CORAM HEALTHCARE CORP, PRE 14A, 1999-05-26

CORAM HEALTHCARE CORP
PRE 14A, 1999-05-26
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<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:

/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 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/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.

(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2

[LETTERHEAD]

Donald J. Amaral
Chairman of the Board

June , 1999

Dear Stockholder:

You are cordially invited to attend the 1999 Annual Meeting of Stockholders
of Coram Healthcare Corporation (the "Company"), which will be held on Thursday,
August 5, 1999 at 12:00 noon local time, at The Oxford Hotel, 1600 Seventeenth
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 letter and the
accompanying 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
Chairman of the Board
<PAGE> 3

CORAM HEALTHCARE CORPORATION
1125 SEVENTEENTH STREET, SUITE 2100
DENVER, COLORADO 80202

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 5, 1999

To the Stockholders of Coram Healthcare Corporation:

NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
Coram Healthcare Corporation, a Delaware corporation ("Coram" or the "Company"),
will be held on Thursday, August 5, 1999, at 12:00 noon local time, at The
Oxford Hotel, Denver, Colorado (the "Meeting"), for the following purposes:

(1) To elect six directors, Donald J. Amaral, William J. Casey,
Stephen A. Feinberg, Richard A. Fink, Richard M. Smith, and L. Peter Smith,
to serve until the 2000 Annual Meeting of Stockholders and until their
successors are duly elected and qualified;

(2) To approve an amendment to the Company's Restated Certificate of
Incorporation, as amended, to increase the number of authorized shares of
the Company's $.001 par value common stock (the "Common Stock") from
100,000,000 to 150,000,000;

(3) To approve certain options to purchase shares of the Company's
Common Stock granted to four directors of the Company, Richard A. Fink,
William J. Casey, Stephen G. Pagliuca and L. Peter Smith, on September 9,
1998;

(4) To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the Company's 1999 fiscal year; and

(5) 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 June
15, 1999 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 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 2100, 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, Chief Executive
Officer
and President

Denver, Colorado
June , 1999
<PAGE> 4

CORAM HEALTHCARE CORPORATION
1125 SEVENTEENTH STREET, SUITE 2100
DENVER, COLORADO 80202
---------------------

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
AUGUST 5, 1999
---------------------

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 of Coram Healthcare Corporation, a Delaware corporation ("Coram" or
the "Company"), to be used at the 1999 Annual Meeting of Stockholders of the
Company to be held on Thursday, August 5, 1999 at 12:00 noon, local time, at The
Oxford Hotel, 1600 Seventeenth 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 June
, 1999. The Company's Annual Report to Stockholders, which includes financial
statements for the fiscal year ended December 31, 1998, is being mailed or
delivered concurrently with this Proxy Statement to stockholders entitled to
vote at the Meeting.

Stockholders of the Company represented at the Meeting will consider and
vote upon (i) the election of six directors, Donald J. Amaral, William J. Casey,
Stephen A. Feinberg, Richard A. Fink, Richard M. Smith, and L. Peter Smith, to
serve on the Board of Directors until the 2000 Annual Meeting of Stockholders of
the Company and until their successors are duly elected and qualified; (ii) to
approve an amendment to the Company's Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), to increase the number of
authorized shares of the Company's Common Stock from 100,000,000 to 150,000,000;
(iii) to approve certain options to purchase shares of the Company's Common
Stock granted to four directors of the Company, William J. Casey, Richard A.
Fink, Stephen G. Pagliuca and L. Peter Smith, on September 9, 1998; (iv) to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 31, 1999; and (v) 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 Board of
Directors or that authority to vote such shares be "WITHHELD" as to all nominees
or any individual nominee or nominees; and voted "FOR," "AGAINST" or "ABSTAIN"
from voting with respect the approval of (i) the proposed amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares; (ii) the approval of certain options to purchase shares of Company's
Common Stock granted to four directors of the Company on September 9, 1998; and
(iii) the ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1999.

A majority of the shares entitled to vote, present in person or represented
by proxy, will constitute a quorum at the Meeting. The affirmative vote of the
majority of the shares present in person or represented by proxy at the Meeting
and entitled to vote on the subject matter will be the act of the Company's
stockholders as to all matters that will come before the Meeting, except with
respect to the election of directors as to which the six nominees receiving the
highest number of votes will be elected and with respect to the proposal to
amend the Company's Certificate of Incorporation (Proposal 2), which requires
the affirmative vote of a majority of the shares of Common Stock issued and
outstanding. Brokers who hold shares for the accounts of
<PAGE> 5

their clients may vote such shares either as directed by their clients or in
their own discretion if permitted by the stock exchange or other organization of
which they are members. Members of the New York Stock Exchange ("NYSE") are
permitted to vote their clients' proxies in their own discretion as to the
election of directors if the clients have not furnished voting instructions
within ten days of the meeting. Certain proposals other than the election of
directors are "non-discretionary" and brokers who have received no instructions
from their clients do not have discretion to vote on those items. When a broker
votes a client's shares on some but not all of the proposals at a meeting, the
missing votes are referred to as "broker non-votes." Those shares will be
included in determining the presence of a quorum at the Annual Meeting, but are
not considered "present" for purposes of voting on the non-discretionary
proposals. They have no direct impact on the outcome of such proposals; however,
they will have the effect of a vote against the Proposal 2, which requires the
affirmative vote of a majority of the shares issued and outstanding. Abstentions
will be counted in tabulations of the votes cast on proposals presented to
stockholders. Therefore, an abstention is the equivalent of a vote against a
proposal. 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. As of the date hereof,
the Company is not aware of any such matters.

The Company has fixed the close of business on June 15, 1999 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 (the "Record Date"). On that date, the
Company had issued and outstanding 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.

Solicitation of proxies for use at the Meeting may be made in person or by
mail, telephone or telegram, by directors, officers and employees of the Company
and MacKenzie Partners, Inc. Other than MacKenzie Partners, Inc., which shall
receive a proxy solicitation fee of approximately $5,000, 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 proxy card, and of
soliciting proxies.

Boston EquiServe, 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 (the "Inspector"). All proxies and ballots delivered to the
Inspector shall be kept confidential by the Inspector.

INFORMATION CONCERNING MEMBERS AND NOMINEES TO THE BOARD OF DIRECTORS

Information is set forth below concerning the members and nominees for
election as directors of Coram. All of the nominees for election as directors at
the Meeting are incumbent directors of Coram. Each member and nominee has
furnished information as to his beneficial ownership of Common Stock as of
February 28, 1999, 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 entered
into any arrangement or understanding pursuant to which such person was to be
selected as a director or nominee for director. Stephen G. Pagliuca has declined
to stand for re-election to the board of directors. Mr. Pagliuca has not
informed the Company of any disagreement with the Company on any matter relating
to the Company's operations, policies, or practices.

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<PAGE> 6

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH CORAM SINCE
---- --- ------------------- --------
<S> <C> <C> <C>
Donald J. Amaral..................... 46 Chairman of the Board* 1995
William J. Casey..................... 54 Director* 1997
Stephen A. Feinberg.................. 39 Director* 1998
Richard A. Fink...................... 44 Director* 1994
Stephen G. Pagliuca.................. 44 Director* 1994
L. Peter Smith....................... 50 Director* 1994
Richard M. Smith..................... 40 Director, Chief Executive Officer, 1999
and President*
</TABLE>

- ---------------

* Indicates such director has been nominated for re-election as a director.

Mr. Amaral was appointed Chairman of the Company's Board of Directors in
September 1997. Mr. Amaral has served as a director of the Company since October
1995, Chief Executive Officer of the Company from October 1995 through April 23,
1999, and as President from October 1995 through December 1997. 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. Mr. Amaral is also a member of the Board of Directors
of Meditrust Corporation and CareMatrix Corporation.

Mr. Casey has served as a director of Coram since September 1997. Since
1983, Mr. Casey has served as a consultant in the healthcare industry,
specializing in hospital management evaluation, hospital planning, managed care
contracting and turnaround services. From 1986 to the present, Mr. Casey has
also served as Contract Administrator for Emergency Department Physicians'
Medical Group, Inc. and its affiliated medical groups, which provide physician
services to non-governmental facilities. In addition, from 1988 to the present,
Mr. Casey has served as Contract Administrator for NP Medical Group, Inc., which
provides physician services to government facilities. Mr. Casey also serves as a
director of TriCounties Bank.

Mr. Feinberg has served as a director of Coram since June 1998. He was
designated to serve on the Board of Directors pursuant to an agreement (the
"Securities Exchange Agreement") between the Company and the holders of the
Company's Series A Senior Subordinated Notes ("Series A Notes") and Series B
Senior Subordinated Convertible Notes. Pursuant to the terms of the Securities
Exchange Agreement, Mr. Feinberg has also been designated as a member of the
Audit Committee and the Compensation Committee. Mr. Feinberg has managed
separate pools of capital since 1985. Through Cerberus Capital Management, L.P.,
and its affiliates, Mr. Feinberg currently manages approximately ten funds which
make investments in publicly traded and private bank debt, trade claims, large
and middle market bank loans, distressed real estate and public and private
equity, including post-bankruptcy equity.

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 LLP since October
1987 and is currently Chairman of that firm's Business & Technology Group.

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 its Managing
Director since that time, focusing on health care and information industry
private-equity investment opportunities. Mr. Pagliuca is also the Chairman of
the Board of Wesley Jensen Corporation and serves on the Board of Directors of
Dade International, Physicians Quality Care, Inc., Vivra, Inc. and Physio
Control, Inc.

Mr. L. Peter Smith has served as a director of Coram since July 1994.
Between November 1993 and July 1994, Mr. Smith was a director of Medisys, Inc.
Mr. Smith served as the Managing Partner of AllCare Health Services, Inc., which
was acquired by Medisys in December 1992. Mr. Smith is also Chief Executive

3
<PAGE> 7

Officer and serves on the Board of Directors of Ralin Medical, Inc., a company
specializing in cardiac disease management. Mr. Smith also serves on the Board
of Directors of Sabratek Corporation and AMSYS, Inc.

Mr. Richard M. Smith has served as the President of Coram since December
1997, and was elected Chief Executive Officer and a director in April 1999. Mr.
Smith also served as Secretary from July 1995 to April 1999. Mr. Smith served as
Chief Financial Officer from August 1995 to March 1998, prior to which time he
served as Vice President, Tax and Treasury, from October 1994 to August 1995.
From November 1993 to October 1994, Mr. Smith served as Vice President, Finance
and Treasurer, and Assistant Secretary, of CoreSource, Inc., a health care
company specializing in third party claims administration, workers compensation
and integrated health delivery systems.

MEETINGS AND COMMITTEES OF THE BOARD DURING 1998

From January 1, 1998 through June 1998, the Company's Board of Directors
consisted of the following five persons: Donald J. Amaral, who served as the
Chairman of the Board, William J. Casey, Richard A. Fink, L. Peter Smith, and
Stephen Pagliuca. In June 1998, Stephen A. Feinberg was elected to the Board of
Directors in accordance with the Securities Exchange Agreement.

The Coram Board of Directors met 18 times during the fiscal year ended
December 31, 1998. Other than as described below, each director attended at
least 75% of the aggregate of (i) the total number of meetings of the Board of
Directors held subsequent to the date of their election or appointment to the
Board of Directors and (ii) the total number of meetings held by all committees
of the Board of Directors on which such director served. Mr. Pagliuca and Mr.
Feinberg attended 44% and 43%, respectively, of the meetings of the Board of
Directors held during 1998, and Mr. Feinberg did not attend the one meeting of
the Audit Committee and the one meeting of the Compensation Committee that
occurred following his appointment to the Board of Directors, Audit Committee
and the Compensation Committee.

The Board of Directors has established an Audit Committee, a Compensation
Committee, a Nominating Committee, a Quality Assurance and Compliance Committee
and an Executive Committee.

Audit Committee. Through June 1998, the Audit Committee consisted of
Messrs. Casey and L. Peter Smith, each a non-employee director of Coram. In June
1998, Mr. Feinberg was appointed to the Audit Committee in accordance with the
Securities Exchange Agreement. The Audit Committee's principal functions are:
(i) to recommend to the 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 management changes
or improvements therein; and (iii) to perform such other functions as the Board
of Directors may from time to time designate. The Audit Committee met two times
during the fiscal year ended December 31, 1998.

Compensation Committee. Through June 1998, the Compensation Committee
consisted of Messrs. Pagliuca and L. Peter Smith, each a non-employee director
of Coram. In June 1998, Mr. Feinberg was appointed to the Compensation Committee
in accordance with the Securities Exchange Agreement. 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 "Stock
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 met twice during the fiscal year ended December 31,
1998.

Nominating Committee. The Nominating Committee consisted of Messrs. Amaral
and L. Peter Smith until June 1998. Thereafter, Messrs. Amaral and Fink were the
members of this committee. The Nominating Committee's principal function is to
nominate persons for election to the Board of Directors at Coram's annual
4
<PAGE> 8

stockholder meetings or for vacancies if and as they arise. The Nominating
Committee will consider nominations made by a stockholder provided that such
stockholder complies with certain procedures set forth in the By-Laws of the
Company. Such stockholder nominations must be made in writing to the Secretary
of the Company in a timely fashion. To be timely, notice must be delivered to or
mailed and received at the principal executive offices of the Company no less
than 30 days nor more than 60 days prior to the meeting to which such nomination
relates; provided, however, that if less than 40 days' notice or prior public
disclosure of the meeting is given or made to stockholders, to be timely, notice
by the stockholder must be so received not later than the close of business on
the tenth day following the day on which such notice of the date of the meeting
was mailed or such public disclosure was made. Such stockholder's written notice
must set forth: (a) as to each person whom the stockholder proposes to nominate,
(i) the name, age, business address and residence address of the proposed
nominee, (ii) the principal occupation or employment of the proposed nominee,
(iii) the class and number of shares of the Company which are beneficially owned
by the proposed nominee, and (iv) any other information relating to the proposed
nominee that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended; and (b) as to the stockholder giving the notice, (i)
the name and record address of the stockholder and (ii) the class and number of
shares of the Company which are beneficially owned by the stockholder. The
Company may require any proposed nominee to furnish such other reasonable
information in order to determine the eligibility of such proposed nominee to
serve as a director of the Company. The Nominating Committee had no meetings
during 1998.

Quality Assurance and Compliance Committee. The Quality Assurance and
Compliance Committee was established by the Board of Directors in February 1995
and, in 1998, the Committee was comprised of Messrs. Casey and Fink. This
committee is responsible for overseeing and ensuring Coram's compliance with
applicable laws, regulations, and Coram's corporate code of conduct, as well as
providing oversight of Coram's corporate compliance program as it relates to the
conduct of its business to ensure that the standards of business, professional,
legal and personal ethics are being met by Coram in the delivery of its services
and products. The Quality Assurance and Compliance Committee met twice during
the fiscal year ended December 31, 1998.

Executive Committee. The Executive Committee was established by the Board
of Directors in September 1997, to have and be able to exercise when the Board
of Directors of the Corporation is not in session all the powers and authority
of the Board of Directors in the management of the business and affairs of the
Corporation other than those as to which the Board of Directors is required to
act as a whole under the Delaware General Corporation Law. Through June 1998,
the Executive Committee consisted of Messrs. Amaral, Fink, Pagliuca and L. Peter
Smith. Since June 1998, the Executive Committee consisted of Messrs. Amaral,
Pagliuca and L. Peter Smith. The Executive Committee also has the power to
review merger and acquisition proposals and make recommendations to the Board
with respect to such proposals, and have such other powers as may lawfully be
delegated to it by the Board of Directors, not in conflict with specific powers
conferred by the Board of Directors upon any other committee thereof appointed
by it, from time to time. The Executive Committee had no meetings in 1998.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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 ("NYSE"). 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, 1998, all
of its directors, executive officers and greater than 10% beneficial owners were
in compliance with these filing requirements, with the exception of the
following: (i) Donald J. Amaral filed a late Statement of Changes in Beneficial
Ownership on Form 4 for the 6,081 shares of Common Stock he received in lieu of
salary for February 1998; (ii) Brendan K. Beggin, the Company's former Vice
President of Reimbursement, inadvertently overstated his ownership of shares of
Common Stock by 200 shares on the Initial Statement of Beneficial Ownership of

5
<PAGE> 9

Securities on Form 3 filed in July 1998 (an amended Form 3 was filed); (iii)
Linda M. McBride, the Company's Vice President of Marketing, filed a late
Statement of Changes in Beneficial Ownership on Form 4 for her June 1998
acquisition under the Company's Employee Stock Purchase Plan of 100 shares of
Common Stock; and (iv) Joseph D. Smith inadvertently failed to disclose 212
shares of Common Stock in his Annual Statement of Beneficial Ownership of
Securities on Form 5 in December 1997 (an amended Form 5 was filed in 1998).

EXECUTIVE OFFICERS

The following table sets forth certain information concerning 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 Richard M.
Smith is set forth under the caption "Information Concerning Members and
Nominees to the Board of Directors" above.

<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH CORAM
---- --- ----------------------
<S> <C> <C>
Richard M. Smith..................... 40 Chief Executive Officer, President, and
Director
Scott R. Danitz...................... 42 Vice President and Controller
Scott T. Larson...................... 36 Senior Vice President, General Counsel, and
Secretary
Dominec A. Meffe..................... 34 President, Coram Prescription Services division
Vito Ponzio, Jr...................... 44 Senior Vice President, Human Resources
Paul J. Quiner....................... 40 Senior Vice President, Mergers and Acquisitions
Wendy L. Simpson..................... 50 Executive Vice President and Chief Financial
Officer
Joseph D. Smith...................... 40 Chief Operating Officer and President, Resource
Network division
</TABLE>

Scott R. Danitz has served as the Company's Vice President and Controller
since January 1998. Previously, Mr. Danitz was employed by First Data
Corporation from 1989 through 1997 and held various positions, the most recent
of which had been Vice President and Controller, Payment Instruments division.

Scott T. Larson has served as the Company's Senior Vice President and
General Counsel since July 1998 and was elected Secretary in April 1999.
Previously, Mr. Larson served as the Company's Vice President and Legal Counsel
from March 1996 to July 1998 and as Assistant General Counsel from July 1994
through February 1996. Between December 1991 and July 1994, Mr. Larson served as
Corporate Counsel and later as Assistant General Counsel for T2 Medical, Inc.
("T2 Medical"). Before joining T2 Medical, Mr. Larson was employed as an
attorney with the Atlanta-based law firm of Alston & Bird.

Dominec A. Meffe has served as the Vice President and General Manager of
the Company's Coram Prescription Services division since November 1997 and was
appointed to serve as the division's President in January 1998. Prior to joining
Coram, Mr. Meffe was the Chief Operating Officer of Columbia Pharmacy Solutions,
the prescription benefit management and mail order pharmacy division of
Columbia/HCA Healthcare Corporation. Mr. Meffe served in that position with
Columbia Pharmacy Solutions from March 1994 to October 1997.

Paul J. Quiner has served as Senior Vice President, Mergers and
Acquisitions since July 1998. Mr. Quiner served as Senior Vice President and
General Counsel of Coram from March 1996 to July 1998 and as Assistant General
Counsel from July 1994 through February 1996. From September 1992 to July 1994,
Mr. Quiner served as Assistant General Counsel for T2 Medical. Previously, Mr.
Quiner was a partner in the Atlanta-based law firm of Alston & Bird.

Vito Ponzio, Jr. has served as the Company's Senior Vice President, Human
Resources since September 1998. Previously, Mr. Ponzio served as the Company's
Vice President of Human Resources from February 1996 to September 1998 and as
Director of Human Resources from February 1994 to February 1996.

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<PAGE> 10

Wendy L. Simpson has served as Executive Vice President and Chief Financial
Officer since March 1998. Previously, Ms. Simpson held the positions of
Executive Vice President, Chief Operating Officer and Chief Financial Officer
for Transitional Hospitals Corporation from July 1994 to July 1997. From March
1991 to June 1994, she was Chief Financial Officer and Principal of Weisman
Taylor Simpson & Sabatino. Ms. Simpson also serves on the Board of Directors of
LTC Properties, Inc., a real estate investment trust.

Joseph D. Smith has served as the Company's Chief Operating Officer since
January 1999 and has been President of the Resource Network division since March
1998. Prior to that time, Mr. Smith served as Chief Operating Officer of the
East of the Company beginning in December 1996. Preceding that and since
September 1994, Mr. Smith had served as Area Vice President, Northeast of the
Company. From 1993 until September 1994, Mr. Smith was the Eastern Area Vice
President of H.M.S.S., Inc., a regional home infusion company acquired by Coram
in September 1994.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

COMPENSATION OF DIRECTORS

Fees for Board Service. Under current Company policy, non-employee
directors earn $2,000 for each Board of Directors meeting attended in person and
$750 for each Board of Directors meeting attended by telephone conference call.
No compensation is earned for participating at meetings of committees of the
Board of Directors. Employee directors earn no additional compensation for
services as a director. All directors are entitled to reimbursement for expenses
incurred in connection with attending meetings of the Board of Directors or
committees thereof. Compensation for participation in the Board of Directors is
at the discretion of the Board.

Mr. Amaral, the only director who was also an employee in 1998, received no
additional compensation for service on the Board of Directors. In addition to
the reimbursement of out-of-pocket expenses relating to meeting attendance,
non-employee directors of Coram earned the following compensation for Board
meetings attended during fiscal 1998:

<TABLE>
<S> <C>
William J. Casey.......................................... $14,500
Richard A. Fink........................................... 16,000
Stephen A. Feinberg....................................... 2,250
Stephen G. Pagliuca....................................... 7,250
L. Peter Smith............................................ 14,500
</TABLE>

Outside Directors' Automatic Option Grant Program. Non-employee members of
the Board of Directors participate in the Automatic Option Grant Program in
effect under the Company's Stock Option Plan. On the date of each annual meeting
of Coram's stockholders, each individual who will continue to serve as a non-
employee Board member receives a non-statutory stock option to purchase 2,500
shares of Common Stock at an exercise price equal to the fair market value of
the Common Stock on the automatic option grant date. Each individual who
continued to serve as a non-employee Board member on June 24, 1998 received an
automatic option grant under the program for 2,500 shares of Common Stock at an
exercise price of $2.00 per share, the fair market value on such date.
Additionally, each non-employee individual, upon being newly appointed or
elected to Coram's Board of Directors, is automatically granted, at the time of
such initial election or appointment, a non-statutory option to purchase 75,000
shares of Common Stock. In 1998, options to purchase 75,000 shares relating to
newly appointed/elected individuals were granted to Mr. Feinberg upon his
appointment to the Board on June 24, 1998, at an exercise price of $2.00 per
share. With regard to the stock options for both the newly appointed/elected
Board members and the continuing Board members, each option 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
of such shares. The optionee's option shares will vest in a series of equal
monthly installments over twelve (12) months of Board service measured from the
automatic option

7
<PAGE> 11

grant date. The shares subject to each automatic option grant under the Stock
Option Plan will, however, 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.

Each automatic option granted to the non-employee Board members 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.

Other Director Options. In September 1998, the Board granted options to
purchase 75,000 shares of the Company's Common Stock to each of Messrs. Casey,
Fink, L. Peter Smith and Pagliuca at an exercise price of $1.6875 per share.
These options were granted subject to stockholder approval. See "Proposal 3:
Proposal to Approve Stock Options Granted to Four Directors of the Company."

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the annual and long-term compensation earned
by the Chief Executive Officer serving in that capacity at December 31, 1998,
the four most highly compensated executive officers of the Company (other than
such Chief Executive Officer) who were serving as executive officers of the
Company at the end of 1998 (collectively the "Named Executive Officers") for
services rendered in all capacities to the Company and its subsidiaries for the
years ended December 31, 1998, 1997 and 1996:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- -------------
NAME AND OTHER ANNUAL STOCK OPTIONS
PRINCIPAL POSITION(1) YEAR SALARY BONUS(2) COMPENSATION(3) (#)
--------------------- ---- -------- ---------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Donald J. Amaral 1998 $650,000(5) $1,000,000(6) $-- --
Director and Chairman 1997 623,076 90,000 -- 300,000
of the Board(4) 1996 600,000 600,000(7) -- --
Richard M. Smith 1998 $320,000 $ 187,500(9) $-- 175,000
Chief Executive Officer, 1997 252,732 250,000 -- 650,000(10)
President and Director(8) 1996 201,458 205,500 -- --
Joseph D. Smith 1998 $264,827 $ 217,500(9) $-- 50,000
Chief Operating Officer 1997 235,809 50,000 -- 300,000(11)
and President, Resource 1996 148,425 116,750 -- 25,000
Network division
Paul J. Quiner 1998 $208,731 $ 138,750(9) $-- 62,500
Senior Vice President, 1997 185,000 35,000 -- 137,500(12)
Mergers and Acquisitions 1996 180,270 83,750 -- 25,000
Christopher J. York 1998 $264,827 $ 187,500(9) $-- --
Former Chief Operating 1997 235,809 50,000 -- 325,000(14)
Officer, West (13) 1996 161,501 117,375 -- 50,000
</TABLE>

- ---------------

(1) Unless otherwise indicated, see information above under captions
"Information Concerning Members and Nominees to the Board of Directors" and
"Executive Officers" for employment history.

(2) Unless otherwise indicated, reflects performance, retention and
discretionary bonuses paid in 1998 and 1997 for services rendered to the
Company in 1997 and 1996, respectively.

(3) Does not include perquisites aggregating in dollar value less than the
lesser of $50,000 or 10% of the individual's annual salary and bonus
reported for such individual for the year presented.

8
<PAGE> 12

(4) Mr. Amaral served as Chief Executive Officer from October 1995 through
April 1999.

(5) Represents base salary received in cash (50%) and Common Stock (50%). The
shares were valued at the time the compensation was paid based upon the
lesser of the closing price of the Common Stock on the last business day of
the month or the average closing price of the Common Stock during the 30
business days ending on the last business day of the month.

(6) Represents payment of a contingent bonus for completing the refinancing of
the Company's debt through the completion of the transactions contemplated
by the Securities Exchange Agreement.

(7) In April 1997, fifty percent of Mr. Amaral's 1996 bonus was paid in cash
and fifty percent was paid in shares of Common Stock of the Company based
on the average closing price of the Company's Common Stock on the NYSE in
the 30-day period immediately preceding the issuance of such shares of
Common Stock.

(8) Mr. Smith was elected to serve as Chief Executive Officer and a director in
April 1999.

(9) Represents retention bonuses earned in 1998 and paid in 1999 except as to
Mr. J. Smith, of which $30,000 of the amount disclosed represents a
performance bonus earned and paid in 1998.

(10) Consists of 325,000 newly issued stock options under the 1994 Stock Option
Plan and the reissuance of 325,000 stock options under the Stock Option
Plan.

(11) Consists of 150,000 newly issued stock options under the 1994 Stock Option
Plan and the reissuance of 150,000 stock options under the Stock Option
Plan.

(12) Consists of 62,500 newly issued stock options under the 1994 Stock Option
Plan and the reissuance of 75,000 stock options under the Stock Option
Plan.

(13) Mr. York resigned in February 1999.

(14) Consists of 150,000 newly issued stock options under the 1994 Stock Option
Plan and the reissuance of 175,000 stock options under the Stock Option
Plan.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning options granted to
each of the Named Executive Officers during the year ended December 31, 1998. In
addition, in accordance with the rules of the Commission, hypothetical gains or
"option spreads" that would exist for the respective options are also shown.
These gains are based on assumed rates of annual compounded stock price
appreciation of 5% and 10% from the date the options were granted over the full
option term. No stock appreciation rights were granted to the Named Executive
Officers during the fiscal year ended December 31, 1998.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PER -----------------------------
NAME GRANTED FISCAL YEAR SHARE EXPIRATION DATE 0% 5% 10%
---- ---------- ------------ -------- --------------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald J. Amaral..... -- --% $ -- -- $ -- $ -- --
Paul J. Quiner....... 62,500 2.29 2.000 June 24,2008 -- 78,612 199,218
Joseph D. Smith...... 50,000 1.83 2.375 March 11,2008 -- 74,681 189,257
Richard M. Smith..... 175,000 6.40 2.250 August 10, 2008 -- 247,627 627,536
Christopher J. -- -- -- -- -- -- --
York...............
</TABLE>

- ---------------

(1) 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, 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 option exercises and Common
Stock holdings are dependent on the future performance of the Coram Common
Stock and overall stock market conditions. Does not reflect changes in the
market price of Coram Common Stock subsequent to December 31, 1998.

9
<PAGE> 13

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth information concerning the aggregate number
of options exercised during the year ended December 31, 1998 by each of the
Named Executive Officers and outstanding options held by each such officer at
December 31, 1998. None of the Named Executive Officers exercised any stock
appreciation rights during the 1998 fiscal year. No stock appreciation rights
were held by the Named Executive Officers at the end of the 1998 fiscal year.

<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED DECEMBER 31, 1998 DECEMBER 31, 1998(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Amaral............ -- -- 2,300,000 200,000 -- --
Paul J. Quiner.............. -- -- 83,332 116,668 -- --
Joseph D. Smith............. -- -- 176,562 173,438 -- --
Richard M. Smith............ -- -- 371,875 453,125 -- --
Christopher J. York......... -- -- 192,707 132,293 -- --
</TABLE>

- ---------------

(1) Whether an option is "in-the-money" is determined by subtracting the
exercise price of the option from the closing price for the Common Stock as
reported by the NYSE on December 31, 1998 ($1.875). If the amount is greater
than zero, the option is "in-the-money." For the purpose of such
calculation, the exercise price per share is the applicable exercise price
as of December 31, 1998 and does not reflect market price changes subsequent
to December 31, 1998.

Shares subject to options granted under the Stock Option Plan to the
Company's Named 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 involuntary termination of the optionee's employment within
eighteen months following such acquisition. In addition, the Compensation
Committee, as the Stock 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 Stock 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 involuntarily terminated following such hostile take-over.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS

The Company has entered into or anticipates entering into employment and/or
severance agreements with its Named Executive Officers and certain other
executive officers as described below.

Donald J. Amaral. On October 13, 1995, Coram entered into an employment
agreement with Donald J. Amaral, for a three-year term commencing on such date,
unless otherwise terminated in accordance with the terms thereof. The Company
extended the agreement to Mr. Amaral to attract and retain his services in light
of the downturn in the Company's business and its uncertain prospects, as he has
been considered critical to Coram's future success in the Company's turn-around
period. Under the agreement, Mr. Amaral initially received a base salary of
$600,000 per annum, and the right to receive a performance bonus based on the
Company's reaching certain performance targets determined annually by the
Compensation Committee. 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 $3.45 per share. The options vested and became exercisable in
three equal annual installments upon Mr. Amaral's completion of

10
<PAGE> 14

each year of service over the three-year period measured from the October 13,
1995 grant date. Mr. Amaral is also eligible to receive all other benefits
generally made available to the Company's senior executives.

In September 1997, the Board of Directors approved certain contingent
"success fees" payable to Mr. Amaral as follows: (i) $1,000,000 upon the
refinancing of the Company on terms acceptable to the Board of Directors,
payable (a) $500,000 upon closing of any such refinancing, and (b) $500,000 six
months later provided that Mr. Amaral is still employed by the Company at that
date; and (ii) $4,000,000 upon the sale of the Company on terms acceptable to
the Board of Directors and approved by the Company's stockholders, which would
be payable on the earlier of (a) the first anniversary of the sale if Mr. Amaral
remains employed by the Company or (b) involuntary termination, other than for
cause, of Mr. Amaral following the sale of the Company. The $1,000,000 success
fee relating to the refinancing of the Company's debt in May 1998 pursuant to
the Securities Exchange Agreement was paid in a $500,000 installment in
September 1998 and a $500,000 installment in February 1999.

In December 1997, at Mr. Amaral's request, the Board of Directors adopted a
resolution authorizing the payment of Mr. Amaral's salary, effective January 1,
1998, in shares of Common Stock of the Company with the number of shares issued
representing a cash value of the monthly base salary subject to normal or
required payroll deductions. The number of shares issued in payment of such
salary was calculated based on a per share price equal to the lesser of (i) the
closing price of the Company's Common Stock on the last business day of the
month, or (ii) the average closing price of the Company's Common Stock during
the thirty business days ending on the last business day of the month. In 1998,
Mr. Amaral received $325,000, representing salary for the first six months of
1998, in the form of Common Stock. See "Summary Compensation Table."

In June 1998, Mr. Amaral's employment agreement was amended to provide for
(i) an increase in Mr. Amaral's base salary from $600,000 per annum to $650,000
per annum, (ii) an extension of the term of Mr. Amaral's employment agreement
until May 15, 2000 and (iii) the grant of options to purchase an additional
300,000 shares of Coram Common Stock at a price of $2.625 per share. Subject to
Mr. Amaral's continued employment with the Company, such options vest and become
exercisable in three equal annual installments on each of the first, second and
third anniversaries of their grant date and immediately vest and become
exercisable in full upon the occurrence of any event resulting in the full
vesting of the original options granted under the employment agreement.

The Company anticipates entering into an amendment to the employment
agreement with Mr. Amaral to reflect the change in his management
responsibilities effective April 23, 1999. The amendment to his employment
agreement is expected to involve the following: (i) reduction in compensation to
$100,000 annually; (ii) a reduction in services required to no more than sixteen
hours per month; (iii) a fee of $2,500 per day plus expenses if time spent on
Company business exceeds sixteen hours per month; (iv) elimination of the
performance bonus contemplated by the agreement relating to the Company
achieving certain earning targets; and (v) accelerated vesting of all
outstanding options as of the end of the employment term on May 15, 2000, with
all stock options remaining exercisable until May 15, 2001.

Other Named Executive Officers. The Company has entered into employment
agreements with Richard M. Smith, Joseph D. Smith and Paul J. Quiner.

The employment agreement between the Company and Richard M. Smith provides
for (i) an initial term of three years (through April 30, 2002); (ii) salary of
$425,000 annually; (iii) severance payments equal to a minimum of two years
annual salary; (iv) a payment of $500,000 upon the occurrence of a "change of
control"; and (v) an amendment to his stock option agreements allowing Mr. Smith
a period of twelve (12) months during which he may exercise such options
following his termination of employment or service for the Company.

With respect to Joseph D. Smith, his employment agreement provides (i) an
initial term of two years (through April 30, 2001); (ii) salary of $310,000
annually; (iii) a severance payment of a minimum of two years annual salary; and
(iv) a payment of $375,000 upon the occurrence of a "change of control."

11
<PAGE> 15

With respect to Paul J. Quiner, his employment agreement provides (i) an
initial term of one year (through April 30, 2000); (ii) salary of $225,000
annually; (iii) a severance payment of a minimum of one year annual salary; and
(iv) a payment of $150,000 upon the occurrence of a "change of control."

A "change in control" is defined in each of the agreements for Messrs.
Richard Smith, Quiner and Joseph Smith and other executive officers (described
below) as (i) a merger or consolidation in which the Company is not the
surviving entity; (ii) the sale, transfer or other disposition of all or
substantially all the assets of the Company; (iii) any reverse merger in which
the Company is the surviving entity but in which securities possessing more than
fifty percent of the total combined voting power of Coram's outstanding
securities are transferred to a person or persons different from the persons
holding those securities immediately prior to such merger. The severance amounts
represent minimum severance, including health and welfare benefits, due upon
termination by the Company (other than for cause) or involuntary termination
following a "change in control."

In 1997, upon Mr. Smith's promotion to President, Mr. Smith's retention
bonus was increased to a total of $240,000 of which $52,500 remains to be paid
in July 1999. Upon Mr. Quiner's promotion to Senior Vice President, Mergers and
Acquisitions in July 1998, his retention bonus was increased by $30,000, which
will become payable in July 1999.

Other Executive Officers. The Company has entered into employment and/or
severance agreements with certain other executive officers of the Company. The
Company's agreement with Wendy L. Simpson, Executive Vice President and Chief
Financial Officer of the Company, provides (i) an initial term of two years
(through April 30, 2001); (ii) salary of $310,000 annually; (iii) severance
payments of a minimum of two years annual salary; and (iv) a payment of $375,000
upon a "change of control."

Each of the employment agreements with Messrs. Richard Smith, Quiner,
Joseph Smith, and Ms. Simpson and other executive officers contain
non-competition covenants that would cover the period of such officer's
employment plus such officer's severance period. The agreements also contain
covenants restricting the solicitation of customers and employees of the Company
during such period.

The Company has also entered into employment agreements and/or severance
agreements with certain other executive officers of the Company. These
agreements provide for minimum severance payments upon termination of employment
and, in certain circumstances, "change of control" payments. The aggregate of
all such severance and "change of control" payments to such other executive
officers is approximately $836,800.

12
<PAGE> 16

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT

The following table sets forth as of March 31, 1999 (unless otherwise noted
below) the number of shares of outstanding Coram Common Stock beneficially owned
by (i) each person known to Coram to be the owner of more than 5% of the
outstanding Common Stock, (ii) each of the executive officers of the Company,
(iii) each of the directors of the Company, and (iv) 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 the Company.

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
NAME AND ADDRESS OF NUMBER OF SHARES OF OF COMMON STOCK
BENEFICIAL OWNER(1) COMMON STOCK(2) OUTSTANDING(3)
------------------- ------------------- --------------------
<S> <C> <C>
Donald J. Amaral.......................................... 2,524,296 4.9%
William J. Casey.......................................... 4,191 *
Scott R. Danitz........................................... 8,064 *
Stephen A. Feinberg (4)................................... 21,103,755 29.9%
Richard A. Fink........................................... 9,791 *
Scott T. Larson........................................... 65,256 *
Dominec A. Meffe.......................................... 13,189 *
Vito Ponzio, Jr........................................... 64,482 *
Stephen G. Pagliuca....................................... 9,791 *
Paul J. Quiner............................................ 104,614 *
Wendy L. Simpson.......................................... 165,833 *
Joseph D. Smith........................................... 219,473 *
L. Peter Smith............................................ 39,872 *
Richard M. Smith.......................................... 429,876 *
All executive officers and directors, as a group (14
persons)................................................ 24,753,750 33.4%
Cerberus Entities (4)..................................... 21,103,755 29.9%
Foothill (5).............................................. 8,599,849 14.8%
Goldman, Sachs (6)........................................ 21,023,744 29.8%
</TABLE>

- ---------------

* Less than 1%

(1) Unless otherwise indicated, the address of each person named above is 1125
Seventeenth Street, Suite 2100, Denver, Colorado 80202.

(2) The aggregate ownership numbers presented include the following shares of
Common Stock subject to options for the following persons: Mr. Amaral
-2,400,000; Mr. Casey -- 2,291; Mr. Danitz -- 7,291; Mr. Fink -- 9,791; Mr.
Larson -- 58,333; Mr. Meffe -- 11,666; Mr. Ponzio -- 58,564; Mr. Pagliuca -
9,791; Mr. Quiner -- 96,092; Mrs. Simpson -- 145,833; Mr. Joseph D. Smith
-217,186; Mr. L. Peter Smith -- 9,791; Mr. Richard M. Smith -- 426,561.
Except as indicated by footnote, Coram has been advised that the persons and
entities named in the table above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.

(3) Shares of Common Stock issuable upon exercise of options or warrants or
conversion of securities convertible into shares of Common Stock that are
currently exercisable or exercisable within 60 days are deemed outstanding
for purposes of computing the percentage ownership of the person or entity
holding such options, warrants or convertible securities but not for
purposes of computing the percentage of any other person or entity.
Percentage computations are based on 49,467,504 shares of Common Stock
outstanding as of March 31, 1999.

(4) Information with respect to Stephen A. Feinberg and the Cerberus Entities
(as defined below) are based on the Schedule 13D, Amendment No. 1 and
Amendment No. 2 thereto, dated June 30, 1998, August 26, 1998 and April 9,
1999, respectively, filed with the Commission. Cerberus Partners, L.P.
("Cerberus") is the holder of $15,174,268 principal amount of Series B Notes
of the Company; Cerberus International, Ltd. ("International") is the holder
of $9,644,090 principal amount of Series B Notes of

13
<PAGE> 17

the Company; Ultra Cerberus Fund, Ltd. ("Ultra") is the holder of $989,137
principal amount of Series B Notes of the Company and certain private investment
funds (the "Funds") in the aggregate are the holder of $7,418,531 principal
amount of Series B Notes of the Company. (Cerberus, International, Ultra
and the Funds are collectively referred to as the "Cerberus Entities.") The
Series B Notes are convertible, at the option of the holder thereof, into
shares of Common Stock of the Company at the rate of $2.00 per share. Mr.
Feinberg possesses sole power to vote and direct the disposition of all
securities of the Company owned by each of Cerberus, International, Ultra
and the Funds. In addition, $7,238,688 principal amount of Series B Notes
are held of record by Cerberus, with respect to which Mr. Feinberg
exercises sole voting but no investment control over such Series B Notes
and the shares of Common Stock into which such Series B Notes are
convertible. Also, Cerberus, International, Ultra and the Funds are the
holders of warrants to purchase, respectively, 246,637, 327,150, 32,976 and
248,147 additional shares of Common Stock of the Company, and Mr. Feinberg
possesses sole voting but no investment control over warrants to purchase
an additional 16,488 shares of Common Stock from the Company and sole
voting but no investment control over the shares of Common Stock underlying
such 16,488 warrants. Thus, for the purposes of Rule 13d-3 of the Exchange
Act, Mr. Feinberg is deemed to beneficially own 21,103,754 shares of Common
Stock, or 29.9% of those deemed issued and outstanding pursuant to Rule
13d-3.

Pursuant to an agreement between Cerberus and Goldman Sachs Credit
Partners, L.P. ("GSCP"), dated as of April 22, 1997 (the "GSCP Agreement"),
GSCP has the right to receive the dividends from, and the proceeds from the
sale of, $8,992,159 principal amount (the "GSCP Interest") of the
$15,174,268 principal amount of Series B Notes held by Cerberus and the
shares of Common Stock into which such Series B Notes relating to the GSCP
Interest are convertible. In addition, certain unaffiliated entities, in
the aggregate, have the right to receive the dividends from, and the
proceeds from the sale of, $7,238,688 principal amount of Series B Notes
and the shares of Common Stock into which such Series B Notes are
convertible and warrants to purchase 16,488 Shares and the Shares
underlying such 16,488 warrants. The address for Mr. Feinberg and the
Cerberus Entities is 450 Park Avenue, 28th Floor, New York, New York 10022.

(5) Information with respect to Foothill Capital Corporation is based on the
Schedule 13G, Amendment No. 1 and Amendment No. 2 thereto dated June 30,
1998, August 26, 1998 and April 9, 1999, respectively, filed with the
Commission. The Foothill Group, Inc., a Delaware Corporation ("Group"),
Foothill Capital Corporation, a California corporation ("Capital"), Foothill
Partners II, L.P., a Delaware limited partnership ("Partners"), Foothill
Income Trust, L.P., a Delaware limited partnership ("Foothill Trust"), FIT
GP, LLC, a Delaware limited liability company ("FIT") and M. Edward Stearns,
Karen S. Sandler, Dennis R. Ascher, Jeffrey T. Nikora, and John F. Nickoll
(collectively, the "Managing Partners/Members") and Peter E. Schwab and
David C. Hilton (the "Managing Partners") (Group, Capital, Partners,
Foothill Trust, FIT, the Managing Partners/Members and the Managing Partners
are collectively referred to as "Foothill"). Group, the Managing
Partners/Members and the Managing Partners are the general partners of
Partners. Capital is a wholly-owned subsidiary of Group. FIT is the general
partner of Foothill Trust and the Managing Partners/Members are the managing
members of FIT. Accordingly, (i) Group, the Managing Partners/Members and
the Managing Partners may be deemed to beneficially own the shares of Common
Stock held by Partners, as its general partners, (ii) the Managing
Partners/Members may be deemed to beneficially own the shares of Common
Stock held by Foothill Trust as the managing members of the general partner
of Foothill Trust, (iii) FIT may be deemed to beneficially own the shares of
Common Stock held by Foothill Trust, as its general partner, and (iv) Group
may be deemed to beneficially own the shares held by Foothill Capital as its
sole shareholder. Foothill has a beneficial interest in all or part of
$16,487,123 principal amount of the Company's Series B Notes, which are
convertible into the Company's Common Stock at a conversion price of $2.00
per share. In addition, certain Foothill entities own warrants that are
exercisable into shares of the Company's Common Stock. The address for
Foothill is 11111 Santa Monica Boulevard, Suite 1500, Los Angeles,
California 90025.

14
<PAGE> 18

(6) Information with respect to Goldman Sachs is based on Schedule 13D,
Amendment No. 1 and Amendment No. 2 thereto dated June 30, 1998, August 26,
1998 and April 9, 1999, respectively, filed with the Commission. GSCP,
Goldman Sachs Global Holdings L.L.C. ("GSGH"), Goldman, Sachs & Co.
("GS&Co."), and The Goldman Sachs Group, L.P. ("GS Group") are referred to
collectively as "Goldman, Sachs."

GSCP, a Bermuda limited partnership, was formed for the purpose of
providing bank debt financing and trading and investing in bank loans,
trade claims and other loans and loan instruments. GSGH, a Delaware limited
liability company, is the sole general partner of GSCP. The managing member
of GSGH is GS Group. The principal business address of GSCP is Conyers,
Dill & Pearman, Church Street, Hamilton HM CX, Bermuda. The principal
business address of GSGH is 85 Broad Street, New York, NY 10004.

GS&Co., a New York limited partnership, is an investment banking firm and a
member of the NYSE and other national exchanges. GS Group, one of the
general partners of GS&Co., owns a 99% interest in GS&Co. GS Group is a
Delaware limited partnership and holding partnership that (directly and
indirectly through subsidiaries or affiliated companies or both) is a
leading investment banking organization. The other general partner of
GS&Co. is The Goldman Sachs & Co. L.L.C., a Delaware limited liability
company ("GS L.L.C."), which is a wholly-owned subsidiary of GS Group and
The Goldman Sachs Corporation, a Delaware corporation ("GS Corp."). GS
Corp. is the sole general partner of GS Group. The principal business
address of each of GS&Co., GS Group, GS L.L.C. and GS Corp. is 85 Broad
Street, New York, NY 10004.

Following the transactions under the Securities Exchange Agreement, GSCP
owned (i) $52,837,117.31 principal amount of Series A Notes and
$30,970,375.22 principal amount of Series B Notes directly and (ii)
$15,341,104.08 principal amount of Series A Notes and $8,992,158.80
principal amount of Series B Notes subject to the GSCP Agreement.

As of June 30, 1998, GS&Co. and GS Group beneficially owned 579 shares of
Common Stock of the Company held in client accounts with respect to which
GS&Co. or employees of GS&Co. have voting or investment discretion, or both
("Managed Accounts"). GS&Co. and GS Group each disclaims beneficial
ownership of shares of Common Stock held in Managed Accounts.

On August 26, 1998, GS&Co. acquired warrants of the Company (the "New
Warrants") giving GS&Co. the right to acquire 863,588 shares (subject to
antidilution and other adjustments) of Common Stock of the Company. The New
Warrants were issued pursuant to the warrant agreement dated as of August
26, 1998 to which GSCP and the Company were party in connection with the
senior loan agreement dated as of August 20, 1998 to which GSCP and the
Company were parties. GSCP directed that the New Warrants be issued to
GS&Co.

As of April 9, 1999, GSCP beneficially owned 19,981,267 shares of Common
Stock (representing 28.8% of the Common Stock outstanding), GSGH
beneficially owned 19,981,267 shares of Common Stock (representing 28.8% of
the Common Stock outstanding), GS Group beneficially owned 21,023,744
shares of Common Stock (representing 29.8% of the Common Stock
outstanding), and GS&Co. beneficially owned 21,023,744 shares of Common
Stock (representing 29.8% of the Common Stock outstanding).

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

From January 1998 through June 1998, the Compensation Committee was
comprised of Stephen G. Pagliuca and L. Peter Smith. In June 1998, Mr. Feinberg
was added to the Committee in accordance with the terms of the Securities
Exchange Agreement. Messrs. Feinberg, L. Peter Smith and Pagliuca are non-
employee directors of Coram who have not previously been in Coram's employ. 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.

15
<PAGE> 19

COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION

The Company's Compensation Committee sets the base salary of certain
executive officers each fiscal year and approves the individual bonus programs
to be in effect for those individuals. The Board of Directors has delegated to
the Compensation Committee the authority to award stock options under the Stock
Option Plan to Coram's executive officers and other key employees and may
delegate authority with respect to other compensation issues from time to time.
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, 1998, including the compensation reflected in the tables
which appear elsewhere in this Proxy Statement, and have continued to govern
such decisions during the current fiscal year except where noted.

General Compensation Policy

Introduction. Our major objectives for the 1998 fiscal year were to
continue a compensation structure which would retain the services of those
executive officers of Coram whom we identified as essential to the Company's
long-term financial success and to attract additional executive officers to the
Company. Accordingly, we continued our 1997 compensation policy with three
principal objectives: (i) to maintain key executive compensation consistent with
the healthcare industry; (ii) to offer base salary levels and annual incentive
compensation sufficient to attract new executives and induce certain existing
management to remain with the Company to continue to lead and participate in the
Company's efforts; and (iii) to provide an equity component in the form of stock
option grants sufficient to strengthen the mutuality of interests between
management and Coram's stockholders.

Factors. The primary factors which we considered in establishing the
components of each executive officer's compensation package for the 1998 fiscal
year were the same as we used in 1997 and 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 1998 fiscal year was based on salary levels we believed were
necessary to retain and attract certain executive officers. On the basis
of our knowledge of the alternate site health care industry and
turn-around situations, we believe that these base salary levels are
competitive with the companies with which Coram competes for executive
talent. During 1997, we engaged Human Capital Services Practice Group of
Arthur Andersen, Chicago to review our compensation program and, through
one or more external compensation surveys for the industry, have
independently confirmed 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. Salaries in 1998 for the Named Executive
Officers were raised to amounts consistent with the information derived
from the 1997 survey. We continue to feel that the most appropriate
vehicle to retain and attract executive officers 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 during either 1997 or 1998 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
alternate site 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.

- ANNUAL INCENTIVE COMPENSATION. Incentive compensation is awarded based
upon the Company's financial performance and improvement, as well as the
Committee's recommendations regarding current position, specific
accomplishments and personal performances of executive officers. All
executive officers have the opportunity to earn cash awards. Even though
the Board of Directors believes that significant accomplishments have
been made in the current year to stabilize the Company and form a
foundation for the future, none of the Named Executive Officers, other
than Joseph D. Smith, received any discretionary awards. Each did receive
retention or other bonuses paid pursuant to specific commitments made to
the individuals in prior years.

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<PAGE> 20

- LONG-TERM INCENTIVE COMPENSATION. The option grants which we make to the
executive officers under the Company's Stock Option Plan 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 are designed
to align the interests of Coram's executive officers with those of the
stockholders and provide each executive 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 options 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 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.

In light of the policies described above governing the Committee's actions,
particularly our desire to induce existing management to remain with the
Company, we have taken several actions in the past years and during the current
fiscal year to provide additional compensation to those officers playing a
significant role in the Company's turn-around efforts and to better align
certain officers equity compensation to the Company's current market position.

In April 1997, based on recommendations set forth in the Compensation
Review and other relevant considerations, we awarded bonuses, in an aggregate
amount of $709,000, to certain Coram officers in recognition of performance
during the 1996 fiscal year. In June 1997, we approved certain retention bonuses
in an aggregate amount of $1,749,750 payable to 13 key executives contingent on
active employment with Coram through December 31, 1998, and minimum severance
agreements of 6 months to 12 months. In addition, we approved change in control
payments in the amount of $1,885,000 to 8 key executives payable the earlier of
one year or upon involuntary termination upon a change of control. Further, in
June 1997, we awarded additional options to purchase an aggregate of 786,250
shares of Coram Common Stock to 12 key executives. Such options contain terms
substantially similar to prior grants received by such officers, including
vesting over a four-year period contingent upon employment with the Company.

In April 1999, in connection with Mr. Smith's promotion to Chief Executive
Officer, the Company's Compensation Committee adopted a resolution authorizing
the Company to enter in an employment agreement with Mr. Smith. The employment
agreement between the Company and Mr. Smith provides for (i) an initial term of
three years (through April 30, 2002); (ii) salary of $425,000 annually; (iii)
severance payments equal to a minimum of two years annual salary; (iv) a payment
of $500,000 upon the occurrence of a "change of control"; and (v) an amendment
to his stock option agreements allowing Mr. Smith a period of twelve (12) months
during which he may exercise options following his termination of employment or
service for the Company.

The Company has also entered into employment agreements with Joseph D.
Smith and Paul J. Quiner.

The Company has entered into employment and/or severance agreements with
certain other executive officers of the Company. The Company's agreement with
Wendy L. Simpson, Executive Vice President and Chief Financial Officer of the
Company, provides (i) an initial term of two years (through April 30, 2001);
(ii) salary of $310,000 annually; (iii) severance payments of a minimum of two
years annual salary; and (iv) a payment of $375,000 upon a "change of control."

The Company's Compensation Committee has authorized Company management to
enter into employment agreements and/or severance agreements with certain other
executive officers of the Company. These agreements will provide for minimum
severance payments upon termination of employment and, in certain circumstances,
"change of control" payments. The aggregate of all such severance and "change of
control" payments to such other executive officers is approximately $836,800.

CEO Compensation

Mr. Amaral's compensation was set pursuant to the terms of the employment
agreement between Mr. Amaral and Coram entered into in October 1995. As
disclosed in the Summary Compensation Table, Mr. Amaral received a bonus of
$600,000 for services performed during fiscal 1996, 50% of which was paid in
cash in April 1997 and 50% which was paid in shares of the Company's Common
Stock. The amount of such bonus was determined pursuant to the terms of Mr.
Amaral's employment agreement, based on the Company's exceeding certain EBITDA
goals set by the Board of Directors for fiscal 1996. In March 1998, Mr. Amaral
received a bonus of $90,000 for services performed during fiscal 1997.

In December 1997, at Mr. Amaral's request, the Board of Directors adopted a
resolution authorizing the payment of Mr. Amaral's salary, effective January 1,
1998, in shares of common stock of the Company with the number of shares issued
representing a cash value of the monthly base salary subject to normal or
required payroll deductions. The number of shares to be issued in payment of
such salary is calculated based on a per share price equal to the lesser of (i)
the closing price of the Company's common stock on the last business day of the
month, or (ii) the average closing price of the Company's common stock during
the thirty business days ending on the last business day of the month. In 1998,
Mr. Amaral received $325,000, representing salary for the first six months of
1998, in the form of Common Stock. See "Summary Compensation Table."

In May 1998, the Board of Directors approved an amendment to Mr. Amaral's
agreement providing for, among other things, an increase in his base salary to
$650,000 and an extension of the term of such agreement until May 2000. In
approving the terms of such amendment we relied in part on an executive
compensation review and recommendations prepared for Coram by the Human Capital
Services Practice Group of Arthur Andersen (the "Compensation Review"). Other
factors relevant to the Committee's approval of the amendment, in addition to
the factors described above applicable to all executive officers, include the
critical role Mr. Amaral has played in the Company's turnaround efforts and the
Company's need to insure continuity in the chief executive officer position.

In April 1999, in connection with the change in Mr. Amaral's management
responsibilities, the Board of Directors adopted a resolution authorizing the
Company to enter into an amendment to the employment agreement with Mr. Amaral.
See "Employment Contracts, Termination of Employment and Change of Control
Arrangements" for a description of compensation relating to Mr. Amaral,
including a description of an amendment to Mr. Amaral's employment agreement
effective May 16, 1998, the revision to Mr. Amaral's success fee in September,
1998, and the expected amendment to Mr. Amaral's employment agreement.

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<PAGE> 22

Compliance with Internal Revenue Code Section 162(m)

As a result of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "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 that qualify as
performance-based compensation are not taken into account for purposes of this
limitation. On the basis of this distinction, the Stock 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 1999 fiscal year will exceed the $1.0 million limit per officer
as defined in Section 162(m). However, we will defer any decision on whether 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 $1.0 million limitation.

The foregoing report has been submitted by the undersigned in our capacity
as members of Coram's Compensation Committee.

Stephen G. Pagliuca
L. Peter Smith
Stephen A. Feinberg (member after
June 1998)

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<PAGE> 23

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) Apria Healthcare
Group, Inc., Olsten Corporation, American Homepatient, Inc., and Option Care,
Inc., which comprise the Company's Peer Group, for the period commencing July
11, 1994, the date the Common Stock was first publicly traded, through December
31, 1998. 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 changes in Coram's stock price subsequent to December 31, 1998.

COMPARISON OF 53 MONTH CUMULATIVE TOTAL RETURN*
AMONG CORAM HEALTHCARE CORPORATION, THE S&P 500 INDEX AND PEER GROUP

<TABLE>
<CAPTION>
CORAM HEALTHCARE
CORPORATION PEER GROUP S&P 500
---------------- ---------- -------
<S> <C> <C> <C>
'7/11/94' 100 100 100
'12/31/94' 115 103 104
'12/31/95' 30 130 143
'12/31/96' 34 89 176
'12/31/97' 23 76 234
'12/31/98' 13 37 301
</TABLE>

- ---------------

* Based on $100 invested on July 11, 1994 in stock or in the index, including
reinvestment of dividends.

20
<PAGE> 24

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

L. Peter Smith. L. Peter Smith also serves on the Board of Directors of
Sabratek Corporation, a manufacturer of medical devices. In December 1998, the
Company agreed to amend its agreement with Sabratek Corporation to be the
Company's sole supplier of multi-therapy infusion pumps and related proprietary
telemedicine technology during the next ten (10) years. This agreement contains
a provision that allows either party to cancel the agreement upon 90 days'
notice. The pricing schedule applicable to the infusion pumps and related
technology to be purchased was negotiated by certain of Coram's management after
proposals from other manufacturers for comparable equipment had been solicited.
The Company purchased approximately $7.8 million of multi-therapy infusion pumps
and related proprietary telemedicine technology from Sabratek Corporation in
1998.

Stephen A. Feinberg; Cerberus Entities; Goldman, Sachs; and
Foothill. Stephen A. Feinberg, a director of the Company, is the managing member
of Cerberus Associates, L.L.C., which is the general partner of Cerberus and the
investment manager for each of International, Ultra and the Funds. Cerberus,
International, Ultra, and the Funds hold $15,174,268, $9,644,090, $989,137 and
$7,418,513 principal amount of the Series B Notes and warrants to purchase
246,637, 327,150, 32,976, and 248,147 shares of Common Stock, respectively.
Cerberus holds approximately $72,546,817 and $8,054,100 principal amount of
Series A Notes and notes under the New Senior Credit Facility, respectively. For
additional information relating to the ownership of securities of the Company by
the Cerberus Entities, Goldman, Sachs and Foothill, see "Security Ownership of
Principal Stockholders and Management."

Cerberus, together with GSCP and Foothill, were previously the holders of
the Company's Subordinated Rollover Notes (the"Rollover Notes") and related
warrants to purchase up to 20% of the outstanding shares of the common stock of
the Company (the "Warrants") on a fully diluted basis. The Cerberus Entities,
Goldman, Sachs and Foothill are collectively referred to herein as the
"Holders." In June 1997, the Company refinanced $150.0 million owed its lenders
under its former senior credit facility (the "Former Senior Credit Facility")
through a refinancing transaction with GSCP. GSCP subsequently sold partial
interests in the debt to Cerberus and Foothill. In January 1998, the Company
repaid all principal, interest and related fees totaling approximately $80.1
million due under the Former Senior Credit Facility and terminated such
facility. On May 6, 1998, the Company entered into the Securities Exchange
Agreement with the Holders. The Securities Exchange Agreement provided for the
cancellation of the Rollover Notes (including deferred interest and fees) and
the Warrants in an exchange (the "Exchange"), effective April 13, 1998, for the
payment of $4.3 million in cash and the issuance by the Company to the Holders
of (i) $150.0 million in principal amount of Series A Notes and (ii) $87.9
million in principal amount of Series B Notes. In addition, under the Securities
Exchange Agreement, the Holders were given the right to approve certain new debt
and the right to name one director to the Company's Board of Directors. Through
April 13, 1998, the Rollover Notes carried an interest rate that was based on
various indices plus a margin that increased by 0.25% quarterly and was 16.75%
upon the effective cancellation date. During the year ended December 31, 1998,
$10.3 million was accrued on the Rollover Notes.

The Series A Notes mature in May 2001 and bear interest at the rate of
9.875% per annum (subject to adjustment to a maximum of 10.5% on March 31, 1999
if certain performance standards are not achieved) payable quarterly in arrears
in cash or through the issuance of additional Series A Notes at the election of
the Company. During the year ended December 31, 1998, interest expense on the
Series A Notes was $10.7 million. The Series B Notes mature in April 2008 and
bear interest at the rate of 8% per annum, payable quarterly in arrears in cash
or through the issuance of additional Series B Notes at the election of the
Company. During the year ended December 31, 1998, interest expense on the Series
B Notes was $5.0 million. The Series B Notes were initially convertible into
shares of the Company's common stock at a conversion price (the "Conversion
Price") equal to $3.00 per share, subject to downward reset to the prevailing
market prices (calculated based on the average of the closing prices for each of
the preceding 20 days) on each of April 13, 1999 and October 13, 1999.

In July 1998, the Company issued secured promissory notes (the "Promissory
Notes") in the aggregate principal amount of $6.0 million to the Holders of the
Series A and B Notes. The Promissory Notes matured

21
<PAGE> 25

August 20, 1998 and carried an interest rate of 12% per annum, payable in cash
on the maturity date of the Promissory Notes. In August 1998, the Company repaid
in full all principal and interest totaling approximately $6.1 million.

On August 20, 1998, the Company entered into a definitive agreement (the
"New Senior Credit Facility") with the Holders providing for the availability of
a $60.0 million facility for acquisitions, working capital, letters of credit
and other corporate purposes. The availability is subject to certain borrowing
base calculations as defined in the underlying agreement. The New Senior Credit
Facility matures February 26, 2001 and bears an interest rate of prime plus
1.5%, payable in arrears on the first business day of each month. The interest
rate was 9.25% at December 31, 1998. Under the New Senior Credit Facility, among
other nominal fees, the Company was required to pay an upfront fee of 1.0%, or
$0.6 million, and is obligated to pay commitment fees on the unused facility of
3/8 of 1.0% per annum, due quarterly in arrears. During the year ended December
31, 1998, interest and related fees on the New Senior Credit Facility were $0.5
million. In addition, the terms of the New Senior Credit Facility provide for
the issuance of warrants to purchase up to 1.9 million shares of Common Stock of
the Company at $0.01 per share, subject to customary adjustments.

On April 9, 1999, the Company entered into Amendment No. 2 (the "Note
Amendment") to the Securities Exchange Agreement. Pursuant to the Note
Amendment, the $87.9 million in outstanding principal amount of Series B Notes
will be convertible into shares of the Company's Common Stock at a price of
$2.00 per share (subject to customary anti-dilution adjustments). Pursuant to
the Note Amendment, the parties also increased the interest rate applicable to
the Series A Notes from 9.875% to 11.5% per annum. As of April 15, 1999, the
principal amount outstanding under the Series A Notes was approximately $157.6
million.

PROPOSAL 1

ELECTION OF DIRECTORS

Six directors are to be elected and qualified at the Meeting. The nominees
are: Donald J. Amaral, William J. Casey, Stephen A. Feinberg, Richard A. Fink,
Richard M. Smith, and L. Peter Smith. In the absence of written instructions to
the contrary, proxies representing shares of Common Stock will be voted FOR the
election of each of such persons as directors of Coram for a term commencing on
the date of the Meeting and continuing until the 2000 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 the Nominating Committee of the Board of
Directors. As of the date of this Proxy Statement, the 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 TO SERVE UNTIL THE 2000 ANNUAL MEETING OF STOCKHOLDERS AND
UNTIL THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND QUALIFIED.

PROPOSAL 2

PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK

BACKGROUND AND PROPOSED AMENDMENT

The Board of Directors has adopted a resolution to amend the Certificate of
Incorporation of the Company to increase the number of authorized shares of the
Company's Common Stock from 100,000,000 to 150,000,000 (the "Amendment"). A copy
of the proposed Amendment as approved by the Board of Directors is attached
hereto as Exhibit A. Under the proposal, the number of authorized shares of
preferred stock of the Company would remain unchanged at 10,000,000.

22
<PAGE> 26

As of the close of business on May 14, 1999, there were 49,499,663 shares
of Common Stock issued and outstanding, and approximately 69,000,000 shares of
Common Stock were committed for issuance (i) upon conversion of outstanding
securities convertible into Common Stock (such as the Series B Notes), (ii) upon
exercise of outstanding options and warrants to purchase Common Stock, and (iii)
under the Company's Employee Stock Purchase Plan. No shares of preferred stock
are issued and outstanding or committed for issuance.

The additional shares of Common Stock for which authorization is sought
will be identical to the shares of Common Stock of the Company now authorized.
Holders of Common Stock do not have preemptive rights to subscribe for
additional securities that may be issued by the Company. If authorized under
this proposal, the additional shares would be available for issuance at the
discretion of the Board of Directors, and no further vote of the stockholders
will be required prior to such issuance, except as may otherwise be required by
applicable law or the rules of any national securities exchange or registered
national securities association on which the Company's shares are then listed.

PURPOSE AND EFFECT OF AMENDMENT

The purpose of the proposed Amendment is to give the Board of Directors the
flexibility and authority to issue additional shares of Common Stock from time
to time to satisfy the Company's commitments described above. Furthermore, the
additional shares of Common Stock being authorized could be issued publicly or
privately for a variety of other corporate purposes, including, without
limitation, in connection with financings, acquisitions, stock splits, stock
dividends, employment agreements, warrants, stock options, employee benefit
plans, or for purposes of augmenting the capital of the Company. The Company
currently has no plans, understandings or arrangements to issue any of the
additional shares of Common Stock authorized by the Amendment. However, because
the need to issue shares can arise when it would be inconvenient or impossible
to hold a stockholders' meeting, the Board believes it is prudent business
planning to authorize the issuance of an additional 50,000,000 shares of Common
Stock.

There may be certain disadvantages to the additional flexibility afforded
the Company as a result of the authorization of additional shares of Common
Stock. Although the proposed Amendment is not intended to have an anti-takeover
effect, the availability of additional shares of Common Stock could make any
attempt to gain control of the Company or the Board of Directors more difficult,
costly or time-consuming. Under certain circumstances, the additional shares
could be used to frustrate persons seeking to effect a takeover that the Board
of Directors determines is not in the best interests of the Company and its
stockholders, if such shares were issued to a holder or holders who might oppose
the takeover bid. The issuance of additional shares of Common Stock, whether or
not in connection with a contest for control, will, in most instances, dilute
the voting power of each stockholder, and may dilute earnings and book value on
a per share basis.

This proposal to amend the Certificate of Incorporation is not in response
to any effort of which the Company is aware to accumulate the Company's Common
Stock or obtain control of the Company, nor is it part of a plan by management
to recommend a series of similar amendments to the Board of Directors and
stockholders.

RECOMMENDATION AND VOTE

APPROVAL OF THIS PROPOSAL REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
MAJORITY OF ALL THE OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK ENTITLED TO
VOTE AT THE MEETING. IF APPROVED BY THE STOCKHOLDERS, THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION WILL BECOME EFFECTIVE UPON THE FILING WITH THE
SECRETARY OF STATE OF THE STATE OF DELAWARE OF ARTICLES OF AMENDMENT,
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT A, WHICH FILING THE COMPANY
PRESENTLY INTENDS UNDERTAKING PROMPTLY AFTER THE MEETING. IF THE AMENDMENT TO
THE COMPANY'S CERTIFICATE OF INCORPORATION IS NOT APPROVED, THE ARTICLES OF
AMENDMENT WILL NOT BE FILED.

THE BOARD OF DIRECTORS IS OF THE OPINION THAT THE INCREASE OF AUTHORIZED
SHARES OF COMMON STOCK IS ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND
UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK OF THE COMPANY.
23
<PAGE> 27

PROPOSAL 3

PROPOSAL TO APPROVE STOCK OPTIONS GRANTED TO
FOUR DIRECTORS OF THE COMPANY

GENERAL

On September 9, 1998, the Compensation Committee of the Board of Directors
granted options to each of William J. Casey, Richard A. Fink, Stephen G.
Pagliuca, and L. Peter Smith options (collectively, the "Options") entitling
each such director to purchase 75,000 shares of Common Stock at an exercise
price of $1.6875 per share (the "Exercise Price"). The purpose of the Options is
to provide valuable incentives for the development of a strong Board of
Directors. The Board of Directors believes that the Options are in the best
interest of the Company and has directed that the Options be submitted to the
stockholders of the Company for approval. In December 1995, Messrs. Fink,
Pagliuca and L. Peter Smith agreed to cancel stock options granted to them by
the Company upon their election to the Board of Directors in 1994. In September
1998, Mr. Casey agreed to cancel certain stock options granted to him by the
Company upon his election to the Board of Directors.

The form of Stock Option Agreement representing the Options is set forth in
Exhibit B to this Proxy Statement. The following summary is qualified in its
entirety by reference to Exhibit B.

The Options are exercisable, in whole or in part, at the exercise price
until the tenth anniversary of the issuance of such Option. Each Option
terminates 90 days after the holder thereof terminates his service with the
Company and 12 months after the holder's death or disability. The Exercise Price
will be adjusted in the event of a reclassification, recapitalization, stock
split or combination in the shares of the Common Stock, to prevent dilution or
enlargement of the Options. Each of the Options are non-transferable except by
will or the laws of descent and distribution. Each Option may be amended only by
a written amendment signed by holders of such Option and the Company.

RECOMMENDATION AND VOTE

APPROVAL OF THE OPTIONS REQUIRES A FAVORABLE VOTE OF THE HOLDERS OF A
MAJORITY OF THE COMPANY'S COMMON STOCK PRESENT AT THE MEETING, IN PERSON OR BY
PROXY, AND ENTITLED TO VOTE.

THE BOARD OF DIRECTORS IS OF THE OPINION THAT APPROVAL OF THE OPTIONS IS
ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND UNANIMOUSLY RECOMMENDS A
VOTE FOR APPROVAL OF THE OPTIONS.

PROPOSAL 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The accounting firm of Ernst & Young LLP served as independent auditors of
the Company for the years ended December 31, 1998, 1997, 1996, 1995 and 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, 1999. The affirmative vote of a majority
of the shares of the Company's Common 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.

A representative of Ernst & Young LLP is expected to attend the Meeting.
Ernst & Young LLP will have an opportunity to make statements and will be
available to respond to appropriate questions from stockholders.

RECOMMENDATION AND VOTE

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS REQUIRES A
FAVORABLE VOTE OF THE HOLDERS OF A MAJORITY OF THE COMPANY'S COMMON STOCK
PRESENT AT THE MEETING, IN PERSON OR BY PROXY, AND ENTITLED TO VOTE.

24
<PAGE> 28

THE BOARD OF DIRECTORS IS OF THE OPINION THAT RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT AUDITORS IS ADVISABLE AND IN THE BEST INTERESTS
OF THE COMPANY AND UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF 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.

ADDITIONAL INFORMATION

FINANCIAL STATEMENTS

The Company has enclosed with this Proxy Statement its 1998 Annual Report
to Stockholders which includes therein the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998 as filed with the Commission on
March 31, 1999, as amended on April 30, 1999 (the "1998 10-K/A"). The
Consolidated Financial Statements of the Company included in the 1998 10-K/A and
the Consolidated Financial Statements of the Company included in the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 1999 as filed with
the Commission on May 17, 1999, including in each case the Notes and Schedules
thereto, are hereby incorporated by reference herein.

The information contained in this Proxy Statement should be read together
with the information incorporated by reference herein. This Proxy Statement
incorporates by reference information which is not presented herein or delivered
herewith. The documents incorporated by reference herein (other than exhibits to
such documents) is available without charge to any person, including any
beneficial owner to whom this Proxy Statement is delivered, upon written or oral
request. Requests for such document should be directed to Coram Healthcare
Corporation, 1125 Seventeenth Street, Suite 2100, Denver, Colorado 80202,
Attention: Scott T. Larson, telephone: (303) 292-4973. The Company's Website is
located at . The contents of the Company's Website do not constitute a part of
this Proxy Statement. In order to ensure timely delivery of the documents prior
to the Meeting, any such request should be made by July 22, 1999.

STOCKHOLDER PROPOSALS FOR 2000 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. Proposals for the 2000 Annual Meeting of Stockholders
must be received by the Company not less than 30 days nor more than 60 days
prior to the scheduled date of the meeting (or, if less than 40 days' notice or
prior public disclosure of the date of the meeting is given, the 10th day
following the earlier of (i) the day such notice was mailed or (ii) the day such
public disclosure was made) to be considered for inclusion in the proxy
statement and form of proxy relating to the 2000 Annual Meeting of Stockholders.
Any such proposals should be addressed to: Corporate Secretary, Coram Healthcare
Corporation, 1125 Seventeenth Street, Suite 2100, Denver, Colorado 80202.

Under Rule 14a-8 adopted by the Commission under the Exchange Act,
proposals of stockholders to be presented at the 2000 meeting of Stockholders
must be received in reasonable time before the solicitation of proxies relating
thereto is made, 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.

25
<PAGE> 29

ANNUAL REPORT TO STOCKHOLDERS

The 1998 Annual Report of the Company, as filed with the Commission, is
being mailed to the stockholders with this Proxy Statement. The 1998 Annual
Report is not to be considered part of the proxy soliciting material.

CORAM HEALTHCARE CORPORATION

Denver, Colorado
June , 1999

26
<PAGE> 30

EXHIBIT A

CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
CORAM HEALTHCARE CORPORATION

Coram Healthcare Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Act"), hereby
certifies as follows:

1. The name of the corporation is Coram Healthcare Corporation (the
"Corporation").

2. The amendment to the Certificate of Incorporation of the Corporation set
forth below was duly adopted in accordance with the provisions of
Section 242 of the Act.

3. The Certificate of Incorporation of the Corporation is hereby amended by
deleting Article FOURTH, Section A thereof in its entirety and
substituting in lieu thereof the following, so that Article FOURTH,
Section A shall hereafter read as follows:

"FOURTH. A. AUTHORIZED CAPITAL STOCK. The total number of shares that
the corporation shall have authority to issue shall be 160,000,000
shares, of which 150,000,000 shares shall be Common Stock, $.001 par
value, and 10,000,000 shares shall be Preferred Stock, $.001 par value."

IN WITNESS WHEREOF, Coram Healthcare Corporation has caused this
Certificate of Amendment to be signed by its duly authorized officer this
day of August, 1999.

CORAM HEALTHCARE CORPORATION, a
Delaware corporation

By:
Title:

A-1
<PAGE> 31

EXHIBIT B

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into as of the
9th day of September, 1998, between Coram Healthcare Corporation, a Delaware
corporation (the "Company"), and (the "Optionee").

R E C I T A L S

A. The Board of Directors of the Company (the "Board") desires to provide
Optionee with a favorable opportunity to acquire shares of the Company's Common
Stock.

B. The Board regards the Optionee as a key contributor to the Company and
has determined that it would be in the best interests of the Company and its
stockholders to grant the Option described in this Agreement to the Optionee as
an inducement to remain affiliated with the Company, and as an incentive for
increasing efforts during such affiliation.

NOW, THEREFORE, it is agreed as follows:

1. DEFINITIONS. Unless otherwise defined herein or the context otherwise
requires, the capitalized terms used herein shall have the following meanings:

(a) "Act" shall mean the Securities Act of 1933, as amended.

(b) "Board" shall mean the Board of Directors of the Company.

(d) "Common Stock" shall mean the Common Stock, $.001 par value per
share, of the Company and any class of shares into which such Common Stock
hereafter may be converted or reclassified.

(e) "Disability" shall mean a medically determinable physical or
mental impairment which has made an individual incapable of engaging in any
substantial gainful activity and which can be expect to result in death or
has lasted or it can be expected to last for a continuous period of not
less than twelve (12) months.

(f) "Employee" shall mean an individual who is employed (within the
meaning of Section 3401 of the Code and the regulations thereunder) by the
Company or a Subsidiary.

(g) "Fair Market Value" shall mean the value of one (1) Share of
Common Stock, determined as follows:

(i) If the Shares are traded on an exchange or over-the-counter on
the National Market System (the "NMS") of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), (A) if
listed on an exchange, the closing price as reported for composite
transactions on the business day immediately prior to the date of
valuation or, if no sale occurred on that date, then the mean between
the closing bid and asked prices on such exchange on such date, and (B)
if traded on the NMS, the last sale price on the business day
immediately prior to the date of valuation or, if no sale occurred on
such date, then the mean between the highest bid and lowest asked prices
as of the close of business on the business day immediately prior to the
date of valuation, as reported in the NASDAQ system;

(ii) If the Shares are not traded on an exchange or the NMS but are
otherwise traded over-the-counter, the mean between the highest bid and
lowest asked prices quoted in the NASDAQ system as of the close of
business on the business day immediately prior to the date of valuation
or, if on such day such security is not quoted in the NASDAQ system, the
mean between the representative bid and asked prices on such date in the
domestic over-the-counter market as reported by the National Quotation
Bureau, Inc., or any similar successor organization; and

B-1
<PAGE> 32

(iii) If neither clause (i) nor (ii) above applies, the fair market
value as determined by the Board. Such determination shall be conclusive
and binding on all persons.

(h) "Option" shall mean the stock option granted pursuant to this
Agreement.

(i) "Option Shares" shall mean the Shares that may be obtained by the
Optionee upon exercise of the Option.

(j) "Purchase Price" shall mean the Exercise Price multiplied by the
number of Option Shares with respect to which an Option is exercised.

(k) "Share" shall mean one share of Common Stock.

(l) "Subsidiary" shall mean any corporation at least fifty percent
(50%) of the total combined voting power of which is owned by the Company
or another Subsidiary.

2. GRANT OF OPTION. The Company hereby grants to the Optionee as of the
date hereof (the "Grant Date"), subject to the terms, conditions and vesting
schedule of this Agreement, the Option to purchase all or any part of an
aggregate of seventy-five thousand (75,000) Shares. The Option is not intended
to qualify as an incentive stock option under Section 422A of the Code.

3. EXERCISE PRICE. The price to be paid for Option Shares upon exercise of
the Option or any part thereof shall be $1.6875 per share (the "Exercise
Price"), subject to adjustment in accordance with Section 22 hereof.

4. RIGHT TO EXERCISE. Commencing on the date hereof and subject to the
terms, conditions and vesting schedule of this Agreement, the Optionee shall
have the right to exercise all or any part of the Option. As the Option becomes
exercisable for one or more installments, whose installments shall accumulate,
and the Option shall remain exercisable the accumulated installments until the
Expiration Date or the sooner termination of the Option pursuant to Section 7 or
8 below. In no event shall the Option become exercisable for any additional
Shares following the Optionee's cessation of service with the Company or any
parent corporation or Subsidiary pursuant to Section 7 or 8 below.

5. VESTING SCHEDULE. Subject to the conditions set forth in this Agreement,
the right to exercise this Option shall accrue in accordance with the vesting
schedule set forth on Exhibit I attached hereto and made a part hereof.

6. TERM OF OPTION. The Option shall terminate in any event on the earliest
of (a) the close of business on the tenth anniversary of the Grant Date (the
"Expiration Date"), (b) the expiration of the period described in Section 7
below, or (c) the expiration of the period described in Section 8 below. The
Option shall also terminate as provided elsewhere in this Agreement.

7. EXERCISE FOLLOWING TERMINATION OF SERVICE. If Optionee's service with
the Company (or any parent corporation or Subsidiary) terminates for any reason
other than death or Disability, the Option (to the extent such Option is
exercisable at the time of such cessation of service) may be exercised within
ninety (90) days after the date of such termination. In no event, however, may
this Option be exercised at the any time after the Expiration Date. The
foregoing notwithstanding, the Option shall cease to be exercisable on the date
of such termination if such termination is for cause. For this purpose, "cause"
shall mean conviction of a felony, misappropriation of the assets of the Company
or parent corporation or Subsidiary, any act of fraud or dishonesty, any
unauthorized use or disclosure by the Optionee of confidential information or
trade secrets of the Company or any parent corporation or Subsidiary, or any
other intentional misconduct by the Optionee adversely affecting the business or
affairs of the Company in a material manner. In addition, for this purpose, the
service relationship shall be treated as continuing intact while the Optionee is
on military leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Board).

8. EXERCISE FOLLOWING DEATH OR DISABILITY. If the Optionee's service with
the Company (or any parent corporation or Subsidiary) terminates by reason of
the Optionee's death or Disability, but while the Optionee could have exercised
the Option and has not fully exercised the Option, the Option may be exercised
within twelve (12) months after the date of the Optionee's death or termination
by reason of Disability. In case of death, the exercise may be made by his or
her representative or by the person entitled thereto under the
B-2
<PAGE> 33

Optionee's will or the laws of descent and distribution; provided that such
representative or such person consents in writing to abide by and be subject to
the terms of this Agreement and such writing is delivered to the Secretary of
the Company. Notwithstanding the foregoing, in no event may this Option be
exercised after the Expiration Date.

9. TIME OF TERMINATION OF SERVICE. For the purposes of this Agreement, the
Optionee's service shall be deemed to have terminated on the earlier of (a) the
date when the Optionee's service is in fact terminated or (b) the date when the
Optionee gave or received written notice that his or her service is to
terminate.

10. NONTRANSFERABILTY. The Option shall be exercisable during the
Optionee's lifetime only by the Optionee or by the Optionee's guardian or legal
representative and shall be nontransferable, except that the Optionee may
transfer all or any part of the Option by will or by the laws of descent and
distribution. Except as otherwise provided herein, any attempted alienation,
assignment, pledge, hypothecation, attachment, execution or similar process,
whether voluntary or involuntary, with respect to all or any part of the Option
or any right thereunder, shall be null and void and, at the Company's option,
shall cause all of the Optionee's rights under this Agreement to terminate.

11. EFFECT OF EXERCISE. Upon exercise of all or any part of the Option, the
number of Option Shares shall be reduced by the number of Shares with respect to
which such exercise is made.

12. EXERCISE OF OPTION. In order to exercise this Option with respect to
all or any part of the Option Shares for which this Option is at the time
exercisable, the Optionee (or in the case of exercise after the Optionee's
death, the Optionee's executor, administrator, heir or legatee, as the case may
be) must take the following auctions:

(a) Deliver to the Secretary of the Company an executed notice of
exercise in substantially the form of Exhibit II to this Agreement (the
"Exercise Notice") in which there is specified the number of Option Shares
to be purchased under the exercised Option.

(b) Pay the aggregate Exercise Price for the purchased shares through
one or more of the following alternatives:

(i) full payment in cash or by check made payable to the Company's
order;

(ii) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Company's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date (as such term is defined below);l

(iii) full payment in a combination of shares of Common Stock held
for the requisite period necessary to avoid a charge to the Company's
reported earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date and cash or check payable to the
Company's order; or

(iv) full payment effected through a broker-dealer sale and
remittance procedure pursuant to which the Optionee shall concurrently
provide irrevocable written instructions (A) to a Company-designated
brokerage firm to effect the immediate sale of the purchased shares and
remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate proceeds
available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes required
to be withheld in connection with such purchase and (B) to the Company
to deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale transaction.

(c) Furnish to the Company appropriate documentation that the person
or persons exercising the Option (if other than Optionee) have the right to
exercise the Option.

(d) The Exercise Date shall be the date on which the executed Exercise
Notice is delivered to the Secretary of the Company.

B-3
<PAGE> 34

13. WITHHOLDING TAXES. If the Optionee is an Employee or former Employee of
the Company when all or part of the Option is exercised, the Company may require
the Optionee to deliver payment, upon exercise of the Option, of all withholding
taxes (in addition to the Purchase Price) with respect to the difference between
the Purchase Price and the Fair Market Value of the Shares acquired upon
exercise (a) in cash, (b) upon written approval from the Board, by delivery of
Shares registered in the name of the Optionee, or by the Company not issuing
such number of Shares subject to this Option, having a Fair Market Value at the
time of exercise in the amount to be withheld, or (c) upon written approval from
the Board, any combination of (a) and (b) above.

14. ISSUANCE OF SHARES. Subject to the foregoing conditions, the Company,
as soon as reasonably practicable after receipt of a proper Exercise Notice and
without transfer or issue tax or other incidental expense to the person
exercising the Option, shall deliver to such person at the principal office of
the Company, or such other location as may be acceptable to the Company and such
person, one or more certificates for the Shares with respect to which the Option
is exercised. Such Shares shall be fully paid and nonassessable and shall be
issued in the name of such person. However, at the request of the Optionee, such
Shares may be issued in the names of the Optionee and his or her spouse (a) as
joint tenants with rights of survivorship, (b) as community property or (c) as
tenants in common without right of survivorship.

15. DISPOSITION OF SHARES. No Shares acquired by the Optionee pursuant to
an exercise of the Option may be disposed of in whole or in part until six (6)
months after the Grant Date.

16. RIGHTS AS A STOCKHOLDER. Neither the Optionee nor any other person
entitled to exercise the Option shall have any rights as a stockholder of the
Company with respect to the Option Shares until a certificate for such Shares
has been issued to him or her upon exercise of the Option.

17. EXTENSION AND RENEWAL OF THE OPTION. The Board may extend or renew the
Option or accept the cancellation of the Option (to the extent not previously
exercised) for the granting of a new Option in substitution therefor.

18. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this Agreement shall confer
upon the Optionee any right to continue in the service of the Company (or any
parent corporation or Subsidiary employing or retaining the Optionee) for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company (or such parent corporation or Subsidiary) or
Optionee, which rights are hereby expressly reserved by each party, to terminate
the Optionee's service with the Company (or any parent corporation or
Subsidiary) at any time for any reason whatsoever, with or without cause.

19. INVESTMENT REPRESENTATIONS. In connection with his or her acceptance of
the Option, the Optionee represents and warrants to the Company that he or she:

(a) is acquiring the Option, and, if applicable, will acquire Option
Shares on exercise of the Option, for investment solely for his or her own
account and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Act, and that he or she
has no present intention of selling, offering to sell or otherwise
disposing of or distributing the Option Shares or any portion thereof in
any transaction other than a transaction exempt from registration under the
Act, and that the entire legal and beneficial interest of the Shares that
Optionee may acquire pursuant to this Agreement is being acquired for, and
will be held for the account of, the Optionee only and neither in whole nor
in part for any other person;

(b) (i) is an officer or director of the Company, (ii) has a
preexisting personal or business relationship with the Company or its
officers and directors such that he or she is aware of the Company's plans,
operations and financial condition or (iii) has business or financial
experience such that he or she has the capacity to protect his or her own
interest in acquiring the Option;

(c) realizes that his or her acquisition of the Option Shares would be
a highly speculative investment and that he or she is able, without
impairing his or her financial condition, to hold the Option Shares for an
indefinite period of time and to suffer a complete loss on his or her
investment;

B-4
<PAGE> 35

(d) understands that the Option has not been, and any Option Shares
acquired by the Optionee would not be, registered under the Act by reason
of a specific exemption under Section 4(2) of the Act, which exemption
depends upon, among other things, the bona fide nature of his or her
investment intent as expressed herein, and any Option Shares acquired by
the Optionee must be held indefinitely unless subsequently registered under
the Act or an exemption from such registration is available; and

(e) understands that any Option Shares acquired by the Optionee would
constitute restricted securities within the meaning of Rule 144 promulgated
under the Act; that the exemption from registration under Rule 144 will not
be available in any event for at least one (1) year from the date of
purchase of and payment for the Option Shares (and payment by a note is not
deemed payment unless it is otherwise secured), and even then will not be
available unless (a) a public trading market then exists for the Shares,
(b) adequate information concerning the Company is then available to the
public, and (c) other terms and conditions of Rule 144 are complied with;
and that any sale of the Shares may be made by him or her only in limited
amounts in accordance with such terms and conditions.

20. SECURITIES LAW REQUIREMENTS.

(a) LEGALITY OF ISSUANCE. The issuance of Option Shares upon the
exercise of the Option and the grant of the Option shall be contingent upon
the following:

(i) the Company and the Optionee shall have taken all action, if
any, required to register the Option and the Option Shares under the Act
or perfect an exemption from the registration requirements thereof;

(ii) any applicable listing requirement of any stock exchange on
which the Common Stock is listed shall have been satisfied; and

(iii) any other applicable provision of state or Federal law shall
have been satisfied.

(b) RESTRICTIONS ON TRANSFER; REPRESENTATIONS OF OPTIONEE; LEGENDS.
Regardless of whether the offering and sale of Option Shares has been
registered under the Act or has been registered or qualified under the
securities laws of any state, the Company may impose restrictions upon the
sale, pledge or other transfer of such Option Shares (including the
placement of appropriate legends on stock certificates) if, in the judgment
of the Company and its counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provision of the Act, the
securities laws of any state or any other law. In the event that the sale
of Option Shares is not registered under the Act but an exemption is
available which requires an investment representation or other
representation, the Optionee shall be required to represent that such
Option Shares are being acquired for investment, and not with a view to the
sale or distribution thereof, and to make such other representations as are
deemed necessary or appropriate by the Company and its counsel. Stock
certificates evidencing Option Shares acquired pursuant to an unregistered
transaction shall bear the following restrictive legend and such other
restrictive legends as are required or deemed advisable under the
provisions of any applicable law:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY IN FORM AND CONTENT TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."

Any determination by the Company and its counsel in connection with any of
the matters set forth in this Section 20 shall be conclusive and binding on all
persons.

B-5
<PAGE> 36

(c) REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may, but
shall not be obligated to, register or quality the issuance of the Option
or the sale of the Option Shares under the Act or any other applicable law.

(d) EXCHANGE OF CERTIFICATES. If, in the opinion of the Company and
its counsel, any legend placed on a stock certificate representing Option
Shares sold is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the
same number of Option Shares but lacking such legend.

21. CORPORATE TRANSACTION.

(a) In the event of any of the following stockholder-approved
transactions effected after the Grant Date to which the Company is a party
(a "Corporate Transaction"):

(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated,

(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital
stock of the Company's Subsidiaries) in complete liquidation or
dissolution of the Company, or

(iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such merger,

this Option, to the extent outstanding at such time but not otherwise fully
exercisable, shall automatically accelerate so that this Option shall,
immediately prior to the specified effective date for the Corporate Transaction,
become fully exercisable for all the Option Shares at the time subject to this
Option and may be exercised for all or any portion of such shares as fully
vested shares of Common Stock.

(b) This Agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

22. ADJUSTMENT IN OPTION SHARES.

(a) In the event any change is made to the Common Stock issuable under
the plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class effected without the Company's receipt
of consideration, the Board shall make appropriate adjustments to (i) the
number and/or class of securities subject to this Option and (ii) the
Exercise Price payable per share in order to prevent any dilution or
enlargement of benefits hereunder. Such adjustments shall be final, binding
and conclusive.

(b) In connection with any Corporate Transaction under Section 21,
this Option shall, immediately after such Corporate Transaction, be
appropriately adjusted to apply and pertain to the number and class of
securities which would have been issued to Optionee in the consummation of
such Corporate Transaction had the Option been exercised immediately prior
to such Corporate Transaction. Appropriate adjustments shall also be made
to the Exercise Price payable per share, provided the aggregate Exercise
Price payable hereunder shall remain the same.

23. NOTICES. Any notice to the Company contemplated by this Agreement shall
be addressed to it in care of its Secretary, 1125 Seventeenth Street, Suite
2100, Denver, Colorado 80202, or such other address as the Company may specify
in a notice to the Optionee; and any notice to the Optionee shall be in writing
and shall be addressed to him or her at the address on file with the Company on
the date hereof or at such other address as he or she may hereafter designate in
writing. Notice shall be deemed to have been given upon receipt or, if

B-6
<PAGE> 37

sooner, five (5) days after such notice has been deposited, postage prepaid,
certified or registered mail, return receipt requested, in the United States
mail addressed to the address specified in the immediately preceding sentence.

24. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of the Option and
the issuance of the Shares upon such exercise shall be subject to compliance by
the Company and the Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange on which
shares of Common Stock may be listed for trading at the time of such exercise
and issuance.

25. INTERPRETATION. The interpretation, construction, performance and
enforcement of this Agreement shall lie within the sole discretion of the Board,
and the Board's determinations shall be conclusive and binding on all interested
persons.

26. CHOICE OF LAW. This Agreement, and all rights and obligations
hereunder, shall be governed by the internal laws of the State of Delaware.

27. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided in
Section 10 or 21, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs and legal
representatives of the Optionee and the successors and assigns of the Company.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.

CORAM HEALTHCARE CORPORATION

By:
Name:
Title:

____________, OPTIONEE

------------------------------------
Signature

Address:

------------------------------------

B-7
<PAGE> 38

EXHIBIT I

VESTING SCHEDULE

Subject to the conditions set forth in this Agreement, the right to
exercise the Option shall accrue as to 25% of the Option Shares on the first
anniversary of the Grant Date and as to the balance of the Option Shares in
equal successive monthly installments during the next thirty six (36) months
thereafter measured from the first anniversary of the Grant Date.

B-8
<PAGE> 39

EXHIBIT II

NOTICE OF EXERCISE OF STOCK OPTION

I hereby notify Coram Healthcare Corporation (the "Company") that I elect
to purchase shares of the Company's Common Stock (the "Purchased
Shares") at the option exercise price of $ per share (the "Exercise Price")
pursuant to that certain option (the "Option"), as evidenced by that certain
Stock Option Agreement dated (the "Option Agreement").

Concurrently with the delivery of this Exercise Notice to the Secretary of
the Company, I shall hereby pay to the Company the Exercise Price for the
Purchased Shares in accordance with the provisions of my Option Agreement with
the Company evidencing the Option and shall deliver whatever additional
documents may be required by such Option Agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and remittance
procedure specified in my Option Agreement to effect the payment of the Exercise
Price for the Purchased Shares.

- ------------------------------------------------------
Date

------------------------------------
Optionee

Address:

------------------------------------

Print name in exact manner it is to
appear on the stock certificate:
------------------------------------------------------

Address to which certificate is to
be sent, if different from address
above:
------------------------------------------------------

------------------------------------------------------

Social Security Number:
- ------------------------------------------------------

B-9
<PAGE> 40

PROXY

CORAM HEALTHCARE CORPORATION

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Richard M. Smith 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 1999 Annual Meeting of Stockholders of Coram Healthcare
Corporation (the "Company") to be held at The Oxford Hotel, 1600 Seventeenth
Street, Denver, Colorado, on August 5, 1999, at 12:00 noon 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 on the reverse side.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF ITEMS 1, 2, 3 and 4.

TO BE COMPLETED AND SIGNED ON THE REVERSE SIDE. SEE REVERSE SIDE.

[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

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,
2, 3 and 4.

1. Election of Directors.

NOMINEES: Donald J. Amaral, William J. Casey, Stephen A. Feinberg,
Richard A. Fink, Richard M. Smith, and L. Peter Smith.

[ ] FOR [ ] WITHHELD

2. To approve an amendment to the Company's Restated Certificate of
Incorporation, as amended, to increase the number of authorized shares
of the Company's Common Stock to 150,000,000 from 100,000,000.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. To approve certain options to purchase shares of Company's Common Stock
granted to four directors of the Company, William J. Casey, Richard A.
Fink, Stephen G. Pagliuca and L. Peter Smith.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. Ratification of the appointment of Ernst & Young LLP as independent
auditors of the Company.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

5. 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.

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.

Signature: Date: