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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Medecision (MM) | NASDAQ:MEDE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.00 | 0 | 01:00:00 |
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
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001-33191 (Commission File Number) |
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23-2530889
(I.R.S. Employer Identification
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601 Lee Road, Chesterbrook
Corporate Center,
(Address of Principal Executive Offices) |
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19087 (Zip Code) |
(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. |
*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 |
By: |
/s/ Carl E. Smith |
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Name: |
Carl E. Smith |
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Title: |
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. |
*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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