SCHEDULE 14A
(RULE 14A-1-1)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
- --------------------------------
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material 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))
IntegraMed America, Inc.
---------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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):
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(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: April 24, 2000
April 21, 2000
Dear IntegraMed America, Inc. Stockholder:
It is my pleasure to invite you to attend the 2000 Annual Meeting of
Stockholders of IntegraMed America, Inc. The meeting will be held at 10:00 a.m.
(local time) on Tuesday, May 23, 2000 at the Company's corporate offices at One
Manhattanville Road, Purchase, New York.
The following pages contain the formal Notice of Annual Meeting of Stockholders
and the Proxy Statement. Please review this material for information concerning
the business to be conducted at the meeting which is the election of eight
directors for a term of one year and the approval of the Company's 2000
Long-Term Compensation Plan. You will also have the opportunity to hear what has
happened in our business in the past year and to ask questions. You will find
detailed information about IntegraMed America, Inc. in the enclosed 1999 Annual
Report to Stockholders.
We hope you can join us on May 23, 2000. Whether or not you can attend, please
read the enclosed Proxy Statement. When you have done so, please mark your votes
on the enclosed proxy, sign and date the proxy, and return it in the enclosed
envelope. Your vote is important to the Company, so please return your proxy
promptly.
Sincerely,
/s/Gerardo Canet
- ----------------
Gerardo Canet
President & Chief Executive Officer
INTEGRAMED AMERICA, INC.
One Manhattanville Road
Purchase, New York 10577
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 23, 2000
To the Stockholders:
Notice is hereby given that the Annual Meeting of the Stockholders of
IntegraMed America, Inc. (the "Company") will be held on May 23, 2000, at 10:00
a.m. local time at the Company's headquarters, One Manhattanville Road,
Purchase, New York 10577. The meeting is called for the following purposes:
1. Election of eight directors for a term of one year;
2. Approval and ratification of the Company's 2000 Long-Term
Compensation Plan; and
3. Consideration of and action upon such other matters as may
properly come before the meeting or any adjournment or
adjournments thereof.
The close of business on March 31, 2000 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the meeting.
All stockholders are cordially invited to attend the meeting. Whether
or not you expect to attend, you are respectfully requested by the Board of
Directors to sign, date and return the enclosed Proxy promptly. Stockholders who
execute proxies retain the right to revoke them at any time prior to the voting
thereof. A return envelope which requires no postage if mailed in the United
States is enclosed for your convenience.
By Order of the Board of Directors,
Claude E. White
Secretary
Dated: April 21, 2000
INTEGRAMED AMERICA, INC.
One Manhattanville Road
Purchase, New York 10577
914-253-8000
PROXY STATEMENT
For the Annual Meeting of Stockholders
To Be Held on Tuesday, May 23, 2000
Solicitation of Proxy
This Proxy Statement and the accompanying Proxy are furnished to
stockholders of IntegraMed America, Inc. (the "Company") in connection with the
solicitation of proxies for use at the Annual Meeting of Stockholders of the
Company to be held in Purchase, New York, on Tuesday, May 23, 2000 at 10:00
a.m., and any adjournments of the meeting. The enclosed Proxy is solicited by
the Board of Directors of the Company.
Mailing Date
The Annual Report of the Company for 1999, including financial
statements, the NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, this Proxy Statement,
and the Proxy were mailed to stockholders on April 21, 2000.
Who can vote -- Record Date
The record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting is March 31, 2000. Each of the 4,262,348 shares of
common stock, par value $.01 per share (the "Common Stock"), and the 165,644
shares of Series A Cumulative Convertible Preferred Stock (the "Preferred
Stock") of the Company issued and outstanding on that date is entitled to one
vote at the meeting. On November 17, 1998, the Company effected a 1-for-4
reverse stock split of its Common Stock. As a result of the reverse split, all
references in this Proxy Statement to Common Stock ownership for the years ended
December 31, 1998 and 1997 have been adjusted.
How to vote -- Proxy Instructions
You can vote your shares by mailing in your proxy card. Stockholders
who hold their shares in "street name" must vote their shares in the manner
prescribed by their brokers.
In voting, you may specify whether your shares should be voted for all,
some, or none of the nominees for director (Proposal 1 on the proxy card). You
may also specify whether you approve, disapprove, or abstain from the additional
proposal which will be presented at the meeting by management.
If you do not specify on your proxy card how you want to vote your
shares, we will vote them "For" the election of all nominees for director as set
forth under "Election of Directors" (Proposal 1) and "For" Proposal 2.
Revocation of Proxies
You may revoke your proxy at any time before it is exercised in any of
three ways:
(1) by submitting written notice of revocation to the Company
Secretary;
(2) by submitting another proxy by mail that is dated later in time
and properly signed; or
(3) by voting in person at the meeting.
Quorum
A quorum of stockholders is necessary to hold a valid meeting. A quorum
will exist if the holders of a majority of the votes entitled to be cast by the
stockholders at the Annual Meeting are present, in person or by proxy. Broker
"non-votes" and abstentions are counted as present at the Annual Meeting for
purposes of determining whether a quorum exists. A broker "non-vote" occurs when
a nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power for that
particular item and has not received instructions from the beneficial owner.
Required Vote
Persons receiving a plurality of the voted shares present in person or
represented by proxy at the Annual Meeting will be elected directors.
"Plurality" means that if nominees receive more affirmative votes than negative
votes irrespective of whether they receive a majority vote they are elected as
directors. Shares not voted (whether abstention, broker "non-votes," or
otherwise) have no effect on the election. If any nominee is unable or declines
to serve, proxies will be voted for the balance of those named and such person
as shall be designated by the Board to replace any such nominee. However, the
Board does not anticipate that this will occur.
A majority of the votes cast at the Annual Meeting is necessary to
approve Proposal 2 (ratification of the Company's 2000 Long-Term Compensation
Plan). Shares not voted (whether by abstentions or broker "non-votes," or
otherwise) will have no effect on the approval of Proposal 2.
Other Business
The Company does not intend to bring any business before the meeting
other than that set forth in the Notice of Annual Meeting and described in this
Proxy Statement. However, if any other business should properly come before the
meeting, the persons named in the enclosed proxy card intend to vote in
accordance with their best judgment on such business and any matters dealing
with the conduct of the meeting pursuant to the discretionary authority granted
in the proxy.
2
SECURITY OWNERSHIP
The following table sets forth, as of March 31, 2000, certain
information concerning stock ownership of all persons known by the Company to
own beneficially 5% or more of the shares of Common Stock, and each director,
and each executive officer named under "Executive Compensation", and all
directors and executive officers of the Company as a group.
Shares of
Common Stock Percent of
Beneficially Common Stock
Beneficial Owner Owned (1),(2) Outstanding
- ---------------- ------------- -----------
Entities affiliated with
Morgan Stanley Dean Witter
1585 Broadway
New York, NY 100036.................... 868,824(3) 20.38%
Officer and Director Stock Ownership
Gerardo Canet.......................... 133,096(4)(5) 3.10%
Peter Cucchiara........................ 4,414(5) *
Jay Higham............................. 24,875(5) *
John W. Hlywak, Jr..................... 25,000 *
Claude E. White........................ 3,116(5) *
Donald S. Wood, Ph.D................... 31,250(5) *
M. Fazle Husain........................ 875,293(3)(5) 20.53%
Michael J. Levy, M.D................... 82,038(5) 1.92%
Sarason D. Liebler..................... 24,612(5) *
Aaron S. Lifchez, M.D.................. 70,497(5) 1.65%
Patricia M. McShane,M.D................ 9,843(5) *
Lawrence J. Stuesser................... 50,300(5)(6) 1.18%
Elizabeth E. Tallett................... 5,005(5) *
ALL EXECUTIVE OFFICERS AND DIRECTORS
AS A GROUP (13 persons)............ 1,254,686(3)(4)(5)(6) 29.43%
- --------------
* Represents less than 1% of outstanding shares of Common Stock
(1) For the purposes of this Proxy Statement, beneficial ownership is defined
in accordance with the rules of the Securities and Exchange Commission and
generally means the power to vote and/or to dispose of the securities
regardless of any economic interest therein.
(2) As of March 31, 2000, there were 165,644 shares of Preferred Stock
outstanding of which 150,000 shares, or 90.6%, were owned by Barry Blank
(Box 32056, Phoenix, AZ 85064) as reported on his Schedule 13D filed with
the Securities and Exchange Commission (the "Commission") on June 6, 1994.
Upon conversion of the 150,000 shares of Preferred Stock owned by Mr.
Blank into an aggregate of 120,000 shares of Common Stock, he would own
2.74% of the Company's outstanding Common Stock
(3) Consists of 808,824 shares of Common Stock and 60,000 shares of Common
Stock issuable upon immediately exercisable warrants held by Morgan
Stanley Venture Partners III, L.P. ("MSVP III, L.P."), Morgan Stanley
Venture Investors III, L.P. ("MSVI III, L.P."), and The Morgan Stanley
Venture Partners Entrepreneur Fund, L.P. ("MSVPE Fund, L.P.") (MSVP III,
L.P., MSVI III, L.P, and MSVPE Fund, L.P. are collectively referred to as
the "Funds"). Fazle Husain, a director of the Company, is a general
partner of the Funds. Mr. Husain may be deemed to beneficially own the
shares held by the Funds, although he has disclaimed beneficial ownership.
(4) Includes 1,250 shares held by Mr. Canet as custodian for the benefit of
his granddaughter.
(5) Includes (or consists of) currently exercisable options, including options
exercisable within sixty days, to purchase Common Stock as follows:
Gerardo Canet -- 99,846; Peter Cucchiara -- 4,414; Jay Higham -- 19,375;
Claude E. White -- 2,602; Donald S. Wood -- 27,838; M. Fazle Husain --
6,471; Michael Levy -- 6,471; Sarason Liebler -- 20,500; Aaron Lifchez --
7,406; Patricia McShane -- 9,843; Lawrence Stuesser -- 14,250; and
Elizabeth Tallett -- 4,505; and currently exercisable warrants to purchase
Common Stock as follows: Fazle Husain -- 60,000; Michael Levy -- 3,750;
Aaron Lifchez -- 3,750; and Patricia McShane -- 3,125.
(6) Includes 2,925 shares held by family members of Mr. Stuesser for which he
disclaims beneficial ownership.
3
PROPOSAL 1
ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
At the meeting, eight directors will be elected by the stockholders to
serve until the next Annual Meeting of Stockholders or until their successors
are elected and shall qualify. Each of the nominees is currently a director of
the Company. Management recommends that the persons named below be elected as
directors of the Company and it is intended that the accompanying proxy will be
voted for the election as directors of the eight persons named below, unless the
proxy contains contrary instructions. The Company has no reason to believe that
any of the nominees will not be a candidate or will be unable to serve. However,
in the event that any nominee should become unable or unwilling to serve as a
director, the persons named in the proxy have advised that they will vote for
the election of such person or persons as shall be designated by the Board.
The Board of Directors proposes the election of the following directors
of the Company for a term of one year. The following sets forth the names and
ages of the eight nominees for election to the Board of Directors, their
respective principal occupations or employments during the past five years and
the period during which each has served as a director of the Company.
GERARDO CANET (54) became President, Chief Executive Officer and a
director of the Company effective February 14, 1994 and served as the Chairman
of the Board from April 19, 1994 to March 7, 2000. For approximately five years
prior to joining the Company, Mr. Canet held various executive management
positions with Curative Health Services, Inc., most recently as Executive Vice
President and President of its Wound Care Business Unit. From 1979 to 1989, Mr.
Canet held various management positions with Kimberly Quality Care, Inc. (and a
predecessor company), a provider of home health care services, most recently
from 1987 to 1989 as Executive Vice President, Chief Operating Officer and a
director of Kimberly Quality Care, Inc. Mr. Canet has been a director of
Curative Health Services, Inc. since July 1991. Mr. Canet earned an M.B.A. from
Suffolk University and a B.A. in Economics from Tufts University.
M. FAZLE HUSAIN (36) became a director of the Company in January 1998.
Mr. Husain is a general partner of Morgan Stanley Dean Witter Venture Partners,
III, L.P., where he has been employed since 1991, and certain partnerships
affiliated with Morgan Stanley Dean Witter. Mr. Husain focuses primarily on
investments in the health care industry, including health care services,
bio-pharmaceutical, medical technology and health care information technology.
Mr. Husain is a director of HealthStream, Inc., Allscripts, Inc., and Cardiac
Pathways. He is also a director of several private companies. He received a B.S.
degree in Chemical Engineering from Brown University and an M.B.A. from Harvard
Graduate School of Business Administration.
MICHAEL J. LEVY, M.D. (40) became a director of the Company in March
1998 and Vice Chairman of the Board effective March 8, 2000. Since 1991, Dr.
Levy, a board certified reproductive endocrinologist, has been a shareholder and
medical director of Levy, Sagoskin and Stillman, M.D., P.C., a physician group
practice that became a Company Reproductive Science Center(R)in March 1998. Dr.
Levy graduated from the University of Cape Town Medical School.
SARASON D. LIEBLER (63) became a director of the Company in August
1994. Mr. Liebler is President of SDL Consultants, a privately-owned consulting
firm engaged in rendering general business advice. During the past 20 years, Mr.
Liebler has been a director and/or officer of a number of companies in the
fields of home health care, clinical diagnostics, high density optical storage
and sporting goods. Mr. Liebler is a graduate of the United States Naval Academy
with a B.S. in Engineering.
AARON S. LIFCHEZ, M.D. (57) became a director of the Company in August
1997 and Chairman of the Board effective March 8, 2000. Since 1996, Dr. Lifchez,
a reproductive endocrinologist, has been a shareholder and president of
Fertility Centers of Illinois, S.C., a physician group practice that became a
Company Reproductive Science Center in August 1997. Dr. Lifchez has maintained a
medical practice in the Chicago area for more than the past five years. Dr.
Lifchez graduated from the University of Chicago Medical School.
4
PATRICIA M. MCSHANE, M.D. (51) became a director of the Company in March
1997 and was a Vice President of the Company in charge of medical affairs from
September 1992 through February 28, 1997. Since May 1988, Dr. McShane, a board
certified reproductive endocrinologist, has been, and currently is, the Medical
Director of the Reproductive Science Center of Boston where she is engaged in
the practice of medicine, specializing in infertility. Dr. McShane graduated
from Tufts University School of Medicine.
LAWRENCE J. STUESSER (58) became a director of the Company in April
1994. From June 1996 to May, 1999, Mr. Stuesser was the President and Chief
Executive Officer of Computer People Inc., the U.S. subsidiary of London-based
Delphi Group plc. From July 1993 to May 1996, he was a private investor and
business consultant. Mr. Stuesser has been a director of Curative Health
Services, Inc. since 1993 and was elected Chairman of the Board in July 1995.
Mr. Stuesser also serves on the Board of Directors of American Retirement
Corporation. Mr. Stuesser was Chief Executive Officer of Kimberly Quality Care,
Inc. from 1986 to July 1993, at which time that company was acquired by the
Olsten Company. Mr. Stuesser holds a B.B.A. in accounting from St. Mary's
University.
ELIZABETH E. TALLETT (51) became a director of the Company in June
1998. Since 1996, Ms. Tallett has held the positions of President and Chief
Executive Officer of Dioscor, Inc. and President and Chief Executive Officer of
Ellard Pharmaceuticals, Inc., both biopharmaceutical companies. In 1992 she
co-founded Transcell Technologies, Inc. a carbohydrate-based pharmaceutical
company, where she served as President and Chief Executive Officer until 1996.
Ms. Tallett is a board member of The Principal Mutual Life Insurance Company,
Varian, Inc., and Coventry Health Care, Inc. She is a founding board member of
the Biotechnology Council of New Jersey and serves as its Treasurer. Ms. Tallett
graduated from Nottingham University with degrees in mathematics and economics.
The Board of Directors recommends a vote "FOR" each nominee listed
above, and the persons named in the accompanying proxy will vote in accordance
with the choice specified thereon, or, if no choice properly indicated, in favor
of the nominees listed above.
Directors are elected by the Company's stockholders at each annual
meeting or, in the case of a vacancy, are appointed by the directors then in
office, to serve until the next annual meeting or until their successors are
elected and qualified. Officers are appointed by and serve at the discretion of
the Board of Directors.
The Board of Directors held five meetings, and took action by written
consent three times during the fiscal year ended December 31, 1999. Each of the
directors attended at least 75% of the aggregate of all meetings of (i) the
Board of Directors and (ii) the committees thereof on which such director served
during the term of each directorship.
EXECUTIVE COMMITTEE
The Executive Committee, which was established March 7, 2000, consists
of Mr. Canet , Drs. Levy and Lifchez, and Mr. Liebler. The Executive Committee
is authorized by the Board of Directors to act for the Board in intervals
between Board meetings, with the exception of certain matters that by law may
not be delegated, and to work with management concerning the Company's
long-range corporate strategies. AUDIT COMMITTEE
The Audit Committee consists of Messrs. Husain and Liebler, and Ms.
Tallett. The Audit Committee met two times during the fiscal year ended December
31, 1999. The Audit Committee is authorized by the Board of Directors to review,
with the Company's independent accountants, the annual financial statements of
the Company; to review the work of, and approve non-audit services performed by,
such independent accountants; and to make annual recommendations to the Board
for the appointment of independent public accountants for the ensuing year. The
Audit Committee also reviews the effectiveness of the financial and accounting
functions, organization, operations and management of the Company.
5
COMPENSATION COMMITTEE
The Compensation Committee consists of Messrs. Husain and Stuesser, and
Ms. Tallett. The Compensation Committee held four meetings during the fiscal
year ended December 31, 1999. The Compensation Committee reviews and recommends
to the Board of Directors the compensation and benefits of all officers of the
Company, reviews general policy matters relating to compensation and benefits of
employees of the Company, administers the issuance of stock options to the
Company's officers, employees and consultants and also has authority to grant
options to directors who are not employees of the Company.
NOMINATING COMMITTEE
The Nominating Committee, consisting of Messrs. Canet, Liebler and
Stuesser, met once during the fiscal year ended December 31, 1999. The
Nominating Committee recommends to the Board of Directors the nominees for
submission to the Stockholders for election at the Annual Meeting of
Stockholders and nominees to fill vacancies on the Board between Annual Meetings
of Stockholders.
DIRECTOR COMPENSATION
In 1999, in addition to stock option compensation discussed below,
non-employee, non-affiliated directors of the Company received an annual
retainer of $10,000, a fee of $750 for each meeting of the Board attended,
$2,500 per year for membership on a committee of the Board, and were reimbursed
for expenses actually incurred in attending meetings. Directors who are also
executive officers are not compensated for their services as directors.
In November 1994, the Board of Directors approved the granting of
Non-Incentive Options to Non-Employee Directors under the 1992 Incentive and
Non-Incentive Stock Option Plan (the "1992 Plan"). Each Non-Employee Director,
upon initial election to the Board of Directors, is granted an option to
purchase 7,500 shares of Common Stock ("Initial Option") at an exercise price
equal to the closing price of the Common Stock on the date immediately preceding
election to the Board. Of the shares subject to the Initial Option, 25% become
exercisable one year from the grant; thereafter the shares become exercisable
every three months at the rate of 6.25% of the total number of shares subject to
the option. Annually, upon re-election, Non-Employee Directors are granted an
option to purchase 1,500 shares of Common Stock ("Re-election Option") at a
price equal to the closing price of the Common Stock on the date of re-election.
Of the shares subject to the Re-election Option, 50% vest one year from the date
of grant and the balance vests two years from the date of grant.
SDL Consultants, a company owned by Sarason D. Liebler, who became a
director of the Company in August 1994, rendered consulting services to the
Company for aggregate fees of approximately $78,000, $43,000 and $93,000 during
1999, 1998 and 1997, respectively. The approximately $93,000 paid to SDL
Consultants in 1997 primarily related to services rendered to the Company in
assisting with the recruitment of five (5) senior management persons and
included reimbursement of expenses. In addition, in part consideration of
consulting services rendered to the Company in 1997, the Company also granted a
Non-Incentive Option to Mr. Liebler on October 21, 1997 to purchase 10,000 of
shares of Common Stock at an exercise price of $4.12 per share, 25% of which
shares became exercisable one year from the date of grant; thereafter the shares
become exercisable every three months at the rate of 6.25% of the total number
of shares subject to the option.
6
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
The following sets forth the business experience of executive officers
who are not also directors of the Company.
PETER CUCCHIARA joined the Company in 1995 as director of information
systems and was promoted to Vice President, Information Systems in March 1999.
Prior to joining the Company, Mr. Cucchiara led various information technology
efforts and initiatives for The Hospital for Special Surgery and the Fransiscan
Sisters Health Care System, and has over 15 years experience in medical
information systems and informatics. Mr. Cucchiara was awarded a B.S. degree in
Industrial Administration from New Jersey Institute of Technology.
JAY HIGHAM became Vice President of Marketing and Development in
October 1994. In January 1999, Mr. Higham was promoted to Senior Vice President
of Marketing and Development. For four years prior to joining the Company, Mr.
Higham held a variety of executive positions, the most current of which was as
Vice President of Health Systems Development for South Shore Hospital and South
Shore Health and Education Corporation where he developed and implemented a
strategy for integration with physician group practices and managed care payors.
Mr. Higham earned an M.H.S.A. from George Washington University.
JOHN W. HLYWAK, JR. joined the Company in July 1999 as its Senior Vice
President and Chief Financial Officer. From 1997 to 1999 he was the Senior Vice
President and Chief Financial Officer of MedSource, Inc., a Tennessee-based
health care billing and receivables management company. From 1995 to 1997 he was
a Principal with The J. William Group, Inc., a merger and acquisition advisory
firm. Prior to 1995 Mr. Hlywak was a Partner in Arthur Andersen & Co., a
worldwide accounting and consulting firm. Mr. Hlywak is a C.P.A. and has a B.S.
degree in Accounting from Widener University.
CLAUDE E. WHITE joined the Company in March 1995 as General Counsel and
Assistant Secretary. In January 1998, Mr. White became Corporate Secretary, in
addition to General Counsel. Mr. White has served as General Counsel of several
major companies over the past 10 years, including Burns International Security
Services, Inc., Staff Builders, Inc. and Quality Care, Inc. Mr. White received
his B.A. degree in Political Science from Rutgers College and J.D. degree from
Rutgers School of Law.
DONALD S. WOOD, PH.D. joined the Company in April 1991 as its Vice
President of Genetics. Dr. Wood became President and Chief Operating Officer of
the Reproductive Science Center Division in 1997 and was promoted to Senior Vice
President and Chief Operating Officer in January 1999. From 1989 through March
1991, Dr. Wood was the Executive Vice President and Chief Scientific Officer of
Odyssey Biomedical Corp., a genetic testing company, which he co-founded, and
which was acquired by IG Labs, Inc. in December 1990. Dr. Wood received a Ph.D.
in Physiology from Washington State University and completed a post-doctoral
fellowship in neurology at the Columbia/Presbyterian Medical Center in New York,
where he subsequently was appointed an Assistant Professor of Neurology.
7
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid or
accrued by the Company during the years ended December 31, 1999, 1998 and 1997
for the Company's Chief Executive Officer and for the four most highly
compensated executive officers (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term
Compensation
- --------- ------------
Securities
Annual Underlying
Compensation Options
Name and Principal Position Year Salary ($) Bonus ($) Granted (#)(1)
--------------------------- ---- ---------- --------- --------------
Gerardo Canet 1999 243,114 76,050 50,000
President and 1998 240,000 43,200 73,750
Chief Executive Officer 1997 228,000 41,040 --
Peter Cucchiara 1999 98,963 9,025 8,125
Vice President, Information 1998 81,107 5,873 1,875
Systems (2) 1997 70,585 5,422 --
Jay Higham 1999 125,666 19,760 --
Sr. Vice President, Marketing 1998 125,000 15,000 20,000
and Development 1997 120,000 12,600 --
Claude E. White 1999 103,739 9,975 --
General Counsel and 1998 102,000 7,650 3,750
Secretary 1997(3) 57,000 4,425 --
Donald S. Wood, Ph.D. 1999 157,108 37,200 15,000
Sr. Vice President and 1998 145,000 21,750 28,339
Chief Operating Officer 1997 121,738 12,285 --
(1) All amounts prior to 1999 reflect the Company's 1-for-4 reverse stock
split effective November 17, 1998 and repricing in August 1998.
(2) Mr. Cucchiara became Vice President, Information Systems on March 1,
1999.
(3) Claude White served the Company in a part-time capacity during 1997.
8
The following table sets forth certain information with respect to
individual grants of stock options made by the Company during fiscal 1999 to the
executive officers indicated below.
OPTIONS GRANTED IN 1999
% of
Number of Total Potential Realizable
Securities Options Value at Assumed Annual Rates
Underlying Granted to of Stock Price Appreciation
Options Employees Exercise Expiration for Option Term (1)
Name Granted (#) in 1999 Price ($) Date 5% ($) 10% ($)
--------------------------- ------------- ------------- ---------- ------------- -------------------------------
Gerardo Canet 50,000 44.00% $3.00 03/17/09 94,334 239,061
Peter Cucchiara 8,125 7.15% $4.63 02/23/09 23,658 59,955
John W. Hlywak, Jr. 30,000 26.40% $4.50 08/10/09 94,185 229,940
Donald S. Wood, Ph.D. 15,000 13.20% $3.00 03/17/09 28,300 71,718
(1) Potential realizable value is based on the assumption that the price per
share of Common Stock appreciates at the assumed annual rate of stock
appreciation for the option term. The assumed 5% and 10% annual rates of
appreciation (compounded annually) over the term of the option are set
forth in accordance with the rules and regulations adopted by the
Commission and do not represent the Company's estimate of stock price
appreciation.
9
The following table sets forth certain information concerning Named
Executive Officers who exercised options during 1999 and who held unexercised
options at December 31, 1999:
AGGREGATED OPTION EXERCISES IN 1999 AND
OPTION VALUES AT DECEMBER 31, 1999
Number of
Securities Underlying Value of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired December 31, 1999 December 31, 1999 ($) (1)
On Value ---------------------------------- ----------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- -------------- ------------- --------------------------------- --------------------------------
Gerardo Canet -- -- 75,003 103,874 4,400 19,000
Peter Cucchiara -- -- 1,875 8,125 -- --
Jay Higham -- -- 18,125 1,875 -- --
Claude E. White -- -- 2,274 1,476 -- --
Donald S. Wood, Ph.D. -- -- 18,496 24,843 -- 5,700
(1) Based upon the closing sales price of the Common Stock on the Nasdaq
National Market on December 31, 1999 of $3.375 per share.
10
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
On February 14, 1994, Gerardo Canet entered into an employment
agreement with the Company to serve as its President and Chief Executive Officer
and was appointed as a director. Pursuant to the employment agreement, Mr. Canet
receives an annual salary of $215,000 subject to increases. Under Mr. Canet's
employment agreement, the Company may terminate his employment without cause on
thirty days' notice, in which event Mr. Canet will receive, as severance pay,
twelve months' salary payable monthly. In the event Mr. Canet's employment is
terminated by reason of his permanent disability or death, Mr. Canet (or his
legal representative) will receive six months' base salary (reduced by any
payments following termination received under any long-term disability policy
maintained by the Company for Mr. Canet's benefit).
The employment agreement further provides that in the event that (i)
within one year after a "Change of Control" (as defined therein) of the Company,
Mr. Canet's employment terminates or there occurs a material reduction in his
duties (other than by reason of his disability) or a material interference by
the Company's Board of Directors with the exercise of his authority, or (ii) the
Company is acquired for cash in excess of $10.00 per share of Common Stock, the
stock options granted to Mr. Canet under the agreement would accelerate and
become exercisable as of the date of such termination, material reduction,
material interference, or cash acquisition, or, with respect to the incentive
options, the earliest date thereafter consistent with certain restrictions set
forth in the agreement.
Under the employment agreement, Mr. Canet has agreed not to compete
with the Company while employed by the Company and for a period of one year
thereafter.
--------------
The Company is also a party to a Change in Control Severance Agreement
with Mr. Canet entered into in August 1994.
The Company is also party to Executive Retention Agreements with each
of Jay Higham and Donald Wood, Sr. Vice Presidents of the Company, entered into
in March 1995, and with Messrs. Cucchiara, (Vice President, Information
Systems), Hlywak (Sr. Vice President) and White (General Counsel and Secretary),
entered into in July and August, 1999.
The Change in Control Severance Agreements and the Key Executive
Retention Agreements (together referred to herein as the "Agreements") provide
for certain severance payments and benefits to the named executives in the event
of a termination of their employment, either by the Company without cause, or by
the executive for "Good Reason" (as defined below), at any time within eighteen
(18) months following a "Change in Control" (as defined below) of the Company
(any such termination, a "Qualifying Termination"). More specifically, the
Agreements provide the named executives with one additional year of salary,
bonus (if applicable), and benefits (or equivalent), more than he or she would
previously have been entitled to receive upon a termination without cause (or,
additionally, in the case of Mr. Canet, certain terminations by Mr. Canet for
Good Reason which would be deemed equivalent to a termination without cause
under his current employment agreement). Accordingly, pursuant to the
Agreements, in the event of a Qualifying Termination, Mr. Canet's severance has
been increased to two years (from the one year severance provision which was
contained in his employment agreement with the Company) and the Executive
Officers will be paid one year's severance. Pursuant to the terms of the
Agreements, all incentive options granted to the respective executive would
become fully vested upon a Qualifying Termination, subject to certain terms and
conditions. Also, pursuant to the Agreements, the Company would be required to
pay each respective executive for all reasonable fees and expenses incurred by
the respective executive in litigating his or her rights, thereunder, to the
extent the executive is successful in any such litigation.
11
"Change in Control" under the Agreements means either: (i) any one or
more changes in the aggregate composition of the Company's Board of Directors as
a result of which Mr. Canet and the other individuals constituting the Board of
Directors as of July 26, 1994 (the "Incumbent Board"), cease to constitute a
majority of the Board of Directors, provided, however, that any individual
elected to the Board by, or nominated for election by, a majority of the
then-current Incumbent Board (except if such person assumes office by reason of
an actual or threatened election contest) is deemed to be a member of the
then-current Incumbent Board; or (ii) the closing of the cash acquisition in the
event the Company is acquired for cash in excess of $10.00 per share of Common
Stock, except in either case (i) or (ii) if the executive is or was a member of
the Board and approved such event in writing or by vote at a meeting of the
Board.
"Good Reason" under the Agreements consists of any of the following
grounds based on which the named executive terminates his or her own employment
within eighteen (18) months following a Change in Control of the Company: (i) a
material reduction in the Executive's duties, title(s) or offices, or a material
interference with his or her authority or status by the Board of Directors; (ii)
a relocation of the Company's principal executive offices to a location at least
fifty (50) miles from the Company's current offices in Purchase, New York; (iii)
in the case of Mr. Canet, a material breach of or default by the Company under
his employment agreement; (iv) in the case of any of the Vice Presidents, in the
event Mr. Canet's employment as President and Chief Executive Officer of the
Company is terminated (other than due to the death or permanent disability of
Mr. Canet) within the eighteen (18) month period following a Change in Control
by either the Company (other than for cause) or Mr. Canet for Good Reason; (v)
if the Executive's total salary and cash bonus opportunities for a fiscal year
(which includes any portion of the eighteen-month period following a Change in
Control) are less than 90% of the total salary and cash bonus compensation
opportunities made available to the executive in the then most recently
completed fiscal year; (vi) the failure of the Company to continue in effect any
material benefits or perquisites or insurance plans in which the executive was
participating unless substituted for with substantially similar benefits, or in
the event the Company takes actions which would adversely affect the executive's
participation in, or materially reduce the executive's benefits under, such
plans, or deprive the executive of a material fringe benefit; (vii) the Company
(either in one transaction or a series of related transactions) sells or
otherwise disposes of, not in the ordinary course of business, assets or earning
power aggregating more than 30% of the assets or earning power of the Company
(or the Company and its subsidiaries), unless the executive is or was a member
of the Board and approved any of the foregoing either in writing or by vote at a
meeting of the Board; (viii) a material breach of or default by the Company
under the Agreements which is not cured by the Company within thirty days after
its receipt or prior written notice thereof from the executive; or (ix) a
purported termination for cause by the Company of the executive's employment
within the eighteen (18) month period following a Change in Control which is not
effected in compliance with certain procedural requirements (such as notice and
an opportunity for the executive to be heard, together with his counsel, before
the Board).
In the event either of Messrs. Cucchiara, Higham, Hlywak, White or Wood
is terminated without cause under circumstances outside a "Change in Control,"
each person would be paid 90 days salary continuation.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), requires the Company's executive officers, directors and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities to file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Such executive officers, directors, and greater than
10% beneficial owners are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms filed by such reporting persons.
Based solely on the Company's review of such forms furnished to the
Company and written representations from certain reporting persons, the Company
believes that the required filings applicable to the Company's executive
officers, and greater than 10% beneficial owners were made on a timely basis for
the year ended December 31, 1999.
12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31,1999 the members of the
Compensation Committee were Messrs. Stuesser (Chairman) and Husain, and Ms.
Tallett.
Each of Messrs. Liebler and Stuesser , and Ms. Tallett was paid $10,000
as an annual retainer fee, $2,500 for membership on a Board committee and $2,250
in Board attendance fees.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION1
The goal of the Company's executive compensation policy is to ensure
that an appropriate relationship exists between executive compensation and the
creation of stockholder value, while at the same time attracting, motivating and
retaining senior management. The Compensation Committee's informal executive
compensation philosophy (which applies generally to all Company management,
including the President and Chief Executive Officer, Gerardo Canet) considers a
number of factors, which may include:
rewarding eligible employees who have achieved specific business and
financial success during the fiscal year;
giving eligible employees the incentive to strive for higher
productivity, efficiency and quality of service; and
encouraging the "best" people to join and stay with the Company.
Compensation structures for senior management generally include a
combination of salary, bonuses and stock options. Specific executive officer
base salary is determined based on a range of measures and by comparison to the
compensation of executive officers of comparable companies. For the fiscal year
ended December 31, 1999, the bonuses of senior management were derived in
accordance with a predetermined percent of base salary. The actual bonuses were
based on three components. The first component was based on the Company's
performance during the fiscal year ended December 31, 1999 versus the 1999
budget. The second component was based on the achievement of specific milestones
and the third component was based on achieving individual performance
objectives. The Compensation Committee also endorses the position that equity
ownership by senior management is beneficial in aligning their interest with
those of stockholders', especially in the enhancement of stockholder value. The
Compensation Committee considers the Company's performance under these measures
and uses its subjective judgment and discretion in approving individual
compensation. Mr. Canet's base salary is established pursuant to an employment
agreement, although his bonus is determined in the same fashion as other
executive officers.
Lawrence J. Stuesser (Chairman)
M. Fazle Husain
Elizabeth E. Tallett
- ----------
1 The material in this report is not soliciting material, is not deemed
filed with the Securities and Exchange Commission and is not incorporated by
reference in any filing of the Company under the Securities Act of 1993, whether
made before or after this date of this Proxy Statement and irrespective any
general incorporation language in such filing.
13
Performance Graph2
(GRAPHIC OMITTED)
- --------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
IntegraMed America, Inc. 100.00 305.26 136.84 152.63 109.22 71.05
Peer Group 100.00 162.24 122.88 120.98 43.28 20.57
NASDAQ Stock Market (U.S.) 100.00 141.33 173.89 213.07 300.25 542.43
The above graph compares the five-year cumulative total return for
IntegraMed America, Inc.'s Common Stock with the comparable cumulative return of
the NASDAQ Stock Market (U.S.) and a peer group index. The peer group index
includes Caremark RX, Inc., Innovative Clinical Solutions, Pediatrix Medical
Group, PHP Healthcare Corp., PhyAmerica Physician Group, Inc., Phycor, Inc.,
Physicians Resource Group, Inc. and US Oncology, Inc. The Company selected these
companies for the peer group based on the nature of such companies' businesses.
The graph assumes $100 was invested on December 31, 1994 in IntegraMed
America, Inc.'s Common Stock and $100 was invested at that same time in each of
the NASDAQ and peer group indexes. The comparison assumes that all dividends
were reinvested. Measurement points are at the last trading day of the years
ended December 31, 1994, 1995, 1996, 1997, 1998 and 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is a party to a management agreement with Reproductive
Science Center of Boston ("RSC of Boston") of which Dr. McShane, a Director of
the Company, is a principal stockholder and officer. During the fiscal year
ended December 31, 1999, RSC of Boston paid approximately $2,196,000 in
management fees to the Company pursuant to such management agreement
The Company is a party to a management agreement with Fertility Centers
of Illinois, S.C. ("FCI") of which Dr. Lifchez, a Director and Chairman of the
Board of the Company, is a principal stockholder and officer. During the fiscal
year ended December 31, 1999, FCI paid approximately $2,302,000 in management
fees to the Company pursuant to such management agreement
The Company is a party to a management agreement with Shady Grove
Fertility Centers, P.C. ("Shady Grove") of which Dr. Levy, a Director and Vice
Chairman of the Board of the Company, is a principal stockholder and officer.
During the fiscal year ended December 31, 1999, Shady Grove paid approximately
$1,417,000 in management fees to the Company pursuant to such management
agreement.
The Company has maintained a consulting arrangement with SDL
Consultants, a privately-owned consulting firm engaged in rendering general
business advice, of which Mr. Liebler is President. During the fiscal year ended
December 31, 1999, the Company paid SDL Consultants approximately $78,000 in
consulting fees, which were primarily related to services rendered to the
Company in assisting with the recruitment of several senior management persons
and included reimbursement for expenses.
- ----------
2 The material in this chart is not soliciting material, is not deemed
filed with the Securities and Exchange Commission and is not incorporated by
reference in any filing of the Company under the Securities Act of 1993, whether
made before or after this date of this Proxy Statement and irrespective any
general incorporation language in such filing.
14
PROPOSAL 2
APPROVAL AND RATIFICATION OF THE 2000 LONG-TERM COMPENSATION PLAN
The 2000 Long-Term Compensation Plan (the "2000 Plan") was adopted by
the Board of Directors of the Company in April 2000. A copy of the 2000 Plan is
attached to this Proxy Statement as Appendix A and is incorporated herein by
reference. The following description of the 2000 Plan is a summary and does not
purport to be a complete description.
Purpose
The purpose of the Plan is to enable the Company to grant incentive
stock options ("Incentive Stock Option"), non-qualified stock options
("Non-qualified Stock Options") and restricted stock ("Restricted Stock")
(Incentive Stock Options, Non-qualified Stock Options and Restricted Stock are
collectively referred to herein as "Grants") to selected employees , directors,
agents, consultants, independent contractors and key advisors (collectively
referred to as "Grantees") so as to further the growth and development of the
Company and its subsidiaries. The Grants are intended to encourage Grantees to
contribute materially to the Company's success to obtain a proprietary interest
in the Company through ownership of its stock, thereby providing Grantees with
an added incentive to promote the best interests of the Company and affording
the Company a means of attracting persons of outstanding ability.
Common Stock Subject to the 2000 Plan
Under the 2000 Plan, subject to adjustment by reason of, among other
things, a stock dividend, spinoff, recapitalization, stock split or combination
or exchange of share, the aggregate number of shares of common stock of the
Company, $.01 par value ("Common Stock") that may be issued or transferred is
600,000 shares. The maximum aggregate number of shares of Common Stock that
shall be granted under the Plan to any individual during any calendar year shall
be 50,000 shares. The shares may be authorized but unissued shares of Common
Stock or reacquired shares of Common Stock, including shares purchased by the
Company on the open market. If and to the extent any shares which are the
subject of a Grant are forfeited, the shares subject to such Grant shall again
be available for a Grant under the 2000 Plan.
No Grants have been made under the 2000 Plan.
Termination
The Plan terminates on such date that is ten years from the date the
Plan is approved by the stockholders of the Company (unless sooner terminated at
the discretion of the Board of Directors).
Grant of Options
Under the 2000 Plan, Incentive Stock Options , qualifying under Section
422 of the Internal Revenue Code of 1986, as amended ("the "Code"), may be
granted to employees (including officers) of the Company and/or any of its
subsidiaries, and Non-qualified Stock Options (Incentive Stock Options and
Non-qualified Stock Options are collectively referred to as "Stock Options") may
be granted to employees, directors, consultants, agents, independent contractors
and such other persons as the Compensation Committee of the Board of Directors
(the "Committee") determines will contribute to the Company's success. The
Committee, which consists of two or more directors appointed by the Board of
Directors who themselves are not eligible for discretionary grants of Stock
Options, selects the Grantees under the 2000 Plan and determines (i) whether the
respective Stock Option is to be a Non-qualified Stock Option or an Incentive
Stock Option, (ii) the number of shares of Common Stock purchasable under the
option, (iii) the exercise price, which cannot be less than 100% of the fair
market value of the Common Stock on the date of grant with respect to Incentive
Stock Options (110% of fair market value in the case of an Incentive Stock
Option granted to an owner of stock possessing more than 10% of the total voting
power of all classes of stock of the Company (a "10% Owner")), (iv) the time or
times when the Stock Option becomes exercisable, and (v) the term of the option
(not to exceed ten years). Incentive Stock Options are not exercisable prior to
one year from the date of grant. The fair market value, determined as of the
date the option is granted, of shares exercisable for the first time by the
holder of an Incentive Stock Option may not exceed $100,000 in any calendar
year.
15
Exercise of Options
All options are exercisable during the Grantee's lifetime only by the
Grantee and only while the Grantee is an employee, director, consultant, agent,
independent contractor or otherwise employed by or engaged in performing
services for the Company or a subsidiary, either directly or through a
collaborating entity, and for a period of three months thereafter, except where
termination of employment or engagement is due to death or disability. In the
event of death or disability, the option is exercisable by the Grantee or the
Grantee's executor or administrator within one year from the date of death or
termination of employment by reason of such disability, only to the extent the
option would be exercisable by the Grantee as at such date. No option is
transferable other than by will or the laws of descent and distribution.
Options are exercisable by payment in cash to the Company, or a check
to its order, of the full purchase price for the shares of Common Stock to be
purchased, plus the amount, if any, required for withholding taxes in connection
with such exercise (the "Exercise Payment"); provided, however, that with the
consent of the Committee or such officer of the Company as may be authorized by
the Committee from time to time to give such consent, the Exercise Payment may
be paid by the surrender of Common Stock owned by the person exercising the
option and having a fair market value on the date of exercise equal to the
Exercise Payment, or in any combination of cash and Common Stock so long as the
total cash so paid and the fair market value of the Common Stock surrendered
equals the Exercise Payment, and the Common Stock so surrendered, if originally
issued to the optionee upon exercise of an option granted by the Company, shall
have been held by the optionee for more than six months.
Option Adjustments
The Plan contains a customary anti-dilution provision which provides
that in the event of any change in the Company's outstanding capital stock by
reason of stock dividends, recapitalizations, mergers, consolidations,
split-ups, combinations or exchanges of shares and the like, the aggregate
number of shares of Common Stock subject to outstanding options and the exercise
price are to be appropriately adjusted by the Board of Directors (or the
Committee), whose determination thereon shall be conclusive.
Restricted Stock Grants
Under the 2000, Plan Restricted Stock Grants may be granted to
employees (including officers) of the Company and/or any of its subsidiaries and
members of the Board of Directors. The 2000 Plan is administered by the
Compensation Committee of the Board of Directors which Committee under the 2000
Plan has the sole authority to (i) determine the individuals to whom Restricted
Stock Grants shall be made, (ii) determine the type, size and terms of the
grants to be made to each individual, (iii) determine the time when the
Restricted Stock Grants will be made and the duration of any applicable
restriction period, (iv) determine the amount of consideration to be paid by the
Grantee, if any, and (v) deal with any other matters arising under the 2000
Plan.
The Committee may establish conditions under which restrictions on
Restricted Stock will lapse over time or other triggering events. The period of
time during which the restrictions remain is referred to as "restricted period."
During the restricted period, a Grantee may not sell, assign, transfer, pledge
or otherwise dispose of the shares of Restricted Stock except by Will or the by
the laws of descent and distribution or, if permitted in any specific case by
the Committee, pursuant to a domestic relations order (as defined under the
Internal Revenue Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the regulations thereunder).
Restricted Stock Grant Adjustments
The 2000 Plan contains a customary anti-dilution provision which
provides that in the event of any change in the Company's outstanding capital
stock by reason of stock dividends, recapitalizations, mergers, consolidations,
split-ups, combinations or exchanges of shares and the like, the aggregate
number of shares of Common Stock subject to the 2000 Plan are to be
appropriately adjusted by the Board of Directors (or the Committee), whose
determination thereon shall be conclusive.
Amendments, Suspension and Termination
The Board has the authority to suspend, make changes in or additions to
the 2000 Plan as it deems desirable and the Board and the Committee may adopt
rules and regulations to carry out the 2000 Plan. The Board may not, without
stockholder approval, (i) increase the number of shares which may be reserved
for issuance under the 2000 Plan, (ii) adversely affect the rights of a holder
of a Grant previously granted under the 2000 Plan, (iii) modify materially the
eligibility requirements for participation in the 2000 Plan, or (iv) increase
materially the benefits accruing to participants under the Plan.
16
Federal Income Tax Consequences
Stock Options
Under current tax law, there are generally no Federal income tax
consequences to either the employee or the Company on the grant of Non-Qualified
Stock Options if granted under the terms set forth in the 2000 Plan and if the
option is not immediately exercisable. Upon exercise of such a Non-Qualified
Stock Option, the excess of the fair market value of the shares subject to the
option over the option price (the "Spread") at the date of exercise is taxable
as ordinary compensation income to the optionee in the year it is exercised and
is deductible by the Company as compensation for Federal income tax purposes, if
Federal income tax is withheld on the Spread. However, if the shares are subject
to vesting restrictions conditioned on future employment or the holder is
subject to the short-swing profits liability restrictions of Section 16(b) the
Exchange Act (i.e., is an executive officer, director or 10% stockholder of the
Company) then taxation and measurement of the Spread is deferred until such
restrictions lapse, unless a special election is made under Section 83(b) of the
Code to report such income currently without regard to such restrictions. The
optionee's basis in the shares will be equal to the fair market value on the
date taxation is imposed (determined without regard to marketability
restrictions imposed by the securities laws) and the holding period commences on
such date.
Holders of Incentive Stock Options incur no regular Federal income tax
liability at the time of grant or upon exercise of such option, assuming that
the optionee was an employee of the Company from the date the option was granted
until 90 days before such exercise. However, upon exercise, the Spread must be
added to regular Federal taxable income in computing the optionee's "alternative
minimum tax" liability. An optionee's basis in the shares received on exercise
of an Incentive Stock Option will be the option price of such shares for regular
income tax purposes. No deduction is allowable to the Company for Federal income
tax purposes in connection with the grant or exercise of such option.
If the holder of shares acquired through exercise of an Incentive Stock
Option sells such shares within two years of the date of grant of such option or
within one year from the date of exercise of such option (a "Disqualifying
Disposition"), the optionee will realize income taxable at ordinary rates.
Ordinary income is reportable during the year of such sale equal to the
difference between the option price and the fair market value of the shares at
the date the option is exercised, but the amount includable as ordinary income
shall not exceed the excess, if any, of the proceeds of such sale over the
option price. In addition to ordinary income, a Disqualifying Disposition may
result in taxable income subject to capital gains treatment if the sales
proceeds exceed the optionee's basis in the shares (i.e., the option price plus
the amount includable as ordinary income). The amount of the optionee's taxable
ordinary income will be deductible by the Company in the year of the
Disqualifying Disposition.
At the time of sale of shares received upon exercise of an option
(other than a Disqualifying Disposition of shares received upon the exercise of
an Incentive Stock Option), any gain or loss is long-term or short-term capital
gain or loss, depending upon the holding period. The holding period for
long-term capital gain or loss treatment is more than one year.
Restricted Stock Grant
All Restricted Stock Grants under the 2000 Plan shall be subject to
applicable Federal (including FICA), state and local withholding requirements.
The Company may require a Grantee or other person receiving such shares to pay
to the Company the amount of any such taxes that the Company is required to
withhold with respect to such Restricted Stock Grants, or the Company may deduct
from other wages paid by the Company the amount of any withholding taxes due
with respect to such Restricted Stock Grants.
The Committee may permit Grantees to satisfy the Company's income tax
withholding obligation with respect to a Restricted Stock Grant by either (i)
having shares withheld or (ii) obtaining a loan from the Company, up to an
amount that does not exceed the Grantee's maximum marginal tax rate for federal
(including FICA), state and local tax liabilities.
The foregoing is not intended to be an exhaustive analysis of the tax
consequences relating to stock options issued under the Plan. For instance, the
treatment of options under state and local tax laws, which are not described
above, may differ from their treatment for Federal income tax purposes.
Effective Date of the 2000 Plan
Subject to the approval of the 2000 Plan by the Company's stockholders,
the 2000 Plan will become effective May 23, 2000.
The Board of Directors recommends a vote FOR the approval and
ratification of the 2000 Long-Term Plan, and the persons named in the
accompanying proxy will vote in accordance with the choice specified thereon or,
if no choice is properly indicated, in favor of the approval and ratification.
17
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP,
independent auditors, to audit the financial statements of IntegraMed America,
Inc. for the fiscal year ending December 31, 2000. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the meeting with the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Under the Commission's proxy rules, shareholder proposals that meet
certain conditions may be included in IntegraMed America, Inc.'s proxy statement
and form of proxy for a particular annual meeting. Shareholders that intend to
present a proposal at IntegraMed America, Inc.'s 2001 Annual Meeting must give
notice of the proposal to IntegraMed America, Inc. no later than December 31,
2000 to be considered for inclusion in the proxy statement and form of proxy
relating to that meeting. Shareholders that intend to present a proposal that
will not be included in the proxy statement and form of proxy must give notice
of the proposal to IntegraMed America, Inc. no fewer than 90 days and no more
than 120 days prior to the date of the 2001 Annual Meeting. Receipt by
IntegraMed America, Inc. of any such proposal from a qualified shareholder in a
timely manner will not guarantee its inclusion in IntegraMed America, Inc.'s
proxy materials or its presentation at the 2001 Annual Meeting because there are
other requirements in the proxy rules.
Pursuant to Rule 14a-4 under the Securities Exchange Act of 1934, as
amended, IntegraMed America, Inc. intends to retain discretionary authority to
vote proxies with respect to shareholder proposals for which the proponent does
not seek inclusion of the proposed matter in IntegraMed America, Inc.'s proxy
statement for our 2001 Annual Meeting, except in circumstances where (i)
IntegraMed America, Inc. receives notice of the proposed matter no earlier than
January 2, 2001 and no later than February 1, 2001, and (ii) the proponent
complies with the other requirements set forth in Rule 14a-4.
GENERAL
The management of the Company does not know of any matters other than
those stated in this Proxy Statement which are to be presented for action at the
meeting. If any other matters should properly come before the meeting, it is
intended that proxies in the accompanying form will be voted on any such other
matters in accordance with the judgment of the persons voting such proxies.
Discretionary authority to vote on such matters is conferred by such proxies
upon the persons voting them. The Company will bear the cost of preparing,
printing, assembling and mailing the proxy, Proxy Statement and other material
which may be sent to stockholders in connection with this solicitation. It is
contemplated that brokerage houses will forward the proxy materials to
beneficial owners at the request of the Company. In addition to the solicitation
of proxies by use of the mails, officers and regular employees of the Company
may solicit by telephone proxies without additional compensation. The Company
does not expect to pay any compensation for the solicitation of proxies.
The Company will provide without charge to each person being solicited
by this Proxy Statement, on the written request of any such person, a copy of
the Annual Report of the Company on Form 10-K for the fiscal year ended December
31, 1999 (as filed with the Securities and Exchange Commission) including the
financial statements thereto. All such requests should be directed to Mr. John
W. Hlywak, Jr., Senior Vice President and Chief Financial Officer of IntegraMed
America, Inc., One Manhattanville Road, Purchase, New York 10577.
By Order of the Board
of Directors,
Aaron S. Lifchez, M.D.
Chairman of the Board
Dated: April 21, 2000
18
APPENDIX A
INTEGRAMED AMERICA, INC.
2000 LONG-TERM COMPENSATION PLAN
The purpose of the IntegraMed America, Inc. 2000 Long-Term Compensation
Plan (the "Plan") is to provide designated employees of IntegraMed America
Inc.(the "Company") and its subsidiaries, members of the Board of Directors,
agents of , consultants to , independent contractors of and key advisors to the
Company with the opportunity to receive grants of incentive stock options,
non-qualified stock options and restricted stock. The Company believes that the
Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefiting the Company's shareholders, and will align the
economic interests of the participants with those of the shareholders.
1. Administration
1.1 Committee. The Plan shall be administered and interpreted by the
Compensation Committee of the Board of Directors.
1.2 Committee Authority. The Committee shall have the sole authority
to (i) determine the individuals to whom grants shall be made under the Plan,
(ii) determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable restriction period, and (iv) deal with any other
matters arising under the Plan.
1.3 Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Grants Awards under the Plan may consist of incentive stock
options as described in Section 5 ("Incentive Stock Options"), non-qualified
stock options as described in Section 5 ("Non-qualified Stock
Options")(Incentive Stock Options and Non-qualified Stock Options are
collectively referred to herein as "Options"), and restricted stock as described
in Section 6 ("Restricted Stock")(Incentive Stock Options, Non-Qualified Stock
Options and Restricted Stock are collectively referred to herein as "Grants").
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in a grant instrument (the "Grant Instrument") or an amendment to the Grant
Instrument. The Committee shall approve the basic form and provisions of each
Grant Instrument. Grants under a particular Section of the Plan need not be
uniform as among the Grantees.
3. Term of Plan/Shares Subject to the Plan
3.1 Term. The Plan shall terminate on such date as is 10 years from
the date the stokholders approve the Plan, except with respect to awards then
outstanding. After such date no further awards shall granted under the Plan.
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3.2 Shares Authorized. Subject to the adjustment specified below, the
aggregate number of shares of common stock of the Company, $.01 par value
("Company Stock") that may be issued or transferred under the Plan is 600,000
shares. The maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year
shall be 50,000 shares. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan. If and to the extent
any shares of Restricted Stock are forfeited, the shares subject to such Grants
shall again be available for purposes of the Plan.
3.3 Adjustments. If there is any change in the number or kind of
shares of Company Stock outstanding (i) by reason of a stock dividend, spin-off,
recapitalization, stock split or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spin-off or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share or the applicable market value of such Grants
shall be appropriately adjusted by the Committee to reflect any increase or
decrease in the number of, or change in the kind or value of, issued shares of
Company Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated by rounding
any portion of a share equal to .5 or greater up, and any portion of a share
equal to less than .5 down, in each case to the nearest whole number. Any
adjustments determined by the Committee shall be final, binding and conclusive.
4. Eligibility for Participation
4.1 Eligible Persons. All employees of the Company and its
subsidiaries, including employees who are officers or members of the Board,
individuals to whom an offer of employment has been extended , members of the
Board , agents of , consultants to, independent contractors of, and key advisors
to the Company (collectively referred to herein as "Grantees") shall be eligible
to participate in the Plan.
4.2 Selection of Grantees. The Committee shall select the Grantees to
receive Grants and shall determine the number of shares of Company Stock subject
to a particular Grant in such manner as the Committee determines.
5. Granting of Options.
5.1 Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each Grantees.
5.2 Type of Option and Price.
5.2.1 The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the
meaning of section 422 of the Internal Revenue Code of 1986, as
amended and related Treasury Regulations (the "Code"),
Nonqualified Stock Options that are not intended so to qualify,
or any combination of Incentive Stock Options and Nonqualified
Stock Options, all in accordance with the terms and conditions
set forth herein. Incentive Stock Options may be granted only to
employees. Nonqualified Stock Options may be granted to
employees, directors, agents, independent contractors and key
advisors.
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5.2.2 The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may
be equal to, greater than, or less than the Fair Market Value (as
defined below) of a share of Company Stock on the date the Option
is granted, provided, however, that (i) the Exercise Price of an
Incentive Stock Option shall be equal to, or greater than, the
Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (ii) an Incentive Stock
Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent
or subsidiary of the Company, unless the Exercise Price per share
is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.
5.2.3 If the Company Stock is publicly traded, then, except as
otherwise determined by the Committee, the following rules
regarding the determination of Fair Market Value per share apply:
(i) if the principal trading market for the Company Stock is a
national securities exchange or The Nasdaq National Market, the
mean between the highest and lowest quoted selling prices on the
relevant date or (if there were no trades on that date) the
latest preceding date upon which a sale was reported, or
(ii) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and
"asked" prices of Company Stock on the relevant date, as reported
on The Nasdaq National Market or as reported in a customary
financial reporting service, as applicable and as the Committee
determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid"
or "asked" quotations as set forth above, the Fair Market Value
per share shall be as determined by the Committee.
5.3 Option Term. The Committee shall determine the term of each
Option. The term of any Option shall not exceed ten years from the date of
grant. However, an Incentive Stock Option that is granted to an Employee who, at
the time of grant, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company, or any parent or
subsidiary of the Company, may not have a term that exceeds five years from the
date of grant.
5.4 Exercisability of Options.
5.4.1 Options shall become exercisable in accordance with such
terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument
or an amendment to the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options
at any time for any reason.
5.4.2 Notwithstanding the foregoing, the Option may, but need
not, include a provision whereby the Grantee may elect at any
time to exercise the Option as to any part or all of the shares
subject to the Option prior to the full vesting of the Option.
Any unvested shares so purchased shall be subject to a repurchase
right in favor of the Company, with the repurchase price to be
equal to the original purchase price, and any other restrictions
the Committee determines to be appropriate.
5.5 Termination of Employment, Disability or Death.
5.5.1 Except as provided below, an Option may only be exercised
while the Grantee is employed by, member of the Board, agent of,
consultant to, independent contractor of or key advisor to the
Company. In the event that a Grantee's status changes for any
reason other than a "disability," death or "termination for
cause," any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within 90 days after the date on
which the Grantee ceases to be employed by the Company (or within
such other period of time as may be specified by the Committee),
but in any event no later than the date of expiration of the
Option term. Any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be
employed by the Company shall terminate as of such date.
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5.5.2 In the event the Grantee ceases to be employed by the
Company on account of a "termination for cause" by the Company,
any Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by the Company.
5.5.3 In the event the Grantee ceases to be employed by the
Company because the Grantee is "disabled," any Option which is
otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee
ceases to be employed by the Company (or within such other period
of time as may be specified by the Committee), but in any event
no later than the date of expiration of the Option term. Any of
the Grantee's Options which are not otherwise exercisable as of
the date on which the Grantee ceases to be employed by the
Company shall terminate as of such date.
5.5.4 If the Grantee dies while employed by the Company or within
90 days after the date on which the Grantee ceases to be employed
on account of a termination of employment specified in Section
5.5.1 above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be
employed by the Company (or within such other period of time as
may be specified by the Committee), but in any event no later
than the date of expiration of the Option term. Any of the
Grantee's Options that are not otherwise exercisable as of the
date on which the Grantee ceases to be employed by the Company
shall terminate as of such date.
5.5.5 For purposes of Sections 5.5 and 6:
(i) "Company," when used in the phrase "employed by the Company,"
shall mean the Company and its parent, subsidiary corporations,
and any business venture in which the Company has a significant
interest.
(ii) "Employed by the Company" shall mean employment or service
as an Employee of IntegraMed America, Inc. or any subsidiary or
business venture in which the Company has a significant interest,
Key Advisor, or member of the Board (so that, for purposes of
exercising Options, and satisfying conditions with respect to
Restricted Stock, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to be
an Employee of IntegraMed America, Inc. or any subsidiary or
business venture in which the Company has a significant interest,
or member of the Board), unless the Committee determines
otherwise. The Committee's determination as to a participant's
employment or other provision of services, termination of
employment or cessation of the provision of services, leave of
absence, or reemployment shall be conclusive on all persons
unless determined to be incorrect.
(iii) "Disability" shall mean a Grantee's becoming disabled
within the meaning of section 22(e)(3) of the Code.
(iv) "Termination for cause" shall mean the determination of the
Committee that any one or more of the following events has
occurred:
(A) the Grantee's conviction of any act which constitutes a
felony under applicable federal or state law, either in
connection with the performance of the Grantee's obligations on
behalf of the Company or which affects the Grantee's ability to
perform his or her obligations as an employee, board member or
advisor of the Company or under any employment agreement,
non-competition agreement, confidentiality agreement or like
agreement or covenant between the Grantee and the Company (any
such agreement or covenant being herein referred to as an
"Employment Agreement");
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(B) the Grantee's willful misconduct in connection with the
performance of his or her duties and responsibilities as an
employee, board member or advisor of the Company or under any
Employment Agreement, which willful misconduct is not cured by
the Grantee within 10 days of his or her receipt of written
notice thereof from the Committee;
(C) the Grantee's commission of an act of embezzlement, fraud or
dishonesty which results in a loss, damage or injury to the
Company;
(D) the Grantee's substantial and continuing neglect, gross
negligence or inattention in the performance of his or her duties
as an employee, board member or advisor of the Company or under
any Employment Agreement which is not cured by the Grantee within
10 days of his or her receipt of written notice thereof from the
Committee;
(E) the Grantee's unauthorized use or disclosure or any trade
secret or confidential information of the Company which adversely
affects the business of the Company, provided that any disclosure
of any trade secret or confidential information of the Company to
a third party in the ordinary course of business who signs a
confidentiality agreement shall not be deemed a breach of this
subparagraph;
(F) the Grantee's material breach of any of the provisions of any
Employment Agreement, which material breach is not cured by the
Grantee within 10 days of his or her receipt of a written notice
from the Company specifying such material breach; or
(G) the Grantee has voluntarily terminated his or her employment
or service with the Company and breaches his or her
non-competition agreement with the Company.
5.6 Exercise of Options. A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option as specified by the Committee:
5.6.1 in cash,
5.6.2 by delivering shares of Company Stock owned by the Grantee
for the period necessary to avoid a charge to the Company's
earnings for financial reporting purposes (including Company
Stock acquired in connection with the exercise of an Option,
subject to such restrictions as the Committee deems appropriate)
and having a Fair Market Value on the date of exercise equal to
the Exercise Price,
5.6.3 by payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board, or
5.6.4 by such other method of payment as the Committee may
approve.
Shares of Company Stock used to exercise an Option shall have been held
by the Grantee for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option. The Grantee shall pay
the Exercise Price and the amount of any withholding tax due (pursuant to
Section 7 ) at the time of exercise.
5.7 Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the option, as to the excess, shall be treated as a Nonqualified
Stock Option. An Incentive Stock Option shall not be granted to any person who
is not an Employee of the Company or a parent or subsidiary (within the meaning
of section 424(f) of the Code). No Incentive Stock Option shall be exercisable
sooner than one year from the date of grant.
6. Restricted Stock Grants. The Committee may issue or transfer shares
of Company Stock to a Grantee under a Grant of Restricted Stock upon such terms
as the Committee deems appropriate. The following provisions are applicable to
Restricted Stock:
6.1 General Requirements. Shares of Company Stock issued or transferred
pursuant to Restricted Stock Grants may be issued or transferred for no
consideration, as determined by the Committee. The Committee may establish
conditions under which restrictions on shares of Restricted Stock shall lapse
over a period of time or according to such other criteria as the Committee deems
appropriate. The period of time during which the Restricted Stock will remain
subject to restrictions will be designated in the Grant Instrument as the
"Restriction Period."
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6.2 Number of Shares. The Committee shall determine the number of
shares of Company Stock to be issued or transferred pursuant to a Restricted
Stock Grant and the restrictions applicable to such shares.
6.3 Requirement of Relationship. If the Grantee ceases to be employed
by, a member of the Board, an agent of, consultant to, independent contractor
to, or key advisors to the Company other than for reasons of death or permanent
disability during a period designated in the Grant Instrument as the Restriction
Period, or if other specified conditions are not met, the Restricted Stock Grant
shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and those shares of Company Stock must be
immediately returned to the Company. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.
6.4 Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 7. Each certificate for a share of Restricted Stock shall
contain a legend giving appropriate notice of the restrictions in the Grant. The
Grantee shall be entitled to have the legend removed from the stock certificate
covering the shares subject to restrictions when all restrictions on such shares
have lapsed. The Committee may determine that the Company will not issue
certificates for shares of Restricted Stock until all restrictions on such
shares have lapsed, or that the Company will retain possession of certificates
for shares of Restricted Stock until all restrictions on such shares have
lapsed. The certificates shall bear, among other required legends, the following
legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including,
without limitation, forfeiture events) contained in the IntegraMed
America, Inc. 2000 Equity Compensation Plan and an Award Agreement
entered into between the registered owner hereof and IntegraMed
America, Inc. Copies of such Plan and Award Agreement are on file in
the office of the Secretary of IntegraMed America, Inc., One
Manhattanville Road, Purchase, New York 10577. IntegraMed America, Inc.
will furnish to the record holder of the certificate, without charge
and upon written request at its principal place of business, a copy of
such Plan and Award Agreement. IntegraMed America, Inc. reserves the
right to refuse to record the transfer of this certificate until all
such restrictions are satisfied, all such terms are complied with and
all such conditions are satisfied."
6.5 Right to Vote and to Receive Dividends. Unless the Committee
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Restricted Stock and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee.
6.6 Lapse of Restrictions. All restrictions imposed on Restricted Stock
shall lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Restricted Stock Grants, that the restrictions shall
lapse without regard to any Restriction Period.
7. Withholding of Taxes
7.1 Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving such
shares to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Grants, or the Company may deduct from
other wages paid by the Company the amount of any withholding taxes due with
respect to such Grants.
7.2 Election to Withhold Shares. If the Committee so permits, a Grantee
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option or Restricted Stock Grant by having shares withheld up to
an amount that does not exceed the Grantee's maximum marginal tax rate for
federal (including FICA), state and local tax liabilities. The election must be
in a form and manner prescribed by the Committee and shall be subject to the
prior approval of the Committee.
7.3 Payment of Taxes Through Company Loan. If the Committee so permits,
a Grantee may elect to satisfy the Company's income tax withholding obligation
with respect to a Restricted Stock Grant by obtaining a loan from the Company up
to an amount that does not exceed the Grantee's maximum marginal tax rate for
federal (including FICA), state and local tax liabilities. The election must be
in a form and manner prescribed by the Committee and shall be subject to the
prior approval of the Committee.
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8. Transferability of Grants
8.1. Non-transferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Grants other than Incentive Stock Options,
if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations thereunder). When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of his or her
right to receive the Grant under the Grantee's will or under the applicable laws
of descent and distribution.
8.2 Transfer of Non-qualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Non-qualified Stock Options to family members or other persons or
entities according to such terms as the Committee may determine; provided that
the Grantee receives no consideration for the transfer of a Non-qualified Stock
Option and the transferred Non-qualified Stock Option shall continue to be
subject to the same terms and conditions as were applicable to the Non-qualified
Option immediately before the transfer.
9. Reorganization of the Company.
9.1 Reorganization. As used herein, a "Reorganization" shall be deemed
to have occurred if the shareholders of the Company approve (or, if shareholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the Company with another corporation where the
shareholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to more than 50% of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.
9.2 Assumption of Grants. Upon a Reorganization where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
or rights by, the surviving corporation.
9.3 Other Alternatives. Notwithstanding the foregoing, in the event of
a Reorganization, the Committee may take one or both of the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options
in exchange for a payment by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceeds the Exercise Price of the Options, or (ii) after giving Grantees
an opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Committee deems appropriate. Such
surrender or termination shall take place as of the date of the Reorganization
or such other date as the Committee may specify.
9.4 Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Reorganization, the Committee shall not have the right to take
any actions described in the Plan (including without limitation actions
described in Subsection (b) above) that would make the Reorganization ineligible
for pooling of interests accounting treatment or that would make the
Reorganization ineligible for desired tax treatment if, in the absence of such
right, the Reorganization would qualify for such treatment and the Company
intends to use such treatment with respect to the Reorganization.
10. Change of Control of the Company.
10.1 As used herein, a "Change of Control" shall be deemed to have
occurred if.
10.1.1 Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as
defined in Rule 13d- 3 under the Exchange Act), directly or
indirectly, of securities of the Company representing a majority
of the voting power of the then outstanding securities of the
Company except where the acquisition is approved by the Board;
or
10.1.2 Any person has commenced a tender offer or exchange offer
for a majority of the voting power of the then outstanding
shares of the Company.
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10.2 Notice and Acceleration. Unless the Committee determines
otherwise, a Change of Control shall result in the acceleration of the vesting
of outstanding Options and the removal of restrictions and conditions on
outstanding Restricted Stock Grants.
10.3 Other Alternatives. Notwithstanding the foregoing, in the event of
a Change in Control, the Committee may take one or both the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options
in exchange for a payment by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceed the Exercise Price of the Options, or (ii) giving Grantees an
opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Committee deems appropriate. Such
surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.
10.4 Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Change of Control, the Committee shall not have the right to
take any actions described in the Plan (including without limitation actions
described in Section 10.3 above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
11. Requirements for Issuance or Transfer of Shares
11.1 Shareholder's Agreement. The Committee may require that a Grantee
execute a shareholder's agreement, with such terms as the Committee deems
appropriate, with respect to any Company Stock distributed pursuant to this
Plan.
11.2 Limitations on Issuance or Transfer of Shares. No Company Stock
shall be issued or transferred in connection with any Grant hereunder unless and
until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.
12. Amendment, Suspension and Termination of the Plan
12.1 Amendment. The Board may amend, suspend or terminate the Plan at
any time.
12.2 Termination of Plan. The Plan shall terminate on the date
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the shareholders.
12.3 Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents. The termination of
the Plan shall not impair the power and authority of the Committee with respect
to an outstanding Grant. Whether or not the Plan has terminated, an outstanding
Grant may be terminated or amended in accordance with the Plan or may be amended
by agreement of the Company and the Grantee consistent with the Plan.
12.4 Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
13. Rights of Grantees. Nothing in this Plan shall entitle any Grantee
or other person to any claim or right to be granted a Grant under this Plan.
Neither this Plan nor any action taken hereunder shall be construed as giving
any individual any rights to be retained by or in the employ of the Company or
any other employment rights.
14. No Fractional Shares. No fractional shares of Company Stock shall
be issued or delivered pursuant to the Plan or any Grant. The Committee shall
determine whether cash, other awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
15. Headings. Section headings are for reference only. In the event of
a conflict between a title and the content of a Section, the content of the
Section shall control.
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16. Miscellaneous.
16.1 Compliance with Law. The Plan and the obligations of the Company
to issue or transfer shares of Company Stock under Grants shall be subject to
all applicable laws and to approvals by any governmental or regulatory agency as
may be required. With respect to persons subject to section 16 of the Exchange
Act, it is the intent of the Company that the Plan and all transactions under
the Plan comply with all applicable provisions of Rule 16b-3 or its successors
under the Exchange Act. The Committee may revoke any Grant if it is contrary to
law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.
16.2 No Right to Employment. Neither the adoption of the Plan, the
granting of any Grant, nor the execution of any Grant Instrument, shall confer
upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.
16.3 Unfunded Plan. The Plan shall be unfunded and the Company shall
not be required to segregate any assets in connection with any Grants under the
Plan. Any liability of the Company to any person with respect to any Grant under
the Plan or any Grant Instrument shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any such Grant
Instrument. No such obligation of the Company shall be deemed to be secured by
any pledge of, encumbrance on, or other interest in, any property or asset of
the Company or any Subsidiary. Nothing contained in the Plan or any Grant
Instrument shall be construed as creating in respect of any Grantee (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Grantee, any beneficiary thereof or any other person.
16.4 Other Company Benefit and Compensation Programs. Payments and
other benefits received by a Grantee under a Grant made pursuant to the Plan
shall not be deemed a part of a Grantee's compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary unless expressly
provided in such other plans or arrangements, or except where the Committee
expressly determines in writing that inclusion of a Grant or portion of a Grant
should be included to reflect accurately competitive compensation practices or
to recognize that a Grant has been made in lieu of a portion of competitive
annual base salary or other cash compensation. Grants under the Plan may be made
in addition to, in combination with, or as alternatives to, grants, awards or
payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.
16.5 Listing, Registration and Other Legal Compliance. No Grants or
shares of the Company Stock shall be required to be issued or granted under the
Plan unless legal counsel for the Company shall be satisfied that such issuance
or grant will be in compliance with all applicable federal and state securities
laws and regulations and any other applicable laws or regulations. The Committee
may require, as a condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or information, as
the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations.
Certificates for shares of the Restricted Shares and/ or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules, regulations,
or other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities law. In addition, if, at any time specified herein (or in
any Grant Instrument or otherwise) for (a) the making of any Award, or the
making of any determination, (b) the issuance or other distribution of
Restricted Shares and/ or Common Stock, or (c ) the payment of amounts to or
through a Participant with respect to any Grant, any law, rule, regulation or
other requirement of any governmental authority or agency shall require either
the Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
to persons subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act.
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16.6 Grant Instrument. Each Participant receiving a Grant under the
Plan shall enter into a Grant Instrument with the Company in a form specified by
the Committee. Each such Participant shall agree to the restrictions, terms and
conditions of the Grant set forth therein and in the Plan.
16.7 Designation of Beneficiary. Each Grantee to whom a Grant has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Option or to receive any payment which under the terms of the Plan and the
relevant Grant Instrument may become exercisable or payable on or after the
Grantee's death. At any time, and from time to time, any such designation may be
changed or cancelled by the Grantee without the consent of any such beneficiary.
Any such designation, change or cancellation must be on a form provided for that
purpose by the Committee and shall not be effective until received by the
Committee or individual designated by the Committee. If no beneficiary has been
designated by a deceased Grantee, or if the designated beneficiaries have
predeceased the Grantee, the beneficiary shall be the Grantee's estate. If the
Grantee designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be made in equal shares unless the Grantee has
expressly designated otherwise, in which case the payments shall be made in the
shares designated by the Grantee.
16.8 Leaves of Absence/Transfers. The Committee shall have the power to
promulgate rules and regulations and to make determinations, as it deems
appropriate, under the Plan in respect of any leave of absence from the Company
or any Subsidiary granted to a Grantee. Without limiting the generality of the
foregoing, the Committee may determine whether any such leave of absence shall
be treated as if the Grantee has terminated employment with the Company or any
such Subsidiary. If a Grantee transfers within the Company, or to or from any
Subsidiary, such Grantee shall not be deemed to have terminated employment as a
result of such transfers.
16.9 Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of New
York.
16.10 Effective Date of the Plan Subject to the approval of the
Company's shareholders, the Plan shall be effective on May 23, 2000.
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Proxy
IntegraMed America, Inc.
Annual Meeting of Stockholders
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Gerardo Canet or Claude E. White as
proxy to represent the undersigned at the Annual Meeting of Stockholders to be
held at the Company's headquarters, One Manhattanville Road, Purchase, New York
10577 on May 23, 2000 at 10:00 a.m. and at any adjournments thereof, and to vote
the shares of Common Stock and/or Preferred Stock the undersigned would be
entitled to vote if personally present, as indicated on the reverse:
(To be Signed on Reverse Side)
[X] Please mark your votes as in this example
FOR all nominees WITHHOLD AUTHORITY
listed at right to vote for all
(except as indicated nominees listed at
to the contrary below right
1. ELECTION OF DIRECTORS [ ] [ ] NOMINEES: Gerardo Canet
M. Fazle Husain
(INSTRUCTIONS: To withhold Michael J. Levy, M.D.
authority to vote for any nominee, Sarason D. Liebler
print that nominees name(s) on the Aaron S. Lifchez, M.D.
on the line provided below) Patricia M. Mcshane, M.D.
Lawrence Stuesser
Elizabeth E. Tallett
____________________________________________________________
2. Approval and ratification of the Company's 2000 Long-Term Compensation Plan
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, proxies are authorized to vote upon such business as
may properly come before the meeting.
The shares of Common Stock and/or Preferred Stock represented by this proxy
will be voted as directed. If no contrary instruction is given, the shares of
Common Stock and/or Preferred Stock will be voted FOR the election of the
nominees and FOR the approval and ratification of the 2000 Long-Term
Compensation Plan.
Signature___________________ Date__________ Signature______________Date_________
Note: (Please date, sign as name appears above, and return promptly. If the
shares of Common Stock and/or Preferred Stock are registered in the
names of two or more persons, each should sign. When signing as
Corporate Officer, Partner, Executor, Administrator, Trustee or
Guardian, please give full title. Please note any changes in your
address alongside the address as it appears in the proxy.)