<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT # 1)
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO _______________
COMMISSION FILE NUMBER 0-22162
SIMIONE CENTRAL HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-3209241
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
6600 POWERS FERRY ROAD, ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 644-6700
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- ---------------------
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ x ]
Aggregate market value of the voting stock held by non-affiliates of
the Registrant on March 24, 1999: $9,165,210.
There were 8,554,673 shares of Common Stock outstanding at March 24,
1999.
Documents incorporated by reference in this Form 10-K/A: None
<PAGE> 2
Introductory Note:
This Form 10-K/A is filed to include the information required by Part
III, Items 10-13 of Form 10-K, which the Registrant previously anticipated
incorporating by reference from its definitive proxy statement.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
The directors of the Company are as follows:
BARRETT C. O'DONNELL, age 46, has served as Chairman of the Board,
Chief Executive Officer and President of the Company since June 15, 1998. Mr.
O'Donnell has been a director of the Company since October 1996. From October
1992 until October 1996, Mr. O'Donnell served as Chairman of the Board of
InfoMed Holdings, Inc., a Delaware corporation ("IMHI") that merged with
Simione Central Holding, Inc., a Georgia corporation, to form the Company
effective October 8, 1996. Mr. O'Donnell also served as Chief Executive
Officer of IMHI from November 1994 to October 1996. From 1978 to present, Mr.
O'Donnell has been Chairman of the Board, President and Chief Executive
Officer of O'Donnell Davis, Inc., a New Jersey corporation ("ODD"), which is
in the consulting and investment advisory services business.
WILLIAM J. SIMIONE, JR., age 57, is a certified public accountant who
has served as Vice Chairman of the Board and Executive Vice President of the
Company since October 1996. From January 1996 until October 1996, Mr. Simione
served as the President of Simione Central, Inc., a wholly-owned subsidiary of
the Company. From January 1975 until December 1995, Mr. Simione was Managing
Partner of the Home Health Care Consulting Division of Simione & Simione,
CPA's ("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 information technology services and commercial
staffing solutions. Mr. Simione has 32 years of experience in the home health
care industry.
MURALI ANANTHARAMAN, age 42, has served as a director of the Company
since October 1996. From January 1996 to October 1996, Mr. Anantharaman was a
director of IMHI. Mr. Anantharaman has been a Partner at Live Oak Equity
Partners ("Live Oak"), a venture capital firm, since July 1998 and was a
partner at EGL Holdings, Inc.,("EGL"), a venture capital firm, from 1987 until
June 1998.
GARY M. BREMER, age 59, has served as a director of the Company since
October 1996. From October 1996 until June 1998, Mr. Bremer was Chairman of
the Board of the Company and from October 1996 to April 1997 also served as
the Company's Chief Executive Officer. From 1978 until October 1996, Mr.
Bremer served as President and Chief Executive Officer of Central Health
Holding Company, Inc. ("CHHC") and Central Health Services, Inc., a subsidiary
of CHHC ("CHS").
JAMES A. GILBERT, age 50, has served as a director of the Company since
May 1997. Mr. Gilbert has been General Partner of Live Oak since July 1998.
From September 1996 to November 1997, Mr. Gilbert served as President, Chief
Operating Officer and a director of IMNET Systems, Inc., a provider of
electronic information and document management systems to the health care
industry. From January 1995 to September 1996, Mr. Gilbert served as Senior
Vice President and General Counsel at HBO & Company, a health care information
company. From 1988 to December 1994, Mr. Gilbert held several other positions
at HBO & Company.
<PAGE> 3
GREG WILSON, age 30, has served as a director of the Company since
April 1998. Mr. Wilson has served as Vice President, Mergers and
Acquisitions, of Eclipsys Corporation, a healthcare information systems
company, since April 1997. From March 1996 until April 1997, Mr. Wilson was a
Vice President and equity analyst at Lehman Brothers, an investment bank.
From May 1995 until March 1996, Mr. Wilson was Vice President of Needham &
Co., an investment bank, and from May 1994 until May 1995 he was Senior Vice
President of Brean Murray & Co., an investment bank.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of the Company held five meetings during 1998.
The Board of Directors has established an Audit Committee and a Compensation
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 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 member of the
Audit Committee is Mr. Anantharaman. The Audit Committee held one meeting
during 1998. 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.
Anantharaman and Gilbert. The Compensation Committee held two meetings during
1998. Each of the Company's directors in 1998 attended at least seventy-five
percent (75%) of the meetings of the Board of Directors and the Committees,
if any, on which they served.
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, 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.
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, was a partner at EGL from 1987
until June 1998. The consulting agreement expires on June 30, 1999 and
provides for a monthly consulting fee of $5,000, plus reimbursement of
out-of-pocket expenses. The fees were determined by negotiation between the
parties. The amount paid to EGL by the Company in consulting fees totaled
$60,027 in the year ended December 31, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is currently
comprised of Messrs. Anantharaman and Gilbert. Neither of these directors
ever served as an officer or employee of the Company or any of its
subsidiaries. Except as set forth under "-- Director Compensation", there
were no material transactions between the Company and any of the members of
the Compensation Committee during the year ended December 31, 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the Company's directors and
executive officers, and any persons holding more than 10% of the Common Stock
outstanding, are required to report their initial ownership of Common Stock
and any subsequent changes in that ownership to the Commission and The Nasdaq
Stock Market. Specific due dates have been established and the Company is
required to disclose any failure to file by these dates during the Company's
most recent fiscal year. To the Company's knowledge, all of these filing
requirements were satisfied. In making these disclosures, the Company has
relied solely on its review of copies of the reports that have been submitted
to the Company with respect to its most recent fiscal year.
2
<PAGE> 4
Information relating to the executive officers of the Company is
provided in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION.
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 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. Barrett C. O'Donnell, who became Chief Executive Officer of the
Company on June 15, 1998, is paid an annual base salary of $450,000. However,
Mr. O'Donnell has since August 1998 elected to waive $100,000 of such annual
salary and therefore is currently being paid based on an annual salary of
$350,000. The Compensation Committee considered the salaries of other Chief
Executive Officers in the healthcare information systems industry in
establishing Mr. O'Donnell's salary. In addition, the Compensation Committee can
consider awarding Mr. O'Donnell cash bonuses and stock option grants. Mr.
O'Donnell was not granted any options in 1998 but was granted 250,000 options
under the Incentive Plan on January 8, 1999. Mr. O'Donnell does not have an
employment agreement with the Company.
Mr. James R. Henderson, who served as the Company's Chief Executive
Officer from April 1997 until June 1998, was paid an annual base salary of
$225,000. Mr. Henderson was not granted any options in 1998.
It should 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 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 Code establishes a limit on the deductibility of
annual compensation for certain executive officers that exceeds $1,000,000 per
year unless
3
<PAGE> 5
certain requirements are met. The Company does not anticipate that any employee
will exceed such $1,000,000 cap in the near future but will make necessary
adjustments if and when this occurs.
Compensation Committee
Murali Anantharaman
James A. Gilbert
COMPENSATION SUMMARY
The following table sets forth all compensation paid by the Company for
the years ended December 31, 1998, 1997 and 1996 to each of the individuals who
served as Chief Executive Officer during 1998, the four most highly compensated
other executive officers, and two individuals for whom disclosure would have
been provided but for the fact that such individuals were not serving as
executive officers of the Company at the end of the last fiscal year(together,
the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------------------------- ------------
Number of
Other Securities
Annual Underlying All Other
Salary Bonus Compensation Options Compensation
Name and Principal Position Year ($) ($) ($) Grants(#) ($)(1)
- ---------------------------- ---- -------- ------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. O'Donnell 1998 $191,667 -- -- -- --
Chairman of the Board, 1997 -- -- -- -- $144,000
Chief Executive Officer 1996 -- -- -- 183,962 186,533
and President (2)
James R. Henderson 1998 118,125 -- -- -- 1,368
Former President and Chief 1997 225,000 -- -- 100,000 6,872
Executive Officer (3) 1996 225,000(4) -- -- 202,526 --
William J. Simione, Jr 1998 300,000 -- -- 75,000 4,500
Vice Chairman of the Board 1997 300,000 -- -- -- 6,134
and Executive Vice 1996 300,000(4) -- -- 60,557 --
President
Robert J. Simione 1998 225,000 -- -- 41,000 1,653
Senior Vice President of 1997 225,000 -- -- -- 1,443
Consulting 1996 225,000(4) -- -- -- 609(4)
Lori N. Siegel 1998 147,500 -- -- 67,500 524
Former Chief Financial 1997 135,000 -- -- -- 3,715
Officer (3) 1996 135,000(4) -- -- 22,661 2,610(4)
Gary M. Bremer 1998 248,764 -- $140,113(5) -- 3,000
Former Chairman of the 1997 329,000 -- 45,934(6) -- 29,909(7)
Board (3) 1996 346,335(4) $42,623 -- 183,324
46,492(4,7)
Gary W. Rasmussen 1998 155,000 -- -- 50,000 699
Former Chief Operating 1997 200,000 -- -- -- 4,891
Officer (3) 1996 200,000(4) -- -- 24,773 4,440(4)
Erin Dosdourian 1998 163,299 -- -- 15,000 399
Former Senior Vice 1997 126,518 -- -- -- 345
Vice President of Product 1996 62,700 -- -- -- --
Management(3)
</TABLE>
- -----------
4
<PAGE> 6
(1) Represents group life insurance and disability insurance premium payments,
except for Mr. O'Donnell whose amounts represent amounts paid to ODD for
consulting services.
(2) Mr. O'Donnell became Chairman, Chief Executive Officer and President on June
15, 1998.
(3) Mr. Henderson resigned as President and Chief Executive Officer in June
1998, Mr. Bremer resigned as Chairman of the Board in June 1998, Mr. Rasmussen
resigned as Chief Operating Officer in September 1998, Ms. Dosdourian resigned
as Senior Vice President of Product Management in January 1999, and Ms. Siegel
resigned as Chief Financial Officer in April 1999.
(4) Represents the annualized salary and group life insurance and disability
insurance premium payments the executive officer would have received had he or
she joined the Company on January 1, 1996. Messrs. Bremer, Henderson, Simione,
Jr., Simione, Rasmussen, and Ms. Siegel joined the Company on October 8, 1996.
The annualized salary and insurance and disability payments set forth herein for
1996 are based on payments made by the Company from October 8, 1996 until
December 31, 1996.
(5) Represents amounts paid pursuant to a severance agreement dated July 22,
1998 (see "Item 11. Executive Compensation - Severance Agreements").
(6) Represents certain car allowance, club membership and insurance expense
reimbursements.
(7) Includes $20,698 and $37,294 of interest imputed to Mr. Bremer in 1997 and
1996, respectively, in connection with a promissory note to the Company for
$900,000 entered into on March 5, 1996 by Mr. Bremer. The Company forgave all
interest (5.05% per annum) that accrued on the outstanding principal balance of
this promissory note. In July 1997, Mr. Bremer repaid in full the then
outstanding principal balance of $850,000.
5
<PAGE> 7
GRANTS OF STOCK OPTIONS
The following table sets forth certain information with respect to
individual grants of stock options by the Company to the Named Executive
Officers during the year ended December 31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Number of Realizable Value
Securities % of Total at Assumed Annual
Underlying Options Rates of Stock
Options Granted to Exercise Price Appreciation
Granted(#) Employee in Price for Option Term(2)
Name (1) Fiscal Year ($/Sh) 10%($)
---- ------- ----------- -------- ------------------
<S> <C> <C> <C> <C>
Barrett C. O'Donnell -- -- -- --
James R. Henderson -- -- -- --
William J. Simione, Jr 75,000 8.22% $6.75 $ 0
Robert J. Simione 15,000 1.64% 2.00 47,812
25,000 2.74% 6.75 0
Lori N. Siegel 15,000 1.64% 2.00 47,812
42,500 4.66% 6.75 0
Gary M. Bremer -- -- -- --
Gary W. Rasmussen 50,000 5.48% 6.75 0
Erin Dosdourian 15,000 1.64% 6.75 0
</TABLE>
- -----------------
(1) The stock options reflected in this table vest as to 33 1/3% of the
shares of Common Stock covered thereby on the first, second and third
anniversary of the date of grant. The exercise price of all such stock
options reflected in this table is equal to the fair market value of
the Common Stock on the date of grant.
(2) 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 Securities and Exchange
Commission (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
1998 will be at or near the Potential Realizable Value indicated in the
table.
6
<PAGE> 8
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning options exercised
during the fiscal year ended December 31, 1998 and the value of unexercised
stock options held at the end of the fiscal year ended December 31, 1998 by each
Named Executive Officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
SHARES
ACQUIRED
ON VALUE NUMBER OF SECURITIES
EXERCISE REALIZED UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
NAME (#) ($) OPTIONS AT OPTIONS AT
---- --- --- DECEMBER 31,1998 (#) DECEMBER 31, 1998 ($) (1)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. O'Donnell 81,600 $153,618 252,581 -- $92,616 --
James R. Henderson -- -- 125,843 58,333 0 $ 0
William J. -- -- 53,217 82,340 0 0
Simione,
Jr.
Robert J. Simione -- -- 25,690 44,588 0 0
Lori N. Siegel -- -- 15,921 64,870 0 0
Gary M. Bremer -- -- 171,213 -- 0 --
Gary W. Rasmussen -- -- 17,433 -- 0 --
Erin Dosdourian -- -- 21,834 18,666 0 0
</TABLE>
- ----------------
(1) Dollar values were calculated by determining the difference between the
fair market value of the underlying securities at year-end ($1 7/8 per
share) and the exercise price of the options.
EMPLOYMENT AGREEMENTS
A Company subsidiary has an employment agreement with Mr. William J.
Simione, Jr., Vice Chairman of the Board and an Executive Vice President of the
Company, which provides for a base salary of $300,000, plus certain benefits,
and a potential bonus payable 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 prohibiting Mr. Simione from competing
with the Company during the term of the agreement and, depending upon the
terminating events of Mr. Simione's employment, for a period of time thereafter.
SEVERANCE AGREEMENTS
The Company entered into a severance agreement with Gary M. Bremer, a
current director of the Company, on July 22, 1998. Mr. Bremer was Chairman of
the Board of the Company from October 1996 until June 1998 and also served as
the Company's Chief Executive Officer from October 1996 until April 1997.
Pursuant to such severance agreement, Mr. Bremer receives, from the period July
1, 1998 until December 10, 2000, severance at an annual rate of $400,000 payable
in semi-monthly installments plus a total payment of $50,000 payable over the
same period.
7
<PAGE> 9
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.
TOTAL SHAREHOLDER RETURNS
-------------------------
(DIVIDENDS REINVESTED)
<TABLE>
<CAPTION>
ANNUAL RETURN PERCENTAGE
YEAR ENDING
COMPANY/INDEX DEC 94 DEC 95 DEC 96 DEC 97 DEC 98
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SIMIONE CENTRAL HOLDINGS INC 10.00 (40.91) 165.35 4.36 (79.17)
COMPUTER (SOFTWARE & SVC)-MID 9.84 75.03 1.40 44.22 191.39
S&P SMALLCAP 600 INDEX (4.77) 29.96 21.32 25.58 (1.31)
</TABLE>
<TABLE>
<CAPTION>
INDEXED RETURNS
YEAR ENDING
COMPANY/INDEX DEC 93 DEC 94 DEC 95 DEC 96 DEC 97 DEC 98
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SIMIONE CENTRAL HOLDINGS INC 100 110.00 65.00 172.48 180.00 37.50
COMPUTER (SOFTWARE & SVC)-MID 100 109.84 192.26 194.95 281.16 819.25
S&P SMALLCAP 600 INDEX 100 95.23 123.76 150.14 188.56 186.10
</TABLE>
8
<PAGE> 10
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table provides information at February 1, 1999 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 above), 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
-------------------
NAME AND ADDRESS OWNED
OF BENEFICIAL OWNER NUMBER(1) PERCENT(2)
- ------------------- --------- ----------
<S> > <C> <C>
Barrett C. O'Donnell (3).............................................................. 1,296,973 14.2%
P.O. Box 7395
Princeton, NJ 08543
O'Donnell Davis, Inc. (4)............................................................. 1,046,973 11.8
P.O. Box 7395
Princeton, NJ 08543
Simione Central Holdings, Inc......................................................... 904,008 10.6
Profit Sharing Plan Trust
c/o Trust Company of Knoxville, Inc.
620 Market Street, Suite 300
Knoxville, TN 37902
Gary M. Bremer (5).................................................................... 895,957 10.3
6600 Powers Ferry Road
Atlanta, GA 30339
Rowan Nominees Limited (6)............................................................ 884,873 10.3
33 King William Street
London, EC4R 9AS
Division Fund Advisors, Inc. (7)...................................................... 461,100 5.4
1299 Ocean Avenue
Santa Monica, CA 90901
Howard B. Krone (8)................................................................... 440,622 5.2
3633 Tuxedo Road
Atlanta, GA 30305
Greg Wilson (9)....................................................................... 420,000 4.9
777 E. Atlantic Avenue, Suite 800
Delray Beach, FL 33483
James R. Henderson (10)............................................................... 150,792 1.7
511 Butler National Drive
Duluth, GA 30136
William J. Simione, Jr. (11).......................................................... 107,088 1.2
4130 Whitney Avenue
Hamden, CT 06518
Robert J. Simione (12)................................................................ 36,732 *
4130 Whitney Avenue
Hamden, CT 06518
Murali Anantharaman (13).............................................................. 35,265 *
120 Breakwater Circle
Atlanta, GA 30328
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C> <C>
Gary W. Rasmussen (14)................................................................ 33,207 *
2450 Regency Lake Drive
Marietta, GA 30062
James A. Gilbert (15)................................................................. 25,000 *
235 North Mill Road
Atlanta, GA 30338
Erin Dosdourian (16).................................................................. 23,874 *
5094 NW 50th Court
Coconut Creek, GA 30338
Lori Nadler Siegel(17)................................................................ 18,455 *
1240 Beach Haven Road
Atlanta, GA 30324
All directors and executive officers as
a group (7 persons) (18)............................................................ 2,817,015 30.0
</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 of February 1, 1999.
(2) Percentages were calculated based on the ratio of the number of shares
of Common Stock beneficially owned by such beneficial owner as of
February 1, 1999 to the sum of (a) 8,554,673, the total number of
outstanding shares of Common Stock as of February 1, 1999, 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 February 1, 1999.
(3) Includes 135,000 shares issuable upon exercise of warrants and 420,981
shares issuable upon exercise of options. Mr. O'Donnell is a
stockholder, director and officer of 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.
(4) Includes 135,000 shares issuable upon exercise of warrants and 170,981
shares issuable upon exercise of options
(5) Includes 171,213 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").
(6) Includes 30,943 shares issuable upon exercise of options.
(7) The information set forth in the table is based on a Schedule 13G dated
February 12, 1999.
(8) Includes 125,135 shares owned by Mr. Krone's wife, as to which Mr.
Krone may be deemed to have sole dispositive and voting power.
(9) Represents 420,000 shares owned by Eclipsys Corporation of which Mr.
Wilson is an officer.
(10) Includes 135,108 shares issuable upon exercise of options.
(11) Includes 53,217 shares issuable upon exercise of options.
10
<PAGE> 12
(12) Includes 25,690 shares issuable upon exercise of options.
(13) Includes 19,801 shares issuable upon exercise of options.
(14) Includes 17,433 shares issuable upon exercise of options. Excludes any
interest Mr. Rasmussen has in the Profit Sharing Plan.
(15) Includes 13,750 shares issuable upon exercise of options.
(16) Represents 23,874 shares issuable upon exercise of options.
(17) Includes 15,299 shares issuable upon exercise of options. Excludes any
interest Ms. Siegel has in the Profit Sharing Plan.
(18) Includes 704,658 shares issuable upon exercise of options and 135,000
shares issuable upon exercise of warrants. Excludes all shares
beneficially owned by Mr. Henderson, Mr. Rasmussen, Ms. Dosdourian and
Ms. Siegel who have resigned from the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On January 1, 1996, IMHI entered into a lease agreement with Gateway
LLC with respect to the Company's Pompano Beach, Florida office (the "Pompano
Lease"). ODD owns 70% of Gateway LLC and more than 5% of the Company's Common
Stock. In addition, Mr. Barrett C. O'Donnell, Chairman, Chief Executive Officer
ad President of the Company, is the Chairman of the Board, President and Chief
Executive Officer and a 75% stockholder of ODD. Reid Horovitz, General Counsel
and Secretary of the Company, owns 10% of Gateway LLC. Pursuant to the lease
agreement, Gateway LLC leases approximately 20,291 square feet to the Company
for a term of five years that commenced on January 1, 1996. In addition, on
October 24, 1997 a subsidiary of the Company entered into a written addendum
extending the Pompano Lease through December 31, 2001. The Company has an option
to renew the lease for an additional five year term. Rental payments from the
Company for the year ended December 31, 1998 totaled $384,528. In addition to
the aforesaid lease payments, the Company is obligated to pay its share of the
office building's operating expenses. 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. Gateway LLC sold the
Pompano Lease to an unrelated third party in August 1998.
On January 1, 1998, the Company replaced an oral lease
agreement with S&S Realty for the Company's Hamden, Connecticut office with a
written agreement. 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 for
a term expiring on December 31, 2002. Rental payments for the year ended
December 31, 1998 totaled $130,000. The scheduled annual rental payments for
each year of the remaining term may, upon thirty (30) days' written notice from
S&S Realty, be increased by $5,850. In addition to the aforesaid lease payments,
the Company is obligated to pay its share of the office building's operating
expenses (other than water, which is provided by S&S Realty). 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.
On November 1, 1996, Simione Central, Inc., a wholly-owned subsidiary
of the Company ("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, formerly a
subsidiary of Central Health Holding Company ("CHHC"), guarantee certain
indemnification 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 a then ongoing investigation of the Plan by the
Department of Labor and the Internal Revenue Service's then ongoing audit of
certain issues related to the Plan (both of which have been resolved).
Columbia/HCA became indirectly responsible for these Plan obligations as
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a result of its acquisition of CHHC by purchasing all of CHHC's stock. Because
all of the former CHHC stockholders were also stockholders of the Company as a
result of the January 1996 spin-off of the Company from CHHC, SCI agreed to
undertake the Guaranty. 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: (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 such liabilities 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 will 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 would
grant Columbia/HCA a security interest equal to the amount of such guaranteed
obligation in 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, 1998, no claims
had been made under the Guaranty, and currently the Company does not anticipate
incurring any losses associated with the Guaranty.
On April 17, 1998, the Company was a party to a Stock Purchase
Agreement among Eclipsys Corporation and certain stockholders of the Company
including Gary M. Bremer, a current director of the Company, and William J.
Simione, Jr., Vice Chairman of the Board and Executive Vice President of the
Company. Pursuant to the Stock Purchase Agreement, Eclipsys Corporation
purchased from the stockholders 420,000 shares (including 187,500 shares from
Mr. Bremer and 25,000 shares from Mr. Simione) of the Company's Common Stock at
a price of $13.25 per share. Additionally, in the event the Company receives an
offer from a third party to purchase more than 5% of its Common Stock, Eclipsys
Corporation will have the option to purchase from the Company up to an
additional 4.9% of the Company's Common Stock at $13.25 per share. The Stock
Purchase Agreement allows Eclipsys Corporation to designate one member to the
Board of Directors of the Company until April 17, 2001. Such director is
currently Greg Wilson. The Stock Purchase Agreement also states that Eclipsys
Corporation will vote its shares in favor of all the nominees to the Board of
Directors of the Company and in favor of all such matters recommended by the
Board of Directors. Also, on April 17, 1998, the Company and Eclipsys
Corporation entered into a remarketing agreement. Under the remarketing
agreement, Eclipsys Corporation may sublicense certain products of the Company
to Eclipsys Corporation's customers.
Mr. Robert J. Simione, the brother of Mr. William J. Simione, Jr. who
is Vice Chairman of the Board and Executive Vice President of the Company, is
currently serving as a Senior Vice President of the Company (see "EXECUTIVE
COMPENSATION"). In addition, Mr. William J. Simione, III, the son of Mr. William
J. Simione, Jr., is currently serving as a Consulting Manager of the Company. As
compensation for his services, Mr. William J. Simione, III was paid $76,610 in
1998.
For a description of a severance agreement between the Company and Gary
M. Bremer, a current director and former officer of the Company, see "Item 11.
Executive Compensation - Severance Agreements". For a description of a
consulting agreement between the Company and a director of the Company, see
""Item 10. Directors and Executive Officers - Director Compensation".
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SIMIONE CENTRAL HOLDINGS, INC.
Date: April 29, 1999 By:/s/Barrett C. O'Donnell
------------------------
Barrett C. O'Donnell
President and Chief Executive Officer
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