As of February 25, 1999, no persons or groups within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended ("1934
Act"), were known by management to beneficially own more than five percent of
the Company's Common Stock except as follows:
Name and Address Number of Shares Percent of Outstanding
of Common Stock Common Stock
Crabbe Huson Group, Inc. 4,925,100 (1) 9.63%
121 S.W. Morrison, Suite 1400
Portland, OR 97204
Massachusetts Financial Services Company 4,391,828 (2) 8.59%
MFS Series Trust II - MFS Energy Growth Fund
500 Boylston Street
Boston, Massachusetts 02116
SG Cowen Securities Corporation 4,982,870 (3) 9.74%
1221 Avenue of the Americas
New York, NY 10020
Franklin Resources, Inc. 4,246,400 (4) 8.3%
Charles B. Johnson
Rupert H. Johnson, Jr.
777 Mariners Island Blvd.
San Mateo, California 94404
Franklin Mutual Advisors, Inc.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
(1) Crabbe Huson Group, Inc. reports that it has shared voting power
and shared dispositive power with respect to 4,499,200 and 4,925,100
shares, respectively, as an investment adviser registered under Section
203 of the Investment Advisers Act of 1940. This information is based
on Amendment No. 1 to Schedule 13G dated February 12, 1999.
(2) Of these shares of Common Stock, 2,359,888 of the shares are
beneficially owned by MFS Series Trust II MFS Emerging Growth Fund and
4,391,828 are beneficially owned by Massachusetts Financial Services
Company ("MFS") and 2,031,940 shares are beneficially owned by certain
other non-reporting entities. This information is based on a schedule
13G dated February 11, 1999.
(3) SG Cowen Securities Corporation reports that it has sole voting and
dispositive power with respect to 133,220 shares, shared voting power
with respect to 3,814,800 shares, and shared dispositive power with
respect to 4,849,650 shares. This information is based on a Schedule
13G dated February 8, 1999.
(4) Franklin Mutual Advisers, Inc. reports that it has sole voting and
dispositive power with respect to 4,246,400 shares. Franklin
Resources, Inc. reports that it is the parent holding company of
Franklin Mutual Advisers, Inc. and Charles B. Johnson and Rupert H.
Johnson, Jr. report that they are principal shareholders of Franklin
Resources, Inc. This information is based on Amendment 2 to Schedule
13G dated January 27, 1999.
ELECTION OF DIRECTORS
The terms of office of Thomas P. Barbera, Francis C. Bruno, M.D., Stanley
M. Dahlman, Ph.D., and James A. Wild expire at the Annual Meeting. Dr. Francis
C. Bruno, James A. Wild, John A. Paganelli, Ivan R. Sabel, and Janet L. Norwood
have been nominated by the Board of Directors for election to the Board, each to
serve for a three-year term. Mr. Thomas Barbera has been nominated by the Board
of Directors for election to the Board to serve for a two-year term. The terms
of approximately one-third of the Board expire each year at the Annual Meeting.
Directors serve until their successors are duly elected and qualified. Following
the Annual Meeting, the size of the Board of Directors will be 14 and, if the
nominees are elected, there will be no vacancies on the Board.
In connection with the settlement of certain litigation among Francis
Bruno, M.D., Stanley Dahlman, Mark D. Groban, M.D., Gretchen Murdza and William
M. Mayer, M.D., current directors of the Company, and George T. Jochum, the
Company's former Chairman, President and Chief Executive Officer, and the
Company, the parties appointed a Transition and Search Committee. This
Committee, composed of Dr. Bruno, Mr. Dahlman, John P. Mamana, M.D. and Edward
J. Muhl, is to identify and recommend to the Board nominees for election as
directors at the Annual Meeting. This Committee identified and proposed Dr.
Bruno, Mr. Wild, John A. Paganelli, Ivan R. Sabel and Janet L. Norwood as
nominees for director at the Annual Meeting.
Except as stated above, there are no arrangements or understandings between
the Company and any person pursuant to which such person has been or will be
elected as a director. If any nominee becomes unavailable for election for any
reason, or if any other vacancy in the class of directors to be elected at the
Annual Meeting should occur before the election, the shares represented by the
proxy will be voted by any of the persons serving as proxies for the person
designated by the Company's Board of Directors to replace the nominee or to fill
such other vacancy on the Board. The Board of Directors has no reason to believe
that any of the nominees will be unavailable or that any other such vacancy on
the Board will occur. Each nominee has consented to be named and has indicated
his or her intent to serve if elected. Except as noted below, there are no
family relationships among any director, nominee for director or executive
officer of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL
NOMINEES TO THE COMPANY'S BOARD OF DIRECTORS.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names of the six nominees for
election as director and of those directors who will continue to serve as such
after the Annual Meeting, as well as the executive officers who are not
directors. Also set forth is certain other information with respect to each such
person's age, the periods during which he or she has served as a director of the
Company and positions currently held with the Company and its Subsidiaries.
Name and Age (1) Director Term of Directorships; Positions with the Company
John H. Cook III, M.D., 62 1990 2001(6) Director of the Company, MLH and PHP-MD.
Raymond H. Cypess, D.V.M., Ph.D., 57 1998 2001 Director of the Company and MLH.
Robert E. Foss, 48 1998 2001 Director of the Company, MLH, HomeCall, FirstCall, HPS,
HHS and Surgicenter; Senior Executive Vice President and
Chief Financial Officer of the Company, MLH, Alliance,
MAPSI, MD-IPA, HomeCall, FirstCall, HPS, HHS,
Surgicenter, OCI, OCIPA, OCCI, MIRI, PHP-MD and MIACI.
Mark D. Groban, M.D., 57 1990 2000(3) Director of the Company, MLH, PHP-MD, MAPSI, MIACI,
MD-IPA, Surgicenter, OCI, OCCI, OCIPA, HomeCall,
FirstCall, HPS, HHS; President of Alliance, MAPSI, and
MIACI; Chairman of the Company, MLH, MAPSI, MIACI,
MD-IPA, Surgicenter, OCI, OCCI, OCIPA, HomeCall,
FirstCall, HPS, HHS; Chief Executive Officer of PHP-MD;
Executive Vice President and Medical Director of Quality
Improvement of the Company, MLH, PHP-MD, FirstCall,
HomeCall, HPS, HHS, MDIPA, Surgicenter, OCI, OCCI, and
John P. Mamana, M.D., 56 1997 2000 Director of the Company, MLH and PHP-MD.
William M. Mayer, M.D., 51 1993 2000(4) Director of the Company, MLH
Edward J. Muhl, 53 1998 2001 Director of the Company and MLH.
Gretchen P. Murdza, 51 1997 2000 Director of the Company, HomeCall, FirstCall, HPS, HHS,
and MLH; Chief Executive Officer of FirstCall and
HomeCall; President of HPS and HHS.
Nominees (for a three-year term expiring in 2002):
Francis C. Bruno, M.D., 57 1986 1999(2) Director of the Company, MLH and PHP-MD; Chairman of
PHP-MD;Co-Medical Director of HHS.
Janet L. Norwood, 75
John A. Paganelli, 64
Ivan R. Sabel, 53
James A. Wild, 47 1989 1999(5) Director of the Company, MLH,
IPA and Surgicenter.
Nominee (for a two-year term expiring in 2001)
Thomas P. Barbera, 48 1996 1999 Director of the Company, MLH, MIACI, and MIRI; Vice
Chairman, Chief Executive Officer, President and
Executive Vice President, Governmental Services of the
Company and MLH; Chief Executive Officer and President of
MIRI, OCCI, OCI; Chief Executive Officer of HPS, MD-IPA,
MIACI, OCIPA, HHS and MAPSI; Executive Vice President,
Governmental Services and Assistant Secretary of HPS,
HHS, MIRI, OCCI, FirstCall, and HomeCall; Executive Vice
President, Governmental Services of the Company, MD-IPA,
OCI, OCIPA, Alliance, and MAPSI.
Executive Officers Who Are Not Current Directors or Nominees or Whose Terms as Director Will Not Continue After the 1999
Paul E. Dillon, 47 Director of MD-IPA; Senior Vice President, and Treasurer
of the Company, MLH, Alliance, MAPSI, FirstCall,
HomeCall, HPS, HHS, Surgicenter, MD-IPA, OCI, OCIPA,
OCCI, and PHP-MD.
J. Stevens Dufresne, 43 Director of Alliance, MAPSI, PHP-MD, OCI, OCCI, OCIPA,
Surgicenter, MIACI, and MIRI; Chief Executive Officer and
President of Surgicenter; President of OCIPA; Executive
Vice President, Provider Networks of the Company, MLH,
Alliance, FirstCall, HomeCall, HPS, HHS, MAPSI, MDIPA,
OCI, OCCI and PHP-MD.
Vera C. Dvorak, M.D., 52 Director of PHP-MD, HomeCall, and FirstCall; President of
PHP-MD; Executive Vice President and Medical Director of
the Company, Alliance, MAPSI, HomeCall, FirstCall, HPS,
HHS, MD-IPA, OCI, OCCI, OCIPA and Surgicenter.
Catherine M. Fridell, 41 Director of MD-IPA, OCI, OCCI, and OCIPA; Executive Vice
President of Claims and Chief Operating Officer of OCIPA
and OCCI; Executive Vice President of Claims of the
Company, MLH, Alliance, FirstCall, HomeCall, HPS, HHS,
MAPSI, MD-IPA, Surgicenter, OCI, OCCI, OCIPA and PHP-MD.
Susan D. Goff, 53 Director of Alliance, MAPSI, MD-IPA, MIACI and MIRI;
President of MD-IPA; Senior Vice President of the
Company, MLH, OCI, OCIPA and OCCI.
Debbie J. Hulen, 39
Director of OCI,OCCI, and OCIPA. Senior Vice President of
the Company, MLH, MIRI,OCCI, OCI,and OCIPA.
Christopher E. Mackail, 40 Senior Vice President and Controller of the Company, and
Sharon C. Pavlos, 40 Executive Vice President, General Counsel and Secretary
of the Company, MLH, Alliance, MAPSI, HomeCall,
FirstCall, HPS, HHS, MD-IPA, Surgicenter, MIACI, MIRI,
OCI, OCCI, OCIPA and PHP-MD.
Mary E. Shocklee, 36 Vice President, Accounting Operations, MLH, Alliance,
MAPSI, HPS, HHS, MD-IPA, Surgicenter, MIACI, MIRI, OCI,
OCCI, OCIPA and PHP-MD.
(1) Signifies age as of December 31, 1998.
(2) Dr. Bruno was not a Director of the Company from April 1991 to April 1992 or
from April 1994 to April 1995. (3) Dr. Groban was not a Director of the Company
from April 1993 to April 1994. (4) Dr. Mayer was not a Director of the Company
from April 1995 to April 1996. (5) Mr. Wild was not a Director of the Company
from April 1992 to April 1993. (6) Dr. Cook was not a Director of the Company
from April 1993 to April 1995 or from April 1997 to April 1998.
Information concerning the principal occupations or employment of the
directors, nominees for director and executive officers of the Company for the
past five years and other biographical data are set forth below.
Continuing Directors and Nominees:
Thomas P. Barbera was elected interim President and Chief Executive Officer
on January 8, 1999. He was elected Vice Chairman of the Company on May 6, 1996.
Mr. Barbera became Executive Vice President of Government Relations and
Assistant Secretary for the Company and MLH in May of 1993. From December 1987
until May 1993, Mr. Barbera was a partner at Weinberg and Green, a general
practice law firm in Baltimore, Maryland.
Francis C. Bruno, M.D. received a B.S. from Kings College in 1964 and a
M.D. from New York Medical College in 1968. He is Board certified in family
practice and has practiced medicine since 1972.
John H. Cook III, M.D. is a board certified practitioner of internal
medicine. From June 1957 to July 1973, Dr. Cook served in the United States
Navy. In 1977, Dr. Cook received an M.D. from Yale University School of Medicine
and, in 1957, Dr. Cook received a B.S. from the United States Naval Academy. Dr.
Cook has been in private practice since 1980.
Raymond H. Cypess, D.V.M., Ph.D. is President and CEO of American Type
Culture Collection, Rockville, Maryland. Dr. Cypess was an Associate Professor
of Epidemiology and Microbiology at the University of Pittsburgh School of
Public Health from 1970 to 1973, Professor and Chairman at the New York State
College of Veterinary Medicine from 1977 to 1987, and Dean of the College of
Graduate Health Sciences, as well as Professor of Microbiology, Immunology, and
Comparative Medicine, and Vice Provost for Research and Research Training, at
the University of Tennessee, Memphis from 1989 to 1993. Dr. Cypess is a fellow
of the Infectious Disease Society and a Member of the American Epidemiology
Society. Dr. Cypess received a B.S. in biology from Brooklyn College in 1961, a
B.Agri. from the University of Illinois in 1965, and a D.V.M. from the
University of Illinois in 1967. In 1970, Dr. Cypess received a Ph.D. in
Parasitology from the University of North Carolina.
Robert E. Foss was elected Senior Executive Vice President and Chief
Financial Officer on January 8, 1999. Mr. Foss joined the Company on July 1,
1994 as its Executive Vice President and Chief Financial Officer. For more than
five years prior to July 1, 1994, Mr. Foss was a partner with Ernst & Young
LLP's Washington, D.C. office. Ernst & Young LLP has served as the Company's
independent public accountants since June 2, 1989 and Mr. Foss was the audit
partner on the Company's account. Mr. Foss received a BSBA from the University
of Colorado in 1971 and became a CPA in 1972.
Mark D. Groban, M.D. was elected interim Chairman of the Board on January
8, 1999. Dr. Groban is a Board certified psychiatrist who joined the Company
full time on December 1, 1990 after being in full time practice since 1973. Dr.
Groban served as a consultant from February 1988 to October 1989 for MD-IPA's
managed mental health program. He became President of MAPSI in October 1989. In
May 1991, he became President of Alliance. In October 1996, Dr. Groban assumed
the responsibility for the Quality Improvement Department and was named
Executive Vice President and Medical Director of Quality Improvement for the
John P. Mamana, M.D. received his B.A. from Harvard University and his M.D.
degree from Boston University School of Medicine. Dr. Mamana is a Director of
American Health Properties as well as a member of the Audit and Compensation
Committee of that entity. Dr. Mamana is also Chief Executive Officer, Chairman
of the Board and a Director of American Health Sciences Inc. Dr. Mamana has
practiced internal medicine in Springfield, Virginia since 1974. In 1978, he
founded Virginia Medical Associates, P.C., a multi-specialty group practice, and
served as the President, Chief Executive Officer, and Chairman of the Board
until December 1997. During 1998, Virginia Medical Associates, P.C. declared
bankruptcy. Dr. Mamana served as the Chief Executive Officer and Chairman of the
Board for Gateway Physicians Services (formerly Virginia Health Partners) and as
the Chief Medical Officer of Health Partners, Inc. in Norwalk, Connecticut from
1994 until January 1998. Dr. Mamana has been a Clinical Associate Professor of
Medicine at Georgetown University Medical School since 1987. He has served as a
member of the Board of Directors of American Health Properties, since May 1997
and as the Chairman and Chief Executive Officer of American Health Sciences,
Inc. since January 1998.
William M. Mayer, M.D. received a B.S. from Georgetown University in 1967
and his M.D. degree from New York Medical College in 1971. He completed an
internal medicine internship at the Cornell Cooperating Hospitals and completed
his Ob-Gyn residency at New York Medical College. Following completion of his
residency, he was the chief of Ob-Gyn at Kimbrough Army Hospital, serving as a
major in the U.S. Army. Upon completion of his tour of duty, he entered private
practice in the field of Ob-Gyn in Columbia, Maryland and has practiced in
Columbia since 1977.
Edward J. Muhl is Executive Vice President and Member of the Board of
Directors of Peterson Consulting, LLC a business and insurance consulting firm.
Mr. Muhl was Superintendent of Insurance for the State of New York from 1995 to
1997. He is a former President of the National Association of Insurance
Commissioners, and a previous Commissioner of Insurance for the State of
Maryland. From 1991 to 1995, Mr. Muhl was a Senior Vice President of the
Reliance Insurance Group. Mr. Muhl received his B.A. in Social Science from the
University of Baltimore in 1973.
Gretchen P. Murdza was employed by the Company as the Director of
Professional Recruitment in October 1989, became the Senior Director of
Professional Recruitment in April 1990, Vice President, Provider Networks in
July 1991 and Senior Vice President responsible for the development of Home
Health Service on March 9, 1994. In October 1994, she became Chief Executive
Officer of HomeCall, Inc. and subsequently President of HomeCall Pharmaceutical
Services, Inc. and HomeCall Hospice Services, Inc. She was educated at the
College of Notre Dame of Maryland located in Baltimore, Maryland.
Janet L. Norwood is an economist and a Senior Fellow with the Urban
Institute since 1991. She served as the Chair of the Advisory Council on
Unemployment Compensation from 1993 to 1996. She was appointed by Presidents
Carter and Reagan to be the U.S. Commissioner of Labor Statistics from 1979 to
1991. From 1993 to 1996, she was appointed by Presidents Bush and Clinton as
Chair, Advisory Council on Unemployment Compensation. Ms. Norwood received a BA
from Douglas College, Rutgers University and holds an MA and Ph.D. from the
Fletcher School of Law and Diplomacy from Tufts University as well as an LL.D.
Honorary from Harvard University and Carnegie Mellon University.
John A. Paganelli was President and Chief Executive Officer of Transamerica
Life Insurance Company of New York from 1992 to 1997. Mr. Paganelli holds an AB
from Virginia Military Institute. Mr. Paganelli is currently retired.
Ivan R. Sabel has been Chairman and Chief Executive Officer of Hanger
Orthopedics Group Inc. (a New York Stock Exchange company that is in the
orthotics and prosthetics market) since August 1995. From November 1987 to
August 1995, Mr. Sabel was President and Chief Operating Officer of Hanger
Orthopedics Group, Inc. He is also a clinical instructor in orthopedics at
Georgetown University Medical School since 1969. Mr. Sabel holds a Bachelor of
Science in Orthotics and Prosthetics from New York University.
James A. Wild received a B.A. in accounting from Franklin and Marshall
College in 1973. He has been Vice President and Director of Waterview Investment
Corporation (a holding company whose 100% owned subsidiary, Almag, is a metal
finishing company) since February 1988.
Paul E. Dillon became the Company's Senior Vice President and Treasurer in
April 1994. From January 1994 through April 1994, he served as the Company's
Senior Vice President, Quality Assurance and Quality Improvement. From November
1990 through January 1994, he served as the Company's Vice President, Enrollment
and Billing; from April 1990 to November 1990, he served as the Company's Senior
Director, Enrollment and Billing; and from November 1989 to April 1990, he
served as the Company's Director of Enrollment. Mr. Dillon graduated from St.
Francis College in Loretto, Pennsylvania in 1973 and received his MBA in
International Business and Finance from Pace University in New York City in
J. Stevens Dufresne was employed by the Company as Senior Vice President of
Provider Networks effective February 1989. He became Executive Vice President of
Provider Networks for the Company, MLH and PHP-MD in April 1993. From June 1987
to February 1989, he served as Senior Director of Professional Recruitment. Mr.
Dufresne graduated from Florida Southern College in 1977 and received his
Masters of Health Services Administration from George Washington University in
Vera C. Dvorak, M.D. joined the Company in August 1994 as an Associate
Medical Director. She became Senior Vice President and Medical Director of the
Company, MLH, PHP-MD, HomeCall, FirstCall and HPS in April 1996. In November
1996, Dr. Dvorak was promoted to Executive Vice President and Medical Director
of the Company. Dr. Dvorak is Board certified in Internal Medicine and
Geriatrics. She was recertified by the American Board of Internal Medicine in
1987 and 1993. Dr. Dvorak was a practicing physician for 18 years (1976-1994);
the last 6 years she served as Chief of Department of Internal Medicine of
Kaiser Permanente. Dr. Dvorak received her M.D. degree from Charles University
in Prague, Czechoslovakia and trained in internal medicine and infectious
diseases at the University of Oklahoma and the University of Pennsylvania.
Catherine M. Fridell (formerly Tyser) joined the Company in February 1992
as Senior Supervisor in Claims Production. Subsequently, Ms. Fridell has held
the following positions within the Claims Department: Manager beginning
September 1992, Director beginning November 1993, Senior Director beginning
November 1994, Vice President beginning March 1995, Senior Vice President
beginning July 1995 when she also assumed the additional responsibilities of
managing the Alliance PPO Claims Department. In November 1996, Ms. Fridell was
promoted to Executive Vice President assuming responsibility for Operations in
North Carolina and Pennsylvania. Prior to joining the Company, Ms. Fridell
worked at NationsBank for 15 years holding various positions within the Consumer
Credit Division. Her last position held was Assistant Vice President, Consumer
Credit Automation Manager responsible for the functioning of an automated loan
processing system and related support personnel for the Metropolitan Washington
Consumer Credit Division.
Susan D. Goff was employed by Alliance and MAPSI as Vice President on
August 1, 1989, became Executive Vice President of MD-IPA on April 26, 1993,
responsible for large group sales activities in all states and President of
MD-IPA on November 15, 1993. Ms. Goff graduated from the University of
California at Los Angeles in 1967 with a B.S. in Nursing and received a Masters
of Science in Administration with a concentration in Health Care from Central
Michigan University in 1989. Ms. Goff is a director of Sandy Spring National
Debbie J. Hulen joined the Company in August 1993 as a Regional Director of
Sales for OCI. Ms. Hulen was promoted to Senior Director in July 1995 and became
a Senior Vice President in charge of sales for OCI and MLH effective September
1997. Ms. Hulen is currently responsible for all small group sales activities in
Maryland, Northern Virginia, Delaware, Pennsylvania, and the District of
Columbia. Prior to joining the Company, Ms. Hulen worked at Esprit de Corps for
ten years, leaving with a final title of Regional Director of Sales.
Christopher E. Mackail joined the Company in October 1996 as the Vice
President of Finance. He became Senior Vice President and Controller on January
25, 1999. Prior to joining the Company, Mr. Mackail was a Senior Manager with
Ernst & Young LLP's Washington, D.C. office. Ernst & Young LLP has served as the
Company's independent public accountants since June 2, 1989 and Mr. Mackail was
the audit Senior Manager on the Company's account. Mr. Mackail graduated from
the University of Richmond in 1981 with a B.S. in accounting and became a CPA in
Sharon C. Pavlos was elected Executive Vice President and General Counsel
of the Company on January 15, 1999. Ms. Pavlos became Senior Vice President,
General Counsel and Secretary of the Company effective September 8, 1998. Before
joining the Company, Ms. Pavlos was the Vice President, Regulatory Affairs &
Network Development for United HealthCare of the Mid-Atlantic, Inc. since May
1996. Prior to her position with United HealthCare of the Mid-Atlantic, Inc.,
Ms. Pavlos was the Vice President, General Counsel of Chesapeake Health Plan,
Inc. since February 1994. From March 1994 to May 1996, Ms. Pavlos also served as
the Vice President, Legal Affairs of HealthWise of America, Inc. Ms. Pavlos
received her B.A. summa cum laude from the University of Maryland in 1980 and
her J.D. from Georgetown University in 1983.
Mary E. Shocklee is Vice President of Accounting Operations. She was the
Controller of the Company from January 1993 to January 1999. She became a Vice
President of the Company effective April 1996. From September 1988 to January
1993, Ms. Shocklee managed the Accounting Department of the Company and served
as the Director of Accounting since September 1990. Ms. Shocklee graduated magna
cum laude from Georgetown University with a BS/BA degree in Accounting in 1983
and became a CPA in 1985.
Board Meetings and Committees
The Company's Board of Directors met 6 times in fiscal 1998. The standing
committees of the Board include the Executive Committee, the Finance Committee,
the Audit Committee, the Stock Option Committee, the Compensation Committee, the
Employment Practices Committee, and the Select Committee. During fiscal 1998,
the Executive Committee held 6 meetings, the Finance Committee held 1 meeting,
the Audit Committee held 3 meetings, the Stock Option Committee held 3 meetings,
the Compensation Committee held 4 meetings, the Employment Practices Committee
held 5 meetings and the Select Committee held 3 meetings. The Board does not
have a standing Nominating Committee.
All Directors attended at least 75 percent of the aggregate of the total
number of meetings of the Company's Board of Directors and the total number of
meetings held by all committees on which they served.
The Executive Committee of the Board of Directors has general oversight
functions relating to the operation of the Company and its Subsidiaries and
functions as the Company's Board when the Company's Board is not in session,
with all powers of the Company's Board, except those of removing or nominating
Directors, filling vacancies on the Board of Directors, and as otherwise limited
by the Delaware General Corporation Law. Its members are Mark D. Groban, M.D.
(Interim Chairman), Thomas P. Barbera, Francis C. Bruno, M.D., John H. Cook,
III, M.D. and James A. Wild.
The Finance Committee of the Company oversees the projections and
assumptions of the Company in preparing its financial goals each year. The Audit
Committee interfaces with the Company's independent public accountants to
determine if the financial accounting practices of the Company are in compliance
with generally accepted accounting principles. The Finance Committee's members
are James A. Wild (Chairman), Raymond H. Cypess, D.V.M., Ph.D., Robert E. Foss,
Mark D. Groban, M.D., and John P. Mamana, M.D. The Audit Committee's members are
James A. Wild (Chairman), Stanley M. Dahlman, Ph.D., and Edward J. Muhl.
The Stock Option Committee grants options under and otherwise implements
the 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996 and 1998 Non-Qualified Stock
Option Plans. The members of the Stock Option Committee are James A. Wild
(Chairman), Stanley M. Dahlman, Ph.D. and Edward J. Muhl.
The Select Committee grants options in the 1989, 1990, 1991, 1992, 1993,
1994, 1995, 1996, and 1998 Non-Qualified Stock Option Plans for employees below
Vice President (Level 17). The Select Committee was formed in 1998. It has
authority to grant options to officers and key employees who are not "covered
employees" within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended ("Code"), and who are not subject to Section 16 of the 1934
Act. If there is a conflict between the Select Committee and the Stock Option
Committee, the determination of the Stock Option Committee will control. The
members of the Select Committee are Thomas P. Barbera and Mark D. Groban, M.D.
The Compensation Committee oversees the development and implementation of
the Company's compensation program for executive officers, the Chairman and the
President and Chief Executive Officer. Its members are James A. Wild (Chairman),
Stanley M. Dahlman, PhD. and Edward J. Muhl.
The Employment Practices Committee oversees the Company's maintenance of
equal opportunity for all employees regardless of race, national origin,
religion, gender, physical disability, sexual orientation, or age. The members
of the Employment Practices Committee are James A. Wild (Chairman), Stanley M.
Dahlman, Ph.D., Gretchen P. Murdza, and William M. Mayer, M.D.
In January 1999 the Board established the Transition and Search Committee
to (1) propose 1999 Board nominees and (2) recommend individuals for the
positions of Chairman, Chief Executive Officer and President.
Thomas P. Barbera, Paul E. Dillon, J. Stevens Dufresne, Vera C. Dvorak,
M.D., Robert E. Foss, Susan D. Goff, Mark D. Groban, M.D., Joseph L. Guarriello,
Debbie J. Hulen, Gretchen P. Murdza and Alfred Talamantes failed to file on a
timely basis one Form 4 Report, Statement of Changes in Beneficial Ownership,
reporting one transaction as required by Section 16(a) of the 1934 Act. Raymond
H. Cypess and Mary E. Shocklee failed to timely file two such forms each
reporting one transaction, and George T. Jochum failed to timely file one such
form reporting 4 transactions. Dr. Mamana failed to timely file 3 such forms
reporting three transactions. All of the aforementioned forms have subsequently