<PAGE> 1
THE COMPANY DOCTOR
5215 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD JANUARY 30, 1997
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 [ ]
[ ] 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 Section 240.14a-11(c) or Section
240.14a-12
THE COMPANY DOCTOR
------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class securities to which transaction applies:
--------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE> 2
THE
COMPANY
DOCTOR
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of The
Company Doctor will be held at the Company's principal offices, 5215 North
O'Connor Boulevard, Irving, Texas on Thursday, January 30, 1997, at 10:00 a.m.,
Central Standard Time, and thereafter as it may from time to time be adjourned,
for the following purposes:
1. To elect seven directors to hold office for the term set forth in
the accompanying Proxy Statement and until their successors shall
have been duly elected and qualified;
2. To approve amendments to, and restatement of, the Company's 1995
Omnibus Stock Option Plan to (i) permit the issuance of an
additional 600,000 shares of Common Stock pursuant to the Plan, and
(ii) to simplify administration of the Plan in accordance with
revisions to Section 16 of the Securities Exchange Act of 1934;
3. To ratify the appointment of Ehrhardt Keefe Steiner & Hottman P.C.
as independent auditors; and
4. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 3,
1996, as the record date for the determination of shareholders entitled to
notice of and to vote at this meeting or any adjournment thereof.
By Order of the Board of Directors,
December 9, 1996 /s/ DONALD F. ANGLE
-----------------------------------
Donald F. Angle, M.D.
Chairman of the Board
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL
BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
<PAGE> 3
THE COMPANY DOCTOR
5215 NORTH O'CONNOR BOULEVARD
IRVING, TEXAS 75039
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD JANUARY 30, 1997
GENERAL
The enclosed proxy is solicited by the Board of Directors of The Company
Doctor (hereinafter referred to as the "Company") for use at the Annual Meeting
of Shareholders to be held at the Company's principal offices, 5215 North
O'Connor Boulevard, Irving, Texas at 10:00 a.m., Central Standard Time, on
Thursday, January 30, 1997, for the purposes set forth in the foregoing Notice
of Annual Meeting of Shareholders. This Proxy Statement and the form of proxy
will be mailed to shareholders on or about December 9, 1996. A shareholder
giving a proxy has the power to revoke it at any time prior to its exercise by
notifying the Secretary of the Company. Unless the proxy is revoked, or
unless it is received in such form as to render it invalid, the shares
represented by it will be voted in accordance with the instructions contained
therein.
The record date with respect to this solicitation is December 3, 1996. All
holders of record of Common Stock of The Company Doctor as of the close of
business on that date are entitled to vote at the meeting. As of October 28,
1996, the Company had 4,972,693 shares of Common Stock outstanding. Each share
of Common Stock is entitled to one vote. A majority of the votes entitled to be
cast constitutes a quorum. If a quorum exists, action on any matter other than
the election of directors will be approved by the affirmative vote of the
majority of shares present in person or by proxy at the meeting and entitled to
vote. Directors shall be elected by a plurality of the votes of the shares
present in person or by proxy at the meeting and entitled to vote in the
election. Abstentions and broker non-votes are not counted in the calculation
of the vote. A proxy may be revoked by the shareholder at any time prior to its
being voted. If a proxy is properly signed and is not revoked by the
shareholder, the shares it represents will be voted at the meeting in accordance
with the instructions of the shareholder. If the proxy is signed and returned
without specifying choices, the shares will be voted in accordance with the
recommendations of the Board of Directors. The cost of this solicitation will
be borne by the Company. Employees and directors of the Company may solicit
proxies but will not receive any additional compensation for such solicitation.
Proxies may be solicited personally or by mail, facsimile, telephone or
telegraph.
As a matter of policy, proxies, ballots and voting tabulations that
identify individual shareholders are held confidential by the Company. Such
documents are available for examination only by the inspectors of election,
none of whom is an employee of the Company, and certain employees associated
with tabulation of the vote. The identity of the vote of any shareholder is
not disclosed except as may be necessary to meet legal requirements.
<PAGE> 4
I. ELECTION OF DIRECTORS
The seven nominees for election as directors are identified below. All
nominees are now members of the Board of Directors. The Board of Directors
knows of no reason why any nominee would be unable to serve as a director. If
any nominee should for any reason become unable to serve, the shares
represented by all valid proxies will be voted for the election of such other
person as the Board of Directors may designate or the Board of Directors may
reduce the number of directors to eliminate the vacancy.
The following material contains information concerning the nominees,
including their recent employment, positions with the Company, other
directorships and age as of the date of this Proxy Statement.
<TABLE>
<CAPTION>
CAPACITIES IN DIRECTOR
NAME AGE WHICH SERVED SINCE
- ---------------------------- --- ---------------------------- ---------
<S> <C> <C> <C>
Donald F. Angle, M.D. 41 Chairman of the Board, President, 1992
Secretary and Treasurer
Carl S. Luikart, M.D.(1)(2) 41 Director 1992
Thomas J. Edwards(1)(2) 48 Director 1992
John P. Kennedy(2) 45 Director 1992
Dale W. Willetts(1) 45 Director 1995
W. Howard Haun 64 Director 1996
Stephen W. Cavanaugh 45 Director 1996
</TABLE>
- ----------------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Donald F. Angle, M.D. has been the Chairman of the Board, President,
Secretary and Treasurer of the Company since its inception. He serves as
President of Andicare, Inc., which he founded in 1987, and President of EOPS,
which he co-founded in 1990, both wholly-owned subsidiaries of the Company. In
1994, Dr. Angle founded Donald F. Angle, M.D. P.A., now renamed as The
Physician Group, P.A. (the "Physician Group"), with which the Company contracts
for physicians services and is its sole stockholder. He also served as Medical
Director for the Emergency Department of Highland Hospital in Shreveport,
Louisiana from 1989 to 1992. Dr. Angle was the Medical Director for Operations
at Louisiana Downs in Bossier City, Louisiana from 1982 to 1992 and was the
Medical Director in the Emergency Department of Riverside Community Hospital in
Bossier City from 1982 to 1991. Dr. Angle has been certified as an Emergency
Medicine Physician by the American Board of Emergency Medicine. He is licensed
to practice medicine in Louisiana, Texas and Arkansas. Dr. Angle received his
M.D. degree from the Louisiana State University School of Medicine in 1980.
-2-
<PAGE> 5
Carl S. Luikart, M.D. currently serves as Chief of the Section of
Cardiovascular Disease at Our Lady of the Lake Regional Medical Center in Baton
Rouge, Louisiana. He is also Chief of the Cardiology Section at the Earl K.
Long Memorial Hospital in Baton Rouge. Dr. Luikart is a member of the Board of
Directors of Louisiana Blue Cross and Blue Shield. He has engaged in the
practice of cardiology medicine since 1985. Dr. Luikart received his M.D.
degree from the Louisiana State University School of Medicine in 1980.
Thomas J. Edwards is the President of A. J. Weller Corporation,
Keithville, Louisiana, a company specializing in the repair and maintenance of
industrial plants in the United States and Mexico, and has held that position
since 1982. Mr. Edwards received a Master of Arts degree from Kent State in
1975 and completed the Owners President Program at the Harvard School of
Business in 1995.
John P. Kennedy is the President of Corporate International Services,
Venice, California, an investment advisory firm that he founded in 1986 to
provide private investment banking services to companies in the United States
and Canada. Mr. Kennedy received a Bachelor of Arts degree from California
State University in 1974.
Dale W. Willetts has been president of Magnum Industries, Huntington
Beach, California, a lease financing company and broker of capital equipment
leases to various financial sources, since 1987. In 1992, Mr. Willetts became
a registered investment advisor. In this capacity, Mr. Willetts advises public
and private companies with respect to finance, business and marketing
strategies. From 1981 to 1984, Mr. Willetts was director of sales and
marketing for the Thomas Group, Garden Grove, California.
W. Howard Haun is currently the President of Risk Management Assurance
Corporation ("RMAC"), the Company's newly acquired insurance subsidiary. He
served as a consultant to Employers General Insurance Group and its
predecessor, Employers Insurance of Texas from 1993 until assuming his current
position with RMAC. From 1953 through 1993, Mr. Haun was employed in various
capacities by Employers Insurance of Texas. Employers Insurance of Texas was
placed in conservatorship in 1992 and thereafter into receivership in 1994.
Mr. Haun is a certified life underwriter, a certified property and casualty
underwriter, a past president of the Dallas chapter of the Society of Property
and Casualty Underwriters, a past president of the Underwriters' Executive
Counsel and former chairman of the Texas Automobile Assigned Risk Plan.
Stephen W. Cavanaugh is the president and chief executive officer of
Louisiana Workers' Compensation Corporation, a private domestic mutual insurer,
and has served in that capacity since December 1991. From January 1988 to
December 1991, he was the Assistant Secretary of the Louisiana Department of
Employment and Training, Director of the Office of Workers' Compensation, a
position to which he was appointed by the Governor of Louisiana. Mr. Cavanaugh
received a Bachelor of Arts degree from Northwestern State University in
Natchitoches, Louisiana and his Juris Doctor degree from the Louisiana State
University School of Law in Baton Rouge, Louisiana.
COMMON STOCK OWNERSHIP
The following table sets forth certain information regarding
beneficial ownership of Common Stock as of October 30, 1996 by (i) each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director or nominee, and (iii) all executive officers and
directors as a group. Each person has sole voting and sole investment or
dispositive power with respect to the shares shown except as noted.
-3-
<PAGE> 6
<TABLE>
<CAPTION>
SHAREHOLDINGS ON
OCTOBER 30, 1996
-------------------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS (1) SHARES (2) CLASS
- ------------------------------- ----------- -------------
<S> <C> <C>
Donald F. Angle, M.D. (3)(4) . . . . . . . . . . . . . . . . . . . . . 1,330,994 26.4%
Carl S. Luikart, M.D. (3)(5) . . . . . . . . . . . . . . . . . . . . . 98,919 2.0%
Thomas J. Edwards (5) . . . . . . . . . . . . . . . . . . . . . . . . . 14,135 --
Jack P. Kennedy (3)(5) . . . . . . . . . . . . . . . . . . . . . . . . 142,779 2.9%
Dale W. Willetts (3)(5) . . . . . . . . . . . . . . . . . . . . . . . . 137,390 2.8%
W. Howard Haun (6) . . . . . . . . . . . . . . . . . . . . . . . . . . 7,638 --
Stephen W. Cavanaugh (7) . . . . . . . . . . . . . . . . . . . . . . . 5,555 --
All directors and executive officers as a group
(eight persons) (3)(8) . . . . . . . . . . . . . . . . . . . . . . . 1,762,685 34.3%
</TABLE>
- -----------------
(1) The address for Messrs. Angle and Haun is Suite 1800, 5215 North O'Connor
Boulevard, Irving, Texas 75039; the address for Dr. Luikart is 5228 Dijon,
Baton Rouge, Louisiana 70808; the address for Mr. Edwards is 9901 Dragstrip
Road, Keithville, Louisiana, 71047; the address for Mr. Kennedy is 878
Commonwealth Avenue, Venice, California 90291; the address for Mr. Willetts
is 19581 Pompano Lane, #103, Huntington Beach, California 92648; and the
address for Mr. Cavanaugh is 3252 Emily Drive, Brusly, Louisiana 70764.
(2) Ownership includes both outstanding Common Stock and shares issuable upon
exercise of options that are currently exercisable or will become
exercisable within 60 days after the date hereof.
(3) Shares beneficially owned include a prorata share of an aggregate of
150,000 shares of Common Stock held in escrow and subject to release to the
Company's stockholders upon the Company reaching certain performance
objectives as of December 31, 1996.
(4) Includes 71,110 shares of Common Stock under options which are currently
exercisable or will become exercisable within 60 days.
(5) Includes 14,135 shares of Common Stock under options which are currently
exercisable or will become exercisable within 60 days.
(6) Includes 7,638 shares of Common Stock under options which are currently
exercisable or will become exercisable within 60 days.
(7) Includes 5,555 shares of Common Stock under options which are currently
exercisable or will become exercisable within 60 days.
(8) Includes 166,120 shares of Common Stock under options which are currently
exercisable or will become exercisable within 60 days.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the annual and
long-term compensation for services in all capacities to the Company for the
three fiscal years ended June 30, 1996, 1995 and 1994 of Donald F. Angle, M.D.,
Chairman of the Board and President of the Company (the "Named Officer"). No
other officer of the Company received total annual salary and bonus in excess
of $100,000 during the year ended June 30, 1996.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
FISCAL ------------------- ------------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS(SHARES)(2) COMPENSATION
- --------------------------- ------ --------- ----- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Donald F. Angle, M.D., 1996 $143,692 -- 107,500 $11,500
Chairman of the Board and 1995 160,196 -- --- -0-
President 1994 186,912 -- --- -0-
</TABLE>
- -------------------
(1) Includes all compensation received as a physician through The Physician
Group and as President of the Company. In fiscal years 1996 and 1995,
compensation received by Dr. Angle for his services as a contract
physician through The Physician Group totalled $27,730 and $7,666,
respectively. Dr. Angle received no compensation for services as a
contract physician in 1994. See "Certain Transactions."
(2) Options were granted under the 1995 Omnibus Stock Option Plan.
(3) Consists of automobile lease payments and related expenses.
-4-
<PAGE> 7
Option Grants Table. The following table sets forth information on grants
of stock options pursuant to the Company's 1995 Omnibus Stock Option Plan
during the fiscal year ended June 30, 1996 to the Named Officer.
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES IN BASE PRICE
NAME GRANTED (SHARES) FISCAL YEAR ($/SHARE) EXPIRATION DATE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Donald F. Angle, M.D. 37,500(1) 9% $ 5.78 February 1, 2001
70,000(2) 18% $ 5.78 September 28, 2000
</TABLE>
- ---------------
(1) On May 6, 1996, such option commenced vesting in eighteen equal monthly
installments.
(2) On November 1, 1995, such option commenced vesting in eighteen equal
monthly installments.
Fiscal Year-End Options/Option Values Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDER- VALUE OF UNEXERCISED IN-
LYING UNEXERCISED OPTIONS THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END(#) FISCAL YEAR-END($)(1)
--------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Donald F. Angle . . . . . . . . . . . . . 35,277 72,223 $131,230 $268,670
</TABLE>
- ---------------
(1) The dollar values are calculated by determining the difference between the
exercise price of the options and the closing bid price for the Common
Stock of $9.50 on June 28, 1996, the last trading day of the fiscal year.
No employee of the Company receives any additional compensation for his
services as a director. Non-management directors receive no salary for their
services as such, although the Company pays reasonable travel or other out-of-
pocket expenses incurred by non-management directors in attending meetings of
the Board of Directors and a fee of $500 per meeting attended.
The Company has no retirement, pension or profit sharing program for
the benefit of its directors, officers or other employees other than the
Company's Option Plan and a 401(k) Plan recently adopted, but not yet
effective, but the Board of Directors may recommend one or more such programs
for adoption in the future.
Employment Agreement. The Company has entered into an employment
agreement with Dr. Angle which provides for a five-year term that commenced
January 1, 1996, with a right on the part of the Company to extend the agreement
for additional one-year periods. The employment agreement calls for Dr. Angle
to receive a salary of a minimum of $135,000 in the first year of employment,
$180,000 in the second year of employment, and $180,000 in each year thereafter,
subject to increase upon agreement of the Compensation Committee of the Board of
Directors. Effective July 1, 1996, the Board of Directors increased Dr. Angle's
compensation to $180,000. The employment agreement for Dr. Angle also contains
bonus provisions which empower the Compensation Committee to grant bonuses to
Dr. Angle based upon his performance, the overall performance of the Company and
its financial condition. In addition, if Dr. Angle is employed by the Company
in any capacity, or if the Physician's Group is contracted to the Company, as of
July 1, 1997, Dr. Angle is to receive a one-time bonus of $45,000 as of such
date. If the agreement is terminated between December 31, 1996 and July 1, 1997
by either party, Dr. Angle is to receive a severance payment of $45,000. The
agreement requires him to devote his full business time to the Company, may be
terminated by the Company for "cause" (as defined in the agreement), and
prohibits him from competing with the Company for two years following
termination of the agreement.
-5-
<PAGE> 8
The employment agreement for Dr. Angle contains provisions which
provide that, upon the occurrence of a "triggering event" (defined to include a
change in ownership of 80% or more of the outstanding shares of the Company, a
merger of the Company into another corporation, or a liquidation of the
Company) during the period that he is acting as an officer of the Company or
for up to one year after acting in such capacity, Dr. Angle will receive a lump
sum payment equal to 2.9 times the last year's base pay in the event of
termination other than for just cause.
COMMITTEES OF THE BOARD
The Board of Directors has delegated certain of its authority to a
Compensation Committee and an Audit Committee. The Compensation Committee is
composed of Messrs. Luikart, Edwards and Willetts. The Audit Committee is also
composed of Messrs. Luikart, Edwards and Kennedy. No member of either
committee is a former or current officer or employee of the Company.
The Compensation Committee held three meetings in fiscal year 1996. The
primary function of the Compensation Committee is to review and make
recommendations to the Board with respect to the compensation, including
bonuses, of the Company's officers and to administer the Company's Option Plan.
The Audit Committee held three meetings in fiscal year 1996. The
function of the Audit Committee is to review and approve the scope of audit
procedures employed by the Company's independent auditors, to review and
approve the audit reports rendered by both the Company's independent auditors
and to approve the audit fee charged by the independent auditors. The Audit
Committee reports to the Board of Directors with respect to such matters and
recommends the selection of independent auditors.
BOARD AND COMMITTEE ATTENDANCE
In fiscal year 1996, the Board of Directors held six meetings. All
directors attended more than 75% of the aggregate of board and committee
meetings held during fiscal year 1996.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE DIRECTOR NOMINEES IDENTIFIED ABOVE.
II. PROPOSAL TO APPROVE AMENDMENTS
TO THE 1995 OMNIBUS STOCK OPTION PLAN
The Company's 1995 Omnibus Stock Option Plan (the "Stock Option Plan"
or "Plan") was adopted effective January 1, 1995 and amended effective December
1, 1995. The Board of Directors feels that the Stock Option Plan has proved to
be of substantial value in stimulating the efforts of employees and increasing
their ownership stake in the Company. In light of the Company's continued
growth, the number of shares remaining for issuance under the Stock Option Plan
is insufficient to provide adequately for participation by the increased number
of eligible employees, directors and consultants to whom the Compensation
Committee would consider granting options during the forthcoming fiscal year.
The Board of Directors has adopted an amendment to the Stock Option Plan to
increase the number of shares available for issuance under the Stock Option
Plan by an additional 600,000 shares of Common Stock. The proposed amendment
to the Stock Option Plan also contains certain changes which the Board of
Directors believes are appropriate in response to recent changes to the federal
securities regulations which govern the Plan.
-6-
<PAGE> 9
The provisions of the existing Plan, as well as the proposed amendments
thereto, are summarized below. A copy of the Plan containing the proposed
amendments thereto is attached hereto as Exhibit A.
SUMMARY OF PLAN
The Option Plan provides for the granting of incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), nonqualified stock options and
stock appreciation rights ("SARs"), up to a maximum number of 440,875 shares.
Nonqualified stock options may be granted to employees, directors and advisors
of the Company, while Incentive Stock Options may be granted only to employees.
No options may be granted under the Option Plan subsequent to December 31,
2004.
The Option Plan is administered by the Compensation Committee of the
Board of Directors, which determines the terms and conditions of the options
and SARs granted under the Option Plan, including the exercise price, number of
shares subject to the option and the exercisability thereof. Messrs. Luikart,
Edwards and Willetts are currently the members of the Compensation Committee.
The exercise price of all Incentive Stock Options granted under the
Option Plan must be at least equal to the fair market value of the Common Stock
of the Company on the date of grant. In the case of an optionee who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company, the exercise price of Incentive Stock Options
shall be not less than 110% of the fair market value of the Common Stock on the
date of grant. The exercise price of all nonqualified stock options granted
under the Option Plan shall be determined by the Compensation Committee, but
shall not be less than 85% of the fair market value of the Common Stock. The
term of all nonqualified stock options granted under the Option Plan may not
exceed ten years and the term of all incentive stock options may not exceed
five years. The Option Plan may be amended or terminated by the Board of
Directors, but no such action may impair the rights of a participant under a
previously granted option.
The Option Plan provides the Board of Directors or the Compensation
Committee the discretion to determine when options granted thereunder shall
become exercisable and the vesting period of such options. Upon termination of
a participant's employment or consulting relationship with the Company, all
unvested options terminate and are no longer exercisable. Vested options shall
remain exercisable for a specified period of time following the termination
date. The length of such extended exercise period generally ranges from 60
days to one year, depending on the nature and circumstances of the termination.
The Option Plan provides that, in the event the Company enters into an
agreement providing for the merger of the Company into another corporation or
the sale of substantially all of the Company's assets, any outstanding
unexercised option shall become exercisable at any time prior to the effective
date of such agreement. Upon the consummation of the merger or sale of assets,
such options shall terminate unless they are assumed or another option is
substituted therefor by the successor corporation.
The Option Plan provides the Board of Directors or the Compensation
Committee discretion to grant SARs in connection with any grant of options.
Upon the exercise of a SAR, the holder shall be entitled to receive a cash
payment in an amount equal to the difference between the exercise price per
share of options then exercised by him and the fair market value of the Common
Stock as of the exercise date. The holder is required to exercise options
covering twice the number of shares which are subject to the SAR so exercised.
SARs are not exercisable during the first six months after the date of grant,
and may be transferred only by will or the laws of descent and distribution.
-7-
<PAGE> 10
As of June 30, 1996, a total of 399,500 nonqualified and Incentive
Stock Options were outstanding, each with an exercise price of $5.25 (except in
the case of Dr. Angle, whose exercise price is $5.78). Also as of June 30,
1996, there were no SARs outstanding. All such options vest over a period of
18 months commencing generally two to six months from the date of grant.
SUMMARY OF AMENDMENTS
The Board of Directors proposes to amend the Plan by making an
additional 600,000 shares of Common Stock available for grant. Assuming
adoption of the amendment, a total of 1,040,875 shares of Common Stock would be
available under the Plan.
The Board of Directors also proposes that the Plan be amended and
restated in response to certain changes made to Rule 16b-3 ("Rule 16b-3") of
the Securities Exchange Act of 1934, as amended. The changes to Rule 16b-3
were announced by the Securities and Exchange Commission in May 1996, and
became effective as of November 1, 1996. The changes to Rule 16b-3 are
designed to simplify administration of stock option plans. Consistent with the
changes to Rule 16b-3, the proposed amendment provides for the following:
(i) The Compensation Committee may consist of two or more members
rather than three or more members, as currently required.
Members of the Compensation Committee are eligible to receive
options or other awards granted under the Plan;
(ii) Options or other awards granted under the Plan to persons
subject to Section 16(b) will be subject to a six-month
holding period only if the Committee does not approve such
grant in advance; and
(iii) The Plan may be amended by the Board of Directors from time to
time without shareholder approval; provided, however, that
certain material changes to the Plan specified in Rule 16b-3
will continue to require shareholder approval.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
SHAREHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO AND RESTATEMENT OF THE 1995
OMNIBUS STOCK OPTION PLAN TO PERMIT THE ISSUANCE OF AN ADDITIONAL 600,000
SHARES PURSUANT TO THE PLAN, AND TO SIMPLIFY ADMINISTRATION OF THE PLAN IN THE
MANNER DESCRIBED ABOVE.
III. SELECTION OF AUDITORS
The firm of Ehrhardt Keefe Steiner & Hottman P.C. has examined the
financial statements of the Company for the period from July 1, 1993 to June
30, 1996. Subject to shareholder approval, Ehrhardt Keefe Steiner & Hottman
P.C. has been re-appointed by the Board of Directors to serve as the Company's
independent auditors for the ensuing fiscal year. Representatives of Ehrhardt
Keefe Steiner & Hottman P.C. are expected to be present at the Annual Meeting
with the opportunity to make a statement if it is their desire to do so, and
will be available to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF EHRHARDT
KEEFE STEINER & HOTTMAN P.C. AS INDEPENDENT AUDITORS FOR THE COMPANY.
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<PAGE> 11
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten
percent of the Company's Common Stock are required to report their initial
ownership of the Company's Common Stock and any subsequent changes in that
ownership to the Securities and Exchange Commission, The Nasdaq Stock Market,
Inc. and the Company. Specific due dates for these reports have been
established and the Company is required to disclose in this proxy statement any
failure to file, or late filing, of such reports. Based solely on the
Company's review of Forms 3, 4 and 5 and amendments thereto furnished to the
Company and written representations with respect to filing of such Forms, the
Company is not aware of any failure to file, or late filing, of any such
reports due through the most recent fiscal year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the transactions described below, the Company did
not secure an independent determination of the fairness and reasonableness of
such transactions and arrangements with affiliates of the Company. However, in
each instance described below, the disinterested directors reviewed and
unanimously approved the fairness and reasonableness of the terms of the
transactions. The Company believes that the transactions described below were
fair and reasonable to the Company on the basis that such transactions were on
terms at least as favorable as could have been obtained from unaffiliated third
parties. The transactions between officers and directors of the Company, on
the one hand, and the Company, on the other, have inherent conflicts of
interest.
Prior to their acquisition by the Company, all of the outstanding
shares of capital stock of EOPS were owned equally by Donald F. Angle, M.D.,
Chairman of the Board and President, Jan Kohout, M.D., then a director and
stockholder of the Company, and Dennis M. Sullivan, M.D., a stockholder of the
Company. Pursuant to the terms of an Exchange Agreement (the "EOPS Exchange
Agreement") entered into in July 1992 by and among the Company, Dr. Angle, EOPS
and Drs. Kohout and Sullivan, each of the latter two individuals exchanged all
of the shares of EOPS held by him for (i) 67,827 shares of Common Stock of the
Company, (ii) the right to payment to him of an aggregate of $80,000,
constituting the payment of $48,000 of outstanding indebtedness from EOPS and a
bonus of $32,000, (iii) the right to a grant (the "Contingent Stock Grant") of
4,239 shares of Common Stock of the Company each time a new facility is opened
by the Company in Dallas/Fort Worth metroplex, and (iv) the right to 2.5% of
gross revenues from facility services rendered in all Dallas/Fort Worth
metroplex Company facilities or $8,000 per month, whichever is greater (the
"Contingent Revenue Payment"). The right to Contingent Stock Grants will
terminate by its terms on the date of this Prospectus. The right to Contingent
Revenue Payments payable to Drs. Kohout and Sullivan ceased in August 1994 and
March 1995, respectively, pursuant to the terms of the EOPS Exchange Agreement.
The Company paid Drs. Kohout and Sullivan the Contingent Revenue Payment due in
the amount of $60,000 in the 1996 fiscal year, and has issued 16,957 shares of
Common Stock required to satisfy the Contingent Stock Grants.
Dale W. Willetts, a director and stockholder of the Company, has
assisted the Company in procuring lease financing to obtain medical equipment
and has received commissions from providers of capital leasing funds as
compensation for these services. Mr. Willetts will continue to offer similar
services to the Company and its subsidiaries in the future and will receive
commissions from providers of such funding in the amount of between 5% and 10%
of the amount of each transaction. The Company believes that the compensation
received by Mr. Willetts in these lease transactions is comparable to that
which would be paid by the providers of such funding to unaffiliated third
parties.
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John P. Kennedy, a director and stockholder of the Company, entered
into a consulting agreement with EOPS in March 1992, which agreement was
subsequently assumed by the Company, pursuant to which Mr. Kennedy provided
investment banking services to the Company for a three year term. Under the
consulting agreement, Mr. Kennedy was entitled to receive $14,000 upon
completion of a private offering for four months of consulting services
rendered prior to that time and was to receive $3,500 per month through
November 1995, the termination date of the consulting agreement pursuant to its
terms. Through February 1996, Mr. Kennedy was owed $84,500 in consulting fees
which were paid in the year ended June 30, 1996.
In March 1992, Messrs. Kennedy and Willetts entered into an agreement,
as amended (the "Capital Agreement") with EOPS, pursuant to which they were
required to assist the Company in raising equity capital in a 1992 private
offering, which was concluded in July 1993. Pursuant to the terms of the
Capital Agreement, Messrs. Kennedy and Willetts purchased an aggregate of
355,074 shares of Common Stock and were granted certain anti-dilution rights.
In November 1995, the Company and Messrs. Kennedy and Willetts executed an
amendment to the Capital Agreement pursuant to which each of Messrs. Kennedy
and Willetts agreed to the issuance of 53,356 shares of Common Stock of the
Company (or an aggregate of 106,712 shares of Common Stock) as a full
satisfaction of the shares of Common Stock issuable to such persons pursuant to
the terms of the anti-dilution provisions of the Capital Agreement.
All of the physicians working at facilities owned and managed by the
Company are independent contractors of The Physician Group, a Texas
professional association. Dr. Angle is the sole stockholder of The Physician
Group. The Physician Group has independent contractor physician agreements in
effect for every physician working in a Company facility. Although The
Physician Group has not received any notice from the Internal Revenue Service
which questions the characterization of physicians affiliated with The
Physician Group as independent contractors, The Physician Group voluntarily
changed the status of such physicians from independent contractors to employees
effective January 1, 1996. Prior to the execution of the Practice Management
Agreement (the "Practice Management Agreement"), the Company compensated The
Physician Group for the services of the physician independent contractors
pursuant to an oral agreement. In November 1995, the Company entered into the
Practice Management Agreement with The Physician Group, the terms of which are
substantially identical to the terms of the oral agreement under which the
Company and The Physician Group previously operated.
In July 1991, the Company entered into a lease agreement with Rockford
Industries for the lease of certain office, computer and medical equipment.
Dr. Angle personally guaranteed the equipment lease and, upon its modification
in January 1995, again guaranteed the lease agreement as modified. Dr. Angle
received no compensation from the Company for providing such guarantees.
In September 1995, the Company entered into a loan agreement with
Regions Bank of Louisiana, for borrowings in the amount of $53,000. This loan
accrued interest at the Regions Bank of Louisiana prime rate, and required
payment of principal and interest in six months. This loan was secured by
certificates of deposit pledged by all of the directors of the Company and the
personal guarantee of Dr. Angle. Dr. Angle was not compensated by the Company
for providing such guarantee. The loan was repaid in November 1995.
Subsequent to September 30, 1995, Dr. Angle was indebted to the Company
in the amount of approximately $15,000. This indebtedness represents amounts
advanced in the normal course of business for travel and related costs. The
indebtedness is evidenced by an unsecured non-interest bearing promissory note
due on demand.
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The Company has adopted a policy that future transactions between the
Company and its officers, directors and 5% or more stockholders are subject to
approval by a majority of the disinterested directors of the Company. Any such
transactions will be on terms believed to be no less favorable than could be
obtained from unaffiliated parties.
ANNUAL REPORT
The Annual Report to Shareholders for the fiscal year ended June 30,
1996 is being sent to all shareholders with this Proxy Statement. The Annual
Report to Shareholders does not form any part of the material for the
solicitation of any Proxy.
A COPY OF THE ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED JUNE 30, 1996 AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT EXHIBITS, IS
AVAILABLE WITHOUT CHARGE TO ANY SHAREHOLDER OF THE COMPANY UPON WRITTEN REQUEST
TO THE SECRETARY, THE COMPANY DOCTOR, 5215 NORTH O'CONNOR BOULEVARD, IRVING,
TEXAS 75039.
SHAREHOLDER PROPOSALS
Shareholders who intend to submit proposals for inclusion in the Proxy
Statement relating to the year ending June 30, 1997 must do so by sending the
proposal and supporting statements, if any, to the Company no later than July
1, 1997. Such proposals should be sent to the attention of the Corporate
Secretary, The Company Doctor, 5215 North O'Connor Boulevard, Irving, Texas
75039.
OTHER MATTERS
Except for the matters described herein, management does not intend to
present any matter for action at the Annual Meeting and knows of no matter to
be presented at such meeting that is a proper subject for action by the
shareholders. However, if any other matters should properly come before the
Annual Meeting, it is intended that votes will be cast pursuant to the
authority granted by the enclosed Proxy in accordance with the best judgment of
the person or person acting under the Proxy.
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EXHIBIT A
THE COMPANY DOCTOR
AMENDED AND RESTATED
OMNIBUS STOCK PLAN OF 1995
1. PURPOSE
The purpose of this Plan is to promote the interest of the Corporation and
its shareholders and the Corporation's success by providing a method whereby a
variety of equity-based incentive and other Awards may be granted to Employees
and Directors of the Corporation and its Subsidiaries and to selected
Consultants who, in the course of their business activities, direct a
significant amount of business to the Corporation.
2. DEFINITIONS
A. "AWARD" means any form of stock option, restricted stock,
Performance Unit, Performance Share, stock appreciation right, dividend
equivalent or other incentive award granted under the Plan.
B. "AWARD NOTICE" means any written notice from the Corporation to a
Participant or agreement between the Corporation and a Participant that
establishes the terms applicable to an Award.
C. "BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
D. "CODE" means the Internal Revenue Code of 1986, as amended.
E. "COMMITTEE" means the Compensation Committee of the Board of
Directors, or such other committee designated by the Board of Directors, which
is authorized to administer the Plan under Section 3 hereof. The number of
persons who shall serve on the Committee shall be specified from time to time
by the Board of Directors; however, in no event shall there be fewer than three
members of the Committee. The Committee will be composed in a manner such that
the Plan will qualify under Rule 16b-3 with regard to Awards to persons who are
subject to Section 16 of the Exchange Act. If at any time the Committee has
fewer than two members or the Committee otherwise ceases to exist, then the
Plan shall be administered by the Board of Directors, and all references herein
to the Committee shall refer to the Board of Directors. If at any time the
Committee has fewer than two members or the Committee otherwise ceases to
exist, then the Plan shall be administered by the Board of Directors, and all
references herein to the Committee shall refer to the Board of Directors.
F. "COMMON STOCK" means Common Shares of the Corporation, $.01 par
value.
G. "CONSULTANT" means any individual who renders services directly to
the Corporation or to the Corporation's customers as defined and designated
from time to time by the Committee.
H. "CORPORATION" means The Company Doctor.
I. "DIRECTOR" means a member of the Board of Directors.
J. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
<PAGE> 15
K. "FAIR MARKET VALUE" means, on any date, the average of the high and
low sales prices of the Common Stock on the principal national securities
exchange, which includes the National Association of Securities Dealers
Automated Quotation System (NASDAQ), on which such Common Stock is listed or
admitted to trading or if not traded on that date, then on the date last
traded; or if such Common Stock is not so listed or admitted to trading, the
arithmetic mean of the per share closing bid price and per share closing asked
price on such date as quoted on any other system of NASDAQ or such other market
in which such prices are regularly quoted; or if there have been no published
bid or asked quotations, the Committee shall, in good faith and in accordance
with Section 422 of the Code, establish the method for determining the Fair
Market Value of the Common Stock.
L. "EMPLOYEE" means any employee of the Corporation or a Subsidiary
whose performance the Committee determines can have a significant effect on the
success of the Corporation.
M. "PARTICIPANT" means any individual to whom an Award is granted under
the Plan.
N. "PERFORMANCE SHARE" means a Unit expressed in terms of, or valued by
reference to, a share of Common Stock.
O. "PERFORMANCE UNIT" means a Unit valued by reference to designated
criteria established by the Committee, other than Common Stock.
P. "PLAN" means this Plan, which shall be known as The Company Doctor
1995 Omnibus Stock Plan.
Q. "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange Act, as
amended effective November 1, 1996, or any successor rule.
R. "SUBSIDIARY" means a corporation or other business entity (i) of
which the Corporation directly or indirectly has an ownership interest of 50%
or more, or (ii) of which it has a right to elect or appoint 50% or more of the
board of directors or other governing body.
S. "UNIT" means a bookkeeping entry used by the Corporation to record
the grant of an Award until such time as the Award is paid, cancelled,
forfeited or terminated.
3. ADMINISTRATION
A. The Plan shall be administered by the Committee. The Committee
shall have the authority to:
(i) construe and interpret the Plan;
(ii) promulgate, amend and rescind rules relating to the
implementation of the Plan;
(iii) make all determinations necessary or advisable for the
administration of the Plan, including the selection of
employees and affiliated individuals who shall be granted
Awards, the number of shares of Common Stock or Units to be
subject to each Award, the Award price, if any, the vesting
or duration of Awards, and the designation of stock options
as incentive stock options or non-qualified stock options;
(iv) determine the disposition of Awards in the event of a
Participant's divorce or dissolution of marriage;
<PAGE> 16
(v) determine whether Awards will be granted alone or in
combination or in tandem with other Awards;
(vi) determine whether cash will be paid or Awards will be granted
in replacement of, or as alternatives to, other grants under
the Plan or any other incentive or compensation plan of the
Corporation, a Subsidiary or an acquired business unit; and
(vii) approve in advance each particular Award to be granted
hereunder in a manner which will cause the Award to be exempt
from Section 16(b) of the Exchange Act by virtue of Rule 16b-3.
B. Subject to the requirements of applicable law, the Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan, any Award, or any Award Notice; take any and all other actions it deems
necessary or advisable for the proper administration of the Plan; designate
persons other than members of the Committee to carry out its responsibilities;
and prescribe such conditions and limitations as it may deem appropriate;
except that the Committee may not delegate its authority with regard to the
selection for participation of, or the granting of Awards to, persons under
Section 16 of the Exchange Act. Any determination, decision, or action of the
Committee in connection with the construction, interpretation, administration,
or application of the Plan shall be final, conclusive and binding upon all
persons validly claiming under or through persons participating in the Plan.
C. The Committee may at any time, and from time to time amend or cancel
any outstanding Award, but only with the consent of the person to whom the
Award was granted.
4. ELIGIBILITY
A. Any Employee is eligible to become a Participant in the Plan.
B. Directors who are not Employees of the Corporation or a Subsidiary
shall receive Awards in accordance with Section 7.
C. Consultants who are not Directors of the Corporation shall be
eligible to receive Awards in accordance with Section 8.
5. SHARES AVAILABLE
A. Subject to Section 16 of the Plan, the maximum number of shares of
Common Stock available for Award grants (including incentive stock options)
shall be 1,040,875. Notwithstanding the foregoing sentence, the maximum number
of shares of Common Stock that may be awarded under this Plan in the form of
restricted stock awards pursuant to Section 10 may be limited by the Committee.
6. TERM
The Plan shall become effective on January 1, 1995, subject to the
approval of the Plan by the Corporation's stockholders not later than the 1995
annual meeting of shareholders, and shall continue in effect until December 31,
2004.
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7. AWARDS TO NON-EMPLOYEE DIRECTORS
Options granted to Directors who are not Employees of the Corporation or a
Subsidiary shall be subject to the following terms:
(i) The exercise price shall be equal to 100% of the Fair Market
Value of the underlying Shares of Common Stock on the date of
the grant, payable in accordance with the alternatives stated
in Section 9.B.(ii) of the Plan;
(ii) The term of the options shall be ten (10) years;
(iii) The options shall be exercisable beginning six months
after the date of the grant; and
(iv) The options shall be subject to Section 14 of the Plan.
8. AWARDS TO CONSULTANTS
Consultants shall receive Awards in accordance with the following terms:
A. No Awards of incentive stock options shall be made to Consultants.
B. Awards of non-qualified stock options to such Consultants shall be
subject to the following terms:
(i) The exercise price shall be not less than 85% of the Fair
Market Value of the underlying shares of Common Stock on the
date of the grant, payable in accordance with the
alternatives stated in Sections 9.B(ii) and (iii) of the Plan;
(ii) The term of the options shall be ten (10) years;
(iii) The options shall be exercisable beginning six months
after the date of the grant; and
(iv) The options shall be subject to Section 14 of the Plan.
9. STOCK OPTIONS
A. Awards may be granted in the form of stock options. Stock options
may be incentive stock options within the meaning of Section 422A of the Code
or non-qualified stock options (i.e., stock options which are not incentive
stock options).
B. Subject to Section 9.C. relating to incentive stock options, options
shall be in such form and contain such terms as the Committee deems
appropriate. While the terms of options need not be identical, each option
shall be subject to the following terms:
(i) The exercise price shall be the price set by the Committee but
may not be less than 85% of the Fair Market Value of the
underlying shares of Common Stock on the date of the grant.
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<PAGE> 18
(ii) The exercise price shall be paid in cash (including check,
bank draft, or money order), or at the discretion of the
Committee, all or part of the purchase price may be paid by
delivery of the optionee's full recourse promissory note,
delivery of Common Stock already owned by the Participant for
at least six (6) months and valued at its Fair Market Value,
or any combination of the foregoing methods of payment. In
the case of incentive stock options, the terms of payment
shall be determined at the time of grant.
(iii) Promissory notes given as payment of the exercise price, if
permitted by the Committee, shall contain such terms as set by
the Committee which are not inconsistent with the following:
the unpaid principal shall bear interest at a rate set from
time to time by the Committee; payments of principal and
interest shall be made no less frequently than annually; no
part of the note shall be payable later than ten (10) years
from the date of purchase of the underlying shares of Common
Stock; and the optionee shall give such security as the
Committee deems necessary to ensure full payment.
(iv) The term of an option may not be greater than ten (10) years
from the date of the grant.
(v) Neither a person to whom an option is granted nor such
person's legal representative, heir, legatee or distributee
shall be deemed to be the holder of, or to have any of the
rights of a holder or owner with respect to, any shares of
Common Stock subject to such option unless and until such
person has exercised the option.
C. The following special terms shall apply to grants of incentive stock
options:
(i) Subject to Section 9.C.(iii) of the Plan, the exercise price
of each incentive stock option shall not be less than 100% of
the Fair Market Value of the underlying shares of Common Stock
on the date of the grant.
(ii) No incentive stock option shall be granted to any Employee who
directly or indirectly owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Corporation, unless at the time of such grant the exercise
price of the option is at least 110% of the Fair Market Value
of the underlying shares of Common Stock subject to the option
and such option is not exercisable after the expiration of
five (5) years from the date of the grant.
(iii) No incentive stock option shall be granted to a person in his
capacity as a Employee of a Subsidiary if the Corporation has
less than a 50% ownership interest in such Subsidiary.
(iv) Options shall contain such other terms as may be necessary to
qualify the options granted therein as incentive stock options
pursuant to Section 422A of the Code, or any successor
statute.
10. RESTRICTED STOCK
A. Awards may be granted in the form of restricted stock.
B. Grants of restricted stock shall be awarded in exchange for
consideration in an amount determined by the Committee. The price, if any, of
such restricted stock shall be paid in cash, or at the discretion of the
Committee, all or part of the purchase price may be paid by delivery of the
Participant's full recourse promissory note, delivery of Common Stock already
owned by the Participant for at least
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<PAGE> 19
six (6) months and valued at its Fair Market Value, or any combination of the
foregoing methods of payment, provided no less than the par value of the stock
is paid in cash, and the Participant has rendered no less than three (3) months
prior service to the Corporation.
C. Restricted stock awards shall be subject to such restrictions as the
Committee may impose and may include, if the Committee shall so determine,
restrictions on transferability and restrictions relating to continued
employment.
D. The Committee shall have the discretion to grant to a Participant
receiving restricted shares all or any of the rights of a shareholder while
such shares continue to be subject to restrictions.
11. PERFORMANCE UNITS AND PERFORMANCE SHARES
A. Awards may be granted in the form of Performance Units or
Performance Shares. Awards of Performance Units and Performance Shares shall
refer to a commitment by the Corporation to make a distribution to the
Participant or to his beneficiary depending on (i) the attainment of the
performance objective(s) and other conditions established by the Committee and
(ii) the base value of the Performance Unit or Performance Shares,
respectively, as established by the Committee.
B. Settlement of Performance Units and Performance Shares may be in
cash, in shares of Common Stock, or a combination thereof. The Committee may
designate a method of converting Performance Units into Common Stock,
including, but not limited to, a method based on the Fair Market Value of
Common Stock over a series of consecutive trading days.
C. Participants shall not be entitled to exercise any voting rights
with respect to Performance Units or Performance Shares, but the Committee in
its sole discretion may attach dividend equivalents to such Awards.
12. STOCK APPRECIATION RIGHTS
A. Awards may be granted in the form of stock appreciation rights.
Stock appreciation rights may be awarded in tandem with a stock option, in
addition to a stock option, or may be free-standing and unrelated to a stock
option.
B. A stock appreciation right entitles the Participant to receive from
the Corporation an amount equal to the positive difference between (i) the Fair
Market Value of Common Stock on the date of exercise of the stock appreciation
right and (ii) the grant price or some other amount as the Committee may
determine at the time of grant.
C. With respect to persons subject to Section 16 of the Exchange Act, a
stock appreciation right may only be exercised during a period which (i) begins
on the third business day following a date when the Corporation's quarterly
summary statement of sales and earnings is released to the public and (ii) ends
on the 12th business day following such date. This Section 12.C shall not
apply if the exercise occurs automatically on the date when a related stock
option expires.
D. Settlement of stock appreciation rights may be in cash, in shares of
Common Stock, or a combination thereof, as determined by the Committee.
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<PAGE> 20
13. DEFERRAL OF AWARDS
At the discretion of the Committee, payment of an Award, dividend
equivalent, or any portion thereof may be deferred until a time established by
the Committee. Deferrals shall be made in accordance with guidelines
established by the Committee to ensure that such deferrals comply with
applicable requirements of the Code and its regulations. Deferrals shall be
initiated by the delivery of a written, irrevocable election by the participant
to the Committee or its nominee. Such election shall be made prior to the date
specified by the Committee. The Committee may also (A) credit interest
equivalents on cash payments that are deferred and set the rates of such
interest equivalents and (B) credit dividends equivalents on deferred payments
denominated in the form of shares of Common Stock.
14. EXERCISE OF STOCK OPTIONS UPON TERMINATION OF EMPLOYMENT OR SERVICES.
A. Options granted under Section 7 and 9 shall be exercisable upon the
Participant's (i.e., Non-Employee Directors or Employees) termination of
service within the following periods only. The definition of termination of
service applicable to Consultants shall be defined and determined by the
Committee in its sole discretion. Subject to Section 22, stock options granted
to other Participants may permit the exercise of options upon the Participant's
termination of employment within the following periods, or such shorter periods
as determined by the Committee at the time of grant:
(i) If on account of death, within twelve (12) months of such
event by the person or persons to whom the Participant's
rights pass by will or the laws of descent or distribution.
(ii) If on account of retirement (as defined from time to time by
Corporation policy), stock options may be exercised within 3
months of such termination.
(iii) If on account of resignation, options may be exercised within
one (1) month of such termination.
(iv) If for cause (as defined from time to time by Corporation
policy), no unexercised option shall be exercisable to any
extent after termination.
(v) If on account of disability or leave of absence for the
purpose of servicing the government or the country in which
the principal place of employment of the Participant is
located, either in a military or a civilian capacity, or for
such other purpose or reason as the Committee may approve, a
Participant shall not be deemed during the period of any such
absence alone, to have terminated his service, except as the
Committee may otherwise expressly provide.
(vi) If for any reason other than death, retirement, resignation,
cause, or disability, options may be exercised within three
(3) months of such termination.
B. An unexercised option shall be exercisable only to the extent that
such option was exercisable on the date the Participant's employment or service
terminated. Notwithstanding the foregoing, and except as provided in Section
14.A. above, terms relating to the exerciseability of options may be amended by
the Committee before or after such termination, except in respect to options
granted under Section 7.
C. In no case may an unexercised option be exercised to any extent by
anyone after expiration of its term.
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15. NONASSIGNABILITY
The rights of a Participant under the Plan shall not be assignable by such
Participant, by operation of law or otherwise, except by will or the laws of
descent and distribution. During the lifetime of the person to whom a stock
option or similar right (including a stock appreciation right) is granted, such
person alone may exercise it. No Participant may create a lien on any funds,
securities, rights or other property to which such Participant may have an
interest under the Plan, or which is held by the Corporation for the account of
the Participant under the Plan.
16. ADJUSTMENT OF SHARES AVAILABLE
The Committee shall make appropriate and equitable adjustments in the
shares of Common Stock available for future Awards and the number of shares of
Common Stock covered by unexercised, unvested or unpaid Awards upon the
subdivision of the outstanding shares of Common Stock; the declaration of a
dividend payable in Common Stock; the declaration of a dividend payable in a
form other than Common Stock in an amount that has a material effect on the
price of the shares of Common Stock; the combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
lesser number of shares of Common Stock; a recapitalization; or a similar
event.
17. PAYMENT OF WITHHOLDING TAXES
As a condition to receiving or exercising an Award, as the case may be,
the Participant shall pay to the Corporation or the employer Subsidiary the
amount of all applicable Federal, state, local and foreign taxes required by
law to be paid or withheld relating to receipt or exercise of the Award.
Alternatively, the Corporation may withhold shares of Common Stock with an
aggregate Fair Market Value equal to such withholding taxes, from any Award in
shares of Common Stock, to the extent the withholding is required by law. The
Corporation also may deduct such withholding taxes from any Award paid in cash.
18. AMENDMENTS
The Board of Directors shall have the authority to amend the Plan from
time to time without Shareholder approval, provided however, that the adoption
of any such amendment shall be permitted by Rule 16b-3. Rights and obligations
under any Award granted before any amendment of the Plan shall not be
materially altered or impaired adversely by such amendment, except with consent
of the person to whom the Award was granted.
19. REGULATORY APPROVALS AND LISTINGS
Notwithstanding any other provision in the Plan, the Corporation shall
have no obligation to issue or deliver certificates for shares of Common Stock
under the Plan prior to (A) obtaining approval from any governmental agency
which the Corporation determines is necessary or advisable, (B) admission of
such shares to listing on the stock exchange on which the Common Stock may be
listed, and (C) completion of any registration or other qualification of such
shares under any state or Federal law or ruling of any governmental body which
the Corporation determines to be necessary or advisable.
20. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS
Participation in the Plan shall not give any Employee any right to remain
in the employ of the Corporation or any Subsidiary. Further, the adoption of
this Plan shall not be deemed to give any Employee or other individual the
right to be selected as a Participant or to be granted an Award.
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<PAGE> 22
21. NO RIGHT, TITLE, OR INTEREST IN CORPORATION ASSETS
No Participant shall have any rights as a shareholder of the Corporation
until he acquires an unconditional right under an Award to have shares of
Common Stock issued to him. To the extent any person acquires a right to
receive payments from the Corporation under this Plan, such rights shall be no
greater than the rights of an unsecured creditor of the Corporation.
22. SPECIAL PROVISION PERTAINING TO PERSONS SUBJECT TO SECTION 16
A. Notwithstanding any other item of this Plan, the following shall
apply to persons subject to Section 16 of the Exchange Act who receive an Award
prior to January 30, 1997, except in the case of death or disability:
(i) Restricted stock or other equity securities (within the
meaning used in Rule 16b-3 of the Exchange Act or any
successor rule) offered pursuant to this Plan must be held for
at least six (6) months from the date of grant; and
(ii) At least six (6) months must elapse from the date of
acquisition of any stock option, Performance Unit, Performance
Share, stock appreciation right or other derivative security
(within the meaning used in Rule 16b-3 of the Exchange Act or
any successor rule) issued pursuant to the Plan to the date of
disposition of such derivative security (other than upon
exercise or conversion) or its underlying equity security.
B. The restrictions contained in paragraphs A(i) and (ii) of this
Section 22 shall also apply to any Award made on or after January 30, 1997, to
a person subject to Section 16 of the Exchange Act without the advance
approval of the Committee in the manner described in paragraph 3A(vii) above.
Such restrictions shall be applied and construed in a manner which will cause
the Award to be exempt from Section 16(b) of the Exchange Act by virtue of Rule
16b-3.
23. INDEMNIFICATION
In addition to such other rights of indemnification as they may have as
Directors, the members of the Board of Directors or the Committee administering
the Plan shall be indemnified by the Corporation against reasonable expenses,
including attorneys' fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such member is liable for
negligence or misconduct in the performance of his duties; provided that within
60 days after institution of any such action, suit or proceeding, the member
shall in writing offer the Corporation the opportunity, at its own expense, to
handle and defend the same.
24. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the laws of
the State of Texas.
-9-
<PAGE> 23
THE COMPANY DOCTOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 30, 1997
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of
The Company Doctor (the "Company") hereby constitutes and appoints Donald F.
Angle, M.D., as attorney and proxy, with the power to appoint his substitute,
and hereby authorizes him to represent and vote, as designated below, all of
the shares of Common Stock of the Company which the undersigned is entitled to
vote at the Annual Meeting of Shareholders of the Company to be held January
30, 1997, and at any and all adjournments thereof with respect to the matters
set forth below and described in the Notice of Annual Meeting of Shareholders
and Proxy Statement dated December 9, 1996, receipt of which is
acknowledged.
1. TO CONSIDER AND ACT UPON A PROPOSAL TO ELECT MESSRS. DONALD F. ANGLE,
M.D., CARL S. LUIKART, M.D., THOMAS J. EDWARDS, JOHN P. KENNEDY, DALE
W. WILLETTS, W. HOWARD HAUN AND STEPHEN W. CAVANAUGH AS DIRECTORS TO
HOLD OFFICE FOR ONE-YEAR TERMS OR UNTIL THEIR SUCCESSORS ARE ELECTED
AND QUALIFIED.
[ ] FOR ELECTION OF ALL NOMINEES
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
[ ] TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THE NOMINEE'S NAME BELOW (FOR ELECTION OF
NOMINEES WHOSE NAMES ARE NOT STRUCK THROUGH:
DONALD F. ANGLE, M.D.
CARL S. LUIKART, M.D.
THOMAS J. EDWARDS
JOHN P. KENNEDY
DALE W. WILLETTS
W. HOWARD HAUN
STEPHEN W. CAVANAUGH
2. TO CONSIDER AND ACT UPON A PROPOSAL TO APPROVE AMENDMENTS TO, AND A
RESTATEMENT OF, THE COMPANY'S 1995 OMNIBUS STOCK OPTION PLAN TO (I)
PERMIT THE ISSUANCE OF AN ADDITIONAL 600,000 SHARES OF COMMON STOCK
PURSUANT TO THE PLAN, AND (II) TO SIMPLIFY ADMINISTRATION OF THE PLAN
IN ACCORDANCE WITH REVISIONS TO SECTION 16 OF THE SECURITIES EXCHANGE
ACT OF 1934.
[ ] FOR PROPOSAL
[ ] AGAINST PROPOSAL
[ ] ABSTAIN
3. TO RATIFY THE APPOINTMENT OF EHRHARDT KEEFE STEINER & HOTTMAN P.C. AS
AUDITORS OF THE COMPANY.
[ ] FOR RATIFICATION
[ ] AGAINST RATIFICATION
[ ] ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY AND ALL
ADJOURNMENTS THEREOF.
[ ] AUTHORIZED TO VOTE
[ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED AND FOR PROPOSALS 2 AND 3 AND THE
PROXY HOLDERS WILL VOTE ON ANY PROPOSAL UNDER 4 IN THEIR DISCRETION AND IN
THEIR BEST JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock
certificate. 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:
------------------- --------------------------------------------
Signature
Dated:
------------------- --------------------------------------------
Signature if held jointly
If this Proxy is not dated, the Proxy will be deemed to bear the date the
form was mailed to the shareholder.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING BUT WOULD LIKE TO VOTE, YOU MAY
MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY TO THE COMPANY'S TRANSFER
AGENT, CONTINENTAL STOCK TRANSFER & TRUST COMPANY AT 2 BROADWAY, 19TH FLOOR,
NEW YORK, NEW YORK 10004.
