SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 21, 2000
Medical Manager Corporation
(Exact name of Registrant as specified in its charter)
Delaware 0-17822 22-2975182
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
669 River Drive, River Drive, Center Two
Elmwood Park, NJ 07407- 1361
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 703-3400
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Item 5. Other Events
On August 21, 2000, Medical Manager Corporation ("Medical
Manager") entered into a stock option agreement (the "Wygod Stock Option
Agreement") with Martin J. Wygod, the current Chairman of Medical Manager and of
CareInsite, Inc. ("CareInsite"), under which Mr. Wygod was granted an option to
purchase 1,200,000 shares of Medical Manager common stock at an exercise price
of $15.00 per share. In connection with entering into the Wygod Stock Option
Agreement, Mr. Wygod agreed that he would not receive any cash compensation for
any employment or consulting services provided to Healtheon/WebMD Corporation
("Healtheon/WebMD") during the three-year period following the effective time of
the mergers of Medical Manager and CareInsite with Healtheon/WebMD. In addition,
the Wygod Stock Option Agreement provides for an extension of Mr. Wygod's
noncompetition and customer nonsolicitation restrictive covenants set forth in
the letter agreement entered into on June 18, 2000 between Healtheon/WebMD and
Mr. Wygod through the fifth anniversary of the date on which his employment
terminates.
The Wygod Stock Option Agreement provides that the options
will vest in full on the six-month anniversary of the effective time of the
mergers of Medical Manager and CareInsite with Healtheon/WebMD, but will become
exercisable over a period of three years (50% of such options will become
exercisable on the first anniversary of the effective time of the mergers, and
an additional 25% will become exercisable on each of the second and third
anniversaries of the effective time of the mergers). If Mr. Wygod's employment
is terminated as a result of his death or disability or by Medical Manager
without "cause" (as defined below), or Mr. Wygod resigns for "good reason" (as
defined below), Mr. Wygod's options will become fully vested and immediately
exercisable. If Mr. Wygod's employment is terminated by Medical Manager for
cause or he resigns without good reason before his options have vested, the
options will terminate and be cancelled. If Mr. Wygod's employment is terminated
by Medical Manager for cause or he resigns without good reason after his options
have vested, the options will continue to become exercisable over the three-year
period as described above. If Mr. Wygod resigns without good reason after his
options have vested but before the third anniversary of the effective time of
the mergers, Mr. Wygod has agreed to make himself available through the third
anniversary of the effective time of the mergers to provide certain consulting
and advisory services to Medical Manager, at no compensation. "Good reason" is
defined as a reduction in Mr. Wygod's title or responsibilities or requiring him
to report to any person other than the Board of Directors of Medical Manager
(following the mergers, the Healtheon/WebMD Board of Directors), any reduction
in Mr. Wygod's compensation (which Mr. Wygod does not currently receive) or
fringe benefits, any breach by Medical Manager of the Wygod Stock Option
Agreement or other material agreement with Mr. Wygod, the failure of
Healtheon/WebMD to assume the Wygod Stock Option Agreement or a change in the
location from which Mr. Wygod performs his services. "Cause" is defined as Mr.
Wygod's non-appealable conviction of a fraud or felony directed against the
Company relating to or adversely affecting his employment.
On August 21, 2000, Medical Manager also entered into Stock
Option Agreements (the "Key Employee Stock Option Agreements") with Charles A.
Mele, a member of Medical Manager's and CareInsite's board of directors and
Medical Manager's Executive Vice President, General Counsel and Secretary, Kevin
Cameron, Executive Vice President -- Corporate Development of Medical Manager,
David Amburgey, Senior Vice President - General Counsel of CareInsite, Kirk G.
Layman, Senior Vice President -- Finance and Chief Accounting Officer of Medical
Manager, and two other key employees of Medical Manager and CareInsite, under
which such individuals were granted, in the aggregate, options to purchase
400,000 shares of Medical Manager common stock at an exercise price of $15.00
per share. The terms of the Key Employee Stock Option Agreements are otherwise
substantially similar to those set forth in the Wygod Stock Option Agreement
described above, except that the employees party to these
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agreements shall not be obligated to provide consulting and advisory services to
Medical Manager following their resignation without good reason, and their
existing noncompetition and customer nonsolicitation restrictive covenants shall
not be extended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDICAL MANAGER CORPORATION
Date: August 28, 2000 By: /s/ Charles A. Mele
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Name: Charles A. Mele
Title: Executive Vice President --
General Counsel and Secretary
