<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:
/ / 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
Coram Healthcare Corporation
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[LETTERHEAD]
Donald J. Amaral
Chief Executive Officer and President
November 13, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Coram Healthcare Corporation (the "Company"), which will be held on Monday,
December 11, 1995 at 9:00 a.m. local time, at The Westin Hotel, 1672 Lawrence
Street, Denver, Colorado. In addition to the matters to be acted upon at the
meeting, which are described in detail in the attached Notice of Annual Meeting
of Stockholders and Proxy Statement, there will be a report to the stockholders
on the operations of the Company. I hope that you will be able to attend.
Whether or not you plan to be at the meeting, please be sure to complete,
date, sign and return the proxy card enclosed with this Proxy Statement as
promptly as possible so that your shares may be voted in accordance with your
wishes. Your vote, whether given by proxy or in person at the meeting, will be
held in confidence by the Inspector of Election for the meeting.
Sincerely,
/s/ DONALD J. AMARAL
------------------------------
DONALD J. AMARAL
Chief Executive Officer and
President
<PAGE> 3
CORAM HEALTHCARE CORPORATION
1125 SEVENTEENTH STREET, SUITE 1500
DENVER, COLORADO 80202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 11, 1995
To the Stockholders of Coram Healthcare Corporation:
NOTICE IS HEREBY GIVEN that the 1995 Annual Meeting of Stockholders (the
"Meeting") of Coram Healthcare Corporation, a Delaware corporation ("Coram" or
the "Company"), will be held on Monday, December 11, 1995, at 9:00 a.m. local
time, at The Westin Hotel, 1672 Lawrence Street, Denver, Colorado, for the
following purposes:
(1) To elect eight directors to serve until the 1996 Annual Meeting of
Stockholders and until their successors are duly elected and qualified;
(2) To ratify the appointment of Ernst & Young LLP, as the independent
auditors of the Company for the Company's 1995 fiscal year; and
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
These matters are more fully described in the accompanying Proxy Statement.
The Board of Directors of the Company has fixed the close of business on
November 6, 1995, as the record date (the "Record Date") for the determination
of stockholders entitled to notice of, and to vote at, the Meeting. Only holders
of the Company's common stock, $.001 par value per share, at the close of
business on the Record Date are entitled to notice of, and to vote at, the
Meeting. A complete list of stockholders entitled to vote at the Meeting will be
available for examination during normal business hours by any stockholder, for
purposes related to the Meeting, for a period of ten days prior to the Meeting,
at the Company's corporate offices located at 1125 Seventeenth Street, Suite
1500, Denver, Colorado 80202.
You are cordially invited to attend the Meeting. Whether or not you plan to
attend the Meeting in person, please complete, date and sign the accompanying
proxy card and return it promptly in the enclosed envelope to ensure that your
shares are represented and voted in accordance with your wishes. If you choose,
you may still vote in person at the Meeting even though you previously submitted
your proxy. You may revoke your proxy by following the procedures set forth in
the accompanying Proxy Statement.
By order of the Board of Directors
/s/ RICHARD M. SMITH
-----------------------------------
Richard M. Smith, Secretary
Denver, Colorado
November 13, 1995
<PAGE> 4
CORAM HEALTHCARE CORPORATION
1125 SEVENTEENTH STREET, SUITE 1500
DENVER, COLORADO 80202
---------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 11, 1995
---------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy card are being furnished in
connection with the solicitation of proxies by and on behalf of the Board of
Directors (the "Board of Directors") of Coram Healthcare Corporation, a Delaware
corporation ("Coram" or the "Company"), to be used at the 1995 Annual Meeting of
Stockholders of the Company to be held on Monday, December 11, 1995, at 9:00
a.m., local time, at The Westin Hotel, 1672 Lawrence Street, Denver, Colorado,
and at any adjournment or postponement thereof (the "Meeting"). This Proxy
Statement and the accompanying proxy card are first being mailed to the holders
of the Company's common stock, $.001 par value per share (the "Common Stock"),
on or about November 13, 1995. The Company's Annual Report to Stockholders,
which includes financial statements for the fiscal year ended December 31, 1994,
is being concurrently mailed or delivered with this Proxy Statement to
stockholders entitled to vote at the Meeting. The Annual Report is not to be
regarded as proxy solicitation material.
Stockholders of the Company represented at the Meeting will consider and
vote upon (i) the election of eight directors to serve until the 1996 Annual
Meeting of Stockholders of the Company and until their successors are duly
elected and qualified, (ii) the ratification of the appointment of Ernst & Young
LLP, as the Company's independent auditors for the year ending December 31, 1995
and (iii) such other business as may properly come before the Meeting. The
Company is not aware of any other business to be presented for consideration at
the Meeting.
VOTING AND SOLICITATION OF PROXIES
The enclosed proxy provides that each stockholder may specify that his or
her shares be voted "FOR" the election of the named nominees to the Company's
Board of Directors with provision to "WITHHOLD AUTHORITY" as to all nominees or
any individual nominee or nominees; and voted "FOR," "AGAINST" or "ABSTAIN" from
voting with respect to the ratification of the appointment of Ernst & Young LLP
as the Company's independent auditors for the year ending December 31, 1995. In
accordance with Delaware law, broker non-votes will not be counted and will be
treated as not present for purposes of calculating the vote on a proposal for
which no specification is made in the proxy. Abstentions will be counted in
tabulations of the votes cast on proposals presented to stockholders. Execution
of a proxy given in response to this solicitation will not affect a
stockholder's right to attend the meeting and to vote in person. Presence at the
meeting of a stockholder who has signed a proxy does not alone revoke a proxy.
Any proxy may be revoked by any stockholder who attends the Meeting and gives
oral notice of his or her intention to vote in person without compliance with
any other formalities. Any stockholder who executes and returns a proxy may
revoke it by executing a subsequent proxy or by giving written notice of
revocation to the Secretary of the Company at any time before it is voted at the
meeting. The persons named in the proxies will have discretionary authority to
vote all proxies with respect to additional matters that are properly presented
for action at the Meeting.
The Company has fixed the close of business on November 6, 1995 as the
record date for determining the holders of its Common Stock who will be entitled
to notice of and to vote at the meeting. On that date, the Company had issued
and outstanding 40,369,015 shares of its Common Stock which are the only
outstanding shares of capital stock of the Company having general voting rights.
Holders of the Company's Common Stock are entitled to one vote for each share
owned of record. Shares representing a majority of the votes
<PAGE> 5
entitled to be cast by the holders of the outstanding shares of Common Stock
must be represented in person or by proxy at the Meeting in order for a quorum
to be present.
This proxy solicitation is made by and on behalf of the Board of Directors.
Solicitation of proxies for use at the Meeting may be made in person or by mail,
telephone or telegram, by directors, officers and regular employees of the
Company. Such persons will receive no additional compensation for any
solicitation activities. The Company will request banks and brokers to solicit
their customers who beneficially own shares listed of record in names of
nominees, and will reimburse those banks and brokers for their reasonable
out-of-pocket expenses in connection with such solicitation. The Company will
bear the entire cost of preparing, assembling, printing and mailing this proxy
statement and the enclosed form of proxy, and of soliciting proxies (including,
without limitation, costs, if any, related to advertising, printing, fees of
attorneys, financial advisors, proxy solicitors, accountants, public relations,
transportation, litigation and other costs material to the solicitation).
The First National Bank of Boston ("Bank of Boston"), the transfer agent
and registrar for the Common Stock, has been appointed by the Board of Directors
to serve as Inspector of Election at the Meeting. All proxies and ballots
delivered to Bank of Boston shall be kept confidential by Bank of Boston.
PROPOSAL 1
ELECTION OF CORAM DIRECTORS
Eight directors are to be elected and qualified at the Meeting. In the
absence of written instructions to the contrary, proxies representing shares of
Coram Common Stock will be voted FOR the election of each of the persons listed
in the following paragraph as directors of Coram for a term commencing on the
date of the Meeting and continuing until the next Annual Meeting of Stockholders
and until their successors have been duly elected and qualified. In the event
that any nominee for director should become unavailable or declines to serve, it
is intended that votes will be cast, pursuant to the enclosed proxy, for an
additional nominee designated by Coram. As of the date of this Proxy Statement,
the Coram Board of Directors has no knowledge that any of the persons named will
be unavailable or will decline to serve. None of the nominees has any family
relationship among themselves or with any executive officer of Coram.
THE CORAM BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF
ALL NOMINEES FOR DIRECTOR IDENTIFIED BELOW TO SERVE UNTIL THE
NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS
HAVE BEEN DULY ELECTED AND QUALIFIED
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<PAGE> 6
INFORMATION CONCERNING NOMINEES TO THE CORAM BOARD OF DIRECTORS
Information is set forth below concerning the nominees for election as
directors of Coram. All of the incumbent directors are nominees for election as
directors at the Meeting. Each nominee has furnished information as to his
beneficial ownership of Coram Common Stock as of November 6, 1995, and, if not
employed by Coram, the nominee's principal occupation. Each nominee has
consented to being named in this Proxy Statement, as a nominee for director of
Coram and has agreed to serve as a director of Coram if elected. Except as
provided below, none of the nominees for director has entered into any
arrangement or understanding pursuant to which such person is to be selected as
a director or nominee for director.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH CORAM SINCE
----------------------------------- ---- ---------------------------------- ---------
<S> <C> <C> <C>
James M. Sweeney................... 53 Chairman 1994
Donald J. Amaral................... 43 Director, Chief Executive Officer 1995
and President
Tommy H. Carter.................... 53 Vice Chairman 1994
Richard A. Fink.................... 40 Director 1994
Andrew J. Nathanson*............... 37 Director 1995
Stephen G. Pagliuca................ 40 Director 1994
L. Peter Smith..................... 47 Director 1994
Dr. Gail R. Wilensky............... 52 Director 1994
</TABLE>
- ---------------
* It is currently anticipated that Mr. Nathanson will be appointed to the Coram
Board of Directors subsequent to the date hereof but prior to the date of the
Meeting pursuant to the terms of the Securities Purchase Agreement dated as of
April 6, 1995, as amended (the "Purchase Agreement"), by and among Coram,
Coram, Inc., its wholly-owned subsidiary, and Coram Funding, Inc., an
affiliate of Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
pursuant to which an affiliate of DLJ provided a $150 million bridge loan to
Coram. Mr. Nathanson is serving on the Board as a designee of DLJ. See
"Certain Relationships and Transactions."
Mr. Sweeney is currently serving as the Chairman of the Board of Directors
of Coram and has been serving as such since July 1994. Mr. Sweeney previously
served as Chief Executive Officer of Coram from July 1994 until October 13,
1995. He also served as President from August 3, 1995 through October 13, 1995.
Prior to joining Coram, Mr. Sweeney was the Chairman and Chief Executive Officer
of McGaw, Inc., and served as a member on the Board of Directors of McGaw, Inc.
from October 1990 until he resigned effective February 7, 1994. From February
1988 to October 1990, Mr. Sweeney was the Chairman and Chief Executive Officer
of CarePartners, Inc., a provider of patient monitoring services and home
therapies. Mr. Sweeney was the founder of Caremark, Inc., formerly the largest
home infusion therapy company in the United States, and served as its Chairman
and Chief Executive Officer from June 1979 to February 1988.
Mr. Amaral has been director, President and Chief Executive Officer of the
Company since October 13, 1995. Previously, he was President and Chief Operating
officer of OrNda Healthcorp ("OrNda") from April 1994 to August 1995, and served
in various executive positions with Summit Health Ltd. ("Summit") from October
1989 to April 1994, including President and Chief Executive Officer between
October 1991 and April 1994. Summit was merged into OrNda in April 1994. Prior
to joining Summit, Mr. Amaral was President and Chief Operating Officer of
Mediplex Group, Inc., a health care subsidiary of Avon Products, Inc., from 1986
until October 1989. Mr. Amaral is also Chairman of the Board of Summit Care
Corporation.
Mr. Carter has served as Vice Chairman of Coram since July 1994. Mr. Carter
came out of retirement to assume the duties of Chief Executive Officer and
President of T2 Medical, Inc. ("T2") in September 1993. Between September 1993
and July 1994, Mr. Carter was Chief Executive Officer and President of T2. Prior
to September 1993, Mr. Carter, a co-founder of T2, served as President of T2
from 1984 to October 1988 and as a director from 1984 to 1990. From November
1978 to May 1984, Mr. Carter served in various capacities with Kendall McGaw
Corporation, a manufacturer of intravenous fluids and equipment, including
Regional
3
<PAGE> 7
Manager, National Sales Administration Manager, and Vice President of Sales and
Marketing for the United States.
Mr. Fink has served as a director of Coram since July 1994. Mr. Fink has
been a partner of the law firm of Brobeck, Phleger & Harrison since October 1987
and is currently Chairman of that firm's Business & Technology Group.
Mr. Nathanson has been a Managing Director of DLJ since January 1991 and
served as Senior Vice President of DLJ between January 1990 and January 1991.
Mr. Nathanson has also served as a director of Specialty Foods Corporation, a
diversified food producer and distributor, since August 1993.
Mr. Pagliuca has served as a director of Coram since July 1994. Mr.
Pagliuca founded Information Partners, a venture capital and management buyout
company based in Boston, Massachusetts, in 1989 and has been Managing Director
since that time, focusing on health care and information industry private-equity
investment opportunities. Prior to 1989, Mr. Pagliuca was a partner at Bain &
Company, a management consulting firm based in Boston, Massachusetts, where he
concentrated on the health care and information industries.
Mr. Smith has served as a director of Coram since July 1994. Between
November 1993 and July 1994, Mr. Smith was director of Medisys, Inc.
("Medisys"). Mr. Smith served as the Managing Partner of AllCare Health
Services, Inc., which was acquired by Medisys in December of 1992. Mr. Smith is
also President and serves on the Board of Directors of Ralin Medical, Inc.
("Ralin"), a company specializing in cardiac disease management. Prior to
joining Ralin in 1990, Mr. Smith served in various capacities with Baxter
Healthcare. From 1984 through 1989 he was president of the home infusion therapy
division of Baxter Healthcare. Mr. Smith also serves on the Board of Directors
of Sabratek, Inc. and AMSYS, Inc.
Dr. Wilensky has served as a director of Coram since November 1994. Since
January 1993, Dr. Wilensky has served as a Senior Fellow at Project HOPE and
since May 1995 has served as chair of the Physician Payment Review Commission.
From March 1992 to January 1993, Dr. Wilensky served in the Bush Administration
as Deputy Assistant to the President for Policy Development, responsible for
advising the President on health and welfare issues. From January 1990 to March
1992, Dr. Wilensky served in the Department of Health and Human Services, where
she directed the Medicare and Medicaid programs. From April 1983 to January
1990, Dr. Wilensky was Vice President, Division of Health Affairs at Project
HOPE. Dr. Wilensky is an elected member of the Institute of Medicine of the
National Academy of Sciences. She has also served as a member of the Physician
Payment Review Commission and the Health Advisory Committee of the General
Accounting Office. Dr. Wilensky also serves as a Director of United HealthCare
Corporation, Syncor International Corporation and Advanced Tissue Sciences, Inc.
MEETINGS AND COMMITTEES OF THE BOARD
The Coram Board of Directors met five times during the fiscal year ended
December 31, 1994. Each director attended at least 75% of the aggregate of (i)
the total number of meetings of the Coram Board of Directors held subsequent to
the date of their election or appointment to the Board and (ii) the total number
of meetings held by all committees of the Board of Directors on which such
director served.
Coram has an Audit Committee, a Compensation Committee and a Compliance and
Quality Assurance Committee. Coram does not have an executive or nominating or
similar committee. The Board generally acts in its entirety upon matters which
might otherwise be the responsibility of such committees.
Coram Audit Committee. The Coram Audit Committee is currently composed of
Messrs. Smith and Pagliuca, each a non-employee director of Coram. The Audit
Committee's principal functions are: (i) to recommend to the Coram Board of
Directors the independent public accountants to be engaged by Coram and to
arrange or approve the details of their engagement, including the remuneration
to be paid; (ii) to review with the independent public accountants Coram's
general policies and procedures with respect to audits and accounting and
financial controls, the general accounting and reporting principles and
practices applied in preparing the financial statements and conducting financial
audits of Coram, and to recommend to
4
<PAGE> 8
management changes or improvements therein; and (iii) to perform such other
functions as the Coram Board of Directors may from time to time elect. The Audit
Committee did not meet during the fiscal year ended December 31, 1994.
Coram Compensation Committee. The Coram Compensation Committee currently
consists of Messrs. Fink and Pagliuca, each a non-employee director of Coram.
The Compensation Committee's principal functions are: (i) to recommend to the
Coram Board of Directors the salaries and other terms of employment for the
senior executive officers of Coram and make recommendations to the Coram Board
of Directors with respect to proposals for new benefits, incentive plans or
programs and (ii) to administer the Company's 1994 Stock Option/Stock Issuance
Plan (the "Coram Option Plan") and grant stock options and stock issuances
thereunder to all eligible individuals, including members of the executive and
managerial group. The Compensation Committee took action by written consent
seven times during the fiscal year ended December 31, 1994.
Coram Compliance and Quality Assurance Committee. The Coram Compliance and
Quality Assurance Committee, established by the Coram Board of Directors in
February 1995, consists of Dr. Gail R. Wilensky and Richard A. Fink. The
Compliance and Quality Assurance Committee is responsible for overseeing and
ensuring Coram's compliance with applicable laws, regulations, and a corporate
code of conduct currently under development by Coram, as well as providing
oversight of Coram's corporate compliance program as it relates to the conduct
of its business to ensure that the highest standards of business, professional,
legal and personal ethics are being met by Coram in the delivery of its services
and products.
COMPLIANCE WITH SECTION 16
Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Coram's directors, executive officers and persons who
beneficially own greater than 10% of a registered class of Coram's equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission") and the New York Stock
Exchange. Based solely upon its review of copies of the Section 16 reports Coram
has received and written representations from certain reporting persons, Coram
believes that during its fiscal year ended December 31, 1994, all of its
directors, executive officers and greater than 10% beneficial owners were in
compliance with their filing requirements.
EXECUTIVE OFFICERS
The following table sets forth the name, age and business experience during
at least the last five years of each of the executive officers of Coram. The
executive officers serve at the pleasure of the Board of Directors of Coram.
Biographical information with respect to Donald J. Amaral is set forth under the
caption "ELECTION OF CORAM DIRECTORS" above.
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
------------------------------------------ ---- --------------------------------------
<S> <C> <C>
Donald J. Amaral.......................... 43 Chief Executive Officer and President
Richard M. Smith.......................... 36 Chief Financial Officer and Secretary
John T. Gallatin.......................... 45 Executive Vice President
Kelly J. McCrann.......................... 40 Executive Vice President
</TABLE>
Mr. Smith has been the Chief Financial Officer of Coram since August 1995
and has been serving as Secretary since July 1995. Mr. Smith also served as Vice
President, Tax and Treasury, from October 1994 to August 1995. Between November
1993 and October 1994, Mr. Smith served as Vice President, Finance and
Treasurer, and Assistant Secretary, for CoreSource, Inc., a health care company
specializing in third party claims administration, workers compensation and
integrated health delivery systems. Mr. Smith served as Assistant Treasurer from
July 1990 to November 1993 and Director of Taxes from July 1985 to July 1990 of
Lane Industries, Inc., a holding company engaged in the manufacture of office
products, hotel ownership and management, radio stations, farming and ranching.
Prior to July 1985, Mr. Smith served in various capacities with KPMG Peat
Marwick as tax accountant and tax manager.
5
<PAGE> 9
Mr. Gallatin was appointed as an Executive Vice President in August 1995.
Between March 1995 and August 1995, Mr. Gallatin served as the President of
Coram Physician Services, Inc., a subsidiary of Coram, and between July 1994 and
March 1995, Mr. Gallatin served as a Vice President of Coram. Between October
1991 and July 1994, Mr. Gallatin served as Executive Vice President of T2. Prior
to October 1991, Mr. Gallatin served as the Southeast Area Vice President of
Caremark International, Inc. Before joining Caremark International, Inc. in
1986, he served as the Vice President of Baxter Healthcare's Alternate Site
Group in the Southeast Area from 1985 to 1986, served as the Director of
National Accounts for Continue Care, Inc., the home infusion division of
American Hospital Supply, Inc. from 1984 to 1985, and held various other sales
and management positions with American Hospital Supply, Inc. between 1977 and
1984.
Mr. McCrann has been an Executive Vice President of Coram since August
1995. Previously, Mr. McCrann served as President, Lithotripsy Division, of
Coram from July 1994 to August 1995. Between February 1994 and July 1994, Mr.
McCrann served as a consultant to T2. During 1990 through 1993, Mr. McCrann
served as Vice President of Strategy with Secomerica, Inc., a company involved
in alternate site infusion therapy, pediatric specialty care, ambulance services
and residential security, and its wholly-owned subsidiary, HMSS, Inc., a
regional provider of home infusion services. Prior to 1990, Mr. McCrann served
as Vice President of Strategy for American Medical International, Inc. and as a
consultant with McKinsey & Company, Inc.
6
<PAGE> 10
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT OF CORAM
The following table sets forth as of November 6, 1995, the number of shares
of Coram's outstanding Common Stock, beneficially owned by (i) each person known
to Coram to be the owner of more than 5% of any such class, (ii) each of Coram's
directors, (iii) each of the Chief Executive Officer and two other most highly
compensated executive officers as of December 31, 1994, (iv) the current
executive officers of the Company and (v) all directors and executive officers
of Coram as a group. All information is taken from or based upon ownership
filings made by such persons with the Commission or upon information provided by
such persons to Coram. Unless otherwise indicated, the address of each person
named below is 1125 Seventeenth Street, Suite 1500, Denver, Colorado 80202.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OF
NAME AND ADDRESS OF SHARES OF COMMON STOCK
BENEFICIAL OWNER(1) COMMON STOCK(2) OUTSTANDING(2)
------------------------------------------------------ --------------- --------------
<S> <C> <C>
James M. Sweeney(3)................................... 3,500,000 8%
Donald J. Amaral(4)................................... -0- *
Tommy H. Carter(5).................................... 109,087 *
Richard A. Fink(6).................................... 75,000 *
Andrew J. Nathanson................................... -0- *
Stephen G. Pagliuca(7)................................ 75,000 *
L. Peter Smith(8)..................................... 135,081 *
Dr. Gail R. Wilensky(9)............................... 75,000 *
Richard M. Smith(10).................................. 106,770 *
John T. Gallatin(11).................................. 212,440 *
Kelly J. McCrann(12).................................. 200,000 *
Patrick J. Fortune(13)
8240 Cattail Drive
Niwot, CO 80503..................................... 87,500 *
Sam R. Leno(14)
1774 Foothills Drive South
Golden, CO 80401.................................... 37,500 *
All Executive Officers and Directors as
a group (11 persons)(15)............................ 4,403,021 9.8%
Putnam Investments, Inc.
One Post Office Square
Boston, MA 02109.................................... 2,511,400 5.7%
Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109.................................... 2,217,800 5.2%
</TABLE>
- ---------------
* Less than 1%
(1) Messrs. Fortune and Leno, each of whom are Named Executive Officers,
resigned on August 3, 1995 and July 10, 1995, respectively. Mr. Amaral, who
is also a director of the Company, assumed the duties of President and
Chief Executive Officer from Mr. Sweeney on October 13, 1995. Mr. Richard
M. Smith assumed the duties of Chief Financial Officer on August 30, 1995
and Messrs. McCrann and Gallatin also became executive officers of the
Company on August 3, 1995. Beneficial ownership information has been
provided for the holdings of Messrs. Richard M. Smith, McCrann and
Gallatin, in addition to the disclosure required for the Named Executive
Officers.
(2) Shares of Coram Common Stock subject to options or warrants which are
currently exercisable or exercisable within 60 days are deemed outstanding
for computing the percentage of the person holding such options or warrants
but are not deemed outstanding for computing the percentage of any other
7
<PAGE> 11
person. Except as indicated by footnote, Coram understands that the persons
named in the table above have sole voting and investment power with
respect to all shares of Coram Common Stock shown as beneficially owned
by them. No percent of class is shown for holdings of less than 1%.
Percentage computations are based on 40,369,015 shares of Coram Common
Stock outstanding as of November 6, 1995.
(3) Includes 3,000,000 shares and 500,000 shares subject to options granted to
Mr. Sweeney on July 28, 1994 and September 7, 1995, respectively. The
options are immediately exercisable, but any shares purchased thereunder
will be subject to repurchase by Coram at the original exercise price paid
per share upon the optionee's cessation of service prior to the vesting of
such shares. Mr. Sweeney (i) vested as to 750,000 of the 3,000,000 option
shares on July 7, 1995, with the balance of the option shares vesting in a
series of successive equal monthly installments upon his completion of each
additional month of service with Coram over the next thirty-six (36) months
thereafter, and (ii) will vest as to 125,000 of the 500,000 option shares
on September 6, 1996, with the balance of the option shares vesting in a
series of successive equal monthly installments upon his completion of each
additional month of service with Coram over the next thirty-six (36) months
thereafter.
(4) Does not include 2,200,000 shares subject to an option granted to Mr.
Amaral on October 13, 1995. The option shares will vest and become
exercisable in three successive equal installments, upon his completion of
each year of service over the three-year period measured from the grant
date. An option for the purchase of 1,400,000 shares was granted under the
Coram Option Plan, and an option for the purchase of the remaining 800,000
shares was granted outside of the Coram Option Plan.
(5) Includes 31,500 vested but unexercised shares pursuant to an option to
purchase 94,500 shares granted to Mr. Carter on July 28, 1994, but does not
include the balance of 63,000 option shares, which will become exercisable
in two equal and successive annual installments over Mr. Carter's continued
period of service with Coram measured from July 28, 1995. The option to
acquire 94,500 shares was granted to Mr. Carter in cancellation of his
existing contractual right to receive an option grant for 150,000 shares of
T2 common stock in September 1994.
(6) Includes 75,000 shares subject to an option granted to Mr. Fink on July 28,
1994 pursuant to the Automatic Grant Option Program of the Coram Option
Plan. The option is immediately exercisable, but any shares purchased
thereunder will be subject to repurchase by Coram at the original exercise
price paid per share upon Mr. Fink's cessation of services prior to the
vesting of such shares. Mr. Fink vested as to 18,750 of the option shares
on July 7, 1995 and will vest as to the balance of the option shares in a
series of successive equal monthly installments upon his completion of each
additional month of Board service with Coram over the next thirty-six (36)
months thereafter.
(7) Includes 75,000 shares subject to an option granted to Mr. Pagliuca on July
28, 1994 pursuant to the Automatic Grant Option Program of the Coram Option
Plan. The option is immediately exercisable, but any shares purchased
thereunder will be subject to repurchase by Coram at the original exercise
price paid per share upon Mr. Pagliuca's cessation of service prior to the
vesting of such shares. Mr. Pagliuca vested as to 18,750 of the option
shares on July 7, 1995 and will vest as to the balance of the option shares
in a series of successive equal monthly installments upon his completion of
each additional month of Board service with Coram over the next thirty-six
(36) months thereafter.
(8) Includes 75,000 shares subject to an option granted to Mr. Smith on July
28, 1994 pursuant to the Automatic Grant Option Program of the Coram Option
Plan. The option is immediately exercisable, but any shares purchased
thereunder will be unvested and subject to repurchase by Coram at the
original exercise price paid per share upon Mr. Smith's cessation of
service prior to the vesting of such shares. Mr. Smith vested as to 18,750
of the option shares on July 7, 1995 and will vest as to the balance of the
option shares in a series of successive equal monthly installments upon his
completion of each additional month of Board service with Coram over the
next thirty-six (36) months thereafter.
(9) Includes 75,000 shares subject to an option granted to Dr. Wilensky on
November 7, 1994. The option is immediately exercisable, but any option
shares purchased thereunder will be subject to repurchase by Coram at the
original exercise price paid per share upon Dr. Wilensky's cessation of
service prior to the vesting of such shares. Dr. Wilensky vested as to
18,750 of the option shares on November 6, 1995 and
8
<PAGE> 12
will vest as to the balance of the option shares in a series of successive
equal monthly installments upon her completion of each additional month of
Board service with Coram over the next thirty-six (36) months thereafter.
(10) Includes 100,000 shares subject to an option granted to Mr. Smith on
September 7, 1995, which option is immediately exercisable for fully-vested
shares. Also includes 6,770 shares vested and exercisable as of December
30, 1995, pursuant to an option to purchase 25,000 shares granted to Mr.
Smith on November 1, 1994, but does not include the balance of 18,230
option shares, which will become exercisable and vested in successive equal
monthly installments upon his completion of each additional month of
service with Coram over the next thirty-five (35) months after December 30,
1995.
(11) Includes 100,000 shares subject to an option granted to Mr. Gallatin on
September 7, 1995, which option is immediately exercisable for fully-vested
shares. Also includes (i) options to purchase 84,891 shares of Coram Common
Stock that were previously granted to him by T2 and were assumed by Coram,
(ii) 466 shares credited to Mr. Gallatin's account under the T2 Medical
Inc. 401(k) Plan and (iii) 27,083 shares vested and exercisable as of
December 30, 1995 pursuant to an option to purchase 100,000 shares granted
to Mr. Gallatin on November 1, 1994, but does not include the balance of
72,917 option shares, which will become exercisable and vested in a series
of successive equal monthly installments upon his completion of each
additional month of service with Coram over the next thirty-five (35)
months after December 30, 1995.
(12) Includes 100,000 shares subject to an option granted to Mr. McCrann on
September 7, 1995, which option is immediately exercisable for fully-vested
shares. Also includes 100,000 shares subject to an option granted to Mr.
McCrann on July 28, 1994, which option is immediately exercisable but any
option shares purchased thereunder will be subject to repurchase by Coram
at the original exercise price paid per share upon Mr. McCrann's cessation
of service prior to the vesting of such shares. Mr. McCrann vested as to
25,000 of the option shares on July 7, 1995 and will vest as to the balance
of the option shares in a series of successive equal monthly installments
upon his completion of each additional month of service with Coram over the
next thirty-six (36) months thereafter.
(13) Includes 87,500 vested shares subject to an option granted to Mr. Fortune
on August 1, 1994, which may be exercised by him at any time prior to
February 3, 1996.
(14) Includes 37,500 vested shares subject to an option granted to Mr. Leno on
July 28, 1994, which may be exercised by him at any time prior to January
17, 1996.
(15) Excludes 87,500 shares which may be deemed to be beneficially owned by
Patrick J. Fortune, the former President and Chief Operating Officer of
Coram, and 37,500 shares which may be deemed to be beneficially owned by
Sam R. Leno, the former Chief Financial Officer of Coram.
There is no arrangement known to the Company, including any pledge by any
person of securities of the Company, the operation of which may at a subsequent
date result in a change in control of the Company.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
Fees for Board Service. Directors who are employees of Coram receive no
additional compensation for service on the Board of Directors. Non-employee
directors of Coram receive no compensation for each Board meeting attended;
however, all out-of-pocket expenses of directors related to meetings attended
are reimbursed by Coram.
Outside Directors' Automatic Option Grant Program. Non-employee members of
Coram's Board of Directors participate in the Automatic Option Grant Program in
effect under the Coram Option Plan. Each individual who served as a non-employee
Board member on July 28, 1994 (other than Mr. Carter) received an automatic
option grant under the program for 75,000 shares of Coram Common Stock at an
exercise price of $11.00 per share, the fair market value on such date.
Accordingly, Messrs. Fink, Pagliuca and Smith each received such a 75,000-share
option grant. On November 7, 1994, the date of her appointment to the Coram
9
<PAGE> 13
Board of Directors, Dr. Wilensky received an automatic option grant for 75,000
shares of Coram Common Stock at an exercise price of $15.375 per share. Each
75,000-share option grant is immediately exercisable for all of the option
shares. However, any shares purchased under the option will be subject to
repurchase by Coram at the original exercise price paid per share upon the
optionee's cessation of Board service prior to vesting in such shares. With
respect to the options granted to Messrs. Fink, Pagliuca and Smith, each
optionee vested in 18,750 of the option shares upon completion of one year of
Board service measured from July 8, 1994 and will vest in the balance in a
series of equal monthly installments over the next thirty-six (36) months of
Board service thereafter. Dr. Wilensky will vest in 25% of the option shares
upon completion of one year of service measured from the grant date and will
vest in the balance in a series of equal monthly installments over the next
thirty-six (36) months of Board service thereafter.
On July 28, 1994, Mr. Carter received a non-statutory stock option grant to
purchase 94,500 shares of Coram Common Stock at an exercise price of $11.00 per
share. The option becomes exercisable in a series of three (3) successive equal
annual installments over Mr. Carter's period of Board service, with the first
such installment to become exercisable on the first anniversary of the option
grant date. The shares subject to Mr. Carter's option will vest in full upon (i)
an acquisition of Coram by merger or asset sale of (ii) a change of control of
Coram.
On the date of each annual stockholders meeting, beginning with the 1995
Annual Meeting, each individual who will continue to serve as a non-employee
Board member will receive a non-statutory stock option to purchase 2,500 shares
of Coram Common Stock at an exercise price equal to the fair market value of the
Coram Common Stock on the automatic option grant date. Each option will be
immediately exercisable for all of the option shares. However, any shares
purchased under the option will be subject to repurchase by Coram at the
original exercise price paid per share upon the optionee's cessation of Board
service prior to vesting in such shares. The optionee will vest in the option
shares in a series of equal monthly installments over twelve (12) months of
Board service measured from the automatic option grant date.
The shares subject to each automatic option grant under the Coram Option
Plan will vest in full upon (i) the optionee's cessation of Board service due to
death or disability, (ii) an acquisition of Coram by merger or asset sale or
(iii) a change in control of Coram.
The option granted to Mr. Carter and each automatic option granted to the
other non-employee Board members includes a limited stock appreciation right
which will allow the optionee, upon the successful completion of a hostile
tender offer for more than 50% of Coram's outstanding securities, to surrender
that option to Coram, in return for a cash distribution in an amount per
surrendered option share equal to the highest price per share of Coram Common
Stock paid in the tender offer less the exercise price payable per share.
10
<PAGE> 14
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation earned, by the Company's
former Chief Executive Officer and each of the two other highest paid executive
officers whose compensation for the 1994 fiscal year was in excess of $100,000,
for services rendered in all capacities to the Company and its subsidiaries for
the fiscal year ended December 31, 1994. The individuals named in the table will
be collectively referred to as the "Named Executive Officers." Information with
respect to fiscal years prior to the last completed fiscal year is not provided
because Coram was not a reporting company pursuant to Section 13(a) or 15(d) of
the Exchange Act at any time prior to July 8, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
--------------------------------- ------------
NAME AND OTHER ANNUAL STOCK ALL OTHER
PRINCIPAL POSITIONS(1) YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION
- ---------------------------------- ---- -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
James M. Sweeney.................. 1994 $ -0- $ -- -- 3,000,000 $3,596,918(2)
Chairman and Former
Chief Executive Officer
Patrick J. Fortune................ 1994 161,762 87,000 171,129(3) 350,000 --
Former President and
Chief Operating Officer
Sam R. Leno....................... 1994 126,202 -- 31,769(4) 150,000 --
Former Vice President and
Chief Financial Officer
</TABLE>
- ---------------
(1) Reflects salary, bonus and other annual compensation paid by the registrant
since its formation on July 8, 1994 to the Named Executive Officers as of
December 31, 1994. Mr. Amaral assumed the duties of President and Chief
Executive Officer from Mr. Sweeney on October 13, 1995. Mr. Richard M.
Smith assumed the duties of Chief Financial Officer on August 30, 1995 and
Messrs. McCrann and Gallatin also became executive officers of the Company
on August 3, 1995.
(2) Consists of a cash fee paid to Mr. Sweeney for financial advisory services
rendered in connection with the formation of Coram pursuant to an agreement
with T2. See "Certain Relationships and Transactions."
(3) Consists of reimbursed expenses paid to Mr. Fortune in connection with his
move to Denver, Colorado.
(4) Consists of reimbursed expenses paid to Mr. Leno in connection with his move
to Denver, Colorado.
11
<PAGE> 15
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted to
each of the Named Executive Officers during the fiscal year ended December 31,
1994. In addition, in accordance with the rules of the Commission, there are
shown hypothetical gains or "option spreads" that would exist for the respective
options. These gains are based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over the full
option term. Except for the limited stock appreciation rights described in
footnote (4) below, no stock appreciation rights were granted to the Named
Executive Officers during the fiscal year ended December 31, 1994.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -------------------------
NAME(1) GRANTED(3)(4) FISCAL YEAR SHARE(5)(6) DATE(3) 5% 10%
- -------------------- ------------- ------------ ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
James M. Sweeney.... 3,000,000(7) 60.0 $ 11.00 July 27, 2004 $20,753,522 $52,593,503
Patrick J.
Fortune........... 350,000(8) 7.0 11.75 July 31, 2004 2,586,329 6,554,266
Sam R. Leno......... 150,000 3.0 11.00 July 27, 2004 1,037,676 2,629,675
</TABLE>
- ---------------
(1) Messrs. Fortune and Leno resigned on August 3, 1995 and July 10, 1995,
respectively. On October 13, 1995, Mr. Amaral assumed the offices of
President and Chief Executive Officer of the Company from Mr. Sweeney, and
in connection therewith was granted an option on October 13, 1995 to
purchase 2,200,000 shares at an exercise price of $3.40 per share. The
option shares subject to Mr. Amaral's grant will vest and become
exercisable in three successive equal annual installments upon his
completion of each year of service with the Company over the three-year
period measured from the October 13, 1995 grant date. Richard M. Smith
assumed the duties of Chief Financial Officer on August 30, 1995, and in
connection therewith was granted an option on September 7, 1995 to purchase
100,000 shares at an exercise price of $2.98 per share. Prior to becoming
Chief Financial Officer of the Company, Mr. Smith was Vice President,
Treasury and Tax of the Company, and in connection therewith was granted an
option on November 1, 1994 to purchase 25,000 shares at an exercise price
of $16.125 per share. The Company also named John T. Gallatin and Kelly J.
McCrann as Executive Vice Presidents in August 1995. In connection
therewith, each of Messrs. Gallatin and McCrann was granted an option on
September 7, 1995 to purchase 100,000 shares at an exercise price of $2.98
per share. Prior to becoming an Executive Vice President of the Company,
Mr. Gallatin served as a Vice President of the Company, and in November
1994 was granted an option to purchase 100,000 shares at an exercise price
of $16.125 per share. Prior to becoming an Executive Vice President of the
Company, Mr. McCrann was President, Lithotripsy Division of the Company,
and in connection therewith was granted an option on July 28, 1994 to
purchase 100,000 shares at an exercise price of $11.00 per share. The
options granted to Messrs. Smith, Gallatin and McCrann during the 1995
fiscal year are immediately exercisable for fully vested shares. The option
grants previously made to these three individuals during the 1994 fiscal
year will vest as to 25% of the option shares upon completion of one year
of service with the Company measured from the grant date, and the balance
of the option shares will vest in a series of equal monthly installments
over the next thirty-six months of service thereafter.
(2) Potential realizable value is determined by taking the exercise price per
share and applying the stated annual appreciation rate compounded annually
for the term of the option (ten years), subtracting the exercise price per
share at the end of the period and multiplying the remaining number by the
number of options granted. Actual gains, if any, on stock options exercises
and Coram Common Stock holdings are dependent on the future performance of
the Coram Common Stock and overall stock market conditions. Does not
reflect declines in the market price of Coram Common Stock subsequent to
December 31, 1994.
(3) The options granted to the Named Executive Officers were immediately
exercisable for all the option shares as of the grant date. However, any
shares purchased thereunder are subject to repurchase by the Company, at
the original exercise price paid per share, upon the optionee's cessation
of service prior to
12
<PAGE> 16
vesting in such shares. The optionee vests in 25% of the option shares upon
completion of one year of service with the Company measured from the
applicable vesting commencement date, and the balance of the option shares
will vest in a series of equal monthly installments over the next
thirty-six months of service thereafter. The applicable vesting
commencement date is July 8, 1994 for the options granted to Messrs.
Sweeney and Leno and August 1, 1994 for the option granted to Mr. Fortune.
The shares subject to Mr. Sweeney's option will immediately vest in full
upon (i) an acquisition of Coram by merger or asset sale or (ii) a change
in control of Coram, and the options will remain exercisable for such
vested shares until the expiration of the ten (10)-year option term. In
connection with their resignations from the Company, the options held by
Messrs. Fortune and Leno terminated with respect to 312,500 and 112,500
unvested shares, respectively. Messrs. Fortune and Leno retain options to
purchase 87,500 and 37,500 vested shares, respectively, and they will each
have a six-month period measured from the effective date of their
resignation in which to exercise their options for those vested shares. The
exercise price in effect for Mr. Fortune's option is $11.75 per share, and
the exercise price in effect for Mr. Leno's option is $11.00 per share.
(4) Each option granted to the Named Executive Officers includes a limited stock
appreciation right which allows the optionee, upon the successful
completion of a hostile tender offer for more than 50% of Coram's
outstanding securities, to surrender that option to Coram in return for a
cash distribution in an amount per surrendered option share equal to the
highest price per share of Coram Common Stock paid in the tender offer less
the exercise price payable per share.
(5) The exercise price for each option may be paid in cash, in shares of Coram's
Common Stock valued at fair market value on the exercise date or through a
cashless exercise procedure involving a same-day sale of the purchased
shares. Coram may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares,
together with any Federal and state income tax liability incurred by the
optionee in connection with such exercise.
(6) The Compensation Committee, as the Coram Option Plan Administrator, has the
authority to reprice outstanding options under such plan, other than the
automatic option grants held by the non-employee Board members. On
September 7, 1995, the Compensation Committee repriced all such outstanding
options held by Coram employees on such date with exercise prices in excess
of $5.50 per share to a reduced exercise price of $5.50 per share. However,
options held by Messrs. Sweeney, Fortune, Leno and all of the Company's
non-employee directors were not subject to such repricing.
(7) Excludes 500,000 shares subject to an option granted to Mr. Sweeney on
September 7, 1995 at an exercise price of $3.50 per share. The option is
immediately exercisable as of the grant date, but any shares purchased
thereunder will be subject to repurchase by Coram at the original exercise
price paid per share upon Mr. Sweeney's cessation of service prior to the
vesting of such shares. Mr. Sweeney will vest as to 25% of the option
shares on September 6, 1996, with the balance of such shares vesting in a
series of successive equal monthly installments upon his completion of each
additional month of service with Coram over the next thirty-six (36) months
thereafter.
(8) Excludes 50,000 shares subject to an option granted to Mr. Fortune on
February 1, 1995 at an exercise price of $21.50 per share. All of such
options were forfeited upon Mr. Fortune's resignation from Coram as of
August 3, 1995.
13
<PAGE> 17
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
The following table sets forth information concerning the aggregate number
of options exercised during the fiscal year ended December 31, 1994, by each of
the Named Executive Officers of Coram and outstanding options held by each such
officer at December 31, 1994. None of the Named Executive Officers exercised any
stock appreciation rights during the 1994 fiscal year. Except for the limited
stock appreciation rights described in footnote (4) above, under "Option Grants
in Last Fiscal Year," no stock appreciation rights were held by the Named
Executive Officers at the end of the 1994 fiscal year.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1994 DECEMBER 31, 1994(2)
SHARES ------------------------------------------- --------------------------------------------
ACQUIRED EXERCISABLE/ EXERCISABLE/
ON VALUE SUBJECT TO SUBJECT TO
NAME EXERCISE REALIZED EXERCISABLE REPURCHASE(1) UNEXERCISABLE EXERCISABLE REPURCHASE(1) UNEXERCISABLE
- ----------------- -------- -------- ----------- ------------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James M.
Sweeney........ -- -- 0 3,000,000 0 0 $ 16,500,00 0
Patrick J.
Fortune........ -- -- 0 350,000 0 0 1,662,500 0
Sam R. Leno...... -- -- 0 150,000 0 0 825,000 0
</TABLE>
- ---------------
(1) The options held by the Named Executive Officers were immediately
exercisable for all the option shares. However, any shares purchased
thereunder are subject to repurchase by the Company, at the original
exercise price paid per share, upon the optionee's cessation of service
prior to vesting in those shares. The optionee vests in twenty-five percent
(25%) of the option shares upon completion of one year of service with the
Company measured from the applicable vesting commencement date, and the
balance of the option shares will vest in a series of equal monthly
installments over the next thirty-six months of service thereafter. The
applicable vesting commencement date is July 8, 1994 for the options
granted to Messrs. Sweeney and Leno and August 1, 1994 for the option
granted to Mr. Fortune. In connection with their resignations from the
Company, the options held by Messrs. Fortune and Leno terminated with
respect to 312,500 and 112,500 unvested shares, respectively. Messrs.
Fortune and Leno retain options to purchase 87,500 and 37,500 vested
shares, respectively, and they will each have a six-month period measured
from the effective date of their resignation in which to exercise their
options for those vested shares.
(2) Value is determined by subtracting the exercise price from the fair market
value (the closing price for the Common Stock as reported by the New York
Stock Exchange) as of December 30, 1994 ($16.50) and multiplying the
resulting number by the number of underlying shares of Common Stock. For
the purpose of such calculation, the exercise price per share is the
applicable exercise price as of December 31, 1994 and does not reflect
market price declines subsequent to December 31.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
Coram does not presently have any employment contracts in effect with any
of the executive officers named in the Summary Compensation Table.
Coram presently has an employment agreement with its President and Chief
Executive Officer, Donald J. Amaral, for a three-year term commencing October
13, 1995, unless otherwise terminated. Under the agreement, Mr. Amaral will
receive a base salary of $600,000 per annum, and the right to receive a
performance bonus. If Mr. Amaral's employment is terminated by the Company other
than for cause or by Mr. Amaral in the event that the Company fails to comply
with any material provision of the agreement, Mr. Amaral will be entitled to
receive his base salary through the longer of (i) the remaining term of the
agreement or (ii) twelve months, plus a bonus payable after the end of each of
the Company's fiscal years thereafter through 1998 in an amount equal to the
average bonus earned by Mr. Amaral during the employment period. Under the
agreement, Mr. Amaral was also granted options to purchase 2,200,000 shares of
Common Stock at $3.40 per share. The options will vest and become exercisable in
three equal annual installments upon Mr. Amaral's completion of each year of
service over the three-year period measured from the October 13, 1995 grant
date. The options will immediately vest and become exercisable in full upon (i)
a change in control of the Company; (ii) any termination by the Company of the
employment agreement other than for cause; (iii) any termination by Mr. Amaral
as a result of a material breach of the employment
14
<PAGE> 18
agreement by the Company; or (iv) termination of the employment agreement as a
result of Mr. Amaral's death or permanent disability. Mr. Amaral is also
eligible to receive all other benefits generally made available by the Company
to its senior executives.
The shares subject to each of the options granted to Mr. Sweeney, the
Company's Chairman and former Chief Executive Officer, under the Coram Option
Plan (as described above in Footnote (3) to the table in the "Option Grants in
Last Fiscal Year" section) will immediately vest in full upon (i) an acquisition
of the Company by merger or asset sale or (ii) a change in control of the
Company. In addition, the 500,000 share option granted to Mr. Sweeney on
September 7, 1995 will immediately vest in full upon any involuntary termination
of Mr. Sweeney, other than for cause.
Shares subject to options granted under the Coram Option Plan to the
Company's other executive officers will immediately vest in full upon (i) an
acquisition of the Company by merger or asset sale in which such options are not
to be assumed by the acquiring entity or, (ii) if such options are so assumed,
the subsequent termination of the optionee's employment (whether involuntarily
or through a forced resignation) within eighteen (18) months following such
acquisition. In addition, the Compensation Committee, as the Coram Option Plan
Administrator, has the authority to provide for the accelerated vesting of the
shares of the Company's Common Stock subject to outstanding options held by the
Company's executive officers, or any unvested shares actually held by those
individuals under the Coram Option Plan, in connection with a hostile take-over
of the Company effected through a successful tender offer for more than 50% of
the Company's outstanding securities or through a change in the majority of the
Board as a result of one or more contested elections for Board membership or in
the event such individual's employment were to be terminated (whether
involuntarily or through a forced resignation) following such hostile take-over.
Mr. Gallatin is subject to an employment agreement with T2, a predecessor
of Coram, originally dated December 24, 1993, which will expire on December 31,
1995. Mr. Gallatin's employment agreement provides that, following a "change of
control" of T2 if (i) Mr. Gallatin is fired without cause, (ii) T2 or its
successor requires Mr. Gallatin to move his principal residence outside of the
Atlanta, Georgia metropolitan area or (iii) T2 or its successor changes his
responsibilities substantially without Mr. Gallatin's consent, then Mr. Gallatin
may terminate the agreement and become entitled to a single cash payment in an
amount equal to one year of his base salary. A "change in control" is deemed to
have occurred when (a) a plan of merger or consolidation is adopted in which the
holders of shares of T2 common stock would receive less than 50% of the voting
capital stock of the surviving or resulting corporation, (b) the approval by the
board of directors of T2 of an agreement for the sale or transfer of
substantially all of the assets of T2, or (c) the acquisition of more than 20%
of the outstanding shares of T2 common stock by any person in the absence of
prior approval of the board of directors.
Since the resignation of Patrick J. Fortune as the Company's President and
Chief Operating Officer, the Company has been paying Mr. Fortune his salary in
accordance with the terms of his original offer of employment to Mr. Fortune in
August 1994. Mr. Fortune's salary continuation will continue until April 1996.
The Company entered into a consulting agreement with Mr. Fortune on August 3,
1995 under which Mr. Fortune will render consulting services to the Company on
an as needed basis for a one year term. Under the agreement, Mr. Fortune agreed
to devote (i) reasonable consulting services as requested by the Company's Chief
Executive Officer or his designee; (ii) no more than twenty hours per week to
performing consulting services commencing November 3, 1995; and (iii) no more
than ten hours per week commencing February 3, 1996. As compensation for Mr.
Fortune's consulting services, the Company agreed to pay Mr. Fortune a
consulting fee of $1,350 for each day on which Mr. Fortune devotes a material
amount of time to rendering such consulting services.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Richard A. Fink and Stephen G. Pagliuca were the only two members of the
Compensation Committee of Coram during the last completed fiscal year. Messrs.
Fink and Pagliuca are both non-employee directors of Coram who have not
previously been in Coram's employ. Mr. Fink is a partner in a law firm that
rendered various legal services to Coram in 1994. In April 1995, Coram paid Mr.
Pagliuca a fee of approximately
15
<PAGE> 19
$2 million for certain investment banking and financial advisory services
rendered in connection with Coram's acquisition of the alternate site and
certain related businesses of Caremark International, Inc. (the "Caremark
Business") in 1995. The fee was contingent upon the closing of the acquisition
of the Caremark Business and represented approximately two-thirds of one percent
of the $310 million financing secured by Coram in connection with such
transaction. No executive officer of Coram serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of Coram's Board of Directors or
Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
As members of the Compensation Committee of Coram's Board of Directors, it
is our duty to set the base salary of certain executive officers each fiscal
year and to approve the individual bonus programs to be in effect for those
individuals. In addition, we have the exclusive authority to award stock options
under the Coram Option Plan to Coram's executive officers and other key
employees. The following is a summary of the policies which governed our
decisions concerning the compensation paid to Coram's executive officers for the
fiscal year ended December 31, 1994, including the compensation reflected in the
tables which appear elsewhere in this Proxy Statement.
GENERAL COMPENSATION POLICY
Introduction. Coram was established in July 1994 through the merger of four
separate publicly-held corporations (the "Four-Way Merger"). Our major objective
for the 1994 fiscal year was to implement a compensation structure which would
retain the services of those executive officers of the four merged companies who
we identified as essential to Company's long-term financial success.
Accordingly, we developed a compensation policy with three major objectives: (i)
to offer base salary levels sufficient to induce and attract executive officers
to join the Company subsequent to the Four-Way Merger and (ii) provide a
significant equity component in the form of stock option grants which would
serve to strengthen the mutuality of interests between the executive officers
and Coram's shareholders.
Factors. The primary factors which we considered in establishing the
components of each executive officer's compensation package for the 1994 fiscal
year are summarized below. We may, however, apply entirely different factors,
particularly different measures of performance, in setting executive
compensation for future fiscal years.
* Base Salary. As indicated, the base salary of each executive officer for
the 1994 fiscal year was based on salary levels we believed were necessary to
induce and attract such individuals to join Coram subsequent to the Four-Way
Merger. On the basis of our knowledge of the home health care industry, we
believe that these base salary levels are competitive with the companies in the
home health care industry with which Coram competes for executive talent.
However, we did not, through one or more external salary surveys for the
industry, independently confirm the specific percentiles at which the base
salary levels in effect for Coram's executive officers stood in relation to
other companies in the industry. We felt that the most appropriate vehicle to
incent Coram's executive officers to remain with the Company and to contribute
to Coram's financial success was to have a substantial portion of their total
compensation package be in the form of the long-term equity component described
below.
Because it was not our intent for the 1994 fiscal year to target the base
salary levels in effect for the executive officers at a designated percentile of
the salary levels in effect for other companies in the home health care
industry, there is no meaningful correlation between Coram's salary levels and
the rates of base salary in effect for those companies which are taken into
account in the Industry Index utilized for purposes of the stock price
performance graph which follows this report.
* Long-Term Incentive Compensation. The option grants which we make under
the Coram Option Plan to the executive officers are intended to advance our
overall objective in subjecting a substantial portion of each officer's
compensation package to Company performance measured in terms of stock price
appreciation. Accordingly, the option grants were designed to align the
interests of Coram's executive officers with those of
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the shareholders and provide each officer with a significant incentive to manage
Coram from the perspective of an owner with an equity stake in the business.
Each grant allows the executive officer to acquire shares of Coram Common Stock
at a fixed price per share (the market price on the grant date) over a specified
period of time (up to ten years). The option shares vest in periodic
installments over a specified period (generally four years), contingent upon the
executive officer's continued employment with Coram. Accordingly, the option
will provide a return to the executive officer only if he or she remains with
Coram, and then only if the price of Coram's Common Stock appreciates.
The size of the option grant to each executive officer was set at a level
which we felt was appropriate to create a meaningful opportunity for stock
ownership based upon the executive officer's current position with Coram,
internal comparability with option grants made to other Company executives, the
executive officer's current level of performance and his or her potential for
future responsibility and promotion over the option term. We also took into
account the number of unvested options held by the executive officer at the time
of the new grant, including options granted to such individual prior to the
Four-Way Merger by his or her former employer and assumed by Coram in the
merger.
We have established certain general guidelines by which we seek to target a
fixed number of unvested option shares for each executive officer based upon his
or her current position with Coram and his or her potential for growth within
Coram, i.e., future responsibilities and possible promotions over the option
term. However, we do not strictly adhere to these guidelines in making stock
option grants, and the relative weight which we give to the various factors
varies from individual to individual, as the circumstances warrant.
* Annual Incentive Compensation. In March 1995, we awarded a performance
bonus to Mr. Fortune, Coram's former President and Chief Operating Officer, in
an amount equal to 54% of his base salary for the 1994 fiscal year. This bonus
was awarded in lieu of a bonus that Mr. Fortune would have been entitled to
receive had he remained with his previous employer. No other executive officers
were awarded bonuses for the 1994 fiscal year.
On September 7, 1995, we decided in our capacity as the Coram Option Plan
Administrator to reprice each option outstanding under the Coram Option Plan on
such date to a reduced exercise price of $5.50 per share, which represented a
$2.00 per share premium over the market price of the Coram Common Stock on such
date. However, we did not reprice the options held by Messrs. Sweeney, Fortune,
Leno or any of the options held by any of the Company's directors. The remaining
terms and conditions of each such repriced option remain unchanged. We
implemented the repricing program because we believe that equity incentives are
a significant factor in the Company's ability to attract and retain key
employees and consultants who are critical to the Company's long-term success.
During the period from April 1995 to September 1995, the market value of the
Company's Common Stock had fallen as a result of market factors that affected
stock prices throughout the healthcare industry and factors that affected the
Company in particular. As a result, almost all of the options outstanding under
the Coram Option Plan had exercise prices significantly in excess of the current
market price of the Company's Common Stock. We believed that the Company's
ability to retain existing employees critical to its future success would be
impaired unless value was restored to their options by reducing the exercise
price to a level closer to the current market value. Accordingly, to enjoy the
benefit of the repriced option, each optionee must remain in the Company's
service until the market price of the Company's Common Stock appreciates
substantially over the September 7, 1995 market price.
CEO COMPENSATION
Coram's former Chief Executive Officer, Mr. James M. Sweeney, did not
receive a salary with respect to services rendered to Coram in the 1994 fiscal
year. Mr. Sweeney was paid a consulting fee of approximately $3.5 million for
financial services rendered pursuant to an agreement which he entered into with
T2 prior to the consummation of the Four-Way Merger. The amount of the fee paid
to Mr. Sweeney was determined as a fixed percentage of the average total market
capitalization of Coram, as determined over the ten (10) trading day period
immediately following the merger. Accordingly, we did not exercise any
discretion with respect to this particular payment. In addition, Mr. Sweeney was
not paid any base salary for his service as Chief
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Executive Officer but was paid salary payments totaling $83,300 between August
3, 1995 and October 13, 1995 for his services as President after Mr. Fortune
resigned.
On the effective date of the Four-Way Merger, Mr. Sweeney was granted an
option for 3,000,000 shares of Coram Common Stock as the principal inducement
for him to serve as Coram's Chairman of the Board. The exercise price
established for the option at the time of grant was $11.00 per share, based on
the market price of the Coram Common Stock on the grant date. Additionally, on
September 7, 1995, Mr. Sweeney was granted an option for 500,000 shares of Coram
Common Stock as the principal inducement for him to assume the duties of
President of Coram after Mr. Fortune resigned. The exercise price established
for the option at the time of grant was $3.50 per share, based on the market
price of the Coram Common Stock on the grant date. The option shares will vest
in a series of installments as Mr. Sweeney continues in Coram's service over the
four year period measured from July 8, 1994 and September 7, 1995, respectively.
Accordingly, Mr. Sweeney's compensation is tied directly to shareholder value in
the form of stock price appreciation over the period of his continued service
with Coram.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
As a result of Section 162(m) of the Internal Revenue Code, Coram is
allowed a federal income tax deduction for compensation paid to certain
executive officers, to the extent that compensation does not exceed $1 million
per officer in any one year. This limitation applies to all compensation paid to
the covered executive officers which is not considered to be performance based.
However, any payments which qualify as performance-based compensation are not
taken into account for purposes of this limitation. On the basis of this
distinction, the Coram Option Plan has been specifically designed to assure that
any compensation deemed paid in connection with the exercise of stock options
granted under that plan with an exercise price equal to the fair market value of
the option shares on the grant date will qualify for performance-based
treatment.
We do not expect that the compensation to be paid to Coram's executive
officers for the 1995 fiscal year will exceed the $1 million limit per officer.
Accordingly, until final Treasury regulations are issued with respect to the new
$1 million limitation, we will defer any decision on whether or not to
restructure one or more components of the compensation paid to the executive
officers so as to qualify those components as performance-based compensation
that will not be subject to the $1 million limitation.
The foregoing report has been submitted by the undersigned in our capacity
as members of the Compensation Committee of Coram's Board of Directors.
Richard A. Fink
Stephen G. Pagliuca
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STOCK PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total stockholder
returns assuming reinvestment of dividends for (i) Coram, (ii) the companies
included in the Standard & Poor 500 Stock Index and (iii) the companies
comprising the Dow Jones Industry Index for Health Care Providers for the period
commencing July 11, 1994, the date Coram Common Stock was first publicly traded,
through December 31, 1994. The stockholder returns are based upon an assumed
$100 investment made on July 11, 1994 in each of three charted alternatives. The
chart does not reflect declines in Coram's stock price subsequent to December
31, 1994.
<TABLE>
<CAPTION>
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Coram DJ Health
Measurement Period Healthcare Care Provid-
(Fiscal Year Covered) Corp Peer Group S&P 500 ers
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<S> <C> <C> <C> <C>
7/94 100 100 100 100
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12/94 115 104 104 101
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</TABLE>
CERTAIN LITIGATION AND OTHER MATTERS
In August 1995, the Company and certain of its officers and directors were
named as defendants in 20 civil suits filed on behalf of individuals claiming to
have purchased and sold Coram Common Stock during the time period from
approximately February 16, 1995 through August 11, 1995. The suits were filed in
the United States District Court for the District of Colorado and have been
consolidated into one suit captioned: In Re: Coram Healthcare Corporation
Securities Litigation, Matter File No. 95-N-2074. The complaint seeks
certification of a plaintiff's class. In general, the complaints allege that the
defendants made false and misleading statements to the public regarding, among
other things, projected earnings, anticipated cost savings, and proposed
mergers. The complaints assert claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 of the Securities
and Exchange Commission, and seek unspecified compensatory damages, attorneys'
fees and costs. The Company will seek coverage under existing directors and
officers insurance policies for any settlements, judgments, and costs of defense
in connection with these cases, within outstanding policy limits. There can be
no assurance, however, that such insurance coverage will be adequate to cover
all potential liabilities and costs that may be incurred.
On November 2, 1995, a shareholder derivative suit captioned Martin J.
Siegal v. James Sweeney, Tommy H. Carter, Richard A. Fink, Stephen G. Pagliuca,
L. Peter Smith, Gail R. Wilensky, Patrick J. Fortune and Coram Healthcare
Corporation, Civil Action No. 14646 was filed in the Court of Chancery of the
State of Delaware asserting substantially similar factual allegations as the
suits described in the preceding paragraph, and seeking a judgment against the
individual defendants to account to Coram for all damages sustained by Coram as
a result of their alleged actions.
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The Company believes that it has meritorious defenses in these actions.
Nevertheless, the ultimate of the litigation described in the preceding
paragraphs cannot presently be determined. Accordingly, no provision for any
loss that may result upon resolution of the suites has been made in the
consolidated financial statements.
The Company is also a party to various legal actions arising out of the
normal course of its business. Management believes that the ultimate resolution
of such actions will not have a material adverse effect on the Company's
financial position and results of operations.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Coram paid Mr. Sweeney a fee of approximately $3.5 million in 1994 for
financial advisory services pursuant to an agreement between Mr. Sweeney and T2,
a predecessor entity of Coram, in connection with the Four-Way Merger. The fee
paid to Mr. Sweeney was determined as a percentage of the average total market
capitalization of Coram as determined over the ten trading day period
immediately following the Four-Way Merger.
Following the consummation of the Four-Way Merger, Mr. Carter received a
severance payment of $1,345,500, or 2.99 times his annual base salary with T2 of
$450,000, from Coram pursuant to the terms of an employment agreement Mr. Carter
entered into with T2 prior to the Four-Way Merger.
In connection with the relocation of Coram's corporate headquarters to
Denver, Colorado, during 1994, Coram made a loan of $650,000 to Mr. Leno, the
former Chief Financial Officer and Secretary of Coram, which loan bears interest
at the applicable interest rate under the Internal Revenue Code. The principal
amount of such loan was repaid in July 1995.
Mr. Fink is a partner in a law firm that rendered various legal services to
Coram in 1994 and is continuing to render such services in 1995.
In April 1995, Coram paid Mr. Pagliuca a fee of approximately $2 million
for certain investment banking and financial advisory services rendered in
connection with Coram's acquisition of the Caremark Business. The fee was
contingent upon the closing of the acquisition of the Caremark Business and
represented approximately two-thirds of one percent of the $310 million
financing secured by Coram in connection with such transaction.
Mr. Nathanson is a Managing Director of DLJ, an investment banking firm
that rendered various financial services to Coram in 1995. An affiliate of DLJ
provided a $150 million bridge loan to Coram in April 1995 in connection with
the acquisition of the Caremark Business, pursuant to the terms of the Purchase
Agreement. The Purchase Agreement provides that DLJ has the right to appoint a
director to Coram's Board of Directors if an event of default has occurred and
so long as it is continuing, provided; however, that the right terminates at
such time that DLJ is no longer the holder of at least fifty percent of the
aggregate principal amount of the outstanding bridge notes. DLJ was granted the
option to exercise the right to appoint a director in September 1995, in
exchange for certain waivers under the Purchase Agreement.
In December 1994, L. Peter Smith received 1,170 shares of Coram Common
Stock in connection with the settlement of an earn-out agreement by and between
AllCare Health Services, Inc. ("AllCare") and Medisys, Inc. ("Medisys"), a
predecessor to Coram. Mr. Smith had previously been a principal of AllCare
before it was acquired by Medisys. Mr. Smith also received a cash payment of
$55,000 from Coram in 1994 in settlement of a preexisting employment agreement
with CareVan Medical System of Illinois, Inc., a subsidiary of Medisys.
Mr. Charles A. Laverty served briefly as an executive officer and director
of Coram during the last fiscal year. As a result of the Four-Way Merger and
restructuring of Coram, Mr. Laverty became eligible to receive certain payments
pursuant to the terms of an Employment Contract dated as of July 8, 1994 between
Mr. Laverty and Coram, including a severance/noncompete payment of $2.5 million
payable in 36 monthly installments. In 1994, payments under such contract
totaled approximately $536,300. Coram also forgave a note in the amount of
approximately $400,000 from Mr. Laverty, payable to a predecessor entity of
Coram, as part of Mr. Laverty's severance.
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Mr. Miles E. Gilman served briefly as an executive officer and director of
Coram during the last fiscal year. As a result of the Four-Way Merger and
restructuring of Coram, Mr. Gilman received certain payments pursuant to the
terms of a Severance/Non-Compete Agreement dated as of July 8, 1994 between Mr.
Gilman and Coram, including a severance payment of $326,000 and a
post-termination noncompete covenant payment of $2,000,000.
Mr. William J. Brummond served briefly as an executive officer and director
of Coram during the last fiscal year. As a result of the Four-Way Merger and
restructuring of Coram, Mr. Brummond became eligible to receive certain payments
pursuant to the terms of a Severance/Noncompete Agreement dated as of July 8,
1994, between Mr. Brummond and Coram, including a severance/noncompete payment
of approximately $822,000, payable in 36 monthly installments. In 1994, payments
under such contract totaled approximately $400,000.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP, served as independent auditors of
the Company for the year ended December 31, 1994. Subject to stockholder
ratification at the Annual Meeting, the Board of Directors has selected Ernst &
Young LLP, as the Company's independent auditors for the fiscal year ending
December 31, 1995. The affirmative vote of a majority of the shares of the
Company's voting stock represented and voted at the Annual Meeting is required
for ratification of the appointment of Ernst & Young LLP, as the Company's
independent auditors.
Representatives of Ernst & Young LLP, are expected to attend the Meeting.
They will have an opportunity to make statements and will be available to
respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
OTHER MATTERS
Management does not know of any other matters to be brought before the
Annual Meeting. If any other matter is properly presented for consideration at
the Annual Meeting, it is intended that the proxies will be voted by the persons
named therein in accordance with their discretion on such matters.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholders may submit proposals on matters appropriate for stockholder
action at the Company's annual stockholder meetings, consistent with rules
adopted by the Commission. Such proposals must be received by the Company not
later than February 15, 1996 to be considered for inclusion in the proxy
statement and form of proxy relating to the 1996 Annual Meeting of Stockholders.
Any such proposals should be addressed to: Corporate Secretary, Coram Healthcare
Corporation, 1125 Seventeenth Street, Suite 1500, Denver, Colorado 80202.
Under Rule 14a-8 adopted by the Commission under the Exchange Act,
proposals of stockholders must conform to certain requirements as to form and
may be omitted from the proxy statement and proxy under certain circumstances.
In order to avoid unnecessary expenditures of time and money by stockholders,
stockholders are urged to review this rule and, if questions arise, to consult
legal counsel prior to submitting a proposal.
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ANNUAL REPORT TO STOCKHOLDERS
The 1994 Annual Report of the Company, as filed with the Commission, is
being mailed to the stockholders with this Proxy Statement. The Annual Report is
not to be considered part of the soliciting material.
CORAM HEALTHCARE CORPORATION
Denver, Colorado
November 13, 1995
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PROXY CORAM HEALTHCARE CORPORATION PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James M. Sweeney and Donald J. Amaral, or
any of them, the proxies and attorneys-in-fact for the undersigned, with full
power of substitution and revocation, to represent and vote on behalf of the
undersigned, at the 1995 annual meeting of stockholders of Coram Healthcare
Corporation (the "Company") to be held at The Westin Hotel, 1672 Lawrence
Street, Denver, Colorado on December 11, 1995 at 9:00 a.m. local time, and any
adjournments or postponements thereof, all shares of the common stock, $.001 par
value per share, of the Company standing in the name of the undersigned or which
the undersigned may be entitled to vote as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<S> <C> <C>
1. Election of Directors / / FOR all nominees listed below / / WITHHOLD AUTHORITY
(check one box only) (except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
James M. Sweeney, Donald J. Amaral, Tommy H. Carter, Richard A. Fink, Andrew J.
Nathanson,
Stephen G. Pagliuca, L. Peter Smith and Dr. Gail R. Wilensky.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, check
the "FOR" box above and write that nominee's name on the space provided below.)
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2. Election of Ernst & Young as independent auditors of the Company.
/ / FOR / / AGAINST / / ABSTAIN
(TO BE COMPLETED AND SIGNED ON THE OTHER SIDE)
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3. In their discretion, the proxies are authorized to vote for the election of
such substitute nominee(s) as such proxies may select in the event that one
or more of the nominees named in Item 1 above becomes unable to serve, and
upon such other business as may properly come before the meeting or any
adjournment or postponement thereof.
The submission of this proxy if properly executed revokes all prior proxies
given by the undersigned.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned. If no direction is made, this proxy will be voted FOR
items 1 and 2.
Receipt of the Notice of Annual Meeting of Stockholders and accompanying
Proxy Statement is hereby acknowledged.
Please sign exactly as name
appears on this card.
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator 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.
Date ____________________, 1995
_______________________________
(Signature of stockholder)
_______________________________
(Signature of stockholder if
held jointly)
NOTE: Please sign, date and mail this proxy promptly in the enclosed
postage-paid envelope.
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