UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
IntegraMed America, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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(4) Date Filed: April 15, 2009
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[GRAPHIC OMITTED][GRAPHIC OMITTED]
April 17, 2009
Dear Stockholder:
It is my pleasure to invite you to the 2009 Annual Meeting of Stockholders of
IntegraMed America, Inc. The meeting will be held at 10:00 a.m. (local time) on
Tuesday, May 12, 2009, at the Company's corporate offices at Two Manhattanville
Road, 3rd Floor, Purchase, New York 10577.
The following pages contain the formal Notice of Annual Meeting of Stockholders
and the Proxy Statement. Please review this material for information concerning
the business to be conducted at the meeting, which is the election of seven
directors named in the enclosed Proxy Statement for a term of one year and the
approval of an amendment to our 2007 Long-Term Compensation Plan. You will also
have the opportunity to hear what has happened in our business in the past year
and to ask questions. You will find detailed information about IntegraMed
America, Inc. in the enclosed 2008 Annual Report to Stockholders.
We hope you can join us on May 12, 2009. Whether or not you can attend, please
read the enclosed Proxy Statement. When you have done so, please mark your votes
on the enclosed Proxy Card, sign and date the Proxy Card, and return it in the
enclosed envelope. Your vote is important to the Company, so please return your
Proxy promptly.
Sincerely,
/s/Jay Higham
---------------------------
Jay Higham
President & Chief Executive Officer
INTEGRAMED AMERICA, INC.
Two Manhattanville Road
Purchase, New York 10577
-----------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 12, 2009
-----------------------------------
To the Stockholders:
Notice is hereby given that the Annual Meeting of the Stockholders of
IntegraMed America, Inc. (the "Company") will be held on Tuesday, May 12, 2009,
10:00 a.m. local time, at the Company's headquarters, Two Manhattanville Road,
3rd Floor, Purchase, New York 10577. The meeting is called for the following
purposes:
1. Election of seven directors named in the enclosed Proxy Statement
for a term of one year;
2. Amendment of the 2007 Long-Term Compensation Plan to increase the
number of shares of common stock available for issuance from 500,000 to
750,000 shares; and
3. Transaction of such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on Friday, March
20, 2009 are entitled to notice of, and to vote at, the meeting.
A copy of our Annual Report to Stockholders for the fiscal year ended
December 31, 2008 is being provided with this Notice of Annual Meeting and Proxy
Statement and is available online as indicated below.
All stockholders are cordially invited to attend the meeting. However,
to assure your representation at the meeting, you are urged to mark, sign, date
and return the enclosed Proxy Card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if the stockholder has returned the Proxy
Card.
/s/Claude E. White
-------------------------------------------
Claude E. White
Vice President, General Counsel & Secretary
April 17, 2009
Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to be Held on May 12, 2009 - Our Proxy Statement and Annual
Report to Stockholders are available at http://www.integramedfertility.com
/proxy under the heading "Investors -Annual Meeting"
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INTEGRAMED AMERICA, INC.
Two Manhattanville Road
Purchase, New York 10577
914-253-8000
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PROXY STATEMENT
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For the Annual Meeting of Stockholders
To Be Held on Tuesday, May 12, 2009
Solicitation of Proxy
This Proxy Statement is furnished to stockholders of IntegraMed
America, Inc. (the "Company") in connection with the solicitation by the
Company's Board of Directors of proxies for use at the Annual Meeting of
Stockholders of the Company ("Annual Meeting") to be held at the Company's
principal executive offices at Two Manhattanville Road, Purchase, New York 10577
on Tuesday, May 12, 2009 at 10:00 a.m., and any adjournments of the Annual
Meeting.
Mailing Date
The Annual Report of the Company for 2008, including financial
statements, the Notice of Annual Meeting of Stockholders, this Proxy Statement,
and the Proxy Card are first being sent or given to stockholders on or about
April 10, 2009.
Who can vote -- Record Date
The record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting is March 20, 2009. Each of the 8,758,803 shares of
Common Stock, par value $.01 per share (the "Common Stock"), of the Company
issued and outstanding on the record date is entitled to one vote at the
meeting.
How to vote -- Proxy Instructions
You can vote your shares by mailing in your proxy card. Stockholders
who hold their shares in "street name" must vote their shares in the manner
prescribed by their brokers.
In voting on the Directors, you may specify whether your shares should
be voted for all, some, or none of the nominees for director.
If you do not specify on your proxy card how you want to vote your
shares, we will vote them "FOR" the election of all nominees for director as set
forth under "Election of Directors For a Term of One Year" and "FOR" the
approval of the amendment of the 2007 Long-Term Compensation Plan as set forth
under "Approval of the Amendment to the Plan."
Revocation of Proxies
You may revoke your Proxy at any time before it is exercised in any of
three ways:
(1) by submitting written notice of revocation to the Company's
Secretary, which must be received prior to the Annual Meeting;
(2) by submitting a new Proxy by mail that is dated later in time
and properly signed; or
(3) by voting in person at the meeting.
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Quorum
A quorum of stockholders is necessary to hold a valid meeting. A quorum
will exist if the holders of a majority of the votes entitled to be cast by the
stockholders at the Annual Meeting are present, in person or by proxy. Broker
"non-votes" and abstentions are counted as present at the Annual Meeting for
purposes of determining whether a quorum exists. A broker "non-vote" occurs when
a nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary voting power for that
particular item and has not received instructions from the beneficial owner.
Required Vote
Election of Directors. Persons receiving a plurality of the voted
shares present in person or represented by proxy at the Annual Meeting will be
elected directors, meaning the individuals receiving the greatest number of
votes will be elected to serve as directors. Shares not voted (whether
abstention, broker "non-votes" or otherwise) have no effect on the election. If
any nominee is unable or declines to serve, proxies will be voted for the
balance of those named and such person as shall be designated by the Board to
replace any such nominee. However, the Board does not anticipate that this will
occur.
Approval of the Amendment to the Plan. A majority of the votes cast at
the Annual Meeting is necessary to approve the amendment to the Company's 2007
Long-Term Compensation Plan (the "Plan"). Shares not voted (whether abstention,
broker "non-votes" or otherwise) have no effect on the approval of the Amendment
Voting Results
Preliminary voting results will be announced at the Annual Meeting.
Final voting results will be published in our quarterly report on Form 10-Q for
the second quarter of 2009.
Other Business
The Company does not intend to bring any business before the meeting
other than that set forth in the Notice of Annual Meeting and described in this
Proxy Statement. However, if any other business should properly come before the
meeting, the persons named in the enclosed proxy card intend to vote in
accordance with their best judgment on such business and any matters dealing
with the conduct of the meeting pursuant to the discretionary authority granted
by your proxy.
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SECURITY OWNERSHIP
The following table sets forth, as of April 1, 2009, certain
information concerning the stock ownership of all persons known by the Company
to own beneficially 5% or more of the shares of Common Stock, each director,
each executive officer named on the "Summary Compensation Table", and all
directors and executive officers of the Company as a group. Except as indicated
in the footnotes to this table, each person has sole voting and dispositve power
with respect to all shares attributable to such person.
Shares of
Common Stock Percent of
Beneficially Common Stock
Beneficial Owners Owned (1) Outstanding
----------------- ------------ --------------
Peter R. Kellogg.............................. 2,641,286 (2) 30.2%
IAT Reinsurance Company Ltd.
120 Broadway
New York, NY 1027
Blue TSV I, LTD ............................. 1,037,748 (5) 12.0%
c/o Maple Corporate Services Limited
PO Box 309, Ugland House
Grand Cayman E9 KY1- 1104
Gruber and McBaine Capital Management, LLC.... 633,850 (4) 7.2%
50 Osgood Place
San Francisco, CA 94133
Dimensional Fund Advisors LP.................. 487,625 (3) 5.6%
1299 Ocean Avenue
Santa Monica, CA 90401
Officer and Director Stock Ownership
------------------------------------
Jay Higham.................................... 153,285(8) 1.7%
John W. Hlywak, Jr............................ 107,695(8) 1.2%
Pamela Schumann............................... 16,626(8) *
Joseph J. Travia, Jr.......................... 34,978(8) *
Dan Doman..................................... 6,623 *
Kush K. Agarwal............................... 141,211(6) 1.6%
Gerardo Canet................................. 41,117 *
Sarason D. Liebler............................ 16,582(7) *
Wayne R. Moon................................. 45,345 (8) *
Lawrence J. Stuesser.......................... 65,739(8) *
Elizabeth E. Tallett.......................... 82,747(8) *
Yvonne S. Thornton, M.D....................... 17,891 *
ALL EXECUTIVE OFFICERS AND DIRECTORS
AS A GROUP (17 persons)................... 761,135(8) 8.7%
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* Represents less than 1% of outstanding shares of Common Stock.
(1) For the purposes of this Proxy Statement, beneficial ownership is defined
in accordance with the rules of the Securities and Exchange Commission
(the "Commission") and generally means the power to vote and/or to dispose
of the securities regardless of any economic interest therein.
(2) Based on Form 4 filed on August 13, 2008..
(3) Represents securities reported on Schedule 13G/A dated February 9, 2009 as
being owned by various Funds for which Dimensional Fund Advisors LP has
sole voting and dispositive power, but disclaims beneficial ownership.
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(4) Represents 491,530 shares held by Gruber and McBaine Capital Management,
LLC as Investment Advisor, plus 78,605 shares held by Jon D. Gruber, and
63,714 shares held by J. Patterson McBaine individually based on a
Schedule 13G dated January 27, 2009 and filed by Gruber and McBaine
Capital Management, LLC, Jon D. Gruber, J. Patterson McBaine and Eric B,
Swergold.
(5) Based on a Schedule 13D/A dated March 30, 2009 filed by Blue TSVI, LTD.,
BlueLine Capital Partners, LP, Blue Line Capital Partners II, LP, Blue
Line Capital Partners III, LP, BlueLine Catalyst Fund IX, LP,
BlueLinePartners, L.L.C and Blue Line Partners II, L.L.C.
(6) 134,680 shares are subject to a voting agreement pursuant to which Mr.
Agarwal has agreed to vote such shares in favor of any proposal
recommended by management of the Company and against any proposal not
recommended by management of the Company until August 8, 2009.
(7) Pursuant to the Company's Corporate Governance Guidelines, MrLiebler (72)
is ineligible to serve as a member of the Company's Board of Directors
after the 2009 Annual Meeting of the Shareholders due to reaching the
mandatory retirement age of 72. Mr. Liebler has served as a director since
1994.
(8) Includes exercisable options to purchase Common Stock, including options
exercisable within 60 days of April 1, 2009, as follows: Wayne R. Moon --
10,156; Lawrence Stuesser -- 23,360; Elizabeth Tallett -- 23,360; Jay
Higham -- 1,741; John Hlywak -- 870; Pam Schumann -- 870; and Joseph
Travia -- 870. As to "All Executive Officers and Directors as a Group,"
includes an aggregate of 61,824 shares beneficially owned, including
exercisable options by executive officers not named above. The address for
each of the directors and executive officers is c/o IntegraMed America,
Inc., Two Manhattanville Road, Purchase, New York 10577.
Proposal 1
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ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
Each of the nominees is currently a director of the Company. The Board
of Directors recommends that the persons named below be elected as directors of
the Company and it is intended that your proxy will be voted for the election as
directors of the seven persons named below, unless your proxy contains contrary
instructions. The Company has no reason to believe that any of the nominees will
not be a candidate or will be unable to serve. However, in the event that any
nominee should become unable or unwilling to serve as a director, your proxy
will be voted for the election of such person or persons as shall be designated
by the Board of Directors.
The following sets forth the names and ages of the seven nominees for
election to the Board of Directors, their respective principal occupations or
employments during the past five years and the period during which each has
served as a director of the Company.
KUSH K. AGARWAL (61) became a director of the Company effective August
8, 2007. He has served as President of Vein Clinics of America, Inc., which was
acquired by the Company on August 8, 2007, since joining Vein Clinics of America
in August 1987 until he resigned on May 15, 2008. Mr. Agarwal has a Master of
Science in Industrial Administration from Carnegie-Mellon University, a Master
of Science in Applied Analysis and Operations Research from the State University
of New York and a Bachelor of Technology in Mechanical Engineering from Indian
Institute of Technology.
GERARDO CANET (63) served as Chief Executive Officer of the Company
from February 14, 1994 to December 31, 2005 and has been a director of the
Company since February 14, 1994. Mr. Canet resigned as Chief Executive Officer
effective December 31, 2005, but continues to serve as Chairman of the Board and
a consultant to the Company. Mr. Canet has been a director of Dendreon
Corporation since December 1996. He earned a B.A. in Economics from Tufts
University and an M.B.A. from Suffolk University.
JAY HIGHAM (50) became President and Chief Executive Officer of the
Company, effective January 1, 2006 and was President and Chief Operating Officer
of the Company since June 2004. He was appointed a director of the Company,
effective January 24, 2006. In October 1994, Mr. Higham joined the Company as
Vice President of Marketing and Development and in January 1999, was promoted to
Senior Vice President of Marketing and Development. He earned a B.S. in
Psychology from the University of Rochester and an M.H.S.A. from George
Washington University.
WAYNE R. MOON (69) became a director of the Company in May 2001. Mr.
Moon joined Kaiser Foundation Health Plan, Inc. in 1970 and was subsequently
elected President, Chief Operating Officer and Director. In September 1993, Mr.
Moon was appointed President and Chief Executive Officer of Blue Shield of
California and a member of its Board of Directors and, later, Chairman. Mr. Moon
4
retired from Blue Shield in January 2000. Until recently, he served as Chairman
of the Board of RelayHealth, Inc. He serves on various corporate and civic
boards, including Varian, Inc. and the California State Automobile Association.
Mr. Moon earned a B.B.A. and a Masters in Hospital Administration from the
University of Michigan.
LAWRENCE J. STUESSER (67) became a director of the Company in April
1994. Since June 1999, Mr. Stuesser has been a private investor. From June 1996
to May 1999, Mr. Stuesser was the President and Chief Executive Officer and a
director of Computer People Inc., the U.S. subsidiary of London-based Delphi
Group plc, of which he was also a director. Mr. Stuesser was a director of
American Retirement Corporation from May 1997 to July 2006. Early in his career,
Mr. Stuesser qualified as a certified public accountant and served as an audit
manager with Alexander Grant & Company, an accounting firm. Mr. Stuesser holds a
B.B.A. in accounting from St. Mary's University.
ELIZABETH E. TALLETT (60) became a director of the Company in June 1998.
Since July 2002, Ms. Tallett has been a Principal of Hunter Partners, LLC, which
provides management services to developing life sciences companies. Ms. Tallett
is a director of The Principal Financial Group, Inc., Varian, Inc., Coventry
Health Care, Inc. and Meredith Corp. Inc. She is a board member of the Museum of
Contemporary Science in New Jersey. Ms. Tallett graduated from Nottingham
University with degrees in mathematics and economics.
YVONNE S. THORNTON, M.D., M.P.H. (61) became a director of the Company
in January 2006. Dr. Thornton is a double board-certified specialist in
obstetrics, gynecology and maternal-fetal medicine. Dr. Thornton is a former
Professor of Clinical Obstetrics and Gynecology at Cornell (Weill) Medical
College and Vice-Chair of the Department of OB/GYN and Director of
Maternal-Fetal Medicine at Jamaica Hospital Medical Center in New York City
where she served from 2002-2005. From 2000-2002, Dr. Thornton was a member of
the Department of Obstetrics and Gynecology, Division of Maternal-Fetal Medicine
at St. Luke's-Roosevelt Hospital in New York City. Currently, Dr. Thornton is a
perinatal consultant at Westchester Medical Center in New York. Dr. Thornton is
a Diplomate of the American Board of Obstetrics and Gynecology, a Fellow of the
American College of Surgeons and an Oral Examiner for the American Board of
Obstetrics and Gynecology. She is the author of the Pulitzer prize-nominated
book entitled, "The Ditchdigger's Daughters." After graduating with honors from
Monmouth College in New Jersey, she received her M.D. degree with honors from
Columbia University College of Physicians and Surgeons. Dr. Thornton also
received her Executive Masters (M.P.H.) degree in Health Policy and Management
from Columbia University.
The Board of Directors recommends a vote "FOR" each nominee listed
above. Your proxy will be voted in accordance with the choice specified thereon,
or, if no choice is properly indicated, in favor of the nominees listed above.
DIRECTOR INDEPENDENCE
The Board of Directors has determined that Messrs. Moon, Liebler and
Stuesser, Ms. Tallett and Dr. Thornton are independent directors in accordance
with Rule 4200(a)(15) of the Nasdaq Marketplace Rules because none of them is
believed to have any relationships that, in the opinion of the Board of
Directors, would interfere with the exercise of independent judgment in carrying
out their responsibilities as a director. The Board considered fees paid to Mr.
Liebler in 2008 in determining his independence.
Directors are elected by the Company's stockholders at each annual
meeting or, in the case of a vacancy, are appointed by the directors then in
office, to serve until the next annual meeting of stockholders or until their
successors are elected and qualified. Officers are appointed by and serve at the
discretion of the Board of Directors.
During 2008, the Board of Directors held four regular meeting. Each
director attended at least 75% of the aggregate of all meetings of (i) the Board
of Directors and (ii) the committees thereof on which each director served
during 2008. In 2008, the independent directors of the Board met four times in
executive session.
Stockholders may communicate directly with the directors. All
communications should be sent in care of the Secretary of the Company at the
Company's address at Two Manhattanville Road, Purchase, New York 10577 and
should prominently indicate on the outside of the envelope that it is intended
5
for the Board of Directors, for non-employee directors or a particular committee
of the directors. If no director is specified, the communication will be
forwarded to the entire Board.
The Company does not have a policy requiring the directors to attend
stockholder meetings; however, all of our directors attended the 2008 annual
meeting. It is expected that all of our directors will attend the 2009 Annual
Meeting.
COMMITTEES OF THE BOARD
The Board of Directors maintains three standing Committees: Audit
Committee, Compensation Committee, and Nominating and Governance Committee whose
members are set forth below:
NOMINATING
AUDIT COMPENSATION** AND GOVERNANCE**
----- -------------- ----------------
Wayne R. Moon Wayne R. Moon Wayne R. Moon*
Lawrence J. Stuesser* Lawrence J. Stuesser Lawrence J. Stuesser
Elizabeth E. Tallett Elizabeth E. Tallett* Elizabeth E. Tallett
Yvonne S. Thornton, M.D. Yvonne S. Thornton, M.D. Yvonne S. Thornton, M.D.
--------------------
*Committee Chairperson
**Mr. Sarason Liebler is currently serving as a member of the
Compensation Committee and the Nominating and Governance Committee but, pursuant
to the Company's Corporate Governance Guidelines, Mr. Liebler will no longer
serve as a member of the Company's Board of Directors after the 2009 Annual
Meeting of the Shareholders due to reaching the mandatory retirement age of 72.
AUDIT COMMITTEE
The Audit Committee is charged by the Board of Directors to (i) study,
review and evaluate the Company's accounting, auditing and financial reporting
practices, including the internal controls and audit functions, (ii) assess the
Company's compliance with legal and regulatory requirements, and (iii) select
the independent auditors and review their qualifications, independence and
performance, while being the focal point for communications between the Board of
Directors, management and the independent auditors. More specifically, the Audit
Committee pre-approves all audit and non-audit services to be performed by the
independent auditors, reviews the scope and results of the audit of the
Company's financial statements, reviews financial statements and periodic
filings with the Commission, and discusses the same with management.
Each Audit Committee member meets the independence standards of The
Nasdaq Stock Market, LLC. The Board of Directors has determined that in addition
to being independent, Mr. Stuesser is an "audit committee financial expert" as
such term is defined in Item 407 of Regulation S-K promulgated by the
Commission. The Board of Directors has adopted a written charter for the Audit
Committee. A copy of the Audit Committee charter is available to stockholders at
the Company's website http://www.integramed.com under the Investors Section
thereof.
The Audit Committee held four regular meetings and five telephonic
meetings in 2008.
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COMPENSATION COMMITTEE
The Compensation Committee, under a delegation of authority from the
Board of Directors, reviews and makes decisions with respect to salaries, wages,
bonuses, equity awards and other benefits and incentives for executive officers
of the Company. The Compensation Committee held four regular meetings, one
special meeting and one special telephonic meeting in 2008.
The Compensation Committee has a charter, a copy of which is available
to stockholders at the Company's website http://www.integramed.com under the
Investors Section thereof.
Compensation Committee Interlocks and Insider Participation
For 2008, the members of the Compensation Committee were Ms. Tallett
(Chairperson), Messrs. Liebler, Moon and Stuesser, and Dr. Thornton, all of whom
are independent directors.. None of these individuals has ever been an officer
or employee of the Company or any of its subsidiaries. For 2008, no executive
officer of the Company served on the Compensation Committee or Board of
Directors of any other entity, which had any executive officer who also served
on the Compensation Committee or Board of Directors of the Company.
NOMINATING AND GOVERNANCE COMMITTEE
The Board of Directors maintains a Nominating and Governance Committee
consisting of independent directors as defined by NASDAQ rules. The primary
purpose of the Committee is to provide oversight on the broad range of issues
surrounding the composition and operation of the Board of Directors, including
identifying individuals qualified to become Board members, recommending to the
Board director nominees for the next annual meeting of stockholders, and
recommending to the Board a set of corporate governance principles applicable to
the Company. The Committee also provides assistance to the Board in the areas of
Committee selection, evaluation of the overall effectiveness of the Board and
management, and review and consideration of developments in corporate governance
practices. The Committee's goal is to assure that the composition, practices,
and operation of the Board contribute to value creation and effective
representation of the Company stockholders. The Nominating and Governance
Committee held four meetings in 2008.
The Nominating and Governance Committee will consider candidates for
board membership whose qualifications, including business experience and skills,
lend themselves to advancing the Company's best interests. There are no minimum
qualifications. Stockholders may recommend candidates for consideration by the
Nominating and Governance Committee by writing to the "Chairperson, Nominating
and Governance Committee, c/o IntegraMed America, Inc., Two Manhattanville Road,
Purchase, New York 10577." Such recommendations for the 2010 annual meeting of
stockholders must be received by the Company between January 13, 2010 and
February 14, 2010. The Nominating and Governance Committee will evaluate
candidates recommended by stockholders in the same manner as candidates
identified by any other source. The Nominating and Governance Committee's
process for identifying and evaluating nominees for director, including nominees
recommended by stockholders, includes background and reference checks, together
with personal interviews.
The Nominating and Governance Committee has a charter, a copy of which
is available to stockholders at the Company's website http://www.integramed.com
under the Investors' Relation Section thereof.
DIRECTOR COMPENSATION
In 2008, non-employee directors of the Company were paid an annual
retainer of $30,000 and a fee of $2,000 for each regularly scheduled meeting of
the Board attended and for any special or committee meeting not coinciding with
a regularly scheduled Board meeting. The chairpersons of the Compensation
Committee and the Nominating and Governance Committee were paid $5,000 each for
serving as chairperson and the Chairperson of the Audit Committee was paid
$8,000 for serving as chair of the Audit Committee. Directors were also
reimbursed for reasonable travel expenses incurred in attending meetings.
Additionally, non-employee directors (other than Mr. Agarwal) were granted, as
part compensation for services rendered, 4,415 shares of Common Stock, with a
market value of $9.06 per share, or $40,000, based on the closing price per
7
share of the Company's Common Stock on the date of the grant which was May 13,
2008, with vesting upon grant. Directors who are also executive officers are not
compensated for their services as directors.
The Company's philosophy regarding director compensation is to recognize
that in order to attract and retain directors who are willing to contribute time
and talent to the Company, it is important to compensate competitively such
persons. With that philosophy in mind, the Company attempts to provide fair cash
compensation for a Company of its size and also provide directors with "skin in
the game" by awarding, as part compensation, stock in the Company. With stock as
part of a director's compensation, the resulting objective is to enable
directors to align their interests with stockholders and appreciate the
importance of improving stock performance and providing investors with long-term
gains. Directors are not paid for their roles on Committees, other than as
serving as Chairperson and for attending meetings of such Committees not
coinciding with a regularly scheduled meeting of the Board of Directors.
Committees meet in conjunction with Board meetings and accordingly, the Company
believes there should not be additional compensation for Committee involvement,
unless a meeting of such Committee does not coincide with a regularly scheduled
meeting of the Board of Directors. Because Committee chairpersons are expected
to interact more with management, they are compensated for the additional time.
During 2006, the Board established a requirement that directors own
Company stock equal to five times the annual retainer fee, for the year of a
director's first appointment or election; provided, however, a director has five
years to achieve this requirement. Once this requirement is met, a director need
not adjust the number of shares owned based on the fluctuation of the market
price of the Company stock. As of the date of this Proxy Statement, all
directors have met this requirement.
The following table sets forth a summary of the compensation paid or
accrued by the Company during the year ended December 31, 2008 for the Company's
Directors, but excludes any management Director whose compensation is reflected
on the Summary Compensation Table for named executive officers:
DIRECTOR COMPENSATION TABLE FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Change in Pension
Fees Value and
Earned or Non-Equity Nonqualified
Paid in Stock Option Incentive Plan Deferred All Other
Cash Awards Awards Compensation Compensation Compensation Total
Name ($) ($)(1) ($) ($) Earnings ($)(2) ($)
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Kush Agarwal $19,000 - - - - - $19,000
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Gerardo Canet $38,000 $40,000 - - - $125,000 $203,000
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Sarason Liebler $38,000 $40,000 - - - $57,533 $135,533
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Wayne Moon $43,000 $40,000 - - - - $83,000
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Lawrence Stuesser $46,000 $40,000 - - - - $86,000
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Elizabeth Tallett $45,000 $40,000 - - - - $85,000
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
Yvonne Thornton, M.D. $40,000 $40,000 - - - - $80,000
------------------------- ----------- ------------ ---------- ----------------- -------------------- ---------------- --------------
(1) Represents the grant of 4,415 shares for directors as indicated above on May
13, 2008, with a fair market value of $9.06 per share. All such Stock Awards
vested immediately.
(2)The amounts in "All Other Compensation" include for Messrs. Canet and
Liebler, consulting fees in the amount of $125,000 and $57,533, respectively,
paid or accrued for in 2008. Pursuant to his Consulting Agreement, dated
February 2, 2009, effective January 1, 2009, Mr. Canet has agreed to provide
consulting services two days per month during the period from January 1, 2009
through December 31, 2009 and will receive an amount equal to $36,000 in twelve
equal installments of $3,000 per month. Pursuant to the Company's Corporate
Governance Guidelines, Mr. Liebler will no longer serve as a member of the
8
Company's Board of Directors after the 2009 Annual Meeting of the Shareholders
due to reaching the mandatory retirement age of 72. Mr. Liebler has served as a
director since 1994.
At December 31, 2008, the aggregate number of outstanding options held
by Directors as a group was 56,876 shares and the aggregate number of
outstanding shares pursuant to the Stock Awards was 30, 905.
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
The following sets forth the business experience of executive officers
of the Company:
JAY HIGHAM (50) Mr. Higham's business experience is set forth under the
business experience of Company Directors.
JOHN W. HLYWAK, JR. (61) joined the Company in July 1999 as its Senior
Vice President and Chief Financial Officer and was named Executive Vice
President and Chief Financial Officer in March 2006. Mr. Hlywak is a C.P.A. and
has a B.S. degree in Accounting from Widener University.
DANIEL P. DOMAN (47) joined the Company in August of 2007 with the
acquisition of Vein Clinics of America, Inc. Since May 2008, he has served as
the President of the Company's Vein Clinics Division. Previously, Mr. Doman was
the Chief Financial Officer of Vein Clinics of America, Inc. Prior to joining
Vein Clinics of America, he was a Partner with BDO Seidman, LLP, an accounting
and consulting firm. He has a Bachelor's degree in accounting and finance from
Loyola University of Chicago.
ANGELA GIZINSKI (59) joined the Company in April 2006 as Vice President,
Human Resources. For more than 3 years prior to joining the Company, Ms.
Gizinski was Director, Human Resources with Sara Lee Branded Apparel, now known
as Hanesbrands, Inc. Ms. Gizinski has an Associates Degree from Bay Path Junior
College and a BA in Human Resource Management from Fairfield University.
VIJAY REDDY (42) serves as Vice President, Information Systems. Before
joining the Company in 2003 as Manager of Technical Operations, Mr. Reddy was
Director of Infrastructure & Technology for Lifetime Television in New York. He
also has held management positions in Information Systems with Martha Stewart
Living Omnimedia, Conde Nast Publications, Viacom and Schlumberger. Mr. Reddy
has a Bachelor's degree in Computer Science from St. John's University, and he
is a certified IEEE Computer Systems Engineer.
PAMELA SCHUMANN (43) was appointed President of the Company's Consumer
Services Division in September 2007. Prior to that she served as Vice President,
Consumer Services. She joined the Company in 2001 to help launch the Company's
consumer services initiative. Ms. Schumann received her BA in Marketing from the
University of Maryland's Robert H. Smith School of Business.
SCOTT SOIFER (46) joined the Company in January 2005 as Vice President,
Marketing and Development. For more than 12 years prior to joining the Company,
Mr. Soifer was an Associate Partner at Accenture (formerly Andersen Consulting),
specializing in Healthcare strategy, focused primarily on the health insurance
sector. Mr. Soifer has a Bachelor's degree in Computer Science from the
University of California at Santa Barbara and an MBA from the Kellogg School of
Management at Northwestern University.
JOSEPH J. TRAVIA, JR. (55) was appointed President of the Company's
Fertility Centers Division in September 2007. Prior to that he served as Senior
Vice President, Operations, Eastern Region. He joined the Company in 2000 as its
Vice President and Executive Director of Reproductive Science Center in New
England. Mr. Travia is a CPA and earned a B.S. in Management from Boston College
and an M.B.A. from Babson College.
CLAUDE E. WHITE (60) joined the Company in March 1995 as General Counsel
and Assistant Secretary. In January 1998, Mr. White became Corporate Secretary,
in addition to General Counsel, and in May, 2002 became a Vice President. Mr.
White received his B.A. degree in Political Science from Rutgers College and his
J.D. degree from Rutgers School of Law.
9
COMPENSATION DISCUSSION AND ANALYSIS
Overview and Objectives
The objective of the Company's compensation program, consisting of base
salary, executive incentive compensation (performance-based compensation), stock
options, restricted stock and restricted stock unit grants ("RSUs") (RSUs are
time and performance based compensation), is to ensure that in the Company's
effort to create shareholder value, the Company attracts, motivates and retains
executives capable of assisting in the creation of such shareholder value.
The Company's compensation program is designed first to be competitive
by providing base salaries that are market driven; second, to reward for Company
and individual performance through annual incentive compensation awards and
third, to retain executives through the grant of restricted stock, RSUs and
stock option awards that provide for vesting over time and upon the obtainment
of certain performance targets in the case of RSUs. Commencing with 2008, the
Company awarded senior executives with stock option awards that vest over a
four-year period and commencing with 2009, with grants of performance-based
RSUs. In order to be market competitive with salaries for senior executives, the
Compensation Committee annually assesses market salaries and attempts to ensure
that salaries for Company senior executives fall within the mid to upper range
of salaries for comparable positions, taking into consideration experience,
backgrounds and annual individual performance reviews for individual executives,
but qualified to comparable size companies within comparable industries. With
respect to executive incentive compensation, executives are expected to
accomplish individual goals annually that contribute to the overall growth of
the Company. To the extent the goals are accomplished, such executives are
rewarded. Additionally, executives are rewarded if certain revenue and
bottom-line goals are achieved by the Company each year, with greater reward
being provided based on higher level of achievement.
The Company believes that linking executive compensation to corporate
performance results in a better alignment of compensation with Company goals and
the interests of the Company's shareholders. As performance goals are met or
exceeded, most probably resulting in increased value to shareholders, executives
are rewarded commensurately. The Company believes the compensation levels during
the fiscal year 2008 for executives and the chief executive officer adequately
reflect the Company's compensation goals and philosophy.
Elements of the Compensation Program
The Company has chosen these four elements of compensation because of
the belief that taken together, (i) base salary, (ii) executive incentive
compensation, (iii) restricted stock grants and RSUs, and (iv) stock option
awards represent the fairest way to compensate for services, provide a financial
incentive to achieve long-term goals and objectives and help align an
executive's interest with that of shareholders by seeking to improve stock
performance and thereby benefit from such result. Short term compensation is
typically in the form of base salary and annual incentive bonuses and long term
compensation is typically in the form of equity. Each individual's base salary
is determined based on years of experience and market rates for similar
positions with other companies of comparable size. While the Compensation
Committee does not believe that it is appropriate to establish compensation
levels based solely on market comparisons or industry practices, it believes
that information regarding pay practices at other companies is useful in
assessing the reasonableness of compensation and recognizes that the Company
needs to be competitive for executive talent in its industry. A significant part
of an executive's compensation is the incentive bonus compensation program. This
program provides a cash bonus which targets 75% of salary for the President and
CEO, 50% of salary for the Division Presidents and Executive Vice Presidents,
40% of salary for Senior Vice Presidents and 30% of salary for Vice Presidents.
The program has been designed to (i) reward executives who have achieved
specific business and financial success during the Company's most recent fiscal
year, (ii) give executives the incentive to strive for higher productivity,
efficiency and quality of services and (iii) encourage the "best" people to join
and stay with the Company. The program is based on achieving specific goals and
results set by the President and CEO, and approved by the Compensation
Committee. The Company's executive incentive compensation program consists of
two parts: Part I is based on the Company's performance versus budget and Part
II is based on the achievement of individual performance goals. The maximum
amount earned under Part I is 60% of an individual's total maximum incentive
compensation which, as stated, ranges from 75% to 30% of base salary. Part II of
the Company's incentive compensation is based on the achievement of certain
common milestones related to Company achievements and specific milestones
established for each executive. The common milestones are applicable to all
10
eligible employees and the specific milestones apply to each eligible employee
and are determined by each executive's individual supervisor with the approval
of the President. For Mr. Higham, the President and CEO, whose milestones are
approved by the Compensation Committee, the common milestones represented 10% of
the bonus eligibility and specific milestones represented 30% of his bonus
eligibility for 2008. For Mr. Hlywak, the Executive Vice President and CFO, 10%
of his eligible bonus was based on the common milestones and specific milestones
represented 30% of his bonus eligibility for 2008.
The Company's President and CEO recommend to, and consult with, the
Compensation Committee with respect to the salary of executive officers. In
order to assure that executive compensation is both competitive and appropriate,
the Compensation Committee reviews executive compensation in its entirety before
determining compensation level adjustments. In that connection, the overall
compensation of senior executives is intended to fall within an appropriate
range for comparable positions in the Company's industry.
The Compensation Committee may retain the services of a compensation
consultant to advise and assist it in the performance of its functions. During
fiscal year 2008, the Compensation Committee engaged Frederic W. Cook & Co.
("Cook") which receives instructions from, and reports directly to, the
Compensation Committee. The Compensation Committee requested Cook's advice on a
variety of issues, including compensation strategy, market comparisons, pay and
performance alignment versus industry peers, executive pay trends and potential
compensation plan design and modifications.
Historically, the Company's executive compensation structure emphasized
cash components over long-term incentive components, due primarily to the low
trading volume of the Company's stock. As the Company has grown, it has become
more feasible to increase the emphasis on long-term incentives, making the
Company's executive compensation more competitive with comparable companies by
increasing the equity portion of its overall compensation.
Allocation of Compensation Among the Four Elements
In determining what portion or percentage of an executive's compensation
is to be allocated among the four elements discussed above, the Company has
determined that the largest portion should be allocated to base salary, the next
portion to incentive compensation and the smallest portion to equity awards of
stock options, restricted stock and RSUs. The Company recognizes that in order
to attract, motivate and retain executives, there must be a connection among
each element of compensation that accomplishes the objectives stated above. The
base salary serves to attract competent executives in what is an increasingly
competitive market place. The incentive compensation award becomes a good
motivator to provide annual incentives for executives to strive for the highest
level of productivity resulting in shareholder value. Lastly, the stock option
awards and the restricted stock and RSU grants serve to retain executives
because the vesting of the options and shares granted is over a period of time
and with the growth of the stock, each executive's well being is aligned with
that of the shareholders.
Perquisites
Our CEO, Jay Higham, is provided with a leased vehicle that is
maintained at Company expense. The total 2008 expenses incurred by the Company
related to the leased vehicle were $12,463. Mr. Doman, our President of Vein
Clinics of America, Inc. received an auto allowance for a portion of the fiscal
year ended 2008 in an aggregate amount of $2,564.
401(k) Defined Contribution Plan
The Company maintains a 401(k) and Profit Sharing Plan which allows
executives, as well as other employees of the Company, to make elective salary
deferrals in accordance with IRS regulations. The Company does provide a
discretionary match of 25% of an individual's maximum contributions of $15,500,
up to 1.5% of an individual's compensation of $230,000 or less for the fiscal
year, for a maximum match of $3,450 per individual. For the President and CEO,
the Executive Vice President and CFO and the other named executive officers, the
Company contributed the maximum match of $3,450 in fiscal year ended December
31, 2008.
11
Retirement Benefits
No retirement benefits are provided to Company executives.
Severance and Change in Control Arrangements
The Company believes that executives, after years of service to the
Company, should not be arbitrarily affected due to a "change in control." For
that reason, the Company enters into retention agreements with executive
officers providing for certain termination benefits if a "change in control"
occurs and such executives are terminated without cause within a specified
period. On October 10, 2005, the Company entered into an employment agreement
with Jay Higham to serve as its President and CEO, effective January 1, 2006.
Pursuant to the employment agreement, Mr. Higham was appointed director of the
Company on January 24, 2006. The employment agreement provides for Mr. Higham to
receive an annual salary of $275,000, subject to increases. Under the employment
agreement, Mr. Higham was granted shares of the Company with a value of $400,000
based on the closing price of the Company's stock on the first trading day of
January 2006. The number of shares granted was 32,000 and they vest over a
10-year period. Pursuant to the agreement, the Company may terminate Mr.
Higham's employment without cause on thirty days' notice, in which event Mr.
Higham will receive, as severance pay, twelve months' base salary payable, plus
Mr. Higham's annual bonus, without regard to the condition precedents
established under the bonus plan, in a lump sum. Under the agreement, if Mr.
Higham had been terminated effective December 31, 2008, based on his 2008
compensation he would have been paid $330,000 representing his 2008 base salary
and $215,000 representing his accrued 2008 bonus, or a total of $545,000.
The employment agreement further provides that in the event that within
one year after a "Change of Control" (as defined therein) of the Company, Mr.
Higham's employment is terminated by Mr. Higham for "Good Reason" (as defined
therein) or by the Company without cause, Mr. Higham will be paid a lump sum
amount equal to his base salary for a 24-month period following termination,
plus twice the full amount of Mr. Higham's annual bonus based on his then
current salary, without regard to the condition precedents established for the
bonus payment. Based on this change of control provision, if there had been a
change of control of the Company in 2008 and Mr. Higham's employment had
terminated effective December 31, 2008, either for "Good Reason" by Mr. Higham
or without cause by the Company, Mr. Higham would be entitled to termination pay
equal to $660,000 representing his then annualized base salary for 24-months,
plus $429,000 representing twice the amount to which he was eligible under the
Company's Executive Incentive Compensation Plan for 2008, or a total of
$1,089,000.
Under the employment agreement, Mr. Higham has agreed not to compete
with the Company while employed by the Company and for a period of two years
thereafter.
--------------
The Company is also party to Executive Retention Agreements with its
executive officers, including Mr. Hlywak, the Company's Executive Vice President
and CFO and the other named executive officers set forth in the foregoing
compensation table.
The Executive Retention Agreements (the "Agreements") provide for
certain severance payments and benefits to the named executives in the event of
a termination of their employment, either by the Company without cause, or by
the executive for "Good Reason" (as defined therein), at any time within
eighteen (18) months following a "Change in Control" (as defined therein) of the
Company (any such termination, a "Qualifying Termination"). More specifically,
the Agreements provide the named executives with one additional year of salary,
bonus (if applicable), and benefits (or equivalent), more than he or she would
previously have been entitled to receive upon a termination without cause.
Accordingly, pursuant to the Agreements, in the event of a Qualifying
Termination, the named executives will be paid one year's severance. Pursuant to
the terms of the Agreements, all incentive options granted to the respective
executive would become fully vested upon a Qualifying Termination, subject to
certain terms and conditions. Also, pursuant to the Agreements, the Company
would be required to pay each respective executive for all reasonable fees and
expenses incurred by the respective executive in litigating his or her rights,
thereunder, to the extent the executive is successful in any such litigation.
12
In the event an executive officer, other than Mr. Higham who would be
paid in accordance with the terms of his employment agreement, is terminated
without cause under circumstances outside a "Change in Control," each person
would be paid ninety (90) days salary continuation. In the event Mr. Hlywak had
been terminated without cause effective December 31, 2008 as a result of a
"change in control" in 2008, Mr. Hlywak would have been paid $256,000,
representing his 2008 annual base salary, and $128,000, representing the bonus
amount Mr. Hlywak was eligible to receive, or a total of $484,000. For each of
the other named executive officers, had they been terminated without cause
effective December 31, 2008 as a result of a "change in control" in 2008, they
would have been paid their respective 2008 base salaries and bonus amount which
they would have been eligible to receive. For Mr. Doman, the payment would have
been $221,880 in salary and $88,720 in bonus or a total of $310,520. For Mr.
Travia, the payment would have been $245,000 in salary and $98,000 in bonus or a
total of $343,000. For Ms. Schumann, the payment would have been $210,000 in
salary and $84,000in bonus or a total of 294,000.
Finally, Section 162(m) of the Internal Revenue Code, in certain
circumstances, limits to $1 million the deductibility of compensation, including
stock-based compensation, paid to executives by public companies. None of the
compensation paid to executive officers named in the Summary Compensation Table
for fiscal year 2008 exceeded the threshold for deductibility under Section
162(m).
13
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation paid or
accrued by the Company during the years ended December 31, 2008, 2007 and 2006
for the Company's Chief Executive Officer, Chief Financial Officer and for the
next three most highly compensated executive officers (the "Named Executive
Officers").
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
All
Option Other
Name and Year Salary Bonus Stock Awards Awards Compensation Total
Principal Position ($) ($) ($)* ($)* ($) ** ($)
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
Jay Higham 2008 $330,000 $128,700 $70,949 $112,516 $15,913 $658,078
(Presidentand 2007 $300,000 $195,000 $154,000 - $13,555 $662,555
Chief Executive 2006 $275,000 $148,500 $441,250 - $15,828 $880,578
Officer)
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
John W. Hlywak, 2008 $256,000 $ 76,500 $38,252 $56,259 $3,450 $430,461
Jr. 2007 $245,000 $122,500 $84,807 - $3,300 $455,607
(Executive Vice 2006 $234,000 $105,750 $28,200 - $3,300 $371,250
President and
Chief Financial
Officer)
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
Dan Doman,** 2008 $221,880 $ 42,750 $100,004 $49,550 $6,014 $420,198
President Vein 2007 $ 79,167 $ 56,670 - - - $135,837
Clinics
Division
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
Pamela Schumann*** 2008 $210,000 $ 84,000 $27,500 $56,259 $3,450 $381,209
(President, 2007 $122,635 $ 31,863 $111,075 - $2,895 $268,468
Consumer Services) 2006 $ 97,231 $ 28,800 $9,770 - $2,775 $138,576
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
Joseph J. 2008 $245,000 $110,250 $37,500 $56,259 $3,450 $452,459
Travia, Jr.
(President, 2007 $222,654 $ 87,200 $124,600 - $3,300 $437,754
Fertility Center
Division) 2006 $201,076 $ 63,570 $19,800 - $3,015 $287,461
------------------- -------- ------------ ------------ --------------- ------------- ---------------- ---------------
*See footnote 19 in our Notes to Consolidated Financial Statements for the year
ended December 31, 2008 included in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 for a discussion of the assumptions made in
the valuation of the restricted stock option awards.
**This column includes the amounts of $12,463, $10,255 and $12,528 for the years
2008, 2007 and 2006, respectively, paid by the Company in connection with a
vehicle leased for Mr. Higham, plus amounts for the listed persons representing
Company matches made for the named individuals under the Company's 401(k) Plan
*** Mr. Doman joined the Company on August 7, 2007 with the acquisition of Vein
Clinics of America, Inc.
****Ms. Schumann worked on a part-time basis from January 1, 2006 through
November 14, 2007.
14
GRANTS OF PLAN-BASED AWARDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
The following table sets forth certain information concerning the Named
Executive Officers with respect to Grants of Plan-Based Awards for the fiscal
year ended December 31, 2008:
------------------ -------------- -------------------- ------------------ ------------------- ------------------
All Other Option
Awards:
All Other Stock Number of Exercise or Grant Date
Awards: Securities Base Price Fair Value
Number of Shares of Underlying Of Option Awards Of Stock &
Name Grant Date Stock or Units (2) Options (3) ($/Sh) (4) Option Awards
------------------ -------------- -------------------- ------------------ ------------------- ------------------
1/02/08 (3) 5,573 $11.20 $ 13,416
Jay Higham 5/13/08 (3) 6,265 - $ 56,761
5/13/08 (4) 1,566 - $ 14,188
7/22/08 (4) 33,600 $ 8.06 $ 99,100
------------------ -------------- -------------------- ------------------ ------------------- ------------------
1/02/08 (3) 2,787 $11.20 $ 6,709
John W. Hlywak, 5/13/08 (3) 3,378 - $ 30,605
Jr. 5/13/08 (4) 844 - $ 7,647
7/22/08 (4) 16,800 $ 8.06 $ 49,550
------------------ -------------- -------------------- ------------------ ------------------- ------------------
Dan Doman 5/13/08 (4) 11,038 - $ 100,004
7/22/08 (4) 16,800 $ 8.06 $ 49,550
------------------ -------------- -------------------- ------------------ ------------------- ------------------
1/02/08 (3) 2,787 $11.20 $ 6,709
5/13/08 (4) 828 - $ 7,502
Pamela Schumann 5/13/08 (4) 3,311 - $ 29,998
7/22/08 (4) 16,800 $ 8.06 $ 49,550
------------------ -------------- -------------------- ------------------ ------------------- ------------------
1/02/08 (3) 2,787 $11.20 $ 6,709
Joseph Travia, 5/13/08 (4) 828 - $ 7,502
Jr. 5/13/08 (3) 3,311 - $ 29,998
7/22/08 (4) 16,800 $ 8.06 $ 49,550
------------------ -------------- -------------------- ------------------ ------------------- ------------------
(1) Represents grants of restricted stock
(2) Options were issued with an exercise price equal to a fair market value
of $11.20 per share with respect to the January 1, 2008 grant and $6.15
per share with respect to the July 22, 2008 grant, in each case the
closing price of the Common Stock on the date of grant.
(3) Granted pursuant to the Company's 2000 Long-Term Compensation Plan
(4) Granted pursuant to the Company's 2007 Long-Term Compensation Plan
15
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2008
The following table sets forth outstanding equity awards with respect to
the Named Executive Officers at December 31, 2008:
---------------------------------------------------------------------- ---------------------------------------
Option Awards Stock Awards
---------------------------------------------------------------------- ---------------------------------------
Numer of Number of Equity Incentive
Securities Securities Plan Awards:
Underlying Underlying Number of
Unexercised Unexercised Securities Number of Shares Market Value of
Options Options Underlying Option Option or Units of Stock Shares or Units of
(#) (#) Unexercised Exercise Expiration That Have Not Stock That Have Not
Name Exercisable Unexercisable Unearned Options Price ($) Date Vested (1) Vested ($) (2)
---------------------------------- ------------- ------------------ --------- ------------- ------------------- -------------------
Jay Higham - 5,573 - $11.20 01/02/2018 13,461 $90,862
33,600 $8.06 07/22/2018
---------------------------------- ------------- ------------------ --------- ------------- ------------------- -------------------
John W. Hlywak, Jr. - 2,787 - $11.20 01/02/2018 7,582 $51,179
16,800 $8.06 07/22/2018
---------------------------------- ------------- ------------------ --------- ------------- ------------------- -------------------
Dan Doman - 16,800 - $8.06 07/22/2018 8,589 $57,976
---------------------------------- ------------- ------------------ --------- ------------- ------------------- -------------------
Pamela Schumann - 19,587 - $8.06 01/02/2018 8,568 $57,834
07/22/2018
---------------------------------- ------------- ------------------ --------- ------------- ------------------- -------------------
Joseph J. Travia, Jr. - 19,587 - $8.06 01/02/2018 8,568 $57,834
07/22/2018
---------------------------------- ------------- ------------------ --------- ------------- ------------------- -------------------
(1) Restricted stock awards granted May 13, 2005 to the named executive officers
vest over a 36-month period at the rate of 8.33% every 90 days of the 36-month
period. Restricted stock awards granted January 4, 2006 to Mr. Higham vest over
a 120-month period at the rate of 2.5% every 90 days of the 120-month period.
Restricted stock awards granted May 23, 2006 to the named executive officers
vest over a 36-month period at the rate of 8.33% every 90 days of the 36-month
period. Restricted stock awards granted May 15, 2007 to the named executive
officers vest over a 36-month period at the rate of 8.33% every 90 days of the
36-month period. 25% of the restricted stock awards granted to Messrs. Higham
and Hlywak on September 24, 2007 vested immediately with the balance vesting
over a 36-month period at the rate of 8.33% every 90 days of the 36-month
period. A restricted stock award granted to Ms. Schumann and Mr. Travia vests
over a 60-month period at the rate of 5% every 90 days of the 60-month period.
The named executive officers received two restricted stock awards on May 13,
2008; the first stock award vest over a 36-month period at the rate of 8.33%
every 90 days of the 36-month period and the second stock award vests on May 12,
2011. Of the total 7,831 shares granted to Mr. Higham, 6,265 vest over a
36-month period at the rate of 8.33% every 90 days of the 36- month period and
1,566 shares vest on May 12, 2011. Of the total 4,222 shares granted to Mr.
Hlywak, 3,378 vest over a 36-month period at the rate of 8.33% every 90 days of
the 36- month period and 844 shares vest on May 12, 2011. All of Mr. Doman's
11,038 shares granted vest over a 36-month period at the rate of 8.33% every 90
days of the 36- month period. Of the total 4,139 shares granted to Ms. Schumann,
3,311 vest over a 36-month period at the rate of 8.33% every 90 days of the 36-
month period and 828 shares vest on May 12, 2011.
(2) The market value of the restricted stock awards is based on the closing
market price of our common stock on December 31, 2008, which was $6.75.
16
OPTION EXERCISES AND STOCK VESTED FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
-----------------------------------------------------------------------------
The following table shows option exercises and stock award vesting with
respect to the Named Executive Officers for the year ended December 31, 2008:
----------------------------------------------------
Stock Awards
---------------------------------------------------
Number of Shares Acquired on Value Realized
Vesting on Vesting
Name (#) (1) ($) (2)
------------------------ --------------------------------- -----------------
Jay Higham 7,831 $70,448
------------------------ --------------------------------- -----------------
John W. Hlywak, Jr. 4,222 $36,900
------------------------ --------------------------------- -----------------
Dan Doman 11,038 $79,032
------------------------ --------------------------------- -----------------
Pamela Schumann 4,139 $31,580
------------------------ --------------------------------- -----------------
Joseph J. Travia, Jr. 4,139 $31,580
------------------------ --------------------------------- -----------------
(1) Reflects restricted shares that vested in fiscal year ended December 31,
2008. (2) Calculated based on the underlying value of the shares on the vesting
date.
EQUITY COMPENSATION PLAN INFORMATION
------------------------------------
The following table sets forth, as of December 31, 2008, equity
compensation plan information under which equity securities are authorized for
issuance:
--------------------------- -------------------------- -------------------------- --------------------------
Number of securities to Weighted-average Number of securities
be issued upon exercise exercise price of remaining available for
of outstanding options, outstanding options, future issuance under
warrants and rights warrants and rights equity compensation
(a) (b) plans (excluding
securities reflected in
Plan Category column (a))
--------------------------- -------------------------- -------------------------- --------------------------
Equity compensation 227,016 $5.78 356,784
plans approved by
security holders
--------------------------- -------------------------- -------------------------- --------------------------
Equity compensation
plans not approved -0- N/A -0-
by security holders
--------------------------- -------------------------- -------------------------- --------------------------
Total 227,016 $5.78 356,813
--------------------------- -------------------------- -------------------------- --------------------------
Pension Benefits
----------------
The Company does not have any pension plans.
Nonqualified Deferred Compensation
----------------------------------
The Company does not have a deferred compensation plan.
17
Proposal 2
APPROVAL OF AMENDMENT TO THE 2007 LONG-TERM COMPENSATION PLAN
The 2007 Long-Term Compensation Plan (the "2007 Plan") was adopted by
the Board of Directors of the Company in March 2007 and approved by the
Stockholders of the Company at the April 11, 2008 Annual Meeting of
Stockholders. Under the 2007 Plan, the Company can issue incentive stock options
("Incentive Stock Options"), non-qualified stock options ("Non-qualified Stock
Options"), restricted stock ("Restricted Stock") and restricted stock units
("RSUs', Incentive Stock Options, Non-qualified Stock Options, Restricted Stock
and RSUs are collectively referred to herein as "Grants"). Currently, 500,000
shares of Common Stock are authorized for issuance under the 2007 Plan. As of
April 1, 2009, there were 52 Grants resulting in 212,716 shares currently
available for issuance under the 2007 Plan. The market price of our Common Stock
on April 1, 2009 was $5.90. The Company's recent growth has resulted in an
increase in persons eligible to participate in the 2007 Plan. In addition, as
the Company experiences higher trading volume and price, the Company desires to
increase the emphasis on long-term incentives to better align compensation with
Company goals and the interests of the Company's stockholders by increasing the
equity portion of the overall equity portion of compensation .The Board of
Directors of the Company has adopted and recommends that the stockholders
approve an amendment to the 2007 Plan to increase the number of shares of Common
Stock authorized for issuance in connection with Grants under the 2007 Plan from
500,000 to 750,000. A copy of the 2007 Plan, as proposed to be amended, is
attached to this Proxy Statement as Appendix A and is incorporated herein by
reference. The following description of the 2007 Plan, as proposed to be
amended, is a summary and does not purport to be a complete description.
Purpose
The purpose of the 2007 Plan is to enable the Company to grant
Incentive Stock Options, Non-qualified Stock Options, Restricted Stock and RSUs
to selected employees, directors, agents, consultants, independent contractors
and key advisors (collectively referred to as "Grantees") so as to further the
growth and development of the Company and its subsidiaries. The Grants are
intended to encourage Grantees to contribute materially to the Company's success
to obtain a proprietary interest in the Company through ownership of its stock,
thereby providing Grantees with an added incentive to promote the best interests
of the Company and affording the Company a means of attracting persons of
outstanding ability. Approximately, 50 directors and employees participate in
the 2007 Plan.
Common Stock Subject to the 2007 Plan
Under the 2007 Plan, subject to adjustment by reason of, among other
things, a stock dividend, spinoff, recapitalization, stock split or combination
or exchange of share, the aggregate number of shares of common stock of the
Company, $.01 par value ("Common Stock") that may be currently issued or
transferred is 500,000 shares. If the Stockholders approved Amendment No. 1, the
shares of Common Stock that may be issued or transferred will be increased to
750,000. The maximum aggregate number of shares of Common Stock that shall be
granted under the Plan to any individual during any calendar year shall be
50,000 shares. The shares may be authorized but unissued shares of Common Stock
or reacquired shares of Common Stock, including shares purchased by the Company
on the open market. If and to the extent any shares which are the subject of a
Grant are forfeited, the shares subject to such Grant shall again be available
for a Grant under the 2007 Plan.
Termination
The Plan terminates on April 10, 2017(unless sooner terminated at the
discretion of the Board of Directors).
Grant of Options
Under the 2007 Plan, Incentive Stock Options, qualifying under Section
422 of the Internal Revenue Code of 1986, as amended ("the "Code"), may be
granted to employees (including officers) of the Company and/or any of its
subsidiaries, and Non-qualified Stock Options (Incentive Stock Options and
Non-qualified Stock Options are collectively referred to as "Stock Options") may
be granted to employees, directors, consultants, agents, independent contractors
and such other persons as the Compensation Committee of the Board of Directors
(the "Committee") determines will contribute to the Company's success. The
18
Committee, which consists of two or more directors appointed by the Board of
Directors who themselves are not eligible for discretionary grants of Stock
Options, selects the Grantees under the 2007 Plan and determines (i) whether the
respective Stock Option is to be a Non-qualified Stock Option or an Incentive
Stock Option, (ii) the number of shares of Common Stock purchasable under the
option, (iii) the exercise price, which cannot be less than 100% of the fair
market value of the Common Stock on the date of grant with respect to Incentive
Stock Options (110% of fair market value in the case of an Incentive Stock
Option granted to an owner of stock possessing more than 10% of the total voting
power of all classes of stock of the Company (a "10% Owner")), (iv) the time or
times when the Stock Option becomes exercisable, and (v) the term of the option
(not to exceed ten years). Incentive Stock Options are not exercisable prior to
one year from the date of grant. The fair market value, determined as of the
date the option is granted, of shares exercisable for the first time by the
holder of an Incentive Stock Option may not exceed $100,000 in any calendar
year.
Exercise of Options
All options are exercisable during the Grantee's lifetime only by the
Grantee and only while the Grantee is an employee, director, consultant, agent,
independent contractor or otherwise employed by or engaged in performing
services for the Company or a subsidiary, either directly or through a
collaborating entity, and for a period of three months thereafter, except where
termination of employment or engagement is due to death or disability. In the
event of death or disability, the option is exercisable by the Grantee or the
Grantee's executor or administrator within one year from the date of death or
termination of employment by reason of such disability, only to the extent the
option would be exercisable by the Grantee as at such date. No option is
transferable other than by will or the laws of descent and distribution.
Options are exercisable by payment in cash to the Company, or a check
to its order, of the full purchase price for the shares of Common Stock to be
purchased, plus the amount, if any, required for withholding taxes in connection
with such exercise (the "Exercise Payment"); provided, however, that with the
consent of the Committee or such officer of the Company as may be authorized by
the Committee from time to time to give such consent, the Exercise Payment may
be paid by the surrender of Common Stock owned by the person exercising the
option and having a fair market value on the date of exercise equal to the
Exercise Payment, or in any combination of cash and Common Stock so long as the
total cash so paid and the fair market value of the Common Stock surrendered
equals the Exercise Payment, and the Common Stock so surrendered, if originally
issued to the optionee upon exercise of an option granted by the Company, shall
have been held by the optionee for more than six months.
Option Adjustments
The 2007 Plan contains a customary anti-dilution provision which
provides that in the event of any change in the Company's outstanding capital
stock by reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, the
aggregate number of shares of Common Stock subject to outstanding options and
the exercise price are to be appropriately adjusted by the Board of Directors
(or the Committee), whose determination thereon shall be conclusive.
Restricted Stock Grants
Under the 2007 Plan, Restricted Stock and RSU Grants may be granted to
employees (including officers) of the Company and/or any of its subsidiaries and
members of the Board of Directors. The 2007 Plan is administered by the
Compensation Committee of the Board of Directors which Committee under the 2007
Plan has the sole authority to (i) determine the individuals to whom Restricted
Stock and RSU Grants shall be made, (ii) determine the type, size and terms of
the Grants to be made to each individual, (iii) determine the time when the
Restricted Stock and RSU Grants will be made and the duration of any applicable
restriction period, (iv) determine the amount of consideration to be paid by the
Grantee, if any, and (v) deal with any other matters arising under the 2007
Plan.
The Committee may establish conditions under which restrictions on
Restricted Stock and RSUs will lapse over time or other triggering events. The
period of time during which the restrictions remain is referred to as the
"restricted period." During the restricted period, a Grantee may not sell,
assign, transfer, pledge or otherwise dispose of the shares of Restricted Stock
or of the RSUs except by will or the by the laws of descent and distribution or,
if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations thereunder).
19
Anti-Dilution
The 2007 Plan contains a customary anti-dilution provision which
provides that in the event of any change in the Company's outstanding capital
stock by reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, the
aggregate number of shares of Common Stock subject to the 2007 Plan are to be
appropriately adjusted by the Board of Directors (or the Committee), whose
determination thereon shall be conclusive.
Amendments, Suspension and Termination
The Board has the authority to suspend, make changes in or additions to
the 2007 Plan as it deems desirable and the Board and the Committee may adopt
rules and regulations to carry out the 2007 Plan. The Board may not, without
stockholder approval, (i) increase the number of shares which may be reserved
for issuance under the 2007 Plan, (ii) adversely affect the rights of a holder
of a Grant previously granted under the 2007 Plan, (iii) modify materially the
eligibility requirements for participation in the 2007 Plan, or (iv) increase
materially the benefits accruing to participants under the Plan.
Federal Income Tax Consequences
Stock Options
Under current tax law, there are generally no Federal income tax
consequences to either the employee or the Company on the grant of Non-qualified
Stock Options if granted under the terms set forth in the 2007 Plan and if the
option is not immediately exercisable. Upon exercise of such a Non-qualified
Stock Option, the excess of the fair market value of the shares subject to the
option over the option price (the "Spread") at the date of exercise is taxable
as ordinary compensation income to the optionee in the year it is exercised and
is deductible by the Company as compensation for Federal income tax purposes, if
Federal income tax is withheld on the Spread. However, if the shares are subject
to vesting restrictions conditioned on future employment or the holder is
subject to the short-swing profits liability restrictions of Section 16(b) the
Exchange Act (i.e., is an executive officer, director or 10% owner of the
Company) then taxation and measurement of the Spread is deferred until such
restrictions lapse, unless a special election is made under Section 83(b) of the
Code to report such income currently without regard to such restrictions. The
optionee's basis in the shares will be equal to the fair market value on the
date taxation is imposed (determined without regard to marketability
restrictions imposed by the securities laws) and the holding period commences on
such date.
Holders of Incentive Stock Options incur no regular Federal income tax
liability at the time of grant or upon exercise of such option, assuming that
the optionee was an employee of the Company from the date the option was granted
until 90 days before such exercise. However, upon exercise, the Spread must be
added to regular Federal taxable income in computing the optionee's "alternative
minimum tax" liability. An optionee's basis in the shares received on exercise
of an Incentive Stock Option will be the option price of such shares for regular
income tax purposes. No deduction is allowable to the Company for Federal income
tax purposes in connection with the grant or exercise of such option.
If the holder of shares acquired through exercise of an Incentive Stock
Option sells such shares within two years of the date of grant of such option or
within one year from the date of exercise of such option (a "Disqualifying
Disposition"), the optionee will realize income taxable at ordinary rates.
Ordinary income is reportable during the year of such sale equal to the
difference between the option price and the fair market value of the shares at
the date the option is exercised, but the amount includable as ordinary income
shall not exceed the excess, if any, of the proceeds of such sale over the
option price. In addition to ordinary income, a Disqualifying Disposition may
result in taxable income subject to capital gains treatment if the sales
proceeds exceed the optionee's basis in the shares (i.e., the option price plus
the amount includable as ordinary income). The amount of the optionee's taxable
ordinary income will be deductible by the Company in the year of the
Disqualifying Disposition.
At the time of sale of shares received upon exercise of an option
(other than a Disqualifying Disposition of shares received upon the exercise of
an Incentive Stock Option), any gain or loss is long-term or short-term capital
gain or loss, depending upon the holding period. The holding period for
long-term capital gain or loss treatment is more than one year.
20
Restricted Stock/RSUs
Restricted Stock. All Restricted Stock Grants under the 2007 Plan shall
be subject to applicable Federal (including FICA), state and local withholding
requirements. The Company may require a Grantee or other person receiving such
shares to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Restricted Stock Grants, or the
Company may deduct from other wages paid by the Company the amount of any
withholding taxes due with respect to such Restricted Stock Grants.
The Committee may permit Grantees to satisfy the Company's income tax
withholding obligation with respect to a Restricted Stock Grant by having shares
withheld up to an amount that does not exceed the Grantee's maximum marginal tax
rate for federal (including FICA), state and local tax liabilities.
Restricted Stock Units. No taxable income is reported when a RSU is
granted to a Grantee. Upon vesting, the participant will recognize ordinary
income in an amount equal to the amount of the fair market value of any shares
received. Any additional gain or loss recognized upon any later disposition of
the shares would be capital gain or loss.
The foregoing is not intended to be an exhaustive analysis of the tax
consequences relating to Stock Options, Restricted Stock and RSUs issued under
the Plan. For instance, the treatment of Grants under state and local tax laws,
which are not described above, may differ from their treatment for Federal
income tax purposes.
Effective Date of the Amendment to the 2007 Plan
The Amendment to the 2007 Plan will become effective upon approval of
the Company's stockholders.
The Board of Directors recommends a vote "FOR" the approval of the
Amendment to the 2007 Long-Term Compensation Plan, and the persons named in the
accompanying proxy will vote in accordance with the choice specified thereon or,
if no choice is properly indicated, in favor of the approval.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who beneficially own more than 10% of a
registered class of the Company's equity securities to file with the Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Such executive officers, directors,
and greater than 10% beneficial owners are required by Commission regulation to
furnish the Company with copies of all Section 16(a) forms filed by such
reporting persons.
To the Company's knowledge, based solely on the Company's review of
copies of such reports furnished to the Company and written representations from
certain reporting persons that no other reports were required, all of the
Company's executive officers and directors, and greater than 10% beneficial
owners complied with applicable Section 16(a) filing requirements during the
year ended December 31, 2008.
21
COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee, under a delegation of authority from the
Board of Directors, reviews and makes decisions with respect to salaries, wages,
bonuses, equity awards and other benefits and incentives for executive officers
of the Company. The Compensation Committee also administers all compensation
programs for executive management of the Company. The Compensation Committee
held four regular meetings, one special and one telephonic meeting in 2008.
The Compensation Committee has a charter, a copy of which is available
to stockholders at the Company's website http://www.integramed.com under the
Investors Section thereof.
The Compensation Committee reviewed and discussed the Compensation
Discussion and Analysis with management and, based on that review and those
discussions, recommended to the Board of Directors the inclusion of the
Compensation Discussion and Analysis in this Proxy Statement and incorporated by
reference into the Company's Annual Report on Form 10-K for the year ended
December 31, 2008.
Elizabeth E. Tallett (Chairperson)
Sarason D. Liebler
Wayne R. Moon
Lawrence J. Stuesser
Yvonne S. Thornton, M.D.
--------------------------
AUDIT COMMITTEE REPORT(2)
The Audit Committee has oversight for the Company's financial reporting
on behalf of the Board of Directors. The Audit Committee, composed of four
independent (as defined by Section (a)(15) of Nasdaq MarketplaceRule 4200)
directors, held four regular and five telephonic meetings in 2008, and operates
under an amended and restated charter approved by the Board of Directors in
December 2006. One member of the Audit Committee, Mr. Stuesser, is an "audit
committee financial expert" as such term is defined in Item 407 of Regulation
S-K promulgated by the Commission.
Management has the primary responsibility for the financial statements
and the reporting process, including the Company's system of internal controls
and the Company's compliance with legal and regulatory requirements. In
fulfilling its oversight responsibilities, the Audit Committee reviewed and
discussed with management the audited financial statements included in the
Company's Annual Report on Form 10-K.
The Audit Committee has discussed with the Company's independent
auditors, Amper, Politziner & Mattia, P.C., the matters required to be discussed
by the statement on Auditing Standards No. 61, as amended (AICPA, Professional
Standards, Vol. 1. AU Section 380) as adopted by the Public Company Accounting
Oversight Board in Rule 3200 T.
The Audit Committee has received and reviewed the written disclosures
and the letter from Amper, Politziner & Mattia, P.C. required by applicable
--------------------------------------
(1) The material in this report is not soliciting material, is not deemd filed
with the SEC and is not incorporated by reference in any filing of the Company
under the Securities Act of 1933 or the Exchange Act, except to the extent the
Company specifically incorporates the report by reference in any such document,
whether made before or after the date of this Proxy Statement and irrespective
of any general incorporation language in such filing.. The Company has
specifically incorporated this report by reference in its Annual Report on Form
10-k for the fiscal year ended December 31, 2008. As such, this report will be
deemed furnished in such Annual Report on Form 10-K and will not be deemed
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act as a result of furnishing the disclosure in this manner.
(2) The material in this report is not soliciting material, is not deemed filed
with the Commission and is not incorporated by reference in any filing of the
Company under the Securities Act of 1933 or the Exchange Act, except to the
extent the Company specifically incorporates the report by reference in any such
document, whether made before or after the date of this Proxy Statement
and irrespective of any general incorporation language in such filing.
22
requirements of the Public Company Accounting Oversight Board for independent
auditor communications with Audit Committees concerning independence and has
discussed with Amper, Politziner & Mattia, P.C. their independence.
The Audit Committee has also considered whether any services provided
by Amper, Politziner & Mattia, P.C. not related to the audit of the financial
statements referred to above and the reviews of the interim financial statements
included in the Company's Form 10-Qs for the quarters ended March 31, 2008, June
30, 2008 and September 30, 2008 were compatible with maintaining the
independence of Amper, Politziner & Mattia, P.C.
Based on the reviews and discussions referred to above, the Audit
Committee, in accordance with its charter, recommended to the Company's Board of
Directors that the audited financial statements referred to above be included in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2008 for filing with the Commission. The Committee has appointed Amper,
Politziner & Mattia, P.C. for the Company's 2009 fiscal year audit.
Lawrence J. Stuesser (Chairperson)
Wayne R. Moon
Elizabeth E. Tallett
Yvonne S. Thornton, M.D.
INDEPENDENT PUBLIC ACCOUNTANTS
On April 14, 2005, the Company engaged Amper, Politziner & Mattia, P.C.
("Amper") as its independent registered public accounting firm. The Audit
Committee of the Company's Board of Directors made the decision to engage Amper.
The Audit Committee engaged Amper to audit the Company's financial
statements for the fiscal years ended December 31, 2006, December 31, 2007 and
December 31, 2008. A representative from Amper is expected to be present at the
2009 Annual Meeting with the opportunity to make a statement, if desired. The
Amper representative is also expected to be available to respond to appropriate
questions.
Pre-Approval Policy
In accordance with the requirements of the Sarbanes-Oxley Act of 2002
and the Audit Committee Charter, as amended in 2006, all audit and audit-related
work and all non-audit work performed by the independent accountants, must be
submitted to the Audit Committee for specific approval in advance by the Audit
Committee, including the proposed fees for such work. The Audit Committee has
not delegated any of its responsibilities to management.
All of the services described below for 2008 and 2007 were pre-approved
by the Audit Committee and/or the Committee Chairman before such services were
rendered by Amper for the fiscal years ended December 31, 2007 and December 31,
2008.
Audit Fees
Audit fees billed or expected to be billed to the Company by Amper for
the audit of the consolidated financial statements included in the Company's
Annual Report on Form 10-K, reviews of the consolidated financial statements
included in the Company's Quarterly Reports on Form 10-Q and consultation on
accounting topics for the year ended December 31, 2008 totaled $315,000. Similar
fees by Amper for the year ended December 31, 2007 totaled $261,000.
23
Audit-Related Fees
The aggregate fees billed by Amper for audit-related services for the
year ended December 31, 2008 were $33,000 and primarily related to an employee
benefit plan review. The aggregate fees billed by Amper for audit related
services for the year ended December 31, 2007 were $103,000 and primarily
related to the employee benefit plans and acquisition reviews.
Tax Fees
For the year ended December 31, 2008, the Company will pay Amper
approximately $72,000 related to tax services and for the year ended December
31, 2007, the Company paid Amper, approximately $60,000 related to tax services.
All Other Fees
There were no other fees for the years ended December 31, 2008 and
2007.
------------------------------------
CERTAIN RELATIONSHIPS AND RELATED-PERSON TRANSACTIONS
The Company entered into a three-year consulting agreement with Mr.
Canet, former President and CEO and current Chairman of the Board of Directors
of the Company, effective January 1, 2006, and a one-year amendment to the
agreement dated December 24, 2008 and effective January 1, 2009. Under the three
year agreement, Mr. Canet was paid $125,000 for each of three years to provide
certain consulting services to the Company. Under the one-year amendment to the
agreement, Mr. Canet will be paid $36,000 to provide certain consulting services
to the Company through December 31, 2009.
The Company does not have written policies and procedures for the
review, approval, or ratification of related party transactions. However, any
related party transaction is reviewed and discussed by the Board of Directors or
appropriate Committee of the Board of Directors with responsibility for the
subject matter. For example the consulting agreement with Mr. Canet was reviewed
and approved by the Compensation Committee of the Board of Directors.
---------------------------------------------
SHAREHOLDER PROPOSALS FOR 2010 ANNUAL MEETING
Under the Commission's proxy rules, stockholder proposals that meet
certain conditions may be included in the Company's proxy statement and form of
proxy for a particular annual meeting. Stockholders that intend to present a
proposal at the Company's 2010 Annual Meeting must give notice of the proposal
to the Company no later than December 11, 2009 to be considered for inclusion in
the proxy statement and form of proxy relating to that meeting. Stockholders
that intend to present a proposal at the 2010 Annual Meeting that will not be
included in the proxy statement and form of proxy must give notice of the
proposal to the Company no fewer than 90 days and no more than 120 days prior to
the first anniversary of the 2009 Annual Meeting. Receipt by the Company of any
such proposal from a qualified stockholder in a timely manner will not guarantee
its inclusion in the Company's proxy materials or its presentation at the 2010
Annual Meeting because there are other requirements in the proxy rules.
Pursuant to Rule 14a-4 under the Exchange Act, the Company intends to
retain discretionary authority to vote proxies with respect to shareholder
proposals for which the proponent does not seek inclusion of the proposed matter
in the Company's proxy statement for our 2010 Annual Meeting, except in
circumstances where (i) the Company receives notice of the proposed matter no
earlier than January 12, 2010 and no later than February 13, 2010, and (ii) the
proponent complies with the other requirements set forth in Rule 14a-4.
24
GENERAL
The management of the Company does not know of any matters other than
those stated in this Proxy Statement, which are to be presented for action at
the 2009 Annual Meeting. If any other matters should properly come before the
meeting, it is intended that proxies in the accompanying form will be voted on
any such other matters in accordance with the judgment of the persons voting
such proxies. Discretionary authority to vote on such matters is conferred by
such proxies upon the persons voting them.
The Company will bear the costs related to preparing, printing,
assembling and mailing the proxy card, Proxy Statement and other material which
may be sent to stockholders in connection with this solicitation, which are
expected to be approximately $10,000. It is contemplated that brokerage houses
will forward the proxy materials to beneficial owners at the request of the
Company. In addition to the solicitation of proxies by use of the mails,
officers and regular employees of the Company may solicit by telephone proxies
without additional compensation. The Company does not expect to pay any
compensation for the solicitation of proxies.
The Company will provide without charge to each person being solicited
by this Proxy Statement, on the written request of any such person, a copy of
the Annual Report of the Company on Form 10-K for the fiscal year ended December
31, 2008 (as filed with the Commission), including the financial statements
thereto. All such requests should be directed to Mr. John W. Hlywak, Jr.,
Executive Vice President and Chief Financial Officer of IntegraMed America,
Inc., Two Manhattanville Road, Purchase, New York 10577. You may also obtain
certain other of the Company's Commission filings through the Internet at
http://www.sec.gov or under "Investors" at http://www.integramed.com, the
Company's website.
Claude E. White
Vice President, General Counsel & Secretary
Dated: April 17, 2009
25
Appendix A
INTEGRAMED AMERICA, INC.
2007 LONG-TERM COMPENSATION PLAN
(As amended)
The purpose of the IntegraMed America, Inc. 2007 Long-Term Compensation
Plan, as the same may be amended on May 13, 2009 (the "Plan") is to provide
designated employees of IntegraMed America Inc. (the "Company") and its
subsidiaries, members of the Board of Directors, agents of, consultants to,
independent contractors of and key advisors to the Company with the opportunity
to receive grants of incentive stock options, non-qualified stock options and
restricted stock and restricted stock units. The Company believes that the Plan
will encourage the participants to contribute materially to the growth of the
Company, thereby benefiting the Company's shareholders, and will align the
economic interests of the participants with those of the shareholders.
1. Administration
1.1 Committee. The Plan shall be administered and interpreted by the
Compensation Committee of the Board of Directors.
1.2 Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable restriction period, and (iv) deal with any other
matters arising under the Plan.
1.3 Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Grants Awards under the Plan may consist of incentive stock options
as described in Section 5 ("Incentive Stock Options"), non-qualified stock
options as described in Section 5 ("Non-qualified Stock Options")(Incentive
Stock Options and Non-qualified Stock Options are collectively referred to
herein as "Options"), and restricted stock ("Restricted Stock") and restricted
stock units ("RSUs") as described in Section 6 (Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock and RSUs are collectively referred
to herein as "Grants"). All Grants shall be subject to the terms and conditions
set forth herein and to such other terms and conditions consistent with this
Plan as the Committee deems appropriate and as are specified in writing by the
Committee to the individual in a grant instrument (the "Grant Instrument") or an
amendment to the Grant Instrument. The Committee shall approve the basic form
and provisions of each Grant Instrument. Grants under a particular Section of
the Plan need not be uniform as among the Grantees.
3. Term of Plan/Shares Subject to the Plan
3.1 Term. The Plan shall terminate on such date as is 10 years from the
date the stockholders initially approved the Plan (April 10, 2017), except with
respect to awards then outstanding. After such date no further awards shall
granted under the Plan.
3.2 Shares Authorized. Effective upon approval of Amendment No. 1 of
the Plan by the Company's Stockholders at the 2009 Annual Meeting of the
Company's Stockholders and subject to the adjustments specified below, the
aggregate number of shares of common stock of the Company, $.01 par value
("Company Stock") that may be issued or transferred under the Plan is 750,000
A-1
shares. The maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year
shall be 50,000 shares. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan. If and to the extent
any shares of Restricted Stock are forfeited, the shares subject to such Grants
shall again be available for purposes of the Plan.
3.3 Adjustments. If there is any change in the number or kind of shares
of Company Stock outstanding (i) by reason of a stock dividend, spin-off,
recapitalization, stock split or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spin-off or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share or the applicable market value of such Grants
shall be appropriately adjusted by the Committee to reflect any increase or
decrease in the number of, or change in the kind or value of, issued shares of
Company Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated by rounding
any portion of a share equal to .5 or greater up, and any portion of a share
equal to less than .5 down, in each case to the nearest whole number. Any
adjustments determined by the Committee shall be final, binding and conclusive.
4. Eligibility for Participation
4.1 Eligible Persons. All employees of the Company and its
subsidiaries, including employees who are officers or members of the Board,
individuals to whom an offer of employment has been extended , members of the
Board , agents of , consultants to, independent contractors of, and key advisors
to the Company (collectively referred to herein as "Grantees") shall be eligible
to participate in the Plan.
4.2 Selection of Grantees. The Committee shall select the Grantees to
receive Grants and shall determine the number of shares of Company Stock subject
to a particular Grant in such manner as the Committee determines.
5. Granting of Options.
5.1 Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each Grantees.
5.2 Type of Option and Price.
5.2.1 The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the
meaning of section 422 of the Internal Revenue Code of 1986, as
amended and related Treasury Regulations (the "Code"),
Nonqualified Stock Options that are not intended so to qualify,
or any combination of Incentive Stock Options and Nonqualified
Stock Options, all in accordance with the terms and conditions
set forth herein. Incentive Stock Options may be granted only to
employees. Nonqualified Stock Options may be granted to
employees, directors, agents, independent contractors and key
advisors.
5.2.2 The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may
be equal to, greater than, or less than the Fair Market Value (as
defined below) of a share of Company Stock on the date the Option
is granted, provided, however, that (i) the Exercise Price of an
Incentive Stock Option shall be equal to, or greater than, the
Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (ii) an Incentive Stock
Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent
or subsidiary of the Company, unless the Exercise Price per share
is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.
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5.2.3 If the Company Stock is publicly traded, then, except as
otherwise determined by the Committee, the following rules
regarding the determination of Fair Market Value per share apply:
(i) if the principal trading market for the Company Stock is a
national securities exchange or The Nasdaq National Market, the
mean between the highest and lowest quoted selling prices on the
relevant date or (if there were no trades on that date) the
latest preceding date upon which a sale was reported, or
(ii) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and
"asked" prices of Company Stock on the relevant date, as reported
on The Nasdaq National Market or as reported in a customary
financial reporting service, as applicable and as the Committee
determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid"
or "asked" quotations as set forth above, the Fair Market Value
per share shall be as determined by the Committee.
5.3 Option Term. The Committee shall determine the term of each Option.
The term of any Option shall not exceed ten years from the date of grant.
However, an Incentive Stock Option that is granted to an Employee who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, may not have a term that exceeds five years from the date of
grant.
5.4 Exercisability of Options.
5.4.1 Options shall become exercisable in accordance with such
terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument
or an amendment to the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options
at any time for any reason.
5.4.2 Notwithstanding the foregoing, the Option may, but need
not, include a provision whereby the Grantee may elect at any
time to exercise the Option as to any part or all of the shares
subject to the Option prior to the full vesting of the Option.
Any unvested shares so purchased shall be subject to a repurchase
right in favor of the Company, with the repurchase price to be
equal to the original purchase price, and any other restrictions
the Committee determines to be appropriate.
5.5 Termination of Employment, Disability or Death.
5.5.1 Except as provided below, an Option may only be exercised
while the Grantee is employed by, member of the Board, agent of,
consultant to, independent contractor of or key advisor to the
Company. In the event that a Grantee's status changes for any
reason other than a "disability," death or "termination for
cause," any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within 90 days after the date on
which the Grantee ceases to be employed by the Company (or within
such other period of time as may be specified by the Committee),
but in any event no later than the date of expiration of the
Option term. Any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be
employed by the Company shall terminate as of such date.
5.5.2 In the event the Grantee ceases to be employed by the
Company on account of a "termination for cause" by the Company,
any Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by the Company.
5.5.3 In the event the Grantee ceases to be employed by the
Company because the Grantee is "disabled," any Option which is
otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee
ceases to be employed by the Company (or within such other period
of time as may be specified by the Committee), but in any event
no later than the date of expiration of the Option term. Any of
the Grantee's Options which are not otherwise exercisable as of
the date on which the Grantee ceases to be employed by the
Company shall terminate as of such date.
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5.5.4 If the Grantee dies while employed by the Company or within
90 days after the date on which the Grantee ceases to be employed
on account of a termination of employment specified in Section
5.5.1 above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be
employed by the Company (or within such other period of time as
may be specified by the Committee), but in any event no later
than the date of expiration of the Option term. Any of the
Grantee's Options that are not otherwise exercisable as of the
date on which the Grantee ceases to be employed by the Company
shall terminate as of such date.
5.5.5 For purposes of Sections 5.5 and 6:
(i) "Company," when used in the phrase "employed by the Company,"
shall mean the Company and its parent, subsidiary corporations,
and any business venture in which the Company has a significant
interest.
(ii) "Employed by the Company" shall mean employment or service
as an Employee of IntegraMed America, Inc. or any subsidiary or
business venture in which the Company has a significant interest,
Key Advisor, or member of the Board (so that, for purposes of
exercising Options, and satisfying conditions with respect to
Restricted Stock, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to be
an Employee of IntegraMed America, Inc. or any subsidiary or
business venture in which the Company has a significant interest,
or member of the Board), unless the Committee determines
otherwise. The Committee's determination as to a participant's
employment or other provision of services, termination of
employment or cessation of the provision of services, leave of
absence, or reemployment shall be conclusive on all persons
unless determined to be incorrect.
(iii) "Disability" shall mean a Grantee's becoming disabled
within the meaning of section 22(e)(3) of the Code.
(iv) "Termination for cause" shall mean the determination of the
Committee that any one or more of the following events has
occurred:
(A) the Grantee's conviction of any act which constitutes a
felony under applicable federal or state law, either in
connection with the performance of the Grantee's obligations on
behalf of the Company or which affects the Grantee's ability to
perform his or her obligations as an employee, board member or
advisor of the Company or under any employment agreement,
non-competition agreement, confidentiality agreement or like
agreement or covenant between the Grantee and the Company (any
such agreement or covenant being herein referred to as an
"Employment Agreement");
(B) the Grantee's willful misconduct in connection with the
performance of his or her duties and responsibilities as an
employee, board member or advisor of the Company or under any
Employment Agreement, which willful misconduct is not cured by
the Grantee within 10 days of his or her receipt of written
notice thereof from the Committee;
(C) the Grantee's commission of an act of embezzlement, fraud or
dishonesty which results in a loss, damage or injury to the
Company;
(D) the Grantee's substantial and continuing neglect, gross
negligence or inattention in the performance of his or her duties
as an employee, board member or advisor of the Company or under
any Employment Agreement which is not cured by the Grantee within
10 days of his or her receipt of written notice thereof from the
Committee;
(E) the Grantee's unauthorized use or disclosure or any trade
secret or confidential information of the Company which adversely
affects the business of the Company, provided that any disclosure
of any trade secret or confidential information of the Company to
a third party in the ordinary course of business who signs a
confidentiality agreement shall not be deemed a breach of this
subparagraph;
(F) the Grantee's material breach of any of the provisions of any
Employment Agreement, which material breach is not cured by the
Grantee within 10 days of his or her receipt of a written notice
from the Company specifying such material breach; or
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(G) the Grantee has voluntarily terminated his or her employment
or service with the Company and breaches his or her
non-competition agreement with the Company.
5.6 Exercise of Options. A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option as specified by the Committee:
5.6.1 in cash; or
5.6.2 by delivering shares of Company Stock owned by the Grantee
for the period necessary to avoid a charge to the Company's
earnings for financial reporting purposes (including Company
Stock acquired in connection with the exercise of an Option,
subject to such restrictions as the Committee deems appropriate)
and having a Fair Market Value on the date of exercise equal to
the Exercise Price; or
5.6.3 by payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board; or
5.6.4 by such other method of payment as the Committee may
approve.
Shares of Company Stock used to exercise an Option shall have been held
by the Grantee for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option. The Grantee shall pay
the Exercise Price and the amount of any withholding tax due (pursuant to
Section 7) at the time of exercise.
5.7 Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the option, as to the excess, shall be treated as a Nonqualified
Stock Option. An Incentive Stock Option shall not be granted to any person who
is not an Employee of the Company or a parent or subsidiary (within the meaning
of section 424(f) of the Code). No Incentive Stock Option shall be exercisable
sooner than one year from the date of grant.
6. Restricted Stock and RSU Grants. The Committee may issue or transfer
shares of Company Stock to a Grantee under a Grant of Restricted Stock or grant
RSUs upon such terms as the Committee deems appropriate. The following
provisions are applicable to Restricted Stock and RSUs:
6.1 General Requirements. Restricted Stock and RSUs may be issued or
transferred for no consideration, as determined by the Committee. The Committee
may establish conditions under which restrictions shall lapse over a period of
time or according to such other criteria as the Committee deems appropriate. The
period of time during which the Restricted Stock or the RSUs will remain subject
to restrictions will be designated in the Grant Instrument as the "Restriction
Period."
6.2 Number of Shares. The Committee shall determine the number of
shares of Company Stock to be issued or transferred pursuant to a Restricted
Stock and RSUt Grant and the restrictions applicable to such shares and/or
units.
6.3 Requirement of Relationship. If the Grantee ceases to be employed
by, a member of the Board, an agent of, consultant to, independent contractor
to, or key advisors to the Company other than for reasons of death or permanent
disability during a period designated in the Grant Instrument as the Restriction
Period, or if other specified conditions are not met, the Restricted Stock and
RSU shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and, in the case of Restricted Stock Grants, those
shares of Company Stock must be immediately returned to the Company. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.
6.4 Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Restricted Stock Grantee may not sell, assign,
transfer, pledge or otherwise dispose of the shares of Restricted Stock except
to a Successor Grantee under Section 7. Each certificate for a share of
Restricted Stock shall contain a legend giving appropriate notice of the
restrictions in the Grant. The Grantee shall be entitled to have the legend
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removed from the stock certificate covering the shares subject to restrictions
when all restrictions on such shares have lapsed. The Committee may determine
that the Company will not issue certificates for shares of Restricted Stock
until all restrictions on such shares have lapsed, or that the Company will
retain possession of certificates for shares of Restricted Stock until all
restrictions on such shares have lapsed. The certificates shall bear, among
other required legends, the following legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including,
without limitation, forfeiture events) contained in the IntegraMed
America, Inc. 2007 Long-Term Compensation Plan and an Award Agreement
entered into between the registered owner hereof and IntegraMed
America, Inc. Copies of such Plan and Award Agreement are on file in
the office of the Secretary of IntegraMed America, Inc., Two
Manhattanville Road, Purchase, New York 10577. IntegraMed America, Inc.
will furnish to the record holder of the certificate, without charge
and upon written request at its principal place of business, a copy of
such Plan and Award Agreement. IntegraMed America, Inc. reserves the
right to refuse to record the transfer of this certificate until all
such restrictions are satisfied, all such terms are complied with and
all such conditions are satisfied."
6.5 Right to Vote and to Receive Dividends. Unless the Committee
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Restricted Stock and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee. A Grantee receiving a RSU Award shall not possess
voting rights and shall accrue dividend equivalents on such units to the extent
provided in the Award Agreement relating to the Grant. The Committee may require
that such dividend equivalents shall be subject to the same restrictions on
vesting and payment as the underlying Award. In addition, with respect to Awards
intended to qualify for the performance-based compensation provisions of Section
162(m) of the Code, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to Restricted
Stock such that the dividends and/or Restricted Stock maintain eligibility for
such provisions.
6.6 Lapse of Restrictions. All restrictions imposed on Restricted Stock
and RSUs shall lapse upon the expiration of the applicable Restriction Period
and the satisfaction of all conditions imposed by the Committee. The Committee
may determine, as to any or all Restricted Stock and RSU Grants, that the
restrictions shall lapse without regard to any Restriction Period.
7. Withholding of Taxes
7.1 Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving such
shares to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Grants, or the Company may deduct from
other wages paid by the Company the amount of any withholding taxes due with
respect to such Grants. There are currently no withholding requirements for
RSUs.
7.2 Election to Withhold Shares. If the Committee so permits, a Grantee
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option or Restricted Stock or RSU Grant by having shares withheld
up to an amount that does not exceed the Grantee's maximum marginal tax rate for
federal (including FICA), state and local tax liabilities. The election must be
in a form and manner prescribed by the Committee and shall be subject to the
prior approval of the Committee.
8. Transferability of Grants
8.1. Non-transferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Grants other than Incentive Stock Options,
if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations thereunder). When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of his or her
right to receive the Grant under the Grantee's will or under the applicable laws
of descent and distribution.
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8.2 Transfer of Non-qualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Non-qualified Stock Options to family members or other persons or
entities according to such terms as the Committee may determine; provided that
the Grantee receives no consideration for the transfer of a Non-qualified Stock
Option and the transferred Non-qualified Stock Option shall continue to be
subject to the same terms and conditions as were applicable to the Non-qualified
Option immediately before the transfer.
9. Reorganization of the Company.
9.1 Reorganization. As used herein, a "Reorganization" shall be deemed
to have occurred if the shareholders of the Company approve (or, if shareholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the Company with another corporation where the
shareholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to more than 50% of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.
9.2 Assumption of Grants. Upon a Reorganization where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
or rights by, the surviving corporation.
9.3 Other Alternatives. Notwithstanding the foregoing, in the event of
a Reorganization, the Committee may take one or both of the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options
in exchange for a payment by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceeds the Exercise Price of the Options, or (ii) after giving Grantees
an opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Committee deems appropriate. Such
surrender or termination shall take place as of the date of the Reorganization
or such other date as the Committee may specify.
9.4 Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Reorganization, the Committee shall not have the right to take
any actions described in the Plan (including without limitation actions
described in Subsection (b) above) that would make the Reorganization ineligible
for pooling of interests accounting treatment or that would make the
Reorganization ineligible for desired tax treatment if, in the absence of such
right, the Reorganization would qualify for such treatment and the Company
intends to use such treatment with respect to the Reorganization.
10. Change of Control of the Company.
10.1 As used herein, a "Change of Control" shall be deemed to have
occurred if.
10.1.1 Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as
defined in Rule 13d- 3 under the Exchange Act), directly or
indirectly, of securities of the Company representing a majority
of the voting power of the then outstanding securities of the
Company except where the acquisition is approved by the Board;
or
10.1.2 Any person has commenced a tender offer or exchange offer
for a majority of the voting power of the then outstanding
shares of the Company.
10.2 Notice and Acceleration. Unless the Committee determines
otherwise, a Change of Control shall result in the acceleration of the vesting
of outstanding Options and the removal of restrictions and conditions on
outstanding Restricted Stock and Restricted Stock Unit Grants.
10.3 Other Alternatives. Notwithstanding the foregoing, in the event of
a Change in Control, the Committee may take one or both the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options
in exchange for a payment by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
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Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceed the Exercise Price of the Options, or (ii) giving Grantees an
opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Committee deems appropriate. Such
surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.
10.4 Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Change of Control, the Committee shall not have the right to
take any actions described in the Plan (including without limitation actions
described in Section 10.3 above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
11. Requirements for Issuance or Transfer of Shares
11.1 Shareholder's Agreement. The Committee may require that a Grantee
execute a shareholder's agreement, with such terms as the Committee deems
appropriate, with respect to any Company Stock distributed pursuant to this
Plan.
11.2 Limitations on Issuance or Transfer of Shares. No Company Stock
shall be issued or transferred in connection with any Grant hereunder unless and
until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.
12. Amendment, Suspension and Termination of the Plan
12.1 Amendment. The Board may amend, suspend or terminate the Plan at
any time.
12.2 Termination of Plan. The Plan shall terminate on the date
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the shareholders.
12.3 Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents. The termination of
the Plan shall not impair the power and authority of the Committee with respect
to an outstanding Grant. Whether or not the Plan has terminated, an outstanding
Grant may be terminated or amended in accordance with the Plan or may be amended
by agreement of the Company and the Grantee consistent with the Plan.
12.4 Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
13. Rights of Grantees. Nothing in this Plan shall entitle any Grantee
or other person to any claim or right to be granted a Grant under this Plan.
Neither this Plan nor any action taken hereunder shall be construed as giving
any individual any rights to be retained by or in the employ of the Company or
any other employment rights.
14. No Fractional Shares. No fractional shares of Company Stock shall
be issued or delivered pursuant to the Plan or any Grant. The Committee shall
determine whether cash, other awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
15. Headings. Section headings are for reference only. In the event of
a conflict between a title and the content of a Section, the content of the
Section shall control.
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16. Miscellaneous.
16.1 Compliance with Law. The Plan and the obligations of the Company
to issue or transfer shares of Company Stock under Grants shall be subject to
all applicable laws and to approvals by any governmental or regulatory agency as
may be required. With respect to persons subject to section 16 of the Exchange
Act, it is the intent of the Company that the Plan and all transactions under
the Plan comply with all applicable provisions of Rule 16b-3 or its successors
under the Exchange Act. The Committee may revoke any Grant if it is contrary to
law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.
16.2 No Right to Employment. Neither the adoption of the Plan, the
granting of any Grant, nor the execution of any Grant Instrument, shall confer
upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.
16.3 Unfunded Plan. The Plan shall be unfunded and the Company shall
not be required to segregate any assets in connection with any Grants under the
Plan. Any liability of the Company to any person with respect to any Grant under
the Plan or any Grant Instrument shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any such Grant
Instrument. No such obligation of the Company shall be deemed to be secured by
any pledge of, encumbrance on, or other interest in, any property or asset of
the Company or any Subsidiary. Nothing contained in the Plan or any Grant
Instrument shall be construed as creating in respect of any Grantee (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Grantee, any beneficiary thereof or any other person.
16.4 Other Company Benefit and Compensation Programs. Payments and
other benefits received by a Grantee under a Grant made pursuant to the Plan
shall not be deemed a part of a Grantee's compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary unless expressly
provided in such other plans or arrangements, or except where the Committee
expressly determines in writing that inclusion of a Grant or portion of a Grant
should be included to reflect accurately competitive compensation practices or
to recognize that a Grant has been made in lieu of a portion of competitive
annual base salary or other cash compensation. Grants under the Plan may be made
in addition to, in combination with, or as alternatives to, grants, awards or
payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.
16.5 Listing, Registration and Other Legal Compliance. No Grants or
shares of the Company Stock shall be required to be issued or granted under the
Plan unless legal counsel for the Company shall be satisfied that such issuance
or grant will be in compliance with all applicable federal and state securities
laws and regulations and any other applicable laws or regulations. The Committee
may require, as a condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or information, as
the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations.
Certificates for shares of the Restricted Shares and/ or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules, regulations,
or other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities law. In addition, if, at any time specified herein (or in
any Grant Instrument or otherwise) for (a) the making of any Award, or the
making of any determination, (b) the issuance or other distribution of
Restricted Shares and/ or Common Stock, or (c ) the payment of amounts to or
through a Participant with respect to any Grant, any law, rule, regulation or
other requirement of any governmental authority or agency shall require either
the Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
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to persons subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act.
16.6 Grant Instrument. Each Participant receiving a Grant under the
Plan shall enter into a Grant Instrument with the Company in a form specified by
the Committee. Each such Participant shall agree to the restrictions, terms and
conditions of the Grant set forth therein and in the Plan.
16.7 Designation of Beneficiary. Each Grantee to whom a Grant has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Option or to receive any payment which under the terms of the Plan and the
relevant Grant Instrument may become exercisable or payable on or after the
Grantee's death. At any time, and from time to time, any such designation may be
changed or cancelled by the Grantee without the consent of any such beneficiary.
Any such designation, change or cancellation must be on a form provided for that
purpose by the Committee and shall not be effective until received by the
Committee or individual designated by the Committee. If no beneficiary has been
designated by a deceased Grantee, or if the designated beneficiaries have
predeceased the Grantee, the beneficiary shall be the Grantee's estate. If the
Grantee designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be made in equal shares unless the Grantee has
expressly designated otherwise, in which case the payments shall be made in the
shares designated by the Grantee.
16.8 Leaves of Absence/Transfers. The Committee shall have the power to
promulgate rules and regulations and to make determinations, as it deems
appropriate, under the Plan in respect of any leave of absence from the Company
or any Subsidiary granted to a Grantee. Without limiting the generality of the
foregoing, the Committee may determine whether any such leave of absence shall
be treated as if the Grantee has terminated employment with the Company or any
such Subsidiary. If a Grantee transfers within the Company, or to or from any
Subsidiary, such Grantee shall not be deemed to have terminated employment as a
result of such transfers.
16.9 Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of New
York.
16.10 Effective Date of the Plan Subject to the approval of the
Company's shareholders, the Plan shall be effective on May 15, 2007.
A-10
PROXY CARD
Annual Meeting of Stockholders of
INTEGRAMED AMERICA, INC.
May 12, 2009
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
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The Notice of Meeting, proxy statement and proxy card
are available at: http://www.integramed.com/proxy
Please sign, date and mail
your proxy card in the
envelope provided as soon as possible.
Please detach along perforated line and mail in the envelope provided
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
AND "FOR" THE APPROVAL OF THE AMENDMENT TO THE 2007 LONG-TERM COMPENSATION PLAN.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
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1. Election Of Directors:
[ ] FOR ALL NOMINEES O Kush K. Agarwal
O Gerardo Canet
[ ] WITHHOLD AUTHORITY O Jay Higham
FOR ALL NOMINEES O Wayne R. Moon
O Lawrence J. Stuesser
[ ] FOR ALL EXCEPT O Elizabeth E. Tallett
(See instructions below) O Yvonne S. Thornton, M.D.
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here:
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2. To approve the Company's 2007 Long-Term FOR AGAINST ABSTAIN
Compensation Plan to increase shares authorized [ ] [ ] [ ]
for issuance from 500,000 to 750,000.
In their discretion, proxies are authorized to vote upon such business as may
properly come before the meeting.
The shares of Common Stock represented by this proxy will be voted as directed.
If no contrary instruction is given, the shares of Common Stock will be voted
FOR the election of the nominees and FOR the approval of the amendment to 2007
Long-Term Compensation Plan..
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To change the address on your account, please check the
box at right and indicate your new address in the address [ ]
space above. Please note that changes to the registered
name(s) on the account may not be submitted via this method.
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Signature of Stockholder ________________________________________ Date:________
Signature of Stockholder_________________________________________ Date:________
NOTE: Please sign exactly as your name appears on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
PROXY
INTEGRAMED AMERICA, INC.
Annual Meeting of Stockholders
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Jay Higham or Claude E. White as proxy to
represent the undersigned at the Annual Meeting of Stockholders to be held at
the Company's Headquarters, Two Manhattanville Road, 3rd Floor, Purchase, New
York 10577 on May 12, 2009 at 10:00 a.m. and at any adjournments thereof, and to
vote the shares of Common Stock the undersigned would be entitled to vote if
personally present, as indicated on the reverse:
(Continued and to be signed on the reverse side