Medecision, Inc. - Additional Proxy Soliciting Materials (definitive) (DEFA14A)
June 18 2008 - 4:36PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
June 17,
2008
MEDecision, Inc.
(Exact Name of Issuer as Specified in Charter)
Pennsylvania
(State or Other Jurisdiction of
Incorporation or Organization)
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001-33191
(Commission File Number)
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23-2530889
(I.R.S. Employer Identification
Number)
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601 Lee Road, Chesterbrook
Corporate Center,
Wayne, Pennsylvania
(Address of Principal Executive Offices)
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19087
(Zip Code)
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(610) 540-0202
(Registrants Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425
under the Securities Act
x
Soliciting material pursuant to Rule 14a-12
under the Exchange Act
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act
Item
1.01 Entry into a Material Definitive
Agreement.
Merger Agreement
On June 17, 2008,
MEDecision, Inc., a Pennsylvania corporation (the Company), Health Care
Service Corporation, a Mutual Legal Reserve Company, an Illinois corporation (Parent)
and Mercury Acquisition Corp., a Pennsylvania corporation and a wholly-owned
subsidiary of Parent (Merger Sub) entered into an Agreement and Plan of
Merger (the Merger Agreement) pursuant to which Merger Sub will merge with
and into the Company and the Company will become a wholly-owned subsidiary of
Parent (the Merger). The following
description of the Merger Agreement does not purport to be a complete
description and is qualified in its entirety by reference to the full text of
the Merger Agreement, which is attached hereto as Exhibit 2.1 and is
incorporated herein by reference.
If the Merger is
completed, each outstanding share of the Companys common stock will be
converted into the right to receive $7.00 in cash (the Merger Consideration),
without interest and less any required withholding taxes. The Company will call and hold a special
shareholder meeting as soon as reasonably practicable for the purpose of voting
on the adoption of the Merger Agreement and the approval of the Merger.
The completion of the
Merger is subject to various customary conditions, including, among others, (i) the
receipt of the required Company shareholder approval; (ii) the absence of
a Company Material Adverse Effect (as defined in the Merger Agreement) since December 31,
2007 and (iii) the Company having Adjusted Net Cash (as defined in the
Merger Agreement) of at least the specified amounts set forth in the Merger
Agreement.
Voting
Agreements
In connection with the
execution of the Merger Agreement, Parent and certain holders of the Companys
common stock have each entered into voting agreements (collectively, the Voting
Agreements). Pursuant to the Voting
Agreements, these shareholders have agreed to vote their shares of the Companys
common stock in favor of adopting the Merger Agreement and approval of the
Merger. These holders beneficially own
in the aggregate approximately 45% of the Companys common stock. The Voting
Agreements will terminate: (i) upon the adoption of the Merger Agreement
by the Companys shareholders; (ii) upon the termination of the Merger
Agreement in accordance with its terms; or (iii) at any time upon notice
by Parent to the signatory shareholders of the Voting Agreements.
The foregoing description
of the Voting Agreements is qualified in its entirety by reference to the full
text of the Voting Agreements, which are attached as exhibits to this report
and are incorporated in this report by reference.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements for Certain Officers
Employment
Agreements
In connection with the
execution of the Merger Agreement, the Company entered into Employment
Agreements (individually, an Agreement and collectively, the Agreements)
with David St. Clair and Carl E. Smith, each a named executive officer of the
Company. The Employment Agreements will
become effective as of the effective time of the Merger.
Mr. St. Clairs
Agreement specifies that he will receive an annual base salary of $420,000 and
additional bonus opportunities.
Mr. Smiths
Agreement specifies that he will receive an annual base salary of $264,000 and
additional bonus opportunities.
Under each Agreement, if
an executives employment is terminated by the Company without cause or by
executive for good reason (in each case as defined in the Agreement), the
executive will receive subsidized COBRA coverage and a lump sum severance
payment in an amount equal to one year of the executives base salary (or two
years of the executives base salary if the termination occurs within one year
(with respect to Mr. Smith) or eighteen months (with respect to
Mr. St. Clair) following a change in control of
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the Company (not
including the Merger, for this purpose)).
Under each Agreement, the payment of any severance benefit is
conditioned on the executives execution of a general release of claims against
the Company.
The Agreements also
provide that each executive will be subject to (i) customary
confidentiality and proprietary information covenants; and (ii) customary
non-competition and non-solicitation covenants for a period of one year
following any termination of employment (or two years, if the executive
receives the enhanced change in control severance benefit described above in
connection with such termination).
The foregoing description
of the Employment Agreements is qualified in its entirety by reference to the
full text of the Employment Agreements, which are attached as Exhibits 10.1 and
10.2 to this report and are incorporated in this report by reference.
Item 8.01 Other Events
The Company issued a
press release on June 18, 2008 announcing the execution of the Merger
Agreement. A copy of the press release
is included as Exhibit 99.8 to this report and is incorporated in this
report by reference.
Additional Information About the
Merger and Where to Find It
The Company will file with the Securities and Exchange
Commission (the SEC), and furnish to its shareholders, a proxy statement
soliciting proxies for the meeting of its shareholders to be called with
respect to the proposed merger between the Company and Parent. The Companys shareholders are advised to
read the proxy statement when it is finalized and distributed to them because
it will contain important information. The Companys shareholders and other
interested parties will be able to obtain, without charge, a copy of the proxy
statement (when available) and other relevant documents filed with the SEC from
the SECs website at http://www.sec.gov. The Companys shareholders and other
interested parties will also be able to obtain, without charge, a copy of the
proxy statement (when available) and other relevant documents by directing a
request by mail or telephone to MEDecision, Inc., 601 Lee Road,
Chesterbrook Corporate Center, Wayne, Pennsylvania, Attention: Corporate
Secretary, telephone: (610) 540-0202, or from the Companys website,
www.medecision.com.
Participants in the Merger Solicitation
The Company and certain of its directors, executive
officers and other members of management and employees may, under SEC rules, be
deemed to be participants in the solicitation of proxies from shareholders of
the Company with respect to the proposed merger. Information regarding the
persons who may be considered participants in the solicitation of proxies
will be set forth in the Companys proxy statement relating to the proposed
merger when it is filed with the SEC. Information regarding certain of these
persons and their beneficial ownership of the Companys common stock as of March 28,
2008 is also set forth in the Companys proxy statement for its 2008 Annual
Meeting of Shareholders, which was filed with the SEC on April 23,
2008. Investors and security holders may
obtain more detailed information regarding the direct and indirect interests of
the Company and its executive officers and directors in the Merger by reading
the proxy statement regarding the Merger when it becomes available.
Item 9.01 Financial Statements and Exhibits
(d)
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Exhibits.
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2.1
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Agreement and Plan of
Merger, dated as of June 17, 2008, by and among MEDecision, Inc.,
Health Care Service Corporation and Mercury Acquisition Corp.*
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10.1
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Employment Agreement,
dated as of June 17, 2008, by and between MEDecision, Inc. and
David St. Clair
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10.2
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Employment Agreement,
dated as of June 17, 2008, by and between MEDecision, Inc. and Carl
E. Smith
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99.1
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and David St.Clair
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99.2
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Carl Smith
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99.3
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Liberty Ventures I, L.P.
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99.4
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Liberty Ventures II, L.P.
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99.5
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Stockwell Fund, L.P.
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99.6
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Grotech V Maryland Fund, L.P.
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99.7
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Grotech Partners V, L.P.
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99.8
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Press Release of
MEDecision, Inc. issued on June 18, 2008.
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*Schedules and similar
attachments have been omitted pursuant to Item 601(b)(2) of Regulation
S-K. The Company undertakes to furnish
supplemental copies of any of the omitted schedules and exhibits upon request
by the U.S. Securities and Exchange Commission.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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MEDECISION,
INC.
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Date: June 18,
2008
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By:
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/s/ Carl E. Smith
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Name:
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Carl E. Smith
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Title:
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Executive Vice
President and Chief
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Financial Officer
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Exhibit Index
2.1
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Agreement and Plan of
Merger, dated as of June 17, 2008, by and among MEDecision, Inc.,
Health Care Service Corporation and Mercury Acquisition Corp.*
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10.1
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Employment Agreement,
dated as of June 17, 2008, by and between MEDecision, Inc. and
David St. Clair
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10.2
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Employment Agreement,
dated as of June 17, 2008, by and between MEDecision, Inc. and Carl
E. Smith
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99.1
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and David St.Clair
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99.2
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Carl Smith
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99.3
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Liberty Ventures I, L.P.
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99.4
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Liberty Ventures II, L.P.
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99.5
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Stockwell Fund, L.P.
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99.6
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Grotech V Maryland Fund, L.P.
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99.7
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Voting Agreement dated
as of June 17, 2008, by and among Health Care Service Corporation,
Mercury Acquisition Corp. and Grotech Partners V, L.P.
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99.8
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Press Release of
MEDecision, Inc. issued on June 18, 2008.
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*Schedules and similar attachments
have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company undertakes to furnish
supplemental copies of any of the omitted schedules and exhibits upon request
by the U.S. Securities and Exchange Commission.
6
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