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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
File by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
HELIAN HEALTH GROUP, INC.
(Name of Registrant as Specified In Its Charter)
HELIAN HEALTH GROUP, INC.
9600 BLUE LARKSPUR
MONTEREY, CA 93940
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
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4) Proposed maximum aggregate value of transaction:
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1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[LOGO]
March 29, 1995
Dear Helian Health Group, Inc. Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders which
will be held on Tuesday, April 25, 1995, at 9:00 a.m. at the Monterey Plaza
Hotel, 400 Cannery Row, Monterey, California 93940.
The Notice of the Annual Meeting and the Proxy Statement have been made a part
of this invitation.
After reading the Proxy Statement, please mark, date, sign and return, as soon
as possible, the enclosed proxy in the prepaid envelope addressed to the
Company, to assure that your shares will be represented. YOUR SHARES CANNOT BE
VOTED UNLESS YOU DATE, SIGN AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL
MEETING IN PERSON.
A copy of the Company's 1994 Annual Report is also enclosed.
The Board of Directors and Management look forward to seeing you at the Annual
Meeting.
Sincerely,
Thomas D. Wilson
Chairman of the Board, Chief
Executive Officer and President
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HELIAN HEALTH GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1995
TO THE STOCKHOLDERS OF HELIAN HEALTH GROUP, INC.
The Annual Meeting of Stockholders of Helian Health Group, Inc. (the
"Company") will be held at the Monterey Plaza Hotel, 400 Cannery Row, Monterey,
California 93940, on Tuesday, April 25, 1995, at 9:00 a.m. local time for the
following purposes:
1. To elect five (5) directors to hold office until the 1996
Annual Meeting of Stockholders and until their respective successors are
elected and qualified.
2. To transact such other business as may properly come before
the meeting and any adjournments or postponements of the meeting.
Stockholders of record at the close of business on March 15, 1995, are
entitled to notice of and to vote at the meeting and any continuations or
adjournments thereof. For ten days prior to the meeting, a complete list of
stockholders entitled to vote at the meeting will be available for examination
by any stockholder for any purpose germane to the meeting during ordinary
business hours at the Company's home office, located at 9600 Blue Larkspur,
Monterey, CA.
BY ORDER OF THE BOARD OF DIRECTORS
Donald C. Blanding,
Assistant Secretary
Monterey, California
March 29, 1995
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN
AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED
ENVELOPE SO THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING.
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PROXY STATEMENT
1995 ANNUAL MEETING OF STOCKHOLDERS
HELIAN HEALTH GROUP, INC.
9600 BLUE LARKSPUR
MONTEREY, CALIFORNIA 93940
(408) 646-9000
The accompanying proxy is solicited on behalf of the management of
Helian Health Group, Inc., a Delaware corporation (the "Company") for use at
the Annual Meeting of Stockholders to be held at 9:00 a.m. local time on April
25, 1995, or any adjournment thereof, at which stockholders of record at the
close of business on March 15, 1995 shall be entitled to vote. The meeting
will be held at the Monterey Plaza Hotel, 400 Cannery Row, Monterey, California
93940.
The date of this Proxy Statement is March 29, 1995, the approximate
date on which the Proxy Statement and form of proxy were first sent or given to
stockholders. The Annual Report to Stockholders for the fiscal year ended
November 30, 1994, including financial statements, is being mailed to the
stockholders concurrently with the mailing of the Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The cost of soliciting of proxies will be borne by the Company. In
addition, arrangements may be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation material to the beneficial
owners of the stock held of record by such persons and the Company may
reimburse them for reasonable out-of-pocket expenses incurred by them in so
doing. Management may use the services of its directors, officers, and others
to solicit proxies, personally or by telephone, without additional
compensation.
Only stockholders of record at the close of business on March 15, 1995
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof. At the close of business on that date,
the Company had outstanding 5,450,592 shares of its Common Stock, par value
$.01 per share. Each stockholder is entitled to one vote for each share of
stock held by the individual. The Company's Bylaws provide that a majority of
the stock issued and outstanding and entitled to vote, whether present in
person or represented by proxy, shall constitute a quorum for the transaction
of business at the meeting.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by filing with the
Assistant Secretary of the Company an instrument revoking it, by presenting at
the meeting a duly executed proxy bearing a later date, or by attending the
meeting and voting in person.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership
of the Common Stock of the Company as of February 28, 1995 by (i) each person
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock of the Company, (ii) each director and
director-nominee of the Company, (iii) the Chief Executive Officer and the
other executive officers of the Company as of November 30, 1994 whose salary
and bonus for the year ended November 30, 1994 exceeded $100,000, and (iv) all
executive officers and directors of the Company as a group. Each person has
sole investment and
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voting power with respect to the shares indicated, subject to community
property laws where applicable, except as otherwise indicated below.
SHARES OWNED
-----------------------
NAME AND ADDRESS OF NUMBER PERCENTAGE
BENEFICIAL OWNERS OF SHARES OF CLASS
------------------- --------- ----------
Lawrence S. Dolin(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 755,700 13.86%
16111 Parkland Drive
Shaker Heights, OH 44120
Thomas D. Wilson(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 758,550 13.63%
9600 Blue Larkspur
Monterey, CA 93940
Nate Dolin(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 677,700 12.43%
One Bratenahl Place
Bratenahl, OH 44108
GeoCapital Corporation(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . 452,180 8.30%
767 Fifth Avenue
New York, NY 10153
Barry Rubenstein(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . 406,436 7.46%
39 Woodland Road
Roslyn, NY 11576
Dimensional Fund Advisors, Inc.(6) . . . . . . . . . . . . . . . . . . . . . . 260,700 4.78%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Andrew W. Miller(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,000 1.85%
William A. Hines(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,105 1.36%
Michael K. McMillan(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,517 *
Robert G. McCreary, III . . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Executive Officers and Directors as a Group (9 persons)(10) . . . . . . . . . . 1,788,972 30.90%
--------------
* Less than 1%
1 Includes 51,000 shares of Common Stock owned directly by Mr. Lawrence
Dolin and 27,000 shares of Common Stock owned by Mr. Dolin's wife,
Deedra Dolin, and his children, as to which Mr. Dolin disclaims
beneficial ownership. Also includes 402,700 shares of Common Stock
owned by The Northern Union Club ("Club") and 275,000 shares of Common
Stock owned by Mordo Partners ("Mordo"). Club is a limited
partnership of which Mordo, an Ohio general partnership, is the sole
general partner and is a limited partner. Lawrence Dolin is a general
partner of Mordo. The business address of Mordo is One Bratenahl
Place, Bratenahl, OH 44108 and the business address of Club is 600 Old
Country Road, Garden City, NY 11530. Lawrence Dolin disclaims
beneficial ownership of 354,539 shares and 165,000 shares of Common
Stock owned by Club and Mordo, respectively. As
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general partner of Mordo, Lawrence Dolin has shared power to vote and
to dispose of 677,700 shares of Common Stock, representing
approximately 12.43% of the outstanding Common Stock.
2 Includes 635,800 shares of Common Stock owned directly by Mr. Wilson
and 6,000 shares of Common Stock owned by Mr. Wilson's wife, Karen
Wilson, as to which Mr. Wilson disclaims beneficial ownership. Also
includes 116,750 shares of Common Stock subject to options exercisable
within 60 days of February 28, 1995.
3 Includes 402,700 shares of Common Stock owned by Club, as to 337,050
shares of which Nate Dolin disclaims beneficial ownership, and 275,000
shares of Common Stock owned by Mordo, as to 192,500 shares of which
Mr. Dolin disclaims beneficial ownership. Nate Dolin is a general
partner of Mordo. See Note 1 for information concerning Mordo and
Club. As general partner of Mordo, Nate Dolin has shared power to
vote and dispose of 677,700 shares of Common Stock.
4 According to a Schedule 13G dated February 9, 1995, GeoCapital
Corporation, as an investment advisor, may be deemed to have sole
dispositive power over 418,680 shares of Common Stock under its
management for its clients. By reason of their ownership interests in
GeoCapital Corporation, Irwin Lieber and Barry K. Fingerhut may be
deemed to beneficially own such 418,680 shares of Common Stock, and
have shared dispositive power over the shares beneficially owned by
GeoCapital Corporation. Also includes 24,000 shares of Common Stock
owned directly by Irwin Lieber, the President and a principal
stockholder of GeoCapital Corporation, and 9,500 shares held by Mr.
Lieber's children. Mr. Lieber disclaims beneficial ownership as to
the shares beneficially owned by GeoCapital Corporation and the shares
held by his children.
5 Mr. Rubenstein owns directly 10,000 shares of Common Stock held by Mr.
Rubenstein in an individual retirement account. Also includes 209,568
shares of Common Stock owned by Woodland Venture Fund ("Woodland
Venture"), 183,568 shares of Common Stock owned by Seneca Ventures
("Seneca"), and 3,300 shares of Common Stock owned by Woodland
Partners. Woodland Venture and Seneca are limited partnerships of
which Mr. Rubenstein and Woodland Services Corp. ("WSC") are the
general partners. The business address of each of Woodland Venture,
Seneca and Woodland Services Corp. is 39 Woodland Road, Roslyn, NY
11576. Mr. Rubenstein is the president and sole shareholder of WSC.
Mr. Rubenstein has a ninety percent general partnership interest in
Woodland Partners. Mr. Rubenstein disclaims beneficial ownership of
209,309 shares of Common Stock owned by Woodland Venture, 183,568
shares of Common Stock owned by Seneca and 3,300 shares of Common
Stock owned by Woodland Partners. Mr. Rubenstein has shared power to
vote and to dispose of 396,436 shares of Common Stock (representing
approximately 7.27% of the shares outstanding) and has sole voting and
investment power with respect to 10,000 shares of Common Stock.
6 According to a Schedule 13G dated February 9, 1994, Dimensional Fund
Advisors, Inc. ("DFA"), as an investment advisor, may be deemed to
have beneficial ownership of 260,700 shares of Common Stock, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the
DFA Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
7 Includes 56,100 shares of Common Stock subject to options exercisable
within 60 days of February 28, 1995.
8 Includes 76,000 shares of Common Stock subject to options exercisable
within 60 days of February 28, 1995.
9 Includes 23,250 shares of Common Stock subject to options exercisable
within 60 days of February 28, 1995.
10 Includes shares of Common Stock held by directors and described in
footnotes 1, 2, and 3 above, and 338,200 shares (including those
described in footnotes 1 and 7 through 10 above) subject to options
exercisable within 60 days of February 28, 1995.
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ELECTION OF DIRECTORS
Five (5) directors are to be elected at the Annual Meeting. Each
nominee will hold office until the next Annual Meeting of Stockholders and
until his successor is duly elected and qualified, unless he shall resign or
his office becomes vacant by death, removal, or other cause in accordance with
the Bylaws of the Company. Harvey Knoernschild, M.D., a director of the
Company, resigned from such position on January 1, 1995. Subsequent to Dr.
Knoernschild's resignation, the Board of Directors approved a reduction of the
number of directors serving on the Board from four (4) to three (3). In March
1995, the Board of Directors expanded the number of directors serving on the
Board from three (3) to five (5) and appointed William A. Hines and Robert G.
McCreary, III, to fill the resulting vacancies. The Board is currently seeking
additional qualified candidates to serve as directors. If the Board locates
such director candidates, the Board will be expanded by the necessary seats and
such individuals will be appointed as directors to the Board.
Management's nominees for election to the office of director and
certain information with respect to their age and background are set forth
below. Each of the nominees was elected to his present term of office at the
1994 Annual Meeting. Management knows of no reason why any nominee should be
unable or unwilling to serve. However, if any nominee(s) should for any reason
be unable or unwilling to serve, the proxies will be voted for such substitute
nominees as Management may designate.
If a quorum is present and voting, the nominees receiving the highest
number of votes will be elected as directors. Abstentions will be counted as
present for purposes of determining if a quorum is present.
DIRECTORS
NAME AGE POSITIONS WITH THE COMPANY SINCE
---- --- -------------------------- -----
Thomas D. Wilson 41 Chairman of the Board, Chief 1986
Executive Officer and President
William A. Hines 36 Director, Vice President and 1995
Chief Operating Officer
Nate Dolin 81 Director 1986
Lawrence S. Dolin 51 Director 1988
Robert G. McCreary, III 43 Director 1995
EXECUTIVE OFFICERS
The executive officers of the Company as of March 1, 1995 are as
follows:
NAME AGE POSITIONS WITH THE COMPANY
---- --- --------------------------
Thomas D. Wilson 41 Chairman of the Board, President
and Chief Executive Officer
Donald C. Blanding 39 Treasurer and Assistant Secretary
Herbert W. Foster 54 Acting Senior Financial Officer
William A. Hines 36 Vice President and Chief Operating Officer
Michael K. McMillan 38 General Counsel and Secretary
Andrew W. Miller 35 Vice President
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Thomas D. Wilson is a founder of the Company and has been President
and a Director since its inception in 1986. He was employed by American
Medical International ("AMI") from 1979 to 1986, serving as President of AMI
Ambulatory Centres, Inc., AMI's subsidiary for outpatient services, and as a
Vice President of AMI from 1984 to 1986. Mr. Wilson is a director, Secretary
and Treasurer of Recovery Inns of America, Inc. See "EXECUTIVE COMPENSATION
AND OTHER MATTERS - Certain Transactions and Other Relationships."
William Hines has been a Director of the Company since March 1995, has
been the Company's Chief Operating Officer since May 1, 1993, has served as
Vice President of Helian Health Group of Georgia, Inc. and Helian Health Group
of Atlanta, Inc., both wholly-owned subsidiaries of the Company, since their
inception in March 1987 and became an executive officer of the Company in March
1990. Previously, Mr. Hines had served since July 1985 as Executive Director
of an AMI Ambulatory Center Inc. occupational health facility in Atlanta,
Georgia.
Nate Dolin has been a Director of the Company since its inception.
From 1982 until May 1989, he served as Chairman of the Board and Chief
Executive Officer of Morgan Foods, Inc., a publicly-held company. From 1966 to
1988 he was an officer and director of Mordo Corporation, a private company
which engaged in investing. Since 1982 he has served as a general partner of
Mordo Partners, the general partner of The Northern Union Club, an investment
limited partnership. Mr. Dolin is currently a private investor. Nate Dolin is
the father of Lawrence S. Dolin.
Lawrence S. Dolin has been a Director of the Company since March 1988.
He has been president of Joy Entertainment, Inc., a company engaged in
providing consulting services in connection with live entertainment by popular
artists and prominent speakers, since July 1993 and was president of The Front
Row Theater, Inc., a company engaged in presenting live entertainment and
concerts, from 1974 to July 1993. Since 1982 he has served as a general
partner of Mordo Partners, the general partner of The Northern Union Club, a
privately-held investment limited partnership. Mr. Dolin is a director of
Morgan Foods, Inc. and The Continuum Group, Inc., both of which are publicly
held companies.
Robert G. McCreary, III, has been a Director of the Company since
March 1995. Since 1993, Mr McCreary has been a principal at Carleton,
McCreary, Holmes & Co., an investment banking and financial services firm in
which he was a founder. From 1988 through 1993, he was a member of Kemper
Securities' Management Council and a Managing Director for Kemper Securities'
corporate financing activities in Cleveland, Ohio.
Donald C. Blanding has been Controller of the Company since October
1986, its Treasurer since October 1987 and its Assistant Secretary since April
1992. He served as Senior Financial Officer of the Company from October 1987
until November 1992. From July 1983 to August 1986 he was the manager of
accounting for AMI Ambulatory Centers, Inc.
Herbert W. Foster has been Acting Senior Financial Officer since
December 1994. Since July 1990, he has been providing financial consulting
services through The Brenner Group, a consulting firm that provides interim
management services to client companies. From June 1989 until July 1990, he
served as Vice President, Controller of Grubb & Ellis Corporation, a real
estate sales and management company.
Michael K. McMillan has been General Counsel and Secretary of the
Company since August 1991. From March 1984 until July 1991 was a member of the
law firm of Gustlin, Golob and Bragin in Los Angeles, California.
Andrew W. Miller has been Vice President of the Company since
inception. From October 1986 to June 1988 Mr. Miller was executive director of
the Company's Occupational Health Center in Austin, Texas. From June 1983 to
October 1986 he was employed by AMI as director of occupational medicine
services.
The Company has an Audit Committee and a Compensation Committee but
does not have a Nominating Committee. Messrs. Nate Dolin and Lawrence Dolin
are the members of the Audit Committee,
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which held two (2) meetings in fiscal 1994. The functions of the Audit
Committee include recommending to the Board of Directors the independent
auditors, reviewing and approving the planned scope of the annual audit,
proposed fee arrangements and the results of the annual audit, reviewing the
adequacy of accounting and financial controls, reviewing the independence of
the independent auditors, approving all assignments to be performed by the
independent auditors, and instructing the independent auditors, as deemed
appropriate, to undertake special assignments.
Messrs. Nate Dolin and Lawrence Dolin are the members of the
Compensation Committee, which assumed the responsibilities of the disbanded
Option Committee in January 1993. The Compensation Committee held three (3)
meetings in fiscal 1994. The Compensation Committee administers the Company's
Amended and Restated 1989 Stock Option Plan, including the granting of
incentive and non-qualified stock options pursuant thereto, and formulates and
administers policies regarding compensation of the Company's executive
officers, including the Chief Executive Officer, with respect to salaries,
bonuses, stock options and all other compensation.
During the fiscal year ended November 30, 1994, the Board held five
(5) meetings. No director serving on the Board in fiscal year 1994 attended
fewer than 75% of such meetings of the Board and the Committees on which he
serves.
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EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation
of the Chief Executive Officer of the Company and the three other executive
officers of the Company as of November 30, 1994 whose total salary and bonus
for the year ended November 30, 1994 exceeded $100,000, for services in all
capacities to the Company and its subsidiaries, during the fiscal years ended
November 30, 1992, 1993 and 1994:
SUMMARY COMPENSATION TABLE
LONG TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
--------------------------------------------------- ------------ ------------
AWARDS
OTHER ANNUAL ------
NAME AND PRINCIPAL COMPENSATION OPTIONS
POSITION YEAR SALARY BONUS ($) (SHARES)
---------------------- ---- -------- --------- ------------ ------------
Thomas D. Wilson 1994 $207,200 $78,879(1) -- -- $21,279(4)
----
President and Chief 1993 $182,200 $25,000 -- 25,000(3) $21,279(4)
----
Executive Officer 1992 $182,200 $45,000(2) -- -- $16,279(4)
----
William A. Hines 1994 $121,609 $20,000 $41,271(5) -- --
----
Vice President 1993 $143,716 $15,000 -- 75,000 --
----
1992 $110,044 -- -- -- --
----
Andrew W. Miller 1994 $107,383 $20,000 -- -- $ 279(6)
----
Vice President 1993 $101,967 $17,500 -- 30,000 $ 252(6)
----
1992 $ 92,304 $13,500 -- -- $ 240(6)
----
Michael K. McMillan 1994 $126,400 $14,000 -- -- --
----
Secretary and General 1993 $111,467 $10,000 -- 40,000(7) --
----
Counsel 1992 $ 91,572 $10,000 -- 25,000(8) --
----
------------------
1 Mr. Wilson was entitled to receive a bonus of $123,149 for his
services in fiscal 1994, but elected to waive his right to $44,270 of
this bonus.
2 Mr. Wilson was entitled to receive a bonus of $157,258 for his
services in fiscal 1992, but elected to waive his right to $112,258 of
this bonus.
3 Reflects options awarded pursuant to Mr. Wilson's employment
agreement, based on the Company's 1992 financial performance.
4 Reflects premiums paid by the Company for a universal life insurance
policy with a coverage amount of approximately $1,100,000 for which
Mr. Wilson's trust is the beneficiary.
5 Represents educational expenses reimbursed by the Company.
6 Reflects annual premium paid by the Company for term life policy for
Mr. Miller.
7 Includes option for 25,000 shares which was repriced October 23, 1993,
replacing options granted in fiscal 1991 and repriced October 13,
1992.
8 Reflects options for 25,000 shares which were repriced October 13,
1992, replacing options granted in fiscal 1991.
No stock options were granted by the Company to the persons named in
the Summary Compensation Table in the year ended November 30, 1994.
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The following table provides the specified information concerning
exercises of options to purchase the Company's Common Stock during the fiscal
year ended November 30, 1994, and unexercised options held as of November 30,
1994, by the persons named in the Summary Compensation Table:
AGGREGATE OPTION EXERCISES(1)
AND FISCAL YEAR-END VALUES
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISABLE IN-THE-MONEY
OPTIONS AT 11/30/94 OPTIONS AT 11/30/94
--------------------------------------- --------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------------------------------------
Thomas D. Wilson 108,250 16,750 $0(2) $0(2)
William A. Hines 56,000 55,000 $13,500 $0(2)
Andrew W. Miller 45,900 20,100 $13,500 $0(2)
Michael K. McMillan 15,750 24,250 $0(2) $0(2)
__________________________
1 There were no option exercises during fiscal 1994.
2 The exercise prices of these options were above the market price of
the Company's Common Stock on November 30, 1994, which was $5.625.
The value shown is for all outstanding in-the-money options regardless
of vesting restrictions.
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Thomas D. Wilson is employed as Chairman of the Board, Chief Executive
Officer, and President of the Company, pursuant to an employment agreement (the
"Agreement") with an initial term through September 30, 1992. The Agreement
automatically extends on a day to day basis upon the expiration of its term.
The Agreement provides for a base salary of $150,000 as well as an annual bonus
based on the financial performance of the Company and additional benefits. In
the event Mr. Wilson is not elected President, Chairman of the Board, Chief
Executive Officer and a member of the Board of Directors, or his employment is
terminated without cause, or his duties are substantially changed while the
Agreement is in effect, he is entitled to receive three years of severance pay
equal to his base salary and bonus in effect on termination, as well as
continuation of life insurance and health benefits for three years. Mr. Wilson
has agreed not to compete with the Company during the term of his employment
and for one year thereafter.
In December 1990, the Company and Mr. Wilson agreed to amend the
Agreement. Pursuant to the amendment, Mr. Wilson receives a base salary at the
annual rate of $175,000, with such rate applicable retroactively to services
rendered on or after December 1, 1989. Mr. Wilson's base salary is subject to
upward adjustment based upon an annual review of his performance in the prior
fiscal year by the Company's Board of Directors. The amendment further
provides that for each fiscal year during the term of the Agreement (commencing
with the fiscal year ended November 30, 1990) in which net income before taxes
has increased 30% or more, compared to net income before taxes in the
immediately prior fiscal year, the Company shall grant Mr. Wilson a
nonqualified stock option to purchase 25,000 shares of Common Stock pursuant to
the Amended Plan. Such options shall be exercisable in equal annual
installments over a three year period from date of grant and will otherwise be
subject to the terms and conditions set forth in the Company's standard form of
nonqualified stock option agreement.
Andrew W. Miller is employed as Vice President of the Company pursuant
to an employment agreement expiring December 31, 1995. This agreement provides
for a base salary of $98,000 a year as well as a discretionary bonus and
various benefits. In the event Mr. Miller is terminated from his employment
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while such agreement is in effect, he is entitled to receive eighteen months of
severance pay equal to his current base salary and is eligible for a
discretionary bonus of up to 40% of base salary.
William A. Hines is employed as Vice President and Chief Operating
Officer of the Company pursuant to an employment agreement expiring December
31, 1996. This agreement provides for a base salary of $158,080 for 1995 and
for 1996 as well as a discretionary bonus and various benefits, including
educational reimbursement. In the event Mr. Hines is terminated from
employment, he is entitled to receive two years of severance pay equal to his
current base salary and is eligible for a discretionary bonus of up to 40% of
base salary, as well as reasonable moving and relocation costs up to $10,000.
Michael K. McMillan was employed as Secretary and General Counsel
pursuant to an employment agreement that expired December 31, 1994. The
agreement provided for a base salary of $100,000 a year as well as a
discretionary bonus and various other benefits.
COMPENSATION OF DIRECTORS
The Company pays its outside directors $1,500 for each meeting of the
Board of Directors which they attend, $750 for each meeting of committees of
the Board of Directors they attend which are not held concurrently with a
meeting of the Board of Directors, and reimburses the directors for their
travel expenses to the meetings.
CERTAIN TRANSACTIONS AND OTHER RELATIONSHIPS
The Company has entered into employment agreements with some of its
executive officers, the terms of which are described above in "Employment and
Change of Control Arrangements".
Harvey E. Knoernschild, M.D., a director of the Company until January
1, 1995, is the founder, President and Chairman of the Board of Recovery Inns
of America ("RIA") and owns 50% of RIA's stock. Thomas D. Wilson also serves
as a Director, Secretary and Treasurer of RIA. The Company, through its
wholly-owned subsidiary, Helian Recovery Corporation ("Recovery"), owns 50% of
the stock of RIA.
Recovery is also the managing general partner and a limited partner of
Recovery Inn of Menlo Park, a California limited partnership, owning a 29.0%
interest and 26.3% interest, respectively. Recovery also owns an additional
indirect 6.0% interest in the Recovery Inn of Menlo Park through RIA's
ownership of a 12% interest as a limited partner.
9
13
REPORT OF THE COMPENSATION COMMITTEE
ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised of
two independent, non-employee directors of the Company, Nate Dolin and Lawrence
S. Dolin. The Compensation Committee is responsible for setting and
administering the policies governing the annual compensation of the Company's
executive officers, including cash compensation and stock ownership programs.
The goals of the Compensation Committee's policies on executive compensation
are the recruitment and retention of qualified management through annual
salary, incentive bonuses and stock option awards under the Option Plan. The
Compensation Committee's policies regarding executive compensation are
developed with recognition of the Company's relative size and geographical
location in relation to companies in its industry, targeted at the median in
its industry.
SALARY. The Company has entered into employment agreements with
several of its executive officers. See "EXECUTIVE COMPENSATION AND OTHER
MATTERS - Employment and Change of Control Arrangements." The agreements are
typically one to three years in duration, and establish a base salary during
the term of the agreement, and provide that the executive officer is eligible
for discretionary incentive compensation. Base salaries of executive officers
other than for Mr. Thomas Wilson, the Company's President and Chief Executive
Officer, are reviewed annually by Mr. Wilson, and adjustments are made, based
on individual executive officer performance, scope of responsibilities and
adjustments deemed necessary to retain qualified personnel. Mr. Wilson
evaluates the performance of all executive officers other than himself
annually.
BONUSES. The Compensation Committee believes that
performance-oriented financial incentives, in the form of bonuses and stock
option grants, will motivate the Company's executive officers and more closely
align their interest with those of the Company's stockholders. In fiscal 1994,
the Company's executive officers participated in "management by objectives,"
under which each executive officer developed goals and objectives for each year
in consultation with Mr. Wilson. Annual incentive compensation for executive
officers total up to 40% of an officer's annual base salary. Mr. Wilson
recommends, subject to the review and approval of the Compensation Committee,
bonus compensation for each individual officer other than himself based on the
executive officer's overall performance, attainment of predetermined financial
and other goals established in consultation between Mr. Wilson and each
executive officer, and the Company's performance. In the case of executive
officers with more operational and profit/loss responsibilities, bonuses are
weighted more heavily on the attainment of the Company's operating plan, with
less weight given to other factors, and for executive officers with less direct
operational or profit/loss responsibilities, bonuses are weighted more to
attainment of non-financial objectives.
The Compensation Committee is considering alternative incentive
compensation arrangements for executive officers during fiscal 1995, under
which executive officers would receive incentive compensation in amounts
determined by the Committee upon achievement of Company performance targets for
return on net assets and profitability.
STOCK OPTIONS. At the commencement of an executive officer's
employment, and periodically thereafter, Mr. Wilson recommends to the
Compensation Committee an award of stock options to such executive officer
under the Option Plan. The Compensation Committee grants stock options at not
less than the market price for the Company's Common Stock on the date of grant,
and therefore these grants will only have value if the Company's Common Stock
price increases over the exercise price. The Compensation Committee believes
that stock options serve to align the interest of executive officers more
closely with other stockholders because of the direct benefit executive
officers receive through improved stock performance. Recommendations for
options are based on relative position and responsibilities of each executive
officer and the historical and expected contributions of each executive officer
to the Company. Options are recommended with the goal to provide competitive
equity compensation for executive officers compared to other officers of
similar rank and position and companies in the health care services industry,
with similar geographical location and size. Generally, stock option grants
vest over three years to encourage executive officers to continue their
employment with the Company.
10
14
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee evaluates the performance of Mr. Wilson at
least annually. In January 1994 the Compensation Committee approved a $25,000
increase in Mr. Wilson's base salary for fiscal 1994, taking into account the
fact that Mr. Wilson had not had a raise in his base salary since 1991. In
March 1995 the Compensation Committee determined to reduce Mr. Wilson's base
salary to the $175,000 base salary under his employment agreement with the
Company, based on Company performance and market conditions. For a description
of Mr. Wilson's employment agreement, see "EXECUTIVE COMPENSATION AND OTHER
MATTERS - Employment and Change of Control Arrangements." Under Mr. Wilson's
employment agreement, Mr. Wilson was entitled to a bonus of $123,149 for fiscal
1994, of which he waived rights to $44,270.
COMPENSATION COMMITTEE
Nate Dolin
Lawrence S. Dolin
11
15
COMPARISON OF STOCKHOLDER RETURN
Set forth below is a line graph comparing the annual percentage change
in the cumulative total return on the Company's Common Stock with the
cumulative total return of the NASDAQ Stock Market (US Companies) and NASDAQ
Health Services Stocks for the period commencing on November 30, 1989 and
ending on November 30, 1994.(1)
COMPARISON OF CUMULATIVE TOTAL RETURN FROM NOVEMBER 30, 1989 THROUGH NOVEMBER
30, 1994:
HELIAN HEALTH GROUP, INC., THE NASDAQ STOCK MARKET (US COMPANIES), NASDAQ
HEALTH SERVICES STOCKS
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 11/30/89 11/30/90 11/29/91 11/20/92 11/20/93 11/30/94
------ ---------------------------- -------- -------- -------- -------- -------- --------
----- Helian Health Group, Inc. 100.0 122.0 107.2 136.0 76.2 92.7
----- Nasdaq Stock Market (US 100.0 81.1 121.0 152.3 175.3 176.6
Companies)
----- Nasdaq Health Services Stocks 100.0 113.2 228.6 270.9 302.6 345.9
SIC 8000-8099 US & Foreign
Notes:
A. The lines represent monthly index levels derived from
compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market
capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end
is not a trading day, the preceding trading day is used.
(1) Assumes that $100.00 was invested on November 30, 1989 in the
Company's Common Stock and each index, and that all dividends were
reinvested. No dividends have been declared on the Company's Common
Stock. Stockholder returns over the indicated period should not be
considered indicative of future stockholder returns.
12
16
INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Coopers & Lybrand
as independent accountants to audit the financial statements of the Company for
the fiscal year ending November 30, 1995. Coopers & Lybrand has acted in such
capacity since its appointment during the fiscal year ended November 30, 1991.
It is anticipated that representatives of Coopers & Lybrand will be present at
the Annual Meeting. Such representatives will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
STOCKHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the next Annual
Meeting of the Stockholders of the Company must be received by the Company at
its home office 9600 Blue Larkspur, Monterey, California 93940, not later than
November 18, 1995, and satisfy the conditions established by the Securities and
Exchange Commission for stockholder proposals to be included in the Company's
proxy statement for that meeting.
TRANSACTION OF OTHER BUSINESS
The Board of Directors knows of no other business that will be
presented for consideration at the meeting. If other matters are properly
brought before the meeting, however, it is the intention of the persons named
in the accompanying proxy to vote the shares represented on such matters in
accordance with their best judgment.
By Order of the Board of Directors
Donald C. Blanding
Assistant Secretary
Monterey, California
March 29, 1995
13
17
HELIAN HEALTH GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael K. McMillan and Donald C. Blanding,
and each of them, with full power of substitution to represent the undersigned
and to vote all the shares of the stock of Helian Health Group, Inc. which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held at the Monterey Plaza Hotel, 400 Cannery Row, Monterey,
California 93940 on Tuesday, April 25, 1995 at 9:00 a.m. local time, and at any
adjournment thereof (1) as hereinafter specified upon the proposals listed below
and as more particularly described in the Corporation's Proxy Statement, receipt
of which is hereby acknowledged, and (2) in their discretion upon such other
matters as may properly come before the meeting. The undersigned hereby
acknowledges receipt of the Corporation's 1994 Annual Report to Stockholders.
A vote FOR the following proposal is recommended by the Board of Directors:
Election of directors listed below.
/ / FOR all nominees listed below (except / / WITHHOLD AUTHORITY to vote for
as marked to the contrary.) all nominees listed below.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list below.)
Thomas D. Wilson
William A. Hines
Nate Dolin
Lawrence S. Dolin
Robert G. McCreary, III
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO SPECIFICATION
IS MADE, SUCH SHARES SHALL BE VOTED FOR THE PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION.
Sign exactly as your name(s) appears on your stock certificate. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign the above Proxy. If shares of stock are held of record by a
corporation, the Proxy should be executed by the President or Vice President and
the Secretary or Assistant Secretary, and the corporate seal should be affixed
thereto. Executors or administrators or other fiduciaries who execute the above
Proxy for a deceased shareholder should give their full title. Please date the
Proxy.
Dated: 1995
-------------------,
--------------------------------
Signature(s)
--------------------------------
WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON,
YOU ARE URGED TO SIGN AND
PROMPTLY MAIL THIS PROXY IN THE
RETURN ENVELOPE SO THAT YOUR
STOCK MAY BE REPRESENTED AT THE
MEETING.
/ / CHECK HERE FOR ADDRESS
CHANGE.
/ / CHECK HERE IF YOU PLAN TO
ATTEND THE ANNUAL MEETING.