<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 0)*
AMERICAN HEALTHCHOICE, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001
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(Title of Class of Securities)
025929 10 0
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(CUSIP Number)
DR. J.W. STUCKI, 1300 W. WALNUT HILL LANE, SUITE 275, IRVING, TEXAS 75038
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
VARIOUS
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(Date of Event which Requires Filing of this Settlement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with the statement. (A fee is not
required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 025929 10 0 PAGE 2 OF 6 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dr. J.W. Stucki
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7 SOLE VOTING POWER
NUMBER OF 2,694,059
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH -0-
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
2,694,059
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,694,059
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
26.6%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE> 3
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of Common Stock, par value $0.001 per
share, of American HealthChoice, Inc., a New York corporation (the "Issuer"),
with principal executive offices at 1300 W. Walnut Hill Lane, Suite 275, Irving,
Texas 75038.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed with respect to the ownership of 2,694,059
shares of the Issuer's Common Stock, consisting of 2,544,059 shares owned of
record and 150,000 shares issuable upon exercise of stock options. The following
information is provided regarding the owner:
(a) Name: Dr. J.W. Stucki
(b) Business Address: 1300 W. Walnut Hill Lane, Suite 275
Irving, Texas 75038
(c) Principal Occupation: Chief Executive Officer, American
HealthChoice, Inc.
(d) Registrant has not, during the past five years, been convicted in
any criminal proceeding (excluding traffic violations and similar
misdemeanors).
(e) Registrant has not, during the past five years, been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction or been subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS, OR OTHER CONSIDERATION.
See Item 4.
ITEM 4. PURPOSE OF TRANSACTION.
The Issuer was formed in 1988 as Paduan, Inc. for the purpose of
acquiring an operating business with a potential for future growth. The Issuer
had no operations until March 1995, when it acquired American HealthChoice,
Inc., a Delaware corporation ("AHDEL"), which operated six clinics providing
medical, chiropractic and physical therapy services in Texas and Louisiana. The
Issuer issued 4,962,000 shares of its Common Stock to the shareholders of AHDEL
representing 91.6% of the Issuer's voting shares. The Registrant was a
shareholder of AHDEL and acquired 2,644,322 shares, representing 49% of shares
outstanding in exchange for his AHDEL shares.
<PAGE> 4
Also in December 1995 and January 1996, Registrant sold an interest in
Total Medical Diagnosis to the Issuer in exchange for 128,000 shares of Common
Stock, and in Valley Family Clinic in exchange for 90,000 shares of Issuer's
Common Stock.
In May 1996, Registrant donated 2,100 shares to certain employees,
conveyed 5,854 shares in satisfaction of a note payable, conveyed 1,000 in
settlement of a claim, and sold 1,882 shares in a private sale.
In June 1996, Issuer granted Registrant 50,000 shares of Common Stock at
par value as compensation under his Employment Agreement with the Issuer.
In March 1997, Issuer entered into an Investor Agreement and an Option
Agreement with Wingate Financial Associates, LLC ("Wingate"), pursuant to which
Registrant and other affiliates granted Wingate the right to acquire up to
2,000,000 shares of Common Stock, for a price of $2.75 per share until October
1, 1998, which was placed in escrow pending exercise of such options. 1,123,261
of such shares were owned by Registrant.
In April 1997, Registrant sold 72,000 shares under Rule 144 for $1.75
per share and loaned the proceeds to the Issuer pursuant to a convertible
debenture in the maximum amount of $500,000.
In July 1997, Registrant sold 469,304 of the shares under option under
Rule 144 for $2.125 per share, and, together with six other shareholders, loaned
a total of $750,000 to the Issuer.
In September 1997, Issuer issued Registrant 167,609 shares of Common
Stock pursuant to the Issuer's Executive Stock Bonus Plan (139,674 shares) and
27,953 restricted shares, for a purchase price of $2.875 per share, both
issuances being compensatory for assisting the Issuer in its efforts to raise
financing and continue operations.
Also in September 1997, Registrant converted the debenture issued in
April 1997 to 87,964 shares of Common Stock, based upon a conversion price of
85% of the issue price plus interest at the rate of 8%. Such conversion right
was also compensatory to Registrant.
In October 1997, Registrant sold 33,200 shares under Rule 144 at prices
between $5.50 and $5.75 per share.
In December 1997, Registrant sold 35,000 shares under Rule 144 at prices
between $4.00 and $4.75 per share.
The purpose of the transactions in such shares has been to acquire a
proprietary stake in and assist in the financing of a growing public company
that can acquire health care clinics and facilities to compete in the managed
care market. Registrant takes an active role in the management of the Issuer and
is Chairman and Chief Executive Officer.
<PAGE> 5
Registrant has no present plan or proposal which would relate to or
result in: (a) the acquisition of additional securities of the Issuer (except
for issuance of 50,000 shares per year due under the terms of his Employment
Agreement); (b) any extraordinary corporate transaction involving the Issuer;
(c) a sale or transfer of a material amount of assets of the Issuer or its
subsidiaries; (d) any change in the Board of Directors of the Issuer; (e) any
material change in the Issuer's capitalization or dividend policy; (f) any other
material change in the Issuer's business or corporate structure; (g) any change
in the Issuer's Articles of Incorporation or Bylaws which may impede the
acquisition of control of the Issuer; (h) cause any securities of the Issuer to
be delisted from the NASDAQ; or (i) any class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities act of 1933.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
(a) 2,694,059 shares (26.6% of shares outstanding) consisting of
2,544,059 shares and options to acquire 150,000 shares.
(b) Dr. J.W. Stucki - sole power to vote and dispose.
(c) See Item 4.
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
(a) Registrant is entitled to receive options to acquire 50,000 shares
per year for service as the Issuer's Chief Executive Officer.
(b) Also see the arrangements described in Item 4.
(c) 653,957 shares of Common Stock remain under option to be acquired by
Wingate pursuant to the Option Agreement and to be sold to Wingate in certain
circumstances.
(d) A total of 13,500 shares are pledged to third parties to
collateralize obligations of Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Convertible Debenture
Escrow Agreement
Executive Stock Bonus Plan
Option Agreement
Investor Agreement
Amendment to Investor Agreement
<PAGE> 6
SIGNATURE
After reasonable inquiry and to the best of my information and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
March 2, 1998 /s/ J.W. Stucki
- ---------------------------------- --------------------------------
Date Dr. J.W. Stucki
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
99(A) Convertible Debenture
99(B) Escrow Agreement
99(C) Executive Stock Bonus Plan
99(D) Option Agreement
99(E) Investor Agreement
99(F) Amendment to Investor Agreement
</TABLE>
<PAGE> 1
EXHIBIT 99(A)
MARCH 23, 1997 $500,000 USD
AMERICAN HEALTHCHOICE, INC.
CONVERTIBLE DEBENTURE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED
UNDER SUCH ACT AND LAWS, OR UNLESS THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL
OR OTHER EVIDENCE SATISFACTORY TO THE ISSUER AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
FOR VALUE RECEIVED, American HealthChoice, Inc., a corporation duly
organized and existing under the laws of the New York ("Issuer"), promises to
pay to
Dr. J.W. Stucki
the registered HOLDER hereof and its successors and assigns (the "Holder"), the
maximum principal sum of
Five Hundred Thousand United States Dollars (USD$500,000) and to pay
interest on the principal sum outstanding at the rate of 10% per annum, on the
basis of the actual number of days elapsed in a three hundred sixty five (365)
day year. Holder shall advance the maximum principal sum to Issuer in one or
more installments solely from the proceeds of sales of up to 200,000 shares of
the Common Stock of Issuer, which have been delivered, endorsed in blank, to
Wingate Financial Associates, L.L.C., as trustee to effect such sale and advance
of proceeds. All installments so advanced to the Issuer shall be repayable to
the Holder together with all accrued interest on a date 90 days following the
last date on which the full $500,000 of principal shall have been advanced,
unless converted by the Holder pursuant to this Note.
The principal and interest of this Debenture is payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at the address last appearing on
the Debenture Register of the Issuer as designated in writing by the Holder
hereof from time to time. The forwarding of such check shall, subject to
collection, constitute a payment of principal hereunder and shall satisfy and
discharge the liability for principal and interest on this Debenture to the
extent of the sum represented by such check plus any amounts so deducted.
The Debenture is subject to the following additional provisions:
1. The Debenture is issuable in minimum denominations of Fifty Thousand
US Dollars (USD$50,000.00) and in integral multiples thereof. The Debenture is
exchangeable for like
1
<PAGE> 2
Debentures in equal aggregate principal amount of different authorized
denominations, as requested by the Holders surrendering the same. No service
charge will be made for such registration or transfer or exchange.
2. The Issuer shall be entitled to withhold from all payments of
principal or interest on this Debenture any amounts required to be withheld
under the applicable provisions of the United States Income Tax or other similar
applicable laws at the time of such payments.
3. This Debenture has been issued subject to investment representations
of the Holder and may be transferred or exchanged only in compliance with the
securities Act of 1933, as amended (the "Act") including the rules and
regulations promulgated thereunder) and applicable state securities laws. Prior
to the due presentment for such transfer of this Debenture, the Issuer and any
agent of the Issuer may treat the person in whose name this Debenture is duly
registered on the Issuer's Debenture Register as the owner hereof for the
purpose of receiving payment as herein provided and all other purposes, whether
or not this Debenture is overdue, and neither the Issuer nor any such agent
shall be affected by notice to the contrary. The transferee shall be bound, as
the original Holder, by the same representations and terms described herein and
under the Subscription Agreement.
4. The Holder of this Debenture is entitled, at its option, at any time
commencing from and after ninety (90) days after the date hereof (the "First
Conversion Date"), to convert up to One Hundred percent (100%) of the principal
amount of this Debenture outstanding into shares of Common Stock, at the
Conversion Price for each share of Common Stock. For purposes of this Section 4,
the "Conversion Price" shall be a price per share equal to 85% of the price at
which shares of Common Stock were sold by Holder to obtain the proceeds to be
loaned to the Issuer hereunder, or a "first-in, first-out" basis (the
"Conversion Price"). Such conversion shall be effected by surrendering the
Debentures to be converted to the Issuer, with the form of conversion notice
attached hereto as Exhibit 1 and incorporated herein by reference executed by
the Holder of this Debenture. For purposes of this Debenture, the "Conversion
Date" on which notice of conversion is given by the Holder shall be deemed to be
the close of business (5:00 p.m. EST) on the date on which the Holder has
telecopied its duly executed Notice of Conversion, together with this Debenture,
to the Issuer, provided that the Holder delivers via overnight courier to the
Issuer the original Notice of Conversion and this Debenture. On or prior to the
fifth (5th) NASDAQ trading day after the Conversion Date, the Issuer shall
deliver, or cause to be delivered, a certificate(s) representing the shares of
Common Stock issued pursuant to the Notice of Conversion hereof (the "Converted
Shares") to the Holder. Such Converted Shares shall be restricted and shall bear
appropriate restrictive legends as determined by the issuer.
5. No provision of this Debenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the principal on this
Debenture at the place, time, and rate, and in the coin or currency, herein
prescribed, except to the extent this Debenture has been converted.
2
<PAGE> 3
6. The Issuer hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, at or omission as or
with respect to the collection of any amount called for hereunder.
7. The Issuer agrees to pay all costs and expenses, including reasonable
attorneys' fees, which may be incurred by the Holder in collecting any amount
due as a result of default by the Issuer or exercising the conversion rights
under this Debenture.
8. In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Debenture will not in any way
be affected or impaired thereby.
9. This Debenture and the agreements referred to in this Debenture
constitute the full and entire understanding and agreement between the Issuer
and the Holder with respect hereof. Neither this Debenture nor any terms hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the Issuer and the Holder.
10. This Debenture shall be governed by and construed in accordance with
the laws of the State of Texas, without regard to its conflict of laws
provisions.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by an officer thereunto duly authorized.
AMERICAN HEALTHCHOICE, INC.
By: J. W. Stucki
-------------------------------------
Official Signatory of Issuer
Name (Printed): J. W. Stucki
Title: Chairman and CEO
Date:
3
<PAGE> 4
EXHIBIT 1
NOTICE OF CONVERSION
(To be executed by the Registered Holder in order to Convert the Debenture)
The undersigned (the "Holder") hereby irrevocably elects to convert
________________ (USD$____________) of the above Debenture No. _____________
into _____________________ (_______________) shares of Common Stock, $.001 par
value, of American HealthChoice, Inc. (the "Issuer") and to receive a remaining
exchange debenture in the amount of _____________ (USD$______) according to the
conditions set forth in such Debenture, as of the date written below. The shares
are to be issued in the name and to be delivered as set forth below:
Send Stock Certificate(s) to:
----------------------------------------
----------------------------------------
----------------------------------------
Registered Holder of Shares:
----------------------------------------
----------------------------------------
----------------------------------------
Registered Holder of Exchange
Debenture (if applicable):
----------------------------------------
----------------------------------------
----------------------------------------
Send Debenture to:
----------------------------------------
----------------------------------------
----------------------------------------
The undersigned represents and warrants that it is a person or entity
meeting the requirements of an "accredited investor" as such term is defined in
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act").
HOLDER:
--------------------------------
By:
------------------------------------
Title:
---------------------------------
Date of Conversion:
--------------------
Applicable Conversion Price:
-----------
4
<PAGE> 1
EXHIBIT 99(B)
ESCROW AGREEMENT
AGREEMENT dated March __, 1997, among Wingate Financial, L.L.C.
("Optionee"), the persons listed on the Signature Page hereof (the "Grantors"),
and Corporate Stock Transfer ("Escrowee").
1. OPTIONS. Grantors have granted to optionee the right and option to
purchase up to 2,000,000 shares of the Common Stock of American HealthChoice,
Inc., a New York corporation (the "Company"), pursuant to the term of the Option
Agreement attached hereto as Exhibit A.
2. CREATION OF ESCROW. Pursuant to the requirements of Section 7 of the
Option Agreement, the Grantors hereby create an escrow account with Escrowee and
have deposited the Shares, together with stock power signed in blank.
3. ESCROWEE DUTIES. Escrowee agrees to hold the Securities in escrow and
release them to Grantors or Optionee, as the case may be, upon exercise of their
rights under the Option Agreement. Escrowee will receive any dividends or other
property distributed with respect the Shares prior to the exercise of the
Options and remit same to Grantors promptly. In case of any dispute as to the
right or obligation to have the Shares reissued, Escrowee may tender the Shares
into a court of competent jurisdiction in an interpleader action. Escrowee shall
have no liability for any action or inaction taken by it unless the Escrowee
shall be found liable for gross negligence or willful misconduct.
4. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties and supersedes all prior agreements and understandings, oral
and written, among the parties with respect to the subject matter hereof, and
the parties are not bound by any agreements, understandings, or conditions other
than as expressly set forth herein.
(b) ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned by
any party hereto without the prior written consent of the other parties. All of
the terms and provisions of this
1
<PAGE> 2
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective parties hereto.
(c) WAIVERS. The failure of any party to act to enforce rights hereunder
shall not be deemed a waiver and shall not preclude enforcement of any rights
hereunder. No waiver of any term or provision of this Agreement on the part of a
party shall be effective for any purpose whatsoever unless such waiver is in
writing and signed by such party.
(d) GOVERNING LAW. This Agreement shall be governed by, interpreted, and
enforced in accordance with the laws of the State of Texas, without regard to
the principles of conflicts of laws.
(e) NO BENEFIT TO OTHERS. The representations, warranties, covenants,
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors, permitted assigns, heirs,
executors, administrators, and legal representatives, and shall not be construed
as conferring and are not intended to confer any rights on any other persons.
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which together
shall constitute one and the same instrument. Facsimile signatures shall be
deemed to be original signatures of all purposes.
EXECUTED the date first above written.
WINGATE FINANCIAL ASSOCIATES, L.L.C.
By: /s/ MANDELL SHERMAN
-------------------------------------
CORPORATE STOCK TRANSFER
By: /s/ LORI LIVINGSTON
-------------------------------------
2
<PAGE> 3
SIGNATURE PAGE FOR GRANTORS
Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
Date: , 1997 ------------------------------------
------------------ Name:
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Date: , 1997 ------------------------------------
------------------ Name:
-------------------------------
3
<PAGE> 1
EXHIBIT 99(C)
AMERICAN HEALTHCHOICE, INC.
1997 EXECUTIVE
STOCK BONUS PLAN
ARTICLE I
GENERAL
1.1 PURPOSE OF THE PLAN.
The purpose of the American HealthChoice, Inc. 1997 Executive Stock Bonus Plan
(the "Plan") is to assist American HealthChoice, Inc., a New York corporation
(the "Company") in securing and retaining key persons of outstanding ability to
serve the Company as key executive personnel by making it possible to offer them
an increased incentive to join or continue in the service of the Company and to
increase their efforts for its welfare through participation or increased
participation in the ownership and growth of the Company.
1.2 DEFINITIONS.
(a) "Award" means an Option granted to a Participant under
the Plan.
(b) "Board of Directors" or "Board" means the Board of
Directors of the Company.
(Company) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Common Stock" means the Common Stock of the Company.
(e) "Grantee" means a Participant to whom an Award is
granted under the Plan.
(f) "Participant" means any person, including consultants
and directors, who is designated a Participant and is or is expected to
be instrumental in promoting the business of the Company.
(g) "Nonqualified Stock Option" means an option to purchase
shares of Common Stock which is not intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code.
- 1 -
<PAGE> 2
(h) "Option" means a Nonqualified Stock Option to purchase
shares of Common Stock.
(i) "Optionee" means a Participant to whom an Option is
granted under the Plan.
(j) "Parent" means any corporation which qualifies as a
parent of a corporation under the definition of "parent corporation"
contained in Section 425(e) of the Code.
(k) "Subsidiary" means any corporation which qualifies as a
subsidiary of a corporation under the definition of "subsidiary
corporation" contained in Section 425(f) of the Code.
(l) "Term" means the period during which a particular option
may be exercised as determined by the Committee and as provided in the
option agreement.
1.3 ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors. The Board
shall have the power to interpret and apply the Plan and to make
regulations for carrying out its purpose. More particularly, the Board
shall determine which Participants shall be granted Options and the
terms of such grants. Determinations by the Board under the Plan
(including, without limitation, determinations of the person to receive
Awards, the form, amount and timing of such Awards, and the terms and
provisions of such Awards and the agreements evidencing same) need not
be uniform and may be made by it selectively among persons who receive,
or are eligible to receive, Awards under the Plan, whether or not such
persons are similarly situated.
1.4 SHARES SUBJECT TO THE PLAN.
The total number of shares that may be purchased pursuant to Options
under the Plan shall not exceed 260,870 shares of Common Stock. Shares
subject to the Options which terminate or expire prior to exercise shall
be available for future Awards under the Plan without again being
charged against the limitation of 260,870 shares set forth above. Shares
issued pursuant to the Plan may be either unissued shares of Common
Stock or reacquired shares of Common Stock held in treasury.
1.5 TERMS AND CONDITIONS OF OPTIONS.
All Options shall be evidenced by agreements in such form as the
Committee shall approve from time to time subject to the provisions of
Article II and Article III, as appropriate, and the following
provisions:
- 2 -
<PAGE> 3
(a) Exercise Price. The exercise price of the Option shall
be $2.875 per share.
(b) Exercise. All options must be exercised, if at all,
written thirty (30) days notice after the date of grant (the
"Termination Date").
(c) Termination. An Optionee's Option shall expire if not
exercised by the Term specified in Section 2.1 (Termination Date), or
upon the occurrence of such events as are specified in the agreement.
(d) Death or Disability. Options under the Plan shall not
terminate due to a Participant's death or disability.
(e) Payment. Payment for shares as to which an Option is
exercised shall be made by each Participant in cash, or at its election,
by surrendering any debt securities owed by the Company and send
Participant having a principal asset equal to the exercise price.
(f) Nontransferability. No Option granted under the Plan
shall be transferable other than by will or by the laws of descent and
distribution. During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee.
(g) Additional Provisions. Each option agreement may contain
such other terms and conditions not inconsistent with the provisions of
the Plan, including the award of cash amounts, as the Committee may deem
appropriate from time to time.
(h) Awards. Awards of Options are hereby made to the
following persons in the following amounts:
<TABLE>
<CAPTION>
NAME SHARES EXERCISE PRICE
<S> <C> <C>
Dr. J. W. Stucki 153,035 $439,973
Dr. Jeff Jones 64,405 185,165
Dr. J. Nelson 34,404 98,912
Dr. Charles Webb 4,452 12,801
Dr. Tracy Bryant 2,421 6,960
Dr. Hanks 2,153 6,191
------- --------
TOTALS 260,870 $750,000
======= ========
</TABLE>
- 3 -
<PAGE> 4
1.6 STOCK ADJUSTMENTS; MERGERS.
(a) Generally. Notwithstanding Section 1.4, in the event the
outstanding shares are increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities
of the Company or of any other corporation by reason of any merger, sale
of stock, consolidation, liquidation, recapitalization,
reclassification, stock split up, combination of shares, stock dividend,
or transaction having similar effect, the total number of shares set
forth in Section 1.4 shall be proportionately and appropriately adjusted
by the Committee.
(b) Options. Following a transaction described in subsection (a)
above, if the Company continues in existence, the number and kind of
shares that are subject to any Option and the option price per share
shall be proportionately and appropriately adjusted without any change
in the aggregate price to be paid therefor upon exercise of the Option.
If the Company will not remain in existence or substantially all of its
voting Common Stock and Common Stock will be purchased by a single
purchaser or group of purchasers acting together, then the Committee may
(i) declare that all Options shall terminate 30 days after the Committee
gives written notice to all Optionee's of their immediate right to
exercise all Options then outstanding (without regard to limitations on
exercise otherwise contained in the Options), or (ii) notify all
Optionee's that all Options granted under the Plan shall apply with
appropriate adjustments as determined by the Committee to the securities
of the successor corporation to which holders of the numbers of shares
subject to such Options would have been entitled, or (iii) take action
that is some combination of aspects of (i) and (ii). The determination
by the Committee as to the terms of any of the foregoing adjustments
shall be conclusive and binding. Any fractional shares resulting from
any of the foregoing adjustments under this section shall be disregarded
and eliminated.
1.7 NOTIFICATION OF EXERCISE.
Options shall be exercised by written notice directed to the Secretary
of the Company at the principal executive offices of the Company. Such
written notice shall be accompanied by any payment required pursuant to
Section 1.5(e). Exercise by an Optionee's heir or the representative of
his estate shall be accompanied by evidence of his authority to so act
in form reasonably satisfactory to the Company.
1.8 MODIFICATION, EXTENSION AND RENEWAL OF AWARDS.
Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding Awards or
accept the surrender of outstanding Awards (to the extent not
theretofore exercised) granted under the Plan or under any other plan of
the Company or a Subsidiary, and authorize the granting of new Awards
pursuant to the Plan in substitution therefor, and the substituted
Awards may bear such different or
- 4 -
<PAGE> 5
additional terms and conditions as the Committee shall deem appropriate
within the limitations of the Plan. Notwithstanding the foregoing,
however, no modification of an Award shall, without the consent of the
Grantee holding the Award, adversely affect the rights or obligations of
such Grantee.
1.9. COMPLIANCE WITH RULE 16b-3.
It is intended that the provisions of the Plan and any Award shall
comply in all respects with the terms and conditions of Rule 16b-3 under
the Securities Exchange Act of 1934, as in effect on July 1, 1997 and as
amended, or any successor provisions, as it relates to persons subject
to the reporting requirements of Section 16(a) of such Act. To the
extent that any provision hereof is found not to be in compliance with
such rule as it relates to such Act, such provision shall be deemed to
be modified so as to be in compliance with such rule, or if such
modification is not possible, shall be deemed to be null and void, as it
relates to such Grantee.
ARTICLE II
ADDITIONAL PROVISIONS
2.1 BOARD APPROVAL.
The Plan has been approved by the unanimous consent of the Board of
Directors of the Company.
2.2 COMPLIANCE WITH OTHER LAWS AND REGULATIONS.
The Plan, the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options,
shall be subject to all applicable Federal and state laws, rules, and
regulations and to such approvals by any government or regulatory agency
as may be required. The Company shall not be required to issue or
deliver any certificates for shares of Common Stock prior to (a) the
listing of such shares on any stock exchange on which the Common Stock
may then be listed and (b) the completion of any registration or
qualification or exemption of such shares under any Federal or state
law, or any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or
advisable. The Company shall file a Form S-8 registration statement to
register the Common Stock issued under the Plan and any resales thereof.
- 5 -
<PAGE> 6
2.3 AMENDMENTS.
The Board of Directors may discontinue the Plan at any time, and may
amend it from time to time, but no amendment, without approval by
stockholders, may (a) increase the total number of shares which may be
issued under the Plan or to any individual under the Plan, (b) reduce
the Option price for shares which may be purchased pursuant to Options
under Articles II or III of the Plan, (c) extend the period during which
Awards may be granted, or (d) change the class of employees to whom
Awards may be granted, except as provided in Section 1.6. Other than as
expressly permitted under the Plan, no outstanding Award may be revoked
or altered in a manner unfavorable to the Grantee without the consent of
the Grantee.
2.4 NO RIGHTS AS SHAREHOLDER.
No Grantee shall have any rights as a shareholder with respect to any
share subject to his or her Option prior to the date of issuance to him
or her of a certificate or certificates for such shares.
2.5 WITHHOLDING.
Whenever the Company proposes or is required to issue or transfer shares
of Common Stock under the Plan, the Company shall have the right to
require the Grantee to remit to the Company an amount sufficient to
satisfy any Federal, state or local withholding tax liability in such
form as the Company may determine or accept in its sole discretion,
including payment by surrender or retention of shares of Common Stock
prior to the delivery of any certificate or certificates for such
shares.
2.6 EFFECTIVE DATE; DURATION.
The Plan shall become effective as of July 27, 1997 pursuant to Board of
Director approval received effective such date and shall expire on
December 31, 1997.
- 6 -
<PAGE> 1
EXHIBIT 99(D)
OPTION AGREEMENT
Agreement dated March 19, 1997, among Dr. J.W. Stucki, Dr. J. Jones and
Dr. J. Nelson and other shareholders who elect to participate (the "Grantors")
and Wingate Financial Associates, L.L.C. (the "Optionee").
1. GRANT OF OPTION. FOR VALUE RECEIVED, the undersigned Grantors hereby
grant to Optionee the right and option to purchase all or a part of an aggregate
of 2,000,000 shares of the Common Stock, par value $0.001 per share of American
HealthChoice, Inc., a New York corporation.
2. OPTION PRICE. The exercise price of the options granted hereby shall
be $2.75 per share, subject to adjustment as defined below.
3. OPTION TERM. The options granted hereby shall be from April 1, 1997
to October 1, 1998 (the "Term").
4. OPTION TO SELL. The Grantors shall have the right and option to sell
to the Optionee the following number of shares subject to this Agreement, and
Optionee agrees to purchase such shares, during the Term, if the market price
per share (subject to adjustment as described below) shall equal or exceed the
following price averaged over five consecutive trading days during the times
specified. Such shares are expressed on a cumulative basis and include all
2,000,000 shares subject to this Agreement. The Grantors will have the right to
put the stock to the Optionee as set forth below, if within the 18 month period
but at no time during the option period shall the Grantors ever receive more
than $2.75 per share. Upon notice by any Grantor, the Optionee shall have ten
(10) business days to exercise the option or Optionee will lose those rights for
the corresponding shares and said shares will no longer be subject to this
Option Agreement.
<TABLE>
<CAPTION>
After the following
Number of days Number of Shares that
Stock Price Equals or Exceeds After Closing may be sold to Optionee
- ----------------------------- ------------- -----------------------
<S> <C> <C>
$5.00 30 300,000
5.50 90 300,000
6.00 120 300,000
6.50 180 300,000
7.00 240 300,000
7.00 300 500,000
</TABLE>
1
<PAGE> 2
5. ADJUSTMENTS. The amounts of options and shares subject to issuance
upon exercise of options shall be adjusted for any stock split, stock dividend
or recapitalization of the Company's common stock.
6. LIMITATION OF RIGHTS. The Optionee shall have no rights as a
stockholder with respect to the Shares covered by the Option until the Optionee
shall become the holder of record of such shares.
7. ESCROW. The shares subject to the options created hereby shall be
held in escrow with a mutually agreeable escrow agent pursuant to an escrow
agreement to be agreed to within 30 days hereof.
8. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties and supersedes all prior agreements and understandings, oral
and written, among the parties with respect to the subject matter hereof, and
the parties are not bound by any agreements, understandings, or conditions other
than as expressly set forth herein.
(b) ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned by
any party hereto without the prior written consent of the other parties. All of
the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective parties hereto.
(c) WAIVERS. The failure of any party to act to enforce rights hereunder
shall not be deemed a waiver and shall not preclude enforcement of any rights
hereunder. No waiver of any term or provision of this Agreement on the part of a
party shall be effective for any purpose whatsoever unless such waiver is in
writing and signed by such party.
(d) GOVERNING LAW. This Agreement shall be governed by, interpreted, and
enforced in accordance with the laws of the State of Texas, without regard to
the principles of conflicts of laws.
(e) NO BENEFIT TO OTHERS. The representations, warranties, covenants,
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors, permitted assigns, heirs,
executors, administrators, and legal representatives, and shall not be construed
as conferring and are not intended to confer any rights on any other persons.
(f) INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable. This Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable
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provision or by its severance herefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision there shall be added automatically as part of
this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which together
shall constitute one and the same instrument. Facsimile signatures shall be
deemed to be original signatures of all purposes.
EXECUTED the date first above written.
/s/ J. W. Stucki
-----------------------------------------
Dr. J.W. Stucki
/s/ Dr. J. Jones
-----------------------------------------
Dr. J. Jones
/s/ Dr. J. Nelson
-----------------------------------------
Dr. J. Nelson
WINGATE FINANCIAL ASSOCIATES, L.L.C.
By: Mandel Sherman
---------------------------------
Its: General Manager
<PAGE> 1
EXHIBIT 99(E)
INVESTOR AGREEMENT
This agreement is made and entered into this 19th day of March 1997, by
and between Wingate Financial Associates, L.L.C., ("Investor"), a Delaware
Corporation, and American HealthChoice, Inc. ("Company"), a New York
Corporation.
WITNESSETH
WHEREAS, Company is engaged in the practice of operating medical clinics
in Texas, Georgia, and Louisiana:
WHEREAS, Investor desires to invest in Company and take certain
responsibilities relative to control of the Company's Board of Directors;
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual covenants,
promises and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Investor and Company hereby agree as follows:
BEST EFFORTS
Both parties agree to use best efforts to effectuate the intent and terms of
this agreement. Investor recognizes that Company is foregoing other
opportunities to fund the Company's needs. Further, both parties recognize time
is of the essence.
REPRESENTATIONS BY COMPANY
BOARD MEMBERS: The Company agrees to change its Board of Directors (Board) to
allow for seven (7) members. Upon the completion of the five hundred and fifty
thousand ($550,000.00) Bridge Loan, as defined below, to the Company, the
Company will agree to change the number of board members to seven (7). Further,
the Company will deliver the resignations of one (1) board member. Investor will
then have the right to appoint four members to the Company Board.
If a Raise of Capital (minimum of two million ($2,000,000), separate from bridge
loan), as described herein under Representations By Investor, is not
substantially complete within one hundred (100) days of the bridge loan, also
described herein under Representations By Investor, the Investor will provide
the Company with resignations of the four (4) board members appointed by the
Investors.
BRIDGE LOAN: The current Board will approve a bridge loan in the amount of five
hundred and fifty thousand dollars ($550,000) by Investor, at ten (10%) percent
annually, as senior debt subject to existing debt already perfected as of the
date of this agreement. Additional consideration for said loan is in the form of
one million (1,000,000) warrants at two and three-eight ($2 3/8) dollars per
share of Company common shares to be issued from "authorized but not issued"
Company common stock.
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CONSULTANT: David Love, C.P.A., J.D., an affiliate of Investor, will be retained
by the board as a consultant for an initial period of one (1) year, subject to
the same terms as imposed upon the new board members. Compensation will be at
forty-eight thousand ($48,000.00) annually plus reasonable reimbursement
expenses, with the first amount being deducted as a non-refundable retainer of
ten thousand ($10,000.00) to be paid upon the closing of the bridge loan, with
the balance being accrued until the funding of the Raise of Capital as
represented by Investor below.
FOUNDER OPTIONS: Doctors J.W. Stucki, J. Jones, and J. Nelson, or other founders
will make available two million (2,000,000) shares of their common stock to
Investor to be optioned at two dollars and seventy-five cents ($2.75) per share
executable for the next eighteen months. Said shares will be held in escrow by
an escrow agent mutually agreed upon by both parties. The "Put" is as follows:
(a) after thirty (30) days, if the stock trades at five ($5.00)
dollars for five consecutive trading days, a Put call can be
exercised for three hundred thousand (300,000) shares.
(b) after ninety (90) days, if the stock trades at five and a half
($5.50) dollars for five consecutive trading days, a Put call can
be exercised for three hundred thousand (300,000) shares.
(c) after one hundred twenty (120) days, if the stock trades at six
($6.00) dollars for five consecutive trading days, a Put call can
be exercised for three hundred thousand (300,000) shares.
(d) after one hundred eighty (180) days, if the stock trades at six
and a half ($6.50) dollars for five consecutive trading days, a
Put call can be exercised for three hundred thousand (300,000)
shares.
(e) after two hundred and forty (240) days, if the stock trades at
seven ($7.00) dollars for five consecutive trading days, a Put
call can be exercised for three hundred thousand (300,000)
shares.
(f) after three hundred (300) days, if the stock trades at seven
($7.00) dollars for five consecutive trading days, a Put call can
be exercised for five hundred thousand (500,000) shares.
FOUNDER LOCK-UP: Doctors J.W. Stucki, J. Jones, J. Nelson, and the majority of
shares belonging to doctors Webb, Bryant, and Hanks, will lock-up with Investor
the remaining portion of any shares that become freely tradable within eighteen
(18) months of this agreement. All shares shall become freely tradable eighteen
(18) months from the date of this agreement. All shares subject to the Investor,
and/or his assignee, lock-up can be rolled out after six (6) months from the
date of this agreement at a rate of one-eighteenth (1/18) per month subject to
Security Exchange Commission Rules. Warrants and Options previously granted are
not subject to this lock-up agreement. Company will use its best efforts to get
other shareholders to lock up under similar terms.
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<PAGE> 3
EMPLOYMENT AGREEMENT: Dr. Stucki will remain as CEO for three (3) years.
Compensation to be at a base rate of two hundred and fifty thousand ($250,000)
annually with milestone bonuses based on Company profitability. The employment
agreement will be substantially similar to Dr. Stucki's existing agreement.
DR. STUCKI'S BRIDGE LOAN: Dr. Stucki agrees to sell shares of his stock in an
amount equal to five hundred thousand ($500,000) dollars and loan the proceeds
to Company. As repayment, Dr. Stucki will receive a debenture of equal value,
convertible to common stock at a fifteen percent (15%) discount fixed on date of
execution, at ten percent (10%) interest, convertible in ninety (90) days. This
is in addition to the salary as enumerated above. To effectuate the proceeds,
Dr. Stucki will agree to lock up in a trust with Investor the amount of shares
necessary and Investor will fund the proceeds within seven (7) days of trust
agreement.
REPAYMENT OF BRIDGE LOAN: Company agrees to repay any loans made under this
agreement or these loans made by Galaxy Investment and/or its assignees from the
sale of the Raise of Capital contemplated herein.
CONSULTING AGREEMENTS: Other than the consulting agreement for Dr. Dave Voracek
and James Carter, the Company agrees all other consulting agreements are void.
REPRESENTATIONS BY INVESTORS
RAISE OF CAPITAL: Investor represents that it will use its best efforts to raise
a minimum of two million ($2,000,000) dollars net to the Company. Company agrees
to repay Galaxy and Investor the five hundred and fifty thousand ($550,000)
dollar bridge loan from said Raise of Capital. The Raise of Capital must be
substantially complete within one hundred (100) days of this agreement. shares
for raising the minimum net capital shall be from no more than one million four
hundred thirty thousand (1,430,000) of "authorized but unissued" Company common
stock.
BOARD CONTROL: The new board members appointed by Investor will not agree to any
stock split, reverse merger, equity conversions, or take any action that is
dilutive to shareholders, except for the transactions that are expressly agreed
to in this agreement or without written approval from Stucki, which approval
shall not be unreasonably withheld.
BRIDGE LOANS: Investor agrees to loan Company a minimum of five hundred and
fifty thousand ($550,000) secured by a note and security agreement perfected
against tangible and intangible assets of the Company. Investor acknowledges
that the intention of the parties is that the bridge loan be repaid by a
convertible debenture at a ten (10%) percent discount.
HOLD HARMLESS: Investor agrees to hold harmless any prior acts by the Company's
officers or directors, except those actions directly related to criminal
conduct.
APPROVALS: Investor agrees that DVI and Grovest Management ("Other Affiliates")
have agreed to the terms of this agreement and that by entering into this
agreement the Other Affiliates will not claim any default under their respective
agreements due to this agreement.
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<PAGE> 4
DISCLOSURE: Investor acknowledges that it has performed due diligence, reviewed
the Company's Form 10-KSB 1996, and Form 10-QSB for the first quarter of 1997,
and has received a copy of the Risk Factors prepared by the Company. Investor
represents that it has had an opportunity to request additional information and
receive such information to the satisfaction of Investor.
INVESTMENT EXPERIENCE: Investor acknowledges that it is an investor in
securities of developing companies and can bear the economic risk of its
investment. Investor represents that it is an accredited investor as that term
is defined under Regulation D promulgated under the Security Act of 1933.
IN WITNESS WHEREOF, Investor and Company have caused this agreement to be duly
executed and delivered this the 18th day of March 1997.
"INVESTOR" "COMPANY"
Wingate Financial Associates, L.L.C. American HealthChoice, Inc.
/s/ Mandel Sherman /s/ Dr. J.W. Stucki
- ------------------------------------ ------------------------------------
4
<PAGE> 5
March 27, 1997
American HealthChoice, Inc.
1300 W. Walnut Hill Lane
Suite 275
Irving, Texas 75038
In consideration of being a participant with the new Company investment plan and
for participating in the option plan, I, Dr. J.W. Stucki, offer and agree to
lock-up my founder shares, that are not part of any options or warrants, per the
Investor Agreement dated March 19, 1997. I certify that as of the date of this
agreement I am the beneficial holder of 2,607,868 founder shares of American
HealthChoice, Inc., common shares. This agreement will be unrevokable and be
binding on my heirs or assignees.
Sincerely,
/s/ J.W. Stucki
Dr. J.W. Stucki
Offer Accepted: /s/
---------------------------
American HealthChoice, Inc.
<PAGE> 1
EXHIBIT 99(F)
AMENDMENT
AMENDMENT, made as of this 31 day of July, 1997, by and among American
HealthChoice, Inc., a New York corporation (the "Company"), Wingate Financial
Associates, L.L.C., a Delaware limited liability company (the "Investor"), Dr.
J.W. Stucki, Dr. J. Jones, Dr. J. Nelson, Dr. and Mrs. Hanks, Dr. Charles Webb,
and Dr. Tracy Bryant (collectively, the "Selling Shareholders") and Tenzer
Greenblatt L.L.P. ("Escrow Agent").
W I T N E S S E T H :
WHEREAS, the Company, and Investor are parties to an agreement dated
March 19, 1997 ("Investor Agreement"); and
WHEREAS, the parties now wish to amend the Investor Agreement as
hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, including, without limitation the agreement by the
Investor that the Selling Shareholders may dispose of a greater amount of shares
of common stock at the date hereof than originally provided for in the Investor
Agreement, the parties agree as follows:
1. References.
Unless otherwise indicated to the contrary herein, all
capitalized terms contained herein shall have the same meaning as ascribed to
such terms in the Investor Agreement.
2. Release of Option Shares.
Notwithstanding anything to the contrary contained in sections
(a), (b) and (c) of Paragraph "Founder Options" in the Investor Agreement, the
Selling Shareholders and the Investor hereby agree to release from the Investor
Agreement eight hundred thousand (800,000) shares of the Common Stock of the
Company (the "Released Stock"), subject to the following terms and conditions:
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<PAGE> 2
(a) The Released Stock, shall be held in an escrow account (the
"Escrow Account") established and maintained by Tenzer Greenblatt LLC as Escrow
Agent pursuant to an escrow agreement of even date herewith (the "Escrow
Agreement"), which Escrow Account shall be for the benefit of each of the
Selling Shareholders and the Investor as hereinafter set forth, and shall not,
except as hereinafter provided, be sold or disposed of by the Escrow Agent.
(b) So long as the Released Stock is maintained in the Escrow
Account, the Selling Shareholders shall not subject such Released Stock to any
pledge, lien, restriction or encumbrance.
(c) In the event that the Company institutes any stock split,
dividend, reclassification, readjustment, consolidation, merger, or like event
with respect to its common stock, which create any new or substitute and/or
additional securities with respect to the Released Stock, such securities shall
be immediately remitted to the Escrow Agent to be held by it pursuant to the
Released Stock Escrow Agreement.
(d) The interests of the Selling Shareholders and the Investor in
the Escrow Account (the "Escrow Parties") shall not be transferable or
assignable other than (i) to executors, administrators, legatees, heirs,
successors, or assigns of the Escrow Parties or (ii) in a transaction involving
no change in beneficial ownership. Any transfer pursuant to clause (ii) above
shall be upon prior written notice from any Escrow Party, to the Escrow Agent
and the non-transferring Escrow Parties.
3. Sale of the Released Stock.
(a) Subject to the provisions of the Escrow Agreement and to the
rights of the Investor provided for herein, the Selling Shareholders may,
directly or indirectly, sell, offer for
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<PAGE> 3
sale, transfer, assign, hypothecate, pledge or otherwise dispose of, the
Released Stock, in whole or part, consistent with the applicable Federal and
state securities laws; provided, however, that the Selling Shareholders covenant
and agree not to sell or dispose, without the consent of the Investor, of any
Released Stock other than through Walsh, Manning Securities, Inc., or other
broker-dealer designated by the Investor.
(b) Any funds realized bu a sale or disposition of Released Stock
by any Selling Shareholders shall be deposited in the escrow fund created
hereunder by the Selling Shareholders or by the broker, for distribution in
accordance with Paragraph 4 hereof.
(c) All Released Stock shall be sold within 5 business days of
delivery to the Escrow Agent.
4. Proceeds of the Sale of Released Stock.
Upon the sale or disposition by, or on behalf of, the Selling
Shareholders of any of the Released Stock pursuant to Paragraph 3 hereof, the
Escrow Agent shall, within three (3) business days of payment of the purchase
price for such Released Stock, distribute the net funds realized by such sale or
disposition to the appropriate selling Shareholders and the Investor, as
follows:
(a) The Selling Shareholders shall receive the sum of $2.125
per share for Released Stock sold; and
(b) The Investor shall receive the balance, of the funds
realized by the sale of the Released Stock.
5. Loan to Company by Selling Shareholders.
Simultaneously with the receipt of proceeds by the Selling
Shareholders from the sale of the Released Stock, the selling Shareholders shall
loan the Company an aggregate of
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<PAGE> 4
$750,000 pursuant to a Promissory Note which shall provide that such loan shall
mature 30 days after the date it is made and shall be interest free until
maturity.
6. Participation in 1997 Executive Stock Bonus Plan
Each Selling Shareholder shall have the right, but not the
obligation, to participate in the 1997 Executive Stock Bonus Plan of the Company
(the "Plan") and to purchase his pro rate share of the 260,870 shares of Common
Stock of the Company available under the Plan (the "Plan Shares") at a purchase
price of $2.87499 per share. The pro rata share of a Selling Shareholder shall
be determined by multiplying the 260,870 Plan Shares by a fraction, the
numerator of which shall be the number of shares of Released Stock held by a
Selling Shareholder and the denominator of which shall be the total number of
shares of Released Stock held by all Selling shareholders (the "Pro Rata
Share"). A Selling Shareholder may, at his sole option, elect to pay the
purchase price of his Plan shares by delivering to the Company the Promissory
Note of the Company held by such Selling Shareholder at the maturity thereof. If
a Selling Shareholder makes the payment election set forth in the foregoing
sentence, he must surrender the full Promissory Note of the Company held by such
Selling Shareholder at the maturity thereof. If a Selling Shareholder makes the
payment election set forth in the foregoing sentence, he must surrender the full
Promissory Note as payment for his entire Pro Rata Sarre. The Plan Shares shall
have appropriate restrictive legends. However, if it is legally possible to
include Plan Shares in an S-8 Registration Statement, the Company shall prepare
and file such Registration Statement for all Plan Shares. Each Selling
Shareholder will then have the right, commencing 31 days after the date of
purchase of the Plan Shares ("Purchase Date"), to sell his respective Pro Rata
Share of that number of Plan Shares which will result in aggregate proceeds of
$1,000,000. It is currently estimated that approximately 173,913 Plan Shares
will be sold pursuant to the foregoing
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<PAGE> 5
provision. The balance of Plan Shares, approximately 86,956, will be "locked up"
by the Selling Shareholders as follows: 43,478 will be locked up for a period of
60 days from the Purchase Date and the balance of approximately 43,478 will be
locked up for twelve months from the Purchase Date. The certificates
representing such shares shall be deposited with the Secretary of the Company
until the end of the twelve month lock up period. After the expiration of the
twelve month lockup, the Plan Shares which have not been sold in the manner
provided above shall be delivered to the owners thereof, free of all contractual
restrictions on the sale thereof.
7. Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the law of the State of the New York without regard to its choice of law
principles.
(a) Notice. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
if delivered personally, by overnight courier or by express, registered or
certified mail (postage prepaid, return receipt requested) or by facsimile
transmittal, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
If to the Company or American HealthChoice, Inc.
the Selling Shareholders: 1300 West Walnut Hill Lane, Suite 275
Irving, Texas 75038
Attn: Dr. J.W. Stucki
Fax: 972-751-1901
If to Investor: Wingate Financial Associates L.L.C.
7450 Shames Drive
Westbury, New York 11590
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<PAGE> 6
If to the Escrow Agent: Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
Attn: Gary A Schonwald, Esq.
Fax: 212-885-5001
All such notices and communications shall, when telefaxed, be effective when
telefaxed or if sent by nationally recognized overnight courier service, be
effective one (1) business day after the same has been delivered to such courier
service marked for overnight delivery, or, if mailed, be effective three (3)
days after being mailed by registered or certified mail, return receipt
requested, postage prepaid.
8. Miscellaneous. This Agreement (i) may only be modified by a written
instrument executed by the party to be charged with such modification; (ii) sets
for the entire agreement of the parties hereto with respect to the subject
matter hereof; and (iii) shall inure to the benefit of, and be binding upon, the
parties hereto and their respective heirs, legal representatives, successors and
assigns.
9. Continued Effect of Investor Agreement. Except as amended and
modified by this Agreement, the Investor Agreement (including without limitation
the put contained in subparagraphs (c) (as to 100,000 shares), (d), (e) and (f)
of Paragraph "Founder Options" of the Agreement, all remain in full force and
effect, without any modification.
10. Counterparts. This Amendment may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement, and shall become effective when one or
more counterparts has been signed and the original signature page, or facsimile
thereof, has been delivered to each of the other parties hereto.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have signed this Amendment the
day and year first above written.
AMERICAN HEALTHCHOICE, INC.
By: /s/ J.W. Stucki
-------------------------------------
J.W. Stucki
WINGATE FINANCIAL ASSOCIATES, L.L.C.
By: /s/ Mandell Sherman
-------------------------------------
Selling Shareholders:
/s/ J.W. Stucki
---------------------------------
Dr. J.W. Stucki
/s/ J. Jones
---------------------------------
Dr. J. Jones
/s/ J. Nelson
---------------------------------
Dr. J. Nelson
/s/ Dr. and Mrs. Hanks
---------------------------------
Dr. and Mrs. Hanks
/s/ Charles Webb
---------------------------------
Dr. Charles Webb
/s/ Tracy Bryant
---------------------------------
Dr. Tracy Bryant
7
<PAGE> 8
ESCROW AGENT
Tenzer Greenblatt LLP
By: /s/ Gary Schonwald
-----------------------------
Gary Schonwald, Partner
8
