<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNITED AMERICAN HEALTHCARE CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
[COMPANY NAME]
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $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 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
United American Logo
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 2, 1996
To The Shareholders of United American Healthcare Corporation:
Please take notice that the 1996 Annual Meeting of Shareholders of United
American Healthcare Corporation will be held on Monday, December 2, 1996 at
10:30 a.m. (eastern standard time) at the Atheneum Hotel, 1000 Brush Avenue,
Detroit, Michigan 48226 for the purpose of:
1. electing four directors to serve for three-year terms;
2. approving the appointment of Grant Thornton LLP as independent
auditors of the Company for the 1997 fiscal year;
3. approving the adoption of an Employee Stock Purchase Plan;
4. approving an amendment to the Company's Stock Option Plan; and
5. acting on such other business as may properly come before the
meeting.
You are cordially invited to attend the 1996 Annual Meeting.
Holders of Common Shares of record at the close of business on October 4,
1996 will be entitled to vote at the meeting. A list of such shareholders will
be available for inspection during normal business hours from November 21, 1996
through December 1, 1996, at the offices of Lewis, Clay & Munday, A Professional
Corporation, 1300 First National Building, Detroit, Michigan.
A Proxy Statement, an Annual Report, and a Proxy Card are enclosed with
this Notice. Each shareholder is urged to execute and return the enclosed Proxy
promptly. In the event a shareholder decides to attend the meeting, he or she
may, if so desired, revoke the Proxy and vote the shares in person.
In order to help us plan for the meeting, please mark the appropriate box
on your Proxy Card telling us if you will be attending. Upon receipt of your
card, an admission card will be sent to you.
By Order of the Board of Directors
Anita C.R. Gorham, Secretary
Detroit, Michigan
November 11, 1996
<PAGE> 3
UNITED AMERICAN HEALTHCARE CORPORATION
1155 BREWERY PARK BOULEVARD, SUITE 200
DETROIT, MICHIGAN 48207
November 11, 1996
PROXY STATEMENT
This Proxy Statement is furnished by the Board of Directors of United
American Healthcare Corporation ("Company") in connection with its solicitation
of proxies for use at the 1996 Annual Meeting of Shareholders on December 2,
1996, and at any and all adjournments thereof. This Proxy Statement and
accompanying form of proxy are first being mailed on or about [November 11,
1996.] The Company's Annual Report (including audited financial statements) for
the fiscal year ended June 30, 1996 is enclosed with this Proxy Statement.
If the proxy is properly executed and returned, the Common Shares it
represents will be voted at the 1996 Annual Meeting in accordance with the
instructions noted thereon. If no instructions are indicated, it will be voted:
(1) FOR the nominated directors; (2) FOR the appointment of auditors; (3) FOR
the approval of the Employee Stock Purchase Plan; (4) FOR the approval of the
amendment to the Company's Stock Option Plan; and (5) FOR or AGAINST such other
matters as may properly come before the meeting in the discretion of the proxy
holders. The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
The Company's management knows of no matter to be brought before the
meeting which is not referred to in this Proxy Statement. If, however, any other
matter comes before the meeting, the proxy will be voted in accordance with the
judgment of the person or persons voting such proxy, unless the proxy contains
instructions to the contrary. Any shareholder executing a proxy has the power to
revoke it at any time before it is voted by submitting a duly executed proxy
bearing a later date, by delivering written notice of such revocation to the
Company's Secretary prior to the 1996 Annual Meeting or by attending the 1996
Annual Meeting and orally withdrawing the proxy. The cost of this solicitation
is being paid for by the Company.
The outstanding voting securities of the Company consist of no par value
common shares ("Common Shares"), of which 6,560,941 were issued and outstanding
at the close of business on October 4, 1996, the record date for determining
voting rights. The Company has no other class of voting securities outstanding.
Each share issued and outstanding on October 4, 1996 will be entitled to one
vote. Shareholders do not have cumulative voting rights.
The shareholder votes cast for all items considered at the meeting will be
calculated by an officer of The Huntington Trust Company, the Company's
Registrar and Transfer Agent, as the Board designated Inspector of Election. The
Inspector of Election shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, hear and
determine challenges and questions arising in connection with the right to vote,
count and tabulate votes, determine the result, and do such acts as are proper
to conduct the election. Abstentions will neither be counted for nor against any
actions for which cast.
ITEM 1 -- ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with terms expiring on
three successive annual meeting dates. At the 1996 Annual Meeting to be held on
December 2, 1996, the following four persons are the nominees of the Board of
Directors for election as directors to serve for three-year terms expiring at
the annual meeting of shareholders in 1999, or until their successors are duly
elected and qualified: Julius V. Combs, M.D., Ronald R. Dobbins, Karl D.
Gregory, Ph.D. and Richard T. White, Esq. The Common Shares represented by your
proxy, unless otherwise specified, will be voted FOR the election of these
nominees. A vote of a majority of the shares represented by proxy and in person
is required to elect each of the nominees to the Board of Directors for the term
indicated.
<PAGE> 4
Certain information concerning the nominees and directors (including
information furnished to the Company at its request as to securities
beneficially owned by such persons as of September 20, 1996) is set forth below.
No nominee or director owns more than 6.6% of all outstanding Common Shares, the
only class of outstanding voting securities. All nominees are presently serving
as directors. Each of the nominees consented to be nominated and agreed to serve
if elected. If any nominee is unable to serve (an event which is not
anticipated), the proxies will be voted for a substitute nominee designated by
the Board of Directors.
NOMINEES FOR ELECTION AS DIRECTORS WITH TERMS EXPIRING IN 1999
(INCLUDING BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS)
JULIUS V. COMBS, M.D. (AGE 65)
Julius V. Combs, M.D., has been the Company's Chief Executive Officer and
Chairman of the Board, as well as a director of the Company, since its
inception. He is Chairman of the Company's Executive Committee and a member of
the Company's Compensation and Finance, Investment and Planning Committees. Dr.
Combs is also the Chairman Emeritus of the Board of Trustees of OmniCare Health
Plan, Michigan ("OmniCare-MI"), President of OmniCare Health Plan, Inc.
("OmniCare-TN"), and Vice Chairman of Ultramedix Healthcare Systems, Inc.
("Ultramedix"). He is a member of the governing board of the American
Association of Health Plans ("AAHP"). Dr. Combs was in private medical practice
from 1964-1995. Dr. Combs beneficially owns directly and indirectly 432,143
Common Shares. (a)
RONALD R. DOBBINS (AGE 61)
Ronald R. Dobbins has been President and Chief Operating Officer, as well
as a director, of the Company since 1984. Mr. Dobbins is Chairman of the
Company's Finance, Investment and Planning Committee and a member of the
Company's Executive and Compensation Committees. Mr. Dobbins is Chief Executive
Officer and President of OmniCare-MI, as well as a member of its Board of
Trustees. He is also a director of OmniCare-TN and Ultramedix. He is a member of
the South Eastern Region Board of Directors of Michigan National Bank and a
member of the Board of Directors of Golden State Life Insurance Company. Mr.
Dobbins is also a member of the governing board of AAHP. Mr. Dobbins
beneficially owns directly 345,105 Common Shares.
KARL D. GREGORY, PH.D. (AGE 65)
Karl D. Gregory, Ph.D., has been a director of the Company since 1986. He
is Chairman of the Company's Nominating Committee and a member of its Audit and
Finance, Investment and Planning Committees. Since 1968, he has been employed as
a Professor of Economics and Management at Oakland University School of Business
Administration in Rochester, Michigan. He retired as a Distinguished Professor
Emeritus in August 1996. He is a director of Karl D. Gregory & Associates, a
consulting firm located in Southfield, Michigan. Dr. Gregory beneficially owns
indirectly 43,856 Common Shares. (b)(c)
RICHARD T. WHITE, ESQ. (AGE 51)
Richard T. White, Esq., was Vice President-General Counsel from 1984 to
December 1995; and has served as a director of the Company since 1984. He is a
member of the Company's Compensation and Nominating Committees. Since January,
1996, Mr. White has been Vice President, Secretary, and General Counsel of AAA
Michigan. Prior to that, Mr. White was a principal in the law firm of Lewis,
Clay & Munday, P.C. (formerly known as Lewis, White & Clay, P.C.). He is
licensed to practice law in the State of Michigan and the District of Columbia,
and is licensed by the Michigan Insurance Bureau as an administrative services
manager for Third Party Administrator ("TPA") activities. He has been engaged in
the private practice of law since 1970. Mr. White beneficially owns directly
94,129 Common Shares.
2
<PAGE> 5
DIRECTORS WITH TERMS EXPIRING IN 1998
(INCLUDING BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS)
ANITA C.R. GORHAM (AGE 55)
Anita C.R. Gorham has been the Company's Secretary and a director since
1984. She is Chairwoman of the Company's Compensation Committee. Ms. Gorham is a
member of the Board of Trustees of OmniCare-MI. Since 1989, she has acted as
Regional Manager for Academic Services at Central Michigan University. From 1987
to 1989 she was an academic advisor for Central Michigan University. She is
currently Associate Director for Executive and Professional Development and an
instructor in the Management Department at Central Michigan University. Ms.
Gorham is also an adjunct faculty member at Detroit College of Business. Ms.
Gorham beneficially owns directly 23,436 Common Shares.
HARCOURT G. HARRIS, M.D. (AGE 68)
Harcourt G. Harris, M.D., has been a director of the Company since 1985. He
is a member of the Company's Executive Committee. He is also Chairman of the
Board of Trustees of OmniCare-MI. Dr. Harris, now retired, had been involved in
the private practice of medicine for thirty years, specializing in internal
medicine. Dr. Harris beneficially owns directly and indirectly 33,607 Common
Shares. (d)
RICHARD P. SUTKIN (AGE 61)
Richard P. Sutkin has been a director of the Company since 1987. He is the
Chairman of the Company's Audit Committee and a member of the Company's Finance,
Investment and Planning Committee. Mr. Sutkin was an Executive Vice President of
Meadowbrook Insurance Group from February 1991 through December 1991. Mr. Sutkin
was previously President of Sutkin & Co., a commercial and industrial insurance
agency located in Birmingham, Michigan, since 1965. He is a Chartered Property
Casualty Underwriter and currently acts as an insurance industry consultant
specializing in litigation support. Mr. Sutkin beneficially owns directly 33,856
Common Shares. (c)
DIRECTORS WITH TERMS EXPIRING IN 1997
(INCLUDING BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS)
EMMETT S. MOTEN, JR. (AGE 52)
Emmett S. Moten, Jr. has been a director of the Company since 1988. He is a
member of its Audit, Compensation and Finance, Investment and Planning
Committees. Since July 1988, he has been Vice President of Development for
Little Caesar Enterprises, Inc., a fast food franchise concern. Prior to that
position, Mr. Moten was Director of the Community & Economic Development
Department for the City of Detroit for nearly ten years. Mr. Moten beneficially
owns directly 16,327 Common Shares. (c)
LOUIS J. NICHOLAS (AGE 57)
Louis J. Nicholas joined the Company in May 1993 as a Senior Vice President
and a director of the Company. He is also a Director, Chairman, President and
CEO of Corporate Healthcare Financing, Inc., a wholly owned Subsidiary of the
Company. He is a member of the Company's Compensation Committee. He was formerly
the sole shareholder of CHF, Inc., the general partner of CHF-HPM Limited
Partnership. Mr. Nicholas beneficially owns directly and indirectly 190,188
Common Shares.
- -------------------------
Notes:
(a) 418,451 Common Shares are held with his spouse as joint tenants. The
remaining 13,692 shares are held in the name of a trust having Dr. Combs as
its Trustee.
(b) The Common Shares held indirectly by Dr. Gregory are held of record in the
name of a trust, of which Dr. Gregory is the trustee.
(c) As required by Michigan law, Directors Gregory, Moten and Sutkin have been
designated as "Independent Directors" by the Board.
(d) Includes 31,421 Common Shares jointly held with spouse.
3
<PAGE> 6
BOARD COMMITTEES, ATTENDANCE AND FEES
During the fiscal year ended June 30, 1996, the Company's Board of
Directors held eight (8) meetings. All directors attended 75% or more of the
aggregate number of meetings of the Board of Directors and applicable committee
meetings, except as specifically noted herein. The Board of Directors has five
(5) active standing committees which facilitate the carrying out of its
responsibilities.
The Executive Committee, which met twice during the 1996 fiscal year, is
empowered to exercise, in the intervals between the meetings of the Board of
Directors, the powers of the Board as it relates to the management of the
business and affairs of the Company. Members of this Committee are Dr. Combs
(Chairman), Mr. Dobbins, and Dr. Harris.
The Audit Committee, which met thirteen (13) times during the 1996 fiscal
year, is empowered to recommend to the Board of Directors certified public
accountants to conduct audits of the accounts and affairs of the Company, and to
review accounting objectives and procedures of the Company, findings and reports
of the independent certified public accountants, and make such reports and
recommendations to the Board of Directors as it deems appropriate. The Bylaws of
the Company require that the members of the Audit Committee all be "independent
directors" (as defined in the Company's Articles of Incorporation). Members of
this Committee are Mr. Sutkin (Chairman), Dr. Gregory and Mr. Moten.
The Finance, Investment and Planning Committee, which met eleven (11) times
during the 1996 fiscal year, is empowered to make recommendations to the Board
of Directors on financial, short and long term investments and business planning
matters. Members of the Committee are Mr. Dobbins (Chairman), Dr. Combs, Dr.
Gregory, Mr. Moten and Mr. Sutkin.
The Compensation Committee, which met four (4) times during the 1996 fiscal
year, is empowered to make recommendations to the Board of Directors relating to
the overall compensation arrangements for officers and staff of the Company, and
to make recommendations to the Board of Directors pertaining to any compensation
plans in which officers and directors of the Company are eligible to
participate. Members of the Committee are Ms. Gorham (Chairwoman), Dr. Combs,
Mr. Dobbins and Mr. Moten. Mr. Nicholas and Mr. White attended two of the four
Compensation Committee meetings held. See also, "Executive Compensation,
Compensation Committee Report" as set forth herein.
The Nominating Committee, which met once during the 1996 fiscal year, is
empowered to present to the Board of Directors, whenever vacancies occur or
terms are expected to expire, names of individuals who would make suitable
directors of the Company and to advise appropriate officers of the Company on
matters relating to the organization of the Board of Directors. Nominations of
persons as candidates for election as directors may be made by any shareholder
of the Company entitled to vote for the election of directors, who complies with
the notice provisions of the Company's Bylaws, summarized as follows: Any
shareholder entitled to vote in the election of directors generally may nominate
one or more persons for election as directors at a meeting only if timely notice
of such shareholder's intent to make such nomination or nominations has been
given in writing to the Secretary of the Company. To be timely, a shareholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Company not less than 90 days prior to the meeting; provided,
however, that in the event that less than 100 days notice or prior public
disclosure of the date of the meeting is given or made to shareholders, notice
by the shareholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. Each such notice
shall set forth: (a) the name and address of both the shareholder who intends to
make the nomination and the person(s) to be nominated; (b) a representation that
the shareholder is a holder of record of stock of the Company entitled to vote
for the election of directors on the date of such notice and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (c) a description of all arrangements or understandings between
the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the shareholder; (d) such other information regarding each nominee
proposed by such shareholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be nominated, by the
Board; and (e) the consent of each nominee to
4
<PAGE> 7
serve as a director of the Company if so elected. Members of the Committee are
Dr. Gregory (Chairman) and Mr. White.
Each of the directors of the Company receives $250 for each Board of
Directors' meeting and each Board committee meeting attended. In addition, each
director who is not also an employee of the Company received an annual stipend
of $15,000 as compensation for director services. Directors are also entitled to
reimbursement for reasonable out-of-pocket expenses incurred in providing
services to the Company in their capacities as directors.
There are currently three vacancies on the Board of Directors. The Board of
Directors intends to fill these vacancies upon identification of suitable
candidates, in accordance with the Company's Bylaws.
ITEM 2 -- PROPOSAL TO RATIFY SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, upon the recommendation of its Audit
Committee, has appointed Grant Thornton LLP as independent public accountants
and auditors in connection with the Company's accounting matters to include
timely quarterly reviews of the consolidated financial statements and an annual
audit of the accounts of the Company and its subsidiary companies, and such
other audits of the Company's related activities as may be required for the
fiscal year ending June 30, 1997. In making its recommendation, the Audit
Committee gave consideration to: the past performance of Grant Thornton LLP, the
firm's credentials, capabilities and general reputation and a review of their
proposed engagement letter. A representative of Grant Thornton LLP is expected
to be present at the 1996 Annual Meeting to make a statement, if requested, and
be available to respond to questions.
In the event the proposal is defeated, the adverse vote will be considered
as a direction to the Board of Directors to select other independent accountants
for the next fiscal year. However, because of the expense and difficulty of
making a substitution after the beginning of a fiscal year, it is planned that
the appointment for the 1997 fiscal year will be permitted to stand unless the
Board of Directors finds other reasons for making a change.
The Board of Directors considers Grant Thornton LLP to be well qualified to
serve as the independent accountant for the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
SELECTION OF GRANT THORNTON LLP AS INDEPENDENT ACCOUNTANTS FOR THE 1997 FISCAL
YEAR. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
ITEM 3 -- PROPOSAL TO APPROVE ADOPTION OF AN EMPLOYEE STOCK PURCHASE PLAN.
The Company is proposing to its stockholders the approval of an Employee
Stock Purchase Plan in the form attached hereto as Exhibit A (the "ESPP") to
encourage and assist employees of the Company and its subsidiaries in acquiring
a stock ownership interest in the Company. All employees of the Company, except
for certain part-time employees, would be eligible to purchase shares of the
Company's common stock at a purchase price of 85% of its fair market value on
the date of purchase (provided such employees meet the requirements set forth in
the ESPP). Each participating employee could use a payroll deduction to pay for
his or her shares under the ESPP.
The ESPP, as approved by the Board of Directors, would have 200,000 shares
of the Company common stock reserved for issuance pursuant thereto. This pool of
shares would be satisfied by reducing the number of shares presently reserved
for issuance pursuant to the Company's Stock Option Plan by 200,000 shares, and
reserving the same for issuance pursuant to the ESPP.
The Board of Directors believes the ESPP is in the best interest of the
Company to assure that its employees are motivated to perform at their highest
potential and to reward its employees for such performance.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ADOPT THE
ESPP. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
SHAREHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
5
<PAGE> 8
ITEM 4 -- PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S STOCK OPTION PLAN.
The Company is proposing to its stockholders an amendment to its Stock
Option Plan (the "Plan"), which is described on page 10. The Proposed amendment,
as approved by the Board of Directors, provides for a decrease in the number of
authorized but previously unissued shares reserved for issuance pursuant to the
terms and provisions of the Plan from 531,250 common shares to 331,250. The
Amendment will be deemed effective on the date of the 1996 Annual Meeting if
approved by the shareholders.
The Board of Directors believes the amendment to the Plan is in the best
interests of the Company in order to assure that there is available a sufficient
number of shares of the Company's common stock to be granted pursuant to the
Plan to act as an incentive for attracting and retaining key employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE
AMENDMENT TO THE PLAN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS SHAREHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
at the meeting. If other matters properly come before the meeting, the persons
named as proxy holders will vote on them in accordance with their best judgment.
The cost of this solicitation of proxies will be borne by the Company. In
addition to the use of the mail, some of the officers and regular employees of
the Company may solicit proxies by telephone and telegraph, and will request
brokerage houses and other custodians, nominees and fiduciaries to forward
soliciting materials to the beneficial owners of Common Shares held of record by
such persons and may verify the accuracy of marked proxies by contacting record
and beneficial owners of Common Shares. The cost of the foregoing solicitation
activities is expected to be nominal.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the annual salary,
bonus and all other compensation awarded to the Company's Chief Executive
Officer and its four most highly compensated executive officers whose respective
salary and bonus exceeded $100,000.
6
<PAGE> 9
The following Summary Compensation Table sets forth the annual salary,
bonus and all other compensation awarded to the Company's Chief Executive
Officer and its four most highly compensated executive officers whose respective
salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
AWARDS
ANNUAL COMPENSATION --------------------- PAYOUTS
------------------------------------------------- RESTRICTED -------
NAME AND OTHER ANNUAL STOCK OPTIONS/ LTIP/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS SARS PAYOUTS COMPENSATION($)(2)
- ----------------------- ---- --------- -------- ------------------- ---------- -------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JULIUS V. COMBS,
M.D.................. 1996 295,392 176,800 -- -- -- -- 7,500
Chairman of the Board, 1995 292,712 -- -- -- -- -- 7,997
Chief Executive Officer 1994 268,449 157,248 -- -- -- -- 11,274
and Director
RONALD R. DOBBINS...... 1996 295,392 163,200 -- -- -- -- 7,500
President, Chief 1995 292,712 -- -- -- -- -- 8,377
Operating Officer 1994 266,024 131,040 -- -- -- -- 13,580
and Director
LOUIS J. NICHOLAS...... 1996 426,556 -- 45,874 -- -- -- 7,500
Senior Vice President, 1995 384,760 -- 49,928 -- -- -- 7,500
Chief Executive
Officer, 1994 310,000 -- 28,140 -- -- -- 7,500
CHF and Director
WILLIAM C. SHARP,
M.D.................. 1996 178,651 -- -- -- -- -- 7,500
Vice President, 1995 182,484 -- -- -- -- -- 4,375
Medical Services 1994 182,067 25,000 -- -- -- -- --
BOBBY L. JONES......... 1996 170,591 -- -- -- -- -- 7,500
Senior Vice President, 1995 165,991 -- -- -- -- -- 7,537
OmniCare Management 1994 149,005 36,225 -- -- -- -- 9,805
Group
</TABLE>
- -------------------------
(1) Life insurance premiums paid for Mr. Nicholas in 1996, 1995 and 1994 was
$37,118, $41,172 and $24,855, respectively.
(2) Represents the Company's annual contribution to the 401(K) Savings Plan.
The Company has not granted any stock options under its Stock Option Plan,
or any Stock Appreciation Rights, nor did it grant any awards under a long-term
incentive plan during fiscal year 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MEMBERS OF MANAGEMENT
Under Section 13(d) of the Exchange Act, a beneficial owner of a security
is any person who directly or indirectly has or shares voting control or
investment power over such security. The following are the only holders which
are known by the Company to own beneficially more than 5% of its Common Shares
as of August 31, 1996:
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS NUMBER OF COMMON SHARES OUTSTANDING
OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON SHARES
- -------------------------------------------------------- ----------------------- -------------
<S> <C> <C>
**Julius V. Combs, M.D.(1)(2)........................... 432,143 6.6%
Richard M. Brown, D.O.(3)(4).......................... 411,727 6.3%
**Ronald R. Dobbins(1).................................. 345,105 5.3%
</TABLE>
- -------------------------
** Director of the Company
(1) The address for Messrs. Combs and Dobbins is 1155 Brewery Park Boulevard,
Suite 200, Detroit, Michigan 48207.
(2) All Common Shares are held with spouse or other person as joint tenants.
(3) Dr. Brown's address is 1200 Ardmoor, Birmingham, Michigan 48010.
(4) All Common Shares are held in the name of a trust.
7
<PAGE> 10
The following table sets forth the Common Shares held by the Chief
Executive Officer and the four most highly compensated executive officers of the
Corporation:
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS* NUMBER OF COMMON SHARES OUTSTANDING
OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON SHARES
- -------------------------------------------------------- ----------------------- -------------
<S> <C> <C>
Julius V. Combs, M.D.................................... See Above See Above
Ronald R. Dobbins....................................... See Above See Above
Louis J. Nicholas....................................... 190,188 2.9%
William C. Sharp........................................ 4,000 **
Bobby L. Jones.......................................... 33,436 **
</TABLE>
- -------------------------
* See table below for addresses
** Percentage of Common Shares beneficially owned does not exceed 1%
The following table sets forth certain information, as of September 20,
1996, concerning the beneficial ownership of Common Shares held by (i) each
shareholder known by the Company to own more than 5% of the Common Shares, (ii)
each director of the Company, (iii) each principal officer of the Company, and
(iv) all directors and officers as a group. Except as otherwise noted, each of
the persons named below possess sole voting and investment power with respect to
all shares set forth opposite his or her name.
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
NAME OF --------------------
BENEFICIAL OWNER NUMBER PERCENT
- -------------------------------------------------------------------------- --------- -------
<S> <C> <C>
Julius V. Combs, M.D.(3)(5)(7)............................................ 432,143 6.6%
Ronald R. Dobbins(3)(5)................................................... 345,105 5.3
Louis J. Nicholas(3)(5)................................................... 190,188 2.9
Richard T. White(1)....................................................... 94,129 1.4
Karl D. Gregory, Ph.D.(1)(6).............................................. 43,856 *
Richard P. Sutkin(1)...................................................... 33,856 *
Harcourt G. Harris, M.D.(1)............................................... 33,607 *
Anita C. R. Gorham(3)..................................................... 23,436 *
Emmett S. Moten, Jr.(1)................................................... 16,327 *
Jagannathan Vanaharam(2)(5)............................................... 107,120 1.6
Bobby L. Jones(2)(5)...................................................... 33,436 *
William C. Sharp, M.D.(2)(5)(6)........................................... 4,000 *
John S. Zaleskie(2)(5).................................................... 1,000 **
Osbie Howard(2)(5)........................................................ 250 *
Wilton A. Savage(2)(5).................................................... 250 *
Richard M. Brown, D.O.(4)(6).............................................. 411,727 6.3
All directors and officers as a group (15 persons)........................ 1,358,703 21
</TABLE>
- -------------------------
* Percentage of common shares beneficially owned does not exceed 1% of the
total common shares outstanding.
(1) Beneficial owner is a director of the Company.
(2) Beneficial owner is an executive of the Company.
(3) Beneficial owner is a director and an officer of the Company.
(4) Dr. Brown's address is 1200 Ardmoor, Birmingham, Michigan 48010.
(5) The address for the listed person is 1155 Brewery Park Boulevard, Suite 200,
Detroit, Michigan 48207.
(6) Reflects all shares held of record in the name of a trust having as its
Trustee the shareholder indicated.
(7) 13,692 Common Shares are held in the name of a trust having Dr. Combs as its
Trustee.
8
<PAGE> 11
Based solely upon a review of Form 4-Statement of Changes in Beneficial
Ownership, and amendments thereto, furnished to the Company pursuant to Rule
16a-3(e), as promulgated under the Securities Exchange Act of 1934, as amended,
the Company believes that all of its officers and directors timely filed their
Form 4s, as required, with the Securities and Exchange Commission in compliance
with Section 16 of the Securities Exchange Section of 1934, as amended.
EMPLOYMENT AGREEMENTS
The Company has entered into five-year employment agreements with Dr. Combs
and Mr. Dobbins, respectively, initially expiring March 1996, subject to
automatic renewal for successive one-year terms, unless terminated by the
Company or the executive upon 90 days notice prior to the end of the initial
term or the renewal terms, as the case may be. The Agreements have been renewed
through March, 1997. Under their respective employment agreements, Dr. Combs and
Mr. Dobbins each currently receives an annual base salary of approximately
$327,957, plus an annual bonus to be based upon specific performance
specifications and/or goals to be agreed upon by the Company and the executive,
with the bonus payable to Dr. Combs for any year of employment to be not less
than 30%, nor more than 60%, of his base salary for such year, and the bonus
payable to Mr. Dobbins to be not less than 25%, nor more than 50%, of his base
salary for such year. No bonus is payable to the executive for any year in which
he is employed by the Company for fewer than six months and any bonus will be
pro-rated to the extent the executive is employed less than the full year. A
bonus accrual equal to amounts approved by the Compensation Committee, in the
absence of Dr. Combs and Mr. Dobbins, have been established for Dr. Combs and
Mr. Dobbins in 1996 equal to $176,800 for Dr. Combs and $163,200 for Mr.
Dobbins.
Under each employment agreement, the executive may, upon giving 30 days
written notice, terminate the agreement in the event there is a change of
control or ownership (as defined in the employment agreement) of the Company and
the executive's powers and duties significantly change or the executive has good
reason (as defined in the employment agreement) to terminate or, as a result of
the change of control or ownership, the executive is unable to exercise or
perform his powers, functions and duties. In the event of such termination, the
executive will receive (i) all monies earned under any Company long-term
incentive plan, (ii) a lump sum severance payment equal to his base salary for
36 months at the rate payable at the time notice of termination was given, and
(iii) the bonus which he would otherwise be entitled to for the year in which
his employment is terminated. Based upon the executive's current base salary,
the Company estimates that the lump sum severance payment payable to each Dr.
Combs and Mr. Dobbins under this provision would be approximately $1.1 million
for the present fiscal year.
In the event the executive terminates his employment due to a breach of his
employment agreement by the Company, he will receive earned and unpaid salary
accrued to the date of termination together with any bonus which would otherwise
be payable to him for the year in which the agreement is terminated.
In the event the executive's employment is terminated without cause by the
Company, the executive will receive his base salary until the last day of the
24th full calendar month immediately following such termination, but in no event
will the executive be entitled to such payments following his normal retirement
date, defined as the August 31st nearest to the date on which the executive
attains the age of 65.
In the event the executive's employment is terminated for cause, death or
disability, the executive (or his estate) will receive earned and unpaid salary
accrued to the date of termination but shall not be entitled to any bonus which
might otherwise be payable to the executive for the year in which his employment
is terminated.
Dr. Combs and Mr. Dobbins have each agreed that for the longer of (i) 12
months from the date of termination of his employment agreement, or (ii) the
period during which the executive receives payments under his employment
agreement, plus the 12 months immediately following expiration of such period,
he will not engage in the development of a managed health care product or
service nor render services similar or related to those which he rendered as an
employee of the Company in any county in which the Company provides any managed
health care product or service or within any contiguous county.
The Company is also party to an Employment Agreement by and between CHF and
Louis J. Nicholas (the "Executive") dated as of May 7, 1993, pursuant to which
it agreed to: (i) refrain from impeding the
9
<PAGE> 12
Executive's ability to operate CHF in a prudent manner consistent with
maximizing a return for purposes of the Contingent Promissory Note; (ii) elect
the Executive to its Board of Directors and as a Senior Vice President; (iii)
pay liquidated damages if the Executive is terminated without good cause or good
reason, as those terms are defined therein; and (iv) provide Board review of a
termination of the Executive for good cause by CHF. In addition, the Employment
Agreement provides the Company with the right to cease payments due under the
Contingent Promissory Note in the event of a material breach of the agreement by
the Executive.
STOCK OPTION PLAN
The Company has adopted a stock option plan (the "Plan"), under which
531,250 Common Shares are presently reserved for issuance upon exercise of
options granted thereunder. No options have been granted under the Plan. In
August, 1996, the Company's Board of Directors approved a decrease in such
reservation to 331,250 Common Shares, subject to shareholder approval at the
1996 Annual Shareholders Meeting. The decrease was necessitated by the Board's
adoption of an employee stock purchase plan which will be submitted for
shareholder approval at the 1996 Annual Meeting. The 200,000 Shares originally
reserved for use in connection with the Plan will be reserved for use in
connection with the employee stock purchase plan. Under the Plan, incentive
stock options may be granted to employees, and non-incentive stock options may
be granted to employers, directors and such other persons as the Board of
Directors (or a Committee appointed by the Board) determines will contribute to
the Company's success, at exercise prices equal to at least 100% of the fair
market value of the Common Shares on the date of grant. In addition to
administering the Plan, the Board (or the Committee) determines the number of
Common Shares subject to each option, the term of each non-incentive stock
option, and the time or times when the non-incentive stock option becomes
exercisable, though in no event may the option be exercisable prior to one year
after the date of grant. Incentive stock options are granted for a term of five
(5) years, and are exercisable accumulatively at the rate of 25% per year
commencing one year after the date of grant.
401(K) SAVINGS PLAN
The Company sponsors a retirement plan intended to be qualified under
section 401(k) of the Internal Revenue Code of 1986, as amended. All employees
over age 21, other than non-resident aliens, are eligible to participate in the
plan. Employees may contribute to the plan on a tax-deferred basis up to 15% of
their total salary. Under the plan, the Company makes matching contributions on
each employee's behalf, up to a maximum of 5% of each employee's total salary.
As of June 30, 1996, 326 employees had elected to participate in the plan. For
the fiscal year ended June 30, 1996, the Company contributed $609,000 to the
plan. See the Summary Compensation Table contained herein for additional
information.
COMPENSATION COMMITTEE REPORT
Compensation for the Company's key executives is determined by the
Compensation Committee of the Board of Directors. Salaries, bonuses and other
compensation of the Company's key executives, including Dr. Combs, are based
upon profitability, enrollment levels of the Company's clients, including
OmniCare-MI, Personal Physician Care, Inc. ("PPC"), Ultramedix and OmniCare-TN,
revenue growth, return on equity and market share.
The Committee believes that compensation of the Company's key executives
should be sufficient to attract and retain highly qualified personnel and also
provide meaningful incentives for measurable superior performance. During the
1996 fiscal year, the Company's executive compensation included a base salary
and bonus. Based upon available data, the Company believes the base salaries of
its executives were set at the levels of comparable companies in its line of
business.
The Company's Compensation Committee is comprised of Ms. Gorham
(Chairwoman), Dr. Combs, Mr. Dobbins, Mr. Moten, Mr. Nicholas, and Mr. White
(see also "Meetings and Committees of the Board of Directors"). Dr. Combs and
Mr. Dobbins do not participate in Compensation Committee meetings during which
their own compensation is considered.
10
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The ownership, operation and management of the Company involve various
potential conflicts of interest, including the relationships and transactions
described below. Management of the Company believes that these agreements and
transactions have been on terms which are as fair to the Company as could have
been obtained from unaffiliated parties.
MANAGEMENT AGREEMENTS. The Company's management agreements with the managed
plans, including OmniCare, PPC, OmniCare-TN and Ultramedix, were negotiated
between related entities. However, the management agreements were reviewed,
revised and approved by the respective plan's full Board. Future evaluation of
the Company's activities under the OmniCare-MI management agreement is made by
the Management Review Committee comprised of independent members of the
respective Boards. No Board member of OmniCare-MI with any interest in the
Company is permitted to sit on the Management Review Committee. There presently
is no comparable committee which reviews the Company's performance under the
management agreements with other plans.
COMMON OFFICERS AND DIRECTORS. As indicated in the chart below, certain
officers and directors of the Company are also members of the Board of
Trustees/Directors and officers of OmniCare-MI, PPC, Ultramedix and OmniCare-TN.
Consequently, such individuals are likely to influence the operation of the
Company and negotiations and arrangements between the Company and these
entities, including the negotiation and operation under respective management
agreements. Conflicts of interest may arise relating to matters that are
presented to the Company's Board of Directors for consideration and with respect
to which the Company and OmniCare-MI, PPC, Ultramedix and OmniCare-TN may have
differing interests, including matters relating to the management agreements.
<TABLE>
<CAPTION>
NAME UAHC OMNICARE-MI PPC OMNICARE-TN ULTRAMEDIX
- --------------------------------------- -------------- ------------------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Julius V. Combs, M.D. ................. Chairman, CEO Chairman Emeritus, -- President, Chairman,
Director Trustee Director Director
Ronald R. Dobbins...................... President, COO President, Trustee -- Director Director
Director
Harcourt G. Harris, M.D. .............. Director Chairman, Trustee -- -- --
Anita C.R. Gorham...................... Secretary, Trustee -- -- --
Director
Bobby L. Jones......................... Senior Vice COO, Trustee -- -- --
President
Wilton A. Savage(1).................... Senior Vice -- Executive -- --
President Director
Jagannathan Vanaharam.................. Senior Vice -- -- Director, Director,
President Treasurer Treasurer
</TABLE>
- -------------------------
(1) Mr. Savage is also a shareholder of PPC-Ohio, owning 7.8% of the issued and
outstanding shares of the same.
AFFILIATIONS WITH PRIMARY CARE PROVIDERS. An officer of the Company is also
affiliated with Primary Care Providers contracting with OmniCare-MI. Dr. Sharp,
Vice President, Medical Services of the Company, also practices medicine with
M.C. Physician Association, P.C., a Primary Care Provider contracting with
OmniCare-MI.
HEALTH INSURANCE BENEFITS FOR COMPANY EMPLOYEES. Health care benefits for
some employees of the Company are provided through OmniCare-MI and PPC. For the
fiscal year ended June 30, 1996, the Company paid premiums of approximately
$1,477,000 for such benefits.
CHARITABLE FOUNDATION. For the fiscal year ended June 30, 1996, the Company
made $150,000 in contributions to United American Healthcare Foundation, a
Michigan non-profit corporation which assists minority organizations involved in
the promotion of health and education. Dr. Combs, Mr. Dobbins, Dr. Francis
Kornegay and Mr. Milton Watson, shareholders of the Company, are directors of
the Foundation.
11
<PAGE> 14
STOCK PERFORMANCE CHART
The Stock Performance Chart graphs the Company's performance during the
previous five (5) fiscal years in comparison to returns on the S&P500 and the
S&P Health Diversified.
<TABLE>
<CAPTION>
COMPARISION OF CUMULATIVE TOTAL RETURN
S&P Health
Measurement Period United Care
(Fiscal Year Covered) American S&P 500 Diversified
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 64.10 113.41 103.41
1993 112.18 128.87 97.82
1994 216.35 130.68 100.70
1995 224.36 164.75 148.00
1996 134.62 207.59 203.50
(Assumes initial investment of $100 and reinvestment of dividends)
</TABLE>
1997 ANNUAL MEETING
Shareholders may present proposals to be considered for inclusion in the
Proxy Statement for the 1997 Annual Meeting of the Shareholders provided such
proposals are received by the Company no later than July 12, 1997.
Anita C.R. Gorham, Secretary
Detroit, Michigan
November 11, 1996
12
<PAGE> 15
EXHIBIT A
UNITED AMERICAN HEALTHCARE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
This United American Healthcare Corporation Employee Stock Purchase Plan
(the "Plan") is intended to encourage and assist employees of United American
Healthcare Corporation, a Michigan corporation (the "Corporation") and the
employees of any present or future subsidiaries of the Corporation in acquiring
a stock ownership interest in the Corporation. The Plan is intended to be an
Employee Stock Purchase Plan under Internal Revenue Code Section 423.
2. Stock Subject To The Plan.
Subject to any adjustment pursuant to Section 13 of the Plan, the aggregate
number of Shares of Common Stock (the "Shares") of the Corporation which may be
sold under the Plan is 200,000. The Corporation shall at all times during the
term of the Plan reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of the Plan.
3. Annual Period.
"Annual Period" shall mean the twelve-month period beginning on July 1 and
ending on June 30.
4. Eligibility.
Employees may join the Plan each July 1, (the "Eligibility Date") as long
as they have completed one year of continuous employment as a full-time or
part-time employee (except any employee who directly or by attribution owns
stock possessing 5% or more of the total combined voting power or value of all
classes of stock of the Corporation or any subsidiary of the Corporation at the
start of any Annual Period). Notwithstanding the foregoing, no employee shall be
entitled to purchase Shares of stock under the Plan and all other purchase Plans
of the Corporation and any parent or subsidiary of the Corporation with an
aggregate fair market value (determined at date of grant) exceeding $25,000 per
year for each calendar year in which such purchase option is outstanding at any
time.
For the Annual Period commencing July 1, 1996, the Eligibility Date shall
be October 1, 1996.
For purposes of this Plan, "Subsidiary" shall mean a corporation of which
not less than fifty percent (50%) of the voting Shares are held by the
Corporation or a subsidiary of the Corporation.
5. Joining The Plan.
Any eligible employee's participation in the Plan shall be effective as of
July 1 following the day on which the employee completes, signs and returns to
the Corporation, or one of its Subsidiaries, a Stock Purchase Plan Application
and Payroll Deduction Authority form indicating his or her acceptance and
agreement to the Plan. Notwithstanding the foregoing, the effective date for the
Annual Period beginning July 1, 1996 will be October 1, 1996. Membership of any
employee in the Plan is entirely voluntary. Except as provided in Paragraph 4,
all employees who elect to participate in the Plan shall have the same rights
and privileges.
The establishment of, or participation in, the Plan shall create no rights
with respect to continuation of employment, nor with respect to continuation of
any particular Corporation business, policy or product.
6. Member's Contributions.
Each member shall elect to make contributions by payroll deduction from two
percent (2%) to ten percent (10%) of his or her base salary as of the annual
Eligibility Date.
The amount of each member's contribution shall be credited by the
Corporation to a special account (the "Plan Account"). No interest shall be
credited to the Plan Account.
A-1
<PAGE> 16
No member will be permitted to make contributions for any period during
which he or she is not receiving a salary from the Corporation or a Subsidiary.
7. Issuance Of Shares.
On the last trading day of each Annual Period so long as the Plan shall
remain in effect, and provided the member has not before that date advised the
Corporation that he or she does not wish Shares to be purchased for his or her
Account on that date, the Corporation shall apply the funds in the member's Plan
Account as of that date to the purchase of Shares in units of one share or
multiples thereof.
The cost to each member (the "Purchase Price") shall be eighty-five (85%)
of the lower of the closing price of the Shares, as declared by the New York
Stock Exchange, on the last trading day preceding June 1 (the "Grant Date") or
on the last trading day of the Annual Period (the "Exercise Date").
Notwithstanding the foregoing, for the Annual period commencing July 1, 1996,
the Grant Date shall be August 30, 1996.
Any moneys remaining in a member's Plan Account by reason of his or her
prior election not to purchase Shares in a given Annual Period or by reason of
the actual Purchase Price being less than the per-share amount deducted from the
member's Account shall be disbursed to the employee after the end of Annual
Period. The Corporation shall as expeditiously as possible after the last day of
each Annual Period issue to the member entitled thereto the certificate
evidencing the Shares issuable to him or her as provided herein.
Notwithstanding anything above to the contrary, (a) if the number of Shares
that members desire to purchase at the end of any Annual Period exceeds the
number of Shares then available under the Plan, the Shares available shall be
allocated among such members in proportion to their Plan Accounts (but no
fractional Shares shall be issued); and (b) no funds in a member's Plan Account
shall be applied to the purchase of Shares and no Shares hereunder shall be
issued unless such Shares are covered by an effective registration statement
under the Securities Act of 1933, as amended, or by an exemption therefrom.
8. Termination Of Membership.
A member's membership in the Plan will be terminated when the member (a)
voluntarily elects to withdraw his or her entire Plan Account, (b) resigns or is
discharged from the Corporation or one of its Subsidiaries, (c) dies, or (d)
does not receive a salary from the Corporation or one of its present or future
subsidiaries for twelve (12) consecutive months, unless this period is due to
illness, injury or for other reasons approved by the persons or person appointed
by the Corporation to administer the Plan as provided in Paragraph 12 below.
Upon termination of membership, the terminated member shall not be entitled to
rejoin the Plan until the first day of the Annual Period immediately following
the Annual Period in which the termination occurs, and further provided that a
terminated member who is an executive officer of the Corporation shall not be
entitled to rejoin the Plan until the first day of the first Annual Period that
commences after the expiration of six months from the date of termination of
membership. Upon termination of membership, the member shall be entitled to the
amount of his or her Plan Account.
9. Leaves Of Absence.
A member who goes on an approved leave of absence prior to the Exercise
Date may elect for Shares to be purchased at that date using his or her Plan
Account.
10. Retirement.
A member who retires prior to the Exercise Date may elect for Shares to be
purchased at that date using his or her Plan Account.
11. Beneficiary.
Each member may file a written designation of a beneficiary who is to
receive any Shares credited to his or her Plan Account in the event of the death
of such member after the Exercise Date but prior to delivery to such member of
such Shares. Such designation may be changed by the member at any time by
written notice received by the Corporation.
A-2
<PAGE> 17
Upon the death of a member his or her Plan Account shall be paid or
distributed to the beneficiary or beneficiaries designated by such member, or in
the absence of such designation, to his or her estate, and in either event the
Corporation shall not be under any further liability to anyone. If more than one
beneficiary is designated, then each beneficiary shall receive an equal portion
of the Plan Account unless the member indicates to the contrary in his or her
designation, provided that the Corporation may in its sole discretion make
distributions in such form as will avoid the creation of fractional Shares.
12. Administration Of The Plan.
The Plan shall be administered by the Compensation Committee of the Board
of Directors of the Corporation (the "Board"), or such individual or committee
as it designates. All costs and expenses incurred in administering the Plan
shall be paid by the Corporation. Any taxes applicable to the member's Plan
Account shall be charged to the member's Plan Account by the Corporation.
13. Modification And Termination.
The Corporation expects to continue the Plan until such time as all Shares
reserved for issuance under the Plan have been sold. The Corporation reserves,
however, the right to amend, alter or terminate the Plan in its discretion, and
intends to terminate the Plan in the event shareholder approval of the Plan is
not obtained prior to July 1, 1997. Upon termination, each member shall be
entitled to the amount of his or her Plan Account.
14. Adjustments Upon Changes In Capitalization.
Appropriate and proportionate adjustments shall be made in the number and
class of Shares subject to this Plan, and to the rights granted hereunder and
the prices applicable to such rights, in the event of a stock dividend, stock
split, reverse stock split, recapitalization, reorganization, merger,
consolidation, acquisition, separation or like change in the capital structure
of the Corporation.
15. Transferability Of Rights.
No rights of any employee under this Plan shall be transferable by him or
her, by operation of law or otherwise, except to the extent that a member is
permitted to designate a beneficiary or beneficiaries as hereinabove provided,
and except to the extent permitted by will or the laws of descent and
distribution if no such beneficiary is designated.
16. Participation In Other Plans.
Nothing herein contained shall affect an employee's right to participate in
and receive benefits under and in accordance with the then current provisions of
any pension, insurance or other employee welfare plan or program of the
Corporation; provided, however, that an employee is prohibited from
simultaneously participating in this Plan and the Corporation's Incentive Stock
Option Plan and/or the Corporation's Stock Bonus Plan.
17. Applicable Law.
The interpretation, performance and enforcement of this Plan shall be
governed by the laws of the State of Michigan.
18. Effective Date Of Plan; Shareholder Approval.
The Plan shall become effective on July 1, 1996 by action of the Board and
shall be submitted to the shareholders of the Corporation for their approval at
the Annual Meeting of Shareholders to be held in 1996. The Corporation's
obligation to offer, sell or deliver Shares under the Plan is subject to any
governmental approval required in connection with the authorized issuance or
sale of such Shares and is further subject to the determination by the
Corporation that it has complied with all applicable securities laws.
A-3
<PAGE> 18
19. Legend Conditions.
The Shares of Common Stock to be issued pursuant to the provisions of this
Plan shall have endorsed upon their face the following:
"The Shares represented by this certificate have not been registered
under the Securities Act of 1933. The Shares have been acquired for
investment and may not be pledged or hypothecated, and may not be sold or
transferred in the absence of an effective Registration Statement for the
Shares under the Securities Act of 1933 or an opinion of counsel to the
Company that registration is not required under said Act."
20. Amendment, Suspension And Termination Of The Plan.
The Board shall have the power at any time to add to, amend or repeal any
of the provisions of the Plan, to suspend the operation of the entire Plan or
any provision or provisions thereof for any period or periods or to terminate
the Plan in whole or in part, provided, however, that no such addition,
amendment, repeal, suspension or termination shall in any way affect the rights
of the holders of outstanding options to purchase Shares in accordance with the
provisions hereof.
A-4
<PAGE> 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
UNITED AMERICAN HEALTHCARE CORPORATION
The undersigned shareholder hereby appoints Julius V. Combs,
M.D. and Ronald R. Dobbins, and each of them, with full power of
substitution, as true and lawful attorneys and proxies of the
undersigned to represent and vote the Common Shares owned by the
undersigned in United American Healthcare Corporation at the
Annual Meeting of Shareholders to be held December 2, 1996 at
10:30 a.m. (eastern standard time) at the Atheneum Hotel, 1000
Brush Avenue, Detroit, Michigan and at any adjournment thereof,
with like effect and as if the undersigned was personally present
and voting, upon all business that may properly come before the
meeting, including the business identified (and in the manner
indicated) on this proxy and described in the Notice of Meeting
and Proxy Statement furnished herewith (the receipt of which is
hereby acknowledged).
The undersigned hereby revokes any proxy or proxies heretofore
given by the undersigned to any person or persons with respect to
such Common Shares and ratifies any and all actions taken by the
above-named proxies hereunder.
Set forth on the reverse side are the number of Common Shares
held of record by you as of October 4, 1996. You are asked to vote
on the business identified below.
Indicate your vote by marking an (X) in the appropriate boxes
below. The Board of Directors recommends voting FOR all Items.
ITEM
1. Election of Directors
[ ] FOR -- ALL Nominees [ ] WITHHOLD AUTHORITY -- ALL
Nominees
(Except as marked to the contrary below)
Nominees: Julius V. Combs, M.D., Ronald R. Dobbins, Karl D.
Gregory, Ph.D., and Richard T. White, Esq.
INSTRUCTIONS -- TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE
MARK THROUGH THAT NOMINEE'S NAME.
2. Approve Selection of Independent Accountants
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approve the adoption of the United American Healthcare
Corporation Employee Stock Purchase Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approve an amendment to the United American Healthcare
Corporation Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(To be signed and dated on the reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY WHICH RECOMMENDS VOTING FOR ALL ITEMS. IT WILL BE
VOTED AS SPECIFIED. IF NOT SPECIFIED, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR EACH ITEM LISTED ABOVE, AND FOR OR
AGAINST ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING AT THE DISCRETION OF THE PROXY HOLDER.
IF YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE CHECK BOX:
[ ]
Dated:................, 1996
............................
Signature of Shareholder
............................
Signature(s) of Joint
Owner(s)
Please sign exactly as your
name(s) is imprinted on this
proxy. If your shares are
held in a joint account,
each joint owner should
sign. If you are signing for
a corporation or partnership
or as agent, attorney,
executor, administrator,
trustee, guardian or other
fiduciary, indicate the
capacity in which you are
signing.
