<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CAREDATA.COM
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
(Caredata Logo)
TWO PIEDMONT CENTER, SUITE 400
3565 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305-1502
March 28, 2000
To Our Stockholders:
You are cordially invited to attend our 2000 Annual Meeting of
Stockholders. The meeting will be held on Tuesday, May 2, 2000 at 10:00 a.m. at
the Grand Hyatt Atlanta, 3300 Peachtree Road, N.E., Atlanta, Georgia. No
presentations or briefings are on the agenda for this meeting.
Even if you plan to attend, please complete the enclosed proxy card and
return it in the enclosed envelope so that your shares will be voted. You will
still be able to vote your shares in person if you attend the meeting and would
like to revoke your proxy.
Again this year we have simplified the Proxy Statement to make it easier to
understand. The Securities and Exchange Commission is encouraging companies to
write documents for investors in plain English, and we support this effort. If
you have any questions about the Annual Meeting, Proxy Statement or the
accompanying materials, please call our Secretary, Barry W. Burt, at (404)
364-6700.
I look forward to seeing you at the meeting.
Sincerely yours,
/s/ Mark A. Kaiser
MARK A. KAISER
Chairman of the Board &
Chief Executive Officer
<PAGE> 3
CAREDATA.COM, INC.
TWO PIEDMONT CENTER, SUITE 400
3565 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305-1502
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 2000
The 2000 Annual Meeting of Stockholders of Caredata.com, Inc. will be held
on Tuesday, May 2, 2000 at 10:00 a.m. at the Grand Hyatt Atlanta, 3300 Peachtree
Road, N.E., Atlanta, Georgia for the following purposes:
(i) To elect two directors for three-year terms;
(ii) To amend the 1998 Long-Term Incentive Plan; and
(iii) To transact other business properly coming before the meeting;
Stockholders who owned Caredata.com common stock at the close of business
on March 6, 2000 are entitled to attend and vote at the meeting. A complete list
of these stockholders will be available at the meeting.
By Order of the Board of Directors
/S/ Barry W. Burt
BARRY W. BURT
Senior Vice President, General Counsel
&
Secretary
Atlanta, Georgia
March 28, 2000
YOUR VOTE IS IMPORTANT. YOU ARE ENCOURAGED TO DATE, SIGN AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
<PAGE> 4
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 2000
Our Board of Directors is soliciting proxies for the 2000 Annual Meeting of
Stockholders. This Proxy Statement contains important information for you to
consider when deciding how to vote on the matters brought before the meeting.
Please read it carefully.
The Board set March 6, 2000 as the record date for the meeting. Stockholders who
owned shares of Caredata.com common stock at the close of business on that date
are entitled to attend and vote at the meeting, with each share entitled to one
vote. There were 8,253,701 shares of Caredata.com common stock outstanding on
the record date.
Voting materials, which include the Proxy Statement, proxy card, 1999 Annual
Report and Annual Report on Form 10-K for the fiscal year ended December 31,
1999, are being mailed to stockholders on or about March 28, 2000.
In this Proxy Statement:
- "we" and "our" refers to Caredata.com, Inc.,
- "1998 Plan" means the 1998 Long-Term Incentive Plan, and
- the "Board" means the Board of Directors of Caredata.com, Inc.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the stockholders of Caredata.com will consider and take
action on the following matters and on such other matters as may properly come
before the meeting:
PROPOSAL 1. ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes, with the term of office of
each class ending in successive years. The terms of the directors in Class 1
expire at this Annual Meeting. The directors of Class 2 and Class 3 will
continue in office until the 2001 and 2002 annual meetings, respectively. At the
present time, there are two directors in Class 1, one director in Class 2, and
two directors in Class 3. The stockholders are being asked to vote for the
election of the two directors in Class 1.
INFORMATION RELATING TO NOMINEES AND DIRECTORS
The table below sets forth (1) the names of the nominees and of the directors
continuing in office; (2) their ages; (3) the year in which they were first
elected directors; (4) their position with Caredata.com (if any); (5) their
principal occupations and employers for at least the last five years; and (6)
any other directorships held by them in companies that are subject to the
reporting requirements of the Securities Exchange Act of 1934 or any company
registered as an investment company under the Investment Company Act of 1940.
1
<PAGE> 5
NOMINEES FOR ELECTION OF DIRECTORS
FOR THREE-YEAR TERMS TO EXPIRE IN 2003
CLASS 1
TERMS EXPIRING AT 2000 ANNUAL MEETING
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME, POSITIONS WITH CAREDATA.COM,
AGE AND PRINCIPAL OCCUPATIONS DURING
YEAR FIRST AT LEAST PAST FIVE YEARS
ELECTED DIRECTOR AND OTHER DIRECTORSHIPS
---------------- ----------------------------
<C> <S>
Keith O. Cowan Mr. Cowan has served as Vice President -- Corporate
43 Development for BellSouth Corporation since May 1996. He is
1997 responsible for managing the merger and acquisition
activities of BellSouth and its operating subsidiaries,
including the identification of acquisition candidates, and
the structuring and negotiation of transactions. Prior to
joining BellSouth, Mr. Cowan was a partner with Alston &
Bird LLP, a law firm based in Atlanta, Georgia, which is
Caredata.com's primary outside legal counsel. Mr. Cowan
holds a Bachelor of Arts degree from the University of North
Carolina at Chapel Hill and a Juris Doctor degree from the
University of Virginia.
William M. McClatchey, M.D. Dr. McClatchey is a physician practicing in Atlanta,
52 Georgia, specializing in primary care internal medicine and
1997 rheumatology. He has practiced medicine at the Piedmont
Clinic in Atlanta since 1979. He is a member of the American
College of Physicians, serving on its Committee on Medical
Informatics from 1986 until 1992 and as Chairman of that
committee from 1990 to 1992. Dr. McClatchey is President and
serves on the Board of Trustees of Georgia Health Decisions,
Inc., a community-based not-for-profit organization working
for comprehensive healthcare reform in Georgia. Dr.
McClatchey is a member of the Georgia Coalition for Health,
a 32-member group charged by Governor Zell Miller to devise
a proposal to reform Georgia's Medicaid program. In
addition, Dr. McClatchey is a member of the Board of
Directors and Executive Committee of the Georgia Health
Policy Center at Georgia State University and a member of
the Information Systems Steering Committee for Promina
Health System.
</TABLE>
VOTE REQUIRED; RECOMMENDATION
The affirmative vote of a plurality of the shares of Caredata.com common stock
represented and entitled to vote at the Annual Meeting (provided a quorum is
present) is necessary for the election of each of the nominees. The Board
recommends that stockholders vote FOR the election of the nominees. Withholding
authority to vote with respect to any one or more nominees will constitute a
vote against such nominee(s).
2
<PAGE> 6
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
CLASS 2
TERMS EXPIRING AT 2001 ANNUAL MEETING
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME, POSITIONS WITH CAREDATA.COM,
AGE AND PRINCIPAL OCCUPATIONS DURING
YEAR FIRST AT LEAST PAST FIVE YEARS
ELECTED DIRECTOR AND OTHER DIRECTORSHIPS
- ---------------- ----------------------------
<C> <S>
Michael J. Finn Mr. Finn is President and a director of Brantley Capital
50 Corporation and is President and a director of Brantley
1992 Capital Management, Ltd., investment advisor to Brantley
Capital. From 1987 to 1995, Mr. Finn was Vice President of
the Venture Capital Group of Sears Investment Management Co.
in Chicago, Illinois. Mr. Finn is also a director of
Pediatric Services of America, Inc. Mr. Finn holds both
Bachelor of Science in Urban Planning and Master of Science
in Land Economics and Finance degrees from Michigan State
University.
</TABLE>
CLASS 3
TERMS EXPIRING AT 2002 ANNUAL MEETING
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME, POSITIONS WITH CAREDATA.COM,
AGE AND PRINCIPAL OCCUPATIONS DURING
YEAR FIRST AT LEAST PAST FIVE YEARS
ELECTED DIRECTOR AND OTHER DIRECTORSHIPS
- ---------------- ----------------------------
<C> <S>
Mark A. Kaiser Mr. Kaiser is Chairman of the Board and Chief Executive
42 Officer of Caredata.com. Before joining Caredata.com, Mr.
1991 Kaiser was Vice President of Sales and Marketing for Charter
Medical Corporation, the nation's largest chain of
psychiatric hospitals. Mr. Kaiser also served as Senior Vice
President of Marketing at TelecomUSA, where he worked from
the early stages of the company until its acquisition by MCI
Communications Corporation. Mr. Kaiser is a member of the
Board of Directors of The Plastic Surgery Company. Mr.
Kaiser holds Bachelor of Science degrees in Computer Science
and Mathematics from Furman University.
Robert P. Pinkas Mr. Pinkas is Chairman of the Board, Chief Executive
46 Officer, Treasurer and a director of Brantley Capital
1991 Corporation, a publicly-traded, closed-end investment
company. Mr. Pinkas was the founding partner of Brantley
Venture Partners, L.P., a venture capital fund started in
1987. Mr. Pinkas also led the formation of three other
Brantley Venture Partners partnerships. Mr. Pinkas currently
serves as Chairman of the Board of Gliatech, Inc., as well
as a director of Quad Systems Corporation, Pediatric
Services of America, Inc. and Waterlink, Inc. Mr. Pinkas
holds both Bachelor of Arts in Government and Master of
Science in History degrees from Harvard University, and a
Juris Doctor degree from the University of Pennsylvania.
</TABLE>
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
The Board held six meetings in 1999. Each director attended at least 75% of all
Board and applicable committee meetings during 1999. This table describes the
Board's committees. The Board does not have a Nominating Committee or a
committee serving a similar function.
Audit Committee. The Audit Committee, presently composed of Mr. Finn and Dr.
McClatchey, is responsible for recommending independent auditors, reviewing the
scope and results of the audit engagement with the independent auditors and
establishing and monitoring our financial policies and control procedures. The
Audit Committee met one time during 1999.
3
<PAGE> 7
Compensation Committee. The Compensation Committee, presently composed of
Messrs. Cowan and Pinkas, is responsible for establishing salaries, bonuses and
other compensation for our executive officers and administering our stock
incentive plans (other than the Nonmanagement Directors' Stock Option Plan).
While the Compensation Committee held no formal meetings during 1999, it took
numerous actions by unanimous written consents.
Nonmanagement Directors' Stock Option Plan Committee. The Nonmanagement
Directors' Stock Option Plan Committee, which is comprised of Messrs. Kaiser and
Pinkas, is responsible for administering our Nonmanagement Directors' Stock
Option Plan. The Nonmanagement Directors' Stock Option Plan Committee did not
meet in 1999.
DIRECTORS' COMPENSATION
We do not pay directors who are also employees of Caredata.com additional
consideration for their service as directors. In 1999, compensation for
nonemployee directors included the following:
- an annual retainer of $5,000;
- $1,000 for each Board meeting attended in person ($250 if attended by
telephone);
- $250 for each Board committee meeting attended in person or by telephone;
and
- expenses of attending Board and committee meetings.
Nonemployee directors also participate in the Nonmanagement Directors' Stock
Option Plan. This Plan provides for the issuance of nonqualified stock options
to nonemployee directors. Under the Plan, each eligible director received an
initial grant of 10,000 options after our initial public offering in 1997 and
further grants of 5,000 options on each of December 31, 1999, December 31, 1998
and December 31, 1997. The Nonmanagement Directors' Plan provides that each new
director elected to our Board will be granted an option to purchase 10,000
shares of Caredata.com common stock as of his or her first day of service.
Thereafter, each eligible director will be granted, as of the last business day
of each fiscal year, an option to purchase 5,000 shares of Caredata.com common
stock. In addition, each eligible director will be granted, as of the date of
exercise of any option granted, an option to purchase an additional number of
shares equal to the number, if any, of the shares of Caredata.com common stock
tendered in payment of the exercise price. The exercise price of options granted
under the Nonmanagement Directors' Plan are equal to the fair market value of
Caredata.com's common stock on the date of grant and become exercisable in
one-third increments over three years following the date of grant. There are
currently no further shares available for grant under the Nonmanagement
Directors' Plan. Nonemployee directors are also entitled to participate in the
1998 Plan, although to date no grants have been made to nonemployee directors
under the 1998 Plan.
Directors who are employees of Caredata.com are entitled to participate in the
1998 Employee Stock Purchase Plan.
PROPOSAL 2. AMENDMENT TO 1998 PLAN
Our Board and stockholders have previously approved the 1998 Plan and a 1999
amendment to the Plan. The 1998 Plan is intended to promote the success and
enhance the value of Caredata.com by linking the personal interests of
employees, officers and directors to the interests of the stockholders, and by
providing the employees, officers and directors with an incentive for
outstanding performance. Currently, there are 850,000 shares of Caredata.com
common stock available for awards under the 1998 Plan. The proposed amendment to
the 1998 Plan would increase the number of shares of Caredata.com common stock
available for awards under the 1998 Plan by 400,000 to 1,250,000. If you would
like more information about the 1998 Plan, a summary of its terms is included as
an Appendix to this Proxy Statement.
4
<PAGE> 8
VOTE REQUIRED; RECOMMENDATION
The affirmative vote of the holders of a majority of the shares of Caredata.com
common stock represented and entitled to vote at the Annual Meeting (provided a
quorum is present) is necessary to approve the proposed amendment to the 1998
Plan to increase the maximum number of shares of Caredata.com common stock
reserved for issuance under the 1998 Plan. The Board recommends that
stockholders vote FOR the approval of the proposed amendment to the 1998 Plan.
OUR EXECUTIVE OFFICERS
The executive officers of Caredata.com are Mr. Kaiser (who is discussed above),
Kenneth M. Goins, Jr., Thomas C. Kuhn III, O.B. Rawls, IV, Barry W. Burt and
Kevin R. Mitchell.
Kenneth M. Goins, Jr. (age 41) has served as President and Chief Operating
Officer since October 1998. Prior to that, Mr. Goins served as Executive Vice
President and Chief Financial Officer from December 1996 to October 1998 and as
Vice President, Finance and Administration and Chief Financial Officer from
April 1996 until December 1996. From 1985 until 1996, Mr. Goins held various
management positions with First Data Corporation and its predecessors First
Financial Management Corporation and MicroBilt Corporation. During his tenure at
First Data, Mr. Goins served as Chief Financial Officer of Unified Merchant
Services, a credit card processing joint venture with NationsBank, N.A. While at
MicroBilt and First Financial, Mr. Goins was involved in several acquisitions in
the information and software industries. Prior to joining MicroBilt, Mr. Goins
held various positions with Colonial Life and Accident Insurance Company, based
in Columbia, South Carolina. Mr. Goins holds a Bachelor of Science degree in
Business Administration from the University of South Carolina and is a Certified
Public Accountant.
Thomas C. Kuhn III (age 37) has been Executive Vice President since February
2000 and Chief Financial Officer since October 1998. Mr. Kuhn also served as a
Senior Vice President from October 1998 through February 2000. Prior to that,
Mr. Kuhn served as Controller since joining Caredata.com in 1996. Mr. Kuhn was
appointed Principal Accounting Officer of Caredata.com in March 1998, after
having been appointed Vice President-Finance and Administration in August 1997.
Prior to joining Caredata.com, from 1992 to 1996, Mr. Kuhn held various
positions with First Data Corporation and its predecessors First Financial
Management Corporation and MicroBilt Corporation, including Vice President of
Working Capital Management for First Financial and Controller of MicroBilt. From
1987 to 1992, Mr. Kuhn was in public accounting with Clayton, Miller and Company
in Atlanta, Georgia, and from 1984 until March 1987, he was with Arthur Young
and Company in Atlanta, Georgia. Mr. Kuhn holds a Bachelor of Science degree in
Business Administration from the University of South Carolina and is a Certified
Public Accountant.
O.B. Rawls, IV (age 48) has been Executive Vice President for Operations since
February 2000 and Group General Manager since he joined Caredata.com in December
1997. He also served as a Senior Vice President from December 1997 through
February 2000. Prior to joining Caredata.com, from 1995 to 1997, Mr. Rawls held
several positions with First Data Corporation, including General
Manager-International Partnership in which he negotiated and implemented an
international merchant processing joint venture. From August 1995 until May
1997, Mr. Rawls served as President of Unified Merchant Services. From 1983
until 1995, Mr. Rawls was an executive with NationsBank and its predecessor NCNB
National Bank, including Senior Vice President/Division Executive of Merchant
Card Services from 1993 until 1995. Mr. Rawls holds a Bachelor of Science Degree
from East Carolina University and an Executive Masters of Business
Administration from Queens College.
Barry W. Burt (age 44) has served as a Senior Vice President of the Company
since March 2000 and as its General Counsel since November 1998. He also served
as a Vice President from joining Caredata.com in August 1996 through March 2000,
as Corporate Counsel from August 1996 through November 1998, and as Director of
Administration of the Company from August 1996 through August 1997. Prior to
joining the Company, Mr. Burt provided legal services to private clients from
December 1995 through August 1996. Mr. Burt served as Vice President and
Corporate Counsel with First Data Corporation and its predecessor, First
Financial Management Corporation, from November 1989 through November 1995.
While at First
5
<PAGE> 9
Financial, Mr. Burt was involved in a number of acquisitions in the information
and software industries and served as primary legal counsel to several of First
Financial's subsidiaries. From 1985 until 1988, Mr. Burt was Vice President and
Legal Counsel for Johnstown American Companies, a real estate services company
headquartered in Atlanta, and from 1982 to 1985 was an associate with the
Atlanta law firm of Powell, Goldstein, Frazer & Murphy. Mr. Burt is admitted to
practice law in the State of Georgia, and holds both Juris Doctor and Masters of
Business Administration degrees from the University of Georgia, as well as a
Bachelor of Science degree in Business Administration from the University of
North Carolina at Chapel Hill.
Kevin R. Mitchell (age 51) has been Senior Vice President of Sales and Marketing
since he joined Caredata.com in March 1999. From October 1989 to March 1999, Mr.
Mitchell served in various capacities, including Executive Vice President Sales
& Marketing, Chief Operating Officer and President of OPIN Systems, Inc., a
developer of enterprise decision support systems and services for the managed
care industry. From April 1975 to June 1989, Mr. Mitchell served as Senior Vice
President of Gelco Corporation, a transportation leasing and management services
company. Mr. Mitchell holds a Masters of Business Administration degree from the
University of Detroit and a Bachelor of Science degree in Business
Administration from Suffolk University.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This table shows how much Caredata.com common stock is owned by the directors,
the executive officers named in the Summary Compensation Table, and persons or
entities known by Caredata.com to own more than 5% of Caredata.com's outstanding
common stock, as of March 6, 2000.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
OF COMMON STOCK RIGHT TO OUTSTANDING
NAME BENEFICIALLY OWNED(1) ACQUIRE(2) SHARES
- ---- --------------------- ---------- -----------
<S> <C> <C> <C>
Brantley Venture Partners II, L.P.(3) 522,745 -- 6.3%
Mark A. Kaiser 261,420(4) 175,921 5.2%
Keith O. Cowan 1,000 14,999 *
Michael J. Finn 528,945(5) 14,999 6.6%
William M. McClatchey, M.D. 167,000(6) 14,999 2.2%
Robert P. Pinkas 527,745(7) 14,999 6.6%
Kenneth M. Goins, Jr. 43,544(8) 55,554 1.2%
Thomas C. Kuhn III 5,536(9) 16,223 *
O. B. Rawls, IV 3,479(10) 20,000 *
Barry W. Burt 2,618(11) 15,423 *
Barrett C. O'Donnell(12) 421,000 -- 5.1%
All directors and executive officers as a
group
(10 members) 1,018,542 353,117 15.9%
</TABLE>
- ------------------------------------
* Less than one percent.
(1) Includes shares for which the named person or entity (a) has sole voting
and investment power, or (b) has shared voting and investment power with
his or her spouse, unless otherwise indicated in the footnotes.
(2) Shares that can be acquired through stock option exercises through May 5,
2000.
(3) The address of Brantley Venture Partners II, L.P. is 20600 Chagrin
Boulevard, Suite 1150 Tower East, Cleveland, Ohio 44122.
(4) Includes 7,275 shares available under a Restricted Stock Award under the
1998 Plan.
(5) Includes 522,745 shares owned by Brantley Venture Partners II, L.P., of
which Mr. Finn is a partner of its general partner.
(6) Includes 10,000 shares owned by Dr. McClatchey's wife, 4,000 shares owned
by a trust for the benefit of Dr. McClatchey's adult child of which Dr.
McClatchey is trustee, and 2,000 shares owned by a trust for the benefit of
Dr. McClatchey's minor child of which Dr. McClatchey is trustee.
(7) Includes 522,745 shares owned by Brantley Venture Partners II, L.P., of
which Mr. Pinkas is a partner of its general partner.
(8) Includes 200 shares held by Mr. Goins' children and 5,092 shares available
under a Restricted Stock Award under the 1998 Plan.
(9) Includes 2,909 shares available under a Restricted Stock Award under the
1998 Plan.
(10) Includes 1,455 shares available under a Restricted Stock Award under the
1998 Plan.
(11) Includes 1,455 shares available under a Restricted Stock Award under the
1998 Plan.
(12) The address of Mr. O'Donnell is c/o O'Donnell Davis, P. O. Box 7395,
Princeton, New Jersey 08543-7395.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table shows the compensation paid during fiscal years 1999, 1998
and 1997 to each person serving as Caredata.com's Chief Executive Officer during
any part of either fiscal year and Caredata.com's four most highly-compensated
executive officers, other than the Chief Executive Officer, who were serving as
executive officers at the end of 1999.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS OTHER
- ---------------------------- ---- -------- -------- ------
<S> <C> <C> <C> <C>
Mark A. Kaiser 1999 $254,178 $160,388 $7,428(1)
Chairman of the Board and Chief Executive Officer 1998 $235,000 $ 25,000 $ 955(1)
1997 $200,500 $110,370 --
Kenneth M. Goins, Jr. 1999 $214,550 $136,500 $4,550(1)
President and Chief Operating Officer 1998 $177,348 $ 17,500 --
1997 $141,711 $ 73,762 --
Thomas C. Kuhn III 1999 $151,079 $ 97,500 $1,080(1)
Executive Vice President and Chief Financial Officer 1998 $119,054 $ 10,000 --
1997 $101,335 $ 25,000 --
O.B. Rawls, IV 1999 $165,000 $107,250
Executive Vice President for Operations and Group 1998 $160,000 $ 5,000 --
General Manager 1997 $ 13,050 $ 7,500 --
Barry W. Burt 1999 $121,000 $ 52,425 --
Senior Vice President, General Counsel and Secretary 1998 $105,875 $ 5,000 --
1997 $ 83,543 $ 12,750 --
</TABLE>
- ------------------------------------
(1) Represents payment of premiums on life and disability insurance policies.
OPTION GRANTS IN FISCAL 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
GRANT DATE ASSUMING
ANNUAL RATES OF
STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OPTION TERM ($)
OPTIONS TO EMPLOYEES IN OR BASE EXPIRATION --------------------
NAME GRANTED (#)(1) FISCAL YEAR (%) PRICE ($/SH) DATE 5% 10%
- ---- --------------- --------------- ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Mark A. Kaiser 32,480 7% $ 6.75 8/18/09 $137,879 $349,412
Kenneth M. Goins, Jr. 25,000 6% $ 7.00 8/21/09 $110,057 $278,905
Thomas C. Kuhn III 15,000 3% $ 7.75 11/4/09 $ 73,109 $185,273
O.B. Rawls, IV 10,000 2% $ 7.75 8/5/09 $ 48,739 $123,515
Barry W. Burt -- -- -- -- -- --
</TABLE>
- ------------------------------------
(1) All options granted vest at the rate of 20% per year.
7
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
The following table presents certain information concerning options
exercised by our executive officers in 1999 and the fiscal year-end value of any
unexercised stock options that they hold.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark A. Kaiser -- -- 173,322 145,032 $939,088 $319,679
Kenneth M. Goins, Jr. -- -- 45,810 100,760 $156,774 $238,405
Thomas C. Kuhn III -- -- 16,223 48,403 $ 44,557 $100,512
O.B. Rawls, IV -- -- 20,000 50,000 $ 17,250 $ 69,000
Barry W. Burt -- -- 11,124 34,502 $ 17,789 $ 71,161
</TABLE>
- ------------------------------------
(1) Calculated by determining the difference between the fair market value of
the securities underlying the option at December 31, 1999 and the exercise
price of the executive officer's options.
EMPLOYMENT AGREEMENTS AND SEVERANCE ARRANGEMENTS
Mark A. Kaiser, Kenneth M. Goins, Jr. and Thomas C. Kuhn III are each party to
an employment agreement with Caredata.com. Mr. Kaiser serves as Chairman of the
Board and Chief Executive Officer, Mr. Goins serves as President and Chief
Operating Officer and Mr. Kuhn serves as Chief Financial Officer. Each
Employment Agreement has an initial term of three years, with automatic one-year
renewals thereafter, unless either party gives 60 days' advance notice of
nonrenewal.
The Employment Agreements provide that Mr. Kaiser, Mr. Goins and Mr. Kuhn will
receive base salaries of $235,000, $175,000 and $140,000, respectively. The base
salary of each officer may be increased annually at the discretion of the
Compensation Committee. In addition, each of Mr. Kaiser and Mr. Goins is
eligible to receive an annual bonus of up to 50% of base salary, and Mr. Kuhn is
eligible to receive an annual bonus of up to 25% of base salary (based upon
Caredata.com's achievement of performance goals established by the Compensation
Committee).
Under the employment agreements, Mr. Kaiser, Mr. Goins and Mr. Kuhn are also
entitled to participate in all of Caredata.com's employee benefit plans. In
addition, they each were granted stock options during 1999 and each is entitled
to receive annual grants of stock options on the first and second anniversaries
of their respective agreements in the following amounts: Mr. Kaiser (32,480),
Mr. Goins (25,000), and Mr. Kuhn (15,000). The exercise prices for the option
grants will equal the fair market value of Caredata.com common stock on the date
of grant. All of the options granted under the Employment Agreements vest
ratably over five years from the date of grant or immediately upon the sale or
other change in control of Caredata.com.
Each Employment Agreement also contains a nondisclosure covenant, as well as
covenants not to divert business or employees from Caredata.com for two years
following termination. In the event any of the above-named officers terminates
his employment for good cause (as defined in the Employment Agreement), or if
Caredata.com terminates employment other than for good cause (as defined in the
Employment Agreement), the officer will be entitled to continue to receive his
base salary for a period of twelve months following termination. If Caredata.com
terminates employment for cause (as defined in the Employment Agreement), such
officer will receive his base salary for a period of one month after the
termination date. If the officer terminates his employment without good reason
(as defined in the Employment Agreement), Caredata.com's obligation to pay his
base salary will terminate as of the date of termination, and Caredata.com will
pay his base salary accrued through the date of termination.
8
<PAGE> 12
If within twelve months following a change in control of Caredata.com (as
defined in the Employment Agreement), either Caredata.com terminates the
employment of the officer without cause or such officer resigns from a declined
reassignment of his job that is not reasonably equivalent in responsibility or
compensation or that is not in the same geographic area, or, solely with respect
to Mr. Kaiser, if within 180 days following said change of control, Mr. Kaiser
terminates his employment with Caredata.com, then such officer shall receive an
amount equal to two multiplied by the sum of his base salary (as then in effect)
plus an amount of annual bonus for the current year (which will be calculated as
if the date of termination was the last day of the current annual period). This
severance payment will be paid by Caredata.com in a single lump-sum payment not
later than thirty days after termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1999, the members of our Compensation Committee were Mr. Pinkas and Mr.
Cowan, neither of which served as an officer or employee of Caredata.com during
the 1999 fiscal year. The current members of the Compensation Committee continue
to be Mr. Pinkas and Mr. Cowan. There are no "interlocks" (as defined by the
Securities and Exchange Commission) with respect to any member of the
Compensation Committee.
9
<PAGE> 13
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Decisions and recommendations regarding the compensation of Caredata.com
executive officers are made by the Compensation Committee of the Board of
Directors, which is composed entirely of directors who do not serve as officers
or employees of Caredata.com. During 1999, the Compensation Committee was
comprised of Messrs. Pinkas and Cowan. Set forth below is a report of the
members of the Compensation Committee during 1999 concerning Caredata.com's
compensation policies for 1999. The following report is not subject to
incorporation by reference in any filings made by Caredata.com with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended.
The Compensation Committee of the Board of Directors establishes compensation
policies and programs for executive officers and other members of senior
management. Subject to any employment agreements that are in place, the
Compensation Committee establishes base compensation, approves increases in base
compensation and determines bonus compensation for Caredata.com's (1) Chairman
of the Board and Chief Executive Officer, (2) President and Chief Operating
Officer and (3) Executive Vice President and Chief Financial Officer. In
addition, the Compensation Committee has authority to approve the
recommendations of senior management regarding annual base and bonus
compensation for all other officers and senior employees. The Compensation
Committee also has exclusive authority to approve all stock option and other
stock-based incentive awards granted to executive officers and other employees.
The Compensation Committee considers both internal and external data in
determining officers' compensation, including relevant industry executive
compensation data.
COMPENSATION PHILOSOPHY
Caredata.com's compensation philosophy is for a substantial portion of the
annual compensation of each executive officer to be contingent on company
performance, as well as the individual contributions of each officer. As a
result, much of each executive officer's compensation is "at risk," with annual
bonus compensation (assuming 100% of target levels are attained) accounting for
not less than 20% of total cash compensation. The purpose of this philosophy is
to align executive compensation closely with the achievement of both annual and
long-range company objectives, thereby serving the interests of stockholders.
Caredata.com also seeks to provide competitive compensation packages when
compared to companies of a similar size in similar industries, which assists in
attracting and retaining highly qualified executives.
COMPENSATION PROGRAM
Caredata.com's executive compensation program has three major components, all of
which are intended to implement Caredata.com's compensation philosophy:
1. Base Salary. Base annual salaries for the Chairman of the Board and
Chief Executive Officer, President and Chief Operating Officer and Executive
Vice President and Chief Financial Officer are established by employment
agreement and are reviewed annually. Base salaries for other executive officers
are established when the officers are employed and are reviewed annually. In
establishing and reviewing base salaries, the Compensation Committee bases its
decisions on competitive pay practices of comparable companies, the skills and
performance of the individual executive, the needs and resources of
Caredata.com, and the expenses that would be incurred in recruiting a new
executive to fill a vacated position.
2. Cash Bonuses. Annual cash bonuses are made available to senior
management based upon the attainment of specified business and personal goals.
Bonuses paid in 1999 were based on Caredata.com's performance in 1998 and
therefore are reported in the Summary Compensation Table. These bonus amounts
were determined pursuant to an incentive compensation program established by the
Compensation Committee for 1998. The program was intended to provide cash
incentive bonuses based on Caredata.com's achievement of short-term goals that
were consistent with its long-term goals and to promote the compensation
philosophy that a substantial portion of executive compensation be at risk. It
was the Compensation Committee's subjective assessment that an incentive bonus
equal to 50% of base salary (the level established for Mr. Kaiser in his
employment agreement) was an
10
<PAGE> 14
appropriate percentage for all executive officers to have at risk pursuant to
the 1998 incentive compensation program. The annual bonuses payable under the
1998 incentive compensation program were based on company performance measured
against targeted earnings-per-share goals for 1998 established by the
Compensation Committee. If the actual performance for 1998 was less than the
target, the bonus would be reduced, and if the actual performance for 1998 was
greater than the target, the bonus would be increased. Caredata.com did not meet
the earnings-per-share targets established for 1998, and bonuses paid to
executive officers pursuant to the 1998 incentive compensation program were
reduced accordingly.
In addition, the Compensation Committee separately determined to pay
discretionary bonuses in 1999 to certain executive officers. These discretionary
bonuses were awarded (1) to compensate certain executive officers for their
individual efforts in 1998 notwithstanding company performance and (2) to retain
key executive officers by providing compensation packages that are competitive
when compared with companies similarly situated to Caredata.com. These bonuses
are also reported in the compensation table for 1998 presented above.
The Compensation Committee adopted a new incentive compensation program for
executive officers in 1999. Like the 1998 program, the 1999 program was intended
to provide cash incentive bonuses based in large part on the achievement of
company goals and to place a substantial portion of executive compensation at
risk. The Compensation Committee determined that a base bonus equal to either
30% or 50% of base salary was an appropriate percentage for all executive
officers to have at risk pursuant to the 1999 incentive compensation program.
The extent to which the base bonuses under the 1999 incentive compensation
program would be paid was based, in large part, on company performance measured
against market analysts' expectations and, to a lesser extent, on individual
performance objectives. Caredata.com met or exceeded the market analysts'
expectations for company performance at year-end and the executive officers met
their respective individual performance objectives for the year. Accordingly,
the base bonuses contemplated by the 1999 incentive compensation program were
paid in full. These bonuses are reported in the compensation table for 1999
presented above.
In addition to the base bonuses described above, the 1999 incentive
compensation program provided that additional cash incentive compensation in an
amount not to exceed 25% of base salary may be awarded at the discretion of the
Compensation Committee for outstanding individual performance. Pursuant to this
component of the 1999 incentive compensation program, the Compensation Committee
awarded additional cash bonuses equal to 15% of base salary to Messrs. Kaiser,
Goins, Kuhn and Burt. These additional bonuses are also reported in the
compensation table for 1999 presented above.
3. Equity-Based Incentive Compensation. Caredata.com provides
equity-based incentives to key employees through its 1996 Stock Incentive Plan
and its 1998 Long-Term Incentive Plan (collectively, the "Stock Incentive
Plans"). The Compensation Committee administers the Stock Incentive Plans. The
Compensation Committee approves grants of stock options to key employees
commensurate with their positions when they join the company and considers
additional discretionary grants of stock options or other stock-based incentive
awards on an annual basis based on performance.
All stock options granted since Caredata.com's initial public offering in
January 1997 have been granted with an exercise price equal to the fair market
value of Caredata.com common stock on the date of grant (based on the last sale
price per share reported by the Nasdaq National Market on such date). The
Compensation Committee believes that this pricing practice will generally
continue in the future. Historically, all options have vested over five years
from the date of grant to provide incentive to key employees to remain with
Caredata.com, and the Compensation Committee intends to continue this practice.
The Compensation Committee has the authority to shorten this vesting period in
its discretion. The purpose of the Stock Incentive Plans is to provide the
economic incentives associated with stock ownership to key employees, to create
management incentives to improve stockholder value and, through the use of
vesting periods, to encourage executives and other key employees to remain with
Caredata.com and focus on long-term results. The Stock Incentive Plans also
permit the grant of stock appreciation rights, restricted stock awards and long-
term incentive bonuses.
11
<PAGE> 15
OTHER EXECUTIVE COMPENSATION
Caredata.com's executives also participate in the benefit programs that are
available to all Caredata.com employees generally, including an employee stock
purchase plan, a 401(k) savings plan (which permits matching contributions) and
medical, life and disability insurance benefits. Caredata.com does not maintain
any other pension or retirement programs. Caredata.com generally does not
provide executive perquisites such as club memberships.
The Securities and Exchange Commission requires all Compensation Committees to
discuss how they intend to deal with the cap on deductibility of compensation
over $1.0 million for executive officers. Given current compensation levels, the
Compensation Committee does not believe it is necessary to consider this issue
at this time. Caredata.com intends to take necessary steps to ensure that its
compensation policies maximize the deductibility of compensation paid to
executives; however, the Compensation Committee may determine that nondeductible
payments are appropriate in light of a particular executive's performance or
particular circumstances.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
Mr. Kaiser's 1999 compensation was derived in large part from commitments under
his employment agreement. In January 1999, the Compensation Committee approved a
discretionary increase in Mr. Kaiser's base salary to $246,750, a 5.0% increase
over his base salary for 1998, as well as a discretionary restricted stock award
of 9,091 shares of common stock. In approving the salary increase, the
Compensation Committee considered its experience with, and knowledge of, the
compensation of chief executive officers of similar companies, as well as Mr.
Kaiser's importance to Caredata.com and its operations. At that time, Mr. Kaiser
also received bonus compensation relating to his performance in 1998 of $25,000,
representing 10.6% of his 1998 base salary. Mr. Kaiser's target annual bonus of
50% of base salary is established in his employment agreement. Mr. Kaiser's
employment agreement provides that the amount of his annual bonus is to be
determined based upon Caredata.com's achievement of performance goals
established by the Compensation Committee. Those performance goals were not
fully met in 1998 and Mr. Kaiser's bonus was reduced accordingly. In compliance
with Mr. Kaiser's employment agreements, Caredata.com also granted Mr. Kaiser
32,480 options in August 1999. When it approved the equity-based compensation
awards provided for in Mr. Kaiser's employment agreement, and when it approved
the January 1999 restricted stock award to Mr. Kaiser, the Compensation
Committee determined that such awards were necessary for the retention of Mr.
Kaiser and to provide added incentive to achieve Caredata.com's short-term and
long-term goals.
COMPENSATION COMMITTEE
ROBERT P. PINKAS, Chairman
KEITH O. COWAN
12
<PAGE> 16
STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for
Caredata.com's common stock, the Nasdaq National Market (U.S. Companies) and the
Hambrecht & Quist Technology Index, each of which assumes an initial value of
$100 and reinvestment of dividends. The graph begins on January 30, 1997, the
date on which our Common Stock began trading on the Nasdaq National Market.
<TABLE>
<CAPTION>
NASDAQ STOCK MARKET
CAREDATA.COM, INC. (U.S.) H & Q TECHNOLOGY
------------------ ------------------- ----------------
<S> <C> <C> <C>
01/30/97 100 100 100
12/31/97 107 115 107
12/31/98 49 162 166
12/31/99 65 292 370
</TABLE>
INDEPENDENT AUDITORS
The firm of KPMG LLP audited our financial statements for the 1999 fiscal year,
and our Board intends to continue to use the services of this firm for the 2000
fiscal year. A representative of KPMG LLP is expected to attend the Annual
Meeting in order to respond to questions from the stockholders and will have the
opportunity to make a statement.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
If you want us to consider including a proposal in our 2001 Proxy Statement, you
must deliver it to the Secretary of Caredata.com at our principal executive
office no later than November 28, 2000.
SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE
Caredata.com believes that during 1999, all filings with the Securities and
Exchange Commission of its officers, directors and 10% stockholders complied
with requirements for reporting ownership and changes in ownership of
Caredata.com common stock pursuant to Section 16(a) of the Securities Exchange
Act of 1934.
13
<PAGE> 17
GENERAL INFORMATION
Stockholders of record as of the close of business on March 6, 2000 are entitled
to notice of and to vote upon all matters at the Annual Meeting. As of the close
of business on March 6, 2000, there were outstanding 8,253,701 shares of
Caredata.com common stock.
Management is not aware of any matters to be brought before the Annual Meeting
other than as described in this Proxy Statement. Should any other matters
properly come before the Annual Meeting, the persons designated by proxies will
vote in accordance with their best judgment on such matters.
Our Annual Report to Stockholders and our Annual Report on Form 10-K for the
year ended December 31, 1999, which includes audited financial statements,
accompany this Proxy Statement.
Caredata.com will bear all costs of soliciting proxies. In addition to the use
of the mails, proxies may be solicited by directors, officers or other employees
of Caredata.com, personally, by telephone or by facsimile. Caredata.com does not
expect to pay any compensation for the solicitation of proxies, but may
reimburse brokers, custodians or other persons holding stock in their names or
in the names of nominees for their expenses in sending proxy materials to
principals and obtaining their instructions.
14
<PAGE> 18
APPENDIX
GENERAL DESCRIPTION OF THE 1998 PLAN
- --------------------------------------------------------------------------------
PURPOSE
The purpose of the Incentive Plan is to promote the success and enhance the
value of the company by linking the personal interests of employees, officers
and directors to those of the stockholders, and by providing such persons with
an incentive for outstanding performance.
AWARDS
The Incentive Plan authorizes the granting of awards to our employees, officers
and directors in the following forms: (a) options to purchase shares of
Caredata.com common stock, which may be incentive stock options or nonqualified
stock options; (b) stock appreciation rights ("SARs"); (c) performance shares;
(d) restricted stock; (e) dividend equivalents; and (f) other stock-based
awards, including unrestricted stock awards.
Under Section 162(m) of the Internal Revenue Code of 1986, as amended, a company
may not deduct compensation in excess of $1 million paid to its chief executive
officer and the four next most highly compensated executive officers of the
company. The 1998 Plan is designed to comply with Code Section 162(m) so that
the grant of options and SARs under the plan, and other awards, such as
performance shares, that are conditioned on the performance goals described in
the 1998 Plan, will be excluded from the calculation of annual compensation for
purposes of Section 162(m) and will be fully deductible by Caredata.com.
Subject to adjustment as provided in the 1998 Plan, the current aggregate number
of shares of Caredata.com common stock reserved and available for awards or
which may be used to provide a basis of measurement for, or to determine the
value of, an award (such as with a SAR or performance share) is 850,000, of
which no more than 20% may be granted in the form of restricted stock awards.
The aggregate number of shares available for awards under the 1998 Plan is
proposed to be increased by 400,000 to 1,250,000, of which no more than 20% may
be granted in the form of restricted or unrestricted stock awards. The maximum
number of shares of Caredata.com common stock with respect to one or more
options and/or SARs that may be granted during any one calendar year under the
1998 Plan to any one participant is 100,000. The maximum fair market value
(measured as of the date of grant) of any awards (other than options and SARs)
that may be received by a participant during any one calendar year under the
1998 Plan is $1,000,000.
ADMINISTRATION
The 1998 Plan is administered by our Board's Compensation Committee. The
Compensation Committee has the power, authority and discretion to designate
participants; determine the type or types of awards to be granted to each
participant and the terms and conditions thereof; establish, adopt or revise any
rules and regulations as it may deem necessary or advisable to administer the
1998 Plan; and make all other decisions and determinations that may be required
under, or as the Compensation Committee deems necessary or advisable to
administer, the 1998 Plan.
LIMITATIONS ON TRANSFER; BENEFICIARIES
No unexercised or restricted award may be assigned or transferred by a
participant other than by will or the laws of descent and distribution or,
except in the case of an incentive stock option, pursuant to a qualifying
domestic relations order. A participant may, in the manner determined by the
Compensation Committee, designate a beneficiary to exercise the rights of the
participant and to receive any distribution with respect to any award upon the
participant's death.
ACCELERATION UPON CERTAIN EVENTS
Upon a participant's death or disability, all awards in the nature of rights
that may be exercised will become fully exercisable and all restrictions on
outstanding awards will lapse. Any options or SARs will thereafter
A-1
<PAGE> 19
continue or lapse in accordance with the other provisions of the 1998 Plan and
the award agreement. In the event of a Change in Control (as defined in the 1998
Plan), all outstanding awards in the nature of rights that may be exercised will
become fully vested and all restrictions on all outstanding awards will lapse,
except in certain limited circumstances described in the 1998 Plan relating to
pooling-of-interests accounting treatment for business combinations. In the
event of the occurrence of any circumstance, transaction or event not
constituting a Change in Control but which the Board deems to be, or to be
reasonably likely to lead to, an effective change in control, the Compensation
Committee or the Board may, in their respective sole discretion, declare all
outstanding awards in the nature of rights that may be exercised to become fully
vested, and/or all restrictions on all outstanding awards to lapse, in each case
as of such date as the Compensation Committee or the Board may, in their
respective sole discretion, declare, which may be on or before the consummation
of such transaction or event. In addition, the Compensation Committee may, in
its sole discretion, accelerate the vesting of an award at any time, in whole or
in part.
TERMINATION AND AMENDMENT
The Board may amend, modify or terminate the 1998 Plan without stockholder
approval; provided, however, that the Board may condition any amendment on the
approval of stockholders if such approval is necessary or deemed advisable with
respect to tax, securities or other applicable laws, policies or regulations. No
termination, amendment, or modification of the 1998 Plan may adversely affect
any award previously granted, without the written consent of the participant.
The Compensation Committee may amend, modify or terminate any outstanding award
without approval of the participant; provided, however, that such amendment,
modification or termination may not, without the participant's consent, reduce
or diminish the value of such award determined as if the award had been
exercised, vested, cashed in or otherwise settled on the date of such amendment
or termination. Absent the prior approval of the stockholders, no outstanding
award shall be (i) repriced by lowering its exercise price, (ii) canceled with
subsequent replacement at a lower exercise price, or (iii) regranted with a
lower exercise price.
FEDERAL INCOME TAX CONSEQUENCES
Nonqualified Stock Options. Under present federal income tax regulations, there
are no federal income tax consequences to either Caredata.com or the participant
upon the grant of a nondiscounted nonqualified stock option. However, the
participant will realize ordinary income on the exercise of the nonqualified
stock option in an amount equal to the excess of the fair market value of
Caredata.com common stock acquired upon the exercise of such option over the
exercise price, and Caredata.com will be entitled to a corresponding deduction.
The gain, if any, realized upon the subsequent disposition by the participant of
Caredata.com common stock will constitute short-term or long-term capital gain,
depending on the participant's holding period.
Incentive Stock Options. Under present federal income tax regulations, there
are no federal income tax consequences to either Caredata.com or the participant
upon the grant of an incentive stock option. Although the participant will not
realize ordinary income upon his exercise of an incentive stock option, the
difference between the exercise price and the fair market value of the shares at
the time of exercise of the incentive stock option will be treated as an item of
tax preference for alternative minimum tax purposes. If the participant holds
the shares of Caredata.com common stock for the greater of two years after the
date the incentive stock option was granted or one year after the acquisition of
the shares of Caredata.com common stock, the difference between the aggregate
exercise price and the amount realized upon disposition of the shares of
Caredata.com common stock will constitute long-term capital gain or loss, and
Caredata.com will not be entitled to a federal income tax deduction. If the
shares of Caredata.com common stock are disposed of in a sale, exchange or other
"disqualifying disposition" during the required holding period, the participant
will realize taxable ordinary income in an amount equal to the lesser of (1) the
gain realized by the participant upon such disposition, or (2) the excess of the
fair market value of Caredata.com common stock purchased at the time of exercise
over the aggregate exercise price, and Caredata.com will be entitled to a
federal income tax deduction equal to that amount. The gain in excess of that
amount realized by the participant as ordinary
A-2
<PAGE> 20
income would be taxed as a capital gain (subject to the holding period
requirements for long-term or short-term capital gain treatment).
SARs. Under present federal income tax regulations, a participant
receiving a nondiscounted SAR will not recognize income, and Caredata.com will
not be allowed a tax deduction, at the time the award is granted. When a
participant exercises the SAR, the amount of cash and the fair market value of
any shares of Caredata.com common stock received will be ordinary income to the
participant and will be allowed as a deduction for federal income tax purposes
to Caredata.com.
Performance Shares. Under present federal income tax regulations, a
participant receiving performance shares will not recognize income, and
Caredata.com will not be allowed a tax deduction, at the time the award is
granted. When a participant receives payment of performance shares, the amount
of cash and the fair market value of any shares of Caredata.com common stock
received will be ordinary income to the participant and will be allowed as a
deduction for federal income tax purposes to Caredata.com.
Restricted Stock. Under present federal income tax regulations, and unless
the participant makes an election to accelerate recognition of the income to the
date of grant, a participant receiving a restricted stock award will not
recognize income, and Caredata.com will not be allowed a tax deduction, at the
time the award is granted. When the restrictions lapse, the participant will
recognize ordinary income equal to the fair market value of Caredata.com common
stock less any amount paid by the participant for the stock, and Caredata.com
will be entitled to a corresponding tax deduction at that time. A participant
will recognize ordinary income on any dividends paid on the shares of restricted
stock when the dividends are received, and Caredata.com will have a
corresponding deduction (unless the participant elected to recognize income upon
grant of the restricted stock, in which case Caredata.com could not deduct the
dividends).
A-3
<PAGE> 21
BENEFITS TO NAMED EXECUTIVE OFFICERS AND OTHERS
As of March 6, 2000, awards had been granted or approved for grant under the
1998 Plan to the following persons and groups. Any future awards will be made at
the discretion of the Compensation Committee.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
1998 PLAN
-------------------------------------------------------------------------------
OPTIONS RESTRICTED STOCK AWARDS
- ------------------------------------------------------------------------------------------------------------------
DOLLAR NUMBER OF DOLLAR NUMBER OF
NAME AND POSITION VALUE(1) OPTIONS VALUE(2) SHARES
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mark A. Kaiser $622,155 93,592 $95,456 9,091
Chairman of the Board and Chief
Executive Officer
- ------------------------------------------------------------------------------------------------------------------
Kenneth M. Goins, Jr. $468,792 71,570 $66,822 6,364
President and Chief Operating
Officer
- ------------------------------------------------------------------------------------------------------------------
Thomas C. Kuhn III $242,875 39,626 $38,178 3,636
Senior Vice President and Chief
Financial Officer
- ------------------------------------------------------------------------------------------------------------------
O. B. Rawls, IV $191,250 30,000 $19,089 1,818
Senior Vice President and Group
General Manager
- ------------------------------------------------------------------------------------------------------------------
Barry W. Burt $208,250 30,626 $19,089 1,818
Vice President and General
Counsel
- ------------------------------------------------------------------------------------------------------------------
All Executive Officers as a Group
(including the above) $1,733,322 265,414 $238,634 22,727
- ------------------------------------------------------------------------------------------------------------------
All Nonexecutive Directors As a
Group (including the above) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------
All Nonexecutive Employees As a
Group $3,005,484 614,991 $38,178 3,636
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------------------
(1) The dollar value of the above options depends on the difference between the
exercise price and the fair market value of the underlying shares on the
date of exercise. The closing price per share of Caredata.com common stock
on March 6, 2000 was $10.50.
(2) Based on the closing price per share of Caredata.com stock of $10.50 on
March 6, 2000.
A-4
<PAGE> 22
PROXY
CAREDATA.COM, INC.
PROXY APPOINTMENT SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 2, 2000
The undersigned Stockholder of Caredata.com, Inc. (the "Company"), hereby
constitutes and appoints Mark A. Kaiser, Kenneth M. Goins, Jr. and Barry W.
Burt, or any one of them, each with full power of substitution, to vote the
number of shares of Common Stock which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders to be held at
the Grand Hyatt Atlanta, 3300 Peachtree Road, N.E., Atlanta, Georgia, on May 2,
2000, at 10:00 a.m., local time, or at any adjournments thereof (the "Annual
Meeting"), upon the proposals described in the Notice of Annual Meeting of
Stockholders and Proxy Statement, both dated March 28, 2000, the receipt of
which is acknowledged, in the manner specified below.
1. ELECTION OF DIRECTORS. On the proposal to elect the following persons to
each serve as a Class 1 Director for a three-year period and until his
successor is elected and qualified:
CLASS 1
Keith O. Cowan
William M. McClatchey, M.D.
[ ] FOR all nominees listed above [ ] WITHHOLD AUTHORITY to
(except as marked below to the contrary) vote for all nominees
listed above
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
LIST NAME BELOW.)
2. AMENDMENT TO THE CAREDATA.COM, INC. 1998 LONG-TERM INCENTIVE PLAN. On the
proposal to amend the Caredata.com, Inc. 1998 Long-Term Incentive Plan to
increase the number of shares of Caredata.com Common Stock available for
awards under the Plan by 400,000 from 850,000 to 1,250,000:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 23
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL OF THE PROPOSALS SET FORTH ON THE REVERSE HEREOF AND WITH
DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
ANNUAL MEETING OR ANY ADJOURNMENTS THEREOF.
Please sign exactly as your name appears on your stock certificate and
date. Where shares are held jointly, each Stockholder should sign. When signing
as executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
SHARES HELD:
-----------------------------------
-----------------------------------------------
Signature of Stockholder
-----------------------------------------------
Signature of Stockholder (If held Jointly)
Date: , 2000
------------------------------------
Month Day
