PROXYMED INC /FT LAUDERDALE/, PRE 14A, 2000-04-26

PROXYMED INC /FT LAUDERDALE/
PRE 14A, 2000-04-26
COMPUTER PROCESSING & DATA PREPARATION

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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:

[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))

PROXYMED, INC.
(Name of Registrant as Specified in Its Charter)

PROXYMED, INC.
(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:

[ ] 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 No.:

(3) Filing Party:

(4) Date Filed:

<PAGE>

PROXYMED, INC.
2555 DAVIE ROAD, SUITE 110
FORT LAUDERDALE, FLORIDA 33317
(954) 473-1001

--------------------------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 8, 2000

---------------------------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
ProxyMed, Inc., a Florida corporation (the "Company"), will be held on Thursday,
June 8, 2000, at 9 o'clock a.m., Eastern Daylight Time, at the Sheraton Fort
Lauderdale Airport, 1825 Griffin Road, Dania, Florida 33004, for the following
purposes, all of which are set forth more completely in the accompanying proxy
statement:

(1) The election of 6 persons to the Board of Directors to serve
until the next annual meeting of the shareholders or until
election and qualification of their respective successors;

(2) To ratify and approve the issuance and sale of the Company's
Series B Convertible Preferred Stock, par value $.01 per share
("Series B Preferred"), and the related warrants, and to approve
the issuance of shares of the Company's common stock, par value
$.001 per share ("Common Stock") to be issued upon the
conversion of the Series B Preferred, the exercise of the
related warrants and the payment of the dividends on the Series
B Preferred;

(3) To ratify and approve the Company's 2000 Stock Option Plan;

(4) To approve the Company's 2000 1/2 Stock Option Plan; and

(5) To transact such other business as may properly come before the
meeting.

Pursuant to the Company's Bylaws, the Board of Directors has fixed the
close of business on April 19, 2000, as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting.

The Annual Meeting may be postponed or adjourned from time to time
without any notice other than by announcement at the meeting of any
postponements or adjournments thereof, and any and all business for which notice
is hereby given may be transacted at any such postponed or adjourned meeting.

A FORM OF PROXY AND THE ANNUAL REPORT OF THE COMPANY FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1999, ARE ENCLOSED. IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT
THE ANNUAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE UNITED STATES.

BY ORDER OF THE
BOARD OF DIRECTORS

Frank M. Puthoff, Secretary
Fort Lauderdale, Florida
May 5, 2000

1
<PAGE>

PROXYMED, INC. PRELIMINARY
2555 DAVIE ROAD, SUITE 110
FORT LAUDERDALE, FLORIDA 33317
(954) 473-1001

----------------------------

PROXY STATEMENT

----------------------------

The enclosed proxy is solicited by the Board of Directors of ProxyMed,
Inc., a Florida corporation (the "Company"), for use at the Annual Meeting of
Shareholders to be held on Thursday, June 8, 2000. The approximate date on which
this statement and the enclosed proxy was sent to shareholders is May 5, 2000.
The form of proxy provides a space for you to withhold your vote for any
proposal. You are urged to indicate your vote on each matter in the space
provided; if no space is marked, it will be voted by the persons therein named
at the meeting (i) for the election of 6 persons to the Board of Directors as
set forth below; (ii) for the ratification and approval of the issuance and sale
of the Series B Preferred and the related warrants, and for the approval of the
issuance of Common Stock upon the conversion of the Series B Preferred, the
exercise of the related warrants and the payment of dividends on the Series B
Preferred; (iii) for ratification and approval of the Company's 2000 Stock
Option Plan; (iv) for approval of the Company's 2000 1/2 Stock Option Plan; and
(v) in their discretion, upoN such other business as may properly come before
the meeting. Whether or not you plan to attend the meeting, please fill in, sign
and return your proxy card to the transfer agent in the enclosed envelope, which
requires no postage if mailed in the United States.

The cost of this proxy solicitation will be borne by the Company. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally and by telephone, all without extra
compensation.

At the record date for the meeting, the close of business on April 19,
2000, the Company had issued 18,299,205 shares of Common Stock. Only
shareholders of record at the close of business on April 19, 2000, are entitled
to notice of and to vote at the Annual Meeting. In the event that there are not
sufficient votes for approval of any of the matters to be voted upon at the
Annual Meeting, the Annual Meeting may be adjourned in order to permit further
solicitation of proxies. The quorum necessary to conduct business at the Annual
Meeting consists of a majority of the outstanding shares of Common Stock. The
approval of the proposals covered by this Proxy Statement will require an
affirmative vote of the holders of a majority of the shares of Common Stock
voting in person or by proxy at the Annual Meeting, with the exception of the
election of directors, each of whom is elected by a plurality.

All shares of Common Stock that are represented at the Annual Meeting by
properly executed proxies received prior to or at the Annual Meeting and not
revoked will be voted at the Annual Meeting in accordance with the instructions
indicated in such proxies. If no instructions are indicated, such proxies will
be voted for approval of each matter voted upon. Abstentions or broker non-votes
are counted as shares present in the determination of whether shares of Common
Stock represented at the meeting constitute a quorum. Abstentions and broker
non-votes are tabulated separately. Since only a plurality is required for the
election of directors, abstentions or broker non-votes will have no effect on
the election of directors (except for purposes of determining whether a quorum
is present at the Annual Meeting). As to other matters to be acted upon at the
Annual Meeting, abstentions are treated as AGAINST votes, whereas broker
non-votes are not counted for the purpose of determining whether the proposal
has been approved.

2
<PAGE>

A SHAREHOLDER WHO SUBMITS A PROXY ON THE ACCOMPANYING FORM HAS THE POWER TO
REVOKE IT AT ANY TIME PRIOR TO ITS USE BY DELIVERING A WRITTEN NOTICE TO THE
SECRETARY OF THE COMPANY, BY EXECUTING A LATER-DATED PROXY OR BY ATTENDING THE
MEETING AND VOTING IN PERSON. UNLESS AUTHORITY IS WITHHELD, PROXIES WHICH ARE
PROPERLY EXECUTED WILL BE VOTED FOR THE PURPOSES SET FORTH THEREON.

The following table sets forth to the best knowledge of the Company,
information regarding the beneficial ownership of the Company's Common Stock as
of April 19, 2000, with respect to (i) each person known to the Company to be
the beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director, and (iii) each executive officer named in the Executive Compensation
chart, and (iv) all directors and officers of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS(1) # OF SHARES (2) % OF CLASS
---------------- --------------- ----------
<S> <C> <C>
Harold S. Blue(3) 349,667 1.9%

John Paul Guinan(4) 189,167 1.0%

Bennett Marks (5) 140,751 *

John B. Okkerse, Jr., Ph.D. 0 0

James H. Pickering(4) 83,667 *

Kevin E. Moley(4) 8,334 *

Bertram J. Polan(6) 92,500 *

Peter A. A. Saunders(7) 27,500 *

Eugene R. Terry(4) 80,000 *

Bellingham Industries Inc.(8) 5,477,342 29.5%
Urraca Building
Frederico Boyd Avenu
Panama City, Panama

All directors and officers 2,025,180 10.5%
AS A GROUP (29 PERSONS)(9)
</TABLE>
- --------------------------
*Less than 1%

(1) The address for each person, unless otherwise noted, is 2555 Davie Road,
Suite 110, Fort Lauderdale, Florida 33317-7424.
(2) In accordance with Rule 13d-3 of the Exchange Act, shares that are not
outstanding, but that are subject to options, warrants, rights or
conversion privileges exercisable within 60 days from April 19, 2000,
have been deemed to be outstanding for the purpose of computing the
percentage of outstanding shares owned by the individual having such
right, but have not been deemed outstanding for the purpose of computing
the percentage for any other person.

3
<PAGE>
(3) Includes 173,000 shares held of record, 10,000 owned beneficially, and
166,667 shares issuable upon the exercise of currently exercisable stock
options.
(4) Represents shares issuable upon the exercise of currently exercisable
stock options.
(5) Includes 24,500 shares held of record, and 116,251 shares issuable upon
the exercise of currently exercisable stock options.
(6) Includes 12,500 shares held of record, and 80,000 shares issuable upon
the exercise of currently exercisable stock options.
(7) Includes 2,500 shares held of record, plus 25,000 shares issuable upon
exercise of currently exercisable stock options.
(8) Includes 5,227,342 shares held of record, and 250,000 shares issuable
upon the exercise of currently exercisable warrants. Share amounts were
provided by Bellingham.
(9) Includes 954,336 shares held of record, and 1,070,844 shares issuable
upon the exercise of currently exercisable stock options.

ITEM 1. ELECTION OF DIRECTORS

The Company currently has seven directors, with each director holding
office until the next annual meeting of shareholders and until his successor is
duly elected and qualified or until the earlier death, resignation, removal or
disqualification of the director. Management of the Company has nominated six
directors currently serving as directors for election to the Board of Directors.
The Company's officers are elected annually by the directors.

The following nominees may be elected by plurality vote. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NOMINEE FOR ELECTION TO THE BOARD.
It is intended that proxies will be voted for the following nominees, unless
otherwise directed:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Harold S. Blue 39 Chairman of the Board

John B. Okkerse, Jr., Ph.D. 50 Chief Executive Officer and Director

Kevin E. Moley (2) 53 Director

Bertram J. Polan (1)(2) 48 Director

Peter A.A. Saunders (1)(2) 58 Director

Eugene R. Terry (1) 61 Director
- --------------------------
<FN>
(1) Member of the Audit Committee, the Chairman of which is Mr. Saunders.
(2) Member of the Compensation Committee, the Chairman of which is Mr. Polan.
</FN>
</TABLE>

HAROLD S. BLUE joined ProxyMed in 1993 and currently serves as Chairman
of the Board. He also held the position of Chief Executive Officer until
December 1999. Blue was also President and Chief Executive Officer of Health
Services, Inc., a physician practice management company, from 1992 to 1996, at
which time it was sold to InPhyNet Medical Management, Inc. In September 1984,
Mr. Blue founded Best Generics, Incorporated, which was later sold to
pharmaceutical manufacturer, IVAX

4
<PAGE>

Corporation, where Mr. Blue served as a member of IVAX's Board of Directors from
1988 to 1990. From 1979 to 1984, Mr. Blue was President and Chief Executive
Officer of Budget Drugs, Inc., a retail discount pharmacy chain located in South
Florida.

JOHN B. OKKERSE, JR., PH.D. was appointed Chief Executive Officer and
Director of ProxyMed in December 1999. Prior to joining ProxyMed, Dr. Okkerse
spent 24 years at SmithKline Beecham working in the clinical laboratory
division. From April 1998 to August 1999, Dr. Okkerse was the Chief Operating
Officer for SB Healthcare Services. In this capacity, he oversaw the operations
of SmithKline's clinical laboratory, SmithKline Beecham Clinical Laboratories
(SBCL) and its pharmacy benefit management company, Diversified Pharmaceutical
Services. From October 1996 to April 1998, Dr. Okkerse was President of
SmithKline Beecham Clinical Laboratories, one of the largest commercial clinical
laboratories. Prior to his appointment as President, Dr. Okkerse was SBCL's
Chief Technology Officer from 1994 to 1996 and was Vice President and General
Manager of SBCL's operation in Florida from 1988 to 1994. Dr. Okkerse has a
Ph.D. in Cellular and Molecular Biology from the University of Southern
California.

KEVIN E. MOLEY has been a director of ProxyMed since June 1999. From
November 1998 to December 1999, Mr. Moley served as Chairman of the Board of
Patient Care Dynamics LLC, a provider of computer hardware and software to
physicians. From January 1996 to February 1998, he was President and Chief
Executive Officer of Integrated Medical Systems, Inc. where he served as a
director since 1994. From February 1993 to December 1995, Mr. Moley was Senior
Vice President to PCS Health Systems, Inc., a provider of prescription
management services. From 1989 to 1992, Mr. Moley served in the George Bush
administration as an Assistant Secretary of the U.S. Department of Health and
Human Services ("HHS"), and in 1992-1993 as Deputy Secretary of HHS. He also
serves as a director of Innovative Clinical Solutions, Ltd., a site management
organization, Merge Technologies, Inc., a medical imaging software company, Per
Se Technologies, a medical billing company, and Cephalon, Inc., a bio-technology
company.

BERTRAM J. POLAN has been a director of ProxyMed since August 1995. Mr.
Polan is the founder and President of Gemini Bio-Products, Inc., a
California-based supplier of biological products used in medical schools,
private medicine research institutes and the biotechnology industry, which he
founded in 1985. From 1973 to 1985, Mr. Polan was employed in various executive
capacities, most recently as vice president of sales and marketing, with
Northern American Biologicals, Inc., one of the world's largest independent
providers of human plasma products.

PETER A.A. SAUNDERS, F.R.S.A. (Fellow of Royal Society of Arts) has been
a director, and was owner and Chairman, of Pass Consultants, a marketing and
business consulting firm founded by Mr. Saunders in Surrey, England, since 1988.
From 1992 through 1994, he also served as Managing Director of United Artist
Communications (London-U.K.), Ltd. From 1959 to 1984, Mr. Saunders held various
executive and directorship positions with Allders Department Stores, a
subsidiary of United Drapery Department Stores Group, and, after its acquisition
by Hanson Trust, P.L.C. in 1984, continued as a Director until 1988. Since 1989,
Mr. Saunders has been serving as a Director of Theragenics Corporation, a public
company located in Norcross, Georgia, specializing in the treatment of prostate
cancer; as a non-executive Director of Mayday Healthcare NHS Trust, a 700-bed
hospital in Surrey, England from 1992 to 1998; and as a non-executive Director
of Eurbell (Sussex) Limited, a United Kingdom cable television and
telecommunications company from 1993 to 1998.

EUGENE R. TERRY has been a director of ProxyMed since August 1995. Mr.
Terry is a pharmacist and the founder and Chairman of Bloodline, Inc., a New
Jersey-based company engaged in the blood

5
<PAGE>

services business, which he founded in 1980. In 1971, Mr. Terry founded Home
Nutritional Support, Inc. ("HNSI"), one of the first companies established in
the home infusion industry. In 1984, HNSI was sold to Healthdyne, Inc. HNSI was
later sold to the W.R. Grace Group. From 1975 to 1984, Mr. Terry was also
founder and Chief Executive Officer of Paramedical Specialties, Inc., a
respiratory and durable medical equipment company, which was also sold to
Healthdyne, Inc.

MEETINGS - All directors attended more than 75% of the meetings of the
Board of Directors for the fiscal year ended December 31, 1999. There were a
total of thirteen Board meetings held during such year.

AUDIT COMMITTEE - Our Audit Committee consists of three non-employee
directors: Peter A. A. Saunders (Chair), Bertram J. Polan and Eugene R. Terry.
The Audit Committee is responsible for meeting with representatives of our
independent accountants and with representatives of senior management to review
the general scope of our annual audit, matters relating to internal audit
control systems and the fee charged by the independent accountants. In addition,
the Audit Committee is responsible for reviewing and monitoring the performance
of non-audit services by our independent accountants and for recommending the
engagement or discharge of our independent accountants.

COMPENSATION COMMITTEE - Our Compensation Committee consists of three
non-employee directors: Bertram J. Polan (Chair), Kevin E. Moley and Peter A. A.
Saunders. The Compensation Committee is responsible for approving and reporting
to the Board on the annual compensation for all officers, including salary,
stock options and other consideration, if any. The Committee is also responsible
for granting stock awards, stock options and other awards to be made under our
existing plans.

COMPENSATION OF DIRECTORS

Our employee directors are not compensated for their services as
directors. Outside directors receive $2,000 for each regularly scheduled board
meeting personally attended, $500 for each telephonic board meeting, and $500
each quarter for each committee a director is a member. All directors are
reimbursed for reasonable expenses incurred in attending board meetings. In
addition, outside directors receive stock options under the 1995 Outside Plan
(described below) upon the directors' initial election or appointment to the
Board of Directors. In August 1995, Messrs. Polan and Terry, upon joining the
Board, were each granted options to purchase 75,000 shares of common stock at an
exercise price equal to the market price on the date of grant. These options are
now fully vested and expire on August 28, 2000. In June 1999, Messrs. Polan,
Saunders and Terry were each granted options to purchase 15,000 shares of common
stock at $13.50. These options vest at the end of the next three years and will
expire ten years after the date of grant. Upon joining the Board in 1998, Mr.
Saunders received 20,000 options at $7.19 per share. Half of these options
vested in September 1998, and the other half vested in September 1999. These
options expire ten years after the date of grant. Upon joining the Board in
1999, Mr. Moley received 25,000 options at $13.00 per share. These options will
vest over three years and expire five years after the date of grant.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934 (the "Exchange
Act") requires our officers and directors, and persons who own more than 10% of
the registered class of our equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange

6
<PAGE>

Commission (the "SEC"). Officers, directors and greater than 10% shareholders
are required by SEC regulation to furnish us with copies of all Section 16(a)
forms they file.

Based on our review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, we believe that, during our fiscal year ended
December 31, 1999, all filing requirements applicable to our officers and
directors and greater than 10% beneficial owners were complied with, except that
(1) Mr. Saunders unknowingly failed to timely file a Form 4 for a transaction in
June 1998 and for a transaction in June 1999, but has since timely filed a Form
5 covering these transactions; and (2) we have not received from Bellingham
Industries Inc. a Form 5 or a written representation that no Form 5 is required.

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid during the past
three fiscal years to our Chief Executive Officers and our other four most
highly compensated executive officers with annual compensation over $100,000 for
such years (the "named executive officers"), plus two additional individuals for
whom disclosure would have been provided but for the fact that the individuals
were not serving as executive officers at the end of the last completed fiscal
year:

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
------------------------------------- -----------
LONG-TERM COMPENSATION
------------------------------------ ------------------------------------- -----------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------ ------ ------------------------------------ -------------------------- ---------- -----------
SECURITIES ALL
NAME AND OTHER RESTRICTED UNDERLYING OTHER
PRINCIPAL ANNUAL STOCK OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY BONUS COMP. AWARD(S) SARS PAYOUTS SATION
- ------------------------ ------ ------------- -------- ------------- ------------ ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John B. Okkerse, Jr.
CEO 1999 16,154(1) -- -- -- 400,000 -- --

Harold S. Blue
Chairman and CEO 1999 202,198 -- -- -- 50,000 -- --
1998 145,033 -- -- -- -- -- --
1997 125,000 -- -- -- -- -- --

John Paul Guinan
Pres., PROXYMED.COM 1999 180,609 5,000 -- -- 35,000 -- --
1998 163,943 15,063 -- -- -- -- --
1997 125,000 -- -- -- -- --

Bennett Marks
EVP & CFO 1999 182,198 15,000 -- -- 25,000 -- --
1998 145,305 20,000 -- -- 20,000 -- --
1997 128,646 15,000 -- -- -- -- --

James H. Pickering
President & COO 1999 201,236 -- 36,540(3) -- 20,000 -- --
1998 165,456 10,000 47,182(2) -- 130,000 -- --

Jeff K. Carpenter
Pres., Lab Division 1999 282,408 100,000 -- -- 142,000 -- --

Bruce S. Roberson
EVP-Business Dev. 1999 182,447 -- -- -- 35,000 -- --
1998 180,000 50,000 22,506(2) -- 20,000 -- --
1997 30,000 -- 24,759 -- -- --
- ------------------------ ------ ------------- -------- ------------- ------------ ------------- ---------- -----------
<FN>
(1) Dr. Okkerse joined us on November 26, 1999.
(2) Consists of reimbursement of relocation expenses.
(3) Consists of reimbursement of certain commuting expenses.
</FN>
</TABLE>

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<PAGE>

The following table provides information on stock option grants during
fiscal year 1999 to each of the named executive officers:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR

- ----------------------------------------------------------------------------------------- ----------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ----------------------------------------------------------------------------------------- ----------------------------
# OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/ EMPLOYEE IN EXERCISE OR EXPIRATION
NAME SARS GRANTED FISCAL YEAR BASE PRICE DATE 5% 10%
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Harold S. Blue 50,000 3% $13.25 6/28/04 $183,037 $ 404,463
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
John Paul Guinan 35,000 2% $13.25 6/28/04 $128,126 $ 283,124
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
Bennett Marks 25,000 2% $13.25 6/28/04 $91,518 $ 202,231
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
John B. Okkerse, Jr. 400,000 27% $10.25 11/26/09 $2,578,468 $6,534,344
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
James H. Pickering 20,000 1% $13.25 6/28/04 $ 73,215 $ 161,785
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
Jeff K. Carpenter 44,000 3% $11.75 1/4/09 $ 325,139 $ 823,965
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
Jeff K. Carpenter 98,000 7% $11.00 8/11/04 $ 297,832 $ 658,130
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
Bruce S. Roberson 35,000 2% $13.25 6/28/04 $ 128,126 $ 283,124
- -------------------------- --------------- ---------------- ------------- --------------- ------------- --------------
</TABLE>
The following table sets forth certain information concerning
unexercised options held by each of the named executive officers:
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES
-------------------------------- --------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FY-END (#) OPTIONS/SARS AT FY-END ($)*
- ----------------------- -------------- ------------- -------------------------------- --------------------------------
# OF SHARES
ACQUIRED ON $ VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Harold S. Blue -- -- 150,000 50,000 $ 937,500 --
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
John Paul Guinan -- -- 217,500 35,000 $1,232,475 --
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
Bennett Marks -- -- 107,917 38,333 $ 564,981 $ 34,132
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
John B. Okkerse, Jr. -- -- -- 400,000 -- --
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
James H. Pickering -- -- 44,000 106,000 $ 121,000 $232,700
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
Jeff K. Carpenter -- -- 44,000 98,000 -- --
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
Bruce S. Roberson 68,550 $261,014 38,117 48,333 $ 107,109 $ 37,466
- ----------------------- -------------- ------------- --------------- ---------------- ---------------- ---------------
<FN>
*Year-end values for unexercised in-the-money options represent the positive spread between the exercise price of such
options and the fiscal year-end market value of the common stock, which was $9.75 on December 31, 1999.
</FN>
</TABLE>
There were no awards made to named executive officers in the last
completed fiscal year under any long-term incentive plan for performance to
occur over a period longer than one fiscal year. We do not have any defined
benefit or actuarial plans for our employees. No stock options for named
executive officers were amended, cancelled, replaced or otherwise repriced
during the past ten years.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is responsible for
administering, reviewing and approving compensation arrangements with respect to
executive compensation which

8
<PAGE>

includes base salaries, annual incentives and long term stock option plans, as
well as any executive benefits and/or perquisites. In addition, the Compensation
Committee is responsible for any awards and administration of the Company's
stock option plans and grant of options to newly-hired employees, and any future
equity incentive plans.

Mr. Blue has been Chairman of the Board and Chief Executive Officer of
the Company since February 1993 through November 1999, at which time Dr. Okkerse
became Chief Executive Officer. Mr. Blue's current base salary is $204,407. He
received no annual bonus during 1999. The Committee believes that his
compensation is within the low-to-middle range of compensation paid to similarly
situated executives at other similar companies. The Committee believes that
since Mr. Blue is the largest individual shareholder of the Company and holds
4.4% of the outstanding shares of the Company's common stock, his interests are
firmly aligned with the shareholders of the Company. Dr. Okkerse's current
annual base salary is $200,000, and at the discretion of the Board, he has the
opportunity to earn an additional cash bonus of at least $200,000 per year and
to participate in any additional stock option or bonus plans which the Company
may now have or in the future develop. Dr. Okkerse also received option for
400,000 shares of common stock at an exercise price equal to the market price on
the date of the grant. These options expire ten years after the date of grant.
The Committee believes Dr. Okkerse's compensation is within the middle range of
compensation paid to similarly situated executives at other similar companies.
The Committee intends to review the performance and compensation of the
executive officers annually, in conjunction with performance of the Company.

The Committee's general philosophy with respect to the compensation of
the Chief Executive Officer and other executive officers is to offer competitive
compensation packages designed to attract and retain key executives critical to
the success of the Company. In general, subjective factors rather than specific
criteria of the Company's performance have been used in determining and
approving executive compensation. The Company's compensation programs include a
base salary, annual bonus awards based on individual and Company performance, as
well as the granting of stock options designed to provide long-term incentives
and aligning the interest of management with those of the Company's
shareholders.

Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1,000,000 paid to the
Company's Chief Executive Officer and the four (4) other most highly compensated
executive officers, unless such compensation is "performance based". For
purposes of Section 162(m), the Company currently intends to structure any
performance based portion of the compensation of its executive officers that it
might develop in a manner that complies with Section 162(m).

9
<PAGE>

PERFORMANCE GRAPH

[OBJECT OMITTED]

EMPLOYMENT AGREEMENTS WITH THE NAMED EXECUTIVE OFFICERS

On April 1, 1996, we entered into an employment agreement with Mr. Blue
for a period of three years, which is automatically extended from year to year
unless terminated by either party upon 60 days' written notice. Mr. Blue
receives an annual base salary of $204,407 and is entitled to such bonuses as
may be awarded from time to time by the Board of Directors and to participate in
any stock option or bonus plans which we may now have or in the future develop.
Mr. Blue may be terminated for "cause", as defined in the agreement. If he is
terminated for cause, he will be entitled to base salary earned, and he will
retain all vested stock options which shall remain exercisable for 90 days after
the date of termination. If he is terminated "without cause", then he will be
entitled to receive an amount equal to his base salary plus bonus, if any, and
continuation of health insurance for six months following termination. In
addition, the agreement contains confidentiality and non-competition covenants.
Mr. Guinan has an employment agreement with us for a three-year term commencing
on December 5, 1995, which is substantially similar to Mr. Blue's, with an
annual base salary of $200,391. The employment agreements were renewed by their
terms for an additional year.

In November 1996, we entered into an employment agreement with Mr.
Marks. In November 1997, we entered into an employment agreement with Mr.
Pickering. The agreements are for a three-year term and automatically extend
from year to year thereafter unless terminated by us upon 90 days' written
notice or by the employee upon 30 days' written notice prior to the end of the
initial term or any extension. Mr. Marks and Mr. Pickering receive an annual
base salary of $200,325 and $225,325, respectively, and are entitled to such
bonuses as may be awarded from time to time and to participate in any stock
option or bonus plans which we may now have or in the future develop. They may
be terminated for "cause" as defined in their agreements. If terminated for
cause, they will be entitled to base salary earned, and they will retain all
vested stock options which shall remain exercisable for 90 days after the date
of termination. If, upon 90 days' prior written notice, they are terminated
"without cause", they will be entitled to receive an amount equal to their base
salary plus bonus, if any, and continuation of health insurance for six months
following termination, plus any unvested options shall

10
<PAGE>

vest. In addition, the agreements contain confidentiality and non-competition
covenants. Mr. Mark's employment agreement was renewed by its terms for an
additional year.

In November 1999, we entered into an employment agreement with Dr.
Okkerse. The agreement is for a three-year term and automatically extends from
year to year thereafter unless terminated by us upon 90 days' written notice or
by the employee upon 30 days' written notice prior to the end of the initial
term or any extension. He receives an annual base salary of $200,000 and is
entitled to bonuses as may be awarded from time to time and has the opportunity
to earn an additional cash bonus of at least $200,000 per year, and to
participate in any stock option or bonus plans which we may now have or in the
future develop. He may be terminated for "cause" as defined in his agreement. If
terminated for cause, he will be entitled to base salary earned, and he will
retain all vested stock options which shall remain exercisable for 90 days after
the date of termination. If, upon 90 days' prior written notice, he is
terminated "without cause", he will be entitled to receive an amount equal to
his base salary plus bonus, if any, and continuation of health insurance for
nine months following termination, plus any unvested options shall vest. In
addition, the agreement contains confidentiality and non-competition covenants.

LIABILITY AND INDEMNIFICATION OF OUR DIRECTORS AND OFFICERS

We have entered into indemnification agreements with each of our
directors and executive officers limiting their personal liability for monetary
damages for breach of their fiduciary duties as officers and directors, except
for liability that cannot be eliminated under the Florida Business Corporation
Act. The Florida Business Corporation Act provides that directors of a
corporation will not be personally liable for monetary damages for breach of
their fiduciary duty as directors, except for liability (i) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (ii) for any unlawful payment of a dividend or unlawful stock
repurchase or redemption, as provided in Section 607.0834 of the Florida
Business Corporation Act, (iii) for any transaction from which the director
derived an improper personal benefit, or (iv) for a violation of criminal law.
Our Restated Articles of Incorporation and Bylaws also provide that we shall
indemnify our directors and officers to the fullest extent permitted by Section
607.0831 of the Florida Business Corporation Act, including circumstances in
which indemnification is otherwise discretionary. We have procured and maintain
a policy of insurance under which our directors and officers are insured,
subject to the limits of the policy, against certain losses arising from claims
made against such directors and officers.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On April 30, 1997, the Company loaned a total of $350,000 to Mr. Blue.
The funds were advanced pursuant to two demand promissory notes in the principal
amounts of $290,000 and $60,000, respectively, each bearing interest at a rate
of 7 3/4% per year. Mr. Blue has agreed to secure the notes pursuant to pledges
of securities, including shares of the Company's Common Stock, satisfactory to
the Company's Board of Directors.

11
<PAGE>

ITEM 2. RATIFICATION AND APPROVAL OF THE ISSUANCE AND SALE OF THE SERIES B
PREFERRED AND THE RELATED WARRANTS AND APPROVAL OF THE ISSUANCE OF
COMMON STOCK UPON THE CONVERSION OF THE SERIES B PREFERRED, THE
EXERCISE OF THE RELATED WARRANTS AND THE PAYMENT OF DIVIDENDS ON THE
SERIES B PREFERRED

GENERAL

On December 23, 1999, the Company issued 15,000 shares of its Series B
Preferred Stock, per value $.01 per share (the "Series B Preferred") and
warrants to purchase 800,000 shares of its Common Stock, per value $.001 per
share (the "Common Stock"), in a private placement to institutional investors.
The net proceeds of the offering, after expenses, were approximately
$14,200,000. J.C. Bradford & Co. served as the Company's placement agent for
this transaction. The shares of Series B Preferred are non-voting and carry a
cumulative dividend at a rate of 6% per annum, payable quarterly or upon
conversion or redemption, which may be paid in cash or Common Stock, at the
Company's option, subject to certain conditions. The shares of Series B
Preferred mature on December 23, 2001, subject to extension in certain
circumstances, at which time the Series B Preferred will be redeemed or
converted at the Company's option, subject to certain conditions. The conversion
price of the Series B Preferred at maturity is 95% of the average of the closing
trade price on the Nasdaq National Market of the Common Stock for the 30
consecutive trading days immediately preceding December 23, 2001. The net
proceeds from this financing transaction have been, and the proceeds from the
exercise of the related warrants will be, used by the Company for working
capital and general corporate purposes including, without limitation, the
repayment of outstanding debt and potential acquisitions.

WARRANTS

In connection with the sale of the Series B Preferred, the Company
issued warrants to purchase up to 800,000 shares of Common Stock. The exercise
price of these warrants is $12.05 per share, subject to adjustment in certain
events. These warrants expire on December 23, 2002. In addition, in order to
obtain the consent of Transamerica Business Credit Corporation to the sale of
the Series B Preferred, a warrant to purchase 25,000 shares of Common Stock at a
price of $11.62 per share was issued to Transamerica Business Credit Corporation
on substantially the same terms as the warrants described above. If all such
warrants were exercised to purchase 825,000 shares of Common Stock, the Company
would receive proceeds of $ 9,930,500. The exercise price and number of shares
of Common Stock which may be purchased upon exercise of the warrants is subject
to adjustment upon the occurrence of certain dilution events including, without
limitation, certain issuances of Common Stock, stock options or convertible
securities or certain corporate transactions such as stock splits, mergers or
asset sales.

REQUIREMENT OF SHAREHOLDER APPROVAL; POSSIBLE DELISTING FROM NASDAQ

In accordance with Nasdaq Stock Market Rule 4310, which generally
requires shareholder approval of transactions that would result in the issuance
of securities representing 20% or more of an issuer's outstanding listed
securities, the Company is not obligated to issue shares of Common Stock upon
conversion or the payment of dividends on the Series B Preferred in excess of
3,663,730 shares, representing 19.9% of its outstanding shares of Common Stock
on December 23, 1999, the date of issuance of the Series B Preferred.

The terms of the Series B Preferred provide that the Company must obtain
shareholder approval of the issuance of (i) the Series B Preferred, (ii) the
related warrants, (iii) Common Stock upon conversion or exercise thereof, and
(iv) Common Stock as dividends thereon, by the earlier to occur of its next
annual meeting of shareholders or within 60 days after the date that the number
of shares of Common

12
<PAGE>

Stock then issuable upon conversion of the Series B Preferred equals or exceeds
2,747,461 shares (15% of the number of shares of Common Stock outstanding on the
date of issuance of the Series B Preferred for any three of five consecutive
days). On April 13, 2000, the Company received a notice from counsel to the
holders of the Series B Preferred, pursuant to Section 4(g) of the Securities
Purchase Agreement between the buyers of the Series B Preferred and the Company
dated as of December 23, 1999 (the "Securities Purchase Agreement"), that for
the three days ending on and including April 12, 2000, the number of shares of
Common Stock issuable upon conversion of all the outstanding shares of Series B
Preferred, based upon the Conversion Price (as defined in the Articles of
Amendment to the Company's Certificate of Incorporation creating the Series B
Preferred, the "Articles of Amendment") on the applicable date (without regard
to any limitation upon the conversion of the shares of Series B Preferred)
equaled or exceeded 2,747,461 shares, requiring the Company to hold a
shareholders meeting on or before June 11, 2000.

If the Company has not obtained shareholder approval of the Series B
Preferred prior to June 11, 2000 and receives a notice from a holder of Series B
Preferred which would require the Company to convert such holder's Series B
Preferred into a number of shares of Common Stock which, when added to all
previous shares of Common Stock issued pursuant to the conversion of Series B
Preferred, would equal or exceed 20% of the number of shares of Common Stock
outstanding at that time, then the Company will be required to either redeem all
of the Series B Preferred submitted for redemption or voluntarily delist its
shares from Nasdaq within five business days after the notice of conversion
referred to above. In addition, failure to obtain shareholder approval by June
11, 2000 or delisting of the Common Stock from Nasdaq would constitute a
"Liquidity Default". See "Effects of Certain Breaches or Defaults" below. The
Company may not have sufficient available cash to redeem the Series B Preferred
at that time, and thus may be forced to pursue the option of delisting. In that
event, trading in the Common Stock would likely decrease substantially, and the
price of the Common Stock may decline. If the Company obtains such shareholder
approval, there is no limit on the number of shares of Common Stock that could
be issued upon conversion of, or the payment of dividends in lieu of cash on,
the Series B Preferred.

REDEMPTION; CONVERSION

On or prior to June 23, 2000, the Company is required to either redeem
or force the conversion of 4,500 shares of Series B Preferred. Such a redemption
would be at a price of 107% of the "Conversion Amount," which is defined for
each share of Series B Preferred as the sum of the amount originally paid for a
share of Series B Preferred ($1,000), plus any unpaid default interest and any
unpaid dividends to the date of determination. A conversion would be at the
applicable conversion rate which is the number of shares of Common Stock equal
to the Conversion Amount defined in the previous sentence divided by 93% of the
lowest closing sale price of the Common Stock on the three consecutive trading
days ending on and including the date of determination (the "Conversion Rate").
On or prior to September 22, 2000, the Company is required to either redeem or
force the conversion of an additional 4,500 shares of Series B Preferred at the
redemption and conversion prices described above in this paragraph.

In addition to the forced conversion described in the preceding
paragraph and subject to certain conditions, the Company may require holders to
convert their Series B Preferred into Common Stock. In addition and subject to
certain conditions, the holders will have the right to convert the Series B
Preferred into Common Stock. Regardless of whether the holders elect to convert
or the Company requires conversion, the number of shares of Common Stock to be
issued upon conversion of a Series B Preferred share is determined by the
applicable Conversion Rate.

The Series B Preferred matures on December 23, 2001, subject to
extension in certain circumstances, at which time the Series B Preferred must be
redeemed or converted at the Company's option. If the Company elects to redeem
any Series B Preferred outstanding on such date, the amount required to be paid
will be equal to the liquidation preference of the Series B Preferred, which
equals the

13
<PAGE>

price originally paid for each share ($1,000), plus any unpaid default interest
and accrued and unpaid dividends to the date of determination.

POSSIBLE EFFECTS ON THE MARKET PRICE OF COMMON STOCK

Because the Series B Preferred converts into Common Stock at a floating
rate based on the market price of Common Stock (PROVIDED, that the conversion
price may not exceed $21.26), the lower the price of Common Stock at the time
the holder converts, the greater the number of shares of Common Stock the holder
will receive. To the extent the Series B Preferred is converted or dividends on
the Series B Preferred are paid in shares of Common Stock rather than cash, a
significant amount of Common Stock may be sold into the market, which could
decrease the price of Common Stock due to the additional supply of shares
relative to demand in the market. In that case, the Company could be required to
issue an increasingly greater number of shares of Common Stock upon future
conversions of Series B Preferred, sales of which could further depress the
market price of Common Stock. If the sale of a large number of shares of Common
Stock upon conversion of, or the payment of dividends in lieu of cash on, the
Series B Preferred results in a decline in the price of Common Stock, this event
could encourage short sales of Common Stock. Short sales could place further
downward pressure on the market price of Common Stock.

The conversion of, and the payment of dividends in shares of Common
Stock in lieu of cash on, the Series B Preferred may result in substantial
dilution to the interests of other holders of Common Stock. Even though no
holder of Series B Preferred may convert its Series B Preferred into more than
4.99% of the Company's then outstanding Common Stock (excluding for purposes of
such determination shares of Common Stock issuable upon conversion of shares of
Series B Preferred which have not been converted and upon exercise of warrants
which have not been exercised), this restriction does not prevent a holder of
Series B Preferred from selling a substantial number of shares in the market. By
periodically selling shares into the market, an individual holder could
eventually sell more than 4.99% of the Company's outstanding Common Stock while
never holding more than 4.99% at any specific time.

NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION

The following table sets forth the number of shares of Common Stock that
the Company would be required to issue upon conversion of all 15,000 shares of
Series B Preferred currently outstanding at the applicable conversion price of
$4.19 per share of Common Stock as of April 17, 2000, and the resulting
percentage of the Company's total shares of Common Stock outstanding after such
conversion. The table also sets forth the results of such calculations assuming
(1) increases of 25%, 50% and 75% in the applicable conversion price; (2)
decreases of 25%, 50% and 75% in the applicable conversion price; and (3) the
fixed conversion price of $21.26 which is the maximum permitted conversion
price.

14
<PAGE>
<TABLE>
<CAPTION>
NO. OF SHARES
ASSUMED CONVERSION COMMON STOCK PERCENTAGE OF
PRICE PER SHARE ISSUABLE UPON OUTSTANDING COMMON
OF COMMON STOCK CONVERSION(1) STOCK AFTER CONVERSION(1)
- ------------------------ --------------------- -----------------------------
<S> <C> <C> <C>
$4.19 3,594,246 16.4%
$5.23 25% 2,875,396 13.6%
$6.28 50% 2,396,164 11.6%
$7.32 75% 2,053,855 10.1%
$21.26 $21.26 710,074 3.7%
$3.14 -25% 4,792,327 20.8%
$2.09 -50% 7,188,491 28.2%
$1.05 -75% 14,376,982 44.0%
- ------------------------
<FN>
(1) The number of shares of Common Stock issuable upon conversion and the percentage of outstanding
Common Stock after such conversion set forth above do not take into account any shares of Common
Stock that may be issuable as dividends on the Series B Preferred, or upon exercise of the
warrants issued in connection with the sale of the Series B Preferred.
</FN>
</TABLE>

If the 15,000 Series B Preferred currently outstanding had been
converted in full and the related warrants had been fully exercised as of April
17, 2000, the Company would have been required to issue an additional 3,594,246
shares, plus 825,000 shares upon the exercise of the related warrants, for a
total of 4,419,246 shares, equivalent to 19.3% of the 22,866,969 shares of
Common Stock which would then be outstanding.

POSSIBLE PAYMENT OF DIVIDENDS IN COMMON STOCK

At the Company's option, subject to certain conditions, the quarterly
dividend may be paid in cash or Common Stock, subject to satisfaction of certain
conditions. If the Company chooses to pay dividends in Common Stock, the number
of shares to be issued in payment of the dividend on the Series B Preferred will
be equal to (1) the sum of any unpaid default interest and any unpaid dividends
to the date of determination divided by (2) 93% of the lowest closing sale price
of the Common Stock on the three consecutive trading days ending on and
including the date which is two trading days prior to the date that the dividend
is payable. On March 31, 2000, the Company issued 29,278 shares of Common Stock
as dividends on the Series B Preferred.

15
<PAGE>

EFFECTS OF CERTAIN BREACHES OR DEFAULTS

If certain defaults or breaches of the Articles of Amendment, the
warrant agreements, the Securities Purchase Agreement or the related
registration rights agreement occur (each defined as a "Liquidity Default"), the
holders of the Series B Preferred have the right to require the Company to make
certain additional cash payments to the holders of the Series B Preferred or,
depending upon the nature of the Liquidity Default, adjust downward the maximum
conversion price. If the Company defaults under certain provisions of the
Articles of Amendment, including a failure to timely make a payment required by
a Liquidity Default (a "Triggering Event"), then, except in the case of the
Triggering Event involving failure to obtain the shareholder approval as
requested herein (which is described above in connection with the possible
delisting of the Common Stock from Nasdaq), the Company would be required to
redeem the Series B Preferred at a price equal to the greater of (1) 125% of the
liquidation preference described in the following paragraph; or (2) the
Conversion Rate in effect when a holder of Series B Preferred demands redemption
times the closing sale price of the Common Stock on the trading day immediately
preceding the date of such Triggering Event.

LIQUIDATION RIGHTS

In the event of the Company's liquidation, the holders of the Series B
Preferred will be entitled to a liquidation preference before any amounts are
paid to the holders of Common Stock. The liquidation preference is equal to the
amount originally paid for the Series B Preferred ($1,000 per share) plus
accrued and unpaid dividends (and any unpaid default interest) on any
outstanding Series B Preferred through the date of determination.

VOTING RIGHTS

Other than as required by law, the holders of the Series B Preferred
have no voting rights except that the consent of holders of at least two-thirds
of the outstanding Series B Preferred will be required to (1) effect any change
in the Company's Articles of Incorporation that would change any of the rights
of the Series B Preferred; or (2) issue any Series B Preferred other than
pursuant to the Securities Purchase Agreement.

FOR MORE INFORMATION

Complete copies of the Articles of Amendment, the form of the related
warrants and the Securities Purchase Agreement between the Company and the
holders of the Series B Preferred are contained in the Company's Current Report
on Form 8-K filed with the Securities and Exchange Commission on December 28,
1999 and are incorporated herein by reference. The descriptions of these
documents are summaries of the material terms and conditions only and are
qualified in their entirety by reference to the complete documents which are
publicly available from the Securities and Exchange Commission.

In connection with the Company's issuance of the Series B Preferred and
the related warrants, the Company filed a registration statement on Form S-3
with the Securities and Exchange Commission (File No. 333-95883) which was
declared effective on February 11, 2000. That registration statement covers the
resale of the Common Stock from time to time on the Nasdaq National Market or in
privately negotiated transactions of the Common Stock which is issuable upon
conversion of the Series B Preferred, in lieu of cash dividends on the Series B
Preferred and upon exercise of the related warrants.

16
<PAGE>

CHANGE IN CONTROL; OTHER PREFERRED STOCK

The Company's Articles of Incorporation and the Florida Business
Corporation Act contain provisions that could have the effect of delaying,
deferring or preventing a change in control and the opportunity to sell the
Company's Common Stock at a premium over current market prices. Although
intended to protect the Company and its shareholders from unwanted takeovers,
their effect could hinder or prevent transactions in which holders might
otherwise receive a premium for their Common Stock over then current market
prices, and may limit the holders' ability to approve transactions that may be
in their best interests. As a result, the mere existence of these provisions
could adversely affect the price of the Company's Common Stock.

The Company's Board of Directors has the authority to issue a total of
up to 2,000,000 shares of preferred stock, of which 15,000 have already been
issued, and to fix the rights, preferences, privileges and restrictions,
including voting rights, of the preferred stock, which typically are senior to
the rights of the common shareholders, without any further vote or action by the
common shareholders. The rights of common shareholders will be subject to, and
may be adversely affected by, the rights of the holders of the preferred stock
that has been issued, or might be issued in the future. Preferred stock also
could have the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of the Company. This could delay, defer
or prevent a change in control. Furthermore, holders of preferred stock may have
other rights, including economic rights, senior to the Common Stock. As a
result, the existence and issuance of preferred stock could have a material
adverse effect on the market value of the Common Stock. The Company has in the
past issued and may, from time to time in future, issue preferred stock for
financing or other purposes with rights, preferences or privileges senior to the
Common Stock.

The Board of Directors recommends a vote "FOR" the ratification and
approval of the issuance and sale of the Series B Preferred and the related
warrants and the approval of the issuance of Common Stock upon the conversion of
the Series B Preferred, the exercise of the related warrants and the payment of
dividends on the Series B Preferred.

ITEM 3. ADOPTION OF THE 2000 STOCK OPTION PLAN

The Board of Directors and a majority of the Company's shareholders by
written proxy on August 16, 1999, adopted and approved the 2000 Stock Option
Plan (the "Plan"), for its employees, officers and directors. Under the rules,
although this plan had been approved by the majority of shareholders and was
effective as of August 11, 2000, it must be submitted to a vote for ratification
and approval at this shareholders meeting. Of the 300,000 shares of Common Stock
available for issuance under the Plan, 210,000 have been issued.

The following description of the Plan is qualified by reference to the
complete text of such Plan which is set forth on Exhibit "A".

The plan provides for the issuance of up to 300,000 shares upon exercise
of options designated as either "incentive stock options" or "non-qualified
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"). The purpose of the Plan is to encourage stock ownership
by certain directors, officers, other key employees and consultants of the
Company and give them a greater personal interest in the success of the Company.
The Plan is administered by the Compensation Committee of the Board of Directors
which determines, among other things, the persons

17
<PAGE>

to be granted options under the Plan, the number of shares subject to each
option and the option price. The exercise price of any incentive stock option
granted under the Plan may not be less than the fair market value of the shares
subject to the option on the date of grant; provided, however, that the exercise
price of any incentive stock option granted to an eligible employee owning more
than 10% of the outstanding Common Stock may not be less than 110% of the fair
market value of the shares underlying such options on the date of grant.
Non-qualified options may not be granted with exercise prices less than the fair
market value of the shares subject to the option on the date of grant. The term
of each option and the manner in which it may be exercised is determined by the
Board of Directors or a committee appointed by the Board of Directors provided
that no option may be exercisable more than ten years after the date of grant
and, in the case of an incentive stock option granted to an eligible employee
owning more than 10% of the Common Stock, no more than five years after the date
of grant. Incentive stock options may be granted only to employees and no option
granted to an employee may be exercised unless, at the time of exercise, the
grantee is an employee of the Company or a subsidiary, and in the event of
death, options may be exercised during a twelve month period following such
event. The Company may grant an employee options for any numbers of shares,
except that the value of the shares subject to one or more incentive stock
options first exercisable in any calendar year may not exceed $100,000
(determined at the date of grant). Options are not transferable, except upon the
death of the optionee or for estate planning purposes under certain
circumstances and if approved by the Board of Directors. This plan has no change
of control provisions.

A summary of the federal income tax treatment under the Code, as
presently in effect, of options granted under the Plan is as follows. The
Company recommends that optionees seek independent tax advice with respect to
their options.

With respect to incentive stock options, an optionee will not recognize
any taxable income at the time an ISO is granted and the Company will not be
entitled to a federal income tax deduction at that time. No ordinary income will
be recognized by the holder of an ISO at the time of exercise. The excess of the
market value of the shares of the Company's Common Stock at the time of exercise
over the aggregate option price will be an adjustment to alternative minimum
taxable income for purposes of the federal "alternative minimum tax" at the date
of exercise. If the optionee holds the shares of the Company's Common Stock
acquired upon exercise of the ISO for the greater of two years after the date
the option was granted or one year after the acquisition of such shares, the
difference between the aggregate option price and the amount realized upon
disposition of the shares will constitute a long-term capital gain or loss, as
the case may be, and the Company will not be entitled to a federal income tax
deduction. If the shares of the Company's Common Stock are disposed of in a
sale, exchange of other "disqualifying disposition" within two years after the
date of grant or within one year after the date of exercise, the optionee will
realize ordinary income in an amount equal to the excess of the market value of
the shares of the Company's Common Stock at the time of exercise, over the
aggregate option price. The Company may be entitled to a federal income tax
deduction equal to such amount.

With respect to non-qualified stock options, the granting of a NQSO
does not produce taxable income to the recipient or a tax deduction to the
Company. Taxable ordinary income will be recognized by the holder at the time of
such exercise in an amount equal to the excess of the market value of shares of
the Company's Common Stock purchased at the time of such exercise over the
aggregate option price. The Company may be entitled to a corresponding federal
income tax deduction. Upon a subsequent disposition of the shares of the
Company's Common Stock, optionee will generally recognize taxable capital gain
or loss based upon the difference between the per share market value at the time
of exercise and the per share selling price. Taxable income at the time or
exercise will constitute wages subject to withholding of income tax and the
Company will be required to make whatever arrangements are necessary to insure
that funds equaling the amount of tax required to be withheld are available for

18
<PAGE>

payment. The tax basis for the shares of the Company's Common Stock acquired is
the option price plus the taxable income recognized.

The Board of Directors recommends that all shareholders vote "FOR"
ratification and approval of the 2000 Stock Option Plan.

ITEM 4. ADOPTION OF THE PROPOSED 2000 1/2 STOCK OPTION PLAN

The Board of Directors has adopted the 2000 1/2 Stock Option Plan (the
"Plan"), for its employees, officers and directors. The plan is effective June
8, 2000, upon shareholder approval. Of the 400,000 shares of Common Stock
available for issuance under the Plan, no shares have been issued.

The following description of the Plan is qualified by reference to the
complete text of such Plan which is set forth on Exhibit "B".

The plan provides for the issuance of up to 400,000 shares upon
exercise of options designated as either "incentive stock options" or
"non-qualified options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The purpose of the Plan is to
encourage stock ownership by certain directors, officers, other key employees
and consultants of the Company and give them a greater personal interest in the
success of the Company. The Plan is administered by the Compensation Committee
of the Board of Directors which determines, among other things, the persons to
be granted options under the Plan, the number of shares subject to each option
and the option price. The exercise price of any incentive stock option granted
under the Plan may not be less than the fair market value of the shares subject
to the option on the date of grant; provided, however, that the exercise price
of any incentive stock option granted to an eligible employee owning more than
10% of the outstanding Common Stock may not be less than 110% of the fair market
value of the shares underlying such options on the date of grant. Non-qualified
options may not be granted with exercise prices less than the fair market value
of the shares subject to the option on the date of grant. The term of each
option and the manner in which it may be exercised is determined by the Board of
Directors or a committee appointed by the Board of Directors provided that no
option may be exercisable more than ten years after the date of grant and, in
the case of an incentive stock option granted to an eligible employee owning
more than 10% of the Common Stock, no more than five years after the date of
grant. Incentive stock options may be granted only to employees and no option
granted to an employee may be exercised unless, at the time of exercise, the
grantee is an employee of the Company or a subsidiary, and in the event of
death, options may be exercised during a twelve month period following such
event. The Company may grant an employee options for any numbers of shares,
except that the value of the shares subject to one or more incentive stock
options first exercisable in any calendar year may not exceed $100,000
(determined at the date of grant). Options are not transferable, except upon the
death of the optionee or for estate planning purposes under certain
circumstances and if approved by the Board of Directors. This plan has change of
control provisions.

19
<PAGE>

aggregate option price will be an adjustment to alternative minimum taxable
income for purposes of the federal "alternative minimum tax" at the date of
exercise. If the optionee holds the shares of the Company's Common Stock
acquired upon exercise of the ISO for the greater of two years after the date
the option was granted or one year after the acquisition of such shares, the
difference between the aggregate option price and the amount realized upon
disposition of the shares will constitute a long-term capital gain or loss, as
the case may be, and the Company will not be entitled to a federal income tax
deduction. If the shares of the Company's Common Stock are disposed of in a
sale, exchange of other "disqualifying disposition" within two years after the
date of grant or within one year after the date of exercise, the optionee will
realize ordinary income in an amount equal to the excess of the market value of
the shares of the Company's Common Stock at the time of exercise, over the
aggregate option price. The Company may be entitled to a federal income tax
deduction equal to such amount.

The Board of Directors recommends that all shareholders vote "FOR"
approval of the proposed 2000 1/2 Stock Option Plan.

INDEPENDENT ACCOUNTANTS

The Board has appointed PricewaterhouseCoopers LLP, Miami, Florida, as
independent accountants to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 2000. Representatives of
PricewaterhouseCoopers LLP will be present at the Annual Meeting of Shareholders
and will be afforded the opportunity to make a statement if they desire to do so
and to respond to appropriate questions.

OTHER MATTERS

The Board of Directors is not aware of any other business that may come
before the meeting. However, if additional matters properly come before the
meeting, proxies will be voted at the discretion of the proxy holders.

SHAREHOLDER PROPOSALS

Shareholder proposals intended to be presented at the Year 2001 Annual
Meeting of Shareholders of the Company must be received by the Company not later
than December 31, 2000, at its principal executive offices, 2555 Davie Road,
Suite 110, Fort Lauderdale, Florida 33317, Attention: John B.

20
<PAGE>

Okkerse, Jr., Ph.D., Chief Executive Officer, for inclusion in the proxy
statement and proxy relating to the Year 2001 Annual Meeting of Shareholders.

ADDITIONAL INFORMATION

Accompanying this proxy statement is a copy of the Company's annual
report, which includes a copy of the Annual Report on Form 10-K. Additional
copies of the Company's annual report on Form 10-K may be obtained from the
Company on written request.

BY ORDER OF THE
BOARD OF DIRECTORS

Frank M. Puthoff, Secretary

May 5, 2000
Fort Lauderdale, Florida

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<PAGE>

EXHIBIT "A"

[OBJECT OMITTED]

2000 STOCK OPTION PLAN

1. PURPOSE OF THE PLAN

The purpose of this Plan is to further the growth of ProxyMed, Inc., a Florida
corporation, and its subsidiaries (the "Company") by offering an incentive to
officers, directors, other key employees and consultants of the Company to
continue in the employ of the Company, and to increase the interest of these
individuals in the Company through additional ownership of its common stock.

2. DEFINITIONS

Whenever used in this Plan, the following terms shall have the meanings set
forth in this Section:

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 Compensation Committee or similar committee of
the Board of Directors.

d) "Common Stock" means the common stock, par value $.001 per share, of
the Company.

e) "Date of Grant" means, as the case may be: (i) the date the
Committee approves the grant of an Option pursuant to this Plan; or (ii) such
later date as may be specified by the Committee as the date a particular Option
granted pursuant to this Plan will become effective.

f) "Employee" means any person employed by the Company within the
meaning of Section 3401(c) of the Code and the regulations promulgated
thereunder. For purposes of any Non-Qualified Option only, any officer or
director of the Company shall be considered an Employee even if he is not an
employee within the meaning of the first sentence of this subsection.

g) "Exercise Price" means the price per share which must be paid upon
exercise of an Option in cash or property or a combination of both.

h) "Fair Market Value" means: (i) if the Common Stock is traded in a
market in which actual transactions are reported, the mean of the high and low
prices at which the Common Stock is reported to have traded on the relevant date
in all markets on which trading in the Common Stock is reported or, if there is
no reported sale of the Common Stock on the relevant date, the mean of the
highest reported bid price and lowest reported asked price for the Common Stock
on the relevant date; (ii) if the Common Stock is Publicly Traded but only in
markets in which there is no reporting of actual transactions, the mean of the
highest reported bid price and the lowest reported asked price for the Common
Stock on the relevant date; or (iii) if the Common Stock is not Publicly Traded,
the value of a share of Common Stock as determined by the most recent valuation
prepared by an independent expert at the request of the Committee.

i) "Incentive Stock Option" means any Option which, at the time of the
grant, is an incentive stock option within the meaning of Section 422 of the
Code.

j) "Non-Qualified Option" means any Option that is not an Incentive
Stock Option pursuant to the terms of this Plan.

k) "Option" means any option granted pursuant to this Plan.

l) "Publicly Traded" means that a class of stock is required to be
registered pursuant to Section 12 of the Exchange Act, or that stock of that
class has been sold within the preceding 12 months in an underwritten public
offering, or stock that is regularly traded in a public market.

<PAGE>

m) "Retirement" means a Termination of Employment by reason of an
Employee's retirement at a time when the Employee is at least 65 years old,
other than by reason of a termination by resignation, discharge, death or Total
Disability or the resignation, failure to stand for re-election or dismissal
from the Board of Directors.

n) "Termination of Employment" means the time when the
employee-employer relationship between an Employee and the Company ceases to
exist for any reason including, but not limited to, a termination by
resignation, discharge, death, Total Disability or Retirement, or the
resignation, failure to stand for re-election or dismissal from the Board of
Directors.

o) "Total Disability" means the inability of an Employee to perform the
material duties of his or her job by reason of a medically determinable physical
or mental impairment that can be expected to result in death or that has lasted
or can be expected to last for a continuous period of not less than 12 months.
All determinations as to the date and extent of disability of an Employee will
be made in accordance with the written policy pertaining to Employee disability,
if any, of the Company by which the Employee is employed. In the absence of a
written policy pertaining to Employee disability, all determinations as to the
date and extent of disability of an Employee will be made by the Committee in
its sole and absolute discretion. In making its determination, the Committee may
consider the opinion of the personal physician of the Employee or the opinion of
an independent licensed physician of the Company's choosing.

3. EFFECTIVE DATE OF THE PLAN

The "effective date" of this Plan is August 11, 1999.

4. ADMINISTRATION OF THE PLAN

Either the Board of Directors or the Committee shall be responsible for the
administration of this Plan, and shall grant Options pursuant to this Plan.
Subject to the express provisions of this Plan, the Committee shall have full
authority to interpret this Plan, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations which it
believes to be necessary or advisable in administering this Plan. The
determinations of the Committee on the matters referred to in this section shall
be conclusive. The Committee may not amend this Plan. No member of the Committee
shall be liable for any act or omission in connection with the administration of
this Plan unless it resulted from the member's willful misconduct.

5. THE COMMITTEE

The Committee shall hold its meeting at such times and places as it may
determine and shall maintain written minutes of its meetings. A majority of the
members of the Committee shall constitute a quorum at any meeting of the
Committee. All determinations of the Committee shall be made by the vote of a
majority of the members who participate in a meeting. The members of the
Committee may participate in a meeting of the Committee in person or by
conference telephone or similar communications equipment by means of which all
members can hear each other. Any decision or determination by written consent of
all of the members of the Committee shall be as effective as if it had been made
by a vote of a majority of the members who participate in a meeting.

6. STOCK SUBJECT TO THE PLAN

The maximum number of shares of Common Stock as to which Options may be granted
pursuant to this Plan is 300,000 shares. The maximum number of shares of such
Common Stock shall be reduced each year by the grant of Options as provided
herein. If any Option expires or is canceled without being exercised in full,
the number of shares as to which the Option is not exercised will once again
become shares as to which new Options may be granted. The Common Stock that is
issued on exercise of Options may be authorized but unissued shares or shares
that have been issued and reacquired by the Company.

2
<PAGE>

7. PERSONS ELIGIBLE TO RECEIVE OPTIONS

Options may be granted only to Employees, as defined in Section 2(i) above.

8. GRANTS OF OPTIONS

a) IN GENERAL. Except as otherwise provided herein, the Committee shall
have complete discretion to determine when and to which Employees Options are to
be granted, the number of shares of Common Stock as to which Options granted to
each Employee will relate, whether Options granted to an Employee will be
Incentive Stock Options or Non-Qualified Options or partly Incentive Stock
Options and partly Non-Qualified Options and, subject to the limitations in
Sections 9 and 10 below, the Exercise Price and the term of Options granted to
an Employee. Any Options that are not designated as Incentive Stock Options when
they are granted shall be Non-Qualified Options. No grant of an Incentive Stock
Option may be conditioned upon a Non-Qualified Option's having yet been
exercised in whole or in part, and no grant of a Non-Qualified Option may be
conditioned upon an Incentive Stock Option's having not been exercised in whole
or in part.

9. OPTION PROVISIONS

a) EXERCISE PRICE. The Exercise Price of each Option shall be as
determined by the Committee; provided, however, that in the case of Incentive
Stock Options, the Exercise Price shall not be less than 100% of the Fair Market
Value of the Common Stock on the Date of Grant of the Option.

b) TERM. The term of each Option shall be as determined by the
Committee, but in no event shall the term of an Option (whether or not an
Incentive Stock Option) be longer than ten (10) years from the Date of Grant.

c) MANNER OF EXERCISE. An Option that has vested pursuant to the terms
of this Plan may be exercised in whole or in part, in increments of a minimum of
100 shares, at any time, or from time to time, during its term. To exercise an
Option, the Employee exercising the Option must deliver to the Company, at its
principal office:

i) a written notice of exercise of the Option, which states the
extent to which the Option is being exercised and which is executed by the
Employee;

ii) a check in an amount, or Common Stock with a Fair Market Value,
equal to the Exercise Price of the Option times the number of shares being
exercised, or a combination of the foregoing; and

iii) a check equal to any withholding taxes the Company is required
to pay as a result of the exercise of the Option by the Employee. If permitted
by the Board of Directors or the Committee, either at the time of the grant of
the Option or the time of exercise, the Employee may elect, at such time and in
such manner as the Board of Directors or the Committee may prescribe, to satisfy
such withholding obligation by (A) delivering to the Company Common Stock (which
in the case of Common Stock acquired from the Company shall have been owned by
the Employee for at least six months prior to the delivery date) having a fair
market value equal to such withholding obligation, or (B) requesting that the
Company withhold from the shares of Common Stock to be delivered upon the
exercise a number of shares of Common Stock having a fair market value equal to
such withholding obligation.

The day on which the Company receives all of the items specified in this
subsection shall be the date on which the Option is exercised to the extent
described in the notice of exercise.

3
<PAGE>

pursuant to the Securities Act of 1933, as amended (the "Securities Act"), each
certificate may bear a legend to indicate that if the Common Stock represented
by the certificate was issued in a transaction that was not registered pursuant
to the Securities Act, and may only be sold or transferred in a transaction that
is registered pursuant to the Securities Act or is exempt from the registration
requirements of the Securities Act.

f) NON-TRANSFERABILITY OF OPTIONS. During the lifetime of a person to
whom an Option is granted pursuant to this Plan, the Option may be exercised
only by that person or by his or her guardian or legal representative, except to
the extent the Board of Directors or the Compensation Committee shall otherwise
determine, whether at the time the option is granted or thereafter, and then
only for estate planning purposes to a trust wherein the option holder is the
trustee, and except to the extent the Board of Directors or the Committee shall
otherwise determine, whether at the time Option is granted or thereafter. An
Option may not be assigned, transferred, sold, pledged or hypothecated in any
way; shall not be subject to levy or execution or disposition under the
Bankruptcy Code of 1978, as amended, or any other state or federal law granting
relief to creditors, whether now or hereafter in effect; and shall not be
transferable otherwise than by will or the laws of descent and distribution. The
Company will not recognize any attempt to assign, transfer, sell, pledge,
hypothecate or otherwise dispose of an Option contrary to the provisions of this
Plan, or to levy any attachment, execution or similar process upon any Option
and, except as expressly stated in this Plan, the Company shall not be required
to, and shall not, issue Common Stock on the exercise of an Option to anyone who
claims to have acquired that Option from the person to whom it was granted in
violation of this subsection.

g) RETIREMENT OF HOLDER OF OPTION. If there is a Termination of
Employment of an Employee to whom an Option has been granted due to Retirement,
each Stock Option held by the retired Employee, whether or not then vested, may
be exercised until the earlier of: (x) the end of the twenty-four (24) month
period immediately following the date of such Termination of Employment; or (y)
the expiration of the term specified in the Option.

h) TOTAL DISABILITY OF HOLDER OF OPTION. If there is a Termination of
Employment of an Employee to whom an Option has been granted by reason of his or
her Total Disability, each Option held by the Employee, whether or not then
vested, may be exercised until the earlier of: (x) the end of the twenty-four
(24) month period immediately following the date of such Termination of
Employment; or (y) the expiration of the term specified in the Option.

i) DEATH OF HOLDER OF OPTION. If there is a Termination of Employment
of an Employee to whom an Option has been granted by reason of (i) his or her
death, or (ii) the death of a former Employee within twenty-four (24) months
following the date of his or her Retirement, or (iii) the death of a former
Employee within twenty-four (24) months following the date of his or her
Termination of Employment by reason of Total Disability, then each Option held
by the person at the time of his or her death, whether or not then vested, may
be exercised by the person or persons to whom the Option shall pass by will or
by the laws of descent and distribution (but by no other persons) until the
earlier of: (x) the end of the twenty-four (24) month period immediately
following the date of death (or such longer period as is permitted by the
Committee); and (y) the expiration of the term specified in the Option,
provided, however, that in no event is the term of the Option to be deemed to
expire prior to the end of three (3) months from the date of death of the
Employee.

4
<PAGE>

j) TERMINATION OF EMPLOYMENT OTHER THAN FOR RETIREMENT, DEATH OR
DISABILITY. Unless the Committee or the Board of Directors states otherwise with
respect to a specific Option, if there is a Termination of Employment of an
Employee to whom an Option has been granted pursuant to this Plan for any reason
other than the Retirement, death or Total Disability of the Employee, then all
Options held by such Employee which are then vested may be exercised until the
earlier of: (x) the twenty-four (24) month period immediately following the date
of such Termination of Employment; or (y) the expiration of the term specified
in the Option.

k) STOCK OPTION AGREEMENT. As promptly as practicable after an Employee
is granted an Option pursuant to this Plan, the Committee shall send the
Employee a document setting forth the terms and conditions of the grant. The
form of grant document shall be substantially as set forth in Exhibit "A"
attached hereto. Each Option granted pursuant to this Plan must be clearly
identified as to whether it is or is not an Incentive Stock Option and shall set
forth all other terms and conditions relating to the exercise thereof. In the
case of an Incentive Stock Option, the document shall include all terms and
provisions that the Committee determines to be necessary or desirable in order
to qualify the Option as an Incentive Stock Option within the meaning of Section
422 of the Code. If an Employee is granted an Incentive Stock Option and a
Non-Qualified Option at the same time, the Committee shall send the Employee a
separate document relating to each of the Incentive Stock Option and the
Non-Qualified Option.

l) REGISTRATION OF PLAN. The Company shall have no obligations to
register the Plan unless directed to do so by the Board of the Company based on
the Company's best interests.

10. SPECIAL PROVISIONS RELATING TO INCENTIVE STOCK OPTIONS

No Incentive Stock Option may be granted pursuant to this Plan after ten (10)
years from the first to occur of: (i) the date this Plan is adopted by the Board
of Directors; or (ii) the date this Plan is approved by the stockholders of the
Company. No Incentive Stock Option may be exercised after the expiration of ten
(10) years from the Date of Grant or such shorter period as is provided herein.
Notwithstanding Section 8(b) hereof, Incentive Stock Options may not be granted
to an Employee who, at the time the Option is granted, owns more than ten (10%)
percent of the total combined voting power of the stock of the Company, unless:
(i) the purchase price of the Common Stock pursuant to the Incentive Stock
Option is at least 110 percent of the Fair Market Value of the Common Stock on
the Date of Grant; and (ii) the Incentive Stock Option by its terms is not
exercisable after the expiration of five (5) years from the Date of Grant. The
Committee is authorized, pursuant to the last sentence of Section 422(b) of the
Code, to provide at the time an Option is granted, pursuant to the terms of such
Option, that such Option shall not be treated as an Incentive Stock Option even
though it would otherwise qualify as an Incentive Stock Option. The terms of any
Incentive Stock Option granted hereunder shall, in the hands of any individual
grantee thereof, be subject to the dollar limitations set forth in Section
422(d) of the Code (pertaining to the $100,000 per year limitation).

11. RECAPITALIZATION

a) IN GENERAL. If the Company increases the number of outstanding
shares of Common Stock through a stock dividend or a stock split, or reduces the
number of outstanding shares of Common Stock through a combination of shares or
similar recapitalization then, immediately after the record date for the change:
(i) the number of shares of Common Stock issuable on the exercise of each
outstanding Option granted pursuant to this Plan (whether or not then vested)
shall be increased in the case of a stock dividend or a stock split, or
decreased in the case of a combination or similar recapitalization that reduces
the number of outstanding shares, by a percentage equal to the percentage change
in the number of outstanding shares of Common Stock as a result of the stock
dividend, stock split, combination or similar recapitalization; (ii) the
Exercise Price of each outstanding Option granted pursuant to this Plan (whether
or not then vested) shall be adjusted so that the total amount to be paid upon
exercise of the Option in full will not change; and (iii) the number of shares
of Common Stock that may be issued on exercise of Options granted pursuant to
this Plan (whether or not then vested) and that are outstanding or remain
available for grant shall be increased or

5
<PAGE>

decreased by a percentage equal to the percentage change in the number of
outstanding shares of Common Stock. Any fractional shares will be rounded up to
whole shares.

12. RIGHTS OF OPTION HOLDER

a) STOCKHOLDER. The holder of an Option (whether or not then vested)
shall not have any rights as a stockholder by reason of holding that Option.
Upon exercise of an Option granted pursuant to this Plan, the holder shall be
deemed to acquire the rights of a stockholder when, but not before, the issuance
of Common Stock as a result of the exercise is recorded in the stock transfer
records of the Company.

b) EMPLOYMENT. Nothing in this Plan or in the grant of an Option shall
confer upon any Employee the right to continue in the employ of the Company or
shall interfere with or restrict in any way the rights of the Company to
discharge any Employee at any time for any reason whatsoever, with or without
cause.

13. LAWS AND REGULATIONS

The obligation of the Company to sell and deliver shares of Common Stock on
vesting and exercise of Options granted pursuant to this Plan shall be subject
to the condition that counsel for the Company be satisfied that the sale and
delivery thereof will not violate the Securities Act or any other applicable
laws, rules or regulations. In addition, the Company may, as a condition to such
sale and delivery, require the Employee to represent and warrant at the time of
any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required pursuant
to such securities laws.

14. WITHHOLDING OF TAXES

a) IN GENERAL. In addition to the requirement set forth in Section 9(c)
above that, in order to exercise an Option granted pursuant to this Plan a
person must make a payment to the Company or authorize withholding in order to
enable the Company to pay any withholding taxes due as a result of the exercise
of that Option, if an Employee who exercised an Incentive Stock Option disposes
of shares of Common Stock acquired through exercise of that Incentive Stock
Option either (x) within two years after the Date of Grant of the Incentive
Stock Option or (y) within one year after the issuance of the shares on exercise
of the Incentive Stock Option then, promptly thereafter, the Employee shall
notify the Company of the occurrence of the event and the amount realized upon
the disposition of such Common Stock by the Employee, and pay any federal, state
and other taxes due as a result thereof.

b) WITHHOLDING OF TAXES. If, whether because of a disposition of Common
Stock acquired on exercise of an Incentive Stock Option, the exercise of a
Non-Qualified Option or otherwise, the Company becomes required to pay
withholding taxes to any federal, state or other taxing authority and the
Employee fails to provide the Company with the funds with which to pay that
withholding tax, then the Company may withhold, subject to applicable state law,
up to 50% of each payment of salary or bonus to the Employee (which will be in
addition to any other required or permitted withholding), until the Company has
been reimbursed for the entire withholding tax it was required to pay.

15. RESERVATION OF SHARES

The Company shall at all times keep reserved for issuance on exercise of Options
granted pursuant to this Plan a number of authorized but unissued or reacquired
shares of Common Stock equal to the maximum number of shares the Company may be
required to issue on exercise of outstanding Options (whether or not then
vested) granted pursuant to this Plan.

16. AMENDMENT OF THE PLAN

6
<PAGE>

stockholders of the Company the Board of Directors may not increase the maximum
number of Incentive Stock Options that may be granted under the Plan. No
modification or amendment of this Plan shall, without the consent of the holder
of an outstanding Option (whether nor not then vested), adversely affect the
holder's rights pursuant to that Option.

17. TERMINATION OF THE PLAN

The Board of Directors may suspend or terminate this Plan at any time
or from time to time, but no such action shall adversely affect the rights of a
person holding an outstanding Option, whether or not then vested, granted
pursuant to this Plan prior to that date.

7
<PAGE>

STOCK OPTION AGREEMENT

This Agreement is made as of ___________, by and between PROXYMED, INC.
(the "Company") and _____________, who is an employee, officer or director of
the Company or one of its subsidiaries (the "Employee").

WHEREAS, the Employee is a valuable and trusted employee, officer or
director of the Company, and the Company considers it desirable and in its best
interests that the Employee be given an inducement to acquire a further
proprietary interest in the Company, and an added incentive to advance the
interests of the Company by possessing a right (the "Option Right") to purchase
shares of the Company's common stock, $.001 par value (the "Option Stock"), in
accordance with the PROXYMED, INC. 2000 Stock Option Plan (the "Plan").

NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:

1. DEFINITIONS. All terms not defined herein and defined in the Plan shall
be given the meaning expressed in the Plan.

2. GRANT OF OPTION. The Company hereby grants to the Employee the right,
privilege and option to purchase the number of shares of Option Stock,
at the purchase price as shown on Schedule I attached hereto (the
"Option Price"), in the manner and subject to the conditions
hereinafter provided in this Agreement and as provided in the Plan. The
Option Right granted hereunder is either an Incentive Stock Option or
Non-Qualified Option, as specified on Schedule I.

3. TIME OF EXERCISE OF OPTION. The aforesaid Option Right may be exercised
at any time, subject to Section 4, below, and from time to time, until
the termination thereof as provided in Paragraph 6, below, or as
otherwise provided in the Plan; provided, however, that the Option
Right granted herein may not be exercised after the termination date as
shown on Schedule I, unless provided otherwise in the Plan.

4. VESTING OF OPTION RIGHT. The Option Right shall vest as provided in
Schedule I.

5. METHOD OF EXERCISE. The Option Right shall be exercised in whole or in
part, in increments of a minimum of one hundred (100) shares, at any
time, or from time to time, during its term. To exercise an option, the
Employee shall deliver written notice in the form attached hereto as
Schedule II to the Company at its principal place of business,
accompanied by payment of the Option Price per share and compliance
with such other conditions and requirements as set forth in the Plan.
Payment shall be made by a check, plus a check equal to any withholding
taxes that the Company is required to pay as a result of the exercise
of the Option by the Employee.

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<PAGE>

Subject to the terms and conditions set forth in the Plan, as promptly
as practicable after an Option is exercised, the Company shall deliver
such shares issuable upon exercise of the Option.

6. TERMINATION OF EMPLOYMENT. The rights and obligations of the Employee
upon Termination of Employment shall be as set forth in the Plan.

7. RESTRICTIONS ON CERTAIN RESALES. The shares issuable upon exercise of
this Option have not been registered under the Securities Act of 1933,
as amended (the "Securities Act") or under any state securities laws,
and are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering. The
holder may not resell the shares purchased hereunder except pursuant to
registration under the Securities Act or an exemption therefrom.

Resales of shares issuable hereunder may be subject to other state and
federal securities laws. The Employee is advised to consult with legal
counsel as to compliance with the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and such other
laws prior to resale of such shares.

The Company, as a condition to the exercise of an Option to acquire
shares not registered under the Securities Act, may require the
Employee to represent and warrant at the time of any exercise that the
shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by the
Securities Act.

8. RECLASSIFICATION, MERGER, ETC. The rights and obligations of the
Company and the Employee as a result of the transactions specified in
Section 11 of the Plan shall be as provided therein.

9. RIGHTS PRIOR TO EXERCISE OF OPTION. This Option Right is nonassignable
and nontransferable by the Employee except as provided in the Plan and,
during his lifetime, is exercisable only by him. The Employee shall
have no rights as a stockholder with respect to the Option Stock until
payment of the Option Price and delivery to him of such shares as
herein provided. Nothing in this Agreement shall confer any right in an
employee to continue in the employment of the Company or interfere in
any way with the right of the Company to terminate such employment at
any time.

10. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.

11. DISCREPANCIES. If there appears to be any discrepancies between this
Agreement and the Plan, they shall be interpreted and determined by the
terms and conditions of the Plan.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.

PROXYMED, INC.

By: _________________________________ By: _______________________________
Frank M. Puthoff, Secretary John B. Okkerse, Jr., Ph.D.
Chief Executive Officer

I hereby accept the stock option right offered to me by the Company, as
set forth in this Stock Option Agreement dated as of _________, and Schedule I
which is attached thereto.

Accepted by:

Employee:

___________________________________
EMPLOYEE SIGNATURE

___________________________________
Date

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<PAGE>

SCHEDULE I

The information set forth in this Schedule I is subject to all of the
terms of the PROXYMED, INC. Stock Option Agreement to which this Schedule is
attached.

1. Name of Employee, Officer or Director:

____________________________________

2. Address:

____________________________________

3. Social Security Number:

4. Number of Shares: ___________

5. Exercise Price: $____ per share [closing price at close of
business on _____].

6. Type of Option (check one):

[ ] Incentive Stock Option

[ ] Qualified Stock Option

7. NUMBER OF SHARES DATE VESTED TERMINATION DATE
---------------- ----------- ----------------

REFERENCE IS MADE TO THE 2000 STOCK OPTION PLAN FOR CERTAIN EVENTS SUCH AS
DEATH, DISABILITY AND TERMINATION OF EMPLOYMENT THAT CAUSE THESE OPTIONS TO
EXPIRE PRIOR TO THE TERMINATION DATE SET FORTH ABOVE.

<PAGE>

SCHEDULE II

NOTICE OF EXERCISE

I, the undersigned Employee, hereby give notice of the exercise of the
Option described below, to the extent and in the manner specified herein,
subject to the all of the terms and conditions of the PROXYMED, INC. STOCK
OPTION AGREEMENT granting this Option and the PROXYMED, INC. 2000 STOCK OPTION
PLAN. If the shares to be acquired pursuant to this exercise of the Option are
not registered under the Securities Act of 1933, as amended, the undersigned
represents and warrants that the shares are being purchased only for investment
and without any present intention to sell or distribute such shares.

1. Name of Employee, Officer or Director:_______________________

2. Address:

____________________________________________

3. Social Security Number: ________________

4. Number of Shares Being Exercised on This Date: ______________

5. Exercise Price: $____ per share

6. Manner of Payment:

______ Check (amount enclosed: $_____________ )

________________________________
EMPLOYEE SIGNATURE

DATE: __________________________

SIGNATURE GUARANTEE:

_____________________________

<PAGE>

EXHIBIT "B"

[OBJECT OMITTED]

2000 1/2 STOCK OPTION PLAN

1. PURPOSE OF THE PLAN

2. DEFINITIONS

Whenever used in this Plan, the following terms shall have the meanings set
forth in this Section:

a) "Board of Directors" means the Board of Directors of the
Company.

b) "Change of Control" means any of the following events:

i) an acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any Person (as
defined in the Exchange Act of 1934, as amended (the "1934 Act") immediately
after which such Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of twenty percent (20%) or more of the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, that in determining whether a Change in Control has occurred,
Voting Securities which are acquired in a Non-Control Acquisition (as
hereinafter defined) shall not constitute an acquisition which would cause a
Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (x)
an employee benefit plan (or a trust forming a part thereof) maintained by (A)
the Company or (B) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly or
indirectly by the Company (a "Subsidiary"), (y) the Company or any Subsidiary,
or (z) any Person in connection with a Non-Control Transaction (as hereinafter
defined).

ii) the individuals who, as of the date this Plan is approved by the
Company's Board of Directors (the "Board"), are members of the Board (the
"Incumbent Board") cease for any reason to constitute at least two-thirds (2/3)
of the Board; provided, however, that the voluntary resignation of a member of
the Incumbent Board unrelated to a Change of Control shall not affect such
calculation; provided, further, however, that if the election or nomination for
election by the Company's stockholders or Board of any new director was approved
by a vote of at least two-thirds (2/3) of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered a member of the Incumbent
Board; provided further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board (a "proxy contest"), including by
reason of any agreement intended to avoid or settle any election contest or
proxy contest; or

iii) approval by stockholders of the Company of:

a) a merger, consolidation or reorganization involving the
Company, unless

(1) the stockholders of the Company, immediately before such
merger, consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, at least seventy-five
percent (75%) of the combined voting power of the outstanding Voting Securities
of the corporation resulting from such merger or consolidation or reorganization
or the ultimate entity controlling such corporation (the "Surviving
Corporation") in

<PAGE>

substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization;

(2) the individuals who are members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least two-thirds (2/3) of the
members of the board of directors of the Surviving Corporation and no agreement,
plan or arrangement is in place to change the composition of the board following
the merger, consolidation or reorganization such that the Incumbent Board would
constitute less than two-thirds (2/3) of the reconstituted board;

(3) no person (other than the Company, any Subsidiary, or
any employee benefit plan (or any trust forming a part thereof) maintained by
the Company, the Surviving Corporation or any Subsidiary, or any Person who
immediately prior to such merger, consolidation or reorganization had Beneficial
Ownership of twenty percent (20%) or more of the then-outstanding Voting
Securities) has Beneficial Ownership of twenty percent (20%) or more of the
combined voting power of the Surviving Corporation's then-outstanding Voting
Securities; and

(4) a transaction described in clauses (1) through (3) shall
herein be referred to as a "Non-Control Transaction".

b) a complete liquidation or dissolution of the Company; or

c) an agreement for the sale or other disposition of all of the
operating assets of the Company to any Person (other than a transfer to a
Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person; provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company, and after such
share acquisition by the Company the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the percentage of the
then-outstanding Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.

c) "Code" means the Internal Revenue Code of 1986, as amended.

d) "Committee" means the Compensation Committee or similar committee of
the Board of Directors.

e) "Common Stock" means the common stock, par value $.001 per share, of
the Company.

f) "Corporate Transaction" means any (i) reorganization or liquidation
of the Company, (ii) reclassification of the Company's capital stock, (iii)
merger of the Company with or into another corporation, or (iv) the sale of all
or substantially all the assets of the Company, which results in a significant
number of employees being transferred to a new employer or discharged or in the
creation or severance of a parent-subsidiary relationship.

g) "Date of Grant" means, as the case may be: (i) the date the
Committee approves the grant of an Option pursuant to this Plan; or (ii) such
later date as may be specified by the Committee as the date a particular Option
granted pursuant to this Plan will become effective.

h) "Employee" means any person employed by the Company within the
meaning of Section 3401(c) of the Code and the regulations promulgated
thereunder. For purposes of any Non-Qualified Option only, any officer or
director of the Company shall be considered an Employee even if he is not an
employee within the meaning of the first sentence of this subsection.

2
<PAGE>

i) "Exercise Price" means the price per share which must be paid upon
exercise of an Option in cash or property or a combination of both.

j) "Fair Market Value" means: (i) if the Common Stock is traded in a
market in which actual transactions are reported, the mean of the high and low
prices at which the Common Stock is reported to have traded on the relevant date
in all markets on which trading in the Common Stock is reported or, if there is
no reported sale of the Common Stock on the relevant date, the mean of the
highest reported bid price and lowest reported asked price for the Common Stock
on the relevant date; (ii) if the Common Stock is Publicly Traded but only in
markets in which there is no reporting of actual transactions, the mean of the
highest reported bid price and the lowest reported asked price for the Common
Stock on the relevant date; or (iii) if the Common Stock is not Publicly Traded,
the value of a share of Common Stock as determined by the most recent valuation
prepared by an independent expert at the request of the Committee.

k) "Incentive Stock Option" means any Option which, at the time of the
grant, is an incentive stock option within the meaning of Section 422 of the
Code.

l) "Non-Qualified Option" means any Option that is not an Incentive
Stock Option pursuant to the terms of this Plan.

m) "Option" means any option granted pursuant to this Plan.

n) "Publicly Traded" means that a class of stock is required to be
registered pursuant to Section 12 of the Exchange Act, or that stock of that
class has been sold within the preceding 12 months in an underwritten public
offering, or stock that is regularly traded in a public market.

o) "Retirement" means a Termination of Employment by reason of an
Employee's retirement at a time when the Employee is at least 65 years old,
other than by reason of a termination by resignation, discharge, death or Total
Disability or the resignation, failure to stand for re-election or dismissal
from the Board of Directors.

p) "Termination of Employment" means the time when the
employee-employer relationship between an Employee and the Company ceases to
exist for any reason including, but not limited to, a termination by
resignation, discharge, death, Total Disability or Retirement, or the
resignation, failure to stand for re-election or dismissal from the Board of
Directors.

q) "Total Disability" means the inability of an Employee to perform the
material duties of his or her job by reason of a medically determinable physical
or mental impairment that can be expected to result in death or that has lasted
or can be expected to last for a continuous period of not less than twelve (12)
months. All determinations as to the date and extent of disability of an
Employee will be made in accordance with the written policy pertaining to
Employee disability, if any, of the Company by which the Employee is employed.
In the absence of a written policy pertaining to Employee disability, all
determinations as to the date and extent of disability of an Employee will be
made by the Committee in its sole and absolute discretion. In making its
determination, the Committee may consider the opinion of the personal physician
of the Employee or the opinion of an independent licensed physician of the
Company's choosing.

3. EFFECTIVE DATE OF THE PLAN

The "effective date" of this Plan is June 8, 2000.

4. ADMINISTRATION OF THE PLAN

3
<PAGE>

Plan. The determinations of the Committee on the matters referred to in this
section shall be conclusive. The Committee may not amend this Plan. No member of
the Committee shall be liable for any act or omission in connection with the
administration of this Plan unless it resulted from the member's willful
misconduct.

5. THE COMMITTEE

6. STOCK SUBJECT TO THE PLAN

The maximum number of shares of Common Stock as to which Options may be granted
pursuant to this Plan is 350,000 shares. The maximum number of shares of such
Common Stock shall be reduced each year by the grant of Options as provided
herein. If any Option expires or is canceled without being exercised in full,
the number of shares as to which the Option is not exercised will once again
become shares as to which new Options may be granted. The Common Stock that is
issued on exercise of Options may be authorized but unissued shares or shares
that have been issued and reacquired by the Company.

7. PERSONS ELIGIBLE TO RECEIVE OPTIONS

Options may be granted only to Employees, as defined in Section 2(h) above.

8. GRANTS OF OPTIONS

9. OPTION PROVISIONS

c) MANNER OF EXERCISE. An Option that has vested pursuant to the terms
of this Plan may be exercised in whole or in part, in increments of a minimum of
one hundred (100) shares, at any time, or from time to time, during its term. To
exercise an Option, the Employee exercising the Option must deliver to the
Company, at its principal office:

4
<PAGE>

i) a written notice of exercise of the Option, which states the
extent to which the Option is being exercised and which is executed by the
Employee;

ii) a check in an amount, or Common Stock with a Fair Market Value,
equal to the Exercise Price of the Option times the number of shares being
exercised, or a combination of the foregoing; and

The day on which the Company receives all of the items specified in this
subsection shall be the date on which the Option is exercised to the extent
described in the notice of exercise.

d) DELIVERY OF STOCK CERTIFICATES. As promptly as practicable after an
Option is exercised, the Company shall cause the transfer agent to deliver to
the Employee who exercises the Option certificates, registered in that person's
name, representing the number of shares of Common Stock that were purchased by
the exercise of the Option. Unless the Common Stock was issued in a transaction
that was registered pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), each certificate may bear a legend to indicate that if the
Common Stock represented by the certificate was issued in a transaction that was
not registered pursuant to the Securities Act, and may only be sold or
transferred in a transaction that is registered pursuant to the Securities Act
or is exempt from the registration requirements of the Securities Act.

e) VESTING OF OPTIONS. Except as otherwise provided in this Plan, the
Options granted hereunder to Employees shall be subject to such conditions as to
vesting as shall be determined by the Committee, in its sole and absolute
discretion, at the Date of Grant of the Option, and the terms of such vesting
shall be clearly set forth in the instrument granting the Option; provided,
however, that upon a Change of Control, any Options that have not yet vested in
accordance with the terms of this Plan and the Stock Option Agreement shall vest
upon such Change of Control. An Option shall "vest" at such time as it becomes
exercisable in accordance with this Plan and the Stock Option Agreement. Upon
exercise of an Option and the delivery the stock certificates as provided
herein, the Common Stock acquired upon exercise of the Option shall not be
subject to forfeiture by the Employee for any reason whatsoever.

f) NONTRANSFERABILITY OF OPTIONS. During the lifetime of a person to
whom an Option is granted pursuant to this Plan, the Option may be exercised
only by that person or by his or her guardian or legal representative, except to
the extent the Board of Directors or the Compensation Committee shall otherwise
determine, whether at the time the option is granted or thereafter, and then
only for estate planning purposes to a trust wherein the option holder is the
trustee, and except to the extent the Board of Directors or the Committee shall
otherwise determine, whether at the time Option is granted or thereafter. An
Option may not be assigned, transferred, sold, pledged or hypothecated in any
way; shall not be subject to levy or execution or disposition under the
Bankruptcy Code of 1978, as amended, or any other state or federal law granting
relief to creditors, whether now or hereafter in effect; and shall not be
transferable otherwise than by will or the laws of descent and distribution. The
Company will not recognize any attempt to assign, transfer, sell, pledge,
hypothecate or otherwise dispose of an Option contrary to the provisions of this
Plan, or to levy any attachment, execution or similar process upon any Option
and, except as expressly stated in this Plan, the Company shall not be required
to, and shall not, issue Common Stock on the exercise

5
<PAGE>

of an Option to anyone who claims to have acquired that Option from the person
to whom it was granted in violation of this subsection.

g) RETIREMENT OF HOLDER OF OPTION. If there is a Termination of
Employment of an Employee to whom an Option has been granted due to Retirement,
each Incentive Stock Option held by the retired Employee, whether or not then
vested, may be exercised until the earlier of: (x) the end of the three (3)
month period immediately following the date of such Termination of Employment;
or (y) the expiration of the term specified in the Option. In the case of a
Non-Qualified Option, there shall be substituted the words, "the end of the
twelve (12) month period" for the words "the end of the three (3) month period"
in the immediately preceding sentence.

h) TOTAL DISABILITY OF HOLDER OF OPTION. If there is a Termination of
Employment of an Employee to whom an Option has been granted by reason of his or
her Total Disability, each Option held by the Employee, whether or not then
vested, may be exercised until the earlier of: (x) the end of the twelve (12)
month period immediately following the date of such Termination of Employment;
or (y) the expiration of the term specified in the Option.

i) DEATH OF HOLDER OF OPTION. If there is a Termination of Employment
of an Employee to whom an Option has been granted by reason of (i) his or her
death, or (ii) the death of a former Employee within three (3) months following
the date of his or her Retirement (or, in the case of a Non-Qualified Option,
within twelve (12) months following the date of his or her Retirement), or (iii)
the death of a former Employee within twelve (12) months following the date of
his or her Termination of Employment by reason of Total Disability, then each
Option held by the person at the time of his or her death, whether or not then
vested, may be exercised by the person or persons to whom the Option shall pass
by will or by the laws of descent and distribution (but by no other persons)
until the earlier of: (x) the end of the twelve (12) month period immediately
following the date of death (or such longer period as is permitted by the
Committee); and (y) the expiration of the term specified in the Option,
provided, however, that in no event is the term of the Option to be deemed to
expire prior to the end of three (3) months from the date of death of the
Employee.

j) TERMINATION OF EMPLOYMENT OTHER THAN FOR RETIREMENT, DEATH OR
DISABILITY. Unless the Committee or the Board of Directors states otherwise with
respect to a specific Option, if there is a Termination of Employment of an
Employee to whom an Option has been granted pursuant to this Plan for any reason
other than the Retirement, death or Total Disability of the Employee, then all
Options held by such Employee which are then vested may be exercised until the
earlier of: (x) the three (3) month period immediately following the date of
such Termination of Employment; or (y) the expiration of the term specified in
the Option.

l) REGISTRATION OF PLAN. Upon a Change of Control, the Company agrees
to use its best efforts to cause the Plan to be registered under the Securities
Act at the earliest possible time. The Company shall have no other obligations
to register the Plan unless directed to do so by the Board of the Company based
on the Company's best interests.

6
<PAGE>

10. SPECIAL PROVISIONS RELATING TO INCENTIVE STOCK OPTIONS

No Incentive Stock Option may be granted pursuant to this Plan after ten (10)
years from the first to occur of: (i) the date this Plan is adopted by the Board
of Directors; or (ii) the date this Plan is approved by the stockholders of the
Company. No Incentive Stock Option may be exercised after the expiration of ten
(10) years from the Date of Grant or such shorter period as is provided herein.
Notwithstanding Section 8(b) hereof, Incentive Stock Options may not be granted
to an Employee who, at the time the Option is granted, owns more than ten
percent (10%) of the total combined voting power of the stock of the Company,
unless: (i) the purchase price of the Common Stock pursuant to the Incentive
Stock Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock on the Date of Grant; and (ii) the Incentive Stock Option by
its terms is not exercisable after the expiration of five (5) years from the
Date of Grant. The Committee is authorized, pursuant to the last sentence of
Section 422(b) of the Code, to provide at the time an Option is granted,
pursuant to the terms of such Option, that such Option shall not be treated as
an Incentive Stock Option even though it would otherwise qualify as an Incentive
Stock Option. The terms of any Incentive Stock Option granted hereunder shall,
in the hands of any individual grantee thereof, be subject to the dollar
limitations set forth in Section 422(d) of the Code (pertaining to the $100,000
per year limitation).

11. RECAPITALIZATION

b) CORPORATE TRANSACTIONS. If, as a result of a Corporate Transaction
while an Option granted pursuant to this Plan is outstanding (whether or not
then vested), and the holders of the Common Stock become entitled to receive,
with respect to their Common Stock, securities or assets other than, or in
addition to, their Common Stock, then upon exercise of that Option the holder
shall receive what the holder would have received if the holder had exercised
the Option immediately before the first Corporate Transaction that occurred
while the Option was outstanding and as if the Company had not disposed of
anything the holder would have received as a result of that and all subsequent
Corporate Transactions. the Company shall not agree to any Corporate Transaction
unless the other party to the Corporate Transaction agrees to make available on
exercise of the Options granted pursuant to this Plan that are outstanding at
the time of the Corporate Transaction, the securities or other assets the
holders of those Options are entitled pursuant to this subsection to receive.

12. RIGHTS OF OPTION HOLDER

7
<PAGE>

13. LAWS AND REGULATIONS

14. WITHHOLDING OF TAXES

15. RESERVATION OF SHARES

16. AMENDMENT OF THE PLAN

The Board of Directors may, at any time and from time to time, modify or amend
this Plan in any respect effective at any date the Board of Directors
determines; provided, however, that, without the approval of the stockholders of
the Company the Board of Directors may not increase the maximum number of
Incentive Stock Options that may be granted under the Plan. No modification or
amendment of this Plan shall, without the consent of the holder of an
outstanding Option (whether nor not then vested), adversely affect the holder's
rights pursuant to that Option.

8
<PAGE>

17. TERMINATION OF THE PLAN

The Board of Directors may suspend or terminate this Plan at any time or from
time to time, but no such action shall adversely affect the rights of a person
holding an outstanding Option, whether or not then vested, granted pursuant to
this Plan prior to that date.

9
<PAGE>

EXHIBIT "A"

STOCK OPTION AGREEMENT

This Agreement is made as of ___________, 20__, by and between
PROXYMED, INC. (the "Company") and _____________, who is an employee, officer or
director of the Company or one of its subsidiaries (the "Employee").

NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:

1. DEFINITIONS. All terms not defined herein and defined in the Plan
shall be given the meaning expressed in the Plan.

2. GRANT OF OPTION. The Company hereby grants to the Employee the right,
privilege and option to purchase the number of shares of Option Stock, at the
purchase price as shown on Schedule I attached hereto (the "Option Price"), in
the manner and subject to the conditions hereinafter provided in this Agreement
and as provided in the Plan. The Option Right granted hereunder is either an
Incentive Stock Option or Non-Qualified Option, as specified on Schedule I.

3. TIME OF EXERCISE OF OPTION. The aforesaid Option Right may be exercised
at any time, subject to Section 4, below, and from time to time, until the
termination thereof as provided in Paragraph 6, below, or as otherwise provided
in the Plan; provided, however, that the Option Right granted herein may not be
exercised after the termination date as shown on Schedule I, unless provided
otherwise in the Plan.

4. VESTING OF OPTION RIGHT. The Option Right shall vest as provided in
Schedule I.

5. METHOD OF EXERCISE. The Option Right shall be exercised in whole or in
part, in increments of a minimum of one hundred (100) shares, at any time, or
from time to time, during its term. To exercise an option, the Employee shall
deliver written notice in the form attached hereto as Schedule II to the Company
at its principal place of business, accompanied by payment of the Option Price
per share and compliance with such other conditions and requirements as set
forth in the Plan. Payment shall be made by a check, plus a check equal to any
withholding taxes that the Company is required to pay as a result of the
exercise of the Option by the Employee.

-1-
<PAGE>

Subject to the terms and conditions set forth in the Plan, as promptly as
practicable after an Option is exercised, the Company shall deliver such shares
issuable upon exercise of the Option.

6. TERMINATION OF EMPLOYMENT. The rights and obligations of the
Employee upon Termination of Employment shall be as set forth in the Plan.

7. RESTRICTIONS ON CERTAIN RESALES. The shares issuable upon exercise of
this Option have not been registered under the Securities Act of 1933, as
amended (the "Securities Act") or under any state securities laws, and are being
offered and sold in reliance upon federal and state exemptions for transactions
not involving any public offering. The holder may not resell the shares
purchased hereunder except pursuant to registration under the Securities Act or
an exemption therefrom.

Resales of shares issuable hereunder may be subject to other state and
federal securities laws. The Employee is advised to consult with legal counsel
as to compliance with the Securities Act, the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and such other laws prior to resale of such
shares.

The Company, as a condition to the exercise of an Option to acquire
shares not registered under the Securities Act, may require the Employee to
represent and warrant at the time of any exercise that the shares are being
purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by the Securities Act.

8. RECLASSIFICATION, MERGER, ETC. The rights and obligations of the
Company and the Employee as a result of the transactions specified in Section 11
of the Plan shall be as provided therein.

9. RIGHTS PRIOR TO EXERCISE OF OPTION. This Option Right is nonassignable
and nontransferable by the Employee except as provided in the Plan and, during
his lifetime, is exercisable only by him. The Employee shall have no rights as a
stockholder with respect to the Option Stock until payment of the Option Price
and delivery to him of such shares as herein provided. Nothing in this Agreement
shall confer any right in an employee to continue in the employment of the
Company or interfere in any way with the right of the Company to terminate such
employment at any time.

10. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.

11. DISCREPANCIES. If there appears to be any discrepancies between this
Agreement and the Plan, they shall be interpreted and determined by the terms
and conditions of the Plan.

-2-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.

PROXYMED, INC.

By: _________________________________ By: _______________________________
Frank M. Puthoff, Secretary John B. Okkerse, Jr., Ph.D.
Chief Executive Officer

I hereby accept the stock option right offered to me by the Company, as
set forth in this Stock Option Agreement dated as of _________, and Schedule I
which is attached thereto.

Accepted by:

Employee:

___________________________________
EMPLOYEE SIGNATURE

___________________________________
Date

-3-
<PAGE>

SCHEDULE I

The information set forth in this Schedule I is subject to all of the
terms of the PROXYMED, INC. Stock Option Agreement to which this Schedule is
attached.

1. Name of Employee, Officer or Director:

____________________________________

2. Address:

____________________________________

3. Social Security Number:

4. Number of Shares: ___________

5. Exercise Price: $____ per share [closing price at close of
business on _____].

6. Type of Option (check one):

[ ] Incentive Stock Option

[ ] Qualified Stock Option

7. NUMBER OF SHARES DATE VESTED TERMINATION DATE
---------------- ----------- ----------------

REFERENCE IS MADE TO THE 2000 1/2 STOCK OPTION PLAN FOR CERTAIN EVENTS SUCH AS
DEATH, DISABILITY AND TERMINATION OF EMPLOYMENT THAT CAUSE THESE OPTIONS TO
EXPIRE PRIOR TO THE TERMINATION DATE SET FORTH ABOVE.

<PAGE>

SCHEDULE II

NOTICE OF EXERCISE

I, the undersigned Employee, hereby give notice of the exercise of the
Option described below, to the extent and in the manner specified herein,
subject to the all of the terms and conditions of the PROXYMED, INC. STOCK
OPTION AGREEMENT granting this Option and the PROXYMED, INC. 2000 1/2 STOCK
OPTION PLAN. If the shares to be acquired pursuant to this exercise of the
Option are not registered under the Securities Act of 1933, as amended, the
undersigned represents and warrants that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares.

1. Name of Employee, Officer or Director:_______________________

2. Address:

____________________________________________

3. Social Security Number: ________________

4. Number of Shares Being Exercised on This Date: ______________

5. Exercise Price: $____ per share

6. Manner of Payment:

______ Check (amount enclosed: $_____________ )

________________________________
EMPLOYEE SIGNATURE

DATE: __________________________

SIGNATURE GUARANTEE:

_____________________________

<PAGE>

PROXY FOR ANNUAL MEETING OF PROXYMED, INC.
2555 DAVIE ROAD, SUITE 110
FT. LAUDERDALE, FLORIDA 33317
(954) 473-1001

SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS OF
PROXYMED, INC.

The undersigned hereby appoints John B. Okkerse, Jr., Ph.D. and Frank
M. Puthoff, with the power to vote, either one of them, at the Annual Meeting of
Shareholders of ProxyMed, Inc. (the "Company") to be held on June 8, 2000, at
9:00 a.m., Eastern Daylight Time, at the Sheraton Fort Lauderdale Airport, 1825
Griffin Road, Dania, Florida 33004, or any adjournment thereof, all shares of
the Common Stock which the undersigned possesses and with the same effect as if
the undersigned was personally present, upon all subjects that may properly come
before the meeting, including the matters described in the proxy statement
furnished herewith, subject to any directions indicated on this card. IF NO
DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE FOR THE ELECTION OF ALL LISTED
NOMINEES, IN FAVOR OF THE RATIFICATION AND APPROVAL OF THE ISSUANCE AND SALE OF
THE SERIES B PREFERRED AND THE RELATED WARRANTS AND APPROVAL OF THE ISSUANCE OF
COMMON STOCK UPON THE CONVERSION OF THE SERIES B PREFERRED, THE EXERCISE OF THE
RELATED WARRANTS AND THE PAYMENT OF DIVIDENDS ON THE SERIES B STOCK, IN FAVOR OF
THE 2000 STOCK OPTION PLAN, , IN FAVOR OF THE 2000 1/2 STOCK OPTION PLAN, AND AT
THEIR DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF ALL ITEMS.

(l) ELECTION OF DIRECTORS: (Nominees are Harold S. Blue, John B. Okkerse,
Jr., Ph.D., Kevin E. Moley, Bertram J. Polan, Peter A. A. Saunders and Eugene R.
Terry)*

[ ] FOR [ ] WITHHOLD AUTHORITY

* To vote your shares for all director nominees, mark the "For" box . To
withhold voting for all nominees, mark the "Withhold Authority" box. If you
do not wish your shares voted "For" a particular nominee(s), enter the
name(s) of that nominee(s) in the following space: ___________________.

(2) RATIFICATION AND APPROVAL OF THE ISSUANCE AND SALE OF THE SERIES B
PREFERRED AND THE RELATED WARRANTS AND APPROVAL OF THE ISSUANCE OF
COMMON STOCK UPON THE CONVERSION OF THE SERIES B PREFERRED, THE
EXERCISE OF THE RELATED WARRANTS AND THE PAYMENT OF DIVIDENDS ON THE
SERIES B PREFERRED.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(3) 2000 STOCK OPTION PLAN.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) 2000 1/2 STOCK OPTION PLAN.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

Dated:_____________________________

___________________________________
Signature

(Please sign exactly as name
appears hereon. If the stock is
registered in the names of two or
more persons, each should sign.
Executors, administrators,
trustees, guardians, attorneys and
corporate officers should include
their titles.)

PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.