SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 14a-11(c)
or Rule 14a-12
Iatros Health Network, Inc.
(Name of Registrant as Specified in its Charter)
________________________________________________________________
Iatros Health Network, Inc.
(Name of Person(s) Filing Proxy Statement)
________________________________________________________________
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to the
Exchange Act Rule 14a-6(i)(3).
[ ] Fee Computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies;
(2) Aggregate number of securities to which
transaction applies;
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11;
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party; Iatros Health Network, Inc.
(4) Dated filed: 11/19/96
IATROS HEALTH NETWORK, INC.
TEN PIEDMONT CENTER
SUITE 400
ATLANTA, GA 30305
_________________________________________
Notice of 1996
Annual Meeting and Proxy Statement
Date of Notice November 19, 1996
TO IATROS STOCKHOLDERS
On behalf of the Board of Directors, it is my pleasure to
invite you to attend the Annual Meeting of the Stockholders of
Iatros Health Network, Inc. The Annual Meeting will be held in
Atlanta, Georgia on December 19, 1996, at 10:00 a.m.
It is important that your shares be represented at the
Annual Meeting. Please sign, date and return the enclosed proxy
card as soon as possible.
Robert T. Eramian - Chairman of the Board
/s/ Robert T. Eramian
Notice of Annual Meeting of Stockholders
The Annual Meeting of the Stockholders of Iatros Health
Network, Inc. will be held at Hotel Nikko Atlanta, 3300 Peachtree
Road, N.E., Atlanta, Georgia, on December 19, 1996, at 10:00 a.m.
(local time).
You may indicate your intention to attend the Annual Meeting
by checking the appropriate box on the enclosed proxy card. If
the shares you own are not registered in your name, please
identify the stockholder of record when you request admission.
The return of the proxy will not affect your right to vote in
person if you attend the Annual Meeting.
The business of the Annual Meeting will be:
1. The election of directors;
2. The ratification of election of independent
accountants; and
3. Transaction of any other business that might
properly come before the meeting or any adjournment thereof.
Holders of Common Stock and Series A Senior Convertible
Preferred Stock of record at the close of business on November
15, 1996 are entitled to notice of, and to vote at, the Annual
Meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ Judson H. Simmons
Judson H. Simmons, Secretary
Iatros Health Network, Inc.
November 19, 1996
IATROS HEALTH NETWORK, INC.
Ten Piedmont Center
Suite 400
Atlanta, Georgia 30305
________________________________________________________________
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, DECEMBER 19, 1996
________________________________________________________________
Proxies in the accompanying form are solicited on behalf,
and at the direction, of the Board of Directors of Iatros Health
Network, Inc. (the "Company") for use at the Annual Meeting of
the Company's stockholders to be held on December 19, 1996 or any
adjournment thereof (the "Annual Meeting"). A stockholder
executing and returning a proxy has the power to revoke it at any
time before it is voted by delivering written notice of
revocation to the Secretary of the Company prior to or at the
Annual Meeting, by filing a duly executed proxy bearing a latter
date or by voting in person at the Annual Meeting. Unless so
revoked, the persons appointed by the enclosed proxy card have
advised the Board of Directors that it is their intention to vote
at the Annual Meeting in compliance with the instructions on the
proxy card and, if no contrary instruction is indicated on the
proxy card, for the election of the persons nominated to serve as
directors, for the ratification of the Company's independent
public accountants and in accordance with their best judgment on
any other matters properly brought before the Annual Meeting as
described herein. The Board of Directors is not aware of any
other matter which may come before the Annual Meeting.
When stock is held of record in the name of more than one
person, the proxy is valid if signed by any of such persons
unless the Company receives written notice to the contrary. If
the stockholder is a corporation, the proxy should be signed in
the name of such corporation by an authorized officer. If
signed as attorney, executor, administrator, trustee, guardian or
in any other representative capacity, the signer's full title
should be given and, if not previously furnished, a certificate
or other evidence of appointment should be furnished to the
Company.
This Proxy Statement and the form of proxy which is
enclosed are being mailed to the Company's stockholders
commencing on or about November 19, 1996.
The cost of soliciting proxies will be paid by the Company.
Solicitations may be made by mail, personal interview, telephone,
and facsimile by officers and regular employees of the Company,
who will receive no additional compensation for their services.
The Company will reimburse banks, brokers and other nominees for
their reasonable expenses in forwarding proxy material to the
beneficial owners for whom they hold shares.
Only holders of record of the Company's shares of Common
Stock (the "Common Stock") and the holders of record of the
Series A Senior Convertible Preferred Stock at the close of
business on November 15, 1996, are entitled to receive notice of,
and to vote at, the Annual Meeting and any adjournment thereof.
On November 15, 1996 there were 15,842,242 shares of Common Stock
issued and outstanding and 533,333 shares of Series A Senior
Convertible Preferred Stock (the "Series A Senior Convertible
Preferred Stock") issued and outstanding. Each share of Common
Stock and each share of Series A Senior Convertible Preferred
Stock is entitled to one vote for each matter considered. A
majority of the outstanding shares of Common Stock entitled to
vote at the Annual Meeting must be present at the Annual Meeting,
in person or by proxy, to constitute a quorum for the transaction
of business. The Common Stock and the Series A Senior
Convertible Preferred Stock vote together as one class on all
matters. Reference herein to "Capital Stock" refers to the
Common Stock and to the Series A Senior Convertible Preferred
Stock and the holder(s) of such stock.
Under applicable Delaware laws and the Company's Certificate
of Incorporation and Bylaws (i) for the election of directors,
which requires a plurality of the votes cast at the Annual
Meeting, only proxies and ballots indicating votes "FOR all
nominees," "WITHHELD for all nominees" or specifying that votes
be withheld for one or more designated nominees are counted to
determine the total number of votes cast; "broker non-votes" are
not counted, and (ii) for the adoption of all other proposals,
which are decided by a majority of the shares of the stock of the
Company present in person or by proxy and entitled to vote, only
proxies and ballots indicating votes "FOR," "AGAINST" or
"ABSTAIN" on the proposals or providing the designated proxies
with the right to vote in their judgment and discretion on the
proposals are counted to determine the number of shares present
and entitled to vote; "broker non-votes" are not counted.
The mailing address of the principal corporate office of the
Company is Ten Piedmont Center, Suite 400, Atlanta, Georgia
30305.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Any stockholder of record at the close of business on
November 15, 1996 (the "Record Date") will be entitled to vote at
the Annual Meeting. On the Record Date, there were issued and
outstanding 15,842,242 shares of Common Stock and 533,333 shares
of the Series A Senior Convertible Preferred Stock.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to
the securities holdings of all persons which the Company, by
virtue of filings with the Securities and Exchange Commission or
otherwise, has reason to believe may be deemed the beneficial
owners of more than 5% of the Company's outstanding Common Stock
or securities convertible into Common Stock which have voting
rights as of November 15, 1996, based on a total of 15,842,242
shares of Common Stock issued and outstanding that day for each
person and any shares of Common Stock that person is deemed to
beneficially own. Also set forth in the table is the beneficial
ownership of all of the Company's outstanding Common Stock as of
such date by all officers and directors, individually and as a
group. None of the directors or executive officers of the
Company are holders of the Series A Senior Convertible Preferred
Stock.
Number of Shares
Name of Beneficial Owner Beneficially Owned(1) Percent
Robert T. Eramian(2) 1,880,306 11.40%
10 Piedmont Center
Suite 400
Atlanta, GA 30305
Joseph C. McCarron, Jr.(3) 720,000 4.35%
15 Constitution Drive
Bedford, NH 03110
John D. Higgins(4) 365,775 2.26%
199 Crossways Park Drive
Woodbury, NY 11797
Robert A. Kasirer(5) 1,070,000 6.72%
1180 S. Beverly Drive
Suite 6091
Los Angeles, CA 90035
Judson H. Simmons(6) 45,000 *
10 Piedmont Center
Suite 400
Atlanta, GA 30305
Joseph L. Rzepka(7) 25,000 *
10 Piedmont Center
Suite 400
Atlanta, GA 30305
Gordon J. Simmons(8) 100,000 *
401 City Avenue
Suite 315
Bala Cynwyd, PA 19004
Royce Investment Group(9) 586,761 3.61%
199 Crossways Park Drive
Woodbury, NY 11797
All current executive officers
and directors
as a group (7 persons) 4,347,976 23.68%
* Less than one percent.
______________________________
(1) Beneficial ownership is determined in accordance with the
Rules of the Securities and Exchange Commission ("SEC") and
generally includes voting or investment power with respect to
securities. In accordance with SEC rules, shares which may be
acquired upon conversion or exercise of stock options, warrants
or convertible securities or which become exercisable within 60
days of the date of the table are deemed beneficially owned by
the optionee. Unless otherwise noted, all shares are
beneficially owned and the sole voting and investment power is
held by the persons indicated.
(2) Includes 1,228,958 shares of Common Stock that Mr. Eramian
has the power to vote pursuant to irrevocable proxies granted to
him by Family Investment Associates L.P. ("Family"), James M.
Foulke and Ellen Foulke ("Foulke") and Bentley-Midas Group, Ltd.
("Bentley"). 250,000 shares of Common Stock purchasable by Etel
Corporation, a corporation controlled by Mr. Eramian, under
warrants granted by the Company, 70,000 shares of Common Stock
purchasable under warrants granted to Mr. Eramian by the Company
and 331,348 shares of Common Stock purchasable under warrants
granted to Mr. Eramian by the Company.
(3) Includes 400,000 shares of Common Stock purchasable under an
option granted to Mr. McCarron pursuant to his employment
agreement, 250,000 shares of Common Stock purchasable under a
warrant granted to Mr. McCarron by the Company and 70,000 shares
of Common Stock purchasable under warrants granted to Mr.
McCarron by the Company.
(4) Includes the following: (i) 53,898 shares held of record;
(ii) 7,500 shares of Common Stock purchasable under a warrant
granted by the Company to Royce Investment Group, Ltd. ("Royce")
and transferred to Mr. Higgins; (iii) 15,948 shares of Common
Stock purchasable under a warrant granted by the Company to Mr.
Higgins as to a debt conversion; (iv) 95,000 shares of Common
Stock purchasable under a warrant granted by the Company to Royce
and transferred to Mr. Higgins by Royce; (v) an option to
purchase 152,839 shares of Common Stock granted to Royce by
stockholders of the Company and transferred to Mr. Higgins by
Royce, and (vi) 40,000 shares of Common Stock purchasable under a
warrant granted by the Company to Mr. Higgins.
(5) Includes 1,000,000 shares of Common Stock held of record by
Healthcare Holdings, Ltd., a limited partnership of which Mr.
Kasirer is a General Partner and 70,000 shares of Common Stock
purchasable under warrants granted to Mr. Kasirer by the Company.
(6) Purchased by Mr. Simmons in an open market transaction prior
to becoming an officer of the Company. Also includes 40,000
shares of Common Stock purchasable under a warrant granted by the
Company to Mr. Simmons.
(7) Includes an option granted to Mr. Rzepka by the Company for
the purchase of 25,000 shares of Common Stock. Mr. Rzepka was
appointed Chief Financial Officer of the Company in September,
1996.
(8) Includes 100,000 shares of Common Stock purchasable under a
warrant granted by the Company to Mr. Simmons pursuant to his
employment agreement. Mr. Simmons was appointed Chief Operating
Officer and Executive Vice President in February, 1996.
(9) Includes 164,993 shares held of record and 82,500 shares of
Common Stock purchasable under a warrant which is part of a unit
purchase warrant granted by the Company to Royce in connection
with the Company's initial public offering completed in 1992.
Includes 305,000 shares of Common Stock purchasable under a
warrant granted by the Company to Royce as placement agent for
the Company's sale of Common Stock completed in 1994. Also
includes an option to purchase 34,268 shares of Common Stock
granted to Royce by stockholders of the Company.
Option and Proxy Agreements
In July 1994, Foulke, Bentley and Family each of whom was a
principal stockholder of the Company (collectively, the "Issuing
Parties") entered into a series of agreements granting options to
purchase shares of Common Stock owned by them to Etel, Royce and
Joseph C. McCarron, Jr. and giving irrevocable proxies to vote
those shares of Common Stock to Mr. Eramian. The options are to
purchase shares from Family, Foulke and Bentley, not for the
purchase of shares from the Company.
Royce has exercised a portion of the option and transferred
a portion of the option granted to it and Etel by the Issuing
Parties. Etel has not exercised the option granted to it by the
Issuing Parties. Either Royce or Etel may separately exercise
all of its respective portion of this option. The term of the
option is thirty-three months. Pursuant to the terms of this
option, the exercise price ranges from $4.00 per share during the
first fifteen months to $8.00 per share after the twenty-seventh
month. The aforementioned shares are subject to an irrevocable
proxy granted to Mr. Eramian.
The Issuing Parties also granted to Etel another option to
purchase 297,000 shares of the Company's Common Stock. The
option expired on July 25, 1996.
The Issuing Parties also granted to Mr. McCarron an option
to purchase 196,125 shares of the Company's Common Stock. The
option expired on July 25, 1996.
The term of the irrevocable proxies is thirty-three months.
The total number of shares represented by the proxies is
1,228,958.
ITEM 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a
Board of Directors consisting of 6 directors. Holders of the
Common Stock and the Series A Senior Convertible Preferred Stock
voting together as one class are entitled to elect this number of
directors. The size of the Board is increased, up to a maximum
of 13 directors, by 1 director each time the cumulative dividends
payable on the Series A Senior Convertible Preferred Stock are in
arrears in an amount equal to two (2) full quarterly dividend
payments. The holders of the Series A Senior Convertible
Preferred Stock voting separately as a single class are entitled
to elect these directors. Currently, the holders of the Series A
Senior Convertible Preferred Stock voting separately as a single
class are entitled to elect 4 directors. The voting rights of
the holders of the Series A Senior Convertible Preferred Stock
for these directors continue until all Cumulative Dividends have
been paid in full, and at such time the number of directors
constituting the full Board of Directors is decreased to 6.
At the Annual Meeting, four (4) nominees for directors are
to be elected by the holders of the Common Stock and the Series A
Senior Convertible Preferred Stock voting together as one class
to serve until the next annual meeting of stockholders of the
Company and their successors are elected and qualified. All of
the nominees for election as directors at the Annual Meeting are
currently directors of the Company. No persons have been
nominated for election as directors by the holders of the Series
A Senior Convertible Preferred Stock voting separately as a
single class. The names and biographical summaries of the four
(4) persons who have been nominated to stand for election at the
Annual Meeting appear in the sections below.
Directors are elected to serve until the next annual meeting
of stockholders and until their respective successors have been
duly elected and qualified. Nominees receiving a plurality of
the votes cast will be elected as directors. The enclosed form
of proxy provides a means for the holders of Capital Stock to
vote for all of the nominees listed therein, to withhold
authority to vote for one or more of such nominees or to withhold
authority to vote for all of such nominees. The Company is not
aware of any reason why any of the nominees, if elected, would be
unable to serve as a director. If an unexpected occurrence makes
it necessary, in the judgment of the Board of Directors, that
some other person be substituted for any of the nominees, shares
represented by proxies will be voted for such other person as the
Board may select.
Vacancies on the Board of Directors may be filled by the
Board of Directors until the next annual meeting of stockholders.
Proxies cannot be voted on the election of directors for a
greater number of persons than four, which is the number of
nominees named herein.
In the election of directors, a stockholder has the right to
vote the number of shares owned by the stockholder for as many
persons as there are directors to be elected other than the
directors elected only by the holders of shares of Series A
Senior Convertible Preferred Stock. The Company's Certificate of
Incorporation does not permit cumulative voting.
Nominees to Serve as Directors
Name Age Since Position(s) Held
Robert T. Eramian 51 1994 Chief Executive Officer,
President, Director and
Chairman of the Board
Joseph C. McCarron 42 1994 Executive Vice President
and Director
John D. Higgins 63 1994 Director
Robert A. Kasirer 46 1995 Director and Managing
Director, Iatros Respiratory
Corporation
Business Experience of the Nominees for the Board of Directors
Robert T. Eramian
Mr. Eramian has been a director since July 1994, and was
elected Chairman of the Board in September, 1994. Mr. Eramian
was appointed Chief Executive Officer and President on January
17, 1995. Mr. Eramian served as Chairman of the Board of
Healthcare Concepts, Inc. a health care financial advisory and
management consulting firm from 1989 through 1994. Prior to co-
founding Healthcare Concepts, Inc., Mr. Eramian was an investment
banker with Bear Stearns in Atlanta, Georgia. Mr. Eramian
received his BA from Merrimack College, his Master's Degree from
the University of Dayton and participated in doctoral studies in
political philosophy at Emory University. Mr. Eramian is the
President of Etel Corporation which was founded in 1994. Etel
Corporation is a health care financial and advisory consulting
firm. The business and affairs of Etel Corporation are inactive.
Joseph C. McCarron, Jr.
Mr. McCarron was appointed President, Chief Executive
Officer and Chief Financial Officer and a director of the Company
in July 1994. In January, 1995, Mr. McCarron was appointed
Executive Vice President. Mr. McCarron served as President of
Healthcare Concepts Inc., a health care financial advisory and
management consulting firm from 1989 through 1994. Mr. McCarron
has held executive management positions in the long-term care
industry for over thirteen years. Mr. McCarron was a senior
manager with Ernst & Young in the New England area. Mr. McCarron
graduated cum laude with a BA in Business Administration from
Northeastern University. Mr. McCarron is a Certified Public
Accountant.
John D. Higgins
Mr. Higgins has been a director since July 1994. Since
October 1990, Mr. Higgins has served as Vice President and Senior
Vice President - Corporate Finance of Royce Investment Group,
Inc., an investment banking firm. From March 1987 to May 1990,
Mr. Higgins served as an executive officer of Lombard Securities
Corp., an investment banking firm. Mr. Higgins holds BBA and MBA
degrees in finance from Hofstra University. He is also a
director of IRATA, Inc. an operator of photo booths in malls and
amusement parks.
Robert A. Kasirer
Mr. Kasirer has been a director of the Company since
February 1995. Mr. Kasirer was appointed Managing Director of
Iatros Respiratory Corporation in January 1995 and in August 1995
became the Director of Business Development. From 1991 to 1994,
Mr. Kasirer was Chief Executive Officer of KingCare Respiratory
Services, Inc. From 1988 to 1991, Mr. Kasirer developed
retirement housing and health care facilities for not-for-profit
owners as a fee contractor. Prior to 1986, Mr. Kasirer practiced
law. Mr. Kasirer graduated from New York University with a BA
degree in 1970. Mr. Kasirer graduated from St. John's University
School of Law in 1973. Mr. Kasirer is a member of the New York
Bar Association.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires directors and certain officers of the Company,
as well as persons who own more than 10% of a registered class of
the Company's equity securities ("Reporting Persons") to file
reports of ownership and changes in ownership on Forms 3, 4 and 5
with the Securities and Exchange Commission. The Company
believes that other than as set forth below, all Reporting
Persons have timely complied with all filing requirements
applicable to them.
Robert A. Kasirer and Judson H. Simmons filed their
respective Form 3 late.
Recommendation
The Board of Directors unanimously recommends a vote "FOR"
the election of each of the above listed nominees as directors.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held eight (8) meetings during 1995.
All directors attended all meetings of the Board. The Company
has a Compensation Committee and an Audit Committee created in
1995 whose members are John D. Higgins (Chairman) and Robert T.
Eramian. The committees have each held two (2) meetings during
1995. The Board of Directors does not have a Nomination
Committee.
The Audit Committee reviews the Company's accounting
functions, operations and management and the adequacy and
effectiveness of the internal controls and internal auditing
methods and procedures of the Company. The Audit Committee
recommends to the Board the appointment of the independent public
accountants for the Company, subject to the ratification by the
stockholders at the annual meeting.
The Compensation Committee reviews and acts with respect to
compensation and other employee benefit plans and makes
recommendations to the Board of Directors regarding the salary
and compensation of the Chief Executive Officer and President and
other officers of the Company.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Mr. Eramian served on the Compensation Committee for the
past fiscal year. Although Mr. Eramian, the Company's Chief
Executive Officer and President, served on the Company's
Compensation Committee, he did not participate in any
recommendation or decisions regarding his own compensation as an
executive officer. The Company's Board of Directors as a whole
determines the method by which the Company's executive
compensation is determined based upon recommendations of the
Compensation Committee.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") is responsible
for reviewing all elements of the total compensation program for
all officers of the Company and making recommendations to the
Board of Directors regarding such program, as well as concerning
the respective compensation packages for each of the Company's
officers. John D. Higgins, an outside director, serves as
Chairman of the Committee. Robert T. Eramian also serves as a
member of this Committee insofar as the compensation of officers
other than himself are concerned.
Compensation Policies.
The policy of the Company and the guidelines followed by the
Committee provide that compensation to the Company's executive
officers should achieve the following objectives:
1. Assist the Company in attracting and retaining talented
and well-qualified executives.
2. Reward performance and initiative.
3. Be competitive with other companies in the long-term
care and ancillary health care services industries.
4. Be significantly related to accomplishments and the
Company's short-term and long-term successes, particularly
measured in terms of growth in net operating income and cash flow
from operations.
5. Encourage executives to achieve meaningful levels of
ownership of the Company's stock.
The Company's compensation practices embody the principles
that annual bonuses should be based primarily on achieving
Company objectives that enhance long-term stockholder value and
also that meaningful stock ownership by management, including
participation in various benefit plans providing for stock
options, restricted stock and retirement, is desirable in
aligning stockholder and management interests.
The Company's approach to base compensation levels is to
offer competitive salaries in comparison with prevailing market
practices. The Committee annually examines market compensation
levels and trends. Additionally, for this purpose, the Committee
also considers the pool of executives who are currently employed
in similar positions in public companies with emphasis on
salaries paid by other companies in the long-term care and
ancillary health care services industries.
The Committee annually evaluates executive officer salary
decisions. This annual review considers the decision-making
responsibilities of each position and the experience, work
performance, and team-building skills of each incumbent. The
Committee views performance as the single most important
measurement factor, followed by team-building skills, and
decision-making responsibilities.
Finally, for executives other than the Chief Executive
Officer, the Committee gives more or less equally consideration
to both overall Company performance and the performance of the
specific areas of the Company under the incumbent's direct
control. This balance supports the accomplishment of overall
objectives and rewards individual contributions by executive
officers. Individual annual bonuses for each named executive are
consistent with market practices for positions with comparable
decision-making responsibilities.
Chief Executive Officer Compensation.
In determining the compensation of the Company's Chief
Executive Officer, as well as the other Executive Officers, the
Committee takes into account various qualitative and quantitative
indicators of corporate and individual performance in determining
the level and the composition of compensation. While the
Committee considers more or less equally such performance
measures as growth in revenues, market capitalization, net
operating income, cash flow from operations, and earnings, the
Committee does not apply any specific quantitative formula in
making compensation decisions. The Committee also values the
importance of achievements that may be difficult to quantify and
recognizes the importance of qualitative factors.
The base salary for Robert T. Eramian, the Company's Chief
Executive Officer, was established at $250,000 for 1995. In
addition, in February 1996, Mr. Eramian was granted warrants to
purchase 50,000 shares of the Company's Common Stock.
Mr. Eramian's base salary was established in light of his
duties and the scope of his responsibilities in the context of
the policies and guidelines enumerated above. In the Committee's
and the Board's evaluation of total compensation for Mr Eramian,
appropriate weight is given to his leadership in growth of the
Company's revenues, in obtaining financing for such growth, in
returning the Company to profitability, and in accomplishing the
Company's short-term and long-term objectives.
The grants of warrants to Mr. Eramian were made based on the
Committee's conclusions as to appropriate levels of participation
for the Company's Chief Executive Officer, with a particular
sensitivity to the Company's objective of aligning stockholder
and management interest. The warrants to purchase 50,000 shares
of the Company's Common Stock were granted as a bonus for Mr.
Eramian's 1995 performance.
Compensation Committee of the Board
John D. Higgins, Chairman
Robert T. Eramian
CORPORATE PERFORMANCE GRAPH
The following graph compares the performance of the
Company's Common Stock with the performance of the composite
prices of companies listed on the University of Chicago's Center
for Research on Security Prices Index for the Nasdaq Stock Market
(Health) ("CRSP") and the S&P 500 Index over the periods from,
respectively, April 28, 1992, the date the Company's Common Stock
was first publicly traded, and December 29, 1995. The graph
assumes that $100 was invested on April 28, 1992 in the Company's
Common Stock and the CRSP Index and S&P 500 Index and that all
dividends were reinvested. On December 31, 1992, the cumulative
total stockholder returns for such investment in the Company, the
CRSP Index and S&P Index were approximately $100.00, $149.09 and
$110.96 respectively; on January 29, 1993: $100.00, $174.88,
$111.80, respectively; on January 31, 1994: $100.38, $238.98 and
$124.17, respectively; on January 31, 1995: $100.75, $250.48 and
$125.19, respectively; and on December 29, 1995 $100.76, $345.05
and $155.05, respectively.
THESE INDICES ARE INCLUDED FOR COMPARATIVE PURPOSES ONLY AND DO
NOT NECESSARILY REFLECT MANAGEMENT'S OPINION THAT SUCH INDICES
ARE AN APPROPRIATE MEASURE OF THE RELATIVE PERFORMANCE OF THE
STOCK INVOLVED AND ARE NOT INTENDED TO FORECAST OR TO BE
INDICATIVE OF POSSIBLE FUTURE PERFORMANCE OF THE COMMON STOCK.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the total compensation paid by the Company
to each of the named executive officers for the fiscal years ended December 31,
1995, December 31, 1994 and December 31, 1993.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL
COMPEN
SATION
Awards Payouts
OTHER RESTRICTED SECURITIES LTIP
YEAR SALARY BONUS($) ANNUAL STOCK UNDERLYING PAYOUTS ALL OTHER
($) COMPENSATION AWARDS OPTIONS/SA (#) COMPENSATION
NONIONM ($) Rs (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert T. 1995 $229,000 $0 $0 $0 361,348 $0 $0
Eramian 1994 N/A N/A N/A N/A N/A N/A N/A
Chief 1993 N/A N/A N/A N/A N/A N/A N/A
Executive
Officer,
President
and
Chairman
of the
Board(1)
Joseph C. 1995 $162,500 $0 $0 $0 30,000 $0 $0
McCarron, 1994 $64,882 N/A $3,750 N/A 650,000 $0 $0
Jr., 1993 N/A N/A N/A N/A N/A N/A N/A
Executive
Vice
President,
Chief
Financial
Officer
and
Director(2)
Judson H. 1995 $0 $0 $125,000 $0 0 $0 $0
Simmons 1994 N/A N/A N/A N/A N/A N/A N/A
Executive 1993 N/A N/A N/A N/A N/A N/A N/A
Vice
President
- -
Strategic
Planning
and
Corporate
Organizati
on(3)
<FN>
(1) Mr. Eramian was appointed Chief Executive Officer on January 17, 1995.
(2) Mr. McCarron was appointed President, Chief Executive Officer and Chief
Financial Officer in July 1994 and resigned the offices of President and Chief
Executive Officer on January 17, 1995. He was appointed Executive Vice
President on January 17, 1995.
(3) Mr. Simmons was appointed Executive Vice President - Strategic Planning and
Corporate Organization in July 1995.
</TABLE>
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS
IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARs EXERCISE MARKET
UNDERLYING GRANTED TO OR PRICE DATE
OPTION/SARs EMPLOYEES IN BASE PRICE AT TO EXPIRE
NAME GRANTED (#) FISCAL YEAR(1) ($/Share) DATE
OF
GRANT
<S> <C> <C> <C> <C> <C>
Robert T. Eramian 30,000 7.66% $0.35 $5.875 July 13,
Chief Executive 71.89% See below(2) (4) 2005
Officer and 281,348(1),(2) 12.78% $4.00 $9.375 April 12,
President 50,000(3) (5) 2006
9.375 April 12,
(5) 2006
Joseph C. McCarron, 30,000 7.66% $0.35 $5.875 July 13,
Jr. (4) 2005
Executive Vice
President and Chief
Financial Officer
Judson H. Simmons 0 0% $0 $0 N/A
Executive Vice
President -
Strategic Planning
and Corporate
Organization
<FN>
(1) This Warrant was granted and exercisable as of April 12, 1996, but was
granted in connection with transactions in 1995.
(2) In satisfaction of obligations owed Etel Corporation, the Company granted
Mr. Eramian a total of 281,348 warrants as follows: a warrant for 89,600 shares
at $1.00 per share, 7,652 shares at $1.44 per share, 38,880 shares at $1.25 per
share, 9,956 shares at $1.41 per share, 18,240 shares at $1.25 per share, 18,112
shares at $2.31 per share, 14,961 shares at $2.41 per share, 25,333 shares at
$3.00 per share, 39,000 shares at $3.00 per share, 7,805 shares at $1.28 per
share, 6,809 shares at $1.47 per share, 5,000 shares at $3.00 per share.
(3) For services rendered to the Company in 1995, the Company granted Mr.
Eramian a warrant for 50,000 shares at $4.00 per share.
(4) Warrant granted on July 13, 1995 based upon the closing bid price of the
Company's Common Stock on that date of $5.875 as traded on the NASDAQ SmallCap
MarketSM. The Warrant was exercisable at grant.
(5) Warrant is valued based upon closing bid price of the Company's Common
Stock on December 29, 1995 of $9.375 as traded on the NASDAQ SmallCap MarketSM.
The Warrant was granted and was exercisable commencing on April 12, 1996.
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
Number of Securities Value
Underlying Unexercised of Unexercised
Shares Net Options/SARs In-the-Money
Name Acquired Value at FY-End (#) Options/SARs
on Realized Exercisable/Unexercisab at Fiscal Year
Exercise le End($)
(#) Exercisable/Unexe
rcisable
<S> <C> <C> <C> <C>
Robert T. Eramian -0- -0- 30,000(E)/331,348(U) $270,750(1)(E)/
Chief Executive Officer $2,413,938(2)(U)
and President
Joseph C. McCarron -0- -0- 430,000(E)/250,000(U) $3,720,750(1)(E)/
Chief Financial Officer $1,968,750(1)(U)
and Executive Vice
President
Judson H. Simmons -0- -0- 0/(E)/0(U) $0(E)/$0(U)
Vice President -
Strategic Planning and
Corporate Organization
<FN>
(1) Based upon the closing bid price of the Company's Common Stock ($9.375 per
share) on December 29, 1995 as traded on the NASDAQ SmallCap market, the bid
price on the last day of the fiscal year, minus the exercise price.
(2) Based upon the closing bid price of the Company's Common Stock ($9.375 per
share) on December 29, 1995 as traded on the NASDAQ SmallCap market, the bid
price on the last day of the fiscal year, minus the exercise price. However,
the Warrant for the underlying shares was not granted until 1996.
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Performanc Threshold ($ or #) Target ($ Maximum ($
e or Other or #) or #)
Number of Period
Name Shares, Until
Units or Maturizati
Other on or
Rights (#) Payout
<S> <C> <C> <C> <C> <C>
Robert T. Eramian 0 N/A N/A N/A N/A
Chief Executive
Officer and
President
Joseph C. McCarron 0 N/A N/A N/A N/A
Chief Financial
Officer and
Executive Vice
President
Judson H. Simmons 0 N/A N/A N/A N/A
Executive Vice
President -
Strategic Planning
and Corporate
Organization
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION,
SEVERANCE AND CHANGE-OF-CONTROL AGREEMENTS
Robert T. Eramian
In February, 1996, the Company's Board of Directors approved
an employment agreement for Mr. Eramian effective January 1,
1996. The term of the agreement is five (5) years. Under the
employment agreement Mr. Eramian is entitled to an annual base
salary of $250,000. The employment agreement also provides for
reimbursement of travel expenses, an automobile allowance of $750
per month and health and life insurance benefits. Mr. Eramian is
eligible for an annual bonus in an amount to be determined by the
Board of Directors based upon recommendations of the Compensation
Committee. In 1995, the Company successfully acquired management
contracts for a number of long term health care facilities that
resulted in a return to profitability and an increase in cash
flow from operations. Based on these results Mr. Eramian was
awarded a bonus consisting of warrants for the purchase of 50,000
shares of the Company's Common Stock.
Joseph C. McCarron, Jr.
The Company entered into an employment agreement with Mr.
McCarron as of October 21, 1994 for a term of three (3) years
beginning July 25, 1994. Under the employment agreement Mr.
McCarron is entitled to an initial annual base salary of $150,000
subject to annual increases, to be determined by the Company's
Board of Directors. Mr. McCarron is also eligible for an annual
bonus equal to 100% of his base salary to be determined by the
Company's Board of Directors based upon recommendations of the
Compensation Committee. Under the employment agreement Mr.
McCarron is also entitled to stock options to purchase 200,000
shares of Common Stock at $.75 per share with a three-year
exercise period and stock options to purchase 200,000 shares of
Common Stock at $1.00 per share with a vesting period of one year
and a three-year-exercise period. The employment agreement also
provides for reimbursement of travel expenses, an automobile
allowance of $750 per month and health and life insurance
benefits. During 1995, the Company's Board of Directors approved
an increase of the annual base salary of Mr. McCarron to $200,000
based on his involvement in the Company's successful acquisition
of management contracts for a number of long term health care
facilities that resulted in a return to profitability and an
increase in cash flow from operations.
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
Cash Compensation Security Grants
NAME Annual Meeting Consultin Number of Number of
Retainer Fees ($) g Shares Securitie
Fee ($) Fees/Othe (#) s
r Fees Underlyin
($) g
Options/
SARS (#)
Robert T. N/A N/A N/A N/A 30,000/0
Eramian
Joseph C. N/A N/A N/A N/A 30,000/0
McCarron
John D. N/A N/A N/A N/A 30,000/0
Higgins
Robert A. N/A N/A N/A N/A 30,000/0
Kasirer
There is no standard compensation for the Directors of the
Company beyond direct reimbursement for expenses incurred in
attending board meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to a consulting agreement between the Company, and
Etel Corporation ("Etel") dated July 14, 1994 (the "Etel
Agreement"), Etel and Mr. Joseph C. McCarron were each issued
warrants to purchase 250,000 shares of the Company's Common Stock
for a ten-year term at an exercise price of $1.50 per share.
Pursuant to the Etel Agreement, Etel provided ongoing financial,
management and growth strategy advice and assistance to the
Company through December, 1995. For such services, Etel was to
be paid periodic compensation and incentive compensation for
certain specified types of transactions. As of December 31, 1994,
the Company had paid approximately $122,000 to Etel. No further
payments are expected to be made. Etel also was entitled to
incur reasonable and appropriate expenses on its and the
Company's behalf in connection with its services relating to the
Company. The Company also agreed to indemnify and hold harmless
Etel, its officers, directors, employees, agents and attorneys
against losses, claims, damages or liabilities to which such
persons become subject in connection with the services which are
the subject of or arise out of the Etel Agreement, except where
such loss, claim, damage or liability was determined to result
from the indemnified person's gross negligence. Etel is
controlled by Mr. Robert T. Eramian. Mr. McCarron is not an
affiliate of Etel. Other than the warrants received by Mr.
McCarron, Mr. McCarron will receive no further compensation under
the Agreement.
In January 1995, Mr. Eramian was appointed Chief Executive
Officer of the Company and the regular periodic compensation
(salary equivalent) payable to Etel under the Etel Agreement was
replaced with similar compensation paid directly to Mr. Eramian.
In 1995, the Company paid $112,000 to Etel, $12,500 of which was
the January 1995 periodic compensation amount and the balance was
for reimbursement of expenses incurred by Etel.
In February 1996, the Company's Board of Directors approved
an employment agreement directly with Mr. Eramian, payment of
incentive compensation due under the Etel Agreement through
issuance of warrants and termination of those parts of the Etel
Agreement that had not been terminated earlier. Warrants were
issued to purchase 281,348 shares of the Company's Common Stock
at exercise prices ranging from $1.00 per share to $3.00 per
share.
The Company has entered into employment agreements with
Messrs. Eramian and McCarron.
In connection with a private offering of its securities in
July 1994, the Company paid Royce Investment Group, Inc.
("Royce") as placement agent $70,000 for expenses and issued
Royce warrants to purchase 400,000 shares of the Company's Common
Stock for a five-year period at an exercise price of $.75 per
share. Mr. John D. Higgins, a director of the Company, is an
executive officer of Royce. Royce transferred 100,000 of such
warrants to Mr. Higgins. Mr. Higgins subsequently transferred
5,000 of such warrants to a non affiliate of the Company. During
May 1995, the Company received short-term working capital loans
in the amount of $200,000. In connection with the loans, the
Company has committed to issue warrants for a total of 100,000
shares of the Company's Common Stock. Each of the previous
warrants has an exercise price of $3.00 per share for a three (3)
year period. Mr. Higgins advanced $20,000 to the Company in
connection with this transaction. In August, the Company issued
short-term notes in the aggregate principal amount of $450,000.
Royce received $30,375 for its services in arranging for the
advances. On September 29, 1995 the $200,000 debt and $450,000
debt were converted into shares of Common Stock and warrants for
the purchase of shares of Common Stock.
Effective April 21, 1992 the Company entered into an
Underwriting Agreement with Royce. Pursuant to this Agreement,
for a period of five years, the Company granted Royce the right
to designate a representative to the Company's board of
directors, which Royce has done. The Company agreed to pay Royce
a commission equal to 5% of the amount paid upon exercise of the
Company's publicly-held Warrants. During 1995, Royce earned
$185,867 and charged $10,000 for expenses under this Agreement.
The Company also agreed to pay Royce up to 5% of the value of any
merger or sale of substantially all of the assets of the Company
if such merger or sale was made within 5 years to an entity
introduced to the Company by Royce. The Company committed for
five years to file necessary reports with the SEC, obtain annual
audited financial statements, maintain a listing on NASDAQ for
its securities and to take other steps to facilitate the trading
of the Company's securities.
In 1995, Royce served as placement agent for securities
offered by the Company and the Company agreed to pay Royce sales
commissions and fees for such services. Total sales commissions
and fees earned by Royce in 1995 amounted to $272,900.
At December 31, 1995, $250,526 of loans receivable and other
assets represented loans due to the Company from Mr. Kasirer, a
director of the Company. This note accrues interest at the rate
of 9% and is payable in January 2000.
ITEM 2
RATIFICATION OF ELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, on the recommendation of the Audit
Committee, has elected Asher & Co., Ltd. as independent
accountants for the year 1997. Asher & Co., Ltd. has served as
the Company's independent certified public accounting firm since
1994. At the Annual Meeting, stockholders will vote on a
proposal to ratify Asher & Co., Ltd. as the Company's
independent certified public accountants. Representatives of
Asher & Co., Ltd. will not be present at the Annual Meeting and
thus will not have an opportunity to make a statement nor will
they be available to respond to appropriate questions. No
accountant for the Company, engaged in the last two fiscal years,
has either resigned or declined to stand for reelection.
It is understood that even if the selection is ratified, the
Board of Directors, in its discretion, may direct the appointment
of a new independent accounting firm at any time during the year
if the Board of Directors feels that such a change would be in
the best interests of the Company and its stockholders.
Recommendation
The Board of Directors unanimously recommends a vote "FOR"
ratification of the selection of Asher & Co., Ltd. as the
Company's independent accountants.
ADDITIONAL INFORMATION - OTHER MATTERS
The Board of Directors does not know of any matters to be
presented at the Annual Meeting other than as set forth in the
Notice of Annual Meeting of Stockholders. However, it is
intended that proxies solicited will be voted on any matters that
may properly come before the Annual Meeting in the discretion of
the persons named in the proxy.
1997 STOCKHOLDER PROPOSALS
In order for a stockholder's proposal to be included in the
Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders the stockholder must follow the procedures of Rule
14a-8 under the Securities Exchange Act of 1934, as amended, and
the proposal must be received by the Secretary of the Company at
its principal office in Atlanta, Georgia on or before July 23,
1997.
ANNUAL REPORT
The Company has mailed a copy of its Annual Report to each
stockholder entitled to vote at the Annual Meeting. A copy of
the Annual Report on Form 10-KSB, filed with the Securities and
Exchange Commission, may be obtained for a nominal fee by writing
to: Stockholder Services, Iatros Health Network, Inc., Ten
Piedmont Center, Suite 400, Atlanta, Georgia 30305.
PROXY
IATROS HEALTH NETWORK, INC.
PROXY SOLICITED BY OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 19, 1996
The undersigned stockholder of Iatros Health Network, Inc.
(the "Company"), revoking all previous proxies, hereby appoints
Robert T. Eramian and Judson H. Simmons, and each of them acting
individually, as the attorneys and proxies of the undersigned,
with full power of substitution and resubstitution, to vote all
shares of Common Stock and Series A Senior Convertible Preferred
Stock of the Company which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders
of the Company, to be held at 10:00 a.m. at the Hotel Nikko
Atlanta at 3300 Peachtree Road, N.E., Atlanta, Georgia 30305, on
Thursday, December 19, 1996, and any adjournment or postponement
thereof. Said proxies are authorized and directed to vote as
indicated with respect to the matters outlined on the reverse.
(Continued and to be voted, signed and dated on reverse side)
Please mark your
X votes as in this
example.
FOR WITHHELD Nominees:
1. Election Robert T. Eramian
of Directors Joseph C. McCarron
for, except vote John D. Higgins
withheld from the Robert A. Kasirer
following nominee(s):
______________________
______________________
______________________
2. Ratification of Asher & Co., Ltd. as the Company's
Independent Accountants.
FOR AGAINST ABSTAIN
3. To transact such other business as may properly come before
this meeting.
4. I will attend the Annual Meeting.
YES NO
This proxy is solicited on behalf of the Board of Directors,
unless otherwise specified, the shares will be voted "For" all
nominees and "For" the proposal to ratify Asher & Co., Ltd. as
the Company's Independent Accountants. This proxy delegates
discretionary authority to vote with respect to any other
business which may properly come before the Meeting or any
adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF
ANNUAL MEETINGS AND ANNUAL REPORT OF IATROS HEALTH NETWORK, INC.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
______________________________
Name (Print)
SIGNATURE__________________ DATE _______
______________________________
Name (Print)
SIGNATURE__________________ DATE _______
NOTE: Please sign this Proxy exactly as name(s) appear in
address. When signing as attorney-in-fact, executor,
administrator, trustee or guardian, please add your title as
such. If stockholder is a corporation, please sign in full
corporate name by duly authorized officer or officers and affix
the corporate seal. When stock is held in the name of two or more
persons, all such persons should sign.
