UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 15, 2004
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Health Grades, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-22019 62-1623449
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
44 Union Boulevard, Suite 600
Lakewood, Colorado 80228
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (303) 716-0041
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240. 14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Reference is made to information contained in Item 5.02 of this report regarding
the salary payable to, and options granted to, J.D. Kleinke, Vice Chairman of
Health Grades, Inc. ("Health Grades"). Such information is incorporated into
this Item 1.01 by reference.
ITEM 5.02. DEPARTURES OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
On December 15, 2004, the Board of Directors of Health Grades, Inc. ("Health
Grades") appointed J.D. Kleinke Vice Chairman of the Board of Directors,
effective January 1, 2005. This is an executive position, and Mr. Kleinke has
become a part-time employee of the Company. In connection with Mr. Kleinke's
appointment, the Compensation Committee of the Board of Directors of Health
Grades determined that Mr. Kleinke's salary will be $100,000 per annum, and
granted options to Mr. Kleinke to purchase 150,000 shares of Health Grades
common stock at an exercise price of $3.00 per share. The shares underlying the
option vest in equal increments on each of the first three anniversaries of the
date of grant, and the option has a ten year term.
Mr. Kleinke is 43 years old. He has served as a director of Health Grades since
April 2002. Since September 2004, Mr. Kleinke has served as Chairman of the
Board and Executive Director of Omnimedix Institute, a non-profit healthcare
research and information technology development organization. In addition, since
April 1998, Mr. Kleinke has served as President and Chief Executive Officer of
HSN, a healthcare consulting company owned by Mr. Kleinke. From May 1992 to
February 1998, Mr. Kleinke served in various capacities for HCIA, Inc., a
healthcare information company that provides information products and services
to healthcare systems, managed care organizations and pharmaceutical companies.
Mr. Kleinke will continue to serve Omnimedix Institute and HSN in the capacities
described above.
The Board of Directors also elected Kerry R. Hicks, Health Grades' President and
Chief Executive Officer, to the additional position of Chairman of the Board of
Directors.
In addition, also on December 15, 2004, the Board of Directors of Health Grades
elected Mark Pacala to the Board of Directors. Mr. Pacala is a Managing Director
of Essex Woodlands Health Ventures, a healthcare industry venture capital firm.
Essex Woodlands Health Ventures Fund IV, L.P., an affiliate of Essex Woodlands,
holds approximately 37% of Health Grades' outstanding common stock.
Health Grades; Kerry Hicks, Health Grades' Chairman, President and Chief
Executive Officer; David Hicks, Health Grades' Executive Vice President -
Information Technology; Sarah Loughran, Health Grades' Executive Vice President
- - Provider Services; and certain of Health Grades' former executive officers
have agreed to take such actions (including in the case of the individuals,
voting their shares) as are in their control so that (1) Health Grades' Board of
Directors is comprised of no more than eight members and (2) one designee of
Essex Woodlands Health Ventures Fund IV, L.P. is elected to the Board of
Directors. Mr. Pacala was elected to the Board of Directors pursuant to the
designation of Essex Woodlands Health Ventures Fund IV, L.P.
Mr. Pacala was named to serve on the Compensation Committee of the Board of
Directors.
In connection with the actions described above, the Board of Directors
reconstituted its two committees. The members of the Audit Committee are Peter
H. Cheesbrough (Chairman), Leslie S. Matthews, M.D. and John J. Quattrone. The
members of the Compensation Committee are Mr. Quattrone (Chairman),
Mr. Cheesbrough and Mr. Pacala.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTH GRADES, INC.
(Registrant)
By: /s/ ALLEN DODGE
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Allen Dodge
Senior Vice President - Finance
and Chief Financial Officer
Dated: January 21, 2005