<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
</TABLE>
VANTAGEMED CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
June 6, 2000
Dear Stockholder:
This year's annual meeting of stockholders will be held on Thursday, July 6,
2000, at 9:00 a.m. local time, at the Sheraton Hotel, 11211 Point East Drive,
Rancho Cordova, California 95742. You are cordially invited to attend.
The Notice of Annual Meeting of Stockholders and a Proxy Statement, which
describe the formal business to be conducted at the meeting, follow this letter.
After reading the Proxy Statement, please promptly mark, sign and return the
enclosed proxy card in the prepaid envelope to assure that your shares will be
represented. Your shares cannot be voted unless you date, sign, and return the
enclosed proxy card or attend the annual meeting in person. Regardless of the
number of shares you own, your careful consideration of, and vote on, the
matters before our stockholders is important.
A copy of the Company's Annual Report to Stockholders is also enclosed for
your information. At the annual meeting the Company will review our activities
over the past year and our plans for the future. The Board of Directors and
management look forward to seeing you at the annual meeting.
Very truly yours,
/s/ James L. Seiler
James L. Seiler
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
VANTAGEMED CORPORATION
3017 KILGORE ROAD, SUITE 180
RANCHO CORDOVA, CALIFORNIA 95670
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, JULY 6, 2000 9:00 A.M.
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of VantageMed
Corporation will be held at the Sheraton Hotel, 11211 Point East Drive, Rancho
Cordova, California 95742, on Thursday, July 6, 2000, at 9:00 a.m.
(1) To elect Class I directors to hold office for three-year terms and until
their respective successors are elected and qualified;
(2) To ratify the appointment of Arthur Andersen LLP, as independent public
auditors of the Company for the fiscal year ended December 31, 2000;
(3) To transact such other business as may properly come before the meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record on the books of the Company as of May 25, 2000
will be entitled to vote at the meeting and any adjournment thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, MARK,
DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE SO THAT
YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
RETURNING THE PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT TO ATTEND THE MEETING
AND TO
VOTE YOUR SHARES IN PERSON.
Dated: June 6, 2000
Rancho Cordova, California
By Order of the Board of Directors
/s/ Richard Pendleton
Richard Pendleton,
CORPORATE SECRETARY
1
<PAGE>
VANTAGEMED CORPORATION
3017 KILGORE ROAD, SUITE 180
RANCHO CORDOVA, CALIFORNIA 95670
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
------------------------
GENERAL
The enclosed proxy is solicited by the Board of Directors (the "Board") of
VantageMed Corporation ("VantageMed" or the "Company") to be used at the Annual
Meeting of Stockholders on July 6, 2000 and at any adjournment or postponement
thereof (the "Annual Meeting"), for the purposes set forth in the foregoing
notice. Only stockholders of record on the books of the Company as of 5:00 PM,
May 25, 2000 will be entitled to vote at the Annual Meeting. As of the close of
business on May 25, 2000, there were outstanding 8,602,560 shares of Common
Stock of the Company, entitled to one vote per share. The date of this Proxy
Statement is June 6, 2000, the date this Proxy Statement and the enclosed form
of proxy were first sent or given to stockholders.
SOLICITATION AND VOTING OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition to
soliciting stockholders by mail through its employees, the Company will request
banks and brokers, and other custodians, nominees and fiduciaries, to solicit
their customers who have stock of the Company registered in the names of such
persons and will reimburse them for their reasonable, out-of-pocket costs. The
Company may use the services of its officers, directors and others to solicit
proxies, personally or by telephone, without additional compensation.
On May 25, 2000, there were 8,602,560 shares of the Company's Common Stock
outstanding, all of which are entitled to vote with respect to all matters to be
acted upon at the annual meeting. Each stockholder of record as of that date is
entitled to one vote for each share of Common Stock held by him or her. The
Company's Bylaws provide that a majority of all of the shares of the stock
entitled to vote, whether present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the meeting. Votes for
and against, abstentions and "broker non-votes" will each be counted as present
for purposes of determining the presence of a quorum.
All valid proxies received before the meeting will be exercised. All shares
represented by a proxy will be voted, and where a stockholder specifies by means
of his or her proxy a choice with respect to any matter to be acted upon, the
shares will be voted in accordance with that specification. If no choice is
indicated on the proxy, the shares will be voted in favor of the proposal. A
stockholder giving a proxy has the power to revoke his or her proxy at any time
before the time it is exercised by delivering to the Secretary of the Company a
written instrument revoking the proxy or a duly executed proxy with a later
date, or by attending the meeting and voting in person.
PROPOSAL 1. ELECTION OF DIRECTORS
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The Board of Directors of the Company is divided into three Classes, with
the term of office of each Class ending in successive years, after the initial
transition period. Class I consists of Richard Pendleton
2
<PAGE>
and Peter Friedli and stands for election at this Annual Meeting. Class II,
currently consisting of James Seiler and John Stevens will stand for election at
the calendar year 2001 Annual Meeting. Class III, currently consisting of Joel
Harris will stand for election at the calendar year 2002 Annual Meeting.
The executive officers and directors of the Company and their ages as of May
31, 2000 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- ------------------------------------------
<S> <C> <C>
James L. Seiler........................... 53 Chief Executive Officer and
Chairman of the Board
Joel M. Harris............................ 45 President and Director
Richard W. Pendleton...................... 53 Senior Vice President--Mergers and
Acquisitions and Director
Peter Friedli............................. 46 Director
John R. Stevens........................... 79 Director
Larry W. LeGate........................... 57 Senior Vice President--Sales
Gregory F. Vap............................ 47 Senior Vice President--Operations
Paul W. Souza............................. 40 Senior Vice President--Chief Financial
Officer
</TABLE>
JAMES L. SEILER has served as Chief Executive Officer since the Company's
acquisition of Mariner Systems, Inc. in August 1999 and became the Chairman of
the Board of Directors in January 2000. Prior to joining the Company, Mr. Seiler
served as President and Chief Executive Officer of Mariner Systems Inc., a
managed care software company, from September 1993 to August 1999, and also as
Chairman of the Board from November 1997 to August 1999. Before joining Mariner,
Mr. Seiler served first as Chief Financial Officer and then as President and
Chief Executive Officer of Destron/IDI, Inc., a public radio frequency
technology company. Mr. Seiler is a Certified Public Accountant and received a
Bachelor of Science degree in Accounting from the University of Akron.
JOEL M. HARRIS was a co-founder of VantageMed since May 1996 and has served
as the President since May 1997. Mr. Harris also served concurrently as the
Chief Executive Officer from May 1997 through August 1999. From October 1994
through April 1996, Mr. Harris served as Chief Operating Officer of Insurance
Benefit Spot Check, Inc., a provider of electronic data interchange services for
healthcare providers. Previously, Mr. Harris co-founded the Stratum Group, a
software development and consulting firm. Mr. Harris received a Bachelor of
Science degree in Business Administration from California State University,
Northridge.
RICHARD W. PENDLETON was a co-founder of VantageMed and served as Chairman
of the Board from inception in April 1995 until January 2000. Mr. Pendleton has
also served concurrently as Senior Vice President--Mergers and Acquisitions
since April 1997. From October 1993 to February 1995, Mr. Pendleton served as
Senior Vice President and Director of Software Development for QuadraMed
Corporation, a healthcare information technology company. Prior to his work with
QuadraMed, Mr. Pendleton served as President of Coast Micro, Inc., a medical
software company, and founded and served as Chief Executive Officer of Cost
Containment Systems, Inc., a healthcare software company. Mr. Pendleton has also
held senior administrative positions at several medical centers. Mr. Pendleton
received a Master of Business Administration in Hospital Administration from the
University of Chicago and a Bachelor of Science degree in Business
Administration from the University of Illinois--Chicago.
PETER FRIEDLI has served as director of VantageMed since September 1999. Mr.
Friedli has been the principal of Friedli Corporate Finance, Inc., a venture
capital firm, since its inception in 1986. Prior to joining Friedli Corporate
Finance, Mr. Friedli worked as an international management consultant for
service and industrial companies in Europe and the U.S. Mr. Friedli has over a
decade of experience as an independent investment manager for venture capital
and has managed various venture investment companies in the U.S.
3
<PAGE>
JOHN R. STEVENS has served as a director of VantageMed since May 1997. Since
1987, Mr. Stevens has served as the Chief Executive Officer and Chairman of the
Board of StellarNet, Inc., a company he founded. StellarNet, Inc. is an
internet-hub connectivity company serving the property and casualty insurance
industry. Mr. Stevens received a Bachelor of Science degree in Military Science
from the University of Maryland.
LARRY W. LEGATE was a co-founder of VantageMed and has served as the
Company's Senior Vice President--Sales since inception in April 1995. Mr. LeGate
also served as a member of its Board of Directors from April 1997 through August
1999. From January 1994 through June 1995, Mr. Legate was the Senior Vice
President of Sales and Marketing for QuadraMed Corporation. Prior to joining
QuadraMed, Mr. LeGate served as Vice President of Sales and Customer Service for
DATIS Corporation, a database software products company. Mr. LeGate received a
Bachelor of Science degree in Architectural Engineering from Oklahoma State
University.
GREGORY F. VAP has served as the Company's Senior Vice President--Operations
since December 1998 and served as Senior Vice President from April 1998 through
December 1998. Prior to joining the Company, Mr. Vap founded Healthcare
Information Systems Inc., a provider of medical practice management products,
and served as President and Chief Executive Officer from 1984 until the
Company's acquisition of Healthcare Information Systems in April 1998. Mr. Vap
received a Bachelor of Science degree in Electronic Engineering from the
Missouri Institute of Technology.
PAUL W. SOUZA became the Company's Senior Vice President and Chief Financial
Officer on June 5, 2000. Prior to joining VantageMed, from May 1999 to May 2000,
Mr. Souza performed various consulting services to the insurance and managed
care industries, including, serving as Chief Financial Officer for Sierra
Insurance Group, a workers' compensation insurance holding company, and a
subsidiary of Sierra Health Services, Inc. from September 1999 to May 2000. From
July 1995 to March 1999, Mr. Souza served as Vice President and Chief Financial
Officer for Business Insurance Group, a holding company and subsidiary of
Foundation Health Systems, Inc. From July 1991 to July 1995, Mr. Souza served as
Vice President and Chief Financial Officer for The Pacific Rim Assurance
Company, a workers' compensation insurance company. Mr. Souza received a
Bachelor of Science degree in Business Administration with an emphasis in
finance, from San Diego State University.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company with
respect to the beneficial ownership of the Company's common stock as of May 15,
2000, except as noted in the footnotes below, by:
- all persons who are beneficial owners of 5% or more of the Company's
common stock;
- each of the Company's directors and director-nominees;
- the Company's Chief Executive Officer and the four other most highly
compensated executive officers (the "Named Executive Officers"); and
- all directors and executive officers of the Company as a group.
The number of shares of common stock beneficially owned and the percentage
of shares beneficially owned are based on 8,602,560 shares of common stock
outstanding as of May 15, 2000.
4
<PAGE>
<TABLE>
<CAPTION>
PERCENT
NUMBER OF BENEFICIALLY
NAME AND ADDRESS(1) SHARES OWNED(2)
------------------- --------- ------------
<S> <C> <C>
Peter Friedli(3)............................................ 1,106,080 12.8%
QuadraMed Corporation....................................... 599,425 7.0%
1003 W. Cutting Blvd., Ste. 2
Richmond, CA 94804
Venturetec, Inc.(4)......................................... 635,690 7.4%
c/o Friedli Corporate Finance
Freigustrasse #5
8002 Zurich, Switzerland
Richard W. Pendleton........................................ 300,000 3.5%
Gregory Vap................................................. 212,774 2.5%
Joel M. Harris.............................................. 150,000 1.7%
James L. Seiler(5).......................................... 87,559 1.0%
John R. Stevens............................................. 16,667 *%
Executive officers and directors as a group (7 persons)..... 2,006,413 23.2%
</TABLE>
------------------------
* Less than 1%
(1) Except as otherwise noted, the address of each person listed on the table is
c/o VantageMed Corporation, 3017 Kilgore Road, Suite 180, Rancho Cordova,
California 95670. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially
owned, subject to community property laws, where applicable.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power
with respect to such shares. All shares of common stock subject to options
or warrants currently exercisable or exercisable within 60 days after May
15, 2000, are deemed to be outstanding and to be beneficially owned by the
person holding such options or warrants for the purpose of computing the
number of shares beneficially owned and the percentage ownership of such
person, but are not deemed to be outstanding and to be beneficially owned
for the purpose of computing the percentage ownership of any other person.
(3) Includes: (i) 43,333 shares issuable upon the exercise of warrants; (ii)
17,125 shares issued to Venturetec, Inc. upon the conversion of secured
promissory notes held through Friedli Corporate Finance; (iii) 510,685
shares of which 185,685 shares were issued to Venturetec, Inc. and the
remaining 325,000 were issued to various entities or individuals affiliated
with Peter Friedli. These shares were issued upon the conversion of a
secured convertible promissory note held through Friedli Corporate Finance;
(iv) 432,880 shares held by Venturetec, Inc.; and (v) 102,057 shares held by
Pine, Inc. Mr. Friedli is President of Venturetec, Inc. and a control person
of Pine, Inc.
(4) Peter Friedli, a director of VantageMed, is President of Venturetec, Inc.
The shares referenced in this footnote are also included in the shares shown
as beneficially owned by Peter Friedli.
(5) Includes 66,879 shares underlying options granted to Mr. Seiler, which are
exercisable within 60 days of May 15, 2000.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has the following special committees of the Board of Directors:
EXECUTIVE COMMITTEE. The Executive Committee is empowered to exercise all
authority of the Board of Directors except as limited by the Delaware General
Corporation Law. Under Delaware law, an
5
<PAGE>
executive committee may not approve, adopt or recommend to stockholders actions
required by Delaware law to be approved by stockholders, or adopt, amend or
repeal any bylaw of the corporation. The Executive Committee consists of Richard
W. Pendleton, James L. Seiler and Joel M. Harris.
COMPENSATION COMMITTEE. The Compensation Committee is primarily responsible
for reviewing and approving the Company's general compensation policies and
setting compensation levels for executive officers. The Compensation Committee
also administers and establishes the terms and conditions of all stock options
granted under the 1998 Plan. The Compensation Committee consists of Peter
Friedli and John R. Stevens.
AUDIT COMMITTEE. The Audit Committee is primarily responsible for approving
the services performed by the Company's independent public auditors, reviewing
with the independent public 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 non-audit services performed by
our auditors. The Audit Committee consists of Peter Friedli and John R. Stevens.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During the fiscal year ended December 31, 1999, the Board of Directors of
the Company held six meetings. During that period the Executive Committee of the
Board met as part of the Board Meetings. The Compensation Committee of the Board
and the Audit Committee of the Board were established on September 15, 1999, but
did not formally meet until after the fiscal year ended December 31, 1999. The
Company has no standing nominating committee of the Board. No director attended
fewer than 75% of the total number of meetings of the Board and all of the
committees of the Board on which such director served held during that period.
DIRECTOR COMPENSATION
The members of the Board of Directors currently do not receive compensation
for their services as Directors. Members of the Board of Directors are eligible
to receive option grants and stock issuance under the Company's 1998 Stock
Option Plan although no determination has been made as to the number of options,
if any, each director may be entitled to receive.
LIMITATIONS ON LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Amended and Restated Certificate of Incorporation provides
that directors shall not be personally liable to the Company or its
stockholders, except liability for:
- breach of the director's duty of loyalty;
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law;
- the unlawful payment of a dividend or unlawful stock purchase or
redemption; and
- any transaction from which the director derives an improper personal
benefit.
The Company's Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws also provide that the Company shall indemnify its directors
and officers to the fullest extent permitted by the Delaware General Corporation
Law. The Company has also entered into indemnification agreements with each of
its directors.
Beginning on March 13, 2000, a series of similar securities class action
lawsuits were filed alleging that VantageMed and certain directors and officers
violated the Securities Act of 1933. As of this date, VantageMed is aware of
four virtually identical actions, all filed in the United States District Court
for the Eastern District of California, the first of which is entitled Zinno v.
The VantageMed Corporation, et. al., No. CIV.S-00-0523 MLS DAD. The Company
expects that all will be consolidated into a single action.
6
<PAGE>
Plaintiffs in the four actions purport to represent a class of all persons
who purchased the Company's common stock pursuant to its February 15, 2000
initial public offering ("IPO"). The complaints allege that VantageMed's S-1
Registration Statement and Prospectus contained materially false and misleading
statements and it did not state that the Company would be delayed in introducing
a new version of its Ridgemark product, and did not state that sales of its
eMCee product would be lower than expected.
The proceedings are in the early stages, and no prediction can be made as to
the outcome. The Company believes these actions are without merit and intends to
defend them vigorously.
PROPOSAL 1. ELECTION OF DIRECTORS
REQUIRED VOTE
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the nominees Richard Pendleton and Peter Friedli,
regardless of whether any other names are placed in nomination by anyone other
than one of the proxy holders. If the candidacy of anyone or more of such
nominees should, for any reason, be withdrawn, the proxy holders will vote in
favor of the remainder of those nominated and for such substituted nominees, if
any, as shall be designated by the proxy holders, or the number of directors to
be elected at this time may be reduced by the Board of Directors. The Board of
Directors has no reason to believe that any of the persons named will be unable
or unwilling to serve as a nominee or as a director if elected.
If a quorum is present and voting, the nominees receiving the highest number
of votes will be elected as directors at the Annual Meeting to serve until the
next Annual Meeting and until their respective successors are elected or
appointed. Abstentions and shares held by brokers that are present, but not
voted because the brokers were prohibited from exercising discretionary
authority, i.e., "broker non-votes," will be counted as present for purposes of
determining if a quorum is present.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR BOTH OF THE NOMINEES LISTED
ABOVE.
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Action will be taken at the Annual Meeting with respect to the ratification
of the appointment of independent public auditors for the Company for the fiscal
year ended December 31, 2000. The Board of Directors has, subject to such
ratification, selected Arthur Andersen LLP. Arthur Andersen LLP has audited
VantageMed's financial statements for the years ended December 31, 1997, 1998
and 1999. A representative of Arthur Andersen LLP will be present at the
meeting. Such representative will have an opportunity to make a statement, if he
or she so desires, and will be available to respond to appropriate questions by
shareholders.
The ratification of the appointment of Arthur Andersen LLP as the Company's
independent public auditors requires the affirmative vote of a majority of the
shares of Common Stock present at the Annual meeting in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC AUDITORS
FOR THE YEAR ENDED DECEMBER 31, 2000.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by the
Company for the fiscal year ended December 31, 1998 and 1999 for each of the
Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
SECURITIES
UNDERLYING
OPTIONS
ANNUAL COMPENSATION GRANTED(#)
---------------------------------- LONG-TERM ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS COMPENSATION COMPENSATION
---------------------------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
James L. Seiler............................... 1998 $ -- $ -- -- $ --
Chief Executive Officer and Chairman 1999 50,000(1) 2,000 100,000 --
of the Board
Joel M. Harris................................ 1998 120,000(2) -- -- --
President and Director 1999 120,000(3) 3,000 -- --
Richard W. Pendleton.......................... 1998 120,000 -- -- --
Senior Vice President--Mergers and 1999 120,000(4) 2,000 -- --
Acquisitions and Director
Gregory F. Vap................................ 1998 83,333 -- -- 7,689(5)
Senior Vice President--Operations 1999 125,000(6) 2,083 -- --
Thomas A. McCreery............................ 1998 52,500 -- 66,666 --
Chief Financial Officer 1999 120,000 -- -- --
</TABLE>
------------------------
(1) Includes $10,000 of compensation deferred until 2000 at the election of Mr.
Seiler. On an annual basis, Mr. Seiler's salary would have been $120,000.
(2) Includes $20,000 of compensation deferred until 1999 at the election of Mr.
Harris.
(3) Includes $15,000 of compensation deferred until 2000 at the election of Mr.
Harris.
(4) Includes $10,000 of compensation deferred until 2000 at the election of Mr.
Pendleton.
(5) The $7,689 in "Other Compensation" was a one-time payment for benefits
surrendered by Mr. Vap upon joining the Company.
(6) Includes $10,417 of compensation deferred until 2000 at the election of Mr.
Vap.
All bonuses shown on the above table represent obligated amounts equal to
20% of the salary deferments. These deferred salary and bonus amounts were
repaid from the proceeds of the Company's IPO completed in February 2000.
Mr. Harris, the Company's President, also served as the Chief Executive
Officer until August 5, 1999, at which time Mr. Seiler became the Chief
Executive Officer. On an annual basis, Mr. Seiler's salary for 1999 would have
been $120,000. Mr. Vap became the Company's Senior Vice President--Operations on
May 1, 1998. On an annual basis, his salary for 1998 would have been $125,000.
Mr. McCreery became the Chief Financial Officer on July 28, 1998. On an annual
basis, his salary for 1998 would have been $120,000. Effective May 31, 2000, Mr.
McCreery is no longer an employee or an executive officer of the Company.
Mr. Souza, the Company's Chief Financial Officer as of June 5, 2000, has
agreed to an annual salary of $130,000 and received 50,000 stock options at an
exercise price of $1.75, the closing market price on the date of approval.
8
<PAGE>
OPTION GRANTS IN FISCAL YEARS 1998 AND 1999
The following table sets forth option grants for the years ended December
31, 1998 and 1999 to each of the Named Executive Officers who received options:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES OF STOCK
SHARES GRANTED PRICE APPRECIATION FOR
UNDERLYING TO EMPLOYEES OPTION TERM
FISCAL OPTIONS IN FISCAL EXERCISE EXPIRATION -----------------------
NAME YEAR END GRANTED YEAR PRICE DATE 5% 10%
---- -------- ---------- ------------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
James L. Seiler............ 1999 100,000 37% $11.10 8/06/09 $698,073 $1,769,054
Joel M. Harris............. -- -- -- -- -- -- --
Richard W. Pendleton....... -- -- -- -- -- -- --
Gregory F. Vap............. -- -- -- -- -- -- --
Thomas A. McCreery......... 1998 38,333 21% 7.50 12/02/08 180,807 458,198
1998 13,333(1) 7% 7.50 12/02/08 62,888 159,370
1998 15,000(2) 8% 7.50 12/02/08 70,751 179,296
</TABLE>
------------------------
(1) 6,250 shares of Mr. McCreery's 13,333 share option vested upon the close of
the IPO.
(2) 833 shares of Mr. McCreery's 15,000 share option vested upon the close of
the IPO.
The percentages listed in the "Percent of Total Options Granted to Employees
in Fiscal Year" column in the above table are based on an aggregate of 178,037
options granted during fiscal year 1998 and 269,354 options granted during
fiscal year 1999 to employees.
The exercise price per share of each option shown in the above table was
equal to the fair market value of the common stock on the date of grant as
determined by the Board of Directors after consideration of a number of factors,
including, but not limited to, the Company's financial performance, market
conditions, and the price and preferred rights and privileges of shares of
equity securities sold to or purchased by outside investors.
The potential realizable values shown in the above table were calculated
based on the term of each option at its time of grant, which is ten years. These
values are calculated assuming that the fair market value of the Company's
common stock on the date of grant appreciates at the indicated annual rate
compounded annually for the entire term of the option and that the option is
exercised and sold on the last day of its term for the appreciated stock price.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999 AND FISCAL YEAR END 1999 OPTION
VALUES
The following table sets forth information concerning option exercises and
option holdings for the year ended December 31, 1999 with respect to the Named
Executive Officers. Except as set forth below, no
9
<PAGE>
options or stock appreciation rights were exercised by any such individual
during such year, and no stock appreciation rights were outstanding on December
31, 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James L. Seiler............ -- -- 100,000(1) -- $ 90,000(2) --
-- -- 36,321 -- 348,570(3) --
Joel M. Harris............. -- -- -- -- -- --
Richard W. Pendleton....... -- -- -- -- -- --
Thomas A. McCreery......... -- -- 26,146 40,521 117,657(4) 182,345(4)
</TABLE>
------------------------
(1) These options are immediately exercisable and are subject to a repurchase
right held by VantageMed which lapses in equal monthly installments over a
period of 36 months.
(2) Based on the offering price of $12.00 per share, less the option exercise
price of $11.10 payable for these shares.
(3) Based on the offering price of $12.00 per share, less option exercise prices
as follows: 10,508 of these options have an exercise price of $6.28; 4,549
of these options have an exercise price of $4.40 per share; and 21,264 of
these options have an exercise price of $0.06 per share.
(4) Based on the offering price of $12.00 per share, less the option exercise
price of $7.50 payable for these shares.
EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS
JAMES L. SEILER. The Company has entered into an employment agreement with
James L. Seiler pursuant to which he is employed as Chief Executive Officer. The
initial term of this employment agreement expires on August 1, 2002. This
employment agreement will continue on a month-to-month basis thereafter. Under
the terms of the employment agreement, Mr. Seiler is paid a monthly base salary
of $10,000, subject to increases as authorized by the Board of Directors and
subject to any company-wide compensation cap then in place. Mr. Seiler's salary
will be reviewed by the Board of Directors on February 1, 2000 and on August 1st
of each year thereafter to determine if an increase in salary is appropriate. At
no time shall Mr. Seiler be paid a base salary that is less than the greater of
$120,000 per annum; any compensation cap then in place; or the base salary of
the Company's highest paid officer and/ or employee. The employment agreement
with Mr. Seiler can be terminated at any time by mutual agreement, upon 100 days
written notice on the part of Mr. Seiler, or immediately for cause. The term
"for cause" is defined to mean: an uncured material violation of the terms of
the employment agreement or proprietary information and inventions agreement; a
conviction or non-appealable judgment involving a claim of dishonesty, willful
misfeasance or nonfeasance of duty by Mr. Seiler intending to injure or having
the effect of injuring in some material fashion the Company's reputation,
business or relationships; Mr. Seiler's conviction upon a felony charge; or
Mr. Seiler's willful or prolonged absence from work or his failure, neglect or
refusal to perform his duties. If, prior to the expiration of the agreement's
initial three-year term, the Company terminates Mr. Seiler's employment without
good cause or due to his death, or if he terminates his employment for good
cause, he will receive monthly payments equal to his monthly base salary through
the expiration of that initial three year term and all options then held by him
shall become fully-vested and immediately exercisable. Mr. Seiler has agreed not
to compete with the Company for a period of one year following the cessation of
his employment. In connection with the signing of this employment agreement,
Mr. Seiler was granted an option to purchase 100,000 shares of our common stock.
10
<PAGE>
THOMAS A. MCCREERY. The Company has entered into an agreement with Thomas
A. McCreery, Chief financial Officer, pursuant to which the Company agreed to
provide six months notice of termination in the event of a change of control.
Effective May 31, 2000, Mr. McCreery is no longer an employee or an executive
officer of the Company.
PAUL W. SOUZA. The Company has entered into an agreement with Paul W.
Souza, Senior Vice President and Chief Financial Officer, pursuant to which the
Company agreed to provide three-months severance benefits (i) upon the event of
a change of control and his position is eliminated, or, (ii) there is a material
change in duties and responsibilities which thereby terminates employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors, formed
in September 1999 are Peter Friedli and John R. Stevens. Prior to September
1999, the functions of the Compensation Committee were performed by the Board of
Directors as a whole. Prior to the formation of the Compensation Committee,
Messrs. Seiler, Harris and Pendleton were involved in compensation decisions.
In August 1999, the Company issued a $190,000 promissory note to a designee
of Friedli Corporate Finance in connection with the acquisition of Mariner
Systems, Inc. Upon closing of the IPO, this note became convertible into 17,125
shares of our common stock at the option of the holder, and in March 2000 was
converted.
In October 1999, the Company borrowed $3.0 million through Friedli Corporate
Finance at an interest rate of 6%. Peter Friedli assisted the Company in
securing this loan. In connection with the borrowing of these funds the Company
issued a secured convertible promissory note which requires the repayment of the
principal sum of $3.0 million, plus interest at an annual rate of 6%, by July 1,
2000. The outstanding principal and any accrued interest on this note
automatically converted into 510,685 shares of our common stock at a conversion
ratio equal to 50% of the initial price of shares of common stock sold in the
IPO. A $240,000 cash fee was paid in connection with this loan. In addition, the
Company issued a convertible promissory note in the principal amount of
$180,000, due and payable on October 6, 2002. No interest accrues or is due on
this note. The $180,000 was converted into 16,214 shares of common stock in
December 1999. In connection with the $3.0 million loan, the Company issued a
warrant to purchase 13,333 shares of its common stock at an exercise price equal
to 60% of the initial price of shares of the common stock as sold in the IPO.
This warrant became exercisable at the completion of the IPO and terminates on
October 6, 2002.
In January 2000, the Company borrowed $700,000 through Friedli Corporate
Finance. Peter Friedli assisted the Company in securing this loan. In connection
with the borrowing of these funds the Company issued a secured promissory note
which requires the repayment of the principal sum of $700,000 plus interest at
an annual rate of 10% and a premium payment equal to 7% of the outstanding
principal amount of the note at the earlier to occur at the completion of the
IPO or July 1, 2000. The Company subsequently paid this loan off from the net
proceeds of the IPO in February, 2000.
The Company has entered into a consulting agreement with Friedli Corporate
Finance pursuant to which the Company agreed to pay Friedli Corporate Finance a
$2,000 per month consulting fee and to take action to support the election of
Peter Friedli, the principal of Friedli Corporate Finance, to the Board of
Directors. In exchange, Friedli Corporate Finance provides the Company with
financial consulting services. The Company charges the cost of the consulting
arrangement to expense as the services are used. This consulting agreement
terminates on July 31, 2002 or upon 30 days written notice by either party. If
the Company terminates the consulting agreement without cause, the Company must
immediately pay Friedli Corporate Finance the full balance, through July 31,
2002, owed under the consulting agreement.
In August 1999 the Company acquired Mariner Systems, Inc. In connection with
this acquisition, Mr. Seiler signed a three-year employment agreement whereby he
agreed to serve as the Company's Chief
11
<PAGE>
Executive Officer. Mr. Seiler received 20,680 shares of our common stock in
exchange for all of his shares of Mariner Systems, Inc. and the Company assumed
options held by Mr. Seiler which entitle him to purchase an additional 36,321
shares of our common stock at a weighted-average exercise price of $2.40. Upon
the signing of his employment agreement the Company granted Mr. Seiler an option
to purchase an additional 100,000 shares of its common stock at an exercise
price of $11.10 per share. Venturetec, Inc., a shareholder in Mariner, became a
principal stockholder of the Company and now owns 635,690 shares of our common
stock. In addition, in exchange for services rendered in connection with the
acquisition of Mariner, the Company issued warrants to purchase up to 30,000
shares of its common stock to Pine, Inc., an entity controlled by Friedli
Corporate Finance, of which Peter Friedli is President. These warrants were
issued at an exercise price of $11.10 per share. Mr. Friedli, a principal with
Venturetec, Inc. was a member of the Board of Directors of Mariner and later
became a member of the Company's Board of Directors.
In July 1997, the Company entered into a promissory note with Richard
Pendleton, Senior Vice President--Mergers and Acquisitions, whereby the Company
loaned Mr. Pendleton $148,000 at an interest rate of 5.25%, payable on or before
July 15, 2000. Accrued interest on this note can be paid annually on July 15th
of each year beginning July 15, 1998 or upon repayment of the principal amount.
Mr. Pendleton has elected to defer the payment of interest on this note and has
not paid any of the principal. As of December 31, 1997, Mr. Pendleton owed a
total of $153,000 on the note. As of December 31, 1998 and 1999 the total
balance due on the note was $162,000 and $170,000, respectively.
None of the executive officers serve on the Board of Directors or
Compensation Committee of any entity which has one or more executive officers
serving as a member of the Board of Directors or Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL COMPENSATION PHILOSOPHY
The role of the Compensation Committee is to set the salaries and other
compensation of the executive officers and certain other key employees of
VantageMed, and to make grants under, and to administer, the stock option and
other executive officer equity and bonus plans. VantageMed's compensation
philosophy for executive officers is to relate compensation to corporate
performance and increases in stockholder value, while providing a total
compensation package that is competitive and enables VantageMed to attract,
motivate, reward and retain key executives and employees. Each executive
officer's compensation package may, in one or more years, be comprised of the
following three elements:--base salary that is designed primarily to be
competitive with base salary levels in effect at market area that are of
comparable size to VantageMed and with which VantageMed competes for executive
personnel;--annual variable performance awards, such as bonuses, payable in cash
and tied to the achievement of performance goals, financial or otherwise,
established by the Compensation Committee; and--long-term stock-based incentive
awards which strengthen the mutuality of interests between the executive
officers and VantageMed stockholders. As of May 23, 2000 the Board Compensation
Committee formally met. In applying the compensation philosophy, the committee
approved the increase of both James Seiler and Joel Harris from their current
salary to $160,000 per year. Additionally, Richard Pendleton, Greg Vap and Larry
LeGate's salary was increased from their current salary to $140,000 per year. In
each case, these increases will not be instituted until such time as the Company
produces and reports to its shareholders positive quarterly net earnings after
adding back depreciation and amortization.
EXECUTIVE COMPENSATION
Base salary for all executive officers and all other forms of compensation
will be administered in accordance with the general compensation philosophy.
12
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Seiler's base salary and all other forms of compensation will be
administered in accordance with the general compensation philosophy subject only
to provisions in his employment contract. See "Employment and Change-In-Control
Agreements."
CERTAIN TRANSACTIONS AND RELATIONSHIPS
SERIES A-1 PREFERRED STOCK
In January 1999, the Company issued 1,795,300 shares of its Series A-1
preferred stock to QuadraMed Corporation for an aggregate purchase price of
$3,500,000, which included the repayment of the $500,000 balance on the
Company's credit facility with QuadraMed and the exchange of 413,018 shares of
Series A preferred stock held by QuadraMed. All shares of the Series A-1
preferred stock was converted into Common Stock upon completion of the IPO.
CONSULTING AGREEMENT WITH FREIDLI CORPORATE FINANCE
In connection with the acquisition of Mariner Systems, Inc., in July 1999,
the Company entered into a consulting agreement with Peter Friedli, now a member
of the Company's Board of Directors. The consulting agreement is described more
fully in "Compensation Committee Interlocks and Insider Participation."
ACQUISITION OF MARINER SYSTEMS, INC.
In connection with the acquisition of Mariner Systems, Inc., in August 1999,
James L. Seiler signed a three-year employee agreement whereby he agreed to
serve as Chief Executive Officer. The employment agreement is described more
fully in "Employment and Change-in-Control Agreements."
FINANCING ARRANGEMENT WITH FRIEDLI CORPORATE FINANCE
In October 1999, the Company borrowed $3.0 million through Friedli Corporate
Finance. Peter Friedli assisted the Company in securing this loan. The financing
arrangement is described more fully in "Compensation Committee Interlocks and
Insider Participation."
SECURED PROMISSORY NOTE WITH FRIEDLI CORPORATE FINANCE
In January 2000, the Company borrowed $700,000 through Friedli Corporate
Finance. Peter Friedli assisted the Company in securing this loan. The
promissory note is described more fully in "Compensation Committee Interlocks
and Insider Participation." The Company subsequently paid this loan off from the
net proceeds of the IPO in February 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who beneficially own more than 10% of
the Company's Common Stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC"). Such
persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms filed by such person.
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that all filing requirements applicable to the Company's executive officers,
directors and more than 10% stockholders were complied with, except that each of
the Company's officers and directors required to file reports under
Section 16(a) filed their initial Form 3 late.
13
<PAGE>
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
The Company has an advance notice provision under its bylaws for stockholder
business to be presented at meetings of stockholders. Such provision states that
in order for stockholder business to be properly brought before a meeting by a
stockholder, such stockholder must have given timely notice thereof in writing
to the Secretary of the Company. A stockholder proposal to be timely must be
received at the Company's principal executive offices not less than 120 calendar
days in advance of the one year anniversary of the date the Company's proxy
statement was released to stockholders in connection with the previous year's
annual meeting of stockholders; except that (i) if no annual meeting was held in
the previous year, (ii) if the date of the annual meeting has been changed by
more than thirty calendar days from the date contemplated at the time of the
previous year's proxy statement or (iii) in the event of a special meeting, then
notice must be received not later than the close of business on the tenth day
following the day on which notice of the date of the meeting was mailed or
public disclosure of the meeting date was made.
Proposals of stockholders intended to be presented at the next annual
meeting of the stockholders of the Company must be received by the Company at
its offices at VantageMed Corporation, 3017 Kilgore Road, Suite 180, Rancho
Cordova, California 95670 no later than February 1, 2001, and satisfy the
conditions established by the Securities and Exchange Commission for stockholder
proposals to be included in the Company's proxy statement for that meeting.
OTHER MATTERS
Management does not know of any matters to be presented at the 2000 Annual
Meeting other than those set forth herein and in the Notice accompanying this
Proxy Statement. If a stockholder vote is necessary to transact any other
business at the 2000 Annual Meeting, the proxy holders intend to vote their
proxies in accordance with their best judgment related to such business.
It is important that your shares be represented at the meeting, regardless
of the number of shares that you hold. YOU ARE, THEREFORE, URGED TO EXECUTE
PROMPTLY AND RETURN THE ACCOMPANYING PROXY IN THE ENVELOPE THAT HAS BEEN
ENCLOSED FOR YOUR CONVENIENCE. Stockholders who are present at the meeting may
revoke their proxies and vote in person or, if they prefer, may abstain from
voting in person and allow their proxies to be voted.
Dated: June 6, 2000
By Order of the Board of Directors
/s/ Richard Pendleton
Richard Pendleton,
CORPORATE SECRETARY
14
<PAGE>
VANTAGEMED CORPORATION
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JULY 6, 2000 9:00 A.M.
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints James L. Seiler, Joel L. Harris and
Kathy L. Victorino, and each of them, with full power of substitution, to
represent the undersigned and to vote all of the shares of stock in
VantageMed Corporation, a Delaware corporation (the "Company"), which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the Sheraton Hotel, 11211 Point East Drive, Rancho
Cordova, California on July 6, 2000, at 9:00 a.m. local time, and at any
adjournment or postponement thereof (1) as hereinafter specified upon the
proposals listed on the reverse side and as more particularly described in
the Proxy Statement of the Company dated June 6, 2000 (the "Proxy
Statement"), receipt of which is hereby acknowledged, and (2) in their
discretion upon such other matters as may properly come before the meeting.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1 AND
PROPOSAL 2.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
/X/
Please mark
votes as in
this example
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS:
1. To elect the following two (2) persons as Class I directors to hold
office for a three-year term and until their respective successors are elected
and qualified:
FOR WITHHELD
[ ] [ ]
FOR, except vote withheld from the following nominee(s):
__________________________________
NOMINEES:
RICHARD W. PENDLETON PETER FRIEDLI
2. To ratify the appointment of Arthur Andersen LLP, as independent
public auditors for the Company for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
PLEASE PRINT THE FOLLOWING:
Name:_______________________________________________________
Address:______________________________________________________
Telephone:____________________________________________________
Number of shares:_____________________________________________
___________________ ___________________ __________
Signature Signature Date
PLEASE SIGN HERE. If shares of stock are held jointly, both or all of such
persons should sign. Corporate or partnership proxies should be signed in full
corporate or partnership name by an authorized person. Persons signing in a
fiduciary capacity should indicate their full titles in such capacity.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN
AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK MAY BE
REPRESENTED AT THE MEETING.
