<PAGE> 1
INFOMED HOLDINGS, INC.
1180 S.W. 36TH AVENUE
POMPANO BEACH, FLORIDA 33069
---------------------
INFORMATION STATEMENT PURSUANT
TO SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
---------------------
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS
IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
NO PROXIES ARE BEING SOLICITED AND YOU ARE
REQUESTED NOT TO SEND THE COMPANY A PROXY.
---------------------
This Information Statement is being mailed on or about September 25, 1996,
to holders of the shares of the $.001 par value common stock (the "Company
Common Stock") and the $10.00 stated value Class A Convertible Preferred Stock
(the "Company Convertible Preferred Stock") of InfoMed Holdings, Inc., a
Delaware corporation (the "Company"), pursuant to Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder. This Information Statement is being furnished in
connection with the merger (the "Merger") of the Company's newly formed,
wholly-owned subsidiary, Infosub, Inc. ("Infosub"), with and into Simione
Central Holding, Inc., a Georgia corporation ("SCHI"), pursuant to the terms of
the Amended and Restated Agreement and Plan of Merger, dated as of September 5,
1996 (the "Merger Agreement"), by and among the Company, SCHI and Infosub.
Pursuant to the Merger Agreement, each of the outstanding shares of the no par
value Class A common stock and Class B common stock of SCHI (collectively, the
"SCHI Common Stock") (other than shares held by SCHI or the Company or any of
their respective subsidiaries and other than shares as to which dissenters'
appraisal rights are perfected) shall be converted into and exchanged for shares
of Company Common Stock.
In the Merger Agreement, the Company has agreed that, prior to the
Effective Time, the Board of Directors of the Company shall have taken all
corporate action necessary to cause the Board of Directors of the Company to
consist of the following persons effective as of the effective time of the
Merger (the "Effective Time"): Gary M. Bremer, William J. Simione, Jr., James R.
Henderson, Barrett C. O'Donnell, and Murali Anantharaman. Only Messrs. O'Donnell
and Anantharaman presently serve as directors of the Company.
NO ACTION IS REQUIRED BY THE SHAREHOLDERS OF THE COMPANY IN CONNECTION WITH
THE DESIGNATION AND ELECTION OF THE DIRECTORS TO THE BOARD. However, Section
14(f) of the Exchange Act requires the mailing to the Company's shareholders of
the information set forth in this Information Statement prior to the change in a
majority of the Company's directors, pursuant to any arrangement or
understanding with the person or persons acquiring securities in a transaction
subject to either Section 14(d) or Section 13(d) of the Exchange Act.
<PAGE> 2
MERGER AGREEMENT
EXCHANGE RATIO IN THE MERGER
The Merger Agreement provides that, at the Effective Time, each issued and
outstanding share of SCHI Common Stock (excluding shares held by SCHI or any of
its subsidiaries or by the Company or any of its subsidiaries, and excluding
shares of SCHI Common Stock as to which dissenters' appraisal rights are
perfected) shall cease to be outstanding and shall be converted into and
exchanged for the right to receive .22021 of a share of Company Common Stock
(the "Exchange Ratio"). Based on the 35,959,075 shares of SCHI Class A Common
Stock and the one share of SCHI Class B Common Stock outstanding on September
24, 1996, the Company would issue a total of approximately 7,918,547 shares of
Company Common Stock to the former holders of SCHI Common Stock, who will
collectively own approximately 67.0% of the outstanding shares of Company Common
Stock after giving effect to the Merger and the conversion of the Company's
outstanding shares of Convertible Preferred Stock into shares of Company Common
Stock. The Central Health Holding Company Employee Stock Ownership Plan Trust
(the "CHHC Trust") will be the Company's largest stockholder, beneficially
owning approximately 36.0% of the outstanding shares of Company Common Stock. In
addition, Gary M. Bremer will beneficially own approximately 25.4% of the
outstanding shares of Company Common Stock and Howard B. Krone will beneficially
own approximately 7.5% of the outstanding shares of Company Common Stock. Each
of the CHHC Trust and Messrs. Bremer and Krone will be required to file with the
Securities and Exchange Commission (the "Commission") statements reporting their
respective beneficial ownership of Company Common Stock pursuant to Section
13(d) of the Exchange Act.
The Merger Agreement further provides that the shares of SCHI Common Stock
held by a SCHI Non-Accredited Shareholder (as defined in the Merger Agreement)
or a SCHI Accredited Shareholder (as defined in the Merger Agreement) who fails
to deliver a SCHI Non-Accredited Shareholder Supplement or a SCHI Accredited
Shareholder Supplement, respectively, shall receive, in exchange for such
holder's SCHI Common Stock, a cash payment equal to the product of (i) the
Exchange Ratio and (ii) the average of the bid and ask prices of Company Common
Stock on the principal market on which Company Common Stock is traded (as
reported by Nasdaq or, if not reported thereby, any other authoritative source
selected by agreement of SCHI and the Company) on the last trading day preceding
the Effective Time.
FRACTIONAL SHARES
Pursuant to the terms of the Merger Agreement, each holder of shares of
SCHI Common Stock exchanged pursuant to the Merger, who would otherwise have
been entitled to receive a fraction of a share of Company Common Stock shall
receive, in lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share of Company Common Stock multiplied by the average of
the bid and ask prices of the Company Common Stock on the principal market on
which Company Common Stock is traded (as reported by Nasdaq, or if not reported
thereby, any other authoritative source selected by SCHI) on the last trading
day preceding the Effective Time. No such holder will be entitled to dividends,
voting rights, or any other rights as a stockholder in respect of any fractional
shares.
CONVERSION OF STOCK OPTIONS AND WARRANTS
The Merger Agreement also provides that, at the Effective Time, all rights
with respect to SCHI Common Stock pursuant to SCHI Options granted under the
SCHI Stock Plans which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to Company
Common Stock, and the Company shall assume each SCHI Option, in accordance with
the terms of the SCHI Stock Plan and stock option agreement by which it is
evidenced. From and after the Effective Time: (i) the Company and the
appropriate committee of its Board of Directors shall be substituted as the
administrator of the SCHI Stock Plan, (ii) each SCHI Option assumed by the
Company may be exercised solely for shares of Company Common Stock (or cash, if
so provided under the terms of such SCHI Option), (iii) the number of shares of
Company Common Stock subject to such SCHI Option shall be equal to the
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<PAGE> 3
number of shares of SCHI Common Stock subject to such SCHI Option immediately
prior to the Effective Time multiplied by the Exchange Ratio and rounding to the
nearest whole share, and (iv) the per share exercise price under each such SCHI
Option shall be adjusted by dividing the per share exercise price under each
such SCHI Option by the Exchange Ratio and rounding up to the nearest cent. It
is intended that the foregoing assumption be undertaken in a manner that will
not prejudice the rights of any holder of a SCHI Option under the terms of the
SCHI Option, the SCHI Stock Plan or the corresponding stock option agreement or
constitute a "modification" as defined in Section 424 of the Code, as to any
stock option which is an "incentive stock option."
The Merger Agreement further provides that, at the Effective Time, all
rights with respect to SCHI Warrants granted under the SCHI Warrant Agreements
which are outstanding at the Effective Time, whether or not exercisable, shall
be converted into and become rights with respect to Company Common Stock, and
the Company shall assume each SCHI Warrant, in accordance with the terms of the
SCHI Warrant Agreements. From and after the Effective Time: (i) each SCHI
Warrant assumed by the Company may be exercised solely for shares of Company
Common Stock (or cash, if so provided under the terms of such SCHI Warrant);
(ii) the number of shares of Company Common Stock subject to such SCHI Warrant
shall be equal to the number of shares of SCHI Common Stock subject to such SCHI
Warrant immediately prior to the Effective Time, multiplied by the Exchange
Ratio; and (iii) the per share exercise price under each SCHI Warrant shall be
adjusted by dividing the per share exercise price under each SCHI Warrant by the
Exchange Ratio and rounding up to the nearest cent.
EFFECTIVE TIME OF THE MERGER
If the Merger Agreement is approved by the requisite vote of SCHI
stockholders, and all other required governmental and other consents and
approvals are received, and if the other conditions to the obligations of the
parties to consummate the Merger are satisfied or waived (as permitted), the
Merger will be consummated. Assuming satisfaction of all conditions to
consummation of the Merger, the Merger is expected to be made effective
immediately following the approval of the Merger Agreement by SCHI stockholders,
which is expected to occur on October 7, 1996.
MANAGEMENT OF THE COMPANY AFTER THE MERGER
In the Merger Agreement, the Company has agreed that, prior to the
Effective Time, the Board of Directors of the Company shall have taken all
corporate action necessary to cause the Board of Directors of the Company to
consist of the following persons effective as of the Effective Time: Gary M.
Bremer, William J. Simione, Jr., James R. Henderson, Barrett C. O'Donnell, and
Murali Anantharaman. Only Messrs. O'Donnell and Anantharaman presently serve as
directors of the Company. Mr. Bremer is presently the sole director of SCHI and
Messrs. Bremer, Simione and Henderson are all presently executive officers of
SCHI.
The Merger Agreement further states the officers of the Company after the
consummation of the Merger shall consist of the following persons, each of whom
is presently an executive officer of SCHI: Gary M. Bremer, Chief Executive
Officer and Chairman; James R. Henderson, President; William J. Simione, Jr.,
Executive Vice President; Gary W. Rasmussen, Chief Operating Officer; Lori
Nadler Siegel, Chief Financial Officer and Treasurer; and James A. Tramonte,
General Counsel and Secretary.
AGREEMENTS WITH CERTAIN HOLDERS OF COMPANY CONVERTIBLE PREFERRED STOCK
The Company is currently party to certain agreements (the "Prior
Agreements") with the holders of the Company Convertible Preferred Stock (as
defined herein) pursuant to which such holders are entitled to certain
preferential rights, including rights to acquire additional shares of capital
stock of the Company upon the occurrence of certain events, to approve or
disapprove certain transactions to which the Company might become a party,
including the Merger, and to require that the Company otherwise take or refrain
from taking specified actions. In addition, under the terms of the Company
Convertible Preferred Stock, such holders are entitled to elect two persons to
serve on the Company's five-person Board and to receive preferential dividends.
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<PAGE> 4
Pursuant to the Merger Agreement, the Company has agreed that it will obtain
from each person who is or was a purchaser of Company Convertible Preferred
Stock pursuant to such agreements an agreement, in form and substance reasonably
acceptable to SCHI, providing for, among such other things as SCHI shall
require, the conversion or exchange of the outstanding Company Convertible
Preferred Stock into Company Common Stock.
REGISTRATION RIGHTS AGREEMENT
It is a condition to the obligations of both the Company and SCHI to
consummate the Merger that the Company shall have executed and delivered a
registration rights agreement in substantially the form attached as an Exhibit
to the Merger Agreement (the "Registration Rights Agreement"). Under the terms
of the Registration Rights Agreement, each holder of SCHI Common Stock who
receives shares of Company Common Stock in the Merger and certain large holders
of Company Common Stock will be entitled to require that the Company undertake
to register resales of shares of Company Common Stock held by such holders under
the federal Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws. Subject to certain limitations, such holders
shall be entitled to up to three demand registrations and unlimited rights to
participate in other registrations undertaken by the Company. In addition, the
Company has agreed that, within 45 days after it becomes eligible for use of
certain registration statement forms that permit filings made by the Company
under the Exchange Act to be incorporated by reference, it will file and seek to
maintain in effect a "shelf" registration permitting resales of such shares from
time to time (subject to certain limitations for holders of more than 20,000
shares of Company Common Stock following the Merger). In connection with any
such registrations, the Company has agreed to pay all expenses of registration,
other than underwriters' and brokers' discounts and commissions. The Company
also has agreed, subject to certain limitations, to indemnify any selling
shareholder from and against any liabilities arising under the Securities Act in
connection with such registrations.
THE COMPANY'S REASONS FOR THE MERGER
In reaching its conclusion to approve the Merger, the Board of Directors of
the Company consulted with the management of the Company, as well as with the
Company's financial and legal advisors, and considered various factors,
including the following:
(a) The financial terms of the Merger. Based upon the financial
information developed by the Company's Board of Directors and management,
and consultations with its financial advisor and subject to receipt of a
fairness opinion from a financial advisor prior to the consummation of the
Merger, the Board of Directors has concluded that the Merger will be fair
to and in the best interests of the Company and its shareholders.
(b) The strategic benefits of the Merger. The Board of Directors of
the Company believes that the Merger presents a number of strategic
benefits to the Company. Upon consummation of the Merger, the Company,
among other things, (i) will offer a broader array of products and services
than does the Company alone, including a shared-services software approach,
(ii) will have a more broad-based management team than the Company
currently possesses, (iii) will serve a larger customer base with a larger
revenue base than the Company could generate on its own in the near future,
which also provides greater cross-marketing opportunities, and (iv) will
have a larger and more experienced consulting and related services staff
than the Company now employs. Management also considered a number of
negative factors, including SCHI's short history and the current limited
number of customers that use its software. Management also took into
account that the Merger should increase the opportunity for the Company to
successfully raise funds in the public market.
(c) Certain financial and other information about the Company and
SCHI. Such information included, but was not limited to, information with
regard to relative valuation analyses, pro forma analyses, comparative
financial and operating performance data, contribution analysis, and
comparable merger and acquisition transactions. The Board of Directors of
the Company also considered the results of the due diligence reviews of
SCHI.
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The foregoing discussion of the information and factors considered by the
Board of Directors and management of the Company is not intended to be
exhaustive but is believed to include all material factors considered. In
reaching its determination to approve the Merger, the Board of Directors did not
assign any relative or specific weights to different factors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Current Management and Beneficial Owners. The following table provides
information regarding beneficial ownership of Company Common Stock and
Convertible Preferred Stock, both before and after consummation of the Merger,
with respect to (i) any person known to the Company to be the beneficial owner
of more than five percent of Company Common Stock or the Convertible Preferred
Stock, (ii) all directors of the Company, (iii) all Named Executive Officers (as
defined herein), and (iv) all directors and executive officers as a group.
Except as otherwise indicated, the stockholders listed below have sole voting
and investment power with respect to the shares of Company Common Stock and
Convertible Preferred Stock.
<TABLE>
<CAPTION>
PRIOR TO MERGER AFTER MERGER
------------------------- ----------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
NAME AND ADDRESS TITLE OF BENEFICIAL % OF BENEFICIAL % OF
OF BENEFICIAL OWNER CLASS OWNERSHIP(1) CLASS(2) OWNERSHIP(1) CLASS
- ------------------------------------- ---------- ------------ -------- ------------ -----
<S> <C> <C> <C> <C> <C>
O'Donnell Davis, Inc. Common 2,004,227(3) 59.5 2,084,944 16.8
P.O. Box 7395 Preferred 90,000 34.0 0 0
Princeton, NJ 08543
Barrett C. O'Donnell Common 2,004,227(4) 59.5 2,084,944 16.8
1180 SW 36th Ave Preferred 90,000(4) 34.0 0 0
Pompano Beach, FL 33069
Craig H. Davis Common 2,004,227(4) 59.5 2,084,944 16.8
P.O. Box 391 Preferred 90,000(4) 34.0 0 0
Princeton, NJ 08542
Frederick Neufeld Common 387,100(5) 14.3 387,100 3.2
8 Hiland Drive
Belle Mead, NJ 08502
Dr. Zola P. Horovitz Common 112,624(6) 4.7 112,624 *
30 Philip Drive
Princeton, NJ 08540
Dr. David O. Ellis Common 1,844,095(7) 46.2 2,000,076 15.9
235 Landfall Road Preferred 173,921(8) 65.6 0 0
Sandy Springs, GA 30328
Rowan Nominees Limited Common 1,560,777(9) 41.4 1,707,862 13.7
33 King William Street Preferred 164,000 61.9 0 0
London, EC4R 9AS
Jay Shevins Common 60,816(10) 2.6 60,816 *
21 Ridge Road
Tenafly, NJ 07670
Murali Anantharaman Common 1,723,264(11) 43.4 1,875,133 14.9
2830 Shurburne Drive Preferred 169,333(12) 63.9 0 0
Alpharetta, GA 30301
EGL Holdings, Inc. Common 805,260(13) 25.7 813,110 6.5
6600 Peachtree Dunwoody Road Preferred 1,750 * 0 0
Atlanta, Georgia 30328
</TABLE>
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<TABLE>
<CAPTION>
PRIOR TO MERGER AFTER MERGER
------------------------- ----------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
NAME AND ADDRESS TITLE OF BENEFICIAL % OF BENEFICIAL % OF
OF BENEFICIAL OWNER CLASS OWNERSHIP(1) CLASS(2) OWNERSHIP(1) CLASS
- ------------------------------------- -------- --------- ---- --------- ----
<S> <C> <C> <C> <C> <C>
Rodger Johnson Common 75,000(14) 3.1 75,000 *
8705 River Trace
Roswell, GA 30076
All directors and officers Common 4,100,367 80.3 4,337,365 32.7
as a group (6 persons) Preferred 264,254 99.7 0 0
</TABLE>
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* Less than 1% of outstanding shares of Common Stock.
(1) Reflects stock ownership as of September 1, 1996. Pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
beneficial ownership of a security consists of sole or shared voting power
(including the power to vote or direct the vote) and/or the sole or shared
investment power (including the power to dispose or direct the disposition)
with respect to a security. The number of shares of Common Stock includes
the number of shares of Common Stock which are subject to the exercise of
options or warrants within 60 days of the date of this Information
Statement and the number of shares of Common Stock issuable upon conversion
of such beneficial owner's shares of Convertible Preferred Stock (each of
which is immediately convertible into five shares of Common Stock),
excluding accrued dividends thereon. After the Merger, no shares of
Convertible Preferred Stock will be outstanding, as they will (along with
accrued dividends thereon) be converted into shares of Common Stock upon
consummation of the Merger.
(2) % of Class of Common Stock with respect to each beneficial owner of Common
Stock was calculated based on the ratio of the number of shares of Common
Stock beneficially owned by such beneficial owner as of the date of this
Information Statement to the sum of (a) the total number of outstanding
shares of Common Stock as of the date of this Information Statement, (b)
the number of shares of Common Stock issuable upon conversion of shares of
Convertible Preferred Stock (each of which is immediately convertible into
five shares of Common Stock) held by the applicable beneficial owner and
the number of shares of Common Stock issuable upon exercise of options or
warrants held by the applicable beneficial owner exercisable within 60 days
of the date of this Information Statement. % of Class of Convertible
Preferred Stock was calculated based on the ratio of the number of shares
of Convertible Preferred Stock beneficially owned by such beneficial owner
of the date of this Information Statement to the total number of
outstanding shares of Convertible Preferred Stock.
(3) Includes 270,000 shares issuable upon exercise of warrants, 321,200 shares
issuable upon exercise of options and 450,000 shares issuable upon
conversion of the Convertible Preferred Stock.
(4) Messrs. O'Donnell and Davis are stockholders, directors and officers of
O'Donnell Davis, Inc. ("ODD"). Accordingly, pursuant to Rule 13d-3 under
the Exchange Act, each of them may be deemed to be indirect beneficial
owners of the Company's securities beneficially owned by ODD.
(5) Includes 387,000 shares issuable upon exercise of options.
(6) Includes 35,100 shares of Common Stock owned individually by Dr. Horovitz,
an additional 16,320 shares owned by members of Dr. Horovitz's family and
61,204 shares issuable upon exercise of options.
(7) Includes 54,356 shares of Common Stock as to which Dr. Ellis has sole
voting power, an additional 2,200 shares owned by members of Dr. Ellis'
family, 122,994 shares related to EGL Holdings, Inc. ("EGL") (a corporation
of which Dr. Ellis is Chairman of the Board and Chief Executive Officer and
has voting rights of the Company's shares), 750,000 shares issuable upon
exercise of warrants related to EGL, 44,940 shares issuable upon exercise
of options related to EGL and 869,605 shares issuable upon conversion of
the Convertible Preferred Stock owned by Dr. Ellis, certain of his family
members and EGL.
(8) Includes 2,041 shares of Convertible Preferred Stock as to which Dr. Ellis
has sole voting power, an additional 2,880 shares owned by members of Dr.
Ellis' family and 169,000 shares related to EGL.
(9) Includes 619,667 shares issuable upon exercise of warrants and 820,000
shares issuable upon conversion of the Convertible Preferred Stock. Shares
are held by Rowan Nominees Limited as nominee for EGL.
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(10) Includes 7,776 shares issuable upon exercise of options.
(11) Includes 3,605 shares of Common Stock as to which Mr. Anantharaman has sole
voting power, 122,994 shares of Common Stock related to EGL, 750,000 shares
issuable upon exercise of warrants related to EGL, 44,940 shares issuable
upon exercise of options related to EGL and 846,665 shares issuable upon
conversion of the Convertible Preferred Stock owned by Mr. Anantharaman and
here EGL.
(12) Includes 333 shares of Preferred Stock as to which Mr. Anantharaman has
sole voting power and 169,000 shares related to EGL.
(13) Includes 750,000 shares issuable upon exercise of warrants, 44,940 shares
issuable upon exercise of options and 8,750 shares issuable upon conversion
of the Convertible Preferred Stock. Does not include shares held by Rowan
Nominees Limited as nominee for EGL.
(14) Includes 75,000 shares of Common Stock issuable upon exercise of options.
On March 31, 1994, ODD, EGL and Frederick Neufeld entered into an agreement
and on February 24, 1995, ODD and EGL entered into an agreement to vote all of
their respective shares of Common Stock and Convertible Preferred Stock to elect
one nominee of each of ODD and EGL to the Board of Directors. Such agreements
will exist for as long as ODD and EGL, as the case may be, retains its
Convertible Preferred Stock. The voting rights under such agreements have not
been considered in calculating the number of percentages in the above table.
New Management and Beneficial Owners Upon Consummation of Merger. The
following table provides information regarding beneficial ownership of Company
Common Stock after consummation of the Merger, with respect to (i) any person
known to the Company who, based on their ownership of SCHI Common Stock, will
upon consummation of the Merger will be the beneficial owner of more than five
percent of the Company Common Stock, and (ii) those persons who are designated,
pursuant to the Merger Agreement, to become directors of the Company and who are
not currently directors of the Company. None of the persons listed below
beneficially own any of the securities of the Company as of the date of this
Information Statement. Except as otherwise indicated, the stockholders listed
below will have sole voting and investment power with respect to the shares of
Company Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE
OF
NAME AND ADDRESS BENEFICIAL % OF
OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
- ------------------------------------------------------------------------ ------------ --------
<S> <C> <C>
Central Health Holding Company Employee Stock Ownership Plan Trust...... 4,248,017 36.0
c/o Trust Company of Knoxville, Inc.
620 Market Street, Suite 300
Knoxville, Tennessee 37902
Gary M. Bremer.......................................................... 3,085,228(2) 25.4
6650 Powers Ferry Road
Atlanta, Georgia 30339
Howard B. Krone, M.D.................................................... 881,244(3) 7.5
3633 Tuxedo Road
Atlanta, Georgia 30305
James R. Henderson...................................................... 31,548(4) *
6650 Powers Ferry Road
Atlanta, Georgia 30339
William J. Simione, Jr.................................................. 234,816(5) 2.0
6650 Powers Ferry Road
Atlanta, Georgia 30339
All proposed new directors and officers as a group (6 persons).......... 3,424,682(6) 28.0
</TABLE>
- ---------------
* Less than 1% of outstanding shares of Common Stock.
(1) Reflects stock ownership as of September 24, 1996. Pursuant to Rule 13d-3
under the Exchange Act, beneficial ownership of a security consists of sole
or shared voting power (including the power to vote or
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<PAGE> 8
to direct the vote) and/or the sole or shared investment power (including
the power to dispose or direct the disposition) with respect to a security.
The number of shares of Company Common Stock includes the number of shares
of Company Common Stock which are subject to the exercise of options within
60 days of the date of this Information Statement.
(2) Includes 330,315 shares issuable upon exercise of options and an aggregate
of 1,329,423 shares as to which Mr. Bremer has sole voting power (including
630,974 shares owned by Mr. Krone, 31,548 shares owned by Mr. Henderson,
and 157,743 shares owned by Mr. Simione) pursuant to voting agreements with
the holders of such shares.
(3) Includes 630,974 shares subject to a voting agreement pursuant to which Mr.
Bremer has the sole power to vote such shares.
(4) Represents shares subject to a voting agreement pursuant to which Mr. Bremer
has the sole right to vote such shares.
(5) Includes 77,073 shares issuable upon exercise of options and 157,743 shares
subject to a voting agreement pursuant to which Mr. Bremer has the sole
power to vote such shares.
(6) Includes 419,499 shares issuable upon exercise of options.
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The following sets forth certain information regarding (a) current
directors of the Company and (b) persons designated to serve as directors of the
Company (to the extent not a current director of the Company) as of the
Effective Time.
Current Directors
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- -------------------------------------------------------- --- ----------------------------------
<S> <C> <C>
Barrett C. O'Donnell.................................... 43 Chairman, Chief Executive Officer
and President
Zola P. Horovitz........................................ 60 Secretary and Director
David O. Ellis.......................................... 53 Director
Murali Anantharaman..................................... 39 Director
Rodger Johnson.......................................... 48 Director
</TABLE>
BARRETT C. O'DONNELL has been Chairman of the Board, President and Chief
Executive Officer of O'Donnell Davis, Inc. ("ODD"), an investment advisory
services company, since he co-founded it in 1978. He has served as Chairman of
the Board of the Company since 1992 and Chief Executive Officer since 1994.
DR. ZOLA P. HOROVITZ is former Vice President Business Development and
Planning, Pharmaceutical Group of Bristol-Myers Squibb, a pharmaceutical
company, a position he held from 1991 to 1994. From 1989 to 1991 he was Vice
President, Licensing of the same company. Dr. Horovitz currently provides
consulting services to several pharmaceutical and biotechnology companies and is
also a director of several biotechnology companies.
DR. DAVID O. ELLIS is President and Chief Executive Officer and a director
of EGL Holdings, Inc. ("EGL"), an Atlanta-based merchant banking group providing
investment services to United States middle market companies. He has been with
EGL and the predecessor company, Corporate Finance Associates, since 1982. Dr.
Ellis is currently a director of several privately-held companies.
MURALI ANANTHARAMAN has been a partner at EGL since 1987. Mr. Anantharaman
is currently a director of several privately-held companies.
RODGER JOHNSON has been President and Chief Executive Officer of
Communication Control, Inc., a telecommunication company, since 1995. During
1994 and 1995 he was President and Chief Executive
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<PAGE> 9
Officer of JKC Holdings, Inc. From 1987 to 1992 he was President, Chief
Operating Officer and later Chief Executive Officer of Brock Control Systems,
Inc., an information systems company.
Persons Designated to Serve as Directors
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- ------------------------------------------- --- -------------------------------------------
<S> <C> <C>
Gary M. Bremer............................. 58 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Bremer will serve as Chairman of the Board
and Chief Executive Officer of the Company.
William J. Simione, Jr..................... 54 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Simione will serve as Vice Chairman of the
Board and Executive Vice President of the
Company.
James R. Henderson......................... 51 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Henderson will serve as President of the
Company.
</TABLE>
GARY M. BREMER has served as Chief Executive Officer and Chairman of SCHI
since September 3, 1996. Mr. Bremer has also served as Chief Executive Officer
and President of Central Health Holding Corporation ("CHHC"), a holding company
which owns and manages home health care agencies, since 1978.
WILLIAM J. SIMIONE, JR. has served as Executive Vice President of Simione
Central, Inc. ("SCI") since August 1996. He served as President of SCI from
January 1996 through July 1996. From January 1973 through December 1995, Mr.
Simione was Managing Partner of the healthcare management consulting practice of
Simione & Simione CPA's.
JAMES R. HENDERSON has served as President of SCHI since September 3, 1996.
From July 1992 to November 1995, he served as Executive Vice President for
National Data Corporation, an information services company. From February 1992
through June 1992, Mr. Henderson served as Executive Vice President, Worldwide
Sales, Marketing and Operations, of Quality Micro Systems, Inc., a computer
hardware company. From 1987 through January 1992, Mr. Henderson served as
Executive Vice President of Dunn and Bradstreet Software Services, Inc., a
client server software solutions company.
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the (a)
current executive officers of the Company and (b) those persons who have been
designated to become executive officers of the Company at the Effective Time.
Current Executive Officers
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- ------------------------------------------- --- -------------------------------------------
<S> <C> <C>
Barrett C. O'Donnell....................... 43 Chairman of the Board, President and Chief
Executive Officer
Jay Shevins................................ 44 Senior Vice President and National Sales
Manager
</TABLE>
BARRETT C. O'DONNELL has been Chairman of the Board, President and Chief
Executive Officer of O'Donnell Davis, Inc. ("ODD"), an investment advisory
services company since he co-founded it in 1978. He has served as Chairman of
the Board of the Company since 1992 and Chief Executive Officer of the Company
since 1994.
9
<PAGE> 10
JAY SHEVINS is Senior Vice President of the Company and has been National
Sales Manager since 1991. Mr. Shevins joined the Company in 1979 and has held a
variety of executive sales positions before becoming National Sales Manager.
Persons Designated to Serve as Executive Officers
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- ------------------------------------------- --- -------------------------------------------
<S> <C> <C>
Gary M. Bremer............................. 58 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Bremer will serve as Chairman of the Board
and Chief Executive Officer of the Company.
James R. Henderson......................... 51 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Henderson will serve as a director and
President of the Company.
William J. Simione, Jr..................... 54 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Simione will serve as Vice Chairman of the
Board and Executive Vice President of the
Company.
Gary W. Rasmussen.......................... 42 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Rasmussen will serve as Chief Operating
Officer of the Company.
James A. Tramonte.......................... 45 None, prior to consummation of the Merger.
After consummation of the Merger, Mr.
Tramonte will serve as General Counsel and
Secretary of the Company.
Lori Nadler Siegel......................... 33 None, prior to consummation of the Merger.
After consummation of the Merger, Ms.
Siegel will serve as Chief Financial
Officer and Treasurer of the Company.
</TABLE>
GARY M. BREMER has served as Chief Executive Officer and Chairman of SCHI
since September 3, 1996. Mr. Bremer has also served as Chief Executive Officer
and President of CHHC, a holding company which owns and manages home health care
agencies, since 1978.
JAMES R. HENDERSON has served as President of SCHI since September 3, 1996.
From July 1992 to November 1995, he served as Executive Vice President for
National Data Corporation, an information services company. From February 1992
through June 1992, Mr. Henderson served as Executive Vice President, Worldwide
Sales, Marketing and Operations, of Quality Micro Systems, Inc., a computer
hardware company. From 1987 through January 1992, Mr. Henderson served as
Executive Vice President of Dunn and Bradstreet Software Services, Inc., a
client server software solutions company.
WILLIAM J. SIMIONE, JR. has served as Executive Vice President of Simione
Central, Inc. ("SCI") since August 1996. He served as President of SCI from
January 1996 through July 1996. From January 1973 through December 1995, Mr.
Simione was Managing Partner of the healthcare management consulting practice of
Simione & Simione CPA's.
GARY W. RASMUSSEN has served as Chief Operating Officer of CHHC since June
1, 1996 and Chief Operating Officer of SCHI since September 3, 1996. He served
as Chief Financial Officer of CHHC from January 1996 through May 1996 and from
October 1994 through December 1995 he served as Chief Financial Officer of CHS.
Mr. Rasmussen served as Chief Financial Officer of Surgical Health Corporation,
an outpatient surgery center company, from May 1992 until September 1994. From
October 1987 through May 1992, he was an Audit Partner with Ernst & Young, LLP.
10
<PAGE> 11
JAMES A. TRAMONTE has served as General Counsel of SCHI since October 1995,
of CHHC since January 1996, and of SCHI since January 1996. He has also served
as Secretary of SCHI since September 3, 1996. From April 1993 through December
1995 Mr. Tramonte served as Deputy General Counsel of CHS. He served in the
capacity of Counsel with the Atlanta Law firm of Glass, McCullough, Sherrill &
Harrold from January 1, 1993 through March 31, 1993. From 1988 through 1992 Mr.
Tramonte was a Partner with the Atlanta law firm of Hurt, Richardson, Garner,
Todd & Cadenhead.
LORI NADLER SIEGEL has served as Chief Financial Officer and Treasurer of
SCHI since September 3, 1996, and has served as Chief Financial Officer of CHHC
since June 1996. From January 1995 through May 1996, she served as Assistant
Vice President of Finance for CHS. From June 1992 through December 1994, she
served as Executive Assistant of CHS. She served as Associate Director of
Administrative Services of CHS from July 1991 to May 1992. From 1985 to 1991,
Ms. Siegel served as an auditor for the accounting firms of Touche Ross & Co.
(now Deloitte & Touche, LLP), Coopers & Lybrand L.L.P., and Price Waterhouse
L.L.P.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held four meetings during the year
ended June 30, 1996. Each director attended at least 75% or more of the
aggregate number of meetings held by the Board of Directors and the committees
on which he served. The Company's Board of Directors has two standing
committees -- the Audit Committee and the Compensation Committee. The Board of
Directors does not have a standing nominating committee, such function being
reserved to the full Board of Directors.
The Audit Committee presently consists of Dr. Zola P. Horovitz and Dr.
David O. Ellis. The Audit Committee has been assigned the principal functions
of: (i) recommending the independent auditors; (ii) reviewing and approving the
annual report of the independent auditors; (iii) approving the annual financial
statements; and (iv) reviewing and approving summary reports of the auditors'
findings and recommendations. The Audit Committee did not hold any meetings
during the year ended June 30, 1996.
The Compensation Committee presently consists of Dr. Zola P. Horovitz and
Dr. David O. Ellis. The Compensation Committee has been assigned the functions
of approving and monitoring the remuneration arrangements for senior management.
In addition, the Compensation Committee administers the Company's stock option
plans. The Compensation Committee did not hold any meetings during the year
ended June 30, 1996.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the cash and non-cash compensation paid by
the Company for the years ended June 30, 1996, 1995 and 1994 to the Company's
Chief Executive Officer and to the other executive officer of the Company whose
total annual salary and bonus exceeded $100,000 for the year ended June 30, 1996
(together, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION ($)
ANNUAL COMPENSATION --------------------
------------------------ NUMBER OF SECURITIES
SALARY BONUS UNDERLYING OPTION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) GRANTS (#) COMPENSATION ($)
- ------------------------------------- ---- -------- ------ -------------------- ----------------
<S> <C> <C> <C> <C> <C>
Barrett C. O'Donnell................. 1996 -- -- 90,000 175,000(2)
Chairman and Chief Executive 1995 -- -- -- 147,817(2)
Officer(1)
Jay Shevins.......................... 1996 197,964 -- 5,000 1,289(3)
Senior Vice President 1995 168,335 1,275 6,500 2,890(3)
1994 213,757 250 6,842(3)
</TABLE>
11
<PAGE> 12
- ---------------
(1) Executive compensation for Mr. O'Donnell is not reported in the fiscal year
ended June 30, 1994 because he was not an executive officer at any time
during such period.
(2) Represents amounts paid to ODD for consulting services. See "CERTAIN
TRANSACTIONS."
(3) Represents reimbursement for certain medical expenses.
GRANT OF STOCK OPTIONS
The following table sets forth certain information with respect to
individual grants of stock options to the Named Executive Officers during the
fiscal year ended June 30, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(1)
OPTIONS EMPLOYEE IN PRICE EXPIRATION ---------------------
NAME GRANTED (#) FISCAL YEAR ($SH) DATE 5% ($) 10% ($)
- -------------------------------- ----------- -------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. O'Donnell............ 90,000(2) 41% 1.13 10/23/05 63,900 162,000
Chairman and Chief Executive
Officer
Jay Shevins..................... -- -- -- -- -- --
Senior Vice President
</TABLE>
- ---------------
(1) The dollar amounts under these columns represent the potential realizable
value of each grant of option assuming that the market price of the
Company's common stock appreciates in value from the date of grant at the
5% and 10% annual rates prescribed by the SEC and therefore are not
intended to forecast possible future appreciation, if any, of the price of
the Company's common stock.
(2) Options are fully vested.
STOCK OPTION EXERCISES AND FISCAL YEAR END STOCK OPTION VALUE
The following table sets forth information concerning the exercise of stock
options and the value of unexercised stock options held at the end of the fiscal
year ended June 30, 1996 by each Named Executive Officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT JUNE 30, 1996
<TABLE>
<CAPTION>
VALUE OF IN-THE-MONEY
NUMBER OF UNEXERCISED OPTIONS AT JUNE 30, 1996
SHARES OPTIONS AT JUNE 30, 1996 ($)(B)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE (#) REALIZED ($)(A) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- --------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. -- -- 321,200 -- 726,716 --
O'Donnell..........
Chairman and Chief
Executive Officer
Jay Shevins.......... 8,160 21,461 6,776 7,444 6,396 4,427
Senior Vice
President
</TABLE>
- ---------------
(a) Dollar values were calculated by determining the difference between the
fair market value of the underlying securities at exercise date and the
exercise price of the options.
(b) Dollar values were calculated by determining the difference between the
fair market value of the underlying securities at year-end ($3.00 per
share) and the exercise price of the options.
12
<PAGE> 13
DIRECTOR COMPENSATION
All Directors are reimbursed for expenses incurred in connection with board
and committee meetings attended. No other cash compensation is paid to Directors
for their services as Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is currently comprised
of Zola P. Horovitz and David O. Ellis. None of the members of the Compensation
Committee served as an officer or employee of the Company or any of its
subsidiaries during the year ended June 30, 1996. Except as set forth herein,
there were no material transactions between the Company and any of the members
of the Compensation Committee during the year ended June 30, 1996.
The Company has a consulting agreement with EGL Holdings, Inc. ("EGL"), a
merchant banking group, whereby EGL provides consulting services on general
business operations and corporate investments including financial analysis,
review of industry trends and assistance with respect to merger or acquisition
opportunities. Dr. David Ellis and Mr. Murali Anantharaman, Directors of the
Company, are partners of EGL. The consulting agreement expires on June 30, 1999
and provides for a monthly consulting fee of $5,000 plus expenses. The fees were
determined by negotiation between the parties. The total amount paid to EGL
under the consulting agreement totaled $64,731 in the fiscal year ended June 30,
1996.
CERTAIN TRANSACTIONS
The Company entered into a lease agreement with Gateway LLC on January 1,
1996 in connection with the Company's Pompano Beach Office. Gateway LLC is a
Florida limited liability company owned 70% by ODD, 10% by each of Dr. Horovitz
and Dr. Ellis, current Directors of the Company, and 10% by an unrelated party.
Pursuant to the lease agreement, Gateway LLC leases 20,291 square feet to the
Company for a term of five years commencing on January 1, 1996. The Company has
an option to renew the lease agreement for an additional five year term. The
scheduled annual rental payments for such term are $213,056 during year one,
$223,201 during year two, $233,347 during year three, $243,492 during year four
and $253,638 during year five. The lease payments were determined by negotiation
between the parties. The Company believes that the terms of the lease agreement
were at least as favorable as could have been obtained elsewhere for similar
facilities from unaffiliated third parties.
During the year ended June 30, 1996, ODD provided consulting services to
the Company, for which the Company paid $175,000 plus travel expenses of
$30,100. Barrett C. O'Donnell, the Chairman of the Board, President and Chief
Executive Officer of the Company serves as Chairman of the Board, President and
Chief Executive Officer of ODD. ODD currently provides management and consulting
services to the Company for a monthly fee of $14,583 plus expenses.
Craig H. Davis, a 25% stockholder of ODD, is a director and shareholder in
the law firm of Mason, Griffin & Pierson P.C., which performs legal services for
the Company. Fees for legal services performed by Mason, Griffin & Pierson P.C.
for the Company and its subsidiaries during the fiscal year ended June 30, 1996
were $140,492.
On October 5, 1994 the Company received a total of $295,000 from the
following related parties: $130,000 from ODD, $120,000 from EGL and $45,000 from
Zola Horovitz. Promissory notes for such amounts were issued to such parties.
Under the terms of the notes, the total principal plus interest at 11% per
annum, was due and payable on December 6, 1994. Any principal or interest not
paid when due accrued interest thereafter at 20% per annum until paid. The notes
were paid in full including interest on January 4, 1996.
For a description of consulting agreements between the Company and certain
directors see "EXECUTIVE COMPENSATION -- Compensation Committee Interlocks and
Insider Participation".
13
<PAGE> 14
In addition, for information regarding certain relationships to be created
as a result of the Merger, see "MERGER AGREEMENT -- Agreement With Certain
Holders of Company Convertible Preferred Stock" and "MERGER
AGREEMENT -- Registration Rights Agreement."
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
Exchange Commission ("SEC") and the National Association of Securities Dealers,
Inc. ("NASD") initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater than 10% shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1996 all Section
16(a) filing requirements applicable to its directors, executive officers and
greater than ten percent beneficial owners were complied with.
14
