxes of COBE and
from 1992 to the present Mr. Lawson has served as an
executive officer of COBE.

Lawrence J. Centella Mr. Centella was appointed the Vice President and a
director of Purchaser in May 1997. Mr. Centella has
served as an executive officer and director of Gambro
Healthcare, Inc. and as President and a director of
Gambro Healthcare Patient Services, Inc., formerly known
as REN-Corporation-USA, since July 1993. From July 1990
to July 1993, Mr. Centella was President of COBE Renal
Care, Inc., a subsidiary of COBE Laboratories, Inc. From
April 1989 to June 1990, Mr. Centella was President of
Gambro-Hospal, Inc., a manufacturer and distributor of
renal care products. For the ten years prior to April
1989, he was President of LADA International, Inc., a
distributor of specialty hospital equipment products.
</TABLE>

A-5
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT,
FIVE-YEAR EMPLOYMENT HISTORY AND
NAME BENEFICIAL OWNERSHIP OF SHARES
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Ralph Z. Levy, Jr. Mr. Levy has served as Vice President and Secretary of
Purchaser, as well as director since May 1997 and has
been Vice President & General Counsel to Gambro
Healthcare, Inc. since 1996. He has also been an
executive officer and director of COBE Laboratories,
Inc., Gambro Healthcare, Inc. and Gambro Healthcare
Patient Services, Inc. since 1996. Previously, Mr. Levy
served as REN-Corporation-USA's Executive Vice President
and General Counsel from 1992 to 1995. Prior to joining
REN-Corporation-USA, Mr. Levy was, from July 1978 to
October 1992, a partner with Wyatt, Tarrant & Combs, a
Nashville, Tennessee and Louisville, Kentucky based law
firm.
</TABLE>

A-6

<PAGE>
EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

David P. Barry................................ 1996 165,000 300,000 90,000 15,576(3)
Executive Vice President 1995 127,000 225,000 141,000 8,519(3)
1994 115,000 120,725 10,500 7,893(3)

Thomas O. Usilton............................. 1996 137,150 210,000 -- --
Vice President 1995 102,000 29,300 -- --

Jacob Lazarovic, M.D.......................... 1996 197,250 -- -- --
Vice President 1995 196,500 32,000 41,250 --
</TABLE>

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(1) Excludes the value of subsidiary options granted.

(3) Includes share of Company's contribution to the Company's Profit Sharing
Plan and/or car allowance.

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OPTION GRANTS IN LAST FISCAL YEAR

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AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

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(1) The closing price of the Company's Common Stock on the New York Stock
Exchange on November 30, 1996 was $30.75 per share.

SUBSIDIARY OPTIONS

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<PAGE>
of options under certain circumstances. The options generally vest over a
four-year term in equal annual installments. All of the subsidiary options were
granted at exercise prices in excess of the Per Share Amount. Option holders are
also required to be bound by the terms of a stockholders' agreement (the
"Stockholders' Agreement"). The Stockholders' Agreement contains rights of first
refusal on transfers of Stock issued pursuant to the exercise of such option
grants by stockholders, a right of the subsidiary to repurchase such shares (the
"Call Right") in the event the employee is no longer employed by the subsidiary,
and a right of the employee to compel the subsidiary to repurchase (a "Put
Right") the shares in 1999. The Call Right and the Put Right may be satisfied by
the Company by the payment of cash, a promissory note, or, in some cases, an
equivalent value of the Company's Common Stock. The Stockholders' Agreement also
contains various other rights and restrictions, including "piggyback"
registration rights to include shares in certain registration statements filed
by the subsidiary under the Securities Act of 1933, as amended. As a condition
to the closing of the Specialty Merger Transaction, the Stockholders' Agreements
relating to subsidiaries of VSP will be terminated.

SUBSIDIARY OPTION GRANTS TO DIRECTORS AND EXECUTIVE OFFICERS AS OF 11/30/96
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<CAPTION>
VIVRA
SPECIALTY
VIVRA ASTHMA & VIVRA HEALTH VIVRA HEART PARTNERS,
FISCAL ALLERGY CAREAMERICA ADVANTAGE, INC. SERVICES, INC. INC.
YEAR --------------------- ---------------------- -------------------- ----------
OF # OF STRIKE # OF STRIKE # OF STRIKE # OF
DIRECTOR NAME GRANT OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE OPTIONS
- ------------------------------------ ----------- ---------- --------- --------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Barry*........................ 1995 -- -- -- -- 10,000 $ .50 60,000
1996 -- -- -- -- -- -- 95,000