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EX-31.1 - EX-31.1 - AMICAS, Inc. | b80717exv31w1.htm |
EX-31.2 - EX-31.2 - AMICAS, Inc. | b80717exv31w2.htm |
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2009
OR
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 000-25311
AMICAS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 59-2248411 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
20 Guest Street, Suite 400, Boston, Massachusetts 02135
(Address of principal executive offices, including zip code)
(Address of principal executive offices, including zip code)
Registrants telephone number, including area code:
(617) 779-7878
(617) 779-7878
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $0.001 | The NASDAQ Stock Market LLC | |
Rights to purchase Series B Preferred Stock | The NASDAQ Stock Market LLC |
Securities registered pursuant to Section 12(g) of the Act:
None
None
Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-12 of the
Act). Yes o No þ
The aggregate market value of the voting and non-voting common equity held by non-affiliates as of
June 30, 2009 was approximately $97.4 million based on the closing price of $2.78 at which the
common equity was last sold. Solely for the purpose of this calculation, directors and officers of
the registrant are deemed to be affiliates.
As of April 27, 2010, there were 37,102,235 shares outstanding of the Registrants $0.001 par value
common stock.
Documents Incorporated by Reference
None.
Table of Contents
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A, or the Amendment, amends AMICAS, Inc.s Annual Report on Form
10-K for the fiscal year ended December 31, 2009, originally filed on March 11, 2010, or the
Original Filing. The purpose of this Amendment is to include information required by Part III of
the Annual Report on Form 10-K that was omitted from Part III of the Original Filing. In addition,
in connection with the filing of this Amendment and pursuant to the rules of the Securities and
Exchange Commission, the Chief Executive Officer and the Chief Financial Officer of the Company
have reissued their certifications. Item 15 of Part IV is being refiled and has been amended to
reflect the filing of such certifications.
On April 28, 2010, AMICAS, Inc. was acquired by Merge Healthcare Incorporated (Merge) pursuant to an Agreement and Plan of Merger effective as of February 28, 2010 among Merge, a wholly owned
subsidiary of Merge and AMICAS, Inc. (the Acquisition).
Upon the completion of the acquisition, AMICAS, Inc. became a wholly owned subsidiary of Merge and the trading of the common stock of AMICAS, Inc. on the Nasdaq Stock Market was suspended pursuant to the filing
of a Form 25 with the SEC. When able under SEC rules, Merge intends to file a Form 15 with the SEC suspending AMICAS, Inc.s obligation to file reports under Section 15(d) of the Securities Exchange Act of 1934 (the Exchange Act). Until such date occurs, AMICAS, Inc.
remains obligated to file reports required by Section 13(a) of the Exchange Act. Therefore, AMICAS, Inc. is filing this Amendment. Please note that all of the executive officers and directors of AMICAS, Inc. that are described in this Amendment ceased to be executive officers and directors
of AMICAS, Inc. upon completion of the Acquisition. The information included in this Amendment is not indicative of the compensation arrangements and business operations of AMICAS, Inc. after the Acquisition.
Except as described above, no other changes have been made to the Original Filing. The Original
Filing continues to speak as of the dates described in the Original Filing, and we have not updated
the disclosures contained therein to reflect any events that occurred subsequent to such dates.
Accordingly, this Amendment should be read in conjunction with the Companys filings made with the
Securities and Exchange Commission subsequent to the filing of the Original Filing, as information
in such filings may update or supersede certain information contained in this Amendment. In this
Amendment, unless the context indicates otherwise, the terms Company, we, us, and our refer
to AMICAS, Inc. and our subsidiaries.
AMICAS, INC.
Form 10-K/A
Table of Contents
* | Reflects only events and arrangements of AMICAS, Inc. prior to April 28, 2010, which is the date that AMICAS, Inc. was acquired by Merge Healthcare Incorporated. |
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PART III
CURRENT DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the name, age and position of each person who was a directors or executive
officers prior to the Acquisition of the Company by Merge Healthcare Incorporated. All of the directors and executive officers listed below ceased to be
directors and executive officers on April 28, 2010, the date the Acquisition was completed.
Name | Age | Title | ||
Directors |
||||
Stephen N. Kahane |
52 | Chairman and Chief Executive Officer | ||
Stephen J. DeNelsky |
42 | Director | ||
Joseph D. Hill |
47 | Director | ||
Stephen J. Lifshatz |
51 | Director | ||
David B. Shepherd |
58 | Director | ||
John J. Sviokla |
52 | Director | ||
Executive Officers |
||||
Kevin C. Burns |
39 | Senior Vice-President, Chief Financial Officer | ||
Paul Merrild |
35 | Senior Vice-President of Marketing and Business Development | ||
Craig Newfield |
50 | Vice President, General Counsel |
Biographical information regarding each of our directors and executive officers is as follows. The
following paragraphs also include specific information about each directors experience,
qualifications, attributes or skills that led the Board to the conclusion that the individual
should serve on the Board as of the time of this filing, in light of our business and structure.
Directors
Stephen N. Kahane, M.D., M.S., age 52, has served as our Chief Executive Officer since September
2004, as a director since March 2001, and as Chairman since June 2005. Dr. Kahane also served as
our President from September 2004 through March 2005 and Vice Chairman from March 2001 to May 2005.
He was our Chief Strategy Officer from November 1999 until August 2004. From November 1999 until
March 2001, Dr. Kahane also served as President of our E-Health unit. Previously, Dr. Kahane served
as CEO of Datamedic, a provider of healthcare practice management and electronic medical record
solutions. Dr. Kahane also trained and served on the faculty and on the information technology, or
IT, leadership team at The Johns Hopkins Medical Institution.
The Board has concluded that Dr. Kahane is qualified to serve as a member of the Board based upon
his experience as a medical professional, his experience as a health system IT executive and his
executive level experience at several healthcare IT businesses, which enable Dr. Kahane to both
effectively manage the Company and to drive its strategy and strategic initiatives.
Stephen J. DeNelsky, age 42, has served as a director since March 2001. Mr. DeNelsky is currently
Senior Research Analyst at 11:11 Capital Management, Inc., an investment firm, where he has served
since November 2008. From October 2004 to December 2007, Mr. DeNelsky served as general partner of
Sapphire Capital Management LP, a New York based investment fund. From March 2003 until October
2004, Mr. DeNelsky worked as a senior research analyst at Copper Arch Capital, LLC, an investment
fund. From November 2001 through March 2003, he served as the portfolio manager of Forstmann-Leff
Associates, LLC. In December 2000, Mr. DeNelsky founded Sapphire Capital Management LLC, a New
York-based investment fund, and he served as its managing partner until November 2001. From June
1999 until December 2000, he was a senior research analyst in Credit Suisse First Bostons Health
Care Equity Research Group, covering primarily the healthcare IT and e-health sectors.
The Board has concluded that Mr. DeNelsky is qualified to serve as a member of the Board based upon
his experience in the financial industry, and based upon his extensive sell-side and buy-side
experience analyzing public companies in the healthcare IT sector, which enable Mr. DeNelsky to
provide the Board with unique insight as to the interests of our shareholders as investors in a
public company in the healthcare IT industry.
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Joseph D. Hill, age 47, was appointed a director on April 4, 2008. Previously, Mr. Hill served as
our Senior Vice President and Chief Financial Officer from October 2004 until April 2008. Mr. Hill
is currently the Chief Financial Officer of Metabolix, Inc., a bioscience company providing
biodegradable and sustainable solutions for the worlds needs for plastics, chemicals and energy.
Prior to this, from April 2003 until March 2004, Mr. Hill served as Vice President and Chief
Financial Officer of Dirig Software, an application performance management solutions provider based
in Nashua, New Hampshire. In February 2004, Dirig Software was acquired by Allen Systems Group of
Naples, Florida. From August 2000 until June 2002, Mr. Hill served as Vice President and Chief
Financial Officer of Maconomy Corporation, a Web-based business management solutions provider with
headquarters in Copenhagen, Denmark and Marlborough, Massachusetts. Prior to joining Maconomy, Mr.
Hill was Vice President and Chief Financial Officer of Datamedic Holding Corp., a practice
management and clinical software company specializing in ophthalmology and general medical
practices. We acquired Datamedic in 1999.
The Board has concluded that Mr. Hill is qualified to serve as a member of the Board based upon his
financial expertise, his experience in the healthcare IT industry, his experience with operations
and with mergers and acquisitions in the software industry and his experience in an FDA-regulated
industry. Together with his insights into image and information management space as former Chief
Financial Officer of the Company, Mr. Hill provides the Board with uniquely strong insight into the
Companys financial operations and controls, as well as the Companys markets and strategy.
Stephen J. Lifshatz, age 51, has served as a director since June 2008. Mr. Lifshatz is currently
the Chief Financial Officer of Authoria, Inc., a provider of talent management software and
solutions. Previously, Mr. Lifshatz served as Chief Financial Officer and Senior Vice President of
Lionbridge Technologies, Inc., a provider of outsourced IT development, localization, testing and
support solutions, which he joined soon after its founding in 1997 and where he had responsibility
for worldwide accounting, risk management and financial reporting and controls. Prior to joining
Lionbridge, Mr. Lifshatz was the Chief Financial Officer and treasurer of the Dodge Group.
Previously, Mr. Lifshatz spent 15 years with Marcam Corporation in various senior roles, including
operations controller, corporate controller, treasurer and Chief Financial Officer as well as
president of an operating unit.
The Board has concluded that Mr. Lifshatz is qualified to serve as a member of the Board based upon
his financial expertise and his operational experience in the global IT industry. His experience
assists the Board in its financial oversight of the Company, and provides the Board with a broader
perspective on mergers and acquisitions applicable to the Company and on the operations of software
and IT services companies.
David B. Shepherd, age 58, has served as a director since June 2001. Since 1990, Mr. Shepherd has
been employed by Louis Dreyfus Property Group LLC, an international commercial property company
owned by Louis Dreyfus S.A.S., and currently is its Vice President and Chief Financial Officer and
holds equivalent positions at various affiliated joint ventures. Mr. Shepherd also is Vice
President and Secretary of LDS Advisors LLC, the sponsor and managing member of LDS Investment
Group LLC, a real estate investment fund formed in February 2007. From 1975 until 1990, Mr.
Shepherd was a certified public accountant with the audit practice of Ernst & Young LLP.
The Board has concluded that Mr. Shepherd is qualified to serve as a member of the Board based upon
his financial expertise and his operational experience, which provide the Board with a broader
perspective on financial and operational issues.
John J. Sviokla, age 52, has served as a director since June 2006. Since September 1998 he has
served as vice president of Diamond Management & Technology Consultants, Inc. (formerly
DiamondCluster, and before that Diamond Technology Partners) and directs the firms Innovation
efforts. He became a director of Diamond Management & Technology Consultants, Inc. in August 1999
and since April 2000 has been its Vice Chairman. Diamond Management & Technology Consultants Inc.
is a public management and technology consulting company (NASDAQ: DTPI). From 1986 to 1998, he was
a professor at Harvard Business School. Dr. Sviokla has been a consultant to large and small
companies around the world specializing in issues how IT changes markets, competition, and
organization. He has authored over 100 articles, cases, videos and tele-seminars. Dr. Sviokla has a
D.B.A., M.B.A. from Harvard Business School, and an A.B. from Harvard College.
The Board has concluded that Dr. Sviokla is qualified to serve as a member of the Board based upon
his diverse strategic expertise in the field of IT. Dr. Sviokla brings excellent knowledge and
expertise to the Boards deliberations regarding marketing & sales, customer relationship
management and loyalty as well as strategy and strategic investments.
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Executive Officers
Stephen N. Kahane, see above.
Kevin C. Burns, age 39, has served as our senior vice president, Chief Financial Officer since
April 2008. Mr. Burns joined AMICAS in November 2004 as our director of finance and business
development, and in February 2007 was promoted to vice president of finance and corporate
development. Prior to joining AMICAS, Mr. Burns was responsible for corporate planning at NMS
Communications, a public telecom equipment company in the wireless applications and infrastructure
market, from November 2003 to November 2004. Previously, Mr. Burns was the director of corporate
development at Demantra, Inc. and has also held senior management positions in finance, accounting
and corporate development at MAPICS, Inc. and Marcam Corporation, both public software companies.
Mr. Burns holds an MBA from F.W. Olin Graduate School of Business at Babson College and a bachelor
of science from Babson College.
Paul B. Merrild, age 35, joined AMICAS in May 2006 as our vice president of marketing. Mr. Merrild
was promoted to senior vice president of marketing and business development in April, 2009. Prior
to joining AMICAS, Mr. Merrild served as director of strategic partnerships for imaging IT
solutions at GE Healthcare from May, 2001 to May, 2006, where he was responsible for general
management and marketing for all large commercial opportunities on a global basis. Prior to GE
Healthcare, Mr. .Merrild served as Senior Project Manager for Organic, Inc., a consulting company
in the website development business, where he managed large scale IT consulting engagements, from
July 1999 to May, 2001. Prior to Organic, Mr. Merrild served as an analyst for Solucient, LLC (now
a part of Thomson Reuters) from July 1997 to July 1999, where he lead the go-to-market strategy for
the development and marketing of healthcare software and information products. Mr. Merrild holds a
BA in economics and psychology from Northwestern University and an MBA from the University of
Chicago with concentrations in finance, strategy, and entrepreneurship.
Craig Newfield, age 50, joined AMICAS in March 2009 as our vice president, general counsel. Prior
to joining AMICAS, Mr. Newfield served as vice president & general counsel of Gomez, Inc., a
private internet infrastructure company in the website experience management market, from November
2007 to May 2008. Prior to Gomez, Mr. Newfield served as vice president & general counsel of MRO
Software, Inc, a public software company in the enterprise asset management market, from September
2001 until September 2006. MRO Software was acquired by IBM Corporation in September 2006, and Mr.
Newfield served as a transition executive with IBM until September, 2007. Prior to MRO Software,
Mr. Newfield served as vice president & General Counsel of Interleaf, Inc., a public software
company in the electronic publishing and content management markets, from May 1997 until July 2000
when Interleaf was acquired by Broadvision, Inc. Previously, Mr. Newfield also served vice
president & general counsel at OneWave, Inc., as in-house counsel at Marcam Corporation, and as an
associate in two Boston area law firms.
LEGAL PROCEEDINGS
No director or executive officer of the Company, nor any associate of any such director or
executive officer of the Company, is a party adverse to the Company or any of its subsidiaries or
has a material interest adverse to the Company or any of its subsidiaries in any material pending
legal proceedings.
CORPORATE GOVERNANCE
The following corporate governance provisions were in effect until the completion of the Acquisition of AMICAS, Inc. by Merge Healthcare Incorporated. Upon the completion of the Acquisition, AMICAS was no longer a
company listed on a stock exchange and consequently these corporate governance provisions ceased to be in effect.
Corporate Governance Guidelines
The Board has adopted corporate governance guidelines, which, in conjunction with our certificate
of incorporation, by-laws and Board committee charters, provide guidelines for the Company and the
Board to ensure effective corporate governance. The corporate governance guidelines are posted on
our website at www.amicas.com/investorrelations.
Code of Business Conduct and Ethics
The Board adopted a Code of Business Conduct and Ethics (Code) effective July 1, 2003 for our
directors, officers (including our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions) and employees.
We have retained EthicsPoint, Inc. to provide an anonymous and confidential method to report Code
violations or voice concerns. Based upon the nature of the complaint, EthicsPoint will generally
advise at least one of our independent directors of the complaint. EthicsPoint and our general
counsel are the designated contacts for any complaints or reported violations concerning the Code.
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This Code is available on our website at www.amicas.com/investorrelations. Stockholders may
request a free copy of the Code by writing to Investor Relations, AMICAS, Inc., 20 Guest Street,
Boston, Massachusetts 02135. We intend to disclose any amendments to, or waivers from, our Code on
our website. Disclosure regarding any amendments to, or waivers from, provisions of the Code that
apply to our directors, principal executive and financial officers will be included in a Current
Report on Form 8-K within four business days following the date of the amendment or waiver, unless
website posting of such amendments or waivers is then permitted by the rules of The NASDAQ Stock
Market LLC, or NASDAQ.
Meetings of the Board and Committees of the Board; Annual Meeting Attendance
The Board holds regular meetings and special meetings as necessary. In addition, independent
members of the Board meet regularly in executive sessions without management present. The Board has
three committees, including the Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee, each of which is described below.
Meeting Attendance. During the fiscal year ended December 31, 2009, the Board held 21 meetings and
acted five times by unanimous written consent. Each of the directors attended at least 75% of the
meetings of the Board and the various committees on which each served during 2009. Directors are
invited to attend the annual meeting of stockholders but we have no specific policy requiring
attendance by directors at such meeting. One of our directors attended our annual meeting of
stockholders held in 2009.
Audit Committee. The Board maintains a standing Audit Committee, currently composed of Stephen J.
DeNelsky, Stephen J. Lifshatz and David B. Shepherd. Our Audit Committee has the authority to
retain and terminate the services of our independent accountants, review annual financial
statements, consider matters relating to accounting policy and internal controls and review the
scope of annual audits. All Audit Committee members satisfy the current independence standards
promulgated by the Securities and Exchange Commission, or SEC, and by NASDAQ as such standards
apply specifically to members of audit committees. The Board has determined that Mr. Lifshatz, the
chair of the Audit Committee, Mr. DeNelsky and Mr. Shepherd are audit committee financial
experts, as the SEC has defined that term in Item 407 of Regulation S-K. The Audit Committee held
five meetings during 2009, and acted one time by unanimous written consent.
A copy of the Audit Committee charter is available on our website at
www.amicas.com/investorrelations.
Compensation Committee. The Board maintains a standing Compensation Committee. At the beginning of
2009, the Compensation Committee was composed of Phillip M. Berman, Stephen J. Lifshatz and John J.
Sviokla. Dr. Berman passed away in February 2009, and in March 2009 Mr. DeNelsky was appointed to
the Compensation Committee. The Compensation Committee is chaired by Dr. Sviokla. Our Compensation
Committee reviews, approves and makes recommendations regarding our compensation policies,
practices and procedures to ensure that legal and fiduciary responsibilities of the Board are
carried out and that such policies, practices and procedures contribute to our success. The
Compensation Committee is responsible for the determination of the compensation of our executive
officers, and conducts its decision-making process with respect to executive compensation without
the Chief Executive Officer present. All Compensation Committee members qualify as independent
under the definition promulgated by NASDAQ. The Compensation Committee held two meetings and acted
one time by unanimous written consent during 2009.
The Compensation Committee generally holds regularly scheduled in-person meetings throughout the
year and additional meetings as appropriate either in person or by telephone. Generally, the chair
of the Compensation Committee works with management in establishing the agenda for Compensation
Committee meetings. Management also prepares and submits information during the course of the year
for the consideration of the Compensation Committee, such as managements proposed recommendations
to the Committee for performance measures and proposed financial targets, managements proposed
recommendations to the Compensation Committee for salary increases, managements performance
evaluations of executive officers, and other data and information, if requested by the Compensation
Committee. The Compensation Committee may delegate to one or more executive officers of the Company
the power to grant options or other stock awards pursuant to such equity-based plan to employees of
the Company or any subsidiary of the Company who are not directors, executive officers or other
officers of the Company.
In addition, the Compensation Committee charter grants the Compensation Committee full authority to
engage compensation consultants and other advisors to assist it in the performance of its
responsibilities. Any compensation consultant retained by the Committee reports directly to the
Compensation Committee. The Compensation
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Committee did not engage a compensation consultant for 2009 but instead independently confirmed for
2009 the market benchmarking of our executive compensation program, as discussed in the
Compensation Discussion and Analysis section of this Annual Report.
A copy of the Compensation Committee charter is available on our website at
www.amicas.com/investorrelations. Please also see the report of the Compensation Committee
set forth elsewhere in this Annual Report.
Nominating and Corporate Governance Committee. The Board maintains a standing Nominating and
Corporate Governance Committee. At the beginning of 2009, the Nominating and Corporate Governance
Committee was composed of Phillip M. Berman, Stephen J. DeNelsky and John J. Sviokla. Dr. Berman
passed away in February 2009, and in March 2009 Mr. Shepherd was appointed to the Nominating and
Corporate Governance Committee. The Nominating and Corporate Governance Committee is chaired by Mr.
DeNelsky. This Committees role is to make recommendations to the full Board as to the size and
composition of the Board and its committees, and to evaluate and make recommendations as to
potential candidates. All Nominating and Corporate Governance Committee members qualify as
independent under the definition promulgated by the NASDAQ. The Nominating and Corporate Governance
Committee held three meetings and acted one time by unanimous written consent during 2009.
The Nominating and Corporate Governance Committee considers diversity among its members in
identifying and considering nominees for director, and strives where appropriate to achieve a
diverse balance of professional expertise and backgrounds, including expertise in healthcare
delivery, finance, operations, strategy and backgrounds in healthcare, investing, academics and
other industries.
A copy of the Nominating and Corporate Governance Committee charter is available on our website at
www.amicas.com/investorrelations.
The process followed by the Nominating and Corporate Governance Committee to identify and evaluate
director candidates includes the solicitation of recommendations from Board members and others,
meetings from time to time to evaluate biographical information and background material relating to
potential candidates, and interviews of selected candidates by members of the Committee and the
Board.
In considering whether to recommend any particular candidate for inclusion in the Boards slate of
recommended director nominees, the Nominating and Corporate Governance Committee will apply the
criteria set forth in our Nominating and Corporate Governance Committee charter. These criteria
include the appropriate skills and characteristics required of Board members in the context of the
current make-up of the Board, including such factors as independence, business experience,
diversity, and personal skills in software, other technology, finance, marketing, business,
financial reporting, accounting, health care and other areas that are expected to contribute to an
effective Board. The Committee does not assign specific weights to particular criteria and no
particular criterion is a prerequisite for a prospective nominee. The Nominating and Corporate
Governance Committee believes that the backgrounds and qualifications of our directors, considered
as a group, should provide a composite mix of experience, knowledge and abilities that will allow
the Board to fulfill its responsibilities.
Stockholders may recommend individuals to the Nominating and Corporate Governance Committee for
consideration as potential director candidates by submitting their names, together with appropriate
biographical information and background materials and a statement as to whether the stockholder or
group of stockholders making the recommendation has beneficially owned more than 5% of our common
stock for at least a year as of the date such recommendation is made, to: Nominating and Corporate
Governance Committee, c/o General Counsel, AMICAS, Inc., 20 Guest Street, Boston, Massachusetts
02135. Assuming that appropriate biographical and background material has been provided on a timely
basis, the Committee will evaluate stockholder-recommended candidates by following substantially
the same process, and applying substantially the same criteria, as it follows for candidates
submitted by others.
Stockholders also have the right under our by-laws to directly nominate director candidates,
without any action or recommendation on the part of the Committee or the Board. According to our
by-laws, a stockholder proposal may only be acted upon at an annual meeting of stockholders if the
stockholder gives us notice of such proposal not less than 60 days nor more than 90 days before
such annual meeting; provided, however, that if we give less than 60 days notice or prior public
disclosure of the date of the annual meeting, notice by the stockholder must be given to us not
later than the tenth day following the earlier of the date on which such notice of the meeting was
mailed or the date on which such public disclosure was made.
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Board Leadership Structure
The Board employs the role of Lead Director, who must qualify as independent under the definition
promulgated by NASDAQ, and appointed Mr. DeNelsky as Lead Director. The Board believes that the use
of a Lead Director enables the Board to exercise oversight over specific transactions or matters in
a manner that is determined by an independent director, and ensures that such transactions and
matters are handled in a manner consistent with the full Boards intentions, during interim periods
between meetings of the full Board. The positions of
Chairman of the Board and Chief Executive Officer of the Company have historically been combined,
and Dr. Kahane currently holds both positions. We believe this Board leadership structure is
appropriate because of the efficiencies achieved in having the role of Chief Executive Officer and
Chairman combined, and because the detailed knowledge of our day-to-day operations and business
that the Chief Executive Officer possesses greatly enhances the decision-making processes of the
Board as a whole. We have a strong governance structure in place, including independent directors,
to ensure the powers and duties of the dual role are handled responsibly. Furthermore, consistent
with NASDAQ listing requirements, the independent directors regularly have the opportunity to meet
without Dr. Kahane in attendance.
Boards Role in Risk Oversight
Management is responsible for managing the risks that we face. The Board is responsible for
overseeing managements approach to risk management that is designed to support the achievement of
organizational objectives, including strategic objectives, to improve long-term organizational
performance and enhance stockholder value. The involvement of the full Board in reviewing our
strategic objectives and plans is a key part of the Boards assessment of managements approach and
tolerance to risk. A fundamental part of risk management is not only understanding the risks a
company faces and what steps management is taking to manage those risks, but also understanding
what level of risk is appropriate for us. In setting our business strategy, our Board assesses the
various risks being mitigated by management and determines what constitutes an appropriate level of
risk for us.
While the Board has ultimate oversight responsibility for overseeing managements risk management
process, various committees of the Board assist it in fulfilling that responsibility.
The Audit Committee assists the Board in its oversight of risk management in the areas of financial
reporting, internal controls and compliance with legal and regulatory requirements, the Nominating
and Corporate Governance Committee reviews legal and regulatory compliance risks and the
Compensation Committee assists the Board in its oversight of the evaluation and management of risks
related to our compensation policies and practices.
Stockholder Communications with the Board
Stockholders interested in communicating with the Board or any individual director may do so by
writing to: AMICAS, Inc., 20 Guest Street, Boston, Massachusetts 02135 attn: General Counsel, or by
email to AMCSboard@amicas.com. These communications will be forwarded to the appropriate director
or directors if they relate to important substantive matters and include suggestions or comments
that our general counsel considers to be important for the directors to know. In general,
communications relating to corporate governance and corporate strategy are more likely to be
forwarded than communications relating to ordinary business affairs, personal grievances and
matters as to which we tend to receive repetitive or duplicative communications.
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, as well as persons
who own more than ten percent of a registered class of our equity securities to file reports of
ownership on Forms 3, 4, and 5 with the SEC and with us. Based solely on our review of copies of
filings made by reporting persons with the SEC or written representations from certain reporting
persons that no Form 5 filing was required for such person, we believe that during fiscal year
2009, all filings required to be made by our reporting persons were timely made in accordance with
the requirements of the Exchange Act, except that for Dr. Kahane and Mr. Burns the Company
inadvertently reported a stock option grant two business days after the deadline for filing the
appropriate Form 4, and for Mr. Shepherd the Company inadvertently reported a stock option grant
one day after the deadline for filing the appropriate Form 4.
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Item 11. Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion and Analysis reflects the analysis of the Compensation Committee of AMICAS, Inc. that was in
effect until the completion of the acquisition of AMICAS, Inc. by Merge Healthcare Incorporated on April 28, 2010. Upon completion of the Acquisition, the Compensation Committee was disbanded.
The Compensation Committee of the Board consisted entirely of independent directors and had overall
responsibility for evaluating, establishing and approving the compensation and benefits provided to
Named Executive Officers. The discussion set forth below focuses on
the following:
| The objectives of our compensation program, including the results and behaviors the program is designed to reward; | ||
| The process that we use to determine executive compensation; | ||
| Each element of the compensation plan; | ||
| The reasons why the Compensation Committee chose to pay each element; and | ||
| How the Compensation Committee determines the amount or the formula used for each element. |
The Companys Compensation Philosophy and Process
The primary objectives of the Compensation Committee of our Board with respect to executive
compensation are to attract, retain, and motivate superior executive talent. The focus is to tie
short-term and long-term incentives to achievement of measurable corporate performance objectives
and to closely align the interests of the Named Executive Officers with those of the Companys
stockholders. To achieve these objectives, the Compensation Committee has implemented compensation
plans that tie a substantial portion of the Named Executive Officers overall compensation to our
financial and operating performance. Pursuant to this overall approach, our compensation plans have
the following objectives:
| To attract and retain a highly skilled work force in a competitive and demanding market, it is necessary for us to offer compensation packages commensurate with the executive officers performance and experience. | ||
| To foster a high performance culture our compensation is based on the level of job responsibility, and Company performance. At the executive level, and in setting compensation policies for our Named Executive Officers, the Compensation Committee considers the individual performance of our Named Executive Officers to be reflected entirely by our corporate performance goals, and the Compensation Committee believes that the success of the Company in achieving these goals is a direct reflection of whether a particular executive has performed well. As a result, the Compensation Committee does not set separate individual goals for our Named Executive Officers, but the Compensation Committee holds the expectation that each executives individual performance will contribute to the overall achievement by the Company of its goals. | ||
| To provide stability we have provided retention incentives for executive officers where we believe appropriate. |
Our Compensation Committee reviews and establishes compensation for our Named Executive Officers on
an annual basis, in an iterative process that typically begins mid-year and is completed during
December. The Compensation Committee takes an overview of existing compensation elements and
potential areas for discussion, and asks our Chief Executive Officer for assistance in gathering
relevant data. Upon the request of the Compensation Committee, our Chief Executive Officer provides
the Compensation Committee with information requested, consisting of publicly available and
independent survey compensation data, the Chief Executive Officers assessment of the Named
Executive Officers (but not his own) past performance, and his assessment and recommendation as to
future compensation for the Named Executive Officers other than himself. The Compensation Committee
takes this information and assessments under advisement, and makes an independent determination
regarding the compensation program for the Companys Named Executive Officers. Except as described
above, none of our executive officers, including our Chief Executive Officer, has a role in
determining compensation for other Named Executive Officers or for himself.
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Compensation Elements and Purposes
As part of its process in developing the Companys executive compensation plan at the beginning of
2009, the Compensation Committee reviewed publicly available data contained in a compensation and
benefits survey of U.S. executives obtained from Culpepper and Associates, Inc. for the current
year, which covers the compensation of executive officers employed by over 900 technology
companies, stratified by company revenues, number of employees, industry group and geography. The
Compensation Committee referred to data from that survey that is aggregated in summary form
regarding public companies that have similar annual revenues and number of employees as the
Company, and that are located in the Northeast U.S. In connection with our acquisition of Emageon
Inc. the Compensation Committee considered whether changes to the Companys executive compensation
plan would be appropriate, and commencing with the end of the first quarter of 2009 and for the
balance of 2009, the Compensation Committee reviewed publicly available data contained in a
compensation and benefits survey of U.S. executives obtained from the Aon Corporation Radford
Global Technology Survey, or Radford, for the current year, which covers the compensation of
executive officers employed by over 1,000 technology companies, stratified by company revenues,
number of employees, industry group and geography. The Compensation Committee referred to data from
that survey that is aggregated in summary form regarding public companies that have similar annual
revenues and number of employees as the Company, and that are located in the Northeast U.S.
As part of its pay-for-performance compensation philosophy, the Compensation Committee generally
targets the creation of compensation plans that will result in base salaries and total executive
compensation being paid that are approximately at the median of the range of public technology
companies having annual revenues and number of employees similar to ours, located in the Northeast
U.S., as aggregated in summary form in the Culpepper and Radford surveys.
The Compensation Committee does not rely on the Culpepper or the Radford survey data to the
exclusion of other factors when determining executive compensation. Rather, our Compensation
Committee considers this data along with all of the factors discussed herein with the goal of
setting our executives compensation at levels that the Compensation Committee members believe to
be appropriate. The Compensation Committee retains full discretion to make compensation decisions
independent of the guidance that may be provided by the data obtained from the benchmarked
companies.
Our compensation program consists of the following components:
| Base salaries we pay annual salaries to provide executives with a base level of compensation to achieve our objectives of attracting and retaining executive talent that we need to accomplish our goals. | ||
| Quarterly Financial Metric Cash Bonus provides performance based cash incentives based on Company performance against specific targets, such as Company sales orders, revenues, and Adjusted EBITDA, with the purpose of motivating and rewarding achievement of our critical strategic and financial goals, fostering a high performance culture and delivering value to stockholders. | ||
| Annual Stock Price Performance Cash Bonus provides performance based cash incentives based on Company stock performance, with the purpose of aligning the executives interests with those of stockholders and increasing stockholder value. | ||
| Quarterly Targeted Cash Bonus provides a performance-based cash incentive based upon criteria that are of heightened importance for the year or quarter, such as achievement in excess of the sales order targets that are established for the Company for the quarter. | ||
| Long Term Equity Incentives we believe that long-term performance is achieved through an ownership culture that encourages long-term participation by our Named Executive Officers of equity-based awards in the form of stock options. The stock option awards are intended to provide each executive with incentive to build value in the Company over an extended period of time. We typically make an initial equity award of stock options to new executives and annual equity grants as part of our overall compensation program. Initial option awards typically vest 1/3 one year from the grant date, and thereafter in eight equal quarterly installments, and annual option awards typically vest in twelve equal quarterly installments from the grant date. |
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| Share Price Based Equity Incentives through the grant of stock options, with an opportunity to accelerate vesting based on share price objectives, we intend to provide an incentive with the purpose of increasing stockholder value. | ||
| Retirement savings through a qualified 401(k) savings plan, pursuant to which all employees can choose to defer compensation for retirement and to which we make a matching contribution, with the purpose of encouraging employees to save for their retirement, with account balance affected by contributions and investment decisions made by the participant. | ||
| Health and welfare benefits a fixed component with the same benefits (medical, dental, vision, disability insurance and life insurance) available for all full-time employees, with the purpose of providing benefits to meet the health and welfare needs of our employees and their families and to provide a competitive total compensation package. | ||
| Severance and change in control agreements and plans pursuant to which we provide additional payments and benefits to the Named Executive Officers with the intention of encouraging them to remain focused on our business in the event of anticipated or actual fundamental corporate changes. | ||
| Special awards our Compensation Committee reserves the ability to make special compensation awards to our Named Executive Officers in recognition of outstanding achievements that are not otherwise adequately rewarded. |
As mentioned above, the Compensation Committee has implemented quarterly performance management
programs for our Named Executive Officers, under which corporate performance goals are determined
and set forth in writing at the beginning of each calendar year. In particular, these corporate
goals establish budget and target levels for revenue, sales orders and Adjusted EBITDA. In
accordance with Instruction 4 to Item 402(b) of Regulation S-K, we have determined not to disclose
specific performance targets. Based on the achievement of these corporate goals, we then calculate
quarterly cash bonuses. At the beginning of 2009, the Compensation Committee determined that the
corporate targets discussed below were equal in value to the overall health and growth of the
Company and determined that they should be equally weighted for 2009, that is 33.33% for each
objective. The principal targets were:
| Revenue we have targeted increased revenue results as a driver to profitability; | ||
| Sales Orders we have targeted sales orders as a driver to current and future revenues; and | ||
| Adjusted EBITDA provides an incentive to reward both controlling expenses and increasing gross margin contributions, and bears a direct relationship with earnings per share which is a driver of stockholder value. |
Following our acquisition of Emageon in April 2009, the Compensation Committee changed the
performance criteria for the remaining three quarters to focus on only two goals Adjusted EBITDA
and sales orders. Commencing in the second quarter of 2009, quarterly bonuses were paid on the
basis of achievement of Adjusted EBITDA goals, with payment being pro-rated based on the percentage
of the quarterly Adjusted EBITDA target achieved. However, to ensure that management did not focus
on short-term profitability to the exclusion of future growth, the performance plan payments were
subject to reduction, or elimination, if the quarterly sales order goals were not met.
The Compensation Committee established each of these goals with a high level of difficulty, in the
belief that the Companys executives should be encouraged to deliver results that exceed those of
our competitors, and that exceed market expectations. In general, these goals for compensation
purposes were set at levels above the Companys internal operating budget, and typically at levels
above publicly disclosed guidance, if any. When setting these goals, the Compensation Committee
considered the Companys performance over prior periods, and trends over those periods, because the
Compensation Committee believed that prior performance and such performance trends were to a
moderate degree predictable of future performance. The Compensation Committee also noted that the
goals set for 2007 and 2008 had been partially achieved, and that goals established for 2009, based
solely on prior performance and trends were likely to be very difficult to achieve in 2009. In
order to optimize our executives motivation, and given the Compensation Committees views as to
general performance expectations for the Company in 2009 and the levels of bonuses that had been
paid out in prior years, the Compensation Committee established the maximum cash bonuses at levels
where, if the executives achieved a portion of their performance
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goals but less than the maximum possible, the total cash bonus plus base salary would result in
overall cash compensation that is comparable to and competitive with the aggregate cash
compensation paid to executive officers in similar positions with comparable companies. It was also
the Compensation Committees intent that, in the event that the executives achieved at or close to
the maximum performance targets, the resulting compensation would be comparable to compensation
paid to the most highly paid executive officers of comparable companies as reflected in the
Culpepper and Radford surveys.
Compensation Components
The components of our executive compensation package include the following:
Base Salary
Base salaries for our Named Executive Officers are established based on the scope of their
responsibilities and their prior relevant background, training, and experience, taking into account
competitive market compensation paid by the companies represented in the compensation data the
Compensation Committee reviews for similar positions and the overall market demand for such
executives at the time of hire. As with total executive compensation, the Compensation Committee
believes that executive base salaries should generally fall at approximately the median of the
range of salaries for executives in similar positions and with similar responsibilities in the
hundreds of public technology companies with annual revenues and numbers of employees similar to
ours, that are located in the Northeast U.S., as aggregated in summary form in the Culpepper
survey. Base salaries for our Named Executive Officers were established with reference to the 50th
percentile of the data obtained from the Culpepper survey, but were not targeted specifically to
this percentile. Each Named Executive Officers base salary is evaluated together with other
components of the executives other compensation to ensure that the executives total compensation
is in line with our overall compensation philosophy.
Base salaries are reviewed annually as part of our performance management program and may be
increased for merit reasons, based on the executives success in meeting or exceeding performance
objectives and an assessment of whether significant corporate goals were achieved. Additionally, we
may adjust base salaries as warranted throughout the year for promotions or other changes in the
scope or breadth of an executives role or responsibilities.
In 2009 our Chief Executive Officers base salary was $350,000 per year, and this has been his base
salary since 2006. The Compensation Committee determined that our Chief Executive Officers salary
was appropriate based on his overall compensation package, prior actual total compensation received
and the Compensation Committees expectations for 2009, the aggregated Culpepper data that was
reviewed and our overall compensation philosophy. Our current Chief Financial Officer was promoted
into this position in April 2008 and in 2009 his base salary was increased to $240,000 per year,
which the Compensation Committee determined to be appropriate based upon his past experience,
achievements while employed by the Company, his customer-focused and market-facing abilities,
changes in the scope of his responsibility, his success in assuming and performing his expanded job
responsibilities, the aggregated Culpepper data that was reviewed and our overall compensation
philosophy. Our Senior Vice President of Marketing and Business Development was promoted into this
role in April 2009, and his base salary was increased to $170,000 per year, based upon his
demonstrated abilities to manage a variety of programs and to drive the business forward, changes
in the scope of his responsibility, the aggregated Radford data that was reviewed and our overall
compensation philosophy. Our Vice President and General Counsel was hired in March 2009, and his
base salary was established at $190,000 per year, based upon market conditions, current salaries of
similarly situated executives as evidenced in the Culpepper data that was reviewed, and our overall
compensation philosophy. Our Senior Vice President of Client Solutions was hired in February 2009,
and his base salary was established at $200,000 per year, based upon market conditions, current
salaries of similarly situated executives as evidenced in the Culpepper data that was reviewed, and
our overall compensation philosophy.
Quarterly Financial Metric Cash Bonus
Our compensation program provides Named Executive Officers with the opportunity to earn a quarterly
cash bonus based on the Companys achievement of certain financial objectives. The amount of the
cash bonus depends on the level of achievement of the corporate revenue, sales orders, operating
income and Adjusted EBITDA performance goals noted above, which are set the beginning of the fiscal
year. In 2009, the Chief Executive Officer, the Chief Financial Officer, the Senior Vice President
of Marketing and Business Development, the Vice President & General Counsel and the Senior Vice
President of Client Solutions were eligible for a quarterly financial metric cash bonus in the
aggregate amount of $250,000, $110,000, $100,000, $80,000 and $90,000 for the year, respectively.
In 2009, the Company reached its financial objectives in part, and as a result the Chief Executive
Officer received $177,081,
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our Chief Financial Officer received $77,916, our Senior Vice President of Marketing and Business
Development received $56,666, our Vice President & General Counsel received $53,438 of
compensation, and our Senior Vice President of Client Solutions received $76,213, respectively,
under this program, as a result of meeting certain revenue, order and operating income goals during
the year.
Quarterly Targeted Cash Bonus
Our compensation program also provides some of our Named Executive Officers with the opportunity to
earn a quarterly cash bonus based on metrics that the Compensation Committee deems of particular
importance for the year in which the bonus is to be earned. In 2009, this bonus could have been
earned if the Company exceeded certain over-achievement (or stretch) thresholds for sales orders
for the corresponding quarter. In 2009, the Chief Executive Officer, Chief Financial Officer and
Senior Vice President of Marketing and Business Development were eligible for a quarterly
performance-based cash bonus in amounts ranging from $7,500 to $12,500. In aggregate, the total
quarterly based cash bonus paid to all Named Executive Officers could not exceed $30,000 per
quarter. In 2009, our Chief Executive Officer, Chief Financial Officer and Senior Vice President of
Marketing and Business Development earned $24,960, $20,020 and $14,950, respectively, under this
program.
Annual Stock Price Performance Cash Bonus
In addition, our compensation program provides our Chief Executive Officer and our Chief Financial
Officer with the opportunity to earn an annual cash bonus based on the performance of our stock
price. The amount of the cash bonus is subject to the attainment of an average stock price of $2.25
to $3.00 per share for 2009, determined by straight-line interpolation. In 2009, our Chief
Executive Officer was eligible for an annual stock price performance cash bonus in the amount of
$250,000 and the Chief Financial Officer was eligible for an annual stock price performance cash
bonus in the amount of $110,000. In 2009, our Chief Executive Officer earned $250,000 and our Chief
Financial Officer earned $110,000 under this program.
Initial Stock Option Awards
Named Executive Officers who join us are awarded an initial stock option grant having an exercise
price equal to the fair market value of our common stock on the day the grant is approved by the
Compensation Committee, vesting 1/3 after 12 months from the date of grant, and thereafter in 8
equal quarterly installments. The amount of the initial stock option award is determined based on
the Named Executive Officers position with us, the Named Executive Officers base salary and an
analysis of the competitive practices of the companies with similar annual revenues to us
represented in the compensation and benefits data that the Compensation Committee reviews. The goal
is to create a total compensation package for a new Named Executive Officer that is competitive
with other similarly situated technology companies that we believe will enable us to attract highly
qualified executives.
In 2009, two of our Named Executive Officers joined the Company, and the Company granted options to
each. On February 9, 2009 an option to purchase 200,000 shares of common stock was granted to our
Senior Vice President of Client Solutions, and on March 9, 2009 an option to purchase 180,000
shares of common stock was granted to our Vice President & General Counsel. These option awards
were determined based upon market conditions and the initial equity incentive awards of similarly
situated executives as evidenced in the publicly available data that was reviewed, and our overall
compensation philosophy.
Annual Stock Option Awards
Our practice is to make annual stock option awards as part of our overall performance management
program. The Compensation Committee believes that stock options provide management with a strong
link to long-term corporate performance and the creation of stockholder value. We intend that the
annual aggregate value of these awards will be set near competitive median levels for companies
represented in the compensation data the Compensation Committee reviews. As is the case when the
amounts of base salary and initial equity awards are determined, a review of all components of the
executives compensation is conducted when determining annual equity awards to ensure that an
executives total compensation conforms to our overall philosophy and objectives.
The Compensation Committee grants annual stock option awards by reviewing a summary of aggregated
compensation data contained in the Radford survey for executive officers employed by public
companies that have similar annual revenues and number of employees as the Company, and that are
located in the Northeast U.S. The Company also views the annual stock option award program as an
opportunity to reward extraordinary achievements realized during the prior year, and to provide
incentive for similar achievements in the future.
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In December 2008, the Compensation Committee granted annual stock option awards under this program
in respect of 2009 as follows: An option to purchase 240,000 shares of common stock was granted to
our Chief Executive Officer, an option to purchase 150,000 shares of common stock was granted to
our Chief Financial Officer, and an option to purchase 120,000 shares was granted to our Senior
Vice President of Marketing and Business Development. These options each vest in 12 equal quarterly
installments.
Special Compensation Awards
The Compensation Committee reserves the ability to grant special compensation awards in recognition
of outstanding performance not otherwise adequately rewarded as described above.
In December 2009, the Compensation Committee recognized that the acquisition of Emageon, Inc. and
the integration of Emageon into the Company had imposed significant additional requirements on
management, and the Compensation Committee determined that the Company and its management had
performed these additional tasks exceptionally, having managed the risks inherent in the
integration of two equal-sized organizations, realized substantial cost reductions, and ended the
year with a combined organization that was healthy, thriving and profitable. In light of these
achievements, the Compensation Committee created an Integration Bonus Pool, of which $90,000 was
paid to our Chief Executive Officer, $53,000 was paid to our Chief Financial Officer, $38,000 was
paid to our Senior Vice President of Marketing and Business Development, $28,000 was paid to our
Vice President & General Counsel, and $30,000 was paid to our Senior Vice President of Client
Solutions.
In December 2009, in recognition of the extraordinary demands that had been placed on our executive
officers for an extended period of time in connection with the transactions that had been under
discussion with Thoma Bravo LLC, the Compensation Committee, in consultation with the Chief
Executive Officer, awarded special cash bonuses to our Chief Financial Officer ($15,000), our
Senior Vice President of Marketing and Business Development ($15,000) and our Vice President and
General Counsel ($12,500).
Other Compensation
We maintain broad-based benefits and perquisites that are provided to all employees, including
health insurance, life and disability insurance, dental insurance, and a 401(k) plan.
Termination Based Compensation and Acceleration of Vesting of Equity-Based Awards
Upon termination of employment by the Company, Named Executive Officers may be entitled to receive
severance payments under their employment arrangements, and their stock options may accelerate. In
determining whether to approve and in setting the terms of such severance arrangements, the
Compensation Committee recognizes that executives, especially highly ranked executives, often face
challenges securing new employment following termination. In order to align the incentives of our
Named Executive Officers with the interests of our stockholders, the Compensation Committee has
also provided that the stock options granted to our Named Executive Officers shall, in general,
accelerate in the event of a change in control.
Severance payable upon termination of employment for our Named Executive Officers, and the
acceleration of their stock options upon change in control, is described below under the heading
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS Executive Compensation Potential Payments
upon Termination or Change-in-Control.
In addition, in the event that our Chief Executive Officer or Chief Financial Officer are
terminated without cause, all stock options other than performance-based options held by such
officer shall immediately vest and the exercise period shall terminate on the earlier of two years
from termination or ten years from the date of the grant. For performance-based options, in the
event of termination without cause, the options will vest to the extent provided in the option
agreement if the performance goals are met for the time period within which the executive is
terminated.
Conclusion
Our compensation policies are designed to retain and motivate our Named Executive Officers and to
ultimately reward them for outstanding individual and corporate performance.
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive Compensation
Summary Compensation Table
The following table sets forth the total compensation paid or accrued during the fiscal years ended
December 31, 2007, 2008 and 2009, respectively, to our Chief Executive Officer, our Chief Financial
Officer and our three most highly compensated executive officers other than our Chief Executive
Officer and Chief Financial Officer, who earned more than $100,000 during the fiscal year ended
December 31, 2009.
All Other | ||||||||||||||||||||||||
Salary | Bonus | Option Awards | Compensation | Total | ||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($)(1) | ($)(2) | ($) | ||||||||||||||||||
Stephen N. Kahane |
2007 | 350,000 | 116,238 | 117,854 | 25,012 | 609,104 | ||||||||||||||||||
Chief Executive Officer |
2008 | 350,000 | 144,500 | 505,795 | 27,800 | 1,028,095 | ||||||||||||||||||
2009 | 350,000 | 542,041 | 0 | 17,513 | 909,554 | |||||||||||||||||||
Kevin C. Burns |
2007 | 157,166 | 35,217 | 58,194 | 25,917 | 276,494 | ||||||||||||||||||
Sr. Vice President and |
2008 | 200,985 | 58,000 | 380,284 | 19,939 | 659,208 | ||||||||||||||||||
Chief Financial Officer(3) |
2009 | 240,000 | 275,936 | 0 | 15,419 | 531,355 | ||||||||||||||||||
Frank E. Stearns, Jr. |
2009 | 180,769 | 106,213 | 163,129 | 5,367 | 455,478 | ||||||||||||||||||
Senior Vice President, Client Solutions(4) |
||||||||||||||||||||||||
Paul B. Merrild |
2009 | 170,000 | 124,616 | 0 | 9,752 | 304,368 | ||||||||||||||||||
Senior Vice President, Marketing &
Business Development(5) |
||||||||||||||||||||||||
Craig Newfield |
2009 | 157,115 | 93,938 | 156,427 | 4,469 | 411,949 | ||||||||||||||||||
Vice President & General Counsel(6) |
(1) | These amounts represent the aggregate grant date fair value for option awards for fiscal years 2009, 2008 and 2007, respectively, computed in accordance with FASB ASC Topic 718. The grant date fair value of performance awards is determined based on the probable outcome of such performance conditions as of the grant date. A discussion of the assumptions used in determining grant date fair value may be found in Note L to our Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2009. | |
(2) | Represents contributions made by the Company pursuant to the Companys 401(k) savings plan, and car allowances. | |
(3) | Mr. Burns became our Senior Vice President and Chief Financial Officer effective April 7, 2008. The 2008 bonus amount includes $10,000 that was paid under the compensation plan in place for the first quarter of 2008 prior to Mr. Burns promotion to the position of Chief Financial Officer. | |
(4) | Mr. Stearns became our Senior Vice President, Client Solutions in February 2009, and resigned from the Company effective January 15, 2010. | |
(5) | Mr. Merrild became our Senior Vice President, Marketing & Business Development in April 2009. | |
(6) | Mr. Newfield became our Vice President & General Counsel in March 2009. |
Grants of Plan-Based Awards
The following table shows information regarding grants of equity awards that we made with respect
to or during the fiscal year ended December 31, 2009 to each of our Named Executive Officers.
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All Other | ||||||||||||||||
Option | ||||||||||||||||
Awards: | ||||||||||||||||
Number of | ||||||||||||||||
Securities | Grant Date Fair | |||||||||||||||
Underlying | Exercise or Base | Value of Stock | ||||||||||||||
Options | Price of Option | and Option | ||||||||||||||
Name | Grant Date | (#) | Awards ($/Sh) | Awards(1) | ||||||||||||
Stephen N. Kahane |
0 | |||||||||||||||
Chief Executive Officer |
||||||||||||||||
Kevin C. Burns |
0 | |||||||||||||||
Sr. Vice President and Chief Financial Officer |
||||||||||||||||
Frank E. Stearns, Jr.(2) |
2/9/2009 | 200,000 | $ | 1.65 | $ | 163,129 | ||||||||||
Senior Vice President, Client Solutions |
||||||||||||||||
Paul B. Merrild |
0 | |||||||||||||||
Senior Vice President, Marketing & Business Development |
||||||||||||||||
Craig Newfield |
3/9/2009 | 180,000 | $ | 1.75 | $ | 156,427 | ||||||||||
Vice President & General Counsel |
(1) | These amounts represent the grant date fair value for each option awards granted during our fiscal year ended December 31, 2009, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note L to our Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2009. | |
(2) | Mr. Stearns resigned from the Company effective January 15, 2010. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
We entered into an employment agreement with Stephen N. Kahane, M.D., M.S. on April 26, 2004,
effective as of January 1, 2004. The agreement was modified on July 26, 2004 in connection with Dr.
Kahanes promotion to Chief Executive Officer and was also amended on April 26, 2005, December 31,
2008 and February 10, 2009. The agreement automatically renews for one-year terms unless prior
written notice is delivered by either party and includes the following:
| An annual base salary of $350,000 for 2007, 2008 and 2009. | ||
| Annual Stock Price Performance Cash Bonus of up to $250,000 for 2007, 2008 and 2009. Subject to the attainment of an average stock price (defined as the average daily closing AMICAS stock price on The NASDAQ Global Market for the applicable calendar year), Dr. Kahane was eligible to receive a percentage (determined by straight line interpolation) of the target compensation. The stock price goals were $3.75 to $4.00 for 2007, $3.75 to $4.00 for 2008, and $2.25 to $3.00 for 2009. These goals were not met for 2007 or 2008 but they were met in full for 2009. As a result, Dr. Kahane did not receive a cash bonus under this program for 2007 or 2008, and he received $250,000 under this program in 2009. | ||
| Quarterly Financial Metric Cash Bonus for 2007, 2008 and 2009 of up to $250,000 pursuant to a program established by the Compensation Committee in the event that certain quarterly performance goals were met, as described above under the heading Compensation Discussion and Analysis Compensation Elements and Purposes. The performance goals were met in part in 2007, 2008 and 2009, and, as a result, Dr. Kahane earned cash bonuses of $109,488, $125,000 and $177,081 under this program for 2007, 2008 and 2009, respectively. | ||
| Quarterly Targeted Cash Bonus for 2007, 2008 and 2009 of up to $27,000, $33,000 and $50,000, respectively, pursuant to a program established by the Compensation Committee in the event that over-achievement (stretch) sales order targets were exceeded on a quarterly basis. The sales order targets were met in part in 2007 and 2009, but they were not met in 2008 and, as a result, Dr. Kahane earned cash bonuses of $6,750 and $24,960 for 2007 and 2009, respectively, and he did not receive any cash bonus under this program for 2008. |
We entered into an employment agreement with Kevin C. Burns, effective April 7, 2008, as amended on
February 10, 2009, for an initial term through December 31, 2008, subject to automatic renewal for
successive one-year terms unless prior written notice is delivered by either party. For 2009, our
Chief Financial Officers base salary was increased from $210,000 to $240,000, his on-target
Quarterly Financial Metric and Annual Stock Price Performance cash bonus amounts were increased
from $100,000 (annualized) to $110,000 per year, and his Quarterly Targeted cash bonus amount was
increased from $21,000 to $40,000 per year. These increases were awarded in recognition of Mr.
Burns success and excellence in assuming and executing his new duties as our Chief Financial
Officer. Our agreement with Mr. Burns includes the following:
| An annualized base salary of $210,000 for 2008 (pro-rated from April 2008) and $240,000 for 2009. | ||
| Annual Stock Price Performance Cash Bonus of up to $100,000, pro-rated to $75,000 in 2008, and $110,000 for 2009. Subject to the attainment of an average stock price (defined as the average daily closing |
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AMICAS stock price on The NASDAQ Global Market) of $3.75 to $4.00 for calendar year 2008 and of $2.25 to $3.00 for calendar year 2009, Mr. Burns was eligible to receive a percentage (determined by straight line interpolation) of the target compensation. This goal was not met in 2008 and it was met in full for 2009, and, as a result, Mr. Burns did not receive a cash bonus under this program for 2008, and he received $110,000 for 2009. | |||
| Quarterly Financial Metric Cash Bonus of up to $100,000, pro-rated to $75,000 in 2008, , and up to $110,000 for 2009, pursuant to a program established by the Compensation Committee in the event that certain quarterly performance goals were met, as described above under the heading Compensation Discussion and Analysis Compensation Elements and Purposes. The performance goals were met in part in 2008 and in 2009, and, as a result, Mr. Burns earned a cash bonus of $40,000 and $77,916 under this program for 2008 and 2009, respectively. | ||
| Quarterly Targeted Cash Bonus for 2008 of up to $15,750 and for 2009 of up to $40,000, pursuant to a program established by the Compensation Committee in the event that over-achievement (stretch) sales order targets were exceeded on a quarterly basis. The sales order targets were not met in 2008 and they were met in part for 2009, and, as a result, Mr. Burns did not earn any cash bonus under this program for 2008, and he earned $20,020 under this program for 2009. |
We entered into an employment letter with Frank Stearns, dated February 3, 2009, under which his
employment was at-will, and which provided for:
| An annual base salary of $200,000 for 2009. | ||
| Quarterly Financial Metric Cash Bonus of up to $100,000 for 2009, pursuant to a program established by the Compensation Committee in the event that certain quarterly performance goals were met, as described above under the heading Compensation Discussion and Analysis Compensation Elements and Purposes. The 2009 performance goals were met in part, and, as a result, Mr. Stearns earned a cash bonus of $76,213 under this program for 2009. | ||
| Mr. Stearns resigned from the Company effective January 15, 2010. | ||
We entered into an employment letter with Paul Merrild dated May 5, 2006, under which his employment was at-will, and each year thereafter we enter into a letter agreement with Mr. Merrild that sets forth his compensation for the year, and which provides for: | |||
| An annual base salary of $170,000 for 2009. | ||
| Quarterly Financial Metric Cash Bonus of up to $80,000 for 2009, pursuant to a program established by the Compensation Committee in the event that certain quarterly performance goals were met, as described above under the heading Compensation Discussion and Analysis Compensation Elements and Purposes. The 2009 performance goals were met in part, and, as a result, Mr. Merrild earned a cash bonus of $56,666 under this program for 2009. | ||
| Quarterly Targeted Cash Bonus for 2009 up to $30,000, pursuant to a program established by the Compensation Committee in the event that over- achievement (stretch) sales order targets were exceeded on a quarterly basis. The sales order targets were met in part in 2009, and, as a result, Mr. Merrild earned a cash bonus of $14,950 for 2009 under this program. |
We entered into an employment letter with Craig Newfield, dated March 9, 2009, under which his
employment is at-will, and which provides for:
| An annual base salary of $190,000 for 2009. | ||
| Quarterly Financial Metric Cash Bonus of up to $100,000 for 2009, pursuant to a program established by the Compensation Committee in the event that certain quarterly performance goals were met, as described above under the heading Compensation Discussion and Analysis Compensation Elements and Purposes. The 2009 performance goals were met in part, and, as a result, Mr. Newfield earned a cash bonus of $53,438 under this program for 2009. | ||
Our employment agreements with our Chief Executive Officer and our Chief Financial Officer each contains a six-month post termination covenant not to compete, certain other restrictions and non- |
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disclosure provisions which protect our interests. Our Named Executive Officers are eligible to participate in all of our health, welfare and benefit programs that are available to our employees. |
2009 and 2010 Compensation Actions
For 2010, the Compensation Committee took note of the dramatic increase in these officers
responsibilities following our acquisition of Emageon Inc. and the resulting step-function increase
in nearly all aspects of our business, and the remarkable achievements represented by the
successful integration of Emageons operations and resources into our organization. As a result,
and having reviewed publicly available data obtained from the Radford survey, the Compensation
Committee increased our Named Executive Officers base salaries and on-target Quarterly Financial
Metric Cash Bonus and Annual Stock Price Performance Cash Bonus amounts for 2010. The Compensation
Committee determined that, in light of the transactions then pending between the Company and Thoma
Bravo LLC, it would not be appropriate to grant additional stock options to our Named Executive
Officers for 2010. In addition, for 2010, the Compensation Committee suspended the Annual Stock
Price Performance Cash Bonus plan for our Chief Executive Officer and our Chief Financial Officer.
The Compensation Committee implemented an additional cash bonus to be earned based on achievement
of the same targets as implemented for the Quarterly Financial Metric Cash Bonus and Quarterly
Targeted Cash Bonus programs.
The following table sets forth the base salaries that have been set for our Named Executive
Officers for both the fiscal years ending December 31, 2009 and 2010, as well as the maximum
potential bonuses that those officers are, or were, eligible to receive under our Annual Stock
Price Performance Cash Bonus, Quarterly Financial Metric Cash Bonus and Quarterly Targeted Cash
Bonus programs, and the options that each such officer has received.
Annual | ||||||||||||||||||||||||
Stock | ||||||||||||||||||||||||
Price | Quarterly | Quarterly | ||||||||||||||||||||||
Performance | Financial Metric | Targeted | Number of | |||||||||||||||||||||
Cash | Cash | Cash | Stock | |||||||||||||||||||||
Annual | Bonus | Bonus | Bonus | Options | ||||||||||||||||||||
Name | Year | Salary | (1) | (2) | (3) | Granted(4) | ||||||||||||||||||
Stephen N. Kahane |
2009 | 350,000 | 250,000 | 250,000 | 50,000 | 240,000 | ||||||||||||||||||
Chief Executive Officer |
2010 | 385,000 | | 620,000 | 50,000 | | ||||||||||||||||||
Kevin C. Burns |
2009 | 240,000 | 110,000 | 110,000 | 40,000 | 150,000 | ||||||||||||||||||
Sr. Vice President and |
2010 | 265,000 | | 290,000 | 40,000 | | ||||||||||||||||||
Chief Financial Officer |
||||||||||||||||||||||||
Frank E. Stearns, Jr. |
2009 | 200,000 | | 100,000 | | 200,000 | ||||||||||||||||||
Senior Vice President, |
2010 | | | | | | ||||||||||||||||||
Client Solutions(5) |
||||||||||||||||||||||||
Paul B. Merrild |
2009 | 170,000 | | 80,000 | 30,000 | 120,000 | ||||||||||||||||||
Senior Vice President, |
2010 | 190,000 | | 90,000 | 30,000 | | ||||||||||||||||||
Marketing & Business
Development |
||||||||||||||||||||||||
Craig Newfield |
2009 | 190,000 | | 90,000 | | 180,000 | ||||||||||||||||||
Vice
President & General Counsel |
2010 | 210,000 | | 90,000 | 20,000 | |
All amounts other than Stock Option Granted are stated in dollars; all dollar amounts are annual
amounts.
(1) | Subject to the attainment of an average stock price (defined as the average daily closing AMICAS stock price on The NASDAQ Global Market) of $2.25 to $3.00 for 2009. | |
(2) | Incentive cash compensation for 2009 and 2010 pursuant to a program established by the Compensation Committee in the event that certain performance goals as described above under the heading Compensation Discussion and Analysis Compensation Elements and Purposes are met on a quarterly basis. | |
(3) | Incentive cash compensation for 2009 and 2010 pursuant to a program established by the Compensation Committee in the event that sales order targets are exceeded on a quarterly basis. | |
(4) | For Dr. Kahane and Messrs. Burns and Merrild, the options were granted in December 2008 in respect of 2009, and the options vest and become exercisable in twelve equal quarterly installments beginning three months from |
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the grant date. For Messrs Stearns and Newfield, the options vest 1/3 one year after the grant date, and thereafter in eight equal quarterly installments. For all Named Executive Officers, upon termination without cause or a change in control, unvested options shall fully vest. | ||
(5) | Mr. Stearns resigned from the Company effective January 15, 2010. |
401(k) Profit Sharing Plan
We maintain a tax-qualified retirement savings plan, or 401(k) plan, that covers all eligible
employees. Pursuant to our 401(k) plan, participants may elect to reduce their current
compensation, on a pre-tax basis, by up to 50% of their compensation, but not more than the maximum
401(k) limit contribution, and have the amount of the reduction contributed to the 401(k) plan. The
401(k) plan also permits us, in our sole discretion, to make employer matching contributions equal
to a specified percentage (as we determine) of the amount a participant has elected to contribute
to the 401(k) plan, and/or employer profit-sharing contributions equal to a specified percentage
(as we determine) of an employees compensation.
Outstanding Equity Awards at Fiscal Year-End
The following table shows grants of stock options outstanding on the last day of the fiscal year
ended December 31, 2009 to each of our Named Executive Officers.
Option Awards | ||||||||||||||||||||
Equity | ||||||||||||||||||||
Incentive | ||||||||||||||||||||
Number | Plan Awards: | |||||||||||||||||||
of | Number of | Number | ||||||||||||||||||
Securities | Securities | of Securities | ||||||||||||||||||
Underlying | Underlying | Underlying | ||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | |||||||||||||||||
Options | Options | Unearned | Exercise | Option | ||||||||||||||||
(#) | (#) | Options | Price | Expiration | ||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | |||||||||||||||
Stephen N. Kahane |
1,015,802 | (1) | | | 2.10 | 8/21/2010 | ||||||||||||||
Chief Executive Officer |
423 | (2) | | | 1.80 | 10/17/2010 | ||||||||||||||
200 | (2) | | | 5.65 | 12/31/2011 | |||||||||||||||
| 115,000 | (3) | | 3.57 | 4/26/2014 | |||||||||||||||
250,000 | (4) | | | 3.02 | 7/26/2014 | |||||||||||||||
117,000 | | 333,000 | (5) | 3.02 | 7/26/2014 | |||||||||||||||
73,333 | (6) | 6,667 | | 2.97 | 1/26/2017 | |||||||||||||||
135,416 | 52,084 | 62,500 | (7) | 2.83 | 1/29/2018 | |||||||||||||||
80,000 | (8) | 160,000 | | 1.53 | 12/30/2018 | |||||||||||||||
Kevin C. Burns |
40,000 | (9) | | | 3.45 | 11/5/2014 | ||||||||||||||
Sr. Vice President and Chief Financial Officer |
2,500 | (10) | | | 5.01 | 10/21/2015 | ||||||||||||||
20,000 | (11) | | | 4.89 | 1/5/2016 | |||||||||||||||
20,000 | (12) | | | 3.56 | 5/31/2016 | |||||||||||||||
18,571 | (13) | 1,429 | | 3.18 | 8/24/2016 | |||||||||||||||
32,083 | (14) | 2,917 | | 2.97 | 1/26/2017 | |||||||||||||||
4,166 | (15) | 834 | | 3.00 | 4/27/2017 | |||||||||||||||
34,999 | (16) | 25,001 | | 2.83 | 1/29/2018 | |||||||||||||||
146,633 | (17) | 41,667 | 11,700 | 2.04 | 3/24/2018 | |||||||||||||||
50,000 | (18) | 100,000 | | 1.53 | 12/30/2018 | |||||||||||||||
Frank E. Stearns, Jr. |
0 | (19) | 200,000 | | 1.65 | | ||||||||||||||
Senior Vice President, Client Solutions |
||||||||||||||||||||
Paul B. Merrild |
100,000 | (20) | 0 | | 3.30 | 5/15/2016 | ||||||||||||||
Senior Vice President, Marketing |
32,083 | (21) | 2,917 | | 2.97 | 1/26/2017 | ||||||||||||||
& Business Development |
4,166 | (22) | 834 | | 3.00 | 4/27/2017 | ||||||||||||||
34,999 | (23) | 25,001 | | 2.83 | 1/29/2018 | |||||||||||||||
40,000 | (24) | 80,000 | | 1.53 | 12/30/2018 | |||||||||||||||
Craig Newfield |
0 | (25) | 180,000 | | 1.75 | 3/8/2019 | ||||||||||||||
Vice President & General Counsel |
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(1) | The option vested as to 8.33% of the shares per quarter beginning 64 days after the grant date. | |
(2) | The option vested as to 100% of the shares on the fourth anniversary of the grant date. | |
(3) | The option will vest 100% on April 26, 2010 (the sixth anniversary of the grant date). Upon a change in control (as defined in the executives employment agreement) all unvested options shall fully vest. | |
(4) | The option vested in twelve equal quarterly installments beginning three months from the grant date. | |
(5) | On July 26, 2004, we granted to Dr. Kahane an option to purchase 450,000 shares of our common stock, under the plan, at fair market value on the grant date that vest on the sixth anniversary of the grant date or upon a change in control (as defined in the executives employment agreement) unless they vest earlier in accordance with the following schedule. Subject to the attainment of an average stock price (defined as the average daily closing AMICAS common stock price on The NASDAQ Global Market) of $4.00 to $5.00 per share for the calendar year 2005, a percentage (determined by straight line interpolation) of 225,000 of the 450,000 option shares granted to Dr. Kahane would vest and become exercisable effective December 31, 2005. In 2005, the average price per share of AMICAS common stock was $4.52, and as a result, 117,000 of the 450,000 shares vested. Under the terms of the option, the remaining 333,000 shares were carried forward. Subject to the attainment of an average stock price of $5.00 to $6.00 per share for calendar year 2006, a percentage (determined by straight line interpolation) of the 333,000 options would have vested and become exercisable. The goal was not met and the shares did not vest. The 333,000 options will vest on the sixth anniversary of the grant date, or upon a change in control. | |
(6) | This option was granted on January 26, 2007, and was fully vested three years from the grant date. | |
(7) | This option was granted on January 29, 2008. Of these shares, 125,000 are vesting in twelve equal quarterly installments beginning three months from the grant date. The remaining 125,000 would have vested on December 31, 2008 subject to the attainment of certain sales order goals; these goals were met in part, and as a result 62,500 shares were vested on December 31, 2008 and the remainder will vest 100% six years from the date of grant. Upon a change in control (as defined in the executives employment agreement) unvested options shall fully vest. | |
(8) | This option was granted on December 30, 2008, and vests in twelve equal quarterly installments beginning three months from the grant date. Upon a change in control (as defined in the executives employment agreement) unvested options shall fully vest. | |
(9) | This option was granted on November 5, 2004, and vested 25% after one year and the remainder in eight quarterly installments beginning fifteen months after the grant date. | |
(10) | This option was granted on October 21, 2005, and was fully vested three years from the grant date. | |
(11) | This option was granted on January 5, 2006, and was fully vested three years from the grant date. | |
(12) | This option was granted on May 31, 2006, and was fully vested three years from the grant date. | |
(13) | This option was granted on August 24, 2006, and was fully vested three years from the grant date. | |
(14) | This option was granted on January 26, 2007, and was fully vested three years from the grant date. | |
(15) | This option was granted on April 27, 2007, and vests in twelve equal quarterly installments beginning three months from the grant date. | |
(16) | This option was granted on January 28, 2008, and vests in twelve equal quarterly installments beginning three months from the grant date. | |
(17) | This option was granted on March 24, 2008, and vests as follows. For 100,000 shares, vesting occurs in twelve equal quarterly installments beginning three months from the grant date. For the remaining 100,000 shares, vesting occurs subject to the attainment of an average stock price (defined as the average daily closing AMICAS common stock price on The NASDAQ Global Market) of $3.75 to $4.00 per share for the calendar year 2008, and $2.25 to $3.00 for 2009. The stock price target was met in part, and as a result 88,300 shares became vested. The remaining 11,700 unvested option shares will vest six years from the date of grant. Upon a change in control (as defined in the executives employment agreement) unvested options shall fully vest. |
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(18) | This option was granted on December 30, 2008, and vests in twelve equal quarterly installments beginning three months from the grant date. Upon a change in control (as defined in the executives employment agreement) unvested options shall fully vest. | |
(19) | This option was granted on February 9, 2009, and vests 25% after one year and the remainder in eight quarterly installments beginning fifteen months after the grant date. Mr. Stearns resigned effective January 15, 2010, and this option was terminated. | |
(20) | This option was granted on May 15, 2006, and was fully vested three years from the grant date. | |
(21) | This option was granted on January 26, 2007, and was fully vested three years from the grant date. | |
(22) | This option was granted on April 27, 2007, and vests in twelve equal quarterly installments beginning three months from the grant date. | |
(23) | This option was granted on January 28, 2008, and vests in twelve equal quarterly installments beginning three months from the grant date. | |
(24) | This option was granted on December 30, 2008, and vests in twelve equal quarterly installments beginning three months from the grant date. Upon a change in control, unvested options shall fully vest. | |
(25) | This option was granted on March 9, 2009, and vests 25% after one year and the remainder in eight quarterly installments beginning fifteen months after the grant date. Upon a change in control, unvested options shall fully vest. |
Option Exercises And Stock Vested
None of our Named Executive Officers exercised options to purchase our common stock, or were
holding restricted shares that vested, during the fiscal year ended December 31, 2009.
Pension Benefits
We do not have any qualified or non-qualified defined benefit plans.
Nonqualified Deferred Compensation
We do not have any non-qualified defined contribution plans or other deferred compensation plan.
Potential Payments Upon Termination Or Change-In-Control
Our employment agreement with Dr. Kahane provides for a severance payment upon the termination of
employment by the Company without cause or by Dr. Kahane for good reason (as defined in the
agreement) or upon non-renewal of the employment agreement, equal to one and one-half times his
then-current annual base salary, payment of a cash bonus if we meet certain financial performance
goals, and the payment of health insurance premiums for eighteen months. In addition, upon
termination of employment within 12 months following a change in control of the Company, Dr. Kahane
will receive payment in an amount equal to twice his then-current annual base salary, payment in an
amount equal to his target annual cash bonuses, and the payment of health insurance premiums for
eighteen months. Pursuant to his employment agreement, all of Dr. Kahanes options vest upon a
change in control.
Our employment agreement with Mr. Burns provides for a severance payment upon the termination of
employment by the Company without cause or by Mr. Burns for good reason (as defined in the
agreement) or upon non-renewal of the employment agreement, equal to his then-current annual base
salary, payment of a cash bonus if we meet certain financial performance goals, and the payment of
health insurance premiums for twelve months. In addition, upon termination of employment within 12
months following a change in control of the Company, Mr. Burns will receive payment in an amount
equal to one and one-half times his then-current annual base salary, payment in an amount equal to
his target annual cash bonuses, and the Company will also pay his health insurance premiums for
eighteen months. Pursuant to his employment agreement, 176,368 of Mr. Burns unvested options will
vest upon a change in control. In connection with the Agreement and Plan of Merger, dated as of
February 28, 2010, by and among Project Ready Corp., a wholly-owned direct subsidiary of Merge
Healthcare Incorporated, Merge Healthcare Incorporated and the Company, or the Merger Agreement,
2,590 (50%) options of the remaining 5,180 unvested options will accelerate and become vested, and
the remaining 2,590 options will be forfeited.
Payments to our Chief Executive Officer and our current Chief Financial Officer described above
(other than health insurance premiums and not including the cash bonuses payable under our 2010
executive compensation plan) will
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be made in a lump sum six months following the date that their employment is terminated, and
payments based on base salary will be forfeited if the executive becomes employed by a competitor
during such six-month period.
Our employment arrangement with Mr. Merrild provides that upon termination of his employment by the
Company without cause (irrespective of a change in control of the Company), Mr. Merrild will
receive severance in an amount equal to one-half of his then-current annual base salary in the form
of salary continuation, and the payment of health insurance premiums for up to three months.
Pursuant to his option agreements, all (105,001) of Mr. Merrilds stock options that are unvested
at the time of the change in control will accelerate and become vested. In connection with the
Merger Agreement, 1,876 (50%) of the remaining 3,751 unvested options will accelerate and become
vested, and the remaining 1,875 options will be forfeited.
Our employment arrangement with Mr. Newfield provides that upon termination of his employment by
the Company at any time (irrespective of a change in control of the Company), Mr. Newfield will
receive severance in an amount equal to one-half of his then-current annual base salary in the form
of salary continuation, and the payment of health insurance premiums for up to six months. If Mr.
Newfields employment is terminated in connection with a change in control of the Company, Mr.
Newfield will receive severance in an amount equal to his then-current annual base salary in the
form of salary continuation, and the payment of health insurance premiums for up to six months.
Pursuant to his option agreement, all (180,000) of Mr. Newfields unvested options will vest upon a
change in control.
Our employment arrangement with Mr. Stearns provided that upon termination of employment by the
Company at any time (irrespective of a change in control of the Company), Mr. Stearns would receive
severance in an amount equal to two-thirds of his then-current annual base salary in the form of
salary continuation, and the payment of health insurance premiums for up to eight months. Pursuant
to his option agreement, one-half (100,000) of Mr. Stearns unvested options would vest upon a
change in control. Mr. Stearns resigned effective January 15, 2010, and he received and will
receive none of the payments or acceleration of options described above.
Under the terms of our 2010 executive compensation plan, upon a change in control of the Company,
each of our Named Executive Officers who remains employed by the Company immediately prior to the
change in control will receive a cash bonus equal to his full on-target annual bonus amount.
The agreements with Dr. Kahane and Mr. Burns provide for an additional gross-up payment to be made
to each of them in the event that, upon a change in control of the Company (as defined in the
agreements), any payments to them would be subject to an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended. The successful consummation of the transactions
contemplated by the Merger Agreement will constitute a change in control under the employment
agreements described above.
The table below reflects amounts payable to the Named Executive Officers assuming (i) their
employment was terminated on December 31, 2009 (without any change in control), and (ii) their
employment was terminated in connection with a change in control that occurred on December 31,
2009.
280G | ||||||||||||||||||||||||||||
Gross- | ||||||||||||||||||||||||||||
Health | Options | Up | ||||||||||||||||||||||||||
Name | Event | Salary | Benefits | Bonus(2) | Total | Vested(3) | Payment | |||||||||||||||||||||
Stephen N. Kahane |
Termination(1) | $ | 525,000 | $ | 24,552 | | $ | 549,552 | $ | 1,962,042 | 0 | |||||||||||||||||
Change in Control | $ | 700,000 | $ | 24,552 | $ | 550,000 | $ | 1,274,552 | $ | 1,962,041 | ||||||||||||||||||
Kevin C. Burns |
Termination(1) | $ | 240,000 | $ | 16,368 | | $ | 256,368 | $ | 637,700 | 0 | |||||||||||||||||
Change in Control | $ | 360,000 | $ | 24,552 | $ | 260,000 | $ | 644,552 | $ | 637,700 | ||||||||||||||||||
Frank E. Stearns, Jr.(4) |
Termination(1) | 0 | 0 | 0 | 0 | 0 | | |||||||||||||||||||||
Change in Control | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Paul Merrild |
Termination(1) | $ | 85,000 | $ | 3,925 | | $ | 88,925 | 0 | | ||||||||||||||||||
Change in Control | $ | 85,000 | $ | 3,925 | $ | 110,000 | $ | 198,925 | $ | 378,053 | ||||||||||||||||||
Craig Newfield |
Termination(1) | $ | 95,000 | $ | 7,849 | | $ | 102,849 | 0 | | ||||||||||||||||||
Change in Control | $ | 190,000 | $ | 7,849 | $ | 90,000 | $ | 287,849 | $ | 664,200 | ||||||||||||||||||
(1) | Upon Termination, bonuses are only paid to the extent earned through the date employment is terminated. | |
(2) | Bonuses payable upon a change in control under the Companys 2009 Executive Compensation Plan. |
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(3) | For Dr. Kahane and Mr. Burns, all options shall fully vest upon Termination or a change in control (as defined in each executives employment agreement). All values stated in this column were calculated based on the closing price of our common stock on December 31, 2009 ($5.44 per share). Termination refers to (i) termination or non-renewal by the Company without Cause, defined in the executives employment agreements to include the executives fraudulent or illegal acts, willful refusal to perform his duties or breach of the employment agreement; (ii) termination by the executive for Good Reason defined in the executives employment agreements to include a material reduction in compensation, material reduction in responsibilities, or the Companys breach of the employment agreement; or (iii) the executives death or permanent disability. If an executive is terminated for Cause or resigns his employment without Good Reason, he will not receive any payments. | |
(4) | Mr. Stearns resigned from the Company effective January 15, 2010, and he received and will receive none of the payments or acceleration of stock options described. |
Director Compensation
The following table shows the total compensation paid or accrued during the fiscal year ended
December 31, 2009 to each of our non-employee directors. We do not pay directors who are also
Company employees any additional compensation for their service as directors.
Fees | ||||||||||||||||
Earned or | Stock | Option | ||||||||||||||
Paid in | Awards | Awards | Total | |||||||||||||
Name | Cash ($) | ($)(1) | ($)(2) | ($) | ||||||||||||
Philip M. Berman(3) |
7,500 | 0 | 0 | 7,500 | ||||||||||||
Stephen J. DeNelsky(4) |
43,255 | 34,500 | 2,173 | 79,928 | ||||||||||||
Joseph D. Hill(5) |
33,255 | 30,000 | 3,256 | 66,511 | ||||||||||||
Stephen J. Lifshatz(6) |
43,255 | 34,500 | 3,467 | 81,222 | ||||||||||||
David B. Shepherd(7) |
37,255 | 30,000 | 3,433 | 70,688 | ||||||||||||
John J. Sviokla(8) |
37,255 | 30,000 | 3,489 | 70,744 |
(1) | Restricted stock had been granted to the Companys non-employee directors, which vest on the earlier of one year from the date of grant and the date the director completes a full term as a director. The fair value of the restricted stock awards was based on the closing market price of the Companys common stock on the date of the grant of the award and is being amortized on a straight line basis over the vesting period. In 2009, each director received one restricted stock award with a grant date fair value of $30,000, and Messrs. DeNelsky and Lifshatz each received a second award with a grant date fair value of $4,500. | |
(2) | These amounts represent the aggregate grant date fair value of all option awards granted during our fiscal year ended December 31, 2009, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note L to our Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2009. As each director only received one stock option award in fiscal 2009, the grant date fair value of each award is reflected in the table above. | |
(3) | Dr. Berman had no options and no shares of unvested restricted stock outstanding as of December 31, 2009. Following Dr. Bermans death in February 2009, the Board accelerated the vesting of all outstanding and unvested stock options and shares of restricted stock that had been held by Dr. Berman. | |
(4) | Mr. DeNelsky had 55,000 options and 13,038 shares of unvested restricted stock outstanding as of December 31, 2009. | |
(5) | Mr. Hill had 277,500 options outstanding as of December 31, 2009; 12,500 shares were granted to Mr. Hill in respect of his service as a director, and 265,000 shares were granted to him in respect of his employment as the Companys Senior Vice President and Chief Financial Officer until his resignation in April 2008. Mr. Hill had 11,538 shares of unvested restricted stock outstanding as of December 31, 2009. | |
(6) | Mr. Lifshatz has 15,000 options and 13,038 shares of unvested restricted stock outstanding as of December 31, 2009. |
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(7) | Mr. Shepherd had 52,500 options and 11,538 shares of unvested restricted stock outstanding as of December 31, 2009. | |
(8) | Dr. Sviokla has 17,500 options and 11,538 shares of unvested restricted stock outstanding as of December 31, 2009. |
The following is a description of the standard compensation arrangements under which our
non-employee directors are compensated for their service as directors, including as members of the
various committees of our Board.
Cash Payments
Each non-employee director receives $7,500 per calendar quarter of service, with additional cash
payments of $2,500 to the chairperson of the Audit Committee; $1,000 to each of the chairpersons of
the Compensation Committee and the Nominating and Corporate Governance Committee, and each member
of the Audit Committee; and $500 to the Lead Director.
2006 Stock Incentive Plan
On the date of his or her initial election or appointment to the Board, each non-employee director
shall receive under our 2006 Stock Incentive Plan (the Plan) restricted shares of our common
stock in an amount equal to $15,000 divided by the per share closing price of our common stock as
quoted on The NASDAQ Global Market on the date of grant, provided, however, that in the event of an
appointment to the Board, such grant shall be made on a pro rata basis based upon a June 1 to May
31 year. On the date of his or her re-election (or initial election following an appointment to the
Board), each non-employee director shall receive, pursuant to the Plan, restricted shares of the
Companys common stock in an amount equal to $15,000 divided by the per share closing price of the
Companys common stock as quoted on The NASDAQ Global Market on the date of grant.
Upon each appointment as chair of the Audit Committee or Lead Director, each such non-employee
director shall receive a grant under the Plan of restricted shares of our common stock in an amount
equal to $4,500 divided by the per share closing price of our common stock as quoted on The NASDAQ
Global Market on the date of grant.
Directors Stock Option Plan
Prior to the adoption of the 2006 Stock Incentive Plan non-employee directors were compensated
through our Directors Stock Option Plan which was adopted by our directors and approved by our
stockholders in June 1998.
The Directors Stock Option Plan provided to each director who is not an employee of AMICAS or its
subsidiaries, at the time he or she was first appointed or elected to the Board, an option to
purchase 10,000 shares of our common stock. On each anniversary of such directors service on the
Board, each such non-employee director received a grant of an option to purchase 2,500 shares of
common stock pursuant to the Directors Stock Option Plan. The Directors Stock Option Plan also
allows the Compensation Committee of the Board to make additional grants of options to non-employee
directors from time to time; however, in practice, the Board approves, at its discretion and upon
the recommendation of the Compensation Committee, additional grants of options to non-employee
directors.
All options granted under the Directors Stock Option Plan vest at a rate of 50% upon completion of
one year of service as a director after the date of grant and 50% upon completion of the second
year of service as a director after the date of grant. Generally, no option is transferable by the
optionee other than by will or the laws of descent and distribution, and each option is exercisable
only by the optionee during his or her lifetime. The exercise price of all options will be the fair
market value of the shares of common stock on the trading day immediately preceding the date of
grant, and the term of each option may not exceed ten years. Unless terminated sooner by the Board,
the Directors Stock Option Plan will continue in effect for a period of ten years or until all
options outstanding thereunder have expired or been exercised. As of December 31, 2008, no shares
remained available for issuance and the plan has expired. Stock option grants to Directors after
January 1, 2008 will be issued from the 2006 Stock Incentive Plan.
Compensation Committee Interlocks and Insider Participation
At the beginning of 2009 the Compensation Committee was composed of Phillip M. Berman, Stephen J.
Lifshatz and John J. Sviokla. Dr. Berman passed away in February 2009, and in March 2009 Mr.
DeNelsky was appointed to the Compensation Committee. None of the Compensation Committee members in
2009 have had any relationship with the Company requiring disclosure under Item 404 of Regulation
S-K.
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None of the Companys executive officers have served as a director or member of the compensation
committee (or other committee serving an equivalent function) of any other entity, one of whose
executive officers served as a director of the Company or member of the Compensation Committee.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of our Board has reviewed and discussed the Compensation Discussion and
Analysis required by Item 402(b) of Regulation S-K, which appears elsewhere in this Annual Report,
with our management. Based on this review and discussion, the Compensation Committee has
recommended to the Board that the Compensation Discussion and Analysis be included in our Annual
Report.
By the Compensation Committee: John J. Sviokla (Chair) Stephen J. DeNelsky Stephen J. Lifshatz |
||||
Note: The above report reflects the members of the Compensation Committee prior to completion of the acquisition of AMICAS, Inc. by Merge Healthcare Incorporated on April 28, 2010. Upon completion of the acquisition,
the Compensation Committee was disbanded.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The following table sets forth certain information regarding beneficial ownership of shares of our
Common Stock as of March 16, 2010 for: (a) each of our named executive officers (together, the
Named Executive Officers), (b) each of our current directors, (c) each of the Purchasers
designees to our board of directors, (d) all of our current directors and executive officers as a
group, and (e) each stockholder known by us to own beneficially more than 5% of our Common Stock. As of April 28, 2010, upon completion of the acquisition of AMICAS, Inc. by Merge Healthcare Incorporated, AMICAS, Inc. was wholly owned by Merge Healthcare Incorporated.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC and
includes voting or investment power with respect to the securities. In computing the number of
shares beneficially owned by a person and the percentage of ownership of that person, shares of
Common Stock subject to options and warrants held by that person that are currently exercisable or
exercisable within 60 days of March 16, 2010 (Presently Exercisable Options) are deemed to be
outstanding for the purpose of computing the percentage ownership of such individual or group.
These shares, however, are not deemed outstanding for the purpose of computing the percentage
ownership of any other person. Percentage of ownership is based on 37,020,131 shares of Common
Stock outstanding on March 16, 2010. The amounts set forth below give effect to the accelerated
vesting that will result from the closing of the tender offer, or the Offer, by Project Ready Corp.
to purchase all of the outstanding shares of the Company or the consummation of the transactions
contemplated by the Merger Agreement. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, we believe that each stockholder named in the table
has sole voting and investment power with respect to the shares set forth opposite the
stockholders name based on information provided to us by these stockholders. Unless otherwise
indicated in the table, the address for each stockholder is c/o AMICAS, Inc., 20 Guest Street,
Suite 400, Boston, Massachusetts 02135.
Shares | Percentage | |||||||||||
Beneficially | Beneficially | |||||||||||
Name of Beneficial Owner | Owned | Owned | ||||||||||
5% Owners |
||||||||||||
Dimensional Fund Advisors LP(1) |
3,371,933 | 9.11 | % | |||||||||
Centaurus Capital, LP(2) |
3,192,205 | 8.62 | % | |||||||||
Harvest Capital Strategies LLC(3) |
2,122,142 | 5.73 | % | |||||||||
J. Caird Investors (Bermuda) L.P.(4) |
2,033,900 | 5.49 | % | |||||||||
Directors and Named Executive Officers |
||||||||||||
Stephen N. Kahane(5) |
2,457,180 | 6.23 | % | |||||||||
Kevin C. Burns(5) |
555,429 | 1.48 | % | |||||||||
Joseph D. Hill(5) |
295,717 | 0.79 | % | |||||||||
Paul B. Merrild(5) |
320,000 | 0.86 | % | |||||||||
Craig Newfield(5) |
195,000 | 0.52 | % |
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Shares | Percentage | |||||||
Beneficially | Beneficially | |||||||
Name of Beneficial Owner | Owned | Owned | ||||||
Frank E. Stearns, Jr.(6) |
| | ||||||
David B. Shepherd(5) |
107,190 | * | ||||||
Stephen J. DeNelsky(5) |
95,434 | * | ||||||
John J. Sviokla(5) |
44,325 | * | ||||||
Stephen J. Lifshatz(5) |
36,769 | * | ||||||
All Current Directors and Executive Officers as a Group (9 persons)(5) |
4,110,252 | 10.05 | % |
* | Represents less than 1% of the outstanding shares of Common Stock. | |
(1) | Number of shares beneficially owned based solely upon a Schedule 13G filed by Dimensional Fund Advisors, LP on February 8, 2010. The address of Dimensional Fund Advisors, LP is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas, 78746. | |
(2) | Number of shares beneficially owned based solely upon a Schedule 13D filed by Centaurus Capital LP and Centaurus Capital Limited (collectively, Centaurus) on March 11, 2010. The address of Centaurus is 33 Cavendish Square, 16th Floor, London, W1G OPW, United Kingdom. | |
(3) | Number of shares beneficially owned based solely upon a Schedule 13D filed by Harvest Capital Strategies LLC. on February 16, 2010. The address of Harvest Capital Strategies LLC is 600 Montgomery Street, Suite 2000, San Francisco, CA 94111. | |
(4) | Number of shares beneficially owned based solely upon a Schedule 13D filed by J. Caird Investors (Bermuda) L.P. and Wellington Global Holdings, Ltd. on February 12, 2010. The address of J. Caird Investors (Bermuda) L.P. and Wellington Global Holdings, Ltd. is c/o Wellington Management Company, LLP, 75 State Street, Boston, MA 02109. | |
(5) | Includes shares that are issuable on exercise of Presently Exercisable Options as follows: |
Presently | ||||
Exercisable | ||||
Holder | Options * | |||
Stephen N. Kahane |
2,401,425 | |||
Kevin C. Burns |
552,500 | |||
Joseph D. Hill |
277,500 | |||
Paul B. Merrild |
320,000 | |||
Craig Newfield |
180,000 | |||
David B. Shepherd |
52,500 | |||
Stephen J. DeNelsky |
52,500 | |||
John J. Sviokla |
17,500 | |||
Stephen J. Lifshatz |
15,000 |
* | Includes options that will accelerate and become vested in connection with the closing of the Offer or the consummation of the transactions contemplated by the Merger Agreement. | |
(6) | Mr. Stearns resigned from the Company effective as of January 15, 2010. |
Item 13. Certain Relationships and Related Transactions, and Director Independence
Our Audit
Committee that was in effect prior to the completion of the
Acquisition reviewed and approved in advance all related person transactions. Since the
beginning of fiscal year 2009, the Company has not been a participant in a transaction, and is not
currently a participant in any proposed transaction, requiring disclosure as a related person
transaction in this Annual Report pursuant to Item 404 of Regulation S-K.
Our
written Audit Committee Charter that was in effect prior to the completion of the Acquisition provides that the Audit Committee shall review all related
party transactions (defined as transactions required to be disclosed pursuant to Item 404 of
Regulation S-K) on an ongoing basis, and that all such transactions must be approved in advance by
the Audit Committee.
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Director Independence
Under applicable rules of NASDAQ, a director will only qualify as an independent director if, in
the opinion of the Board, that person does not have a relationship which would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director. The Board has
determined that (i) Mr. Stephen J. DeNelsky, (ii) Mr. Stephen J. Lifshatz, (iii) Mr. David B.
Shepherd, and (iv) Dr. John J. Sviokla are each independent directors as defined by the NASDAQ
rules. Mr. Joseph D. Hill is not considered independent under the applicable rules of NASDAQ, as he
served as the Senior Vice-President and Chief Financial Officer of the Company until April 4, 2008.
The independent directors met separately four times in 2009, and the independent directors met with
Mr. Hill but without Dr. Kahane present an additional four times in 2009. In 2009, Mr. DeNelsky
was, upon the recommendation of the independent directors, re-appointed as Lead Director by the
Board.
The Board
has also determined that each member of the Audit Committee that was in effect prior to the completion of the Acquisition meets the independence
requirements as prescribed by NASDAQ and the SEC.
Item 14. Principal Accounting Fees and Services
The following table summarizes the fees that BDO Seidman, LLP, our independent registered public
accounting firm, billed to us for professional audit services rendered during each of the last two
fiscal years:
Fee Category | 2009 | 2008 | ||||||
Audit Fees(1) |
$ | 741,000 | $ | 565,000 | ||||
Audit-Related Fees(2) |
$ | 31,733 | $ | 47,130 | ||||
All Other Fees |
| | ||||||
Total Fees |
$ | 772,733 | $ | 612,130 | ||||
(1) | Audit fees consist of fees for the audits of our financial statements and internal controls, the review of the interim financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements that generally only the independent auditor can reasonably be expected to provide. | |
(2) | Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under Audit Fees. These services relate to due diligence related to mergers and acquisitions, employee benefit audits, and consultations concerning financial accounting and reporting standards. |
The percentage of services set forth above in the categories Audit-Related Fees, and All Other
Fees, that were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(C) under the SECs
Regulation S-X (relating to the approval of a de minimis amount of non-audit services after the
fact but before completion of the audit), was 0%.
Pre-Approval Policy and Procedures
Consistent
with SEC policies regarding auditor independence, the Audit Committee that was in effect prior to the completion of the Acquisition was responsible for
overseeing the independence of and setting the compensation for the independent auditor, in
addition to evaluating, retaining and, when necessary, terminating the engagement of the
independent auditor. In recognition of this responsibility, the Audit Committee established a
policy to pre-approve all audit and permissible non-audit services provided by the independent
auditor.
As set forth in its charter, the Audit Committee pre-approved all audit services to be provided to
us, whether provided by the principal auditor or other firms, and all other services (review,
attest and non-audit) to be provided to us by the independent auditor; provided, however, that de
minimis non-audit services could instead be approved in accordance with applicable SEC rules. A copy
of the Audit Committee charter is available on our website at
www.amicas.com/investorrelations. All of the services provided by BDO Seidman, LLP during
the last two fiscal years were approved by the Audit Committee.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
Item 15(a)(1) and (2) Financial Statements.
The following documents were filed as part of the Annual Report on Form 10-K that was filed on
March 11, 2010. Financial statement schedules are not included as they are not applicable as all
items are included in the financial statements.
Financial Statements and Supplementary Data
Page | ||||
Financial Statements: |
||||
Report of Independent Registered Public Accounting Firm |
F-1 | |||
Consolidated Balance Sheets as of December 31, 2009 and 2008 |
F-3 | |||
Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007 |
F-4 | |||
Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) for the
years ended December 31, 2009, 2008 and 2007 |
F-5 | |||
Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008, and 2007 |
F-6 | |||
Notes to Consolidated Financial Statements |
F-7 |
Item 15(a)(3) Exhibits.
The following is a list of exhibits filed as part of this Annual Report on Form 10-K/A:
Exhibit | ||||
No. | Description |
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31.1
|
| Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2
|
| Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.1
|
| Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (incorporated by reference to Exhibit 32.1 to the Registrants Annual Report on Form 10-K, filed with the Commission on March 11, 2010). |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 to this Annual Report on Form 10-K/A to be signed
on its behalf by the undersigned, thereunto duly authorized on this 30th day of April
2010.
AMICAS, Inc. |
||||
By: | /s/ Steven M. Oreskovich | |||
Steven M. Oreskovich | ||||
Chief Financial Officer |
29