<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 CORPORATION
- --------------------------------------------------------------------------------
(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.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 2000
To our Shareholders:
The 2000 annual meeting of shareholders of AmSurg Corp. will be held
Friday, May 19, 2000, at 9:00 a.m., local time, at the SunTrust Bank Building,
201 Fourth Avenue, 4th Floor Boardroom, Nashville, Tennessee. At the meeting,
shareholders will act on the following matters:
1. Election of three directors in Class III, each for a term of
three years;
2. Approval of an amendment to our 1997 Stock Incentive Plan to
increase the number of shares reserved for issuance
thereunder from 1,120,000 to 1,600,000; and
3. Any other matters that may properly come before the meeting.
Shareholders of record at the close of business on March 24, 2000 are
entitled to notice of and to vote at the meeting.
Your vote is important. Please COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY in the enclosed stamped envelope in order that as many shares as
possible will be represented.
By Order of the Board of Directors,
/s/ Claire M. Gulmi
Claire M. Gulmi
Secretary
Nashville, Tennessee
April 19, 2000
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ABOUT THE MEETING....................................................................... 1
What is the purpose of the annual meeting?..................................... 1
Who is entitled to vote?....................................................... 1
What constitutes a quorum?..................................................... 1
How do I vote?................................................................. 1
Can I change my vote after I return my proxy card?............................. 2
What are the Board's recommendations?.......................................... 2
What vote is required to approve each item?.................................... 2
STOCK OWNERSHIP......................................................................... 3
Who are the largest owners of the Company's stock?............................. 3
How much stock do our directors and executive officers own?.................... 4
Section 16(a) Beneficial Ownership Reporting Compliance........................ 5
ITEM 1 - ELECTION OF DIRECTORS.......................................................... 6
Directors Standing for Election................................................ 6
Directors Continuing in Office................................................. 7
How are our directors compensated?............................................. 8
What committees has the Board established?..................................... 8
How often did the Board meet during fiscal 1999?............................... 9
Certain Relationships and Related Transactions................................. 9
Report of the Compensation Committee on Executive Compensation................. 10
Employment Agreements.......................................................... 13
Executive Compensation Summary Table........................................... 13
Option Grants for Fiscal 1999.................................................. 14
Option Exercises and Fiscal Year-End Values.................................... 14
Comparison of Cumulative Total Returns......................................... 15
ITEM 2 - APPROVAL OF AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN......................... 16
The Proposed Amendment......................................................... 16
Summary of the Material Provisions of the Plan................................. 16
Options Granted Under the Plan................................................. 18
Certain U.S. Federal Income Tax Consequences................................... 19
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS........................................ 21
OTHER MATTERS........................................................................... 21
ADDITIONAL INFORMATION.................................................................. 21
</TABLE>
<PAGE> 4
AMSURG CORP.
20 BURTON HILLS BOULEVARD
NASHVILLE, TENNESSEE 37215
PROXY STATEMENT
The Board of Directors is soliciting proxies to be used at the 2000
annual meeting of shareholders. This proxy statement and the enclosed proxy
will be mailed to shareholders on or about April 19, 2000.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At our annual meeting, shareholders will act upon the matters outlined
in the accompanying notice of meeting, including the election of directors and
the approval of an amendment to the 1997 Stock Inventive Plan. In addition, our
management will report on our performance during fiscal 1999 and respond to
questions from shareholders.
WHO IS ENTITLED TO VOTE?
Only shareholders of record at the close of business on the record
date, March 24, 2000, are entitled to receive notice of the annual meeting, and
to vote the shares of common stock that they held on that date at the meeting,
or any postponement or adjournment of the meeting. Each outstanding share of
our Class A common stock entitles its holder to cast one vote on each matter to
be voted upon. Each share of our Class B common stock entitles its holder to
cast ten votes on the election of directors and one vote on all other matters
to be voted upon.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of
a majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting us to conduct the business of the meeting. As
of the record date, 9,760,278 shares of our Class A common stock and 4,787,131
shares of our Class B common stock were outstanding. Proxies received but
marked as abstentions will be included in the calculation of the number of
shares considered to be present at the meeting.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and
return it to us, it will be voted as you direct. If you are a registered
shareholder and attend the meeting, you may deliver your completed proxy card
in person. "Street name" shareholders who wish to vote at the meeting will need
to obtain a proxy form from the institution that holds their shares.
1
<PAGE> 5
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. You can revoke your proxy at any time before it is exercised in
any of three ways:
- by submitting written notice of revocation to the Secretary;
- by submitting another proxy that is later dated and properly
signed; or
- by voting in person at the meeting.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board's recommendations are set
forth below together with the description of each item in this proxy statement.
In summary, the Board recommends a vote:
- for election of the nominated slate of directors (see page 6);
- for approval of the amendment to the 1997 Stock Incentive Plan
(see page 16);
With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the Board of Directors
or, if no recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The affirmative vote of a plurality of the
votes cast by the shareholders entitled to vote at the meeting is required for
the election of directors. A properly executed proxy marked "WITHHOLD
AUTHORITY" with respect to the election of one or more directors will not be
voted with respect to the director or directors indicated, although it will be
counted in determining whether there is a quorum.
APPROVAL OF THE AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN; OTHER
ITEMS. The amendment to the 1997 Stock Incentive Plan and any other matter than
properly comes before the meeting will be approved if the number of shares of
common stock voted in favor of the proposal exceeds the number of shares of
common stock voted against it. A properly executed proxy marked "WITHHOLD
AUTHORITY" with respect to any such item will not be voted on any of these
proposals.
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may or may not be permitted to exercise voting
discretion with respect to the approval of the amendment to the 1997 Stock
Incentive Plan or another matter to be acted upon. 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. A broker
non-vote occurs when the broker returns a proxy card with no vote (the
"non-vote") on the non-routine matter. Shares represented by such broker
non-votes will not be counted as votes for or against any director nominee or
the proposal to amend the 1997 Stock Incentive Plan, but they will be counted
in determining whether there is a quorum.
2
<PAGE> 6
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF THE COMPANY'S STOCK?
The following table shows those shareholders, other than our directors
and executive officers, who beneficially own more than 5% of either class of
our common stock.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
-------------------------- ---------------------------
SHARES SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT BENEFICIALLY PERCENT
OWNED OF CLASS(1) OWNED OF CLASS(1)
---------------------------------------------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Wasatch Advisors, Inc. (2)......................... 1,642,653 16.8% 734,135 15.3%
150 Social Hall Avenue
Salt Lake City, UT 84111
Waddell & Reed Investment Management Company (3)... 445,000 4.6% 746,361 15.6%
6300 Lamar Avenue, P.O. Box 29217
Shawnee Mission, KS 66201-9217
Provident Investment Counsel, Inc. (4)............. 972,950 10.0% -- --
300 North Lake Avenue
Pasadena, CA 91101-4106
Wellington Management Company, L.L.P. (5) ......... 1,047,000 10.7% -- --
75 State Street
Boston, Massachusetts 02109
Electra Investment Trust P.L.C. (6)................ 717,738 7.3% -- --
65 Kingsway
London, England WC 2B6QT
Capital Research and Management Company............ -- -- 309,970 6.5%
SMALLCAP World Fund, Inc. (7)
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
(1) Based on the number of shares outstanding at March 24, 2000.
(2) This information is based upon two Schedule 13G/A's filed on February 14,
2000. Wasatch Advisors, Inc. is an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940. It reports sole voting
power and sole dispositive power as to 1,642,653 shares of the Company's
Class A common stock and sole voting power and sole dispositive power as
to 734,135 shares of the Company's Class B common stock.
(3) This information is based upon two Schedule 13G/A's filed on February 14,
2000. The shares are beneficially owned directly by Waddell & Reed
Investment Management Company, an investment advisor registered under
Section 203 of the Investment Advisors Act of 1940, and indirectly by each
of Waddell & Reed Financial, Inc., Waddell & Reed Financial Services,
Inc., and Waddell & Reed, Inc. Each entity reports sole voting power and
dispositive power as to 445,000 shares of the Company's Class A common
stock and sole voting power and dispositive power as to 746,361 shares of
the Company's Class B common stock.
(4) This information is based upon a Schedule 13G/A filed on February 8, 2000
by Provident Investment Counsel, Inc. Provident Investment Counsel, Inc.
is an investment advisor registered under Section 203 of the Investment
Advisors Act of 1940 and reports sole voting power as to 893,400 shares
and sole dispositive power as to 972,950 shares of the Company's Class A
common stock.
(5) This information is based upon a Schedule 13G/A filed on March 10, 2000.
Wellington Management Company, L.L.P. is an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940 and reports
shared voting power as to 741,500 shares and shared dispositive power as
to 1,047,000 shares of the Company's Class A common stock.
3
<PAGE> 7
(6) This information is based upon information provided to the Company on or
about March 24, 2000 by Electra Investment Trust P.L.C.
(7) This information is based upon a Schedule 13G filed on February 14, 2000.
Capital Research and Management Company is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940 and
reports no voting power and sole dispositive power as to 309,970 shares of
the Company's Class B common stock, but disclaims beneficial ownership
thereof. SMALLCAP World Fund, Inc. is an investment company registered
under Section 8 of the Investment Company Act of 1940 and reports no
dispositive power and sole voting power as to 309,970 shares of the
Company's Class B common stock.
HOW MUCH STOCK DO OUR DIRECTORS AND EXECUTIVE OFFICERS OWN?
The following table shows the amount of our common stock beneficially
owned (unless otherwise indicated) by our directors, our executive officers
named in the Summary Compensation Table below and our directors and executive
officers as a group. Except as otherwise indicated, all information is as of
the record date, March 24, 2000.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
--------------------------------------- ------------------------
ACQUIRABLE
OUTSTANDING WITHIN 60 PERCENT OF OUTSTANDING PERCENT OF
NAME SHARES (1) DAYS (2) CLASS(3) SHARES (1) CLASS
-------------------------------------- ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Ken P. McDonald....................... 2 172,582 1.7% -- --
Claire M. Gulmi....................... -- 63,199 * -- --
Royce D. Harrell...................... -- 108,848 1.1% -- --
Rodney H. Lunn ....................... 56,613 235,082 2.9% 59 *
David L. Manning ..................... 52,000 245,066 3.0% -- --
Thomas G. Cigarran ................... 85,544 -- * 378,554 7.9%
3841 Green Hills Village Drive
Nashville, TN 37215
James A. Deal......................... 31,470 -- * 179,728 3.8%
Steven I. Geringer.................... 12,035 -- * -- --
Debora A. Guthrie..................... 185,159 -- 1.9% 890 *
Henry D. Herr......................... 57,120 -- * 221,558 4.6%
Bergein F. Overholt, M.D.............. 144,112 6,248 1.5% 340 *
All directors and executive officers
as a group (11 persons)............ 624,055 831,025 13.7% 781,129 16.3%
</TABLE>
*Represents less than 1% of each class of our outstanding common stock.
(1) The number of shares shown includes shares that are individually or
jointly owned, as well as shares over which the individual has either sole
or shared investment or voting authority. Certain of our directors and
executive officers disclaim beneficial ownership of some of the shares
included in the table, as follows:
- Mr. McDonald - 2 shares of Class A common stock held by Mr.
McDonald's wife;
- Mr. Lunn - 999 shares of Class A common stock held for the
benefit of Mr. Lunn's children and 1,800 shares of Class A
common stock held in a family trust;
- Mr. Deal - 1,089 shares of Class A common stock held by Mr.
Deal's children and 7,013 shares of Class B common stock held by
Mr. Deal's children;
- Mr. Geringer - 8,460 shares of Class A common stock held in a
family trust;
4
<PAGE> 8
- Ms. Guthrie - 179,434 shares of Class A common stock held by
Capitol Health Partners, L.P., and 500 shares of Class A common
stock held by Capitol Health Consultants, Inc., attributable to
Ms. Guthrie, who is President and Chief Executive Officer of
Capitol Health Consultants, Inc., the general partner of Capitol
Health Partners, L.P.; and
- Dr. Overholt - 21,000 shares of Class A common stock owned by
The Endoscopy Center, Knoxville, Tennessee, of which Dr.
Overholt is a partner, 8,482 shares of Class A common stock
owned by Gastrointestinal Associates, P.C., of which Dr.
Overholt is President and a shareholder, and 29,083 shares of
Class A common stock held in trust for Dr. Overholt's
grandchildren.
(2) Reflects the number of shares that could be purchased by exercise of
options available on March 24, 2000 or within 60 days thereafter under our
stock option plans.
(3) Pursuant to the rules of the Securities and Exchange Commission, or the
SEC, 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 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 our directors and executive officers which are exercisable
within 60 days of the record date are all deemed outstanding for the
purpose of computing the percentage ownership of all executive officers
and directors as a group.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The federal securities laws require our directors and executive officers,
and persons who own more than 10% of either class of our common stock, to file
initial reports of ownership and reports of changes in ownership with us, the
SEC and The Nasdaq National Market. Based solely upon a review of filings with
the SEC and written representations that no other reports were required, we
believe that all of our directors and executive officers complied during fiscal
1999 with their reporting requirements, with the exception of a late filing
made by Ms. Guthrie in September 1999 relating to a purchase transaction in
July 1999.
5
<PAGE> 9
ITEM 1 - ELECTION OF DIRECTORS
DIRECTORS STANDING FOR ELECTION
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. Three members will be elected at the annual
meeting. The Board of Directors has nominated and recommends to the
shareholders Thomas G. Cigarran, Debora A. Guthrie and Bergein F. Overholt,
M.D., each of whom is an incumbent Class III director, for election as Class
III directors to serve until the annual meeting of shareholders in 2003 and
until such time as their respective successors are duly elected and qualified.
If any 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
any of the nominees named above will be unable to serve. Certain information
with respect to the nominees for election as Class III directors and with
respect to the Class I and Class II directors (who are continuing in office) is
set forth below.
CLASS III DIRECTORS
(TO BE ELECTED; TERMS EXPIRE IN 2003)
THOMAS G. CIGARRAN Director since 1992
Mr. Cigarran, 58, has served as our Chairman of the Board since 1992. Mr.
Cigarran served as our Chief Executive Officer from January 1993 until December
1997, and as our President from January 1993 to July 1996. From December 1997
to December 1999, Mr. Cigarran served as an advisor to us. Mr. Cigarran is a
co-founder of American Healthways, Inc. (formerly known as American Healthcorp,
Inc.), or AHI, and has served as Chairman of the Board, President and Chief
Executive Officer of AHI since 1988.
DEBORA A. GUTHRIE Director since 1996
Ms. Guthrie, 44, has served as President and Chief 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, L.P. in 1995, Ms. Guthrie was President and
Chief Executive Officer of Capitol Health Consultants, a venture management
company providing financial advisory and investment banking services to
healthcare companies in the Mid-Atlantic and Southeastern United States. Ms.
Guthrie is Treasurer and a member of the Executive Committee and Board of
Directors of the National Association of Small Business Investment Companies as
well as the Board of Directors of the Center for International Private
Enterprise, an arm of the U.S. Chamber of Commerce. Ms. Guthrie, an affiliate
of Capitol Health Partners, L.P., was appointed to the Board of Directors in
connection with our preferred stock equity financing in November 1996. In
addition to serving on the Board of Directors for AmSurg, Ms. Guthrie is a
director of six other privately-held health care services companies.
BERGEIN F. OVERHOLT, M.D. Director since 1992
Dr. Overholt, 62, has served as President of 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 us, since 1992.
Dr. Overholt also serves as our Medical Director, is Chairman of the Laser
Department at the Thompson Cancer Survival Center in Knoxville, Tennessee and
is an Associate Professor of Clinic Medicine at the University of Tennessee in
Knoxville, Tennessee.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THESE NOMINEES.
6
<PAGE> 10
DIRECTORS CONTINUING IN OFFICE
CLASS I DIRECTORS
(TERMS EXPIRE IN 2001)
JAMES A. DEAL Director since 1992
Mr. Deal, 50, serves as President and Chief Executive Officer and Director of
CDI, Inc., a national network of outpatient diagnostic imaging centers. Mr.
Deal served as Executive Vice President of AHI from May 1991 to August 1998 and
as President of Diabetes Treatment Centers of America, Inc., an AHI subsidiary,
from 1985 to August 1998.
STEVEN I. GERINGER Director since 1997
Mr. Geringer, 54, has been a private investor since June 1996, previously
having served as President and Chief Executive Officer of PCS Health Systems,
Inc., a unit of Eli Lilly & Company 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.
CLASS II DIRECTORS
(TERMS EXPIRE IN 2002)
HENRY D. HERR Director since 1992
Mr. Herr, 54, has served as Executive Vice President of Finance and
Administration and Chief Financial Officer of AHI since 1986 and a director of
AHI since 1988. From December 1997 to December 1999, Mr. Herr served as an
advisor to us. Mr. Herr served as our Chief Financial Officer from April 1992
until September 1994 and as our Secretary from April 1992 until December 1997.
KEN P. MCDONALD Director since 1996
Mr. McDonald, 59, has served as our Chief Executive Officer since December 1997
and our President since July 1996, previously having served as our Executive
Vice President and Chief Operating Officer since December 1994. Mr. McDonald
joined us in 1993 as a Vice President.
7
<PAGE> 11
HOW ARE OUR DIRECTORS COMPENSATED?
BASE COMPENSATION. Each non-employee director receives an annual fee of
$10,000, which may be adjusted annually to reflect changes in the Consumer
Price Index, U.S. All City Average Report, of the U.S. Bureau of Labor
Statistics, or 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. In 1999, each
non-employee director received an annual fee of $10,000.
RESTRICTED STOCK. On the date of each annual meeting of shareholders, each
non-employee 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. A director
serving as medical director of the Company but not as an employee of the
Company will be treated as a non-employee director for purposes of these
restricted stock grants. In 1999, each non-employee director received shares of
Class A common stock having an aggregate fair market value of $10,232.
Each grant of restricted stock shall vest in one-third increments with the
one-third vesting equally on the date of grant and the first and second
anniversary of the date of grant, if the grantee is still a director on each of
such dates. Until the earlier of (i) five years from the date of grant and (ii)
the date on which the non-employee director ceases to serve as a director, no
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 a non-employee director's service as a
director for any reason other than death, disability or retirement, all shares
of unvested non-employee director restricted stock will be forfeited. Upon
resignation of a non-employee director as a director due to death, disability
or retirement, all shares of restricted stock will immediately vest.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Board of Directors has standing Audit, Compensation and Nominating
Committees.
AUDIT COMMITTEE. The principal functions of the Audit Committee are to
recommend to the full Board of Directors the engagement or discharge of our
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 independent auditors 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 our
financial organization and accounting practices, including but not limited to a
review of our financial statements with the auditors and an inquiry into the
effectiveness of our financial and accounting functions and internal controls
through discussions with our auditors and officers; 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. In
fiscal 1999, the Audit Committee met two times.
COMPENSATION COMMITTEE. The functions of the Compensation Committee
include recommending to the full Board of Directors the compensation
arrangements for senior management and directors, adopting 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 our 1992 Stock Option Plan and
8
<PAGE> 12
the 1997 Stock Incentive Plan. Members of the Compensation Committee are Steven
I. Geringer, Debora A. Guthrie and James A. Deal. No member of this committee
is a former or current officer or employee. The Compensation Committee met two
times during fiscal 1999.
NOMINATING COMMITTEE. The Nominating Committee is responsible for
soliciting recommendations for candidates for the Board of Directors;
developing and reviewing background information for candidates; making
recommendations to the Board regarding such candidates; and reviewing and
making recommendations to the Board with respect to candidates for directors
proposed by shareholders. Any shareholder wishing to propose a nominee should
submit a recommendation in writing to our Secretary, indicating the nominee's
qualifications and other relevant biographical information and providing
confirmation of the nominee's consent to serve as a director. Members of the
Nominating Committee are Ken P. McDonald, Thomas G. Cigarran and Bergein F.
Overholt, M.D. The Nominating Committee met one time during fiscal 1999.
HOW OFTEN DID THE BOARD MEET DURING FISCAL 1999?
The Board of Directors met six times during fiscal 1999. Each of the
directors attended at least 75% of the aggregate of all meetings of the Board
of Directors and all meetings of the committees of which the director was a
member, except Ms. Guthrie and Mr. Deal, who each attended four of the six
director meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ADVISORY AGREEMENTS. Effective December 1997, we entered into advisory
agreements with each of Thomas G. Cigarran and Henry D. Herr, pursuant to which
Messrs. Cigarran and Herr provided continuing services to us through December
1999. Immediately prior to December 1997, Mr. Cigarran served as our Chief
Executive Officer, and Mr. Herr served as our Vice President and Secretary.
Pursuant to the advisory agreements, Messrs. Cigarran and Herr provided
advisory services to our senior management in the areas of strategy,
operations, management and organizational development. As compensation for
these services during the two-year term, in December 1997 we paid $200,000 to
Mr. Cigarran and $150,000 to Mr. Herr in the form of shares of Class A common
stock, which were issued as restricted stock. One-third of the shares paid as
compensation vested immediately, one-third vested December 3, 1998 and the
remaining one-third of the shares vested December 3, 1999. The Advisory
Agreements provide that Messrs. Cigarran and Herr could not sell the shares of
our Class A common stock received pursuant to these agreements 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 non-employee
directors. Messrs. Cigarran and Herr are also entitled to indemnification as
provided in the indemnification agreement that each entered into with us in
December 1997.
LEASE ARRANGEMENT. Until December 31, 1999, we leased approximately 15,400
square feet of space from AHI in Nashville, Tennessee, where our corporate
headquarters are located, pursuant to a sublease dated June 9, 1996. We were
required to make an aggregate of $990,076 in rental payments to AHI over the
three-year term of the sublease, which expired December 31, 1999.
OTHER ARRANGEMENTS. Bergein F. Overholt, M.D. is a director, our Medical
Director and President and a 14% owner of The Endoscopy Center. The Endoscopy
Center is a limited partner, and one of our subsidiaries 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 1999
was $1,543,000, of which Dr. Overholt received his pro rata ownership
percentage. During 1999, Dr. Overholt was paid $50,000 for his
9
<PAGE> 13
services as the Company's Medical Director and he participated in the 1997
Stock Incentive Plan as a non-employee director. See "Compensation of
Directors."
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Decisions on compensation of our executive officers are made by the
Compensation Committee of our Board of Directors. Each member of the
Compensation Committee is a non-employee director. It is the responsibility of
the Compensation Committee to determine whether in its judgment the executive
compensation policies are reasonable and appropriate, meet their stated
objectives and effectively serve our best interests and the best interests of
our shareholders.
WHAT IS OUR PHILOSOPHY OF EXECUTIVE OFFICER COMPENSATION?
The Compensation Committee believes that the primary objectives of the
Company's executive compensation policies should be:
- To attract and retain talented executives by providing compensation
that is, overall, highly competitive with the compensation provided
to executives at companies of comparable position in the health care
services industry, while maintaining compensation within levels that
are consistent with the Company's annual budget, financial objectives
and operating performance;
- To provide appropriate incentives for executives to work toward the
achievement of the Company's annual financial performance and
business goals based on the Company's annual budget; and
- To more closely align the interests of executives with those of
shareholders and the long-term interests of the Company by providing
long-term incentive compensation in the form of non-qualified stock
options or other equity-based long-term incentive compensation.
The Compensation Committee believes that the Company's executive
compensation policies should be reviewed annually and should be reviewed in
light of the Company's financial performance, its annual budget and its
position within the health care services industry, as well as the compensation
policies of similar companies in the health care services business. The
compensation of individual executives should then be reviewed annually by the
Compensation Committee in light of its executive compensation policies for that
year.
In reviewing the comparability of the Company's executive compensation
policies, the Compensation Committee reviews executive compensation for other
comparable companies. In light of factors that are unique to the Company, the
Compensation Committee believes that, while the Company competes generally with
these other health care service companies, the Company is the leader in the
development of a relatively new method of delivery for outpatient surgical
procedures, and its rapid and high growth history provides unique circumstances
that should be taken into account. These differences are important factors,
which the Compensation Committee expects to consider in determining executive
compensation and in analyzing comparable financial performance.
The Compensation Committee believes that in addition to corporate
performance, it is appropriate to consider in setting and reviewing executive
compensation the level of experience and responsibilities of each executive as
well as the personal contributions a particular individual may make to the
success of the corporate enterprise. Such qualitative factors as leadership
skills, analytical skills, organizational
10
<PAGE> 14
development, public affairs and civic involvement are deemed to be important
qualitative factors to take into account in considering levels of compensation.
No relative weight is assigned to these qualitative factors, which are applied
subjectively by the Compensation Committee.
BASE SALARY. Base compensation for executive officers of the Company is
based on the terms of employment agreements between the Company and the
executives. These agreements provide for a minimum base salary adjusted for
increases in the CPI and such other increases as the Compensation Committee
shall determine to be appropriate. In determining whether an increase in base
compensation for the executive officers is appropriate, the Compensation
Committee may review recommendations of management and consult with the chief
executive officer. After taking into consideration these recommendations and
consultations, the contributions of each executive and the performance of the
Company, the Compensation Committee will subjectively determine appropriate
levels of base compensation. In fiscal 1999, the Compensation Committee awarded
increases in the annual base compensation for executive officers, excluding the
chief executive officer, ranging from 5% to 29%. The minimum increase mandated
by the employment agreements with the executive officers is the annual CPI
increase. The Compensation Committee did not assign any relative weight to the
quantitative and qualitative factors it applied in reaching its base
compensation decisions.
ANNUAL BONUS. The Compensation Committee considers that compensation
should be linked primarily to operating performance. To achieve this link with
regard to short-term performance, the Compensation Committee relies on cash
bonuses awarded under the bonus plan under which cash awards can be granted to
executive officers based upon: (a) the extent to which actual earnings of the
Company during a fiscal year meets or exceeds the earnings targets approved by
the Compensation Committee for such fiscal year and (b) other specific targets
related to an executive officer's specific area of responsibility, including
surgery center profits and new acquisition and development transactions. These
elements of the bonus plan were established in advance of the beginning of the
fiscal year. The maximum total bonus award that executive officers could
receive ranged from 60% to 70% of base salary for 1999. Total combined awards
for all components of the bonus plan for 1999 ranged from 38% to 51% of base
salary for 1999.
STOCK OPTIONS AND 401(K) PLAN. Stock options and contributions under the
Company's 401(k) plan are the principal vehicle for payment of long-term
compensation. The Compensation Committee considers that an integral part of the
Company's executive compensation program is equity-based compensation plans
which align executives' long-range interests with those of the shareholders.
This long-term incentive program is principally reflected in the 1992 Stock
Option Plan and the 1997 Stock Incentive Plan. The 401(k) plan provides for a
matching contribution by the Company of 25% of the participant's voluntary
salary contributions, with a maximum Company contribution of $2,500 per year,
based on a maximum voluntary salary contribution established by the U.S.
Department of Labor.
The Compensation Committee believes that long-term stock-based incentive
compensation should be structured so as to closely align the interests of the
executives with the interests of the Company's shareholders and, in particular,
to provide only limited value in the event that the Company's stock price fails
to increase over time. The Compensation Committee determines the award of stock
option grants to the executive officers and takes into account the
recommendations of the chief executive officer prior to approving annual awards
of long-term stock-based incentive compensation. These stock options are
granted in part to reward the senior executives for their long-term strategic
management of the Company, and to motivate the executives to improve
shareholder value. They also reflect the committee's objective to provide a
greater portion of compensation for executives in the form of long-term
equity-linked awards. During fiscal 1999, the Committee awarded options to
purchase Class A common stock with an exercise price of $7.63 per share to the
following executive officers in the following amounts: Ms. Gulmi 27,000 shares;
Mr. Harrell 9,000 shares; Mr. Lunn 10,000 shares; and Mr. Manning 10,000 shares.
11
<PAGE> 15
HOW IS OUR CHIEF EXECUTIVE OFFICER COMPENSATED?
The Compensation Committee believes that the compensation of our chief
executive officer is consistent with its general policies concerning executive
compensation and is appropriate in light of the Company's financial objectives
and performance. Awards of long-term incentive compensation to our chief
executive officer are considered concurrently with awards to other executive
officers and follow the same general policies as such other long-term incentive
awards.
In reviewing and approving Mr. McDonald's fiscal 1999 compensation
package, the Compensation Committee took into account the Company's performance
in fiscal 1998, the Company's progress in developing its practice-based
ambulatory surgery center business and such other factors as the Committee
deemed appropriate in its subjective judgment. Mr. McDonald received an annual
performance bonus of 38% of base salary based on corporate profits for fiscal
1999; a matching contribution of $2,500 to the Company's 401(k) plan on his
behalf; and long-term stock-based incentives in the form of an option to
purchase 40,000 shares of the Company's Class A common stock at an exercise
price of $7.63 per share.
HOW ARE WE ADDRESSING INTERNAL REVENUE CODE LIMITS ON DEDUCTIBILITY OF
COMPENSATION?
Section 162(m) of the Internal Revenue Code of 1986, enacted as part of
the Omnibus Budget Reconciliation Act of 1993, generally disallows a tax
deduction to public companies for compensation over $1,000,000 paid to the
chief executive officer and four other most highly compensated executive
officers. Under IRS regulations, qualifying performance-based compensation will
not be subject to the deduction limit if certain requirements are met. The
Compensation Committee does not believe that any of the executive compensation
arrangements for fiscal 1999 will result in the loss of a tax deduction
pursuant to Section 162(m). The Compensation Committee expects to continue to
monitor the application of Section 162(m) to executive compensation and will
take appropriate action if it is warranted in the future.
Steven I. Geringer
Debora A. Guthrie
James A. Deal
12
<PAGE> 16
EMPLOYMENT AGREEMENTS
We have employment agreements with each of Mr. McDonald, Ms. Gulmi, Mr.
Harrell, Mr. Lunn and Mr. Manning. 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 until
such employee reaches age 65, after which term the employment agreement shall
not be automatically extended. We can cancel the automatic renewal provision
prior to each anniversary date. The employment agreements provide that if we
elect 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 us under certain circumstances at any
time within 12 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 us
during the time we are obligated to compensate him or her pursuant to his or
her employment agreement.
EXECUTIVE COMPENSATION SUMMARY TABLE
The following table provides information as to annual, long-term or other
compensation during fiscal years 1999, 1998 and 1997 for the persons who, at
the end of fiscal 1999, were the chief executive officer and the other four
most highly compensated executive officers (the "named executive officers").
Prior to December 1997, Thomas G. Cigarran served as our chief executive
officer but received no compensation from us or with respect to his service to
us.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- -----------------
NUMBER OF STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS GRANTED COMPENSATION
--------------------------------- --------- ------------- -------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Ken P. McDonald 1999 $225,000 $85,641 40,000 $2,500 (2)
President and Chief 1998 $175,007 $77,003 -- $4,000
Executive Officer (3) 1997 $156,253 $13,461 88,333 $4,000
Claire M. Gulmi 1999 $160,000 $74,100 27,000 $2,447 (2)
Senior Vice President, 1998 $134,535 $41,084 28,333 --
Chief Financial Officer 1997 $124,796 $ 9,984 16,666 --
and Secretary (4)
Royce D. Harrell 1999 $153,230 $78,655 9,000 $2,175 (2)
Senior Vice President, 1998 $145,940 $41,717 5,000 --
Operations 1997 $138,190 $11,055 8,333 --
Rodney H. Lunn 1999 $156,620 $65,634 10,000 $6,707 (2)
Senior Vice President, 1998 $145,697 $39,411 7,500 $4,320
Center Development 1997 $139,597 $26,872 38,333 $4,320
David L. Manning 1999 $156,620 $67,298 10,000 $6,820 (2)
Senior Vice President, 1998 $145,697 $22,507 6,667 $4,320
Development 1997 $139,597 $ 7,782 43,333 $4,320
</TABLE>
(1) Reflects bonuses earned during fiscal 1999.
(2) The fiscal 1999 amounts reflect Company matching contributions to the
employee's 401(k) plan account and, in the cases of Mr. Lunn and Mr.
Manning, contributions made by the Company for car allowances.
(3) Mr. McDonald became Chief Executive Officer in December 1997.
(4) Ms. Gulmi became Senior Vice President in March 1997 and Secretary in
December 1997.
13
<PAGE> 17
OPTION GRANTS FOR FISCAL 1999
The following table provides information as to options granted to the
named executive officers during fiscal 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE
SECURITIES OF TOTAL OPTIONS VALUES AT ASSUMED
UNDERLYING GRANTED TO EXERCISE ANNUAL RATES OF
OPTIONS EMPLOYEES IN PRICE EXPIRATION STOCK PRICE APPRECIATION
NAME GRANTED FISCAL YEAR PER SHARE DATE FOR OPTION TERM
---- ------- ----------- --------- ---- ---------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Ken P. McDonald 40,000 (1) 11.0% $7.63 1/21/09 $191,813 $486,091
Claire M. Gulmi 27,000 (1) 7.4% $7.63 1/21/09 $129,474 $328,112
Royce D. Harrell 9,000 (1) 2.5% $7.63 1/21/09 $ 43,158 $109,371
Rodney H. Lunn 10,000 (1) 2.8% $7.63 1/21/09 $ 47,953 $121,523
David L. Manning 10,000 (1) 2.8% $7.63 1/21/09 $ 47,953 $121,523
</TABLE>
(1) Represents options to purchase shares of Class A common stock which vest
in five equal annual installments beginning on the date of grant. If there
is a change in control or a potential change in control as defined in the
1997 Stock Incentive Plan, any stock options which are not then
exercisable, in the discretion of the Board of Directors, may become fully
exercisable and vested.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
None of the named executive officers exercised options during fiscal 1999.
The following table provides information with respect to the status at December
31, 1999 of the options held by named executive officers. The aggregate dollar
value of the options held at year-end are calculated as the difference between
the fair market value of the Class A common stock ($6.50 as reported on The
Nasdaq National Market on December 31, 1999) and the respective exercise prices
of the stock options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999
---------------------------- --------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ken P. McDonald 146,333 93,655 $ 214,127 $25,719
Claire M. Gulmi 42,483 52,848 $ 68,448 $ 7,949
Royce D. Harrell 99,632 17,199 $ 353,981 $ 6,249
Rodney H. Lunn 229,207 13,625 $1,047,013 --
David L. Manning 238,999 13,000 $1,061,314 --
</TABLE>
14
<PAGE> 18
COMPARISON OF CUMULATIVE TOTAL RETURNS
The following graph compares the performance of our Class A common stock
and Class B common stock with the performance of a market index and a peer
group index. The market index is the Center for Research in Security Prices
Index for NASDAQ Stock Market (U.S. Companies) and the peer group index is the
Center for Research in Security Prices Index for NASDAQ Health Services Stocks.
The graph covers the period from the inception of trading in our common stock,
December 4, 1997, through the end of fiscal 1999. The graph assumes that $100
was invested on December 4, 1997 in our Class A and Class B common stock, the
NASDAQ Index and the NASDAQ Health Services Index, and that all dividends were
reinvested.
[GRAPH]
<TABLE>
<CAPTION>
12/4/97 12/31/97 06/30/98 12/31/98 6/30/99 12/31/99
------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
AmSurg Class A 100 86 87 84 86 74
AmSurg Class B 100 86 78 75 85 72
Nasdaq Stock Market (US) 100 97 117 137 168 250
Nasdaq Health Services Stocks 100 101 100 85 95 69
</TABLE>
15
<PAGE> 19
ITEM 2 - APPROVAL OF AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN
The Board of Directors has approved and recommends that the shareholders
approve an amendment to our 1997 Stock Incentive Plan to increase the number of
shares of Class A common stock reserved for issuance pursuant to the exercise
of options granted under the plan and shares of restricted stock issuable under
the plan from a maximum of 1,120,000 shares to 1,600,000 shares. The major
features of the plan are summarized below.
THE PROPOSED AMENDMENT
As of the record date, options to purchase 1,042,416 shares of our Class A
common stock were outstanding under the plan, options to purchase 2,281 shares
had been exercised, 66,151 restricted shares had been issued and 9,152 shares
remained available for the grant of options under the plan. The proposed
amendment would increase to 1,600,000 the number of shares of our Class A
common stock reserved for issuance pursuant to awards granted or to be granted
under the plan. If the proposed amendment is approved, Paragraph (a) of Section
3 of the plan would be deleted and replaced with the following:
"(a) The aggregate number of shares of Common Stock that may be issued
under the Plan shall be 1,600,000 shares. The shares of Common Stock
issuable under the Plan may consist, in whole or in part, of authorized
and unissued shares or treasury shares. No officer of the Corporation or
other person whose compensation may be subject to the limitations or
deductibles under Section 162(m) of the Code shall be eligible to receive
awards pursuant to this Plan relating to in excess of 200,000 shares of
Common Stock in any fiscal year (the "Section 162(m) Maximum")."
The Board of Directors believes that it is in our best interests and the
best interests of our shareholders to approve the amendment to allow us to
continue to grant options and other awards under the plan to secure the
benefits of the additional incentive inherent in the ownership of our common
stock by our key employees, to help secure and retain the services of our key
employees and to have a sufficient number of shares of common stock available
for awards of restricted stock to our non-employee directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN.
SUMMARY OF THE MATERIAL PROVISIONS OF THE PLAN
The following summary of the material provisions of the 1997 Stock
Incentive Plan is qualified in its entirety by reference to the text of the
plan, as amended and restated to reflect the proposed amendment, which is
attached to this proxy statement as Exhibit A.
GENERALLY. Under the 1997 Stock Incentive Plan, the Compensation Committee
has the authority to grant to our officers, other key employees, non-employee
directors and consultants the following types of awards: (1) stock options; (2)
stock appreciation rights; (3) restricted stock; and/or (4) other stock-based
awards.
Any shares as to which an option or other award expires, lapses unexpired,
or is forfeited, terminated, or canceled may become subject to a new option or
other award. The plan will terminate on, and no award may be granted later
than, December 2007, but the exercise date of awards granted prior to such
tenth anniversary may extend beyond such date.
16
<PAGE> 20
AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS. The plan provides for
automatic grants of restricted Class A common stock to our non-employee
directors as described in detail under the heading "How are our directors
compensated?"
STOCK OPTIONS. Incentive stock options and non-qualified stock options may
be granted for such number of shares as the Compensation Committee may
determine and may be granted alone, in addition to, or in tandem with other
awards under the plan or cash awards outside the plan. A stock option will be
exercisable at such times and subject to such terms and conditions as the
Compensation Committee will determine. The term may not be more than ten years
after the date of grant (five years in the case of incentive stock options for
certain 10% shareholders). The option price for an incentive stock option will
not be less than 100% (110% in the case of certain 10% shareholders) of the
fair market value of our Class A common stock as of the date of grant and for
any non-qualified stock option will not be less than 50% of the fair market
value as of the date of grant. Stock options and stock appreciation rights
granted under the plan may not be transferred or assigned without the prior
written consent of the Compensation Committee other than (i) transfers by the
optionee to a member of his or her immediate family or a trust for the benefit
of the optionee or a member of his or her immediate family or (ii) transfers by
will or by the laws of descent and distribution.
Stock appreciation rights may be granted under the plan in conjunction
with all or part of a stock option and will be exercisable only when the
underlying stock option is exercisable. Once a stock appreciation right has
been exercised, the related portion of the stock option underlying the stock
appreciation right will terminate. Upon the exercise of a stock appreciation
right, the Compensation Committee will pay to the employee or consultant in
cash, Class A common stock or a combination thereof (the method of payment to
be at the discretion of the Compensation Committee), in an amount equal to the
excess of the fair market value of the Class A common stock on the exercise
date over the option price, multiplied by the number of stock appreciation
rights being exercised.
RESTRICTED STOCK. Restricted stock awards may be granted alone, in
addition to, or in tandem with other awards under the plan or cash awards made
outside the plan. The provisions attendant to a grant of restricted stock may
vary from participant to participant. In making an award of restricted stock,
the Compensation Committee will determine the periods during which the
restricted stock is subject to forfeiture and may provide such other awards
designed to guarantee a minimum value for such stock.
OTHER STOCK-BASED AWARDS. The Compensation Committee also may grant other
types of awards, such as performance shares, convertible preferred stock,
convertible debentures, or exchangeable securities that are valued, in whole or
in part, by reference to earnings per share or performance of our subsidiaries.
These awards may be granted alone, in addition to, or in tandem with, stock
options, restricted stock, or cash awards outside of the plan. Awards will be
made upon such terms and conditions as the Compensation Committee may
determine.
EFFECTS OF A CHANGE IN CONTROL. If there is a change of control or a
potential change of control of the Company, stock appreciation rights and
limited stock appreciation rights outstanding for at least six months and any
stock options that are not then exercisable, in the discretion of the Board,
may become fully exercisable and vested and the restrictions and deferral
limitations applicable to restricted stock and other stock-based awards may
lapse and such shares and awards will be deemed fully vested. For purposes of
the plan, a change of control is defined generally to include:
- any person or entity, other than the Company or a wholly-owned
subsidiary of the Company, becoming the beneficial owner of our
securities having 35% or more of the combined voting power of
the then outstanding securities that may be cast for the
election of directors;
17
<PAGE> 21
- as a result of, or in connection with, a cash tender, exchange
offer, merger, or other business combination, sale of assets, or
contested election, less than a majority of the combined voting
power of our then outstanding securities entitled to vote
generally in the election of directors being held in the
aggregate by the holders of our securities entitled to vote
generally in the election of our directors immediately prior to
such transaction; and
- during any period of two consecutive years, individuals who at
the beginning of any such period constitute the Board of
Directors ceasing to constitute at least a majority thereof,
unless the election of each director first elected during such
period was approved by a vote of at least two-thirds of our
directors then still in office who were our directors at the
beginning of any such period.
Stock options, stock appreciation rights, limited stock appreciation
rights, restricted stock, and other stock-based awards will, unless otherwise
determined by the Compensation Committee in its sole discretion, be cashed out
on the basis of the change in control price (as defined in the plan and as
described below). The change of control price will be the highest price per
share paid in any transaction reported on The Nasdaq National Market or paid or
offered to be paid in any bona fide transaction relating to a change in control
or potential change in control at any time during the immediately preceding
60-day period, as determined by the Compensation Committee.
AMENDMENTS AND TERMINATION. Our Board of Directors may amend, alter, or
discontinue the plan, provided that no amendment may be made that would impair
the rights of an optionee or participant under an award made under the plan
without the participant's consent.
OPTIONS GRANTED UNDER THE PLAN
Because awards under the plan are at the discretion of the Compensation
Committee, the benefits that will be awarded under the plan to persons other
than non-employee directors are not currently determinable. The following table
shows as to each of the named executive officers, as to all executive officers
as a group and as to all other employees as a group, as of March 31, 2000, the
aggregate number of shares of Class A common stock subject to options granted
under the plan, excluding options that have been canceled or forfeited
unexercised, and the weighted average per share exercise price. As of March 31,
2000, the market value of a share of Class A common stock based on the closing
price for such stock on The Nasdaq National Market was $5.875.
<TABLE>
<CAPTION>
NUMBER OF
STOCK
OPTIONS AVERAGE EXERCISE
NAME GRANTED PRICE PER SHARE
---- ------- ---------------
<S> <C> <C>
Ken P. McDonald........................................ 188,333 $7.65
Claire M. Gulmi........................................ 83,999 $7.67
Royce D. Harrell....................................... 32,333 $7.15
Rodney H. Lunn......................................... 65,833 $6.79
David L. Manning....................................... 72,000 $6.70
All executive officers as a group (6 persons).......... 442,498 $7.33
All other employees as a group......................... 599,918 $7.38
</TABLE>
18
<PAGE> 22
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain U.S. federal income tax
aspects of options and shares of restricted stock awarded under the plan based
upon the federal income tax laws in effect on the date hereof. This summary is
not intended to be exhaustive and the exact tax consequences to any grantee
will depend upon his or her particular circumstances and other facts. The plan
participants must consult their tax advisors with respect to any state, local,
and foreign tax considerations or particular federal tax implications of
options granted under the plan.
INCENTIVE STOCK OPTIONS. Neither the grant nor the exercise of an
incentive stock option will result in taxable income to the employee. The tax
treatment on sale of shares of common stock acquired upon exercise of an
incentive stock option depends on whether the holding period requirement is
satisfied. The holding period is met if the disposition by the employee occurs
(i) at least two years after the date of grant of the option; (ii) at least one
year after the date the shares were transferred to the employee; and (iii)
while the employee remains employed by us or not more than three months after
his or her termination of employment (or not more than one year in the case of
a disabled employee). In the case of a deceased employee, the incentive stock
option may be exercised by the deceased employee's legal representative or heir
provided the option was an incentive stock option in the hands of the deceased
employee and the deceased employee was employed by us for at least three months
before his or her death. However, the plan limits the right of the legal
representative of any deceased employee to exercise an option to one year
following death. If the holding period requirement is satisfied, the excess of
the amount realized upon sale of the shares of common stock acquired upon the
exercise of the incentive stock option over the price paid for these shares
will be treated as a capital gain. If the employee disposes of the common stock
acquired upon the exercise of the incentive stock option before the holding
period requirement is met (a "disqualifying disposition"), the excess of the
fair market value of the shares on the date of exercise or, if less, the fair
market value on the date of disposition, over the exercise price will be
taxable as ordinary compensation income to the employee at the time of
disposition, and we will be entitled to a corresponding deduction. The balance
of the gain, if any, will be a capital gain for the employee. Any capital gain
recognized by the employee will be a long-term capital gain if the employee=s
holding period for the shares of common stock at the time of disposition is
more than one year; otherwise it will be short-term.
Although the exercise of an incentive stock option will not result in
taxable income to the employee, the excess of the fair market value of the
common stock on the date of exercise over the exercise price will be included
in the employee's "alternative minimum taxable income" under the Internal
Revenue Code. This inclusion might subject the employee to, or increase his or
her liability for, the alternative minimum tax under Section 55 of the Internal
Revenue Code.
NONQUALIFIED STOCK OPTIONS. There will be no federal income tax
consequences to us or to the grantee upon the grant of non-qualified stock
options under the plan. However, upon the exercise of a non-qualified stock
option under the plan, the grantee will recognize ordinary compensation income
for federal income tax purposes in an amount equal to the excess of the fair
market value of the shares of common stock purchased over the exercise price.
We will generally be entitled to a tax deduction at such time and in the same
amount that the employee realizes ordinary income. If the shares of common
stock so acquired are later sold or exchanged, the difference between the
amount realized from such sale or exchange and the fair market value of such
stock on the date of exercise of the option is generally taxable as long-term
or short-term capital gain or loss depending upon the length of time the common
stock has been held after such date.
19
<PAGE> 23
EXERCISE WITH SHARES. A grantee who pays the exercise price upon exercise
of an incentive stock option or non-qualified stock option, in whole or in
part, by delivering shares of common stock already owned by him or her will
realize no gain or loss for federal income tax purposes on the shares
surrendered, but otherwise will be taxed according to the rules described
above. Shares of common stock acquired upon exercise that are equal in number
to the shares surrendered will have a tax basis equal to the tax basis of the
shares surrendered, and (except as noted below with respect to disqualifying
dispositions) the holding period of such shares will include the holding period
of shares surrendered. In the case of a non-qualified stock option, the basis
of additional shares received upon exercise of the non-qualified stock option
will be equal to the fair market value of such shares on the date of exercise,
and the holding period for such additional shares will commence on the date the
option is exercised. In the case of an incentive stock option, the tax basis of
the additional shares received will be zero, and the holding period of such
shares will commence on the date of the exchange. If any of the shares received
upon exercise of the incentive stock option are disposed of within two years of
the date of the grant of the incentive stock option or within one year after
exercise, the shares with the lowest basis (i.e., zero basis) will be deemed to
be disposed of first, and such disposition will be a disqualifying disposition
giving rise to ordinary income as previously discussed above.
RESTRICTED STOCK. A participant receiving restricted stock generally will
recognize ordinary income in the amount of the fair market value of the
restricted stock at the time the stock is no longer subject to forfeiture, less
the consideration paid for the stock. However, a participant may elect, under
Section 83(b) of the Internal Revenue Code within 30 days of the grant of the
stock, to recognize taxable ordinary income on the date of grant equal to the
excess of the fair market value of the shares of restricted stock (determined
without regard to the restrictions) over the purchase price of the restricted
stock. Thereafter, if the shares are forfeited, the participant will be
entitled to a deduction, refund, or loss, for tax purposes only, in an amount
equal to the purchase price of the forfeited shares regardless of whether she
or he made a Section 83(b) election. With respect to the sale of shares after
the forfeiture period has expired, the holding period to determine whether the
participant has long-term or short-term capital gain or loss generally begins
when the restriction period expires and the tax basis for such shares will
generally be based on the fair market value of such shares on such date. If the
participant makes an election under Section 83(b), however, the holding period
will commence on the date of grant, the tax basis will be equal to the fair
market value of shares on such date (determined without regard to
restrictions), and we generally will be entitled to a deduction equal to the
amount that is taxable as ordinary income to the participant in the year that
such income is taxable.
DIVIDENDS AND DIVIDEND EQUIVALENTS. Dividends paid on restricted stock
generally will be treated as compensation that is taxable as ordinary income to
the participant, and will be deductible by us. If the participant makes a
Section 83(b) election, however, the dividends will be taxable as ordinary
income to the participant but will not be deductible by us.
OTHER STOCK-BASED AWARDS. The federal income tax treatment of other
stock-based awards will depend on the nature of any such award and the
restrictions applicable to such award. Such an award may, depending on the
conditions applicable to the award, be taxable as an option, an award of
restricted stock, or in a manner not described herein.
The plan is not intended to be a "qualified plan" under Section 401(a) of
the Internal Revenue Code.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
We have appointed Deloitte & Touche LLP as our independent public
accountants for 2000. Deloitte & Touche LLP served as our independent public
accountant for 1999. A representative of Deloitte & Touche LLP is expected to
be present at the annual meeting to make a statement if they desire to do so
and to respond to questions from the shareholders.
OTHER MATTERS
As of the date of this proxy statement, we know of no business that will
be presented for consideration at the annual meeting other than the items
referred to above. If any other matter is properly brought before the meeting
for action by shareholders, proxies in the enclosed form returned to us will be
voted in accordance with the recommendation of the Board of Directors or, in
the absence of such a recommendation, in accordance with the judgment of the
proxy holder.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING. Pursuant to Rule
14a-8(e) of the Securities Exchange Act of 1934, shareholder proposals
submitted in accordance with applicable rules and regulations for presentation
at our next annual meeting and received at our executive offices no later than
December 21, 2000 will be considered for inclusion in our proxy statement and
form of proxy relating to the 2001 annual meeting.
For other shareholder proposals to be timely (but not considered for
inclusion in our proxy statement), a shareholder's notice must be received at
our executive offices no later than March 5, 2001 and should otherwise comply
with the advance notice provisions of our bylaws. For proposals that are not
timely filed, we retain discretion to vote proxies we receive. For proposals
that are timely filed, we retain discretion to vote proxies we receive provided
(1) we include in our proxy statement advice on the nature of the proposal and
how we intend to exercise our voting discretion and (2) the proponent does not
issue a proxy statement.
PROXY SOLICITATION COSTS. The proxies being solicited hereby are being
solicited by us. We will bear the cost of soliciting proxies in the enclosed
form. Our officers and regular employees may, but without compensation other
than their regular compensation, solicit proxies by further mailing or personal
conversations, or by telephone, telex, facsimile or electronic means. We will,
upon request, reimburse brokerage firms and others for their reasonable
expenses in forwarding solicitation material to the beneficial owners of stock.
FINANCIAL STATEMENTS AVAILABLE. A copy of our 1999 Annual Report to
Shareholders containing audited financial statements accompanies this proxy
statement. The 1999 Annual Report does not constitute a part of the proxy
solicitation material.
April 19, 2000
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EXHIBIT A
AMENDED AND RESTATED
AMSURG CORP.
1997 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the AmSurg Corp. 1997 Stock Incentive Plan (the "Plan") is
to enable AmSurg Corp., a Tennessee corporation (the "Corporation") to attract,
retain and reward key employees of and consultants to the Corporation and its
Subsidiaries and Affiliates, and directors who are not also employees of the
Corporation, and to strengthen the mutuality of interests between such key
employees, consultants, and directors by awarding such key employees,
consultants, and directors performance-based stock incentives and/or other
equity interests or equity-based incentives in the Corporation, as well as
performance-based incentives payable in cash. The creation of the Plan shall
not diminish or prejudice other compensation programs approved from time to
time by the Board.
For purposes of the Plan, the following terms shall be defined as set
forth below:
A. "Affiliate" means any entity other than the Corporation and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Corporation directly or indirectly owns at least
20% of the combined voting power of all classes of stock of such entity or at
least 20% of the ownership interests in such entity.
B. "Board" means the Board of Directors of the Corporation.
C. "Cause" has the meaning provided in Section 5(j) of the Plan.
D. "Change in Control" has the meaning provided in Section 10(b) of the
Plan.
E. "Change in Control Price" has the meaning provided in Section 10(d) of
the Plan.
F. "Common Stock" means (i) prior to the Distribution, the Corporation's
Common Stock, without par value, and (ii) following the Distribution, the
Corporation's Class A Common Stock, without par value.
G. "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
H. "Committee" means the Committee referred to in Section 2 of the Plan.
I. "Corporation" means AmSurg Corp., a corporation organized under the
laws of the State of Tennessee or any successor corporation.
<PAGE> 26
J. "Disability" means disability as determined in accordance with
Corporation's policies in effect from time to time.
K. "Distribution" means the Distribution contemplated by that certain
Distribution Agreement, dated as of March 7, 1997, by and between American
Healthcorp, Inc. and the Corporation.
L. "Early Retirement" means retirement, for purposes of this Plan with the
express consent of the Corporation at or before the time of such retirement,
from active employment with the Corporation and any Subsidiary or Affiliate
prior to age 65, in accordance with any applicable early retirement policy of
the Corporation then in effect or as may be approved by the Committee.
M. "Effective Date" has the meaning provided in Section 14 of the Plan.
N. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
O. "Fair Market Value" means with respect to the Common Stock, as of any
given date or dates, unless otherwise determined by the Committee in good
faith, the reported closing price of a share of Common Stock on The Nasdaq
Stock Market National Market or such other market or exchange as is the
principal trading market for the Common Stock, or, if no such sale of a share
of Common Stock is reported on The Nasdaq Stock Market National Market or other
exchange or principal trading market on such date, the fair market value of a
share of Common Stock as determined by the Committee in good faith.
P. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
Q. "Immediate Family" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall
include adoptive relationships.
R. "Non-Employee Director" means a member of the Board who is a
Non-Employee Director within the meaning of Rule 16b-3(b)(3) promulgated under
the Exchange Act and an outside director within the meaning of Treasury
Regulation Sec. 162-27(e)(3) promulgated under the Code.
S. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
T. "Normal Retirement" means retirement from active employment with the
Corporation and any Subsidiary or Affiliate on or after age 65.
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U. "Other Stock-Based Award" means an award under Section 8 below that is
valued in whole or in part by reference to, or is otherwise based on, the
Common Stock.
V. "Outside Director" means a member of the Board who is not an officer or
employee of the Corporation or any Subsidiary or Affiliate of the Corporation.
A Board member who serves as a medical director but is not either an officer or
employee will be deemed to be an Outside Director.
W. "Outside Director Restricted Stock" means an award to an Outside
Director under Section 9 below.
X. "Plan" means this 1997 Stock Incentive Plan, as amended from time to
time.
Y. "Restricted Stock" means an award of shares of Common Stock that is
subject to restrictions under Section 7 of the Plan.
Z. "Restriction Period" has the meaning provided in Section 7 of the Plan.
AA. "Retirement" means Normal or Early Retirement.
BB. "Section 162(m) Maximum" has the meaning provided in Section 3(a)
hereof.
CC. "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 below to surrender to the Corporation all (or a
portion) of a Stock Option in exchange for an amount equal to the difference
between (i) the Fair Market Value, as of the date such Stock Option (or such
portion thereof) is surrendered, of the shares of Common Stock covered by such
Stock Option (or such portion thereof), subject, where applicable, to the
pricing provisions in Section 6(b)(ii), and (ii) the aggregate exercise price
of such Stock Option (or such portion thereof).
DD. "Stock Option" or "Option" means any option to purchase shares of
Common Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.
EE. "Subsidiary" means any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
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SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee of not less than two
Non-Employee Directors, who shall be appointed by the Board and who shall serve
at the pleasure of the Board. Decisions of the Committee may be ratified by the
Board. The functions of the Committee specified in the Plan may be exercised by
an existing Committee of the Board composed exclusively of Non-Employee
Directors. The initial Committee shall be the Compensation Committee of the
Board.
The Committee shall have authority to grant, pursuant to the terms of the
Plan, to officers, other key employees, Outside Directors and consultants
eligible under Section 4: (i) Stock Options, (ii) Stock Appreciation Rights,
(iii) Restricted Stock, and/or (iv) Other Stock-Based Awards; provided,
however, that the power to grant and establish the terms and conditions of
awards to Outside Directors under the Plan other than pursuant to Section 9
shall be reserved to the Board.
In particular, the Committee, or the Board, as the case may be, shall
have the authority, consistent with the terms of the Plan:
(a) to select the officers, key employees and Outside Directors
of and consultants to the Corporation and its Subsidiaries and
Affiliates to whom Stock Options, Stock Appreciation Rights,
Restricted Stock, and/or Other Stock-Based Awards may from time to
time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock
Options, NonQualified Stock Options, Stock Appreciation Rights,
Restricted Stock, and/or Other Stock-Based Awards, or any combination
thereof, are to be granted hereunder to one or more eligible persons;
(c) to determine the number of shares to be covered by each such
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but
not limited to, the share price and any restriction or limitation, or
any vesting acceleration or waiver of forfeiture restrictions
regarding any Stock Option or other award and/or the shares of Common
Stock relating thereto, based in each case on such factors as the
Committee shall determine, in its sole discretion); and to amend or
waive any such terms and conditions to the extent permitted by
Section 11 hereof;
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash or Restricted Stock under Section 5(m)
or (n), as applicable, instead of Common Stock;
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(f) to determine whether, to what extent, and under what
circumstances Option grants and/or other awards under the Plan are to
be made, and operate, on a tandem basis vis-a-vis other awards under
the Plan and/or cash awards made outside of the Plan;
(g) to determine whether, to what extent, and under what
circumstances shares of Common Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);
(h) to determine whether to require payment of tax withholding
requirements in shares of Common Stock subject to the award; and
(i) to impose any holding period required to satisfy Section 16
under the Exchange Act.
The Committee shall have the authority to adopt, alter, and repeal such
rules, guidelines, and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be subject to ratification by the Board, which shall act only on the
recommendation of the Committee as to all matters as to which the Committee has
discretion pursuant to the provisions of the Plan. Subject to such
ratification, the decisions of the Committee shall be final and binding on all
persons, including the Corporation and Plan participants.
SECTION 3. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) The aggregate number of shares of Common Stock that may be issued
under the Plan shall be 1,600,000 shares. The shares of Common Stock issuable
under the Plan may consist, in whole or in part, of authorized and unissued
shares or treasury shares. No officer of the Corporation or other person whose
compensation may be subject to the limitations on deductibility under Section
162(m) of the Code shall be eligible to receive awards pursuant to this Plan
relating to in excess of 200,000 shares of Common Stock in any fiscal year (the
"Section 162(m) Maximum").
(b) If any shares of Common Stock that have been optioned cease to be
subject to a Stock Option, or if any shares of Common Stock that are subject to
any Restricted Stock or Other Stock-Based Award granted hereunder are forfeited
prior to the payment of any dividends, if applicable, with respect to such
shares of Common Stock, or any such award otherwise
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<PAGE> 30
terminates without a payment being made to the participant in the form of
Common Stock, such shares shall again be available for distribution in
connection with future awards under the Plan.
(c) In the event of any merger, reorganization, consolidation,
recapitalization, extraordinary cash dividend, stock dividend, stock split or
other change in corporate structure affecting the Common Stock, an appropriate
substitution or adjustment shall be made in the maximum number of shares that
may be awarded under the Plan, in the number and option price of shares subject
to outstanding Options granted under the Plan, in the number of shares
underlying grants of Restricted Stock and Outside Director Restricted Stock,
the Section 162(m) Maximum and in the number of shares subject to other
outstanding awards granted under the Plan as may be determined to be
appropriate by the Committee, in its sole discretion, provided that the number
of shares subject to any award shall always be a whole number. An adjusted
option price shall also be used to determine the amount payable by the
Corporation upon the exercise of any Stock Appreciation Right associated with
any Stock Option.
SECTION 4. ELIGIBILITY.
Officers, other key employees and Outside Directors of and consultants to
the Corporation and its Subsidiaries and Affiliates who are responsible for or
contribute to the management, growth and/or profitability of the business of
the Corporation and/or its Subsidiaries and Affiliates are eligible to be
granted awards under the Plan. Outside Directors are eligible to receive awards
pursuant to Section 9 and as otherwise determined by the Board.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan. Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. Incentive Stock Options may
be granted only to individuals who are employees of the Corporation or any
Subsidiary of the Corporation.
The Committee shall have the authority to grant to any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options (in
each case with or without Stock Appreciation Rights).
Options granted to officers, key employees, Outside Directors and
consultants under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
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<PAGE> 31
(a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant but shall be not less than 100% (or, in the case
of any employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation or
of any of its Subsidiaries, not less than 110%) of the Fair Market
Value of the Common Stock at grant, in the case of Incentive Stock
Options, and not less than 50% of the Fair Market Value of the Common
Stock at grant, in the case of Non-Qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be fixed by
the Committee, but no Incentive Stock Option shall be exercisable
more than ten years (or, in the case of an employee who owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or any of its Subsidiaries or
parent corporations, more than five years) after the date the Option
is granted.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however,
that except as provided in Section 5(g) and (h) and Section 10,
unless otherwise determined by the Committee at or after grant, no
Stock Option shall be exercisable prior to the first anniversary date
of the granting of the Option. The Committee may provide that a Stock
Option shall vest over a period of future service at a rate specified
at the time of grant, or that the Stock Option is exercisable only in
installments. If the Committee provides, in its sole discretion, that
any Stock Option is exercisable only in installments, the Committee
may waive such installment exercise provisions at any time at or
after grant, in whole or in part, based on such factors as the
Committee shall determine in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
restrictions apply under Section 5(c), Stock Options may be exercised
in whole or in part at any time during the option period, by giving
written notice of exercise to the Corporation specifying the number
of shares to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, either by check, note, or such
other instrument as the Committee may accept. As determined by the
Committee, in its sole discretion, at or (except in the case of an
Incentive Stock Option) after grant, payment in full or in part may
also be made in the form of shares of Common Stock already owned by
the optionee or, in the case of a Non-Qualified Stock Option, shares
of Restricted Stock or shares subject to such Option or another award
hereunder (in each case valued at the Fair Market Value of the Common
Stock on the date the Option is exercised). If payment of the
exercise price is made in part or in full with Common Stock, the
Committee may award to the employee a new Stock Option to replace the
Common Stock which was surrendered. If payment of the option exercise
price of a Non-Qualified Stock Option is made in whole or in part in
the form of Restricted Stock, such Restricted Stock (and any
replacement shares relating thereto) shall remain (or be) restricted
in accordance
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<PAGE> 32
with the original terms of the Restricted Stock award in question, and
any additional Common Stock received upon the exercise shall be
subject to the same forfeiture restrictions, unless otherwise
determined by the Committee, in its sole discretion, at or after
grant. No shares of Common Stock shall be issued until full payment
therefor has been made. An optionee shall generally have the rights to
dividends or other rights of a shareholder with respect to shares
subject to the Option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has
given the representation described in Section 13(a).
(e) Transferability of Options. No Non-Qualified Stock Option
shall be transferable by the optionee without the prior written
consent of the Committee other than (i) transfers by the Optionee to
a member of his or her Immediate Family or a trust for the benefit of
the optionee or a member of his or her Immediate Family, or (ii)
transfers by will or by the laws of descent and distribution. No
Incentive Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution and
all Incentive Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(f) Bonus for Taxes. In the case of a Non-Qualified Stock Option
or an optionee who elects to make a disqualifying disposition (as
defined in Section 422(a)(1) of the Code) of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option, the Committee
in its discretion may award at the time of grant or thereafter the
right to receive upon exercise of such Stock Option a cash bonus
calculated to pay part or all of the federal and state, if any,
income tax incurred by the optionee upon such exercise.
(g) Termination by Death. Subject to Section 5(k), if an
optionee's employment by the Corporation and any Subsidiary or
(except in the case of an Incentive Stock Option) Affiliate
terminates by reason of death, any Stock Option held by such optionee
may thereafter be exercised, to the extent such option was
exercisable at the time of death or (except in the case of an
Incentive Stock Option) on such accelerated basis as the Committee
may determine at or after grant (or except in the case of an
Incentive Stock Option, as may be determined in accordance with
procedures established by the Committee) by the legal representative
of the estate or by the legatee of the optionee under the will of the
optionee, for a period of one year (or such other period as the
Committee may specify at or after grant) from the date of such death
or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(h) Termination by Reason of Disability. Subject to Section
5(k), if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Disability, any Stock Option held
by such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of termination or (except in
the case of an Incentive Stock Option)
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<PAGE> 33
on such accelerated basis as the Committee may determine at or after
grant (or, except in the case of an Incentive Stock Option, as may be
determined in accordance with procedures established by the Committee),
for a period of (i) three years (or such other period as the Committee
may specify at or after grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock
Option, whichever period is the shorter, in the case of a Non-Qualified
Stock Option and (ii) one year from the date of termination of
employment or until the expiration of the stated term of such Stock
Option, whichever period is shorter, in the case of an Incentive Stock
Option; provided however, that, if the optionee dies within the period
specified in (i) above (or other such period as the committee shall
specify at or after grant), any unexercised NonQualified Stock Option
held by such optionee shall thereafter be exercisable to the extent to
which it was exercisable at the time of death for a period of twelve
months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter. In the
event of termination of employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the
exercise period applicable to Incentive Stock Options, but before the
expiration of any period that would apply if such Stock Option were a
Non-Qualified Stock Option, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(i) Termination by Reason of Retirement. Subject to
Section 5(k), if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Normal or Early Retirement, any Stock
Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of such
Retirement or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or,
except in the case of an Incentive Stock Option, as may be determined
in accordance with procedures established by the Committee), for a
period of (i) three years (or such other period as the Committee may
specify at or after grant) from the date of such termination of
employment or the expiration of the stated term of such Stock Option,
whichever period is the shorter, in the case of a Non-Qualified Stock
Option and (ii) three months from the date of such termination of
employment or the expiration of the stated term of such Stock Option,
whichever period is the shorter, in the event of an Incentive Stock
Option; provided however, that, if the optionee dies within the period
specified in (i) above (or other such period as the Committee shall
specify at or after grant), any unexercised Non-Qualified Stock Option
held by such optionee shall thereafter be exercisable to the extent to
which it was exercisable at the time of death for a period of twelve
months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter. In the
event of termination of employment by reason of Retirement, if an
Incentive Stock Option is exercised after the expiration of the
exercise period applicable to Incentive Stock Options, but before the
expiration of the period that would apply if such Stock Option were a
Non-Qualified Stock Option, the option will thereafter be treated as a
Non-Qualified Stock Option.
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(j) Other Termination. Subject to Section 5(k), unless
otherwise determined by the Committee (or pursuant to procedures
established by the Committee) at or (except in the case of an Incentive
Stock Option) after grant, if an optionee's employment by the
Corporation and any Subsidiary or (except in the case of an Incentive
Stock Option) Affiliate is involuntarily terminated for any reason
other than death, Disability or Normal or Early Retirement, the Stock
Option shall thereupon terminate, except that such Stock Option may be
exercised, to the extent otherwise then exercisable, for the lesser of
three months or the balance of such Stock Option's term if the
involuntary termination is without Cause. For purposes of this Plan,
"Cause" means (i) a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or (ii) a
participant's willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Corporation or
any Subsidiary or Affiliate. If an optionee voluntarily terminates
employment with the Corporation and any Subsidiary or (except in the
case of an Incentive Stock Option) Affiliate (except for Disability,
Normal or Early Retirement), the Stock Option shall thereupon
terminate; provided, however, that the Committee at grant or (except in
the case of an Incentive Stock Option) thereafter may extend the
exercise period in this situation for the lesser of three months or the
balance of such Stock Option's term.
(k) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to Incentive
Stock Options shall be interpreted, amended, or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as
to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock
Option under such Section 422. No Incentive Stock Option shall be
granted to any participant under the Plan if such grant would cause the
aggregate Fair Market Value (as of the date the Incentive Stock Option
is granted) of the Common Stock with respect to which all Incentive
Stock Options are exercisable for the first time by such participant
during any calendar year (under all such plans of the Company and any
Subsidiary) to exceed $100,000. To the extent permitted under Section
422 of the Code or the applicable regulations thereunder or any
applicable Internal Revenue Service pronouncement:
(i) if (x) a participant's employment is terminated
by reason of death, Disability, or Retirement and (y) the
portion of any Incentive Stock Option that is otherwise
exercisable during the post-termination period specified under
Section 5(g), (h) or (i), applied without regard to the
$100,000 limitation contained in Section 422(d) of the Code,
is greater than the portion of such Option that is immediately
exercisable as an "Incentive Stock Option" during such post-
termination period under Section 422, such excess shall be
treated as a NonQualified Stock Option; and
(ii) if the exercise of an Incentive Stock Option
is accelerated by reason of a Change in Control, any portion
of such Option that is not exercisable
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as an Incentive Stock Option by reason of the $100,000
limitation contained in Section 422(d) of the Code shall be
treated as a Non-Qualified Stock Option.
(l) Buyout Provisions. The Committee may at any time
offer to buy out for a payment in cash, Common Stock, or Restricted
Stock an Option previously granted, based on such terms and conditions
as the Committee shall establish and communicate to the optionee at the
time that such offer is made.
(m) Settlement Provisions. If the option agreement so
provides at grant or (except in the case of an Incentive Stock Option)
is amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the
shares to be issued with respect to the spread value of an exercised
Option take the form of Restricted Stock, which shall be valued on the
date of exercise on the basis of the Fair Market Value (as determined
by the Committee) of such Restricted Stock determined without regards
to the forfeiture restrictions involved.
(n) Performance and Other Conditions. The Committee may
condition the exercise of any Option upon the attainment of specified
performance goals or other factors as the Committee may determine, in
its sole discretion. Unless specifically provided in the option
agreement, any such conditional Option shall vest immediately prior to
its expiration if the conditions to exercise have not theretofore been
satisfied.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option granted
under the Plan. In the case of a Non-Qualified Stock Option, such
rights may be granted either at or after the time of the grant of such
Stock Option. In the case of an Incentive Stock Option, such rights may
be granted only at the time of the grant of such Stock Option. A Stock
Appreciation Right or applicable portion thereof granted with respect
to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, subject
to such provisions as the Committee may specify at grant where a Stock
Appreciation Right is granted with respect to less than the full number
of shares covered by a related Stock Option. A Stock Appreciation Right
may be exercised by an optionee, subject to Section 6(b), in accordance
with the procedures established by the Committee for such purpose. Upon
such exercise, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options
relating to exercised Stock Appreciation Rights shall no longer be
exercisable to the extent that the related Stock Appreciation Rights
have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall
be subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to time by the
Committee, including the following:
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(i) Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Stock
Options to which they relate shall be exercisable in
accordance with the provisions of Section 5 and this Section 6
of the Plan.
(ii) Upon the exercise of a Stock Appreciation Right,
an optionee shall be entitled to receive an amount in cash
and/or shares of Common Stock equal in value to the excess of
the Fair Market Value of one share of Common Stock over the
option price per share specified in the related Stock Option
multiplied by the number of shares in respect of which the
Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.
When payment is to be made in shares, the number of shares to
be paid shall be calculated on the basis of the Fair Market
Value of the shares on the date of exercise. When payment is
to be made in cash, such amount shall be calculated on the
basis of the Fair Market Value of the Common Stock on the date
of exercise.
(iii) Stock Appreciation Rights shall be transferable
only when and to the extent that the underlying Stock Option
would be transferable under Section 5(e) of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right,
the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in
Section 3 of the Plan on the number of shares of Common Stock
to be issued under the Plan.
(v) The Committee, in its sole discretion, may also
provide that, in the event of a Change in Control and/or a
Potential Change in Control, the amount to be paid upon the
exercise of a Stock Appreciation Right shall be based on the
Change in Control Price, subject to such terms and conditions
as the Committee may specify at grant.
(vi) The Committee may condition the exercise of any
Stock Appreciation Right upon the attainment of specified
performance goals or other factors as the Committee may
determine, in its sole discretion.
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be
issued either alone, in addition to, or in tandem with other awards
granted under the Plan and/or cash awards made outside the Plan. The
Committee shall determine the eligible persons to whom, and the time or
times at which, grants of Restricted Stock will be made, the number of
shares
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of Restricted Stock to be awarded to any person, the price (if any) to
be paid by the recipient of Restricted Stock (subject to Section 7(b)),
the time or times within which such awards may be subject to
forfeiture, and the other terms, restrictions and conditions of the
awards in addition to those set forth in Section 7(c). The Committee
may condition the grant of Restricted Stock upon the attainment of
specified performance goals or such other factors as the Committee may
determine, in its sole discretion. The provisions of Restricted Stock
awards need not be the same with respect to each recipient.
(b) Awards and Certificates. The prospective recipient of
a Restricted Stock award shall not have any rights with respect to such
award, unless and until such recipient has executed an agreement
evidencing the award and has delivered a fully executed copy thereof to
the Corporation, and has otherwise complied with the applicable terms
and conditions of such award.
(i) The purchase price for shares of Restricted Stock
shall be established by the Committee and may be zero.
(ii) Awards of Restricted Stock must be accepted
within a period of 60 days (or such shorter period as the
Committee may specify at grant) after the award date, by
executing a Restricted Stock Award Agreement and paying
whatever price (if any) is required under Section 7(b)(i).
(iii) Each participant receiving a Restricted Stock
award shall be issued a stock certificate in respect of such
shares of Restricted Stock. Such certificate shall be
registered in the name of such participant, and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
(iv) The Committee shall require that the stock
certificates evidencing such shares be held in custody by the
Corporation until the restrictions thereon shall have lapsed,
and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in
blank, relating to the shares of Common Stock covered by such
award.
(c) Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section 7 shall be subject to the
following restrictions and conditions:
(i) In accordance with the provisions of this Plan
and the award agreement, during a period set by the Committee
commencing with the date of such award (the "Restriction
Period"), the participant shall not be permitted to sell,
transfer, pledge, assign, or otherwise encumber shares of
Restricted Stock awarded under the Plan, except to the extent
permitted under Section 13(h) below. Within these limits, the
Committee, in its sole discretion, may provide for the
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<PAGE> 38
lapse of such restrictions in installments and may accelerate
or waive such restrictions, in whole or in part, based on
service, performance, such other factors or criteria as the
Committee may determine in its sole discretion.
(ii) Except as provided in this paragraph (ii) and
Section 7(c)(i), the participant shall have, with respect to
the shares of Restricted Stock, all of the rights of a
shareholder of the Corporation, including the right to vote
the shares, and the right to receive any cash dividends. The
Committee, in its sole discretion, as determined at the time
of award, may permit or require the payment of cash dividends
to be deferred and, if the Committee so determines,
reinvested, subject to Section 14(e), in additional Restricted
Stock to the extent shares are available under Section 3, or
otherwise reinvested. Pursuant to Section 3 above, stock
dividends issued with respect to Restricted Stock shall be
treated as additional shares of Restricted Stock that are
subject to the same restrictions and other terms and
conditions that apply to the shares with respect to which such
dividends are issued. If the Committee so determines, the
award agreement may also impose restrictions on the right to
vote and the right to receive dividends.
(iii) Subject to the applicable provisions of the
award agreement and this Section 7, upon termination of a
participant's employment with the Corporation and any
Subsidiary or Affiliate for any reason during the Restriction
Period, all shares still subject to restriction will vest, or
be forfeited, in accordance with the terms and conditions
established by the Committee at or after grant.
(iv) If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to
such Restriction Period, certificates for an appropriate
number of unrestricted shares shall be delivered to the
participant promptly.
(d) Minimum Value Provisions. In order to better ensure
that award payments actually reflect the performance of the Corporation
and service of the participant, the Committee may provide, in its sole
discretion, for a tandem performance-based or other award designed to
guarantee a minimum value, payable in cash or Common Stock to the
recipient of a restricted stock award, subject to such performance,
future service, deferral, and other terms and conditions as may be
specified by the Committee.
SECTION 8. OTHER STOCK-BASED AWARDS.
(a) Administration. Other Stock-Based Awards, including,
without limitation, performance shares, convertible preferred stock,
convertible debentures, exchangeable securities and Common Stock awards
or options valued by reference to earnings per share or Subsidiary
performance, may be granted either alone, in addition to, or in tandem
with
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Stock Options, Stock Appreciation Rights, or Restricted Stock granted
under the Plan and cash awards made outside of the Plan; provided that
no such Other Stock-Based Awards may be granted in tandem with
Incentive Stock Options if that would cause such Stock Options not to
qualify as Incentive Stock Options pursuant to Section 422 of the Code.
Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at
which such awards shall be made, the number of shares of Common Stock
to be awarded pursuant to such awards, and all other conditions of the
awards. The Committee may also provide for the grant of Common Stock
upon the completion of a specified performance period. The provisions
of Other Stock-Based Awards need not be the same with respect to each
recipient.
(b) Terms and Conditions. Other Stock-Based Awards made
pursuant to this Section 8 shall be subject to the following terms and
conditions:
(i) Shares subject to awards under this Section 8 and
the award agreement referred to in Section 8(b)(v) below, may
not be sold, assigned, transferred, pledged, or otherwise
encumbered prior to the date on which the shares are issued,
or, if later, the date on which any applicable restriction,
performance, or deferral period lapses.
(ii) Subject to the provisions of this Plan and the
award agreement and unless otherwise determined by the
Committee at grant, the recipient of an award under this
Section 8 shall be entitled to receive, currently or on a
deferred basis, interest or dividends or interest or dividend
equivalents with respect to the number of shares covered by
the award, as determined at the time of the award by the
Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have
been reinvested in additional shares of Common Stock or
otherwise reinvested.
(iii) Any award under Section 8 and any shares of
Common Stock covered by any such award shall vest or be
forfeited to the extent so provided in the award agreement, as
determined by the Committee in its sole discretion.
(iv) In the event of the participant's Retirement,
Disability, or death, or in cases of special circumstances,
the Committee may, in its sole discretion, waive in whole or
in part any or all of the remaining limitations imposed
hereunder (if any) with respect to any or all of an award
under this Section 8.
(v) Each award under this Section 8 shall be
confirmed by, and subject to the terms of, an agreement or
other instrument by the Corporation and the participant.
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(vi) Common Stock (including securities convertible
into Common Stock) issued on a bonus basis under this Section
8 may be issued for no cash consideration. Common Stock
(including securities convertible into Common Stock) purchased
pursuant to a purchase right awarded under this Section 8
shall be priced at least 85% of the Fair Market Value of the
Common Stock on the date of grant.
SECTION 9. AWARDS TO OUTSIDE DIRECTORS.
(a) The provisions of this Section 9 shall apply only to
awards to Outside Directors in accordance with this Section 9. The
Committee shall have no authority to determine the timing of or the
terms or conditions of any award under this Section 9.
(b) Effective as of the Distribution, each person serving
as an Outside Director on such date will receive a grant of a number of
shares of Common Stock (rounded up to the next whole share) having an
aggregate Fair Market Value on such date equal to $10,000, which shares
shall be restricted as provided in this Section 9.
(c) On the date of the Annual Meeting of Shareholders of
the Corporation occurring after the Distribution, unless this Plan has
been previously terminated, each Outside Director will receive an
automatic grant of a number of shares of Common Stock (rounded up to
the next whole share) having an aggregate Fair Market Value on such
date equal to $10,000 (subject to increase based upon any increase in
the Consumer Price Index for Urban Wage Earning and Clerical Workers,
U.S. All City Average Report, of the U.S. Bureau of Labor Statistics
or, if such index is no longer available, a similar index), which
shares shall be restricted as provided in this Section 9.
(d) Each grant of Outside Director Restricted Stock shall
vest in increments of one-third of the shares of Common Stock subject
to such grant with the first one-third increment vesting on the date of
grant, the second one-third increment on the first anniversary of the
date of grant and the final one-third increment on the second
anniversary of the date of grant, if the grantee is still a member of
the Board on such dates. Upon the vesting of the shares, the
Corporation will deliver the stock certificate(s) evidencing the vested
shares to the Outside Director, all restrictions on the shares imposed
by this Plan (other than pursuant to Section 13(a) below) will be
lifted and such shares will no longer be deemed to be "Outside
Directors Restricted Stock" hereunder.
(e) 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 Corporation (the "Outside Director Period of
Restriction"), 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.
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Each certificate representing Outside Director Restricted Stock granted
pursuant to this Section 9 shall bear the following legend:
"The sale or other transfer of the shares represented by this
certificate, whether voluntary, involuntary, or by operation
of law, is subject to certain restrictions on transfer set
forth in the AmSurg Corp. 1997 Stock Incentive Plan (the
"Plan"). A copy of the Plan and the rules of such Plan may be
obtained from the Secretary of AmSurg Corp."
Once the Outside Director Period of Restriction has lapsed, the grantee
shall be entitled to have the legend required by this Section 9 removed
from such stock certificate(s); provided however, that such certificate
shall be subject to any legend required by applicable state or federal
law.
(f) Upon termination of an Outside Director's service as
a member of the Board for any reason other than death, disability or
retirement, all shares of Outside Restricted Stock not theretofore
vested will be forfeited. Upon termination of an Outside Director's
service as a member of the Board due to death, disability or
retirement, all shares of Outside Director Restricted Stock will
immediately vest.
(g) Grantees of Outside Director Restricted Stock shall
enter into a restricted stock agreement with the Corporation setting
forth the terms provided herein. Each participant receiving an award of
Outside Director Restricted Stock shall be issued one or more stock
certificates evidencing the shares of Outside Director Restricted
Stock. Such certificates shall be registered in the name of the Outside
Director, and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to the award. The stock
certificates shall be held in the custody of the Corporation until the
award or portion thereof represented by such certificate is vested. The
Corporation may require the Outside Director to deliver a stock power,
endorsed in blank, relating to the shares of Common Stock covered by
the award.
(h) Outside Directors will have the right to vote the
shares and to receive cash dividends with respect to the shares of
Outside Director Restricted Stock. Stock dividends issued with respect
to Outside Director Restricted Stock will be treated as additional
shares of Outside Director Restricted Stock subject to the same
restrictions and vesting schedule as the shares of Outside Director
Restricted Stock with respect to which they were received.
(i) Shares of Outside Director Restricted Stock shall be
subject to Section 10. The number of shares underlying each grant of
Outside Director Restricted Stock shall be adjusted automatically in
the same manner as the number of shares under Section 3 hereof at any
time that awards of Restricted Stock are adjusted as provided in
Section 3.
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SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section
10(b); or
(2) a "Potential Change in Control" as defined in
Section 10(c), but only if and to the extent so determined by
the Committee or the Board at or after grant (subject to any
right of approval expressly reserved by the Committee or the
Board at the time of such determination),
(i) Subject to the limitations set forth below in
this Section 10(a), the following acceleration provisions
shall apply:
(a) Any Stock Appreciation Rights or any Stock
Option awarded under the Plan not previously
exercisable and vested shall become fully exercisable
and vested.
(b) The restrictions applicable to any Restricted
Stock, Outside Director Restricted Stock and Other
Stock-Based Awards, in each case to the extent not
already vested under the Plan, shall lapse and such
shares and awards shall be deemed fully vested.
(ii) Subject to the limitations set forth below in
this Section 10(a), the value of all outstanding Stock
Options, Stock Appreciation Rights, Restricted Stock, Outside
Director Restricted Stock and Other Stock-Based Awards, in
each case to the extent vested, shall, unless otherwise
determined Board or by the Committee in its sole discretion
prior to any Change in Control, be cashed out on the basis of
the "Change in Control Price" as defined in Section 10(d) as
of the date such Change in Control or such Potential Change in
Control is determined to have occurred or such other date as
the Board or Committee may determine prior to the Change in
Control.
(iii) The Board or the Committee may impose
additional conditions on the acceleration or valuation of any
award in the award agreement.
(b) Definition of Change in Control. For purposes of
Section 10(a), a "Change in Control" means the happening of any of the
following:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Exchange Act, other than
the Corporation or a wholly-owned subsidiary thereof or any
employee benefit plan of the Corporation or any
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of its Subsidiaries, becomes the beneficial owner of the
Corporation's securities having 35% or more of the combined
voting power of the then outstanding securities of the
Corporation that may be cast for the election of directors of
the Corporation (other than as a result of an issuance of
securities initiated by the Corporation in the ordinary course
of business); or
(ii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sales of assets or contested election, or any
combination of the foregoing transactions, less than a
majority of the combined voting power of the then outstanding
securities of the Corporation or any successor corporation or
entity entitled to vote generally in the election of the
directors of the Corporation or such other corporation or
entity after such transaction are held in the aggregate by the
holders of the Corporation's securities entitled to vote
generally in the election of directors of the Corporation
immediately prior to such transaction; or
(iii) during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Board cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Corporation's shareholders, of each director
of the Corporation first elected during such period was
approved by a vote of at least two-thirds of the directors of
the Corporation then still in office who were directors of the
Corporation at the beginning of any such period.
(c) Definition of Potential Change in Control. For
purposes of Section 10(a), a "Potential Change in Control" means the
happening of any one of the following:
(i) The approval by shareholders of an agreement by
the Corporation, the consummation of which would result in a
Change in Control of the Corporation as defined in Section
10(b); or
(ii) The acquisition of beneficial ownership,
directly or indirectly, by any entity, person or group (other
than the Corporation or a Subsidiary or any Corporation
employee benefit plan (including any trustee of such plan
acting as such trustee)) of securities of the Corporation
representing 5% or more of the combined voting power of the
Corporation's outstanding securities and the adoption by the
Committee of a resolution to the effect that a Potential
Change in Control of the Corporation has occurred for purposes
of this Plan.
(d) Change in Control Price. For purposes of this Section
10, "Change in Control Price" means the highest price per share paid in
any transaction reported on The Nasdaq Stock Market National Market or
such other exchange or market as is the principal trading market for
the Common Stock, or paid or offered in any bona fide
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transaction related to a Potential or actual Change in Control of the
Corporation at any time during the 60 day period immediately preceding
the occurrence of the Change in Control (or, where applicable, the
occurrence of the Potential Change in Control event), in each case as
determined by the Committee except that, in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock
Options, such price shall be based only on transactions reported for
the date on which the optionee exercises such Stock Appreciation Rights
or, where applicable, the date on which a cash out occurs under Section
10(a)(ii).
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may at any time amend, alter or discontinue the Plan;
provided, however, that, without the approval of the Corporation's shareholders,
no amendment or alteration may be made which would (a) except as a result of the
provisions of Section 3(c) of the Plan, increase the maximum number of shares
that may be issued under the Plan or increase the Section 162(m) Maximum, (b)
change the provisions governing Incentive Stock Options except as required or
permitted under the provisions governing incentive stock options under the Code,
or (c) make any change for which applicable law or regulatory authority
(including the regulatory authority of The Nasdaq Stock Market National Market
or any other market or exchange on which the Common Stock is traded) would
require shareholder approval or for which shareholder approval would be required
to secure full deductibility of compensation received under the Plan under
Section 162(m) of the Code. No amendment, alteration, or discontinuation shall
be made which would impair the rights of an optionee or participant under a
Stock Option, Stock Appreciation Right, Restricted Stock, Other Stock-Based
Award or Outside Director Restricted Stock theretofore granted, without the
participant's consent.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices. Solely
for purposes of computing the Section 162(m) Maximum, if any Stock Options or
other awards previously granted to a participant are canceled and new Stock
Options or other awards having a lower exercise price or other more favorable
terms for the participant are substituted in their place, both the initial Stock
Options or other awards and the replacement Stock Options or other awards will
be deemed to be outstanding (although the canceled Stock Options or other awards
will not be exercisable or deemed outstanding for any other purposes).
SECTION 12. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the
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Corporation, nothing contained herein shall give any such participant or
optionee any rights that are greater than those of a general creditor of the
Corporation. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or payments in lieu of or with respect to awards hereunder;
provided, however, that, unless the Committee otherwise determines with the
consent of the affected participant, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 13. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing
shares pursuant to a Stock Option or other award under the Plan to
represent to and agree with the Corporation in writing that the
optionee or participant is acquiring the shares without a view to
distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for shares of Common Stock
or other securities delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions.
(b) Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(c) The adoption of the Plan shall not confer upon any
employee of the Corporation or any Subsidiary or Affiliate any right to
continued employment with the Corporation or a Subsidiary or Affiliate,
as the case may be, nor shall it interfere in any way with the right of
the Corporation or a Subsidiary or Affiliate to terminate the
employment of any of its employees at any time.
(d) No later than the date as of which an amount first
becomes includible in the gross income of the participant for Federal
income tax purposes with respect to any award under the Plan, the
participant shall pay to the Corporation, or make arrangements
satisfactory to the Committee regarding the payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with
respect to such amount. The Committee may require withholding
obligations to be settled with Common Stock, including Common Stock
that is part of the award that gives rise to the withholding
requirement. The obligations of the Corporation under the Plan shall be
conditional on such payment
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<PAGE> 46
or arrangements and the Corporation and its Subsidiaries or Affiliates
shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the
participant.
(e) The actual or deemed reinvestment of dividends or
dividend equivalents in additional Restricted Stock (or other types of
Plan awards) at the time of any dividend payment shall only be
permissible if sufficient shares of Common Stock are available under
Section 3 for such reinvestment (taking into account then outstanding
Stock Options and other Plan awards).
(f) The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the
laws of the State of Tennessee.
(g) The members of the Committee and the Board shall not
be liable to any employee or other person with respect to any
determination made hereunder in a manner that is not inconsistent with
their legal obligations as members of the Board. In addition to such
other rights of indemnification as they may have as directors or as
members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be
a party by reason of any action taken or failure to act under or in
connection with the Plan or any option granted thereunder, and against
all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that such
Committee member is liable for negligence or misconduct in the
performance of his duties; provided that within 60 days after
institution of any such action, suit or proceeding, the Committee
member shall in writing offer the Corporation the opportunity, at its
own expense, to handle and defend the same.
(h) In addition to any other restrictions on transfer
that may be applicable under the terms of this Plan or the applicable
award agreement, no Stock Option, Stock Appreciation Right, Restricted
Stock award, Other Stock-Based Award or Outside Director Restricted
Stock award or other right issued under this Plan is transferable by
the participant without the prior written consent of the Committee, or,
in the case of an Outside Director, the Board, other than (i) transfers
by a participant to a member of his or her Immediate Family or a trust
for the benefit of the participant or a member of his or her Immediate
Family or (ii) transfers by will or by the laws of descent and
distribution. The designation of a beneficiary will not constitute a
transfer.
(i) The Committee may, at or after grant, condition the
receipt of any payment in respect of any award or the transfer of any
shares subject to an award on the satisfaction of a six-month holding
period, if such holding period is required for compliance with Section
16 under the Exchange Act.
22
<PAGE> 47
SECTION 14. Effective Date of Plan.
The Plan shall be effective upon adoption by the Board (the "Effective
Date"), subject to approval by the holders of a majority of the votes of the
Corporation's capital stock.
SECTION 15. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock award,
Other Stock-Based Award or award of Outside Director Restricted Stock award
shall be granted pursuant to the Plan on or after the tenth anniversary of the
Effective Date of the Plan, but awards granted prior to such tenth anniversary
may be extended beyond that date.
23
<PAGE> 48
AMSURG. CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, MAY 19, 2000
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
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 19, 2000, at the SunTrust Bank Building,
4th Floor Boardroom, 201 Fourth Avenue, Nashville, Tennessee at 9:00 a.m., local
time, and any adjournments thereof.
(1) ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR all of the following nominees [ ] WITHHOLD AUTHORITY (ABSTAIN)
(except as indicated to the contrary below): to vote for all nominees
</TABLE>
Class III: Thomas G. Cigarran, Debora A. Guthrie and Bergein F.
Overholt, M.D.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- -------------------------------------------------------------------------------
(2) APPROVAL OF AN AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY (ABSTAIN)
</TABLE>
(3) 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: , 2000
----------------------------------------
PLEASE SIGN HERE AND RETURN
PROMPTLY
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----------------------------------------------------
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.
