<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
RENAL CARE GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
RENAL CARE GROUP, INC.
2100 WEST END AVENUE, SUITE 800
NASHVILLE, TENNESSEE 37203
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, JUNE 7, 2000
To the Stockholders of Renal Care Group, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Renal Care Group, Inc. (the "Company" or "RCG"), will be held at
the Loews Vanderbilt Plaza Hotel, 2100 West End Avenue, Nashville, Tennessee, on
Wednesday, June 7, 2000 beginning at 9:00 a.m. (Central Daylight Time) for the
following purposes:
(1) To elect three Class I directors to serve for a term of three (3) years
and until their successors are elected;
(2) To consider and vote upon a proposal to approve an amendment to the
Renal Care Group, Inc. 1999 Long-Term Incentive Plan (the "Long-Term
Incentive Plan") to increase the number of shares available for
issuance thereunder; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on April 17, 2000 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof.
Your attention is directed to the Proxy Statement accompanying this Notice
for more complete information regarding the matters to be acted upon at the
Annual Meeting.
The Board of Directors of RCG unanimously recommends that stockholders vote
FOR the director nominees named in the Proxy Statement and FOR approval of the
proposed amendment to the Long-Term Incentive Plan.
Stockholders are cordially invited to attend the meeting in person.
By Order of the Board of Directors
Douglas B. Chappell,
Secretary
April 28, 2000
IMPORTANT
YOUR PROXY IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PERSONALLY PRESENT
AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
<PAGE> 3
RENAL CARE GROUP, INC.
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 7, 2000
This Proxy Statement is being furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Renal Care Group, Inc. (the
"Company" or "RCG") from holders of the Company's common stock, $0.01 par value
(the "Common Stock"). These proxies will be voted at the 2000 annual meeting of
stockholders of the Company (the "Annual Meeting") to be held at 9:00 a.m.
(Central Daylight Time) on Wednesday, June 7, 2000, at the Loews Vanderbilt
Plaza Hotel, 2100 West End Avenue, Nashville, Tennessee, and at any adjournments
or postponements thereof. The mailing address of the principal executive offices
of the Company is 2100 West End Avenue, Suite 800, Nashville, Tennessee 37203.
Stockholders of record as of the close of business on April 17, 2000 (the
"Record Date"), are entitled to vote at the Annual Meeting and any adjournments.
Each share of Common Stock is entitled to one vote on all matters presented at
the Annual Meeting. Stockholders do not have the right to cumulate their votes
for directors. As of the close of business on April 17, 2000, there were
45,116,717 shares of Common Stock outstanding. The Notice of Annual Meeting,
this Proxy Statement and the proxy are first being mailed to stockholders on or
about May 1, 2000.
A majority of the outstanding shares of Common Stock entitled to vote at
the meeting, represented in person or by proxy, is required to constitute a
quorum. If a quorum is not present at the Annual Meeting, or if for any reason
the Company believes that additional time should be allowed for the solicitation
of proxies, the Company may adjourn or postpone the Annual Meeting with or
without a vote of the stockholders. If adjournment is proposed by the Company,
the persons named on the enclosed proxy will vote all shares for which they have
voting authority in favor of adjournment.
All shares of Common Stock represented at the Annual Meeting by properly
executed proxies received prior to or at the Annual Meeting and not properly
revoked will be voted at the Annual Meeting in accordance with the instructions
indicated thereon. If no instructions are given, the proxies will be voted in
favor of the matters listed on the proxy card. Directors must be elected by a
plurality of votes cast (in person or by proxy) by the holders of Common Stock
entitled to vote at the Annual Meeting if a quorum is present. The proposed
amendment to the Long-Term Incentive Plan and any other matters will be
determined based upon the vote of the majority of votes cast (in person or by
proxy) by the holders of Common Stock entitled to vote at the Annual Meeting if
a quorum is present.
Shares represented by proxies that are marked "withhold authority" or
"abstain" will be counted as shares present for purposes of establishing a
quorum. Shares represented by proxies that include broker nonvotes will also be
counted as shares present for purposes of establishing a quorum. A broker
nonvote occurs when a broker or nominee holding shares for a beneficial owner
votes on one proposal but does not vote on another proposal because the broker
or nominee does not have discretionary voting power and has not received
instructions from the beneficial owner. Neither withholding authority to vote
with respect to one or more nominees or a broker nonvote will have an effect on
the outcome of the election of directors or the amendment of the Long-Term
Incentive Plan.
All expenses of the Annual Meeting, including the cost of soliciting
proxies, will be paid by the Company. The Company may reimburse persons holding
shares in their names for others, or holding shares for others who have the
right to give voting instructions, such as brokers, banks, fiduciaries and
nominees, for such persons' reasonable expenses in forwarding the proxy
materials to their principals.
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Any stockholder returning the accompanying proxy card may revoke that proxy
at any time prior to the Annual Meeting by (a) giving written notice to the
Company of such revocation, (b) voting in person at the Annual Meeting, or (c)
executing and delivering to the Company a proxy card bearing a later date.
PROPOSALS FOR STOCKHOLDER ACTION
PROPOSAL 1
ELECTION OF CLASS I DIRECTORS
The Company's Board of Directors is composed of three classes, designated
Class I, Class II, and Class III. The term of the Class I directors expires at
the Annual Meeting. The current Class I directors are Sam A. Brooks, Stephen D.
McMurray, M.D. and William V. Lapham. The Board of Directors has designated Sam
A. Brooks, Stephen D. McMurray and William V. Lapham as the nominees for
election as Class I directors at the Annual Meeting. The term of the Class II
directors will expire at the 2001 annual meeting of the stockholders of the
Company, and the term of the Class III directors will expire at the 2002 annual
meeting of the stockholders of the Company. Each succeeding term of a director
in Class I, Class II or Class III will be for three years or until his or her
successor is elected. The members of Class II are Joseph C. Hutts, Harry R.
Jacobson, M.D. and Thomas A. Lowery, M.D., and the members of Class III are John
D. Bower, M.D., Kenneth E. Johnson, Jr., M.D. and W. Tom Meredith, M.D.
The Amended and Restated Certificate of Incorporation of the Company
presently provides that the Board of Directors shall consist of between five and
twelve members, and that the actual number of members shall be determined within
such minimum and maximum by resolutions adopted by an affirmative vote of at
least two-thirds (2/3) of the total number of directors then in office. The
Amended and Restated Certificate of Incorporation of the Company further
provides that any vacancy in the Board created by an increase in the number of
directors, death, resignation, retirement, disqualification, removal from office
or otherwise may be filled, until the next election of directors by the
stockholders, by the affirmative vote of at least two-thirds (2/3) of the total
number of directors then remaining in office, though they may constitute less
than a quorum of the Board.
Each nominee for election at the Annual Meeting has consented to be named
as a candidate in this Proxy Statement and to serve, if elected. The Company
knows of no reason why any nominee may be unwilling or unable to serve as a
director. If any nominee is unwilling or unable to serve, the shares represented
by all valid proxies will be voted for such other person as the Board of
Directors may recommend.
Directors will be elected by a plurality of the votes cast by the shares of
Common Stock represented in person or by proxy at the Annual Meeting. Therefore,
the three nominees for election as Class I directors who receive the greatest
number of votes cast at the Annual Meeting will be elected to the Board of
Directors as Class I directors. Unless the stockholder gives other instructions,
the persons named in the accompanying proxy will vote FOR Mr. Brooks, Dr.
McMurray and Mr. Lapham as Class I directors.
Information as to each nominee and as to directors continuing as Class II
directors and Class III directors follows:
CLASS I DIRECTORS -- NOMINEES FOR ELECTION AT THE ANNUAL MEETING -- TERM
EXPIRING AT THE 2003 ANNUAL MEETING
SAM A. BROOKS
Age -- 61
Mr. Brooks has been President and Chief Executive Officer of the Company
since 1995, Chairman since October 1997, and served as Treasurer from June 1995
to November 1995. He also currently serves as President of MedCare Investments,
Inc., a health care investment company, and he has held that position since
1991. Mr. Brooks is a director of Quorum Health Group, Inc., an owner, operator
and manager of acute care hospitals and PhyCor, Inc., an operator of
multi-specialty medical clinics.
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STEPHEN D. MCMURRAY, M.D.
Age -- 52
Dr. McMurray has been a director of the Company since 1996. He is a
board-certified nephrologist trained at Indiana University Medical Center. Dr.
McMurray has practiced nephrology in Fort Wayne, Indiana, since 1977. He has
been President of the Medical Staff at Lutheran Hospital in Fort Wayne, Indiana,
and has been affiliated with Indiana Dialysis Management, P.C. since 1991. Dr.
McMurray was also a founder of D.M.N. Professional Corporation, one of the
companies included in the formation of the Company in February 1996. Dr.
McMurray is presently a member of the Board of Directors of the Renal Physicians
Association.
WILLIAM V. LAPHAM
Age -- 61
Mr. Lapham has been a director of the Company since July 1999. He served as
acting Chief Financial Officer of Uptons, a division of American Retail Group,
from January 1999 to June 1999. From 1963 until his retirement in 1998, Mr.
Lapham was a partner in Ernst & Young LLP and its predecessors. He was a member
of Ernst & Young's International Council for eight years ending in December
1997. Mr. Lapham is a director of LifePoint Hospitals, Inc., an operator of
general, acute care hospitals in non-urban areas.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE ABOVE NOMINEES AS CLASS I DIRECTORS.
CURRENT DIRECTORS WHOSE TERMS ARE NOT EXPIRING AT THE ANNUAL MEETING:
CLASS II DIRECTORS -- TERM EXPIRING AT THE 2002 ANNUAL MEETING
JOSEPH C. HUTTS
Age -- 58
Mr. Hutts has been a director of the Company since 1995. He has been
Chairman of the Board, President and Chief Executive Officer of PhyCor, Inc., an
operator of multi-specialty medical clinics, since 1988. Mr. Hutts was formerly
with Hospital Corporation of America in various positions, the last of which was
President, HCA Health Plans. From 1986 to 1988, Mr. Hutts was Vice Chairman and
Chief Operating Officer of Equitable HCA Corporation, which did business as
Equicor. Mr. Hutts serves on the board of directors of Quorum Health Group, Inc.
HARRY R. JACOBSON, M.D.
Age -- 52
Dr. Jacobson has been a director of the Company since 1995 and was Chairman
of the Board of Directors of the Company from 1995 to 1997. He currently serves
as Vice Chancellor for Health Affairs at Vanderbilt University, a position he
has held since 1997. He also currently serves as Professor of Medicine at
Vanderbilt University Medical Center, a position he has held since 1985. Dr.
Jacobson received a B.S. degree from the University of Illinois and his M.D.
from the University of Illinois Abraham Lincoln School of Medicine. He completed
his internal medicine training at Johns Hopkins Hospital and his nephrology
training at Southwestern Medical School in Dallas, Texas.
THOMAS A. LOWERY, M.D.
Age -- 56
Dr. Lowery has been a director of the Company since 1996. He is a
board-certified nephrologist trained at Baylor College of Medicine and the
University of Alabama, Birmingham. He has served on the Executive Committee of
Southwest Organ Bank and has been the Director of the Renal Transplant Program
of East Texas Medical Center in Tyler, Texas. In addition, he has practiced as a
partner of Tyler Nephrology Associates, P.A. and its predecessors since 1979.
Dr. Lowery was a founder of one of the companies included in the formation of
the Company in February 1996.
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CLASS III DIRECTORS -- TERM EXPIRING AT THE 2003 ANNUAL MEETING
JOHN D. BOWER, M.D.
Age -- 68
Dr. Bower has been a director of the Company since 1996. He is a
board-certified nephrologist trained at the Medical College of Virginia. Dr.
Bower has practiced in Mississippi since 1972. He has been a Professor of
Medicine and Chief, Division of Nephrology at University of Mississippi Medical
Center since 1976 and 1990, respectively. In addition, he served as Chairman of
the Board and President of Medical Enterprises Ltd., a Mississippi corporation
("MEL"), and served as Chief Executive Officer of MEL from 1993 to 1995. He also
has served as Chairman of the Board and President of Kidney Care, Inc., a
Mississippi nonprofit corporation ("Kidney Care") since 1973. MEL and Kidney
Care were related dialysis providers whose dialysis businesses were included in
the formation of the Company in February 1996.
KENNETH E. JOHNSON, JR., M.D.
Age -- 55
Dr. Johnson has been a director of the Company since 1996. He is a
board-certified nephrologist trained at the University of Utah. In 1975, Dr.
Johnson was a founding partner of Arizona Nephrology Associates and RenalWest,
L.C. ("RenalWest"). Dr. Johnson joined the Board of Directors when the Company
acquired RenalWest in September 1996. Dr. Johnson has served as the director of
the critical care units of two hospitals and serves as chairman of several
Departments of Medicine in the East Valley area of Mesa, Arizona. Dr. Johnson is
a member of the Medical Review Board of the Regional End Stage Renal Disease
Network.
W. TOM MEREDITH, M.D.
Age -- 64
Dr. Meredith has been a director of the Company since 1996. He is a
board-certified nephrologist who practiced in Wichita, Kansas, from 1969 until
his retirement in August 1999. He has been Clinical Associated Professor,
Department of Internal Medicine, The University of Kansas School of Medicine,
Wichita, since 1977. In addition, he served as the President of Kansas
Nephrology Association from 1979 until it was acquired in the formation of the
Company in February 1996 and was the President of Kansas Nephrology Physicians,
P.A. from 1990 until August 1999.
BOARD COMMITTEES, ATTENDANCE, AND COMPENSATION OF DIRECTORS
COMMITTEES
The Board of Directors has established three Committees, the Audit and
Compliance Committee, the Compensation Committee, and the Nominating Committee,
each of which is briefly described below.
The Company's Audit and Compliance Committee, composed solely of
non-employee directors, recommends the annual appointment of the Company's
independent auditors and, in conjunction with such auditors, reviews the scope
of audit and other assignments and related fees. The Audit and Compliance
Committee also reviews the accounting principles used by the Company in
financial reporting, the Company's internal auditing procedures and the adequacy
of the Company's internal control procedures, all in conjunction with the
Company's auditors. The Audit and Compliance Committee also oversees the
activities of the Company's internal compliance committee and receives reports
from that committee and the Company's Compliance Officer. The Audit and
Compliance Committee is chaired by Mr. Lapham and also includes Mr. Hutts, Dr.
Johnson and Dr. Lowery.
The Company's Compensation Committee, composed solely of non-employee
directors, is responsible for establishing salaries, bonuses, and other
compensation for the Company's executive officers and administering any stock
option and other employee benefit plans of the Company. The Compensation
Committee is chaired by Dr. McMurray and also includes Mr. Hutts, Mr. Lapham and
Dr. Meredith.
The Company's Nominating Committee is responsible for considering
nominations of Directors to the Company's Board of Directors and currently
consists of Dr. Jacobson, Mr. Brooks and Dr. Bower. The
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Nominating Committee will consider nominees recommended by stockholders provided
that the names of such persons are submitted no later than the date established
for the submission of stockholder proposals for action at the Company's next
annual meeting of stockholders.
MEETINGS
During 1999, the Board of Directors of the Company held four regularly
scheduled meetings. In addition, the Compensation Committee met once, the Audit
and Compliance Committee met twice and the Nominating Committee met once. Each
director attended at least 75% of the total number of meetings held by the Board
of Directors and its committees on which he served.
COMPENSATION OF DIRECTORS
Employees of the Company who are members of the Board of Directors of the
Company do not receive any compensation for serving on the Company's Board of
Directors. Each non-employee member of the Board of Directors, other than
members who serve as Medical Directors, receives a fee of $2,000 for each
meeting of the Board of Directors he attends, and $1,000 for each committee
meeting he attends that is not on the same day as a meeting of the Board of
Directors. All directors of the Company, including members who are employees,
receive reimbursement of out-of-pocket expenses incurred in connection with
attending meetings of the Board of Directors or committees thereof.
The Company maintains the Renal Care Group, Inc. 1996 Stock Option Plan for
Outside Directors (the "Outside Director Plan") to provide for grants of options
to its non-employee directors. Prior to the Company's initial public offering
and adoption of the Outside Director Plan, (a) Mr. Hutts was granted options to
purchase an aggregate of 22,500 shares of Common Stock, of which 9,000 are
exercisable at a price of $3.33 per share and 4,500 are exercisable at $8.00 per
share, and (b) Dr. Jacobson was granted options to purchase an aggregate of
168,750 shares of Common Stock, of which 56,250 are exercisable at a price of
$3.33 per share and 112,500 are exercisable at $8.00 per share.
The Outside Director Plan provides for automatic grants to Directors of the
Company who are (1) not employees of the Company, (2) not the Chairman or Vice
Chairman of the Board of Directors of the Company, and (3) not a party to, and
whose medical practices are not a party to, a medical director agreement with
the Company that is in force (each an "Eligible Director"). The Outside Director
Plan provides for an initial grant to each Eligible Director of 11,250 shares on
the date such person first becomes a Director and subsequent annual grants of
options to purchase 5,625 shares of Common Stock following each annual meeting.
The annual grants are made on the day following each annual meeting of
stockholders beginning with the 1997 Annual Meeting. The Option Price for each
option granted under the Outside Director Plan is the "Fair Market Value," as
that term is defined in the Outside Director Plan, of the shares of Common Stock
subject to the option on the date the option is granted. Such options are
immediately exercisable and will have a term of ten years. Accordingly, on the
day after the Annual Meeting, the Company will grant to each Eligible Director
an option to purchase 5,625 shares of Common Stock with an exercise price of the
Fair Market Value on such date.
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PROPOSAL 2
APPROVAL OF PROPOSED AMENDMENT TO THE
LONG-TERM INCENTIVE PLAN
The Renal Care Group, Inc. 1999 Long-Term Incentive Plan (the "Long-Term
Incentive Plan") was adopted by the Board of Directors in April 1999 and
approved by the stockholders of the Company at the 1999 annual meeting. Under
the Long-Term Incentive Plan, the Company has reserved for issuance upon the
grant or exercise of awards a total of 1,500,000 shares of the authorized but
unissued shares of Common Stock. The Board of Directors has adopted resolutions
approving and recommending to the stockholders for their approval an amendment
to the Long-Term Incentive Plan which would increase the number of shares of
Common Stock reserved for issuance under the Long-Term Incentive Plan from
1,500,000 to 2,500,000 shares. If approved by the stockholders, the proposed
Amendment will be effective as of the date of the Annual Meeting.
A summary of the Long-Term Incentive Plan is set forth below. The summary
is qualified in its entirety by reference to the full text of the Long-Term
Incentive Plan, a copy of which may be obtained, free of charge, upon written
request to the Secretary, Renal Care Group, Inc., 2100 West End Avenue, Suite
800, Nashville, Tennessee 37203.
GENERAL
The purpose of the Long-Term Incentive Plan is to promote the success, and
enhance the value, of the Company by linking the personal interests of
employees, officers, consultants and directors to those of the stockholders, and
by providing such employees, officers, consultants and directors with an
incentive for outstanding performance. As of March 31, 2000, there were
approximately 270 persons eligible to participate in the Long-Term Incentive
Plan.
The Long-Term Incentive Plan authorizes the granting of awards to
employees, officers, consultants and directors of the Company or its
subsidiaries in the following forms: (i) options to purchase shares of Common
Stock which may be incentive stock options or nonqualified stock options; (ii)
stock appreciation rights ("SARs"); (iii) performance units; (iv) restricted
stock; (v) dividend equivalents; (vi) other stock-based awards; or (vii) any
other right or interest relating to Common Stock or cash. The maximum number of
shares of Common Stock with respect to one or more options and/or SARs that may
be granted during any one calendar year under the Long-Term Incentive Plan to
any one participant is 300,000.
Pursuant to Section 162(m) of the Code, the Company may not deduct
compensation in excess of $1 million paid to the President and the four next
most highly compensated executive officers of the Company. The Long-Term
Incentive Plan is designed to comply with Code Section 162(m) so that the grant
of options and SARs under the Long-Term Incentive Plan, and other awards, such
as performance units, that are conditioned on the performance goals described in
Section 13.13 of the Long-Term Incentive Plan, will be excluded from the
calculation of annual compensation for purposes of Code Section 162(m) and will
be fully deductible by the Company. The Board of Directors has approved the
proposed amendment to the Long-Term Incentive Plan for submission to the
stockholders at the Annual Meeting in order to permit the grant of awards
thereunder that will constitute deductible performance-based compensation for
purposes of Code Section 162(m).
ADMINISTRATION
The Long-Term Incentive Plan provides that it will be administered by a
committee designated by the Board of Directors of the Company (the "Committee"),
or at the discretion of the Board from time to time, by the Board. The Board of
Directors has designated the Stock Option Subcommittee of the Compensation
Committee to serve as the Committee under the Long-Term Incentive Plan. The
Committee has the power, authority and discretion to designate participants;
determine the type or types of awards to be granted to each participant and the
number, terms and conditions thereof; establish, adopt or revise any rules and
regulations as it may deem necessary or advisable to administer the Long-Term
Incentive Plan; and make all other
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decisions and determinations that may be required under, or as the Committee
deems necessary or advisable to administer, the Long-Term Incentive Plan.
AWARDS
Stock Options. The Committee is authorized to grant options, which may be
incentive stock options or nonqualified stock options, to participants. All
options must be evidenced by a written award agreement between the Company and
the participant, which will include such provisions as may be specified by the
Committee. The Long-Term Incentive Plan provides that the exercise price of an
option will not be less than the fair market value of the underlying Common
Stock as of the date of the grant. The terms of any incentive stock option must
meet the requirements of Section 422 of the Code, including stockholder approval
requirements.
Stock Appreciation Rights. The Committee may grant SARs to participants.
Upon the exercise of a SAR, the participant has the right to receive the excess,
if any, of: the fair market value of one share of Common Stock on the date of
exercise, over the grant price of the SAR as determined by the Committee, which
will not be less than the fair market value of one share of Common Stock on the
date of grant. All awards of SARs must be evidenced by an award agreement,
reflecting the terms, methods of exercise, methods of settlement, form of
consideration payable in settlement, and any other terms and conditions of the
SAR, as determined by the Committee at the time of grant.
Performance Units. The Committee may grant performance units to
participants on such terms and conditions as may be selected by the Committee.
The Committee will have the complete discretion to determine the number of
performance units granted to each participant and to set performance goals and
other terms or conditions to payment of the performance units in its discretion
which, depending on the extent to which they are met, will determine the number
and value of performance units that will be paid to the participant.
Restricted Stock Awards. The Committee may make awards of restricted stock
to participants, which will be subject to such restrictions on transferability
and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote restricted stock or the right to
receive dividends, if any, on the restricted stock).
Dividend Equivalents. The Committee is authorized to grant dividend
equivalents to participants subject to such terms and conditions as may be
selected by the Committee. Dividend equivalents entitle the participant to
receive payments equal to dividends with respect to all or a portion of the
number of shares of Common Stock subject to an option award or SAR award, as
determined by the Committee. The Committee may provide that dividend equivalents
be paid or distributed when accrued or be deemed to have been reinvested in
additional shares of Common Stock or otherwise reinvested.
Other Stock-Based Awards. The Committee may, subject to limitations under
applicable law, grant to participants such other awards that are payable in,
valued in whole or in part by reference to, or otherwise based on or related to
shares of Common Stock as deemed by the Committee to be consistent with the
purposes of the Long-Term Incentive Plan, including without limitation shares of
Common Stock awarded purely as a bonus and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Common Stock and awards valued by
reference to book value of shares of Common Stock or the value of securities of
or the performance of specified parents or subsidiaries of the Company. The
Committee will determine the terms and conditions of any such awards.
Performance Goals. The Committee may determine that any award will be
determined solely on the basis of (a) the achievement by the Company or a parent
or subsidiary company of a specified target return, or target growth in return,
on equity or assets, (b) the Company's, parent's or subsidiary's stock price,
(c) the Company's total shareholder return (stock price appreciation plus
reinvested dividends) relative to a defined comparison group or target over a
specific performance period, (d) the achievement by a business unit of the
Company, parent or subsidiary of a specified target, or target growth in, net
income or earnings per share, or (e) any combination of the goals set forth in
(a) through (d) above. If an award is made on such basis, the
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Committee will establish goals prior to the beginning of the period for which
such performance goal relates (or such later date as may be permitted under Code
Section 162(m) or the regulations thereunder), and the Committee may reduce (but
not increase) the award, notwithstanding the achievement of a specified goal.
Any payment of an award granted with performance goals will be conditioned on
the written certification of the Committee in each case that the performance
goals and any other material conditions were satisfied.
Limitations on Transfer; Beneficiaries. No award will be assignable or
transferable by a participant other than by will or the laws of descent and
distribution or, except in the case of an incentive stock option, pursuant to a
qualified domestic relations order; provided, however, that the Committee may
(but need not) permit other transfers where the Committee concludes that such
transferability (i) does not result in accelerated taxation, (ii) does not cause
any option intended to be an incentive stock option to fail to be described in
Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking
into account any factors deemed relevant, including without limitation, state or
federal tax or securities laws applicable to transferable awards. A participant
may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the participant and to receive any distribution with
respect to any award upon the participant's death.
Acceleration Upon Certain Events. Upon the participant's death or
disability, all outstanding options, SARs, and other awards in the nature of
rights that may be exercised will become fully exercisable and all restrictions
on outstanding awards will lapse. Any options or SARs will thereafter continue
or lapse in accordance with the other provisions of the Long-Term Incentive Plan
and the award agreement. Unless otherwise provided in an Award Agreement
approved by the Committee, if a Change in Control (as defined in the Long-Term
Incentive Plan) occurs and is followed by a participant's termination of
employment (other than by reason of participant's death, disability, resignation
without good reason or termination for cause) within twelve months after the
Change in Control, then all of such participant's unexercised Awards (whether
vested or not vested) shall automatically vest and become unforfeitable and
shall be cashed out at the greater of (a) the highest closing price per share
paid for the purchase of Common Stock in a national securities market during the
90 day period ending on the date of the Change in Control (the "Change in
Control Price") or (b) the fair market value of the Common Stock on the date of
such termination. Upon a Change in Control that results directly or indirectly
in the Common Stock (or the stock of any successor received in exchange
therefor) ceasing to be publicly traded in a national securities market, all
unexercised Awards (whether vested or not vested) shall automatically vest and
become unforfeitable and shall be cashed out at the Change in Control Price.
Upon a Change in Control, no action may be taken that would adversely affect the
rights of any participant or the operation of the Long-Term Incentive Plan with
respect to any Award to which a participant may be entitled on or prior to the
date, or as a result, of the Change in Control. Under certain conditions, the
Board of Directors may determine that events otherwise constituting a Change in
Control will not be considered a Change in Control.
TERMINATION AND AMENDMENT
The Board of Directors or the Committee may, at any time and from time to
time, terminate, amend or modify the Long-Term Incentive Plan without
stockholder approval. The Committee may, however, condition any amendment on the
approval of the stockholders of the Company if such approval is necessary or
deemed advisable with respect to tax, securities or other applicable laws,
policies or regulations. No termination, amendment or modification of the
Long-Term Incentive Plan may adversely affect any award previously granted under
the Long-Term Incentive Plan, without the written consent of the participant.
The exercise price of any option held by an executive officer of the Company may
not be reduced and the original term of any option held by an executive officer
of the Company may not be extended.
CERTAIN FEDERAL INCOME TAX EFFECTS
Nonqualified stock options. Under present federal income tax regulations,
there will be no federal income tax consequences to either the Company or the
participant upon the grant of a non-discounted nonqualified stock option.
However, the participant will realize ordinary income on the exercise of the
nonqualified stock option in an amount equal to the excess of the fair market
value of the Common Stock
8
<PAGE> 11
acquired upon the exercise of such option over the exercise price, and the
Company will receive a corresponding deduction (subject to Code Section 162(m)
limitations). The gain, if any, realized upon the subsequent disposition by the
participant of the Common Stock will constitute short-term or long-term capital
gain, depending on the participant's holding period.
Incentive Stock Options. Under present federal income tax regulations,
there will be no federal income tax consequences to either the Company or the
participant upon the grant of an incentive stock option or the exercise thereof
by the participant, except that upon exercise of an incentive stock option, the
participant may be subject to alternative minimum tax on certain items of tax
preference. If the participant holds the shares of Common Stock for the greater
of two years after the date the option was granted or one year after the
acquisition of such shares of Common Stock (the "required holding period"), the
difference between the aggregate option price and the amount realized upon
disposition of the shares of Common Stock will constitute long-term capital gain
or loss, and the Company will not be entitled to a federal income tax deduction.
If the shares of Common Stock are disposed of in a sale, exchange or other
"disqualifying disposition" during the required holding period, the participant
will realize taxable ordinary income in an amount equal to the excess of the
fair market value of the Common Stock purchased at the time of exercise over the
aggregate option price, and the Company will be entitled to a federal income tax
deduction in that amount (subject to Code Section 162(m) limitations).
SARs. Under present federal income tax regulations, a participant
receiving a SAR will not recognize income, and the Company will not be allowed a
tax deduction, at the time the award is granted. When a participant exercises a
SAR, the amount of cash and the fair market value of any shares of Common Stock
received will be ordinary income to the participant, and the Company will be
allowed a deduction in that amount for federal income tax purposes to the
Company (subject to Code Section 162(m) limitations).
Performance units. Under present federal income tax regulations, a
participant receiving performance units will not recognize income, and the
Company will not be allowed a tax deduction, at the time the award is granted.
When a participant receives payment of performance units, the amount of cash and
the fair market value of any shares of Common Stock received will be ordinary
income to the participant, and the Company will be allowed a deduction in that
amount for federal income tax purposes (subject to Code Section 162(m)
limitations)
Restricted stock. Under present federal income tax regulations, and unless
the participant makes an election to accelerate recognition of the income to the
date of grant, a participant receiving a restricted stock award will not
recognize income, and the Company will not be allowed a tax deduction, at the
time the award is granted. When the restrictions lapse, the participant will
recognize ordinary income equal to the fair market value of the Common Stock,
and the Company will be entitled to a tax deduction in that amount (subject to
Code Section 162(m) limitations).
9
<PAGE> 12
BENEFITS TO NAMED EXECUTIVE OFFICERS AND OTHERS
As of March 31, 2000, awards had been granted under the Long-Term Incentive
Plan to the persons and groups shown in the table below. Any future awards under
the Long-Term Incentive Plan will be made at the discretion of the Committee or
the Board, as the case may be. Consequently, the Company cannot determine, with
respect to (1) the executive officers of the Company, (2) all current executive
officers as a group, (3) all non-executive directors, as a group, or (4) all
eligible participants, including all current officers who are not executive
officers, as a group, either the benefits or amounts that will be received in
the future by such persons or groups pursuant to the Long-Term Incentive Plan.
1999 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
STOCK OPTION GRANTS(1)
--------------------------
DOLLAR VALUE NUMBER OF
NAME AND POSITION OF OPTIONS OPTIONS
- ----------------- ------------ ---------
<S> <C> <C>
Sam A. Brooks............................................... (2) 230,000
Chairman of the Board, Chief Executive Officer and
President
Gary Brukardt............................................... (2) 140,000
Executive Vice President and Chief Operating Officer
Raymond Hakim, M.D., Ph.D................................... (2) 140,000
Executive Vice President, Chief Medical Officer
Ronald Hinds................................................ (2) 140,000
Former Executive Vice President, Chief Financial Officer
and Treasurer
All Executive Officers as a Group........................... (2) 650,000
All Non-Executive Directors as a Group...................... (2) 0
All Non-Executive Officer Employees as a Group.............. (2) 290,390
</TABLE>
- ---------------
(1) The options granted to such persons named in this table became exercisable
as to 20% of the shares as of the respective grant dates, and will become
exercisable with respect to an additional 20% of the shares on each of the
first four anniversaries of the date of grant. The exercise price per share
for options granted to executive officers of the Company during 1999 was
$18.25 per share.
(2) The dollar value of the above options is dependent on the difference between
the exercise price and the fair market value of the underlying shares on the
date of exercise.
REASONS FOR AMENDMENT OF THE LONG-TERM INCENTIVE PLAN
The Company believes that granting awards under the Long-Term Incentive
Plan is necessary to attract, retain, and motivate qualified employees and
consultants, including but not limited to individuals who are or will be
employed by RCG. RCG also grants awards to new employees joining the Company
through acquisitions. Management believes that grants to employees of acquired
companies are an important tool, enhancing RCG's ability to acquire companies
and pursue its growth strategy, by aligning the interests of these new employees
with those of RCG's stockholders. In the past, the Company has also granted
options to physicians serving as medical directors of some of its facilities. Of
the approximately 7.7 million options currently outstanding, medical directors
hold approximately 1.5 million options.
There are currently fewer than 750,000 shares available for grant under the
Company's Long-Term Incentive Plan and the Company's 1996 Stock Option Plan,
which are the only plans under which the Company will make grants to current
officers, employees and consultants. The Company has determined not to make
future grants under option plans of acquired companies.
10
<PAGE> 13
The Company believes it is important to make annual grants to current
officers and employees, so that they have a continuing incentive to improve the
Company's performance that vests over a period of time and mirrors the results
for the Company's stockholders. To be able to continue to use stock-based
incentives to attract new employees, to incent and retain existing employees,
and to align the incentives of employees of acquired companies with those of
RCG's stockholders, the Board of Directors has recommended an amendment to
increase the number shares of Common Stock reserved for issuance under the
Long-Term Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT TO
THE LONG-TERM INCENTIVE PLAN
SECURITY OWNERSHIP OF DIRECTORS,
OFFICERS AND PRINCIPAL STOCKHOLDERS
The following table sets forth the number of shares of Common Stock held
beneficially, directly or indirectly, as of the Record Date by (a) each person
known by the Company to be the beneficial owner of more than five percent of the
Common Stock, (b) each director of the Company, (c) the Company's Chief
Executive Officer and the Company's four most highly compensated executive
officers other than the Chief Executive Officer whose total salary and bonus for
1999 exceeded $100,000, including the Company's former Chief Financial Officer,
who was not an executive officer of the Company as of December 31, 1999
(collectively, the "Named Executive Officers"), (d) the Company's current Chief
Financial Officer, who is not a Named Executive Officer because his total salary
and bonus for 1999 was less than $100,000, and (e) all directors and executive
officers of the Company as a group, together with the percentage of the
outstanding shares of Common Stock which such ownership represents.
COMMON STOCK
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP(1)
-------------------
NAME NUMBER PERCENT
- ---- --------- -------
<S> <C> <C>
T. Rowe Price(2)............................................ 2,159,150 5.0
Sam A. Brooks(3)............................................ 939,505 2.1
Gary A. Brukardt(4)......................................... 214,365 *
Raymond Hakim, M.D., Ph.D.(5)............................... 301,714 *
R. Dirk Allison(6).......................................... 35,000 *
Ronald Hinds(7)............................................. 203,699 *
John D. Bower(8)............................................ 874,056 2.0
Joseph C. Hutts(9).......................................... 24,750 *
Harry R. Jacobson, M.D.(10)................................. 511,767 *
Kenneth E. Johnson, Jr., M.D.(11)........................... 449,693 *
William V. Lapham(12)....................................... 11,850 *
Thomas A. Lowery, M.D.(13).................................. 305,079 *
Stephen D. McMurray, M.D.(14)............................... 161,302 *
W. Tom Meredith, M.D........................................ 305,314 *
All executive officers and directors as a group (13
persons)(15).............................................. 6,497,244 14.4
</TABLE>
- ---------------
* Less than 1% of the outstanding Common Stock.
(1) Information relating to the beneficial ownership of Common Stock by the
above individuals is based upon information furnished by each such
individual using "beneficial ownership" concepts set forth in rules
promulgated by the Securities and Exchange Commission (the "Commission")
under Section 13(d) of the Exchange Act. Beneficial ownership includes
shares as to which such person or group, directly or indirectly, through
any contract, management, understanding, relationship, or otherwise has or
shares voting power and/or investment power as those terms are defined in
Rule 13d-3(a) of the
11
<PAGE> 14
Exchange Act. Except as indicated in other footnotes to this table, each
individual listed above possesses sole voting and investment power with
respect to all shares set forth by his or its name, except to the extent
such power is shared by a spouse under applicable law. Any security that
any person named above has the right to acquire within 60 days is deemed to
be outstanding for purposes of calculating the ownership percentage by the
particular person or group, but are not deemed outstanding for any other
purpose.
(2) The address of T. Rowe Price Associates, Inc. is 100 East Pratt Street,
Baltimore Maryland 21202. Includes shares owned by various individual and
institutional investors for which T. Rowe Price Associates, Inc. ("Price
Associates") serves as investment adviser with power to direct investments
and/or sole power to vote the indicated shares. For purposes of the
reporting requirements of the Exchange Act, Price Associates is deemed to
be a beneficial owner of such shares; however, Price Associates expressly
disclaims that it is, in fact the beneficial owner of such shares." Such
information is based solely on the Schedule 13G filed by Price Associates
with the Commission in February 2000.
(3) Includes 202,500 shares of Common Stock that may be acquired upon exercise
of immediately exercisable warrants, 16,550 shares of restricted stock and
713,500 shares of Common Stock that may be acquired upon exercise of
options. Does not include 454,000 shares of Common Stock that may be
acquired upon exercise of options that are not exercisable within 60 days.
(4) Includes 205,500 shares of Common Stock that may be acquired upon exercise
of options and 6,525 shares of restricted stock. Does not include 314,500
shares of Common Stock that may be acquired upon exercise of options that
are not exercisable within 60 days.
(5) Includes 283,000 shares of Common Stock that may be acquired upon exercise
of options and 6,525 shares of restricted stock. Does not include 179,500
shares of Common Stock that may be acquired upon exercise of options that
are not exercisable within 60 days.
(6) Includes 35,000 shares of Common Stock that may be acquired upon exercise
of options. Does not include 140,000 shares of Common Stock that may be
acquired upon exercise of options that are not exercisable within 60 days.
(7) Includes 178,900 shares of Common Stock that may be acquired upon exercise
of options and 15,750 shares of restricted stock. Does not include 283,000
shares of Common Stock that may be acquired upon exercise of options that
are not exercisable within 60 days.
(8) Includes 81,000 shares of Common Stock that may be acquired upon exercise
of options. Does not include 3,375 shares of Common Stock that may be
acquired upon exercise of options that are not exercisable within 60 days.
(9) Includes 24,750 shares of Common Stock that may be acquired upon exercise
of options.
(10) Includes 157,500 shares of Common Stock that may be acquired upon exercise
of immediately exercisable warrants, 27,050 shares of restricted stock and
180,000 Shares of Common Stock that may be acquired upon exercise of
options.
(11) Includes 401,318 shares of Common Stock owned by EVIG Konsten, L.P., an
Arizona limited partnership and 43,875 shares of Common Stock owned by The
Kenneth E. and Becky H. Johnson Foundation.
(12) Includes 11,250 shares of Common Stock that may be acquired upon exercise
of options.
(13) Includes 45,000 shares of Common Stock that may be acquired upon exercise
of options and 5,250 shares of restricted stock.
(14) Includes 18,000 shares of Common Stock that may be acquired upon exercise
of options and 18,300 shares of restricted stock. Does not include 16,750
shares of Common Stock that may be acquired upon exercise of options that
are owned by his spouse.
(15) Includes 2,135,900 shares of Common Stock that may be acquired upon
exercise of options and warrants and 95,950 shares of restricted stock.
Includes both the Company's current Chief Financial Officer and its former
Chief Financial Officer.
12
<PAGE> 15
MANAGEMENT
The current executive officers of the Company are listed in the table
below. Biographical information concerning Sam A. Brooks, who is also a director
of the Company, is set forth under Proposal 1 in this Proxy Statement.
Biographical information concerning the other current executive officers of the
Company is set forth below.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Sam A. Brooks.............................. 61 Chairman of the Board, President, Chief
Executive Officer and Director
Gary A. Brukardt........................... 54 Executive Vice President, Chief Operating
Officer
Raymond Hakim, M.D., Ph.D.................. 55 Executive Vice President and Chief Medical
Officer
R. Dirk Allison............................ 44 Executive Vice President, Chief Financial
Officer, and Treasurer
</TABLE>
Mr. Brukardt has been Executive Vice President and Chief Operating Officer
of the Company since 1996. From 1991 to 1996, Mr. Brukardt served as Executive
Vice President of Baptist Health Care Affiliates in Nashville, Tennessee, where
he was responsible for the development and operation of physician practice
management organizations and the management of four hospitals and 22 outpatient
facilities. In addition, from 1991 to 1996, Mr. Brukardt served as Chairman and
President of HealthNet Management, Inc., a managed care company.
Dr. Hakim has been Executive Vice President and Chief Medical Officer of
the Company since 1995. He has published extensively on the adequacy of dialysis
and the clinical aspects of biocompatibility. From 1992 to 1995, Dr. Hakim
served as Medical Director for the Vanderbilt Dialysis Program. He served as a
member of the Medical Board of Vanderbilt University Medical Center in 1992, as
Chairman of the Ambulatory Services Committee of Vanderbilt University Medical
Center in 1990 and 1991, and as Director, Clinical Nephrology of Vanderbilt
University Medical Center from 1987 to 1991. He received his M.S. from
Rensselaer Polytechnic Institute, his Ph.D. from Massachusetts Institute of
Technology and his M.D. from McGill University. Dr. Hakim performed his
residency at Royal Victoria Hospital and his renal fellowship at Brigham and
Women's Hospital.
Mr. Allison has been Executive Vice President and Chief Financial Officer
of the Company since October 1999. From 1997 until 1999, Mr. Allison was
President and Chief Executive Officer of MedSynergies, Inc. a physician practice
management company specializing in eye care based in Dallas, Texas. From 1995
until 1997, Mr. Allison was President and Chief Executive Officer of Capstone
Pharmacy Services, Inc., a public institutional pharmacy company with more than
40 pharmacies. From 1993 until 1995, Mr. Allison was President and Chief
Executive Officer of PremierPharmacy, Inc. an institutional pharmacy company
that was sold to Capstone Pharmacy Services, Inc. From 1987 until 1993, Mr.
Allison was President and Chief Executive Officer of Allied Pharmacy Management,
Inc., a hospital pharmacy management company. In 1987, Mr. Allison was Director
of Internal Auditing for Wal-Mart Stores, Inc. Mr. Allison is a certified public
accountant and holds an MBA from the University of Dallas and a BBA from
Northeast Louisiana University.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Brooks,
Allison and Brukardt and Dr. Hakim, as well as certain other key personnel. The
terms of the employment agreements for Messrs. Brooks and Brukardt and Dr. Hakim
commenced on January 15, 1998, and the term of Mr. Allison's commenced on
October 15, 1999. Each employment agreement has a term of three years and
successive one-year renewal terms thereafter. The employment agreement for each
of the Named Executive Officers, other than Dr. Hakim, contains restrictive
covenants prohibiting such officer from competing with the Company for a period
of one year after the end of the employment term.
13
<PAGE> 16
The annual salaries of the executive officers as set forth in the
employment agreements are $300,000, $250,000, $225,000, and $200,000 for Messrs.
Brooks, Allison and Brukardt and Dr. Hakim, respectively. These salaries are
subject to adjustment by the Company's Compensation Committee, and their annual
salaries during 1999 were $445,016, $250,000, $330,018, and $290,004 for Messrs.
Brooks, Allison and Brukardt and Dr. Hakim, respectively. Each executive officer
is eligible under his employment agreement for bonuses at the sole discretion of
the Company.
The employment agreements of Messrs. Brooks, Allison and Brukardt, also
provide for severance of (i) his salary (plus prior year bonus in the case of
Mr. Brooks) for 12 months if such officer is terminated without cause, (ii) his
salary for one month if such officer is terminated for cause, or (iii) his
salary (plus prior year bonus) for 36 months if such officer is terminated
within 12 months of certain changes in control of the Company either (A) without
cause, or (B) by resignation of the officer as a result of declining to accept
reassignment to a job that is not the equivalent of his then current position.
Dr. Hakim's employment agreement contains similar severance provisions that
become operative if he enters into a non-competition agreement. If any of the
executive officers receives severance that would result in the imposition of
excise tax under Section 4999 of the Code, he will be entitled to the amount
described above plus a gross-up payment, if necessary, to reimburse him for any
such excise tax plus all federal, state and local income and excise taxes
imposed on such gross-up payment. In addition, following a change in control of
the Company, if any of the above officers resigns for any reason or is
terminated without cause, the non-competition covenants set forth in his
employment agreement will become null and void.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the annual salaries paid to the Named
Executive Officers for the fiscal years ended December 31, 1997, 1998 and 1999.
As noted above, the Named Executive Officers include the Company's former Chief
Financial Officer, who resigned that position effective October 27, 1999 and was
not an executive officer of the Company as of December 31, 1999. The Named
Executive Officers do not include the Company's current Chief Financial Officer.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING
------------------- STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(1)(2) SARS COMPENSATION
- --------------------------- ---- -------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sam A. Brooks..................... 1999 $445,016 $323,750 $113,096 230,000 --
Chairman of the Board and 1998 356,530 258,750 -- 300,000 --
President 1997 300,000 225,000 227,288 225,000 --
Gary A. Brukardt.................. 1999 330,018 142,506 -- 140,000 --
Executive Vice President, 1998 294,623 142,500 -- 187,500 --
Chief Operating Officer 1997 250,000 125,000 113,644 112,500 --
Raymond Hakim, M.D., Ph.D......... 1999 290,004 135,000 -- 140,000 --
Executive Vice President 1998 252,692 122,500 -- 112,500 --
and Chief Medical Officer 1997 200,000 80,000 113,644 -- --
Ronald Hinds...................... 1999 315,016 135,005 169,643 140,000 --
Executive Vice President, 1998 278,660 135,000 -- 187,500 --
Chief Financial Officer, and 1997 225,000 112,500 182,875 146,250 --
Treasurer
</TABLE>
- ---------------
(1) Messrs. Brooks, Brukardt and Hinds, and Dr. Hakim were granted restricted
stock awards of 13,050; 6,525; 10,500; and 6,525 shares respectively, on
December 23, 1997. The values in the above table are based on a closing
price of $17.417 on that date. The awards contain restrictions that lapse on
December 23, 2002.
14
<PAGE> 17
(2) Messrs. Brooks and Hinds were granted restricted stock awards of 3,500 and
5,250 shares respectively, on January 25, 1999. The values in the above
table are based on a closing price of $32.313 on that date. The awards
contain restrictions that lapse on January 25, 2004.
OPTION GRANTS IN 1999
The following table is a summary of all stock options granted to the Named
Executive Officers during the year ended December 31, 1999. Individual grants
are listed separately for each Named Executive Officer. In addition, this table
shows the potential gain that could be realized if the fair market value of the
Common Stock were to appreciate at an annual rate of either 5% or 10% over the
option term.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION TERM(2)
UNDERLYING OPTIONS EMPLOYEES IN FISCAL EXERCISE OR BASE ------------------------
NAME GRANTED (1) YEAR PRICE ($/SHARE) EXPIRATION DATE 5% 10%
---- ------------------ ------------------- ---------------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sam A. Brooks........... 230,000 13.3% $18.25 8/30/09 $2,639,785 $6,689,734
Gary A. Brukardt........ 140,000 8.1 $18.25 8/30/09 1,606,826 4,072,012
Raymond Hakim, M.D.,
Ph.D.................. 140,000 8.1 $18.25 8/30/09 1,606,826 4,072,012
Ronald Hinds............ 140,000 8.1 $18.25 8/30/09 1,606,826 4,072,012
</TABLE>
- ---------------
(1) Options become exercisable as to 20% of the shares as of the grant date, and
an additional 20% of the shares will vest on each of the first four
anniversaries of the date of grant.
(2) The potential realizable value through the expiration date of the options
has been determined on the basis of the market price per share at the time
of grant compounded annually over the term of the option, net of the
exercise price. These values have been determined based upon assumed rates
of appreciation mandated by the Securities and Exchange Commission and are
not intended to forecast the possible future appreciation, if any, of the
price or value of the Common Stock.
AGGREGATED OPTION EXERCISES IN 1999 AND YEAR-END VALUES
Set forth below is information with respect to exercises of options by the
Named Executive Officers during 1999 pursuant to the Company's stock incentive
plans, and information with respect to unexercised options held by the Named
Executive Officers as of December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES HELD AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(2)
ACQUIRED VALUE --------------------------- ----------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sam A. Brooks......................... 0 $ 0 713,500 454,000 $10,023,581 $2,094,253
Gary A. Brukardt...................... 40,000 437,712 205,500 314,500 1,291460 1,652,448
Raymond Hakim, M.D., Ph.D............. 0 0 298,000 179,500 4,714,758 666,813
Ronald Hinds.......................... 71,200 1,271,145 186,300 283,000 1,083,099 1,316,127
</TABLE>
- ---------------
(1) These amounts represent the market value of the underlying Common Stock on
the date of exercise, less the applicable exercise price.
(2) The market value of the Common Stock on the Nasdaq Stock Market was $23.375
per share as of December 31, 1999.
15
<PAGE> 18
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
This report is submitted by the Company's Compensation Committee at the
direction of the Board of Directors. It provides information regarding the
compensation and benefits provided to the Company's Chief Executive Officer and
other executive officers. The Compensation Committee of the Board of Directors
is responsible for all decisions regarding compensation for the Company's
executive officers. The Compensation Committee is composed of four non-employee
directors. Because the Compensation Committee believes that each executive
officer has the potential to affect the short-term and long-term profitability
of the Company, the Committee places considerable importance on the task of
creating and implementing the Company's executive compensation program. During
1999 the Board of Directors created the Stock Option Subcommittee of the
Compensation Committee. This subcommittee administers the Company's stock option
and incentive plans.
The Company's executive compensation program is focused on stockholder
value, the overall performance of the Company, the effect of the executive's
performance on the success of the Company and the individual performance of the
particular executive.
COMPENSATION PHILOSOPHY
The Compensation Committee's philosophy is to integrate the compensation of
the Company's executive officers with corporate performance. The Committee's
objectives are to measure executive performance against short-term and long-term
goals, reward performance, and recognize individual initiative and achievements.
The Compensation Committee is also focused on assisting the Company in
attracting, motivating, and retaining qualified executives, and aligning the
incentives of management with the interests of stockholders. In administering
the compensation policies and programs used by the Compensation Committee and
endorsed by the Board of Directors, the Compensation Committee:
- recommends total compensation of executive officers in relation to
Company performance;
- aligns compensation amounts with comparable levels paid to executive
officers of companies comparable in size and performance to the Company;
and
- provides cash bonuses based upon a percentage of annual salary to
motivate and retain high quality executive officers.
The Stock Option Subcommittee now considers and approves all grants of
stock options and restricted stock. The compensation program of the Company
currently consists of base salary, annual incentive compensation in the form of
cash bonuses, restricted stock awards, and options. In 1999, the Compensation
Committee reviewed the Company's executive compensation relative to executive
compensation of peer groups. Because the Company's compensation plan involves
incentives contingent upon the Company's performance and individual performance,
an executive officer's actual compensation level in any particular year may be
above or below that of similarly situated officers of competitors. The
Compensation Committee reviews each element of executive compensation annually.
The key components of the Company's executive compensation program are
described below.
BASE SALARY
The Compensation Committee, along with the CEO of the Company, reviews and
approves an annual salary plan for the Company's executive officers. The salary
plan is developed by the Company's CEO. Many subjective factors are included in
determining these salary plans, such as the executive officer's
responsibilities, the scope of the position, length of service with the Company,
corporate and individual performance, and salaries paid by other health care
services companies to officers in similar positions. While these subjective
factors are then integrated with objective factors, including the Company's net
income, earnings per share,
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<PAGE> 19
return on equity, and growth, the overall assessment is primarily a subjective
one, intended to reflect the level of responsibility and individual performance
of the particular executive officer.
BONUSES
The Compensation Committee believes that a significant portion of the total
cash compensation for executive officers should be based on the Company's
achievement of specific performance criteria, including earnings per share,
clinical performance and individual performance. Executive officers of the
Company receive a cash bonus based on a percentage of annual base salary, if the
Company and the executive officer meet annual performance targets. The
performance targets are established and communicated at the beginning of each
year. Prior to 1999 the performance targets focused primarily on the Company's
earnings per share and other financial measures. Beginning in 1999, the
Compensation Committee added clinical performance targets and individual
performance targets to the criteria on which bonuses could be based. The
Compensation Committee added these additional performance targets because it
believes the Company's long-term success depends on keeping the Company's
patients healthy and on having the executive officers take responsibility for
meeting their personal goals, both of which may not translate directly into
improved annual financial performance. Bonuses for executive officers can be as
much as 112.5% in the case of the CEO and 75% for Executive Vice Presidents.
This means that a significant part of each executive's cash compensation package
is at risk.
LONG-TERM COMPONENT -- STOCK INCENTIVE PLANS
To date, the Company has relied primarily upon stock option and restricted
stock awards to provide long-term incentives for executives and to align
executives' incentives more closely with the interests of stockholders. The
Stock Option Subcommittee of the Compensation Committee continues to believe
that stock options and restricted stock awards have been and remain an excellent
vehicle for providing financial incentives for management. The Company's stock
incentive plans permit the Company to issue stock options and restricted stock
awards to officers, key employees, and consultants of the Company. Subject to
general limits prescribed by the stock incentive plans, the Stock Option
Subcommittee of the Compensation Committee has the authority to determine the
individuals to whom stock options and restricted stock awards will be granted,
the terms of the options and restricted stock awards, and the number of shares
subject to each option or restricted stock award. The size of any particular
stock option or restricted stock award is based upon position and the
executive's individual performance during the related evaluation period. With
respect to stock options, because the exercise price of the options is the
market price of stock on the date of grant and the options generally vest over a
period of time and carry a ten-year life, employees benefit only if the value of
the Company's Common Stock increases. Thus, employees with stock options are
rewarded for their efforts to improve long-term stock market performance. In
this way, the financial interests of management are aligned with those of the
Company's stockholders. For this reason, the Company uses stock options as it's
predominate long-term incentive program.
Executive officers of the Company may also participate in the Company's
Employee Stock Purchase Plan (the "Stock Purchase Plan"). Executive officers
participate in the Stock Purchase Plan on the same terms as non-executive
employees who meet the applicable eligibility criteria, subject to any legal
limitations on the amounts that may be contributed or the benefits that may be
payable under the Stock Purchase Plan. All contributions to the Stock Purchase
Plan are made or invested in the Company's Common Stock. These features are
intended to align further the employees' and stockholders' long-term financial
interests.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee's basis for compensation of the CEO is based on
the compensation philosophy discussed above. Mr. Brooks participates in the same
executive compensation plans available to the other executive officers. In 1999,
the Compensation Committee set the base salary of Mr. Brooks, the Company's
Chief Executive Officer, at $445,016. The Stock Option Subcommittee approved a
grant of options to purchase 230,000 shares of Common Stock. The compensation
levels established for Mr. Brooks were in response to the Board's, the
Committee's and the Subcommittee's assessments of the Company's
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<PAGE> 20
performance and accomplishments in 1999, as well as Mr. Brooks' position in the
Company and the nature of his responsibilities and contributions. The Committee
considered Mr. Brooks' performance in terms of the Company's success in meeting
its performance targets, from both an operational and a financial standpoint,
and in developing and executing its strategic plan. In evaluating Mr. Brooks'
compensation, the Committee also considered the Company's performance relative
to its peers and competitors in the health care services industry.
FEDERAL INCOME TAX DEDUCTIBILITY LIMITATIONS
The Compensation Committee and the Stock Option Subcommittee intend to work
to structure future compensation so that executive compensation paid by the
Company is fully deductible in accordance with Section 162(m) of the Internal
Revenue Code. Section 162(m) generally disallows a tax deduction to public
companies for compensation over $1 million paid to certain executive officers
unless certain conditions are met. However, the Compensation Committee may, in a
particular case, decide to approve compensation that may prove not to be
deductible.
SUMMARY
The Committee believes that this mix of base salaries, variable cash
incentives and the potential for equity ownership in the Company represents a
balance that will motivate the management team to produce strong returns for the
Company's stockholders over the long term. The Committee also further believes
this program strikes an appropriate balance between the interests and needs of
the Company in operating its business and appropriate rewards based on
stockholder value.
Submitted by the Compensation Committee of the Company's Board of Directors.
Stephen D. McMurray, M.D., Chairman
Joseph C. Hutts
William V. Lapham
W. Tom Meredith, M.D.
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STOCKHOLDER RETURN
PERFORMANCE GRAPH
The following is a comparative performance graph that compares the
percentage change of cumulative total stockholder return on the Company's Common
Stock with (a) the performance of a broad equity market indicator and (b) the
performance of a published industry index or peer group. The following graph
compares the percentage change of cumulative total stockholder return on the
Company's Common Stock with (1) the Standard & Poor's 500 Composite Index (the
"Broad Index") and (2) the Nasdaq Health Services Stocks, SIC Codes 8000-8099
(the "Industry Index"). The graph begins on February 6, 1996, the date on which
the Company's Common Stock first began trading on the Nasdaq National Market.
For purposes of preparing the graph, the Company assumed that an investment of
$100 was made on February 6, 1996 in each of Company's Common Stock, the Broad
Index and the Industry Index and that all dividends, if any, were reinvested at
the time they were paid.
The comparison in the graph below is based on historical data and is not
intended to forecast the possible future performance of the Company's Common
Stock.
<TABLE>
<CAPTION>
RENAL CARE GROUP, INC. S&P 500 STOCKS NASDAQ HEALTH SERVICES
---------------------- -------------- STOCKS SIC 8000-8099 US
& FOREIGN
-----------------------
<S> <C> <C> <C>
02/1996 100.00 100.00 100.00
12/1996 131.80 117.10 99.00
12/1997 200.00 156.20 101.60
12/1998 270.10 201.60 86.10
12/1999 219.10 244.10 70.20
</TABLE>
- ---------------
(A) The lines represent annual index levels derived from compounded daily
returns that include all dividends.
(B) The indexes are reweighted daily, using the market capitalization on the
previous trading day.
(C) If the annual interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
(D) The index level for all series was set to $100.00 on 02/06/1996.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Joseph C. Hutts,
Stephen D. McMurray, M.D., W. Tom Meredith, M.D. and William V. Lapham. Mr.
Brooks, the Chairman of the Board, Chief Executive Officer, President, and a
Director of the Company, is a member of the board of directors of PhyCor, Inc.,
of which Mr. Hutts is the Chairman of the Board, President and Chief Executive
Officer.
Dr. McMurray is a member of Indiana Dialysis Management, P.C., a practice
group currently consisting of eight nephrologists. The Company entered into a
Medical Director Agreement dated February 12, 1996 with that practice group. The
Medical Director Agreement has a term of seven years with successive renewal
terms of three years each and provides for medical director fees of $326,000
subject to agreed adjustments. In 1999, the Company paid Indiana Dialysis
Management, P.C. $500,000 under this agreement.
The Company entered into an Independent Contractor Agreement with Dr.
McMurray, dated November 20, 1997, pursuant to which Dr. McMurray receives
$12,000 per month in connection with services to be provided to the Company. Dr.
McMurray received $144,000 under this agreement during 1999. Dr. McMurray
received an award of 5,250 shares of restricted stock subject to restrictions
and other terms and conditions set forth in that certain Restricted Stock Award
Agreement effective January 25, 1999.
Barbara McMurray, Dr. McMurray's spouse, is a party to an employment
agreement dated February 6, 1996 with the Company with an annual base salary of
$115,000 and with a term of three years, renewable thereafter for successive
one-year terms. Ms. McMurray serves as Regional Manager of Clinical Services
Central/East of the Company. During 1999, Ms. McMurray received $181,904.18 in
salary and bonus for her services under this Agreement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MEDICAL DIRECTOR ARRANGEMENTS
Dr. Lowery is a member of Tyler Nephrology Associates, P.A., a practice
group currently consisting of five nephrologists. The Company entered into a
Medical Director Agreement with that practice group dated February 12, 1996. The
Medical Director Agreement has a term of seven years with successive renewal
terms of three years each and provides for medical director fees of $392,000
subject to agreed adjustments. During 1999, the Company paid Tyler Nephrology
Associates, P.A. $400,580 under this agreement.
Dr. Bower is a party to an agreement with the Company dated February 12,
1996 to serve as Chief Medical Officer of the Company's centers in Mississippi
for which he is compensated $100,000 annually through February 2000. The
agreement has a term of four years with successive annual renewals.
Dr. Johnson is a party to a Medical Director Services Agreement with
several additional nephrologists dated September 30, 1996 that has a term of
seven years with successive renewal terms of three years each and currently
provides for medical director fees of $840,000 per year. During 1999, the
Company paid Dr. Johnson and such nephrologists $840,000 in the aggregate under
this Agreement. The Company is also a party to an oral agreement with Dr.
Johnson, pursuant to which Dr. Johnson received $75,000 in 1999 for consulting
services provided to the Company's operations in Arizona.
The Company believes that each of the foregoing Medical Director Agreements
was obtained on terms no less favorable to the Company than could be obtained
from unaffiliated third parties. The terms of each such Medical Director
Agreement were determined by arm's-length negotiations between the Company and
the practices generally before the practice became affiliated with the Company
and before the director became a director of the Company. "See Compensation
Committee Interlocks and Insider Participation" for a discussion of the terms of
Medical Director Agreement between the Company and Dr. McMurray's practice
group.
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<PAGE> 23
LEASES OF REAL PROPERTY
Pursuant to a lease agreement dated February 12, 1996, the Company leases
from an affiliate of Dr. Bower approximately 20,000 square feet of
administrative and other space used by the Company for the operation of the
centers acquired from Kidney Care. The lease is a triple net lease at a rate of
approximately $6.00 per square foot per year, or a gross payment of
approximately $10,000 per month. The lease contains an initial term of ten years
and two five-year renewal options. During 1999, the Company paid the affiliate
of Dr. Bower $157,010 under this lease.
Dr. Lowery owns a 25% interest in certain real property and improvements
used in connection with the operation of two of the Company's centers in Tyler,
Texas. Pursuant to lease agreements dated February 12, 1996, the Company leases
those centers which are located in Carthage and Tyler, Texas. Each lease is a
triple net lease with rent payable at $12.00 per square foot per year. The Tyler
lease requires a gross payment of $20,092 per month, and the Carthage lease
requires a gross payment of $2,479 per month. Each lease has an initial term of
ten years with two additional five-year renewal options. The amount of rent is
subject to a consumer price index adjustment after the initial five-year period.
In addition, the Company has subleased back to Tyler Nephrology Associates, Inc.
a portion of the Tyler center on terms substantially similar to those contained
in the lease of such center to the Company. During 1999, the Company paid
$226,250 in rent under these leases net of amounts attributable to the sublease.
The Company believes that each of the foregoing Leases was obtained on
terms no less favorable to the Company than could be obtained from unaffiliated
third parties.
EMPLOYMENT ARRANGEMENTS
Anne N. Bower, Dr. Bower's daughter, is a party to an employment agreement
dated February 7, 1996 with the Company with an annual base salary of $125,000
and with a term of three years, renewable thereafter for successive one-year
terms. Ms. Bower serves as the chief operating officer of the Company's
Mississippi operations.
RELATIONSHIP WITH VANDERBILT UNIVERSITY
Dr. Jacobson currently serves as Vice Chancellor for Health Affairs at
Vanderbilt University and as Professor of Medicine at Vanderbilt University.
On February 12, 1996, the Company assumed a Dialysis Center Management
Agreement with Vanderbilt University Medical Center pursuant to which the
Company manages the outpatient dialysis center of Vanderbilt University Medical
Center. The Company received approximately $477,550 pursuant to this agreement
for the year ended December 31, 1999. This agreement has a one-year term that is
automatically renewed each year unless either party cancels the agreement at
least 90 days prior to the end of the current term.
COMPANY POLICY
The Company has adopted a policy pursuant to which transactions with
affiliates (other than those entered into in connection with the formation of
the Company) must be reviewed by the Audit and Compliance Committee and approved
by a majority of the disinterested members of the Board of Directors and will be
made on terms no less favorable to the Company than could be obtained from
unaffiliated third parties.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16 of the Exchange Act, the Company's directors, executive
officers and any person holding more than ten percent of the Common Stock are
required to report their ownership of the Common Stock and any changes in that
ownership to the SEC and the Nasdaq Stock Market's National Market. These
persons also are required by SEC regulations to furnish copies of these reports
to the Company. Specific due
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<PAGE> 24
dates for these reports have been established, and the Company must report in
this Proxy Statement any failure to make required filings in 1999. Based solely
on a review of the reports furnished to the Company or written representations
from the Company's directors, officers, and ten percent beneficial owners, all
reporting requirements were satisfied, with the exception of: (1) a Form 4 that
was filed late by W. Tom Meredith, M.D. in connection with the sale of 20,000
shares of Common Stock; and (2) a Form 3 that was filed late by William V.
Lapham.
AUDITORS
The firm of Ernst & Young LLP has served as the Company's independent
public accountants since inception and, while not yet approved by the audit
committee, is expected to be selected to serve in that capacity for the fiscal
year ended December 31, 2000. A representative of Ernst & Young LLP will attend
the Annual Meeting to respond to questions from stockholders and to make a
statement if he so desires.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Stockholders of the Company wishing to submit a proposal for action at the
Company's 2001 annual meeting of stockholders and to have the proposal included
in the Company's proxy materials relating to that meeting, must deliver their
proposals to the Company at its principal offices not later than December 29,
2000. Additional legal requirements apply to any inclusion of stockholder
proposals in proxy materials of the Company.
ANNUAL REPORTS
The Company's 1999 Annual Report to stockholders is being mailed to the
Company's stockholders with this Proxy Statement. The Annual Report is not part
of the proxy soliciting material.
A copy of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 as filed with the Securities and Exchange Commission may
be obtained by any stockholder, free of charge, upon written request to the
Secretary, Renal Care Group, Inc., 2100 West End Avenue, Suite 800, Nashville,
Tennessee 37203.
OTHER MATTERS
The management of the Company knows of no other matters to be presented and
acted upon at the Annual Meeting other than those set forth in the accompanying
notice. However, if any other matters requiring a vote of the stockholders
should properly come before the Annual Meeting or any adjournment thereof, each
proxy will be voted with respect thereto in accordance with the best judgment of
the proxy holder.
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<PAGE> 25
RENAL CARE GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Sam A. Brooks and R. Dirk Allison as
Proxies, each with power to appoint his substitute, and hereby authorizes either
one or both of them to represent and to vote, as designated below, all the
shares of Common Stock of Renal Care Group, Inc. held of record by the
undersigned on April 17, 2000, at the Annual Meeting of Stockholders to be held
on June 7, 2000.
The Board of Directors recommends a vote "FOR" all of the following
proposals:
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees listed below
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(Sam A. Brooks, Stephen D. McMurray, M.D. and William V. Lapham as Class I
Directors)
2. PROPOSAL TO: approve an amendment to the Renal Care Group, Inc. 1999
Long-Term Incentive Plan that would increase the number of shares available
for issuance from 1,500,000 to 2,500,000; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be dated and signed on reverse side)
<PAGE> 26
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 ALL NOMINEES FOR DIRECTOR LISTED ABOVE AND FOR PROPOSAL 2 ABOVE.
Please sign exactly as name
appears below. 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: , 2000
--------------------------
--------------------------------------
Signature
--------------------------------------
Signature if held jointly
