<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
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
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
EMCARE HOLDINGS INC.
(Name of Registrant as Specified in its Charter)
Inapplicable
(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)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
Inapplicable
(2) Aggregate number of securities to which transaction applies:
Inapplicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Inapplicable
(4) Proposed maximum aggregate value of transaction: Inapplicable
(5) Total fee paid: Inapplicable
[ ] 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.
Amount Previously Paid: Inapplicable
Form, Schedule or Registration Statement No.: Inapplicable
Filing Party: Inapplicable
Date Filed: Inapplicable
<PAGE> 2
EMCARE HOLDINGS INC.
1717 MAIN STREET, SUITE 5200
DALLAS, TEXAS 75201
NOTICE OF THE 1997 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD MAY 15, 1997
To the Stockholders:
EmCare Holdings Inc. (the "Company") cordially invites you to
attend the 1997 annual meeting of its stockholders at the Crescent Club, 200
Crescent Court, 17th Floor, Dallas, Texas, on May 15, 1997, at 10:00 a.m., for
the following purposes:
1. CLASS III DIRECTORS. The election of the
Class III Directors of the Company, who will serve until the 2000
annual meeting and the election and qualification of their successors;
and
2. OTHER MATTERS. The transaction of such other
business as may properly come before the meeting, including any
continuation of the meeting pursuant to any adjournment of it to
another time (the "Annual Meeting").
The board of directors of the Company has established the
close of business on April 4, 1997, as the record date for determining the
stockholders entitled to notice of the Annual Meeting and to vote at it. Any
stockholder may examine the list of stockholders as of the record date during
regular business hours at the principal executive office of the Company on any
business day before the Annual Meeting.
By Order of the Board of Directors,
/s/ ROBERT F. ANDERSON, II
Robert F. Anderson, II
Chief Financial Officer, Senior Vice
President, Treasurer, and Secretary
Dallas, Texas
April 4, 1997
<PAGE> 3
EMCARE HOLDINGS INC.
PROXY STATEMENT
1997 ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD MAY 15, 1997
INTRODUCTION
The board of directors (the "Board of Directors") of EmCare
Holdings Inc., a Delaware corporation (the "Company"), hereby solicits your
proxy on behalf of the Company for use at the 1997 annual meeting of the
Company's stockholders and any continuation of such meeting pursuant to any
adjournment of it to another time (the "Annual Meeting"). The Annual Meeting
will be held at the Crescent Club, 200 Crescent Court, 17th Floor, Dallas,
Texas, on May 15, 1997, at 10:00 a.m.
The Company's principal executive office is located at 1717
Main Street, Suite 5200, Dallas, Texas 75201. The Company's telephone number is
(214) 712-2000.
The Company will mail this proxy statement (this "Proxy
Statement") and the accompanying proxy card (the "Proxy Card") on or about
April 17, 1997. The date of this Proxy Statement is April 4, 1997.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the stockholders of the Company (the
"Stockholders") will vote upon the following matters:
1. CLASS III DIRECTORS. The election of the
Class III Directors of the Company who will serve until the 2000
annual meeting and the election and qualification of their successors;
and
2. OTHER MATTERS. The transaction of such other
business as may properly come before the Annual Meeting.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you vote to elect as
Class III Directors the nominees named in this Proxy Statement and the Proxy
Card.
RECORD DATE AND VOTING
RECORD DATE. The Board of Directors has established the close
of business on April 4, 1997 (the "Record Date"), as the record date for
determining the Stockholders entitled to notice of the Annual Meeting and to
vote at it. On that date, the Company had 8,180,611 shares of Common Stock
outstanding. The Company did not have any other shares of capital stock
outstanding.
<PAGE> 4
VOTING. Each Stockholder will be entitled to one vote per
share of Common Stock in connection with the election of each Class III
Director and each other matter that properly comes before the Annual Meeting.
The Stockholders do not possess cumulative voting rights.
The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock will constitute a quorum at
the Annual Meeting. Shares represented at the meeting but not voted will be
counted for the purpose of determining the presence of a quorum. Unless a
quorum is present at the Annual Meeting, no action may be taken at the meeting
except the adjournment of the meeting until a later time. Abstaining from
participation in the Annual Meeting will affect whether the necessary quorum
exists to convene the meeting.
The election of each of the two nominees for Class III
Director requires a plurality of the votes of the shares of Common Stock
represented at the Annual Meeting. The Stockholders may cast their votes for a
nominee or withhold them. Withholding authority to vote for one or more of the
nominees will result in such nominee receiving fewer votes. The withholding of
such authority, however, will not decrease the number of votes that such
nominee otherwise receives. Withheld votes will count towards determining
whether a quorum exists.
BROKER NON-VOTES. Under the rules of the American and New York
Stock Exchanges, if a broker holds shares of Common Stock on behalf of its
customers and forwards this Proxy Statement and the accompanying material to
its customers at least 15 days before the Annual Meeting, the broker may vote
its customers' shares on the proposal to elect the Class III Directors if the
broker does not receive voting instructions from its customers by the tenth day
before the meeting.
PROXYHOLDERS. The proxyholders named on the Proxy Card (the
"Proxyholders") will vote the shares of Common Stock represented by valid
proxies at the Annual Meeting in accordance with the directions given on the
respective Proxy Cards. If a Stockholder signs and returns a Proxy Card without
giving any directions, the Proxyholders will vote such Stockholder's shares of
Common Stock for the election of the two nominees for Class III Director named
in this Proxy Statement and the Proxy Card. The Board of Directors does not
intend to present, and has no information that others will present, any
business at the Annual Meeting requiring a vote on any other matter. If any
other matter requiring a vote properly comes before the Annual Meeting, the
Proxyholders will vote the proxies that they hold in accordance with their best
judgment, including voting them to adjourn the Annual Meeting to another time
if a quorum is not present at the meeting or if they believe that an
adjournment is in the best interests of the Company.
REVOCATION. A Stockholder has the unconditional right to
revoke such Stockholder's proxy at any time prior to the voting of it by: (i)
submitting a later dated proxy to the Company or someone who attends the Annual
Meeting, (ii) attending the Annual Meeting and delivering a written notice of
revocation of the proxy to an officer of the Company present at the meeting, or
(iii) delivering a written notice of revocation of the proxy to the principal
executive office of the Company, which the Company receives on or before May
14, 1997.
SOLICITATION AGENT. The Company has retained Chemical Mellon
Shareholder Services, L.L.C. (the "Solicitation Agent") to solicit proxies in
connection with the Annual Meeting. The Solicitation Agent may solicit proxies
from the Stockholders and other persons in person or by mail, facsimile
transmission, telephone, personal interview, or any other means. The Company
will pay the Solicitation Agent a fee of $4,000 and
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reimburse it for its out-of-pocket expenses in connection with this
solicitation. The Company also will reimburse banks, brokers, custodians,
fiduciaries, nominees, securities dealers, trust companies, and other persons
for the reasonable expenses that they incur when forwarding this Proxy
Statement and the accompanying material to the beneficial owners of shares of
Common Stock. The directors, officers, and employees of the Company also may
solicit proxies from Stockholders and other persons by any of the means
described above. The Company will not pay these individuals any extra
compensation for their participation in this solicitation.
ELECTION OF THE CLASS III DIRECTORS
(PROPOSAL 1 ON THE PROXY CARD)
The Board of Directors is divided into three classes, with
each class elected to serve a three year term. Mr. Terry Hartshorn and Mr.
James T. Kelly are the Class I Directors, their terms expire at the 1998 annual
meeting. Mr. Andrew M. Paul and Mr. William F. Miller, III are the Class II
Directors, their terms expire at the 1999 annual meeting. Leonard M. Riggs,
Jr., M.D. and Mr. Richard H. Stowe are the Class III Directors, their terms
expire at this year's Annual Meeting.
Mr. Hartshorn and Mr. Kelly were elected as Class I Directors
at the 1995 annual meeting. Mr. Paul and Mr. Miller were elected as Class II
Directors at the 1996 annual meeting. Dr. Riggs and Mr. Stowe were elected
Class III Directors pursuant to a shareholders' agreement that terminated when
the Company completed its initial public offering in December 1994.
At the Annual Meeting, the Stockholders will vote for the
election of the Class III Directors. The Class III Directors elected will serve
until the 2000 annual meeting and the election and qualification of their
successors.
The nominees for election as Class III Directors are Dr. Riggs
and Mr. Stowe, the current Class III Directors. If either Dr. Riggs or Mr.
Stowe is unavailable for election as a result of unforeseen circumstances, the
Proxyholders will vote for the election of such substitute nominee as the Board
of Directors may propose.
DR. RIGGS. Leonard M. Riggs, Jr., M.D. has served as Chairman
of the Board and Chief Executive Officer of the Company since 1992. From 1974
through 1992, Dr. Riggs served as the President of EmCare, Inc. ("EmCare"), the
Company's emergency physician practice management subsidiary. Dr. Riggs began
practicing emergency medicine in 1969, and has served twelve years on the
Medical Board of the Company's largest hospital client as Chief of Emergency
Medicine. Prior to that time, Dr. Riggs served as such hospital's Director of
Emergency Medicine. Dr. Riggs is a past president of the American College of
Emergency Physicians. Dr. Riggs is a director of American Oncology Resources,
Inc. ("American Oncology"), which operates comprehensive cancer treatment
centers, and Prentiss Property Trust, a real estate investment trust.
MR. STOWE. Richard H. Stowe has served as a director of the
Company since February 1992 when Welsh, Carson, Anderson & Stowe ("Welsh
Carson") participated in the recapitalization of EmCare, which resulted in the
formation of the Company (the "Recapitalization"). Mr. Stowe has been a general
partner of Welsh Carson since 1979 and is a general partner of the partnerships
that serve as the general partners of Welsh, Carson, Anderson & Stowe V, L.P.
("WCAS V") and WCAS Capital Partners II, L.P. ("Capital Partners"), the Welsh
Carson affiliates that participated in the Recapitalization. Mr. Stowe is a
director of Aurora Electronics Inc., a distributor of computer spare parts,
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Health Management Systems, Inc., a provider of revenue enhancement services for
health care providers and payors, and several private companies.
THE BOARD OF DIRECTORS
The following table sets forth certain information concerning the directors.
<TABLE>
<CAPTION>
DIRECTOR YEAR TERM POSITIONS WITH THE COMPANY/
NAME AGE CLASS EXPIRES COMMITTEE MEMBERSHIPS
------ ----- ------- --------- -----------------------
<S> <C> <C> <C> <C>
Terry Hartshorn 52 I 1998 Compensation Committee
James T. Kelly 50 I 1998 Audit Committee
William F. Miller, III 47 II 1999 President and Chief Operating Officer
Andrew M. Paul 41 II 1999 Audit and Compensation Committees and
Stock Option Subcommittee
Leonard M. Riggs, Jr., M.D. 54 III 1997 Chairman of the Board and Chief
Executive Officer
Richard H. Stowe 53 III 1997 Audit and Compensation Committees and
Stock Option Subcommittee
</TABLE>
The business experience of Dr. Riggs and Mr. Stowe is
described above.
MR. HARTSHORN. Terry Hartshorn has served as a director of the
Company since December 1994. Since 1993, Mr. Hartshorn has been the Chairman of
the Board of Pacificare Health Systems ("Pacificare"), a managed care
organization. From 1977 to 1993, Mr. Hartshorn served as the President and
Chief Executive Officer of Pacificare. From 1993 to February 1997, Mr.
Hartshorn also was the Chief Executive Officer and President of UniHealth, a
non-profit integrated health system. Mr. Hartshorn is a director of Apria
Healthcare, a provider of home health care products and services.
MR. KELLY. James T. Kelly has served as a director of the
Company since May 1993. Mr. Kelly is the Chairman of the Board of Lincare
Holdings Inc. ("Lincare"), a provider of oxygen and other respiratory therapy
services in the home. Mr. Kelly served as Chief Executive Officer of Lincare
from June 1986 through December 1996. Prior to that time, Mr. Kelly served for
19 years in a number of capacities within the Mining and Metals Division of
Union Carbide Corp., departing as Director of Marketing.
MR. MILLER. William F. Miller, III has served as the President
and Chief Operating Officer of the Company since 1992. Mr. Miller also has been
a director of the Company since 1992. From 1983 to 1992, Mr. Miller served as
the Chief Executive Officer of EmCare. Prior to 1983, Mr. Miller served for
nine years in financial and management positions in the health care industry,
including positions as chief executive officer and chief financial officer of
hospitals and administrator/director of operations of a multi-specialty group
practice.
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MR. PAUL. Andrew M. Paul has served as a director of the
Company since the Recapitalization in February 1992. Mr. Paul joined Welsh
Carson in 1984 and is a general partner of the partnerships that serve as the
general partners of WCAS V and Capital Partners. Mr. Paul is a director of
American Oncology, Housecall Medical Resources Inc., a provider of home health
services, Lincare, Medcath Incorporated, a provider of cardiology and
cardiovascular services, National Surgery Centers Inc., an operator of surgical
centers, and several private companies.
BOARD OF DIRECTOR MEETINGS AND COMMITTEES
MEETINGS. During the year ended December 31, 1996, the Board
of Directors held four regularly scheduled meetings and no special meetings.
During the year, each director attended 75% or more of the aggregate number of
such meetings and committee meetings of the Board of Directors on which the
director served. In addition, during 1996 the Board of Directors acted by
unanimous written consent on seven occasions.
DIRECTOR COMPENSATION. The Company's general policy through
1995 was that the Company did not compensate the directors for their service as
directors, although the Company reimbursed them for the expenses that they
incurred when serving as directors. On two occasions, however, the Company
granted stock options to two different outside directors to compensate them for
their service as directors. On May 10, 1993, the Company granted Mr. Kelly
options to purchase 7,500 shares of Common Stock at an exercise price of $14.00
per share. In connection with the initial public offering, the Company
decreased the exercise price of these options to $11.00 per share, the price
per share in the offering. In addition, on January 12, 1995 the Company granted
Mr. Hartshorn options to purchase 7,500 shares of Common Stock at an exercise
price of $11.00 per share. The options granted to Messrs. Kelly and Hartshorn
vest over five years.
In 1996 the Company implemented a policy of granting options
to purchase shares of Common Stock annually to each outside director as
compensation for serving as a director. The per share exercise price of these
options will be the closing price of a share of Common Stock on the trading day
immediately preceding the date of the grant. Under this policy, on August 15,
1996 the Company granted options to purchase 6,000 shares of Common Stock to
each outside director at an exercise price of $23.25 per share. One-third of
these stock options vested on the date of grant and one-third of these stock
options will vest on the first two anniversaries of such date, subject to
automatic vesting upon a change in control of the Company. In addition, the
Company continues to reimburse the directors for the expenses that they incur
when serving as directors.
COMMITTEES. The Board of Directors has an audit committee (the
"Audit Committee"), a compensation committee (the "Compensation Committee"),
and a sub-committee of the Compensation Committee (the "Stock Option
Subcommittee") that administers the Company's Amended and Restated Stock Option
and Restricted Stock Purchase Plan, as amended (the "Stock Option Plan"). The
Audit Committee reviews the financial and internal controls of the Company,
makes recommendations to the Board of Directors concerning the engagement of
the Company's independent certified public accountants and reviews their audit
plan, reviews related party transactions and potential conflict of interest
situations involving the Company, and reviews the Company's compliance
programs. The members of the Audit Committee are Messrs. Kelly, Paul, and
Stowe. The Audit Committee held three meetings during 1996. The Audit Committee
did not act by unanimous written consent during the year.
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The Board of Directors does not have a nominating committee.
The entire Board of Directors considers nominees for the position of director.
If any Stockholder desires the Board of Directors to consider an individual for
nomination as a director at next year's annual meeting, such Stockholder should
contact the Company concerning such nomination during the period described
below for considering Stockholder proposals for next year's annual meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The Compensation Committee consists of Messrs. Hartshorn, Paul, and Stowe. None
of them has ever been an employee or officer of the Company or any of its
subsidiaries. The Compensation Committee reviews and approves the compensation
that the Company pays to its executive officers. The Stock Option Subcommittee
consists of members of the Compensation Committee selected by the Board of
Directors who satisfy: (i) the non-employee director requirement under Rule
16b-3 of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and (ii) the outside director requirement under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Currently, Messrs. Paul
and Stowe are the members of the Stock Option Subcommittee. During 1996 the
Compensation Committee held one meeting and acted by unanimous written consent
on one occasion. During 1996 the Stock Option Subcommittee held one meeting and
acted by unanimous written consent on one occasion.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee reviews and approves the salaries
and other compensation that the Company pays to its executive officers.
OVERALL POLICY. The Compensation Committee intends to
compensate the Company's executive officers in ways that: (i) motivate them to
strive continually to improve the Company's financial results, and (ii) align
their interests with the interests of the Stockholders.
ANNUAL COMPENSATION. The compensation of Dr. Riggs and Mr.
Miller for 1996 was established under their employment agreements, which are
discussed below. These employment agreements provide that a significant portion
of the annual compensation of these individuals may consist of bonuses payable
upon the Company's achievement of earnings targets. The Company has not
disclosed the specific earnings targets used when determining these bonuses
because the Board of Directors has determined that such disclosure would
adversely affect the Company's competitive position. The Compensation Committee
established the 1996 salary levels for the other executive officers by
evaluating their relative skills and past performances.
The Compensation Committee established the 1996 bonuses for
the executive officers based upon the committee's evaluation of their
individual performances and the Company's achievement of earnings targets,
subject to any minimum bonuses under the employment agreements described above.
The Compensation Committee generally awarded smaller bonuses in 1996 than in
1995 because in 1995 the Company significantly surpassed its earnings targets.
Although the Company achieved its earnings targets in 1996, the Company did not
surpass them.
When establishing salary and bonus amounts, the Compensation
Committee consulted with Dr. Riggs and Mr. Miller and considered the
compensation ranges for executive officers of companies similar to the Company
set forth in a consultant's report prepared in 1993 and updated for use in
1996. This report and the related compensation
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decisions did not specifically compare the compensation levels of the Company's
executive officers to the compensation levels of the executive officers of all
of the companies in the Peer Group described in connection with the Performance
Graph set out below because of the varying sizes of the companies comprising
the Peer Group. The Compensation Committee also did not compare each executive
officer's performance against any list of specific factors, use any formula to
determine such officer's overall compensation, or seek to compensate such
officer at a predetermined percentile within the compensation range for such
officer in the consultant's report.
The Compensation Committee believes that the 1996 compensation
of the Company's executive officers is reasonable in relation to the market
performance of the Common Stock in 1996. As shown in the Performance Graph, the
closing price of the Common Stock on December 31, 1996 was $23.25, a decrease
of 3.1% from the closing price on December 31, 1995. This decrease of 3.1%
compares favorably to the decrease of 33.4% in the weighted average of the
common stocks in the Peer Group during 1996. See "Performance Graph."
CHANGE IN CONTROL PROVISIONS. During 1996 the Compensation
Committee approved adding change in control provisions to the employment
agreements of Dr. Riggs and Mr. Miller. These provisions provide for the
payment and benefits described below if the Company terminates such individual
without cause or he resigns for good reason following a change in control or a
potential change in control of the Company. In addition, during 1996 the
Company entered into a severance agreement with Mr. Anderson providing for the
payment and benefits described below if the Company terminates him without
cause or he resigns for good reason following a change in control of the
Company.
The Compensation Committee believes that providing these
individuals with some measure of financial security in the event of a change in
control of the Company would increase their loyalty to the Company and
encourage them to remain with the Company immediately following any change in
control. The assurance that these individuals would remain with the Company
during the transition period following any change in control should increase
the value of any change in control transaction to the Stockholders. These
change in control provisions are precautionary and responsive to the industry's
consolidation.
STOCK OPTIONS. The Stock Option Subcommittee determines the
number of stock options to grant to each executive officer and other
participant under the Stock Option Plan. This plan limits the number of shares
of Common Stock subject to options that the Stock Option Subcommittee may grant
to any executive officer or other participant under the plan to 250,000 shares
in any given year, including all shares related to forfeited, canceled, or
repriced options. The Stock Option Subcommittee does not grant stock options at
pre-determined times or intervals, although the committee usually grants some
stock options during the first quarter of each year. The stock options
reflected in the compensation tables set out below are the options actually
granted during the periods indicated, except for certain stock options granted
to Mr. Miller discussed below.
The Stock Option Subcommittee grants stock options to the
executive officers to encourage loyalty to the Company, reward them for their
past contributions to the Company's success, and motivate them to perform in a
superior manner in the future. When awarding stock options, the Stock Option
Subcommittee also considers the executive officer's seniority and the number of
stock options previously granted to such individual. The Stock Option
Subcommittee grants stock options at an exercise price equal to the closing
price of the Common Stock on the trading day immediately preceding the date of
the grant. The options therefore provide value to the executive officers only
if the
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price of the stock appreciates. The stock options generally vest over four or
five years. When options vest over four years, 20% of the options usually vest
upon their grant. The stock options granted during 1996 also automatically vest
upon a change in control of the Company. This change in control provision is
precautionary and responsive to the industry's consolidation.
In 1996 the Securities and Exchange Commission (the
"Commission") significantly revised Rule 16b-3. Effective August 15, 1996, the
Board of Directors amended the Stock Option Plan to conform to the revised rule
and make certain insignificant changes to the plan. Section 16(b) of the
Exchange Act generally provides that directors, executive officers, and
beneficial owners of more than 10% of any class of an issuer's equity
securities (collectively, "Reporting Persons") must disgorge any "short-swing
profit" realized on purchases and sales of the issuer's equity securities
during any six month period. A grant of a stock option usually is considered a
purchase of the underlying stock for purposes of Section 16(b). Accordingly,
granting stock options to a Reporting Person could cause such person to become
liable for short-swing profits. If the issuer complies with Rule 16b-3 when
granting the stock options, however, the grant is not considered a purchase.
SECTION 162(m). Unless the Company satisfies certain
requirements, Section 162(m) of the Code will generally limit the Company's tax
deduction for compensation paid to each of the executive officers named in the
Summary Compensation Table below to $1.0 million. During 1996, none of the
executive officers named in the table received compensation exceeding the
maximum deductible amount. The Company believes that the Stock Option Plan
complies with Section 162(m). Accordingly, the tax deductions available to the
Company when executive officers exercise their stock options should not count
against the $1.0 million limit. The Compensation Committee intends to monitor
the compensation paid to the Company's executive officers to insure
deductibility under Section 162(m), subject to maintaining the Company's
flexibility to attract and retain qualified executives to manage the Company.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. As described
above, the compensation of Dr. Riggs is established under his employment
agreement originally entered into prior to the Company's initial public
offering in December 1994. Under that agreement, Dr. Riggs was eligible for a
1996 bonus of not less than $100,000 if the Company achieved an earnings target
established by the Board of Directors. In the year ended December 31, 1996, the
Company achieved the established target and the Compensation Committee awarded
Dr. Riggs a bonus of $166,031. The Compensation Committee awarded Dr. Riggs a
bonus in excess of the minimum bonus under his employment agreement because
that minimum amount was based upon the Company's status as a private company.
The Compensation Committee believed that Dr. Riggs's increased responsibilities
as the chief executive officer of a public company and the Company's
achievement of the 1996 earnings target established by the Board of Directors
justified a higher bonus amount.
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MR. MILLER'S ACQUISITION BONUS. In the beginning of 1996, the
Compensation Committee informally arranged with Mr. Miller and the other
members of the Company's acquisition team to award them incremental bonuses if
they successfully implemented the Company's aggressive acquisition program. The
incremental bonuses would be based upon the estimated increase in the Company's
earnings per share from the acquisitions. The key members of the team were Mr.
Miller and the Company's former Chief Financial Officer. In March 1996, the
former Chief Financial Officer resigned to accept a position with another
company. Mr. Miller, however, proceeded to close all nine of the company's 1996
acquisitions, which represented over 65 contracts to provide emergency
department management services.
The incremental bonus to which Mr. Miller would have been
entitled under the informal arrangement exceeded $500,000. Both Mr. Miller and
the members of the Compensation Committee believed that Mr. Miller's success
went beyond the boundaries that they had contemplated when establishing the
incremental bonus arrangement. In addition, both Mr. Miller and the members of
the Compensation Committee believed that awarding Mr. Miller such a large
incremental bonus when regular year-end bonuses had decreased from the prior
year would be inappropriate.
Mr. Miller and the members of the Compensation Committee
decided that Mr. Miller's incremental bonus should only be $100,000. In
addition, they requested the Stock Option Subcommittee to make an incremental
award of stock options to Mr. Miller. In response, the Stock Option
Subcommittee awarded Mr. Miller options to purchase an additional 35,000 shares
of Common Stock. This incremental cash bonus and stock option grant was in
addition to Mr. Miller's regular 1996 bonus of $166,031 and his March 1996
grant of stock options to purchase 75,000 shares of Common Stock.
Respectfully submitted,
Terry Hartshorn
Andrew M. Paul
Richard H. Stowe
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EXECUTIVE OFFICERS
The following table sets forth the current executive officers
of the Company. Although the Board of Directors has not elected Dr. Cooley as
an officer of the Company, he is considered an executive officer for purposes
of this Proxy Statement because he performs policy making functions for the
Company. Each executive officer serves at the pleasure of the Board of
Directors.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Leonard M. Riggs, Jr., M.D. 54 Chairman of the Board, Chief
Executive Officer, and Director
William F. Miller, III 47 President, Chief Operating
Officer, and Director
Robert F. Anderson, II 54 Chief Financial Officer, Senior
Vice President, Treasurer, and
Secretary
Steven W. Cooley, M.D., 44 Executive Vice President of
F.A.C.E.P. EmCare
S. Kent Fannon 44 Senior Vice President of
Corporate Development
</TABLE>
The business experience of Dr. Riggs and Mr. Miller is
described above.
MR. ANDERSON. Robert F. Anderson, II, has served as Chief
Financial Officer, Senior Vice President, Treasurer, and Secretary of the
Company since April 1, 1996. Mr. Anderson also administers the Company's
compliance programs. From 1977 to 1996, Mr. Anderson was a partner with Ernst &
Young LLP and its predecessor firms. From 1994 to 1995, Mr. Anderson was
Director of the Healthcare Industry Group for the North Texas office of Ernst &
Young. From 1990 to 1993, Mr. Anderson was Director of the Audit Practice for
the Fort Worth office of Ernst & Young. From 1984 to 1989, Mr. Anderson was
Managing Partner of the Fort Worth office of Ernst & Whinney. From 1981 to
1983, Mr. Anderson was Director of Entrepreneurial Services for the Dallas
office of Ernst & Whinney.
DR. COOLEY. Steven W. Cooley, M.D., F.A.C.E.P. has served as
Executive Vice President of EmCare since 1992. From 1991 to 1992, Dr. Cooley
served as Executive Vice President and Chief Medical Officer of Spectrum
Emergency Care, Inc., a physician practice management company. From 1989 to
1991, Dr. Cooley served as Executive Vice President and Chief Operating Officer
of Synergon and Government Health Services, Inc. ("Synergon"), an emergency
medicine practice management company. From 1985 to 1989, Dr. Cooley served as
Executive Vice President of Synergon. Dr. Cooley began practicing emergency
medicine in 1978. In addition to his activities described above, from 1978 to
1992 Dr. Cooley served as a director, staff physician, or attending physician
in hospital emergency departments.
MR. FANNON. S. Kent Fannon has served as Senior Vice President
of Corporate Development since December 30, 1996. From 1994 to 1996, Mr. Fannon
was a partner with Covington Group, L.C., a merchant banking and consulting
firm. From 1993 to 1994, Mr. Fannon was Planning, Quality, and Resource
Management Officer for EPIC
10
<PAGE> 13
Healthcare Group, Inc., which owned and operated hospitals and other health
care related business. From 1990 to 1993, Mr. Fannon was a partner with The
Elder Group, a management consulting firm.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth
certain information with respect to compensation paid or accrued by the Company
during the years ended December 31, 1996, 1995, and 1994 to the Company's Chief
Executive Officer and its other four executive officers. The fringe benefits
provided to each of these executive officers was less than the lesser of
$50,000 or 10% of such executive officer's compensation. The Company therefore
excluded such fringe benefits from the following table as permitted under the
Commission's rules.
<TABLE>
<CAPTION>
Long-Term
Compensa-
Annual tion/
Compensation Securities
----------------------- Underlying All Other
Salary Bonus Options(1) Compensation
Name and Principal Position Year ($) ($) (#) ($)
--------------------------- ---- --------- --------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Leonard M. Riggs, Jr., M.D. 1996 297,448 166,031 75,000 9,250 (2)
Chairman of the Board and 1995 278,250 225,000 75,000 16,534 (2)
Chief Executive Officer 1994 265,585 175,000 37,500 13,268 (2)
William F. Miller, III, 1996 284,258 266,031 (3) 110,000 (3) 9,250 (4)
President and Chief Operating 1995 257,250 225,000 75,000 16,784 (4)
Officer 1994 245,000 175,000 37,500 16,667 (4)
Robert F. Anderson, II, (5) 1996 147,449 74,714 70,000 0
Chief Financial Officer, Senior
Vice President, Treasurer, and
Secretary
Steven W. Cooley, M.D. 1996 229,379 74,714 45,000 9,250 (6)
F.A.C.E.P., Executive Vice 1995 215,254 100,000 15,000 13,807 (6)
President of EmCare 1994 205,004 65,000 17,500 13,281 (6)
S. Kent Fannon (7) 1996 0 0 50,000 0
Senior Vice President of
Corporate Development
</TABLE>
- -----------------------------------
(1) The Company originally granted the stock options shown as granted during
1994 at an exercise price of $14.00 per share in December 1993 and then
repriced them to the Company's initial public offering price of $11.00 per
share in December 1994, except that the Company originally granted stock
options to purchase 12,500 shares of Common Stock to Dr. Cooley in July
1994.
(2) The 1996 other compensation amount for Dr. Riggs consists of $4,750 in
matching contributions made under the Company's 401(k) Plan and $4,500 in
profit sharing payments that the Company paid into the 401(k) Plan on Dr.
Riggs's behalf. The 1995 other compensation amount for Dr. Riggs
11
<PAGE> 14
consists of $4,638 in matching contributions made under the Company's
401(k) Plan, $4,500 in profit sharing payments that the Company paid into
the 401(k) Plan on Dr. Riggs's behalf, $5,278 in health insurance premiums
paid on behalf of Dr. Riggs, $957 in life insurance premiums paid on behalf
of Dr. Riggs, and $1,161 in disability insurance premiums paid on behalf of
Dr. Riggs. The 1994 other compensation amount for Dr. Riggs consists of
$3,524 in contributions on behalf of Dr. Riggs to a Money Purchase Pension
Plan, $624 in life insurance premiums paid on behalf of Dr. Riggs, $4,620
in matching contributions made under the Company's 401(k) Plan, and $4,500
in profit sharing payments that the Company paid into the 401(k) Plan on
Dr. Riggs's behalf.
(3) Mr. Miller's bonus and stock option grants include an incremental bonus of
$100,000 and an incremental award of stock options to purchase 35,000
shares of Common Stock because of Mr. Miller's successful implementation of
the Company's aggressive acquisition program in 1996. Although the Company
actually granted these incremental stock options to Mr. Miller on February
18, 1997, the Company has included them in this table because they related
to Mr. Miller's 1996 performance. See "Report of the Compensation
Committee -- Mr. Miller's Acquisition Bonus."
(4) The 1996 other compensation amount for Mr. Miller consists of $4,750 in
matching contributions made under the Company's 401(k) Plan and $4,500 in
profit sharing payments that the Company paid into the 401(k) Plan on Mr.
Miller's behalf. The 1995 other compensation amount for Mr. Miller consists
of $4,888 in matching contributions made under the Company's 401(k) Plan,
$4,500 in profit sharing payments that the Company paid into the 401(k)
Plan on Mr. Miller's behalf, $5,278 in health insurance premiums paid on
behalf of Mr. Miller, $957 in life insurance premiums paid on behalf of Mr.
Miller, and $1,161 in disability insurance premiums paid on behalf of Mr.
Miller. The 1994 other compensation amount for Mr. Miller consists of
$3,524 in contributions on behalf of Mr. Miller to a Money Purchase Pension
Plan, $4,049 in life insurance premiums paid on behalf of Mr. Miller,
$4,594 in matching contributions made under the Company's 401(k) Plan, and
$4,500 in profit sharing payments that the Company paid into the 401(k)
Plan on Mr. Miller's behalf.
(5) Mr. Anderson became an employee of the Company on April 1, 1996.
Accordingly, the table does not contain any information for Mr. Anderson
for 1995 and 1994.
(6) The 1996 other compensation amount for Dr. Cooley consists of $4,750 in
matching contributions made under the Company's 401(k) Plan and $4,500 in
profit sharing payments that the Company paid into the 401(k) Plan on Dr.
Cooley's behalf. The 1995 other compensation amount for Dr. Cooley consists
of $4,620 in matching contributions made under the Company's 401(k) Plan,
$4,500 in profit sharing payments that the Company paid into the 401(k)
Plan on Dr. Cooley's behalf, $2,540 in health insurance premiums paid on
behalf of Dr. Cooley, $986 in life insurance premiums paid on behalf of Dr.
Cooley, and $1,161 in disability insurance premiums paid on behalf of Dr.
Cooley. The 1994 other compensation amount for Dr. Cooley consists of
$3,524 in contributions on behalf of Dr. Cooley to a Money Purchase Pension
Plan, $645 in life insurance premiums paid on behalf of Dr. Cooley, $4,612
in matching contributions made under the Company's 401(k) Plan, and $4,500
in profit sharing payments that the Company paid into the 401(k) Plan on
Dr. Cooley's behalf.
(7) Mr. Fannon became an employee of the Company on December 30, 1996, although
he did not receive any salary or bonus with respect to 1996. Accordingly,
the table does not contain any information for Mr. Fannon for 1995 or 1994.
12
<PAGE> 15
OPTIONS GRANTED IN THE LAST FISCAL YEAR. The following table
sets forth certain information regarding the grant of stock options during the
year ended December 31, 1996 to each of the Company's executive officers and
the grant of stock options to purchase 35,000 shares of Common Stock to Mr.
Miller on February 18, 1997 in partial compensation for his successful
implementation of the Company's aggressive acquisition program in 1996.
Although the Company granted these stock options to Mr. Miller in 1997, the
Company has included them in this table because they relate to Mr. Miller's
1996 performance.
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------
Percent of
Total
Number of Options Potential Realizable
Securities Granted to Value at Assumed
Underlying Employees Exercise Annual Rates of Stock
Options in Fiscal Price (Per Price Appreciation for
Granted Year Share) Expiration Option Term
--------------------------
Name (#) (%)(1) ($) Date 5% ($) 10% ($)
- ------------------- ---------- ------------ ------------ ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leonard M. Riggs, 75,000 13.31 25.63 03-11-06 918,375 2,600,625
Jr., M.D.
William F. Miller, III 75,000 13.31 25.63 03-11-06 918,375 2,600,625
35,000 6.21 24.44 02-18-07 470,138 1,255,188
Robert F. Anderson, II 50,000 8.87 26.88 04-01-06 549,750 1,671,250
20,000 3.55 20.25 11-12-06 352,400 801,000
Steven W. Cooley, 45,000 7.99 25.63 03-11-06 551,025 1,560,379
M.D., F.A.C.E.P.
S. Kent Fannon 50,000 8.87 23.00 12-30-06 743,500 1,865,000
</TABLE>
- ---------------
(1) The total stock options granted used to compute this percentage
includes: (a) the stock options granted to the participants under the
Stock Option Plan who are physicians under contract with either a
subsidiary of the Company or a PA (as defined in the section entitled
"Certain Transactions"), and (b) the stock options to purchase 35,000
shares of Common Stock granted to Mr. Miller on February 18, 1997 in
partial compensation for his successful implementation of the
Company's aggressive acquisition program in 1996. See "Report of the
Compensation Committee -- Mr. Miller's Acquisition Bonus."
OPTIONS EXERCISED AND HELD. The following table sets forth
information regarding the exercise of stock options during the year ended
December 31, 1996 and the number and value of options held as of December 31,
1996 by each of the Company's executive officers.
13
<PAGE> 16
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired Value at Fiscal Year End (#) at Fiscal Year End ($)
on Exercise Realized (Exercisable/ (Exercisable/
Name (#) ($) Unexercisable Unexercisable)
- ---------------------- ----------- --------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Leonard M. Riggs, 0 0 71,667/125,833 682,466/718,099
Jr., M.D.
William F. Miller, III 22,500 285,000 57,500/130,000(1) 600,735/794,430(1)
Robert F. Anderson, II 0 0 14,000/56,000 12,000/48,000
Steven W. Cooley, M.D., 8,500 157,681 12,500/55,500 42,875/241,431
F.A.C.E.P.
S. Kent Fannon 0 0 10,000/40,000 2,500/10,000
</TABLE>
- ---------------
(1) These numbers exclude the stock options to purchase 35,000 shares of
Common Stock granted to Mr. Miller on February 18, 1997 in partial
compensation for his successful implementation of the Company's
aggressive acquisition program in 1996.
EMPLOYMENT AND SEVERANCE AGREEMENTS. In connection with the
Recapitalization in February 1992, Dr. Riggs and Mr. Miller each entered into
a five year employment agreement with the Company. Although the five year terms
under these agreements have expired, they continue to govern the terms of the
Company's employment arrangements with each of Dr. Riggs and Mr. Miller. The
parties amended these employment agreements in December 1993 to increase the
1994 base salaries under them. The amendment to Dr. Riggs's employment
agreement increased his 1994 base salary to $265,000. The amendment to Mr.
Miller's employment agreement increased his 1994 base salary to $245,000. After
1994, the base salaries under both of these employment agreements increase
annually by the greater of the increase in the Consumer Price Index during the
preceding year or 5%.
In addition, under their employment agreements, Dr. Riggs and
Mr. Miller are each entitled to an annual bonus of not less than $100,000 if
the Company achieves certain earnings targets for internal growth and
profitability. If the Company fails to achieve these targets, Dr. Riggs and
Mr. Miller are entitled to receive pro rata portions of their bonuses if the
Company achieves at least 80% of its operating income target.
Under Dr. Riggs's and Mr. Miller's employment agreements, if
the Company terminates such individual without cause or he resigns because of
the Company's breach of his employment agreement, during the year immediately
after such termination or resignation the Company must pay him a monthly amount
equal to the aggregate of his monthly salary and one-twelfth of his estimated
bonus. During this period, the Company also must continue to provide such
individual and his dependents with the medical, life, and disability insurance
coverage in effect at the time of such termination or resignation.
During the year ended December 31, 1996, the parties amended
and restated these employment agreements. Dr. Riggs's and Mr. Miller's amended
and restated agreements added a change in control provision that provides that
if the Company terminates him or he resigns for good reason during the two
years immediately after a change in control of the Company, the Company will
pay him a lump sum equal to twice the
14
<PAGE> 17
aggregate of his annual salary and average annual bonus. The Company will
increase this amount for any excise tax that Dr. Riggs or Mr. Miller must pay
on such payment under the "golden parachute" provisions of the Code. In
addition, during the two years immediately after such termination or
resignation the Company must continue to provide such individual with the
health, dental, life, and disability benefits that the Company previously
provided to him. Finally, following such termination or resignation such
individual's vested stock options will remain exercisable for at least 30 days.
Under each amended and restated agreement the Company provides
equivalent benefits to Dr. Riggs and Mr. Miller if the Company terminates him
without cause or he resigns for good reason within one year after a potential
change in control. Any payments to Dr. Riggs or Mr. Miller because of a change
in control or potential change in control will be offset by any other severance
obligations provided to him under his respective agreement.
During the year ended December 31, 1996, the Company entered
into a severance agreement with Mr. Anderson. This agreement provides that the
Company will pay Mr. Anderson severance of $190,000 if within 180 days
following a change in control the Company terminates him without cause or he
resigns for good reason. In addition, for up to one year after such termination
or resignation the Company will continue to provide Mr. Anderson with the
disability, health, and life insurance benefits provided to him at the time of
such termination or resignation.
COMMON STOCK OWNERSHIP
PRINCIPAL STOCKHOLDERS. The following table sets forth the
persons and groups who beneficially owned more than 5% of the outstanding
shares of Common Stock as of April 4, 1997. The Company compiled this
information from its stock records, the Schedules 13D and 13G sent to the
Company, and other information available to the Company. Unless otherwise
indicated, these persons and groups possess sole voting and investment power
with respect to the shares of Common Stock that they beneficially own.
15
<PAGE> 18
<TABLE>
<CAPTION>
Number of Shares Percentage of
Name and Address of Beneficial Owner Beneficially Owned Outstanding Shares
- ------------------------------------ ------------------ ------------------
<S> <C> <C>
William F. Miller, III 499,500(1) 6.03%
c/o EmCare Holdings Inc.
1717 Main Street, Suite 5200
Dallas, Texas 75201
Putnam Investments, Inc. 1,010,000 12.35%
One Post Office Square
Boston, Massachusetts 02109
Leonard M. Riggs, Jr., M.D. 970,766(2) 11.70%
c/o EmCare Holdings Inc.
1717 Main Street, Suite 5200
Dallas, Texas 75201
Warburg, Pincus Counselors, Inc. 1,162,058 14.21%
466 Lovington Avenue
New York, New York 10017
</TABLE>
- ----------------------------------
(1) These shares of Common Stock include: (a) 107,500 shares issuable to
Mr. Miller upon the exercise of stock options that are vested or will
vest within 60 days after April 4, 1997, (b) 10,000 shares owned by
The Abby Margaret Miller 1994 Descendants Trust, for which Mr. Miller
serves as the trustee, (c) 10,000 shares owned by The Joshua William
Miller 1994 Descendants Trust for which Mr. Miller serves as the
trustee, (d) 500 shares owned by Abby M. Miller, Mr. Miller's minor
daughter, and (e) 500 shares owned by Joshua W. Miller, Mr. Miller's
minor son.
(2) These shares of Common Stock include: (a) 114,667 shares issuable to
Dr. Riggs upon the exercise of stock options that are vested or will
vest within 60 days after April 4, 1997, (b) 94,350 shares owned by
the Riggs Family Limited Partnership, a partnership in which Dr. Riggs
and trusts established for Dr. Riggs's children are the partners, and
(c) 257,884 shares owned by a voting trust established for Peggy A.
Riggs, Dr. Riggs's wife, for which Dr. Riggs serves as the trustee.
DIRECTORS AND EXECUTIVE OFFICERS. The following table sets
forth the number of shares of Common Stock beneficially owned as of April 4,
1997 by each director of the Company, each executive officer of the Company,
and all directors and executive officers of the Company as a group. The Company
obtained this information from its directors and executive officers. Unless
otherwise indicated, these individuals possess sole voting and investment power
with respect to the shares that they beneficially own.
16
<PAGE> 19
<TABLE>
<CAPTION>
Percentage of
Number of Shares Outstanding
Name Beneficially Owned Shares
---- ------------------ ------------------
<S> <C> <C>
Robert F. Anderson, II 28,000 (1) *
Steven W. Cooley, M.D., F.A.C.E.P. 37,000 (1) *
S. Kent Fannon 10,000 (1) *
Terry Hartshorn 5,000 (1) *
James T. Kelly 13,500 (1) *
William F. Miller, III 499,500 (1)(2) 6.03%
Andrew M. Paul 15,175 (1) *
Leonard M. Riggs, Jr., M.D. 970,766 (1)(2) 11.70%
Richard H. Stowe 51,201 (1) *
All directors and executive officers as a group 1,630,142 (1) 19.19%
(9 individuals)
</TABLE>
- --------------------------
* Less than 1%.
(1) The shares of Common Stock owned beneficially by the following
individuals include stock options that are vested or will vest within
60 days after April 4, 1997 for the number of shares following their
name: Mr. Anderson-28,000 shares, Dr. Cooley-37,000 shares, Mr.
Fannon-10,000 shares, Mr. Hartshorn-5,000 shares, Mr. Kelly-9,500
shares, Mr. Miller-107,500 shares, Mr. Paul-2,000 shares, Dr.
Riggs-114,667 shares, and Mr. Stowe-2,000 shares, and all directors
and executive officers as a group-315,667 shares.
(2) See the preceding table for a description of the beneficial ownership
of the shares of Common Stock by Mr. Miller and Dr. Riggs.
In connection with the Recapitalization, the Company granted
certain registration rights with respect to the transfer of shares of Common
Stock to Mr. Miller, Dr. Riggs, and certain other persons.
PERFORMANCE GRAPH
The following Performance Graph compares the Company's
cumulative total Stockholder return on the Common Stock for the period from
December 8, 1994, the day the Common Stock commenced trading on the NASDAQ
National Market, to December 31, 1996, with the cumulative total return of: (i)
the NASDAQ market index, which includes the Company, and (ii) the peer group of
companies described below that the Company selected for purposes of this
comparison (the "Peer Group"). The return of each company in the Peer Group has
been weighted to reflect its relative stock market capitalization. The
Performance Graph assumes dividend reinvestment.
17
<PAGE> 20
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
THE COMPANY, THE NASDAQ MARKET INDEX, AND THE PEER GROUP
<TABLE>
<CAPTION>
Dec. 8, Dec. 31, Dec. 31, Dec. 31,
1994 1994 1995 1996
------- -------- -------- ---------
<S> <C> <C> <C> <C>
EmCare Holdings Inc. 100.00 130.34 215.73 208.99
Peer Group 100.00 106.25 169.60 112.95
NASDAQ Market Index 100.00 100.09 129.83 161.33
</TABLE>
The Peer Group is comprised of Coastal Physician Group, Inc.
(formerly Coastal Healthcare Group, Inc.), InPhyNet Medical Management Inc.,
PhyCor, Inc., and Physician Reliance Network, Inc. Although they are not all
direct competitors of the Company, all the companies in the Peer Group are
engaged in emergency physician practice management or related businesses in the
health care industry. The Company believes that including only its direct
competitors in the Peer Group would not provide a meaningful group for
comparative purposes because of the small number of public companies that
directly compete against the Company. Pacific Physician Services, Inc. was
included in the Peer Group in last year's proxy statement. As Med Partners,
Inc. acquired Pacific Physician Services, Inc. in 1996, however, the Company
has excluded it from the Peer Group for all of the years shown in the
Performance Graph above.
CERTAIN TRANSACTIONS
In certain states the Company's services are provided in
conjunction with professional associations and corporations owned by Dr. Riggs
or another representative of the Company who is a physician (the "PAs"). Under
this arrangement, a PA enters into a management agreement with the hospital and
engages physicians to provide the necessary medical practice coverage. The
Company then provides the non-medical portion of the service under this
arrangement pursuant to a management agreement between a Company subsidiary and
the PA. For the fiscal year ended December 31, 1996, the PAs paid approximately
$33,211,000 to the Company's subsidiaries under these management agreements,
which approximated the excess of the PAs' revenues over their expenses. Dr.
Riggs and such other representatives have generally arranged for the transfer
of the capital stock of the PAs to other representatives of the Company who are
medical doctors if they die or become incapacitated.
For operational purposes, a subsidiary of the Company has
entered into a revolving credit agreement with each PA that permits such PA to
borrow up to $1,000,000. These agreements restrict operations of the PAs and
prohibit them from making any distributions to Dr. Riggs or the Company's other
representatives. As of April 4, 1997, no PA had borrowed any amount under these
agreements.
18
<PAGE> 21
CERTIFIED PUBLIC ACCOUNTANTS
The policy of the Board of Directors is not to request the
Stockholders to ratify the selection of the Company's certified public
accounting firm. The Company's current certified public accounting firm is
Ernst & Young LLP. The Company has invited representatives of Ernst & Young
LLP to attend the Annual Meeting. The Company will give these representatives
the opportunity to make a statement at the meeting and respond to appropriate
questions from any Stockholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's
Reporting Persons to file with the Commission initial reports of Common Stock
ownership and reports of changes in such ownership. A Reporting Person must
file a Form 3 -- Initial Statement of Beneficial Ownership of Securities within
10 days after such person becomes a Reporting Person. A Reporting Person must
file a Form 4 -- Statement of Changes of Beneficial Ownership of Securities
within 10 days after any month in which such person's beneficial ownership of
securities changes, except for certain changes exempt from the reporting
requirements of Form 4. Such exempt changes include stock options granted under
a plan qualifying under Rule 16b-3. A Reporting Person must file a Form 5 --
Annual Statement of Beneficial Ownership of Securities within 45 days after the
end of the issuer's fiscal year to report any changes in ownership during such
year not reported on a Form 4, including changes exempt from the reporting
requirements of Form 4.
The Commission's rules require the Company's Reporting Persons
to furnish the Company with copies of all Section 16(a) reports that they file.
Based solely upon a review of the copies of such reports furnished to the
Company and written representations that no other reports were required with
respect to the year ended December 31, 1996, the Company believes that the
Reporting Persons have complied with all applicable Section 16(a) filing
requirements for 1996 on a timely basis, except that Mr. Anderson filed his
Form 3 when he became an executive officer of the Company and his Form 5 for
1996 late, Andrew G. Buck, the Company's Chief Accounting Officer, filed his
Form 5 for 1996 late, Dr. Cooley filed his Form 5 for 1996 late, and Mr. Fannon
filed his Form 3 when he became an executive officer of the Company and his
Form 5 for 1996 late.
STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
To be considered for inclusion in the Company's proxy
statement for the 1998 annual meeting, Stockholder proposals must be received
at the Company's principal executive office in the manner described in the
Company's bylaws between November 18, 1997 and December 18, 1997.
INCORPORATION BY REFERENCE
With respect to any future filings with the Commission into
which this Proxy Statement is incorporated by reference, the material under the
headings "Report of the Compensation Committee" and "Performance Graph" shall
not be incorporated into such future filings.
19
<PAGE> 22
ANNUAL REPORT
Accompanying this Proxy Statement is a copy of the Company's
Annual Report for the year ended December 31, 1996.
FORM 10-K
The Company will mail a copy of its Annual Report on Form 10-K
for the year ended December 31, 1996 (the "Form 10-K") to any Stockholder or
beneficial owner of shares of Common Stock upon written request and without
charge. Any such person desiring a Form 10-K should make such request to Mr.
Robert F. Anderson, II at the principal executive office of the Company. The
Company will only furnish copies of any exhibits to the Form 10-K, however,
upon further request and reimbursement of the Company's copying and mailing
expenses.
20
<PAGE> 23
PROXY CARD PROXY CARD
EMCARE HOLDINGS INC.
1717 MAIN STREET, SUITE 5200
DALLAS, TEXAS 75201
TELEPHONE NO. (214) 712-2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1997 ANNUAL MEETING OF THE STOCKHOLDERS TO BE HELD ON MAY 15, 1997
The undersigned hereby appoints Andrew G. Buck and Steven W. Cooley,
M.D., F.A.C.E.P., or in the event of their inability or unwillingness to serve,
such other individuals as the Board of Directors may designate, as
Proxyholders, each with full power of substitution and resubstitution, and
hereby authorizes any Proxyholder to represent and vote, as designated on the
reverse side of this Proxy Card, all of the shares of Common Stock of the
Company that the undersigned held on the Record Date at the Annual Meeting to
be held on May 15, 1997, which includes any continuation of such meeting
pursuant to any adjournment of it to another time. Terms beginning with
initial capital letters that are used but not defined in this Proxy Card have
the meanings giving to them in the Company's Proxy Statement for the Annual
Meeting.
(Continued and to be signed on the reverse side)
<PAGE> 24
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL:
Please mark [X]
your vote as
indicated in
this example
1. ELECTION OF CLASS III DIRECTORS
<TABLE>
<CAPTION>
FOR ALL NOMINEES WITHHOLD NOMINEES: LEONARD M. RIGGS, JR., M.D. AND RICHARD H. STOWE
LISTED TO THE RIGHT AUTHORITY
(EXCEPT AS MARKED TO THE TO VOTE FOR ALL NOMINEES INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE
CONTRARY) LISTED TO THE RIGHT THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.
<S> <C> <C>
[ ] [ ] 2. Any Proxyholder is authorized to vote upon such other
matters properly coming before the Annual Meeting in accordance with such
Proxyholder's best judgment, including matters incident to the conduct of
the meeting. If either Dr. Riggs or Mr. Stowe is unavailable for election
as a result of unforeseen circumstances, any Proxyholder may vote for the
election of such substitute nominee as the Board of Directors may propose.
A PROXYHOLDER WILL VOTE THE UNDERSIGNED'S SHARES OF COMMON STOCK IN THE
MANNER DIRECTED ON THIS PROXY CARD. IF THE UNDERSIGNED DOES NOT GIVE
DIRECTIONS ON THIS PROXY CARD WITH RESPECT TO PROPOSAL 1, A PROXYHOLDER
WILL VOTE SUCH SHARES FOR ALL OF THE NOMINEES NAMED IN PROPOSAL 1.
Please sign and date below. When shares of Common Stock are held by joint
tenants both joint tenants should sign. When signing as administrator,
attorney-in-fact, executor, fiduciary, guardian, officer, trustee, or
other person acting in a representative capacity, please give your full
title. If a corporation, an authorized officer should sign in the name
of the corporation. If a partnership, a general partner should sign in
the name of the partnership.
</TABLE>
SIGNATURE SIGNATURE DATE
------------------------ ---------------------- ------------
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
