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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant[X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Oacis Healthcare Holdings Corp.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
___________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
___________________________________________________________________________
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[ ] 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:
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4) Date Filed:
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OACIS HEALTHCARE HOLDINGS CORP.
100 DRAKE'S LANDING ROAD, SUITE 100
GREENBRAE, CALIFORNIA 94904
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NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 1998
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TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Oacis
Healthcare Holdings Corp., a Delaware corporation (the "Company"), will be held
on Wednesday, June 17, 1998 at 3:00 p.m., local time, at the Wyndham Garden
Hotel, 1010 Northgate Drive, San Rafael, California 94903, for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected;
2. To ratify the selection of Price Waterhouse LLP as the
independent auditors of the Company for the fiscal year ending
December 31, 1998;
3. To approve an amendment to the Company's 1996 Stock Plan
increasing the total number of shares of Common Stock reserved
for options issued thereunder from 850,000 shares to 1,700,000
shares; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 22, 1998
are entitled to notice of and to vote at this meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy card as promptly as possible in the enclosed
self-addressed envelope. Any stockholder attending the meeting may vote in
person even if he or she returned a proxy. However, if a stockholder's shares
are held of record by a broker, bank or other nominee and the stockholder wishes
to vote at the meeting, the stockholder must obtain from the record holder a
proxy issued in his or her name.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ STEPHEN F. GHIGLIERI
---------------------------------------------
Stephen F. Ghiglieri
Vice President of Finance and Administration,
Chief Financial Officer and Secretary
Greenbrae, California
May 15, 1998
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OACIS HEALTHCARE HOLDINGS CORP.
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PROXY STATEMENT
1998 ANNUAL MEETING OF STOCKHOLDERS
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The enclosed Proxy is solicited on behalf of the Board of Directors (the
"Board") of Oacis Healthcare Holdings Corp., a Delaware corporation (the
"Company"), for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held on Wednesday, June 17, 1998 at 3:00 p.m., local time, at the Wyndham
Garden Hotel, 1010 Northgate Drive, San Rafael, California 94903, or at any
adjournment thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Company's principal executive
offices are located at 100 Drake's Landing Road, Suite 100, Greenbrae,
California 94904. The Company's telephone number at that location is (415)
925-0121.
The Company intends to mail this proxy statement and accompanying proxy
card on or about May 15, 1998 to all stockholders entitled to vote at the
meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARE OWNERSHIP
Stockholders of record at the close of business on April 22, 1998 (the
"Record Date"), are entitled to notice of and to vote at the annual meeting. At
the Record Date, 10,350,931 shares of the Company's common stock ("Common
Stock") were issued and outstanding and held of record by approximately 2,000
stockholders.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company
(attention: Stephen F. Ghiglieri, Vice President of Finance and Administration,
Chief Financial Officer and Secretary) a written notice of revocation or a duly
executed proxy bearing a later date or by attending the meeting of stockholders
and voting in person.
VOTING AND SOLICITATION
Each share of Common Stock outstanding on the Record Date is entitled to
one vote. The required quorum for the transaction of business at the Annual
Meeting is a majority of the votes eligible to be cast by holders of shares of
Common Stock issued and outstanding on the Record Date. For purposes of
determining the presence of a quorum, abstentions and broker non-votes will be
counted by the Company as present at the meeting. Abstentions will also be
counted by the Company in determining the total number of votes cast with
respect to a proposal (other than the election of directors). Broker non-votes
will not be counted in determining the number of votes cast with respect to a
proposal.
The cost of soliciting proxies will be borne by the Company. Proxies may
be solicited by certain of the Company's directors, officers and regular
employees, without additional compensation, in person or by telephone or
facsimile. In addition, the Company may retain the services of one or more firms
to assist in the solicitation of proxies, for an estimated fee of $5,000 plus
reimbursement of expenses. In addition, the Company may reimburse brokerage
firms and other persons representing beneficial owners of shares for their
expenses in forwarding solicitation materials to such beneficial owners.
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PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The Company's Bylaws provide for a variable Board of Directors of from
one to nine, with the number currently fixed at eight directors. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the nominees named below, all of whom are presently directors of the
Company. If any nominee is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee designated by
the present Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director. If stockholders
nominate persons other than the Company's nominees for election as directors,
the proxy holders will vote all proxies received by them to assure the election
of as many of the Company's nominees as possible, with the proxy holder making
any required selection of specific nominees to be voted for. The term of office
of each person elected as a director will continue until the next annual meeting
of stockholders or until his earlier death, resignation or removal. There is no
family relationship between any director and any other director or executive
officer of the Company.
Certain information regarding the nominees is set forth below:
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- - --------------- --- -------------------- --------------
Jim McCord......................... 55 Chairman of the Board and Chief 1994
Executive Officer of the Company
Alan W. Crites..................... 45 General Partner of InterWest Partners 1995
David Dominik...................... 41 General Partner of Information 1994
Partners
Fred Goad.......................... 57 Chairman and Co-Chief Executive 1996
Officer of ENVOY Corporation
John Kingery....................... 52 President and Chief Operating Officer 1997
of the Company
Dennis G. Sisco.................... 51 Partner of Behrman Capital 1994
William H. Younger, Jr............. 48 Venture Capitalist 1994
Jim McCord joined the Company in May 1994 as Chief Executive Officer and
has served as a director since joining the Company. In March 1996, he was
appointed Chairman of the Board of Directors. From January 1986 to March 1994,
Mr. McCord served as a Vice President of Shared Medical Systems Corporation
("SMS") where he started and managed the Decision Support Systems Group, an
independent business unit that provides analytic products and services to senior
healthcare managers and professionals in the SMS client base. From 1974 through
1985, Mr. McCord was founder and Chief Executive Officer of SysteMetrics, Inc.,
a health services research and information company that is now part of Medical
Economics, a Thompson Communications Company.
Alan W. Crites has served as a director of the Company since May 1995.
He has been a General Partner of InterWest Partners, a venture capital
investment firm, since November 1989. He also serves as a director of Gadzooks,
Inc., and several privately held companies.
David Dominik has served as a director of the Company since May 1994.
Mr. Dominik has been a General Partner of Information Partners, the General
Partner of Information Partners Capital Fund, L.P., a venture capital investment
firm, since January 1990, and Managing Director of Information Partners, Inc.
since June 1993. In addition, he has been Managing Director of Bain Capital,
Inc., an investment firm, since June 1993 and is a General Partner of BCIP
Associates and BCIP Trust Associates, L.P.
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Fred Goad joined the Company as a director in October 1996. Mr. Goad
joined ENVOY Corporation, a data transactions company, in August 1984 as a
director and President, and was elected Chairman and Co-Chief Executive Officer
in 1995. Mr. Goad also serves as a director of Performance Food Group, Inc. and
three privately held companies. Mr. Goad was a founding member of the Nashville
Healthcare Council.
John Kingery served as a consultant to the Company from February 1996 to
March 1996, at which time he joined the Company as President and Chief Operating
Officer. He was appointed as a director in January 1997. From June 1992 to March
1996, Mr. Kingery provided interim management and consulting services to
high-growth companies. From January 1991 to May 1992, he was the founder and
President of Summit Credit Corporation, a company that arranges financing for
medical diagnostic imaging equipment.
Dennis G. Sisco has served as a director of the Company since May 1994.
Mr. Sisco has been a partner of Behrman Capital, a private equity investment
firm, since January 1998. From 1988 to February 1997 he was employed by the Dun
& Bradstreet Corporation and Cognizant Corporation, which was spun off from Dun
& Bradstreet in November 1996. At Dun & Bradstreet and Cognizant, Mr. Sisco was
an Executive Vice President with responsibility for several operating units as
well as business development. He also serves as a director of Gartner Group,
Inc., Aspect Development, Inc. and TSI Software International.
William H. Younger, Jr. has served as a director of the Company since
May 1994. Mr. Younger is a managing director of the general partner of Sutter
Hill Ventures, a venture capital investment firm, where he has been employed
since 1981. He also serves as a director of Celeritek, FORTE Software,
Information Advantage and several privately held companies.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held six meetings during the fiscal year ended
December 31, 1997. The Board of Directors has an Audit Committee and a
Compensation Committee but does not have a nominating committee or a committee
performing the function of a nominating committee. From time to time, the Board
has created various ad hoc committees for special purposes. No such committee is
currently functioning.
The Audit Committee currently consists of directors Alan C. Crites and
William H. Younger, Jr. The Audit Committee held two meetings during the last
fiscal year. The Audit Committee reviews the internal accounting procedures of
the Company and consults with and reviews the services provided by the Company's
independent auditors.
The Compensation Committee currently consists of directors David
Dominik, Dennis G. Sisco and William H. Younger, Jr. The Compensation Committee
held two meetings during the last fiscal year. The Compensation Committee
reviews and recommends to the Board the compensation and benefits of all
executive officers of the Company, administers the Company's 1996 Stock Plan and
1996 Employee Stock Purchase Plan with respect to grants made thereunder to
executive officers, and reviews general policies relating to compensation and
benefits of employees of the Company.
During fiscal 1997, each Board Member except for Bernard Puckett,
attended 75% or more of the meetings of the Board of Directors and of the
committees of the Board on which the director served during the period for which
he was director or committee member, respectively.
DIRECTOR COMPENSATION
Directors do not currently receive any cash compensation from the
Company for their service as members of the Board of Directors or any committee
of the Board, although they are reimbursed for certain reasonable expenses in
connection with attendance at Board and committee meetings. Under the 1996
Director Option Plan (the "Director Plan"), each director who is not an employee
of the Company receives an option to purchase 10,000 shares of Common Stock upon
joining the Board of Directors. In addition, on the first day following each
annual meeting of stockholders, each re-elected nonemployee director who has
served as a director for at least six months
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will receive an option to purchase 2,500 shares of Common Stock. The exercise
price of all options granted under the Director Plan equals the fair market
value of the Common Stock on the date of grant. Options granted under the
Director Plan vest monthly over twelve months from the date of grant. Options to
purchase an aggregate of 32,500 shares of Common Stock were granted under the
Director Plan at a weighted average exercise price of $5.75 in 1997. Employee
directors do not receive any compensation or stock option grants for serving as
directors or for attending Board or Committee meetings. However, they are
reimbursed for certain reasonable expenses in connection with attendance at
Board and committee meetings
Under the terms of indemnification agreements with each of the Company's
directors, the Company is obligated to indemnify each director against certain
claims and expenses for which the director might be held liable in connection
with past or future service on the Board. In addition, the Company's Certificate
of Incorporation provides that, to the greatest extent permitted by the Delaware
General Corporation Law, its directors shall not be liable for monetary damages
for breach of fiduciary duty as a director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of directors
David Dominik, Dennis G. Sisco and William H. Younger, Jr. No executive officer
of the Company served on the compensation committee of another entity or on any
other committee of the board of directors of another entity performing similar
functions during the last fiscal year.
VOTE REQUIRED
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ELECTION
OF EACH OF THE NOMINEES LISTED ABOVE.
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Price Waterhouse LLP as
the Company's independent auditors to audit the financial statements of the
Company for the fiscal year ending December 31, 1998, and recommends that
stockholders vote for ratification of this appointment. Price Waterhouse LLP has
audited the Company's financial statements (and those of the predecessor to the
Company) since 1993. Representatives of Price Waterhouse LLP are expected to be
present at the meeting and will have the opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions.
Stockholder ratification of the selection of Price Waterhouse LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Price Waterhouse
LLP to the stockholders for ratification as a matter of good corporate practice.
If the stockholders fail to ratify the selection, the Audit Committee and the
Board will reconsider whether or not to retain that firm. Even if the selection
is ratified, the Board in its discretion may direct the appointment of different
independent auditors at any time during the year if it determines that such
change would be in the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and voting at the Annual Meeting will be
required to ratify the selection of Price Waterhouse LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS
THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1998.
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PROPOSAL NO. 3:
AMENDMENT TO 1996 STOCK PLAN
On March 23, 1996, the Board of Directors adopted, and the stockholders
subsequently approved, the Company's 1996 Stock Plan (the "1996 Plan") and
reserved for issuance 850,000 shares under the 1996 Plan.
On March 31, 1998, options (net of canceled or expired options) covering
an aggregate of 850,000 shares of the Company's Common Stock had been granted
under the 1996 Plan, and there were no shares remaining available for future
grant under the 1996 Plan. During the last fiscal year, under the 1996 Plan, the
Company has granted to all current executive officers as a group, options to
purchase 414,340 shares at exercise prices of $3.62 to $7.13 per share, and to
all employees (excluding executive officers) as a group options to purchase
687,915 shares at exercise prices of $3.62 to $8.50 per share.
In April 1998, the Board approved an amendment to the 1996 Plan, subject
to stockholder approval, to enhance the flexibility of the Board and the
Compensation Committee in granting stock awards to the Company's employees and
consultants. The amendment increases the number of shares authorized for
issuance under the 1996 Plan from an aggregate of 850,000 shares to an aggregate
of 1,700,000 shares. The Board adopted this amendment to ensure that the Company
can continue to grant stock options to employees at levels determined
appropriate by the Board and the Compensation Committee.
At meetings held on December 22, 1997 and February 19, 1998, the Board
granted options to purchase 323,286 shares of the Company's Common Stock subject
to stockholder approval. 91,337 of the 323,286 options granted subject to
stockholder approval were granted to executive officers and 231,949 of the
323,286 options granted subject to stockholder approval were granted to
employees (excluding executive officers). In the event that Proposal No. 3 is
not approved by the stockholders, such options will be void.
The essential features of the 1996 Plan are outlined below:
GENERAL
The 1996 Plan provides for the grant or issuance of incentive stock
options to employees and incentive and nonstatutory stock options and stock
purchase rights to employees and consultants. To date only incentive stock
options and nonstatutory stock options have been awarded under the 1996 Plan.
Incentive stock options granted under the 1996 Plan are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Nonstatutory stock options
granted under the 1996 Plan are intended not to qualify as incentive stock
options under the Code. See "Federal Income Tax Information" for a discussion of
the tax treatment of the various awards included in the 1996 Plan.
PURPOSE
The 1996 Plan provides a means by which selected employees and
consultants to the Company and its affiliates may be given an opportunity to
purchase Common Stock of the Company. The Company, by means of the 1996 Plan,
seeks to retain the services of persons who are now employees of or consultants
to the Company or its affiliates, to secure and retain the services of new
employees and consultants, and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its affiliates.
FORMS OF BENEFIT
The 1996 Plan provides for incentive stock options, nonstatutory stock
options and stock purchase rights (collectively "Stock Awards").
ADMINISTRATION
The 1996 Plan is administered by the Board unless and until the Board
delegates administration to a committee composed of two or more Board members,
all of the members of which committee may be non-employee
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directors (as such term is defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and/or, outside
directors (as such term is defined in the Treasury regulations promulgated under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). If
administration is delegated to a committee, such committee will have, in
connection with the administration of the 1996 Plan, the powers possessed by the
Board, subject, however, to such resolutions, not inconsistent with the
provisions of the 1996 Plan, as may be adopted from time to time by the Board.
The Board or the committee may delegate to a committee of one or more members of
the Board the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act and/or who are either (i) not
then employees covered by Code Section 162(m) and are not expected to be covered
by Section 162(m) at the time of recognition of income resulting from such Stock
Award, or (ii) not persons with respect to whom the Company wishes to avoid the
application of Section 162(m). The Board may abolish such committee at any time
and revest in the Board the administration of the 1996 Plan. The Board has
delegated the administration of the 1996 Plan to the Compensation Committee.
The Board has the power to determine from time to time which of the
persons eligible under the 1996 Plan shall be granted awards, the type of awards
to be granted, when and how each award shall be granted, to construe and
interpret the 1996 Plan and awards granted under it, and to establish, amend and
revoke rules and regulations for its administration. The Board may correct any
defect in the 1996 Plan or in any award agreement to make the 1996 Plan fully
effective.
STOCK SUBJECT TO THE PLAN
If any award expires or terminates under the 1996 Plan, in whole or in
part, without having been exercised in full, the stock not purchased under such
award will revert to and again become available for issuance under the 1996
Plan. The Common Stock subject to the 1996 Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
ELIGIBILITY
Incentive stock options may be granted only to employees. Nonstatutory
stock options and stock purchase rights may be granted to employees or
consultants.
No person is eligible for the grant of an incentive stock option if, at
the time of grant, such person owns stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company unless
the exercise price of such option is at least one hundred ten percent (110%) of
the fair market value of such Common Stock subject to the option at the date of
grant and the option is not exercisable after the expiration of five (5) years
from the date of grant, or in the case of a restricted stock purchase award, the
purchase price is at least one hundred percent (100%) of the fair market value
of Common Stock subject to the award at date of grant. In addition, no person
shall be eligible to be granted options and stock purchase rights covering more
than two hundred thousand (200,000) shares of the Company's Common Stock in any
calendar year, provided, that, in connection with an individual's initial
employment with the Company, stock awards for an additional two hundred thousand
(200,000) shares may be granted.
TERM AND TERMINATION
No option is exercisable after the expiration of ten (10) years from the
date it was granted.
In the event an optionee's continuous status as an employee or
consultant is terminated, the optionee may exercise his or her option (to the
extent that the optionee was entitled to exercise it at the time of termination)
but only within the earlier of (i) the date as specified in the Stock Option
agreement, however, not later than 90 days after the termination of the
optionee's continuous status as an employee or consultant, or (ii) the
expiration of the term of the option as set forth in the option agreement.
In the event an optionee's continuous status as an employee or
consultant terminates as a result of the optionee's death or disability, the
optionee (or such optionee's estate, heirs or beneficiaries) may exercise his or
her
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option, but only within the period ending on the earlier of (i) twelve (12)
months following such termination (or such longer or shorter period as specified
in the option agreement) or (ii) the expiration of the term of the option as set
forth in the option agreement.
In the event a restricted stock recipient's continuous status as an
employee or consultant terminates, the Company may repurchase or otherwise
reacquire any or all of the shares of stock held by that person which have not
vested as of the date of termination under the terms of the restricted stock
purchase agreement between the Company and such person.
EXERCISE PRICE
The exercise price of each incentive stock option will not be less than
one hundred percent (100%) of the fair market value of the Company's Common
Stock on the date of grant. The exercise price of each nonstatutory stock option
will be determined by the Board at the time of grant. Stock purchase rights may
be awarded in consideration for past services actually rendered to the Company
or for its benefit.
CONSIDERATION
The purchase price of stock acquired pursuant to a Stock Award is paid
either in cash at the time of exercise or purchase, or (if determined by the
Board at the time of grant for an option) by deferred payment or other
arrangement or in any other form of legal consideration that may be acceptable
to the Board. Additionally, in the case of an option and in the discretion of
the Board at the time of the grant of an option, by delivery to the Company of
other Common Stock of the Company. In the case of any deferred payment
arrangement, interest will be payable at least annually and will be charged at
the minimum rate of interest necessary to avoid the treatment as interest of
amounts that are not stated to be interest.
TRANSFERABILITY
An incentive stock option will not be transferable except by will or by
the laws of descent and distribution, and shall be exercisable during the
lifetime of the person to whom the incentive stock option is granted only by
such person. A nonstatutory stock option and restricted stock purchase right
generally will not be transferable except by will or by the laws of descent and
distribution or pursuant to a domestic relations order. In addition, an optionee
may designate a beneficiary who may exercise his or her option after death.
VESTING
The total number of shares of stock subject to an option may, but need
not, be allotted in periodic installments. The option agreement may provide that
from time to time during each of such installment periods, the option may become
exercisable ("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period and/or any prior period as to which the option became vested but
was not fully exercised. The option agreement may also provide that an optionee
may exercise an option prior to full vesting, provided that the Company may have
a repurchase right with respect to any unvested shares.
Stock purchase rights granted under the 1996 Plan may be granted
pursuant to a repurchase option in favor of the Company in accordance with a
vesting schedule determined by the Board.
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ADJUSTMENTS UPON CHANGES IN STOCK
If any change is made in the Common Stock subject to the 1996 Plan, or
subject to any Stock Award, without receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the class(es) and maximum number of shares subject to
the 1996 Plan, the maximum annual award applicable under the 1996 Plan and the
class(es) and number of shares and price per share of stock subject to
outstanding Stock Awards will be appropriately adjusted.
In the event of a merger, consolidation, or the sale of substantially
all of the Company's assets or a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, any
surviving corporation shall assume any Stock Awards outstanding under the 1996
Plan or shall substitute similar awards for those outstanding under the 1996
Plan or such Stock Awards shall continue in full force and effect. In the event
a surviving corporation refuses to assume such Stock Awards or substitute
similar awards, then, in the discretion of the Board and with respect to stock
awards held by persons then performing services as employees or consultants, the
time during which such Stock Awards may be exercised shall be accelerated prior
to completion of such transaction and such Stock Awards terminated if not
exercised prior to such transaction.
AMENDMENT OF THE 1996 PLAN
The Board at any time, and from time to time, may amend the 1996 Plan.
However, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will increase the number of shares reserved for
issuance under the 1996 Plan, modify the requirements as to eligibility for
participation or in any other way if such modification requires stockholder
approval in order for the 1996 Plan to satisfy the requirements of Section 422
of the Code, Rule 16b-3, or any Nasdaq or securities exchange requirements. The
Board may in its sole discretion submit any other amendment to the 1996 Plan for
stockholder approval.
TERMINATION OR SUSPENSION OF THE 1996 PLAN
The Board may suspend or terminate the 1996 Plan at any time. Unless
sooner terminated, the 1996 Plan shall terminate on March 22, 2006. No Stock
Awards may be granted under the 1996 Plan while the 1996 Plan is suspended or
after it is terminated.
FEDERAL INCOME TAX INFORMATION
Incentive Stock Options. Incentive stock options under the 1996 Plan are
intended to be eligible for the favorable federal income tax treatment accorded
"incentive stock options" under the Code.
There generally are no federal income tax consequences to the optionee
or the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.
If an optionee holds stock acquired through exercise of an incentive
stock option for at least two years from the date on which the option is granted
and at least one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of such
stock will be capital gain or loss. Generally, if the optionee disposes of the
stock before the expiration of either of these holding periods (a "disqualifying
disposition"), at the time of disposition, the optionee will realize taxable
ordinary income equal to the lesser of (a) the excess of the stock's fair market
value on the date of exercise over the exercise price, or (b) the optionee's
actual gain, if any, on the purchase and sale. The optionee's additional gain,
or any loss, upon the disqualifying disposition will be a capital gain or loss,
which will be long-term, mid-term or short-term depending
8.
11
on how long the optionee holds the stock. Slightly different rules may apply to
optionees who are subject to Section 16 of the Exchange Act or who acquire stock
subject to certain repurchase options.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, Code Section 162(m) and the satisfaction of a
tax reporting obligation) to a corresponding business expense deduction in the
tax year in which the disqualifying disposition occurs.
Nonstatutory Stock Options. Nonstatutory stock options granted under the
1996 Plan generally have the following federal income tax consequences:
There are no tax consequences to the optionee or the Company by reason
of the grant of a nonstatutory stock option. Upon exercise of a nonstatutory
stock option, the optionee normally will recognize taxable ordinary income equal
to the excess of the stock's fair market value on the date of exercise over the
option exercise price. Generally, with respect to employees, the Company is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness, Code Section 162(m) and the satisfaction of a reporting
obligation, the Company will generally be entitled to a business expense
deduction equal to the taxable ordinary income realized by the optionee. Upon
disposition of the stock, the optionee will recognize a capital gain or loss
equal to the difference between the selling price and the sum of the amount paid
for such stock plus any amount recognized as ordinary income upon exercise of
the option. Such gain or loss will be long-term, mid-term or short-term
depending on how long the optionee holds the stock. Slightly different rules may
apply to optionees who are subject to Section 16(b) of the Exchange Act or who
acquire stock subject to certain repurchase rights.
Stock Purchase Rights. Stock purchase rights granted under the 1996 Plan
generally have the following federal income tax consequences:
Upon acquisition of the stock, the recipient normally will recognize
taxable ordinary income equal to the excess of the stock's fair market value
over the purchase price, if any. However, to the extent the stock is subject to
certain types of vesting restrictions, the taxable event will be delayed until
the vesting restrictions lapse unless the recipient elects to be taxed on
receipt of the stock. With respect to employees, the Company is generally
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Generally, the Company will be entitled
to a business expense deduction equal to the taxable ordinary income realized by
the optionee. Upon disposition of the stock, the optionee will recognize a
capital gain or loss equal to the difference between the selling price and the
sum of the amount paid for such stock plus any amount recognized as ordinary
income upon acquisition (or vesting) of the stock. Such gain or loss will be
long-term, mid-term or short-term depending on how long the stock was held.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
Potential Limitation on Company Deductions. Code Section 162(m) which
denies a deduction to any publicly held corporation for compensation paid to
certain employees in a taxable year to the extent that compensation exceeds $1
million for a covered employee. It is possible that compensation attributable to
awards granted in the future under the 1996 Plan, when combined with all other
types of compensation received by a covered employee from the Company, may cause
this limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation,
provided that the option is granted by a compensation committee comprised solely
of "outside directors" and either: (i) the option plan contains a per-employee
limitation on the number of shares for which options may be granted during a
specified period, the per-employee limitation is approved by the stockholders,
and the exercise price of the option is no less than the fair market value of
the stock on the date of grant; or (ii) the option is granted (or exercisable)
only upon the achievement (as certified in writing by the compensation
committee) of an objective performance goal
9.
12
established in writing by the compensation committee while the outcome is
substantially uncertain, and the option is approved by stockholders.
Compensation attributable to restricted stock will qualify as
performance-based compensation, provided that: (i) the award is granted by a
compensation committee comprised solely of "outside directors;" and (ii) the
purchase price of the award is no less than the fair market value of the stock
on the date of grant. Stock bonuses qualify as performance-based compensation
under the Treasury regulations only if: (i) the award is granted by a
compensation committee comprised solely of "outside directors;" (ii) the award
is granted (or exercisable) only upon the achievement of an objective
performance goal established in writing by the compensation committee while the
outcome is substantially uncertain; (iii) the compensation committee certifies
in writing prior to the granting (or exercisability) of the award that the
performance goal has been satisfied; and (iv) prior to the granting (or
exercisability) of the award, stockholders have approved the material terms of
the award (including the class of employees eligible for such award, the
business criteria on which the performance goal is based, and the maximum amount
(or formula used to calculate the amount) payable upon attainment of the
performance goal).
THE FOREGOING SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME
TAXATION UPON THE PARTICIPANT AND THE COMPANY IN CONNECTION WITH THE PLAN DOES
NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH THE PARTICIPANT MAY RESIDE.
NEW PLAN BENEFITS
1996 STOCK PLAN
The following table presents certain information with respect to stock
options granted under the 1996 Plan on December 22, 1997 and February 19, 1998
that are subject to stockholder approval to (i) each of the executive officers
named in the Summary Compensation Table, (ii) all executive officers as a group,
(iii) all non-executive officer directors as a group and (iv) all non-executive
officer employees as a group.
NAME AND POSITION DOLLAR VALUE ($)(1) NUMBER OF SHARES
- - ----------------- ------------------- ----------------
Jim McCord........................................... $78,833 21,747
Chairman of the Board and
Chief Executive Officer
John Kingery......................................... 78,833 21,747
President and Chief Operating Officer
Louis Delzompo....................................... 31,534 8,699
Vice President of Development
Gaspar DeViedma...................................... -- --
Vice President of Sales
Lee Ann Slinkard..................................... 47,299 13,048
Vice President of Professional Services
Eva Williams......................................... -- --
Vice President of Marketing
Executive Group (6 persons).......................... 331,097 91,337
Non-Executive Director Group......................... -- --
Non-Executive Officer Employee Group (49 persons).... 840,815 231,949
(1) Exercise price multiplied by number of shares underlying the options.
REQUIRED VOTE
Approval of the amendment to the Plan requires the affirmative vote of the
majority of shares present in person or represented by proxy and voting at the
meeting. An abstention is not an affirmative vote and, therefore, will have the
same effect as a vote against the proposal. If such amendment is not approved by
the stockholders, the shares available for grants under the Plan will not be
increased as described above and any options issued that are subject to
stockholder approval will be void.
10.
13
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE PLAN.
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
executive officers of the Company as of March 31, 1998:
NAME AGE POSITION
- - ---------------------------------------- --- ---------------------------------------------
Jim McCord.............................. 55 Chairman of the Board and Chief Executive
Officer
John Kingery............................ 52 President and Chief Operating Officer
Stephen F. Ghiglieri.................... 36 Vice President of Finance and Administration,
Chief Financial Officer and Secretary
Louis Bunz.............................. 49 Vice President of Sales
Louis Delzompo.......................... 38 Vice President of Development
Lee Ann Slinkard........................ 42 Vice President of Professional Services
Jim McCord joined the Company in May 1994 as Chief Executive Officer and
a director. In March 1996, he was appointed Chairman of the Board. From January
1986 to March 1994, Mr. McCord served as a Vice President of Shared Medical
Systems Corporation ("SMS") where he started and managed the Decision Support
Systems Group, an independent business unit that provides analytic products and
services to senior healthcare managers and professionals in the SMS client base.
From 1974 through 1985, Mr. McCord was founder and Chief Executive Officer of
SysteMetrics, Inc., a health services research and information company that is
now part of Medical Economics, a Thompson Communications Company.
John Kingery served as a consultant to the Company from February 1996 to
March 1996, at which time he joined the Company as President and Chief Operating
Officer. He was appointed as a director in January 1997. From June 1992 to March
1996, Mr. Kingery provided interim management and consulting services to
high-growth companies. From January 1991 to May 1992, he was the founder and
President of Summit Credit Corporation, a company that arranges financing for
medical diagnostic imaging equipment.
Stephen F. Ghiglieri joined the Company in July 1994 as Vice President
of Finance and Administration and Chief Financial Officer. He was appointed
Secretary in September 1994. From March 1992 to July 1994, he served as
Controller for Oclassen Pharmaceuticals, Inc., a developer and marketer of
prescription pharmaceuticals. From August 1984 to March 1992, he was employed by
Price Waterhouse, most recently as an audit manager, where he specialized in
high-growth health and life sciences companies. Mr. Ghiglieri is a certified
public accountant.
Louis Bunz joined the Company in August 1997 as Area Vice President of
Sales and in October 1997 was promoted to Vice President of Sales. From April
1996 to July 1997 Mr. Bunz served as Director of Customer Business Development
for Motorola Emtek Health Care Division and from July 1989 to April 1996 served
as Vice President of Sales for Transitions Systems, Inc.
Louis Delzompo joined the Company in July 1996 as Vice President of
Development. From April 1987 to July 1996, he was employed by Sun Microsystems,
Inc. in a variety of product marketing management and software development
management positions, serving most recently as Director of Network Access and
Messaging Development. From July 1981 to March 1987, he was employed by Data
General Corporation as a systems engineer and product marketing manager.
11.
14
Lee Ann Slinkard has worked for the Company since September 1986. She
has served in a variety of roles, including Director of Installation Services
and Director of Client Services. In May 1994, she was appointed Vice President
of Client Services and in October 1994 she was appointed Vice President of
Professional Services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of Common Stock as of the Record Date by (i) each
person known to the Company to beneficially own more than 5% of Common Stock,
(ii) each of the Company's directors, (iii) each Named Executive Officer in the
Summary Compensation Table below, and (iv) all directors and executive officers
of the Company as a group:
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY SHARES BENEFICIALLY
BENEFICIAL OWNER OWNED(1) OWNED(1)
- - ---------------------------------------------------------- ---------------- --------------------
Entities affiliated with Information Partners(2) ......... 1,880,151 18.2%
Two Copley Place
Boston, MA 02116
Sutter Hill Ventures(3) .................................. 1,236,172 11.9
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Entities affiliated with InterWest Partners (4) .......... 1,129,944 10.9
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA 94025
Cognizant Corporation(5) ................................. 1,110,661 10.7
200 Nyala Farms Road
Westport, CT 06897
Entities affiliated with Sequoia Capital (6) ............. 706,215 6.8
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA 94025
Entities affiliated with Weiss, Peck & Greer(7) .......... 652,091 6.3
555 California Street, Suite 4760
San Francisco, CA 94104
Jim McCord(8) ............................................ 470,964 4.5
John Kingery(9) .......................................... 128,498 1.2
Louis Delzompo(10) ....................................... 32,908 *
Gaspar DeViedma(11) ...................................... -- --
Lee Ann Slinkard(12) ..................................... 86,091 *
Eva Williams(13) ......................................... 30,793 *
Alan W. Crites(14) ....................................... 1,154,944 11.2
David Dominik(15) ........................................ 1,892,651 18.3
Fred C. Goad, Jr.(16) .................................... 16,500 *
Bernard Puckett(17) ...................................... 10,000 *
Dennis G. Sisco(18) ...................................... 12,500 *
William H. Younger, Jr.(19) .............................. 1,236,172 11.9
All directors and executive officers as a group
(14 persons)(20) ....................................... 5,197,862 50.2
* Less than one percent of the outstanding Common Stock.
12.
15
(1) This table is based on information supplied by officers, directors and
principal stockholders of the Company and on any Schedules 13D or 13G
filed with the Securities and Exchange Commission. Except as otherwise
indicated in the footnotes to this table and pursuant to applicable
community property laws, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock.
(2) Includes 1,603,525 shares held by Information Partners Capital Fund,
L.P., 90,332 shares held by BCIP Associates and 39,688 shares held by
BCIP Trust Associates, L.P. Also includes warrants held by Information
Partners Capital Fund, L.P. to purchase 135,757 shares, warrants held by
BCIP Associates to purchase 4,398 shares and warrants held by BCIP Trust
Associates, L.P. to purchase 6,451 shares. Excludes 12,500 shares
issuable upon exercise of stock options exercisable within 60 days of
the Record Date held by David Dominik, a general partner of Information
Partners Capital Fund, L.P., BCIP Associates and BCIP Trust Associates,
L.P. See Note 15.
(3) Includes 819,216 shares held by Sutter Hill Ventures, a California
limited partnership ("Sutter Hill"), over which Mr. Younger, a director
of the Company, shares voting and investment power with four other
partners of the general partner of Sutter Hill. Also includes 82,449
shares held by Mr. Younger, 12,500 shares issuable upon exercise of
stock options exercisable within 60 days of the Record Date held by Mr.
Younger and 322,007 shares held by the other four partners and their
related family entities. See Note 19.
(4) Includes 1,122,882 shares held by InterWest Partners V, L.P. and 7,062
shares held by InterWest Investors V. Excludes 25,000 shares issuable
upon exercise of stock options exercisable within 60 days of the Record
Date held by Alan W. Crites, a general partner of InterWest Partners V,
L.P. and InterWest Investors V. See Note 14.
(5) Includes 10,000 shares issuable upon exercise of stock options
exerciseable within 60 days of the Record Date. These options were
granted to Mr. Sisco, a director of the Company, under the 1996 Director
Option Plan and were assigned by Mr. Sisco to Cognizant Corporation.
(6) Includes 663,842 shares held by Sequoia Capital Growth Fund and 42,373
shares held by Sequoia Technology Partners III.
(7) Includes 356,082 shares held by WPG Enterprises Fund II, L.P. and
269,009 shares held by Weiss, Peck & Greer Venture Associates III, L.P.
(8) Includes 425,711 shares issuable upon exercise of stock options
exercisable within 60 days of the Record Date.
(9) Includes 128,498 shares issuable upon exercise of stock options
exercisable within 60 days of the Record Date.
(10) Includes 31,087 shares issuable upon exercise of stock options
exerciseable within 60 days of the Record Date.
(11) Mr. DeViedma resigned from the Company in October 1997.
(12) Includes 80,134 shares issuable upon exercise of stock options
exercisable within 60 days of the Record Date.
(13) Includes 30,793 shares issuable upon exercise of stock options
exercisable within 60 days of the Record Date. Ms. Williams resigned
from the Company in February 1998.
(14) Includes 1,122,882 shares held by InterWest Partners V, L.P. and, 7,062
shares held by InterWest Investors V. Mr. Crites disclaims beneficial
ownership of shares held by such entities, except as to the extent of
his proportionate partnership interest therein. Also includes 25,000
shares issuable upon exercise of stock options exercisable within 60
days of the Record Date held by Mr. Crites.
(15) Includes 1,603,525 shares held by Information Partners Capital Fund,
L.P., 90,332 shares held by BCIP Associates and 39,688 shares held by
BCIP Trust Associates, L.P. Also includes warrants held by Information
Partners Capital Fund, L.P. to purchase 135,757 shares, warrants held by
BCIP Associates to purchase 4,398 shares and warrants held by BCIP Trust
Associates, L.P. to purchase 6,451 shares. Mr. Dominik is a general
13.
16
partner of Information Partners Capital Fund, L.P., BCIP Associates and
BCIP Trust Associates, L.P., and disclaims beneficial ownership of the
shares held by such entities except to the extent of his proportionate
partnership interest therein. Also includes 12,500 shares issuable upon
exercise of stock options exercisable within 60 days of the Record Date
held by Mr. Dominik.
(16) Includes 12,500 shares issuable upon exercise of stock options
exercisable within 60 days of the Record Date.
(17) Includes 10,000 shares issuable upon exercise of stock options
exerciseable within 60 days of the Record Date. Mr. Puckett is not
standing for re-election to the Board of Directors.
(18) Includes 12,500 shares issuable upon exercise of stock options
exercisable within 60 days of the Record Date.
(19) Includes 819,216 shares held by Sutter Hill Ventures, a California
limited partnership ("Sutter Hill"), over which Mr. Younger, a director
of the Company, shares voting and investment power with four other
partners of the general partner of Sutter Hill. Also includes 82,449
shares held by Mr. Younger, 12,500 shares issuable upon exercise of
stock options exercisable within 60 days of the Record Date held by Mr.
Younger and 322,007 shares held by the other four partners and their
related family entities. Mr. Younger disclaims beneficial ownership of
shares held by Sutter Hill and the other persons and entities except to
the extent of his proportionate partnership interest in Sutter Hill.
(20) Includes 885,553 shares issuable upon exercise of stock options and
warrants within 60 days of the Record Date.
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning
compensation paid to or accrued for the Company's Chief Executive Officer and
each of the other four most highly compensated current executive officers of the
Company, determined as of December 31, 1997 (hereafter collectively referred to
as the "Named Executed Officers"), for the fiscal years ended December 31, 1995,
1996 and 1997:
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------- ------------
NUMBER OF
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS
- - ------------------------------ ---- -------- ------- --------------- ------------
Jim McCord................... 1997 $218,053 -- 2,406 72,715
Chairman of the Board and 1996 201,667 45,375 4,713 --
Chief Executive Officer 1995 170,000 -- 5,163 273,801
John Kingery................. 1997 207,667 -- 3,031 91,635
President and Chief 1996 150,000 45,000 3,228 262,500
Operating Officer 1995 -- -- -- --
Louis Delzompo............... 1997 164,942 -- 5,039 49,655
Vice President of 1996 96,115 14,000 1,729 75,000
Development 1995 -- -- -- --
Gaspar DeViedma.............. 1997 155,148 -- 39,723(2) 75,000
Vice President of Sales 1996 -- -- -- --
1995 -- -- -- --
14.
17
Lee Ann Slinkard............. 1997 150,417 -- 1,099 56,850
Vice President of 1996 131,250 29,520 45,598 --
Professional Services 1995 108,500 -- 76,684 51,095
Eva Williams................. 1997 160,000 -- 1,184 32,480
Vice President of Marketing 1996 16,667 -- 440 75,000
1995 -- -- -- --
(1) Includes relocation reimbursements and health and disability insurance
premiums.
(2) Includes severance payment of $35,500.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers during the fiscal year
ended December 31, 1997. In accordance with the rules of the SEC, also shown
below is the potential realizable value over the term of the option (the period
from the grant date to the expiration date) based on assumed rates of stock
appreciation of 5% and 10%, compounded annually. These amounts are based on
certain assumed rates of appreciation and do not represent the Company's
estimate of future stock price. Actual gains, if any, on stock option exercises
will be dependent on the future performance of the Common Stock.
INDIVIDUAL GRANTS
---------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OR TERM (5)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------------
NAME GRANTED FISCAL YEAR (3) PER SHARE (4) DATE 5% 10%
- - --------------- ------------- --------------- ------------ ----------- --------- --------
Jim McCord 50,000(1) 4.54% $3.625 12/22/07 $113,985 $288,864
22,715(2) 2.06 4.750 05/22/07 67,854 171,958
John Kingery 50,000(1) 4.54 3.625 12/22/07 113,986 288,865
21,635(2) 1.96 4.750 05/22/07 64,628 163,781
20,000(2) 1.81 6.750 01/22/07 84,900 215,153
Louis Delzompo 20,000(1) 1.81 3.625 12/22/07 45,594 115,546
29,655(2) 2.69 4.750 05/22/07 88,585 224,494
Gaspar DeViedma 75,000(2) 6.80 7.750 01/31/98 29,061 58,124
Lee Ann Slinkard 30,000(1) 2.72 3.625 12/22/07 68,390 173,318
8,850(2) 0.80 4.750 05/22/07 26,437 66,996
18,000(2) 1.63 6.750 01/22/07 76,410 193,639
Eva Williams 20,000(1) 1.81 3.625 05/13/98 3,625 7,250
12,480(2) 1.13 4.750 05/13/98 2,963 5,927
(1) Options were granted under the 1996 Plan and vest at the rate of 1/36 of
the shares at the end of each month following the date of grant, subject
to a restriction on exercisability which expires on January 1, 1999.
(2) Options were granted under the 1996 Plan and vest at the rate of 1/48 of
the shares at the end of each month following the date of grant.
15.
18
(3) Based on an aggregate of 1,102,255 options granted by the Company in the
year ended December 31, 1997 to employees of the Company, including the
Named Executive Officers, certain of such grants being subject to
shareholder approval.
(4) The exercise price per share of each option was equal to the fair market
value of the Common Stock on the date of grant.
(5) The potential realizable value is calculated based on the term of the
option at its time of grant (ten years). It is calculated assuming that
the fair market value of the Company's Common Stock on the date of grant
appreciates at the indicated annual rate compounded annually for the
entire term of the option and that the option is exercised and sold on
the last day of its term for the appreciated stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information with respect to the
Named Executive Officers concerning option exercises for the year ended December
31, 1997 and exercisable and unexercisable options held as of December 31, 1997:
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS/SARS AT THE-MONEY OPTIONS/SARS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(R) (2)
ACQUIRED ON VALUE ------------------------------- -----------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------- ----------- ------------ ----------- ------------- ----------- -------------
Jim McCord -- $-- 376,496 153,275 $1,351,287 $326,274
John Kingery -- -- 122,729 231,406 -- 21,875
Louis Delzompo -- -- 30,952 93,703 -- 8,750
Gaspar DeViedma -- -- 14,062 -- -- --
Lee Ann Slinkard -- -- 69,806 73,290 233,039 92,512
Eva Williams -- -- 22,218 85,262 -- 8,750
(1) Based on the date of exercise, minus the per share exercise price,
multiplied by the number of shares issued upon exercise of the option.
(2) Based on the difference between the fair market value of Common Stock on
December 31, 1997 ($4.0625) and the option exercise price, multiplied by
the number of shares underlying the option.
EMPLOYMENT AGREEMENT
The Company has an employment agreement with Jim McCord, its Chairman of
the Board and Chief Executive Officer. The agreement provides that Mr. McCord
shall devote his full business efforts and time to the Company and shall not
actively engage in any other employment, occupation or consulting activity
without the prior approval of the Board of Directors. In exchange, Mr. McCord is
entitled to receive a base salary (initially $170,000 per year) and is eligible
to receive cash and option bonuses based on achievement of certain milestones
and performance. The agreement further provides that if Mr. McCord's employment
is terminated for any or no reason, he will be entitled to receive severance pay
at a rate of fifty percent of his then base salary rate for a period of two
years, although such payments immediately cease in the event Mr. McCord engages
in any activity that involves the development or sale of automated transaction
processing systems for health care providers and associated systems integration
activities. The agreement does not provide for any specified term of employment.
16.
19
CERTAIN TRANSACTIONS
In January 1997, the Company loaned $60,000 to Louis Delzompo, Vice
President of Development. The loan bears interest at prime plus two percent.
Subject to Mr. Delzompo's continued employment with the Company, 1/3 of the
principal and all then accrued interest shall be forgiven on January 14 of each
subsequent year. If Mr. Delzompo voluntarily terminates his employment with the
Company, or if the Company terminates Mr. Delzompo's employment for any reason
other than a downturn in business, all then outstanding principal and accrued
interest shall immediately become due and payable. As of March 31, 1998, the
principal amount of the loan outstanding was $40,000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file certain reports
regarding ownership of, and transactions in, the Company's securities with the
SEC. Such officers, directors and 10% stockholders are also required by SEC
rules to furnish the Company with copies of all Section 16(a) forms that they
file. Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that for the year ended December 31, 1997, all reporting persons complied with
Section 16(a) filing requirements with the exception of Mr. Goad, a director,
who did not timely file a Form 4 for a reportable transaction during the year.
This report was subsequently filed.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the Company's 1999 Annual Meeting of
Stockholders must be received by the Company no later than January 15, 1999 to
be included in the proxy statement and form of proxy relating to that meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, then the persons
named in the enclosed form of proxy will vote the shares they represent in such
manner as the Board may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ STEPHEN F. GHIGLIERI
------------------------------------
Stephen F. Ghiglieri
Vice President of Finance and
Administration, Chief Financial
Officer and Secretary
Dated: May 15, 1998
17.
20
OACIS HEALTHCARE HOLDINGS CORP.
1996 STOCK PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
o to attract and retain the best available personnel for
positions of substantial responsibility,
o to provide additional incentive to Employees and
Consultants, and
o to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating
to the administration of stock option plans under U.S. state corporate laws,
U.S. federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options or Stock Purchase Rights are, or
will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Oacis Healthcare Holdings Corp., a
Delaware corporation.
(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i)
21
any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor. A leave of absence approved by the Company shall include sick leave,
military leave, or any other personal leave approved by an authorized
representative of the Company. For purposes of Incentive Stock Options, no such
leave may exceed ninety days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract. If reemployment upon expiration of a leave
of absence approved by the Company is not so guaranteed, on the 181st day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(p) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
22
(q) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the
Plan.
(t) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(u) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.
(v) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.
(w) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Stock Purchase Right.
(x) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(y) "Plan" means this 1996 Stock Plan.
(z) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.
(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(bb) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(cc) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
(dd) "Share" means a share of the Common Stock, as adjusted
in accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.
23
(ff) "Subsidiary" means a "subsidiary corporation", whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section
13 of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is 1,700,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers who are not Directors, and Employees who are neither
Directors nor Officers.
(ii) Administration With Respect to Directors and Officers
Subject to Section 16(b). With respect to Option or Stock Purchase Right grants
made to Employees who are also Officers or Directors subject to Section 16(b) of
the Exchange Act, the Plan shall be administered by (A) the Board, if the Board
may administer the Plan in a manner complying with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities
are to be made, or (B) a committee designated by the Board to administer the
Plan, which committee shall be constituted to comply with the rules under Rule
16b-3 relating to the disinterested administration of employee benefit plans
under which Section 16(b) exempt discretionary grants and awards of equity
securities are to be made. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and substitute new
members, fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
(iii) Administration With Respect to Other Persons. With
respect to Option or Stock Purchase Right grants made to Employees or
Consultants who are neither Directors nor Officers of the Company, the Plan
shall be administered by (A) the Board or (B) a committee designated by the
24
Board, which committee shall be constituted to satisfy Applicable Laws. Once
appointed, such Committee shall serve in its designated capacity until otherwise
directed by the Board. The Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions
of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights may be granted hereunder;
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;
(vii) to reduce the exercise price of any Option or
Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;
(viii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
25
(x) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;
(xi) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to make all other determinations deemed
necessary or advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants. Incentive Stock Options may
be granted only to Employees. If otherwise eligible, an Employee or Consultant
who has been granted an Option or Stock Purchase Right may be granted additional
Options or Stock Purchase Rights.
6. Limitations.
(a) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted. If
an Option is granted hereunder that is part Incentive Stock Option and part
Nonstatutory Stock Option due to becoming first exercisable in any calendar year
in excess of $100,000, the Incentive Stock Option portion of such Option shall
become exercisable first in such calendar year, and the Nonstatutory Stock
Option portion shall commence becoming exercisable once the $100,000 limit has
been reached.
(b) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's employment or consulting relationship with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to
terminate such employment or consulting relationship at any time, with or
without cause.
(c) The following limitations shall apply to grants 0f
Options and Stock Purchase Rights to Employees:
26
(i) No Employee shall be granted, in any fiscal year
of the Company, Options and Stock Purchase Rights to purchase more than 200,000
Shares.
(ii) In connection with his or her initial
employment, an Employee may be granted Options and Stock Purchase Rights to
purchase up to an additional 200,00 Shares which shall not count against the
limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.
(iv) If an Option or Stock Purchase Right is
cancelled in the same fiscal year of the Company in which it was granted (other
than in connection with a transaction described in Section 13), the cancelled
Option or Stock Purchase Right will be counted against the limits set forth in
sub sections (i) and (ii) above. For this purpose, if the exercise price of an
Option or Stock Purchase Right is reduced, the transaction will be treated as a
cancellation of the Option or Stock Purchase Right and the grant of a new Option
or Stock Purchase Right:
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company as described in Section 19 of the
Plan. It shall continue in effect for a term often (10) years unless terminated
earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the
Notice of Grant; provided, however, that in the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant. Moreover, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Notice of
Grant.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
27
A. granted to an Employee who, at the time
the Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.
B. granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period.
(c) Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
(v) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;
(vii) any combination of the foregoing methods of
payment; or
(viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.
28
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement.
An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship.
Upon termination of an Optionee's Continuous Status as an Employee or
Consultant, other than upon the Optionee's death or Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Notice of Grant to the extent that he or she is entitled to exercise it on the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Notice of Grant). In the absence of a specified
time in the Notice of Grant, the Option shall remain exercisable for thirty (30)
days following the Optionee's termination. In the case of an Incentive Stock
Option, such period of time for exercise shall not exceed three (3) months from
the date of termination. If, on the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change
in status from Consultant to Employee or Employee to Consultant, the Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status. In such event, an Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option
three months and one day following such change of status.
29
(c) Disability of Optionee. Upon termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of termination, but only to the extent
that the Optionee is entitled to exercise it on the date of termination (and in
no event later than the expiration of the term of the Option as set forth in the
Notice of Grant). If, on the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) Death of Optionee. Upon the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee would have been entitled to exercise the
Option on the date of death. If, at the time of death, the Optionee is not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If the
Optionee's estate or the person who acquires the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares, an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
(f) Rule 16b-3. Options granted to individuals subject to
Section 16 of the Exchange Act ("Insiders") must comply with the applicable
provisions of Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to Plan transactions.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase, the price to be paid, and the
time within which the offeree must accept such offer, which shall in no event
exceed six (6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the
Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason
30
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock purchase agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.
(c) Rule 16b-3. Stock Purchase Rights granted to Insiders,
and Shares purchased by Insiders in connection with Stock Purchase Rights, shall
be subject to any restrictions applicable thereto in compliance with Rule 16b-3.
An Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.
(d) Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock Purchase Agreements
need not be the same with respect to each purchaser.
(e) Rights as a Shareholder. Once the Stock Purchase Right
is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. An
Option or Stock Purchase Right may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Asset Sale.
(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right.
31
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Administrator may provide for the Optionee to have the
right to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be exercisable. If
the Administrator makes an Option or Stock Purchase Right exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option or Stock Purchase Right
shall be fully exercisable for a period of fifteen (15) days from the date of
such notice, and the Option or Stock Purchase Right shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or
Stock Purchase Right shall be considered assumed if, following the merger or
sale of assets, the option or right confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.
14. Date of Grant. The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
32
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and desirable
to comply with Rule 16b-3 or with Section 422 of the Code (or any successor rule
or statute or other applicable law, rule or regulation, including the
requirements of any exchange or quotation system on which the Common Stock is
listed or quoted). Such shareholder approval, if required, shall be obtained in
such a manner and to such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable Laws, and the requirements of any
stock exchange or quotation system upon which the Shares may then be listed or
quoted, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
(b) Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.
17. Liability of Company.
(a) Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Stock Purchase Right exceeds, as of the date of grant,
the number of Shares which may be issued under the Plan without additional
shareholder approval, such Option or Stock Purchase Right shall be void with
respect to such excess Optioned Stock, unless shareholder approval of an
amendment sufficiently
33
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 15(b) of the Plan.
18. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval. Continuance of the Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such shareholder approval shall be
obtained in the manner and to the degree required under Applicable Laws and the
rules of any stock exchange upon which the Common Stock is listed.
34
OACIS HEALTHCARE HOLDINGS CORP.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 1998
The undersigned hereby appoints JIM MCCORD and and STEPHEN F. GHIGLIERI,
and each of them, as attorneys and proxies of the undersigned, with full power
of substitution, to vote all of the shares of stock of Oacis Healthcare Holdings
Corp. (the "Company") that the undersigned may be entitled to vote at the Annual
Meeting of Stockholders of Oacis Healthcare Holdings Corp. to be held at the
Wyndham Garden Hotel, 1010 Northgate Drive, San Rafael, California, at 3:00 p.m.
local time on June 17, 1998, and at any and all continuations and adjournments
thereof, with all powers that the undersigned would possess if personally
present, upon and in respect of the following matters and in accordance with the
following instructions, with discretionary authority as to any and all other
matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED IN PROPOSAL 1 AND, FOR PROPOSALS 2 AND 3, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE
INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.
PROPOSAL 1: To elect directors to serve for the ensuing year and until
their successors are elected.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as written below) to vote for all nominees
below
NOMINEES: Jim McCord, Alan W. Crites, David Dominik,
Fred Goad, John Kingery, Dennis G. Sisco,
William H. Younger, Jr.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE SUCH
NOMINEE(S)' NAME(S) BELOW:
1.
35
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2 BELOW.
PROPOSAL 2: To ratify the selection of Price Waterhouse LLP as the
Company's independent auditors for the fiscal year ending
December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 3 BELOW.
PROPOSAL 3: To approve the 1996 Stock Plan, as amended, to increase the
number of shares of Common Stock authorized for issuance under
such Plan by 850,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated: , 1998
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Signature(s)
Please sign exactly as your name
appears hereon. If the stock is
registered in the names of two or
more persons, each should sign.
Executors, administrators, trustees,
guardians and attorneys-in-fact
should add their titles. If signer
is a corporation, please give full
corporate name and have a duly
authorized officer sign, stating
title. If signer is a partnership,
please sign in partnership name by
authorized person.
PLEASE VOTE, DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
2.