<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
AMSURG CORP.
- --------------------------------------------------------------------------------
(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)(1) 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:
<PAGE> 2
AMSURG CORP.
ONE BURTON HILLS BOULEVARD
SUITE 350
NASHVILLE, TENNESSEE 37215
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1998
As a shareholder of AmSurg Corp. (the "Company"), you are hereby given
notice of and invited to attend in person or by proxy the Annual Meeting of
Shareholders of the Company to be held at the SunTrust Bank Building (Board of
Directors Room), 201 4th Avenue North, Nashville, Tennessee 37219 on Friday, May
15, 1998, at 9:00 a.m. local time for the following purposes:
1. To elect two directors in Class I to serve for a term of three
years and until their successors are duly elected and qualified;
and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record of the Company at the close of business on
March 31, 1998 are entitled to notice of and to vote at the meeting.
Whether or not you expect to attend the meeting, management desires to
have the maximum representation at the meeting and respectfully requests that
you date, execute and mail promptly the enclosed proxy in the enclosed stamped
envelope, which requires no postage if mailed in the United States. A proxy may
be revoked by a shareholder any time prior to its use as specified in the
enclosed proxy statement.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Claire M. Gulmi
-----------------------------------
CLAIRE M. GULMI
SECRETARY
Nashville, Tennessee
April 15, 1998
<PAGE> 3
AMSURG CORP.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1998
This Proxy Statement is furnished to shareholders of AmSurg Corp. (the
"Company") in connection with the solicitation of proxies by the Board of
Directors of the Company (the "Board of Directors") to be voted at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at the date, time and
place and for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders, or at any adjournment or adjournments thereof. The
approximate date on which this Proxy Statement and the enclosed proxy are first
being sent to shareholders is April 17, 1998. The principal executive offices of
the Company are located at One Burton Hills Boulevard, Suite 350, Nashville,
Tennessee 37215.
The record of shareholders entitled to vote at the Annual Meeting was
taken at the close of business on March 31, 1998 (the "Record Date"). On such
date, 5,145,966 shares of the Company's Class A Common Stock, without par value
(the "Class A Common Stock") having one vote per share, 4,787,131 shares of the
Company's Class B Common Stock, without par value (the "Class B Common Stock,"
and together with the Class A Common Stock, the "Common Stock") having ten votes
per share with respect to the election of directors and one vote per share with
respect to all other matters and 416,666 shares of the Company's Series B
Convertible Preferred Stock (the "Series B Preferred Stock") having 1.08 votes
per share were outstanding.
Shares represented by valid proxies will be voted in accordance with
instructions contained therein, or, in the absence of such instructions, in
accordance with the Board of Directors' recommendations. Any shareholder of the
Company has the unconditional right to revoke his or her proxy at any time prior
to the voting thereof by any action inconsistent with the proxy, including
notifying the Secretary of the Company in writing, executing a subsequent proxy
or personally appearing at the Annual Meeting and casting a contrary vote. No
such revocation will be effective, however, unless and until notice of such
revocation has been received by the Company at or prior to the Annual Meeting.
The cost of soliciting proxies in the accompanying form will be borne
by the Company. In addition to the use of mail, officers of the Company may
solicit proxies by telephone or telecopy. Upon request, the Company will
reimburse brokers, dealers, banks and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of the Company's capital stock.
PROPOSAL ONE - ELECTION OF DIRECTORS
The Board of Directors is divided into three classes (Class I, Class II
and Class III). At each annual meeting of shareholders, directors constituting
one class are elected for a three-year term. The current Board of Directors is
comprised of seven members. Two members will be elected at the Annual Meeting.
The Board of Directors has nominated and recommends to the shareholders James A.
Deal and Steven I. Geringer, each of whom is an incumbent Class I director, for
election as Class I directors to serve until the annual meeting of shareholders
in 2001 and until such time as their respective successors are duly elected and
qualified. The holders of the Common Stock vote together with holders of the
Series B Preferred Stock as a single group with respect to the election of
directors. The election of each director requires the vote of a plurality of the
votes cast by shares entitled to vote. Cumulative voting is not permitted.
If either of the nominees should become unable to accept election, the
persons named in the proxy may vote for such other person or persons as may be
designated by the Board of Directors. Management has no reason to believe that
either of the nominees named above will be unable to serve. Certain information
with respect to directors who are nominees for election at the Annual Meeting
and with respect to the five other directors who are continuing in office is set
forth below.
1
<PAGE> 4
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" ALL OF THE
DIRECTOR NOMINEES IN PROPOSAL ONE.
<TABLE>
<CAPTION>
Name Age Principal Occupation/Directorships Director Since
----- --- ---------------------------------- --------------
<S> <C> <C> <C>
DIRECTOR NOMINEES
Class I Directors
(Terms Expire 2001)
James A. Deal 48 Mr. Deal has served as Executive Vice President 1992
of American Healthcorp, Inc. ("AHC") since
May 1991 and as President of
Diabetes Treatment Centers of
America, Inc., an AHC subsidiary,
since 1985.
Steven I. Geringer 52 Mr. Geringer has been a private investor since 1997
June 1996, previously having served as President
and Chief Executive Officer of PCS Health
Systems, Inc., a unit of Eli Lilly & Company
("PCS") and provider of managed
pharmaceutical services to managed care
organizations and health insurers, from June
1995 until June 1996, and President and Chief
Operating Officer of PCS from May 1993
through May 1995.
CONTINUING DIRECTORS
Class II Directors
(Terms Expire 1999)
Henry D. Herr 51 Mr. Herr has served as Executive Vice President 1992
of Finance and Administration and Chief
Financial Officer of AHC since 1986 and a
director of AHC since 1988. Since December
1997, Mr. Herr has served as an advisor to the
Company. Mr. Herr served as Chief Financial
Officer of the Company from April 1992 until
September 1994 and as Secretary from April
1992 until December 1997.
Ken P. McDonald 57 Mr. McDonald has served as Chief Executive 1996
Officer of the Company since December 1997
and President since July 1996, previously having
served as Executive Vice President and Chief
Operating Officer since December 1994. Mr.
McDonald joined the Company in 1993 as a
Vice President.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
Name Age Principal Occupation/Directorships Director Since
----- --- ---------------------------------- --------------
<S> <C> <C> <C>
Class III Directors
(Terms Expire 2000)
Thomas G. Cigarran 56 Mr. Cigarran has served as Chairman of the 1992
Board since 1992. Mr. Cigarran served as Chief
Executive Officer from January 1993 until
December 1997, and President from January
1993 to July 1996. Since December 1997, Mr.
Cigarran has served as an advisor to the
Company. Mr. Cigarran is a co-founder of AHC
and has served as Chairman of the Board,
President and Chief Executive Officer thereof
since 1988. Mr. Cigarran serves as a member of
the Board of Directors of ClinTrials Research,
Inc. and CorporateFamily Solutions, Inc.
Debora A. Guthrie 42 Ms. Guthrie has served as President and Chief 1996
Executive Officer of the general partner of
Capitol Health Partners, L.P., a Washington,
D.C.-based venture fund specializing in
healthcare industries since October 1995. Prior
to forming Capitol Health Partners in 1995, Ms.
Guthrie was President and Chief Executive
Officer of Guthrie Capital Corporation, a venture
management company providing financial
advisory and investment banking services to
healthcare companies in the Mid-Atlantic and
Southeastern United States.
Bergein F. Overholt, 60 Dr. Overholt has served as President of 1992
M.D. Gastrointestinal Associates, P.C. a
gastrointestinal specialty group,
and a partner in The Endoscopy
Center, Knoxville, Tennessee, which
owns a limited partnership interest
in an ambulatory surgery center
that is majority-owned and managed
by the Company, since 1992. Dr.
Overholt also serves as Chairman,
Laser/Hyperthermia Department,
Thompson Cancer Survival Center in
Knoxville, Tennessee and is an
Associate Professor of Clinic
Medicine, University of Tennessee
in Knoxville, Tennessee.
</TABLE>
Ms. Guthrie, an affiliate of Capitol Health Partners, L.P., was
appointed to the Board of Directors in connection with the preferred stock
equity financing in November 1996, in which Capitol Health Partners, L.P.
purchased 18.2% of the Company's Series A Redeemable Preferred Stock and Series
B Preferred Stock.
3
<PAGE> 6
The Board of Directors holds a number of regular meetings each year and
meets on other occasions when required by special circumstances. Certain
directors also devote their time and attention to the Board's principal standing
committees. The committees, their primary functions, and memberships are as
follows:
Audit Committee --The principal functions of the Audit Committee are to
recommend to the full Board of Directors the engagement or discharge of
the Company's independent auditors; to review the nature and scope of
the audit, including but not limited to a determination of the
effectiveness of the audit effort through meetings held at least
annually with the independent auditors of the Company and a
determination through discussion with the auditors that no unreasonable
restrictions were placed on the scope or implementation of their
examinations; to review the qualifications and performance of the
auditors, including but not limited to a review of the plans and
results of the auditing engagement and each professional service
provided by the independent auditors; to review the financial
organization and accounting practices of the Company, including but not
limited to a review of the Company's financial statements with the
auditors and an inquiry into the effectiveness of the Company's
financial and accounting functions and internal controls through
discussions with the auditors and the officers of the Company; and to
recommend to the full Board of Directors policies concerning avoidance
of employee conflicts of interest and to review the administration of
such policies. Members of the Audit Committee are Debora A. Guthrie,
James A. Deal and Henry D. Herr.
Compensation Committee -- The functions of the Compensation Committee
include recommending to the full Board of Directors the compensation
arrangements for senior management and directors, the adoption of
compensation and benefit plans in which officers and directors are
eligible to participate and granting options or other benefits under
(and otherwise administering) such plans, including the Company's 1992
Stock Option Plan and the 1997 Stock Incentive Plan (the "1997 Plan").
Members of the Compensation Committee are Debora A. Guthrie and Steven
I. Geringer. No member of this committee is a former or current officer
or employee of the Company.
Nominating Committee --The principal function of the Nominating
Committee is to recommend to the Board of Directors nominees for
election to the Board of Directors. Members of the Nominating Committee
are Ken P. McDonald, Thomas G. Cigarran and Bergein F. Overholt, M.D.
The Board of Directors held six meetings during the fiscal year ended
December 31, 1997. The Audit Committee, the Compensation Committee and the
Nominating Committee held no meetings during 1997 since the Common Stock did not
begin trading on The Nasdaq Stock Market's National Market until December 4,
1997. Each of the directors attended at least 75% of the meetings of the Board
of Directors.
4
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth the "beneficial ownership," as that term
is defined in the rules of the Securities and Exchange Commission (the
"Commission"), of the Company's capital stock of each director and Named
Executive Officer (as defined herein), all directors and executive officers as a
group and each other person known to be a "beneficial owner" of more than five
percent (5%) of any class of capital stock of the Company based on information
in the possession of the Company as of March 31, 1998. Except as otherwise
indicated, the Company believes the persons listed in the table have sole voting
and investment power with respect to the stock owned by them.
COMMON STOCK
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON PERCENT OF COMMON PERCENT
NAME STOCK(1) CLASS(1) STOCK(1) OF CLASS(1)
- ---- -------- -------- -------- -----------
<S> <C> <C> <C> <C>
Waddell & Reed, Inc.(2)............................. 94,142 1.8% 606,851 12.7%
The Capital Group Companies, Inc.(3)................ 0 -- 309,970 6.5
Ken P. McDonald..................................... 59,584(4) 1.1 0 --
Claire M. Gulmi..................................... 20,000(5) * 0 --
Royce D. Harrell.................................... 90,750(6) 1.7 0 --
Rodney H. Lunn...................................... 280,145(7) 5.2 59 *
David L. Manning.................................... 287,332(8) 5.3 0 --
Thomas G. Cigarran(9)............................... 83,081 1.6 363,554 7.6
James A. Deal....................................... 29,004(10) * 179,728(11) 3.8
Steven I. Geringer.................................. 9,572(12) * 0 --
Debora A. Guthrie................................... 1,250 * 890 *
Henry D. Herr....................................... 54,657 1.1 221,558 4.6
Bergein F. Overholt, M.D............................ 136,333(13) 2.6 340 *
All directors and executive officers as a group (11
persons)........................................ 1,051,981 18.2 766,134 16.0
</TABLE>
- ------------
* Less than 1%.
(1) Pursuant to the rules of the Commission, shares of Common Stock which an
individual owner set forth in this table has a right to acquire within 60
days after the record date hereof pursuant to the exercise of stock options
are deemed to be outstanding for the purpose of computing the ownership of
that owner, but are not deemed outstanding for the purpose of computing the
ownership of any other individual owner shown in the table. Likewise, the
shares subject to options held by the other directors and executive
officers of the Company which are exercisable within 60 days of the record
date hereof are all deemed outstanding for the purpose of computing the
percentage ownership of all executive officers and directors as a group.
(2) The address of Waddell & Reed, Inc. is 6300 Lamar Avenue, P.O. Box 29217,
Shawnee Mission, KS 66201-9217. Information with respect to the Class B
Common Stock ownership of Waddell & Reed, Inc. is based upon the Form 13G
dated January 30, 1998.
(3) The address of The Capital Group Companies, Inc. is 333 South Hope Street,
Los Angeles, CA 90071. Information with respect to the Class B Common Stock
ownership of The Capital Group Companies, Inc. is based upon the Form 13G
dated February 10, 1998.
(4) Represents currently exercisable options for the purchase of 59,584 shares
of Class A Common Stock.
(5) Represents currently exercisable options for the purchase of 20,000 shares
of Class A Common Stock.
(6) Represents currently exercisable options for the purchase of 90,750 shares
of Class A Common Stock.
(7) Includes 999 shares held for the benefit of Mr. Lunn's children and
currently exercisable options for the purchase of 225,332 shares of Class A
Common Stock.
(8) Includes currently exercisable options for the purchase of 235,332 shares
of Class A Common Stock.
(9) The address of Mr. Cigarran is One Burton Hills Blvd., Nashville, TN 37215.
(10) Includes 1,086 shares of Class A Common Stock held by Mr. Deal's children.
(11) Includes 7,013 shares of Class B Common Stock held by Mr. Deal's children.
(12) Includes 8,460 shares of Class A Common Stock held in trust for the benefit
of Mr. Geringer's son.
(13) Includes 21,000 shares of Class A Common Stock owned by The Endoscopy
Center, Knoxville, Tennessee, and 10,000 shares of Class A Common Stock
owned by Gastrointestinal Associates, P.C. Dr. Overholt is a partner of the
Endoscopy Center and President of Gastrointestinal Associates, P.C. Also,
includes currently exercisable options for the purchase of 4,166 shares of
Class A Common Stock and 23,583 shares of Class A Common Stock held in
trust for Dr. Overholt's grandchildren.
5
<PAGE> 8
SERIES B PREFERRED STOCK
<TABLE>
<CAPTION>
SERIES B PERCENT OF
NAME AND ADDRESS PREFERRED STOCK CLASS
- ---------------- --------------- -----
<S> <C> <C>
Electra Investment Trust P.L.C.(1)............................................ 303,030 72.7%
Capitol Health Partners, L.P.(2)(3)........................................... 75,757 18.2
Michael E. Stephens(4)........................................................ 37,879 9.1
Ken P. McDonald............................................................... 0 --
Claire M. Gulmi............................................................... 0 --
Royce D. Harrell.............................................................. 0 --
Rodney H. Lunn................................................................ 0 --
David L. Manning.............................................................. 0 --
Thomas G. Cigarran............................................................ 0 --
James A. Deal................................................................. 0 --
Steven I. Geringer............................................................ 0 --
Debora A. Guthrie(5).......................................................... 75,757 18.2
Henry D. Herr................................................................. 0 --
Bergein F. Overholt, M.D...................................................... 0 --
All directors and executive officers as a group (11 persons)(5)............... 75,757 18.2
</TABLE>
- ------------
(1) The address for Electra Investment Trust P.L.C. is 65 Kingsway, London,
England WC 2B6QT.
(2) The address for Capitol Health Partners, L.P. is 3000 P Street, N.W.,
Washington, D.C. 20005.
(3) Shares beneficially owned by Capitol Health Partners, L.P. are attributable
to Ms. Guthrie, who is President and Chief Executive Officer of the general
partner of Capitol Health Partners, L.P., and are included in the shares
beneficially held by directors and executive officers as a group.
(4) The address for Michael E. Stephens is 3230 Cahaba Valley Road, Pelham, AL
35124.
(5) Represents shares held by Capitol Health Partners, L.P. for which Ms.
Guthrie disclaims beneficial ownership.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table provides information as to annual, long-term or
other compensation during fiscal years 1997, 1996 and 1995 for the persons who,
at the end of fiscal 1997, were the Chief Executive Officer and the other four
most highly compensated executive officers of the Company (collectively, the
"Named Executive Officers"). Prior to December 1997, Thomas G. Cigarran served
as Chief Executive Officer of the Company but received no compensation from or
with respect to the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
AWARDS
ANNUAL COMPENSATION -------------
NAME AND PRINCIPAL ------------------------ SECURITIES ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
-------- ---- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Ken P. McDonald............... 1997 $156,253 $ 13,461 88,333 $4,000 (1)
President and Chief 1996 139,050 41,905 69,999 4,000
Executive Officer 1995 125,050 25,386 -- 4,000
Claire M. Gulmi............... 1997 124,796 9,984 16,666 --
Senior Vice President, 1996 100,000 28,292 6,666 --
Chief Financial Officer 1995 86,292 22,652 -- --
and Secretary(2)
Royce D. Harrell.............. 1997 138,190 11,055 8,333 --
Senior Vice President, 1996 130,788 38,471 8,333 --
Operations 1995 124,538 36,708 -- --
Rodney H. Lunn................ 1997 139,597 26,872 38,333 4,320 (3)
Senior Vice President, 1996 132,108 29,169 5,000 4,320
Center Development 1995 125,818 18,205 -- 4,320
David L. Manning.............. 1997 139,597 7,782 43,333 4,320 (3)
Senior Vice President, 1996 132,108 106,460 8,333 4,320
Development 1995 125,818 26,384 -- 4,320
</TABLE>
- ------------
(1) Forgiveness of debt.
(2) Ms. Gulmi became Senior Vice President in March 1997 and Secretary in
December 1997.
(3) Automobile allowance.
7
<PAGE> 10
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information as to options granted to the
Named Executive Officers during 1997. No Stock Appreciation Rights ("SARs") were
awarded in 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBERS OF PERCENT OF
SECURITIES TOTAL OPTIONS/SARS EXERCISE POTENTIAL REALIZABLE VALUE
UNDERLYING GRANTED TO OR BASE AT ASSUMED ANNUAL RATES
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION OF STOCK PRICE APPRECIATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE FOR OPTION TERM
---- ---------- ----------- ------ ---- ---------------
5% ($) 10% ($)
-------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ken P. McDonald....... 13,333(1) 4.6% $5.91 02/07/07 $ 49,556 $ 125,584
75,000(1) 25.7 8.70 12/02/07 410,354 1,039,917
Claire M. Gulmi....... 16,666(1) 5.7 5.91 02/07/07 61,944 156,977
Royce D. Harrell...... 8,333(1) 2.9 5.91 02/07/07 30,972 78,489
Rodney H. Lunn........ 5,000(2) 1.7 5.91 02/07/07 18,584 47,095
33,000(2) 11.4 6.15 04/11/07 128,922 326,714
David L. Manning...... 10,000(2) 3.4 5.91 02/07/07 37,168 94,190
33,333(2) 11.4 6.15 04/11/07 128,922 326,714
</TABLE>
- ------------
(1) Represents options to purchase shares of Class A Common Stock which vest at
the rate of 25% per year over a four year period beginning on the date of
grant. If there is a Change in Control or a Potential Change in Control as
defined in the 1997 Plan, any stock options which are not then exercisable,
in the discretion of the Board of Directors, may become fully exercisable
and vested.
(2) Represents options to purchase shares of Class A Common Stock which vested
April 11, 1997.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
None of the Named Executive Officers exercised options or separate SARs
during fiscal 1997. The following table provides information with respect to the
number of shares covered by both exercisable and unexercisable stock options as
of fiscal year-end. Also reported are the values for "in-the-money" options,
which represent the positive spread between the exercise price of any existing
stock options and the year-end price.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END($)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ken P. McDonald..................................... 53,334 146,664 $ 201,463 $163,381
Claire M. Gulmi..................................... 14,167 25,831 58,026 58,368
Royce D. Harrell.................................... 86,583 16,248 425,242 37,819
Rodney H. Lunn...................................... 225,332 -- 1,272,345 --
David L. Manning.................................... 235,332 -- 1,296,646 --
</TABLE>
8
<PAGE> 11
COMPENSATION OF DIRECTORS
Members of the Board of Directors, other than those who are employees
of the Company, receive an annual fee of $10,000, adjusted annually to reflect
changes in the Consumer Price Index, U.S. All City Average Report, of the U.S.
Bureau of Labor Statistics (the "CPI") for their services as directors and as
members of any committees of the Board of Directors on which they serve. In
addition, each non-employee director is reimbursed for out-of-pocket expenses
incurred in attending Board of Directors' meetings and committee meetings. Also,
Outside Directors are eligible to receive annual restricted stock awards
("Outside Director Restricted Stock") pursuant to the 1997 Plan. An "Outside
Director" is a member of the Board of Directors who is not an officer or
employee of the Company, its subsidiaries or affiliates. A director serving as
medical director of the Company but not as an employee of the Company will be
treated as an Outside Director for purposes of the 1997 Plan. On the date of
each annual meeting of shareholders of the Company, each Outside Director who is
elected or reelected to the Board of Directors or who otherwise continues as a
director shall automatically receive on the date of the annual meeting of
shareholders a grant of that number of shares of restricted Class A Common Stock
having an aggregate fair market value on such date equal to $10,000, adjusted
annually for changes in the CPI. Members of the Board of Directors who are
employees of the Company will not receive any additional compensation for their
services as directors or as members of committees.
Each grant of Outside Director Restricted Stock shall vest in
increments of one-third of the shares of Class A Common Stock subject to such
grant, with the first one-third increment vesting on the date of grant, the
second one-third increment vesting on the first anniversary of the date of grant
and the final one-third increment vesting on the second anniversary of the date
of grant, if the grantee is still a member of the Board of Directors on each of
such dates. Until the earlier of (i) five years from the date of grant and (ii)
the date on which the Outside Director ceases to serve as a director of the
Company, no Outside Director Restricted Stock may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, otherwise than by will or by
the laws of descent and distribution. Upon termination of an Outside Director's
service as a member of the Board of Directors for any reason other than death,
disability or retirement, all shares of Outside Director Restricted Stock not
theretofore vested will be forfeited. Upon termination of an Outside Director's
service as a member of the Board of Directors due to death, disability or
retirement, all shares of Outside Director Restricted Stock will immediately
vest. Pursuant to Section 9 of the 1997 Plan, during December 1997, each Outside
Director received a grant of Outside Director Restricted Stock having an
aggregate fair market value on such date equal in value to $10,000.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with each of Mr. McDonald, Ms.
Gulmi, Mr. Harrell, Mr. Lunn and Mr. Manning (the "Employment Agreements"). The
Employment Agreements have an initial one-year term, but contain a provision
that automatically extends the term for an additional one year on the first and
each successive anniversary date of the Employment Agreements until such
employee reaches age 65, after which term the Employment Agreement shall not be
automatically extended. The automatic renewal provision can be canceled by the
Company prior to each anniversary date of the Employment Agreements. The
Employment Agreements provide that if the Company elects not to extend the
executive's employment, the executive will be considered to have been terminated
without cause and will receive his or her base salary, reduced by any salary
earned by the executive from another employer, plus certain benefits for a
period of one year. The executive will also receive the same compensation as
provided above if the executive terminates his or her employment with the
Company under certain circumstances at any time within twelve months following a
Change In Control (as defined in the Employment Agreements). The Employment
Agreements also contain a restrictive covenant pursuant to which each executive
has agreed not to compete with the Company during the time the Company is
obligated to compensate him or her pursuant to the Employment Agreement.
9
<PAGE> 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENTS
By letter agreement dated January 1, 1997 (the "1997 Letter
Agreement"), AHC and the Company agreed to continue, on a modified basis, the
administrative services arrangements provided under a previously signed letter
agreement dated November 30, 1992 (the "1992 Letter Agreement"), pursuant to
which Henry D. Herr and Thomas G. Cigarran provided general supervision and
business management services to the Company, and AHC provided accounting,
financial and administrative services for the operations of the Company and each
of the ambulatory surgery centers managed by the Company. Under the 1997 Letter
Agreement, the Company agreed to pay AHC an annual fee of $85,000 plus out of
pocket expenses for services provided by Messrs. Cigarran and Herr. The services
provided by Messrs. Cigarran and Herr were the general supervision of the
business of the Company and the provision of advice and consultation regarding
the financial, accounting and administrative aspects of the Company's business.
The new arrangement also provided that AHC would provide the services it
provided under the 1992 Letter Agreement to each of the Company's ambulatory
surgery centers, physician practices and specialty physician networks. As
compensation for such services, the Company paid AHC a fixed monthly fee of
$4,166.67, a variable monthly fee of $625 for each ambulatory surgery center and
specialty physician network in operation and certain multiples thereof for the
corporate office and other operations. Such payments averaged $25,379 per month
during 1997.
In December 1997, the Company and AHC entered into a management
agreement (the "Management Agreement") pursuant to which AHC provides certain
financial and accounting services to the Company and its subsidiaries on a
transitional basis, with the intent that the Company acquire the personnel,
systems and expertise necessary to become self-sufficient in the provision of
these services during the period beginning on the date of the Management
Agreement and ending one year later (or earlier if so elected by the Company).
Pursuant to the Management Agreement, AHC shall provide the Company with
services, including assistance with respect to processing payroll and associated
payroll tax returns and accounts payable for the Company's corporate office,
maintaining general accounting records for the Company's corporate operations
and operations of the Company's subsidiaries (including the partnerships and
limited liability companies), preparing the Company's consolidated financial
statements, preparing the Company's corporate tax returns and tax returns for
its subsidiaries, preparing estimated tax reports, and preparing financial
statements in connection with periodic reports required to be filed by the
Company with the Commission.
Effective January 1, 1998, as compensation for such services, the
Company pays AHC $11,210 per month, subject to adjustment as the Company assumes
the responsibility for such services. Pursuant to the Management Agreement, the
Company has sole responsibility for the accuracy and the integrity of the
financial statements and tax returns prepared by AHC, and the Company provides
oversight and review on a timely basis of the services provided by AHC. In
addition, in the absence of gross negligence on the part of AHC, the Company
will indemnify and hold AHC, its directors, officers, employees and agents and
any person who controls AHC within the meaning of the Securities Act of 1933, as
amended, harmless from and against any and all liabilities, claims or damages
(including the cost of investigating any claim and reasonable attorneys' fees
and disbursements) in connection with any services performed by AHC or any
transactions or conduct in connection therewith.
Pursuant to the Management Agreement, AHC is responsible for any claims
incurred on or prior to the date of such agreement by the Company's employees
under any medical or dental plans offered by AHC to the Company's employees on
or prior to the date of such agreement in accordance with the terms of such
plans. AHC is not responsible for any claims incurred following the date of the
Management Agreement by any of the Company's employees under any such plan.
10
<PAGE> 13
ADVISORY AGREEMENTS
Effective December 1997, the Company and each of Thomas G. Cigarran and
Henry D. Herr entered into an advisory agreement (the "Advisory Agreements"),
pursuant to which Messrs. Cigarran and Herr will provide certain continuing
services to the Company through December 1999. Immediately prior to December
1997, Mr. Cigarran served as Chief Executive Officer of the Company, and Mr.
Herr served as Vice President and Secretary of the Company. Pursuant to the
Advisory Agreements, Messrs. Cigarran and Herr provide advisory services to the
senior management of the Company in the areas of strategy, operations,
management and organizational development. As compensation for these services,
the Company is required to pay compensation of $200,000 to Mr. Cigarran and
$150,000 to Mr. Herr during the two-year term of the Advisory Agreements. The
compensation is payable in shares of Class A Common Stock, which shares were
issued as restricted stock pursuant to the terms of the 1997 Plan. One-third of
the shares paid as compensation vested immediately, one-third will vest December
3, 1998 and the remaining one-third of the shares will vest December 3, 1999.
The Advisory Agreements provide that Messrs. Cigarran and Herr will not sell the
shares of the Class A Common Stock received pursuant to the agreement until
December 1999, subject to certain limited exceptions. The Advisory Agreements
also contain certain non-compete and confidentiality provisions. In addition,
Messrs. Cigarran and Herr are eligible to receive compensation as Outside
Directors. Messrs. Cigarran and Herr are also entitled to indemnification as
provided in the indemnification agreement that each entered into with the
Company in December 1997.
LEASE ARRANGEMENT
Pursuant to a sublease dated June 9, 1996 between AHC and the Company
(the "Sublease"), the Company leases approximately 15,400 square feet of space
from AHC in Nashville, Tennessee where the Company's corporate headquarters are
located. The Company is required to make an aggregate of $960,820 in rental
payments to AHC over the term of the Sublease which expires December 31, 1999.
OTHER ARRANGEMENTS
Bergein F. Overholt, M.D. is a director of the Company, the Company's
Medical Director and President and a 14% owner of The Endoscopy Center. The
Endoscopy Center is a limited partner and a subsidiary of the Company is the
general partner and majority owner of The Endoscopy Center of Knoxville, L.P.,
which owns and operates an ambulatory surgery center. The aggregate amount of
distributions made by The Endoscopy Center of Knoxville, L.P. to The Endoscopy
Center in 1997 was $1,230,390, of which Dr. Overholt received his pro rata
ownership percentage. During 1997 Dr. Overholt was paid $50,000 for his services
as the Company's Medical Director and he participated in the 1997 Plan as an
Outside Director of the Company. See "Compensation of Directors."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors, the Company's executive officers and persons
who beneficially own more than ten percent of either class of the Common Stock
to file reports of ownership and changes in ownership with the Commission. Such
directors, officers and greater than ten percent shareholders are required by
Commission regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on the Company's review of the copies of such forms
furnished to the Company, or written representations from certain reporting
persons, the Company believes that during 1997 its officers, directors and
greater than ten percent beneficial owners were in compliance with all
applicable filing requirements.
11
<PAGE> 14
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, which was the Company's independent public
accountant for 1997, has been selected as the independent public accountant of
the Company for 1998. The Company has been informed that representatives of
Deloitte & Touche LLP plan to attend the Annual Meeting. Such representatives
will have the opportunity to make a statement if they desire to do so and will
be available to respond to questions by the shareholders.
PROPOSALS OF SHAREHOLDERS
A proper proposal submitted by a shareholder in accordance with
applicable rules and regulations for presentation at the Company's Annual
Meeting of Shareholders in 1999 and received at the Company's executive offices
no later than December 16, 1998, will be included in the Company's Proxy
Statement and form of proxy relating to such Annual Meeting.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of shareholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in accordance with their
best judgment in the interest of the Company.
METHOD OF COUNTING VOTES
Unless a contrary choice is indicated, all duly executed proxies will
be voted in accordance with the instructions set forth on the back side of the
proxy card. Abstentions and broker non-votes will be counted as present for
purposes of determining a quorum. Because directors are elected by a plurality
of the votes cast, abstentions and broker non-votes will not be counted either
for or against the election of directors. A broker non-vote occurs when a broker
holding shares registered in a street name is permitted to vote, in the broker's
discretion, on routine matters without receiving instructions from the client,
but is not permitted to vote without instructions on non-routine matters, and
the broker returns a proxy card with no vote (the "non-vote") on the non-routine
matter.
FINANCIAL STATEMENTS AVAILABLE
A copy of the Company's Annual Report containing audited consolidated
financial statements accompanies this Proxy Statement. The Annual Report does
not constitute a part of the proxy solicitation material.
UPON WRITTEN REQUEST TO CLAIRE M. GULMI, SECRETARY, AMSURG CORP., ONE
BURTON HILLS BOULEVARD, SUITE 350, NASHVILLE, TENNESSEE 37215, THE COMPANY WILL
PROVIDE, WITHOUT CHARGE, COPIES OF THE COMPANY'S ANNUAL REPORT TO THE COMMISSION
ON FORM 10-K.
April 15, 1998
12
<PAGE> 15
Appendix A
AMSURG CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, MAY 15, 1998
The undersigned hereby appoints Ken P. McDonald and Claire M. Gulmi and each
of them, as proxies, with full power of substitution, to vote all shares of
AMSURG CLASS A COMMON STOCK and CLASS B COMMON STOCK of the undersigned as shown
below on this proxy at the Annual Meeting of Shareholders of AmSurg Corp. (the
"Company"), to be held on FRIDAY, MAY 15, 1998, at the SunTrust Bank Building
(Board of Directors Room), 201 4th Avenue North, Nashville, Tennessee at 9:00
a.m., local time (CST), and any adjournments thereof.
(1) ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR both of the following nominees [ ] WITHHOLD AUTHORITY (ABSTAIN)
(except as indicated to the contrary below): to vote for both nominees
</TABLE>
Class I: James A. Deal and Steven I. Geringer
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
(2) In their discretion on any other matter which may properly come before the
meeting or any adjournment thereof.
(PLEASE DATE AND SIGN THIS PROXY BELOW.)
Your shares will be voted in accordance with your instructions. If no choice is
specified your shares will be voted FOR approval of all of the proposals set
forth above.
Date: , 1998
-------------------
PLEASE SIGN HERE AND RETURN
PROMPTLY
-------------------------------
-------------------------------
Please sign exactly as your
name appears at left. If
registered in the names of two
or more persons, each should
sign. Executors,
administrators, trustees,
guardians, attorneys, and
corporate officers should show
their full titles.
- --------------------------------------------------------------------------------
If you have changed your address, please PRINT your new address on this line.
