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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
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<TABLE>
<S> <C>
(MARK ONE)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1993
OR
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
</TABLE>
COMMISSION FILE NUMBER 1-9868
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T(2) MEDICAL, INC,
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 59-2405366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1121 ALDERMAN DRIVE, 30302
ALPHARETTA, GEORGIA (Zip Code)
(Address of principal executive offices)
</TABLE>
(Registrant's telephone number, including area code) (404) 442-2160
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
Name of Each Exchange
Title of Each Class on which Registered
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COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K. ( )
The aggregate market value of the registrant's Common Stock, $.01 Par
Value, held by non-affiliates of the registrant as of November 30, 1993
(computed by reference to the closing price of such stock on the New York Stock
Exchange, Inc.) was $282,439,416.
The number of shares outstanding of the registrant's Common Stock, $.01 Par
Value, as of November 30, 1993 was 40,496,387 shares.
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T(2) Medical, Inc. (the "Company" or "T(2)) hereby amends the following
items of its Annual Report on Form 10-K for the fiscal year ended September 30,
1993 (the "Form 10-K") as set forth in the pages attached hereto:
1. Cover page of the Form 10-K.
2. Part III. Item 10. Directors and Executive Officers of the Company.
3. Part III. Item 11. Executive Compensation.
4. Part III. Item 12. Security Ownership of Certain Beneficial Owners
and Management.
5. Part III. Item 13. Certain Relationships and Related Transactions.
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PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table identifies all directors and executive officers of the
Company as of January 27, 1994:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY SINCE
- ---------------------------------------------- --- ---------------------------------- ----
<S> <C> <C> <C>
Tommy H. Carter............................... 51 Chief Executive Officer, President 1993
and Director
Bruce D. Fielitz (2)(3)....................... 51 Director 1989
John T. Gallatin.............................. 43 Executive Vice President 1991
Gary P. Greenhood 45 Vice President of Medical Affairs 1993
Thomas E. Haire............................... 49 Chairman and Director 1984
Bruce A. Kolleda.............................. 38 Principal Accounting Officer 1993
Anthony C. Smith (1)(2)(3).................... 44 Director 1990
Stanley S. Trotman (1)(2)(3).................. 49 Director 1988
</TABLE>
- ---------------
(1) Member of the Stock Option Committee.
(2) Member of the Executive Compensation Committee.
(3) Member of the Audit Committee.
Tommy H. Carter has been Chief Executive Officer, President and Director of
the Company since September 15, 1993. Prior to that time, Mr. Carter, a
co-founder of the Company, served as President of the Company from 1984 to
October 1, 1988 and a Director from 1984 to 1990. Mr. Carter came out of
retirement to assume the duties of President and Chief Executive Officer on
September 14, 1993. From November 1978 to May 1984, Mr. Carter served in various
capacities with Kendall McGaw Corporation, a manufacturer of intravenous fluids
and equipment, including Regional Manager, National Sales Administration
Manager, and Vice President of Sales and Marketing for the United States.
Bruce D. Fielitz, D.B.A., has been a Director of the Company since
September 13, 1989. Since 1987 he has been Managing Director at Atlanta Capital
Management Company, an investment counseling firm. Dr. Fielitz's primary areas
of activity at Atlanta Capital consist of development, management and
supervisory responsibility over all investment products.
John T. Gallatin joined the Company as an Executive Vice President on
October 1, 1991. Mr. Gallatin had previously served as the Southeast Area Vice
President of Caremark International, Inc. (which, at that time, was a division
of Baxter Healthcare) from 1986 to 1991. Before joining Caremark, Inc. in 1986,
he served as the Vice President of Baxter Health Care's Alternate Site Group in
the Southeast Area from 1985 to 1986, served as the Director of National
Accounts for Continue Care, Inc., the home infusion division of American
Hospital Supply, Inc. from 1984 to 1985, and held various other sales and
management positions with American Hospital Supply, Inc. between 1977 and 1984.
Gary P. Greenhood, M.D. joined the Company as Vice President of Medical
Affairs on July 1, 1992. Dr. Greenhood's initial duties related to organizing
and establishing a clinical outcome measurement committee and serving as a
resource for the Company's clinical operations and relations with physicians who
utilize the Company's services. On November 9, 1993, Dr. Greenhood's
responsibilities were expanded to include overseeing the Company's information
systems department and the Company's purchasing arm for medical supplies and
pharmaceuticals, Home Therapeutics Supply, Inc., overseeing the feasibility of
international expansion of the Company's services, overseeing the introduction
of new Company services, and serving as a resource to the Company's senior
managers. Prior to joining the Company, Dr. Greenhood was a physician in private
practice in the Atlanta metropolitan area and specialized in internal medicine
and the diagnosis and treatment of infectious diseases.
Thomas E. Haire, a co-founder of the Company, has served as Chairman of the
Company since 1984 and served as Treasurer and Chief Financial Officer from 1984
until May 1990 and Chief Executive Officer from
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October 1, 1989 to September 30, 1992. He also served as Secretary of the
Company from 1984 until November 1989. Mr. Haire also serves as a Director of
InMedica Development Corporation and as Chairman, a Director and member of the
Compensation Committee of Radiation Care, Inc.
Bruce A. Kolleda became the Company's principal accounting officer after
the Company's former Chief Financial officer was placed on administrative leave
on August 11, 1993. Mr. Kolleda has served the Company as its Controller since
May 1991 when he joined the Company after leaving Deloitte & Touche. Mr. Kolleda
held various positions with Deloitte & Touche from 1980 through May 1991, the
last of which was Senior Audit Manager.
Anthony C. Smith has served as a Director of the Company since October
1990. Mr. Smith has served as a Director of Radiation Care, Inc. since December
1991 and as Vice President-Acquisitions of Radiation Care from July 1992 until
October 1993. Prior to becoming an officer of Radiation Care, Inc., Mr. Smith
was President of Anthony Smith Advisors, Inc., a registered investment advisory
firm. He became President of Anthony Smith Advisors, Inc. in January 1988. From
1984 through 1987, Mr. Smith was a Regional Director of Financial Advisory
Services for Kidder, Peabody & Co. Incorporated. He was a registered
representative with Buckhead Financial Corporation from January 1991 until March
1992.
Stanley S. Trotman has been a Director of the Company since March 2, 1988.
Mr. Trotman is currently a Managing Director of Kidder, Peabody & Co.
Incorporated, an investment banking firm. From 1978 until February 1990, he was
a Managing Director of Drexel Burnham Lambert Incorporated, an investment
banking firm.
Filings Under Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, to file reports
of ownership and changes in ownership of such securities with the Securities and
Exchange Commission and the New York Stock Exchange. Executive officers,
directors and greater than ten percent beneficial owners are required by
applicable regulations to furnish the Company with copies of all Section 16(a)
forms they file.
To the Company's knowledge, based solely on review of the copies of
applicable reports furnished to the Company during the two fiscal years ended
September 30, 1993 and 1992, all reporting requirements under Section 16(a) of
the Securities Exchange Act of 1934, as amended, applicable to the Company's
executive officers, directors and greater than ten percent (10%) beneficial
owners were timely complied with, except that Mr. Kolleda was approximately
thirty-two days late in filing his Form 3 after he became an executive officer
of the Company by reason of the departure of the Company's Chief Financial
Officer on August 12, 1993.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during the fiscal years ended September 30, 1991, 1992 and 1993, for
(i) the President and Chief Executive Officer of the Company; (ii) each of the
three other most highly compensated executive officers of the Company
(determined as of September 30, 1993) whose total salary and bonus exceeded
$100,000; (iii) the former President and Chief Executive Officer of the Company
(who was not serving in such capacity as of September 30, 1993); and (iv) two
other former executive officers of the Company (who were not serving in such
capacities as of September 30, 1993) whose total salary and
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bonus exceeded $100,000 (such four executive officers as of September 30, 1993
and three former executive officers are referred to herein collectively as the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION AWARDS
COMPENSATION -------------------
NAME AND ------------ OTHER ANNUAL SECURITIES ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) UNDERLYING OPTIONS COMPENSATION(1)
- ------------------------- ---- -------- ------------ ---------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Tommy H. Carter.......... 1993 $133,250 -- -- 300,000(2) --
President and Chief 1992 100,000 -- -- -- --
Executive Officer 1991 100,000 -- -- -- --
John T. Gallatin......... 1993 155,000 $ 25,000 -- 25,000 $ 8,886(3)
Executive Vice 1992 120,000 45,000 -- 60,000
President 1991 -- -- -- --
Thomas E. Haire.......... 1993 150,000 -- $ 25,027(4) -- --
Chairman 1992 283,333 450,000 -- -- --
1991 378,125 33,900 -- 700,000 --
Bruce A. Kolleda......... 1993 89,333 22,500 -- -- 944(3)
Chief Accounting 1992 70,000 17,000 -- 30,000 --
Officer 1991 20,923 -- -- 10,000 --
Joseph C. Allegra(5)..... 1993 400,000 -- -- 200,000 --
Former President and 1992 300,000 412,000 -- -- --
Chief Executive Officer 1991 275,000 100,000 -- 200,000 --
J. Lee Ledbetter(6)...... 1993 275,000 -- -- -- 408,352(7)
Former Chief Operating 1992 250,000 350,000 -- -- --
Officer 1991 151,938 24,000 -- 400,000 --
David Hersh(8)........... 1993 258,750 30,750 -- -- 42,901(9)
Former Chief Financial 1992 131,666 25,000 -- 25,000 --
Officer 1991 102,500 12,500 -- 115,000 --
</TABLE>
- ---------------
(1) In accordance with the transitional provisions applicable to the revised
rules on Executive Officer and Director Compensation Disclosure adopted by
the Securities and Exchange Commission, amounts of "Other Annual
Compensation" and "All Other Compensation" are excluded for the Company's
1991 and 1992 fiscal years. Except as otherwise disclosed with respect to
Mr. Haire, no amounts of "Other Annual Compensation" were paid to each
Named Executive Officer, except for perquisites and other personal
benefits, securities or properties which for each Executive Officer did not
exceed the lesser of $50,000 or 10% of such individual's salary plus annual
bonus.
(2) Consists of an option to purchase 300,000 shares of common stock granted on
September 15, 1993. The exercise price for 150,000 of such shares was set
on September 15, 1993. The exercise price for the remaining 150,000 of such
shares will be set on September 15, 1994.
(3) These amounts reflect matching contributions to the Company's 401(k) Plan
made by the Company on behalf of each such Named Executive Officer.
(4) This amount includes $16,234 paid by the Company for an automobile lease on
a vehicle used by Mr. Haire and certain disability insurance payments of
$8,793.
(5) Dr. Allegra's employment with the Company terminated as of August 12, 1993.
See "Employment Agreements" in this Item 11.
(6) Mr. Ledbetter's employment as the Company's Senior Executive Vice President
and Chief Operating Officer terminated as of September 30, 1993. See
"Employment Agreements" in this Item 11.
(7) Consists of $250,000 as severance compensation payable monthly through the
end of fiscal 1994, $152,435 resulting from the forgiveness by the Company
of certain loans and advances, and $5,917 in various health and other
benefits continuing through fiscal 1994.
(8) Mr. Hersh's employment with the Company terminated as of September 30, 1993.
See "Employment Agreements" in this Item 11.
(9) Consists of $41,667 severance compensation paid over two and one-half months
following termination of his employment and $1,234 of various health and
other benefits through such period.
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<PAGE> 6
Option Grants in Last Fiscal Year
The following table provides details regarding stock options granted to the
Named Executive Officers in fiscal 1993. In addition, in accordance with
Securities and Exchange Commission rules, also shown are the hypothetical gains
or "option spreads" that would exist for the respective options. These gains are
based on assumed rates of annual compound price appreciation of 5% and 10% from
the date the options are granted over the full option term.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------ POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
- ------------------------------- ---------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Tommy H. Carter................ 300,000(1) 18.0% $ 6.74(1) 9/15/99 $343,500(1) $780,000(1)
John T. Gallatin............... 25,000(2) 1.6 20.125 10/2/99 171,000 388,000
Thomas E. Haire................ -- -- -- -- -- --
Bruce A. Kolleda............... -- -- -- -- -- --
Joseph C. Allegra.............. 200,000 12.7 26.25 8/12/93(3) -- --
J. Lee Ledbetter............... -- -- -- -- -- --
David Hersh.................... -- -- -- -- -- --
</TABLE>
- ---------------
(1) All of the options are non-qualified stock options granted under the
Company's 1988 Stock Option Plan. The exercise price for 150,000 of such
shares was set on September 15, 1993 at the fair market value of the common
stock on such date plus ten percent (10%). The exercise price for the
option to purchase the remaining 150,000 of such shares will not be set
until September 15, 1994, and will equal the fair market value of the
common stock on that date. Therefore, the exercise price per share and
potential realizable vale amounts disclosed herein reflect only the option
to purchase 150,000 shares for which the price was set on the date of the
grant. The option as to the first 150,000 shares will become exercisable on
September 15, 1994 and as to the second 150,000 shares will become
exercisable on September 15, 1995.
(2) All of the options are non-qualified stock options granted under the
Company's 1988 Stock Option Plan. These options become exercisable in
increments of 8,333 shares on October 2 in each of 1993, 1994 and 1995.
(3) These options expired on August 12, 1993 simultaneously with the termination
of Dr. Allegra's employment.
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Fiscal Year-End Options
The following table shows stock option exercises by the Named Executive
Officers during fiscal 1993, including the aggregate value of gains on the date
of exercise. In addition, this table includes the number of shares covered by
both exercisable and non-exercisable stock options as of September 30, 1993.
Also reported are the values for "in-the-money" options, which represents the
positive spread between the exercise price of any such existing stock options
and the fiscal year-end price of the Company's Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END AT FISCAL YEAR END
SHARES ACQUIRED ----------------------------- ---------------------------
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tommy H. Carter.... 40,000 $515,000 -- 300,000 $ -- $ -0-
John T. Gallatin... -- -- 20,000 65,000 -0- -0-
Thomas E. Haire.... -- -- 580,000 -- -0- --
Bruce A. Kolleda... -- -- 16,667 23,333 -0- -0-
Joseph C.
Allegra.......... -- -- 133,333(1) --(2) -0- --
J. Lee Ledbetter... 10,000 52,500 130,000(3) --(4) -0- --
David Hersh........ -- -- -- -- -- --
</TABLE>
- ---------------
(1) These options, which were exercisable on September 30, 1993, terminated
without being exercised on November 11, 1993.
(2) All unvested options held by Dr. Allegra terminated simultaneously with the
date of termination of employment.
(3) These options may be exercised at any time prior to or on September 30,
1994.
(4) All unvested options held by Mr. Ledbetter terminated simultaneously with
the date he resigned as the Senior Executive Vice President and Chief
Executive Officer of the Company.
Compensation of Directors
In fiscal 1993, each member of the Company's Board of Directors who was not
a full-time employee of the Company received $10,000 annually, and each Board
Committee Chairman received in fiscal 1993 an additional annual fee of $5,000.
Directors also receive reimbursement for out-of-pocket travel expenses incurred
in attending Board and committee meetings. If the stockholders approve the
Company's 1993 NonEmployee Director Stock Option Plan at the Company's 1994
Annual Meeting of Stockholders, each nonemployee director of the Company will
also receive at each Annual Meeting of the Stockholders an option to purchase
15,000 shares of Company Common Stock at a price per share equal to the closing
price of the Company's Common Stock on the New York Stock Exchange on the date
of the Meeting.
Employment Agreements
On December 27, 1993, the Company entered into a new employment agreement
with Mr. Haire to replace his prior employment agreement and executive
agreement. The new agreement has a term continuing through September 30, 1995
and provides for an annual base salary of $150,000. The Agreement further
provides that if Mr. Haire is terminated by the Company without cause within one
(1) year following a "Change of Control", he will be entitled to a single cash
payment in an amount equal to three times his annual base salary, provided that
the amount of such payment will be reduced appropriately to prevent it from
resulting in a "parachute payment" as determined under Section 280G of the
Internal Revenue Code (the "Code"). A "Change of Control" is deemed to have
occurred when (i) a plan of merger or consolidation is adopted in which the
holders of the shares of Common Stock of the Company would receive less than 50%
of the voting capital stock of the surviving or resulting corporation, (ii) the
approval by the Board of Directors of
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an agreement for the sale or transfer of substantially all of the assets of the
Company, or (iii) the acquisition of more than 20% of the outstanding shares of
Common Stock of the Company by any person in the absence of prior approval of
the Board of Directors.
On September 15, 1993, the Company entered into an employment agreement
with Mr. Carter that has a term continuing through September 30, 1995 and
provides for an annual base salary of $450,000. Mr. Carter's employment
agreement also provides that if his employment is terminated by the Company
without cause within one (1) year following the occurrence of a "Change of
Control" (defined in the same manner as in Mr. Haire's agreement), he will be
entitled to a single cash payment in an amount equal to three times his annual
base salary, provided that the amount of such payment will be reduced
appropriately to prevent it from resulting in a "parachute payment" as
determined under Section 280G of the Code. Mr. Carter's agreement also provides
for the grant of stock options to purchase 300,000 shares of Common Stock of the
Company. The exercise price for 150,000 of such options was set at a price equal
to the fair market value of Company shares on September 14, 1993 plus 10% and
the exercise price for the remaining options will be fixed using the fair market
value of Common Stock on September 15, 1994. One half of the options granted to
Mr. Carter will be exercisable beginning on September 15, 1994 and the other
options granted to Mr. Carter will be exercisable beginning on September 15,
1995.
On November 9, 1993, the Company entered into an employment agreement with
Dr. Greenhood that has a term continuing through November 8, 1995 and provides
for an annual base salary of $200,000. Dr. Greenhood's agreement also provides
that, following a "Change of Control" (as defined in the same manner as in Mr.
Haire's agreement, except that the acquisition of 20% ownership must be followed
by a change in the members of the Board of Directors), if either (i) Dr.
Greenhood is fired without cause, (ii) the Company or its successor requires Dr.
Greenhood to move his principal residence outside of the Atlanta, Georgia
metropolitan area, or (iii) the Company or its successor changes his
responsibility substantially without Dr. Greenhood's consent, then Dr. Greenhood
may terminate his agreement and become entitled to a single cash payment in an
amount equal to one year of his base salary and benefits. In addition, following
the occurrence of a "Change of Control" of the Company, Dr. Greenhood may elect
at any time between 90 days and 180 days following the "Change of Control" to
resign and receive his full base salary and benefits for twelve (12) months. Dr.
Greenhood's agreement also provides for the grant to him of stock options to
purchase an aggregate of 50,000 shares of the Common Stock of the Company, of
which 25,000 were exercisable immediately and 25,000 will be exercisable one
year from the date of grant. All such options were granted at the fair market
value of shares of Common Stock on the date of Dr. Greenhood's agreement.
On December 24, 1993, the Company entered into an employment agreement with
Mr. Gallatin that has a term continuing through December 31, 1995 and provides
for an annual base salary of $200,000. Mr. Gallatin's employment agreement also
provides that, following a "Change of Control" (as defined in the same manner as
in Dr. Greenhood's agreement), if either (i) Mr. Gallatin is fired without
cause, (ii) the Company or its successor requires Mr. Gallatin to move his
principal residence outside of the Atlanta, Georgia metropolitan area, or (iii)
the Company or its successor changes his responsibility substantially without
Mr. Gallatin's consent, then Mr. Gallatin may terminate his agreement and become
entitled to a single cash payment in an amount equal to one year of his base
salary. Mr. Gallatin's agreement also provides for the grant to him of stock
options to purchase an aggregate of 50,000 shares of the Common Stock of the
Company, of which 25,000 were exercisable immediately and 25,000 will be
exercisable one year from the date of Grant. All such options were granted at
the fair market value of shares of Common Stock on the date of Mr. Gallatin's
agreement.
Each of the employment agreements described above further provides that the
applicable employee may not, for a period of one year following termination of
employment, solicit referral sources, solicit employees or compete with the
Company in the same geographical area where the Company has been doing business.
The employment agreements also provide for medical and disability insurance. Mr.
Haire's employment agreement provides for life insurance in the amount of
$2,000,000 on his life and Mr. Carter's employment agreement provides for
$1,000,000 on his life, all of which is payable to their respective nominees.
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On August 11, 1993, the Company and its former President and Chief
Executive Officer agreed to terminate Dr. Allegra's employment with the Company.
Pursuant to a termination agreement, Dr. Allegra agreed, among other things: (i)
to resign all of his offices and positions with the Company and its subsidiaries
and affiliated companies, (ii) to refrain from making disparaging public
statements about the Company and its business, (iii) to abide by and continue to
observe certain restrictive covenants, (iv) to cooperate with the Company in the
transition and winding up of his employment relationship with the Company, and
(v) to release certain claims.
On September 30, 1993, the Company and its former Senior Executive Vice
President and Chief Operating Officer, J. Lee Ledbetter agreed to terminate Mr.
Ledbetter's employment under his former Employment Agreement, and Mr. Ledbetter
resigned all of his offices and positions with the Company and its subsidiaries
and affiliated companies. In exchange for a general release of claims and an
agreement to perform various covenants, including certain covenants that
restrict Mr. Ledbetter's future business activities, the Company agreed to
continue to pay Mr. Ledbetter a salary at the annual rate of $250,000 during
fiscal 1994 and to provide Mr. Ledbetter with certain benefits, including
continuing participation in employee benefit plans and certain outplacement
services. Mr. Ledbetter also agreed to refrain from making disparaging comments
regarding the Company and its businesses, agreed to provide certain consulting
and transition assistance to the Company through September 30, 1994, and agreed
to certain restrictive covenants.
On August 12, 1993, the Company placed its former Chief Financial Officer,
David Hersh, on administrative leave. On September 30, 1993, Mr. Hersh formally
resigned all of his positions with the Company and its subsidiary and affiliated
companies. Following Mr. Hersh's resignation, Mr. Hersh returned his company car
and the Company made monthly severance payments and provided various health and
other benefits to him totaling $42,901.
Compensation Committee Interlocks and Insider Participation
The members of the Company's Compensation Committee during fiscal 1993 were
Messrs. Fielitz, Smith and Trotman, none of whom served as an officer or an
employee of the Company during the year. Mr. Smith is a director of Radiation
Care, Inc., and was the Vice President -- Acquisitions of Radiation Care from
July 1992 to October 1993. Mr. Haire, the Chairman of the Company, is also the
Chairman, a Director and a member of the Compensation Committee of Radiation
Care.
The terms of the transactions described below, including, when applicable,
amounts received by Mr. Haire for his respective interests, if any, in the
companies acquired, were determined pursuant to arms-length negotiations between
T(2) and the stockholders of each of such companies, and independent appraisals
of such companies were not sought or obtained in connection with these
transactions. The prices paid for the respective companies were the result of
negotiations between T(2) and the stockholders of each of the companies
acquired. The terms of the transactions listed below were consistent with other
acquisitions by T(2) of infusion therapy companies managed by T(2). T(2)
historically has paid, in shares of restricted stock of the Company's Common
Stock, approximately five times such adjusted pre-tax earnings, which are
measured over the period of operations determined to be most representative of
the acquired company's operations.
Baltimore Home Therapeutics, Inc. On March 31, 1993, T(2) acquired
Baltimore Home Therapeutics, Inc. ("Baltimore"), which operated a T(2)-managed
home infusion therapy company in the Baltimore, Maryland metropolitan area. The
aggregate consideration paid for Baltimore was approximately $4,200,000.
Pursuant to the Baltimore merger agreement, each Baltimore stockholder received
shares of common stock valued at $15.50 per share.
Broadway Home Therapeutics, Inc. On March 31, 1993, T(2) acquired Broadway
Home Therapeutics, Inc. ("Broadway"), which operated a T(2)-managed home
infusion therapy company in New York, New York metropolitan area. The aggregate
consideration paid for Broadway was approximately $3,633,000. Pursuant to the
Broadway merger agreement, each Broadway stockholder who was not previously
affiliated with T(2) received shares of common stock valued at $15.50 per share.
9
<PAGE> 10
Southern New Jersey Home Therapeutics, Inc. On March 31, 1993, T(2)
acquired Southern New Jersey Home Therapeutics, Inc. ("Southern New Jersey"),
which operated a T(2)-managed home infusion therapy company in the Fairfield,
New Jersey metropolitan area. The aggregate consideration paid for Southern New
Jersey was approximately $1,600,000. Pursuant to the Southern New Jersey merger
agreement, each Southern New Jersey stockholder other than Thomas E. Haire,
received shares of common stock valued at $15.50 per share.
For his interests in the companies listed above, Mr. Haire received
$218,638 in cash and 19,354 shares of the Company's Common Stock. Mr. Haire
currently owns equity interests in five of the 103 home infusion therapy
companies managed by the Company. Mr. Haire has not acquired an equity interest
in any T(2)-managed company organized after January 1, 1992.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of November 30, 1993 by (i) each
Director of the Company, (ii) each of the Named Executive Officers and (iii) all
current executive officers and Directors of the Company as a group. The table
does not disclose, and the Company is not aware of, any person who is the
beneficial owner of more than 5% of the outstanding Common Stock of the Company.
According to rules adopted by the Securities and Exchange Commission, a person
is a "beneficial owner" of securities if such person has or shares the power to
vote them or to direct their investment or has the right to acquire beneficial
ownership of such securities within 60 days through the exercise of an option,
warrant or right, conversion of a security or otherwise. Except as otherwise
noted, the indicated owners have sole voting and investment power with respect
to shares beneficially owned.
<TABLE>
<CAPTION>
BENEFICIALLY OWNED PERCENT OF CLASS(1)
------------------ -------------------
<S> <C> <C>
Tommy H. Carter...................................... 123,154(3) *
Bruce D. Fielitz..................................... 21,000(4) *
John T. Gallatin..................................... 20,265(5) *
Thomas E. Haire...................................... 879,370(6) 2.2%
Bruce A. Kolleda..................................... 16,768(7) *
Anthony C. Smith..................................... 35,500(8) *
Stanley S. Trotman................................... 20,000(4) *
Joseph C. Allegra(2)................................. 109,666(9) *
David Hersh(2)....................................... 658 *
J. Lee Ledbetter(2).................................. 130,000(10) *
All Directors and Executive Officers as a group (8
persons)(11)....................................... 1,151,354(12) 3.5%
</TABLE>
- ---------------
* Less than 1%.
(1) Excludes from the total number of outstanding shares 2,978,282 shares that
are outstanding, but which are held by wholly-owned subsidiaries of the
Company.
(2) Messrs. Allegra, Hersh and Ledbetter are no longer executive officers of
the Company.
(3) Excludes 300,000 shares issuable pursuant to options held by Mr. Carter
that are not exercisable within 60 days.
(4) Includes 20,000 shares issuable to each of Messrs. Fielitz and Trotman,
respectively, pursuant to currently exercisable options, but excludes
10,000 shares issuable pursuant to options held by each of Messrs. Fielitz
and Trotman that are not exercisable within 60 days.
(5) Includes 20,000 shares issuable to Mr. Gallatin pursuant to currently
exercisable options, but excludes 65,000 shares issuable pursuant to
options held by Mr. Gallatin that are not exercisable within 60 days.
(6) Includes 580,000 shares issuable to Mr. Haire pursuant to options that are
currently exercisable.
(7) Includes 16,667 shares issuable to Mr. Kolleda pursuant to currently
exercisable options, but excludes 23,333 shares issuable pursuant to
options held by Mr. Kolleda that are not exercisable within 60 days.
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(8) Includes 35,000 shares issuable to Mr. Smith pursuant to currently
exercisable options, but excludes 10,000 shares issuable pursuant to
options held by Mr. Smith that are not exercisable within 60 days.
(9) Excludes 200 shares held in an individual retirement account for the
benefit of Dr. Allegra's spouse. Dr. Allegra may be deemed to be a
beneficial owner of such shares.
(10) Includes 130,000 shares issuable to Mr. Ledbetter pursuant to currently
exercisable options.
(11) Excludes all shares beneficially owned by Messrs. Allegra, Hersh and
Ledbetter, former Executive Officers of the Company.
(12) Includes 38,000 shares issuable to executive officers of the Company who
are not Directors pursuant to currently exercisable options. The
information set forth in notes (3) through (8) to this table are
incorporated in this note (12) by this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The terms of the transactions described below, including, when applicable,
amounts received by Mr. Haire, Mr. Carter and Joseph C. Allegra, M.D., the
former President and Chief Executive Officer of the Company, and for their
respective interests, if any, in the companies acquired, were determined
pursuant to arms-length negotiations between T(2) and the stockholders of each
of such companies, and independent appraisals of such companies were not sought
or obtained in connection with these transactions. The prices paid for the
respective companies were the result of negotiations between T(2) and the
stockholders of each of the companies acquired. The terms of the transactions
listed below were consistent with other acquisitions by T(2) of infusion therapy
companies managed by T(2). T(2) historically has paid, in shares of restricted
stock of the Company's Common Stock, approximately five times such adjusted
pre-tax earnings, which are measured over the period of operations determined to
be most representative of the acquired company's operations.
Baltimore Home Therapeutics, Inc. On March 31, 1993, T(2) acquired
Baltimore Home Therapeutics, Inc. ("Baltimore"), which operated a T(2)-managed
home infusion therapy company in the Baltimore, Maryland metropolitan area. The
aggregate consideration paid for Baltimore was approximately $4,200,000.
Pursuant to the Baltimore merger agreement, each Baltimore stockholder, other
than Tommy H. Carter, received shares of common stock valued at $15.50 per
share.
Broadway Home Therapeutics, Inc. On March 31, 1993, T(2) acquired Broadway
Home Therapeutics, Inc. ("Broadway"), which operated a T(2)-managed home
infusion therapy company in New York, New York metropolitan area. The aggregate
consideration paid for Broadway was approximately $3,633,000. Pursuant to the
Broadway merger agreement, each Broadway stockholder who was not previously
affiliated with T(2) received shares of common stock valued at $15.50 per share.
Southern New Jersey Home Therapeutics, Inc. On March 31, 1993, T(2)
acquired Southern New Jersey Home Therapeutics, Inc. ("Southern New Jersey"),
which operated a T(2)-managed home infusion therapy company in the Fairfield,
New Jersey metropolitan area. The aggregate consideration paid for Southern New
Jersey was approximately $1,600,000. Pursuant to the Southern New Jersey merger
agreement, each Southern New Jersey stockholder other than Thomas E. Haire,
received shares of common stock valued at $15.50 per share.
For their respective interests in the companies listed above, Mr. Haire
received $218,638 in cash and 19,354 shares of the Company's Common Stock, Mr.
Carter received $300,000 cash and Dr. Allegra received $129,749 in cash and
5,734 shares of the Company's Common Stock. Mr. Haire currently owns equity
interests in five of the 103 home infusion therapy companies managed by the
Company, and Mr. Carter owns no equity interests in any such companies. Mr.
Haire has not acquired an equity interest in any T(2)-managed company organized
after January 1, 1992.
Dr. Greenhood, an executive officer of the Company, owns 12.5% of the
shares in Intracare of Atlanta V, Inc. ("Atlanta V"), an infusion therapy
company to which the Company provides certain management services. The Company
has reached an oral agreement to acquire all of the outstanding shares of
Atlanta V for $208,005 in cash. Pursuant to this transaction, which is expected
to close on or about February 1, 1994, Dr. Greenhood would receive approximately
$26,001 in cash.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
T(2) MEDICAL, INC.
(Registrant)
By: /s/ TOMMY H. CARTER
-----------------------------------------------
Tommy H. Carter
President
Date: January 28, 1994
12
