<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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HEALTHDYNE INFORMATION ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(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)(1) 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
HEALTHDYNE INFORMATION ENTERPRISES, INC.
1850 Parkway Place
Suite 1100
Marietta, Georgia 30067
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of Healthdyne Information Enterprises, Inc. (the "Company"), which will be held
at the Wyndham Garden Hotel, 1775 Parkway Place, Marietta, Georgia 30067, on
Tuesday, May 20, 1997, at 11:00 a.m., Atlanta time. Holders of the Company's
outstanding Common Stock at the close of business on April 7, 1997 will be
entitled to consider and vote on the following matters:
(1) To elect seven directors to serve until the next
annual meeting and until their successors are
elected and qualified; and
(2) To transact any and all other business as may
properly come before the meeting or any adjournment
thereof.
Detailed information relating to the above matters is set forth in the
accompanying Proxy Statement dated April 28, 1997. Whether or not you expect to
attend the Annual Meeting, please mark, sign, date and return the accompanying
proxy card in the enclosed postage-prepaid envelope. If for any reason you
desire to revoke your proxy, you can do so at any time before the voting by
giving notice of such revocation to the Secretary of the Company.
I look forward to welcoming you at the meeting.
By Order of the Board of Directors
Joseph G. Bleser
Secretary
Marietta, Georgia
April 28, 1997
<PAGE> 3
HEALTHDYNE INFORMATION ENTERPRISES, INC.
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 1997
This proxy statement and the accompanying proxy card are being
furnished to the shareholders of Healthdyne Information Enterprises, Inc. (the
"Company") in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Shareholders of the
Company to be held on Tuesday, May 20, 1997 at the Wyndham Garden Hotel, 1775
Parkway Place, Marietta, Georgia 30067, at 11:00 a.m., Atlanta time, and any
adjournments thereof. It is anticipated that this proxy statement and
accompanying proxy card will first be mailed to the Company's shareholders on
or about April 28, 1997. When the proxy is properly executed and returned, the
shares it represents will be voted at the meeting as directed by the
shareholder executing the proxy unless it is revoked. If no directions are
given on the proxy with respect to any of the specified matters to be acted
upon, the shares represented by the proxy will be voted in favor of such
matters. Any shareholder giving a proxy has the power to revoke it any time
before it is voted by the execution of another proxy bearing a later date or by
written notification to the Secretary of the Company. Shareholders who are
present at the Annual Meeting may revoke their proxy and vote in person if they
so desire. The Company's 1996 Annual Report to Shareholders is also enclosed
and should be read in conjunction with the matters set forth herein.
The mailing address of the principal executive offices of the Company
is 1850 Parkway Place, Suite 1100, Marietta, Georgia 30067, and the telephone
number is (770) 423-8450.
VOTING SHARES
Only shareholders of record as of the close of business on April 7,
1997 will be entitled to notice of, and to vote at, the Annual Meeting. As of
that date, the Company had outstanding 20,211,945 shares of common stock, par
value $.01 per share (the "Common Stock"), each share being entitled to one
vote. The cost of soliciting proxies will be borne by the Company. In addition
to the use of the mails, directors, officers and employees of the Company may
solicit proxies by telephone, telegraph or personal interview, but will not be
compensated for such solicitation. The Company has retained D.F. King & Co.,
Inc. to assist in the solicitation of proxies for a fee of $3,500, plus
expenses. Brokerage houses and other custodians, nominees and fiduciaries will
be requested to forward soliciting material to their principals, and the
Company will, upon request, reimburse them for the reasonable expense of doing
so.
A majority of the Common Stock outstanding on the record date shall
constitute a quorum for purposes of the Annual Meeting. Under Georgia law,
assuming a quorum is present, directors are elected by a plurality of the votes
cast and other matters are approved if the votes cast in favor of such matter
exceed the votes cast opposing the matter.
<PAGE> 4
I. ELECTION OF DIRECTORS
The Board of Directors presently consists of eight persons. One of the
present directors (Mr. John W. Lawless) is not standing for reelection. The
Board of Directors has fixed the number of directors constituting the Board and
to be elected at the Annual Meeting at seven persons. The Board of Directors
recommends the election of the seven nominees named in this proxy statement as
directors, to hold office until the next annual meeting and until their
successors are elected and qualified. All of the nominees are members of the
present Board and were elected at the last annual meeting of the Company's
shareholders.
The Board of Directors has no reason to believe that any of the
nominees for director will not be available to stand for election as a
director. However, should any of such nominees become unable to serve, the
proxies may be voted for a substitute nominee or nominees, or to allow the
vacancy created thereby to remain open until filled by the Board, or to reduce
the size of the full Board in the discretion of those persons named as proxies
in the form of proxy.
NOMINEES FOR BOARD OF DIRECTORS
The following is a brief description of each director's principal
occupation and business experience during the last five years, directorships of
publicly-held companies presently held by each director and certain other
information.
PARKER H. PETIT, age 57, has been Chairman of the Board of the Company
since its inception in June 1994. He is currently Chairman of the Board of
Directors of Matria Healthcare, Inc. ("Matria Healthcare"), a provider of
specialized obstetrical home healthcare services. Previously, Mr. Petit was
also the founder of and was employed by Matria Healthcare's predecessor,
Healthdyne, Inc., ("Healthdyne") as its Chairman of the Board of Directors and
Chief Executive Officer from 1970 until March 1996. Mr. Petit is also the
founder and Chairman of the Board of Directors of Healthdyne Technologies, Inc.
and a director of Atlantic Southeast Airlines, Inc. and Intelligent Systems,
Inc.
H. DARRELL YOUNG, age 48, has served as a director and the President
and Chief Executive Officer of the Company since June 1994. From January 1992
to June 1993, Mr. Young was Chairman and a principal investor in Transtel
Corp., a start-up telecommunications company that manufactured stationary
wireless voice and data products, and from 1977 through 1991 he was employed by
HBO & Company, a publicly-traded, international healthcare information systems
and services provider ("HBO"), in various management positions, including
serving as Vice President of Research and Development from 1984 to 1986,
President of Product Group from 1986 to 1987, and President and Chief Executive
Officer of its subsidiary, HBO & Company of Georgia, from 1987 to 1991.
J. TERRY DEWBERRY, age 53, has served as a director of the Company
since June 30, 1995 and also from June 15, 1994 to January 30, 1995. Mr.
Dewberry also served as Vice President of the Company from June 24, 1994 until
January 30, 1995. Mr. Dewberry was a director of Healthdyne from 1981 until
March 1996 and served as Vice Chairman of Healthdyne from March 1992 until
March 1996, when he retired. From September 1987 until March 1992, Mr. Dewberry
was President and Chief Operating Officer of Healthdyne and was Executive Vice
President of
2
<PAGE> 5
Healthdyne from August 1984 to September 1987. Mr. Dewberry is also a director
of Healthdyne Technologies, Inc.
WILLIAM J. GRESHAM, JR., age 54, has served as a director of the
Company since June 30, 1995. He has been a consultant to The Miller Richmond
Company, a real estate management and brokerage firm, since March 1992 and
previously was a consultant to the Landmark Group, a real estate management and
development firm, from June 1990 to February 1992. From September 1987 to June
1990, he served as Chairman of the Board of City Group, Inc., a real estate
development firm, and also served as President of that company from October
1989 to January 1992.
Mr. Gresham previously served as a Director of Healthdyne.
CHARLES R. HATCHER, JR., M.D., age 66, has served as a director of the
Company since June 30, 1995. Dr. Hatcher has served as Advisor to the
University President and Board of Trustees of Emory University and Director
Emeritus of the Robert W. Woodruff Health Sciences Center of Emory University
(the "Center") since 1996. He has been a physician since 1962, and until his
retirement during 1996, served as Director and Vice President for Health
Affairs at the Center from 1984 and Professor of Surgery at the Emory
University School of Medicine from 1971. Dr. Hatcher is also a director of Life
of the South Corporation and previously served as a Director of Healthdyne.
CARL E. SANDERS, age 71, is Chairman of Troutman Sanders LLP, an
Atlanta-based law firm which the Company retained in 1995. Mr. Sanders is also
a director of Matria Healthcare, Inc., Carmike Cinemas, Inc., Metromedia
International, Inc., Norrell Corporation and Roadmaster Industries, Inc.
DONALD W. WEBER, age 60, has served as a director of the Company since
January 30, 1995. Mr. Weber has been President and Chief Executive Officer of
Viewstar Entertainment Services, Inc., a distributor of satellite entertainment
systems, since August 1993. From April 1991 to August 1993, he was a consultant
and private investor, and from May 1987 to March 1991, he served as President
and Chief Executive Officer of Contel Corporation, a telecommunications
supplier, which was sold in March 1991 to GTE Corp. Mr. Weber is also a
director of Intercel, Inc. and Pegasus Media & Communications, Inc.
3
<PAGE> 6
ADDITIONAL INFORMATION
MEETINGS OF THE BOARD AND BOARD COMMITTEES
The business of the Company is managed by or under the direction of
the Board of Directors. During the year ended December 31, 1996, the Board of
Directors held nine meetings. Each of the directors attended at least 75% of
the aggregate of (1) the total meetings of the Board of Directors, and (2) the
total number of meetings held by all committees of the Board on which he
served, during the periods that he served.
The Company has four standing committees: (1) an Executive Committee,
(2) a Compensation Committee, (3) a Stock Option Committee and (4) an Audit
Committee.
The Executive Committee has the authority to exercise the full powers
of the Board of Directors, except as otherwise provided by law or the Company's
Articles of Incorporation or By-Laws. The present members of the Executive
Committee are Messrs. Petit, Young, Sanders and Weber. The Executive Committee
did not meet during 1996.
The Compensation Committee is responsible for establishing and
administering the policies which govern the compensation of the Company's
executive officers and key employees. The Compensation Committee presently
consists of Messrs. Petit, Lawless and Weber and Dr. Hatcher. The Compensation
Committee met two times during 1996.
The Stock Option Committee is responsible for administering the
Company's stock option plans as provided for in said plans. The present members
of the Stock Option Committee are Messrs. Lawless, Gresham and Petit.
The Stock Option Committee met five times during 1996.
The function of the Audit Committee is to (a) select and engage
independent auditors to audit the books, records and accounts of the Company,
(b) approve the scope of such audits set by said auditors, (c) establish policy
in connection with internal audit programs of the Company, and (d) perform such
other duties as the Board may from time to time prescribe. Messrs. Weber and
Dewberry and Dr. Hatcher are the current members of the Audit Committee. The
Audit Committee met two times during 1996.
DIRECTORS' COMPENSATION
Directors who are employees of the Company receive no additional
compensation for serving on the Board of Directors. Prior to January 1997, the
Company paid all directors who were not employees of the Company ("Non-Employee
Directors") a quarterly retainer of $2,500, plus $500 for each meeting of the
Board and $250 for each committee meeting or telephonic meeting. The Company
continues to pay all Non-Employee Directors, other than the Chairman of the
Board of Directors, as described above. Effective January 1, 1997, in lieu of
the compensation described above, the Company pays the Chairman of the Board of
Directors $8,750 on a quarterly basis for his services and business expenses
with said amount to be determined at the start of each year by the
disinterested directors. All Non-Employee Directors are also entitled to
receive options to
4
<PAGE> 7
purchase Common Stock under the Non-Employee Director Stock Option Plan and to
receive their retainer fee in shares of Common Stock equivalent in market value
to said retainer fee on the date said retainer fee is payable. Under the terms
of the Non-Employee Director Stock Option Plan, current and subsequently
elected directors each receive an initial option to purchase 20,000 shares of
Common Stock. In addition, each Non-Employee Director will be granted an
additional option to purchase 2,000 shares of Common Stock following such
director's reelection at an annual meeting of shareholders of the Company,
provided that such individual has been a Non-Employee Director for the
preceding six months. The purchase price for all options granted under the
Non-Employee Director Stock Option Plan is equal to the fair market value on
the date of said grants.
5
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as to the Common
Stock beneficially owned as of February 28, 1997 by each of the Company's
directors and nominees for director, each executive officer named in the
Summary Compensation Table set forth under the caption "Executive Compensation
and Other Information" and all directors and executive officers as a group.
Under the rules of the Securities and Exchange Commission (the "Commission"), a
person is deemed to be a beneficial owner of a security if he or she has or
shares the power to vote or to direct the voting of such security, or the power
to dispose or to direct the disposition of such security. A person is also
deemed to be a beneficial owner of any securities which that person has the
right to acquire within 60 days, as well as any securities owned by such
person's spouse, children or relatives living in the same house. Accordingly,
more than one person may be deemed to be a beneficial owner of the same
securities. Unless otherwise indicated in a footnote each person listed below
possesses sole voting and investment power with respect to the shares indicated
as beneficially owned by him. Mr. Parker H. Petit, the Chairman of the Board of
the Company, is the only shareholder known to the Company to beneficially own
more than five percent of the outstanding shares of the Company's Common Stock.
Mr. Petit's address is c/o Matria Healthcare, Inc., 1850 Parkway Place, Suite
1200, Marietta, Georgia 30067.
<TABLE>
<CAPTION>
NAME AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------
<S> <C> <C> <C>
Parker H. Petit.................................. 1,546,011(1)(2) 7.6%
H. Darrell Young................................. 840,705(3) 4.1%
Joseph G. Bleser................................. 124,871(4) *
J. Terry Dewberry................................ 113,526(5) *
William J. Gresham, Jr........................... 28,500(6) *
Charles R. Hatcher, Jr., M.D..................... 25,000(7) *
John W. Lawless.................................. 70,800(8) *
Carl E. Sanders.................................. 92,350(9) *
Donald W. Weber.................................. 15,000(10) *
All directors and executive officers as a
group (9 individuals).......................... 2,856,763 14.1%
</TABLE>
- ---------------------------
* Indicates less than 1%
6
<PAGE> 9
(1) Does not include 277,130 shares owned by NationsBank of Georgia, N.A.
("NationsBank"), as Trustee of an irrevocable trust for the benefit of
Mr. Petit's children, or 600,000 shares owned by NationsBank as
Trustee of an irrevocable trust for the benefit of Mr. Petit's
grandchildren (such trusts hereinafter referred to collectively as the
"Trusts" and individually as a "Trust"). Mr. Dewberry, a director of
the Company, is a member of the self-perpetuating advisory committee of
each Trust. Each advisory committee has the power to remove the
Trustee and to direct the Trustee as to the voting and disposition of
the shares owned by the Trustee except that the advisory committee has
no such power during the lifetime of Mr. Petit if the shares held by
Mr. Petit and the Trust, when aggregated, are "significant from the
viewpoint of voting control" of the Company. Both the Trustee and the
respective advisory committees consider the shares owned by the
Trustee under the Trusts to be significant in terms of voting control.
In the absence of direction by the advisory committees, the Trustee
has sole power to direct the voting and disposition of the securities
in the Trusts.
(2) Includes 1,433,511 shares owned by Mr. Petit, 97,500 shares held by
Petit Investments Limited Partnership, 10,000 shares held by the Petit
Grantor Trust and 5,000 shares that Mr. Petit may acquire through the
exercise of stock options exercisable within 60 days.
(3) Includes 840,000 shares that Mr. Young may acquire through the
exercise of stock options exercisable within 60 days.
(4) Includes 111,666 shares that Mr. Bleser may acquire through the
exercise of stock options exercisable within 60 days.
(5) Includes 5,000 shares that Mr. Dewberry may acquire through the
exercise of stock options exercisable within 60 days.
(6) Represents 13,500 shares owned by Mr. Gresham and 15,000 shares that
may be acquired through the exercise of stock options exercisable
within 60 days.
(7) Represents 10,000 shares owned by Dr. Hatcher and 15,000 shares that
Dr. Hatcher may acquire through the exercise of stock options
exercisable within 60 days.
(8) Represents 65,800 shares owned jointly by Mr. Lawless and his spouse
and 5,000 shares that may be acquired through the exercise of stock
options exercisable within 60 days.
(9) Represents 72,950 shares owned by Mr. Sanders, 4,400 shares held in an
IRA account and 15,000 shares that may be acquired through the
exercise of stock options exercisable within 60 days.
(10) Represents 10,000 shares owned by Mr. Weber and 5,000 shares that may
be acquired through the exercise of stock options exercisable within
60 days.
7
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information concerning the
compensation of the Company's Chief Executive Officer and the one other
executive officer of the Company whose cash compensation exceeded $100,000
during the year ended December 31, 1996 (the Chief Executive Officer and such
other officer, collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------
-------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY(1) COMPENSATION OPTIONS
--------------------------- ---- --------- ------------ --------
<S> <C> <C> <C> <C>
H. Darrell Young 1996 $203,400 $ 585 (2) -
President and Chief Executive 1995 $190,000 $ 8,775 (3) 775,000
Officer 1994* $108,255 $ 5,344 (3) 65,000 (4)
Joseph G. Bleser 1996 180,000 $ 540 (2) 65,000
Vice President-Finance, Chief
Financial Officer, Treasurer and 1995** $141,923 $ 231 (2) 155,000
Secretary
</TABLE>
- -------------------------------
*From June 15, 1994 (date of incorporation of the Company) through December
31, 1994.
**From March 20, 1995 (date of commencement of employment) through
December 31, 1995.
(1) Includes amounts deferred pursuant to flexible benefit plan.
(2) Includes group life insurance premiums.
(3) Includes automobile allowances and group life insurance premiums.
(4) Represents options to purchase shares of Healthdyne Common Stock. In
connection with the distribution of all of the then outstanding shares
of the Company's Common Stock by Healthdyne to its shareholders in
1995, outstanding Healthdyne options were adjusted and adjustment
options to purchase shares of the Company's Common Stock were issued
to option holders pursuant to the Healthdyne Information Enterprises,
Inc. Adjustment Stock Option Plan
8
<PAGE> 11
STOCK OPTION GRANTS AND RELATED INFORMATION
The following table sets forth information concerning stock option grants
during 1996 to the named executive officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------
POTENTIAL REALIZABLE
NUMBER OF % OF VALUE AT ASSUMED
SECURITIES TOTAL ANNUAL RATES OF
UNDERLYING OPTIONS EXERCISE STOCK PRICE APPRECI-
OPTIONS GRANTED TO OR BASE ATION FOR OPTION
GRANTED EMPLOYEES PRICE EXPIRATION TERM
NAME (#) IN 1996 ($/SH) DATE 5% 10%
---- ---- ----------- ------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
H. Darrell Young -0- - - - - -
Joseph G. Bleser 40,000 3.8% $4.50 12/12/02 $61,217 $138,881
25,000 2.4% $2.37 02/15/02 $20,151 $ 45,715
</TABLE>
Neither Mr. Young nor Mr. Bleser exercised any stock options during
1996. The following table sets forth information concerning the value of
unexercised options held by the named executive officers as of December 31,
1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT DECEMBER 31, 1996 (#) DECEMBER 31, 1996 ($)(1)
------------------------------------ -------------------------------
NAME Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
H. Darrell Young 646,250 193,750 $2,665,921 $775,000
Joseph G. Bleser 51,666 168,334 $206,664 $531,474
</TABLE>
- ---------------------
(1) Represents the excess of the fair market value of the Common Stock of
$5.50 per share on December 31, 1996, above the exercise price of the
options.
9
<PAGE> 12
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the Performance Graph shall not be incorporated by reference into
any such filings.
Compensation Philosophy. The Compensation Committee of the Board of Directors
(the "Compensation Committee") and the Stock Option Committee of the Board of
Directors (the "Stock Option Committee" and, together with the Compensation
Committee, the "Committees") are responsible for the Company's executive
compensation policies and practices. The Committees believe that the Company
must pay competitively to attract and retain qualified executives. To motivate
executive personnel to perform at their full potential, the Committees believe
that a significant portion of compensation should be incentive-based. In
addition, the Committees believe it is important to reward not only individual
performance and achievement, but also to focus on overall corporate results.
This latter objective serves the dual purposes of encouraging teamwork among
executives and also supports the Company's objective of creating stockholder
value.
Overall Objectives and Approach. In making its compensation determinations,
the Committees evaluate, on both an absolute and relative basis, a variety of
the Company's financial results (including revenue growth, earnings, return on
equity, return on assets and balance sheet strength), market share and
competitive position, the potential for future growth, the overall importance
of the individual to the organization, the individual and group performance of
senior management, and compensation levels at comparable companies, especially
within the healthcare industry. In formulating its determinations, the
Committees recognize and reward achievements on an annual basis, while
emphasizing the value and importance of sustained long-term performance and the
recognition of developing trends within the healthcare industry. The Board of
Directors reviews information prepared or compiled by the Company, and relies
on the business experience of the individual members of the Committees.
Cash Compensation. Officers and other employees are compensated within salary
ranges that are generally based on similar positions in companies of comparable
size and complexity to the Company. The actual base pay level for each officer
is determined by the Compensation Committee based on a combination of
experience, performance and the particular needs of the Company for the
services provided by the individual, and is reviewed annually, with the amount
of any increases based on factors such as Company performance, general economic
conditions, marketplace compensation trends and individual performance.
As a matter of policy, the Company intends to provide cash incentive bonuses
for executives and other key personnel ranging from 10% to 50% of annual salary
based on the Company exceeding the financial objectives in the Company's Annual
Business Plan (the "Plan"). Messrs. Young and Bleser agreed to forgo any cash
incentive bonus for 1996 in consideration of their stock option grants during
1995 and 1996, but each of these executives has a cash incentive bonus
potential of 35% of his annual salary for 1997 in accordance with the above
described policy.
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<PAGE> 13
Stock Options. The Stock Option Committee grants stock options to the
executives and other key personnel who are individually and collectively
responsible for creating and enhancing stockholder value. The grants generally
have been based on guidelines that take performance, salary level, tenure, the
number of options previously granted to the individual and the individual's
importance to the Company into account. All stock options have been granted at
exercise prices equal to the market price of the underlying Common Stock on the
date of grant. The Company believes that employee ownership of its Common Stock
is an important element to its success.
CEO Compensation. Consistent with the Company's compensation philosophy, Mr.
Young's compensation, consisting of base salary and stock options during 1996,
was structured to encourage him to create stockholder value. Accordingly,
during March 1995 Mr. Young was granted options to purchase 775,000 shares of
the Company's Common Stock. Mr. Young's annual salary rate was increased from
$203,400 to $224,000, which represents a 10% increase, effective January 1,
1997. As previously discussed, Mr. Young did not receive a cash bonus related
to the Company's 1996 financial results, but has a cash incentive bonus
potential of 35% of his annual salary for 1997.
COMPENSATION COMMITTEE
Parker H. Petit (Chairman) STOCK OPTION COMMITTEE
Charles R. Hatcher, Jr., M.D. John W. Lawless (Chairman)
John W. Lawless William J. Gresham, Jr.
Donald W. Weber Parker H. Petit
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Parker H. Petit, the Chairman of the Board of the Company and a
member of both the Compensation Committee and the Stock Option Committee, is
also Chairman of the Board of Matria Healthcare, which provides certain
administrative and related services to the Company under the terms of an
Administrative Services Agreement (the "Services Agreement") originally entered
into between the Company and Healthdyne. These services relate to areas such as
accounting, legal, tax, data processing, human resources and certain other
services. Charges for these services are made on a monthly basis in an amount
which is estimated to equal Matria Healthcare's cost, including overhead, of
providing the services. The Company is under no obligation to purchase such
services from Matria Healthcare. For the year ended December 31, 1996, the
Company reimbursed Matria Healthcare for the cost of the administrative and
personnel services provided by employees of Matria Healthcare in the amount of
$51,000. In addition, the Company paid $10,000 to reimburse Matria Healthcare
for the cost of group health, life, directors and officers and property and
casualty insurance premiums paid by Matria Healthcare on behalf of the Company
for the period from January 1996 to March 1996 after which time the Company
paid such insurance premiums directly to the applicable insurance company or
its agent. These amounts paid by the Company to Matria Healthcare for services
provided through Matria Healthcare, however, may not be representative of the
amount of such services required by the Company in the future. The Services
Agreement has an initial term of
11
<PAGE> 14
two years and is automatically renewed each year thereafter. The Services
Agreement may be cancelled for any reason by either party without penalty on
120 days advance notice. It is the intention of the Company and Matria
Healthcare that all transactions between them, or between the Company and any
other affiliated party, will be on an arm's length basis on terms no less
favorable to the Company than could be obtained from unaffiliated third
parties.
Mr. Carl E. Sanders, a director of the Company, is Chairman of Troutman
Sanders LLP, a law firm based in Atlanta, Georgia, which provided legal
services to the Company in fiscal year 1996 and is presently being retained to
provide certain services to the Company.
12
<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the total cumulative shareholder returns on
the Company's Common Stock during the period from November 7, 1995 (the date on
which shares of the Common Stock began trading publicly) through December 31,
1996, with the comparable total cumulative returns of the Media General Market
Weighted NASDAQ Index Return (the "NASDAQ Market Index") and the SIC Code 7373
Index (Computer Integrated Systems Design). The graph assumes that the value of
the investment in the Common Stock and each index was $100 on November 7, 1995,
and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG HEALTHDYNE INFORMATION
ENTERPRISES, INC., NASDAQ MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
1995 1995 1996
<S> <C> <C> <C>
HEALTHDYNE INFO. ENTERP. 100.00 163.64 400.00
INDUSTRY INDEX 100.00 106.98 113.55
BROAD MARKET 100.00 101.13 125.67
</TABLE>
13
<PAGE> 16
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented
for action at the 1997 Annual Meeting. If any other business should properly
come before the meeting, the persons named in the accompanying form of proxy
intend to vote thereon in accordance with their best judgment.
INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP to audit the
accounts of the Company and its subsidiaries for the fiscal year ending
December 31, 1997. A representative of KPMG Peat Marwick LLP will be present at
the Annual Meeting and will have the opportunity to make a statement if he or
she so desires and will be available to respond to appropriate shareholder
questions.
SHAREHOLDER PROPOSALS
Shareholders of the Company who intend to submit proposals at the
Company's 1998 Annual Meeting of Shareholders must submit such proposals to the
Company no later than December 22, 1997, in order to be considered for
inclusion in the proxy statement and form of proxy to be distributed by the
Board of Directors in connection with that meeting. Shareholder proposals
should be submitted to Healthdyne Information Enterprises, Inc., 1850 Parkway
Place, Suite 1100, Marietta, Georgia 30067, Attention: Secretary. The Company
reserves the right to decline to include in the Company's proxy material any
shareholder's proposal which does not comply with the rules of the Commission
for inclusion therein.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
officers and persons who own more than ten percent of a registered class of the
Company's equity securities to file reports with the Commission regarding
beneficial ownership of Common Stock and other equity securities of the
Company. To the Company's knowledge, based solely on a review of copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1996, all
officers, directors and greater than ten percent beneficial owners complied
with the Section 16(a) filing requirements of the Act in all instances with the
exception of late filings with respect to the reporting of transactions
relating to (i) the acquisition of shares of Common Stock in May 1996 by John
W. Lawless and (ii) the acquisition of a portion of certain shares of Common
Stock in January 1996 by Parker H. Petit.
14
<PAGE> 17
ANNUAL REPORT ON FORM 10-K
The Company will furnish without charge a copy of its Annual Report on
Form 10-K filed with the Commission for the fiscal year ended December 31,
1996, including financial statements and schedules, to any record or beneficial
owner of its Common Stock as of April 7, 1997 who requests a copy of such
report. Any request for the Form 10-K should be in writing addressed to:
Joseph G. Bleser, Secretary
Healthdyne Information Enterprises, Inc.
1850 Parkway Place
Suite 1100
Marietta, Georgia 30067
If the person requesting the Form 10-K was not a shareholder of record on
April 7, 1997, the request must include a representation that such person was a
beneficial owner of the Common Stock on that date. Copies of any exhibit(s) to
the Form 10-K will be furnished on request and upon the payment of the
Company's expenses in furnishing such exhibit(s).
YOUR VOTE IS IMPORTANT
You are encouraged to let us know your preference by marking the
appropriate boxes on the enclosed proxy card.
15
<PAGE> 18
APPENDIX
HEALTHDYNE INFORMATION ENTERPRISES, INC.
1850 PARKWAY PLACE, SUITE 1100
MARIETTA, GEORGIA 30067
COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 20, 1997
The undersigned hereby appoints Parker H. Petit and H. Darrell Young, and
each of them, proxies, with full power of substitution and with discretionary
authority, to represent and to vote in accordance with the instructions set
forth herein, all shares of Common Stock of Healthdyne Information Enterprises,
Inc. held of record by the undersigned on April 7, 1997 at the Annual Meeting of
Shareholders to be held at the Wyndham Garden Hotel, 1775 Parkway Place,
Marietta, Georgia at 11:00 a.m. on Tuesday, May 20, 1997, and any adjournments
thereof.
MANAGEMENT RECOMMENDS A VOTE FOR ITEM 1.
1. Election of Directors
<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below) nominees listed below
</TABLE>
NOMINEES: Parker H. Petit, H. Darrell Young, J. Terry Dewberry, William J.
Gresham, Jr., Charles R. Hatcher, Jr., M.D.,
Carl E. Sanders and Donald W. Weber
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
(Continued on reverse side)
fold and detach here
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
ITEM 1.
PLEASE SIGN EXACTLY AS NAME APPEARS ON STOCK CERTIFICATE.
Dated: , 1997
---------------------
----------------------------------
Signature
----------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
If stock is held in the name of
two or more persons, all must
sign. When signing as attorney, as
executor, administrator, trustee,
or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
by President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
