SCHEDULE 14A
(RULE 14A-1-1)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 Rule 14a-11 (c) or Rule 14a-12
[ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
IntegraMed America, 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: April 30, 1999
<PAGE>
INTEGRAMED AMERICA, INC.
One Manhattanville Road
Purchase, New York 10577
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 25, 1999
To the Stockholders:
Notice is hereby given that the Annual Meeting of the Stockholders of
IntegraMed America, Inc. (the "Company") will be held on May 25, 1999, at 10:00
a.m. local time at the Company's headquarters, One Manhattanville Road,
Purchase, New York 10577. The meeting is called for the following purposes:
1. Election of eight directors for a term of one year; and
2. Consideration of and action upon such other matters as may
properly come before the meeting or any adjournment or
adjournments thereof.
The close of business on April 2, 1999 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the meeting.
All stockholders are cordially invited to attend the meeting. Whether
or not you expect to attend, you are respectfully requested by the Board of
Directors to sign, date and return the enclosed proxy promptly. Stockholders who
execute proxies retain the right to revoke them at any time prior to the voting
thereof. A return envelope which requires no postage if mailed in the United
States is enclosed for your convenience.
By Order of the Board of Directors,
Claude E. White
Secretary
Dated: April 30, 1999
<PAGE>
INTEGRAMED AMERICA, INC.
One Manhattanville Road
Purchase, New York 10577
(914) 253-8000
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of IntegraMed America, Inc., a Delaware
corporation (the "Company"), for the Annual Meeting of Stockholders to be held
at the Company's headquarters, One Manhattanville Road, Purchase, New York 10577
on May 25, 1999, at 10:00 a.m. and for any adjournment or adjournments thereof,
for the purposes set forth in the accompanying NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS. Any stockholder giving such a proxy has the power to revoke it at
any time before it is voted. Written notice of such revocation should be
forwarded directly to the Corporate Secretary of the Company, at the above
stated address. Attendance at the meeting will not have the effect of revoking
the proxy unless such written notice is given or the stockholder votes by ballot
at the meeting.
If the enclosed proxy is properly executed and returned, the shares
represented thereby will be voted in accordance with the directions thereon and
otherwise in accordance with the judgment of the persons designated as proxies.
Any proxy on which no direction is specified will be voted in favor of the
actions described in this Proxy Statement, including the election of the
nominees set forth under the caption "Election of Directors."
The approximate date on which this Proxy Statement and the accompanying
form of proxy will first be mailed or given to the Company's stockholders is
April 30, 1999.
Your vote is important. Accordingly, you are urged to sign and return
the accompanying proxy card whether or not you plan to attend the meeting.
VOTING SECURITIES
Holders of shares of Common Stock, par value $.01 per share (the
"Common Stock") and Series A Cumulative Convertible Preferred Stock (the
"Preferred Stock") of record as of the close of business on April 2, 1999, are
entitled to notice of and to vote at the meeting on all matters. On the record
date there were outstanding 4,918,460 shares of Common Stock and 165,644 shares
of Preferred Stock entitled to vote on all matters to be acted upon at the
meeting. Each outstanding share is entitled to one vote upon all matters to be
acted upon at the meeting. A majority of the outstanding shares of Common Stock
and Preferred Stock entitled to vote on any matter and represented at the
meeting in person or by proxy shall constitute a quorum. Assuming a quorum is
present, the affirmative vote of a plurality of the shares of Common Stock and
Preferred Stock so represented and entitled to vote is necessary to elect the
directors. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
If a stockholder, present in person or by proxy, abstains on any matter, the
stockholder's shares of Common Stock and/or Preferred Stock will not be voted on
such matter. Thus, an abstention from voting on any matter has the same legal
effect as a vote "against" the matter, even though the stockholder may interpret
such action differently. Except for determining the presence or absence of a
quorum for the transaction of business, broker non-votes are not counted for any
purpose in determining whether a matter has been approved.
On November 17, 1998, the Company effected a 1-for-4 reverse stock
split of its Common Stock. All references in this Proxy Statement to share and
per share data concerning the Common Stock have been restated to reflect the
reverse stock split.
-1-
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 31, 1999, certain
information concerning stock ownership of all persons known by the Company to
own beneficially 5% or more of the shares of Common Stock, and each director,
and each executive officer named under "Executive Compensation", and all
directors and executive officers of the Company as a group.
Shares of
Common Stock Percent of
Beneficially Common Stock
Name and Address Owned (1),(2) Outstanding
- ---------------- ------------- -----------
Entities affiliated with
Morgan Stanley Dean Witter
1585 Broadway
New York, NY 10036........................ 868,822(3)(5) 17.45%
Gerardo Canet ............................ 581,233(4)(5) 11.66%
Eugene R. Curcio.......................... 2,500(6) *
Jay Higham................................ 22,375(5) *
Claude E. White........................... 2,225(5) *
Donald S. Wood, Ph.D...................... 19,253(5) *
M. Fazle Husain........................... 871,168(3)(5) 17.49%
Michael J. Levy, M.D...................... 91,193(5) 1.85%
Sarason D. Liebler........................ 19,113(5) *
Aaron S. Lifchez, M.D..................... 70,124(5) 1.42%
Patricia M. McShane, M.D.................. 7,625(5) *
Lawrence J. Stuesser ..................... 56,800(5)(7) 1.15%
Elizabeth E. Tallett...................... 0 *
All executive officers and directors
as a group (12 persons)................. 1,594,950(3)(4)(5)(7) 31.10%
* Represents less than 1% of outstanding shares of Common Stock
(1) For the purposes of this Proxy Statement, beneficial ownership is defined
in accordance with the rules of the Securities and Exchange Commission and
generally means the power to vote and/or to dispose of the securities
regardless of any economic interest therein.
(2) As of March 31, 1999, there were 165,644 shares of Preferred Stock
outstanding of which 150,000 shares, or 90.6%, were owned by Barry Blank
(Box 32056, Phoenix, AZ 85064) as reported on his Schedule 13D filed with
the Securities and Exchange Commission (the "Commission") on June 6, 1994.
Upon conversion of each share of Preferred Stock owned by Mr. Blank into
approximately 121,000 shares of Common Stock, he would own approximately
2.40% of the Company's outstanding Common Stock.
(3) Includes 808,822 shares of Common Stock and 60,000 shares of Common Stock
issuable upon immediately exercisable warrants held by Morgan Stanley
Venture Partners III, L.P. ("MSVP III, L.P."), Morgan Stanley Venture
Investors III, L.P. ("MSVI III, L.P."), and The Morgan Stanley Venture
Partners Entrepreneur Fund, L.P. ("MSVPE Fund, L.P.") (MSVP III, L.P.,
MSVI III, L.P, and MSVPE Fund, L.P. are collectively referred to as the
"Funds"). M. Fazle Husain, a director of the Company, is a general partner
of the Funds. Mr. Husain may be deemed to beneficially own the shares held
by the Funds, although he has disclaimed beneficial ownership.
(4) Includes an aggregate of 484,200 shares of Common Stock owned by certain
physicians, including Michael J. Levy, M.D. and Aaron S. Lifchez, M.D.,
for which Gerardo Canet has a proxy to vote for a two-year period with
-2-
<PAGE>
respect to (i) the election of Directors or any amendment to the Company's
Amended and Restated Certificate of Incorporation affecting Directors and
(ii) any change in stock options for management and Directors of the
Company. Includes 1,250 shares held by Mr. Canet as custodian for the
benefit of his granddaughter.
(5) Includes (or consists of) currently exercisable options, including options
exercisable within sixty days, to purchase Common Stock as follows:
Gerardo Canet -- 65,783; Jay Higham -- 16,875; Claude E. White -- 1,875;
Donald S. Wood -- 15,841; M. Fazle Husain -- 2,346; Michael J. Levy --
1,876; Sarason D. Liebler -- 15,000; Aaron S. Lifchez -- 3,282; Patricia
M. McShane --4,500; and Lawrence J. Stuesser -- 11,250; and currently
exercisable warrants to purchase Common Stock as follows: M. Fazle Husain
-- 60,000; Michael J. Levy -- 3,750; Aaron S.
Lifchez -- 3,750; and Patricia M. McShane --3,125.
(6) Mr. Curcio resigned as Sr. Vice President and Chief Financial Officer
effective March 27, 1999.
(7) Includes 12,425 shares held by family members of Mr. Stuesser for which he
disclaims beneficial ownership.
ELECTION OF DIRECTORS
At the meeting, eight directors will be elected by the stockholders to
serve until the next Annual Meeting of Stockholders or until their successors
are elected and shall qualify. Each of the nominees is currently a director of
the Company. Management recommends that the persons named below be elected as
directors of the Company and it is intended that the accompanying proxy will be
voted for the election as directors of the eight persons named below, unless the
proxy contains contrary instructions. The Company has no reason to believe that
any of the nominees will not be a candidate or will be unable to serve. However,
in the event that any nominee should become unable or unwilling to serve as a
director, the persons named in the proxy have advised that they will vote for
the election of such person or persons as shall be designated by management.
The following sets forth the names and ages of the eight nominees for
election to the Board of Directors, their respective principal occupations or
employments during the past five years and the period during which each has
served as a director of the Company.
GERARDO CANET (53) became President, Chief Executive Officer and a
director of the Company effective February 14, 1994 and the Chairman of the
Board effective April 19, 1994. For approximately five years prior to joining
the Company, Mr. Canet held various executive management positions with Curative
Health Services, Inc., most recently as Executive Vice President and President
of its Wound Care Business Unit. From 1979 to 1989, Mr. Canet held various
management positions with Kimberly Quality Care, Inc. (and a predecessor
company), a provider of home health care services, most recently from 1987 to
1989 as Executive Vice President, Chief Operating Officer and a director of
Kimberly Quality Care, Inc. Mr. Canet earned an M.B.A. from Suffolk University
and a B.A. in Economics from Tufts University. Mr. Canet has been a director of
Curative Health Services, Inc. since July 1991.
M. FAZLE HUSAIN (35) became a director of the Company in January 1998.
Mr. Husain is a general partner of Morgan Stanley Venture Partners III, L.P.,
where he has been employed since 1991, and certain partnerships affiliated with
Morgan Stanley Venture Partners III, L.P. Mr. Husain is also a director of U.S.
Healthworks, and Dental Co., Inc.
MICHAEL J. LEVY, M.D. (39) became a director of the Company in March
1998. Since 1991, Dr. Levy, a board certified reproductive endocrinologist, has
been a shareholder and medical director of Levy, Sagoskin and Stillman, M.D.,
P.C., a physician group practice that became a Network Site in March 1998. Dr.
Levy graduated from the University of Cape Town Medical School.
SARASON D. LIEBLER (62) became a director of the Company in August 1994.
Mr. Liebler is President of SDL Consultants, a privately-owned consulting firm
engaged in rendering general business advice. From February 1985 to December 1,
1991, Mr. Liebler served as Chief Executive Officer of American Equine Products,
Inc. and served as a director of that company from February 1985 to November
1992. During the past 20 years, Mr. Liebler has been a director and/or officer
of a number of companies in the fields of home health care, clinical
diagnostics, high density optical storage and sporting goods. Mr. Liebler
graduated from the United States Naval Academy with a B.S. in Engineering.
-3-
<PAGE>
AARON S. LIFCHEZ, M.D. (56) became a director of the Company in August
1997. Since 1996, Dr. Lifchez, a reproductive endocrinologist, has been a
shareholder and president of Fertility Centers of Illinois, S.C., a physician
group practice that became a Network Site in August 1997. Dr. Lifchez has
maintained a medical practice in the Chicago area for more than the past five
years. Dr. Lifchez graduated from the Chicago Medical School.
PATRICIA M. MCSHANE, M.D. (50) became a director of the Company in March
1997 and was a Vice President of the Company in charge of medical affairs from
September 1992 through February 28, 1997. Since May 1988, Dr. McShane, a board
certified reproductive endocrinologist, has been, and currently is, the Medical
Director of the Boston Network Site where she is engaged in the practice of
medicine, specializing in infertility. Dr. McShane graduated from Tufts
University School of Medicine.
LAWRENCE J. STUESSER (57) became a director of the Company in April
1994. Since June 1996, Mr. Stuesser has been the President and Chief Executive
Officer of Computer People Inc., the U.S. subsidiary of London-based Delphi
Group plc. From July 1993 to May 1996, he was a private investor and business
consultant. Mr. Stuesser has been a director of Curative Health Services, Inc.
since 1993 and was elected its Chairman of the Board in July 1995. Mr. Stuesser
also serves on the Board of Directors of American Retirement Corporation and
Delphi Group plc. Mr. Stuesser was Chief Executive Officer of Kimberly Quality
Care, Inc. from 1986 to July 1993, at which time that Company was acquired by
the Olsten Company. Mr. Stuesser holds a B.B.A. in accounting from St. Mary's
University.
ELIZABETH E. TALLETT (50) became a director of the Company in June 1998.
Since 1996, Ms. Tallett has held the positions of President and Chief Executive
Officer of Dioscor, Inc. and President and Chief Executive Officer of Ellard
Pharmaceuticals, Inc., both biopharmaceutical companies. In 1992 she co-founded
Transcell Technologies, Inc. a carbohydrate-based pharmaceutical company, where
she served as President and Chief Executive Officer until 1996. Ms. Tallett is a
board member of The Principal Mutual Life Insurance Company, Varian Associates,
Inc., Humascan, Inc. and Coventry Health Care, Inc. She is a founding board
member of the Biotechnology Council of New Jersey and serves as its Treasurer.
Ms. Tallett graduated from Nottingham University with degrees in mathematics and
economics.
Directors are elected by the Company's stockholders at each annual
meeting or, in the case of a vacancy, are appointed by the directors then in
office, to serve until the next annual meeting or until their successors are
elected and qualified. Officers are appointed by and serve at the discretion of
the Board of Directors.
The Board of Directors of the Company held six meetings, and took action
by written consent eight times during the fiscal year ended December 31, 1998.
Each of the directors attended at least 75% of the aggregate of all meetings of
(i) the Board of Directors and (ii) the committees thereof on which such
director served during the term of his or her directorship.
The Audit Committee consists of Messrs. Husain and Liebler, and Ms.
Tallett. The Audit Committee met one time during the fiscal year ended December
31, 1998. The Audit Committee is authorized by the Board of Directors to review,
with the Company's independent accountants, the annual financial statements of
the Company; to review the work of, and approve non-audit services performed by,
such independent accountants; and to make annual recommendations to the Board
for the appointment of independent public accountants for the ensuing year. The
Audit Committee also reviews the effectiveness of the financial and accounting
functions, organization, operations and management of the Company.
The Compensation Committee consists of Messrs. Husain and Stuesser, and
Ms. Tallett. The Compensation Committee met four times during the fiscal year
ended December 31, 1998. The Compensation Committee reviews and recommends to
the Board of Directors the compensation and benefits of all officers of the
Company, reviews general policy matters relating to compensation and benefits of
employees of the Company, administers the issuance of stock options to the
Company's officers, employees and consultants and also has authority to grant
options to directors who are not employees of the Company.
-4-
<PAGE>
The Nominating Committee, consisting of Messrs. Canet, Liebler and
Stuesser, was established by the Board of Directors in February 1998 and
convened two times during the fiscal year ended December 31, 1998. The
Nominating Committee recommends to the Board of Directors the nominees for
submission to the Stockholders for election at the Annual Meeting of
Stockholders and nominees to fill vacancies on the Board between Annual Meetings
of Stockholders.
DIRECTOR COMPENSATION
In 1998, each of Messrs. Liebler and Stuesser was paid $10,000 as an
annual retainer fee, $2,500 for membership on a Board committee and $4,500 and
$3,750, respectively, in Board attendance fees. Ms. Tallett, who became a
director in June 1998, was paid $5,833 as a retainer fee, $1,250 for membership
on a Board committee and $3,750 in Board attendance fees. No other director
received cash compensation in 1998 for services as a director.
Under the 1994 Outside Director Stock Purchase Plan , there are reserved
for issuance thereunder 31,250 shares of Common Stock, pursuant to which
directors who are not full-time employees of the Company may elect to receive
all or a part of their annual retainer fees, the fees payable for attending
meetings of the Board and the fees payable for serving on Committees of the
Board, in the form of shares of Common Stock rather than cash, provided that any
such election be made at least six months prior to the date that the fees are to
be paid; no such elections were made as of April 16, 1999.
In November 1994, the Board of Directors approved the granting of
Non-Incentive Options to Non-Employee Directors under the 1992 Incentive and
Non-Incentive Stock Option Plan (the "1992 Plan"). Each Non-Employee Director,
upon initial election to the Board of Directors, is granted an option to
purchase 7,500 shares of Common Stock ("Initial Option") at an exercise price
equal to the closing price of the Common Stock on the date immediately preceding
election to the Board. 25% of the shares subject to the Initial Option become
exercisable one year from the grant; thereafter the shares become exercisable
every three months at the rate of 6.25% of the total number of shares subject to
the option. Annually, upon re-election, Non-Employee Directors are granted an
option to purchase 1,500 shares of Common Stock ("Re-election Option") at a
price equal to the closing price of the Common Stock on the date of re-election.
50% of the shares subject to the Re-election Option vest one year from the date
of grant and the balance vests two years from the date of grant. During 1998,
each of Mr. Husain, Dr. Levy and Ms. Tallett were granted Initial Options and
each Mr. Liebler, Dr. Lifchez, Dr. McShane and Mr. Stuesser were granted
Re-election Options; all at the then current fair market value.
On August 31, 1998, the Board of Directors offered (the "Repricing
Offer") each employee, officer, consultant and director of the Company the right
to exchange certain of his or her then outstanding options in which the exercise
price per share was in excess of $4.12 (the "Exchanged Options") for new options
to purchase the number of shares represented by the Exchanged Options at an
exercise price equal to the fair market value of the shares on the date of the
Repricing Offer (the "Repriced Options"). All of the directors were eligible to
participate in the Repricing Offer, and directors exchanged an aggregate of
options to purchase 82,000 shares of Common Stock. See "Compensation Committee
Report on Option Repricing."
SDL Consultants, a company owned by Sarason D. Liebler, who became a
director of the Company in August 1994, rendered consulting services to the
Company for aggregate fees of approximately $43,000, $93,000 and $17,000 during
1998, 1997 and 1996, respectively. The approximately $43,000 paid to Mr. Liebler
in 1998 primarily related to services rendered to the Company in assisting with
the recruitment of several senior management persons and included reimbursement
of expenses. In addition, in part consideration of consulting services rendered
to the Company in 1997, the Company also granted a Non-Incentive Option to Mr.
Liebler on October 21, 1997 to purchase 10,000 of shares of Common Stock at an
exercise price of $4.12 per share, 25% of which shares become exercisable one
year from the date of grant; thereafter the shares become exercisable every
three months at the rate of 6.25% of the total number of shares subject to the
option.
-5-
<PAGE>
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
The following sets forth the business experience of executive officers
who are not also directors of the Company.
EUGENE R. CURCIO served as Vice President of Finance and Chief Financial
Officer from April 1998 to March 1999. Prior to joining the Company, Mr. Curcio
was Vice President of the Kaufman Group Division of Superior Consultant Company,
Inc., a national, publicly-traded healthcare consulting company. Between 1978
and 1997, Mr. Curcio held several positions with Central Connecticut Health
Alliance, a multi-provider organization, the last of which was Senior Vice
President and CFO. Mr. Curcio received his MBA from the University of Pittsburgh
Graduate School of Business and is a CPA.
JAY HIGHAM became Vice President of Marketing and Development in October
1994. In January 1999, Mr. Higham was promoted to Senior Vice President of
Marketing and Development. For four years prior to joining the Company, Mr.
Higham held a variety of executive positions, the most current of which was as
Vice President of Health Systems Development for South Shore Hospital and South
Shore Health and Education Corporation where he developed and implemented a
strategy for integration with physician group practices and managed care payors.
Mr. Higham earned an M.H.S.A. from George Washington University.
CLAUDE E. WHITE joined the Company in March 1995 as General Counsel and
Assistant Secretary. In January 1998, Mr. White became Corporate Secretary, in
addition to General Counsel. Prior to joining the Company, Mr. White was engaged
in the practice of law with William A. Thomas, Jr. & Associates, a New Jersey
law firm, since 1993. Mr. White has served as General Counsel of several major
companies over the past 10 years, including Burns International Security
Services, Inc., Staff Builders, Inc. and Quality Care, Inc. Mr. White received
his B.A. degree in Political Science from Rutgers College and J.D. degree from
Rutgers School of Law.
DONALD S. WOOD, PH.D. joined the Company in April 1991 as its Vice
President of Genetics. Dr. Wood became President and Chief Operating Officer of
the Reproductive Science Center Division in 1997 and was promoted to Senior Vice
President and Chief Operating Officer in January 1999. From 1989 through March
1991, Dr. Wood was the Executive Vice President and Chief Scientific Officer of
Odyssey Biomedical Corp., a genetic testing company which he co-founded and
which was acquired by IG Labs, Inc. in December 1990. Dr. Wood received a Ph.D.
in Physiology from Washington State University and completed a post-doctoral
fellowship in neurology at the Columbia/Presbyterian Medical Center in New York,
where he subsequently was appointed an Assistant Professor of Neurology.
-6-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid or
accrued by the Company during the years ended December 31, 1998, 1997 and 1996
for the Company's Chief Executive Officer and for the four most highly
compensated executive officers (the "Named Executive Officers"), including one
who is no longer serving as an officer of the Company.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
------------
Securities
Annual Underlying
Compensation Options
Name and Principal Position Year Salary ($) Bonus ($) Granted (#)
- --------------------------- ---- ---------- --------- -----------
Gerardo Canet 1998 240,000 43,200 73,750(4)
President and 1997 228,000 41,040 43,750
Chief Executive Officer (1) 1996 220,000 -- 30,000
Eugene R. Curcio
Sr. Vice President and
Chief Financial Officer (1), (2) 1998 123,958 18,750 30,000(4)
Jay Higham 1998 125,000 15,000 20,000(4)
Sr. Vice President, Marketing 1997 120,000 12,600 --
and Development (1) 1996 125,000 -- 10,000
Claude E. White 1998 102,000 7,650 6,375(4)
General Counsel 1997 57,000 4,425 --
and Secretary (1), (3) 1996 56,583 3,000 --
Donald S. Wood, Ph.D. 1998 145,000 21,750 34,589(4)
Chief Operating Officer (1) 1997 121,738 12,285 15,000
1996 112,143 -- --
(1) Gerardo Canet, Eugene R. Curcio, Jay Higham, Claude E. White and Donald S.
Wood commenced employment with the Company on February 14, 1994, April 13,
1998, October 10, 1994, March 1, 1995 and March 1, 1991, respectively.
(2) Eugene R. Curcio resigned as Sr. Vice President of Finance and Chief
Financial Officer effective March 27, 1999.
(3) Claude E. White served the Company in a part-time capacity during 1997 and
1996.
(4) Amount includes options that were granted during and/or prior to 1998 which
were repriced in August 1998. See "Compensation Committee Report on Option
Repricing".
-7-
<PAGE>
The following table sets forth certain information with respect to
individual grants of stock options made by the Company during fiscal 1998 to the
Named Executive Officers.
<TABLE>
OPTIONS GRANTED IN 1998
<CAPTION>
% of Potential Realizable
Number of Total Value at Assumed Annual Rates
Securities Options of Stock Price Appreciation for
Underlying Granted to Option Term (4)
Options Employees Exercise Expiration
Name Granted (#)(1) in 1998 Price ($) Date 5% ($) 10% ($)
---- -------------- ------- --------- ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Gerardo Canet 30,000(2) 1.44 4.12 08/01/2006 59,012 141,346
43,750(3) 2.10 4.12 10/21/2007 47,795 166,371
Eugene R. Curcio 15,000(3) 0.72 4.12 04/13/2008 -- --
15,000 0.72 8.00 04/13/2008 6,000 12,000
Jay Higham 6,250(3) 0.30 4.12 10/25/2004 2,391 11,452
3,750(3) 0.18 4.12 11/15/2004 1,435 6,871
10,000(3) 0.48 4.12 08/01/2006 8,442 30,824
Claude E. White 1,125(3) 0.05 4.12 08/22/2005 683 2,731
2,625(3) 0.13 4.12 01/07/2008 3,551 12,061
2,625 0.13 5.76 01/07/2008 9,508 24,097
Donald S. Wood, Ph.D. 3,501(3) 0.17 4.12 11/01/2001 0 1,232
3,000(3) 0.14 4.12 04/19/2004 1,148 5,497
588(3) 0.03 4.12 11/15/2004 225 1,077
6,250(3) 0.30 4.12 02/25/2007 6,827 23,766
8,750(3) 0.42 4.12 10/21/2007 9,558 33,273
6,250(3) 0.30 4.12 02/26/2008 8,456 28,718
6,250 0.30 8.12 02/26/2008 31,916 80,882
</TABLE>
(1) Effective August 31, 1998, the Board of Directors approved a resolution to
reprice certain stock options held by each officer, director and employee
of the Company, under the 1992 Incentive and Non-Incentive Stock Option
Plan and/or the 1988 Stock Option Plan. Per the resolution, stock options
for which the exercise price per share was greater than $4.12 ("Exchanged
Options") were exchanged for new options to purchase the same number of
shares as represented by the Exchanged Options at an exercise price equal
to the fair market value on the date of the Repricing Offer ("Repriced
Options"). Except for the exercise price of the Repriced Options, all other
terms and conditions of the options remained in full force and effect. Per
the resolution, options to purchase approximately 326,000 shares of Common
Stock were repriced. See "Compensation Committee Report on Option
Repricing".
(2) Represents grant of a Repriced Option in connection with cancellation of an
existing option. Per amendment to the option agreement at the time of
repricing, 15,000 shares in which the optionee was fully vested became
unexercisable until 8/31/00.
(3) Represents grant of a Repriced Option in connection with cancellation of an
existing option.
(4) Potential realizable value is based on the assumption that the price per
share of Common Stock appreciates at the assumed annual rate of stock
appreciation for the option term. The assumed 5% and 10% annual rates of
appreciation (compounded annually) over the term of the option are set
forth in accordance with the rules and regulations adopted by the
Commission and do not represent the Company's estimate of stock price
appreciation.
-8-
<PAGE>
The following table sets forth certain information concerning Named
Executive Officers who exercised options during 1998 and who held unexercised
options at December 31, 1998:
<TABLE>
AGGREGATED OPTION EXERCISES IN 1998 AND
OPTION VALUES AT DECEMBER 31, 1998
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired December 31, 1998 December 31, 1998 ($) (1)
On Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gerardo Canet 18,750 60,125 56,564 72,313 34,523 77,372
Eugene R. Curcio -- -- 0 15,000(2) 0 16,050
Jay Higham -- -- 15,625 4,375 16,717 4,681
Claude E. White -- -- 914 2,836 977 3,033
Donald S. Wood, Ph.D. 2,912 7,248 12,012 16,327 12,852 17,469
</TABLE>
(1) Based upon the closing sales price of the Common Stock on the Nasdaq
National Market on December 31, 1998 of $5.19 per share.
(2) Mr. Curcio resigned as an executive officer of the Company effective March
27, 1999. All options held by him expired as of the effective date of his
resignation.
COMPENSATION COMMITTEE REPORT ON OPTION REPRICING1
On August 31, 1998, the Board of Directors offered (the "Repricing
Offer") each employee, officer, consultant and director of the Company the right
to exchange certain of his or her then outstanding options in which the exercise
price per share was in excess of $4.12 (the "Exchanged Options") for new options
to purchase the number of shares represented by the Exchanged Options at an
exercise price equal to the fair market value of the shares on the date of the
Repricing Offer (the "Repriced Options"). Except for the exercise price of the
Repriced Options, all other terms and conditions of the options remained in full
force and effect. Options to purchase an aggregate of approximately 326,000
shares of Common Stock held by employees, officers and directors were repriced
in connection with the Repricing Offer.
The Compensation Committee and the Board of Directors believe that the
future growth and success of the Company is dependent upon, and the best
interests of the Company and its stockholders are served by, the Company's
ability to attract, retain and motivate its officers, employees and consultants
consistent with the interests of its stockholders, and that the Company's stock
option plans are an important factor in accomplishing these goals. It is
believed that the utilization of stock options as a portion of the compensation
- --------
1 The material in this report is not soliciting material, is not deemed
filed with the Securities and Exchange Commission and is not incorporated by
reference in any filing of the Company under the Securities Act of 1993, whether
made before or after the date of this Proxy Statement and irrespective any
general incorporation language in such filing.
-9-
<PAGE>
and incentives for officers, employees and consultants and for aligning the
interests of its officers, employees and consultants with those of the Company's
stockholders is critical. During 1998, the stock prices of healthcare stocks in
the Company's peer group declined dramatically. Even though the Company
experienced growth in revenues and increased levels of facility contribution
during 1998, decline in the market prices of healthcare stocks has significantly
impacted the market price of the Company's Common Stock. This resulted in an
artificially depressed market price for the Company's Common Stock so that
certain of the stock options granted since 1991 were significantly out-of-the
money for reasons not solely related to the Company's performance, thus creating
a situation that had the potential to act as a disincentive to the core group of
officers and employees responsible for the ongoing profitable growth of the
Company. Moreover, the depressed market price made it difficult to reconcile the
incentives provided to longer term employees with those accorded newly hired
persons and to integrate properly an effective equity-based incentive program
for all of the officers, employees and consultants of the Company. The
Compensation Committee and the Board of Directors determined that lowering the
exercise price of options with a per share exercise price in excess of $4.12 per
share would restore the incentive value to the options and would achieve
consistency between awards granted to long-term employees and those more
recently hired.
Lawrence J. Stuesser (Chairman)
M. Fazle Husain
Elizabeth E. Tallett
-10-
<PAGE>
The following table sets forth information concerning repricing of
options held by any executive officer during the last ten completed fiscal years
of the Company. During the last ten completed fiscal years of the Company,
options were repriced twice; once in the fiscal year ended December 31, 1998 and
once in the fiscal year ended December 31, 1994.
10-YEAR OPTION REPRICING
<TABLE>
<CAPTION>
Number of
Securities Market Price of Expiration Date of
Underlying Stock at Time of Exercise Price at New Original Option at
Options Repriced Repricing or Time of Repricing Exercise Date of Repricing or
Name or Amended (#) Amendment ($) or Amendment ($) Price ($) Amendment
---- ---------------- --------------- ---------------- --------- --------------------
<S> <C> <C> <C> <C> <C>
Gerardo Canet 30,000 3.38 9.37 4.12 08/01/2006(1)
43,750 3.38 8.76 4.12 10/21/2007(1)
Eugene R. Curcio 15,000 3.38 8.00 4.12 04/13/2008(1)
Jay Higham 6,250 3.38 4.36 4.12 10/25/2004(1)
3,750 3.38 5.00 4.12 11/15/2004(1)
10,000 3.38 9.48 4.12 08/01/2006(1)
Claude E. White 1,125 3.38 11.00 4.12 08/22/2005(1)
2,625 3.38 5.76 4.12 01/07/2008(1)
Donald S. Wood, Ph.D. 3,501 3.38 6.20 4.12 11/01/2001(1)
3,000 3.38 10.00 4.12 04/19/2004(1)
588 3.38 5.00 4.12 11/15/2004(1)
6,250 3.38 6.72 4.12 02/25/2007(1)
8,750 3.38 8.76 4.12 10/21/2007(1)
6,250 3.38 8.12 4.12 02/26/2008(1)
3,000 8.00 38.00 10.00 03/09/2003(2)
Vicki L. Baldwin (3) 4,625 8.00 38.00 10.00 03/09/2003(2)
David J. Beames, Ph.D. (3) 3,000 8.00 38.00 10.00 03/09/2003(2)
Patricia M. McShane, M.D. (3) 3,000 8.00 38.00 10.00 03/09/2003(2)
3,190 8.00 32.00 10.00 09/15/2002(2)
Dwight P. Ryan (3) 2,250 8.00 38.00 10.00 03/09/2003(2)
</TABLE>
(1) Represents the expiration date of the original option at the time of
repricing. The expiration dates of the Repriced Options are identical to
those of the original options.
(2) Represents the expiration date of the original option at the time of
repricing. The expiration date of the Repriced Options is April 18, 2004.
(3) Individual was a former executive officer of the Company. All options held
by such individual have expired.
-11-
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
On February 14, 1994, Gerardo Canet entered into an employment
agreement with the Company to serve as its President and Chief Executive Officer
and was appointed as a director. Pursuant to the employment agreement, Mr. Canet
receives an annual salary of $215,000 subject to increases and in February 1994
was granted options to purchase an aggregate of 35,125 shares of Common Stock.
Under Mr. Canet's employment agreement, the Company may terminate his employment
without cause on thirty days' notice, in which event Mr. Canet will receive, as
severance pay, twelve months' salary payable monthly. In the event Mr. Canet's
employment is terminated by reason of his permanent disability or death, Mr.
Canet (or his legal representative) will receive six months' base salary
(reduced by any payments following termination received under any long-term
disability policy maintained by the Company for Mr. Canet's benefit).
The employment agreement further provides that in the event that (i)
within one year after a "Change of Control" (as defined therein) of the Company,
Mr. Canet's employment terminates or there occurs a material reduction in his
duties (other than by reason of his disability) or a material interference by
the Company's Board of Directors with the exercise of his authority, or (ii) the
Company is acquired for cash in excess of $10.00 per share of Common Stock, the
stock options granted to Mr. Canet under the agreement would accelerate and
become exercisable as of the date of such termination, material reduction,
material interference, or cash acquisition, or, with respect to the incentive
options, the earliest date thereafter consistent with certain restrictions set
forth in the agreement.
Under the employment agreement, Mr. Canet has agreed not to compete
with the Company while employed by the Company and for a period of one year
thereafter.
--------------
The Company is also a party to a Change in Control Severance Agreement
with Mr. Canet entered into in August 1994.
The Company is also party to Executive Retention Agreements with each
of Jay Higham and Donald Wood, Vice Presidents of the Company, entered into in
March 1995.
The Change in Control Severance Agreements and the Key Executive
Retention Agreements (together referred to herein as the "Agreements") provide
for certain severance payments and benefits to the named executives in the event
of a termination of their employment, either by the Company without cause, or by
the executive for "Good Reason" (as defined below), at any time within eighteen
(18) months following a "Change in Control" (as defined below) of the Company
(any such termination, a "Qualifying Termination"). More specifically, the
Agreements provide the named executives with one additional year of salary,
bonus (if applicable), and benefits (or equivalent), more than he or she would
previously have been entitled to receive upon a termination without cause (or,
additionally, in the case of Mr. Canet, certain terminations by Mr. Canet for
Good Reason which would be deemed equivalent to a termination without cause
under his current employment agreement). Accordingly, pursuant to the
Agreements, in the event of a Qualifying Termination of the respective
executive, Mr. Canet's severance has been increased to two years (from the one
year severance provision which was contained in his employment agreement with
the Company) and the two Vice Presidents will be paid one year's severance (the
Vice Presidents not previously having been a party to a severance agreement with
the Company). Pursuant to the terms of the Agreements, all incentive options
granted to the respective executive would become fully vested upon a Qualifying
Termination, subject to certain terms and conditions. Also, pursuant to the
Agreements, the Company would be required to pay each respective executive for
all reasonable fees and expenses incurred by the respective executive in
litigating his or her rights, thereunder, to the extent the executive is
successful in any such litigation.
"Change in Control" under the Agreements means either: (i) any one or
more changes in the aggregate composition of the Company's Board of Directors as
a result of which Mr. Canet and the other individuals constituting the Board of
Directors as of July 26, 1994 (the "Incumbent Board"), cease to constitute a
majority of the Board of Directors, provided, however, that any individual
-12-
<PAGE>
elected to the Board by, or nominated for election by, a majority of the
then-current Incumbent Board (except if such person assumes office by reason of
an actual or threatened election contest) is deemed to be a member of the
then-current Incumbent Board; or (ii) the closing of the cash acquisition in the
event the Company is acquired for cash in excess of $10.00 per share of Common
Stock, except in either case (i) or (ii) if the executive is or was a member of
the Board and approved such event in writing or by vote at a meeting of the
Board.
"Good Reason" under the Agreements consists of any of the following
grounds based on which the named executive terminates his or her own employment
within eighteen (18) months following a Change in Control of the Company: (i) a
material reduction in the Executive's duties, title(s) or offices, or a material
interference with his or her authority or status by the Board of Directors; (ii)
a relocation of the Company's principal executive offices to a location at least
fifty (50) miles from the Company's current offices in Purchase, New York; (iii)
in the case of Mr. Canet, a material breach of or default by the Company under
his employment agreement; (iv) in the case of any of the Vice Presidents, in the
event Mr. Canet's employment as President and Chief Executive Officer of the
Company is terminated (other than due to the death or permanent disability of
Mr. Canet) within the eighteen (18) month period following a Change in Control
by either the Company (other than for cause) or Mr. Canet for good Reason; (v)
if the executive's total salary and cash bonus opportunities for a fiscal year
(which includes any portion of the eighteen-month period following a Change in
Control) are less than 90% of the total salary and cash bonus compensation
opportunities made available to the executive in the then most recently
completed fiscal year; (vi) the failure of the Company to continue in effect any
material benefits or perquisites or insurance plans in which the executive was
participating unless substituted for with substantially similar benefits, or in
the event the Company takes actions which would adversely affect the executive's
participation in, or materially reduce the executive's benefits under, such
plans, or deprive the executive of a material fringe benefit; (vii) the Company
(either in one transaction or a series of related transactions) sells or
otherwise disposes of, not in the ordinary course of business, assets or earning
power aggregating more than 30% of the assets or earning power of the Company
(or the Company and its subsidiaries), unless the executive is or was a member
of the Board and approved any of the foregoing either in writing or by vote at a
meeting of the Board; (viii) a material breach of or default by the Company
under the Agreements which is not cured by the Company within thirty days after
its receipt or prior written notice thereof from the executive; or (ix) a
purported termination for cause by the Company of the executive's employment
within the eighteen (18) month period following a Change in Control which is not
effected in compliance with certain procedural requirements (such as notice and
an opportunity for the executive to be heard, together with his counsel, before
the Board).
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), requires the Company's executive officers, directors and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities to file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Such executive officers, directors, and greater than
10% beneficial owners are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms filed by such reporting persons.
Based solely on the Company's review of such forms furnished to the
Company and written representations from certain reporting persons, the Company
believes that the required filings applicable to the Company's executive
officers, and greater than 10% beneficial owners were made on a timely basis for
the year ended December 31, 1998 except that Eugene R. Curcio failed to file
timely an Initial Report on Form 3.
-13-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31,1998 the members of the
Compensation Committee were Messrs. Stuesser (Chairman) and Husain, and Ms.
Tallett.
The Company has maintained a consulting arrangement with SDL
Consultants, a privately-owned consulting firm engaged in rendering general
business advice, of which Mr. Liebler is President. During the fiscal year ended
December 31, 1998 the Company paid SDL Consultants approximately $43,000 in
consulting fees, which were primarily related to services rendered to the
Company in assisting with the recruitment of several senior management persons
and included reimbursement for expenses.
Each of Messrs. Liebler and Stuesser was paid $10,000 as an annual
retainer fee, $2,500 for membership on a Board committee and $4,500 and $3,750,
respectively, in Board attendance fees. Ms. Tallett, who became a director in
June 1998, was paid $5,833 as a retainer fee, $1,250 for membership on a Board
committee and $3,750 in Board attendance fees.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION2
The goal of the Company's executive compensation policy is to ensure
that an appropriate relationship exists between executive compensation and the
creation of stockholder value, while at the same time attracting, motivating and
retaining senior management. The Compensation Committee's informal executive
compensation philosophy (which applies generally to all Company management,
including the President and Chief Executive Officer, Gerardo Canet) considers a
number of factors, which may include:
o rewarding eligible employees who have achieved specific business and
financial success during the fiscal year;
o giving eligible employees the incentive to strive for higher
productivity, efficiency and quality of service; and
o encouraging the "best" people to join and stay with the Company.
Compensation structures for senior management generally include a
combination of salary, bonuses and stock options. Specific executive officer
base salary is determined based on a range of measures and by comparison to the
compensation of executive officers of comparable companies. During the fiscal
year ended December 31, 1998, the bonuses of senior management were derived in
accordance with a predetermined percent of base salary. The actual bonuses were
based on two components. One component was based on the Company's performance
during the fiscal year ended December 31, 1998 versus the 1998 budget. The
second component was based on the achievement of specific milestones. The
Compensation Committee also endorses the position that equity ownership by
senior management is beneficial in aligning their interest with those of
stockholders', especially in the enhancement of stockholder value. The
Compensation Committee considers the Company's performance under these measures
and uses its subjective judgment and discretion in approving individual
compensation. Mr. Canet's base salary is established pursuant to an employment
agreement, although his bonus is determined in the same fashion as other
executive officers.
Lawrence J. Stuesser (Chairman)
M. Fazle Husain
Elizabeth E. Tallett
- --------
2 The material in this report is not soliciting material, is not deemed
filed with the Securities and Exchange Commission and is not incorporated by
reference in any filing of the Company under the Securities Act of 1993, whether
made before or after the date of this Proxy Statement and irrespective any
general incorporation language in such filing.
-14-
<PAGE>
Performance Graph3
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
INMD Common Stock 100 48 145 65 73 52
Peer Group 100 140 348 231 254 97
NASDAQ Stock Market (U.S.) 100 98 138 170 208 294
The above graph compares the five-year cumulative total return for INMD
Common Stock with the comparable cumulative return of the NASDAQ Stock Market
(U.S.) and a peer group index. The peer group index includes American Oncology
Res. Inc., FPA Medical Management, Coastal Physician Group Inc., MedPartners,
Inc., Pediatrix Med Group, Inc., Php Healthcare Corp., Phycor, Inc., Phymatrix
Corp., Physician Reliance Network, Physicians Resource Group and Sheridan
Healthcare Inc. The Company selected these companies for the peer group based on
the nature of such companies' businesses.
The graph assumes $100 was invested on December 31, 1993 in INMD Common
Stock and $100 was invested at that same time in each of the NASDAQ and peer
group indexes. The comparison assumes that all dividends were reinvested.
Measurement points are at the last trading day of the years ended December 31,
1993, 1994, 1995, 1996, 1997 and 1998.
- --------
3 The material in this chart is not soliciting material, is not deemed
filed with the Securities and Exchange Commission and is not incorporated by
reference in any filing of the Company under the Securities Act of 1993, whether
made before or after the date of this Proxy Statement and irrespective any
general incorporation language in such filing.
-15-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Dr. Patricia M. McShane, became a director of the Company in March 1997
and was a Vice President of the Company in charge of medical affairs from
September 1992 through February 28, 1997. Since May 1988, Dr. McShane has been,
and currently is, the Medical Director of MPD Medical Associates (MA) P.C. ("the
Boston Medical Practice") where she is engaged in the practice of medicine,
specializing in infertility. The Company is a party to a management agreement
with the Boston Medical Practice. During the fiscal years ended December 31,
1998 and 1997, the Boston Medical Practice paid approximately $1,941,000 and
$1,833,000 in management fees, respectively, to the Company pursuant to such
management agreement. Dr. McShane is the sole stockholder of the Boston Medical
Practice. In connection with the extension of the management agreement in
November 1998, Dr. McShane received warrants to purchase 12,500 shares of the
Company's Common Stock at an exercise price equal to $4.12 per share.
SDL Consultants, a company owned by Sarason D. Liebler, a Company
director, rendered consulting services to the Company during 1998, 1997 and 1996
for aggregate fees of approximately $43,000, $93,000 and $17,000, respectively.
The approximately $43,000 paid to Mr. Liebler in 1998 primarily related to
services rendered to the Company in assisting with the recruitment of several
senior management persons and included reimbursement of expenses.
In January 1998, the Company sold for a total purchase price of
$5,500,000 an aggregate of 808,824 shares of Common Stock, $.01 par value, to
Morgan Stanley Venture Partners III, L.P., Morgan Stanley Venture Investors III,
L.P. and The Morgan Stanley Venture Partners Entrepreneur Fund, L.P.
(collectively, the "Funds") and warrants expiring January 23, 2002 to purchase
60,000 shares of Common Stock, $.01 par value, at an exercise price of $.01 per
share (the "Warrants"). The Funds were granted registration rights with respect
to the shares of Common Stock and the shares of Common Stock issuable upon
exercise of the Warrants. The Funds also have the right to designate nominees
for election to the Company's Board of Directors based on their proportionate
voting interest in the Company. In addition, the Funds are required to vote all
of their voting securities for nominees to the Company' Board of Directors who
have been recommended by the Company's Board of Directors. Mr. Husain, a
director of the Company, is a general partner of the Funds.
The Company is a party to a management agreement with Fertility Centers
of Illinois, S.C. ("FCI"). Dr. Lifchez, a director of the Company, is a
principal stockholder and officer of FCI. In connection with the extension of
the management agreement in March 1998, Dr. Lifchez received warrants to
purchase 3,750 shares of the Company's Common Stock at an exercise price equal
to the then current fair market value of the Company's Common Stock. In August
1998, such warrants were exchanged for new warrants to purchase the number of
shares represented by such exchanged warrants at an exercise price equal to
$4.12 per share. During the fiscal years ended December 31, 1998 and 1997, FCI
paid approximately $2,313,000 and $791,000 in management fees, respectively, to
the Company pursuant to the management agreement.
In March 1998, the Company acquired the majority of the outstanding
stock of Shady Grove Fertility Centers, Inc. ("Shady Grove") which is a party to
a management agreement with Levy, Sagoskin and Stillman, M.D., P.C. ("LS&S").
Dr. Levy, a director of the Company, is a principal stockholder of LS&S. In
connection with the extension of the management agreement in April 1998, Dr.
Levy received warrants to purchase 3,750 shares of the Company's Common Stock at
an exercise price equal to the then current fair market value of the Company's
Common Stock. In August 1998, such warrants were exchanged for new warrants to
purchase the number of shares represented by such exchanged warrants at an
exercise price equal to $4.12 per share. Pursuant to a submanagement agreement
between Shady Grove and the Company, the Company is entitled to receive
management fees for services provided to LS&S. During the fiscal year ended
December 31, 1998, Shady Grove paid approximately $842,000 in management fees to
the Company pursuant to the submanagement agreement.
-16-
<PAGE>
GENERAL
The Management of the Company does not know of any matters other than
those stated in this Proxy Statement which are to be presented for action at the
meeting. If any other matters should properly come before the meeting, it is
intended that proxies in the accompanying form will be voted on any such other
matters in accordance with the judgment of the persons voting such proxies.
Discretionary authority to vote on such matters is conferred by such proxies
upon the persons voting them.
The Company will bear the cost of preparing, printing, assembling and
mailing the proxy, Proxy Statement and other material which may be sent to
stockholders in connection with this solicitation. It is contemplated that
brokerage houses will forward the proxy materials to beneficial owners at the
request of the Company. In addition to the solicitation of proxies by use of the
mails, officers and regular employees of the Company may solicit by telephone
proxies without additional compensation. The Company does not expect to pay any
compensation for the solicitation of proxies.
The Company will provide without charge to each person being solicited
by this Proxy Statement, on the written request of any such person, a copy of
the Annual Report of the Company on Form 10-K for the fiscal year ended December
31, 1998 (as filed with the Securities and Exchange Commission) including the
financial statements thereto. All such requests should be directed to Mr. Claude
E. White, Secretary of IntegraMed America, Inc., One Manhattanville Road,
Purchase, New York 10577.
STOCKHOLDER PROPOSALS
The Annual Meeting of Stockholders for the fiscal year ending December
31, 1999 is expected to be held in June 2000. All proposals intended to be
presented at the Company's next Annual Meeting of Stockholders must be received
at the Company's executive office no later than December 31, 1999 for inclusion
in the Proxy Statement and form of proxy related to that meeting.
By Order of the Board of Directors,
Gerardo Canet
Chairman of the Board, President
and Chief Executive Officer
Dated: April 30, 1999
-17-
<PAGE>
Proxy
IntegraMed America, Inc.
Annual Meeting of Stockholders
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Gerardo Canet or Claude E. White as
proxy to represent the undersigned at the Annual Meeting of Stockholders to be
held at the Company's headquarters, One Manhattanville Road, Purchase, New York
10577 on May 25, 1999 at 10:00 a.m. and at any adjournments thereof, and to vote
the shares of Common Stock and/or Preferred Stock the undersigned would be
entitled to vote if personally present, as indicated on the reverse:
(To be Signed on Reverse Side)
<PAGE>
<TABLE>
<CAPTION>
[EXAMPLE] Please mark your votes as in this example
<S> <C> <C>
FOR all nominees WITHHOLD AUTHORITY
listed at right(except to vote for all nominees listed
as marked to the contrary at right
below) <C>
Nominees:
-------------
Gerardo Canet
1. ELECTION OF DIRECTORS M. Fazle Husain
Michael J. Levy, M.D.
(INSTRUCTIONS: To withhold authority to Sarason D. Liebler
vote for any nominee, print that Aaron S. Lifchez, M.D.
nominees name(s) on the line provided Patricia M. McShane, M.D.
below) Lawrence J. Stuesser
Elizabeth E. Tallett
______________________________________________
In their discretion, proxies are authorized to vote upon such business as
may properly come before the meeting.
The shares of Common Stock and/or Preferred Stock represented by this proxy
will be voted as directed. If no contrary instruction is given, the shares of
Common Stock and/or Preferred Stock will be voted FOR the election of the
nominees.
Signature___________________ Date__________ Signature______________Date_________
Note: (Please date, sign as name appears above, and return promptly. If the
shares of Common Stock and/or Preferred Stock are registered in the
names of two or more persons, each should sign. When signing as
Corporate Officer, Partner, Executor, Administrator, Trustee or
Guardian, please give full title. Please note any changes in your
address alongside the address as it appears in the proxy.)
</TABLE>
