<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 240.14a-11(c) or 240.14a-12
BIRMAN MANAGED CARE, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
BIRMAN MANAGED CARE, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 1, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Birman
Managed Care, Inc. (the "Company") will be held at the Nashville Airport
Marriott Hotel, 600 Marriott Drive, Nashville, Tennessee 37214, on December 1,
1997 at 9:00 a.m. for the following purposes:
1. To elect five (5) directors to the Board of Directors to serve until the
Company's 1998 Annual Meeting of Stockholders and until their successors
have been duly elected and qualified.
2. To ratify the selection of BDO Seidman L.L.P. as the Company's
independent public accountants for the fiscal year ending June 30, 1998.
3 To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Only stockholders of record at the close of business on October 30, 1997
are entitled to notice of and to vote at the Annual Meeting. A complete list of
the stockholders of the Company entitled to vote at the Annual Meeting will be
available for the examination of any stockholders for at least ten (10) days
prior to the Annual Meeting at the Company's principal executive office located
at 502 Gould Drive, Cookeville, Tennessee 38506, and will also be available for
inspection at the Annual Meeting.
By Order of the Board of Directors
/s/ SUE D. BIRMAN
Sue D. Birman
Executive Vice President,
Secretary and Director
Cookeville, Tennessee
October 31, 1997
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE 1997 ANNUAL MEETING IN PERSON,
PLEASE COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
YOUR PROXY WILL BE REVOCABLE ANY TIME PRIOR TO ITS EXERCISE EITHER IN WRITING OR
BY VOTING YOUR SHARES PERSONALLY AT THE 1997 ANNUAL MEETING.
<PAGE> 3
BIRMAN MANAGED CARE, INC.
502 GOULD DRIVE
COOKEVILLE, TENNESSEE 38506
------------------------
PROXY STATEMENT
------------------------
FOR ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 1, 1997
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Birman Managed Care, Inc., a Delaware
corporation (the "Company"), for use at its Annual Meeting of Stockholders to be
held at the Nashville Airport Marriott Hotel, 600 Marriott Drive, Nashville,
Tennessee 37214 on December 1, 1997 at 9:00 a.m., and at any and all
adjournments thereof. The Company's principal executive office is located at 502
Gould Drive, Cookeville, Tennessee 38506. This Proxy Statement and the enclosed
form of proxy are being mailed to stockholders on or about October 31, 1997.
A form of proxy is enclosed for use at the Annual Meeting. The proxy must
be signed and dated by you or your authorized agent. A proxy may be revoked at
any time before it is exercised by giving written notice of revocation to the
Secretary of the Company or by submitting, prior to the time of the Annual
Meeting, a properly executed proxy bearing a later date. It may also be revoked
by attendance at the Annual Meeting and election to vote thereat. Stockholders
having executed and returned a proxy, who attend the Annual Meeting and desire
to vote in person, are requested to so notify the Secretary of the Company prior
to the time of the Annual Meeting. Subject to such revocation, all shares
represented by a properly executed proxy received in time for the Annual Meeting
will be voted by the proxy holders in accordance with the instructions on the
proxy.
If no instructions are specified on the proxy, all shares represented by
valid proxies received pursuant to this solicitation (and not revoked before
they are voted) will be voted "FOR" the election of the nominees for director
set forth herein and "FOR" the ratification of BDO Seidman L.L.P. as the
Company's independent public accountants for the fiscal year ending June 30,
1998. As of the date hereof, management is not aware of any other matters to be
presented for action at the Annual Meeting. If, however, any other matters
properly are presented at the Annual Meeting, the proxy will be voted in
accordance with the best judgment and in the discretion of the proxy holders.
For purposes of determining whether a proposal has received the necessary votes
to be approved, abstentions from voting on any matter other than in the election
of directors will have the effect of a vote "AGAINST" the proposal.
If you hold your shares of Common Stock in "street name" and you fail to
instruct your broker or nominee as to how to vote such shares of Common Stock,
your broker or nominee may, in its discretion, vote your shares of Common Stock
"FOR" the election of the nominees for director set forth herein and "FOR"
ratification of the appointment BDO Seidman L.L.P. as the Company's independent
public accountants for the fiscal year ending June 30, 1998.
MATTERS TO BE CONSIDERED
The matters to be considered and voted upon at the Annual Meeting are:
1. Electing five (5) directors to the Board of Directors to serve
until the 1998 Annual Meeting of Stockholders and until their successors
have been duly elected and qualified.
2. Ratifying the appointment of BDO Seidman L.L.P. as the Company's
independent public accountants for the fiscal year ending June 30, 1998.
<PAGE> 4
3. Transacting such other business as may properly come before the
Annual Meeting and at any and all adjournments thereof.
COSTS OF SOLICITATION OF PROXIES
The Company will bear the costs of this solicitation, including the expense
of preparing, assembling, printing and mailing this Proxy Statement and the
material used in this solicitation of proxies. It is contemplated that proxies
will be solicited principally through the mails, but directors, officers and
regular employees of the Company may solicit proxies personally or by telephone.
Although there is no formal agreement to do so, the Company may reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for the
reasonable expense in forwarding these proxy materials to their principals. In
addition, the Company may pay for and utilize the services of individuals or
companies not regularly employed by the Company in connection with the
solicitation of proxies if the Board of Directors of the Company determines that
this is advisable.
OUTSTANDING SHARES AND VOTING RIGHTS
There were 8,756,254 shares of the Company's common stock issued and
outstanding, par value $0.001 per share ("Common Stock"), as of October 30,
1997, the record date (the "Record Date") for the stockholders entitled to
notice of and to vote at the Annual Meeting. Each stockholder of record at the
close of business on October 30, 1997 is entitled to one vote for each share of
common stock then held on each matter, or any adjournments thereof. The
Company's Certificate of Incorporation also authorizes the issuance of up to
5,000,000 shares of preferred stock, par value $0.001 per share, of which no
shares are presently issued and outstanding.
A majority of the outstanding shares of Common Stock entitled to vote at
the Annual Meeting must be present in person or represented by proxy at the
Annual Meeting in order to constitute a quorum for the transaction of business.
Abstentions and broker non-votes will be treated as shares present and entitled
to vote for purposes of determining the presence of a quorum.
The Company's Certificate of Incorporation does not authorize cumulative
voting. In the election of directors, the five (5) candidates receiving the
highest number of votes will be elected. Ratification of the appointment of BDO
Seidman L.L.P. as the Company's independent public accountants requires the
affirmative vote of the majority of the shares of the Common Stock present at
the Meeting in person or by proxy and entitled to vote.
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<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of the Record Date by (i) each person who is known by the Company
to own beneficially more than five percent (5%) of the outstanding shares of
Common Stock; (ii) each director or nominee for director of the Company; (iii)
the Chief Executive Officer of the Company; (iv) each of the four other most
highly compensated executive officers of the Company for fiscal 1997 (the "Named
Executives"); and (v) all directors and Named Executives as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)(5)
---------------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS(3) SHARES CLASS(2)
------------------------------------------------------------ ---------- ----------
<S> <C> <C>
David N. Birman, M.D.(4).................................... 5,081,606 55.80%
Sue D. Birman(4)............................................ 5,081,606 55.80%
Douglas A. Lessard(9)....................................... 24,313 *
Vincent Wong(9)............................................. 72,940 *
Mark C. Wade(9)............................................. 36,470 *
Richard M. Ross............................................. 175,000 1.92%
John Higgins(6)............................................. 0(6) *
James J. Rhodes(7).......................................... 0(7) *
Diedrich Von Soosten(7)..................................... 0(7) *
Directors and officers as a group (9 persons)............... 5,491,581(8) 60.30%
</TABLE>
- ---------------
* Less than 1%
(1) Except as indicated in footnotes to this table, the stockholders named in
this table are known to the Company to have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned by
them subject to community property laws where applicable. Shares shown as
beneficially owned by any person have been determined in accordance with the
requirements of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended.
(2) Shares of Common Stock issuable upon exercise of stock options exercisable
within 60 days of the Record Date are deemed outstanding for computing the
percentage of the person or entity holding such securities but are not
deemed outstanding for computing the percentage of any other person or
entity.
(3) The address for each of the beneficial owners is care of the Company: 502
Gould Drive, Cookeville, Tennessee 38506.
(4) Includes 666,667 Escrow Shares. David N. Birman, M.D. disclaims beneficial
ownership as to 547,046 shares beneficially owned by Sue D. Birman
individually. Sue D. Birman disclaims beneficial ownership as to 4,344,663
shares beneficially owned by David N. Birman, M.D. individually.
(5) Does not include options to purchase shares of Common Stock scheduled to
first become exercisable more than 60 days after the Record Date.
(6) Mr. Higgins was granted options under the Company's 1996 Directors' Options
Plan to acquire 3,000 shares of the Company's Common Stock at an exercise
price of $7.50 per share.
(7) Mr. Rhodes and Mr. Von Soosten were granted options under the Company's 1996
Directors' Option Plan to acquire 6,000 shares of the company's Common Stock
at an exercise price of $5.00 per share.
(8) Includes shares subject to options exercisable currently to acquire 229,274
shares for all officers and directors as a group.
(9) Shares shown for Mr. Lessard, Mr. Wong and Mr. Wade represent options
currently exercisable to acquire those shares.
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<PAGE> 6
DIRECTORS AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors shall be one
or more as shall be determined from time to time by the Board of Directors or
stockholders. The Board of Directors of the Company shall be elected at the
Annual Meeting and each director shall be elected to serve until the next annual
meeting or until his successor shall be elected and qualify. The Board of
Directors has established the number of directors at five (5) persons and as of
the date hereby, the Board of Directors consists of: David N. Birman, M.D., Sue
D. Birman, John D. Higgins, James J. Rhodes, and Diedrich Von Soosten.
Each of the persons listed in the table below are present members of the
Board of Directors of the Company and have been nominated for election to serve
until the 1998 Annual Meeting of Stockholders or until their successors are
elected and have qualified. Votes will be cast pursuant to the enclosed proxy in
such a way as to effect the election of said five (5) nominees. In the event
that any of the nominees should be unable or unwilling to accept nomination for
election as a director, it is intended that the proxy holders will vote for the
election of such substitute nominees, if any, as shall be designated by the
Board of Directors.
The following table sets forth certain information as of the Record Date
with respect to each person nominated and recommended to be elected by the
Company's current Board of Directors.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED/APPOINTED
NAME AGE POSITION DIRECTOR
--------------------------------- ------------------------------------ -----------------
<S> <C> <C> <C>
David N. Birman, M.D. 45 Chairman of the Board, President, 1991
and Chief Executive Officer
Sue D. Birman 39 Executive Vice President, Corporate 1991
Secretary and Director
John D. Higgins 65 Director 1997
James J. Rhodes 40 Director 1996
Diedrich Von Soosten 57 Director 1996
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED
ABOVE.
Set forth below are brief summaries of the background and business
experience, including principal occupation, of the Company's directors and Named
Executives:
David N. Birman, M.D. has served as Chairman of the Board of Directors,
President, and Chief Executive Officer of the Company and its predecessor
corporations since May 1991. From February 1990 to mid-1991, Dr. Birman served
as Chairman of the Board of Birman, Mathes & Associates, Inc., a consulting
company providing quality management and Medicare reimbursement review services
to rural hospitals. From April 1989 until January 1990, Dr. Birman served as a
consultant, providing quality management and Medicare reimbursement review
services to five rural hospitals. Previously, Dr. Birman was employed by
Whitwell Medical Center, Whitwell, Tennessee where, as a physician assistant, he
performed certain clinical duties and developed patient care management
techniques and reporting strategies that formed the basis for development of the
Quality Management Program. Dr. Birman received his M.D. from the Universidad
Tecnologica de Santiago; his B.A., with honors in Biology from Occidental
College; and certification as a physician assistant in primary care and surgery
from the University of Southern California School of Medicine.
Sue D. Birman has served as Executive Vice President and a director of the
Company and its predecessor corporations since May 1991 and served as their
Chief Financial Officer from May 1991 until June 1996. She was elected corporate
Secretary in March of 1997. From February 1990 to mid-1991, Ms. Birman assisted
Dr. Birman in the financial aspects and business development of Birman, Mathes &
Associates, Inc. From April 1989 until January 1990, Ms. Birman assisted Dr.
Birman in the operation of his consulting firm. Ms. Birman is the spouse of
David N. Birman, M.D.
4
<PAGE> 7
John D. Higgins was elected a director of the Company in March 1997. Since
1990, Mr. Higgins has been Senior Vice President -- Corporate Finance of Royce
Investment Group, Inc., the Company's managing underwriter for its
recently-completed initial public offering of Common Stock. Mr. Higgins holds
BBA and MBA degrees from Hofstra University. He is also a director of Iatros
Health Network, Inc., a publicly-owned company which is a provider of health
care services. The Company conducts no business with Iatros Health Network, Inc.
James J. Rhodes became a director of the Company in September 1996. Since
1986, Mr. Rhodes has served as a Regional Manager in the pension division of
ManuLife Financial (The Manufacturer's Life Insurance Company (USA)), a global
financial services company offering annuities, insurance, and investment
products.
Diedrich Von Soosten became a director of the Company in September 1996.
Since 1990, Mr. Von Soosten has been Managing Partner of Coloney Von Soosten &
Associates, Inc., a management consulting and financial advisory services firm
specializing in business turnarounds. Prior to 1990, Mr. Von Soosten was an
independent consultant providing restructuring and turnaround assistance to
underperforming businesses. Mr. Von Soosten is a former director and officer of
the Association of Certified Turnaround Professionals.
Samuel S. Patterson has served as Senior Vice President of the Company and
as President and Chief Operating Officer of Birman & Associates, Inc., the
Company's principal operating subsidiary, since July 1997. For approximately two
years before joining Birman Managed Care, Inc., Mr. Patterson was Vice President
and Chief Marketing Officer of Foundation Health Systems. From 1988 through
1995, Mr. Patterson was employed as a Vice President of the Ohio Region of
Cigna.
Jeffrey L. Drake has served as Senior Vice President of Corporate
Development of the Company since July 1997. For approximately three years before
joining Birman Managed Care, Inc., Mr. Drake was Vice President, Managed Care
Sales and Marketing of Coram Healthcare. From January 1992 through December
1993, Mr. Drake served as Executive Vice President for American Health Group,
Inc. From 1986 through 1991, Mr. Drake was an Executive Vice President with Blue
Cross and Blue Shield of Ohio.
Vincent W. Wong has served as President, Chief Executive Officer, of BMC
Health Plans, Inc., the Company's health plan subsidiary, since January 1996.
For approximately five years before joining BMC Health Plans, Inc., Mr. Wong was
employed by Foundation Health Corporation, a New York Stock Exchange-listed
managed care organization. During such time, Mr. Wong served in positions of
increasing responsibility culminating in his service as Vice President of
Operations. From 1984 to 1991, Mr. Wong was employed in marketing by Blue Cross
Blue Shield of Ohio.
Douglas A. Lessard has served as Vice President, Treasurer, and Chief
Financial Officer of the Company since June 1996 and as Controller since January
1996. Mr. Lessard provided accounting and consulting services to the Company
from April 1995 through December 1995. From March 1993 through March 1995, Mr.
Lessard served as the Chief Executive Officer and from September 1991 through
March 1993, as Chief Financial Officer of the American Institute of Professional
Careers, Inc., a private college in Phoenix, Arizona, which provides
post-secondary education in legal and other career fields. From March 1989
through September 1991, Mr. Lessard was employed as the Controller of Arizona
Building and Development, Inc., a real estate development and management
company. Mr. Lessard is a Certified Public Accountant in the State of Arizona.
Mark C. Wade has served as Executive Vice President, Sales and Marketing,
of BMC Health Plans, Inc. since July 1995 and has been employed by BMC Health
Plans, Inc. since March 1995. From November 1993 to March 1995, Mr. Wade served
as the founding director and president of Forum Health Care, Inc., a consulting
firm specializing in the development and management of integrated health care
delivery networks for both the private and public sectors. From February 1988 to
November 1993, Mr. Wade served in several positions at Health Management
Associates, Inc., an Arizona company that, commencing in 1982, developed and
managed four prepaid Medicaid plans that operated in 11 of Arizona's 15
counties, a prepaid Medicaid plan in Las Vegas, Nevada, and other managed care
programs. Mr. Wade's last position with Health
5
<PAGE> 8
Management Associates, Inc. was as vice president for all private sector
commercial sales and marketing activity with particular emphasis on commercial
provider networks, including marketing to large insurance companies and
self-funded payors, integrated delivery systems, pharmacy networks, managed care
benefit designs, and utilization management and third-party administration
services.
Rockey C. Talley, M.D., has served as Executive Vice President, Chief of
Professional Services, of Birman & Associates, Inc. since September 1997. Dr.
Talley joined Birman & Associates in 1996. Prior to joining the Company, Dr.
Talley served as President-elect and President, Board of Directors, of Southern
Plains Medical Center, Chickasha, Oklahoma, from 1993 to 1996. From 1991 to
1993, he served variously as Chairman of Medical Records, Utilization Review,
Quality Assurance and Internal Medicine Division of Grady Memorial Hospital,
also in Chickasha, Oklahoma. Dr. Talley is Board Certified in Internal Medicine.
He received his medical doctor degree from the University of Oklahoma in 1984.
BOARD COMMITTEES
There are two committees of the Board of Directors: the Compensation
Committee and the Audit Committee. The Compensation Committee determines the
Company's executive compensation policies and practices and changes in
compensation and benefits for senior management. The Compensation Committee also
administers the Company's 1995 Stock Option Plan. The Audit Committee reviews
the internal accounting procedures of the Company, consults with the Company's
independent accountants, and reviews the services provided by such accountants.
Messrs, Rhodes and Von Soosten currently serve as the members of the
Compensation Committee and Audit Committee.
SUMMARY COMPENSATION TABLE
The following table provides certain information concerning the
compensation earned by the Company's Chief Executive Officer and the four other
most highly compensated executive officers of the Company who received
compensation in excess of $100,000 for services rendered in all capacities to
the Company for fiscal 1997 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
OTHER ----------------------
ANNUAL AWARDS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- -------------------------------------------- ---- -------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
David N. Birman, M.D........................ 1997 $350,000 $70,000 $ 73,982 -- --
Chairman of the Board, President, 1996 350,000 60,000 69,025 -- --
and Chief Executive Officer 1995 275,000 -- 52,922 -- --
Sue D. Birman............................... 1997 150,000 30,000 12,052 -- --
Executive Vice President, 1996 150,000 40,000 11,834 -- --
Secretary and Director 1995 118,617 -- 11,968 -- --
Douglas A. Lessard.......................... 1997 115,000 72,000 16,023 -- --
Chief Financial Officer and 1996 40,500 -- 65,152 72,940 --
Vice President 1995 -- -- 12,000 -- --
Vincent W. Wong............................. 1997 182,970 -- 5,212 -- --
President and Chief Executive Officer 1996 75,000 -- 28,897 218,819 --
BMC Health Plans, Inc., 1995 -- -- -- -- --
Mark C. Wade................................ 1997 165,000 -- 8,224 -- --
Executive Vice President -- Sales and 1996 165,000 -- 6,000 145,879 --
Marketing -- BMC Health Plans, Inc. 1995 11,800 -- 1,500 -- --
</TABLE>
EXECUTIVE BONUS PLAN
The Company has adopted an Executive Bonus Plan (the "Executive Bonus
Plan") pursuant to which officers of the Company are eligible to receive cash
bonuses after the close of each fiscal year of the Company. The Executive Bonus
Plan is administered by the Compensation Committee of the Board of Directors.
Bonuses are determined on the basis of (i) the operating profit of the Company,
(ii) net revenue growth of the Company achieved as a percentage of the goal
established by the Company at the beginning of the fiscal year, and (iii) the
officer's individual performance and contribution to the Company. An officer's
bonus for any
6
<PAGE> 9
fiscal year may not exceed such officer's annual base salary multiplied by the
Target Bonus Percentage as defined in the Executive Bonus Plan in such fiscal
year.
STOCK OPTION PLANS
1995 Stock Option Plan
The Company has adopted the 1995 Stock Option Plan (the "1995 Option Plan")
pursuant to which certain significant employees, including officers and
directors who are employees, and consultants of the Company are eligible to
receive incentive stock options as well as non-qualified stock options and stock
appreciation rights ("SARs"). The Plan, which expires in October 2005, is
administered by the Compensation Committee of the Board of Directors. Incentive
stock options granted under the Plan are exercisable for a period of up to 10
years from the date of grant at an exercise price which is not less than the
fair market value of the Common Stock on the date of the grant, except that the
term of an incentive stock option granted under the Plan to a stockholder owning
more than 10% of the outstanding Common Stock may not exceed five years and the
exercise price of an incentive stock option granted to such a stockholder may
not be less than 110% of the fair market value of the Common Stock on the date
of the grant. Non-qualified stock options may be granted on terms determined by
the Compensation Committee of the Board of Directors. SARs, which give the
holder the privilege of surrendering such rights for an amount of stock equal to
the appreciation in the Common Stock between the time of grant and the
surrender, may be granted on any terms determined by the Compensation Committee
of the Board of Directors. The Plan also permits the grant of new stock options
to participants who tender shares of the Company's Common Stock as payment of
the exercise price of stock options or the payment of withholding tax ("Reload
Options"). The Reload Options will be granted at the fair market value of a
share of Common Stock on the date of the grant and will be exercisable six
months following the date of the grant. The Plan also includes limited option
valuation rights upon a change of control of the Company. As of June 30, 1997,
options for the exercise of 812,061 shares have been granted under the 1995
Option Plan at the exercise price of $1.37 per share; 55,000 shares have been
granted at an exercise price of $5.00 per share; and 300,000 shares have been
granted at an exercise price of $4.75 per share. A total of 1,458,780 shares of
Common Stock are reserved for issuance under the 1995 Option Plan.
1996 Directors' Option Plan
On September 9, 1996, the Company adopted the 1996 Non-Employee Directors'
Non-Qualified Stock Option Plan (the "1996 Directors' Plan"). A total of 100,000
shares of Common Stock are reserved for issuance under the 1996 Directors' Plan.
Under this plan, upon initial election to the Board of Directors, non-employee
directors are awarded options to purchase 6,000 shares of Common Stock. Upon
each subsequent election to the Board of Directors, non-employee directors
receive option awards to purchase 3,000 shares of Common Stock. These options,
which have an exercise price equal to the fair market value of the shares of
Common Stock as of the date of grant, vest at the rate of 33.33% per year. All
options awarded under the 1996 Directors' Plan expire on the first to occur of
(i) 10 years after the date of grant, or (ii) 90 days after the date the
director is no longer serving in such capacity for reasons other than death or
disability. On September 9, 1996, each of Messrs. Rhodes and Von Soosten were
granted options to purchase 6,000 shares of Common Stock under this plan at an
exercise price of $5.00 per share. On March 18, 1997, Mr. Higgins was granted
options to acquire 3,000 shares of Common Stock at an exercise price of $7.50
per share.
7
<PAGE> 10
Fiscal 1997 Option Grants
The following table sets forth certain information concerning individual
grants of incentive stock options to executive officers and directors during the
fiscal year ended June 30, 1997:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
SHARES OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE PRICE EXPIRATION
NAME OF DIRECTOR OR OFFICER OPTIONS GRANTED UNDER PLAN PER SHARE DATE
----------------------------- --------------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
James J. Rhodes.............. 6,000 .5% $ 5.00 9/30/06
Diedrich Von Soosten......... 6,000 .5% $ 5.00 9/30/06
John Higgins................. 3,000 .5% $ 7.50 4/30/07
</TABLE>
None of the persons named in the Summary Compensation Table exercised
options during the fiscal year ended June 30, 1997.
In July, 1997, the Company granted options to acquire 150,000 shares each
to Samuel S. Patterson and Jeffrey L. Drake at an exercise price of $4.75 per
share.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
The following table sets forth certain information with respect to
exercises by the Named Executive Officers of stock options during 1996 and the
value of all unexercised employee stock options as of June 30, 1997 held by the
Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS(2) IN-THE-MONEY OPTIONS(1)
SHARES ACQUIRED VALUE ------------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- --------------- -------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Lessard..... 0 0 24,313 48,627 $ 100,413 $ 200,825
Vincent W. Wong........ 0 0 72,940 145,879 301,242 602,484
Mark C. Wade........... 0 0 36,470 109,409 150,621 451,860
</TABLE>
- ---------------
(1) The value of the Unexercised In-the-Money Options is based upon the $5.50
per share closing price of the Company's Common Stock on the Nasdaq Stock
Market on June 30, 1997.
(2) No options may be exercised until December of 1998 under "lock-up"
agreements signed in connection with the Company's initial public offering
of shares.
COMPANY ALTERNATIVE HEALTH PROGRAM
The Company maintains a plan by which under certain conditions employees of
the Company may seek and the Company will pay for medical treatment commonly
known as "alternative" health care. As part of this plan, employees are required
to report their treatments and allow the Company to monitor their treatment and
progress. The Company views this plan as a research project. The Company spent
approximately $80,000 on this plan in fiscal 1997. The Company hopes that one or
more of these treatments will prove effective enough to attempt to incorporate
into the Company's health plans. Approximately eleven Company employees
participated in this program in fiscal 1997.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of its current executive
officers. The employment agreements provide for annual salaries that generally
are subject to annual adjustments for increases in the Consumer Price Index;
participation in employee deferred compensation plans, stock options and
retirement and insurance plans; and include customary noncompetition,
nondisclosure, and severance provisions. Set forth below is a summary of other
principal provisions of those employment agreements:
In March 1996, the Company entered into an employment agreement with David
N. Birman, M.D. for a term expiring June 30, 2001, pursuant to which Dr. Birman
serves as Chief Executive Officer of the Company. The employment agreement
provides for an initial base salary of $350,000 per annum, participation in the
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Executive Bonus Plan, and other compensation not to exceed $60,000 per annum.
The employment agreement provides for severance benefits upon termination as a
result of death, for "cause," by mutual agreement, and as a result of
disability. If Dr. Birman's employment is terminated for reasons other than
death, "cause," mutual agreement, or disability, he shall be entitled to receive
his base salary (as most recently adjusted) for the remainder of the initial
term or the applicable renewal term and all unvested stock options granted to
him under 1995 Option Plan shall accelerate and become vested. If Dr. Birman's
employment is not renewed following expiration of the initial term or the
applicable renewal term, he shall be entitled to receive, as severance, his base
salary (as last adjusted) payable over the 12-month period following the
severance of his employment.
In March 1996, the Company entered into an employment agreement with Sue D.
Birman for a term expiring June 30, 2001, pursuant to which Ms. Birman serves as
Executive Vice President of the Company. The employment agreement provides for
an initial base salary of $150,000 per annum, participation in the Executive
Bonus Plan, and other compensation not to exceed $10,000 per annum. The
employment agreement provides for severance benefits upon termination as a
result of death, for "cause," by mutual agreement, and as a result of
disability. If Ms. Birman's employment is terminated for reasons other than
death, "cause," mutual agreement, or disability, she shall be entitled to
receive her base salary (as most recently adjusted) for the remainder of the
initial term or the applicable renewal term and all unvested stock options
granted to her under 1995 Option Plan shall accelerate and become vested. If Ms.
Birman's employment is not renewed following expiration of the initial term or
the applicable renewal term, she shall be entitled to receive, as severance, her
base salary (as last adjusted) payable over the 12-month period following the
severance of her employment.
In July, 1997, the Company entered into an employment agreement with Samuel
S. Patterson for a term expiring July 13, 2000, pursuant to which Mr. Patterson
serves as Senior Vice President of the Company and President and COO of Birman &
Associates, Inc. The employment agreement provides for an initial base salary of
$185,000 per annum. The employment agreement also provides Mr. Patterson with
the opportunity to earn up to an additional $92,500 per annum based upon the
overall performance of the Company and also the performance of Birman &
Associates, Inc. The employment agreement provides for severance benefits upon
termination as a result of death, for "cause", by mutual agreement, and as a
result of disability. If Mr. Patterson's employment is terminated for reasons
other than death, "cause", mutual agreement, or disability, he shall be entitled
to receive base salary (as most recently adjusted) payable over the six month
period following the severance of his employment, providing that he has served
the Company not less that one year. In the event the agreement is terminated for
any reason, all unvested options shall lapse. Additionally, the employment
agreement requires Mr. Patterson to relocate to Cookeville, Tennessee and
provides for moving expenses not to exceed $10,000, temporary living expenses
not to exceed $9,000, reimbursement for loss on sale of his house not to exceed
$25,000 plus broker's commission, and a temporary bridge loan of up to $100,000.
The bridge loan will be secured by Mr. Patterson's equity in his existing home
by a second deed of trust and is due and payable upon sale of Mr. Patterson's
home in Florida.
In July, 1997, the Company entered into an employment agreement with
Jeffrey L. Drake for a term expiring on July 20, 2000, pursuant to which Mr.
Drake serves as Senior Vice President of Corporate Development of the Company.
The employment agreement provides for an initial base salary of $185,000 per
annum. The employment agreement also provides Mr. Drake with the opportunity to
earn up to an additional $92,500 per annum based upon the overall performance of
the Company as a whole. The employment agreement provides for severance benefits
upon termination as a result of death, for "cause", by mutual agreement, and as
a result of disability. If Mr. Drake's employment is terminated for reasons
other than death, "cause", mutual agreement, or disability, he shall be entitled
to receive base salary (as most recently adjusted) payable over the six month
period following the severance of his employment, providing that he has served
the Company not less that one year. In the event the agreement is terminated for
any reason, all unvested options shall lapse. Additionally, the employment
agreement requires Mr. Drake to relocate to Cookeville, Tennessee and provides
for moving expenses not to exceed $10,000, temporary living expenses not to
exceed $9,000, reimbursement for loss on sale of his house not to exceed $25,000
plus broker's commission, and a temporary bridge loan of up to $100,000. The
bridge loan will be secured by Mr. Drake's equity in his
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existing home by a second deed of trust and is due and payable upon sale of Mr.
Drake's home in Georgia. Mr. Drake has notified the Company that at this time he
does not expect to take the bridge loan.
In March 1996, the Company entered into an employment agreement with
Vincent W. Wong for a term expiring on January 31, 1999, pursuant to which Mr.
Wong serves as President and Chief Executive Officer of BMC Health Plans, Inc.
The employment agreement provides for an initial base salary to Mr. Wong of
$180,000 per annum. The employment agreement also provides Mr. Wong with the
opportunity to earn up to an additional $180,000 per annum based upon the number
of enrollees in health plans developed, managed, or operated by the Company and
health plan net earnings. The employment agreement provides for severance
benefits upon termination as a result of death, for "cause," by mutual
agreement, and as a result of disability. If Mr. Wong's employment is terminated
for reasons other than death, "cause," mutual agreement, or disability, he shall
be entitled to receive his base monthly salary (as most recently adjusted)
payable over the six month period following the severance of his employment, and
all unvested stock options granted to him under the 1995 Option Plan shall
accelerate and become vested.
In March 1996, the Company entered into an employment agreement with
Douglas A. Lessard for a term expiring June 30, 2001, pursuant to which Mr.
Lessard serves as Chief Financial Officer of the Company. The employment
agreement provides for an initial base salary of $120,000 per annum,
participation in the Executive Bonus Plan, and other compensation not to exceed
$9,000 per annum. The employment agreement provides for severance benefits upon
termination as a result of death, for "cause," by mutual agreement, and as a
result of disability. If Mr. Lessard's employment is terminated for reasons
other than death, "cause," mutual agreement or disability, he shall be entitled
to receive his base salary (as most recently adjusted) for the remainder of the
initial term or the applicable renewal term and all unvested stock options
granted under the 1995 Option Plan shall accelerate and become vested. If Mr.
Lessard's employment is not renewed following expiration of the initial term or
the applicable renewal term, he shall be entitled to receive, as severance, his
base salary (as last adjusted) payable over the 12-month period following his
severance of employment.
In July 1995, the Company entered into an employment agreement with Mark C.
Wade for a term expiring on September 1, 1998, pursuant to which Mr. Wade serves
as Executive Vice President -- Sales and Marketing of BMC Health Plans, Inc. The
employment agreement provides for a base salary of $165,000 per annum with the
opportunity for Mr. Wade to earn up to an additional $85,000 per annum based
upon the number of enrollees in health plans developed, managed, or operated by
the Company. Mr. Wade's employment agreement does not contain a severance
provision.
COMPENSATION OF DIRECTORS
All directors must receive reimbursement for reasonable expenses incurred
in connection with their attendance at Board of Directors and committee
meetings. In addition, all non-employee directors receive $2,000 for each Board
meeting that they attend. All non-employee directors are also entitled to
receive awards and options to purchase shares of Common Stock under the 1996
Non-Employee Directors' Non-Qualified Stock Option Plan.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
The Report of the Compensation Committee of the Board of Directors shall
not be deemed incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates the information contained in the report by
reference, and shall not otherwise be deemed filed under such acts.
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<PAGE> 13
THE 1997 BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY REGARDING EXECUTIVE OFFICERS
The fundamental philosophy of the Company's compensation program is to
offer compensation opportunities for all employees which are based on the
individual's contribution and personal performance. Consideration is also given
to a person's potential for future responsibility and promotion.
In designing and administering the individual elements of the executive
compensation program, the Compensation Committee strives to balance short and
long-term incentive objectives and employ prudent judgment in establishing
performance criteria, evaluating performance and determining actual incentive
payments. Essentially, the executive compensation program of the Company has
been designed to:
- support a pay for performance policy that differentiates in compensation
amounts based on corporate performance;
- motivate key executive officers to achieve strategic business initiatives
and reward them for their achievement;
- provide compensation opportunities which are comparable to those offered
by other leading companies in the health care industry, thus allowing the
Company to compete for and retain talented executives who are critical to
the Company's long-term success; and
- align the interest of executives with the long-term interest of
stockholders through award opportunities that can result in bonuses and
ownership of common stock.
RELATIONSHIP OF PERFORMANCE UNDER THE COMPENSATION PROGRAM
The compensation program supports the Company's internal culture and human
resource values which are to foster career opportunities and develop the best
people at all levels and to encourage and reward actions which put the interests
of the Company as a whole ahead of functional specialties and individual
considerations.
During 1997, the compensation program for all senior executives is
comprised of three elements:
- Base salary and benefits typically offered to executives by comparable
corporations.
- Stock option grants to tie the executives' financial future to that of
the Company in a form which reflects a long-term ownership interest in
the Company.
- An executive bonus plan to reward executives promptly and significantly
for achievement of annual corporate goals.
1997 Compensation Committee
James J. Rhodes
Diedrich Von Soosten
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to June 30, 1995, the Company operated, as a division, a livestock
breeding farm on property owned by David N. Birman, M.D. and Sue D. Birman, his
spouse. At that time, Dr. Birman was the sole stockholder, President, and a
director of the Company, and Mrs. Birman was a Executive Vice President, the
Chief Financial Officer, and a director of the Company. Prior to June 30, 1994,
the Company lent to Dr. and Mrs. Birman approximately $482,000, which was used
primarily to improve their farm property and residence. During fiscal 1995, Dr.
and Mrs. Birman repaid $442,000 of such loan and also received additional
advances of approximately $270,000, resulting in an outstanding principal
balance of $310,000 at June 30, 1995. As of June 30, 1995, the Company
contributed all of its farm assets, subject to the related liabilities, to a new
corporation, Birman Farms, Inc., and distributed all of the outstanding shares
of capital stock of Birman
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Farms, Inc. to Dr. Birman. This dividend distribution of property was valued by
the Company at $230,000. Subsequent to the distribution, the Company authorized
additional advances to Dr. Birman through September 1996 of approximately
$465,000 to defray the operating and ownership costs of the farm. Accordingly,
as of September 9, 1996, Dr. Birman owned a total of $775,000 to the Company.
The Company made no further advances to Dr. Birman to defray the operation and
ownership costs of the farm. All amounts owed to the Company by Dr. Birman,
including interest at a rate of 7% per annum, through August 31, 1996 and at the
prime rate of American National Bank and Trust Company of Chicago from September
1, 1996 to February 12, 1997, were repaid by Dr. Birman on February 12, 1997 by
tendering 174,800 shares of Common Stock owned by him and valued at $4.60 per
share. No additional loans will be made by the Company to any member of
management without approval of the non-employee members of the Board of
Directors of the Company.
Richard M. Ross served as Vice-Chairman and as a director of the Company
from February 1994 to August 1996. Effective September 1, 1996, Mr. Ross retired
as Vice-Chairman and a newly formed company controlled by Mr. Ross was engaged
as a consultant to the Company pursuant to a consulting agreement (the
"Consulting Agreement"). While serving as Vice-Chairman of the Company, Mr. Ross
was actively involved in policy-making matters relating to day-to-day operations
of the Company and corporate finance. As a consultant, Mr. Ross will undertake
special assignments designated by Dr. Birman and the Board of Directors
including, among other things, developing business plans for acquired companies
and evaluating acquisition candidates. The Consulting Agreement provides for Mr.
Ross to serve as the provider of consulting services thereunder, provides for a
fee to be paid to the consultant firm of $186,000 per annum payable in equal
monthly installments over the 12-month term of the agreement, and provides for
termination of the Consulting Agreement by mutual agreement, upon the occurrence
of an uncured material breach, upon the death of Mr. Ross, or 10 days after
receipt of notice of termination from the consultant. Except as otherwise
provided or as otherwise agreed to by the parties, the Consulting Agreement will
be renewed annually by the Company for up to an additional five consecutive
years. The Company also paid Mr. Ross a $26,000 severance fee and has
transferred to Mr. Ross personal computer equipment used by Mr. Ross in
rendering services to the Company and having a value of less than $1,000. In
addition, Dr. Birman has sold Mr. Ross 175,000 shares of Company Stock in
consideration for a $175,000 principal amount promissory note.
On or about September 22, 1997, the Company lent Samuel S. Patterson
$100,000 in connection with his acquisition of a residence in Cookeville,
Tennessee, as provided in his employment agreement with the Company. The loan
will bear interest at the rate of eight percent (8%) per annum, payable monthly
in arrears, and will be repayable upon sale of his other residence. The Company
has agreed to reimburse Mr. Patterson 75% of any loss he might sustain on the
sale of his other residence, up to a maximum reimbursement of $25,000 plus real
estate broker's commission. Mr. Patterson has advised the Company that he wishes
the loan to be made and it is anticipated that it will be made to him by the end
of September, 1997.
The employment agreement between the Company and Jeffrey L. Drake contains
the same provision for a loan and possible reimbursement of certain losses on
the sale of his previous residence, which is also not located in Tennessee. Mr.
Drake has notified the Company that at this time he does not expect to take
advantage of this provision.
John D. Higgins, a director of the Company, is Senior Vice
President -- Corporate Finance of Royce Investment Group, Inc., the
representative of the underwriters for the Company's successful February 1997
initial public offering of stock ("Royce"). Mr. Higgins was elected to the Board
pursuant to a provision in the Company's underwriting agreement with Royce which
allowed Royce to nominate one member of the Board of Directors. In addition to
underwriting commissions of $920,000, Royce and the other underwriters received
in connection with the Company's initial public offering a non-accountable
expense allowance of $345,000. As part of the underwriting agreement, the
Company also agreed to sell to Royce and its designees, for nominal
consideration, warrants to purchase up to 200,000 shares of the Company's Common
Stock. The warrants will be exercisable until February 12, 2001 at an exercise
price of $7.50 per share (150% of the initial public offering price of the
Common Stock). The shares acquired upon the exercise of the warrants may not be
transferred or hypothecated for one year after exercise. The Company has agreed
to register the shares so acquired at the Company's expense under the Securities
Act of 1933. The Company and Royce also entered
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into a one-year financial consulting agreement under which the paid Royce a fee
of $172,500, i.e., 1.5% of the gross proceeds of the Company's initial public
offering including the sale of the overallotment. In addition, the Company and
Royce entered into a five-year agreement which provides that if Royce arranges
for the sale of substantially all of the assets of the Company or for a merger,
consolidation, or acquisition through and including February 12, 2001, Royce
will receive a fee based on a sinking sale ranging from 5% of the first $1.0
million of consideration, 4% of the consideration between $1.0 million and $2.0
million, and 3% of the consideration in excess of $3.0 million.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
the Common Stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Executive officers, directors and greater
than ten-percent stockholders are required by Securities and Exchange Commission
regulation to furnish to the Company with copies of all Section 16(a) forms they
file.
Based solely on review of the copies of such forms furnished by the
Company, or written representation that no Form 5 was required, the Company
believes that during the fiscal year ended June 30, 1997 all executive officers,
directors and greater than ten-percent beneficial owners complied with all
Section 16(a) filing requirements applicable to them.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed BDO Seidman L.L.P. ("BDO Seidman") as
its independent public accountants for the fiscal year ending June 30, 1998, and
stockholders are being asked to ratify the appointment. The appointment was
recommended by the Audit Committee. BDO Seidman, the Company's accountants for
the fiscal year ended June 30, 1997, performed audit services for fiscal 1997
which included the examination of the consolidated financial statements and
services related to filings with the Securities and Exchange Commission. All
professional services rendered by BDO Seidman during fiscal 1997 were furnished
at customary rates and terms. Representatives of BDO Seidman will be present at
the Annual Meeting and will be available to respond to appropriate questions
from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
ANNUAL REPORT
Together with this Proxy Statement, the Company has distributed to each of
its stockholders an annual report for the fiscal year ended June 30, 1997. The
annual report contains consolidated financial statements of the Company and its
subsidiaries and the reports thereon of BDO Seidman, the Company's independent
public accountants.
UPON WRITTEN REQUEST OF ANY PERSON ENTITLED TO VOTE AT THE MEETING,
ADDRESSED TO INVESTOR RELATIONS, BIRMAN MANAGED CARE INC., 502 GOULD DRIVE,
COOKEVILLE, TENNESSEE 38506, THE COMPANY WILL PROVIDE WITHOUT CHARGE AN
ADDITIONAL COPY OF ITS ANNUAL REPORT ON FORM 10-KSB FOR 1997, INCLUDING THE
FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934.
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OTHER BUSINESS
The Board of Directors knows of no other business which will be presented
for consideration at the Meeting other than as stated in the Notice of Meeting.
If, however, other matters are properly brought before the Meeting, it is the
intention of the persons named in the accompanying form of proxy to vote the
shares represented thereby in accordance with their best judgment and in their
discretion, and authority to do so is included in the proxy.
By Order of the Board of Directors
/s/ SUE D. BIRMAN
Sue D. Birman
Executive Vice President
Secretary and Director
Cookeville, Tennessee
October 31, 1997
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PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE
ANNUAL MEETING OF STOCKHOLDERS
BIRMAN MANAGED CARE, INC.
DECEMBER 1, 1997
Please Detach and Mail in the Envelope Provided
Please mark your
A [X] votes as in this
example
FOR WITHHOLD
all nominees listed at AUTHORITY
right (except as marked to vote for all
to the contrary) nominees at right
1. ELECTION OF [ ] [ ]
DIRECTORS
(for terms as
described in the Proxy Statement)
NOMINEES: David N. Birman, M.D.
Sue D. Birman
John D. Higgins
James J. Rhodes
Diedrich Von Soosten
INSTRUCTION: To withhold authority to vote for an
individual nominee, write the nominee's name in the
space provided below.
- ---------------------------------------------------
FOR AGAINST ABSTAIN
2. RATIFICATION OF ACCOUNTANTS [ ] [ ] [ ]
proposal to ratify the selection of BDO
Seidman L.L.P. as independent auditors of
the Company as described in the Proxy
Statement
3. IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
PERSONS NOMINATED BY MANAGEMENT AS DIRECTORS AND FOR PROPOSAL 2.
Signature of Stockholder
--------------------------- ---------------------------
(Signature if held jointly
Dated
-----------------------
NOTE: Please date and sign exactly as your name appears herein. If shares are
held jointly, each stockholder should sign. Executors, administrators,
trustees, etc. should use full title and, if more than one, all should sign. If
the stockholder is a corporation, please sign full corporate name by an
authorized officer.
<PAGE> 18
BIRMAN MANAGED CARE, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 1, 1997
(THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY)
The undersigned stockholder of Birman Managed Care, Inc. hereby
appoints Sue D. Birman, with full power of substitution, proxy to vote all
shares of stock which the undersigned could vote if personally present at the
Annual Meeting of Stockholders of Birman Managed Care, Inc. to be held at the
Nashville Airport Marriott Hotel, 600 Marriott Drive, Nashville, Tennessee
37214, on December 1, 1997, telephone number 615-889-9300, at 9:00 a.m.
(central standard time), or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
