<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
Shared Medical Systems Corporation
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Shared Medical Systems Corporation
--------------------------------------------------------------------------------
(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>
SHARED MEDICAL SYSTEMS CORPORATION
51 Valley Stream Parkway
Malvern, Pennsylvania 19355-1406
----------------
SUPPLEMENT TO PROXY STATEMENT
This Supplement to Proxy Statement (this "Supplement") and the enclosed
proxy are being mailed on or about May 30, 2000 to the stockholders of Shared
Medical Systems Corporation (the "Company") in order to supplement the
Company's Proxy Statement previously mailed on or about April 18, 2000 (the
"Original Proxy Statement"). Except to the extent supplemented by the
information in this Supplement, the information in the Original Proxy
Statement is complete and the Original Proxy Statement is incorporated herein
by reference in its entirety. The enclosed proxy is identical to the proxy
enclosed with the Original Proxy Statement (the "Original Proxy"), and has
been included with this Supplement in the event that you desire to change your
vote, as directed in the Original Proxy, in response to the information
contained in this Supplement. Unless you intend to so change your vote, there
is no need to complete and execute the enclosed proxy or to deliver it to the
Company. All votes will be cast in accordance with the Original Proxy unless
the enclosed proxy is properly completed, executed and delivered to the
Company. The enclosed proxy is solicited by the Board of Directors of the
Company (the "Board" or "Board of Directors"). Any stockholder giving a proxy
has the power to revoke it at any time prior to its use by giving notice to
the Secretary of the Company.
PROPOSED CHANGE IN CONTROL OF THE COMPANY
On April 30, 2000, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Siemens Corporation, a Delaware corporation
("Siemens") and Autobahn Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Siemens (the "Purchaser"), pursuant to which the
Purchaser commenced a tender offer on May 10, 2000 to purchase all outstanding
shares of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock") and the associated preferred stock purchase rights (the shares of
Common Stock and any associated preferred stock purchase rights are referred
to in this Supplement as the "Shares"), at a price per Share of $73.00, net to
the seller in cash (the "Offer"). The Merger Agreement provides that, subject
to the satisfaction or waiver of certain conditions, following completion of
the Offer, and in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), the Purchaser will be merged with and into the Company
(the "Merger"). Following consummation of the Merger, the Company will
continue as the surviving corporation and will be a wholly-owned subsidiary of
Siemens. At the effective time of the Merger (the "Effective Time"), each
issued and outstanding Share (other than Shares that are owned by Siemens, the
Purchaser, any of their respective subsidiaries, the Company or any of its
subsidiaries, and Shares held by stockholders of the Company who did not vote
in favor of the Merger Agreement and who comply with all of the relevant
provisions of Section 262 of the DGCL) will be converted into the right to
receive $73.00 in cash or any greater amount per Share paid pursuant to the
Offer. The Offer is currently scheduled to expire at 5:00 p.m., New York City
time, on June 7, 2000, unless the Purchaser extends it in accordance with the
Merger Agreement and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules promulgated thereunder. The Offer, the Merger,
and the Merger Agreement are more fully described in the Schedule 14D-9 filed
by the Company with the Securities Exchange Commission (the "Commission") on
May 10, 2000 (the "Schedule 14D-9").
DESIGNATION OF DIRECTORS BY PURCHASER
As indicated in the Original Proxy Statement, the Board of Directors has
determined that the number of directors to be elected at the Annual Meeting to
be held on June 9, 2000 shall be six, and the Board has nominated Messrs.
Macaleer, DeTurk, Weston, Rubin and Cadwell and Dr. Wilensky for election as
directors at
1
<PAGE>
the 2000 Annual Meeting. In addition, as indicated in the Original Proxy
Statement, it is the intention of the persons named in the enclosed proxy to
vote for the nominees listed above unless otherwise directed. If elected, the
nominees would ordinarily serve as directors for a term of one year. However,
if the Offer is consummated, the term of each director elected at the 2000
Annual Meeting, as well as the overall composition of the Board of Directors,
will be subject to change following the Effective Time when the Company will
become a wholly-owned subsidiary of Siemens.
The Merger Agreement provides that immediately upon the acceptance for
payment of and payment for shares of the Common Stock by the Purchaser or any
of its affiliates pursuant to the Offer, the Purchaser shall be entitled to
designate up to such number of directors (the "Purchaser Designees"), rounded
up to the next whole number, for election or appointment to the Board of
Directors as will give the Purchaser, subject to compliance with Section 14(f)
of the Exchange Act, representation on the Board of Directors equal to the
product of (i) the total number of directors on the Board of Directors (giving
effect to the increase in size of such Board pursuant to this paragraph) and
(ii) the percentage that the number of shares of the Common Stock beneficially
owned by the Purchaser and its affiliates (including shares of Common Stock so
accepted for payment and purchased) bears to the number of shares of Common
Stock then outstanding. In furtherance thereof, concurrently with such
acceptance for payment and payment for such shares of Common Stock, the
Company shall, upon request of Parent or the Purchaser and in compliance with
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder,
promptly increase the size of its Board of Directors by such number as is
necessary to enable the Purchaser Designees to be so elected or appointed to
the Company's Board of Directors, and, subject to applicable law, the Company
shall take all reasonable actions available to the Company to cause such
designees of the Purchaser to be so elected or appointed. The Merger Agreement
provides that at such time, the Company will, if requested by Siemens or the
Purchaser and subject to applicable law, also take all reasonable action
necessary to cause persons designated by the Purchaser to constitute at least
the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each subsidiary
of the Company and (iii) each committee (or similar body) of each such board.
It is expected that the Purchaser Designees will assume office promptly
following the purchase by Purchaser of any Shares pursuant to the terms of the
Offer, which purchase cannot be earlier than June 7, 2000, and that, upon
assuming office, the Purchaser Designees together with the continuing
directors of the Company will thereafter constitute the entire Board. If
Purchaser's purchase of Shares pursuant to the terms of the Offer occurs prior
to the date of the 2000 Annual Meeting, it is expected that the 2000 Annual
Meeting will be adjourned to a date following the Effective Time and a new
record date (subsequent to the Effective Time) will be fixed for such
adjourned meeting. In addition, following the Effective Time, the Company
expects the Purchaser to remove from the Board of Directors any directors who
are elected at the 2000 Annual Meeting.
As of the date of this Supplement, the Purchaser has not determined who will
be the Purchaser Designees. However, the Purchaser Designees will be selected
from among the persons listed in Schedule I attached hereto. Schedule I also
includes certain information with respect to each such person. Each of the
persons listed in Schedule I has consented to serve as a director of the
Company if appointed or elected. None of such persons currently is a director
of, or holds any positions with, the Company. Siemens and the Purchaser have
advised the Company that, to the best of their knowledge, none of the persons
listed on Schedule I or any of their affiliates beneficially owns any equity
securities or rights to acquire any such securities of the Company, nor has
any such person been involved in any transaction with the Company or any of
its directors, executive officers or affiliates that is required to be
disclosed pursuant to the rules and regulations of the Commission other than
with respect to transactions between Siemens, the Purchaser and the Company
that have been described in the Schedule 14D-9.
2
<PAGE>
EFFECTS OF THE OFFER AND THE MERGER UNDER COMPANY INCENTIVE AGREEMENTS AND
PLANS BETWEEN THE COMPANY AND ITS DIRECTORS AND EXECUTIVE OFFICERS
As disclosed in the Company's Schedule 14D-9, certain members of the
Company's management and the Board of Directors have interests in the
transactions contemplated by the Merger Agreement that are in addition to
their interests as Company shareholders generally.
Stock Option Agreements. The Merger Agreement provides that each outstanding
option to purchase shares of Common Stock granted to the Board or the
executive officers or other employees under any stock option agreement or
similar arrangement (each, a "Company Stock Option") will automatically, in
accordance with the terms of the applicable agreements or arrangements
governing such Company Stock Option (each, a "Company Stock Option
Agreement"), be converted into the right to receive an amount in cash equal to
the product obtained by multiplying (1) the difference between the Merger
Consideration and the per share exercise price of such Company Stock Option,
by (2) the number of shares of Common Stock covered by such Company Stock
Option. All cash payments will be made at the times, in the amounts and with
interest in accordance with the applicable Company Stock Option Agreement,
except that any payments that would otherwise be made (pursuant to the vesting
schedule of the applicable Company Stock Option Agreement) more than 30 months
after the consummation of the Merger will instead be paid in quarterly
installments as nearly equal as possible, with interest at the rate of 10.0%
per annum, over the first thirty months after the consummation of the Merger.
The purchase of a majority of the Shares pursuant to the Offer will constitute
a "change in control" for purposes of the change-in-control provisions
applicable to the Company Stock Options held by Company employees and by the
Company's non-employee directors. The vesting schedules in the Company Stock
Option Agreements with the Company's non-employee directors and with Marvin S.
Cadwell, the Company's President and Chief Executive Officer, are to be
accelerated, and Mr. Cadwell will be entitled to the applicable cash payments
in respect of his Company Stock Options upon the consummation of the Merger
and the non-employee directors will be entitled to the applicable cash
payments in respect of their Company Stock Options upon their removal from
office following the consummation of the Merger.
Restricted Stock Agreements. The Merger Agreement provides that each holder
of a restricted share of Common Stock will be entitled to receive the Merger
Consideration payable with respect to such restricted share in accordance with
the terms of the applicable agreements or arrangements governing such
restricted share (each, a "Restricted Stock Agreement"). All cash payments
will be made in accordance with the vesting schedules set forth in the
applicable Restricted Stock Agreement, except that any payments that would
otherwise be made (pursuant to such vesting schedule) more than 30 months
after the consummation of the Merger will instead be paid in quarterly
installments as nearly equal as possible, with interest at the rate of 10.0%
per annum, over the first thirty months after the consummation of the Merger.
Except as described in the immediately preceding sentence, the vesting
schedules set forth in the Company's existing Restricted Stock Agreements will
not be accelerated as a result of the consummation of the Offer.
Parachute Payments. To the extent that any payments to any of the Company's
executive officers are subject to the excise tax on excess parachute payments
under Section 4999 of the Internal Revenue Code of 1986, as amended, Siemens
will be required to "gross up" such payments to cover such tax. The Company
expects that Mr. Cadwell will be the only executive officer to receive a
parachute payment pursuant to the transactions contemplated by the Merger
Agreement.
Certain Arrangements With Mr. Cadwell. The Board of Directors, at a meeting
held April 28, 2000, approved a cash bonus of $600,000 for Mr. Cadwell payable
upon the successful completion of the transactions contemplated by the Merger
Agreement. At the same meeting, the Board approved a Company loan to Mr.
Cadwell in the amount of $432,994.46. Mr. Cadwell used the proceeds of the
loan to pay the exercise price (and applicable taxes) for the exercise of
Company Stock Options held by him that were scheduled to expire in May 2000.
The loan is repayable on demand and is interest free for 90 days, but bears
interest at the rate of 6% per annum thereafter until paid. The loan was made
independently of the transactions contemplated by the Merger Agreement.
3
<PAGE>
Certain Retention and Other Arrangements Under Consideration. Siemens has
indicated that it wants to implement, and is considering, the adoption of a
retention plan intended to provide financial incentives for certain employees
to remain in the employ of the Company for 30 months following the Merger.
Siemens is also considering possible amendments to the existing deferred
compensation arrangements between the Company and certain officers. The
existing terms of the deferred compensation arrangements are as described in
the Original Proxy Statement.
OTHER MATTERS
Management of the Company knows of no matters other than those discussed
herein and in the Original Proxy Statement which will be brought before the
meeting by any person. If, however, any such matter shall properly come before
the meeting, the persons named in the enclosed proxy or in the Original Proxy,
as applicable, will vote the same in accordance with their best judgment.
All expenses in connection with the solicitation of proxies, including the
cost of preparing, printing and mailing this Supplement and the enclosed proxy
will be borne by the Company. Employees of the Company may solicit proxies by
personal interview, mail, telephone, facsimile transmission and telegraph. The
Company will reimburse brokers and other persons holding stock in their names
or in the names of nominees for their expenses in forwarding proxies and proxy
materials to beneficial owners of the shares.
By Order of the Board of Directors
James C. Kelly
Secretary
4
<PAGE>
SCHEDULE I
As of the date of this Supplement, the Purchaser has not determined who will
be the Purchaser Designees. However, such Purchaser Designees will be selected
from the following list of directors and executive officers of Siemens or its
affiliates. The information contained herein concerning Siemens and its
directors and executive officers and those of its affiliates has been
furnished by Siemens and the Purchaser. The Company assumes no responsibility
for the accuracy or completeness of such information.
The name, present principal occupation or employment and five-year
employment history of each of the persons is set forth below. None of the
persons listed below owns any Shares or has engaged in any transactions with
respect to Shares during the past 60 days. During the last five years, none of
the persons listed below has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) nor was such person a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws. None of the persons listed below (i) is currently a
director of, or holds any position with, the Company (ii) has a familial
relationship with any of the directors or executive officers of the Company or
(iii) based on information provided to the Company by Siemens (which is to the
best of Siemens' knowledge), beneficially owns any securities (or rights to
acquire any securities) of the Company. The Company has been advised by
Siemens that, to the best of Siemens' knowledge, none of the persons listed
below has been involved in any transaction with the Company or any of its
directors, executive officers or affiliates which is required to be disclosed
pursuant to the rules and regulations of the Commission.
Unless otherwise indicated, each of the persons listed below is a citizen of
the Federal Republic of Germany. Unless otherwise indicated, each such person
has held his or her present occupation as set forth below, or has been an
executive officer at Siemens AG, the indirect parent of Siemens, for the past
five years.
<TABLE>
<CAPTION>
Name and Address Age Present Principal Occupation or Employment
---------------- --- ------------------------------------------
<S> <C> <C>
Reinhard Benditte 48 Executive Vice President and Chief
Siemens Medical Systems, Inc. Financial Officer, Siemens Medical
186 Wood Avenue South Systems, Inc., Iselin, New Jersey.
Iselin, New Jersey 08830 Previously Chief Financial Officer of
Siemens Automotive Corporation
Bernhard K. Halfpap 51 Head of Business Planning of
Siemens AG Medical Engineering Division of
Henkestrasse 127 Siemens AG, Erlangen, Germany
D-91050 Erlangen
Germany
Robert Kirschbaum 52 Corporate Legal Counsel, Siemens
Siemens AG AG, Erlangen, Germany
Werner von Siemens Strasse 50
D-91050 Erlangen
Germany
Klaus Kleinfeld 42 Corporate Vice President and Group
Siemens AG Executive, Medical Engineering
Henkestrasse 127 Division of Siemens AG. Previously
D-91050 Erlangen President of Angiography,
Germany Fluoroscopy and Radiography
Systems Division of Medical
Engineering of Siemens AG;
President of the Siemens
Management Consulting Group
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Name and Address Age Present Principal Occupation or Employment
---------------- --- ------------------------------------------
<S> <C> <C>
Thomas N. McCausland 57 President and Chief Executive Officer,
Citizen of USA Siemens Medical Systems, Inc., Iselin,
Siemens Medical Systems, New Jersey. Previously Vice President
Inc. of Sales and Marketing, Siemens
186 Wood Avenue South Energy & Automation, Inc.
Iselin, New Jersey 08830
Kenneth R. Meyers 39 Legal Counsel, Siemens Corporation,
Citizen of USA New York, New York
Siemens Corporation
153 East 53rd Street
New York, New York 10022
Erich Reinhardt 53 Chief Executive Officer and Group
Siemens AG President, Medical Engineering
Henkestrasse 127 Division of Siemens AG, Erlangen,
D-91050 Erlangen Germany
Germany
Goetz Steinhardt 56 Corporate Vice President and Group
Siemens AG Executive, Medical Engineering
Henkestrasse 127 Division of Siemens AG, Erlangen,
D-91050 Erlangen Germany
Germany
</TABLE>
6
<PAGE>
This Proxy is Solicited By The Board of Directors Of The Company
P
SHARED MEDICAL SYSTEMS CORPORATION
R
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
O
June 9, 2000
X
Y The undersigned hereby appoints R. James Macaleer and James C. Kelly, or
each of them, as Proxies, each with full power of substitution and
revocation, to attend the Annual Meeting of Stockholders of Shared Medical
Systems Corporation on June 9, 2000 and any adjournment thereof, and thereat
to vote all shares which the undersigned would be entitled to vote if
personally present upon the matters as set forth in the Notice of Annual
Meeting and Proxy Statement and, in their discretion, upon any other matters
which may properly come before the meeting.
(Continued and to be signed on other side)
--FOLD AND DETACH HERE--
<PAGE>
Please mark [X]
your votes as
indicated in
this example
--------------------------------------------------------------------------------
1. Election of Directors FOR ALL AUTHORITY
NOMINEES WITHHELD
[_] [_]
To withhold authority to vote for one or more but less
than all of the six nominees named in the Proxy Statement
(Messrs. Macaleer, DeTurk, Weston, Rubin and Cadwell and
Dr. Wilensky), please list the name(s) of the nominee(s)
for whom authority is withheld:
_________________________________________________________
--------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE SIX NOMINEES LISTED IN ITEM 1.
Signature______________________Signature______________________Date______________
NOTE: (Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such).
--FOLD AND DETACH HERE--
