<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ACCESS HEALTH, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[ACCESS HEALTH LOGO]
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
TO BE HELD MARCH 26, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Access
Health, Inc., a Delaware corporation (the "Company"), will be held on
Wednesday, March 26, 1997, at 11:00 a.m., local time, at the Company's
business address at 11020 White Rock Road, Rancho Cordova, California 95670,
for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
for the Company for the fiscal year ending September 30, 1997.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on February 14, 1997,
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
All stockholders are invited to attend the meeting in person. However, to
assure your representation at the meeting, you are urged to mark, sign, date
and return the enclosed proxy card as promptly as possible in the postage
prepaid envelope enclosed for that purpose. Any stockholder attending the
meeting may vote in person even if he or she has returned a proxy.
Sincerely,
Thomas E. Gardner
President and Chief Executive
Officer
Rancho Cordova, California
February 21, 1997
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED.
<PAGE>
ACCESS HEALTH, INC.
----------------
PROXY STATEMENT FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of Access Health, Inc., a Delaware
corporation ("Access Health" or the "Company"), for use at the Annual Meeting
of Stockholders to be held on Wednesday, March 26, 1997, at 11:00 a.m., local
time, or at any adjournment thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be held at the Company's business address at 11020 White Rock Road,
Rancho Cordova, California 95670. The Company's telephone number is (916) 851-
4000.
These proxy solicitation materials were mailed on or about February 21,
1997, together with the Company's 1996 Annual Report to Stockholders, to all
stockholders entitled to vote at the meeting.
RECORD DATE AND PRINCIPAL SHARE OWNERSHIP
Stockholders of record at the close of business on February 14, 1997 (the
"Record Date"), are entitled to notice of and to vote at the meeting. On
December 31, 1996, 17,609,942 shares of the Company's Common Stock were issued
and outstanding. The following table sets forth the beneficial ownership of
the Company's Common Stock as of December 31, 1996, as to (i) each person who
is known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) each director of and each nominee for director of
the Company, (iii) each of the executive officers named in the Summary
Compensation Table below and (iv) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED OWNED(1)
- ------------------------------------ ------------ -----------
<S> <C> <C>
Denver Investment Advisors LLC ....................... 1,392,955 7.9%
1225 17th Street 26th Floor
Denver, CO 80202-5526
Pilgrim Baxter & Associates Ltd ...................... 1,357,550 7.7
1255 Drummers Lane-300
Wayne, PA 19087-1501
The Kaufmann Fund, Inc. .............................. 900,000 5.1
140 E. 45th St. 43rd Floor
New York, NY 10017
Kenneth B. Plumlee(2)................................. 280,106 1.6
Thomas E. Gardner..................................... 2,000 *
Richard C. Miller(3).................................. 227,530 1.3
Joseph P. Tallman(4).................................. 466,670 2.6
James O. Steeb(5)..................................... 55,910 *
Kipp A. Johnson(6).................................... 82,789 *
John V. Crisan(7)..................................... 9,398 *
John R. Durant, M.D.(8)............................... 6,063 *
Kinney L. Johnson(9).................................. 715,003 4.1
Alice H. Lusk(10)..................................... 1,875 *
Brent T. Rider(11).................................... 6,875 *
Edward K. Rygiel(12).................................. 6,875 *
Frank Washington(13).................................. 313 *
All directors and executive officers as a group (16
persons)(14) ......................................... 1,993,248 11.1%
</TABLE>
<PAGE>
- --------
* Less than one percent
(1) Applicable percentage of ownership is based on 17,609,942 shares of Common
Stock outstanding as of December 31, 1996, together with applicable
options and warrants for such stockholder. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission, and includes voting and investment power with respect to
shares. Shares of Common Stock subject to options and warrants currently
exercisable or exercisable within 60 days after December 31, 1996, are
deemed outstanding for computing the percentage ownership of the person
holding such options and warrants, but are not deemed outstanding for
computing the percentage of any other person.
(2) Includes 8,675 shares held by Mr. Plumlee as custodian for his daughters
and 73,018 shares issuable upon exercise of options to purchase shares of
Common Stock which are exercisable within 60 days after December 31, 1996.
(3) Includes 8,450 shares held by Mr. Miller as custodian for his son and
daughter and 72,617 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after December
31, 1996.
(4) Includes 33,887 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after December
31, 1996.
(5) Includes 48,919 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days of December
31, 1996.
(6) Includes 33,000 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after December
31, 1996.
(7) Includes 7,950 shares issuable upon exercise of options to purchase shares
of Common Stock which are exercisable within 60 days after December 31,
1996.
(8) Includes 5,313 shares issuable upon exercise of options to purchase shares
of Common Stock which are exercisable within 60 days after December 31,
1996.
(9) Includes 313 shares held by Mr. Johnson issuable upon exercise of options
to purchase shares of Common Stock which are exercisable within 60 days
after December 31, 1996.
(10) Consists of 1,875 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after
December 31, 1996.
(11) Consists of 6,875 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after
December 31, 1996.
(12) Consists of 6,875 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after
December 31, 1996.
(13) Consists of 313 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after
December 31, 1996.
(14) Includes 419,555 shares issuable upon exercise of options to purchase
shares of Common Stock which are exercisable within 60 days after
December 31, 1996.
2
<PAGE>
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
VOTING AND SOLICITATION
Every stockholder voting for the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares held by
such stockholder or distribute the stockholder's votes on the same principle
among as many candidates as the stockholder may select, provided that votes
cannot be cast for more than ten candidates. However, no stockholder shall be
entitled to cumulate votes unless the candidate's name has been placed in
nomination prior to the voting and the stockholder, or any other stockholder,
has given notice at the meeting prior to the voting of the intention to
cumulate the stockholder's votes. On all other matters, each share has one
vote.
The cost of soliciting proxies will be borne by the Company. The Company may
retain the services of a proxy solicitation firm to aid in solicitation of
proxies from brokers, bank nominees and other institutional owners, on terms
customary for such services. In addition, the Company may reimburse brokerage
firms and other persons representing beneficial owners of shares for their
expenses in forwarding solicitation material to such beneficial owners.
Proxies may also be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, personally or by
telephone or telegram.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record Date. Shares that are voted "FOR,"
"AGAINST" or "WITHHELD FROM" a matter are treated as being present at the
meeting for purposes of establishing a quorum and are also treated as shares
entitled to vote at the Annual Meeting (the "Votes Cast") with respect to such
matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of a controlling precedent to the contrary, the Company intends to
treat abstentions in this manner. Accordingly, abstentions will have the same
effect as a vote against the proposal.
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes should be counted for purposes of
determining the presence or absence of a quorum for the transaction of
business, broker non-votes should not be counted for purposes of determining
the number of Votes Cast with respect to the particular proposal on which the
broker has expressly not voted. Accordingly, the Company intends to treat
broker non-votes in this manner. Thus, a broker non-vote will not have any
effect on the outcome of the voting on a proposal.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at next year's Annual Meeting must be received by the
Company no later than October 8, 1997 so that they may be included in the
proxy statement and form of proxy relating to that meeting.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A Board of ten directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
Company's ten nominees named below, all of whom are presently directors of the
Company. In the event that any nominee of the Company is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner, in accordance with cumulative
voting, as will assure the election of as many of the nominees listed below as
possible, and, in such event, the specific nominees to be voted for will be
determined by the proxy holders. The Company is not aware of any nominee who
will be unable or will decline to serve as a director. The term of office of
each person elected as a director will continue until the next Annual Meeting
of Stockholders or until a successor has been elected and qualified. There are
no family relationships among any directors or executive officers of the
Company.
The names of the nominees and certain information about them are set forth
below.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
--------------- --- -------------------- --------
<S> <C> <C> <C>
Kenneth B. Plumlee 36 Chairman of the Board of the Company 1988
Thomas E. Gardner 48 President and Chief Executive Officer of the Company 1996
Richard C. Miller 48 Executive Vice President and Secretary of the Company 1988
Joseph P. Tallman 45 Executive Vice President of the Company 1996
John R. Durant, M.D. 66 Executive Vice President, American Society of Clinical Oncology 1995
Kinney L. Johnson 53 General Partner, Capital Health Venture Partners 1996
Alice H. Lusk 48 Senior Vice President, NCR Corp. 1996
Brent T. Rider 54 General Partner, El Dorado Ventures, L.P. 1988
Edward K. Rygiel 56 President, MDS Health Ventures, Inc. 1990
Frank Washington 48 President and Chief Executive Officer of Systems Integrators, Inc. 1996
</TABLE>
Mr. Plumlee is a founder of the Company and has served as Chairman of the
Board since June 1996. He also served as President of the Company from 1988 to
June 1996 and as Chief Executive Officer from 1988 to September 1996.
Mr. Gardner joined the Company in June 1996 and currently serves as
President and Chief Executive Officer. Prior to joining the Company, he served
as President and Chief Executive Officer of Dun & Bradstreet Healthcare
Information from 1992 to 1995 and as President, CEO and COO of IMS America
Ltd., a division of Dun & Bradstreet from 1990 to 1992.
Mr. Miller is a founder of the Company and has served as Vice President of
Business Development and Secretary of the Company since the management-led
buyout of Referral Systems Group. In December 1991 he became Executive Vice
President.
Mr. Tallman joined the Company in November 1996 in connection with the
Company's merger with Informed Access Systems, Inc. ("Informed Access").
Currently, he serves as Executive Vice President and a director of the
Company. Between 1992 and November 1996, Mr. Tallman held the positions of
director, president and chief executive officer of Informed Access. From 1989
to 1992, Mr. Tallman was an independent consultant and was involved in the
formation of Informed Access.
4
<PAGE>
Dr. Durant became a director of the Company in 1995. Since April 1995, Dr.
Durant has been Executive Vice President of the American Society of Clinical
Oncology. Prior to that, he was Vice President for Health Affairs, Director of
the Medical Center and Professor of Medicine at the University of Alabama,
Birmingham.
Mr. Johnson became a director in November 1996 in connection with the
Company's merger with Informed Access. Between 1992 and November 1996, Mr.
Johnson served as a director of Informed Access. In addition, Mr. Johnson has
been a general partner of Capital Health Venture Partners, a private venture
capital firm, since June 1986. Mr. Johnson also serves on the Board of
Directors of The Spectranetics Corporation, Fischer Imaging Corporation and
Somatogen, Inc.
Ms. Lusk became a director of the Company in June 1996. Since September
1996, Ms. Lusk has been Senior Vice President of NCR Corp. Prior to that, she
spent 20 years with Electronic Data Systems, most recently as Corporate Vice
President of the insurance and healthcare business.
Mr. Rider became a director of the Company in 1988. He has been a General
Partner of El Dorado Ventures, L.P since May 1986.
Mr. Rygiel became a director of the Company in 1990. He has been President
of MDS Health Ventures, Inc., a Canadian venture capital corporation
specializing in healthcare investments, since April 1988. Mr. Rygiel is also a
director of Hemosol Inc., Drug Royalty Corporation Inc., Micrologix Biotech
Inc. and Allelix Biopharmaceuticals, Inc.
Mr. Washington became a director of the Company in 1996. Since July 1996,
Mr. Washington has been President and Chief Executive Officer of System
Integrators, Inc., a provider of publishing solutions. In addition, Mr.
Washington has been a director and President of World Television of Washington
LLC, a television broadcasting concern, since May 1995. Between June 1988 and
April 1995, Mr. Washington served as general partner of Robin Intermedia Cable
Systems Partners, a cable television systems operator.
VOTE REQUIRED
The ten nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be
elected as directors.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of 11 meetings and took
three actions by written consent during the fiscal year ended September 30,
1996. No director participated in fewer than 75% of the aggregate number of
meetings of the Board of Directors and meetings of the committees of the Board
on which he or she served.
The Board of Directors has standing Audit, Compensation and Stock Option
Committees. It does not have a nominating committee or a committee performing
the functions of a nominating committee.
The Audit Committee of the Board of Directors, currently consisting of
directors Rider and Rygiel, did not meet or take any action by written consent
during fiscal 1996. The Audit Committee recommends engagement of the Company's
independent auditors, and is primarily responsible for reviewing and approving
the scope of the audit and other services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its system of internal accounting controls.
The Compensation Committee of the Board of Directors, currently consisting
of directors Rider and Rygiel, held a total of three meetings and took action
by written consent four times during fiscal 1996. The Compensation Committee
reviews and approves the Company's executive compensation policy, the
compensation of the executive officers including the President and Chief
Executive Officer, and the grant of stock options to executive officers and
other officers.
5
<PAGE>
The Stock Option Committee of the Board of Directors, currently consisting
of directors Plumlee and Miller, did not meet and took action by written
consent 15 times during fiscal 1996. The Stock Option Committee approves stock
option grants to non-officer employees under the Company's 1989 Incentive
Stock Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Rider and Rygiel,
neither of whom is or has been an officer or employee of the Company. No
interlocking relationship exists between the Company's Board of Directors or
Compensation Committee and the board of directors or compensation committee of
any other company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal year 1996, Access Health engaged System Integrators, Inc.
("SII") pursuant to a contract to develop, install and maintain on behalf of
the Company an Internet website for users of the World Wide Web and the
Internet on a 24-hour basis. Frank Washington is currently a director of
Access Health and is also President and Chief Executive Officer of SII. Under
the contract, SII will host the Company's website for a monthly fee based on
the number of subscribers, however, the Company believes such fees will be
immaterial as the Company expects to take over this function. During 1996, SII
earned $85,800 under this contract of which a balance of $35,800 was due to
SII as of January 24, 1997.
The Company believes that the contract set forth above was made on terms no
less favorable to the Company than could have been obtained from unaffiliated
third parties.
6
<PAGE>
PROPOSAL TWO
RATIFICATION OF
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent auditors,
to audit the financial statements of the Company for the fiscal year ending
September 30, 1997, and recommends that stockholders vote "FOR" ratification
of such appointment. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection.
Ernst & Young LLP has audited the Company's financial statements since the
inception of the Company. Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting, will have an opportunity to make a statement
if they desire to do so and are expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote "FOR" the ratification of the
appointment of Ernst & Young LLP as independent auditors.
7
<PAGE>
ACCESS HEALTH MANAGEMENT, EXECUTIVE COMPENSATION AND OTHER MATTERS
MANAGEMENT
The executive officers of Access Health and their ages as of September 30,
1996 are as follows:
<TABLE>
<CAPTION>
NAME AGE OFFICE
- ---- --- ------
<S> <C> <C>
Thomas E. Gardner....... 48 President, Chief Executive Officer and Director
Richard C. Miller....... 48 Executive Vice President, Secretary and Director
John V. Crisan.......... 51 Senior Vice President of Finance and Administration and
Chief Financial Officer
Kipp A. Johnson......... 49 Senior Vice President, Managed Care Services
Jeremy J. Nobel, M.D. .. 42 Senior Vice President, Medical Affairs
David G. Pincus......... 47 Senior Vice President, Consumer Health Division
James O. Steeb.......... 35 Senior Vice President, Information Systems
Julie A. Brooks......... 50 Senior Vice President and General Counsel
</TABLE>
Thomas E. Gardner joined Access Health in June 1996 and currently serves as
President and Chief Executive Officer. Prior to joining Access Health, he
served as President and Chief Executive Officer of Dun & Bradstreet Healthcare
Information from 1992 to 1995 and as President, CEO and COO of IMS America
Ltd., a division of Dun & Bradstreet from 1990 to 1992.
Richard C. Miller is a founder of Access Health and has served as Vice
President of Business Development and Secretary and a director of Access
Health since the management-led buyout of Referral Systems Group. In 1991 he
became Executive Vice President.
John V. Crisan joined Access Health in April 1994 as Senior Vice President
of Finance and Administration and Chief Financial Officer. From 1991 to 1994
he served as Chief Operating Officer and Chief Financial Officer of American
PsychManagement, Inc., a subsidiary of Value Health, Inc. From 1989 to 1990 he
served as Vice President of Health Affairs for Blue Cross and Blue Shield of
Ohio, Inc. Prior to that, he held various positions with various insurance
companies. Mr. Crisan is a Certified Public Accountant.
Kipp A. Johnson joined Access Health in May 1992 as Senior Vice President of
Operations. From 1986 to April 1992 he was employed by MCI Communications, a
telecommunications company, where he held various positions, most recently
Vice President of Consumer Sales.
8
<PAGE>
Jeremy J. Nobel, M.D. joined Access Health in October 1995 as Senior Vice
President for Medical Affairs and previously served as an advisor to Access
Health on clinical matters related to outcome and measurement systems and
clinical system strategies. He is board-certified in internal medicine and has
received a master's degree in both Epidemiology and Health Policy. Prior to
joining Access Health, Dr. Nobel was a consultant to a number of companies and
an adjunct faculty member at the Harvard School of Public Health, where he
retains an appointment. Dr. Nobel teaches health policy and management, and
his areas of interest include development of computer based information
technology applications that coordinate critical aspects of health care
delivery.
Mr. Pincus joined Access Health in September 1994 and currently serves as
Senior Vice President, Consumer Health Division. From September 1994 to July
1996 he served as Vice President of Marketing. Prior to joining Access Health,
Mr. Pincus served five years as Vice President of Marketing for Blue Cross of
California.
James O. Steeb joined Access Health in 1989 and currently serves as Senior
Vice President, Information Systems. Prior to joining Access Health, he spent
seven years with Baxter Healthcare Corporation where he was Director of
Operations and Group Manager, Research and Development.
Julie A. Brooks joined Access Health on September 30, 1996. Prior to joining
Access Health, Ms. Brooks served as the principal executive officer of The
General Counsel, Inc., a legal services company that Ms. Brooks founded in
1992. Prior to 1992, Ms. Brooks served as the vice president, general counsel
and corporate secretary for Westmark International, Inc., a manufacturer of
diagnostic ultrasound and patient monitoring systems.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by Access Health during
each of the three fiscal years ended September 30, 1996, to (i) the Chief
Executive Officer of Access Health, (ii) each individual who served as Chief
Executive Officer of Access Health during fiscal 1996, and (iii) the four
other most highly compensated executive officers of Access Health during
fiscal 1996 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- ---------------------
RESTRICTED SECURITIES
NAME AND PRINCIPAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS OTHER AWARDS($ ) OPTIONS(#) COMPENSATION(1)
------------------ ---- ------- ------- ----- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas E. Gardner(2)... 1996 $94,959 $57,684 -- $101,250 230,000 $170
President and Chief 1995
Executive -- -- -- -- --
Officer 1994 -- -- -- -- -- --
Kenneth B. Plumlee(3).. 1996 281,865 170,810 -- -- 112,500 296
Chairman of the Board 1995 210,276 119,800 -- -- 60,000 296
1994 169,231 -- -- -- 37,322 291
Richard C. Miller...... 1996 207,534 104,805 -- -- 75,000 245
Executive Vice
President and 1995 177,283 90,958 -- -- 45,000 245
Secretary 1994 140,354 -- -- -- 31,034 241
John V. Crisan(4)...... 1996 152,453 61,591 -- -- 45,000 286
Senior Vice President
and Chief 1995 145,224 57,033 -- -- 9,750 286
Financial Officer 1994 71,615 -- 8,700 -- 52,500 217
Kipp A. Johnson(5)..... 1996 157,493 63,627 -- -- 60,000 259
Senior Vice President,
Managed 1995 136,460 38,198 -- -- 11,250 259
Care Services 1994 124,719 -- -- -- 15,000 238
James O. Steeb......... 1996 147,794 58,113 -- -- 60,000 222
Senior Vice President, 1995 123,951 35,263 -- -- 67,500 222
Information Services 1994 105,443 -- -- -- 11,250 204
</TABLE>
9
<PAGE>
- --------
(1) The dollar amounts in this column represent premium payments made by
Access Health with respect to insurance policies for the lives of the
Named Executive Officers for which Access Health is not a beneficiary.
(2) Mr. Gardner joined the Company as President and Chief Operating Officer in
May 1996 and was elected Access Health's Chief Executive Officer in
September 1996. Salary amount shown is based on an annual salary of
$250,000. Mr. Gardner received 2,000 restricted shares of Access Health
Common Stock on May 8, 1996 which, based on the closing price of Access
Health Common Stock of $50.625 on such date, had a value as of such date
of $101,250. Such restricted shares vest at a rate of 50% annually from
their date of issue and had a value of $112,500 at year-end 1996, based on
a closing price of $56.25.
(3) Mr. Plumlee served as Chief Executive Officer for all periods shown
through September 1996. Since June 1996, Mr. Plumlee has served as
Chairman of the Board of Access Health.
(4) Mr. Crisan joined Access Health in April 1994. In connection with Mr.
Crisan's relocation to California, Access Health paid for his temporary
living expenses (included in other annual compensation) which amounted to
$8,700 in fiscal 1994.
(5) Mr. Johnson also received $9,425 and $11,554 in reimbursement for
relocation expenses in fiscal 1995 and 1994, respectively.
OPTION GRANTS IN FISCAL 1996
The following table sets forth each grant of stock options during the fiscal
year ended September 30, 1996 to the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
NUMBER OF PRICE APPRECIATION FOR
SECURITIES PERCENT OF TOTAL INDIVIDUAL GRANTS OPTION TERM(2)
UNDERLYING OPTIONS GRANTED ------------------- ----------------------
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
---- ---------- ---------------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Gardner....... 230,000 16.6% $50.63 5/08/03 $4,740,176 $11,046,625
Kenneth B. Plumlee...... 112,500 8.1 39.31 3/27/03 1,800,351 4,195,583
Richard C. Miller....... 75,000 5.4 39.31 3/27/03 1,200,234 2,797,055
John V. Crisan.......... 45,000 3.2 17.83 10/20/02 326,603 761,123
Kipp A. Johnson......... 60,000 4.3 17.83 10/20/02 435,470 1,014,831
James O. Steeb.......... 60,000 4.3 17.83 10/20/02 435,470 1,014,831
</TABLE>
- --------
(1) Options granted under Access Health's 1989 Incentive Stock Option (the
"Stock Plan"). The option exercise price of all incentive stock options
granted under the Stock Plan is generally equal to the fair market value
of the shares of Common Stock on the date of grant; the options have terms
of five to seven years and generally vest at the rate of 20% of the shares
subject to the option for each year that the optionee remains in
continuous status as an employee or consultant.
(2) Potential realizable value is based on the assumption that the Common
Stock of Access Health appreciates at the annual rate shown (compounded
annually) from the date of grant until the expiration of the option term.
These numbers are calculated based on the requirements promulgated by the
Securities and Exchange Commission and do not reflect Access Health's
estimate of future stock price growth.
10
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in fiscal 1996
by the Named Executive Officers and the value of such officers' unexercised
options at September 30, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE (1) OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT SEPT. 30, 1996 AT SEPT. 30, 1996
ACQUIRED ON VALUE (1) ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. Gardner....... -- -- -- 230,000 $ -- $1,293,750
Kenneth B. Plumlee...... 16,667 $ 943,069 55,048 175,428 2,659,678 4,840,957
Richard C. Miller....... -- -- 58,652 123,415 2,888,448 3,532,011
John V. Crisan.......... 22,950 867,939 -- 84,300 -- 3,649,406
Kipp A. Johnson......... 40,500 1,360,490 18,750 94,500 965,870 4,046,373
James O. Steeb.......... 20,667 801,975 42,862 78,752 2,324,935 3,232,368
</TABLE>
- --------
<TABLE>
<S> <C>
</TABLE>
(1) Market value of underlying securities at exercise or year-end 1996 as the
case may be, minus the exercise price, based on a closing price of $56.25.
COMPENSATION OF DIRECTORS
Other than reimbursement for certain expenses incurred in connection with
attendance at board and committee meetings, the directors of Access Health did
not receive any cash compensation for services provided as directors during
fiscal 1996. Outside directors are granted nonstatutory stock options under
the 1995 Director Option Plan. Currently, there are seven outside directors.
Please see "Employee Benefit Plans--1995 Director Option Plan" for information
with respect to the 1995 Director Option Plan.
EMPLOYMENT CONTRACTS, TERMINATION AND CHANGE OF CONTROL ARRANGEMENTS
The 1995 Director Option Plan provides that upon a change in control of
Access Health, the unvested portion of all options held by Outside Directors
shall become immediately exercisable. The 1989 Incentive Stock Plan provides
that in the event of a change in control of Access Health, outstanding stock
options and stock purchase rights shall be assumed or equivalent options or
rights shall be substituted by the successor entity. Unless such successor
corporation does not agree to such assumption or substitution, Access Health's
Board of Directors must provide for the options or rights to become
immediately exercisable in full. In addition, option agreements and stock
purchase agreements for executive officers at the Vice President level and
above provide that options under such agreements become immediately
exercisable in full in the event of a change in control of Access Health.
Access Health has entered into an employment agreement with Thomas E.
Gardner under which Mr. Gardner will receive a base salary of $300,000
annually and be eligible for a performance bonus of up to 60% of base
compensation. Salary and bonus are subject to adjustment by the Board of
Directors based on annual reviews. Mr. Gardner has been granted options to
purchase 230,000 shares of Common Stock at an exercise price of $50.625 and
250,000 shares of Common Stock at an exercise price of $34.625, both of which
options vest 20% annually, and has been issued 2,000 shares of restricted
Common Stock which vest 50% annually in each case from May 8, 1996. Access
Health has agreed to employ Mr. Gardner in the position of President and Chief
Executive Officer and to nominate Mr. Gardner for election as a director.
Access Health has also agreed that it will pay temporary living expenses of
Mr. Gardner for 12 months and reimburse Mr. Gardner's relocation expenses and
commissions on selling his former residence through a non-interest bearing
promissory note that will be forgiven ratably over 24 months subject to
continued employment, subject to certain repayment terms if his employment is
terminated for cause or voluntarily within such 24-month period. The term of
the agreement is until September 1, 2006. If Mr. Gardner's employment is
terminated without cause or as a result of a
11
<PAGE>
"constructive termination" (as defined), he shall be entitled to certain
severance benefits including (i) an amount equal to 125% of the sum of his
base salary and his on-plan target bonus award for the year, (ii) a pro rata
annual incentive award for the year, (iii) the right to exercise all stock
options which have vested or will vest during the 12-month period following
termination, (iv) full vesting of the unvested portion, if any, of his 2,000
shares of restricted stock, and (v) continued health care benefits for up to
24 months from termination. In the event Mr. Gardner's employment is
terminated without cause or as a result of a "constructive termination" (as
defined) in connection with a "change in control" (as defined) of the Company,
Mr. Gardner shall be entitled to the foregoing benefits except that he shall
be entitled to (i) an amount equal to 200% of the sum of his base salary and
his on-plan target bonus award for the year, and (ii) all of his stock options
and other equity-based awards shall become immediately vested, provided such
payments may be subject to limitations if section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") applies. The Company agreed to reimburse
Mr. Gardner for all legal expenses incurred in connection with the agreement
up to $50,000.
There are no other employment contracts between Access Health and any of the
Named Executive Officers, and there are no other compensatory plans or
arrangements with respect to a Named Executive Officer which will result in
payments upon resignation, retirement, or any other termination of such
executive officer's employment or from a change of control of Access Health.
EMPLOYEE BENEFIT PLANS
The following is a brief summary of plans in effect during the fiscal year
ended September 30, 1996 under which officers, directors and employees of the
Company received benefits.
401(k) PLAN
In July of 1989 the Company adopted a tax-qualified employee savings and
retirement plan (the "401(k) Plan"), which generally covers all of the
Company's full-time employees who have attained age 21. Pursuant to the 401(k)
Plan, employees may elect to defer up to 20% of their current compensation
(subject to certain statutorily prescribed limits, including an annual limit
of $9,500 in 1996). These deferred amounts are contributed to the 401(k) Plan.
The 401(k) Plan permits, but does not require, additional matching and Company
contributions on behalf of participants. To date, the Company has not made any
such additional contributions. The 401(k) Plan is intended to qualify under
Sections 401(k) and 401(a) of the Code. Contributions to such a qualified plan
are deductible to the Company when made and neither the contributions nor the
income earned on those contributions is taxable to participants until
withdrawn. All 401(k) Plan contributions are credited to separate accounts
maintained in trust by two individual trustees. Contributions are invested, at
the participant's direction, in one or more of the investment funds available
under the 401(k) Plan. All account balances are adjusted at least annually to
reflect the investment earnings and losses of the trust fund. Each participant
is fully vested in his or her salary deferral accounts under the 401(k) Plan.
Additional matching and Company contributions would be subject to a seven-year
vesting schedule. Distributions may be made from a participant's account
pursuant to the 401(k) Plan's hardship withdrawal provisions as well as upon a
participant's termination of employment, disability or attainment of age 59 .
Distributions will be in the form of a lump sum, installment payments or an
annuity, in the participant's discretion. Federal tax laws limit the amount
that may be added to a participant's accounts for any one year under a
qualified plan such as the 401(k) Plan to the lesser of (i) $30,000 or (ii)
25% of the participant's compensation (net of salary deferral contributions)
for the year.
1991 EMPLOYEE STOCK PURCHASE PLAN
The 1991 Employee Stock Purchase Plan (the "Purchase Plan") was adopted by
the Board of Directors in December 1991, approved by the stockholders in
January 1992 and amended in December 1992, November 1993, and January 1995.
The Purchase Plan, which is intended to qualify under Section 423 of the Code,
authorizes the issuance of up to an aggregate of 825,000 shares of Common
Stock to participating employees. Employees of the Company are eligible to
participate in the Purchase Plan if they are employed by the Company
12
<PAGE>
for at least 20 hours per week and more than five months per-year. Employees
who own 5% or more of the Common Stock of the Company and directors who are
not employees are not eligible to participate. The Purchase Plan may be
administered by the Board of Directors or a committee appointed by the Board
of Directors. The Purchase Plan permits eligible employees to purchase Common
Stock through payroll deductions, which may not exceed ten percent (10%) of an
employee's compensation.
Unless the Board of Directors or its committee determines otherwise, each
offering and purchase period under the Purchase Plan will run for six months,
although the first three offering periods will run for 24 months and will be
divided into four consecutive six-month purchase periods. The price at which
stock is purchased under the Purchase Plan is equal to 85% of the fair market
value of the Common Stock on the first day of the offering period or the last
day of the applicable purchase period, whichever is lower. New offering
periods will commence every six months. Employees may end their participation
in the offering at any time during the offering period, and participation ends
automatically on termination of employment with the Company.
As of September 30, 1996, a total of 397,506 shares of Common Stock had been
issued to employees at an aggregate purchase price of $1,931,316 and a
weighted average purchase price of $4.86 per share pursuant to offerings under
the Purchase Plan and 427,494 shares remained available for future issuance
under the Purchase Plan.
The following table sets forth as to the Named Executive Officers who
purchased shares pursuant to the Purchase Plan, all current executive officers
as a group and all other employees as a group (i) the number of shares of the
Company's Common Stock purchased under the Purchase Plan during the period
from its inception until September 30, 1996; (ii) the aggregate purchase price
thereof and (iii) the fair value of stock purchased through September 30, 1996
under the Purchase Plan:
<TABLE>
<CAPTION>
FAIR
NUMBER OF AGGREGATE VALUE OF
SHARES PURCHASE STOCK
NAME OF INDIVIDUAL OR IDENTITY OF GROUP PURCHASED PRICE PURCHASED
--------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Thomas E. Gardner................................. -- -- --
Kenneth B. Plumlee................................ 559 $ 15,918 $ 23,618
Richard C. Miller................................. -- -- --
John V. Crisan.................................... 2,963 27,513 54,072
Kipp A. Johnson................................... 14,686 53,205 134,060
James O. Steeb.................................... 7,221 32,610 82,347
All current executive officers as a group
(9 persons)...................................... 26,890 148,142 330,979
All employees as a group (including current
officers who are not executive officers)......... 397,506 1,931,316 4,152,275
</TABLE>
1989 INCENTIVE STOCK PLAN
The Company's 1989 Incentive Stock Plan (the "Stock Plan") was adopted by
the Board of Directors and approved by the Company's stockholders in May 1989
and amended by the Board in October and December 1991, December 1992, January
1994, October 1995 and August 1996 to increase the number of shares available
for issuance thereunder. Each such amendment to the Stock Plan has been
approved by the stockholders. A total of 3,550,000 shares have been approved
for issuance under the Stock Plan. The Stock Plan permits the direct sale of
shares and the grant of "incentive stock options" (within the meaning of
Section 422 of the Code) to employees and officers of the Company and the
grant of nonstatutory stock options to employees, officers and directors who
are also officers of and consultants to the Company. The purpose of the Stock
Plan is to attract the best available personnel to the Company and to give
employees, officers and directors of and consultants to the Company a greater
personal stake in the success of the business. As of September 30, 1996,
options to purchase 639,780 shares had been exercised, options to purchase
1,849,571 shares were outstanding at a weighted average exercise price of
$17.00 per share, and there were 32,065 shares available for future option
grants. As of September 30, 1996, direct sales had been made under the Stock
Plan to officers in the amount of 24,744 shares.
13
<PAGE>
The Stock Plan may be administered by the Board of Directors or a committee
appointed by the Board which determines the recipients of options and the
terms of options granted, including the exercise price, number of shares
subject to the option and the exercisability thereof, and the recipients and
terms of any direct sales of shares. Currently, the Compensation Committee
determines option grants to executive officers and other officers, and the
Stock Option Committee determines option grants to non-officer employees.
Options generally become exercisable over a period of five years.
The exercise price of all incentive stock options granted under the Stock
Plan must be at least equal to the fair market value of such shares on the
date of grant, and the maximum term of any stock option is ten years. With
respect to any participant who owns stock possessing more than ten percent of
the voting rights of the Company's outstanding capital stock, the exercise
price of any incentive option must be at least equal to 110% of the fair
market value of such shares on the date of grant, and the term may be no
longer than five years. Nonstatutory stock options have an exercise price
determined by the Board of Directors or its Committee.
Please see "Executive Compensation and Other Matters--Executive
Compensation--Option Grants in Fiscal 1996" for information with respect to
the grant of options to the Named Executive Officers during fiscal 1996.
During the fiscal year ended September 30, 1996, all current executive
officers as a group and all employees as a group were granted options to
purchase 547,500 shares and 1,153,375 shares, respectively, at a weighted
average exercise price of $26.15 per share, pursuant to the Stock Plan.
1995 DIRECTOR OPTION PLAN
The Company's 1995 Director Option Plan (the "Director Plan") was adopted by
the Board of Directors in January 1995 and approved by the Company's
stockholders in March 1995. A total of 150,000 shares have been approved for
issuance under the Director Plan.
The Director Plan is designed to provide for the granting, by means of a
predetermined schedule, of nonstatutory stock options to the Company's non-
employee directors ("Outside Directors"). The purpose of the Director Plan is
to provide equity incentives to outside Board members while preserving the
ability of these members to grant options or other equity awards to other
directors and/or employees of the Company in compliance with Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Rule 16b-3
provides an exemption from the liability provisions of Section 16 under the
Exchange Act for certain routine transactions under employee benefit plans. As
of September 30, 1996, a total of 150,000 shares of Common Stock have been
reserved for issuance under the Director Plan, of which 116,250 shares
remained available for the granting of options at September 30, 1996.
The Director Plan is administered by the Board of Directors, who receive no
additional compensation for such service. All grants of options under the
Director Plan are automatic and non-discretionary pursuant to the terms of the
Director Plan. Options under the Director Plan may be granted only to Outside
Directors of the Company.
Participation in the Director Plan provides for grants of options in two
ways. First, each Outside Director is automatically granted an option to
purchase 7,500 shares (the "First Option") upon the date on which such
individual first becomes a director, whether through election by the
stockholders of the Company or by appointment by the Board of Directors in
order to fill a vacancy; provided, however, in lieu of being granted a First
Option, an Outside Director who, immediately prior to the effective date of
the Director Plan, was an Outside Director, is automatically granted an option
to purchase 2,500 shares (the "Initial Option"). Second, each Outside Director
who has served on the Board for at least six months after the grant of the
First Option (or, alternatively, the Initial Option), is automatically granted
an option to purchase 2,500 shares (the "Subsequent Option") on the first day
of each fiscal year. The First Option (or, alternatively, the Initial Option)
becomes exercisable at the rate of one-twelfth (1/12) each three months after
the date of grant, with the effect that this option is not exercisable as to
the full number of shares until the third anniversary of the date of its
grant. The Subsequent Option becomes exercisable at the rate of one-fourth
(1/4) every three months after the date of grant, with the effect that this
option is not exercisable as to the full number of shares until the first
anniversary of the
14
<PAGE>
date of its grant. Options granted under the Director Plan expire ten years
following the date of grant. An option is exercised by giving written notice
of exercise to the Company specifying the number of full shares of Common
Stock to be purchased and by tendering payment of the purchase price. Payment
for shares purchased upon exercise of an option shall be in such form of
consideration as is authorized by the Director Plan and determined by the
Board, and such form of consideration may vary for each option. The per share
exercise price for shares to be issued pursuant to exercise of an option under
the Director Plan is 100% of the fair market value per share of the Company's
Common Stock on the date of grant of the option. The fair market value is
determined by the closing price on the NASDAQ National Market on the last
market trading day prior to the date of the grant of the option.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors serves as an
administrative arm of the Board to make decisions regarding executive
compensation and to make recommendations to the Board on compensation matters
generally. The following is the report of the Compensation Committee
describing compensation policies and rationales applicable to the Company's
executive officers with respect to the compensation paid to such executive
officers for the fiscal year ended September 30, 1996. The information
contained in such report shall not be deemed to be "soliciting material" or to
be "filed" with the Securities and Exchange Commission, nor shall such
information be incorporated by reference into any future filing under the
Securities Act or Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.
The Compensation Committee of the Board of Directors establishes the general
compensation policies of the Company as well as the compensation plans and
specific compensation levels for executive officers. The Compensation
Committee believes that the compensation of the executive officers, including,
that of the Chief Executive Officer, should be related to the Company's
performance.
The Compensation Committee seeks to provide the executive officers of the
Company with competitive compensation that enables the Company to attract and
retain employees who contribute to the success of the Company and maximize
stockholder value. Specifically for executive officers, compensation is
determined according to the criteria described below.
Compensation
The Compensation Committee establishes the salaries of the executive
officers by considering (i) the salaries of executive officers in similar
positions at comparably-sized peer companies, (ii) the Company's financial
performance over the past year based upon revenues and operating results and
(iii) the achievement of individual performance goals related to each
executive officer's duties and area of responsibility.
Equity-Based Compensation
The Compensation Committee views stock options as an important part of its
long-term, performance-based compensation program. The Compensation Committee
bases grants of stock options to the Executive Officers of the Company under
the Company's 1989 Incentive Stock Plan (the "Stock Plan") upon the
Committee's estimation of each executive's contribution to the long-term
growth and profitability of the Company. The Stock Plan is intended to provide
additional incentives to the executive officers to maximize stockholder value.
Options are granted under the Stock Plan at the then-current market price and
are generally subject to five-year vesting periods to encourage key employees
to remain with the Company.
Compensation of the Chief Executive Officer
The compensation of the Company's Chief Executive Officer for fiscal 1996
was based upon the same criteria described above. Specifically, the
Compensation Committee considered several factors as important in determining
the Chief Executive Officer's compensation for fiscal 1996. These factors
included the attainment of corporate revenue and operating results goals for
the fiscal year and the achievement of progress in new product and service
programs. After considering these factors, the Committee concluded that
substantial completion of the goals for fiscal 1996 on which the Chief
Executive Officer's compensation was based had been achieved.
15
<PAGE>
Summary
The Compensation Committee believes that the Company's compensation policies
have been successful in attracting and retaining qualified employees and in
linking compensation directly to corporate performance relative to the
Company's goals. The Company's compensation policies will evolve over time as
the Company moves to attain the near-term goals it has set for itself while
maintaining its focus on building long-term stockholder value.
MEMBERS OF THE COMPENSATION
COMMITTEE:
EDWARD K. RYGIEL
BRENT T. RIDER
16
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the annual percentage change in the
cumulative return to the stockholders of the Company's Common Stock with the
cumulative return of the CRSP Index for the NASDAQ Stock Market (U.S. Index)
and the Hambrecht & Quist Health Care Index (excluding biotechnology) for the
period commencing February 21, 1992 and ending on September 30, 1996. The graph
assumes that $100 was invested on February 21, 1992 in the Company's Common
Stock and in each index, and that all dividends were reinvested. No dividends
have been declared or paid on the Company's Common Stock. Stockholder returns
over the indicated period should not be considered indicative of future
stockholder returns.
The information contained in the performance graph shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act or Exchange Act, except to the extent
that the Company specifically incorporates it by reference into such filing.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG ACCESS HEALTH, INC., NASDAQ STOCK MARKET, AND HAMBRECHT & QUIST
HEALTHCARE WITHOUT BIOTECHNOLOGY INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NASDAQ H&Q HEALTHCARE
ACCESS STOCK WITHOUT
DATES HEALTH, INC. MARKET-U.S. BIOTECHNOLOGY
- ----- ----------- ---------- -------------
<S> <C> <C> <C>
2/21/92 $ 100.00 $100.00 $100.00
2/29/92 $ 85.71 $100.60 $ 98.87
3/31/92 $ 85.71 $ 95.85 $ 91.12
4/30/92 $ 76.78 $ 91.74 $ 85.24
5/31/92 $ 76.78 $ 92.93 $ 88.09
6/30/92 $ 46.43 $ 89.30 $ 84.06
7/31/92 $ 51.78 $ 92.46 $ 89.19
8/31/92 $ 55.36 $ 89.64 $ 84.81
9/30/92 $ 53.57 $ 92.97 $ 78.75
10/31/92 $ 51.78 $ 96.63 $ 81.57
11/30/92 $ 71.43 $104.32 $ 86.35
12/31/92 $ 76.78 $108.16 $ 90.14
1/31/93 $ 89.28 $111.24 $ 85.56
2/28/93 $ 89.28 $107.09 $ 70.41
3/31/93 $ 101.78 $110.19 $ 67.15
4/30/93 $ 94.64 $105.48 $ 57.72
5/31/83 $ 121.43 $111.79 $ 62.36
6/30/93 $ 125.90 $112.30 $ 60.61
7/31/93 $ 151.78 $112.43 $ 57.40
8/31/93 $ 135.71 $118.25 $ 57.04
9/30/93 $ 130.35 $121.77 $ 57.74
10/31/93 $ 130.35 $124.50 $ 63.03
11/30/93 $ 130.35 $120.79 $ 62.38
12/31/93 $ 142.85 $124.16 $ 64.56
1/31/94 $ 182.14 $127.93 $ 70.54
2/28/94 $ 180.35 $126.73 $ 65.04
3/31/94 $ 142.85 $118.94 $ 59.57
4/30/94 $ 144.64 $117.39 $ 58.19
5/31/94 $ 128.57 $117.68 $ 60.13
6/30/94 $ 112.50 $113.38 $ 57.69
7/31/94 $ 141.07 $115.70 $ 59.92
8/31/94 $ 164.28 $123.08 $ 68.23
9/30/94 $ 267.85 $122.76 $ 68.94
10/31/94 $ 269.64 $125.18 $ 67.14
11/30/94 $ 246.42 $121.02 $ 66.95
12/31/94 $ 249.99 $121.36 $ 68.60
1/31/95 $ 217.85 $122.04 $ 72.97
2/28/95 $ 225.00 $128.50 $ 74.66
3/31/95 $ 274.99 $132.31 $ 80.13
4/30/95 $ 241.07 $136.47 $ 79.11
5/31/95 $ 228.57 $139.99 $ 79.49
6/30/95 $ 291.07 $151.33 $ 82.31
7/31/95 $ 285.71 $162.46 $ 89.35
8/31/95 $ 333.92 $165.75 $ 94.80
9/30/95 $ 403.56 $169.56 $102.97
10/31/95 $ 444.63 $168.59 $104.77
11/30/95 $ 467.85 $172.55 $107.12
12/31/95 $ 632.13 $171.63 $114.21
1/31/96 $ 710.70 $172.48 $122.17
2/29/96 $ 782.13 $179.05 $122.17
3/31/96 $ 830.30 $179.65 $122.18
4/30/96 $1,186.52 $194.55 $119.84
5/31/96 $1,167.77 $203.49 $119.90
6/30/96 $1,012.43 $194.29 $114.84
7/31/96 $ 905.29 $176.94 $105.18
8/31/96 $1,087.42 $186.89 $112.05
9/30/96 $1,205.27 $201.10 $126.02
</TABLE>
17
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC") and the
Nasdaq National Market. Executive officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on its review of the copies
of such forms received by it, or written representations from certain
reporting persons, the Company believes that during fiscal 1996 all filing
requirements applicable to its executive officers and directors and greater
than 10% stockholders were complied with, except that John Durant, M.D. and
Ken Plumlee, both directors of the Company, Richard Miller, a director and
executive officer of the Company and John Crisan and Kipp Johnson, both
executive officers of the Company, each filed one report on Form 4 late.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are therefore urged to execute and
return, at your earliest convenience, the accompanying proxy card in the
envelope which has been enclosed.
THE BOARD OF DIRECTORS
Dated: February 21, 1997
18
<PAGE>
This Proxy is solicited on behalf of the Board of Directors
ACCESS HEALTH, INC.
1997 ANNUAL MEETING OF STOCKHOLDERS
March 26, 1997
The undersigned stockholder of ACCESS HEALTH, INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated February 21, 1997, and hereby
appoints Thomas E. Gardner and John V. Crisan, and each of them proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1997 Annual Meeting
of Stockholders of ACCESS HEALTH, INC. to be held on Wednesday, March 26, 1997,
at 11:00 a.m., local time, at the Company's business address at 11020 White Rock
Road, Rancho Cordova, California 95670, and at any adjournment or adjournments
thereof, and to vote all shares of Common Stock which the undersigned would be
entitled to vote if then and there personally present, on the matters set forth
on the reverse side.
-------------
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
-------------
<PAGE>
[X] Please mark
votes as in
this example
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND AS SAID PROXIES
DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
1. ELECTION OF DIRECTORS:
Nominees: Kenneth B. Plumlee; Thomas E. Gardner; Richard C. Miller; Joseph
Tallman; John R. Durant, M.D.; Kinney L. Johnson; Alice H. Lusk; Brent
T. Rider; Edward K. Rygiel; Frank Washington
[_] FOR [_] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT
AUDITORS FOR THE COMPANY FOR FISCAL 1997:
FOR AGAINST ABSTAIN
[_] [_] [_]
and, in their discretion, upon such other matter or matters which may
properly come before the meeting or any adjournment or adjournments thereof.
[_]
-----------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided above.)
MARK HERE [_] (This proxy should be marked, dated, signed by the
FOR ADDRESS stockholder(s) exactly as his or her name appears hereon, and
CHANGE AND returned promptly in the enclosed envelope. Persons signing in
NOTE BELOW a fiduciary capacity should so indicate. If shares are held by
joint tenants or as community property, both should sign.)
Signature: Date
------------------------------------ ----------------------------
Signature: Date
------------------------------------ ----------------------------
