<PAGE>
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
INFOCURE CORPORATION
- --------------------------------------------------------------------------------
(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 paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
INFOCURE CORPORATION
1765 THE EXCHANGE
SUITE 450
ATLANTA, GEORGIA 30339
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 1998
----------------
TO THE STOCKHOLDERS OF INFOCURE CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of InfoCure
Corporation (the "Company") will be held on Wednesday, June 17, 1998 at 10:00
a.m. local time, at the American Stock Exchange, 86 Trinity Place, New York,
New York 10006, to consider and act upon the following matters:
1. To ratify and approve the issuance of 850,000 shares of the Company's
Convertible Redeemable Preferred Stock, Series A to investors in a
private placement and to the issuance of shares of Common Stock upon
conversion thereof;
2. To elect seven directors to hold office until the 1999 Annual Meeting of
Stockholders;
3. To ratify and approve the amendment of the InfoCure Corporation 1996
Stock Option Plan to increase the number of shares of Common Stock
reserved for issuance under such plan;
4. To ratify and approve the InfoCure Corporation Employee Stock Purchase
Plan;
5. To ratify and approve the Company's Length-of-Service Nonqualified Stock
Option Plan;
6. To ratify and approve the Company's 1997 Directors Stock Option Plan;
7. To ratify and approve the selection by the Board of Directors for the
year ending December 31, 1998 of BDO Seidman, LLP as independent
accountants for the Company; and
8. To transact such other business as may properly come before the meeting
or any adjournment of the meeting.
Stockholders of record at the close of business on April 20, 1998 will be
entitled to notice of and to vote at the meeting or any adjournment thereof.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
/s/ James K. Price
-----------------------------
James K. Price
Executive Vice President and
Secretary
April 30, 1998
Atlanta, Georgia
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE YOUR REPRESENTATION AT THE MEETING. NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES. IN THE EVENT YOU ARE ABLE TO ATTEND THE MEETING,
YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON. PLEASE NOTE,
HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
OWNER A PROXY IN YOUR NAME.
<PAGE>
INFOCURE CORPORATION
1765 THE EXCHANGE
SUITE 450
ATLANTA, GEORGIA 30339
----------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 1998
----------------
GENERAL
This Proxy Statement and the enclosed Proxy are furnished on behalf of the
Board of Directors of InfoCure Corporation, a Georgia corporation (the
"Company") for use at the Annual Meeting of Stockholders to be held on June
17, 1998 at 10:00 a.m. local time (the "Annual Meeting") or at any adjournment
or postponement of that meeting, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting. The Annual Meeting will be held at the
American Stock Exchange, 86 Trinity Place, New York, New York 10006. The
Company intends to mail this Proxy Statement and the accompanying Proxy card
on or about May 11, 1998 to all stockholders entitled to vote at the Annual
Meeting. All proxies will be voted in accordance with the instructions
contained therein, and if no choice is specified, the proxies will be voted in
favor of the proposals set forth in the accompanying Notice of Meeting. Any
proxy may be revoked by a stockholder at any time before it is exercised by
giving written notice to that effect to the Secretary of the Company.
As used in this Proxy Statement, the terms "InfoCure" and the "Company"
refer to InfoCure Corporation and its subsidiaries, unless the context
otherwise requires.
STOCKHOLDERS ENTITLED TO VOTE
The Board of Directors has fixed April 20, 1998 as the record date for
determining stockholders who are entitled to vote at the meeting. At the close
of business on April 20, 1998, there were outstanding and entitled to vote
6,132,414 shares of Common Stock of the Company, par value $.001 per share
(the "Common Stock") and 850,000 shares of Convertible, Redeemable Preferred
Stock, Series A, par value $.001 per share (the "Preferred Stock"). Each
stockholder of record on such date will have one vote for each share of Common
Stock and 1.18 votes for each share of Preferred Stock.
Holders of Common Stock have 86% of the general voting power; holders of
Preferred Stock have the remaining 14% of the general voting power. Holders of
Common Stock and holders of Preferred Stock will vote together on the matters
to be voted upon at the Annual Meeting.
The holders of a majority of the total shares of Common Stock outstanding on
the record date, whether present at the Annual Meeting or in person, or
represented by Proxy, will constitute a quorum for the transaction of business
at the Annual Meeting. The shares held by each stockholder who signs and
returns the enclosed form of Proxy will be counted for the purposes of
determining the presence of a quorum at the Annual Meeting, whether or not the
stockholder abstains on all or any matter to be acted on at the Annual
Meeting. Abstentions and broker non-votes will be counted toward fulfillment
of quorum requirements. A broker non-vote occurs when a nominee holding shares
for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that proposal
and has not received instructions from the beneficial owner.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this Proxy Statement and the
accompanying Proxy card. Copies of solicitation materials will be furnished to
banks, brokerage houses, fiduciaries and custodians holding in their names
shares of Common Stock
<PAGE>
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners.
The Company will, upon written request of any stockholder, furnish without
charge a copy of its Annual Report on Form 10-KSB for the year ended December
31, 1997, as filed with the Securities and Exchange Commission, without
exhibits. Please address all such requests to the Company, Attention of
Richard E. Perlman, Chief Financial Officer, 1765 The Exchange Suite 450
Atlanta, Georgia 30339. Exhibits will be provided upon written request and
payment of an appropriate processing fee.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted by giving written notice of
revocation or a duly executed proxy bearing a later date to the Secretary of
the Company, or by attending the meeting and voting in person. Attendance at
the meeting will not, by itself, revoke a proxy.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
1999 Annual Meeting of Stockholders must be received by the Company no later
than December 30, 1998 in order to be included in the proxy statement and
proxy relating to that annual meeting.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 20, 1998, the beneficial
ownership of the Company's outstanding Common Stock and Preferred Stock of (i)
each person known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock or Preferred Stock, (ii) each executive
officer of the Company since February 1, 1997, (iii) each director of the
Company since February 1, 1997, and (iv) all executive officers and directors
as a group:
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(1)
------------------------- -------------------------
NUMBER OF NUMBER OF
SHARES OF PERCENTAGE SHARES OF PERCENTAGE
NAME AND ADDRESS OF COMMON OF PREFERRED OF
BENEFICIAL OWNERS STOCK CLASS STOCK CLASS
- ------------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Norson's International
LLC(2)................. 544,027 8.9% -- --
William Herbert Hunt
Trust Estate(3)........ 373,231 5.8 268,440 31.6%
James Ventures,
L.P.(4)................ 74,646 1.2 53,688 6.3
Frederick L. Fine(5).... 478,842 7.8 -- --
Richard E. Perlman(6)... 310,294 5.0 -- --
James K. Price(7)....... 474,842 7.7 -- --
Michael E. Warren(8).... 78,114 1.3 -- --
Gary W. Plumer(9)....... 4,474 * -- --
R. Ernest Chastain(10).. 20,433 * -- --
Donald M. Rogers(11).... 81,022 1.3 -- --
James D. Elliott........ 21,886 * -- --
Ronald M. Vagle......... 201,565 3.3 -- --
Raymond H. Welsh........ -- -- -- --
All executive officers
and directors as a
group (10 persons)..... 1,894,858 29.4% -- --
</TABLE>
- --------
* Less than 1% of the outstanding Common Stock
2
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. For purposes of calculating
the percentage beneficially owned, the number of shares deemed
outstanding includes (i) 6,132,414 shares outstanding as of April 20,
1998 and (ii) shares issuable by the Company pursuant to options held by
the respective person or group which may be exercised within 60 days
following the date of this Proxy Statement ("Presently Exercisable
Options"). Presently Exercisable Options are deemed to be outstanding and
to be beneficially owned by the person or group holding such options for
the purpose of computing the percentage ownership of such person or group
but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person or group. Unless otherwise
specified, the mailing address of each beneficial owner is c/o InfoCure
Corporation, 1765 The Exchange, Suite 450, Atlanta, Georgia 30339.
(2) The mailing address of Norson's International, LLC is 1411 Rouse Lane,
Suite 201, Roswell, Georgia 30076.
(3) Common Stock total includes 315,811 shares of Common Stock issuable upon
conversion of 268,440 shares of Preferred Stock at a conversion price of
$8.50 per share. The mailing address of The William Herbert Hunt Trust
Estate is 3900 Thanksgiving Tower, 1601 Elm Street, Dallas, Texas 75201.
(4) Common Stock total includes 63,162 shares of Common Stock issuable upon
conversion of 53,688 shares of Preferred Stock at a conversion price of
$8.50 per share. The mailing address of James Ventures, L.P. is 3555
Timmons Lane, Suite 610, Houston, Texas 77027.
(5) Includes 3,579 shares held by Mr. Fine for the benefit of his children
and 1,193 shares held by a charitable trust over which he has sole voting
and investment control. Also includes 32,148 shares issuable upon the
exercise of Presently Exercisable Options.
(6) Includes (i) 177,146 shares held by Compass Partners, L.L.C., of which
Mr. Perlman holds a majority interest; (ii) 110,000 shares issuable upon
exercise of an outstanding warrant at an exercise price of $5.50 per
share; and (iii) 23,184 shares issuable upon the exercise of Presently
Exercisable Options.
(7) Includes 3,225 shares held by Mr. Price's brothers as to which Mr. Price
maintains voting control. Also includes 28,148 shares issuable upon the
exercise of Presently Exercisable Options.
(8) Includes 29,830 shares issuable upon the exercise of Presently
Exercisable Options.
(9) Includes 4,474 shares issuable upon the exercise of Presently Exercisable
Options.
(10) Includes 20,135 shares issuable upon the exercise of Presently
Exercisable Options.
(11) Includes 36,460 shares held by Mr. Rogers' spouse.
COUNTING OF VOTES
The affirmative vote of the holders of a plurality of the votes cast at the
Annual Meeting is required for the election of directors and for the approval
of each of the other matters which are to be submitted to the stockholders at
the Annual Meeting. ("Plurality" means that more votes must be cast in favor
of the matter than those cast against it). Accordingly, the withholding of
authority by a stockholder (including broker non-votes) will not be counted in
computing a plurality and thus will have no effect on the vote. Shares of
Common Stock or Preferred Stock represented by executed proxies received by
the Company will be counted for purposes of establishing a quorum at the
meeting, regardless of how or whether such shares are voted on any specific
proposal. Each Proxy will be voted in accordance with the stockholder's
directions. Abstentions with respect to any matter to be voted upon at the
Annual Meeting will have the same effect as a vote against these proposals.
When the enclosed Proxy is properly signed and returned, the shares which it
represents will be voted at the Annual Meeting in accordance with the
instructions noted thereon. In the absence of such instructions, the shares
represented by a signed Proxy will be voted in favor of the nominees for
election to the Board of Directors, and in favor of the approval of the
remaining proposals. All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes.
3
<PAGE>
PROPOSAL 1
ISSUANCE OF 850,000 SHARES OF
CONVERTIBLE, REDEEMABLE PREFERRED STOCK, SERIES A
BACKGROUND
A core component of the Company's business strategy is the acquisition of
complementary businesses and assets, principally for cash. Prior to completion
of the private placement (the "Private Placement") of 850,000 shares of
Preferred Stock, the Company utilized cash from the proceeds of its initial
public offering as well as from a $10.0 million acquisition line of credit
with FINOVA Capital Corporation ("FINOVA") in order to complete acquisitions.
In December 1997, the Company's management determined that if the Company
successfully completed all acquisitions that were under negotiation at that
time, it would exhaust its available sources of cash. Additionally, the
Company's Board of Directors believed that it was important to improve the
Company's balance sheet (and, in particular, its current assets and cash) and
to raise additional capital as quickly as possible. The Board of Directors
concluded that a public offering would take too much time to complete, would
involve too high a cost and would involve a significant risk of completion.
Accordingly, the Company's Board of Directors determined to raise additional
cash through a combination of the issuance of the Preferred Stock in a private
placement and through a contemporaneous increase in the borrowing limit on its
credit facility with FINOVA from $10.0 million to $30.0 million. FINOVA
conditioned the increase in the funds available under this credit facility on
the Company's successful completion of the Private Placement.
In February 1998, the Company completed the Private Placement of 850,000
shares of Preferred Stock, resulting in gross proceeds to the Company of $8.5
million and net proceeds of approximately $7.8 million after payment of
selling commissions to the placement agent for the Private Placement and other
expenses of the Private Placement. As additional compensation, the Company
granted to the placement agent a warrant to acquire 100,000 shares of the
Company's Common Stock at an exercise price of $9.00 per share. Following
completion of the Private Placement the Company completed an amendment to the
FINOVA line of credit in February 1998 increasing the Company's borrowing
limit to $30.0 million.
The purchase price for the Preferred Stock ($10.00 per share) and the
initial conversion price of the Preferred Stock ($8.50 per share) were
determined through negotiations between the Company and the placement agent
for the Private Placement and were based upon the fair market value of the
Company's Common Stock as reported by the American Stock Exchange. The closing
price for the Company's Common Stock, as reported, was $8 3/8 on the date when
the terms of the Private Placement were negotiated between the Company and the
placement agent in early December 1997. The Board of Directors concluded that
the initial conversion price of $8.50 per share reflected fair market value in
December 1997 and further concluded that the conversion price reset terms were
fair to the Company and the investors to protect against the risk of price
decline during the one-year period in which the investors would be required
under the terms of the Private Placement to hold the Preferred Stock or the
Common Stock issued upon conversion thereof.
The Board of Directors is authorized by the Company's Certificate of
Incorporation, without any action of the stockholders, to issue one or more
classes and series of preferred stock with respect to which the Board of
Directors may determine voting, conversion, redemption and other rights which
could adversely affect the rights of holders of Common Stock. The rights of
the holders of the Common Stock generally are subject to the prior rights of
any preferred stock issued by the Company with respect to dividends,
liquidation preferences and other matters. Among other things, preferred stock
can be issued by the Company to raise capital or to finance acquisitions. The
issuance of preferred stock under certain circumstances can have the effect of
delaying or preventing a change of control of the Company.
Notwithstanding provisions of the Company's Certificate of Incorporation
permitting the issuance of preferred stock without stockholder approval, under
the American Stock Exchange Guidelines ("AMEX Guidelines"), the Company is
submitting for the ratification and approval of its stockholders at a price
less than fair market value, the issuance of the Preferred Stock and the
Common Stock issuable upon conversion of the Preferred Stock. Under the AMEX
Guidelines, stockholder approval must be obtained, as a prerequisite to list
4
<PAGE>
additional shares, for any shares issued in connection with a transaction
involving the sale or issuance by the Company of Common Stock, or securities
convertible into Common Stock, at a price less than market value, which equals
20% or more of the Company's outstanding Common Stock on the date of issuance.
Under the conditions described below, the American Stock Exchange has notified
the Company that the Preferred Stock may be converted into a number of shares
of Common Stock which exceed 20% of the number of shares of Common Stock
outstanding on the date that the Preferred Stock was issued at a price less
than fair market value. Notwithstanding that the Company disagreed with the
conclusion of the American Stock Exchange that stockholder approval is
required, the Company is seeking stockholder ratification and approval for the
issuance of the Preferred stock in order to satisfy the American Stock
Exchange interpretation of the AMEX Guidelines.
TERMS OF THE CONVERTIBLE REDEEMABLE PREFERRED STOCK, SERIES A
The Preferred Stock issued in connection with the Private Placement has the
following designations, preferences and rights.
Dividends. The Preferred Stock is not currently entitled to any set level of
dividends; however, in the event the Company should pay any dividend or make
any other distribution in respect of its Common Stock, a dividend in a like
amount must be paid in respect of the Preferred Stock (based on the number of
shares of Common Stock into which the Preferred Stock could then be
converted). In addition, in the event any shares of Preferred Stock remain
outstanding after the Mandatory Redemption Date (as hereinafter defined), such
outstanding shares will accrue dividends at an annual rate of 18% from the
Mandatory Redemption Date until the date paid.
Conversion. For a period ending on February 9, 1999 (the "Reset Date"), the
Preferred Stock will be convertible at any time at the election of the holder
into shares of Common Stock at a conversion price of $8.50 per share. On the
Reset Date, the conversion price will be reset to the lesser of (a) $8.50 per
share or (b) the trailing 30-day average closing price of the Common Stock as
of the Reset Date (in the case of conversions after such date), subject to a
minimum price of $6.75 per share provided, however, that, in the event that
the conversion price is required to be reset to a price less than $7.41 per
share (the "Tentative Reset Price") and the offering of the Preferred Stock is
not approved by the Company's stockholders prior to the Reset Date, the
minimum conversion price per share of Preferred Stock will be reset to $7.41
per share and any holders of unconverted shares of Preferred Stock as of the
Reset Date will be entitled to a return of capital equal to the number of
shares of Preferred Stock owned by them multiplied times the positive
difference between $7.41 per share and the Tentative Reset Price (such per
share amount is referred to herein as the "Return Capital Amount"). Any such
return of capital will also result in a reduction in the Preferential Amount
(as hereinafter defined) in respect of liquidating distributions. The American
Stock Exchange has informed the Company that stockholder approval is required
if the conversion price is reset to a price that is less than $7.41 per share
but is not required if the conversion price is reset to a price equal to or
greater than $7.41 per share.
The Preferred Stock will be automatically converted into shares of Common
Stock at the then-applicable conversion price contemporaneously with the
effectiveness of an underwritten public offering of the Company's Common Stock
at a minimum public offering price of $10.00 per share and with minimum net
proceeds to the Company of $20.0 million. The conversion price is will be
reduced to the lowest price received by the Company for certain issuances of
Common Stock below the then-applicable conversion price during the first year
following the closing of the Offering (subject to certain exceptions for
shares issued under employee benefit plans and in connection with bona fide
acquisition transactions), or to a "weighted-average" reduced conversion price
in the case of certain issuances by the Company of Common Stock at prices
lower than the then-applicable conversion price at any time after such first
anniversary. The conversion price is further subject to standard anti-dilution
adjustments in the case of stock dividends, stock splits, reclassifications of
stock and other similar transactions.
Redemption. All unconverted shares of Preferred Stock will be redeemed by
the Company on February 9, 2003 (the "Mandatory Redemption Date") upon 30
days' notice by the Company, at the Preferential Amount; provided, however,
that if prior to February 9, 2001 and subsequent to February 9, 2001, the
Company is not
5
<PAGE>
then a party to a bona fide loan agreement with one or more bank lenders
prohibiting redemption of the Preferred Stock, then the then unconverted
shares of Preferred Stock will be redeemable at the option of the holder upon
30 days' notice by the holder. In addition, upon any change of control of the
Company (measured as a change of control of 50% or more of the shares of
Common Stock held by affiliates of the Company coupled with a change in the
constitution of a majority of the current Board of Directors, within one
year's time), holders of the unconverted shares of Preferred Stock may, at
their election, require the Company to redeem their shares of Preferred Stock
at the Preferential Amount.
Voting Rights. The holders of Preferred Stock are entitled to vote together
as a single class with the holders of Common Stock on all matters submitted to
a vote of stockholders, except to the extent a separate class vote is required
under the Delaware General Corporation Law. The holders of Preferred Stock
have one vote for each share of Common Stock that could then be acquired on
conversion of their Preferred Stock. In addition, the affirmative vote of
holders of at least two-thirds of the outstanding Preferred Stock, voting
separately as a class, is required in order to change any scheduled redemption
dates, the number of shares to be redeemed or the redemption price; or to the
amount or priority of payments to be made to the holders of Preferred Stock
upon liquidation, dissolution or winding-up of the Company; or to change the
conversion price; or to create any class of capital stock having a preference
in liquidation over the Preferred Stock.
Liquidation Preference. Upon any dissolution, liquidation or winding-up of
the Company, before any payments are made to any holders of Common Stock or
any other class or series the Company's capital stock then outstanding, the
holders of Preferred Stock are entitled to receive an amount equal to $10.00
per share of Preferred Stock (less the Return Capital Amount, in the event the
Company returns a portion of capital in respect of the Preferred Stock as a
result of its inability to obtain stockholder approval of the issuance of the
Preferred Stock), together with accumulated but unpaid dividends thereon (the
"Preferential Amount"); or, in the event the holders of Common Stock would be
entitled to a greater payment, the holders of Preferred Stock are entitled to
participate equally with the holders of Common Stock, on an as-converted
basis, in such liquidating distribution. Generally, consolidations, mergers
and reorganizations will be treated as a dissolution and liquidation for the
above purposes.
Other. As is the case with the Common Stock, the Preferred Stock is not
entitled to cumulative voting and has no preemptive rights. There is no
sinking fund in respect of the Preferred Stock.
PROPOSAL
The Company is submitting to its stockholders the approval of the issuance
of the Preferred Stock and the Common Stock issuable upon conversion of the
Preferred Stock in order to satisfy the American Stock Exchange's
interpretation of its AMEX Guidelines. The Company has completed the Private
Placement. A vote in favor of this Proposal 1 will allow the Company to avoid
the obligation to pay any Return Capital Amount if the conversion price is
required to be reset to a price below $7.41 per share (subject to the minimum
reset price of $6.75 per share). A vote against this Proposal 1 will cause the
Company to be required to pay a Return Capital Amount if the conversion price
is required to be reset below $7.41 per share.
The Board of Directors believes that it is in the best interest of the
Company not to be required to pay a Return Capital Amount and therefore
recommends a vote FOR ratification and approval of the issuance of 850,000
shares of Preferred Stock and the Common Stock issuable upon conversion of the
Preferred Stock.
6
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PROPOSAL 2
ELECTION OF DIRECTORS
The Board of Directors consists of seven directors each serving a one-year
term. In accordance with Article 2 of the Company's Bylaws, at each annual
meeting of stockholders the directors will be elected for a one-year term to
succeed the directors whose terms are then expiring. There are no family
relationships between any of the directors or executive officers of the
Company.
Each of the nominees for election to the Board of Directors is currently a
director of the Company. If elected at the Annual Meeting, each of the nominees
would serve until the Annual Meeting held in 1999 and until his successor is
duly elected and qualified, or until such director's earlier death, resignation
or removal.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the two nominees named below. In the event
that either nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as the Board of Directors may select. Each person nominated
for election has agreed to serve if elected, and management has no reason to
believe that either nominee will be unable to serve.
The Board of Directors recommends a vote FOR each named nominee.
NOMINEES TO SERVE UNTIL THE 1999 ANNUAL MEETING
Frederick L. Fine
Mr. Fine, age 39, is a founder of the Company and currently serves as its
President and Chief Executive Officer. Mr. Fine served as president of AMC from
1995 to 1997 and as president of ICS from 1994 to 1997. From 1993 to 1995, Mr.
Fine served as executive vice president of AMC, and from 1985 to 1994 served as
executive vice president of ICS, which he co-founded in 1985. From 1991 to
1993, Mr. Fine served as vice president of Newport Capital, Inc., predecessor
to AMC. Mr. Fine has served as a director of the Company as well as AMC, ICS
and Newport throughout the terms of his employment by each company. From 1983
to 1985, Mr. Fine was with Informatics General Corporation, a supplier of
accounting software, and from 1981 to 1983 was with Moore Business Systems, a
division of Moore Corporation Ltd. and a provider of practice management
systems. Mr. Fine holds a B.S. in Economics from the University of Georgia.
Richard E. Perlman
Mr. Perlman, age 51, has served as the Company's Chairman, Chief Financial
Officer and Treasurer since December 1997. Mr. Perlman is the founder of
Compass Partners, L.L.C. ("Compass"), a merchant banking and financial advisory
firm specializing in corporate restructuring and middle market companies and
has served as its president since its inception in May 1995. Since June 1996,
Compass, of which Mr. Perlman is a majority owner, was engaged by the Company
to assist in the formulation of the Company's business plan and its acquisition
strategy, and to assist in obtaining financing for the Company to implement
them. Mr. Perlman performed the substantial majority of these services. From
1991 to 1995, Mr. Perlman was executive vice president of Matthew Stuart & Co.,
Inc., an investment banking firm. Mr. Perlman received a B.S. in Economics from
The Wharton School of The University of Pennsylvania and a Masters in Business
Administration from the Columbia University Graduate School of Business.
James K. Price
Mr. Price, age 40, is a founder of the Company and has served as its
Executive Vice President since 1996. Mr. Price served as executive vice
president of AMC from 1996 until 1997 and was vice president from 1993 to 1995.
Mr. Price co-founded ICS and has served as its executive vice president since
1994, as vice president from 1987 to 1994 and as president from 1985 to 1987.
In addition, from 1991 to 1993, Mr. Price was a vice president
7
<PAGE>
of Newport. Mr. Price has served as a director of the Company as well as AMC,
ICS and Newport throughout the terms of his employment by each company. From
1983 to 1985, Mr. Price was health care sales manager of Executive Business
Systems, a practice management systems supplier, and from 1981 to 1983 was with
Moore Business Systems. Mr. Price holds a B.A. in Marketing from the University
of Georgia.
Michael E. Warren
Mr. Warren, age 44, has served as Vice President of the Company since
December 1997. Prior to that time he served as the Company's Chief Financial
Officer from 1996 until December 1997. Mr. Warren served as vice president of
operations and as chief financial officer of AMC from 1994 to 1996. From 1992
to 1994, Mr. Warren was director of provider systems at Millennium Healthcare,
a supplier of electronic health care services. From 1986 to 1992, Mr. Warren
was director of the Computer Risk Management Practice in the Southeast of
Arthur Andersen, LLP. From 1983 to 1986, Mr. Warren worked as Manager of
Systems Auditing for NationsBank, and from 1980 to 1983 was an accountant with
Coopers & Lybrand, LLP. Mr. Warren holds a Masters in Business Information
Systems from Georgia State University and a B.A. in Accounting from the
University of Georgia. Mr. Warren is a member of the AICPA and a member of the
Georgia Society of CPAs.
James D. Elliott
Mr. Elliott, age 38, has been the president of GE Integrated Technology
Solutions ("GEI") since March, 1997 and its executive vice president and
general manager since August 1996. Prior to his current employment, Mr. Elliott
co-founded Universal Data Consultants, Inc., a systems integrator, in 1983 and
served as its president from 1983 until it was purchased by an affiliate of GEI
in July 1996. In addition, from 1991 to 1996, Mr. Elliott served as president
of Cablepro, Inc., a computer and telephone company. Mr. Elliott holds a B.S.
in Economics from the University of Georgia.
Ronald M. Vagle
Mr. Vagle, age 54, has served as Chief Information Officer of the Company
since April 1998. From July 1997 to April 1998, he served as the Company's
General Manager, Enterprise Division. Mr. Vagle was one of the original
founders of Rovak, Inc. ("Rovak") and served as its chairman from 1993 to 1997.
From 1985 to 1993 Mr. Vagle was president of Rovak. Mr. Vagle holds a B.A. in
Aeronautical Engineering from the University of Minnesota.
Raymond H. Welsh
Mr. Welsh, age 66, has served as Senior Vice President of PaineWebber
Incorporated since January 1995. From August 1955 to January 1995 Mr. Welsh
served as an investment broker, director, Senior Vice President and partner of
Kidder Peabody & Co. Incorporated. Mr. Welsh received a B.S. in Economics from
the Wharton School of the University of Pennsylvania in 1954.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the year ended December 31, 1997, the Board of Directors of the
Company held 13 meetings, including written actions in lieu of meetings. Each
of the directors attended at least 75% of the aggregate of (i) the total number
of meetings of the Board of Directors and (ii) the total number of meetings
held by all committees of the Board on which he served, in each case during the
periods that he served.
The Company's Board of Directors has established a Compensation Committee and
an Audit Committee. Messrs. Elliott and Welsh currently comprise the members of
the Audit and Compensation Committees of the Board of Directors. The Audit
Committee is responsible for recommending independent auditors, reviewing with
the independent auditors the scope and results of the audit engagement,
monitoring the Company's financial policies and control procedures, and
reviewing and monitoring the provisions of nonaudit services by the Company's
auditors. The Compensation Committee is responsible for reviewing and
recommending salaries, bonuses and other compensation for the Company's
executive officers. The Compensation Committee also is
8
<PAGE>
responsible for administering the Company's stock option plans and for
establishing the terms and conditions of all stock options granted under these
plans.
The Company does not have a standing nominating committee.
DIRECTORS' COMPENSATION
The Company's Board of Directors has adopted the 1997 Directors Stock Option
Plan (the "Directors Plan"), subject to shareholder approval, which provides
for the grant of non-qualified stock options to persons who are not officers or
employees of the Company ("Non-employee Directors"). Effective January 1998,
each Non-employee Director who is first appointed or elected to the Board of
Directors will be granted an option to purchase 10,000 shares of the Company's
Common Stock. Subsequently, Non-employee Directors will be eligible for annual
grants of options to purchase 2,500 shares of Common Stock. The Directors Plan
also allows the Compensation Committee to make extraordinary grants of options
to Non-employee Directors. All options granted under the Directors Plan vest
50% per year of service by the Non-employee Director on the Board of Directors.
No option is transferable by the optionee other than by will or the laws of
descent and distribution, and each option is exercisable during the lifetime of
the optionee, only by the optionee. The exercise price of all options will be
the fair market value of the shares of Common Stock on the date of grant, and
the term of each option may not exceed ten years. The Directors Plan will
continue in effect for a period of ten years unless sooner terminated by the
Board of Directors. There are 100,000 shares of the Company's common stock
reserved for issuance under the Directors Plan. As of the date of this
Memorandum, options to acquire 10,000 shares of Common Stock have been granted
pursuant to the Directors Plan. All options granted under the Directors Plan
are subject to shareholder approval of the plan.
EXECUTIVE OFFICERS
In addition to the individuals who serve on the Company's Board of Directors
who are also executive officers of the Company, the following individuals
presently serve as executive officers of the Company:
Gary W. Plumer
Mr. Plumer, age 40, has served as Vice President--Finance, Assistant
Secretary and Assistant Treasurer of the Company since December 1997. He served
as Controller for the Company from November 1996 until December 1997. Prior to
joining the Company, Mr. Plumer served as Divisional Controller for Turner
Broadcasting System, Inc., a worldwide broadcasting company, from April 1988
until November 1996. Mr. Plumer is a certified public accountant and holds a
B.B.A. in Finance from the University of Georgia.
R. Ernest Chastain
Mr. Chastain, age 48, has served as Vice President--Sales and Marketing of
the Company since December 1996. Prior to joining the Company, Mr. Chastain
served as Vice President--Sales and Marketing of AMC from 1996 to 1997. From
1994 until 1996 he served as vice president of sales of Quality Systems, Inc.,
a health care practice management company; and from 1993 to 1994, Mr. Chastain
served as vice president of sales for ELCOMP, Inc. (up until their merger with
Medic), a health care practice management company; and from 1983 to 1986, Mr.
Chastain served as regional vice president for Contel Business Systems, Inc., a
supplier of practice management systems, which was acquired in 1986 by Versyss,
Inc., another practice management system supplier. From 1986 to 1992, Mr.
Chastain served as vice president of sales management for Versyss, Inc. Mr.
Chastain holds a B.A. in Marketing from the University of Georgia.
Donald M. Rogers
Mr. Rogers, age 39, has served as Vice President of the Company since April
1998. From July 1997 until April 1998, he served as President of the Company's
Medical Systems Division. He was the founder of DR Software and served as its
president since its formation in 1983. From 1983 to 1984, Mr. Rogers was an
account manager at HBO & Company, health care software company, and from 1980
to 1983 was a systems analyst at
9
<PAGE>
NCR Corporation, a computer hardware manufacturer. Mr. Rogers holds a B.S. in
Management from the State University of New York at Buffalo.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information with respect to
the compensation earned for services rendered by the Company's Chief Executive
Officer for the fiscal years ended December 31, 1997 and January 31, 1997 and
the only other most highly compensated executive officer of the Company who
received a combined annual salary and bonus exceeding $100,000 as determined at
December 31, 1997 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ENDING SALARY BONUS OPTION COMPENSATION(1)
- --------------------------- ----------- -------- ----- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Frederick L. Fine.......
President and Chief Ex- 12/31/97 $127,778 -- 129,000 --
ecutive Officer 01/31/97 101,065 -- -- --
James K. Price..........
Executive Vice Presi- 12/31/97 126,036 -- 125,000 --
dent and Secretary 01/31/97 100,292 -- -- --
</TABLE>
- --------
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted because such perquisites and other personal benefits
constituted less than the lesser of $50,000 or 10% of the total annual
salary and bonus for the Named Executive Officer for such year.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted to the
Named Executive Officers during the year ended December 31, 1997:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION
XECUTIVE OFFICERE GRANTED(1) FISCAL YEAR PER SHARE DATE
- ----------------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Frederick L. Fine...........129,000 15.2% $4.13 09/09/07
James K. Price............ 125,000 14.7 4.13 09/09/07
</TABLE>
- --------
(1) These options were granted as an incentive stock options with an exercise
price equal to the fair market value of the Common Stock on the date of
grant as determined by the Board of Directors.
OPTION EXERCISES IN LAST FISCAL AND YEAR-END OPTION VALUES
The following table sets forth the aggregate dollar value of all options
exercised and the total number of unexercised options held, on December 31,
1997, by the Named Executive Officers:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT DECEMBER 31, 1997 DECEMBER 31, 1997(1)
ACQUIRED VALUE --------------------------------- -------------------------
EXECUTIVE OFFICER ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------- ----------- -------- -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frederick L. Fine....... -- -- 32,148 96,852 $168,616 $507,989
James K. Price.......... -- -- 28,148 96,852 147,636 507,989
</TABLE>
- --------
(1) The closing price for the Company's Common Stock as reported by the
American Stock Exchange on December 31, 1997 was $9 3/8. Value is
calculated on the basis of the difference between the option exercise price
and $9 3/8, multiplied by the number of shares of Common Stock underlying
the option.
10
<PAGE>
EMPLOYEE BENEFIT PLANS
Employee Stock Option Plans
In October 1996, American Medcare Corporation ("AMC"), InfoCure's predecessor
company, adopted and issued stock options under AMC's 1996 Stock Option Plan
(the "AMC Plan"). In addition, in December 1996, InfoCure's Board of Directors
and stockholders adopted the InfoCure Corporation 1996 Stock Option Plan (the
"Company's Plan"). In December 1997, the Company's Board of Directors amended
the Company's Plan, subject to shareholder approval, to allow 1,125,000 shares
of Common Stock to be issued under the Company's Plan.
The Company's Plan and the AMC Plan (collectively, the "Stock Option Plans")
each provide for the granting to key employees of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and for the granting of nonstatutory stock options to
employees and consultants. The Stock Option Plans are administered by the board
of directors, or a committee thereof, which determines the term of the option
grant, exercise price, number of shares subject to the option, the vesting
schedule and the form of consideration payable upon its exercise.
Options granted under the Stock Option Plans are not transferable by the
optionee other than by will or the laws of descent and distribution, and each
option is exercisable during the lifetime of the optionee only by the optionee.
The exercise price of all incentive stock options granted under the Stock
Option Plans must be at least equal to the fair market value of the common
stock on the date of grant. With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of the outstanding
common stock of the issuer, the exercise price of any incentive stock option
granted must equal at least 110% of the fair market value on the grant date and
the maximum term of the option must not exceed five years. The term of all
options granted under the Stock Option Plans may not exceed ten years. Stock
options may be granted within ten years of the adoption of the Stock Option
Plan by the board of directors.
All stock options under the Stock Option Plans granted in 1996 and to be
granted to executive officers prospectively, expire seven years after the date
of grant and vest 25% on each anniversary date of an option grant, thus
becoming fully exercisable on the fourth anniversary of its grant. The Board of
Directors determines the fair market value of the common stock on the date of
grant. If the executive officer's employment is terminated for any reason,
except a change in control, prior to the vesting of the option, that portion of
the option which has not vested shall be terminated. Upon a change in control
of the Company, all options become fully vested.
As of April 20, 1998, options to purchase 135,727 shares of Common Stock were
outstanding under the AMC Plan at an equivalent weighted average exercise price
of $4.19 per share and options to purchase 851,000 shares of Common Stock were
outstanding under the Company's Plan at weighted average exercise price of
$4.13 per share. No additional stock options will be granted under the AMC
Plan.
Employee Stock Purchase Plan
The Company's Board of Directors has adopted the InfoCure Corporation
Employee Stock Purchase Plan (the "Stock Purchase Plan"), subject to
shareholder approval, which is intended to qualify under Section 423 of the
Code. The Company implemented the Stock Purchase Plan during the first quarter
of 1998. The Stock Purchase Plan will allow employees of the Company and its
subsidiaries to purchase Common Stock of the Company through payroll deductions
for 85% of the stock's then fair market value. Participation in the Stock
Purchase Plan is voluntary. Employees may become participants in the Stock
Purchase Plan by authorizing payroll deductions of one to fifteen percent of
their base pay or a set dollar amount for each payroll period. At the end of
each three-month purchase period, each participant in the Stock Purchase Plan
will receive an amount of the Company's Common Stock equal to the sum of that
participant's payroll deductions during the calendar quarter multiplied by 85%
of the lower of (i) the fair market value of the Company's stock at the
beginning of the calendar quarter, or (ii) the fair market value of the
Company's stock at the end of the quarter. Stock which
11
<PAGE>
is purchased pursuant to the Stock Purchase Plan is subject to a one-year
holding period, and thus employees who purchase stock under the Stock Purchase
Plan will not receive stock certificates for their shares until the one-year
holding period has terminated. There are currently 100,000 shares reserved for
issuance under the Stock Purchase Plan.
Length-of-Service Stock Option Plan
The Company's Board of Directors has adopted the Length-of-Service
Nonqualified Stock Option Plan, subject to shareholder approval, which provides
for the grant of non-qualified stock options to employees of the Company and
its subsidiaries (the "Length-of-Service Plan"). Employees are eligible for the
grant of options under the Length-of-Service Plan based on the number of years
of service which they have completed with the Company, a subsidiary of the
Company or a business which has been acquired by the Company. Upon completion
of each of their first five years of service, employees are eligible to receive
an option to purchase 50 shares of the Company's Common Stock. Upon completion
of their sixth year of service, employees are eligible to receive an option to
purchase 350 shares of Common Stock. Upon completion of each year of service
after the sixth year of service, employees are eligible to receive an option to
purchase 100 shares of Common Stock. Options granted under the Length-of-
Service Plan will be granted at an exercise price equal to the fair market
value of the underlying Common Stock on the date of grant and will vest as to
100% of the underlying shares on the fourth anniversary of the date of grant.
Employees lose all non-vested options upon leaving the employment of the
Company. Employees who leave the Company may exercise their options, to the
extent vested, within 180 days after leaving the employment of the Company,
except in the case of a termination for cause, in which case the employees lose
all vested options upon termination. Upon change of control of the Company, all
outstanding options under the Length-of-Service Plan fully vest and become
immediately exercisable. As of the date of this Memorandum, 150,000 shares of
the Company's Common Stock are reserved for issuance under the Length-of-
Service Plan and 74,100 shares have been granted at a weighted average exercise
price of $4.13 per share. All options granted under the Length-of-Service Plan
are subject to shareholder approval of the plan.
EMPLOYMENT AGREEMENTS
In December 1997, the Company entered into five-year employment agreements
with Frederick L. Fine and James K. Price. Each agreement provides for an
initial annual base salary of $125,000 and a three-year severance payment equal
to the then-current annual base salary rate upon the termination of employment
by the Company without cause and a voluntary termination in the event of a
change in control of the Company.
Richard E. Perlman entered into a four-year employment agreement with the
Company in December 1997 at an annual base salary of $120,000 and a three-year
severance payment equal to the then current annual base salary rate upon
termination of employment by the Company without cause and a voluntary
termination in the event of a change of control of the Company. Under the
agreement, Mr. Perlman was granted an incentive stock option to acquire 120,000
shares of Common Stock at an exercise price of $4.13 per share.
Michael E. Warren entered into a three-year employment agreement with AMC on
September 23, 1994. Under that agreement, Mr. Warren was granted a stock option
which has been assumed by the Company. This stock option represents the right
to acquire 29,830 shares of the Company's Common Stock at an exercise price of
$1.67 per share at any time prior to September 25, 2000. The stock option was
granted to Mr. Warren under a stock option plan that was not assumed by the
Company.
R. Ernest Chastain, upon his employment with AMC in November 1996, entered
into a two-year employment agreement at an annual base salary of $125,000. At
that time he was granted an incentive stock option to acquire 80,541 shares of
Common Stock at an equivalent exercise price of $4.18 per share. The Company
has assumed the obligations of AMC under this employment agreement.
The Company has entered into a two-year employment agreement with Donald M.
Rogers which provides an annual base salary of $110,000.
12
<PAGE>
Each of the foregoing employment agreements has a covenant that the
executive may not compete with the Company for a period of one year following
termination of employment.
The Company has not adopted a formal bonus plan. However, all executive
officers of the Company are eligible for a bonus depending upon their
individual performance and the performance of the Company to be awarded at the
sole discretion of the Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1996, pursuant to a written agreement, the Company engaged Compass
to render financial advisory services in connection with the Company's
acquisition program. Mr. Perlman, Chairman of the Board, Chief Financial
Officer, Treasurer and Director of the Company, is the president and founder
of Compass and holds a majority equity interest in Compass. Compass received
an initial retainer of $15,000 and a monthly retainer of $5,000 per month
commencing July 1, 1996, and $10,000 per month from October 1, 1996 through
September 1997. As compensation for services, Compass received 28,577 shares
of Common Stock and a warrant exercisable within five years to purchase
111,296 shares of Common Stock at an exercise price of $1.09 per share.
Pursuant to the agreement, Compass also received 55,818 shares of Common Stock
and the right to receive approximately $206,000 in cash upon consummation of
the Company's initial acquisitions. Compass also was entitled to a fee of
$200,000 upon completion of the Company's definitive line of credit agreement
with FINOVA and a fee of $230,000 upon closing of certain subsequent
acquisitions. Of the aggregate obligation of $636,000, the Company paid
Compass approximately $306,000, leaving an unpaid balance of approximately
$330,000.
In September 1997, Compass and the Company reached agreements whereby (i)
the ongoing financial advisory agreement was terminated; (ii) Mr. Perlman
agreed to join the Company as its Chairman of the Board and Chief Financial
Officer; and (iii) the Company's obligation to pay Compass the unpaid balance
of approximately $330,000 was converted into a warrant to acquire 110,000
shares of Common Stock at an exercise price of $5.50 per share. The Company
also agreed to register the Common Stock issuable upon exercise of this
warrant on a registration statement to be filed with the Securities and
Exchange Commission (the "Commission") on Form S-8 or Form S-3.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Exchange Act requires the Company's directors and officers
and persons who own more than 10% of a registered class of the Company's
equity securities, to file initial reports of ownership and reports of changes
in ownership with the Commission. Such persons are required by Commission
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors
of the Company, the Company believes that all Section 16(a) filing
requirements were met during 1997.
PROPOSAL 3
APPROVAL OF AMENDMENT OF THE INFOCURE CORPORATION 1996 STOCK OPTION PLAN
In December 1997, the Company's Board of Directors amended the 1996 Stock
Option Plan to increase the number of shares of Common Stock authorized to be
issued under such plan from 800,000 to 1,125,000. The features of this plan
are discussed elsewhere in this Proxy Statement under the caption "Employee
Benefit Plans--Employee Stock Option Plans."
13
<PAGE>
The stockholders are being requested to approve the amendment approved by
the Board of Directors in December 1997 to the Company's Plan to increase the
number of shares reserved for issuance thereunder from 800,000 shares to
125,000 shares, of which options to purchase approximately 726,000 shares
would be available for future grants under the Company's Plan. The amendment
to increase the number of shares reserved under the Company's Plan is proposed
in order to give the Board of Directors greater flexibility to grant stock
options and stock purchase rights. The Company believes that granting stock
options motivates high levels of performance and provides an effective means
of recognizing employee contributions to the success of the Company. The
Company believes that this policy is of great value in recruiting and
retaining highly qualified technical and other key personnel who are in great
demand as well as rewarding incenting current employees. The Board of
Directors believes that the ability to grant options and stock purchase rights
will be important to the future success of the Company by allowing it to
accomplish these objectives.
The Board of Directors recommends a vote FOR ratification and approval of
the amendment of the Company's 1996 Stock Option Plan.
PROPOSAL 4
APPROVAL OF THE INFOCURE CORPORATION EMPLOYEE STOCK PURCHASE PLAN
In December 1997, the Company's Board of Directors adopted the InfoCure
Corporation Stock Purchase Plan to allow the Company's employees to purchase
shares of the Company's Common Stock. The Company believes that allowing
employees to purchase shares of the Company's Common Stock through the Stock
Purchase Plan motivates high levels of performance and provides an effective
means of encouraging employee commitment to the success of the Company. The
Company believes that this policy is of great value in recruiting and
retaining new employees, aligning employees' interests with those of the
Company's stockholders and allowing existing employees to participate in the
success of the Company. The Board of Directors believes that the ability to
grant participation in the Stock Purchase Plan will be important to the future
success of the Company. The essential features of this plan are provided
elsewhere in this Proxy Statement under the caption "Employee Benefit Plans--
Employee Stock Purchase Plan."
The Board of Directors recommends a vote FOR ratification and approval of
the InfoCure Corporation Stock Purchase Plan.
PROPOSAL 5
APPROVAL OF THE LENGTH-OF-SERVICE NONQUALIFIED STOCK OPTION PLAN
In December 1997, the Company's Board of Directors adopted the Length-of-
Service Nonqualified Stock Option Plan to allow the Company to reward
employees for years of service to the Company and provide an incentive for
employees to remain with the Company. The Board of Directors believes that the
Length-of-Service Plan will be effective tool in retaining qualified personnel
in what the Board of Directors believes is a highly competitive market. The
essential features of this plan are provided elsewhere in this Proxy Statement
under the caption "Employee Benefit Plans--Length-of-Service Stock Option
Plan."
The Board of Directors recommends a vote FOR ratification and approval of
the Length-of-Service Stock Option Plan.
PROPOSAL 6
APPROVAL OF THE 1997 DIRECTORS STOCK OPTION PLAN
In December 1997, the Company's Board of Directors adopted the 1997
Directors Stock Option Plan to allow the Company to compensate its directors
for their service to the Company. The Board of Directors believes
14
<PAGE>
that the Directors Plan will be of great value in attracting and retaining
highly competent directors. The essential features of this plan are provided
elsewhere in this Proxy Statement under the caption "Directors' Compensation."
The Board of Directors recommends a vote FOR ratification and approval of the
1997 Directors Stock Option Plan.
PROPOSAL 7
SELECTION OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of Directors has
selected, for the year ending December 31, 1998, the firm of BDO Seidman, LLP
as independent accountants for the Company. If the stockholders do not ratify
the selection of BDO Seidman, LLP, the Board of Directors will reconsider the
matter. Representatives of BDO Seidman, LLP are expected to be present at the
Annual Meeting of Stockholders. They will have an opportunity to make a
statement if they desire to do so, and will also be available to respond to
appropriate questions from stockholders.
The Board of Directors recommends a vote FOR ratification and approval of BDO
Seidman, LLP as independent accountants for the Company.
OTHER MATTERS
The Board of Directors does not know of any matters which may come before the
Company's stockholders at the Annual Meeting other than those mentioned in the
Notice of Annual Meeting of Stockholders and referred to in this Proxy
Statement. However, if any other matters are properly presented to the meeting,
it is the intention of the persons named in the accompanying proxy to vote, or
otherwise act, in accordance with their judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frederick L. Fine
Frederick L. Fine
President and Chief Executive
Officer
April 30, 1998
15
<PAGE>
INFOCURE CORPORATION - ANNUAL MEETING
Proxy solicited on behalf of the Board of Directors
P The undersigned hereby appoints Frederick L. Fine and James K. Price, and
each of them, with power of substitution, proxies to represent and to vote
R all shares of Common Stock or Preferred Stock of Infocure Corporation,
which the undersigned is entitled to vote, at the Annual Meeting of
O Stockholders to be held in New York, New York on Wednesday, June 17, 1998,
at 10 A.M., EDT, and at any and all adjournments thereof, and hereby
X revokes any prior proxies given with respect to such stock, and the
undersigned authorizes the voting of such stock as follows on the reverse
Y side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-------------
|SEE REVERSE|
| SIDE |
-------------
<PAGE>
[X] Please mark
your votes
as this example
FOR AGAINST ABSTAIN
1. Approval of Issuance of 850,000 [ ] [ ] [ ]
Shares of Convertible, Redeemable
Preferred Stock, Series A
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1, "FOR" THE NOMINEES
SET FORTH BELOW AND "FOR" EACH OF PROPOSALS 2, 3, 4, 5, 6 AND 7 BELOW.
2. Election of Directors
FOR the nominees listed below (except as indicated to the contrary below):
Frederick L. Fine Michael E. Warren Ronald M. Vagle
Richard E. Perlman James D. Elliott Raymond H. Welsh
James K. Price
WITHHOLD AUTHORITY to vote for the following nominee(s):
________________________________________________________
FOR AGAINST ABSTAIN
3. Approval of Amendment of the [ ] [ ] [ ]
InfoCure Corporation 1996 Stock
Option Plan
FOR AGAINST ABSTAIN
4. Approval of the InfoCure [ ] [ ] [ ]
Corporation Employee Stock
Purchase Plan
FOR AGAINST ABSTAIN
5. Approval of the Length-of-Service [ ] [ ] [ ]
Nonqualified Stock Option Plan
FOR AGAINST ABSTAIN
6. Approval of the 1997 Directors [ ] [ ] [ ]
Stock Option Plan
FOR AGAINST ABSTAIN
7. Approval of Independent Accountants [ ] [ ] [ ]
I plan to attend the meeting [ ] I do not plan to attend the meeting [ ]
Change of Address/comments on reverse side [ ]
SIGNATURE(S)________________________________________ DATE ______________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
