<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
(770) 423-8450
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1998
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 Company's corporate office building, 1850 Parkway Place, Suite 320,
Marietta, Georgia 30067, on Tuesday, May 19, 1998, at 11:00 a.m., Atlanta time,
for the following purposes:
(1) To consider and act upon a proposal to approve an
amendment to the Company's Articles of Incorporation to provide for
classification of the Board of Directors of the Company into three
classes serving staggered terms of three years;
(2) To elect nine directors to serve either (i) for staggered
terms if the first proposal is approved by the shareholders or (ii) for
one-year terms if the first proposal is not approved, and in either
case until their successors are elected and qualified; and
(3) To transact any and all other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 31,
1998, as the record date for determination of shareholders entitled to notice
of, and to vote at, the annual meeting or any adjournment thereof. Please mark,
sign and date the enclosed proxy card and mail it promptly in the accompanying
envelope.
I look forward to welcoming you at the meeting.
By Order of the Board of Directors
/s/ Joseph G. Bleser
Joseph G. Bleser
Secretary
Marietta, Georgia
April 2, 1998
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. IN THE EVENT YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY
AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
HEALTHDYNE INFORMATION ENTERPRISES, INC.
PROXY STATEMENT
FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1998
The Board of Directors of Healthdyne Information Enterprises, Inc., a
Georgia corporation (the "Company"), is furnishing this Proxy Statement to the
holders of its common stock, par value $.01 per share, together with associated
preferred stock purchase rights (the "Common Stock"), in connection with the
solicitation of proxies for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at 11:00 a.m., Atlanta time, on Tuesday, May 19,
1998 and at any and all adjournments thereof.
At the Annual Meeting, shareholders will be requested to act upon the
matters set forth in this Proxy Statement. If you are not present at the
meeting, your shares can be voted only when represented by proxy. The shares
represented by your proxy will be voted in accordance with your instructions if
the proxy is properly signed and returned to the Company before the Annual
Meeting. If no directions are specified, the shares will be voted (i) FOR the
amendment of the Company's Articles of Incorporation to provide for a staggered
board, (ii) FOR the election of the director nominees either (x) for staggered
terms if Proposal One (as hereinafter defined) is approved by the shareholders
or (y) for one-year terms if Proposal One is not approved, and (iii) in
accordance with the discretion of the named proxies on other matters properly
brought before the Annual Meeting. A proxy may be revoked, prior to its
exercise, by executing and delivering a later dated proxy card, by delivering
written notice of the revocation of the proxy to the Secretary of the Company
prior to the Annual Meeting, or by attending and voting at the Annual Meeting.
Attendance at the Annual Meeting, in and of itself, will not constitute a
revocation of a proxy.
The Company will bear the expenses of preparing, printing and mailing
this Proxy Statement and soliciting the proxies sought hereby. In addition to
the use of the mails, proxies may be solicited by officers, directors and
employees of the Company, who will not receive additional compensation therefor,
in person, or by telephone, telegraph or facsimile transmission. The Company has
retained D.F. King & Co., Inc. to assist in the solicitation of proxies for a
fee of $3,500, plus expenses. The Company also will request brokerage firms,
banks, nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares of Common Stock as of the Record Date (as
hereinafter defined) and will provide reimbursement for the cost of forwarding
the proxy materials in accordance with customary practice. Your cooperation in
promptly signing and returning the enclosed proxy card will help to avoid
additional expense.
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.
This Proxy Statement and the enclosed proxy card are first being mailed
to shareholders on or about April 2, 1998. A copy of the Company's 1997 Annual
Report to Shareholders is being mailed with this Proxy Statement.
<PAGE> 4
QUORUM AND VOTING REQUIREMENTS
The close of business on March 31, 1998 has been fixed as the record
date (the "Record Date") for the determination of shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. On that date, the
Company had outstanding 20,909,221 shares of its Common Stock. Each share of
Common Stock entitles the holder to one vote.
A majority of the votes entitled to be cast by the holders of all
shares of Common Stock that are outstanding and entitled to vote on the Record
Date shall constitute a quorum for purposes of the Annual Meeting. Abstentions
will be treated as present for purposes of determining a quorum. If a broker
indicates on a proxy that it does not have the discretionary authority as to
voting certain Common Stock (a "broker non-vote"), those shares will not be
considered present and entitled to vote with respect to that matter.
With regard to approval of the proposed amendment of the Company's
Articles of Incorporation to provide for classification of the Board of
Directors of the Company into three classes serving staggered terms of three
years ("Proposal One"), votes may be cast for or against the matter, or
shareholders may abstain from voting on the matter. APPROVAL OF PROPOSAL ONE
REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING
SHARES OF COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING. Since the
required vote is based upon the number of outstanding shares of Common Stock
rather than the shares actually voted in person or by proxy at the Annual
Meeting, the failure of a holder to submit a proxy or to vote in person at the
meeting (including abstentions and broker non-votes) will have the same effect
as a vote against approval of Proposal One.
With regard to the election of directors ("Proposal Two"), votes may be
cast for or votes may be withheld from each nominee. Abstentions may not be
specified with respect to the election of directors. UNDER GEORGIA LAW, ASSUMING
A QUORUM IS PRESENT, DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST.
Therefore, votes that are withheld will be excluded entirely from the vote and
will have no effect.
I. PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION
TO PROVIDE FOR A STAGGERED BOARD
The Company's Articles of Incorporation currently provide for the
annual election of directors to the Board of Directors. The Board of Directors
of the Company has adopted resolutions proposing an amendment to the Company's
Articles of Incorporation to provide for classification of the Board of
Directors of the Company into three classes serving staggered terms of three
years. The Board's approval of the proposed amendment is not in response to any
change in control activity involving the Company. The text of the proposed
amendment to the Articles is attached hereto as Appendix A.
Section 14-2-806 of the Georgia Business Corporation Code allows a
corporation to provide, either in its articles of incorporation or a bylaw
adopted by the shareholders, for staggered terms for directors, such that (i)
the total number of directors may be divided into two or three groups, and (ii)
the terms of directors in the first group expire at the first annual
shareholders' meeting after their election, the terms of directors in the second
group expire at the second annual shareholders' meeting after their election,
and the terms of directors in the third group, if any, expire
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<PAGE> 5
at the third annual shareholders' meeting after their election. Under the
proposed amendment, the Company's Board of Directors would be divided into three
classes (with the classes to be as equal in number as may be possible) to serve
staggered terms as follows: Class I Directors shall serve until the next annual
shareholders meeting after their election (1999) and until their successors are
elected and qualified; Class II Directors shall serve until the second annual
shareholders meeting after their election (2000) and until their successors are
elected and qualified; and Class III Directors shall serve until the third
annual shareholders meeting after their election (2001) and until their
successors are elected and qualified. At each annual meeting thereafter, the
class of directors elected each year would hold office for a three-year term and
until their successors are duly elected and qualified, or until their death,
resignation or removal from office. If the proposed amendment is adopted,
directors would not be removed from the Board by shareholders except for cause,
vacancies on the Board could only be filled by the remaining directors and
amendments or interpretations of the staggered term provisions of the Articles
of Incorporation by the shareholders would require the affirmative vote of at
least two-thirds of the outstanding shares.
Although the Company has in the past retained a high percentage of its
directors, the Board of Directors believes that a staggered board is a
desirable means of enabling the Company to more effectively carry out its
long-range plans for the mutual benefit of shareholders, customers and
employees. If Proposal One is approved, a change in control of the Board would
generally require at least two annual meetings. As a result, a majority of
directors at any given time would have prior experience as directors of the
Company. By ensuring that directors serve for a longer period of time, the Board
believes that a staggered board will help to assure the understanding,
continuity and stability of the Company's long-range business plans, goals,
strategies and policies in the future. In addition, extending director terms
from one to three years should allow the Board to continue to attract candidates
willing to make a commitment to the Company's future.
Over the last several years there has been a trend toward the
accumulation of substantial stock positions in public corporations by outside
parties either with a view toward utilizing a controlling block of stock to
force a merger or consolidation or as a prelude to proposing a restructuring or
sale of all or part of a company or other similar extraordinary corporate action
requiring the approval of its board of directors. These actions are often
undertaken without advance notice to or consultation with management of the
company. In many cases, such third parties seek representation on the company's
board of directors in order to increase the likelihood that their proposals will
be implemented by the company. If the company resists the efforts to obtain
representation on the company's board, the outside parties may commence proxy
contests to have themselves or their nominees elected to the board in place of
certain directors or the entire board.
The Company believes that if a potential acquiror were to purchase a
controlling interest in the Company, such potential acquiror's ability to remove
the Company's directors and obtain control of the Board and thereby remove the
Company's management would severely curtail the Company's ability to negotiate
effectively with the potential acquiror. In addition, the Company believes that
if a proxy contest were to occur, such contest would be both disruptive to
ongoing Company operations and a significant financial burden on the Company,
neither of which is in the best interest of shareholders. If Proposal One is
approved, a change in control of the Board would generally require two annual
meetings. The Board believes that such delay will enable its shareholders to
evaluate a change in control more carefully. Moreover, such delay would reduce
the likelihood of a costly proxy contest or a disruption in the Company's
operations by providing the Board with the time to gather sufficient information
to evaluate a proposal and study alternative proposals and the bargaining power
to assure that shareholder value is maximized for all shareholders equally. The
Board hopes that Proposal One will thereby deter disruptive tactics
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<PAGE> 6
that distract management, divide shareholders and damage the Company's long-term
investment value. Furthermore, the Board believes that Proposal One will have
the effect of preserving stability in the Company's stock price by preventing
speculative swings.
Because Proposal One may have an impact upon the rights of shareholders
and may be characterized as an anti-takeover measure which, if adopted, may make
the accomplishment of certain transactions involving a potential change of
control of the Company more difficult, each shareholder should carefully study
the proposed amendment which is set forth in Appendix A. In addition,
a staggered board may discourage a potential acquiror from making a tender offer
(including an offer at a substantial premium over the then-prevailing market
value of the Common Stock), even though such an attempt might be beneficial to
the Company and its shareholders. By reducing the attractiveness of accumulating
large blocks of Common Stock and subsequently changing control of the Company,
adoption of the amendment could tend to reduce any temporary fluctuation in the
market price of the Common Stock that is caused by such accumulations.
Accordingly, shareholders could be deprived of certain opportunities to sell
their stock at a temporarily higher market price.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
COMPANY'S ARTICLES OF INCORPORATION TO PROVIDE FOR CLASSIFICATION OF THE BOARD
OF DIRECTORS OF THE COMPANY INTO THREE CLASSES SERVING STAGGERED TERMS OF THREE
YEARS.
II. ELECTION OF DIRECTORS
The Board of Directors is currently comprised of nine directors. The
Board has nominated and recommends for election as a director the nine nominees
as set forth below. Each nominee currently serves as a director of the Company.
If the shareholders of the Company approve Proposal One at the Annual Meeting,
nine directors will be elected and divided into three classes to serve staggered
terms as set forth below and until their successors are elected and qualified.
If the shareholders do not approve Proposal One, nine directors will be elected
at the Annual Meeting, each to serve for a one-year term until the 1999 Annual
Meeting and until their successors are elected and qualified.
NOMINEES FOR BOARD OF DIRECTORS
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.
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.
CLASS I NOMINEES FOR THE TERM EXPIRING IN 1999
William J. Gresham, Jr., age 55, has served as a director of the
Company since June 1995. He has been a consultant to The Miller Richmond
Company, a real estate management and brokerage firm, since 1992 and previously
was a consultant to the Landmark Group, a real
4
<PAGE> 7
estate management and development firm, from 1990 to 1992. From 1987 to 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 1989 to 1992. Mr.
Gresham is also a director of Riverside Bank.
Charles R. Hatcher, Jr., M.D., age 67, has served as a director of the
Company since June 1995. Dr. Hatcher has served as an advisor to the University
President and the 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, had served as Director and Vice President for Health Affairs at the Center
since 1984 and Professor of Surgery at the Emory University School of Medicine
since 1971. Dr. Hatcher is also a director of Life of the South Corporation.
Donald W. Weber, age 61, has served as a director of the Company since
January 1995. Mr. Weber was President and Chief Executive Officer of Viewstar
Entertainment Services, Inc., a distributor of satellite entertainment systems,
from August 1993 until November 1997, when he sold that company and became a
private investor. From 1991 to August 1993, he was a consultant and private
investor, and from 1987 to 1991, he served as President and Chief Executive
Officer of Contel Corporation, a telecommunications supplier, which was sold in
1991 to GTE Corp. Mr. Weber is also a director of Powertel, Inc. and Pegasus
Communications, Inc.
CLASS II NOMINEES FOR THE TERM EXPIRING IN 2000
Joseph G. Bleser, age 52, has served as a director and Executive Vice
President of the Company since October 1997, Chief Financial Officer since March
1995, and Treasurer and Secretary since August 1995. He was Vice President -
Finance from August 1995 to October 1997. Prior to joining the Company, Mr.
Bleser served as Executive Vice President, Chief Financial Officer and Treasurer
of Allegiant Physician Services, Inc., a physician practice management company,
from May 1993 until March 1995. He was previously employed by HBO & Company, a
healthcare information systems and services provider ("HBO"), as Senior Vice
President-Finance, Treasurer, Assistant Secretary and Chief Financial Officer
from 1992 to 1993 and as Vice President, Controller and Chief Accounting Officer
from 1983 to 1992.
J. Terry Dewberry, age 54, has served as a director of the Company
since June 1995 and prior thereto from June 1994 to January 1995. Mr. Dewberry
also served as Vice President of the Company from June 1994 to January 1995. Mr.
Dewberry was a director of Healthdyne, Inc. ("Healthdyne"), a provider of
specialized obstetrical home healthcare services and a predecessor company of
Matria Healthcare, Inc. ("Matria"), from 1981 until March 1996 and served as
Vice Chairman of Healthdyne from 1992 until March 1996, when he retired. From
1987 until 1992, Mr. Dewberry was President and Chief Operating Officer of
Healthdyne and was Executive Vice President of Healthdyne from 1984 to 1987. Mr.
Dewberry is also a director of Respironics, Inc. ("Respironics").
Carl E. Sanders, age 72, has served as a director of the Company since
June 1994. He also serves as Chairman of Troutman Sanders LLP, an Atlanta-based
law firm which has provided legal services to the Company since 1995. See
"Certain Relationships and Related Transactions." Mr. Sanders is also a director
of Matria, Carmike Cinemas, Inc., Metromedia International Group, Inc. and
Norrell Corporation.
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<PAGE> 8
CLASS III NOMINEES FOR THE TERM EXPIRING IN 2001
John W. Lawless, age 54, has served as a director of the Company since
February 1998 and from January 1995 to May 1997. Mr. Lawless was a director of
Inforum, Inc., a healthcare information company ("Inforum"), from 1989 to March
1993. He was Chairman of Inforum from 1991 to March 1993, when that company was
merged with Medstat Group, a healthcare information services company. He served
on the board of directors of Medstat Group from April 1993 to January 1994. Mr.
Lawless was a co-founder of HBO in 1974 and retired as President and director of
HBO in 1987. From 1988 until the present Mr. Lawless has been a private investor
and management consultant.
Robert I. Murrie, age 52, has served as a director and the President
and Chief Executive Officer of the Company since October 1997. He was President
of Healthcare Communications, Inc., a wholly-owned subsidiary of the Company,
from April 1997 to October 1997 and served as a Client Partner of the Company (a
senior sales executive position) from January 1996 to April 1997. Prior to
joining the Company, Mr. Murrie served as President and Chief Executive Officer
of Nurse on Call, a managed care service company, from 1992 to December 1995 and
held several senior executive positions at HBO from 1985 to 1992, including
President and Chief Executive Officer of Healthquest, Inc., a wholly-owned
subsidiary of HBO, from 1988 to 1992.
Parker H. Petit, age 58, has served as Chairman of the Board of
Directors of the Company since June 1994. He has also served as Chairman of the
Board of Directors of Matria since March 1996. Mr. Petit was the founder of
Healthdyne and acted as its Chairman of the Board and Chief Executive Officer
from 1970 until Healthdyne and Tokos Medical Corporation (Delaware) merged with
and into Matria in March 1996. Mr. Petit also serves as a director of
Respironics, ASA Holdings, Inc., Intelligent Systems, Inc. and Logility, Inc.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ITS NINE
NOMINEES AS DIRECTORS.
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 fiscal year ended December 31, 1997, the Board of
Directors held six 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, Murrie, Sanders
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and Weber. The Executive Committee met once during the fiscal year ended
December 31, 1997.
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 consists of
Messrs. Petit and Weber and Dr. Hatcher. The Compensation Committee met once
during the fiscal year ended December 31, 1997.
The Stock Option Committee is responsible for administering the
Company's stock option plans as provided for in such plans. The members of the
Stock Option Committee are Messrs. Petit and Gresham and Dr. Hatcher. The Stock
Option Committee met six times during the fiscal year ended December 31, 1997.
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 twice during the fiscal year ended December 31, 1997.
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no additional
compensation for serving on the Board of Directors. During the fiscal year ended
December 31, 1997, the Company paid all directors who are not employees of the
Company ("Non-Employee Directors"), except the Chairman of the Board of
Directors, a quarterly retainer of $2,500, plus $500 for each meeting of the
Board which they attend and $250 for each committee meeting or telephonic
meeting. During the fiscal year ended December 31, 1997, in lieu of the
compensation paid to Non-Employee Directors, the Company paid the Chairman of
the Board a quarterly fee of $6,250 for his services and reimbursed him for
business expenses of $17,320. All Non-Employee Directors are also entitled to
receive options to 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as to the Common
Stock beneficially owned as of January 31, 1998 by each of the Company's
directors and nominees for director, each Named Executive Officer (as
hereinafter defined) and all directors and executive officers as a
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group. No person is believed by the Company to own beneficially more than five
percent of the outstanding shares of Common Stock.
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.
<TABLE>
<CAPTION>
NAME AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
------------------- ----------------------- --------
<S> <C> <C>
Parker H. Petit.................................. 1,064,011 (1)(2) 4.99%
Robert I. Murrie................................. 26,339 (3) *
Joseph G. Bleser................................. 201,043 (4) *
George T. Schwend................................ 7,126 (5) *
James L. Oakes, Jr............................... 28,765 (6) *
James Morrison................................... 138,878 (7) *
J. Terry Dewberry................................ 119,026 (2) *
William J. Gresham, Jr........................... 24,000 (2) *
Charles R. Hatcher, Jr., M.D..................... 20,500 (2) *
John W. Lawless.................................. 130,800 *
Carl E. Sanders.................................. 97,850 (2) *
Donald W. Weber.................................. 20,500 (2) *
H. Darrell Young................................. 842,553 (8) 3.95
All directors and executive officers as a
group (14 individuals)......................... 1,892,971 (9) 8.88%
</TABLE>
- ----------------
* Indicates less than 1%
(1) Includes 946,011 shares owned by Mr. Petit, 97,500 shares held by Petit
Investments Limited Partnership, and 10,000 shares held by the Petit
Grantor Trust.
(2) Includes 10,500 shares of Common Stock that may be acquired upon
exercise of stock options exercisable within 60 days of January 31,
1998.
(3) Includes 13,332 shares of Common Stock that may be acquired by Mr.
Murrie upon exercise of stock options exercisable within 60 days of
January 31, 1998.
(4) Includes 184,999 shares of Common Stock that may be acquired by Mr.
Bleser upon exercise of stock options exercisable within 60 days of
January 31, 1998.
(5) Includes 5,000 shares of Common Stock that may be acquired by Mr.
Schwend upon exercise of stock options exercisable within 60 days of
January 31, 1998.
(6) Includes 25,582 shares of Common Stock that may be acquired by Mr.
Oakes upon exercise of stock options exercisable within 60 days of
January 31, 1998.
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<PAGE> 11
(7) Includes 112,500 shares of Common Stock that may be acquired by Mr.
Morrison upon exercise of stock options exercisable within 60 days of
January 31, 1998.
(8) Includes 840,000 shares of Common Stock that may be acquired upon
exercise of stock options exercisable within 60 days of January 31,
1998.
(9) Includes 416,179 shares of Common Stock that may be acquired upon
exercise of stock options exercisable within 60 days of January 31,
1998. Does not include 842,553 shares beneficially owned by
Mr. Young, who is no longer an executive officer or director.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information concerning the
compensation of each individual who served as the Company's Chief Executive
Officer during the fiscal year ended December 31, 1997 and the four highest-paid
executive officers (other than the Company's Chief Executive Officer) of the
Company whose cash compensation exceeded $100,000 during the fiscal year ended
December 31, 1997 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- ---------------------- ALL
BONUS ($) SECURITIES OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY UNDERLYING OPTIONS/SARs(#) COMPENSATION
($) (1) ($)
- --------------------------- ---- -------- --------- -------------------------- ------------
<S> <C> <C> <C> <C> <C>
Robert I. Murrie..................................... 1997 (2) 157,795 33,699 260,000 --
President and Chief Executive Officer
Joseph G. Bleser..................................... 1997 189,049 -- 80,000 --
Executive Vice President, Chief Financial 1996 180,000 -- 65,000 --
Officer, Treasurer and Secretary.................. 1995 (3) 141,923 -- 155,000 --
George T. Schwend.................................... 1997 (4) 125,000 32,500 85,000 --
Senior Vice President, Sales and Marketing
James L. Oakes, Jr................................... 1997 (4) 73,333 76,659 61,250 --
Senior Vice President, Integration Services
James Morrison....................................... 1997 (4) 150,000 14,000 -- --
Senior Vice President, Research and Development
H. Darrell Young..................................... 1997 186,667 - -- 37,333(5)
Former President and Chief Executive Officer (6) 1996 203,400 - -- --
1995 190,000 - 775,000 --
</TABLE>
- ----------------
(1) Includes sales commissions and/or bonuses.
(2) Mr. Murrie has served as President and Chief Executive Officer of the
Company since October 21, 1997.
(3) Mr. Bleser commenced employment on March 20, 1995.
(4) Messrs Schwend, Oakes and Morrison were appointed as executive officers
of the Company on October 27, 1997.
(5) Represents consulting fees of $18,667 per month under Mr. Young's
Consulting Agreement with the Company, which provides for said fees
from November 1997 through October 1998.
(6) Mr. Young resigned as President and Chief Executive Officer of the
Company on October 21, 1997.
9
<PAGE> 12
STOCK OPTION GRANTS AND RELATED INFORMATION
The following table sets forth information concerning stock option grants
during the fiscal year ended December 31, 1997 to the Named Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------- VALUE AT ASSUMED
NUMBER OF % OF ANNUAL RATES OF
SECURITIES TOTAL STOCK PRICE APPRECI-
UNDERLYING OPTIONS EXERCISE ATION FOR OPTION
OPTIONS GRANTED TO OR BASE TERM
GRANTED EMPLOYEES PRICE EXPIRATION ----
NAME (#) IN 1997 ($/SH) DATE 5% 10%
---- ----------- --------------- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert I. Murrie........ 35,000 3.1% $2.88 4/22/03 $ 34,282 $ 77,773
225,000 19.6% $2.47 10/21/03 $189,008 $428,795
Joseph G. Bleser........ 80,000 7.0% $2.47 10/21/03 $ 67,203 $152,460
George T. Schwend....... 25,000 2.2% $2.56 7/22/03 $ 21,766 $ 49,380
25,000 2.2% $2.31 10/27/03 $ 19,641 $ 44,558
35,000 3.1% $1.62 12/16/03 $ 19,283 $ 43,748
James L. Oakes, Jr...... 38,000 3.3% $5.50 2/18/03 $ 71,080 $161,256
15,000 1.3% $2.88 4/22/03 $ 14,692 $ 33,331
8,250 0.7% $1.62 12/16/03 $ 4,545 $ 10,312
James Morrison.......... -- -- -- -- -- --
H. Darrell Young........ -- -- -- -- -- --
</TABLE>
None of the Named Executive Officers exercised any stock options during
the fiscal year ended December 31, 1997. The following table sets forth
information concerning the value of unexercised options held by the Named
Executive Officers as of December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT DECEMBER 31, 1997 (#) DECEMBER 31, 1997 ($)(1)
------------------------------------ -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert I. Murrie........ 13,332 286,668 $ -- $ --
Joseph G. Bleser........ 124,998 175,002 28,933 14,467
George T. Schwend....... 5,000 95,000 -- 5,600
James L. Oakes, Jr...... 12,916 87,084 -- 1,320
James Morrison.......... 86,664 95,836 14,466 7,234
H. Darrell Young........ 840,000 -- 319,200 --
</TABLE>
- ----------------
(1) Represents the excess of the fair market value of the Common Stock of
approximately $1.78 per share (the closing selling price of the Common
Stock as quoted on the Nasdaq National Market on December 31, 1997)
above the exercise price of the options.
10
<PAGE> 13
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 (the "Exchange Act"), 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 shareholder
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.
None of the executive officers received any cash incentive bonus in
1997 in their capacities as executive officers of the Company. As a matter of
policy, however, the Company intends to provide cash incentive bonuses for
executive officers and other key personnel ranging from 5% to 50% of annual
salary based on the Company achieving or exceeding the financial objectives in
the Company's Annual Business Plan (the "Plan").
Stock Options. The Stock Option Committee grants stock options to the
executive officers and other key personnel who are individually and collectively
responsible for creating
11
<PAGE> 14
and enhancing shareholder 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.
Compensation of Chief Executive Officer. The Committee considers
essentially the same factors in determining the base salary and cash incentive
bonus potential for the President and Chief Executive Officer as it does for the
other executive officers. Since Mr. Murrie was appointed to the positions of
President and Chief Executive Officer on October 21, 1997, following the
resignation of Mr. Young from those positions on that same date, and given the
performance of the Company in 1997, no cash bonuses were paid to either Messrs.
Young or Murrie in 1997 in the capacities of President and Chief Executive
Officer. Mr. Murrie's annual base salary for 1998 is $225,000 plus an automobile
allowance of $1,000 per month. Mr. Murrie's cash incentive bonus potential for
1998 is 35% of his annual base salary payable if, and only if, the Company
achieves the revenue and earnings per share goals (the "Goals") inherent in the
Plan. Mr. Murrie could earn up to 50% of his annual salary as a cash incentive
bonus in 1998 for exceeding those Goals by pre-determined amounts. In addition,
as a long-term incentive, Mr. Murrie was granted options to purchase 225,000
shares of the Company's Common Stock at $2.47 per share, the fair value per
share on the October 21, 1997 date of grant. As of December 31, 1997, Mr. Murrie
held options to purchase a total of 300,000 shares of the Company's Common Stock
at a weighted average price of $2.81 per share.
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Parker H. Petit (Chairman) Charles R. Hatcher, Jr., M.D. (Chairman)
Charles R. Hatcher, Jr., M.D. William J. Gresham, Jr.
Donald W. Weber Parker H. Petit
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,
1997, 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>
Fiscal Year Ended
-------------------------
1995 1995 1996 1997
---- ------ ------ ------
<S> <C> <C> <C> <C>
Healthdyne Information
Enterprises, Inc............ 100 163.64 400.00 129.45
SIC Code Index Index............. 100 106.98 113.55 135.69
Nasdaq Market Index ............. 100 101.13 125.67 153.73
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Carl E. Sanders, a member of the Board of Directors, is Chairman of
Troutman Sanders LLP, a law firm based in Atlanta, Georgia, which provided legal
services to the Company during fiscal year 1997 and is expected to provide legal
services to the Company during fiscal year 1998.
OTHER MATTERS
The Board of Directors does not know of any other matters to be
presented for action at the 1998 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.
13
<PAGE> 16
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, 1998. 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 1999 Annual Meeting of Shareholders must submit such proposals to the
Company no later than December 4, 1998, 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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1997, all officers,
directors and greater than ten percent beneficial owners complied with the
Section 16(a) filing requirements of the Act, except that Mr. Petit did not
report one transaction on a timely basis, which report has since been filed.
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, 1997,
including financial statements and schedules, to any record or beneficial owner
of its Common Stock as of March 31, 1998 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 March 31, 1998, 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.
14
<PAGE> 17
APPENDIX A
PROPOSED AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION
Article 6 of the Articles of Incorporation of the Company shall be
amended in its entirety and shall read as follows:
"6.
(A) Beginning with the election of directors in 1998, the Board of
Directors of the Corporation shall consist of nine (9) natural persons of the
age of eighteen years or over and shall be divided into three classes, Class I,
Class II and Class III. Each class shall consist, as nearly as possible, of
one-third of the total number of directors and any remaining directors shall be
included within such class or classes as the Board of Directors shall designate,
provided that the difference in the number of directors in any two classes shall
not exceed one (1). At the annual meeting of shareholders in 1998, Class I
Directors shall be elected for a one-year term, Class II Directors for a
two-year term and Class III Directors for a three-year term. At each succeeding
annual meeting of shareholders beginning in 1999, successors to the class of
directors whose term expires at the annual meeting shall be elected for a
three-year term.
(B) Any director of the Corporation, or the entire Board of Directors,
may be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least two-thirds of the shares entitled to
vote for the election of directors, voting together as a single class. No
director may be removed without cause.
(C) The number of directors constituting the Board of Directors may be
increased or decreased from time to time by the affirmative vote of a number of
directors equal to at least a majority of the then authorized number of
directors (regardless of any vacancies then existing). If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible. No decrease in the number of directors shall affect the term of any
director.
(D) Any vacancy on the Board of Directors, including any vacancy
occurring by reason of any increase in the number of directors, shall be filled
only by the Board of Directors acting by the affirmative vote of a majority of
the directors then remaining in office. If the directors remaining in office
constitute fewer than a quorum of the Board, they may fill the vacancy by the
affirmative vote of a majority of all the directors remaining in office.
(E) The provisions of this Article 6 are subject in all respects to the
rights, privileges and preferences of the holders of any class of capital stock
of the Corporation other than Common Stock.
(F) This Article 6 may be modified, amended or repealed only by the
affirmative vote of the holders of at least two-thirds of the shares entitled to
vote on such modification, amendment or repeal; any provision in the Articles of
Incorporation inconsistent with this Article 6, or any provision in the Articles
of Incorporation or the By-laws of the Corporation purporting to interpret or
define the terms contained in this Article 6, may be adopted only by the
affirmative vote of the holders of at least two-thirds of the shares entitled to
vote on such provision; provided that, the Board of Directors may adopt By-laws
implementing or interpreting this Article 6."
15
<PAGE> 18
ANNEX A
HEALTHDYNE INFORMATION ENTERPRISES, INC.
COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 19, 1998
The undersigned hereby appoints PARKER H. PETIT and ROBERT I. MURRIE,
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 March 31,
1998, at the Annual Meeting of Shareholders to be held at the Company's
corporate office building, 1850 Parkway Place, Suite 320, Marietta, Georgia
30067, at 11:00 a.m., Atlanta time, on Tuesday, May 19, 1998, and any
adjournments thereof.
1. APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
PROVIDE FOR CLASSIFICATION OF THE BOARD INTO THREE CLASSES SERVING STAGGERED
TERMS OF THREE YEARS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. ELECTION OF THE FOLLOWING NOMINEES TO THE BOARD OF DIRECTORS (I) FOR THE
TERMS STATED BELOW IF ITEM 1 IS APPROVED BY THE SHAREHOLDERS, OR (II) FOR
ONE-YEAR TERMS IF ITEM 1 IS NOT APPROVED, AND IN EITHER CASE UNTIL THEIR
SUCCESSORS ARE ELECTED AND QUALIFIED.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
Class I (term expiring at the annual meeting of shareholders to be held in
year 1999):
William J. Gresham, Jr., Charles R. Hatcher, Jr., M.D. and Donald W. Weber
Class II (term expiring at the annual meeting of shareholders to be held in
year 2000):
Joseph G. Bleser, J. Terry Dewberry and Carl E. Sanders
Class III (term expiring at the annual meeting of shareholders to be held in
year 2001):
John W. Lawless, Robert I. Murrie and Parker H. Petit
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.)
---------------------------------------------------------------------------
3. 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 AND "FOR" THE ELECTION OF THE DIRECTOR NOMINEES NAMED ABOVE.
Dated: , 1998
-------------------------------
-------------------------------------------
Signature
-------------------------------------------
Signature if held jointly
Please sign exactly as name appears on stock
certificate. 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.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
