SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
filed by a party other than the Registrant [ ]
Check the appropriate box:
-------------------------
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-12
[ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e) (2))
IntegraMed America, Inc.
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (l) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with prelininary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offseting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid;
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed: April 11, 2007
April 10, 2007
Dear Stockholder:
It is my pleasure to invite you to the 2007 Annual Meeting of Stockholders of
IntegraMed America, Inc. The meeting will be held at 10:00 a.m. (local time) on
Tuesday, May 15, 2007, at the Company's corporate offices at Two Manhattanville
Road, 3rd Floor, Purchase, New York.
The following pages contain the formal Notice of Annual Meeting of Stockholders
and the Proxy Statement. Please review this material for information concerning
the business to be conducted at the meeting, which is the election of seven
directors for a term of one year, and the approval and ratification of the
Company's 2007 Long-Term Compensation Plan. You will also have the opportunity
to hear what has happened in our business in the past year and to ask questions.
You will find detailed information about IntegraMed America, Inc. in the
enclosed 2006 Annual Report to Stockholders.
We hope you can join us on May 15, 2007. Whether or not you can attend, please
read the enclosed Proxy Statement. When you have done so, please mark your votes
on the enclosed Proxy Card, sign and date the Proxy Card, and return it in the
enclosed envelope. Your vote is important to the Company, so please return your
Proxy promptly.
Sincerely,
/s/Jay Higham
-------------------------------------
Jay Higham
President & Chief Executive Officer
INTEGRAMED AMERICA, INC.
Two Manhattanville Road
Purchase, New York 10577
_____________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 15, 2007
_____________________________
To the Stockholders:
Notice is hereby given that the Annual Meeting of the Stockholders of
IntegraMed America, Inc. (the "Company") will be held on Tuesday, May 15, 2007,
10:00 a.m. local time, at the Company's headquarters, Two Manhattanville Road,
3rd Floor, Purchase, New York 10577. The meeting is called for the following
purposes:
1. Election of seven directors for a term of one year;
2. Approval and ratification of the Company's 2007 Long-Term
Compensation Plan; and
3. Transaction of such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on March 23, 2007
are entitled to notice of, and to vote at, the meeting.
All stockholders are cordially invited to attend the meeting. However,
to assure your representation at the meeting, you are urged to mark, sign, date
and return the enclosed Proxy Card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if the stockholder has returned the Proxy
Card.
/s/Claude E. White
--------------------------------------------
Claude E. White
Vice President, General Counsel & Secretary
April 10, 2007
INTEGRAMED AMERICA, INC.
Two Manhattanville Road
Purchase, New York 10577
914-253-8000
_____________________________
PROXY STATEMENT
_____________________________
For the Annual Meeting of Stockholders
To Be Held on Tuesday, May 15, 2007
Solicitation of Proxy
This Proxy Statement is furnished to stockholders of IntegraMed
America, Inc. (the "Company") in connection with the solicitation by the
Company's Board of Directors of proxies for use at the Annual Meeting of
Stockholders of the Company to be held in Purchase, New York, on Tuesday, May
15, 2007 at 10:00 a.m., and any adjournments of the meeting ("Annual Meeting").
Mailing Date
The Annual Report of the Company for 2006, including financial
statements, the NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, this Proxy Statement,
and the Proxy Card are being mailed to stockholders on or about April 10, 2007.
Who can vote -- Record Date
The record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting is March 23, 2007. Each of the 6,513,431 shares of
Common Stock, par value $.01 per share (the "Common Stock"), of the Company
issued and outstanding on the record date is entitled to one vote at the
meeting.
How to vote -- Proxy Instructions
You can vote your shares by mailing in your proxy card. Stockholders
who hold their shares in "street name" must vote their shares in the manner
prescribed by their brokers.
In voting on the Directors, you may specify whether your shares should
be voted for all, some, or none of the nominees for director.
If you do not specify on your proxy card how you want to vote your
shares, we will vote them "FOR" the election of all nominees for director as set
forth under "Election of Directors" (Proposal 1).
In voting on the approval and ratification of the Company's 2007
Long-Term Compensation Plan (the "Plan"), you may specify whether your shares
should be voted for or against the Plan (Proposal 2).
If you do not specify on your Proxy Card how you want to vote your
shares, we will vote them "FOR" the amendment to the Plan (Proposal 2).
Revocation of Proxies
You may revoke your Proxy at any time before it is exercised in any of
three ways:
(1) by submitting written notice of revocation to the Company's
Secretary, which must be received prior to the Annual Meeting;
1
(2) by submitting a new Proxy by mail that is dated later in time
and properly signed; or
(3) by voting in person at the meeting.
Quorum
A quorum of stockholders is necessary to hold a valid meeting. A quorum
will exist if the holders of a majority of the votes entitled to be cast by the
stockholders at the Annual Meeting are present, in person or by proxy. Broker
"non-votes" and abstentions are counted as present at the Annual Meeting for
purposes of determining whether a quorum exists. However, with respect to
proposals, which require the affirmative vote of a percentage of shares present
at the Annual Meeting and entitled to vote on such proposal for approval, such
broker "non-votes" will be treated as not present for purposes of determining
the outcome of any such matter. With respect to proposals, which require the
affirmative vote of a percentage of the outstanding shares for approval, since
such broker "non-votes" are not cast "FOR" a particular matter, they will have
the same effect as negative votes or votes cast "AGAINST" such proposals. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power for that particular item and has not received
instructions from the beneficial owner.
Required Vote
Election of Directors: Persons receiving a plurality of the voted
shares present in person or represented by proxy at the Annual Meeting will be
elected directors, meaning the individuals receiving the greatest number of
votes will be elected to serve as directors. Shares not voted (whether
abstention, broker "non-votes" or otherwise) have no effect on the election. If
any nominee is unable or declines to serve, proxies will be voted for the
balance of those named and such person as shall be designated by the Board to
replace any such nominee. However, the Board does not anticipate that this will
occur.
Approval of the Plan: A majority of the votes cast at the Annual
Meeting is necessary to approve Proposal 2 (ratification of the Company's 2007
Long-Term Compensation Plan). Shares not voted (whether by abstentions or broker
"non-votes," or otherwise) will have no effect on the approval of Proposal 2.
Voting Results
Preliminary voting results will be announced at the Annual Meeting.
Final voting results will be published in our quarterly report on Form 10-Q for
the second quarter of 2007.
Other Business
The Company does not intend to bring any business before the meeting
other than that set forth in the Notice of Annual Meeting and described in this
Proxy Statement. However, if any other business should properly come before the
meeting, the persons named in the enclosed proxy card intend to vote in
accordance with their best judgment on such business and any matters dealing
with the conduct of the meeting pursuant to the discretionary authority granted
by your proxy.
2
SECURITY OWNERSHIP
The following table sets forth, as of March 31, 2007, certain
information concerning the stock ownership of all persons known by the Company
to own beneficially 5% or more of the shares of Common Stock, and each director,
and each executive officer named under "Executive Compensation", and all
directors and executive officers of the Company as a group.
Shares of
Common Stock Percent of
Beneficially Common Stock
Beneficial Owners Owned (1) Outstanding
---------------- ------------ --------------
Peter R. Kellogg............................. 875,163(2) 13.44%
120 Broadway
New York, NY 10271
Healthinvest Partners B...................... 624,058(3) 9.59%
Arsenalsgatan 4
SE-111 47 Stockholm
Sweden
Austin W. Marxe.............................. 519,914(4) 7.98%
David M. Greenhouse
527 Madison Avenue, Suite 2600
New York, New York 10022
Gruber & McBaine Capital Management, LLC..... 453,000(5) 6.96%
50 Osgood Place, Penthouse
San Francisco, CA 94133-4622
Officer and Director Stock Ownership
Jay Higham................................... 105,870 1.63%
John W. Hlywak, Jr........................... 73,400 1.13%
Scott Soifer................................. 2,213
Joseph J. Travia, Jr......................... 22,299(6) *
Donald S. Wood, PhD.......................... 39,760 *
Gerardo Canet................................ 28,650 *
Sarason D. Liebler........................... 2,622 *
Wayne R. Moon................................ 21,633(6) *
Lawrence J. Stuesser......................... 41,948(6) *
Elizabeth E. Tallett......................... 57,954(6) *
Yvonne S. Thornton, M.D...................... 3,669 *
ALL EXECUTIVE OFFICERS AND DIRECTORS
AS A GROUP (16 persons).................. 409,494(6) 6.29%
--------------
* Represents less than 1% of outstanding shares of Common Stock.
(1) For the purposes of this Proxy Statement, beneficial ownership is defined
in accordance with the rules of the Securities and Exchange Commission
(the "Commission") and generally means the power to vote and/or to dispose
of the securities regardless of any economic interest therein.
(2) Includes 100 shares held by Cynthia Kellogg, wife of Peter R. Kellogg,
based on a Schedule 13G/A dated February 15, 2006 filed jointly by IAT
Reinsurance Company Ltd. ("IAT") and Mr. Kellogg. According to the
Schedule 13G/A, Mr. Kellogg has sole dispositive and voting power with
respect to the Company shares owned by IAT and its subsidiaries. Mr.
Kellogg disclaims beneficial ownership of the shares owned by IAT and its
subsidiaries, and his wife.
(3) Information is based on Schedule 13G/A dated February 12, 2007.
(4) Information is based on Schedule 13G dated February 13, 2007.
3
(5) Includes 345,996 shares of Common Stock held by accounts managed by Gruber
and McBaine Capital Management, LLC. (the "LLC"), for which the LLC has
shared voting and dispositive powers pursuant to various investment
management agreements, and 39,997 and 38,015 shares held by Jon D. Gruber
and J. Patterson McBaine, respectively, based on a Schedule 13G filed
February 6, 2007. Messrs. Jon D. Gruber, J. Patterson McBaine and Eric B.
Swergold are managers of the LLC. The 345,996 shares of Common Stock
includes 271,090 shares for which Lagunitas Partners, an investment
limited partnership of which the LLC is the general partner, has shared
voting and dispositive powers.
(6) Includes exercisable options to purchase Common Stock, including options
exercisable within 60 days of March 31, 2007, as follows: Joseph Travia---
6,449; Wayne R. Moon -- 8,125; Lawrence Stuesser -- 23,564; and Elizabeth
Tallett -- 28,688. As to "All Executive Officers and Directors as a
Group," includes an aggregate of 9,476 shares beneficially owned,
including exercisable options by executive officers not named above. The
address for each of these individuals is c/o IntegraMed America, Inc., Two
Manhattanville Road, Purchase, New York 10577.
Proposal 1
ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
Each of the nominees is currently a director of the Company. The Board
of Directors recommends that the persons named below be elected as directors of
the Company and it is intended that your proxy will be voted for the election as
directors of the seven persons named below, unless your proxy contains contrary
instructions. The Company has no reason to believe that any of the nominees will
not be a candidate or will be unable to serve. However, in the event that any
nominee should become unable or unwilling to serve as a director, your proxy
will be voted for the election of such person or persons as shall be designated
by the Board of Directors.
The following sets forth the names and ages of the seven nominees for
election to the Board of Directors, their respective principal occupations or
employments during the past five years and the period during which each has
served as a director of the Company.
GERARDO CANET (61) served as Chief Executive Officer of the Company
from February 14, 1994 to December 31, 2005 and has been a director of the
Company since February 14, 1994. Mr. Canet resigned as Chief Executive Officer
effective December 31, 2005, but continues to serve as Chairman of the Board and
a consultant to the Company. For approximately five years prior to joining the
Company, Mr. Canet held various executive management positions with Curative
Health Services, Inc., the last of which was as Executive Vice President and
President of its Wound Care Business Unit. Mr. Canet has been a director of
Dendreon Corporation since December 1996. Mr. Canet earned a B.A. in Economics
from Tufts University and an M.B.A. from Suffolk University.
JAY HIGHAM (48) became President and Chief Executive Officer, effective
January 1, 2006 and was President and Chief Operating Officer of the Company
since June 2004. In October 1994 Mr. Higham joined the Company as Vice President
of Marketing and Development and in January 1999, was promoted to Senior Vice
President of Marketing and Development. For four years prior to joining the
Company, Mr. Higham held a variety of executive positions, the most current of
which was as Vice President of Health Systems Development for South Shore
Hospital and South Shore Health and Education Corporation where he developed and
implemented a strategy for integration with physician group practices and
managed care payers. Mr. Higham earned a B.S. in Psychology from the University
of Rochester and a M.H.S.A. from George Washington University.
SARASON D. LIEBLER (70) became a director of the Company in August 1994.
Mr. Liebler is President of SDL Consultants, a privately-owned consulting firm
engaged in rendering general business advice. During the past 20 years, Mr.
Liebler was a director and/or officer of a number of companies in the fields of
home health care, clinical diagnostics, high density optical storage and
sporting goods. Mr. Liebler is a graduate of the United States Naval Academy
with a B.S.
WAYNE R. MOON (67) became a director of the Company in May 2001. Mr.
Moon joined Kaiser Foundation Health Plan, Inc. in 1970 and was subsequently
elected President, Chief Operating Officer and Director. In September 1993, Mr.
Moon was appointed President and Chief Executive Officer of Blue Shield of
California and a member of its Board of Directors and, later, Chairman. Mr. Moon
retired from Blue Shield in January 2000. Until recently, he served as Chairman
of the Board of RelayHealth, Inc. He serves on various corporate and civic
boards, including Varian, Inc. and the California State Automobile Association.
Mr. Moon earned a B.B.A. and a Masters in Hospital Administration from the
University of Michigan.
4
LAWRENCE J. STUESSER (65) became a director of the Company in April
1994. Since June 1999, Mr. Stuesser has been a private investor. From June 1996
to May, 1999, Mr. Stuesser was the President and Chief Executive Officer and a
director of Computer People Inc., the U.S. subsidiary of London-based Delphi
Group plc., of which he was also a director. Mr. Stuesser was a director of
American Retirement Corporation from May 1997 to July 2006. Early in his career,
Mr. Stuesser qualified as a certified public accountant and served as an audit
manager with Alexander Grant & Company, an accounting firm. Mr. Stuesser holds a
B.B.A. in accounting from St. Mary's University.
ELIZABETH E. TALLETT (58) became a director of the Company in June
1998. Since July 2002, Ms. Tallett has been a Principal of Hunter Partners, LLC,
which provides management services to developing life sciences companies. From
November 2000 until January 2003, Ms. Tallett was Chief Executive Officer of
Marshall Pharmaceuticals, Inc., a specialty pharmaceutical company. Ms. Tallett
held the position of President and Chief Executive Officer of Dioscor, Inc., a
biopharmaceutical company, from 1996 until July 2003. Ms. Tallett is a director
of The Principal Financial Group, Inc., Varian Semiconductor Equipment
Associates, Inc., Varian, Inc., Coventry Health Care, Inc. and Immunicon, Inc.
She is a founding board member of the Biotechnology Council of New Jersey. Ms.
Tallett graduated from Nottingham University with a degree in mathematics and
economics.
YVONNE S. THORNTON, M.D., M.P.H. (59) became a director of the Company
in January 2006. Dr. Thornton is a double board-certified specialist in
obstetrics, gynecology and maternal-fetal medicine. Dr. Thornton is a former
Professor of Clinical Obstetrics and Gynecology at Cornell (Weill) Medical
College and Vice-Chair of the Department of OB/GYN and Director of
Maternal-Fetal Medicine at Jamaica Hospital Medical Center in New York City
where she served from 2002-2005. From 2000-2002, Dr. Thornton was a member of
the Department of Obstetrics and Gynecology, Division of Maternal-Fetal Medicine
at St. Luke's-Roosevelt Hospital in New York City. Currently, Dr. Thornton is a
perinatal consultant at St. Peter's University Hospital in New Brunswick, New
Jersey. Dr. Thornton is a Diplomate of the American Board of Obstetrics and
Gynecology, a Fellow of the American College of Surgeons and an Oral Examiner
for the American Board of Obstetrics and Gynecology. She is the author of the
Pulitzer prize-nominated book entitled, "The Ditchdigger's Daughters." After
graduating with honors from Monmouth College in New Jersey, she received her
M.D. degree with honors from Columbia University College of Physicians and
Surgeons. Dr. Thornton also received her Executive Masters (M.P.H.) degree in
Health Policy and Management from Columbia University.
The Board of Directors recommends a vote "FOR" each nominee listed
above. Your proxy will be voted in accordance with the choice specified thereon,
or, if no choice is properly indicated, in favor of the nominees listed above.
DIRECTOR INDEPENDENCE
The Board of Directors has determined that Messrs. Moon and Stuesser,
Ms. Tallett and Dr. Thornton are independent directors in accordance with Rule
4200(a)(15) of the National Association Securities Dealers ("NASD") listing
standards because none of them is believed to have any relationships that, in
the opinion of the Board of Directors, would interfere with the exercise of
independent judgment in carrying out their responsibilities as a director.
During the fiscal year ended December 31, 2006, the Board of Directors
authorized the appointment of The Principal Financial Group as the plan sponsor
of the Company's 401(k) Plan. In that connection, the Board assessed whether
appointing The Principal Financial Group to such role would compromise the
independence of Ms. Tallett who is also a member of the Board of Directors of
The Principal Financial Group. The Board concluded that Ms. Tallett's
independence would not be compromised under the circumstances. The Company's
401(k) Plan is administered by a management committee consisting of the Chief
Financial Officer, General Counsel and Vice President for Human Resources, who
are known as the Plan Administrators. Once the Plan Sponsor is appointed by the
Board, the oversight and fiduciary responsibility for the Plan are entrusted to
the Plan Administrators.
5
Directors are elected by the Company's stockholders at each annual
meeting or, in the case of a vacancy, are appointed by the directors then in
office, to serve until the next annual meeting of stockholders or until their
successors are elected and qualified. Officers are appointed by and serve at the
discretion of the Board of Directors.
During 2006, the Board of Directors held four regular and one telephonic
meetings. Each director attended at least 75% of the aggregate of all meetings
of (i) the Board of Directors and (ii) the committees thereof on which each
director served during 2006. In 2006, the independent directors of the Board met
four times in executive session.
Stockholders may communicate directly with the directors. All
communications should be sent in care of the Secretary of the Company at the
Company's address and should prominently indicate on the outside of the envelope
that it is intended for the Board of Directors, for non-employee directors or a
particular committee of the directors. If no director is specified, the
communication will be forwarded to the entire Board.
The Company does not have a policy requiring the directors to attend
stockholders meetings; however, all of our directors attended the 2006 annual
meeting. It is expected that all of our directors will attend the 2007 Annual
Meeting.
COMMITTEES OF THE BOARD
The Board of Directors maintains three standing Committees: Audit
Committee, Compensation Committee, and Nominating and Governance Committee whose
members are set forth below:
AUDIT COMPENSATION NOMINATING AND GOVERNANCE
----- ------------ -------------------------
Wayne R. Moon Wayne R. Moon Wayne R. Moon*
Lawrence J. Stuesser* Lawrence J. Stuesser Lawrence J. Stuesser
Elizabeth E. Tallett Elizabeth E. Tallett* Elizabeth E. Tallett
Yvonne S. Thornton, M.D. Yvonne S. Thornton, M.D. Yvonne S. Thornton, M.D.
*Committee Chairperson
AUDIT COMMITTEE
The Audit Committee is charged by the Board of Directors to (i) study,
review and evaluate the Company's accounting, auditing and financial reporting
practices, including the internal controls and audit functions, (ii) assess the
Company's compliance with legal and regulatory requirements, and (iii) select
the independent auditors and review their qualifications, independence and
performance, while being the focal point for communications between the Board of
Directors, management and the independent auditors. More specifically, the Audit
Committee pre-approves all audit and non-audit services to be performed by the
independent auditors, reviews the scope and results of the audit of the
Company's financial statements, reviews financial statements and periodic
filings with the Commission, and discusses the same with management.
Each Audit Committee member meets the independence standards of The
Nasdaq Stock Market, Inc. The Board of Directors has determined that in addition
to being independent, Mr. Stuesser is an "audit committee financial expert" as
such term is defined in Item 407 of Regulation S-K of the Exchange Act. The
Board of Directors has adopted a written charter for the Audit Committee, a copy
of which, as amended and restated as of December 12, 2006, is appended to this
Proxy Statement as Appendix A. A copy of the Compensation Committee charter is
also available to stockholders at the Company's website
http://www.integramed.com under the Investors' Relation Section thereof.
The Audit Committee held four regular and five telephonic meetings in
2006.
COMPENSATION COMMITTEE
The Compensation Committee, under a delegation of authority from the
Board of Directors, reviews and makes decisions with respect to salaries, wages,
bonuses, equity awards and other benefits and incentives for executive officers
6
of the Company. The Compensation Committee also administers all compensation
programs for executive management of the Company. The Compensation Committee
held four regular meetings in 2006.
The Compensation Committee has a charter, a copy of which is available
to stockholders at the Company's website http://www.integramed.com under the
Investors' Relation Section thereof.
Compensation Committee Interlocks and Insider Participation
For 2006 the members of the Compensation Committee were Ms. Tallett
(Chairperson) and Messrs. Moon and Stuesser, and Dr. Thornton. None of these
individuals has ever been an officer or employee of the Company or any of its
subsidiaries. For 2006, no executive officer of the Company served on the
Compensation Committee or Board of Directors of any other entity, which had any
executive officer who also served on the Compensation Committee or Board of
Directors of the Company.
NOMINATING AND GOVERNANCE COMMITTEE
The Board of Directors maintains a Nominating and Governance Committee
consisting of independent directors as defined by NASDAQ rules. The primary
purpose of the Committee is to provide oversight on the broad range of issues
surrounding the composition and operation of the Board of Directors, including
identifying individuals qualified to become Board members, recommending to the
Board director nominees for the next annual meeting of stockholders, and
recommending to the Board a set of corporate governance principles applicable to
the Company. The Committee also provides assistance to the Board in the areas of
Committee selection, evaluation of the overall effectiveness of the Board and
management, and review and consideration of developments in corporate governance
practices. The Committee's goal is to assure that the composition, practices,
and operation of the Board contribute to value creation and effective
representation of the Company stockholders.
The Nominating and Governance Committee will consider candidates for
board membership whose qualifications, including business experience and skills,
lend themselves to advancing the Company's best interests. There are no minimum
qualifications. Stockholders may recommend candidates for consideration by the
Nominating and Governance Committee by writing to the "Chairperson, Nominating
Committee, c/o IntegraMed America, Inc. Two Manhattanville Road, Purchase, New
York 10577." Such recommendations for the 2008 annual meeting of stockholders
must be received by the Company between January 15, 2008 and February 15, 2008.
The Nominating and Governance Committee's process for identifying and evaluating
nominees for director, including nominees recommended by stockholders, includes
background and reference checks, together with personal interviews.
The Nominating and Governance Committee has a charter, a copy of which
is available to stockholders at the Company's website http://www.integramed.com
under the Investors' Relation Section thereof.
DIRECTOR COMPENSATION
In 2006 non-employee directors of the Company were paid an annual
retainer of $15,000, a fee of $1,500 for each regularly scheduled meeting of the
Board attended, $2,500 per year for membership on each committee of the Board
(and $1,500 for serving as Chairperson a Committee or $3,000 for serving as
Chairperson of the Audit Committee), and were reimbursed for expenses incurred
in attending meetings. Additionally, non-employee directors were granted, as
part compensation for services rendered, 2,097 shares of Common Stock, with a
market value of $25,000 based on the closing price per share of the Company's
Common Stock on the date of the grant which was May 23, 2006. Directors who are
also executive officers are not compensated for their services as directors. For
2007, each non-employee director currently receives (1) an annual retainer fee
of $22,500 (2) $1,500 if he or she serves as Chairperson of a Committee and
$3,000 if he or she serves as Chairperson of the Audit Committee; (3) $1,500 for
each regular Board meeting attended ($2,000 for any special meeting or committee
meeting not coinciding with a regularly scheduled Board meeting (and are
reimbursed for reasonable travel expenses incurred in attending meetings); and
(4) a stock grant, upon election at the Annual Meeting equal to the number of
shares resulting from dividing $30,000 by the closing market price on the day
before the Annual Meeting of Shareholders, with vesting upon grant.
7
The Company's philosophy regarding director compensation is to recognize
that in order to attract and retain directors who are willing to contribute time
and talent to the Company, it is important to compensate competitively such
persons. With that philosophy in mind, the Company attempts to provide fair cash
compensation for a Company's of its size and also provide directors with "skin
in the game" by awarding, as part compensation, stock in the Company. With stock
as part of a director's compensation, the resulting objective is to enable
directors to align their interests with shareholders. So directors are expected
to appreciate the importance of improving stock performance and providing
investors with long-term gains. Directors aren't paid for their roles on
Committees, other than as serving as Chairperson. Committees meet in conjunction
with Board meetings and accordingly, the Company believes there shouldn't be
additional compensation for Committee involvement. On the other hand Committee
chairpersons are expected to interact more with management and therefore should
be compensated for the additional time.
During 2006, the Board established a requirement that directors own
Company stock equal to five times the annual retainer fee, which based on the
2007 annual retainer would mean $112,500 in Company stock; provided, however, a
director has five years to achieve this requirement.,
The following table sets forth a summary of the compensation paid or
accrued by the Company during the year ended December 31, 2006 for the Company's
Directors, but excludes any management Director whose compensation is reflected
on the Summary Compensation Table for Named Executive Officers:
DIRECTOR COMPENSATION TABLE
---------------------------
Change in
Fees Pension Value
Earned Non-Equity and
or Stock Option Incentive Nonqualified All Other
Paid Awards Awards Plan Deferred Compensation Total
Name in Cash ($) ($) Compensation Compensation ($) ($)
($) ($) Earnings
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
Gerardo Canet $21,000 $25,000 ---- ---- ---- $125,000 $171,000
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
Sarason Liebler 21,000 25,000 ---- ---- ---- 81,900 127,900
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
Wayne Moon 30,000 25,000 ---- ---- ---- -0- 55,000
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
Lawrence Stuesser 31,500 25,000 ---- ---- ---- -0- 56,500
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
Elizabeth Tallett 30,000 25,000 ---- ---- ---- -0- 55,000
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
Yvonne Thornton, M.D. 26,000 31,250 ---- ---- ---- -0- 57,250
----------------------- -------- -------- ---------- --------------- ---------------- -------------- ----------
The amounts in "All Other Compensation include for Messrs. Canet and
Liebler, consulting fees in the amount of $125,000 and $81,900, respectively,
paid or accrued for in 2006. The amount for Stock Awards includes for Dr.
Thornton a stock award of $6,125 in connection with her initial appointment to
the Board in January 2006.
The aggregate number of outstanding equity awards held by Directors as
group at December 31, 2006 was 66,770 shares.
8
BUSINESS EXPERIENCE OF EXECUTIVE OFFICERS
The following sets forth the business experience of executive officers
who are not also directors of the Company:
JAY HIGHAM (48) Mr. Higham's business experience is set forth under the
business experience of Company Directors.
JOHN W. HLYWAK, JR. (59) joined the Company in July 1999 as its Senior
Vice President and Chief Financial Officer and was named Executive Vice
President and Chief Financial Officer in March 2006. From 1997 to 1999 he was
the Senior Vice President and Chief Financial Officer of MedSource, Inc., a
Tennessee-based health care billing and receivables management company. Mr.
Hlywak is a C.P.A. and has a B.S. degree in Accounting from Widener University.
ANGELA GIZINSKI (57) joined the Company in April 2006 as Vice President,
Human Resources. Prior to joining the Company, Ms. Gizinski was Director, Human
Resources with Sara Lee Branded Apparel, now known as Hanesbrands, Inc. Her 18
years of experience in the apparel business have involved maintaining continuity
of human resources for the business as it transitioned through mergers and
buy-outs. In her most recent position she had responsibility for merging human
resources into one design operation for the New York Design Center operations
for Playtex and Bali brands. Ms. Gizinski has an Associates Degree from Bay Path
College and a BA in Human Resource Management from Fairfield University.
MIRI POLACHEK (34) joined the Company in June 2006 as Vice President,
Finance. Ms. Polachek has held Finance roles in the healthcare industry for the
last 12 years, most recently at Pfizer. During her 6-year tenure there, Ms.
Polachek supervised Sarbanes-Oxley compliance for the US Pharmaceuticals market
and provided financial analysis and decision support to senior Sales and
Marketing management. Ms. Polachek has a Bachelor's Degree in Economics and
Mathematics from Boston University, a Master's Degree in Health Economics from
Boston University, and an MBA from the New York University Stern School of
Business.
VIJAY REDDY (40) serves as Vice President, Information Systems. Before
joining the Company in 2003 as Manager of Technical Operations, Mr. Reddy was
Director of Infrastructure & Technology for Lifetime Television in New York. He
also has held management positions in Information Systems with Martha Stewart
Living Omnimedia, Conde Nast Publications, Viacom and Schlumberger. He has over
16 years of infrastructure and technology support experience specializing in
Service Delivery and Call Center Management. Mr. Reddy has a Bachelor's degree
in Computer Science from St. John's University, and he is a certified IEEE
Computer Systems Engineer.
PAMELA SCHUMANN (41) serves as Vice President, Consumer Services. She
joined the Company in in 2001 to help launch the Company's consumer services
initiative. Before joining the Company, Ms. Schumann was Vice President of a
physician-focused managed care consulting firm where she spent 8 years. Ms.
Schumann has extensive experience in healthcare marketing, GPO operations and
physician practice development. Ms. Schumann received her BA in Marketing from
University of Maryland's Robert H. Smith School of Business.
SCOTT SOIFER (44) joined the Company in January 2005 as Vice President,
Marketing and Development. Prior to joining the Company, Mr. Soifer was an
Associate Partner at Accenture (formerly Andersen Consulting) for 13 years,
specializing in Healthcare strategy, focused primarily on the health insurance
sector. He also did independent consulting work, focused on streamlining
financial transactions between payers, providers and patients, and on new
product development in the disease management area. Mr. Soifer has a Bachelor's
degree in Computer Science from the University of California at Santa Barbara
and an MBA from the Kellogg School of Management at Northwestern University.
JOSEPH J. TRAVIA, JR. (54) serves as Senior Vice President, Operations,
Eastern Region. He joined the Company in 2000 as its Vice President and
Executive Director of Reproductive Science Center in New England. Prior to
joining the Company, from 1997 - 1999, Mr. Travia served as President and Chief
9
Executive Officer of Capstan, LLC. Mr. Travia is a CPA and earned a B.S. in
Management from Boston College and an M.B.A. from Babson College.
CLAUDE E. WHITE (58) joined the Company in March 1995 as General Counsel
and Assistant Secretary. In January 1998, Mr. White became Corporate Secretary,
in addition to General Counsel, and in May, 2002 became a Vice President. Mr.
White has served as General Counsel of several major companies over a period of
10 years prior to joining the Company, including Burns International Security
Services, Inc., Staff Builders, Inc. and Quality Care, Inc. Mr. White received
his B.A. degree in Political Science from Rutgers College and J.D. degree from
Rutgers School of Law.
DONALD S. WOOD, PHD. (62) serves as Senior Vice President, Operations
Administration. He joined the Company in April 1991 as its Vice President of
Genetics. During his tenure with the Company, Dr. Wood has served in various
capacities, including Vice President of Science and Technology, President and
Chief Operating Officer of the Reproductive Science Center Division and Senior
Vice President and Chief Operating Officer. Dr. Wood received a PhD. in
Physiology from Washington State University and completed a post-doctoral
fellowship in neurology at the Columbia/Presbyterian Medical Center in New York,
where he subsequently was appointed an Assistant Professor of Neurology.
COMPENSATION DISCUSSION AND ANALYSIS
Objectives
The objective of the Company's compensation program, consisting of base
salary, executive incentive compensation (performance-based compensation) and
restricted stock grants, is to ensure that in the Company's effort to create
shareholder value, the Company attracts, motivates and retains executives
capable of assisting in the creation of such shareholder value.
The Company's compensation program is designed first to be competitive
by providing base salaries that are market driven; second, to reward for Company
and individual performance through annual incentive compensation awards and
third, to retain executives through the grant of restricted stock awards that
provide for vesting over time. In order to be market competitive with salaries,
the Company annually assesses market salaries and attempts to ensure that
salaries for Company executives fall within the mid to upper range of salaries
for comparable positions, taking into consideration experience, backgrounds and
annual individual performance reviews for individual executives, but qualified
to comparable size companies within comparable industries. With respect to
executive incentive compensation, executives are expected to accomplish
individual goals annually that contribute to the overall growth of the Company.
To the extent the goals are accomplished, such executives are rewarded.
Additionally, executives are rewarded if certain revenue and bottom-line goals
are achieved by the Company each year, with greater reward being provided based
on higher level of achievement.
The Company believes that linking executive compensation to corporate
performance results in a better alignment of compensation with Company goals and
the interests of the Company's shareholders. As performance goals are met or
exceeded, most probably resulting in increased value to shareholders, executives
are rewarded commensurately. The Company believes the compensation levels during
the fiscal year 2006 for executives and the chief executive officer adequately
reflect the Company's compensation goals and philosophy.
Elements of the Compensation Program
The Company has chosen these three elements of compensation because of
the belief that taken together, base salary, executive incentive compensation
and restricted stock grants represent the fairest way to compensate for
services, provide an incentive for increased compensation and help align an
executive's interest with that of shareholders by seeking to improve stock
performance and thereby benefit from such result. Each individual's base salary
is determined based on years of experience and market rates for similar
positions with other companies of comparable size. A significant part of an
eligible executive's compensation is the incentive bonus compensation program
which is 65% of salary for the President & CEO, 50% of salary for the Executive
Vice President & CFO, 40% of salary for Senior Vice Presidents and 30% salary
10
for Vice Presidents. The program has been designed to (i) reward eligible
employees who have achieved specific business and financial success during the
Company's fiscal year (ii) give eligible employees the incentive to strive for
higher productivity, efficiency and quality of services and (iii) encourage the
"best" people to join and stay with the Company. The program is based on
achieving specific goals and is not meant as a reward for hard work or long
hours, but rather reward executives for results. Part I of the Company's
incentive compensation is based on the Company's performance versus budget. The
maximum amount earned under Part I is 60% of an individual's total maximum
incentive compensation which, as stated, ranges from 65% to 30% of base salary.
Part II of the Company's incentive compensation is based on the achievement of
certain common milestones related to Company achievements and specific
milestones established for each executive. The common milestones are applicable
to all eligible employees and the specific milestones apply to each eligible
employee and are determined by each executive's individual supervisor with the
approval of the President. For Mr. Higham, the President, the 2006 common
milestones represented 10% of the bonus eligibility and specific milestones
represented 30% of his bonus eligibility for 2006. For Mr. Hlywak, the Executive
Vice President and CFO, 10% of his eligible bonus was based on the Common
Milestones and specific milestones represented 30% of his bonus eligibility for
2006.
The Company's President & CEO recommends to and consults with the
Compensation Committee with respect to the salary of executive officers. In
order to assure that executive compensation is both competitive and appropriate,
the Compensation Committee reviews executive compensation in its entirety before
determining compensation level adjustments. The Company seeks to compensate
executives fairly based on longevity with the Company and market rates for
comparable size companies and executive positions. In that connection, the
overall compensation of executives is intended to be a percentage of base salary
which is projected to range from 120% to 147% for 2007.
Historically, the Company's executive compensation structure emphasized
cash components over long-term incentive components, due primarily to the low
trading volume of the Company's stock. As the Company has grown and experienced
higher trading volume and price, it has become more feasible to increase the
emphasis on long-term incentives, making the Company's executive compensation
more competitive with comparable companies.
Allocation of Compensation Among the Three Elements
In determining what portion or percentage of an executive's compensation
is to be allocated among the three elements discussed above, the Company has
determined that the largest portion should be allocated to base salary, the next
portion to incentive compensation and the smallest portion to restricted stock
grants. The Company recognizes that in order to attract, motivate and retain
executives, there must be a connection among each element of compensation that
accomplishes these three objectives. The base salary serves to attract competent
executives in what is an increasingly competitive market place. The incentive
compensation award becomes a good motivator to provide annual incentives for
executives to strive for the highest level of productivity resulting in
shareholder value. Lastly, the restricted stock grants serve to retain
executives because the vesting of the shares granted is over a period of time
and with the growth of the stock, the executives well being is aligned with that
of the shareholders.
Perquisites
Based on the Company's relative size, perquisites that have historically
provided to executives at other companies are not offered at the Company. Our
CEO, Jay Higham, is provided with leased vehicle that is maintained at Company
expense. The total 2006 expenses incurred by the Company related to the lease
vehicle were $12,528.00.
401(k) Defined Contribution Plan
The Company maintains a 401(k) and Profit Sharing Plan which allows
executives to make elective salary deferrals in accordance with IRS regulations.
The Company does provide a discretionary match of 25% of an individual's maximum
contributions of $15,500 up to 1.5% of an individual's compensation of $220,000
or less for the fiscal year, for a maximum match of $3,300 per individual. For
the CEO, CFO and the other Named Executive Officers, the Company contributed a
match for 2006 ranging from $3,300 to $2,775.
11
Retirement Benefits
No retirement benefits are provided to Company executives.
Severance and Change in Control arrangements
The Company believes that executives, after years of service to the
Company, should not be arbitrarily affected due to a "change in control." For
that reason, the Company enters into retention agreements with executive
officers providing for certain termination benefits if a "change in control"
occurs and such executives are terminated without cause within a specified
period. On October 10, 2005, the Company entered into an employment agreement
with Jay Higham to serve as its President and Chief Executive Officer, effective
January 1, 2006. Pursuant to the employment agreement, Mr. Higham was appointed
director of the Company on January 24, 2006. The employment agreement provides
for Mr. Higham to receive an annual salary of $275,000, subject to increases.
Under the employment agreement, Mr. Higham was granted shares of the Company
with a value of $400,000 based on the closing price of the Company's stock the
first trading day of January 2006. The number of shares granted was 32,000 and
they vest over a 10-year period. Pursuant to the agreement, the Company may
terminate Mr. Higham's employment without cause on thirty days' notice, in which
event Mr. Higham will receive, as severance pay, twelve months' base salary
payable, plus Mr. Higham's annual bonus, without regard to the condition
precedents established under the bonus plan, in a lump sum. Under the agreement,
if Mr. Higham had been terminated effective December 31, 2006, based on his 2006
compensation he would have been paid $275,000 representing his 2006 base salary
and $178,750 representing his accrued 2006 bonus.
The employment agreement further provides that in the event that within
one year after a "Change of Control" (as defined therein) of the Company, Mr.
Higham's employment is terminated by Mr. Higham for "Good Reason" (as defined
therein) or by the Company without cause, Mr. Higham will be paid a lump sum
amount equal to his base salary for a 24-month period following termination,
plus twice the full amount of Mr. Higham's annual bonus based on his then
current salary, without regard to the condition precedents established for the
bonus payment. Based on this change of control provision, if there had been a
change of control of the Company in 2006 and Mr. Higham's employment had
terminated effective December 31, 2006, either for "Good Reason" by Mr. Higham
or without cause by the Company, Mr. Higham would be entitled to termination pay
equal to $550,000 representing his then annualized base salary for 24-months,
plus $357,500 representing twice the amount to which he was eligible under the
Company's Executive Incentive Compensation Plan for 2006.
Under the employment agreement, Mr. Higham has agreed not to compete
with the Company while employed by the Company and for a period of two years
thereafter.
--------------
The Company is also party to Executive Retention Agreements with its
executive officers, including Mr. Hlywak, the Company's Principal Financial
Officer and the other named executive officers set forth in the foregoing
compensation table.
The Executive Retention Agreements (the "Agreements") provide for
certain severance payments and benefits to the named executives in the event of
a termination of their employment, either by the Company without cause, or by
the executive for "Good Reason" (as defined therein), at any time within
eighteen (18) months following a "Change in Control" (as defined therein) of the
Company (any such termination, a "Qualifying Termination"). More specifically,
the Agreements provide the named executives with one additional year of salary,
bonus (if applicable), and benefits (or equivalent), more than he or she would
previously have been entitled to receive upon a termination without cause.
Accordingly, pursuant to the Agreements, in the event of a Qualifying
Termination, the named executives will be paid one year's severance. Pursuant to
the terms of the Agreements, all incentive options granted to the respective
executive would become fully vested upon a Qualifying Termination, subject to
certain terms and conditions. Also, pursuant to the Agreements, the Company
would be required to pay each respective executive for all reasonable fees and
expenses incurred by the respective executive in litigating his or her rights,
thereunder, to the extent the executive is successful in any such litigation.
12
In the event an executive officer, other than Mr. Higham who would be
paid in accordance with the terms of his employment agreement, is terminated
without cause under circumstances outside a "Change in Control," each person
would be paid ninety (90) days salary continuation. In the event Mr. Hlywak had
been terminated without cause effective December 31, 2006 as a result of a
"change in control" in 2006, Mr. Hlywak would have been paid $234,000
representing his 2006 annual base salary and $117,000 representing the bonus
amount Mr. Hlywak was eligible to receive.
Finally, Section 162(m) of the Internal Revenue Code, in certain
circumstances, limits to $1 million the deductibility of compensation, including
stock-based compensation, paid to executives by public companies. None of the
compensation paid to executive officers named in the Summary Compensation Table
for fiscal year 2006 exceeded the threshold for deductibility under Section
162(m).
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation paid or
accrued by the Company during the year ended December 31, 2006 for the Company's
Chief Executive Officer, Chief Financial Officer and for the next three most
highly compensated executive officers (the "Named Executive Officers").
Change in
Non- Pension Value
Equity and
Incentive Nonqualified
Plan Deferred All
Name and Stock Option Compensation Compensation Other
Principal Salary Bonus Awards Awards ($) Earnings Compensation Total
Position Year ($) ($) ($) ($) ($) ($) * ($)
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
Jay Higham
(Principal 2006 $275,000 $148,500 $441,250 -0- -0- N/A $15,828 $880,578
Executive
Officer)
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
John W. Hlywak,
Jr. 2006 234,000 105,750 28,200 -0- -0- N/A 3,300 382,500
(Principal
Financial
Officer)
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
Donald S. Wood,
PhD. 2006 220,500 70,560 19,800 -0- -0- N/A/ 3,300 314,160
(Sr. Vice
President)
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
Scott Soifer
(Vice 2006 185,000 44,400 9,476 -0- -0- N/A 2,775 239,151
President,
Marketing &
Development)
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
Joseph J.
Travia, Jr. 2006 201,076 63,570 19,800 -0- -0- N/A 3,015 287,461
(Sr. Vice
President)
----------------- ------- ---------- ---------- ---------- -------- ----------- --------------- ------------- ----------
* This column includes the amount of $12,528 paid by the Company in connection
with a vehicle leased for Mr. Higham, plus amounts ranging from $3,300 to $2,775
representing Company matches made for the named individuals under the Company's
401(k) Plan.
13
15
GRANTS OF PLAN-BASED AWARDS TABLE
The following table sets forth certain information concerning the Named
Executive Officers with respect to Grants of Plan-Based Awards for the fiscal
year ended December 31, 2006:
----------------- --------- ---------------------------- ------------------------- ----------- ----------- ---------- ----------
Name Grant Estimated Future Payouts Estimated Future Payouts All Other All Other Exercise or Grant Date
Date Under Non-Equity Incentive Under Equity Stock Option Base Price Fair Value
Plan Awards Incentive Plan Awards Awards: Awards: of Option Of Stock
Number of Number of Awards & Option
Shares of Securities ($/Sh) Award
Stock or Underlying
Units (#) Options
(#)
(i) (j) (k) (l)
----------------- --------- ----------- -------- ------- ---------- -------- -------- -------- --------- ------- ----------
Threshold Target Maximum Threshold Target Maximum
($) ($) ($) (#) (#) (#)
(a) (b) (c) (d) (e) (f) (g) (h)
----------------- --------- ----------- -------- ------- --------- -------- -------- -------- --------- ------- - ---------
Jay Higham 1/03/06 N/A N/A N/A N/A N/A N/A 32,000 None -0- $400,000
5/23/06 3,461 $41,250
----------------- --------- ----------- -------- ------- -------- -------- -------- -------- --------- ------ ----------
John W. Hlywak, 5/23/06 N/A N/A N/A N/A N/A N/A 2,366 None -0- $28,203
Jr.
----------------- --------- ----------- -------- ------- -------- -------- -------- -------- --------- ------- ----------
Donald S. Wood, 5/23/06 N/A N/A N/A N/A N/A N/A 1,661 None -0- $19,800
PhD.
----------------- --------- ----------- -------- ------- -------- -------- -------- -------- --------- ------- ----------
Scott Soifer 5/23/06 N/A N/A N/A N/A N/A N/A 1,661 None -0- $9,476
----------------- --------- ----------- -------- ------- -------- -------- -------- -------- --------- ------- ----------
Joseph J. Travia, 5/23/06 N/A N/A N/A N/A N/A N/A 1,661 None -0- $19,800
Jr.
----------------- --------- ----------- -------- ------- -------- -------- -------- -------- --------- ------- ----------
14
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
The following table sets forth outstanding equity awards with respect to
the Named Executive Officers at December 31, 2006:
----------------------------------------------------------- ---------------------------------------------------------
Option Awards Stock Awards
----------------------------------------------------------- ---------------------------------------------------------
Name Number of Number of Equity Option Option Number Market Equity Incentive Equity Incentive
Securities Securities Incentive Exercise Expiration of Value of Plan Awards: Plan Award:Market
Underlying Underlying Plan Awards: Price Date Shares Shares or Number of or Payout Value
Unexercised Unexercised Number of ($) or Units Units of Unearned Shares, of Unearned
Options Options Securities of Stock Stock that Units or Other Shares, Units or
(#) (#) Underlying That have Not Rights That Have Other Rights that
Exercisable Unexercisable Unexercised have Not Vested Not Vested have Not Yet
Unearned Vested ($) (#) Vested
Options ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
Jay Higham -0- -0- -0- N/A N/A 34,087 $513,009 -0- -0-
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
John W. Hlywak, -0- -0- -0- N/A N/A 3,359 50,553 -0- -0-
Jr.
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
Scott Soifer -0- -0- -0- N/A N/A 994 14,960 -0- -0-
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
Joseph J. 6,449 -0- -0- 3.68 3/21/2012 1,796 27,030 -0- -0-
Travia, Jr.
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
-------------- ---------- ------------- ---------- ------- ----------- ---------- ----------- ---------------- -----------------
Donald S. Wood, -0- -0- -0- N/A N/A 2,560 38,528 -0- -0-
PhD.
15
OPTION EXERCISES AND STOCK VESTED TABLE
The following tables shows with respect to the Named Executive Officers
option exercises and stock award vesting for the year ended December 31, 2006:
------------------------------------- ----------------------------------- -----------------------------------
Option Awards Stock Awards
---------------------------------- -----------------------------------
Name Number of Value Realized Number of Value Realized
Shares Acquired on Exercise Shares Acquired on Vesting
on Exercise ($) on Vesting ($)
(#) (#)
(a) (b) (c) (d) (e)
------------------------------------- ----------------- ----------------- ----------------- -----------------
Jay Higham 2,287 $19,668 4,873 $73,339
------------------------------------- ----------------- ----------------- ----------------- -----------------
John W. Hlywak, Jr. 9,063 77,942 1,960 29,498
------------------------------------- ----------------- ----------------- ----------------- -----------------
Donald S. Wood, PhD. 2,287 17,816 1,657 24,938
------------------------------------- ----------------- ----------------- ----------------- -----------------
Scott Soifer -0- -0- 405 6,095
------------------------------------- ----------------- ----------------- ----------------- -----------------
Joseph J. Travia, Jr. -0- -0- 823 12,386
------------------------------------- ----------------- ----------------- ----------------- -----------------
Pension Benefits
The Company does not have any pension plans.
Nonqualified Deferred Compensation
The Company does not have a deferred compensation plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), requires the Company's executive officers, directors and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities to file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Such executive officers, directors, and greater than
10% beneficial owners are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms filed by such reporting persons.
To the Company's knowledge, based solely on the Company's review of
copies of such reports furnished to the Company and written representations from
certain reporting persons that no other reports were required, all of the
Company's executive officers and directors, and greater than 10% beneficial
owners complied with applicable Section 16(a) filing requirements during the
year ended December 31, 2006, except that Ms. Schumann, Vice President for
Consumer Services, failed to file timely a Form 4 to report a purchase of 3,250
shares of our Common Stock and a sale of 839 shares of our Common Stock on
December 15, 2006. A Form 4 was later filed on February 28, 2007 to report these
transactions.
16
COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee, under a delegation of authority from the
Board of Directors, reviews and makes decisions with respect to salaries, wages,
bonuses, equity awards and other benefits and incentives for executive officers
of the Company. The Compensation Committee also administers all compensation
programs for executive management of the Company. The Compensation Committee
held four meetings in 2006.
The Compensation Committee has a charter, a copy of which is available
to stockholders at the Company's website http://www.integramed.com under the
Investors' Relation Section thereof.
The Compensation Committee reviewed and discussed the Compensation
Discussion & Analysis with management and, based on that review, recommended the
inclusion of the Compensation Discussion & Analysis in this Proxy Statement.
Elizabeth E. Tallett (Chairperson)
Wayne R. Moon
Lawrence J. Stuesser
Yvonne S. Thornton, M.D.
AUDIT COMMITTEE REPORT(2)
The Audit Committee has oversight for the Company's financial reporting
on behalf of the Board of Directors. The Audit Committee, composed of three
independent (as defined by Section (a)(15) of Nasdaq Rule 4200) directors, held
four regular and five telephonic meetings in 2006, and operates under an amended
and restated charter approved by the Board of Directors in December 2006. The
amended and restated charter is attached as Appendix A to this Proxy Statement.
The Audit Committee also has at least one member, Mr. Stuesser, who is an "audit
committee financial expert" as such term is defined in Item 407 of Regulation
S-K of the Exchange Act.
Management has the primary responsibility for the financial statements
and the reporting process, including the Company's system of internal controls
and the Company's compliance with legal and regulatory requirements. In
fulfilling its oversight responsibilities, the Audit Committee reviewed and
discussed with management the audited financial statements to be included in the
Company's Annual Report on Form 10-K.
The Audit Committee has discussed with the Company's independent
auditors, Amper, Politziner & Mattia, P.C. the matters required to be discussed
by Statement on Auditing Standards No. 61, Communications With Audit Committees,
as amended by the Auditing Standards Board of the American Institute of
Certified Public Accountants.
----------------------------------------
(1) The material in this report is not soliciting material, is not
deemed filed with the Commission and is not incorporated by reference in any
filing of the Company under the Securities Act of 1933 or the Exchange Act,
except to the extent the Company specifically incorporates the report by
reference in any such document, whether made before or after the date of this
Proxy Statement and irrespective of any general incorporation language in such
filing.
(2) The material in this report is not soliciting material, is not
deemed filed with the Commission and is not incorporated by reference in any
filing of the Company under the Securities Act of 1933 or the Exchange Act,
except to the extent the Company specifically incorporates the report by
reference in any such document, whether made before or after the date of this
Proxy Statement and irrespective of any general incorporation language in such
filing.
17
The Audit Committee has received and reviewed, including matters in the
written disclosures and the letter from Amper, Politziner & Mattia, P.C.
required by Independent Standards Board No. 1, Independence Discussions with
Audit Committees, as amended by the Independence Standards Board, and has
discussed with Amper, Politziner & Mattia, P.C. their independence.
The Audit Committee has also considered whether any services provided
by Amper, Politziner & Mattia, P.C. not related to the audit of the financial
statements referred to above and the reviews of the interim financial statements
included in the Company's Form 10-Qs for the quarters ended March 31, 2006, June
30, 2006 and September 30, 2006 were compatible with maintaining the
independence of Amper, Politziner & Mattia, P.C..
Based on the reviews and discussions referred to above, the Audit
Committee, in accordance with its charter, recommended to the Company's
management that the audited financial statements referred to above be included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2006. The Committee has appointed Amper, Politziner & Mattia, P.C. for the
Company's 2007 fiscal year audit.
Lawrence J. Stuesser (Chairperson)
Wayne R. Moon
Elizabeth E. Tallett
Yvonne S. Thornton, M.D.
INDEPENDENT PUBLIC ACCOUNTANTS
On April 14, 2005, the Company dismissed PricewaterhouseCoopers LLP
("PwC") as its independent registered public accounting firm. The Audit
Committee made the decision to dismiss PwC.
The reports of PwC on the financial statements of the Company for the
fiscal year ended December 31, 2004 contained no adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
During the fiscal year ended December 31, 2004, and through April 14,
2005, there were no disagreements with PwC on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of PwC,
would have caused PwC to make reference to its report on the financial
statements for such years. During the fiscal year ended December 31, 2004, and
through April 14, 2005, there were no "reportable events" (as defined in
Regulation S-K, Item 304(a)(1)(v)).
The Company furnished to PwC the statements made in Item 4.01 to its Form
8-K filed with the Securities and Exchange Commission ("SEC") and attached as
Exhibit 16.1 to said Form 8-K is PwC's letter to the SEC dated April 20, 2005,
regarding these statements.
On April 14, 2005, the Company engaged Amper, Politziner & Mattia, P.C.
("Amper") as its independent registered public accounting firm. The Audit
Committee of the Company's Board of Directors made the decision to engage Amper.
During the fiscal years ended December 31, 2004, and through April 14,
2005, the Company had not consulted with Amper in respect of the Company's
consolidated financial statement for the year ended December 31, 2004 regarding
any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of
Regulation S-K.
The Audit Committee engaged Amper to audit the Company's financial
statements for the fiscal year ended December 31, 2005 and for the fiscal year
ended December 31, 2006. For the fiscal year ended December 31, 2004, the
Company's financial statements were audited by PwC. For the Company's fiscal
year ending December 31, 2007 the Audit Committee has retained the firm Amper to
audit the Company's financial statements. A representative from Amper is
expected to be present at the 2007 Annual Meeting with the opportunity to make a
18
statement, if desired. The Amper representative is also expected to be available
to respond to appropriate questions.
Pre-Approval Policy
In accordance with the requirements of the Sarbanes-Oxley Act of 2002
(the "Act") and the Audit Committee Charter, as amended in 2006, all audit and
audit-related work and all non-audit work performed by the independent
accountants, must be submitted to the Audit Committee for specific approval in
advance by the Audit Committee, including the proposed fees for such work. The
Audit Committee has not delegated any of its responsibilities to management.
All of the services described below for 2006 and 2005 were pre-approved
by the Audit Committee and/or the Committee Chairman before such services were
rendered by Amper in 2006 and from April 14, 2005 to December 31, 2005, and PwC
for the period January 1, 2005 to April 13, 2005.
Audit Fees
Audit fees billed or expected to be billed to Company by Amper for the
audit of the consolidated financial statements included in the Company's Annual
Report on Form 10-K, reviews of the consolidated financial statements included
in the Company's Quarterly Reports on Form 10-Q and consultation on accounting
topics for the year ended December 31, 2006 totaled $160,000. Similar fees by
the Company's prior auditors, PwC for the year ended December 31, 2005 totaled
$37,000 and by Amper for the year ended December 31, 2005 totaled $158,000.
Audit-Related Fees
The aggregate fees billed by Amper for audit-related services for the
year ended December 31, 2006 were $33,500 and primarily related to the Company's
restatement of its Financial Statements in Form 10-K for the year ended December
31, 2005 and in Forms 10-Q for the quarters ended March 31, 2006 and June 30,
2006. The aggregate fees billed by Amper for audit related services for the year
ended December 31, 2005 were $13,750 and primarily related to the Company's
response to an SEC comment letter.
Tax Fees
For the year ended December 31, 2006, the Company will pay Amper
approximately $36,000 related to tax services and for the year ended December
31, 2005, the Company paid Amper, approximately $25,000, related to tax
services.
All Other Fees
There were no other fees for the years ended December 31, 2006 and
2005.
------------------------------------
CERTAIN RELATIONSHIPS AND RELATED-PERSON TRANSACTIONS
The Company entered into a three-year consulting agreement with Mr.
Canet, former President and CEO of the Company, effective January 1, 2006. Under
the agreement, Mr. Canet is paid $125,000 for each of three years to provide
certain consulting services to the Company.
The Company has maintained a consulting arrangement with SDL
Consultants, a privately-owned consulting firm engaged in rendering general
business advice, of which Mr. Liebler is President. During the fiscal year ended
December 31, 2006 the Company paid SDL Consultants approximately $82,000 in
consulting fees, which were primarily related to services rendered to the
Company in assisting with the recruitment of several senior managers and
included reimbursement for expenses.
19
PROPOSAL 2
APPROVAL AND RATIFICATION OF THE 2007 LONG-TERM COMPENSATION PLAN
The 2007 Long-Term Compensation Plan (the "2007 Plan") was adopted by
the Board of Directors of the Company in March 2007. A copy of the 2007 Plan is
attached to this Proxy Statement as Appendix A and is incorporated herein by
reference. The following description of the 2007 Plan is a summary and does not
purport to be a complete description.
Purpose
The purpose of the 2007 Plan is to enable the Company to grant
incentive stock options ("Incentive Stock Option"), non-qualified stock options
("Non-qualified Stock Options") and restricted stock ("Restricted Stock")
(Incentive Stock Options, Non-qualified Stock Options and Restricted Stock are
collectively referred to herein as "Grants") to selected employees , directors,
agents, consultants, independent contractors and key advisors (collectively
referred to as "Grantees") so as to further the growth and development of the
Company and its subsidiaries. The Grants are intended to encourage Grantees to
contribute materially to the Company's success to obtain a proprietary interest
in the Company through ownership of its stock, thereby providing Grantees with
an added incentive to promote the best interests of the Company and affording
the Company a means of attracting persons of outstanding ability.
Common Stock Subject to the 2007 Plan
Under the 2007 Plan, subject to adjustment by reason of, among other
things, a stock dividend, spinoff, recapitalization, stock split or combination
or exchange of share, the aggregate number of shares of common stock of the
Company, $.01 par value ("Common Stock") that may be issued or transferred is
500,000 shares. The maximum aggregate number of shares of Common Stock that
shall be granted under the Plan to any individual during any calendar year shall
be 50,000 shares. The shares may be authorized but unissued shares of Common
Stock or reacquired shares of Common Stock, including shares purchased by the
Company on the open market. If and to the extent any shares which are the
subject of a Grant are forfeited, the shares subject to such Grant shall again
be available for a Grant under the 2007 Plan.
No Grants have been made under the 2007 Plan.
Termination
The Plan terminates on such date that is ten years from the date the
Plan is approved by the stockholders of the Company (unless sooner terminated at
the discretion of the Board of Directors).
Grant of Options
Under the 2007 Plan, Incentive Stock Options , qualifying under Section
422 of the Internal Revenue Code of 1986, as amended ("the "Code"), may be
granted to employees (including officers) of the Company and/or any of its
subsidiaries, and Non-qualified Stock Options (Incentive Stock Options and
Non-qualified Stock Options are collectively referred to as "Stock Options") may
be granted to employees, directors, consultants, agents, independent contractors
and such other persons as the Compensation Committee of the Board of Directors
(the "Committee") determines will contribute to the Company's success. The
Committee, which consists of two or more directors appointed by the Board of
Directors who themselves are not eligible for discretionary grants of Stock
Options, selects the Grantees under the 2007 Plan and determines (i) whether the
respective Stock Option is to be a Non-qualified Stock Option or an Incentive
Stock Option, (ii) the number of shares of Common Stock purchasable under the
option, (iii) the exercise price, which cannot be less than 100% of the fair
market value of the Common Stock on the date of grant with respect to Incentive
Stock Options (110% of fair market value in the case of an Incentive Stock
Option granted to an owner of stock possessing more than 10% of the total voting
power of all classes of stock of the Company (a "10% Owner")), (iv) the time or
times when the Stock Option becomes exercisable, and (v) the term of the option
(not to exceed ten years). Incentive Stock Options are not exercisable prior to
20
one year from the date of grant. The fair market value, determined as of the
date the option is granted, of shares exercisable for the first time by the
holder of an Incentive Stock Option may not exceed $100,000 in any calendar
year.
Exercise of Options
All options are exercisable during the Grantee's lifetime only by the
Grantee and only while the Grantee is an employee, director, consultant, agent,
independent contractor or otherwise employed by or engaged in performing
services for the Company or a subsidiary, either directly or through a
collaborating entity, and for a period of three months thereafter, except where
termination of employment or engagement is due to death or disability. In the
event of death or disability, the option is exercisable by the Grantee or the
Grantee's executor or administrator within one year from the date of death or
termination of employment by reason of such disability, only to the extent the
option would be exercisable by the Grantee as at such date. No option is
transferable other than by will or the laws of descent and distribution.
Options are exercisable by payment in cash to the Company, or a check
to its order, of the full purchase price for the shares of Common Stock to be
purchased, plus the amount, if any, required for withholding taxes in connection
with such exercise (the "Exercise Payment"); provided, however, that with the
consent of the Committee or such officer of the Company as may be authorized by
the Committee from time to time to give such consent, the Exercise Payment may
be paid by the surrender of Common Stock owned by the person exercising the
option and having a fair market value on the date of exercise equal to the
Exercise Payment, or in any combination of cash and Common Stock so long as the
total cash so paid and the fair market value of the Common Stock surrendered
equals the Exercise Payment, and the Common Stock so surrendered, if originally
issued to the optionee upon exercise of an option granted by the Company, shall
have been held by the optionee for more than six months.
Option Adjustments
The Plan contains a customary anti-dilution provision which provides
that in the event of any change in the Company's outstanding capital stock by
reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, the
aggregate number of shares of Common Stock subject to outstanding options and
the exercise price are to be appropriately adjusted by the Board of Directors
(or the Committee), whose determination thereon shall be conclusive.
Restricted Stock Grants
Under the 2007 Plan, Restricted Stock Grants may be granted to
employees (including officers) of the Company and/or any of its subsidiaries and
members of the Board of Directors. The 2007 Plan is administered by the
Compensation Committee of the Board of Directors which Committee under the 2007
Plan has the sole authority to (i) determine the individuals to whom Restricted
Stock Grants shall be made, (ii) determine the type, size and terms of the
grants to be made to each individual, (iii) determine the time when the
Restricted Stock Grants will be made and the duration of any applicable
restriction period, (iv) determine the amount of consideration to be paid by the
Grantee, if any, and (v) deal with any other matters arising under the 2007
Plan.
The Committee may establish conditions under which restrictions on
Restricted Stock will lapse over time or other triggering events. The period of
time during which the restrictions remain is referred to as "restricted period."
During the restricted period, a Grantee may not sell, assign, transfer, pledge
or otherwise dispose of the shares of Restricted Stock except by Will or the by
the laws of descent and distribution or, if permitted in any specific case by
the Committee, pursuant to a domestic relations order (as defined under the
Internal Revenue Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the regulations thereunder).
Restricted Stock Grant Adjustments
The 2007 Plan contains a customary anti-dilution provision which
provides that in the event of any change in the Company's outstanding capital
stock by reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, the
aggregate number of shares of Common Stock subject to the 2007 Plan are to be
appropriately adjusted by the Board of Directors (or the Committee), whose
determination thereon shall be conclusive.
21
Amendments, Suspension and Termination
The Board has the authority to suspend, make changes in or additions to
the 2007 Plan as it deems desirable and the Board and the Committee may adopt
rules and regulations to carry out the 2007 Plan. The Board may not, without
stockholder approval, (i) increase the number of shares which may be reserved
for issuance under the 2007 Plan, (ii) adversely affect the rights of a holder
of a Grant previously granted under the 2007 Plan, (iii) modify materially the
eligibility requirements for participation in the 2007 Plan, or (iv) increase
materially the benefits accruing to participants under the Plan.
Federal Income Tax Consequences
Stock Options
Under current tax law, there are generally no Federal income tax
consequences to either the employee or the Company on the grant of Non-Qualified
Stock Options if granted under the terms set forth in the 2007 Plan and if the
option is not immediately exercisable. Upon exercise of such a Non-Qualified
Stock Option, the excess of the fair market value of the shares subject to the
option over the option price (the "Spread") at the date of exercise is taxable
as ordinary compensation income to the optionee in the year it is exercised and
is deductible by the Company as compensation for Federal income tax purposes, if
Federal income tax is withheld on the Spread. However, if the shares are subject
to vesting restrictions conditioned on future employment or the holder is
subject to the short-swing profits liability restrictions of Section 16(b) the
Exchange Act (i.e., is an executive officer, director or 10% stockholder of the
Company) then taxation and measurement of the Spread is deferred until such
restrictions lapse, unless a special election is made under Section 83(b) of the
Code to report such income currently without regard to such restrictions. The
optionee's basis in the shares will be equal to the fair market value on the
date taxation is imposed (determined without regard to marketability
restrictions imposed by the securities laws) and the holding period commences on
such date.
Holders of Incentive Stock Options incur no regular Federal income tax
liability at the time of grant or upon exercise of such option, assuming that
the optionee was an employee of the Company from the date the option was granted
until 90 days before such exercise. However, upon exercise, the Spread must be
added to regular Federal taxable income in computing the optionee's "alternative
minimum tax" liability. An optionee's basis in the shares received on exercise
of an Incentive Stock Option will be the option price of such shares for regular
income tax purposes. No deduction is allowable to the Company for Federal income
tax purposes in connection with the grant or exercise of such option.
If the holder of shares acquired through exercise of an Incentive Stock
Option sells such shares within two years of the date of grant of such option or
within one year from the date of exercise of such option (a "Disqualifying
Disposition"), the optionee will realize income taxable at ordinary rates.
Ordinary income is reportable during the year of such sale equal to the
difference between the option price and the fair market value of the shares at
the date the option is exercised, but the amount includable as ordinary income
shall not exceed the excess, if any, of the proceeds of such sale over the
option price. In addition to ordinary income, a Disqualifying Disposition may
result in taxable income subject to capital gains treatment if the sales
proceeds exceed the optionee's basis in the shares (i.e., the option price plus
the amount includable as ordinary income). The amount of the optionee's taxable
ordinary income will be deductible by the Company in the year of the
Disqualifying Disposition.
At the time of sale of shares received upon exercise of an option
(other than a Disqualifying Disposition of shares received upon the exercise of
an Incentive Stock Option), any gain or loss is long-term or short-term capital
gain or loss, depending upon the holding period. The holding period for
long-term capital gain or loss treatment is more than one year.
22
Restricted Stock Grant
All Restricted Stock Grants under the 2007 Plan shall be subject to
applicable Federal (including FICA), state and local withholding requirements.
The Company may require a Grantee or other person receiving such shares to pay
to the Company the amount of any such taxes that the Company is required to
withhold with respect to such Restricted Stock Grants, or the Company may deduct
from other wages paid by the Company the amount of any withholding taxes due
with respect to such Restricted Stock Grants.
The Committee may permit Grantees to satisfy the Company's income tax
withholding obligation with respect to a Restricted Stock Grant by having shares
withheld up to an amount that does not exceed the Grantee's maximum marginal tax
rate for federal (including FICA), state and local tax liabilities.
The foregoing is not intended to be an exhaustive analysis of the tax
consequences relating to stock options issued under the Plan. For instance, the
treatment of options under state and local tax laws, which are not described
above, may differ from their treatment for Federal income tax purposes.
Effective Date of the 2007 Plan
Subject to the approval of the 2007 Plan by the Company's stockholders,
the 2007 Plan will become effective May 15, 2007.
The Board of Directors recommends a vote FOR the approval and
ratification of the 2007 Long-Term Plan, and the persons named in the
accompanying proxy will vote in accordance with the choice specified thereon or,
if no choice is properly indicated, in favor of the approval and ratification.
SHAREHOLDER PROPOSALS FOR 2008 ANNUAL MEETING
Under the Commission's proxy rules, stockholder proposals that meet
certain conditions may be included in the Company's proxy statement and form of
proxy for a particular annual meeting. Stockholders that intend to present a
proposal at the Company's 2008 Annual Meeting must give notice of the proposal
to the Company no later than December 15, 2007 to be considered for inclusion in
the proxy statement and form of proxy relating to that meeting. Stockholders
that intend to present a proposal at the 2008 Annual Meeting that will not be
included in the proxy statement and form of proxy must give notice of the
proposal to the Company no fewer than 90 days and no more than 120 days prior to
the first anniversary of the 2007 Annual Meeting. Receipt by the Company of any
such proposal from a qualified stockholder in a timely manner will not guarantee
its inclusion in the Company's proxy materials or its presentation at the 2008
Annual Meeting because there are other requirements in the proxy rules.
Pursuant to Rule 14a-4 under the Securities Exchange Act, as amended,
the Company intends to retain discretionary authority to vote proxies with
respect to shareholder proposals for which the proponent does not seek inclusion
of the proposed matter in the Company's proxy statement for our 2007 Annual
Meeting, except in circumstances where (i) the Company receives notice of the
proposed matter no earlier than January 15, 2008 and no later than February 15,
2008, and (ii) the proponent complies with the other requirements set forth in
Rule 14a-4.
GENERAL
The management of the Company does not know of any matters other than
those stated in this Proxy Statement, which are to be presented for action at
the 2007 Annual Meeting. If any other matters should properly come before the
meeting, it is intended that proxies in the accompanying form will be voted on
any such other matters in accordance with the judgment of the persons voting
such proxies. Discretionary authority to vote on such matters is conferred by
such proxies upon the persons voting them.
The Company will bear the costs related to preparing, printing,
assembling and mailing the proxy card, Proxy Statement and other material which
may be sent to stockholders in connection with this solicitation, which are
expected to be approximately $15,000.00. It is contemplated that brokerage
houses will forward the proxy materials to beneficial owners at the request of
the Company. In addition to the solicitation of proxies by use of the mails,
23
officers and regular employees of the Company may solicit by telephone proxies
without additional compensation. The Company does not expect to pay any
compensation for the solicitation of proxies.
The Company will provide without charge to each person being solicited
by this Proxy Statement, on the written request of any such person, a copy of
the Annual Report of the Company on Form 10-K for the fiscal year ended December
31, 2006 (as filed with the Commission), including the financial statements
thereto. All such requests should be directed to Mr. John W. Hlywak, Jr.,
Executive Vice President and Chief Financial Officer of IntegraMed America,
Inc., Two Manhattanville Road, Purchase, New York 10577. You may also obtain
certain other of the Company's Commission filings through the Internet at
http://www.sec.gov or under "Investor Relations" at http://www.integramed.com,
the Company's website.
/s/Claude E. White
------------------------------------------
Claude E. White
Vice President, General Counsel & Secretary
Dated: April 10, 2007
24
Appendix A
INTEGRAMED AMERICA, INC.
AUDIT COMMITTEE CHARTER
As Amended and Restated December 12, 2006
Purpose
The primary purpose of the Audit Committee (the "Committee") of the
Board of Directors (the "Board") of IntegraMed America, Inc. (the "Company") is
to assist the Board in its oversight of (a) the integrity of the Company's
financial statements and its financial reporting and disclosure practices, (b)
the soundness of the Company's accounting, auditing and financial reporting
practices, including the internal controls and audit functions (c) the Company's
compliance with legal and regulatory requirements, and (d) the appointment,
compensation, qualifications, independence and performance of the Company's
independent auditors. Membership
The Committee shall consist of three or more directors all of whom, in
the judgment of the Board, shall be independent in accordance with the rules and
regulations of the Securities and Exchange Commission ("SEC") and NASDAQ listing
standards. Each member shall, in the judgment of the Board, be financially
literate under NASDAQ Rule 4350(d)(2), including having the ability to read and
understand the Company's basic financial statements or at the time of
appointment undertaking training for that purpose. At least one member of the
Committee shall, in the judgment of the Board, be a "financial expert" as
defined by Item 407 of Regulation S-K. Committee members shall not
simultaneously serve on the audit committee of more than two other public
companies, unless the Board determines that such simultaneous service would not
impair the ability of the director to effectively serve on the Committee, and
the Company discloses this determination in the Company's annual proxy
statement. The members of the Committee shall be appointed by the Board on the
recommendation of the Nominating and Governance Committee of the Board.
Committee members may be replaced by the Board.
Committee Authority and Responsibility
The Committee shall:
1. Appoint the independent auditors for the purpose of preparing and
issuing an audit report or to perform related work, and set such independent
auditors' compensation, and if appropriate, replace such independent auditors.
2. Pre-approve all audit and permitted non-audit services to be
performed by the Company's independent auditors; or delegate the authority to
pre-approve such services to one or more members of the Committee, who shall
report any decision to preapprove any services to the full Committee at its
regularly scheduled meetings.
3. Report the pre-approval of any permitted non-audit services to
management for disclosure in the Company's periodic reports.
4. Review with the independent auditors selected by the Committee the
scope of the prospective audit, the estimated fees therefor and such other
matters pertaining to such audit as the Committee may deem appropriate.
5. Receive, review and discuss:
5.1 a report by the Company's independent auditors describing (i) the
Company's independent auditors internal quality-control procedures, (ii) any
A-1
material issues raised by the most recent internal quality control review, or
peer review, of the firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the Company's independent auditors, and
any steps taken to deal with any such issues, (iii) in an effort to assess the
Company's independent auditors' independence, all relationships between the
Company's independent auditors and the Company and (iv) any significant
deficiencies and material weaknesses identified during their audit on
management's assessment of internal controls.
5.2 all other reports from the Company's independent auditors,
including the annual comments from the Company's auditors on accounting
procedures and systems of control.
5.3. copies of the annual comments from the Company's independent
auditors on accounting procedures and systems of control; review and consider
whether the provision by the Company's independent auditors of any permitted
non-audit services is compatible with maintaining their independence; review and
approve the non-audit fees of the Company's independent auditors; and review
with the Company's independent auditors any questions, comments or suggestions
they may have relating to the internal controls, accounting practices or
procedures of the Company or its subsidiaries, and any audit problems or
difficulties and management's responses.
6. Review, at least annually, the then current and future programs with
respect to the Company's internal audit procedures, including the procedure for
assuring implementation of accepted recommendations made by the Company's
independent auditors; and review any issues that arise regarding the performance
of the Company's internal audit function and the significant matters contained
in any internal audit function reports.
7. Make or cause to be made, from time to time, such other examinations
or reviews as the Committee may deem advisable with respect to the adequacy of
the systems on internal controls and accounting practices of the Company and its
subsidiaries and with respect to current accounting trends and developments, and
take such action with respect thereto as may be deemed appropriate.
8. Review with management and the Company's independent auditors the
annual and quarterly financial statements of the Company, including the
Company's disclosures under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and any critical or material accounting
policies, principles or practices used, considered or changed in preparing the
statements prior to the filing of a report on Form 10-K or 10-Q with the SEC.
Such review will also include (1) the items required by SAS 61 and SAS 90 as in
effect at that time in the case of the annual statements and SAS 71 and SAS 90
as in effect at that time in the case of the quarterly statements, (2) the
results of the independent auditor's reviews of such financial statements, (3)
the adequacy of the Company's internal controls which could significantly affect
the Company's financial statements and (4) off-balance sheet structures on the
Company's financial statements. During such review, or otherwise, the Committee
shall determine that the independent auditors are satisfied with the disclosures
in and contents of the financial statements and shall inform management that the
Committee is satisfied with the inclusion of such disclosures and financial
statements in the applicable Form 10-K or 10-Q which is to be filed with the
SEC.
9. Review and discuss with management and the independent auditor, as
applicable, earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies.
10. Review and discuss with Company management Company policies with
respect to risk assessment and risk management.
11. Receive from the Company's independent auditors the report required
by Independence Standards Board Standards No. 1 as in effect at that time and
discuss it with the Company's independent auditors.
12. Review the status of compliance with laws, regulations, and
internal procedures, contingent liabilities and risks that may be material to
the Company, the scope and status of systems designed to assure Company
A-2
compliance with laws, regulations and internal procedures, through receiving
reports from management, legal counsel and other third parties as determined by
the Committee on such matters, as well as major accounting, legislative and
regulatory developments and pronouncements which could materially impact the
Company's contingent liabilities and risks.
13. Establish and maintain procedures for the confidential and
anonymous receipt, retention and treatment of complaints regarding the Company's
accounting, internal controls or auditing matters and the Company's Corporate
Compliance Manual. Establish clear hiring policies for employees or former
employees of the Company's independent auditors.
14. Obtain the advice and assistance, as appropriate, of independent
counsel and other advisors as necessary to fulfill the responsibilities of the
Committee.
15. Report regularly to the Board as to the Committee's accomplishments
of its purposes and responsibilities.
16. Conduct an annual performance evaluation of the Committee and
deliver a written or oral report to the Board of Directors.
17. Annually review the Committee's charter and recommend any changes
to the charter deemed necessary by recent accounting and regulatory
pronouncements or desirable by the Committee.
18. Investigate, review and report on propriety and ethical
implications of any material transactions, as defined by SFAS No. 57, reported
to the Committee between the Company and any employee, officer or member of the
Board or any affiliate of the foregoing.
19. Prepare the audit committee report required by the SEC to be
included in Company's proxy statement.
20. Review the experience and qualifications of the Company's senior
finance executives.
21. Perform other responsibilities as directed by the Board of
Directors.
Meetings
The Committee shall meet as it determines, but not less frequently than
quarterly. Not less than two members shall be in attendance for a quorum. The
Committee shall meet periodically with management and the independent auditors
in separate executive sessions. The proceedings of all meeting shall be
reflected in written minutes, which shall be maintained with the records of
proceedings of the Board.
The Committee is governed by the same rules and regulations regarding
meetings (including meetings by teleconference or similar communications
equipment), action without meetings, notice waiver of notice, and quorum and
voting requirements as are applicable to the Board. The Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent auditors to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
Resources and Authority
The Committee shall have the resources and authority necessary to
discharge its duties and responsibilities, including authority to retain outside
counsel or other experts or consultants, as it deems appropriate. The Committee
shall have sole authority to approve related fees and retention terms.
Limitation of Audit Committee's Role
The Audit Committee's role is one of oversight. Management is
responsible for preparing the Company's financial statements, and the
independent auditors are responsible for auditing those financial statements.
Management is responsible for the fair presentation of the information set forth
A-3
in the financial statements in conformity with GAAP. The independent auditor's
responsibility is to provide their opinion, based on their audits, that the
financial statements fairly present, in all material respects, the financial
position, results of operations and cash flows of the Company in conformity with
GAAP. While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements and disclosures
are complete and accurate and in conformity with GAAP. Further, it is not the
duty of the Audit Committee to assure compliance with applicable laws and
regulations or the Company's Code of Ethical Conduct.
A-4
Appendix B
INTEGRAMED AMERICA, INC.
2007 LONG-TERM COMPENSATION PLAN
The purpose of the IntegraMed America, Inc. 2007 Long-Term Compensation
Plan (the "Plan") is to provide designated employees of IntegraMed America
Inc.(the "Company") and its subsidiaries, members of the Board of Directors,
agents of , consultants to , independent contractors of and key advisors to the
Company with the opportunity to receive grants of incentive stock options,
non-qualified stock options and restricted stock. The Company believes that the
Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefiting the Company's shareholders, and will align the
economic interests of the participants with those of the shareholders.
1. Administration
1.1 Committee. The Plan shall be administered and interpreted by the
Compensation Committee of the Board of Directors.
1.2 Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable restriction period, and (iv) deal with any other
matters arising under the Plan.
1.3 Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Grants Awards under the Plan may consist of incentive stock options
as described in Section 5 ("Incentive Stock Options"), non-qualified stock
options as described in Section 5 ("Non-qualified Stock Options")(Incentive
Stock Options and Non-qualified Stock Options are collectively referred to
herein as "Options"), and restricted stock as described in Section 6
("Restricted Stock")(Incentive Stock Options, Non-Qualified Stock Options and
Restricted Stock are collectively referred to herein as "Grants"). All Grants
shall be subject to the terms and conditions set forth herein and to such other
terms and conditions consistent with this Plan as the Committee deems
appropriate and as are specified in writing by the Committee to the individual
in a grant instrument (the "Grant Instrument") or an amendment to the Grant
Instrument. The Committee shall approve the basic form and provisions of each
Grant Instrument. Grants under a particular Section of the Plan need not be
uniform as among the Grantees.
3. Term of Plan/Shares Subject to the Plan
3.1 Term. The Plan shall terminate on such date as is 10 years from the
date the stockholders approve the Plan, except with respect to awards then
outstanding. After such date no further awards shall granted under the Plan.
3.2 Shares Authorized. Effective upon ratification and approval of the
Plan by the Company's Stockholders at the 2007 Annual Meeting of the Company's
Stockholders, subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company, $.01 par value ("Company Stock") that may
be issued or transferred under the Plan is 500,000 shares. The maximum aggregate
number of shares of Company Stock that shall be subject to Grants made under the
B-1
Plan to any individual during any calendar year shall be 50,000 shares. The
shares may be authorized but unissued shares of Company Stock or reacquired
shares of Company Stock, including shares purchased by the Company on the open
market for purposes of the Plan. If and to the extent any shares of Restricted
Stock are forfeited, the shares subject to such Grants shall again be available
for purposes of the Plan.
3.3 Adjustments. If there is any change in the number or kind of shares
of Company Stock outstanding (i) by reason of a stock dividend, spin-off,
recapitalization, stock split or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spin-off or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share or the applicable market value of such Grants
shall be appropriately adjusted by the Committee to reflect any increase or
decrease in the number of, or change in the kind or value of, issued shares of
Company Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated by rounding
any portion of a share equal to .5 or greater up, and any portion of a share
equal to less than .5 down, in each case to the nearest whole number. Any
adjustments determined by the Committee shall be final, binding and conclusive.
4. Eligibility for Participation
4.1 Eligible Persons. All employees of the Company and its
subsidiaries, including employees who are officers or members of the Board,
individuals to whom an offer of employment has been extended , members of the
Board , agents of , consultants to, independent contractors of, and key advisors
to the Company (collectively referred to herein as "Grantees") shall be eligible
to participate in the Plan.
4.2 Selection of Grantees. The Committee shall select the Grantees to
receive Grants and shall determine the number of shares of Company Stock subject
to a particular Grant in such manner as the Committee determines.
5. Granting of Options.
5.1 Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each Grantees.
5.2 Type of Option and Price.
5.2.1 The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the
meaning of section 422 of the Internal Revenue Code of 1986, as
amended and related Treasury Regulations (the "Code"),
Nonqualified Stock Options that are not intended so to qualify,
or any combination of Incentive Stock Options and Nonqualified
Stock Options, all in accordance with the terms and conditions
set forth herein. Incentive Stock Options may be granted only to
employees. Nonqualified Stock Options may be granted to
employees, directors, agents, independent contractors and key
advisors.
5.2.2 The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Committee and may
be equal to, greater than, or less than the Fair Market Value (as
defined below) of a share of Company Stock on the date the Option
is granted, provided, however, that (i) the Exercise Price of an
Incentive Stock Option shall be equal to, or greater than, the
Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (ii) an Incentive Stock
Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent
or subsidiary of the Company, unless the Exercise Price per share
is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.
B-2
5.2.3 If the Company Stock is publicly traded, then, except as
otherwise determined by the Committee, the following rules
regarding the determination of Fair Market Value per share apply:
(i) if the principal trading market for the Company Stock is a
national securities exchange or The Nasdaq National Market, the
mean between the highest and lowest quoted selling prices on the
relevant date or (if there were no trades on that date) the
latest preceding date upon which a sale was reported, or
(ii) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and
"asked" prices of Company Stock on the relevant date, as reported
on The Nasdaq National Market or as reported in a customary
financial reporting service, as applicable and as the Committee
determines. If the Company Stock is not publicly traded or, if
publicly traded, is not subject to reported transactions or "bid"
or "asked" quotations as set forth above, the Fair Market Value
per share shall be as determined by the Committee.
5.3 Option Term. The Committee shall determine the term of each Option.
The term of any Option shall not exceed ten years from the date of grant.
However, an Incentive Stock Option that is granted to an Employee who, at the
time of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, may not have a term that exceeds five years from the date of
grant.
5.4 Exercisability of Options.
5.4.1 Options shall become exercisable in accordance with such
terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument
or an amendment to the Grant Instrument. The Committee may
accelerate the exercisability of any or all outstanding Options
at any time for any reason.
5.4.2 Notwithstanding the foregoing, the Option may, but need
not, include a provision whereby the Grantee may elect at any
time to exercise the Option as to any part or all of the shares
subject to the Option prior to the full vesting of the Option.
Any unvested shares so purchased shall be subject to a repurchase
right in favor of the Company, with the repurchase price to be
equal to the original purchase price, and any other restrictions
the Committee determines to be appropriate.
5.5 Termination of Employment, Disability or Death.
5.5.1 Except as provided below, an Option may only be exercised
while the Grantee is employed by, member of the Board, agent of,
consultant to, independent contractor of or key advisor to the
Company. In the event that a Grantee's status changes for any
reason other than a "disability," death or "termination for
cause," any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within 90 days after the date on
which the Grantee ceases to be employed by the Company (or within
such other period of time as may be specified by the Committee),
but in any event no later than the date of expiration of the
Option term. Any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be
employed by the Company shall terminate as of such date.
5.5.2 In the event the Grantee ceases to be employed by the
Company on account of a "termination for cause" by the Company,
any Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by the Company.
B-3
5.5.3 In the event the Grantee ceases to be employed by the
Company because the Grantee is "disabled," any Option which is
otherwise exercisable by the Grantee shall terminate unless
exercised within one year after the date on which the Grantee
ceases to be employed by the Company (or within such other period
of time as may be specified by the Committee), but in any event
no later than the date of expiration of the Option term. Any of
the Grantee's Options which are not otherwise exercisable as of
the date on which the Grantee ceases to be employed by the
Company shall terminate as of such date.
5.5.4 If the Grantee dies while employed by the Company or within
90 days after the date on which the Grantee ceases to be employed
on account of a termination of employment specified in Section
5.5.1 above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be
employed by the Company (or within such other period of time as
may be specified by the Committee), but in any event no later
than the date of expiration of the Option term. Any of the
Grantee's Options that are not otherwise exercisable as of the
date on which the Grantee ceases to be employed by the Company
shall terminate as of such date.
5.5.5 For purposes of Sections 5.5 and 6:
(i) "Company," when used in the phrase "employed by the Company,"
shall mean the Company and its parent, subsidiary corporations,
and any business venture in which the Company has a significant
interest.
(ii) "Employed by the Company" shall mean employment or service
as an Employee of IntegraMed America, Inc. or any subsidiary or
business venture in which the Company has a significant interest,
Key Advisor, or member of the Board (so that, for purposes of
exercising Options, and satisfying conditions with respect to
Restricted Stock, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to be
an Employee of IntegraMed America, Inc. or any subsidiary or
business venture in which the Company has a significant interest,
or member of the Board), unless the Committee determines
otherwise. The Committee's determination as to a participant's
employment or other provision of services, termination of
employment or cessation of the provision of services, leave of
absence, or reemployment shall be conclusive on all persons
unless determined to be incorrect.
(iii) "Disability" shall mean a Grantee's becoming disabled
within the meaning of section 22(e)(3) of the Code.
(iv) "Termination for cause" shall mean the determination of the
Committee that any one or more of the following events has
occurred:
(A) the Grantee's conviction of any act which constitutes a
felony under applicable federal or state law, either in
connection with the performance of the Grantee's obligations on
behalf of the Company or which affects the Grantee's ability to
perform his or her obligations as an employee, board member or
advisor of the Company or under any employment agreement,
non-competition agreement, confidentiality agreement or like
agreement or covenant between the Grantee and the Company (any
such agreement or covenant being herein referred to as an
"Employment Agreement");
(B) the Grantee's willful misconduct in connection with the
performance of his or her duties and responsibilities as an
employee, board member or advisor of the Company or under any
Employment Agreement, which willful misconduct is not cured by
the Grantee within 10 days of his or her receipt of written
notice thereof from the Committee;
(C) the Grantee's commission of an act of embezzlement, fraud or
dishonesty which results in a loss, damage or injury to the
Company;
(D) the Grantee's substantial and continuing neglect, gross
negligence or inattention in the performance of his or her duties
as an employee, board member or advisor of the Company or under
B-4
any Employment Agreement which is not cured by the Grantee within
10 days of his or her receipt of written notice thereof from the
Committee;
(E) the Grantee's unauthorized use or disclosure or any trade
secret or confidential information of the Company which adversely
affects the business of the Company, provided that any disclosure
of any trade secret or confidential information of the Company to
a third party in the ordinary course of business who signs a
confidentiality agreement shall not be deemed a breach of this
subparagraph;
(F) the Grantee's material breach of any of the provisions of any
Employment Agreement, which material breach is not cured by the
Grantee within 10 days of his or her receipt of a written notice
from the Company specifying such material breach; or
(G) the Grantee has voluntarily terminated his or her employment
or service with the Company and breaches his or her
non-competition agreement with the Company.
5.6 Exercise of Options. A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option as specified by the Committee:
5.6.1 in cash; or
5.6.2 by delivering shares of Company Stock owned by the Grantee
for the period necessary to avoid a charge to the Company's
earnings for financial reporting purposes (including Company
Stock acquired in connection with the exercise of an Option,
subject to such restrictions as the Committee deems appropriate)
and having a Fair Market Value on the date of exercise equal to
the Exercise Price; or
5.6.3 by payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board; or
5.6.4 by such other method of payment as the Committee may
approve.
Shares of Company Stock used to exercise an Option shall have been held
by the Grantee for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option. The Grantee shall pay
the Exercise Price and the amount of any withholding tax due (pursuant to
Section 7) at the time of exercise.
5.7 Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the option, as to the excess, shall be treated as a Nonqualified
Stock Option. An Incentive Stock Option shall not be granted to any person who
is not an Employee of the Company or a parent or subsidiary (within the meaning
of section 424(f) of the Code). No Incentive Stock Option shall be exercisable
sooner than one year from the date of grant.
6. Restricted Stock Grants. The Committee may issue or transfer shares
of Company Stock to a Grantee under a Grant of Restricted Stock upon such terms
as the Committee deems appropriate. The following provisions are applicable to
Restricted Stock:
6.1 General Requirements. Shares of Company Stock issued or transferred
pursuant to Restricted Stock Grants may be issued or transferred for no
consideration, as determined by the Committee. The Committee may establish
conditions under which restrictions on shares of Restricted Stock shall lapse
over a period of time or according to such other criteria as the Committee deems
appropriate. The period of time during which the Restricted Stock will remain
subject to restrictions will be designated in the Grant Instrument as the
"Restriction Period."
6.2 Number of Shares. The Committee shall determine the number of
shares of Company Stock to be issued or transferred pursuant to a Restricted
Stock Grant and the restrictions applicable to such shares.
B-5
6.3 Requirement of Relationship. If the Grantee ceases to be employed
by, a member of the Board, an agent of, consultant to, independent contractor
to, or key advisors to the Company other than for reasons of death or permanent
disability during a period designated in the Grant Instrument as the Restriction
Period, or if other specified conditions are not met, the Restricted Stock Grant
shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and those shares of Company Stock must be
immediately returned to the Company. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.
6.4 Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 7. Each certificate for a share of Restricted Stock shall
contain a legend giving appropriate notice of the restrictions in the Grant. The
Grantee shall be entitled to have the legend removed from the stock certificate
covering the shares subject to restrictions when all restrictions on such shares
have lapsed. The Committee may determine that the Company will not issue
certificates for shares of Restricted Stock until all restrictions on such
shares have lapsed, or that the Company will retain possession of certificates
for shares of Restricted Stock until all restrictions on such shares have
lapsed. The certificates shall bear, among other required legends, the following
legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including,
without limitation, forfeiture events) contained in the IntegraMed
America, Inc. 2007 Long-Term Compensation Plan and an Award Agreement
entered into between the registered owner hereof and IntegraMed
America, Inc. Copies of such Plan and Award Agreement are on file in
the office of the Secretary of IntegraMed America, Inc., Two
Manhattanville Road, Purchase, New York 10577. IntegraMed America, Inc.
will furnish to the record holder of the certificate, without charge
and upon written request at its principal place of business, a copy of
such Plan and Award Agreement. IntegraMed America, Inc. reserves the
right to refuse to record the transfer of this certificate until all
such restrictions are satisfied, all such terms are complied with and
all such conditions are satisfied."
6.5 Right to Vote and to Receive Dividends. Unless the Committee
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Restricted Stock and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee.
6.6 Lapse of Restrictions. All restrictions imposed on Restricted Stock
shall lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Restricted Stock Grants, that the restrictions shall
lapse without regard to any Restriction Period.
7. Withholding of Taxes
7.1 Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require the Grantee or other person receiving such
shares to pay to the Company the amount of any such taxes that the Company is
required to withhold with respect to such Grants, or the Company may deduct from
other wages paid by the Company the amount of any withholding taxes due with
respect to such Grants.
7.2 Election to Withhold Shares. If the Committee so permits, a Grantee
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option or Restricted Stock Grant by having shares withheld up to
an amount that does not exceed the Grantee's maximum marginal tax rate for
federal (including FICA), state and local tax liabilities. The election must be
in a form and manner prescribed by the Committee and shall be subject to the
prior approval of the Committee.
8. Transferability of Grants
B-6
8.1. Non-transferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Grants other than Incentive Stock Options,
if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations thereunder). When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of his or her
right to receive the Grant under the Grantee's will or under the applicable laws
of descent and distribution.
8.2 Transfer of Non-qualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Non-qualified Stock Options to family members or other persons or
entities according to such terms as the Committee may determine; provided that
the Grantee receives no consideration for the transfer of a Non-qualified Stock
Option and the transferred Non-qualified Stock Option shall continue to be
subject to the same terms and conditions as were applicable to the Non-qualified
Option immediately before the transfer.
9. Reorganization of the Company.
9.1 Reorganization. As used herein, a "Reorganization" shall be deemed
to have occurred if the shareholders of the Company approve (or, if shareholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the Company with another corporation where the
shareholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to more than 50% of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.
9.2 Assumption of Grants. Upon a Reorganization where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
or rights by, the surviving corporation.
9.3 Other Alternatives. Notwithstanding the foregoing, in the event of
a Reorganization, the Committee may take one or both of the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options
in exchange for a payment by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceeds the Exercise Price of the Options, or (ii) after giving Grantees
an opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Committee deems appropriate. Such
surrender or termination shall take place as of the date of the Reorganization
or such other date as the Committee may specify.
9.4 Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Reorganization, the Committee shall not have the right to take
any actions described in the Plan (including without limitation actions
described in Subsection (b) above) that would make the Reorganization ineligible
for pooling of interests accounting treatment or that would make the
Reorganization ineligible for desired tax treatment if, in the absence of such
right, the Reorganization would qualify for such treatment and the Company
intends to use such treatment with respect to the Reorganization.
10. Change of Control of the Company.
10.1 As used herein, a "Change of Control" shall be deemed to have
occurred if.
10.1.1 Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as
defined in Rule 13d- 3 under the Exchange Act), directly or
indirectly, of securities of the Company representing a majority
of the voting power of the then outstanding securities of the
Company except where the acquisition is approved by the Board;
or
B-7
10.1.2 Any person has commenced a tender offer or exchange offer
for a majority of the voting power of the then outstanding
shares of the Company.
10.2 Notice and Acceleration. Unless the Committee determines
otherwise, a Change of Control shall result in the acceleration of the vesting
of outstanding Options and the removal of restrictions and conditions on
outstanding Restricted Stock Grants.
10.3 Other Alternatives. Notwithstanding the foregoing, in the event of
a Change in Control, the Committee may take one or both the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options
in exchange for a payment by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceed the Exercise Price of the Options, or (ii) giving Grantees an
opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Committee deems appropriate. Such
surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.
10.4 Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Change of Control, the Committee shall not have the right to
take any actions described in the Plan (including without limitation actions
described in Section 10.3 above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
11. Requirements for Issuance or Transfer of Shares
11.1 Shareholder's Agreement. The Committee may require that a Grantee
execute a shareholder's agreement, with such terms as the Committee deems
appropriate, with respect to any Company Stock distributed pursuant to this
Plan.
11.2 Limitations on Issuance or Transfer of Shares. No Company Stock
shall be issued or transferred in connection with any Grant hereunder unless and
until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.
12. Amendment, Suspension and Termination of the Plan
12.1 Amendment. The Board may amend, suspend or terminate the Plan at
any time.
12.2 Termination of Plan. The Plan shall terminate on the date
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the shareholders.
12.3 Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents. The termination of
the Plan shall not impair the power and authority of the Committee with respect
to an outstanding Grant. Whether or not the Plan has terminated, an outstanding
Grant may be terminated or amended in accordance with the Plan or may be amended
by agreement of the Company and the Grantee consistent with the Plan.
B-8
12.4 Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
13. Rights of Grantees. Nothing in this Plan shall entitle any Grantee
or other person to any claim or right to be granted a Grant under this Plan.
Neither this Plan nor any action taken hereunder shall be construed as giving
any individual any rights to be retained by or in the employ of the Company or
any other employment rights.
14. No Fractional Shares. No fractional shares of Company Stock shall
be issued or delivered pursuant to the Plan or any Grant. The Committee shall
determine whether cash, other awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
15. Headings. Section headings are for reference only. In the event of
a conflict between a title and the content of a Section, the content of the
Section shall control.
16. Miscellaneous.
16.1 Compliance with Law. The Plan and the obligations of the Company
to issue or transfer shares of Company Stock under Grants shall be subject to
all applicable laws and to approvals by any governmental or regulatory agency as
may be required. With respect to persons subject to section 16 of the Exchange
Act, it is the intent of the Company that the Plan and all transactions under
the Plan comply with all applicable provisions of Rule 16b-3 or its successors
under the Exchange Act. The Committee may revoke any Grant if it is contrary to
law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.
16.2 No Right to Employment. Neither the adoption of the Plan, the
granting of any Grant, nor the execution of any Grant Instrument, shall confer
upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.
16.3 Unfunded Plan. The Plan shall be unfunded and the Company shall
not be required to segregate any assets in connection with any Grants under the
Plan. Any liability of the Company to any person with respect to any Grant under
the Plan or any Grant Instrument shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any such Grant
Instrument. No such obligation of the Company shall be deemed to be secured by
any pledge of, encumbrance on, or other interest in, any property or asset of
the Company or any Subsidiary. Nothing contained in the Plan or any Grant
Instrument shall be construed as creating in respect of any Grantee (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Grantee, any beneficiary thereof or any other person.
16.4 Other Company Benefit and Compensation Programs. Payments and
other benefits received by a Grantee under a Grant made pursuant to the Plan
shall not be deemed a part of a Grantee's compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary unless expressly
provided in such other plans or arrangements, or except where the Committee
expressly determines in writing that inclusion of a Grant or portion of a Grant
should be included to reflect accurately competitive compensation practices or
to recognize that a Grant has been made in lieu of a portion of competitive
annual base salary or other cash compensation. Grants under the Plan may be made
in addition to, in combination with, or as alternatives to, grants, awards or
payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.
16.5 Listing, Registration and Other Legal Compliance. No Grants or
shares of the Company Stock shall be required to be issued or granted under the
Plan unless legal counsel for the Company shall be satisfied that such issuance
or grant will be in compliance with all applicable federal and state securities
laws and regulations and any other applicable laws or regulations. The Committee
may require, as a condition of any payment or share issuance, that certain
B-9
agreements, undertakings, representations, certificates, and/or information, as
the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations.
Certificates for shares of the Restricted Shares and/ or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules, regulations,
or other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities law. In addition, if, at any time specified herein (or in
any Grant Instrument or otherwise) for (a) the making of any Award, or the
making of any determination, (b) the issuance or other distribution of
Restricted Shares and/ or Common Stock, or (c ) the payment of amounts to or
through a Participant with respect to any Grant, any law, rule, regulation or
other requirement of any governmental authority or agency shall require either
the Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
to persons subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act.
16.6 Grant Instrument. Each Participant receiving a Grant under the
Plan shall enter into a Grant Instrument with the Company in a form specified by
the Committee. Each such Participant shall agree to the restrictions, terms and
conditions of the Grant set forth therein and in the Plan.
16.7 Designation of Beneficiary. Each Grantee to whom a Grant has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Option or to receive any payment which under the terms of the Plan and the
relevant Grant Instrument may become exercisable or payable on or after the
Grantee's death. At any time, and from time to time, any such designation may be
changed or cancelled by the Grantee without the consent of any such beneficiary.
Any such designation, change or cancellation must be on a form provided for that
purpose by the Committee and shall not be effective until received by the
Committee or individual designated by the Committee. If no beneficiary has been
designated by a deceased Grantee, or if the designated beneficiaries have
predeceased the Grantee, the beneficiary shall be the Grantee's estate. If the
Grantee designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be made in equal shares unless the Grantee has
expressly designated otherwise, in which case the payments shall be made in the
shares designated by the Grantee.
16.8 Leaves of Absence/Transfers. The Committee shall have the power to
promulgate rules and regulations and to make determinations, as it deems
appropriate, under the Plan in respect of any leave of absence from the Company
or any Subsidiary granted to a Grantee. Without limiting the generality of the
foregoing, the Committee may determine whether any such leave of absence shall
be treated as if the Grantee has terminated employment with the Company or any
such Subsidiary. If a Grantee transfers within the Company, or to or from any
Subsidiary, such Grantee shall not be deemed to have terminated employment as a
result of such transfers.
16.9 Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of New
York.
16.10 Effective Date of the Plan Subject to the approval of the
Company's shareholders, the Plan shall be effective on May 15, 2007.
B-10
PROXY
INTEGRAMED AMERICA, INC.
Annual Meeting of Stockholders
This Proxy is Solicited on Behalf of the Board of Directors
1. Election Of Directors:
FOR ALL NOMINEES
ANNUAL MEETING OF STOCKHOLDERS OF
NOMINEES
O Gerardo Canet
O Jay Higham
O Sarason D. Liebler
O Wayne R. Moon
O Lawrence J. Stuesser
O Elizabeth E. Tallett
O Yvonne S. Thornton, M.D.
Please date, sign and mail
your proxy card in the
envelope provided as soon
Please detach and mail in the envelope provided.
------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 1.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE X
May 15, 2007 as possible.
2. To approve the Company's 2007 Long-Term Compensation Plan.
In their discretion, proxies are authorized to vote upon such business as may
properly come before the meeting. The shares of Common Stock represented by this
proxy will be voted as directed. If no contrary instruction is given, the shares
of Common Stock will be voted FOR the election of the nominees and FOR Proposal
2.
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: To change the address on your account, please check the
box at right and indicate your new address in the address space above. Please
note that changes to the registered name(s) on the account may not be submitted
via this method.
Signature of Stockholder ________________________________________ Date:________
Signature of Stockholder_________________________________________ Date:________
Note: This proxy must be signed exactly as the name appears hereon. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
----------------
FOR AGAINST ABSTAIN
------------------
PROXY
INTEGRAMED AMERICA, INC.
Annual Meeting of Stockholders
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Jay Higham or Claude E. White as proxy to
represent the undersigned at the Annual Meeting of Stockholders to be held at
the Company's Headquarters, Two Manhattanville Road, 3rd Floor, Purchase, New
York 10577 on May 15, 2007 at 10:00 a.m. and at any adjournments thereof, and to
vote the shares of Common Stock the undersigned would be entitled to vote if
personally present, as indicated on the reverse:
(To be Signed on Reverse Side)
----------------
0
14475