<PAGE> 1
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SCHEDULE 14A
(RULE 14a)
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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HEALTH CARE AND RETIREMENT CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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
- --------------------------------------------------------------------------------
HCR LOGO
HEALTH CARE AND RETIREMENT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
and
PROXY STATEMENT
MEETING DATE
MAY 5, 1998
YOUR VOTE IS IMPORTANT!
Please mark, date and sign the enclosed proxy card and
promptly return it to the Company in the enclosed envelope.
- --------------------------------------------------------------------------------
<PAGE> 3
HCR LOGO
HEALTH CARE AND RETIREMENT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 5, 1998
The Annual Meeting of Stockholders of Health Care and Retirement
Corporation will be held on Tuesday, May 5, 1998 at 2:00 p.m. in the auditorium
of One SeaGate, Toledo, Ohio, for the following purposes:
1. To elect two directors for three-year terms, or until their successors
are elected and qualified;
2. To vote on approval of an amendment to the Certificate of Incorporation
to increase the authorized common shares ($.01 par value) from
80,000,000 to 160,000,000;
3. To ratify the selection of Ernst & Young LLP as independent public
accountants for the Company for the fiscal year ending December 31,
1998; and
4. To transact such other business as may properly come before the meeting.
The record date for voting at the meeting is March 12, 1998. Only holders
of Common Stock of record at the close of business on the record date will be
entitled to notice of and to vote at the Annual Meeting.
Please sign, date and return your proxy in the enclosed envelope so that
your shares may be voted at the meeting. If the shares are held in more than one
name, all holders of record should sign.
By Order of the Board of Directors,
Paul A. Ormond
Chairman of the Board
R. Jeffrey Bixler
Secretary
March 24, 1998
<PAGE> 4
HEALTH CARE AND RETIREMENT CORPORATION
PROXY STATEMENT
This statement is furnished in connection with the solicitation on behalf
of the Board of Directors of Health Care and Retirement Corporation, a Delaware
corporation ("HCR" or "Company"), of proxies for use at the Annual Meeting of
Stockholders of the Company ("Annual Meeting"), to be held at One SeaGate,
Toledo, Ohio, on Tuesday, May 5, 1998, at 2:00 p.m., and at any and all
adjournments thereof. It is anticipated that the mailing to stockholders of this
Proxy Statement and the enclosed proxy will commence on or about March 24, 1998.
The mailing address of the principal executive offices of the Company is One
SeaGate, Toledo, Ohio 43604-2616.
Only stockholders of record at the close of business on March 12, 1998 will
be entitled to vote at the meeting. At such date, there were outstanding
00,000,000 shares of the Company's Common Stock. Each share of Common Stock is
entitled to one vote. There is no provision in the Company's Certificate of
Incorporation for cumulative voting. The holders of a majority of the total
shares issued and outstanding, whether present in person or represented by
proxy, will constitute a quorum for the transaction of business at the meeting.
Votes cast in person or by proxy will be tabulated by the election inspectors
appointed for the meeting and will determine whether or not a quorum is present.
The election inspectors will treat abstentions as shares that are present and
entitled to vote for purposes of determining the presence of a quorum but as
unvoted for purposes of determining the matter to which the abstention applies.
If a broker indicates on the proxy that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter. The
Common Stock outstanding on the record date included 000,000 shares held by the
trustee under the Company's Stock Purchase and Retirement Savings Plan, a
defined contribution plan qualified under Section 401(k) of the Internal Revenue
Code, which shares the trustee must vote in accordance with written instructions
from participants in such plan or, as to those shares for which no instructions
are received, in a uniform manner as a single block in accordance with the
instructions received with respect to the majority of shares for which
instructions were received.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and By-Laws provide that the
Board of Directors is divided into three classes. Each year the stockholders are
asked to elect the members of a class for a term of three years. Currently, the
terms of office for members of Class I of the Board of Directors will expire on
the date of the Annual Meeting in 1998. The members of Class I are John J.
Clair, Jr. and Paul A. Ormond. The Board of Directors has fixed the number of
directors to be elected at the 1998 Annual Meeting at two and has nominated
Messrs. Clair and Ormond for election to Class I. Those persons who are elected
directors at the 1998 Annual Meeting will hold office until their terms expire
on the date of the 2001 Annual Meeting or until the election and qualification
of their successors. The terms of office of the members of Class II and III of
the Board of Directors will expire, respectively, on the dates of the Annual
Meeting in 1999 and 2000.
So far as the Board has been advised, only the two persons named above as
nominees will be nominated for election as directors at the Annual Meeting. It
is intended that the shares represented by proxies in the accompanying form will
be voted for the election of these two nominees unless authority to so vote is
withheld. The nominees have consented to being named herein and to serve if
elected. If any of them should
1
<PAGE> 5
become unavailable prior to the Annual Meeting, the proxy will be voted for a
substitute nominee or nominees designated by the Board of Directors or the
number of directors may be reduced accordingly. Directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
at the meeting and entitled to vote on the election of directors. A stockholder
entitled to vote for the election of directors may withhold authority to vote
for all or certain nominees.
The following information, which has been provided by the directors, sets
forth for each of the nominees for election to the Board of Directors and for
each director whose term continues, his name, age, principal occupation or
employment during at least the past five years, the name of the corporation or
other organization, if any, in which such occupation or employment is carried on
and the period during which such person has served as a director of the Company.
1998 NOMINEES
JOHN J. CLAIR, JR., age 51, has been a director of the Company since
February, 1992. Since 1980, he has been a partner in the law firm of Latham &
Watkins, with headquarters in Los Angeles, California. Mr. Clair concentrates
his practice in corporate tax matters. He is a member of the bar of the State of
California and a member of the American, California and Los Angeles County bar
associations. He is a member of Class I of the Board of Directors and a member
of the Audit Committee.
PAUL A. ORMOND, age 48, has been Chairman of the Board, President and Chief
Executive Officer of the Company since August, 1991. Since October, 1991 he has
been employed by Health Care and Retirement Corporation of America ("HCRA"), a
subsidiary of the Company, as President and Chief Executive Officer. He is a
member of Class I of the Board of Directors of the Company. Mr. Ormond is also a
director of Aeroquip-Vickers, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH NOMINEE.
CONTINUING DIRECTORS
JOSEPH H. LEMIEUX, age 67, has been a director of the Company since August,
1991. Mr. Lemieux is Chief Executive Officer of Owens-Illinois, Inc., a position
he has held since September, 1990. Mr. Lemieux has been a member of the
Owens-Illinois Board of Directors since July, 1984 and Chairman of that Board
since September, 1991. He is a member of Class II of the Board of Directors of
the Company and a member of the Compensation Committee. Mr. Lemieux is also a
director of National City Corporation.
GEOFFREY G. MEYERS, age 53, has been Executive Vice President, Chief
Financial Officer and Treasurer of the Company since August, 1991 and a director
of the Company since February, 1992. Since October, 1991 he has been employed by
HCRA, as Executive Vice President and Chief Financial Officer. Mr. Meyers is a
member of Class II of the Board of Directors of the Company.
ROBERT G. SIEFERS, age 52, has been a director of the Company since
February, 1992. Since February, 1991 Mr. Siefers has been Executive Vice
President and Chief Financial Officer of National City Corporation, Cleveland,
Ohio. Mr. Siefers is a member of Class III of the Board of Directors and a
member of the Audit and Compensation Committees.
M. KEITH WEIKEL, age 60, has been Senior Executive Vice President and Chief
Operating Officer of the Company since August, 1991 and a director of the
Company since February, 1992. Since October, 1991 he has been employed by HCRA
as Senior Executive Vice President and Chief Operating Officer. Mr. Weikel is a
member of Class III of the Board of Directors.
2
<PAGE> 6
THOMAS L. YOUNG, age 54, has been a director of the Company since August,
1991. He is Executive Vice President-Administration and General Counsel of
Owens-Illinois, Inc., a position he has held since April, 1992. He is a member
of Class III of the Board of Directors and a member of the Audit and
Compensation Committees of the Board.
COMPENSATION OF DIRECTORS
During 1997, the annual fee for service on the Board by each non-management
director was $20,000. In addition, the fee paid to non-management directors for
attendance at Board meetings was $1,000 per meeting, and the fee for attendance
at meetings of a committee of the Board was $500 per meeting. Such fees were
paid in cash quarterly unless deferred under the Deferred Compensation Plan for
Outside Directors. Management directors do not receive additional compensation
for service on the Board of Directors.
The Company has adopted, with stockholder approval, a Stock Option Plan for
Outside Directors ("Outside Directors Plan"). Under the terms of the Outside
Directors Plan, each non-management director receives an option to purchase
9,000 shares of Common Stock upon election to the Board and, after completing
one year of service, an additional option to purchase 9,000 shares of Common
Stock on the business day immediately following each annual stockholders'
meeting for so long as such person continues to serve as a director. The per
share exercise price of each option is the fair market value of a share of
Common Stock on the date of grant. Options granted under this plan are
immediately exercisable. During 1997, Messrs. Clair, Lemieux, Siefers and Young
each received option grants under the terms of the Outside Directors Plan.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors met four times during 1997. All members of the Board
attended all meetings of the Board and all meetings of the committees on which
each served.
The Board of Directors currently has an Audit Committee and a Compensation
Committee. The Audit Committee makes recommendations to the Board of Directors
as to the engagement or discharge of the independent public accountants; reviews
the plan and results of the auditing engagement with the independent public
accountants; reviews the scope and results of the Company's internal auditing
procedures; reviews the adequacy of the Company's system of internal accounting
controls and corporate compliance program; and directs and supervises
investigations into matters within the scope of its duties. The Audit Committee
met twice during 1997. The Committee is comprised of Messrs. Clair, Siefers and
Young.
The Compensation Committee of the Board of Directors is comprised of
directors who are not officers or employees of the Company and are not eligible
to participate in any of the Company's executive compensation programs. The
Committee has overall responsibility for administering the executive
compensation program of the Company. The Committee regularly evaluates the
executive compensation program to ensure its appropriateness in the context of
the Company's business and its competitiveness with the compensation practices
of other companies. From time to time, the Committee seeks the advice of
independent experts in evaluating plan design, compensation levels and
administration. Each year the Compensation Committee reviews and approves
salaries for the executive officers of the Company. The Committee is also
responsible for administering the Stock Option Plan for Key Employees, the
Amended Restricted Stock Plan and certain other incentive compensation plans
covering executive officers. The Compensation Committee met three times during
1997. The Committee is comprised of Messrs. Lemieux, Siefers and Young.
3
<PAGE> 7
OTHER DIRECTOR INFORMATION
During 1997, the law firm of Latham & Watkins, of which Mr. Clair is a
partner, received fees from the Company for legal services in connection with
various securities, tax, acquisition and litigation matters. The Company
anticipates continuing to utilize the services of Latham & Watkins on various
legal matters.
During 1997, National City Bank and National City Bank, Northwest,
subsidiaries of National City Corporation, provided commercial banking, private
banking and trust services to the Company and certain of its officers. National
City Bank, Northwest, is also trustee of the Company's Stock Purchase and
Retirement Savings Plan and administrator of its Senior Management Savings Plan.
Mr. Lemieux is a director of National City Corporation and Mr. Siefers is an
executive officer of National City Corporation.
SECURITY OWNERSHIP OF CERTAIN MANAGEMENT
AND BENEFICIAL OWNERS
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows, as of the record date, information concerning
beneficial ownership of shares of Common Stock by directors and nominees
individually, the individuals named in the Summary Compensation Table, and
directors and executive officers of the Company as a group. Except as indicated
by the notes to the table, the holders listed below have sole voting and
investment power over the shares beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP(1)(2)(3) OF CLASS
- ------------------------------------- ----------------------- ------------------ --------
<S> <C> <C> <C>
Common Stock......................... R. Jeffrey Bixler -- (4)
Common Stock......................... John J. Clair, Jr. -- (4)
Common Stock......................... Joseph H. Lemieux -- (4)
Common Stock......................... Geoffrey G. Meyers -- (4)
Common Stock......................... Paul A. Ormond --(5) 0.0
Common Stock......................... Paul G. Sieben -- (4)
Common Stock......................... Robert G. Siefers -- (4)
Common Stock......................... M. Keith Weikel -- 0.0
Common Stock......................... Thomas L. Young -- (4)
Common Stock......................... Executive Officers & -- 0.0
Directors as a group
</TABLE>
- ---------------
(1) Includes shares of restricted stock granted to the named executive officers
under the Company's Amended Restricted Stock Plan.
(2) Includes the following number of shares which the person has a right to
acquire within 60 days of the record date upon the exercise of options:
Bixler -- 90,320; Clair -- 54,000; Lemieux -- 54,000; Meyers -- 335,348;
Ormond -- 1,559,302; Sieben -- 66,001; Siefers -- 54,000; Weikel -- 416,394;
Young -- 45,000; and Executive Officers and Directors as a
Group -- 2,817,840.
(3) Includes shares held by Messrs. Bixler, Meyers, Ormond, Sieben and Weikel
and by all executive officers as a group, under the Stock Purchase and
Retirement Savings Plan as of the record date.
(4) Percentage of ownership does not exceed one percent of the class.
(5) Includes 81,472 shares held by family members of Mr. Ormond and 89,286
shares held in trust for certain family members of Mr. Ormond. Mr. Ormond
disclaims any beneficial interest in the shares held by family members or in
trust.
4
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information, as of December 31, 1997, with
respect to any person who is known to the Company to be the beneficial owner of
more than five percent of its Common Stock. The information presented is based
upon Schedule 13Gs filed pursuant to the Securities Exchange Act of 1934 and
received by the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------------------- ------------------------------------------ ----------------- ----------
<S> <C> <C> <C>
Common Stock................... Putnam Investments, Inc.(1) 0,000,000 00.0%
One Post Office Square
Boston, MA 02109
Common Stock................... A I M Management Group, Inc.(2) 0,000,000 00.0%
11 Greenway Plaza, Suite 1919
Houston, TX 77046
Common Stock................... Brinson Partners, Inc.(3) 0,000,000 00.0%
209 South LaSalle Street
Chicago, IL 60604
Common Stock................... J.P. Morgan & Co. Incorporated(4) 0,000,000 00.0%
60 Wall Street
New York, NY 10260
</TABLE>
- ---------------
(1) The Schedule 13G received by the Company from Putnam Investments, Inc.
("PI") indicated that the filing was made on behalf of PI, its parent
company, Marsh & McLennan Companies, Inc. ("MMC"), two subsidiaries of PI
which are registered investment advisers, Putnam Investment Management, Inc.
("PIM") and the Putnam Advisory Company, Inc. ("PAC"), and Putnam New
Opportunities Fund ("Fund"). The Schedule 13G filing further indicated that
PI had shared voting power over 000,000 shares and shared dispositive power
over 0,000,000 shares; that PIM had shared dispositive power over 0,000,000
shares; that PAC had shared voting power over 000,000 shares and shared
dispositive power over 000,000 shares; and that Fund had shared dispositive
power over 0,000,000 shares.
(2) The Schedule 13G received by the Company from A I M Management Group, Inc.
("AIM") indicated that the filing was made on behalf of AIM and its
wholly-owned subsidiaries, A I M Advisors, Inc. and A I M Capital
Management, Inc., and that AIM had shared voting and dispositive power over
all shares.
(3) The Schedule 13G received by the Company from Brinson Partners, Inc. ("BPI")
indicated that the filing was made on behalf of BPI, Brinson Trust Company
("BTC"), Brinson Holdings, Inc. ("BHI"), SBC Holding (USA), Inc. ("SBCUSA")
and Swiss Bank Corporation ("SBC"). BTC is a wholly-owned subsidiary of BPI.
BPI is a wholly-owned subsidiary of BHI. BHI is a wholly-owned subsidiary of
SBCUSA. SBCUSA is a wholly-owned subsidiary of SBC. The Schedule 13G further
indicated that BPI, BHI, SBCUSA and SBC had shared voting and shared
dispositive power over all shares and BTC had shared voting and shared
dispositive power over 000,000 shares.
(4) The Schedule 13G received by the Company from J.P. Morgan & Co. Incorporated
("J.P. Morgan") indicated that J.P. Morgan had sole voting power over
0,000,000 shares, shared voting power over 00,000 shares, sole dispositive
power over 0,000,000 shares and shared dispositive power over 00,000 shares.
5
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth the annual and long-term compensation for
the last three completed fiscal years for the Company's Chief Executive Officer
and the four other most highly compensated executive officers at the end of the
last completed fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(1) LONG-TERM COMPENSATION
------------------- ------------------------------------
AWARDS PAYOUTS
------------------------ ---------
RESTRICTED SECURITIES LONG-TERM
NAME AND STOCK UNDERLYING INCENTIVE ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(2) OPTIONS (#) PAYOUTS COMPENSATION(3)
------------------ ---- -------- -------- ---------- ----------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul A. Ormond.................... 1997 $511,904 $550,000 $4,387,500 90,000 $405,000 $ 38,395
Chairman, President 1996 481,731 500,000 -- 90,000 396,900 32,781
and Chief Executive Officer 1995 451,846 450,000 -- 90,000 378,000 31,206
M. Keith Weikel................... 1997 326,154 285,000 1,170,000 30,000 213,750 30,022
Senior Exec. Vice President 1996 306,154 260,000 -- 30,000 211,680 24,055
and Chief Operating Officer 1995 286,231 235,000 -- 30,000 201,600 24,017
Geoffrey G. Meyers................ 1997 234,808 140,000 877,500 18,000 109,200 12,403
Exec. Vice President 1996 220,808 128,000 -- 18,000 108,241 13,300
and Chief Financial Officer 1995 208,738 115,000 -- 18,000 103,088 13,267
R. Jeffrey Bixler................. 1997 172,635 80,000 585,000 12,898 54,375 9,575
Vice President and 1996 160,692 66,000 -- 12,000 53,746 8,407
General Counsel 1995 145,923 60,000 -- 10,500 51,188 8,000
Paul G. Sieben.................... 1997 164,519 62,000 219,375 9,000 54,375 9,829
Vice President, Director of 1996 155,519 57,000 -- 9,000 53,746 8,231
Development & Construction 1995 145,615 54,000 -- 9,000 51,188 8,112
</TABLE>
- ---------------
(1) The aggregate incremental cost of perquisites and other personal benefits
was less than the minimum required to be reported pursuant to the Securities
and Exchange Commission's rules.
(2) The amounts in this column represent the value of restricted stock awards
made to the named individuals in March 1997. The grant of the restricted
stock was contingent upon achievement by the Company of certain
performance-based criteria specified in the award and the certification by
the Compensation Committee that the criteria was achieved. Subsequent to
year-end, the Committee certified the achievement of the criteria and the
restricted stock grants were made on January 29, 1998.
(3) The amounts disclosed in this column for 1997 include (a) Company matching
contributions to its Senior Management Savings Plan ("SMSP"), a nonqualified
defined contribution plan, on behalf of Messrs. Ormond, Weikel, Meyers,
Bixler and Sieben in the amounts of $30,357, $17,585, $7,044, $6,042 and
$6,646, respectively; and (b) the dollar value of premiums paid for life
insurance for Messrs. Ormond, Weikel, Meyers, Bixler and Sieben in the
amounts of $8,038, $12,437, $5,359, $3,533 and $3,183, respectively.
6
<PAGE> 10
OPTION GRANTS
The following table sets forth information on stock option grants during
1997 pursuant to the Company's Amended Stock Option Plan for Key Employees
("Option Plan") for the individuals named in the Summary Compensation Table. The
Company does not maintain a stock appreciation rights plan covering executive
officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
-------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION GRANT DATE
NAME GRANTED(#) 1997 PRICE DATE PRESENT VALUE(2)
- ---- ----------- ------------ -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Paul A. Ormond................. 90,000 21.5% $39.4375 12/03/07 $1,368,000
M. Keith Weikel................ 30,000 7.2% 39.4375 12/03/07 456,000
Geoffrey G. Meyers............. 18,000 4.3% 39.4375 12/03/07 273,600
R. Jeffrey Bixler.............. 12,000 2.9% 39.4375 12/03/07 164,400
898 0.2% 29.8750 10/24/01 6,241
Paul G. Sieben................. 9,000 2.1% 39.4375 12/03/07 123,300
</TABLE>
- ---------------
(1) Each grant during 1997 provides that the option shall not be exercisable to
any extent until three years following the date of grant at which time the
option becomes fully exercisable except that the option grant of 898 shares
to Mr. Bixler, pursuant to the Additional Option feature of the Option Plan,
is immediately exercisable.
(2) Represents an estimate of option values at grant date by using the
Black-Scholes option pricing model with the following weighted average
assumptions: dividend yield of 0%, expected volatility of 20%, risk-free
rate of return of 5.90% and expected life of 6.8 years.
AGGREGATED OPTION VALUES
The following table sets forth information concerning option exercises
during the last fiscal year by the individuals named in the Summary Compensation
Table and the aggregate dollar value of unexercised options held at the end of
the last fiscal year by such individuals. The value is based upon a share price
of $40.25.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT DECEMBER 31, 1997 OPTIONS AT DECEMBER 31, 1997
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul A. Ormond....... 1,699,302 270,000 $57,156,100 $2,885,625
M. Keith Weikel...... 464,394 90,000 15,490,498 961,875
Geoffrey G. Meyers... 358,992 54,000 12,098,977 577,125
R. Jeffrey Bixler.... 15,000 $353,550 93,073 34,500 3,011,011 356,625
Paul G. Sieben....... 32,785 775,474 66,001 27,000 2,088,117 288,563
</TABLE>
7
<PAGE> 11
LONG-TERM INCENTIVE PLANS
The individuals named in the Summary Compensation Table are covered by the
Company's Performance Award Plan ("PAP") under which eligible employees receive
a cash award payable at the end of the three-year period following the grant of
the award. The total amount of any award payable at the end of an award period
is determined by the Compensation Committee of the Board of Directors and is
based upon Company performance criteria established at the beginning of the
period. Award payouts for the 1997-1999 award period will be based on the
compound annual growth rate in earnings per share of Common Stock over the
period.
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1997
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS
OR OTHER UNDER NON-STOCK
PERIOD UNTIL PRICE-BASED PLANS
MATURATION ---------------------------------
NAME OR PAYOUT THRESHOLD TARGET MAXIMUM
---- ------------- --------- -------- --------
<S> <C> <C> <C> <C>
Paul A. Ormond........................ 1997-1999 $153,000 $306,000 $459,000
M. Keith Weikel....................... 1997-1999 81,250 162,500 243,750
Geoffrey G. Meyers.................... 1997-1999 40,950 81,900 122,850
R. Jeffrey Bixler..................... 1997-1999 25,800 51,600 77,400
Paul G. Sieben........................ 1997-1999 20,500 41,000 61,500
</TABLE>
RETIREMENT PLANS
The following table illustrates the estimated combined annual retirement
benefits which would be provided under the Company's Pension Plan, a qualified
defined benefit plan ("Pension Plan"), and the Senior Executive Retirement Plan,
a nonqualified defined benefit plan ("SERP"), in various average earnings
classifications upon normal retirement at age 65:
<TABLE>
<CAPTION>
HIGH CONSECUTIVE YEARS OF CREDITED SERVICE
THREE-YEAR -------------------------------------------------------------------------------
AVERAGE EARNINGS 5 10 15 20 25 30 35
- ---------------- ------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000 20,400 40,800 61,200 81,600 102,000 122,400 142,800
600,000 41,800 83,700 125,500 167,300 209,100 251,000 292,800
900,000 63,300 126,500 189,800 253,000 316,300 379,500 442,800
1,200,000 84,700 169,400 254,100 338,700 423,400 508,100 592,800
1,500,000 106,100 212,200 318,300 424,500 530,600 636,700 742,800
1,700,000 120,400 240,800 361,200 481,600 602,000 722,400 842,800
</TABLE>
The benefits illustrated in the above table are calculated on a
straight-life annuity basis. In accordance with the provisions of the Pension
Plan and the SERP, the table reflects the greater of the regular benefit under
current provisions of the plans and the "grandfathered benefit" under the
formula in effect prior to January 1, 1989. The regular benefit does not contain
an offset for social security or other benefits, but the "grandfathered" benefit
does contain a partial offset for social security benefits.
At December 31, 1997, Messrs. Ormond, Weikel, Meyers, Bixler and Sieben
had, respectively, total Credited Service under the Pension Plan and the SERP of
24 years, 11 years, 30 years, 15 years and 18 years. Annual covered compensation
includes base salary and amounts earned under the Annual Incentive Award Plan
and PAP. The covered compensation for 1997 does not differ substantially from
that set forth in the Salary, Bonus and Long-Term Payout columns in the Summary
Compensation Table.
8
<PAGE> 12
EXECUTIVE EMPLOYMENT AGREEMENTS
HCRA has entered into employment agreements with each of the Company's
corporate officers including the executive officers listed in the Summary
Compensation Table, that entitle them to receive their base salaries and to
participate in designated benefit plans of the Company. Each Employment
Agreement also provides that the officer's base salary may be adjusted
periodically and that benefit plans in which the officer is entitled to
participate may be adjusted or terminated by the Company at any time but that no
vested or accrued benefit may be adversely affected. The agreements provide that
the officer's employment is not for any specified term and may be terminated at
any time. In the event of the officer's termination other than for "cause" (as
defined in the agreements), payment of base salary would continue for two years
for Mr. Ormond and for one year for the other officers. The employment
agreements of Messrs. Ormond, Weikel, Meyers and Bixler also contain provisions
applicable in the event of a change of control of the Company. Under these
provisions, the Company would pay or otherwise provide certain severance
benefits to such individuals in the event that, following a change in control,
the individual's employment is terminated for reasons other than cause or the
individual resigns under specified circumstances. The severance benefits include
a payment equal to three times the aggregate cash compensation of the individual
(as defined in the agreement) plus medical, dental and other specified benefits
for a period of thirty-six months following termination or resignation. These
agreements further provide for the exercisability of all options held by the
individual and the lapsing of restrictions on restricted stock holdings upon the
consummation of the change in control.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
The Compensation Committee is comprised of Messrs. Lemieux, Siefers and
Young, none of whom were officers or employees of the Company or any of its
subsidiaries during the fiscal year. Messrs. Lemieux and Young were, prior to
October 1991, officers of certain subsidiaries of the Company. As disclosed on
page 4, the Company has received banking and related services from subsidiaries
of National City Corporation of which Mr. Lemieux is a director and Mr. Siefers
is an executive officer.
COMPENSATION COMMITTEE REPORT
Compensation Policies Applicable to Executive Officers. During 1997, the
Compensation Committee continued to follow basic compensation policies
previously established. The main objective of the executive compensation program
remains the enhancement of stockholder value over the long term. The Committee
has noted that the health care industry continues to evolve in a highly
competitive and heavily regulated environment which presents senior management
with significant challenges and opportunities. The Committee believes that the
superior performance of the senior management team in this complex business
environment has directly resulted in significant and consistent increases in
recognized measures of stockholder value. In the judgment of the Committee, the
continued achievement of significant increases in stockholder value requires a
superior compensation package which attracts and retains executives of
exceptional talents and leadership ability and motivates superior performance in
achieving future growth in stockholder value. The compensation program therefore
is designed and administered (1) to be strongly competitive within the health
care industry generally and with the compensation policies of other publicly-
held companies of comparable size and complexity; (2) to provide major
incentives directly linked to increases in recognized measures of stockholder
value; and (3) to reward superior performance as measured by financial and
non-financial factors. The Committee believes that the current compensation
program is
9
<PAGE> 13
accomplishing these objectives but the Committee also recognizes its
responsibility to evaluate the program regularly and make appropriate changes to
ensure its continued success.
Annual base salaries of the executive officers were reviewed by the
Committee at its fall meeting and adjusted as determined to be appropriate,
effective December 1, 1997. Following previously stated policies, the Committee
adjusted salaries based upon competitive information, past individual
performance as measured by both qualitative and quantitative factors and the
potential for making significant contributions to future Company performance.
The Committee also took into consideration relatively low inflation in the
national economy. Although strong overall performance by the Company was a
factor in determining the salary adjustments, the individual factors stated
above were the primary considerations.
The Committee approved payouts under the incentive components of the
executive compensation program based upon the Company's performance against
goals previously established by the Committee. With respect to the Annual
Incentive Plan ("Annual Plan"), the Company performance in 1997 significantly
exceeded Committee-approved targets for net income and earnings per share
("EPS"). Other important measures of financial performance such as revenue,
operating income margins, cash flow from operations and revenue mix greatly
improved versus prior year. In addition, the Committee determined that the
quality of care in the Company's nursing centers remained at a high level and
significant progress was made during 1997 in implementing strategic plans. These
performance achievements justified payouts under the Annual Plan in excess of
the target payout levels. In determining the amount of the additional payout,
the Committee considered a number of factors but primarily rewarded performance
which significantly exceeded pre-established goals.
The Committee approved payouts under the Performance Award Plan ("PAP")
based upon the actual rate of growth in EPS during the 1995-1997 award period,
the criteria established by the Committee at the time awards were made. During
this period the growth in EPS exceeded the target goal by an amount which earned
maximum payouts under the specific formula established at the time the target
goals were set by the Committee. The Committee also set a target growth rate in
EPS for the 1997-1999 award period which includes a threshold growth rate for
any payment and a maximum payment for growth significantly in excess of the
target. The Committee believes that the PAP is achieving its objective of
focusing senior management on long-term increases in stockholder value.
The Committee continues to believe that a broad-based stock option plan is
an important element in a compensation program designed to maximize stockholder
value. The Company's Amended Stock Option Plan for Key Employees ("Option Plan")
covers executive officers and key corporate and field management. The Committee
believes that the program is valued by eligible employees at all levels of the
organization and that the program is providing an important incentive to
increasing stockholder value. The Committee approved additional stock option
grants during 1997, with exercise dates deferred for three years and exercise
prices set at the market value on the date of grant. The grants were based upon
competitive option practices and the individual's potential to make a
contribution to earnings growth as determined by the individual's job
classification, responsibilities and past performance.
In March, 1997 the Compensation Committee made awards of restricted stock
to key management employees, including the executive officers listed in the
Summary Compensation Table, subject to stockholder approval of the Amended
Restricted Stock Plan ("Amended Plan"). The awards were contingent upon
achievement of certain performance-based criteria established by the Committee.
The Committee approved restrictions on the sale or encumbrance of the restricted
shares until December 31, 2000 for non-officers and until the later of December
31, 2000 or retirement for officers. The Committee believes that the awards of
restricted stock, conditioned upon achieving performance-based goals, are an
important feature in
10
<PAGE> 14
the long-term retention of key executives and will provide further motivation
for performance which is directly linked to future increases in stockholder
value. The stockholders approved the Amended Plan at the Annual Meeting in May,
1997.
Compensation of Chief Executive Officer. The compensation policies
described above apply as well to the compensation of the Chief Executive Officer
("CEO"). The Committee is directly responsible for determining the CEO's salary
level and for all awards and grants to the CEO under the incentive components of
the compensation program. The overall compensation package of the CEO is
designed to recognize that the CEO bears primary responsibility for increasing
the value of stockholders' investments. Accordingly, a substantial portion of
the CEO's compensation is incentive-based, providing greater compensation as
direct and indirect financial measures of stockholder value increase. The
Committee also believes that the complex health care environment in which the
Company currently operates requires a high degree of leadership, innovation and
prudent risk-taking in order to meet and sustain corporate objectives for
increasing stockholder value. The CEO's compensation is thus structured and
administered to motivate and reward the successful exercise of these
entrepreneurial skills.
The CEO's compensation for 1997 was again directly related to the overall
performance of the Company as measured by financial criteria and important
qualitative factors. Successful financial performance during the year was
demonstrated by the significant growth in revenue, revenue mix, operating income
and EPS. In addition, the CEO's compensation continued to reflect (1) the
excellent quality of care maintained in the Company's nursing centers and the
continued emphasis on quality among all employees; (2) progress in implementing
the growth objectives of the Company as reflected in earnings growth from
existing assets, the further development and addition of specialty care units,
and acquisition and new construction activities; (3) the continued strong
performance of the senior management team; and (4) related qualitative factors.
Policy Related to Deductibility of Compensation. Section 162(m) of the
Internal Revenue Code of 1986 denies a deduction to any publicly held
corporation for compensation paid to the CEO and the other four most highly
compensated officers, as of the end of a fiscal year, to the extent that the
compensation exceeds $1 million in any taxable year of the corporation beginning
after 1993, subject to an exception for "performance-based compensation." It is
the Committee's policy to take the necessary steps, including appropriate plan
amendments, to qualify compensation paid to executive officers for deductibility
to the extent that so qualifying the compensation is not inconsistent with the
Company's fundamental compensation policies. In furtherance of this policy, the
stockholders have approved amendments to the PAP and the Option Plan designed to
meet the performance-based compensation requirements of Section 162(m). The
Amended Restricted Stock Plan has also been designed to meet the
performance-based compensation requirements of Section 162(m) and was approved
by the Stockholders at the 1997 Annual Meeting. The Committee will continue to
monitor developments on this subject and take further action as may be
appropriate.
Joseph H. Lemieux
Robert G. Siefers
Thomas L. Young
11
<PAGE> 15
PERFORMANCE GRAPH
The graph below compares the total stockholder return on HCR Common Stock
to the cumulative total return for a broad market index (the Standard & Poor's
500 Stock Index), and to the cumulative total return for an index comprised of a
peer group of companies.(1) The indices reflect the year-end market value of an
investment in the stock of each company in the index, including additional
shares assumed to have been acquired with cash dividends, if any.
The graph assumes a $100 investment in HCR stock on December 31, 1992 at a
price of $10.9167 per share, as adjusted for 100% and 50% stock dividends on
March 5, 1993 and June 5, 1996, respectively. The graph also assumes investments
of $100 in the S&P 500 and the peer group indices, respectively, on the same
date.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD PEER GROUP
(FISCAL YEAR COVERED) HCR S&P 500 INDEX
<S> <C> <C> <C>
1992 $100.00 $100.00 $100.00
1993 135.87 110.08 92.30
1994 183.97 111.60 91.20
1995 213.73 153.51 84.90
1996 262.21 189.51 106.47
1997 368.69 252.73 139.28
</TABLE>
- ---------------
(1) The peer group index is based upon the total return for investments in the
common stock of the following companies: Beverly Enterprises, Inc.;
Integrated Health Services, Inc.; Manor Care, Inc.; and Novacare, Inc. The
returns for each company are weighted in proportion to the market values of
the equity capitalization of such companies. Living Centers of America,
Inc., is no longer included in the peer group because it ceased to exist as
a separate public company during 1997.
12
<PAGE> 16
PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
The Company's Certificate of Incorporation, as amended in February, 1993,
presently authorizes the issuance of 80,000,000 shares of Common Stock, par
value $.01 per share. As of March 12, 1998, 00,000,000 shares of Common Stock
were issued and outstanding. In addition, as of that date, the Company had
reserved 00,000,000 shares of Common Stock for issuance under the Stock Purchase
and Retirement Savings Program, the Amended Stock Option Plan for Key Employees,
the Amended Restricted Stock Plan and the Outside Directors Stock Option Plan.
On January 29, 1998, the Board of Directors authorized further amendment to
the first paragraph of Article IV of the Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 80,000,000 to
160,000,000 shares, subject to stockholder approval at the Annual Meeting on May
5, 1998. The text of the first paragraph of Article IV as so amended is set
forth on Exhibit A hereto.
The increase in authorized shares of Common Stock is recommended by the
Board of Directors in order to provide the Company with increased flexibility in
implementing the strategic objectives of the Company. Except with respect to the
stock option, restricted stock and employee stock purchase plans, there are at
present no specific plans, arrangements, negotiations or commitments which will
result in the issuance of additional shares. The additional authorized shares
will be available for issuance from time to time as the Board of Directors may
determine to be in the best interests of the Company. Such issuance may not
require further stockholder approval. Holders of Common Stock do not have
preemptive rights.
The affirmative vote of a majority of the stockholders present in person or
represented by proxy at the Annual Meeting is required to approve the amendment
to the Company's Certificate of Incorporation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE PROPOSAL.
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has selected Ernst & Young LLP as independent public accountants for
the Company for the fiscal year ending December 31, 1998, subject to
ratification of such selection by the stockholders.
A partner of Ernst & Young LLP will attend the Annual Meeting. He will have
an opportunity to make a statement if he desires and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE PROPOSAL.
OTHER BUSINESS
As of the date of this Proxy Statement, management knows of no other
business that will be presented for consideration at the Annual Meeting.
However, if other proper matters are presented at the meeting, it is the
intention of the proxy holders named in the accompanying proxy to take such
action as shall be in accordance with their judgment on such matters. For
adoption, all proposals to be voted upon by stockholders require a majority vote
of Common Stock represented at the meeting in person or by proxy.
13
<PAGE> 17
GENERAL INFORMATION
REVOCABILITY OF PROXIES
Any proxy solicited hereby may be revoked by the person or persons giving
it at any time before it has been exercised at the Annual Meeting by giving
notice of revocation to the Company in writing or at the Annual Meeting.
SOLICITATION COSTS
The Company will pay the cost of preparing and mailing this proxy statement
and other costs of the proxy solicitation made by the Company's Board of
Directors. Certain of the Company's officers and employees may solicit the
submission of proxies authorizing the voting of shares in accordance with the
Board of Directors' recommendations, but no additional remuneration will be paid
by the Company for the solicitation of those proxies. Such solicitations may be
made by personal interview, telephone and telegram. Arrangements have also been
made with brokerage firms and others for the forwarding of proxy solicitation
materials to the beneficial owners of Common Stock, and the Company will
reimburse them for reasonable out-of-pocket expenses incurred in connection
therewith.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
A stockholder desiring to submit a proposal for inclusion in the Company's
Proxy Statement for the 1999 Annual Meeting must deliver the proposal so that it
is received by the Company no later than November 24, 1998. The Company requests
that all such proposals be addressed to R. Jeffrey Bixler, Vice President,
General Counsel and Secretary, Health Care and Retirement Corporation, One
SeaGate, Toledo, Ohio 43604-2616.
By Order of the Board of Directors,
R. JEFFREY BIXLER, SECRETARY
Toledo, Ohio
March 24, 1998
14
<PAGE> 18
EXHIBIT A
First paragraph of Article IV of the Certificate of Incorporation of Health
Care and Retirement Corporation:
The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is One Hundred Sixty-Five Million
(165,000,000), consisting of One Hundred Sixty Million (160,000,000) shares
of common stock, par value $.01 per share (hereinafter called the "Common
Stock") and Five Million (5,000,000) shares of preferred stock, par value
$.01 per share (hereinafter called the "Preferred Stock").
15
<PAGE> 19
HCR LOGO
<PAGE> 20
PROXY HEALTH CARE AND RETIREMENT CORPORATION PROXY
HCR STOCK PURCHASE AND RETIREMENT SAVINGS PLAN
The undersigned hereby authorizes and instructs National City Bank,
Northwest, Trustee under the HCR Stock Purchase and Retirement Savings Plan, to
vote in person or by proxy the full common shares of Health Care and Retirement
Corporation credited to my account under the Health Care and Retirement
Corporation Stock Fund as of March 13, 1997, if any, at the Annual Meeting of
Stockholders to be held on May 6, 1997, or at any adjournment thereof.
When properly executed, this proxy will be voted in the manner directed
on the reverse side of this card by the undersigned stockholder. If no direction
is made, this proxy will be voted by the Trustee in accordance with the
instructions received with respect to a majority of shares in the Health Care
and Retirement Corporation Stock Fund.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
ITEMS 1, 2 AND 3 HAVE BEEN PROPOSED BY THE REGISTRANT.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- -------------------------------------------------------------------------------
3351 - HEALTH CARE & RETIREMENT CORP. (SAVINGS PLAN) (YELLOW STOCK)
<PAGE> 21
HEALTH CARE AND RETIREMENT CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
<TABLE>
<CAPTION>
For All
For Withheld Except Nominees(s)
All All Written Below
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: CLASS III- / / / / / /
Nominees: Robert G. Siefers, M. Keith Weikel
and Thomas L. Young
________________________________________________________
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
2. Approval of the Amended Restricted Stock Plan. / / / / / /
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
3. Ratify selection of Ernst & Young LLP as auditors. / / / / / /
4. In its discretion, the Proxy is authorized to
vote upon such other business as may
properly come before the meeting.
</TABLE>
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
Dated: _________________________, 1997
_____________________________________
Signature
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
3351 - HEALTH CARE & RETIREMENT CORP. (SAVINGS PLAN)(YELLOW STOCK)
<PAGE> 22
PROXY HEALTH CARE AND RETIREMENT CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul A. Ormond, Geoffrey G. Meyers and
R. Jeffrey Bixler and each of them, as Proxies with full power of substitution,
and hereby authorize(s) them to represent and to vote, as designated herein, all
shares of common stock of Health Care and Retirement Corporation held of record
by the undersigned on March 13, 1997, at the Annual Meeting of Stockholders to
be held on May 6, 1997, or at any adjournment thereof.
This proxy, when properly executed will be voted in the manner directed
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR Items 1, 2 and 3. Items 1, 2 and 3 have been proposed by the
registrant.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
- -------------------------------------------------------------------------------
3350 - HEALTH CARE & RETIREMENT CORP. (PROXY)
<PAGE> 23
HEALTH CARE AND RETIREMENT CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
<TABLE>
<CAPTION>
For All
For Withheld Except Nominees(s)
All All Written Below
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: CLASS III- / / / / / /
Nominees: Robert G. Siefers, M. Keith Weikel
and Thomas L. Young
________________________________________________________
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
2. Approval of the Amended Restricted Stock Plan. / / / / / /
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
3. Ratify selection of Ernst & Young LLP as auditors. / / / / / /
4. In their discretion, the Proxies are authorized to
vote upon such other business as may
properly come before the meeting.
</TABLE>
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: _________________________, 1997
_____________________________________
Signature
_____________________________________
Signature, if held jointly
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
3350 - HEALTH CARE & RETIREMENT CORP. (PROXY)
