<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
American Physician Partners, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
(5) Total fee paid:
- -------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- -------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------------
(3) Filing Party:
- -------------------------------------------------------------------------------
(4) Date Filed:
- -------------------------------------------------------------------------------
<PAGE> 2
AMERICAN PHYSICIAN PARTNERS, INC.
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of American Physician Partners, Inc. on Wednesday, May 20, 1998, at
10:00 a.m., local time. The meeting will be held in Conference Room A, 29th
Floor, at 901 Main Street, Suite 2900, Dallas, Texas 75202.
At the meeting, you will be asked to consider and elect seven directors
to serve until the 1999 Annual Meeting of Stockholders. Your Board of Directors
has unanimously nominated these persons for election as directors. You are also
being asked to ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for fiscal year 1998. Information about the
business of the meeting is set forth in the accompanying proxy statement, which
you are urged to read carefully. During the meeting, I will review with you the
affairs and progress of the Company during 1997 and the first quarter of 1998.
Officers of the Company will be present to respond to questions from
stockholders.
The Board of Directors appreciates and encourages stockholder
participation in the Company's affairs. Whether or not you plan to attend the
meeting, please sign, date and return the enclosed proxy promptly in the
envelope provided. Your shares will then be represented at the meeting. If you
attend the meeting, you may, at your discretion, withdraw the proxy and vote in
person.
On behalf of the Board of Directors, thank you for your cooperation and
continued support.
Sincerely,
/s/ LAWRENCE R. MUROFF, M.D.
Lawrence R. Muroff, M.D.
Chairman of the Board and
Senior Vice President of Physician Affairs
April 16, 1998
<PAGE> 3
AMERICAN PHYSICIAN PARTNERS, INC.
2301 NationsBank Plaza
901 Main Street
Dallas, Texas 75202
Telephone (214) 761-3100
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
The Annual Meeting of Stockholders of American Physician Partners,
Inc., a Delaware corporation (the "Company"), will be held in Conference Room A,
29th Floor, at 901 Main Street, Suite 2900, Dallas, Texas 75202, on May 20,
1998, at 10:00 a.m., Dallas, Texas time, for the following purposes:
(1) To elect seven persons to serve as directors until the 1999 Annual
Meeting of Stockholders and until their successors are duly elected and
qualified;
(2) To ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for fiscal year 1998; and
(3) To transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 8,
1998, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting or any adjournment(s) thereof. Only
stockholders of record at the close of business on April 8, 1998 are entitled to
notice of, and to vote at, such meeting. A complete list of stockholders
entitled to vote at the meeting will be available for examination at 2301
NationsBank Plaza, 901 Main Street, Dallas, Texas 75202, for ten days prior to
and during the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE
ENCOURAGED TO FILL OUT, SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
PROXIES FORWARDED BY OR FOR BROKERS OR FIDUCIARIES SHOULD BE RETURNED AS
REQUESTED BY THEM.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ PAUL M. JOLAS
Paul M. Jolas
General Counsel, Senior Vice President and
Secretary
Dallas, Texas
April 16, 1998
<PAGE> 4
AMERICAN PHYSICIAN PARTNERS, INC.
2301 NationsBank Plaza
901 Main Street
Dallas, Texas 75202
Telephone (214) 761-3100
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of American Physician Partners, Inc. (the
"Company") for use at the Annual Meeting of Stockholders of the Company to be
held on May 20, 1998 (the "Annual Meeting") and at any and all adjournments
thereof. The approximate date on which this Proxy Statement and accompanying
proxy card are first being sent or given to stockholders is April 16, 1998.
Shares represented by each proxy, if properly executed and returned to
the Company prior to the Annual Meeting, will be voted as directed, but if not
otherwise specified, will be voted for the election of the seven directors and
to ratify the appointment of Arthur Andersen LLP as independent public
accountants, all as recommended by the Board of Directors. A stockholder
executing the proxy may revoke it at any time before it is voted by giving
written notice to the Secretary of the Company, by subsequently executing and
delivering a proxy or by voting in person at the Annual Meeting (although
attending the Annual Meeting without executing a ballot or executing a
subsequent proxy will not constitute revocation of a proxy).
OUTSTANDING VOTING SECURITIES OF THE COMPANY
On April 8, 1998, the record date for determining stockholders entitled
to vote at the Annual Meeting, there were outstanding 17,973,268 shares of
Common Stock, par value $.0001 per share ("Common Stock"). Each share of Common
Stock is entitled to one vote for each director to be elected and upon all other
matters to be brought to a vote by the stockholders at the Annual Meeting. The
affirmative vote of a plurality of the shares of Common Stock present or
represented at the Annual Meeting is required to elect the directors, and the
affirmative vote of a majority of the shares of Common Stock present or
represented at the Annual Meeting is required to ratify the appointment of
Arthur Andersen LLP.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on the proposal to ratify the
appointment of the independent public accountants and will be counted as present
for such purpose, but will have the effect of a negative vote on that proposal
because that proposal requires the affirmative vote of holders of a majority of
shares present in person or by proxy and entitled to vote. Brokers who hold
shares in street name for customers may vote on certain items when they have not
received instructions from beneficial owners. Brokers that do not receive
instruction may vote on the election of directors and the proposal to ratify the
appointment of the independent public accountants. Under applicable Delaware
law, a broker non-vote will have no effect on the outcome of the election of
directors or the proposal to ratify the appointment of the auditors.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 8, 1998 certain information
with regard to the beneficial ownership of the Common Stock by (i) all persons
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director and nominee for director of the
Company, (iii) each executive officer of the Company, and (iv) all directors and
executive officers of the Company as a group. Unless otherwise indicated, all
shares shown in the table below are held with sole voting and investment power
by the person or entity indicated.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OF OUTSTANDING
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
NAME OWNED (1) OWNED (2)
- ---- ------------- --------------
<S> <C> <C>
Gregory L. Solomon (3) (4).......................................... 188,753 1.0%
Lawrence R. Muroff, M.D. (3) (5).................................... 140,463 *
Mark S. Martin (3) (6).............................................. 128,568 *
Sami S. Abbasi (3) (7).............................................. 130,392 *
Paul M. Jolas (3) (8)............................................... 101,416 *
Derace L. Schaffer, M.D. (3) (9).................................... 646,475 3.6
John Pappajohn (3) (10)............................................. 557,291 3.1
Less T. Chafen, M.D. (3) (11)....................................... 37,326 *
John W. Colloton (3)................................................ -- *
Michael L. Sherman, M.D. (3) (12)................................... 100,473 *
All directors and executive officers as a group (10 persons) (13)... 2,031,157 10.9%
</TABLE>
- ----------
* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power
with respect to securities. Shares of Common Stock issuable upon the
exercise or conversion of stock options or other securities currently
exercisable or convertible, or exercisable or convertible within 60 days,
are deemed outstanding and to be beneficially owned by the person holding
such option or security for purposes of computing such person's percentage
ownership, but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. Except for shares held jointly
with a person's spouse or subject to applicable community property laws,
or as indicated in the footnotes to this table, each stockholder
identified in the table posses sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
stockholder.
(2) Applicable percentage of ownership is based on 17,973,268 shares of Common
Stock outstanding.
(3) The address of Messrs. Solomon, Martin, Abbasi, Jolas, Pappajohn and
Colloton and Drs. Muroff, Schaffer, Chafen and Sherman is c/o American
Physician Partners, Inc., 2301 NationsBank Plaza, 901 Main Street, Dallas,
Texas 75202.
(4) Includes 182,920 shares of Common Stock issuable upon exercise of options
exercisable within 60 days.
(5) Includes 19,630 shares of Common Stock issuable upon exercise of options
exercisable within 60 days.
(6) Includes 128,568 shares of Common Stock issuable upon exercise of options
exercisable within 60 days.
(7) Includes 130,392 shares of Common Stock issuable upon exercise of options
exercisable within 60 days.
4
<PAGE> 6
(8) Includes 99,416 shares of Common Stock issuable upon exercise of options
exercisable within 60 days.
(9) Includes exercisable options to purchase 20,833 shares of Common Stock in
connection with service as a director of the Company exercisable within 60
days. Also includes 109,965 shares of Common Stock received in connection
with the acquisition of the assets of, and affiliation with, The Ide
Group, P.C.
(10) Includes exercisable options to purchase 20,833 shares of Common Stock in
connection with service as a director of the Company exercisable within 60
days. Also includes 100,000 shares held by Halkis Ltd., a sole
proprietorship owned by Mr. Pappajohn, 75,000 owned by Thebes Ltd., a sole
proprietorship owned by Mr. Pappajohn's spouse, Mary Pappajohn, and 75,000
shares owned directly by Mary Pappajohn. Mr. Pappajohn disclaims
beneficial ownership of the shares owned by Thebes Ltd. and by Mary
Pappajohn.
(11) Includes 37,326 shares of Common Stock received in connection with the
acquisition of the assets of, and affiliation with, Pacific Imaging
Consultants.
(12) Includes exercisable options to purchase 25,000 shares of Common Stock in
connection with service as a consultant to the Company. Also includes
75,473 shares of Common Stock received in connection with the acquisition
of the assets of, and affiliation with, Advanced Radiology, P.A.
(13) Includes 627,592 shares of Common Stock issuable upon exercise of options
exercisable within 60 days.
In connection with the Company's acquisition of the non-medical assets of
Community Radiology Associates, Inc. ("CRA"), the Company issued 254,754 shares
of Common Stock to CRA in January 1998. The Company is obligated to issue an
additional 764,264 shares of Common Stock to CRA during 1998 and 1999.
PROPOSAL I: ELECTION OF DIRECTORS
It is intended that the names of the nominees listed below will be
placed in nomination and that the persons named in the proxy will vote for their
election. All nominees listed below are currently members of the Board of
Directors. Each nominee has consented to being named in this Proxy Statement and
to serve if elected. If any nominee becomes unavailable for any reason, the
shares represented by the proxies will be voted for such person, if any, as may
be designated by the Board of Directors. However, management has no reason to
believe that any nominee will be unavailable.
NOMINEES
TERM TO EXPIRE IN 1999
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION
---- --- ----------------
<S> <C> <C>
Less T. Chafen, M.D....................... 56 Director
John W. Colloton.......................... 67 Director
Lawrence R. Muroff, M.D................... 55 Chairman of the Board of Directors and Senior Vice
President of Physician Affairs
John Pappajohn............................ 69 Director
Derace L. Schaffer, M.D................... 50 Director
Michael L. Sherman, M.D................... 55 Director and Consultant
Gregory L. Solomon........................ 53 President, Chief Executive Officer and Director
</TABLE>
5
<PAGE> 7
Set forth below is a description of the background of each of the
directors of the Company.
Less T. Chafen, M.D. has been a director of the Company since the
consummation of the IPO. Since 1978, Dr. Chafen has served as the Chairman of
the Board and currently serves as President of Pacific Imaging Consultants, a
Medical Group, Inc., one of the founding affiliated practices. Dr. Chafen
received his M.D. from Loma Linda University and his B.A. in zoology and
chemistry from Columbia Union College.
John W. Colloton has been a director of the Company since June 1997.
Mr. Colloton served as the director of the University of Iowa Hospitals and
Clinics from 1971 to 1993, and since 1993, has been Vice President for Statewide
Health Services at the University of Iowa. He also serves as a director of the
following companies: Baxter International, Inc.; MidAmerican Energy, Inc.;
Wellmark, Inc. (Blue Cross and Blue Shield of Iowa and South Dakota); OncorMed,
Inc.; and Iowa State Bank and Trust Company. Mr. Colloton is also a trustee of
the University of Pennsylvania Medical Center. Mr. Colloton, who earned his M.A.
in Hospital and Health Administration from the University of Iowa, has been
elected to the Institute of Medicine of the National Academy of Sciences and has
received Distinguished Service Awards from both the American Hospital
Association and the Association of American Medical Colleges.
Lawrence R. Muroff, M.D. has served as Chairman of the Board of
Directors and Senior Vice President of Physician Affairs of the Company since
its inception. Dr. Muroff also serves as the chairman of the Physician Advisory
Board. Dr. Muroff has served as President of Educational Symposia, Inc., an
educational company which provides qualified teaching credits to radiologists
and certain referring physicians, since January 1975. He has also served as
President of Imaging Consultants, Inc., a company which provides consulting
services to radiology groups, hospital corporations and other entities involved
in diagnostic imaging, since May 1994. Dr. Muroff holds appointments as Clinical
Professor of Radiology at the University of South Florida, College of Medicine
(from 1982 to the present); the University of Florida, College of Medicine (from
1988 to the present); and the H. Lee Moffitt Cancer Center & Research Institute
(from 1994 to the present). From 1974 through 1994, Dr. Muroff was a partner in
Sheer, Ahearn & Associates, a radiology group based in Florida. Dr. Muroff
received his M.D. from Harvard Medical School; his B.M.Sc. in basic medical
science from Dartmouth Medical School; and his A.B. in liberal arts from
Dartmouth College.
John Pappajohn has been a director of the Company since its inception.
Since 1969, Mr. Pappajohn has been the President and principal stockholder of
Equity Dynamics, Inc., a financial consulting firm, and the sole owner of
Pappajohn Capital Resources, a venture capital firm, both located in Des Moines,
Iowa. He also serves as a director of the following public companies: Core,
Inc.; OncorMed, Inc.; The Care Group, Inc.; PACE HealthManagement Systems, Inc.;
Patient InfoSystems, Inc.; and HealthDesk Corporation. Mr. Pappajohn received
his Bachelors degree in business from the University of Iowa.
Derace L. Schaffer, M.D. has been a director of the Company since its
inception. Dr. Schaffer is President of The Ide Group, P.C., one of the founding
affiliated practices, as well as the Lan Group, a venture capital firm. He also
serves as a director of the following public companies: The Care Group, Inc.,
Oncor, Inc., and Patient InfoSystems, Inc. He is also a director of several
private companies, including Logisticare, Inc., Medical Records Corporation,
Analytika, Inc. and NeuralTech, Inc. Dr. Schaffer is a board certified
radiologist. He received his postgraduate radiology training at the Harvard
Medical School and Massachusetts General Hospital, where he served as Chief
Resident. Dr. Schaffer is a member of Alpha Omega Alpha, the national medical
honor society, and is Clinical Professor of Radiology at the University of
Rochester School of Medicine.
Michael L. Sherman, M.D. has been a director of the Company since the
consummation of the IPO. Since 1995, Dr. Sherman has served as the President of
Advanced Radiology, P.A., one of the Founding Affiliated Practices. From 1985 to
1995, Dr. Sherman served as the Managing Partner of Drs. Copeland, Hyman &
Shackman. Dr. Sherman received his M.D. from, and served his radiology residency
at, the University of Maryland Medical School and his A.B. in history and
pre-medicine from Duke University. The Company has agreed to nominate Dr.
Sherman at the next Annual Meeting of Stockholders.
6
<PAGE> 8
Gregory L. Solomon has served as President, Chief Executive Officer and
a director of the Company since its inception. From April 1995 through September
1995, Mr. Solomon served as Chairman of the Board of Directors and Chief
Executive Officer of Physicians Resource Group, Inc., a publicly-traded
physician practice management company which provides management and
administrative services to ophthalmic and optometric practices. Physicians
Resource Group, Inc. became a public company in June 1995 and is listed on the
New York Stock Exchange. From December 1994 through April 1995, Mr. Solomon
served as a consultant to Physicians Resource Group, Inc. From February 1991
through December 1994, Mr. Solomon served as Chairman of the Board of Directors
and Chief Executive Officer of Associated Optical, Inc., a company that provided
optical laboratory services and distributed contact lenses to private
practitioners, retailers and third-party providers of eye care. From March 1983
through February 1991, he served as President, Chief Executive Officer and a
director of Allco Chemical Corporation, a manufacturer of specialty chemicals
serving the electronic and aerospace industries. Mr. Solomon received his M.B.A.
in finance from Indiana University and his B.S. in economics from Xavier
University.
The affirmative vote of a plurality of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting is required to
elect the nominees for director named above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR NAMED ABOVE.
MEETINGS OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board
of Directors. The Board meets to review significant developments affecting the
Company and to act on matters requiring Board approval. It also holds special
meetings when an important matter requires Board action between scheduled
meetings. The Board of Directors met two times during fiscal year 1997. During
fiscal year 1997, each member of the Board participated in at least 75% of all
Board and applicable committee meetings held during the period.
The Board of Directors has established Acquisition, Audit, Compensation
and Stock Plan Administration and Executive Committees to devote attention to
specific subjects and to assist it in the discharge of its responsibilities. The
functions of those committees, their current members and the number of meetings
held during fiscal year 1997 are described below. The Board of Directors does
not have a standing nominating committee. Prior to the Company's initial public
offering (the "IPO") in November 1997, the Company did not conduct any
significant operations. As a result, there were no committees of the Board and
the Board performed all of the functions.
Acquisition Committee. The Board of Directors has a standing
Acquisition Committee which evaluates acquisition proposals regarding radiology
practices, management service organizations, imaging centers and related
businesses. The members of the Acquisition Committee are Messrs. Pappajohn and
Solomon and Drs. Muroff and Sherman. The Acquisition Committee met one time
during fiscal year 1997.
Audit Committee. The Board of Directors has a standing Audit Committee
which provides the opportunity for direct communications between the independent
public accountants and the Board. The Audit Committee meets with the certified
public accountants periodically to review their effectiveness during the annual
audit program and to discuss the Company's internal control policies and
procedures. The members of the Audit Committee are Messrs. Colloton and
Pappajohn and Dr. Chafen. The Audit Committee did not meet during fiscal year
1997.
Compensation and Stock Plan Administration Committee. The Board of
Directors also has a standing Compensation and Stock Plan Administration
Committee (the "Compensation Committee") that provides recommendations to the
Board of Directors regarding salaries and other compensation of executive
officers of the Company. The members of the Compensation Committee are Mr.
Colloton and Drs. Schaffer and Sherman. The Compensation Committee met one time
during fiscal year 1997.
7
<PAGE> 9
Executive Committee. The Executive Committee exercises all of the
powers of the Board of Directors between meetings of the Board of Directors,
except such powers as are reserved to the Board of Directors by law. The members
of the Executive Committee are Mr. Solomon and Drs. Muroff and Schaffer. The
Executive Committee did not meet during fiscal year 1997.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is information with respect to each executive officer
of the Company including their respective ages as of April 10, 1998 and the
positions held with the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------- --- --------------------------------------
<S> <C> <C>
Gregory L. Solomon........... 53 President, Chief Executive Officer and
Director
Lawrence R. Muroff, M.D. .... 55 Chairman of the Board of Directors and
Senior Vice President of Physician
Affairs
Mark S. Martin............... 38 Senior Vice President and Chief
Operating Officer
Sami S. Abbasi............... 32 Senior Vice President and Chief
Financial Officer
Paul M. Jolas................ 33 Senior Vice President, General Counsel
and Secretary
</TABLE>
Officers serve pursuant to employment agreements or a consulting
agreement. Set forth below is biographical information regarding each executive
officer who is not a nominee for election as a director.
Mark S. Martin has served as Chief Operating Officer and Senior Vice
President of the Company since June 1996. From January 1993 through June 1996,
Mr. Martin served as Executive Vice President of Practice Management Development
and Support for Medaphis Physician Services Corporation, a subsidiary of
Medaphis Corporation, a publicly-traded company which provides business and
information services to physicians, physician group practices and hospitals.
From October 1987 through December 1992, he served as Vice President of
Financial Services for CompMed, Inc., a company which provided comprehensive
management and administrative services to hospital-based physicians and
physician groups, with a primary emphasis on radiology. From 1982 through 1987,
Mr. Martin was employed by KPMG Peat Marwick as a tax manager. Mr. Martin was
licensed as a Certified Public Accountant in 1982. He received his B.A. in
accounting from Capital University.
Sami S. Abbasi has served as Chief Financial Officer and Senior Vice
President of the Company since August 1996. From January 1995 through July 1996,
Mr. Abbasi served as Vice President in the Health Care Group of Robertson
Stephens & Company. His responsibilities included investment banking business
development and transaction execution with emerging growth publicly-held and
privately-held companies in the health care industry, with specific emphasis on
physician practice management companies. From 1988 through January 1995, he held
various positions with Citicorp Securities, Inc., including Vice President and
Senior Analyst -- Health Care Group. Mr. Abbasi received his M.B.A. from the
University of Rochester and his B.A. in economics from the University of
Pennsylvania.
Paul M. Jolas has served as General Counsel and Senior Vice President
of the Company since August 1996 and as Secretary of the Company since October
1996. From September 1989 through July 1996, Mr. Jolas was an attorney with the
law firm of Haynes and Boone, LLP in Dallas, Texas, where he practiced in the
corporate finance section and was responsible for a broad range of corporate and
securities transactions, including numerous initial and secondary public
offerings of equity and debt securities, mergers and acquisitions and public
company reporting requirements. Mr. Jolas received his J.D. from Duke University
School of Law and his B.A. in economics from Northwestern University.
8
<PAGE> 10
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Act"), requires the Company's directors, executive officers and beneficial
owners of more than 10% of the Common Stock to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Based solely upon its review of the copies of such forms received by it
and its knowledge that no Form 5s were required from reporting persons, the
Company believes that all such reports were submitted on a timely basis during
fiscal year 1997.
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for fiscal
years 1996 and 1997 with respect to those persons who were, during fiscal year
1997, (i) the Chief Executive Officer and (ii) the other four executive officers
of the Company (collectively, with the Chief Executive Officer, the "Named
Executive Officers"). Since the Company was not formed until April 30, 1996, no
information is available for fiscal year 1995 and the information for 1996 is
from inception (April 30, 1996) to December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------- SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- ------------------ ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gregory L. Solomon.............. 1997 $192,917 $131,500 -- 125,000 $5,841 (2)
President and Chief 1996 142,500 -- -- 250,000 (1) 4,518 (2)
Executive Officer
Lawrence R. Muroff, M.D........ 1997 91,667 55,000 -- 57,500 --
Chairman of the Board of 1996 75,000 -- -- 230,000 (1) --
Directors and Senior Vice
President of Physician Affairs
Mark S. Martin................. 1997 162,500 111,250 -- 90,000 1,404 (2)
Senior Vice President and 1996 84,529 -- -- 180,000 (1) 25,274 (3)
Chief Operating Officer
Sami S. Abbasi................. 1997 162,500 111,250 -- 90,000 4,244 (2)
Senior Vice President and 1996 66,667 -- -- 180,000 (1) 5,619 (4)
Chief Financial Officer
Paul M. Jolas.................. 1997 140,833 80,500 -- 70,000 1,806 (2)
Senior Vice President and 1996 58,333 -- -- 140,000 (1) 945 (2)
General Counsel
</TABLE>
- ----------
(1) 25% of the options granted in 1996 were cancelled in connection with the
IPO. Upon completion of the IPO, the Company granted to each such Named
Executive Officer options to purchase the same number of shares of Common
Stock and with the same vesting period as the options that were cancelled
and with an exercise price equal to the IPO price.
(2) Represents amount of health insurance premiums reimbursed by the Company.
(3) Represents amount of health insurance premiums and $24,399 in relocation
expenses reimbursed by the Company.
(4) Represents amount of health insurance premiums and $4,103 in relocation
expenses reimbursed by the Company.
9
<PAGE> 11
Stock Options
The following table sets forth certain information concerning options
granted in fiscal year 1997 to the Company's Named Executive Officers. The
Company had outstanding 1,590,500 options for the purchase of Common Stock as of
December 31, 1997. The Company has no outstanding stock appreciation rights and
granted no stock appreciation rights during fiscal year 1997.
OPTION GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENT OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS GRANTED EXERCISE OR PRICE APPRECIATION FOR
OPTIONS TO EMPLOYEES BASE PRICE OPTION TERM (3)
NAME GRANTED (1) IN FISCAL YEAR ($/SH) (2) EXPIRATION DATE 5% ($) 10% ($)
---- ----------- -------------- ---------- --------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Gregory L. Solomon............... 62,500 (1) 9.4% $12.00 04/30/06 $385,456 $ 936,161
62,500 9.4 12.00 11/25/07 471,671 1,195,307
------- ----- ------- ---------
125,000 18.8 857,127 2,131,468
Lawrence R. Muroff, M.D.......... 57,500 (1) 8.7 12.00 04/30/06 354,620 861,268
Mark S. Martin................... 45,000 (1) 6.8 12.00 04/30/06 278,858 677,895
45,000 6.8 12.00 11/25/07 339,603 860,621
------- ----- ------- ---------
90,000 13.6 618,461 1,538,516
Sami S. Abbasi................... 45,000 (1) 6.8 12.00 07/31/06 287,561 703,311
45,000 6.8 12.00 11/25/07 339,603 860,621
------- ----- ------- ---------
90,000 13.6 627,164 1,563,932
Paul M. Jolas.................... 35,000 (1) 5.3 12.00 07/31/06 223,659 547,020
35,000 5.3 12.00 11/25/07 264,136 669,372
------- ----- ------- ---------
70,000 10.6 487,795 1,216,392
</TABLE>
- ----------
(1) Represents regrants of certain options that were granted during 1996 with
an exercise price of $0.125 per share that were cancelled at the time of
the IPO. Upon completion of the IPO, the Company granted to each such
Named Executive Officer options to purchase the same number of shares of
Common Stock with the same vesting period as the options that were
cancelled and with an exercise price equal to the IPO price.
(2) The option exercise price may be paid in shares of Common Stock owned by
the Named Executive Officer, in cash, or in any other form of valid
consideration as determined by the Compensation Committee in its
discretion.
(3) The dollar amounts in these columns represent the potential realizable
value that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming that the market price of
Common Stock appreciates in value from the date of grant at assumed annual
rates of 5% and 10%. These assumed rates of appreciation are prescribed by
the rules and regulations of the Commission, and therefore are not
intended to forecast possible future appreciation, if any, of the price of
the Common Stock. These numbers do not take into account provisions of
certain options providing for termination of the option following
termination of employment, nontransferability or vesting over periods.
10
<PAGE> 12
Stock Option Exercises
The following table sets forth certain information concerning options
exercised in fiscal year 1997 by certain of the Named Executive Officers. Dr.
Muroff and Mr. Jolas exercised options on December 8, 1997 and December 31,
1997, respectively.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED FISCAL YEAR-END (#) FISCAL YEAR-END ($)(3)
ON VALUE -------------------------- --------------------------
NAME EXERCISE(#)(1) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gregory L. Solomon...... -- -- 159,970 152,530 $1,007,811 $ 960,939
Lawrence R. Muroff, M.D. 65,000 $ 641,875 52,737 112,263 539,364 589,386
Mark S. Martin.......... -- -- 115,115 109,885 725,225 692,275
Sami S. Abbasi.......... -- -- 115,000 110,000 724,500 693,000
Paul M. Jolas........... 2,000 21,000 87,443 85,557 542,493 539,007
</TABLE>
- ----------
(1) Includes all exercises during calendar year 1997.
(2) The value realized equals the market value of the common stock acquired on
the date of exercise minus the exercise price.
(3) Based on the closing price of the Common Stock of $10.625 per share, as of
December 31, 1997, less the option exercise price.
Repricing of Stock Options
In connection with the IPO, each Named Executive Officer surrendered
25% of his outstanding options with an exercise price of $0.125 per share. In
exchange for each such surrender, upon completion of the IPO, the Company
granted to each Named Executive Officer an option to purchase the same number of
shares of Common Stock with the same vesting period as the options that were
surrendered but with an exercise price equal to $12.00 per share. These options
vest monthly over the remaining term of the five-year vesting period of the
options surrendered and retain the same exercise period as the options
surrendered.
The Company also granted Messrs. Solomon, Martin, Abbasi and Jolas
additional options equal to the number of options they surrendered. All of these
options vested upon the completion of the IPO and are exercisable for ten years
from the date of grant at an exercise price equal to $12.00 per share.
The voluntary surrender by the Named Executive Officers of those
options described above with a $0.125 exercise price and the Company's regrant
of options with a $12.00 exercise price were done in the best interest of the
Company by aligning the interests of the Named Executive Officers with the
investors in the IPO by granting options having an exercise price equal to that
paid by investors in the IPO.
11
<PAGE> 13
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF ORIGINAL
MARKET PRICE EXERCISE OPTION TERM
NO. OF NO. OF OF STOCK PRICE AT NEW REMAINING AT DATE
OPTIONS NEW OPTIONS AT TIME OF TIME OF EXERCISE OF REPRICING
NAME DATE REPRICED GRANTED REPRICING REPRICING PRICE (IN YEARS)
---- ---- -------- ----------- ------------ -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Gregory L. Solomon 11/26/97 62,500 125,000 $12.00 $0.125 $12.00 8.50
President and
Chief Executive Officer
Larry R. Muroff, M.D. 11/26/97 57,500 57,500 12.00 0.125 12.00 8.50
Chairman of the Board
of Directors and Senior
Vice President of
Physician Affairs
Mark S. Martin 11/26/97 45,000 90,000 12.00 0.125 12.00 8.53
Senior Vice President
and Chief Operating
Officer
Sami S. Abbasi 11/26/97 45,000 90,000 12.00 0.125 12.00 8.75
Senior Vice President
and Chief Financial
Officer
Paul M. Jolas 11/26/97 35,000 70,000 12.00 0.125 12.00 8.75
Senior Vice President
and General Counsel
</TABLE>
By the Board of Directors prior to the IPO
John W. Colloton
Lawrence R. Muroff, M.D.
John Pappajohn
Derace L. Schaffer, M.D.
Gregory L. Solomon
Employment Contracts
The Company has employment agreements with Messrs. Solomon, Martin,
Abbasi and Jolas, each of whom receive annual salaries at the rate of $225,000,
$190,000, $190,000 and $150,000, respectively. Each employment agreement has a
term of one year with automatic successive one-year renewal periods. Each
employment agreement provides that in the event of a termination of employment
by the Company (i) other than for cause, (ii) upon disability or (iii) upon
voluntary termination by employee due to an adverse change in duties, such
employee shall be entitled to receive from the Company a payment equal to
one-half of the amount of such employee's then current annual base salary, to be
paid in one lump sum, plus a payment for all accrued but unpaid wages and
expense reimbursements. Such employment agreements provide that in the event
such employee's employment terminates following a change in control transaction
(as defined in such employment agreements) of the Company, the Company shall pay
such employee two times such employee's then current annual base salary.
Each such employment agreement contains a covenant-not-to-compete with
the Company for a period of one year following termination of employment.
The Company has a consulting agreement with Lawrence R. Muroff, M.D.,
Chairman of the Board of Directors of the Company and Senior Vice President of
Physician Affairs pursuant to which Dr. Muroff receives annual compensation of
$112,500.
Compensation of Directors
Pursuant to the Company's Bylaws, the members of the Board of Directors
may be compensated in a manner and at a rate determined from time to time by the
Board of Directors. Directors who are employees of the Company do not receive
additional compensation for service as a director. Under the Company's 1996
Stock Option Plan, Directors who are not employees of the Company receive
options to purchase 10,000 shares of Common Stock per year of service and $1,000
for each Board meeting attended in person and $500 for attendance via telephone.
Directors are paid $500 for each committee meeting attended and $250 for
attendance via telephone, unless such committee meeting is held on the same day
as a Board meeting.
12
<PAGE> 14
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of independent directors who are
not employees of the Company and who qualify as disinterested persons for
purposes of Section 16(b) under the Act. Since the IPO, the Compensation
Committee has been, and continues to be, responsible for (i) overseeing and
recommending to the Board of Directors compensation for the Named Executive
Officers starting with fiscal year 1997 and (ii) administering the Company's
1996 Stock Option Plan and the Company's Cash Bonus Plan. In addition, the
Compensation Committee is responsible for reviewing and recommending to the
Board of Directors policies and programs for the development of management
personnel and management structure and organization. Prior to the IPO, the Board
determined executive officer compensation.
Compensation Philosophy
The Compensation Committee believes that compensation for the Company's
employees, including the Named Executive Officers, must be in amounts sufficient
to attract, retain and motivate employees, while at the same time maintaining a
reasonable relationship to the Company's financial performance. Moreover, the
Compensation Committee believes that compensation decisions should foster career
opportunities for, and aid the development of, employees and encourage and
reward employees who put the Company's interests ahead of their own.
The Company's compensation philosophy is based on the following general
principles:
O Achieve "above market" compensation levels for employees
through bonuses (based on Company and individual performance).
O Align employees' and stockholders' interests in maximizing
stockholder value through the granting of options to purchase
Common Stock of the Company.
O Set bonuses, as a percentage of total compensation, to reflect
an employee's level of responsibility and contribution to the
Company's financial performance.
Compensation of the Chairman of the Board and Chief Executive Officer and the
Other Executive Officers
Prior to the IPO, the Company entered into employment agreements with
Messrs. Solomon, Martin, Abbasi and Jolas and a Consulting Agreement with
Lawrence R. Muroff, M.D. These employment and consulting agreements establish
the base salaries of Dr. Muroff and Messrs. Solomon, Martin, Abbasi and Jolas
and provide for bonuses determined by the Compensation Committee. See "Executive
Compensation -- Employment Contracts." The employment agreements also provided
for the payment of a pre-determined dollar amount on the first anniversary of
employment with the Company.
Prior to the IPO and the acquisition of the seven founding affiliated
practices on November 26, 1997, the Company did not conduct any significant
operations. As a result, fiscal year 1997 bonuses for Dr. Muroff and Messrs.
Solomon, Martin, Abbasi and Jolas were determined following the IPO by the
Compensation Committee based primarily on the successful completion of the IPO
and the acquisition of the seven founding affiliated practices and certain other
subjective factors.
The Company has in place a Cash Bonus Program (the "Program"). The
purpose of the Program is to establish a bonus plan pursuant to which the
executive officers of the Company and certain key employees whose
responsibilities and activities are closely connected to the Company's overall
performance will be entitled to receive cash bonuses based on the performance of
the Company. Under the Program, cash bonuses are calculated as a percentage of
each eligible employee's base salary, with such percentage being determined
based upon the annual increase in the Company's earnings per share. In addition,
each eligible employee may receive a cash bonus based upon the achievement of
certain individual objectives and the Company's overall performance. Payments
made under the Program with respect to individual objectives are at the
discretion of the Compensation Committee.
13
<PAGE> 15
In fiscal year 1997, the Board of Directors approved grants of stock
options to Dr. Muroff and Messrs. Solomon, Martin, Abbasi and Jolas. The options
were granted in exchange for the cancellation of certain options with an
exercise price of $0.125 per share at the IPO. In determining the number of
shares to grant under these stock options, the Compensation Committee took into
account the number of options surrendered by such executive officers, the spread
between the fair market value of such options on the day of surrender, the
vesting schedule, and the exercise price, the Company's performance, employee
morale, physician satisfaction and the Company's desire to retain Dr. Muroff and
Messrs. Solomon, Martin, Abbasi and Jolas. No specific weights were assigned to
any of these factors.
Prior to the IPO and the establishment of the Compensation Committee,
all compensation-related matters were decided by the Board of Directors in place
at the time of such decisions.
By the Board of Directors
Less T. Chafen, M.D.
John W. Colloton *
Lawrence R. Muroff, M.D.
John Pappajohn
Derace L. Schaffer, M.D. *
Michael L. Sherman, M.D. *
Gregory L. Solomon
* Members of the Compensation Committee
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits the tax deduction of
a public company to $1,000,000 for compensation paid to its chief executive
officer or any of its four other highest paid officers. The Company has not
adopted a policy with respect to executive compensation in excess of $1,000,000
a year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
Prior to the IPO, the Board determined executive officer compensation.
Subsequent to the IPO, Mr. Colloton and Drs. Schaffer and Sherman comprise the
Compensation Committee. None of the foregoing individuals serving on the
Compensation Committee are or have been officers or employees of the Company or
its subsidiaries.
14
<PAGE> 16
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common
Stock over the period commencing November 21, 1997 (the first day after the
effective date of the IPO) and ending December 31, 1997, with PPM Industry
Index, Single Specialty PPM Index and the S & P 500. Each index assumes $100
invested at the close of trading on November 21, 1997 and reinvestment of
dividends. The Company believes that the information provided has only limited
relevance due to the very short period of time during which the Company has been
public.
<TABLE>
<CAPTION>
AMERICAN
MEASUREMENT PERIOD PHYSICIAN PPM INDUSTRY SINGLE SPECIALTY
(FISCAL YEAR COVERED) PARTNERS, INC. INDEX PPM INDEX S & P 500
<S> <C> <C> <C> <C>
11/21/97 100.0% 100.0% 100.0 100.0
11/28/97 86.5 95.2 92.2 99.6
12/15/97 83.3 89.6 91.9 100.5
12/31/97 88.5 91.1 94.4 101.2
</TABLE>
<TABLE>
<CAPTION>
11/21/97 11/30/97 12/15/97 12/31/97
-------- -------- -------- --------
<S> <C> <C> <C> <C>
APPM................................... $ 12.00 $ 10.38 $ 10.00 $ 10.63
PPM Industry Index..................... 20.57 19.59 18.42 18.74
Single Specialty PPM Index............. 15.09 13.91 13.87 14.24
S & P 500.............................. 958.98 955.40 963.39 970.43
</TABLE>
[AMERICAN PHYSICIAN PARTNERS, INC. STOCK PERFORMANCE CHART]
15
<PAGE> 17
CERTAIN TRANSACTIONS
On April 30, 1996, Derace L. Schaffer, M.D., a director of the Company,
purchased 1,000,000 shares of Common Stock in the Company for $125,000 and John
Pappajohn, a director of the Company, and his affiliates purchased 1,000,000
shares of Common Stock for $125,000. In connection with the IPO, Dr. Schaffer
and Mr. Pappajohn and his affiliates each surrendered 500,000 outstanding shares
of Common Stock. During August 1996, Mr. Pappajohn and Dr. Schaffer advanced a
total of $400,000 to the Company as loans, which were repaid on October 31,
1996, out of the proceeds of the Company's private placement of $3.5 million of
convertible promissory notes (the "Convertible Notes"). Dr. Schaffer purchased
$107,500 in principal amount of the Convertible Notes and Mr. Pappajohn
purchased $250,000 in principal amount of the Convertible Notes. On December 10,
1997, all of the outstanding Convertible Notes were converted into shares of
Common Stock at a conversion price of approximately $6.86 per share of Common
Stock. On July 17, 1997, Mr. Pappajohn advanced $150,000 to the Company as a
loan bearing interest at an annual rate of 6%. On July 25, 1997, Mr. Pappajohn
and Dr. Schaffer personally guaranteed a $1,000,000 line of credit for the
benefit of the Company. The Company repaid the $150,000 loan from Mr. Pappajohn
on August 21, 1997 out of the proceeds of the $1,000,000 line of credit. On
October 3, 1997, October 28, 1997, November 12, 1997, and November 20, 1997, Mr.
Pappajohn advanced $100,000, $150,000, $200,000, and $200,000, respectively, to
the Company as loans bearing interest at an annual rate of 6%. The Company
repaid the $650,000 amount borrowed from Mr. Pappajohn upon completion of the
IPO through borrowings under the Company's $115 million credit facility.
The Company and Lawrence R. Muroff, M.D., Chairman of the Board of
Directors of the Company and Senior Vice President of Physician Affairs, entered
into a consulting agreement in October 1997 pursuant to which Dr. Muroff
receives annual compensation of $112,500 (prorated for actual months worked) in
exchange for rendering consulting services to the Company. In 1996, Dr. Muroff
received option grants for 200,000 shares of Common Stock in connection with his
employment by the Company. In addition, he received option grants for 30,000
shares of Common Stock for his services as a member of the Company's Board of
Directors. Twenty-five percent (25%) of such options granted in 1996 with an
exercise price of $0.125 per share were cancelled and regranted upon completion
of the IPO at a price equal to the initial public offering price. Dr. Muroff
purchased $40,000 in principal amount of the Convertible Notes, which were
converted into shares of Common Stock.
The Company and Michael L. Sherman, M.D., a director nominee of the
Company, entered into a consulting agreement in August 1996 pursuant to which
Dr. Sherman received an option grant for 20,000 shares of Common Stock.
Twenty-five percent (25%) of such options granted in 1996 with an exercise price
of $0.125 per share were cancelled and regranted upon completion of the IPO at a
price equal to the initial public offering price. For his services as a member
of the Board of Directors, on November 26, 1997, Dr. Sherman received option
grants for 30,000 shares of Common Stock with an exercise price of $12.00 per
share. On January 26, 1998, the Company granted Dr. Sherman 5,000 options with
an exercise price of $12.00 per share. Dr. Sherman receives annual compensation
of $100,000 pursuant to the consulting agreement. The Company has agreed to
nominate Dr. Sherman for election to the Board of Directors at the 1998 and 1999
annual meetings of stockholders.
Mr. Solomon, the President, Chief Executive Officer and a director of
the Company, purchased $40,000 in principal amount of the Convertible Notes,
which were converted into shares of Common Stock.
Ann Vassiliou, Mr. Pappajohn's daughter, Bernard Schaffer, Dr.
Schaffer's father, and James Gordon, a principal of Edgewater Private Equity
Fund, II, L.P. each purchased 50,000 shares of Common Stock in the IPO at the
initial public offering price.
In connection with the acquisitions of the assets of and affiliation
with, Advanced Radiology, P.A., The Ide Group, P.C. and Pacific Imaging
Consultants, three of founding affiliated practices, Dr. Sherman received 75,473
shares of Common Stock and $301,900, Dr. Schaffer received 109,965 shares of
Common Stock and $439,862 and Dr. Less T. Chafen received 37,326 shares of
Common Stock and $149,316, respectively. Drs. Sherman, Schaffer and Chafen are
presidents of their respective radiology practices. During fiscal year 1997,
Advanced Radiology, P.A., The Ide Group, P.C. and Pacific Imaging Consultants
paid the Company $3,532,572, $1,699,931 and $647,917 in service fees pursuant to
the Service Agreements between the Company and each respective practice.
16
<PAGE> 18
Dr. Chafen received option grants on November 26, 1997, for 30,000
shares of Common Stock with an exercise price of $12.00 per share for his
services as a member of the Company's Board of Directors.
PROPOSAL II: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee,
has appointed Arthur Andersen LLP as the independent public accountants of the
Company for fiscal year 1998, subject to stockholder ratification.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they so desire and to be
available to respond to appropriate questions.
The affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting and entitled to
vote is required to ratify the appointment of Arthur Andersen LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF ARTHUR ANDERSEN LLP.
STOCKHOLDER PROPOSALS
Pursuant to the rules of the Commission, in order for stockholder
proposals to receive consideration for inclusion in the Company's Proxy
Statement for the 1999 Annual Meeting of Stockholders, such proposals must be
received by the Company at its principal executive offices no later than January
21, 1999. Such proposals should be directed to American Physician Partners,
Inc., 2301 NationsBank Plaza, 901 Main Street, Dallas, Texas 75202, Attention:
Chief Executive Officer.
GENERAL
The 1997 Annual Report to Stockholders, which includes the Company's
Report on Form 10-K, has been mailed to the stockholders with this mailing.
Copies of any exhibit(s) to the Form 10-K will be furnished on request and upon
the payment of the Company's expenses in furnishing such exhibit(s). Any request
for exhibits should be in writing addressed to Paul M. Jolas, General Counsel,
Senior Vice President and Secretary, American Physician Partners, Inc., 2301
NationsBank Plaza, 901 Main Street, Dallas, Texas 75202. The Annual Report does
not form any part of the material for the solicitation of proxies.
The expense of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone or telegram. The Company
may request brokers, dealers or other nominees to send proxy materials to and
obtain proxies from their principals and the Company may reimburse such persons
for their reasonable expenses.
17
<PAGE> 19
OTHER BUSINESS
Management knows of no other matter that will come before the Annual
Meeting. However, if other matters do come before the Annual Meeting, the proxy
holders will vote in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ PAUL M. JOLAS
Paul M. Jolas
General Counsel, Senior Vice President
and Secretary
April 16, 1998
<PAGE> 20
AMERICAN PHYSICIAN PARTNERS, INC.
2301 NATIONSBANK PLAZA
901 MAIN STREET
DALLAS, TEXAS 75202
ANNUAL MEETING OF STOCKHOLDERS -- MAY 20, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned stockholder(s) of American Physician Partners, Inc., a
Delaware corporation (the "Company"), hereby appoints Gregory L. Solomon and
Paul M. Jolas, and each of them, attorneys-in-fact and proxies of the
undersigned, with full power of substitution, to represent and to vote all
shares of common stock of the Company, which the undersigned is entitled to
vote at the Annual Meeting of Stockholders to be held in Conference Room A,
29th Floor, at 901 Main Street, Suite 2900, Dallas, Texas 75202, at 10:00 A.M.,
local time, on Wednesday, May 20, 1998, and at any adjournment thereof.
(continued on reverse side)
*FOLD AND DETACH HERE*
<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C> <C>
Election of Directors
WITHHOLD NOMINEES: Less T. Chafen, M.D.; John W. Colloton; Lawrence R. Muroff,
FOR all nominees AUTHORITY M.D.; John Pappajohn; Derace L. Schaffer, M.D.; Michael L.
listed to the right to vote for all nominees Sherman, M.D.; and Gregory L. Solomon
(except as marked listed to the right
to the contrary) INSTRUCTION: To withhold authority to vote for any individual nominee,
[ ] [ ] write that nominee's name in the space provided below.
---------------------------------------------------------------------
Ratification of the appointment of Arthur Andersen LLP as independent In their discretion, such attorneys-in-fact and proxies
auditors of the Company for the fiscal year ending December 31, 1998. are authorized to vote upon such other business as
properly may come before the meeting.
FOR AGAINST ABSTAIN
I will [ ] will not [ ] be attending the meeting
[ ] [ ] [ ]
YOU ARE REQUESTED TO COMPLETE, DATE, SIGN,
AND RETURN THIS PROXY PROMPTLY, ALL JOINT
OWNERS MUST SIGN, PERSONS SIGNING AS
EXECUTORS, ADMINISTRATORS, TRUSTEES,
CORPORATE OFFICERS, OR IN OTHER REPRESENTATIVE
CAPACITIES SHOULD SO INDICATE.
Date: 1998
------------------------------------,
---------------------------------------------
Signature
---------------------------------------------
Signature
o FOLD AND DETACH HERE o
</TABLE>
