<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>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SIMIONE CENTRAL HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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
[INSERT LOGO]
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 21, 1997
---------------------
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders of
Simione Central Holdings, Inc., a Delaware corporation (the "Company"), will be
held at the executive offices of the Company located at 6600 Powers Ferry Road,
Atlanta, Georgia 30339 on June 21, 1997 at 10:00 A.M., Atlanta time, for the
following purposes:
1. To elect six directors for a term of one year, and until their
successors shall have been elected and shall have been qualified;
2. To amend the Company's Certificate of Incorporation, as amended, to
effect a reverse stock split of the Company's outstanding common stock, par
value $.001 per share (the "Common Stock"), pursuant to which each two
shares of Common Stock then outstanding will be converted into one share;
3. To approve the Simione Central Holdings, Inc. Omnibus Equity-based
Incentive Plan;
4. To approve the Simione Central Holdings, Inc. 1997 Non-Qualified
Formula Stock Option Plan;
5. To ratify the appointment of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1997; and
6. To transact such other business as may properly come before the
meeting, or any adjournment thereof.
Stockholders of record at the close of business on May , 1997 will
be entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
James A. Tramonte
General Counsel and Secretary
Atlanta, Georgia
June , 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND
MAIL THE ACCOMPANYING FORM OF PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
<PAGE> 3
SIMIONE CENTRAL HOLDINGS, INC.
6600 POWERS FERRY ROAD
ATLANTA, GEORGIA 30339
---------------------
PROXY STATEMENT
---------------------
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Simione Central Holdings, Inc., a Delaware corporation (the
"Company"), for use at the 1997 Annual Meeting of Stockholders to be held on
June 21, 1997 (the "Annual Meeting"). Stockholders of record at the close of
business on May , 1997 will be entitled to vote at the meeting.
The cost of solicitation will be borne by the Company. The Board of
Directors may use the services of the Company's directors, officers and
employees to solicit proxies personally or by telephone, and the Company may
reimburse them for the reasonable out-of-pocket expenses incurred by them.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation material to the beneficial
owners of the shares held of record by such persons, and the Company will
reimburse them for their reasonable out-of-pocket expenses.
The shares represented by the accompanying proxy will be voted as directed,
or, if no direction is indicated, will be voted FOR: (i) the election of the six
nominees for director identified below; (ii) the approval of an amendment to the
Company's Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), to effect a reverse stock split (the "Reverse Split") of the
Company's outstanding common stock, par value $.001 per share (the "Common
Stock"), pursuant to which each two shares of Common Stock then outstanding will
be converted into one share; (iii) the approval of the Simione Central Holdings,
Inc. Omnibus Equity-based Incentive Plan; (iv) the approval of the Simione
Central Holdings, Inc. 1997 Non-Qualified Formula Stock Option Plan; and (v) the
ratification of the appointment of Ernst & Young LLP as the Company's
independent public accountants. Each proxy executed and returned by a
stockholder may be revoked at any time thereafter by giving written notice of
such revocation to the Secretary of the Company or by attending the Annual
Meeting and electing to vote in person, except as to any matter or matters upon
which, prior to such revocation, a vote shall have been cast pursuant to the
authority conferred by such proxy. The approximate date on which the Proxy
Statement and form of proxy were first sent or given to stockholders is June
, 1997.
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, including financial statements, accompanies this Proxy Statement.
Additional copies of the Annual Report on Form 10-K are available upon request.
VOTING SECURITIES
The Company has set the close of business on May , 1997 as the record
date for the purpose of determining stockholders entitled to vote at the Annual
Meeting. At the close of business on May , 1997, the Company had outstanding
shares of Common Stock, the only class of voting securities of the
Company outstanding. Each holder of Common Stock is entitled to one vote for
each share so held.
The presence, in person or by proxy, of the holders of a majority of the
shares of Common Stock entitled to vote is required for a quorum to transact
business at the Annual Meeting. Abstentions and broker non-votes will be counted
as present in determining whether the quorum requirement is satisfied. A
plurality of the votes of the shares present in person or represented by proxy
at the Annual Meeting and entitled to vote is required to elect directors. An
affirmative vote of a majority of the issued and outstanding shares of Common
Stock is required for approval of the Reverse Split, and an affirmative vote of
a majority of the shares present in person or represented by proxy at the Annual
<PAGE> 4
Meeting and entitled to vote on the subject matter is required for approval of
the other proposals set forth in this Proxy Statement. With respect to an
abstention from voting on any matter, the shares will be considered present and
entitled to vote at the Annual Meeting. With respect to broker non-votes, the
shares will not be considered entitled to vote at the Annual Meeting for such
matter.
HISTORY OF THE COMPANY
Central Health Management Services, Inc. ("CHMS") was incorporated in
September 1991 as a wholly-owned subsidiary of Central Health Holding Company,
Inc. ("CHHC"), a home health care provider, to provide information and
management support services to home health care providers. Central Health
Services, Inc. ("CHS"), also a wholly-owned subsidiary of CHHC, provided similar
services to home health care agencies owned by CHHC. On January 1, 1996, CHHC
transferred to CHMS at book value the assets and employees related to CHS's
information and certain clinical and financial support services. On January 17,
1996, CHHC completed a pro-rata distribution of the outstanding common stock of
CHMS to the stockholders of CHHC. On January 18, 1996, CHMS amended its articles
of incorporation to change its name to Simione Central Holding, Inc. For
purposes hereof, however, Simione Central Holding, Inc. will continue to be
referred to herein as CHMS.
Subsequent to the distribution, CHMS began to actively pursue a strategy
designed to enhance and expand the business solutions it could offer to home
health care providers. In January 1996, CHMS acquired the home health care
consulting division of Simione & Simione, CPAs ("Simione & Simione"), a provider
of consulting services to the home health care industry with significant
expertise in strategic planning, Medicare compliance and operational
re-engineering. On October 8, 1996, CHMS and InfoMed Holdings, Inc. ("IMHI"), a
publicly traded provider of information solutions for home health care
providers, merged in a transaction that was accounted for as a reverse
acquisition for financial reporting purposes (the "IMHI Acquisition"). In
connection with the IMHI Acquisition, IMHI issued approximately 7.9 million
shares of its common stock in exchange for all the outstanding common stock of
CHMS, and the former stockholders of CHMS thereby acquired control of IMHI. As a
result, CHMS is considered the acquiring company, and the historical financial
statements of CHMS became the historical financial statements of IMHI. However,
under the rules and regulations of the Securities and Exchange Commission (the
"Commission"), IMHI is deemed to continue as the registrant for purposes of
filing periodic reports and statements with the Commission.
Prior to the IMHI Acquisition, shares of IMHI common stock traded on the
OTC Bulletin Board under the symbol "IMHI." Effective December 19, 1996, IMHI
changed its name to Simione Central Holdings, Inc. (the "Company") and changed
its stock symbol to "SCHI" effective December 24, 1996. The Company currently
has on file with the Commission a Registration Statement on Form S-1
(Registration No. 333-25551) for a proposed public offering (the "Offering") of
its Common Stock.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information at March 7, 1997 with respect to
(i) any person known to the Company to be the beneficial owner of more than 5%
of the Common Stock, (ii) all directors of the Company, (iii) all Named
Executive Officers (as defined on page 7), and (iv) all directors and executive
officers as a group. The Company believes that the beneficial owners of the
Common Stock listed below, based on information furnished by such owners, have
sole voting and investment power with respect to the shares of Common Stock,
except as noted below.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
NAME AND ADDRESS -----------------------------
OF BENEFICIAL OWNER NUMBER(1) PERCENT(2)
- ------------------- --------- ----------
<S> <C> <C>
Simione Central Holdings, Inc............................... 4,248,017 35.5%
Profit Sharing Plan Trust
c/o Trust Company of Knoxville, Inc.
620 Market Street, Suite 300
Knoxville, TN 37902
O'Donnell Davis, Inc.(3) ................................... 2,248,946 17.6
P.O. Box 7395
Princeton, NJ 08543
Barrett C. O'Donnell(4)..................................... 2,248,946 17.6
P.O. Box 7395
Princeton, NJ 08543
Murali Anantharaman(5)...................................... 1,915,281 15.0
2830 Shurburne Drive
Alpharetta, GA 30301
Gary M. Bremer(6)........................................... 1,755,804 14.3
6600 Powers Ferry Road
Atlanta, GA 30339
Rowan Nominees Limited(7)................................... 1,769,749 14.0
33 King William Street
London, EC4R 9AS
Howard B. Krone............................................. 881,244 7.4
3633 Tuxedo Road
Atlanta, GA 30305
William J. Simione, Jr.(8) ................................. 234,817 2.0
James R. Henderson.......................................... 31,548 *
Gary W. Rasmussen(9)........................................ 70,273 *
James A. Tramonte(10)....................................... 40,738 *
Richard D. Jackson.......................................... -- --
Jay Shevins(11)............................................. 64,260 *
All directors and executive officers as a group (9
persons).................................................. 6,304,817 45.1
</TABLE>
- ---------------
* Less than 1%
(1) 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 sole or shared investment power (including the power to
dispose or direct the disposition) with respect to a security through any
contract, arrangement, understanding, or relationship. 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.
3
<PAGE> 6
(2) Percentages were calculated based on the ratio of the number of shares of
Common Stock beneficially owned by such beneficial owner as of the date of
March 7, 1997 to the sum of (a) the total number of outstanding shares of
Common Stock as of March 7, 1997 and (b) 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 March 7, 1997.
(3) Includes 270,000 shares issuable upon exercise of warrants and 505,162
shares issuable upon exercise of options.
(4) Mr. O'Donnell is a stockholder, director and officer of O'Donnell Davis,
Inc. ("ODD"). Accordingly, pursuant to Rule 13d-3 under the Exchange Act,
he is deemed to be an indirect beneficial owner of the Company's securities
beneficially owned by ODD.
(5) Includes 5,928 shares as to which Mr. Anantharaman has sole voting power,
39,604 shares issuable upon exercise of options, 1,088,195 shares related
to Rowan Nominees Limited ("Rowan"), 100,000 shares issuable upon exercise
of warrants related to EGL Holdings, Inc. ("EGL"), 619,667 shares issuable
upon exercise of warrants related to Rowan, and 61,887 shares issuable upon
exercise of options related to Rowan.
(6) Includes 330,315 shares issuable upon exercise of options. Excludes any
interest Mr. Bremer has in the Simione Central Holdings, Inc. Profit
Sharing Plan Trust (the "Profit Sharing Plan").
(7) Includes 619,667 shares issuable upon exercise of warrants and 61,887
shares issuable upon exercise of options.
(8) Includes 77,073 shares issuable upon exercise of options.
(9) Includes 5,505 shares issuable upon the exercise of options. Excludes any
interest Mr. Rasmussen has in the Profit Sharing Plan.
(10) Includes 5,505 shares issuable upon the exercise of options. Excludes any
interest Mr. Tramonte has in the Profit Sharing Plan.
(11) Includes 14,220 shares issuable upon exercise of options.
For a description of a voting agreement among the Company, ODD, EGL, Mr.
Anantharaman and certain of their affiliates, see "Certain Relationships and
Related Transactions."
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act, requires the Company's directors,
executive officers and persons who beneficially own more than 10% of the Common
Stock to file with the Commission initial reports of beneficial ownership and
reports of changes in beneficial ownership of such Common Stock. Directors,
executive officers and greater than 10% beneficial owners are required by
Commission rules to furnish the Company with copies of all such reports. To the
Company's knowledge, based solely upon a review of the copies of such reports
furnished to the Company and written representations from the Company's
directors and executive officers that no other reports were required, all
Section 16(a) filing requirements applicable to the Company's directors and
executive officers were complied with during the year ended December 31, 1996,
except that Mr. Richard D. Jackson, a director of the Company, inadvertently
failed to timely file an initial statement of beneficial ownership of securities
upon being elected to the Board of Directors in December 1996.
4
<PAGE> 7
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company, and their respective
ages and positions, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Gary M. Bremer............................. 57 Chairman of the Board
James R. Henderson......................... 51 President and Chief Executive Officer and
Director
William J. Simione, Jr..................... 55 Vice Chairman of the Board and Executive
Vice President
Gary W. Rasmussen.......................... 42 Chief Operating Officer
Lori Nadler Siegel......................... 33 Chief Financial Officer and Treasurer
James A. Tramonte.......................... 46 General Counsel and Secretary
Murali Anantharaman(1)..................... 40 Director
Richard D. Jackson(2)...................... 59 Director
Barrett C. O'Donnell(1)(2)................. 43 Director
</TABLE>
- ---------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
GARY M. BREMER has served as Chairman of the Board of the Company since
October 8, 1996 and served as the Company's Chief Executive Officer from October
8, 1996 to April 10, 1997. Mr. Bremer has also served as the Chairman of the
Board and Chief Executive Officer of CHMS since September 1991. From 1978 until
October 1996, Mr. Bremer served as President and Chief Executive Officer of CHHC
and CHS. Mr. Bremer has also served as a director of the National Association
for Home Care and Hospice since 1987. Mr. Bremer has 22 years of experience in
the home health care industry.
JAMES R. HENDERSON has served as Chief Executive Officer of the Company
since April 10, 1997 and has served as President of the Company since October 8,
1996. Mr. Henderson has also served as the President of CHMS since September
1996 and as a director of the Company and CHMS since October 8, 1996 and
December 1996, respectively. From July 1992 to November 1995, Mr. Henderson
served as Executive Vice President for National Data Corporation, an information
services company. From February 1991 to June 1992, he served as Executive Vice
President, Worldwide Sales, Marketing and Operations, of QMS, Inc., a computer
hardware company. From 1987 to January 1992, he served as Executive Vice
President of Dun and Bradstreet Software Services, Inc., a client server
software solutions company. Mr. Henderson has 29 years of experience in the
information services industry.
WILLIAM J. SIMIONE, JR. is a certified public accountant who has served as
Vice Chairman of the Board and Executive Vice President of the Company since
October 8, 1996, and has 31 years of experience in the home health care
industry. From January 1996 until October 1996, Mr. Simione served as the
President of Simione Central, Inc., a wholly-owned subsidiary of CHMS ("SCI").
From January 1975 until December 1995, Mr. Simione was Managing Partner of the
Home Health Care Consulting Division of Simione & Simione. Since September 1995,
Mr. Simione has also served as a director and an audit committee member of
Personnel Group of America, Inc., a leading provider of personnel staffing and
home health services.
GARY W. RASMUSSEN is a certified public accountant who has served as Chief
Operating Officer of the Company and CHMS since October 8, 1996 and June 1996,
respectively. From June 1996 to October 1996, Mr. Rasmussen served as Chief
Operating Officer of CHHC. He also served as Chief Financial Officer of CHHC
from January 1996 to May 1996, and as Chief Financial Officer of CHS from
October 1994 to December 1995. Mr. Rasmussen served as Chief Financial Officer
of Surgical Health Corporation, an outpatient surgery center company, from May
1992 until September 1994, and was an Audit Partner with Ernst & Young LLP from
October 1987 to May 1992.
5
<PAGE> 8
LORI NADLER SIEGEL is a certified public accountant who has served as the
Chief Financial Officer and Treasurer of the Company and CHMS since October 8,
1996 and June 1996, respectively. From June 1996 to October 1996, Ms. Siegel
served as Chief Financial Officer of CHHC. From January 1995 until May 1996, Ms.
Siegel served as Assistant Vice President of Finance for CHS after holding
various accounting and finance positions at CHS from July 1991 until December
1994.
JAMES A. TRAMONTE is a certified public accountant who has served as
General Counsel and Secretary of the Company since October 8, 1996 and as
General Counsel of CHMS since October 1995. Mr. Tramonte has also served as
Secretary of CHMS since September 1996. He previously served as General Counsel
of CHHC from January 1996 to October 1996 and was Deputy General Counsel of CHS
from April 1993 through December 1995. He served in the capacity of counsel with
the Atlanta law firm of Glass, McCullough, Sherrill & Harrold from January 1993
to March 1993, and from 1988 through December 1992, Mr. Tramonte was a partner
with the Atlanta law firm of Hurt, Richardson, Garner, Todd & Cadenhead.
MURALI ANANTHARAMAN has served as a director of the Company since October
8, 1996. From January 1996 to October 8, 1996, Mr. Anantharaman was a director
of IMHI. Mr. Anantharaman has been a partner at EGL, a venture capital firm,
since 1987.
RICHARD D. JACKSON has served as a director of the Company since December
1996. Mr. Jackson served as Vice Chairman of First Financial Management Corp., a
financial services company, from January 1995 to August 1996 and as Chief
Operating Officer and Senior Executive Vice President from June 1993 to December
1995. From 1990 through May 1993, he served as Vice Chairman and Chief Executive
Officer of Georgia Federal Bank, Atlanta, Georgia. Mr. Jackson is currently a
director of ANACOMP, Inc., a service provider to and manufacturer of
micrographic machines and equipment, and of Schweitzer Mauduit International,
Inc., a manufacturer of tobacco papers and wrappers.
BARRETT C. O'DONNELL has served as a director of the Company since October
8, 1996. Mr. O'Donnell served as Chairman of the Board of IMHI from October 1992
to October 8, 1996 and as Chief Executive Officer from November 1994 to October
8, 1996. From 1978 to present, Mr. O'Donnell has been Chairman of the Board,
President and Chief Executive Officer of ODD, a consulting and investment
advisory services company.
PROPOSAL TO ELECT DIRECTORS
The Bylaws of the Company currently provide that the Board of Directors
shall determine the number of directors to serve on the Board. The Company's
Board of Directors currently consists of six members. All directors are elected
annually by the holders of Common Stock. Each director holds office until the
next Annual Meeting of Stockholders and until his successor is elected and
qualified or until his earlier resignation or removal. All of the six nominees
are presently serving as directors of the Company. If no direction to the
contrary is given, all proxies received by the Board of Directors will be voted
"FOR" the election of the six nominees. In the event that any nominee is unable
or declines to serve, the proxy solicited herewith may be voted for the election
of another person in his stead at the discretion of the Board of Directors. The
Board of Directors knows of no reason to anticipate that this will occur.
Biographical information for each person nominated is set forth in "Directors
and Executive Officers." The nominees for director are: Gary M. Bremer; James R.
Henderson; William J. Simione, Jr.; Murali Anantharaman; Richard D. Jackson; and
Barrett C. O'Donnell.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of the Company held seven meetings during 1996. The
Board of Directors has established an Audit Committee and a Compensation
Committee. The Company does not have a Nominating Committee. The Audit Committee
reviews the Company's accounting practices and financial results, consults with
and reviews the services provided by the Company's independent
6
<PAGE> 9
accountants and reviews and approves (with the concurrence of a majority of the
disinterested directors of the Company) transactions, if any, with affiliated
parties. The current members of the Audit Committee are Messrs. Anantharaman and
O'Donnell. The Audit Committee held two meetings during 1996. The Compensation
Committee reviews and recommends to the Board of Directors the compensation and
benefits of all the executive officers of the Company, administers the Company's
compensation and benefit plans, and reviews general policies relating to
compensation and benefits of employees of the Company. The current members of
the Compensation Committee are Messrs. Jackson and O'Donnell. The Compensation
Committee did not hold any meetings during 1996. Each director attended at least
seventy-five percent (75%) of the meetings of the Board of Directors and the
Committees on which such director serves.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
SIX NOMINEES LISTED ABOVE AS DIRECTORS.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION SUMMARY
The following table sets forth all compensation paid by IMHI and the
Company for the years ended December 31, 1996, 1995 and 1994 to the Chief
Executive Officer and to certain other most highly compensated executive
officers (together, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) --------------------
-------------------------- NUMBER OF SECURITIES ALL OTHER
SALARY BONUS UNDERLYING OPTION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) GRANTS(#) ($)
- --------------------------- ---- -------- ------- -------------------- ------------
<S> <C> <C> <C> <C> <C>
Gary M. Bremer...................... 1996 $340,000(3) $40,000 366,649 $ 8,656(4)
Chairman of the Board and former 1995 -- -- -- --
Chief Executive Officer(2) 1994 -- -- -- --
Barrett C. O'Donnell................ 1996 -- -- 183,962 186,533(6)
Former Chairman of the 1995 -- -- 90,000 111,103(6)
Board and Chief 1994 -- -- -- 120,170(6)
Executive Officer of IMHI(5)
James R. Henderson.................. 1996 225,000(3) -- 405,052 --
President and Chief 1995 -- -- -- --
Executive Officer 1994 -- -- -- --
William J. Simione, Jr.............. 1996 300,000(3) -- 121,115 --
Vice Chairman of the Board and 1995 -- -- -- --
Executive Vice President 1994 -- -- -- --
Gary W. Rasmussen................... 1996 200,000(3) -- 49,547 4,344(4)
Chief Operating Officer 1995 -- -- -- --
1994 -- -- -- --
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) --------------------
-------------------------- NUMBER OF SECURITIES ALL OTHER
SALARY BONUS UNDERLYING OPTION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) GRANTS(#) ($)
- --------------------------- ---- -------- ------- -------------------- ------------
<S> <C> <C> <C> <C> <C>
James A. Tramonte................... 1996 150,000(3) -- 49,547 3,794(4)
General Counsel and 1995 -- -- -- --
Secretary 1994 -- -- -- --
Jay Shevins......................... 1996 173,891 -- -- 2,900(8)
Former Senior 1995 193,193 1,275 -- --
Vice President of IMHI(7) 1994 189,303 250 11,500 6,842(8)
</TABLE>
- ---------------
(1) Does not include the value of perquisites and other personal benefits
provided to the Named Executive Officers which in the aggregate did not
exceed the lesser of $50,000 or 10% of such officer's salary and bonus.
(2) Mr. Bremer served as Chief Executive Officer of the Company from October 8,
1996 until April 10, 1997.
(3) Represents the annualized salary the executive officer would have received
had he joined the Company on January 1, 1996. Messrs. Bremer, Henderson,
Simione, Rasmussen and Tramonte joined the Company on October 8, 1996. The
annualized salary set forth herein is based on payments made by the
registrant from October 8, 1996 until December 31, 1996.
(4) Represents life insurance and disability insurance premium payments.
(5) Mr. O'Donnell served as Chairman of the Board and Chief Executive Officer of
IMHI until October 8, 1996.
(6) Represents amounts paid to ODD by IMHI and the Company for consulting and
investment advisory services. Mr. O'Donnell is the Chairman of the Board,
President and Chief Executive Officer and a 75% stockholder of ODD. See
"-- Director Compensation."
(7) Mr. Shevins served as Senior Vice President of IMHI until October 8, 1996.
Mr. Shevins continues to serve as Senior Vice President of InfoMed, Inc., a
subsidiary of the Company.
(8) Represents reimbursements for certain medical expenses.
8
<PAGE> 11
GRANTS OF STOCK OPTIONS
The following table sets forth certain information with respect to
individual grants of stock options by IMHI and the Company to the Named
Executive Officers during the year ended December 31, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED
-------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(1)
OPTIONS EMPLOYEE IN PRICE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ----------- ------------ -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gary M. Bremer.............. 330,315 18.09% $ 1.58 1/18/06 $ 328,219 $ 831,771
36,334 1.99 2.50 9/04/06 57,126 144,768
Barrett C. O'Donnell........ 50,000 2.74 3.50 8/28/06 110,057 278,905
133,962 7.34 3.125 9/23/06 263,275 667,190
James R. Henderson.......... 55,052 3.02 2.50 9/04/06 86,555 219,347
350,000 19.17 5.25 10/08/06 1,155,594 2,928,502
William J. Simione, Jr...... 77,073 4.22 1.58 1/18/06 76,584 194,079
44,042 2.41 2.50 9/04/06 69,244 175,479
Gary W. Rasmussen........... 5,505 .30 1.58 1/18/06 5,470 13,862
44,042 2.41 2.50 9/04/06 69,244 175,479
James A. Tramonte........... 5,505 .30 1.58 1/18/06 5,470 13,862
44,042 2.41 2.50 9/04/06 69,244 175,479
Jay Shevins................. -- -- -- -- -- --
</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 Common
Stock appreciates in value from the date of grant at the 5% and 10% annual
rates prescribed by the Commission and therefore are not intended to
forecast possible future appreciation, if any, of the price of the Common
Stock. The actual value, if any, that an executive officer may ultimately
realize will depend on the excess of the stock price over the exercise price
on the date the stock option is exercised. Therefore, there can be no
assurance that the value realized by an executive officer upon actual
exercise of the stock options granted in 1996 will be at or near the
Potential Realizable Value indicated in the table.
9
<PAGE> 12
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 December 31, 1996 by each Named Executive Officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES VALUE DECEMBER 31, 1996(#) DECEMBER 31, 1996($)(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary M. Bremer.............. $ -- $ -- 330,315 36,334 $ 902,586 $ 65,855
Barrett C. O'Donnell........ -- -- 505,162 -- 1,347,996 --
James R. Henderson.......... -- -- -- 405,052 -- 99,782
William J. Simione, Jr...... -- -- 77,073 44,042 210,602 79,826
Gary W. Rasmussen........... -- -- 5,505 44,042 15,042 79,826
James A. Tramonte........... -- -- 5,505 44,042 15,042 79,826
Jay Shevins................. -- -- 14,220 -- 25,087 --
</TABLE>
- ---------------
(1) Dollar values were calculated by determining the difference between the fair
market value of the underlying securities at year-end ($4.3125 per share)
and the exercise price of the options.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Gary M. Bremer, its
Chairman of the Board. The agreement provides for an initial base salary of
$329,000 and, commencing in 1997, an annual bonus of $70,000 if the Company
achieves certain financial results. In addition, Mr. Bremer receives up to
$46,000 per year for certain car, membership and insurance allowances. The
agreement was signed on December 10, 1996 and has an initial three year term
which will renew for additional one year terms unless terminated by either
party. The agreement further provides that if Mr. Bremer is terminated for any
reason other than for cause (as defined in the agreement), or if Mr. Bremer
terminates the agreement for good reason (as defined in the agreement), he shall
be entitled to the compensation remaining under the current term of the
agreement. The agreement contains non-compete provisions restricting Mr. Bremer
during the term of the agreement and for one year thereafter.
SCI has an employment agreement with Mr. William J. Simione, Jr., Vice
Chairman of the Board and an Executive Vice President of the Company. The
agreement provides for a base salary of $300,000 plus certain benefits and a
potential bonus to be paid at the discretion of the Board of Directors. The
agreement was signed on January 1, 1996 and has an initial five year term that
can be renewed for additional one year terms unless terminated by either party.
The agreement provides for different severance payments if there is a change in
control of the Company based upon the circumstances and timing of Mr. Simione's
termination of employment with respect to the change in control. The agreement
also contains a non-compete provision restricting Mr. Simione during the term of
the agreement and for one year thereafter.
DIRECTOR COMPENSATION
Directors who are officers of the Company receive no additional
compensation for serving on the Board of Directors. Directors who are not
officers of the Company, except Messrs. Murali Anantharaman and Barrett C.
O'Donnell, receive fees of $1,000, $500 and $250 for each Board, Committee and
telephone meeting, respectively, attended. All directors receive reimbursement
for certain expenses in connection with attendance at Board and Committee
meetings. Further, upon election to the Board of Directors, each outside
director will be entitled to receive an option for 10,000 shares of Common Stock
with the exercise price equal to the fair market value of the Common Stock
10
<PAGE> 13
on the date of the grant and vesting in three equal annual installments. See
"Proposal to Approve the Director Plan."
The Company has a verbal consulting arrangement with ODD, a consulting and
investment advisory services company, whereby ODD provides consulting services
on general business operations and corporate investments and assistance with
respect to merger or acquisition opportunities. Mr. O'Donnell, a director of the
Company, is the Chairman of the Board, President and Chief Executive Officer and
a 75% stockholder of ODD. Currently, ODD is paid $12,000 per month plus expenses
for such services. The fees were determined by negotiation between the parties.
The amount paid to ODD by IMHI for consulting services totaled $157,064,
including expenses, in the year ended December 31, 1996. For the year ended
December 31, 1996, the Company paid $43,749, including expenses, for such
consulting services. See "Certain Relationships and Related Transactions."
The Company has a consulting agreement with EGL, a venture capital firm,
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. Mr.
Anantharaman, a director of the Company, is a partner of EGL. The consulting
agreement expires pursuant to its terms on June 30, 1999 and provides for a
monthly consulting fee of $5,000 plus expenses. However, EGL and the Company
have agreed to terminate this consulting agreement immediately prior to the
consummation of the Offering. The fees were determined by negotiation between
the parties. The amount paid to EGL by IMHI under the consulting agreement
totaled $49,346, including expenses, in the year ended December 31, 1996. For
the year ended December 31, 1996, the Company paid $15,000, including expenses,
under the consulting agreement. See "Certain Relationships and Related
Transactions."
Prior to becoming a director of the Company, Mr. Richard D. Jackson was
paid an aggregate of $11,000 for assistance with a series of strategic planning
meetings during the summer of 1996. See "Certain Relationships and Related
Transactions."
For a description of certain options granted to certain directors of the
Company, see "-- Grants of Stock Options." In addition to the option grants
described in such section, options for an aggregate of 166,038 shares of Common
Stock were granted to EGL by IMHI at an exercise price of $3.125 per share on
September 23, 1996. Mr. Anantharaman, a director of the Company, is a partner of
EGL. Additional options for 50,000 shares of Common Stock and 133,962 shares of
Common Stock were granted to ODD by IMHI at an exercise price of $3.50 per share
on August 28, 1996, and $3.125 per share on September 23, 1996, respectively.
Mr. O'Donnell, a director of the Company, is the Chairman of the Board,
President and Chief Executive Officer and a 75% stockholder of ODD.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is currently comprised
of Messrs. Richard D. Jackson and Barrett C. O'Donnell. Mr. O'Donnell served as
Chairman of the Board and Chief Executive Officer of IMHI from November 1994 to
October 8, 1996. Mr. Jackson did not serve as an officer or employee of the
Company or any of its subsidiaries during the year ended December 31, 1996.
Except as set forth under "-- Director Compensation" and "Certain Relationships
and Related Transactions," there were no material transactions between the
Company and any of the members of the Compensation Committee during the year
ended December 31, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee consists entirely of nonemployee directors and
determines the compensation paid to the Chief Executive Officer. The
Compensation Committee also determines, along with the Chief Executive Officer,
all compensation paid to the other executive officers of the Company. The
Compensation Committee believes that for the Company to be successful long-term
and for it to increase stockholder value it must be able to hire, retain,
adequately compensate and
11
<PAGE> 14
financially motivate talented and ambitious executives. The Compensation
Committee attempts to reward executives for both individual achievement and
overall Company success.
Executive compensation is made up of three components:
i. Base Salary: An executive's base salary is initially determined by
considering the executive's level of responsibility, prior experience and
compensation history. Published salaries of executives in similar positions
at other companies of comparable size (sales and/or number of employees) is
also considered in establishing base salary.
ii. Cash Bonus: The Company maintains an incentive bonus plan to
provide annual cash bonuses to certain executives. Such bonuses are based,
in part, on the Company's financial performance during the previous fiscal
year including data in connection with earnings per share and profitability
and performance as compared to the Company's approved profit plan. In
addition, objective individual measures of performance compared to the
individual's business unit profit performance are considered. A subjective
rating of the executive's personal performance is also considered.
iii. Stock Options: The Compensation Committee believes that the
granting of stock options is directly linked to increased executive
commitment and motivation and to the long-term success of the Company. The
Compensation Committee thus awards stock options to certain executives. The
Compensation Committee uses both subjective appraisals of the executive's
performance and the Company's performance and financial success during the
previous year to determine option grants.
Mr. Gary M. Bremer, who serves as the Company's Chairman of the Board and
who served as the Company's Chief Executive Officer during the year ended
December 31, 1996, is paid a base salary of $329,000 pursuant to an employment
agreement. See "-- Employment Agreements." The Compensation Committee also
considers an annual bonus of $70,000 and stock option grants that can be awarded
to Mr. Bremer. Additional compensation is based on a subjective analysis of the
Company's performance and Mr. Bremer's role in generating such performance.
Compensation of the chief executive officers of the Company's competitors was
also considered in determining Mr. Bremer's compensation.
It should also be noted that: (i) exceptions to the general principles
stated above are made when the Compensation Committee deems them appropriate to
stockholder interest; (ii) the Compensation Committee regularly considers other
forms of compensation and modifications of its present policies, and will make
changes as it deems appropriate; and (iii) the competitive opportunities to
which the Company's executives are exposed frequently come from private
companies or divisions of large companies, for which published compensation data
is often unavailable, with the result that the Compensation Committee's
information about such opportunities is often anecdotal.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), establishes a limit on the deductibility of annual compensation for
certain executive officers that exceeds $1,000,000 per year unless certain
requirements are met. The Company does not anticipate that any employee will
exceed such $1,000,000 cap in the near future but will make any necessary
adjustments if and when this occurs.
Compensation Committee
Richard D. Jackson
Barrett C. O'Donnell
12
<PAGE> 15
STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph shows a comparison, since the Common Stock began
trading on September 3, 1993 of cumulative total returns for the Common Stock,
the Standard & Poor's SmallCap 600 Index and the Standard & Poor's Computer
(Software and Services) -- Mid-Cap Index. The comparisons in this table are
required by the Commission and, therefore, are not intended to forecast or be
indicative of possible future performance of the Common Stock.
<TABLE>
<CAPTION>
INDEXED RETURNS
Years Ending
Base
Period
Company/Index 3Sep93 Dec93 Dec94 Dec95 Dec96
- ------------- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
SIMIONE CENTRAL HOLDINGS INC 100 62.50 68.75 40.63 107.80
COMPUTER (SOFTWARE&SVC)-MID 100 100.68 110.57 193.46 196.20
S&P SMALLCAP 600 INDEX 100 104.04 99.07 128.76 156.21
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 28, 1995, IMHI entered into a settlement agreement with Mr.
Frederick Neufeld, whereby Mr. Neufeld resigned as an employee, officer and
director of IMHI. Pursuant to the terms of the agreement, IMHI agreed to pay Mr.
Neufeld a total of $225,000 in 25 equal monthly installments of $9,000
commencing in March 1995, and to provide certain additional benefits through
February 1996, and Mr. Neufeld agreed to release and surrender options to
purchase 68,000 shares of the IMHI common stock. The agreement also prohibited
Mr. Neufeld from competing in any business of IMHI (as such phrase is defined in
the agreement) until September 1, 1996.
On January 1, 1996, IMHI entered into a lease agreement with Gateway LLC
with respect to the Company's Pompano Beach office. ODD owns 70% of Gateway LLC
and more than 5% of the Company's Common Stock. In addition, Mr. Barrett C.
O'Donnell, a director of the Company, is the Chairman of the Board, President
and Chief Executive Officer and a 75% stockholder of ODD. Pursuant to the lease
agreement, Gateway LLC leases approximately 20,291 square feet to the
13
<PAGE> 16
Company for a term of five years that commenced on January 1, 1996. The Company
has an option to renew the lease for an additional five year term. Rental
payments from IMHI and the Company for the year ended December 31, 1996 totaled
$272,869. The scheduled annual rental payments for the remaining term are
$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
are at least as favorable as could have been obtained elsewhere for similar
facilities from unaffiliated third parties.
During 1996, the Company entered into various capital lease agreements with
National Leasing, Inc. Mr. Gary M. Bremer, Chairman of the Board of the Company,
Mr. William J. Simione, Jr., Vice Chairman of the Board and Executive Vice
President of the Company, and Mr. Gary W. Rasmussen, Chief Operating Officer of
the Company, each respectively owns a 33.33% interest in National Leasing, Inc.
Each lease is for a three year term and provides for an interest rate of 14%.
Interest expense related to such capital leases totaled $22,215 during the year
ended December 31, 1996. The terms of the various lease agreements were
determined by negotiation between the parties. The Company believes that the
terms of the lease agreements are at least as favorable as could have been
obtained for similar assets from unaffiliated third parties.
On January 17, 1996, the Company entered into a lease agreement with S&S
Realty with respect to the Company's Hamden, Connecticut office. Mr. Simione
owns 45% of S&S Realty. Pursuant to the lease agreement, S&S Realty leases
approximately 6,500 square feet to the Company on a month-to-month basis. Rental
payments for the year ended December 31, 1996 totaled $112,539. The scheduled
annual rental payments for the remaining term are $10,833 per month. The lease
payments were determined by negotiation between the parties.
The Named Executive Officers listed below entered into promissory notes in
the amounts listed below in connection with money borrowed from the Company for
the purchase of Common Stock. Each promissory note was dated March 5, 1996 with
all principal and interest (5.05% per annum) due on December 5, 1996. Each such
promissory note was paid in full except for the promissory note of Mr. Bremer,
which has a current outstanding principal balance of $850,000 and has been
extended until such time as Mr. Bremer no longer personally guarantees $1.5
million of the Company's $2.5 million credit facility. The Company's $2.5
million credit facility is secured by the pledge of a $1 million certificate of
deposit of the Company. Pursuant to an agreement among Mr. Bremer and other
stockholders of the Company, any liability of Mr. Bremer as a result of calls on
Mr. Bremer's guarantee will be shared equally by Mr. Bremer, ODD and EGL.
<TABLE>
<S> <C>
Gary M. Bremer.............................................. $900,000
William J. Simione, Jr...................................... $225,000
Gary W. Rasmussen........................................... $ 90,000
</TABLE>
On October 7, 1996 and as a condition to the consummation of the IMHI
Acquisition, EGL and ODD (each an "Investor"), Mr. Anantharaman and certain
other holders of shares of IMHI Preferred Stock entered into an agreement with
IMHI (the "Preferred Stock Agreement"). Pursuant to the Preferred Stock
Agreement, such holders agreed to exchange all of their respective shares of
Preferred Stock for Common Stock based on a conversion price of $2.00 per share.
In addition, such holders received shares of Company Common Stock in lieu of
cash dividends that were payable on their respective shares of Preferred Stock.
Mr. Anantharaman is a partner in EGL. EGL is an affiliate of Rowan, which is a
more than 5% beneficial owner of the Common Stock. Mr. O'Donnell is a director
and officer of ODD. ODD is also a more than 5% beneficial owner of the Common
Stock. In connection with the Preferred Stock Agreement (i) Rowan received
approximately 967,100 shares of Common Stock, (ii) ODD received approximately
530,700 shares of Common Stock, and (iii) Mr. Anantharaman received
approximately 2,000 shares of Common Stock.
In addition, the Preferred Stock Agreement entitles an Investor, as long as
such Investor and its affiliates own 5% or more of the Common Stock, to
designate through the second anniversary of the IMHI Acquisition, one person
reasonably acceptable to the Company's Board of Directors to serve as a
14
<PAGE> 17
director of the Company, and the Company shall use all reasonable efforts to
cause the election of such designees. Furthermore, EGL and ODD and their
respective affiliates agreed to be present, in person or by proxy, at every
stockholder meeting and to vote in favor of all nominees to the Company's Board
of Directors as approved by such Board, provided EGL's and ODD's designees are
included with such nominees. Currently, Mr. Anantharaman is EGL's designee and
Mr. O'Donnell is ODD's designee to the Board of Directors.
On November 1, 1996, SCI entered into various information, support and
management service agreements (the "Columbia Agreements") with certain
affiliates of Columbia/HCA Healthcare Corporation ("Columbia/HCA"). As part of
the negotiation of the Columbia Agreements, Columbia/ HCA required that SCI
guarantee certain indemnity obligations of the former stockholders of CHHC,
including Mr. Bremer, to those Columbia/HCA affiliates (the "Guaranty") for
potential liabilities relating to the Central Health Holding Company Employee
Stock Ownership Plan Trust (the "Plan") or its participants, including potential
liabilities resulting from the ongoing investigation of the Plan by the
Department of Labor and the Internal Revenue Service audit of certain issues
related to the Plan. Also, on November 1, 1996, the Plan was converted into the
Profit Sharing Plan and sponsorship of the Plan was transferred from CHHC to the
Company. Under the terms of the Guaranty, SCI guarantees Columbia/HCA against
losses arising from: (i) Plan losses arising from a fiduciary breach, prohibited
transaction or other violation of law relating to the Plan; or (ii) liabilities
related to the Plan which are not paid by the former stockholders of CHHC other
than the Plan, but only to the extent losses are not recovered by Columbia/HCA
through other indemnity provisions of the stock purchase agreement.
Columbia/HCA's other sources of potential recovery include amounts accrued on
CHHC's closing balance sheet at the time of sale and escrow accounts established
for the benefit of Columbia/HCA by the former stockholders of CHHC. SCI's
maximum liability under the Guaranty is limited to $20 million for obligations
arising before November 1, 1997, $17.5 million for obligations arising before
November 1, 1998, $15 million for obligations arising before November 1, 1999,
$15 million for obligations arising before November 1, 2000 and $0 thereafter.
At no time during the term of the Guaranty shall SCI's liability exceed $20
million in the aggregate. Pursuant to the Guaranty, SCI agreed that on each date
that a guaranteed obligation is required to be paid to Columbia/HCA, SCI shall
grant Columbia/ HCA a security interest equal to the amount of the guaranteed
obligation in all SCI's accounts receivable. SCI also granted to Columbia/HCA
and the parties to the Columbia Agreements the right to offset any liability
arising under the Guaranty against any payments due from such parties to SCI for
information, management and support services. At December 31, 1996, no claims
had been made under the Guaranty and currently the Company does not anticipate
incurring any losses associated with the Guaranty.
Mr. G. Blake Bremer, the son of Mr. Bremer, is currently serving as an
Assistant Vice President of the Company. As compensation for his services, Mr.
Blake Bremer is expected to be paid approximately $100,000 in 1997. Ms. Lori
Yawn Ferrero, the Company's Director of Human Resources, and Ms. Martha
Elizabeth Cavaiani, the Director of Marketing of the Company, are the
sisters-in-law of Mr. Gary M. Bremer. Ms. Ferrero and Ms. Cavaiani are each
expected to be paid approximately $83,200 and $82,600, respectively, in 1997 for
their services. In addition, Mr. William J. Simione, III, the son of Mr.
Simione, is currently serving as a Consulting Manager of the Company. As
compensation for his services, Mr. William J. Simione, III is expected to be
paid approximately $69,000 in 1997.
Mr. Jay Shevins served as a Senior Vice President of IMHI until October 8,
1996 and is presently serving as the Senior Vice President of InfoMed, Inc. On
September 9, 1994, Mr. Shevins entered into a severance agreement with IMHI
pursuant to which he will receive the equivalent of one years' salary if his
employment is terminated for any reason other than gross negligence or a breach
of fiduciary duty.
For a description of consulting agreements between the Company and certain
directors, see "Compensation of Executive Officers and Directors -- Director
Compensation."
15
<PAGE> 18
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF
INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE COMMON STOCK
The Board of Directors has unanimously adopted a resolution declaring the
advisability of, and submits to the stockholders for approval, a proposal to
amend the Company's Certificate of Incorporation to effect a reverse stock split
of the outstanding Common Stock, pursuant to which each two shares of Common
Stock then outstanding will be automatically converted into one share (the
"Reverse Split") without any action on the part of the holder.
Consummation of the Reverse Split will not change the number of shares of
Common Stock authorized by the Company's Certificate of Incorporation, which
will remain at 20,000,000 shares, or the par value of the Common Stock per
share. The Reverse Split will become effective as of 5:00 P.M., Atlanta time
(the "Effective Date"), on the date that the certificate of amendment to the
Company's Certificate of Incorporation is filed with the Secretary of State of
Delaware. It is anticipated that the Effective Date for the Reverse Split will
be on or about the date that the Company's registration statement for the
Offering is declared effective by the Commission. If, for any reason the Board
of Directors deems it advisable to abandon the proposed Reverse Split, the
proposed Reverse Split may be abandoned by the Board of Directors at any time
before the Effective Date, whether before or after the Annual Meeting (even if
such proposal has been approved by the stockholders).
The text of the proposed amendment to the Company's Certificate of
Incorporation implementing the Reverse Split, is attached hereto as Exhibit A
and is hereby incorporated herein by reference.
In lieu of issuing less than one whole share resulting from the Reverse
Split to holders of an odd number of shares, the Company will determine the fair
value of each outstanding share of Common Stock held on the Effective Date of
the Reverse Split (the "Fractional Share Purchase Price"). The Company currently
anticipates that the Fractional Share Purchase Price will be based on the
average daily closing bid price per share of the Common Stock as reported by the
OTC Bulletin Board for the ten (10) trading days immediately preceding the
Effective Date. In the event the Company determines that unusual trading
activity would cause such amount to be an inappropriate measure of the fair
value of the Common Stock, the Company may base the Fractional Share Purchase
Price on the average daily closing bid price of the Common Stock over a shorter
or longer period not exceeding thirty (30) trading days. Stockholders who hold
an odd number of shares on the Effective Date will be entitled to receive, in
lieu of the less than one whole share arising as a result of the Reverse Split,
cash in the amount of the relevant portion of the Fractional Share Purchase
Price.
As soon as practical after the Effective Date, the Company will mail a
letter of transmittal to each holder of record of a stock certificate or
certificates which represent issued Common Stock outstanding on the Effective
Date. The letter of transmittal will contain instructions for the surrender of
such certificate or certificates to the Company's designated exchange agent in
exchange for certificates representing the number of whole shares of Common
Stock (plus the relevant portion of the Fractional Share Purchase Price, if any)
into which the shares of Common Stock have been converted as a result of the
Reverse Split. No cash payment will be made or new certificate issued to a
stockholder until he has surrendered his outstanding certificates together with
the letter of transmittal to the Company's exchange agent. See "-- Exchange of
Stock Certificates."
Effect of the Reverse Split. As a result of the Reverse Split, the number
of whole shares of Common Stock held by stockholders of record as of the
Effective Date will be equal to the number of shares of Common Stock held
immediately prior to the Effective Date divided by two, plus cash in lieu of any
fractional share. The Reverse Split will not affect a stockholder's percentage
ownership interest in the Company or proportional voting power, except for minor
differences resulting from the payment of cash in lieu of fractional shares. The
shares of Common Stock resulting from the Reverse Split will be fully paid and
nonassessable. The voting rights and other rights and privileges of the holders
of Common Stock will not be affected by the adoption or the implementation of
the Reverse Split. Each stockholder on the Effective Date will continue as a
stockholder with respect to the shares resulting from the Reverse Split. Each
such stockholder will continue to share in the Company's assets, earnings
16
<PAGE> 19
or profits, if any, to the extent of each such stockholder's ownership of Common
Stock following the Reverse Split.
The Company's Certificate of Incorporation currently authorizes the
issuance of 20,000,000 shares of Common Stock. The authorized Common Stock will
not be changed by reason of the Reverse Split. As of May , 1997, the number of
outstanding shares of Common Stock was shares. As a result of the
Reverse Split, the number of outstanding shares of Common Stock as of May ,
1997 would be reduced to approximately shares. An additional 1,950,000
shares (post-Reverse Split) would be issued by the Company upon the successful
completion of the Offering.
The Common Stock is currently registered under Section 12(g) of the
Exchange Act and as a result, the Company is subject to the periodic reporting
and other requirements of the Exchange Act. The Reverse Split will not affect
the registration of the Common Stock under the Exchange Act, and the Company has
no current intention of terminating its registration under the Exchange Act. The
Company has filed an application to have its Common Stock traded on the Nasdaq
National Market. The Reverse Split is not expected to adversely affect the
eligibility of the Common Stock to be traded on the Nasdaq National Market.
The par value of the Common Stock will remain at $.001 per share following
the Effective Date of the Reverse Split, and the number of shares of Common
Stock issued will be reduced. As a consequence, the aggregate par value of the
issued Common Stock will be reduced. The resolutions adopted by the Board of
Directors approving the Reverse Split provide that this increase in capital in
excess of par value will be transferred from capital to surplus, which
additional surplus could be distributed to stockholders as dividends or used by
the Company to repurchase outstanding Common Stock. The Company currently has no
plans to use any surplus so created to pay any such dividend or to repurchase
shares.
The increase in the authorized but unissued number of shares of Common
Stock affected by the Reverse Split could have an anti-takeover effect. Common
Stock could, within the limits imposed by applicable law, be issued by the
Company in one or more transactions which would make more difficult, and
therefore less likely, a takeover of the Company. Any such issuance of
additional Common Stock could have the effect of diluting the earnings per share
and book value per share of outstanding Common Stock, and such additional shares
could be used to dilute the stock ownership or voting rights of persons seeking
to obtain control of the Company.
Upon consummation of the Reverse Split, the total number of shares
currently reserved for grants of stock options and all stock options previously
granted would be decreased proportionately. The cash consideration payable per
share upon exercise of the stock options would be increased proportionately.
Similarly, the total number of shares issuable upon exercise of warrants granted
by the Company would be decreased proportionately and the cash consideration
payable per share upon exercise of the warrants would increase proportionately.
Dissenting stockholders have no appraisal rights under Delaware law or the
Company's Certificate of Incorporation with respect to the Reverse Split.
Purpose of the Reverse Split. The Board of Directors believes that a
decrease in the number of authorized and outstanding shares of Common Stock,
without any material alteration of the proportionate economic interest in the
Company held by individual stockholders, may increase the trading price of the
outstanding shares to a price more appropriate for a Nasdaq National Market
security and thereby facilitates the Offering, although no assurance can be
given that the market price of the Common Stock will rise in proportion to the
reduction in the number of outstanding shares resulting from the Reverse Split.
Additionally, the Board of Directors believes that the current per share
price of the Common Stock may limit the effective marketability of the Common
Stock, including the Common Stock to be sold in the Offering, because of the
reluctance of many brokerage firms and institutional investors to recommend
lower-priced stocks to their clients or to hold them in their own portfolios.
The
17
<PAGE> 20
underwriters in the Offering have indicated to the Company that certain policies
and practices of the securities industry may tend to discourage individual
brokers within those firms from dealing in lower-priced stocks. Some of those
policies and practices involve time-consuming procedures that make the handling
of lower-priced stocks economically unattractive. The brokerage commission on a
sale of lower-priced stock may also represent a higher percentage of the sale
price than the brokerage commission on a higher-priced issue. Any reduction in
brokerage commissions resulting from the Reverse Split may be offset, however,
in whole or in part, by increased brokerage commissions required to be paid by
stockholders selling "odd lots" created by the Reverse Split.
The Board of Directors believes that the decrease in the number of shares
of Common Stock outstanding as a consequence of the proposed Reverse Split and
the resulting anticipated increased price level will encourage greater interest
in the Common Stock by the financial community and the investing public and
possibly facilitate the completion of the Offering and promote greater liquidity
for the holders of the Common Stock. It is possible, however, that liquidity
could be affected adversely by the reduced number of shares outstanding after
the Reverse Split. Although any increase in the market price of the Common Stock
resulting from the Reverse Split may be proportionately less than the decrease
in the number of shares outstanding, the proposed Reverse Split could result in
a market price for the shares that would be high enough to overcome the
reluctance, policies and practices of brokerage houses and investors referred to
above and to diminish the adverse impact of correspondingly high trading
commissions on the market for the shares.
There can be no assurances, however, that the foregoing effects will occur
or that the market price of the Common Stock immediately after implementation of
the proposed Reverse Split will be maintained for any period of time, or that
such market price will approximate two times the market price before the
proposed Reverse Split.
Exchange of Stock Certificates. If the Board of Directors determines to
consummate the Reverse Split, as soon as practicable after the Effective Date,
the Company will send letters of transmittal to all stockholders of record on
the Effective Date for use in transmitting stock certificates ("Old
Certificates") to the Company's exchange agent.
Upon proper completion and execution of the letter of transmittal and
return thereof to the exchange agent, together with Old Certificates, holders of
record will receive certificates ("New Certificates") representing the number of
whole shares of Common Stock into which their shares of Common Stock have been
converted as a result of the Reverse Split (as well as cash in lieu of
fractional shares resulting from the Reverse Split). Until surrendered, each
outstanding Old Certificate held by a stockholder shall be deemed for all
purposes to represent the number of whole shares to which the holder is entitled
as a result of the Reverse Split (as well as cash in lieu of fractional shares
resulting from the Reverse Split).
No service charges will be payable by stockholders in connection with the
exchange of certificates, all expenses of which will be borne by the Company.
Federal Income Tax Consequences on the Reverse Split. The following
discussion describes certain federal income tax consequences of the Reverse
Split to stockholders who are citizens or residents of the United States, other
than stockholders who received their Common Stock as compensation. The
consequences for each stockholder will be governed by the specific facts and
circumstances pertaining to his acquisition and ownership of Common Stock. Thus,
the Company recommends that each stockholder consult with his tax advisor
concerning his own personal tax situation. In general, the federal income tax
consequences of the proposed Reverse Split will vary among stockholders
depending upon whether they receive the Fractional Share Purchase Price or
solely New Certificates in exchange for Old Certificates. The Company has not
sought and will not seek an opinion of counsel or a ruling from the Internal
Revenue Service regarding the federal income tax consequences of the Reverse
Split. The Company, however, believes that because the Reverse Split is not part
of a plan to
18
<PAGE> 21
increase periodically a stockholder's proportionate interest in the Company's
assets or earnings and profits, the Reverse Split probably will have the
following federal income tax effects:
1. A stockholder who receives solely New Certificates will not
recognize gain or loss on the exchange. In the aggregate, the stockholder's
basis in the Common Stock represented by New Certificates will equal the
holder's basis in the Common Stock represented by Old Certificates.
2. A stockholder who receives a portion of the Fractional Share
Purchase Price as a result of the Reverse Split will generally be treated
as having received the payment as a distribution in redemption of the
Fractional Share, as provided in Section 302(a) of the Code. Each affected
stockholder will be required to consult such stockholder's own tax advisor
for the tax effect of such redemption (i.e., exchange or dividend
treatment) in light of such stockholder's particular facts and
circumstances.
3. The Reverse Split will constitute a reorganization within the
meaning of Section 368(a)(1)(E) of the Code, and the Company will not
recognize any gain or loss as a result of the Reverse Split.
Recommendation and Vote. The Reverse Split must be approved by the holders
of a majority of the outstanding Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
REVERSE SPLIT.
PROPOSAL TO APPROVE THE INCENTIVE PLAN
The Company maintains the 1997 Omnibus Equity-based Incentive Plan (the
"Incentive Plan") attached hereto as Exhibit B and is hereby incorporated herein
by reference. The Incentive Plan provides the Company with increased flexibility
to grant equity-based compensation to key employees, officers, directors and
consultants of the Company or an affiliate. The Board of Directors has reserved
500,000 shares of Common Stock for issuance pursuant to awards that may be made
under the Incentive Plan, subject to adjustment as provided therein. The number
of shares of Common Stock associated with any forfeited Stock Incentive (as
defined below) are added back to the number of shares that can be issued under
the Incentive Plan. The last reported closing bid price per share of Common
Stock was $ as of June , 1997.
The Incentive Plan is subject to approval of the stockholders within twelve
months after adoption of the Incentive Plan. The Incentive Plan was adopted by
the Board of Directors on March 26, 1997.
Awards under the Incentive Plan will be determined by the Compensation
Committee of the Board of Directors. The Incentive Plan permits the Compensation
Committee to make awards of a variety of equity-based incentives, including
stock awards, incentive stock options and non-qualified stock options to
purchase shares of Common Stock, stock appreciation rights, phantom shares,
performance unit appreciation rights, and dividend equivalent rights
(collectively, "Stock Incentives"). As of June , 1997, the Compensation
Committee had not made any awards of Stock Incentives. Any Stock Incentives
granted after June , 1997 will be void if stockholder approval of the
Incentive Plan is not obtained.
The number of shares of Common Stock as to which a Stock Incentive is
granted and to whom any Stock Incentive is granted shall be determined by the
Compensation Committee, subject to the provisions of the Incentive Plan. Stock
Incentives issuable may be made exercisable or settled at such prices and may be
made forfeitable or terminable under such terms as are established by the
Compensation Committee, to the extent not otherwise inconsistent with the terms
of the Incentive Plan. Each Stock Incentive will be evidenced by a Stock
Incentive Agreement or made subject to the terms of a Stock Incentive Program,
each containing terms and restrictions as the Compensation
19
<PAGE> 22
Committee may deem appropriate. No participant, however, may be granted during
any one year period rights to shares of Common Stock under options and stock
appreciation rights which, in the aggregate, exceed 200,000 shares of Common
Stock.
The Incentive Plan allows for the grant of incentive stock options and
non-qualified stock options. The Compensation Committee will determine whether
an option is an incentive stock option or a non-qualified stock option at the
time the option is granted. The exercise price of an option is established by
the Compensation Committee. The exercise price of an incentive stock option may
not be less than the fair market value of the Common Stock on the date of the
grant (or less than 110% of the fair market value if the participant controls
more than 10% of the voting power of the Company or a subsidiary). Non-qualified
stock options may be made exercisable at a price equal to, less than or more
than the fair market value of the Common Stock on the date that the option is
awarded. The Compensation Committee may permit an option exercise price to be
paid in cash or by the delivery of previously-owned shares of Common Stock, or
to be satisfied through a cashless exercise executed through a broker or by
having a number of shares of Common Stock otherwise issuable at the time of
exercise withheld.
The term of an option will be specified in the applicable Stock Incentive
Agreement. The term of an incentive stock option may not exceed ten years from
the date of grant; however, any incentive stock option granted to a participant
who controls more than 10% of the voting power of the Company or a subsidiary
will not be exercisable after the expiration of five years after the date the
option is granted. Subject to any further limitations in a Stock Incentive
Agreement, in the event of a participant's termination of employment, an
incentive stock option will become unexercisable no later than three months
after the date of such termination of employment; provided, however, that if
such termination of employment is due to death or disability, one year will be
substituted for the three-month period.
Stock appreciation rights may be granted separately or in connection with
another Stock Incentive, and the Compensation Committee may provide that they
are exercisable at the discretion of the holder or that they will be paid at a
time or times certain or upon the occurrence or non-occurrence of certain
events. Stock appreciation rights may be settled in shares of Common Stock or in
cash, according to terms established by the Compensation Committee with respect
to any particular award.
The Compensation Committee may grant shares of Common Stock to a
participant as stock awards, subject to such restrictions and conditions, if
any, as the Compensation Committee may determine. Dividend equivalent rights,
performance units and phantom shares may be granted in such numbers or units and
may be subject to such conditions or restrictions as the Compensation Committee
may determine and will be payable in cash or shares of Common Stock, as the
Compensation Committee may determine. The Compensation Committee may make cash
awards designed to cover tax obligations of employees that result from the
receipt or exercise of a Stock Incentive.
Stock Incentives generally are not transferable or assignable during a
holder's lifetime. However, Stock Incentives may include exercise, conversion or
settlement rights to a holder's estate or personal representative in the event
of the holder's death or disability. At the Compensation Committee's discretion,
Stock Incentives that are subject to termination upon termination of employment
may be cancelled, accelerated, paid or continued, subject to the terms of the
applicable Stock Incentive Agreement and to the provisions of the Incentive
Plan.
The number of shares of Common Stock reserved for issuance in connection
with the grant or settlement of Stock Incentives or to which a Stock Incentive
is subject, as the case may be, and the exercise price of each option are
subject to adjustment in the event of any recapitalization of the Company. In
the event of certain corporate reorganizations, Stock Incentives may be
substituted, cancelled, accelerated, cashed-out or otherwise adjusted by the
Compensation Committee, provided such adjustment is not inconsistent with the
terms of the Incentive Plan or any agreement reflecting the terms of a Stock
Incentive.
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<PAGE> 23
Although the Incentive Plan may be amended by the Board of Directors
without stockholder approval, the Board of Directors also may condition any such
amendment upon stockholder approval if stockholder approval is deemed necessary
or appropriate in consideration of tax, securities or other laws. No such action
by the Board of Directors may adversely affect the rights of a holder of a Stock
Incentive without the holder's consent.
A participant will not recognize income upon the grant of an option or at
any time prior to the exercise of the option or a portion thereof. At the time a
participant exercises a non-qualified option or portion thereof, he or she will
recognize compensation taxable as ordinary income in an amount equal to the
excess of the fair market value of the Common Stock on the date the option is
exercised over the price paid for the Common Stock, and the Company will then be
entitled to a corresponding deduction.
A participant who exercises an incentive stock option will not be taxed at
the time he or she exercises his or her option or a portion thereof. Instead, he
or she will be taxed at the time he or she sells the Common Stock purchased
pursuant to the option. A participant will be taxed on the difference between
the price he or she paid for the stock and the amount for which he or she sells
the stock. If a participant does not sell the stock prior to two years from the
date of grant of the option and one year from the date the stock is issued to
him or her, the gain will be capital gain and the Company will not get a
corresponding deduction. If a participant sells the stock at a gain prior to
that time, the difference between the amount the participant paid for the stock
and the lesser of the fair market value on the date of exercise or the amount
for which the stock is sold will be taxed as ordinary income and the Company
will be entitled to a corresponding deduction. If the stock is sold for an
amount in excess of the fair market value on the date of exercise, the excess
amount is taxed as capital gain. If a participant sells the stock for less than
the amount he or she paid for the stock prior to the one or two year periods
indicated, no amount will be taxed as ordinary income and the loss will be taxed
as a capital loss. Exercise of an incentive stock option may subject a
participant to, or increase a participant's liability for, the alternative
minimum tax.
A participant generally will not recognize income upon the grant of a stock
appreciation right, dividend equivalent right, performance unit appreciation
right or phantom share (an "Equity Incentive"). At the time a participant
receives payment under any Equity Incentive, he or she generally will recognize
compensation taxable as ordinary income in an amount equal to the cash or the
fair market value of the Common Stock received, and the Company will then be
entitled to a corresponding deduction.
A participant will not be taxed upon the grant of a stock award if such
award is not transferrable by the participant or is subject to a "substantial
risk of forfeiture," as defined in the Code. However, when the shares of Common
Stock that are subject to the stock award become transferrable by the
participant and are no longer subject to a substantial risk of forfeiture, a
participant will recognize compensation taxable as ordinary income in an amount
equal to the fair market value of the stock subject to the stock award, less any
amount paid for such stock, and the Company will then be entitled to a
corresponding deduction. However, if a participant so elects at the time of
receipt of a stock award that is subject to a substantial risk of forfeiture, he
or she may include the fair market value of the stock subject to the stock
award, less any amount paid for such stock, in income at the time of grant and
the Company also will be entitled to a corresponding deduction at that time.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
INCENTIVE PLAN.
21
<PAGE> 24
PROPOSAL TO APPROVE THE DIRECTOR PLAN
The Company maintains the Simione Central Holdings, Inc. 1997 Non-Qualified
Formula Stock Option Plan (the "Director Plan") attached hereto as Exhibit C and
is hereby incorporated herein by reference. The Board of Directors has reserved
50,000 shares of Common Stock for issuance pursuant to awards that may be made
under the Director Plan subject to adjustment as provided therein. The number of
shares of Common Stock associated with any forfeited option are added back to
the number of shares that can be issued under the Director Plan. The last
reported closing bid price per share of Common Stock was $ as of June , 1997.
The awards under the Director Plan are determined by the express terms of
the Director Plan. The Director Plan will be administered by a committee (the
"Committee"), the members of which are appointed by the Board of Directors. The
Committee will consist of at least one or more members of the Board of Directors
who will not receive a grant of an option under the Director Plan and who are
not currently eligible to receive a grant of an option under the Director Plan.
The members of the Committee are currently Mr. James R. Henderson and Mr.
William J. Simione, Jr. The Committee will have the authority in its sole
discretion to interpret the Director Plan, to grant options under and accordance
with the provisions of the Director Plan, and to make all other determinations
and to take all other actions it deems necessary or advisable for the
implementation and administration of the Director Plan.
Only nonemployee directors of the Company are eligible to participate in
the Director Plan. Mr. Richard D. Jackson is the only director currently
eligible to participate in the Director Plan. The Director Plan contemplates
awards that are granted upon a nonemployee director's initial appointment to the
Board of Directors providing an option to purchase 10,000 shares of Common Stock
at a price per share exercise price equal to the then fair market value of a
share of Common Stock. Each option granted pursuant to the Director Plan will be
authorized by the Committee, will be evidenced by an agreement, and will be
subject to additional terms as set forth in the agreement. Upon his initial
appointment to the Board of Directors in December 1996, Mr. Jackson was granted
an option to purchase 10,000 shares of Common Stock at an exercise price of
$4.44 per share that has been authorized by the Committee, and is evidenced by
and subject to an agreement.
The Director Plan was effective on January 1, 1997 and will continue to be
effective until ten years after the earlier of the effective date of the
Director Plan or the date the stockholders approve the Director Plan, unless
sooner terminated by the Board of Directors.
The number of shares of Common Stock reserved for issuance upon exercise of
options granted under the Director Plan, the number of shares of Common Stock
subject to outstanding options and the exercise price of each option are subject
to adjustment in the event of any recapitalization of the Company or similar
event, effective without receipt of consideration. The number of shares of stock
subject to options granted in connection with initial appointments are also
subject to adjustment in such events. In the event of certain corporate
reorganizations and similar events, the options may be adjusted or, with regard
to vested options, cashed out depending upon the nature of the event. As of June
, 1997, options for shares of Common Stock have been granted under the
Director Plan.
A participant will not recognize income upon the grant of an option or at
any time prior to the exercise of the option or a portion thereof. At the time a
participant exercises a non-qualified option or portion thereof, he or she will
recognize compensation taxable as ordinary income in an amount equal to the
excess of the fair market value of the Common Stock on the date the option is
exercised over the price paid for the Common Stock, and the Company will then be
entitled to a corresponding deduction.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
DIRECTOR PLAN.
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<PAGE> 25
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Effective January 23, 1997, the Company appointed Ernst & Young LLP as the
Company's independent public accountants for the fiscal year ended December 31,
1996 and replaced Arthur Andersen LLP. The decision to change accountants was
approved by the Audit Committee of the Board of Directors of the Company acting
pursuant to authority granted by the Board of Directors.
Arthur Andersen LLP's reports on IMHI's Financial Statements for the three
years ended June 30, 1996 contained no adverse opinion or a disclaimer of
opinion, and were not qualified or modified as to uncertainty, audit scope or
accounting principles.
During the last three fiscal years ended June 30, 1996, there were no
disagreements between IMHI and Arthur Andersen LLP on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Arthur
Andersen LLP, would have caused it to make a reference to the subject matter of
the disagreements in connection with its reports.
None of the "reportable events" described in Item 304(a)(1)(v) of
Regulation S-K occurred with respect to IMHI during the last three fiscal years
or in the subsequent interim period to the date hereof.
During the last three fiscal years and subsequent interim period to the
date hereof, the Company did not consult with Ernst & Young LLP regarding any of
the matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
The Board of Directors has selected the firm of Ernst & Young LLP as the
Company's independent public accountants for the fiscal year ending December 31,
1997. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, at which time they will have the opportunity to make a statement
if they desire to do so and to respond to appropriate questions.
The affirmative vote of a majority of the shares entitled to vote at the
Annual Meeting is required to ratify the appointment of Ernst & Young LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP.
OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the Board
of Directors intends to present, and knows that others will present at the
Annual Meeting, is that set forth herein. If any other matter or matters are
properly brought before the Annual Meeting or any adjournments thereof, it is
the intention of the persons named in the accompanying form of proxy to vote the
proxy on such matters in accordance with their judgement.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Company's 1998
Annual Meeting of Stockholders must be received by the Company on or prior to
, 1998 to be eligible for inclusion in the Company's Proxy Statement
and form of Proxy to be used in connection with the 1998 Annual Meeting.
By Order of the Board of Directors,
James A. Tramonte
General Counsel and Secretary
Atlanta, Georgia
June , 1997
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<PAGE> 26
EXHIBIT A
PROPOSED RESOLUTION FOR THE AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION
NOW THEREFORE BE IT RESOLVED, that an amendment to the Certificate of
Incorporation of the Corporation (the "Amendment") to effect a reverse stock
split (the "Reverse Split") of the outstanding Common Stock pursuant to which
each two shares currently outstanding will be converted into one share be, and
it hereby is, approved and adopted, by adding the following to the end of
Article III Section 2:
"As of 5:00 P.M., Atlanta time, on the date on which the Certificate of
Amendment reflecting this amendment is filed with the Secretary of State
of the State of Delaware (the "Effective Time"), each TWO outstanding
shares of Common Stock, par value $.001 per share ("Old Common Stock"),
shall thereupon be reclassified and changed into ONE share of Common
Stock, par value $.001 per share. Upon such Effective Time, each holder
of Old Common Stock shall thereupon automatically be and become the
holder of ONE share of Common Stock for every TWO shares of Old Common
Stock then held by such holder immediately prior thereto. Upon such
Effective Time, each certificate formerly representing a stated number
of shares of Old Common Stock shall thereupon be deemed for all
corporate purposes to evidence ownership of Common Stock in the
appropriately reduced whole number of shares. As soon as practicable
after such Effective Time, stockholders as of the date of the
reclassification will be notified thereof and, upon their delivery of
their certificates of Old Common Stock to the Company or its designated
agent, will be sent stock certificates representing their shares of
Common Stock, rounded down to the nearest whole number, together with
cash representing the fair value of such holder's fractional shares of
Old Common Stock. No scrip or fractional share certificates for Common
Stock will be issued in connection with this reverse stock split. This
amendment shall not effect any change in the authorized number or par
value of the shares of Common Stock. Except as specifically provided in
this paragraph, references to Common Stock in the Certificate of
Incorporation shall be deemed to include Old Common Stock unless the
context otherwise requires."
<PAGE> 27
EXHIBIT B
SIMIONE CENTRAL HOLDINGS, INC.
OMNIBUS EQUITY-BASED INCENTIVE PLAN
<PAGE> 28
SIMIONE CENTRAL HOLDINGS, INC.
OMNIBUS EQUITY-BASED INCENTIVE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1 DEFINITIONS................................................. 1
1.1 Definitions................................................. 1
SECTION 2 THE STOCK INCENTIVE PLAN.................................... 2
2.1 Purpose of the Plan......................................... 2
2.2 Stock Subject to the Plan................................... 2
2.3 Administration of the Plan.................................. 3
2.4 Eligibility and Limits...................................... 3
SECTION 3 TERMS OF STOCK INCENTIVES................................... 3
3.1 Terms and Conditions of All Stock Incentives................ 3
3.2 Terms and Conditions of Options............................. 4
(a) Option Price........................................... 4
(b) Option Term............................................ 4
(c) Payment................................................ 4
(d) Conditions to the Exercise of an Option................ 5
(e) Termination of Incentive Stock Option.................. 5
(f) Special Provisions for Certain Substitute Options...... 5
3.3 Terms and Conditions of Stock Appreciation Rights........... 5
(a) Settlement............................................. 5
(b) Conditions to Exercise................................. 6
3.4 Terms and Conditions of Stock Awards........................ 6
3.5 Terms and Conditions of Dividend Equivalent Rights.......... 6
(a) Payment................................................ 6
(b) Conditions to Payment.................................. 6
3.6 Terms and Conditions of Performance Unit Awards............. 6
(a) Payment................................................ 6
(b) Conditions to Payment.................................. 6
3.7 Terms and Conditions of Phantom Shares...................... 6
(a) Payment................................................ 7
(b) Conditions to Payment.................................. 7
3.8 Treatment of Awards Upon Termination of Employment.......... 7
SECTION 4 RESTRICTIONS ON STOCK....................................... 7
4.1 Escrow of Shares............................................ 7
4.1 Restrictions on Transfer.................................... 7
SECTION 5 GENERAL PROVISIONS.......................................... 8
5.1 Withholding................................................. 8
5.2 Changes in Capitalization; Merger; Liquidation.............. 8
5.3 Cash Awards................................................. 9
5.4 Compliance with Code........................................ 9
5.5 Right to Terminate Employment............................... 9
5.6 Non-alienation of Benefits.................................. 9
5.7 Restrictions on Delivery and Sales of Shares; Legends....... 9
5.8 Termination and Amendment of the Plan....................... 9
5.9 Stockholder Approval........................................ 9
5.10 Choice of Law............................................... 10
5.11 Effective Date of Plan...................................... 10
</TABLE>
i
<PAGE> 29
SIMIONE CENTRAL HOLDINGS, INC.
OMNIBUS EQUITY-BASED INCENTIVE PLAN
SECTION 1
DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a) "Board of Directors" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee appointed by the Board of
Directors to administer the Plan.
(d) "Company" means Simione Central Holdings, Inc., a Delaware
corporation.
(e) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any affiliate of the Company
for the Participant. If no long-term disability plan or policy was ever
maintained on behalf of the Participant or, if the determination of
Disability relates to an Incentive Stock Option, Disability shall mean that
condition described in Code Section 22(e)(3), as amended from time to time.
In the event of a dispute, the determination of Disability shall be made by
the Committee and shall be supported by advice of a physician competent in
the area to which such Disability relates.
(f) "Disposition" means any conveyance, sale, transfer, assignment,
pledge or hypothecation, whether outright or as security, inter vivos or
testamentary, with or without consideration, voluntary or involuntary.
(g) "Dividend Equivalent Rights" means certain rights to receive cash
payments as described in Plan Section 3.5
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(i) "Exercise Price" means the price per share of Stock purchasable
under any Option.
(j) "Fair Market Value" with regard to a date means (1) the closing
price at which Stock shall have been sold on the last trading date prior to
that date as reported by the Nasdaq Stock Market (or, if applicable, as
reported by a national securities exchange selected by the Committee on
which the shares of Stock are then actively traded) and published in The
Wall Street Journal, (2) if Stock is not traded on a securities exchange,
but is reported by the Nasdaq Stock Market and market information is
published on a regular basis in The Wall Street Journal, the average of the
published high and low sales prices for the last business day prior to that
date as published in The Wall Street Journal, (3) if such market
information is not published on a regular basis, the average of the high
bid and low asked prices of Stock in the over-the-counter market on the
last business day prior to that date, as reported by the Nasdaq Stock
Market, or, if not so reported, by a generally accepted reporting service,
or (4) if Stock is not publicly traded, as determined in good faith by the
Committee with due consideration being given to (i) the most recent
independent appraisal of the Company, if such appraisal is not more than
twelve months old and (ii) the valuation methodology used in any such
appraisal provided that, for purposes of granting awards other than
Incentive Stock Options, Fair Market Value of the shares of Stock may be
determined by the Committee by reference to the average market value
determined over a period certain or as of specified dates, to a tender
offer price for the shares of Stock (if settlement of an award is triggered
by such an event) or to any other reasonable measure of fair market value.
<PAGE> 30
(k) "Option" means a non-qualified stock option or an incentive stock
option.
(l) "Over 10% Owner" means an individual who at the time an Incentive
Stock Option is granted owns Stock possessing more than 10% of the total
combined voting power of the Company or one of its Subsidiaries, determined
by applying the attribution rules of Code Section 424(d).
(m) "Participant" means an individual who receives a Stock Incentive
hereunder.
(n) "Performance Unit Award" refers to a performance unit award
described in Plan Section 3.6.
(o) "Phantom Shares" refers to the rights described in Plan Section
3.7.
(p) "Plan" means the Simione Central Holdings, Inc. Omnibus
Equity-based Incentive Plan.
(q) "Stock" means the Company's common stock, no par value.
(r) "Stock Appreciation Right" means a stock appreciation right
described in Plan Section 3.3.
(s) "Stock Award" means a stock award described in Plan Section 3.4.
(t) "Stock Incentive Agreement" means an agreement between the Company
and a Participant or other documentation evidencing an award of a Stock
Incentive.
(u) "Stock Incentive Program" means a written program established by
the Committee, pursuant to which Stock Incentives are awarded under the
Plan under terms, conditions and restrictions set forth in such written
program.
(v) "Stock Incentives" means, collectively, Dividend Equivalent
Rights, Options, Performance Unit Awards, Phantom Shares, Stock
Appreciation Rights and Stock Awards.
(w) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, with respect
to incentive stock options, at the time of the granting of the Option, 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.
(x) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company and
its affiliates, regardless of whether severance or similar payments are
made to the Participant for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee shall, in its absolute discretion, determine the
effect of all matters and questions relating to a Termination of
Employment, including, but not by way of limitation, the question of
whether a leave of absence constitutes a Termination of Employment.
SECTION 2
THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide incentive to
officers, key employees, consultants, and directors of the Company and its
affiliates to stimulate their efforts toward the continued success of the
Company and to operate and manage the business in a manner that will provide for
the long-term growth and profitability of the Company; (b) encourage stock
ownership by officers, key employees, consultants, and directors by providing
them with a means to acquire a proprietary interest in the Company, acquire
shares of Stock, or to receive compensation which is based upon appreciation in
the value of Stock; and (c) provide a means of obtaining, rewarding and
retaining key personnel.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
Section 5.2, 500,000 shares of Stock (the "Maximum Plan Shares") are hereby
reserved exclusively for issuance pursuant to
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Stock Incentives, all or any portion of which may be issued pursuant to Options.
At no time shall the Company have outstanding Stock Incentives subject to
Section 16 of the Exchange Act and shares of Stock issued in respect of Stock
Incentives in excess of the Maximum Plan Shares; for this purpose, the
outstanding Stock Incentives and shares of Stock issued in respect of Stock
Incentives shall be computed in accordance with Rule 16b-3(a)(1) as promulgated
under the Exchange Act. To the extent permitted by Rule 16b-3(a)(1) as
promulgated under the Exchange Act, the shares of Stock attributable to the
nonvested, unpaid, unexercised, unconverted or otherwise unsettled portion of
any Stock Incentive that is forfeited or cancelled or expires or terminates for
any reason without becoming vested, paid, exercised, converted or otherwise
settled in full shall again be available for purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by the
Committee, which shall be comprised of at least two members of the Board of
Directors who may be "outside directors" within the meaning of Code Section
162(m) and the regulations thereunder. The Committee shall have full authority
in its discretion to determine the officers, key employees, consultants, and
directors of the Company or its affiliates to whom Stock Incentives shall be
granted and the terms and provisions of Stock Incentives, subject to the Plan.
Subject to the provisions of the Plan, the Committee shall have full and
conclusive authority to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the respective Stock Incentive Agreements or Stock Incentive
Programs and to make all other determinations necessary or advisable for the
proper administration of the Plan. The Committee's determinations under the Plan
need not be uniform and may be made by it selectively among persons who receive,
or are eligible to receive, awards under the Plan (whether or not such persons
are similarly situated). The Committee's decisions shall be final and binding on
all Participants. The Committee may delegate to any member of the Board of
Directors or officer of the Company the administrative authority to (a)
interpret the provisions of the Plan, any Stock Incentive Agreement or any Stock
Incentive Program; and (b) determine the treatment of Stock Incentives upon a
Termination of Employment, as contemplated in Plan Section 3.8.
2.4 Eligibility and Limits. Stock Incentives may be granted only to
officers, key employees, consultants, and directors of the Company, or any
affiliate of the Company; that an incentive stock option may only be granted to
an employee of the Company or any Subsidiary. In the case of incentive stock
options, the aggregate Fair Market Value (determined as at the date an incentive
stock option is granted) of stock with respect to which stock options intended
to meet the requirements of Code Section 422 become exercisable for the first
time by an individual during any calendar year under all plans of the Company
and its Subsidiaries shall not exceed $100,000; provided further, that if the
limitation is exceeded, the incentive stock option(s) which cause the limitation
to be exceeded shall be treated as non-qualified stock option(s).
SECTION 3
TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Incentives. (a) The number of shares
of Stock as to which a Stock Incentive shall be granted shall be determined by
the Committee in its sole discretion, subject to the provisions of Section 2.2
as to the total number of shares available for grants under the Plan and subject
to the limits on Options and Stock Appreciation Rights described in the
following sentence. To the extent required under Section 162(m) of the Code and
the regulations thereunder for compensation to be treated as qualified
performance-based compensation, the maximum number of shares of Stock with
respect to which Options or Stock Appreciation Rights may be granted during any
one year period to any employee shall not exceed 200,000.
(b) Each Stock Incentive shall either be evidenced by a Stock Incentive
Agreement in such form and containing such terms, conditions and restrictions as
the Committee may determine to be appropriate, or, except for Options or Stock
Appreciation Rights, be made subject to the terms of a
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Stock Incentive Program, containing such terms, conditions and restrictions as
the Committee may determine to be appropriate. Each Stock Incentive Agreement or
Stock Incentive Program shall be subject to the terms of the Plan and any
provisions contained in the Stock Incentive Agreement or Stock Incentive Program
that are inconsistent with the Plan shall be null and void.
(c) The date a Stock Incentive is granted shall be the date on which the
Committee has approved the terms and conditions of the Stock Incentive and has
determined the recipient of the Stock Incentive and the number of shares covered
by the Stock Incentive and has taken all such other action necessary to complete
the grant of the Stock Incentive.
(d) Any Stock Incentive may be granted in connection with all or any
portion of a previously or contemporaneously granted Stock Incentive. Exercise
or vesting of a Stock Incentive granted in connection with another Stock
Incentive may result in a pro rata surrender or cancellation of any related
Stock Incentive, as specified in the applicable Stock Incentive Agreement or
Stock Incentive Program.
(e) Stock Incentives shall not be transferable or assignable except by will
or by the laws of descent and distribution. Stock Incentives shall be
exercisable, during the Participant's lifetime, only by the Participant; or in
the event of the Disability of the Participant, by the legal representative of
the Participant; or in the event of the death of the Participant, by the legal
representatives of the Participant's estate or if no legal representative has
been appointed, by the successor in interest determined under the Participant's
will.
3.2 Terms and Conditions of Options. Each Option granted under the Plan
shall be evidenced by a Stock Incentive Agreement. At the time any Option is
granted, the Committee shall determine whether the Option is to be an incentive
stock option described in Code Section 422 or a non-qualified stock option, and
the Option shall be clearly identified as to its status as an incentive stock
option or a non-qualified stock option. Incentive stock options may only be
granted to employees of the Company or any Subsidiary. At the time any incentive
stock option granted under the Plan is exercised, the Company shall be entitled
to legend the certificates representing the shares of Stock purchased pursuant
to the Option to clearly identify them as representing the shares purchased upon
the exercise of an incentive stock option. An incentive stock option may only be
granted within ten (10) years from the earlier of the date the Plan is adopted
or approved by the Company's stockholders.
(a) Option Price. Subject to adjustment in accordance with Section 5.2 and
the other provisions of this Section 3.2, the Exercise Price under (i) any
non-qualified stock option shall be as set forth in the applicable Stock
Incentive Agreement which may be Fair Market Value on the date of grant or less
than or greater than such Fair Market Value; and (ii) any incentive stock option
shall be as set forth in the applicable Stock Incentive Agreement, but in no
event shall it be less than the Fair Market Value on the date the incentive
stock option is granted. With respect to each grant of an incentive stock option
to a Participant who is an Over 10% Owner, the Exercise Price shall not be less
than 110% of the Fair Market Value on the date the Option is granted.
(b) Option Term. Any incentive stock option granted to a Participant who
is not an Over 10% Owner shall not be exercisable after the expiration of ten
(10) years after the date the Option is granted. Any incentive stock option
granted to a Participant who is an Over 10% Owner shall not be exercisable after
the expiration of five (5) years after the date the Option is granted. The term
of any non-qualified stock option shall be as specified in the applicable Stock
Incentive Agreement.
(c) Payment. Payment for all shares of Stock purchased pursuant to
exercise of an Option shall be made in any form or manner authorized by the
Committee in the Stock Incentive Agreement, including, but not limited to, (i)
cash, (ii) by delivery to the Company of a number of shares of Stock which have
been owned by the holder for at least six (6) months prior to the date of
exercise having an aggregate Fair Market Value of not less than the product of
the Exercise Price multiplied by the number of shares the Participant intends to
purchase upon exercise of the Option on the date of delivery; (iii) in a
cashless exercise through a broker; or (iv) by having a number of shares of
Stock
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<PAGE> 33
withheld, the Fair Market Value of which as of the date of exercise is
sufficient to satisfy the Exercise Price. In its discretion, the Committee also
may authorize (at the time an Option is granted or thereafter) Company financing
to assist the Participant as to payment of the Exercise Price on such terms as
may be offered by the Committee in its discretion. If a Stock Incentive
Agreement so provides, the Participant may be granted a new Option to purchase a
number of shares of Stock equal to the number of previously owned shares of
Stock tendered in payment for each share of Stock purchased pursuant to the
terms of the Stock Incentive Agreement. Any such new Option shall be subject to
the terms and conditions of the Stock Incentive Agreement pursuant to which such
new Option is granted. Payment of the Exercise Price shall be made at the time
that the Option or any part thereof is exercised, and no shares shall be issued
or delivered upon exercise of an Option until full payment has been made by the
Participant. The holder of an Option, as such, shall have none of the rights of
a stockholder.
(d) Conditions to the Exercise of an Option. Each Option granted under the
Plan shall be exercisable by whom, at such time or times, or upon the occurrence
of such event or events, and in such amounts, as the Committee shall specify in
the Stock Incentive Agreement; provided, however, that subsequent to the grant
of an Option, the Committee, at any time before complete termination of such
Option, may accelerate the time or times at which such Option may be exercised
in whole or in part and may permit the Participant or any other designated
person to exercise the Option, or any portion thereof, for all or part of the
remaining Option term, notwithstanding any provision of the Stock Incentive
Agreement to the contrary.
(e) Termination of Incentive Stock Option. With respect to an incentive
stock option, in the event of Termination of Employment of a Participant, the
Option or portion thereof held by the Participant which is unexercised shall
expire, terminate, and become unexercisable no later than the expiration of
three (3) months after the date of Termination of Employment; provided, however,
that in the case of a holder whose Termination of Employment is due to death or
Disability, one (1) year shall be substituted for such three (3) month period.
For purposes of this Subsection (e), Termination of Employment of the
Participant shall not be deemed to have occurred if the Participant is employed
by another corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the incentive stock option of the Participant in
a transaction to which Code Section 424(a) is applicable.
(f) Special Provisions for Certain Substitute Options. Notwithstanding
anything to the contrary in this Section 3.2, any Option issued in substitution
for an option previously issued by another entity, which substitution occurs in
connection with a transaction to which Code Section 424(a) is applicable, may
provide for an exercise price computed in accordance with such Code Section and
the regulations thereunder and may contain such other terms and conditions as
the Committee may prescribe to cause such substitute Option to contain as nearly
as possible the same terms and conditions (including the applicable vesting and
termination provisions) as those contained in the previously issued option being
replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan shall be evidenced by a Stock
Incentive Agreement. A Stock Appreciation Right shall entitle the Participant to
receive the excess of (1) the Fair Market Value of a specified or determinable
number of shares of the Stock at the time of payment or exercise over (2) a
specified or determinable price which, in the case of a Stock Appreciation Right
granted in connection with an Option, shall be not less than the Exercise Price
for that number of shares subject to that Option. A Stock Appreciation Right
granted in connection with a Stock Incentive may only be exercised to the extent
that the related Stock Incentive has not been exercised, paid or otherwise
settled.
(a) Settlement. Upon settlement of a Stock Appreciation Right, the Company
shall pay to the Participant the appreciation in cash or shares of Stock (valued
at the aggregate Fair Market Value on the date of payment or exercise) as
provided in the Stock Incentive Agreement or, in the absence of such provision,
as the Committee may determine.
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(b) Conditions to Exercise. Each Stock Appreciation Right granted under
the Plan shall be exercisable or payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of a Stock Appreciation Right, the Committee, at any time before
complete termination of such Stock Appreciation Right, may accelerate the time
or times at which such Stock Appreciation Right may be exercised or paid in
whole or in part.
3.4 Terms and Conditions of Stock Awards. The number of shares of Stock
subject to a Stock Award and restrictions or conditions on such shares, if any,
shall be as the Committee determines, and the certificate for such shares shall
bear evidence of any restrictions or conditions. Subsequent to the date of the
grant of the Stock Award, the Committee shall have the power to permit, in its
discretion, an acceleration of the expiration of an applicable restriction
period with respect to any part or all of the shares awarded to a Participant.
3.5 Terms and Conditions of Dividend Equivalent Rights. A Dividend
Equivalent Right shall entitle the Participant to receive payments from the
Company in an amount determined by reference to any cash dividends paid on a
specified number of shares of Stock to Company stockholders of record during the
period such rights are effective. The Committee may impose such restrictions and
conditions on any Dividend Equivalent Right as the Committee in its discretion
shall determine, including the date any such right shall terminate and may
reserve the right to terminate, amend or suspend any such right at any time.
(a) Payment. Payment in respect of a Dividend Equivalent Right may be made
by the Company in cash or shares of Stock (valued at Fair Market Value on the
date of payment) as provided in the Stock Incentive Agreement or Stock Incentive
Program, or, in the absence of such provision, as the Committee may determine.
(b) Conditions to Payment. Each Dividend Equivalent Right granted under
the Plan shall be payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee shall specify in the
applicable Stock Incentive Agreement or Stock Incentive Program; provided,
however, that subsequent to the grant of a Dividend Equivalent Right, the
Committee, at any time before complete termination of such Dividend Equivalent
Right, may accelerate the time or times at which such Dividend Equivalent Right
may be paid in whole or in part.
3.6 Terms and Conditions of Performance Unit Awards. A Performance Unit
Award shall entitle the Participant to receive, at a specified future date,
payment of an amount equal to all or a portion of the value of a specified or
determinable number of units (stated in terms of a designated or determinable
dollar amount per unit) granted by the Committee. At the time of the grant, the
Committee must determine the base value of each unit, the number of units
subject to a Performance Unit Award, the performance factors applicable to the
determination of the ultimate payment value of the Performance Unit Award and
the period over which Company performance shall be measured. The Committee may
provide for an alternate base value for each unit under certain specified
conditions.
(a) Payment. Payment in respect of Performance Unit Awards may be made by
the Company in cash or shares of Stock (valued at Fair Market Value on the date
of payment) as provided in the applicable Stock Incentive Agreement or Stock
Incentive Program or, in the absence of such provision, as the Committee may
determine.
(b) Conditions to Payment. Each Performance Unit Award granted under the
Plan shall be payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee shall specify in the
applicable Stock Incentive Agreement or Stock Incentive Program; provided,
however, that subsequent to the grant of a Performance Unit Award, the
Committee, at any time before complete termination of such Performance Unit
Award, may accelerate the time or times at which such Performance Unit Award may
be paid in whole or in part.
3.7 Terms and Conditions of Phantom Shares. Phantom Shares shall entitle
the Participant to receive, at a specified future date, payment of an amount
equal to all or a portion of the Fair Market
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Value of a specified number of shares of Stock at the end of a specified period.
At the time of the grant, the Committee shall determine the factors which will
govern the portion of the rights so payable, including, at the discretion of the
Committee, any performance criteria that must be satisfied as a condition to
payment. Phantom Share awards containing performance criteria may be designated
as Performance Share Awards.
(a) Payment. Payment in respect of Phantom Shares may be made by the
Company in cash or shares of Stock (valued at Fair Market Value on the date of
payment) as provided in the applicable Stock Incentive Agreement or Stock
Incentive Program, or, in the absence of such provision, as the Committee may
determine.
(b) Conditions to Payment. Each Phantom Share granted under the Plan shall
be payable at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Committee shall specify in the applicable
Stock Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Phantom Share, the Committee, at any time before
complete termination of such Phantom Share, may accelerate the time or times at
which such Phantom Share may be paid in whole or in part.
3.8 Treatment of Awards Upon Termination of Employment. Except as
otherwise provided by Plan Section 3.2(e), any award under this Plan to a
Participant who has experienced a Termination of Employment may be cancelled,
accelerated, paid or continued, as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision, as
the Committee may determine. The portion of any award exercisable in the event
of continuation or the amount of any payment due under a continued award may be
adjusted by the Committee to reflect the Participant's period of service from
the date of grant through the date of the Participant's Termination of
Employment or such other factors as the Committee determines are relevant to its
decision to continue the award.
SECTION 4
RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the shares of Stock
issued under the Plan shall be issued in the Participant's name, but, if the
applicable Stock Incentive Agreement or Stock Incentive Program so provides, the
shares of Stock shall be held by a custodian designated by the Committee (the
"Custodian"). Each applicable Stock Incentive Agreement or Stock Incentive
Program providing for transfer of shares of Stock to the Custodian shall appoint
the Custodian as the attorney-in-fact for the Participant for the term specified
in the applicable Stock Incentive Agreement or Stock Incentive Program, with
full power and authority in the Participant's name, place and stead to transfer,
assign and convey to the Company any shares of Stock held by the Custodian for
such Participant, if the Participant forfeits the shares under the terms of the
applicable Stock Incentive Agreement or Stock Incentive Program. During the
period that the Custodian holds the shares subject to this Section, the
Participant shall be entitled to all rights, except as provided in the
applicable Stock Incentive Agreement or Stock Incentive Program, applicable to
shares of Stock not so held. Any dividends declared on shares of Stock held by
the Custodian shall, as the Committee may provide in the applicable Stock
Incentive Agreement or Stock Incentive Program, be paid directly to the
Participant or, in the alternative, be retained by the Custodian or by the
Company until the expiration of the term specified in the applicable Stock
Incentive Agreement or Stock Incentive Program and shall then be delivered,
together with any proceeds, with the shares of Stock to the Participant or to
the Company, as applicable.
4.2 Restrictions on Transfer. The Participant shall not have the right to
make or permit to exist any Disposition of the shares of Stock issued pursuant
to the Plan except as provided in the Plan or the applicable Stock Incentive
Agreement or Stock Incentive Program. Any Disposition of the shares of Stock
issued under the Plan by the Participant not made in accordance with the Plan or
the applicable
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Stock Incentive Agreement or Stock Incentive Program shall be void. The Company
shall not recognize, or have the duty to recognize, any Disposition not made in
accordance with the Plan and the applicable Stock Incentive Agreement or Stock
Incentive Program, and the shares so transferred shall continue to be bound by
the Plan and the applicable Stock Incentive Agreement or Stock Incentive
Program.
SECTION 5
GENERAL PROVISIONS
5.1 Withholding. The Company shall deduct from all cash distributions
under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan or upon the vesting of any Stock Award, the
Company shall have the right to require the recipient to remit to the Company an
amount sufficient to satisfy any federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares or the vesting of such Stock Award. A Participant may pay the withholding
tax in cash, or, if the applicable Stock Incentive Agreement or Stock Incentive
Program provides, a Participant may elect to have the number of shares of Stock
he is to receive reduced by, or with respect to a Stock Award, tender back to
the Company, the smallest number of whole shares of Stock which, when multiplied
by the Fair Market Value of the shares of Stock determined as of the Tax Date
(defined below), is sufficient to satisfy federal, state and local, if any,
withholding taxes arising from exercise or payment of a Stock Incentive (a
"Withholding Election"). A Participant may make a Withholding Election only if
both of the following conditions are met:
(a) The Withholding Election must be made on or prior to the date on
which the amount of tax required to be withheld is determined (the "Tax
Date") by executing and delivering to the Company a properly completed
notice of Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable except on six
months advance written notice delivered to the Company; however, the
Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation. (a) The number of
shares of Stock reserved for the grant of Options, Dividend Equivalent Rights,
Performance Unit Awards, Phantom Shares, Stock Appreciation Rights and Stock
Awards; the number of shares of Stock reserved for issuance upon the exercise or
payment, as applicable, of each outstanding Option, Dividend Equivalent Right,
Performance Unit Award, Phantom Share and Stock Appreciation Right and upon
vesting or grant, as applicable, of each Stock Award; the Exercise Price of each
outstanding Option and the specified number of shares of Stock to which each
outstanding Dividend Equivalent Right, Phantom Share and Stock Appreciation
Right pertains shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Stock resulting from a subdivision or combination
of shares or the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration by the
Company.
(b) In the event of or anticipation of a merger, consolidation or other
reorganization of the Company or tender offer for shares of Stock, the Committee
may make such adjustments with respect to awards and take such other action as
it deems necessary or appropriate to reflect such merger, consolidation,
reorganization or tender offer, including, without limitation, the substitution
of new awards, the termination or adjustment of outstanding awards, the
acceleration of awards or the removal of restrictions on outstanding awards. Any
adjustment pursuant to this Section 5.2 may provide, in the Committee's
discretion, for the elimination without payment therefor of any fractional
shares that might otherwise become subject to any Stock Incentive, but shall not
otherwise diminish the then value of the Stock Incentive.
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(c) The existence of the Plan and the Stock Incentives granted pursuant to
the Plan shall not affect in any way the right or power of the Company to make
or authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Stock or the rights thereof, the dissolution or liquidation of the Company,
any sale or transfer of all or any part of its business or assets, or any other
corporate act or proceeding.
5.3 Cash Awards. The Committee may, at any time and in its discretion,
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion, a cash amount
which is intended to reimburse such person for all or a portion of the federal,
state and local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.
5.4 Compliance with Code. All incentive stock options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all incentive stock options granted hereunder shall be construed in
such manner as to effectuate that intent.
5.5 Right to Terminate Employment. Nothing in the Plan or in any Stock
Incentive shall confer upon any Participant the right to continue as an employee
or officer of the Company or any of its affiliates or affect the right of the
Company or any of its affiliates to terminate the Participant's employment at
any time.
5.6 Non-alienation of Benefits. Other than as specifically provided with
regard to the death of a Participant, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void. No such benefit
shall, prior to receipt by the Participant, be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or torts of the
Participant.
5.7 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld unless and until such listing, registration or
qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws
with respect to the shares of Stock purchasable or otherwise deliverable under
Stock Incentives then outstanding, the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock pursuant
to a Stock Incentive, that the Participant or other recipient of a Stock
Incentive represent, in writing, that the shares received pursuant to the Stock
Incentive are being acquired for investment and not with a view to distribution
and agree that the shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities laws. The Company
may include on certificates representing shares delivered pursuant to a Stock
Incentive such legends referring to the foregoing representations or
restrictions or any other applicable restrictions on resale as the Company, in
its discretion, shall deem appropriate.
5.8 Termination and Amendment of the Plan. The Board of Directors at any
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive shall adversely
affect the rights of the Participant under such Stock Incentive.
5.9 Stockholder Approval. The Plan shall be submitted to the stockholders
of the Company for their approval within twelve (12) months before or after the
adoption of the Plan by the Board of
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Directors of the Company. If such approval is not obtained, any Stock Incentive
granted hereunder shall be void.
5.10 Choice of Law. The laws of the State of Georgia shall govern the
Plan, to the extent not preempted by federal law.
5.11 Effective Date of Plan. The Plan shall become effective March 26,
1997, the effective date of its adoption by the Board of Directors, subject,
however, to the approval of the Plan by the Company's shareholders.
SIMIONE CENTRAL HOLDINGS, INC.
By: /s/ GARY M. BREMER
------------------------------------
Title: Chairman/CEO
----------------------------------
ATTEST:
/s/ JAMES A. TRAMONTE
- --------------------------------------
Secretary
[Corporate Seal]
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EXHIBIT C
SIMIONE CENTRAL HOLDINGS, INC.
1997 NONQUALIFIED FORMULA STOCK OPTION PLAN
THIS INDENTURE is made effective the first day of January, 1997, by Simione
Central Holdings, Inc., a Delaware corporation (hereinafter called the
"Company");
INTRODUCTION
The Company is adopting the Simione Central Holdings, Inc. 1997
Nonqualified Formula Stock Option Plan (the "Plan") to provide nonemployee
directors with non-qualified stock options ("Options"). The Board of Directors
of the Company believes this Plan will promote personal interest in the welfare
of the Company by, and provide incentive to, the individuals who are primarily
responsible both for the regular operations of and for shaping and carrying out
the long term plans of the Company, thus facilitating the continued growth and
financial success of the Company.
<PAGE> 40
SIMIONE CENTRAL HOLDINGS, INC.
1997 NONQUALIFIED FORMULA STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1 DEFINITIONS..................................... 1
SECTION 2 ADMINISTRATION.................................. 1
SECTION 3 ELIGIBILITY..................................... 2
SECTION 4 SHARES SUBJECT TO PLAN.......................... 2
SECTION 5 FORMULA AND TERMS AND CONDITIONS................ 2
SECTION 6 TERM OF PLAN.................................... 3
SECTION 7 INDEMNIFICATION OF COMMITTEE.................... 3
SECTION 8 AMENDMENT AND TERMINATION OF THE PLAN........... 3
SECTION 9 NO OBLIGATION TO EXERCISE OPTION................ 4
SECTION 10 ADJUSTMENT IN OPTION SHARES AND EXERCISE
PRICE..................................................... 4
SECTION 11 WITHHOLDING TAXES............................... 4
SECTION 12 RIGHTS AS A STOCKHOLDER......................... 4
SECTION 13 GOVERNING LAW................................... 5
</TABLE>
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SECTION 1
DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise, and the following words and phrases shall, when used
herein, have the meanings set forth below:
1.1 "Act" means the Securities Exchange Act of 1934.
1.2 "Affiliate" means (a) an entity that directly or through one or more
intermediaries is controlled by the Company, and (b) any entity in which the
Company has a significant equity interest, as determined by the Company.
1.3 "Agreement" means a stock option agreement, which is an agreement
subject to the terms of the Plan.
1.4 "Board of Directors" means the Board of Directors of the Company.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Committee" means the committee appointed by the Board of Directors to
administer the Plan.
1.7 "Director" means a director of the Company.
1.8 "Employee" means any person who is employed by the Company or an
Affiliate for purposes of the Federal Insurance Contributions Act and any
consultant retained to provide services (other than in the capacity of a
director) to the Company or an Affiliate.
1.9 "Option" means an option to purchase Shares of the Company granted
pursuant to and in accordance with the provisions of the Plan.
1.10 "Optionee" means a Director who is granted an Option pursuant to and
in accordance with the provisions of the Plan.
1.11 "Option Shares" means Shares subject to and issued pursuant to an
exercise of an Option granted under the Plan.
1.12 "Share" means a share of Common Stock of the Company and/or any share
or shares of stock of another corporation or corporations issued in exchange for
a share of Common Stock of the Company as a result of a merger, consolidation or
other adjustment to the capital structure of the Company.
SECTION 2
ADMINISTRATION
2.1 Delegation to Committee. The Plan shall be administered by the
Committee. The members of the Committee shall be appointed by the Board of
Directors. The Committee shall consist of at least one or more members of the
Board of Directors who have not received a grant of an Option under the Plan
which remains outstanding and who are not currently eligible to receive a grant
of an Option under the Plan. The Board of Directors may from time to time remove
members from or add members to the Committee. Vacancies on the Committee shall
be filled by the Board of Directors.
2.2 Committee Actions. The Committee shall select one of its members as
chairman, and shall hold meetings at such times and places as it may determine.
Acts approved by the majority of the Committee in a meeting at which a quorum is
present or acts reduced to or approved in writing by a majority of the members
of the Committee shall be the valid acts of the Committee. A quorum shall be
present at any meeting of the Committee which a majority of the Committee
members attend.
<PAGE> 42
2.3 Finality. The Committee shall have the authority in its sole
discretion to interpret the Plan, to grant Options under and in accordance with
the provisions of the Plan, and to make all other determinations and to take all
other actions it deems necessary or advisable for the implementation and
administration of the Plan or Agreements thereunder, except to the extent such
powers are herein reserved by the Board of Directors. All actions of the Board
of Directors and the Committee shall be final, conclusive, and binding upon the
Optionees. No member of the Board of Directors or the Committee shall be liable
for any action taken or decision made in good faith relating to the Plan or any
grant of an Option thereunder.
SECTION 3
ELIGIBILITY
Directors who are not Employees shall be eligible to receive Options under
the Plan on the terms and subject to the restrictions hereinafter set forth.
SECTION 4
SHARES SUBJECT TO PLAN
4.1 The aggregate number of Option Shares which may be issued under the
Plan shall at no time exceed 50,000. The limitations established by this Section
shall be subject to adjustment in accordance with the provisions of the Plan.
4.2 In the event that an Option expires or is terminated for any reason,
the Option Shares allocable to the unexercised portion of such Option may again
be subjected to an Option under the Plan.
4.3 In the event that an Optionee delivers Shares as payment of the
exercise price for an Option, such Shares may be subjected to Options under this
Plan.
SECTION 5
FORMULA AND TERMS AND CONDITIONS
5.1 Each person who is not an Employee and first becomes a Director after
the date hereof shall be granted an Option to purchase 10,000 Shares on the date
the person becomes a Director.
5.2 Each Director who is not an Employee will receive an annual grant equal
to -0- Shares on the January 1 of each year he serves as a Director who is not
an Employee.
5.3 The exercise price of each share granted pursuant to an Option shall be
the Fair Market Value of a Share on the first trading day preceding the day the
Option is granted. "Fair Market Value" means:
(1) the closing price at which Shares shall have been sold on the last
trading date prior to that date as reported by the Nasdaq Stock Market (or,
if applicable, as reported by a national securities exchange selected by
the Committee on which the shares of Stock are then actively traded) and
published in The Wall Street Journal,
(2) if Shares are not traded on a securities exchange, but are
reported by the Nasdaq Stock Market and market information is published on
a regular basis in The Wall Street Journal, the average of the published
high and low sales prices for the last business day prior to that date as
published in The Wall Street Journal,
(3) if such market information is not published on a regular basis,
the average of the high bid and low asked prices of Shares in the
over-the-counter market on the last business day prior to that date, as
reported by the Nasdaq Stock Market, or, if not so reported, by a generally
accepted reporting service, or
2
<PAGE> 43
(4) if Shares are not publicly traded, as determined in good faith by
the Committee with due consideration being given to (i) the most recent
independent appraisal of the Company, if such appraisal is not more than
twelve months old and (ii) the valuation methodology used in any such
appraisal provided that, for purposes of granting awards other than
incentive stock options, Fair Market Value of the Shares may be determined
by the Committee by reference to the average market value determined over a
period certain or as of specified dates, to a tender offer price for the
Shares (if settlement of an award is triggered by such an event) or to any
other reasonable measure of fair market value.
5.4 Each Option granted pursuant to this Plan shall be authorized by the
Committee, shall be evidenced by an Agreement and shall be subject to such
additional terms as set forth in the Agreement.
SECTION 6
TERM OF PLAN
The Plan shall be effective on the date hereof and shall continue to be
effective until ten (10) years following the earlier of the effective date of
the Plan or the date the stockholders approve the Plan, unless sooner terminated
by the Board of Directors pursuant to Section 8 hereof. The Company shall submit
the Plan to its stockholders for approval within twelve (12) months of the
adoption of the Plan by the Board of Directors.
SECTION 7
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification that the members of the
Committee may have, each member of the Committee shall be indemnified by the
Company 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 it 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 it in
settlement thereof (provided the settlement has received the prior approval of
the Company) or paid by it 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 the action, suit or proceeding that the Committee member is liable
for negligence or misconduct in the performance of its duties; provided that
promptly after institution of the action, suit or proceeding the Committee
member shall in writing offer the Company the opportunity, at its own expense,
to handle and defend such matter. Upon the delivery to the Committee member of
written notice of assumption by the Company of the defense of such matter, the
Company will not be responsible to the Committee member for any further fees and
disbursements relating to the defense of such matter, including fees and
disbursements of counsel.
SECTION 8
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors at any time may amend or terminate the Plan without
shareholder approval; provided, however, that the Board of Directors may
condition any amendment on the approval of the shareholders of the Company if
such approval is necessary or advisable with respect to tax, securities or other
applicable laws to which the Company, this Plan, optionees or eligible employees
or directors are subject. No amendment or termination of the Plan shall
adversely affect the rights of an optionee with regard to his Options without
his consent.
3
<PAGE> 44
SECTION 9
NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the Optionee to
exercise the Option.
SECTION 10
ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE
If (i) the number of Shares shall be increased or reduced by a change in
par value, split-up, stock split, reverse stock split, reclassification, merger,
consolidation, distribution of stock dividends or similar capital adjustments,
or (ii) the Company engages in a transaction for which the Committee determines
an adjustment is appropriate, then the Committee may make an adjustment in the
number and kind of Shares available for the granting of Options under the Plan.
In addition, the Committee may, in its sole and absolute discretion, make an
adjustment in the number, kind and price of Shares as to which outstanding
Options, or the portions thereof then unexercised, shall be exercisable, to the
end that the Optionee's proportionate interest is maintained as before the
occurrence of the event. The adjustment in outstanding Options will be made
without change in the total price applicable to the unexercised portion of the
Option and, if necessary, with a corresponding adjustment in the Option price
per share. Any fractional Shares resulting from such adjustments shall be
eliminated. All adjustments made by the Committee under this Section shall be
conclusive.
Notwithstanding the foregoing paragraph, the Committee shall have the right
to terminate the Options granted under the Plan in consideration of the payment
to the Optionees of the difference between (a) and (b) where (a) equals the then
Fair Market Value of the Option Shares to the extent vested and (b) equals the
Option price of the Option Shares to the extent vested. Alternatively, upon
termination of an Option granted under the Plan, the Committee may grant the
Optionee a substitute option to acquire an equity interest in an Affiliate in
the manner set forth in an Agreement.
SECTION 11
WITHHOLDING TAXES
Whenever the Company proposes or is required to issue Shares to an optionee
who is or was an employee of the Company or a Subsidiary, or to his legatee or
legal representative under this Plan, pursuant to the exercise of an Option
granted under this Plan, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirement, if any, prior to the delivery of
any certificate or certificates for such Shares. An optionee must pay the
withholding tax in cash or by certified check or by the Company deducting a
sufficient number of Shares from the Option Shares issued to satisfy withholding
taxes, in accordance with the Agreement.
SECTION 12
RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Optionee shall have no rights as a
stockholder with respect to any Option or Option Shares until the date of the
issuance of a stock certificate to him for the Option Shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date the stock certificate is issued, except as
otherwise provided in the Plan.
4
<PAGE> 45
SECTION 13
GOVERNING LAW
The laws of the State of Georgia shall govern this Plan.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of
the day and year first above written.
SIMIONE CENTRAL HOLDINGS, INC.
By: /s/ GARY M. BREMER
------------------------------------
Title: Chairman/CEO
-----------------------------------
ATTEST:
By: /s/ JAMES A. TRAMONTE
----------------------------------
Title: Secretary
---------------------------------
[CORPORATE SEAL]
5
<PAGE> 46
ANNEX
SIMIONE CENTRAL HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary M. Bremer as proxy to represent the
undersigned at the Annual Meeting of Stockholders to be held at the offices of
the Company, 6600 Powers Ferry Road, Atlanta, Georgia 30339, on June 21, 1997 at
10:00 A.M. and at any adjournment thereof, and to vote the shares of stock the
undersigned would be entitled to vote if personally present, as indicated below.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS
[ ] FOR all nominees below [ ] WITHHOLD AUTHORITY to vote
(EXCEPT AS MARKED TO THE CONTRARY for all nominees below.
BELOW).
</TABLE>
Gary M. Bremer, James R. Henderson, William J. Simione, Jr., Murali
Anantharaman, Richard D. Jackson, and Barrett C. O'Donnell
INSTRUCTION: To withhold authority to vote for an individual nominee, print that
nominee's name on the line provided below.
- --------------------------------------------------------------------------------
2. Approval of the amendment of the Company's Certificate of Incorporation,
as amended, to effect a reverse stock split of the Company's outstanding common
stock, par value $.001 per share (the "Common Stock"), pursuant to which each
two shares of Common Stock then outstanding will be converted into one share.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the Simione Central Holdings, Inc. Omnibus Equity-based
Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval of the Simione Central Holdings, Inc., 1997 Non-Qualified Formula
Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE
(continued and to be signed on reverse side)
(continued from other side)
5. The ratification of the appointment of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ended December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
CONTRARY INSTRUCTION IS GIVEN, THE SHARES WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES, FOR THE AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION, FOR
THE APPROVAL OF THE OMNIBUS EQUITY-BASED INCENTIVE PLAN, FOR THE 1997
NON-QUALIFIED FORMULA STOCK OPTION PLAN, AND FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP.
Dated: , 1997
-------------------
--------------------------------
Signature
--------------------------------
Signature if held jointly
Please date, sign as name
appears at the left, and return
promptly. If the shares are
registered in the names of two
or more persons, each should
sign. When signing as Corporate
Officer, Partner, Executor,
Administrator, Trustee or
Guardian, please give full
title. Please note any changes
in your address alongside the
address as it appears on the
proxy.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.
