##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission File Number 000-25311
 AMICAS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    59-2248411(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 20 Guest Street, Suite 400, Boston, Massachusetts 02135  (Address of principal executive offices, including zip code)
 Registrants telephone number, including area code:
(617) 779-7878
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $0.001
    
    The NASDAQ Stock Market LLCRights to purchase Series B Preferred Stock
    
    The NASDAQ Stock Market LLC
 Securities registered pursuant to Section 12(g) of the Act:
None
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   Documents Incorporated by Reference




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EXPLANATORY NOTE




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##### 



AMICAS, INC.
 Form 10-K/A
  
 Table of Contents
 PagePART III* Item 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    2* Item 11.
    
    Executive Compensation
    
    
    8* Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    24* Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    25* Item 14.
    
    Principal Accounting Fees and Services
    
    
    26PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    27Signatures
    
    
    
    
    29Ex-31.1Ex-31.2
 
 *
    
    Reflects only events and arrangements of AMICAS, Inc. prior to April 28, 2010, which is the date that AMICAS, Inc. was acquired by Merge Healthcare Incorporated.
  1




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##### Table of Contents



PART III
 Item 10. Directors, Executive Officers and Corporate Governance
 CURRENT DIRECTORS AND EXECUTIVE OFFICERS
  Name
    
    Age
    
    TitleDirectorsStephen N. Kahane
    
    52
    
    Chairman and Chief Executive OfficerStephen J. DeNelsky
    
    42
    
    DirectorJoseph D. Hill
    
    47
    
    DirectorStephen J. Lifshatz
    
    51
    
    DirectorDavid B. Shepherd
    
    58
    
    DirectorJohn J. Sviokla
    
    52
    
    DirectorExecutive OfficersKevin C. Burns
    
    39
    
    Senior Vice-President, Chief Financial OfficerPaul Merrild
    
    35
    
    Senior Vice-President of Marketing and Business DevelopmentCraig Newfield
    
    50
    
    Vice President, General Counsel
  Directors
 Stephen N. Kahane, M.D., M.S.,
  Stephen J. DeNelsky,
  2




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Joseph D. Hill,
  Stephen J. Lifshatz
  David B. Shepherd
  John J. Sviokla,
  3




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Executive Officers
 Stephen N. Kahane
 Kevin C. Burns
 Paul B. Merrild
 Craig Newfield
 LEGAL PROCEEDINGS
  CORPORATE GOVERNANCE
  Corporate Governance Guidelines
 www.amicas.com/investorrelations
 Code of Business Conduct and Ethics
  4




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www.amicas.com/investorrelations
 Meetings of the Board and Committees of the Board; Annual Meeting Attendance
  Meeting Attendance.
 Audit Committee.
 www.amicas.com/investorrelations
 Compensation Committee.
   5




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www.amicas.com/investorrelations
 Nominating and Corporate Governance Committee.
  www.amicas.com/investorrelations
     6




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Board Leadership Structure
  Boards Role in Risk Oversight
    Stockholder Communications with the Board
 AMCSboard@amicas.com
 Section 16(A) Beneficial Ownership Reporting Compliance
  7




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Item 11. Executive Compensation
 COMPENSATION DISCUSSION AND ANALYSIS
   
    
    The objectives of our compensation program, including the results and behaviors the
program is designed to reward;
    
    The process that we use to determine executive compensation;
    
    Each element of the compensation plan;
    
    The reasons why the Compensation Committee chose to pay each element; and
    
    How the Compensation Committee determines the amount or the formula used for each
element.
 The Companys Compensation Philosophy and Process
  
    
    To attract and retain a highly skilled work force  in a competitive and demanding
market, it is necessary for us to offer compensation packages commensurate with the
executive officers performance and experience.
    
    To foster a high performance culture  our compensation is based on the level of job
responsibility, and Company performance. At the executive level, and in setting
compensation policies for our Named Executive Officers, the Compensation Committee
considers the individual performance of our Named Executive Officers to be reflected
entirely by our corporate performance goals, and the Compensation Committee believes that
the success of the Company in achieving these goals is a direct reflection of whether a
particular executive has performed well. As a result, the Compensation Committee does not
set separate individual goals for our Named Executive Officers, but the Compensation
Committee holds the expectation that each executives individual performance will
contribute to the overall achievement by the Company of its goals.
    
    To provide stability  we have provided retention incentives for executive officers
where we believe appropriate.
  8




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Compensation Elements and Purposes
     
    
    Base salaries  we pay annual salaries to provide executives with a base level of
compensation to achieve our objectives of attracting and retaining executive talent that we
need to accomplish our goals.
    
    Quarterly Financial Metric Cash Bonus  provides performance based cash incentives
based on Company performance against specific targets, such as Company sales orders,
revenues, and Adjusted EBITDA, with the purpose of motivating and rewarding achievement of
our critical strategic and financial goals, fostering a high performance culture and
delivering value to stockholders.
    
    Annual Stock Price Performance Cash Bonus  provides performance based cash incentives
based on Company stock performance, with the purpose of aligning the executives interests
with those of stockholders and increasing stockholder value.
    
    Quarterly Targeted Cash Bonus  provides a performance-based cash incentive based upon
criteria that are of heightened importance for the year or quarter, such as achievement in
excess of the sales order targets that are established for the Company for the quarter.
    
    Long Term Equity Incentives  we believe that long-term performance is achieved through
an ownership culture that encourages long-term participation by our Named Executive
Officers of equity-based awards in the form of stock options. The stock option awards are
intended to provide each executive with incentive to build value in the Company over an
extended period of time. We typically make an initial equity award of stock options to new
executives and annual equity grants as part of our overall compensation program. Initial
option awards typically vest 1/3 one year from the grant date, and thereafter in eight
equal quarterly installments, and annual option awards typically vest in twelve equal
quarterly installments from the grant date.
 9




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
    
    Share Price Based Equity Incentives  through the grant of stock options, with an
opportunity to accelerate vesting based on share price objectives, we intend to provide an
incentive with the purpose of increasing stockholder value.
    
    Retirement savings through a qualified 401(k) savings plan, pursuant to which all
employees can choose to defer compensation for retirement and to which we make a matching
contribution, with the purpose of encouraging employees to save for their retirement, with
account balance affected by contributions and investment decisions made by the participant.
    
    Health and welfare benefits  a fixed component with the same benefits (medical,
dental, vision, disability insurance and life insurance) available for all full-time
employees, with the purpose of providing benefits to meet the health and welfare needs of
our employees and their families and to provide a competitive total compensation package.
    
    Severance and change in control agreements and plans pursuant to which we provide
additional payments and benefits to the Named Executive Officers with the intention of
encouraging them to remain focused on our business in the event of anticipated or actual
fundamental corporate changes.
    
    Special awards  our Compensation Committee reserves the ability to make special
compensation awards to our Named Executive Officers in recognition of outstanding
achievements that are not otherwise adequately rewarded.
  
    
    Revenue  we have targeted increased revenue results as a driver to profitability;
    
    Sales Orders  we have targeted sales orders as a driver to current and future
revenues; and
    
    Adjusted EBITDA  provides an incentive to reward both controlling expenses and
increasing gross margin contributions, and bears a direct relationship with earnings per
share which is a driver of stockholder value.
   10




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Compensation Components
  Base Salary
    Quarterly Financial Metric Cash Bonus
  11




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Quarterly Targeted Cash Bonus
  Annual Stock Price Performance Cash Bonus
  Initial Stock Option Awards
   Annual Stock Option Awards
   12




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Special Compensation Awards
    Other Compensation
  Termination Based Compensation and Acceleration of Vesting of Equity-Based Awards
    Conclusion
  13




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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
 Executive Compensation
 Summary Compensation Table
  All OtherSalary
    
    
    Bonus
    
    
    Option Awards
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)(1)
    
    
    ($)(2)
    
    
    ($)Stephen N. Kahane
    
    
    2007
    
    
    
    350,000
    
    
    
    116,238
    
    
    
    117,854
    
    
    
    25,012
    
    
    
    609,104Chief Executive Officer
    
    
    2008
    
    
    
    350,000
    
    
    
    144,500
    
    
    
    505,795
    
    
    
    27,800
    
    
    
    1,028,0952009
    
    
    
    350,000
    
    
    
    542,041
    
    
    
    0
    
    
    
    17,513
    
    
    
    909,554Kevin C. Burns
    
    
    2007
    
    
    
    157,166
    
    
    
    35,217
    
    
    
    58,194
    
    
    
    25,917
    
    
    
    276,494Sr. Vice President and
    
    
    2008
    
    
    
    200,985
    
    
    
    58,000
    
    
    
    380,284
    
    
    
    19,939
    
    
    
    659,208Chief Financial Officer(3)
    
    
    2009
    
    
    
    240,000
    
    
    
    275,936
    
    
    
    0
    
    
    
    15,419
    
    
    
    531,355Frank E. Stearns, Jr.
    
    
    2009
    
    
    
    180,769
    
    
    
    106,213
    
    
    
    163,129
    
    
    
    5,367
    
    
    
    455,478Senior Vice President, Client Solutions(4)Paul B. Merrild
    
    
    2009
    
    
    
    170,000
    
    
    
    124,616
    
    
    
    0
    
    
    
    9,752
    
    
    
    304,368Senior Vice President, Marketing &
Business Development(5)Craig Newfield
    
    
    2009
    
    
    
    157,115
    
    
    
    93,938
    
    
    
    156,427
    
    
    
    4,469
    
    
    
    411,949Vice President & General Counsel(6)
 
 (1)
    
    These amounts represent the aggregate grant date fair value for option awards for fiscal
years 2009, 2008 and 2007, respectively, computed in accordance with FASB ASC Topic 718. The
grant date fair value of performance awards is determined based on the probable outcome of
such performance conditions as of the grant date. A discussion of the assumptions used in
determining grant date fair value may be found in Note L to our Financial Statements, included
in our Annual Report on Form 10-K for the year ended December 31, 2009.(2)
    
    Represents contributions made by the Company pursuant to the Companys 401(k) savings plan,
and car allowances.(3)
    
    Mr. Burns became our Senior Vice President and Chief Financial Officer effective April 7,
2008. The 2008 bonus amount includes $10,000 that was paid under the compensation plan in
place for the first quarter of 2008 prior to Mr. Burns promotion to the position of Chief
Financial Officer.(4)
    
    Mr. Stearns became our Senior Vice President, Client Solutions in February 2009, and resigned
from the Company effective January 15, 2010.(5)
    
    Mr. Merrild became our Senior Vice President, Marketing & Business Development in April 2009.(6)
    
    Mr. Newfield became our Vice President & General Counsel in March 2009. Grants of Plan-Based Awards
  14




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All OtherOptionAwards:Number ofSecurities
    
    
    
    
    
    
    Grant Date FairUnderlying
    
    
    Exercise or Base
    
    
    Value of StockOptions
    
    
    Price of Option
    
    
    and OptionName
    
    Grant Date
    
    
    (#)
    
    
    Awards ($/Sh)
    
    
    Awards(1)Stephen N. Kahane
    
    
    
    
    
    
    0Chief Executive OfficerKevin C. Burns
    
    
    
    
    
    
    0Sr. Vice President and Chief Financial OfficerFrank E. Stearns, Jr.(2)
    
    
    2/9/2009
    
    
    
    200,000
    
    
    $
    1.65
    
    
    $
    163,129Senior Vice President, Client SolutionsPaul B. Merrild
    
    
    
    
    
    
    0Senior Vice President, Marketing & Business DevelopmentCraig Newfield
    
    
    3/9/2009
    
    
    
    180,000
    
    
    $
    1.75
    
    
    $
    156,427Vice President & General Counsel
 
 (1)
    
    These amounts represent the grant date fair value for each option awards granted during
our fiscal year ended December 31, 2009, computed in accordance with FASB ASC Topic 718. A
discussion of the assumptions used in determining grant date fair value may be found in Note L
to our Financial Statements, included in our Annual Report on Form 10-K for the year ended
December 31, 2009.(2)
    
    Mr. Stearns resigned from the Company effective January 15, 2010. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
  
    
    An annual base salary of $350,000 for 2007, 2008 and 2009.
    
    Annual Stock Price Performance Cash Bonus of up to $250,000 for 2007, 2008 and 2009.
Subject to the attainment of an average stock price (defined as the average daily closing
AMICAS stock price on The NASDAQ Global Market for the applicable calendar year), Dr.
Kahane was eligible to receive a percentage (determined by straight line interpolation) of
the target compensation. The stock price goals were $3.75 to $4.00 for 2007, $3.75 to $4.00
for 2008, and $2.25 to $3.00 for 2009. These goals were not met for 2007 or 2008 but they
were met in full for 2009. As a result, Dr. Kahane did not receive a cash bonus under this
program for 2007 or 2008, and he received $250,000 under this program in 2009.
    
    Quarterly Financial Metric Cash Bonus for 2007, 2008 and 2009 of up to $250,000 pursuant
to a program established by the Compensation Committee in the event that certain quarterly
performance goals were met, as described above under the heading Compensation Discussion
and Analysis  Compensation Elements and Purposes. The performance goals were met in part
in 2007, 2008 and 2009, and, as a result, Dr. Kahane earned cash bonuses of $109,488,
$125,000 and $177,081 under this program for 2007, 2008 and 2009, respectively.
    
    Quarterly Targeted Cash Bonus for 2007, 2008 and 2009 of up to $27,000, $33,000 and
$50,000, respectively, pursuant to a program established by the Compensation Committee in
the event that over-achievement (stretch) sales order targets were exceeded on a
quarterly basis. The sales order targets were met in part in 2007 and 2009, but they were
not met in 2008 and, as a result, Dr. Kahane earned cash bonuses of $6,750 and $24,960 for
2007 and 2009, respectively, and he did not receive any cash bonus under this program for
2008.
  
    
    An annualized base salary of $210,000 for 2008 (pro-rated from April 2008) and $240,000
for 2009.
    
    Annual Stock Price Performance Cash Bonus of up to $100,000, pro-rated to $75,000 in
2008, and $110,000 for 2009. Subject to the attainment of an average stock price (defined
as the average daily closing
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AMICAS stock price on The NASDAQ Global Market) of $3.75 to $4.00 for calendar year 2008 and
of $2.25 to $3.00 for calendar year 2009, Mr. Burns was eligible to receive a percentage
(determined by straight line interpolation) of the target compensation. This goal was not
met in 2008 and it was met in full for 2009, and, as a result, Mr. Burns did not receive a
cash bonus under this program for 2008, and he received $110,000 for 2009.
    
    Quarterly Financial Metric Cash Bonus of up to $100,000, pro-rated to $75,000 in 2008, ,
and up to $110,000 for 2009, pursuant to a program established by the Compensation
Committee in the event that certain quarterly performance goals were met, as described
above under the heading Compensation Discussion and Analysis  Compensation Elements and
Purposes. The performance goals were met in part in 2008 and in 2009, and, as a result,
Mr. Burns earned a cash bonus of $40,000 and $77,916 under this program for 2008 and 2009,
respectively.
    
    Quarterly Targeted Cash Bonus for 2008 of up to $15,750 and for 2009 of up to $40,000,
pursuant to a program established by the Compensation Committee in the event that
over-achievement (stretch) sales order targets were exceeded on a quarterly basis. The
sales order targets were not met in 2008 and they were met in part for 2009, and, as a
result, Mr. Burns did not earn any cash bonus under this program for 2008, and he earned
$20,020 under this program for 2009.
  
    
    An annual base salary of $200,000 for 2009.
    
    Quarterly Financial Metric Cash Bonus of up to $100,000 for 2009, pursuant to a program
established by the Compensation Committee in the event that certain quarterly performance
goals were met, as described above under the heading Compensation Discussion and Analysis
  Compensation Elements and Purposes. The 2009 performance goals were met in part, and,
as a result, Mr. Stearns earned a cash bonus of $76,213 under this program for 2009.
    
    Mr. Stearns resigned from the Company effective January 15, 2010.We entered into an employment letter with Paul Merrild dated May 5, 2006, under which
his employment was at-will, and each year thereafter we enter into a letter agreement
with Mr. Merrild that sets forth his compensation for the year, and which provides for:
    
    An annual base salary of $170,000 for 2009.
    
    Quarterly Financial Metric Cash Bonus of up to $80,000 for 2009, pursuant to a program
established by the Compensation Committee in the event that certain quarterly performance
goals were met, as described above under the heading Compensation Discussion and Analysis
  Compensation Elements and Purposes. The 2009 performance goals were met in part, and,
as a result, Mr. Merrild earned a cash bonus of $56,666 under this program for 2009.
    
    Quarterly Targeted Cash Bonus for 2009 up to $30,000, pursuant to a program established
by the Compensation Committee in the event that over- achievement (stretch) sales order
targets were exceeded on a quarterly basis. The sales order targets were met in part in
2009, and, as a result, Mr. Merrild earned a cash bonus of $14,950 for 2009 under this
program.
  
    
    An annual base salary of $190,000 for 2009.
    
    Quarterly Financial Metric Cash Bonus of up to $100,000 for 2009, pursuant to a program
established by the Compensation Committee in the event that certain quarterly performance
goals were met, as described above under the heading Compensation Discussion and Analysis
  Compensation Elements and Purposes. The 2009 performance goals were met in part, and,
as a result, Mr. Newfield earned a cash bonus of $53,438 under this program for 2009.Our employment agreements with our Chief Executive Officer and our Chief Financial
Officer each contains a six-month post termination covenant not to compete, certain other
restrictions and non-
 16




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disclosure provisions which protect our interests. Our Named Executive Officers are eligible
to participate in all of our health, welfare and benefit programs that are available to our
employees.
 2009 and 2010 Compensation Actions
   AnnualStockPrice
    
    
    Quarterly
    
    
    QuarterlyPerformance
    
    
    Financial Metric
    
    
    Targeted
    


 Number ofCash
    
    
    Cash
    
    
    Cash
    


 StockAnnual
    
    
    Bonus
    
    
    Bonus
    
    
    Bonus
    


 OptionsName
    
    Year
    
    
    Salary
    
    
    (1)
    
    
    (2)
    
    
    (3)
    


    Granted(4)Stephen N. Kahane
    
    
    2009
    
    
    
    350,000
    
    
    
    250,000
    
    
    
    250,000
    
    
    
    50,000
    


240,000Chief Executive Officer
    
    
    2010
    
    
    
    385,000
    
    
    
    
    
    
    
    620,000
    
    
    
    50,000
    


Kevin C. Burns
    
    
    2009
    
    
    
    240,000
    
    
    
    110,000
    
    
    
    110,000
    
    
    
    40,000
    


150,000Sr. Vice President and
    
    
    2010
    
    
    
    265,000
    
    
    
    
    
    
    
    290,000
    
    
    
    40,000
    


Chief Financial OfficerFrank E. Stearns, Jr.
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    100,000
    
    
    
    
    


200,000Senior Vice President,
    
    
    2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


    Client Solutions(5)Paul B. Merrild
    
    
    2009
    
    
    
    170,000
    
    
    
    
    
    
    
    80,000
    
    
    
    30,000
    


120,000Senior Vice President,
    
    
    2010
    
    
    
    190,000
    
    
    
    
    
    
    
    90,000
    
    
    
    30,000
    


Marketing & Business
DevelopmentCraig Newfield
    
    
    2009
    
    
    
    190,000
    
    
    
    
    
    
    
    90,000
    
    
    
    
    


180,000Vice
President & General Counsel
    
    
    2010
    
    
    
    210,000
    
    
    
    
    
    
    
    90,000
    
    
    
    20,000
    



 
  (1)
    
    Subject to the attainment of an average stock price (defined as the average daily closing
AMICAS stock price on The NASDAQ Global Market) of $2.25 to $3.00 for 2009.(2)
    
    Incentive cash compensation for 2009 and 2010 pursuant to a program established by the
Compensation Committee in the event that certain performance goals as described above under
the heading Compensation Discussion and Analysis  Compensation Elements and Purposes are
met on a quarterly basis.(3)
    
    Incentive cash compensation for 2009 and 2010 pursuant to a program established by the
Compensation Committee in the event that sales order targets are exceeded on a quarterly
basis.(4)
    
    For Dr. Kahane and Messrs. Burns and Merrild, the options were granted in December 2008 in
respect of 2009, and the options vest and become exercisable in twelve equal quarterly
installments beginning three months from 17




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the grant date. For Messrs Stearns and Newfield, the options vest 1/3 one year after the grant
date, and thereafter in eight equal quarterly installments. For all Named Executive Officers,
upon termination without cause or a change in control, unvested options shall fully vest.(5)
    
    Mr. Stearns resigned from the Company effective January 15, 2010. 4 01(k) Profit Sharing Plan
  Outstanding Equity Awards at Fiscal Year-End
  Option AwardsEquityIncentiveNumber
    
    
    
    
    
    
    Plan Awards:of
    
    
    Number of
    
    
    NumberSecurities
    
    
    Securities
    
    
    of SecuritiesUnderlying
    
    
    Underlying
    
    
    UnderlyingUnexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    OptionOptions
    
    
    Options
    
    
    Unearned
    
    
    Exercise
    
    
 Option(#)
    
    
    (#)
    
    
    Options
    
    
    Price
    
    
    ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    (#)
    
    
    ($)
    
    
    DateStephen N. Kahane
    
    
    1,015,802
    (1)
    
    
    
    
    
    
    
    
    
    
    2.10
    
    
    
    8/21/2010Chief Executive Officer
    
    
    423
    (2)
    
    
    
    
    
    
    
    
    
    
    1.80
    
    
    
    10/17/2010200
    (2)
    
    
    
    
    
    
    
    
    
    
    5.65
    
    
    
    12/31/2011
    
    
    
    115,000
    (3)
    
    
    
    
    
    
    3.57
    
    
    
    4/26/2014250,000
    (4)
    
    
    
    
    
    
    
    
    
    
    3.02
    
    
    
    7/26/2014117,000
    
    
    
    
    
    
    
    333,000
    (5)
    
    
    3.02
    
    
    
    7/26/201473,333
    (6)
    
    
    6,667
    
    
    
    
    
    
    
    2.97
    
    
    
    1/26/2017135,416
    
    
    
    52,084
    
    
    
    62,500
    (7)
    
    
    2.83
    
    
    
    1/29/201880,000
    (8)
    
    
    160,000
    
    
    
    
    
    
    
    1.53
    
    
    
    12/30/2018Kevin C. Burns
    
    
    40,000
    (9)
    
    
    
    
    
    
    
    
    
    
    3.45
    
    
    
    11/5/2014Sr. Vice President and Chief Financial Officer
    
    
    2,500
    (10)
    
    
    
    
    
    
    
    
    
    
    5.01
    
    
    
    10/21/201520,000
    (11)
    
    
    
    
    
    
    
    
    
    
    4.89
    
    
    
    1/5/201620,000
    (12)
    
    
    
    
    
    
    
    
    
    
    3.56
    
    
    
    5/31/201618,571
    (13)
    
    
    1,429
    
    
    
    
    
    
    
    3.18
    
    
    
    8/24/201632,083
    (14)
    
    
    2,917
    
    
    
    
    
    
    
    2.97
    
    
    
    1/26/20174,166
    (15)
    
    
    834
    
    
    
    
    
    
    
    3.00
    
    
    
    4/27/201734,999
    (16)
    
    
    25,001
    
    
    
    
    
    
    
    2.83
    
    
    
    1/29/2018146,633
    (17)
    
    
    41,667
    
    
    
    11,700
    
    
    
    2.04
    
    
    
    3/24/201850,000
    (18)
    
    
    100,000
    
    
    
    
    
    
    
    1.53
    
    
    
    12/30/2018Frank E. Stearns, Jr.
    
    
    0
    (19)
    
    
    200,000
    
    
    
    
    
    
    
    1.65
    
    
    
    Senior Vice President, Client SolutionsPaul B. Merrild
    
    
    100,000
    (20)
    
    
    0
    
    
    
    
    
    
    
    3.30
    
    
    
    5/15/2016Senior Vice President, Marketing
    
    
    32,083
    (21)
    
    
    2,917
    
    
    
    
    
    
    
    2.97
    
    
    
    1/26/2017& Business Development
    
    
    4,166
    (22)
    
    
    834
    
    
    
    
    
    
    
    3.00
    
    
    
    4/27/201734,999
    (23)
    
    
    25,001
    
    
    
    
    
    
    
    2.83
    
    
    
    1/29/201840,000
    (24)
    
    
    80,000
    
    
    
    
    
    
    
    1.53
    
    
    
    12/30/2018Craig Newfield
    
    
    0
    (25)
    
    
    180,000
    
    
    
    
    
    
    
    1.75
    
    
    
    3/8/2019Vice President & General Counsel
 18




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##### Table of Contents



(1)
    
    The option vested as to 8.33% of the shares per quarter beginning 64 days after the grant
date.(2)
    
    The option vested as to 100% of the shares on the fourth anniversary of the grant date.(3)
    
    The option will vest 100% on April 26, 2010 (the sixth anniversary of the grant date). Upon a
change in control (as defined in the executives employment agreement) all unvested options
shall fully vest.(4)
    
    The option vested in twelve equal quarterly installments beginning three months from the
grant date.(5)
    
    On July 26, 2004, we granted to Dr. Kahane an option to purchase 450,000 shares of our common
stock, under the plan, at fair market value on the grant date that vest on the sixth
anniversary of the grant date or upon a change in control (as defined in the executives
employment agreement) unless they vest earlier in accordance with the following schedule.
Subject to the attainment of an average stock price (defined as the average daily closing
AMICAS common stock price on The NASDAQ Global Market) of $4.00 to $5.00 per share for the
calendar year 2005, a percentage (determined by straight line interpolation) of 225,000 of the
450,000 option shares granted to Dr. Kahane would vest and become exercisable effective
December 31, 2005. In 2005, the average price per share of AMICAS common stock was $4.52, and
as a result, 117,000 of the 450,000 shares vested. Under the terms of the option, the
remaining 333,000 shares were carried forward. Subject to the attainment of an average stock
price of $5.00 to $6.00 per share for calendar year 2006, a percentage (determined by straight
line interpolation) of the 333,000 options would have vested and become exercisable. The goal
was not met and the shares did not vest. The 333,000 options will vest on the sixth
anniversary of the grant date, or upon a change in control.(6)
    
    This option was granted on January 26, 2007, and was fully vested three years from the grant
date.(7)
    
    This option was granted on January 29, 2008. Of these shares, 125,000 are vesting in twelve
equal quarterly installments beginning three months from the grant date. The remaining 125,000
would have vested on December 31, 2008 subject to the attainment of certain sales order goals;
these goals were met in part, and as a result 62,500 shares were vested on December 31, 2008
and the remainder will vest 100% six years from the date of grant. Upon a change in control
(as defined in the executives employment agreement) unvested options shall fully vest.(8)
    
    This option was granted on December 30, 2008, and vests in twelve equal quarterly
installments beginning three months from the grant date. Upon a change in control (as defined
in the executives employment agreement) unvested options shall fully vest.(9)
    
    This option was granted on November 5, 2004, and vested 25% after one year and the remainder
in eight quarterly installments beginning fifteen months after the grant date.(10)
    
    This option was granted on October 21, 2005, and was fully vested three years from the grant
date.(11)
    
    This option was granted on January 5, 2006, and was fully vested three years from the grant
date.(12)
    
    This option was granted on May 31, 2006, and was fully vested three years from the grant
date.(13)
    
    This option was granted on August 24, 2006, and was fully vested three years from the grant
date.(14)
    
    This option was granted on January 26, 2007, and was fully vested three years from the grant
date.(15)
    
    This option was granted on April 27, 2007, and vests in twelve equal quarterly installments
beginning three months from the grant date.(16)
    
    This option was granted on January 28, 2008, and vests in twelve equal quarterly installments
beginning three months from the grant date.(17)
    
    This option was granted on March 24, 2008, and vests as follows. For 100,000 shares, vesting
occurs in twelve equal quarterly installments beginning three months from the grant date. For
the remaining 100,000 shares, vesting occurs subject to the attainment of an average stock
price (defined as the average daily closing AMICAS common stock price on The NASDAQ Global
Market) of $3.75 to $4.00 per share for the calendar year 2008, and $2.25 to $3.00 for 2009.
The stock price target was met in part, and as a result 88,300 shares became vested. The
remaining 11,700 unvested option shares will vest six years from the date of grant. Upon a
change in control (as defined in the executives employment agreement) unvested options shall
fully vest. 19




---



##### Table of Contents



(18)
    
    This option was granted on December 30, 2008, and vests in twelve equal quarterly
installments beginning three months from the grant date. Upon a change in control (as defined
in the executives employment agreement) unvested options shall fully vest.(19)
    
    This option was granted on February 9, 2009, and vests 25% after one year and the remainder
in eight quarterly installments beginning fifteen months after the grant date. Mr. Stearns
resigned effective January 15, 2010, and this option was terminated.(20)
    
    This option was granted on May 15, 2006, and was fully vested three years from the grant
date.(21)
    
    This option was granted on January 26, 2007, and was fully vested three years from the grant
date.(22)
    
    This option was granted on April 27, 2007, and vests in twelve equal quarterly installments
beginning three months from the grant date.(23)
    
    This option was granted on January 28, 2008, and vests in twelve equal quarterly installments
beginning three months from the grant date.(24)
    
    This option was granted on December 30, 2008, and vests in twelve equal quarterly
installments beginning three months from the grant date. Upon a change in control, unvested
options shall fully vest.(25)
    
    This option was granted on March 9, 2009, and vests 25% after one year and the remainder in
eight quarterly installments beginning fifteen months after the grant date. Upon a change in
control, unvested options shall fully vest. Option Exercises And Stock Vested
  Pension Benefits
  Nonqualified Deferred Compensation
  Potential Payments Upon Termination Or Change-In-Control
    20




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##### Table of Contents



280GGross-Health
    
    
    
    
    
    
    
    
    
    
    Options
    
    
    UpName
    
    Event
    
    
    Salary
    
    
    Benefits
    
    
    Bonus(2)
    
    
    Total
    
    
    Vested(3)
    
    
    PaymentStephen N. Kahane
    
    Termination(1)
    
    $
    525,000
    
    
    $
    24,552
    
    
    
    
    
    
    $
    549,552
    
    
    $
    1,962,042
    
    
    
    0Change in Control
    
    $
    700,000
    
    
    $
    24,552
    
    
    $
    550,000
    
    
    $
    1,274,552
    
    
    $
    1,962,041Kevin C. Burns
    
    Termination(1)
    
    $
    240,000
    
    
    $
    16,368
    
    
    
    
    
    
    $
    256,368
    
    
    $
    637,700
    
    
    
    0Change in Control
    
    $
    360,000
    
    
    $
    24,552
    
    
    $
    260,000
    
    
    $
    644,552
    
    
    $
    637,700Frank E. Stearns, Jr.(4)
    
    Termination(1)
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    Change in Control
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Paul Merrild
    
    Termination(1)
    
    $
    85,000
    
    
    $
    3,925
    
    
    
    
    
    
    $
    88,925
    
    
    
    0
    
    
    
    Change in Control
    
    $
    85,000
    
    
    $
    3,925
    
    
    $
    110,000
    
    
    $
    198,925
    
    
    $
    378,053Craig Newfield
    
    Termination(1)
    
    $
    95,000
    
    
    $
    7,849
    
    
    
    
    
    
    $
    102,849
    
    
    
    0
    
    
    
    Change in Control
    
    $
    190,000
    
    
    $
    7,849
    
    
    $
    90,000
    
    
    $
    287,849
    
    
    $
    664,200
 
 (1)
    
    Upon Termination, bonuses are only paid to the extent earned through the date employment
is terminated.(2)
    
    Bonuses payable upon a change in control under the Companys 2009 Executive Compensation
Plan. 21




---



##### Table of Contents



(3)
    
    For Dr. Kahane and Mr. Burns, all options shall fully vest upon Termination or a change in
control (as defined in each executives employment agreement). All values stated in this
column were calculated based on the closing price of our common stock on December 31, 2009
($5.44 per share). Termination refers to (i) termination or non-renewal by the Company
without Cause, defined in the executives employment agreements to include the executives
fraudulent or illegal acts, willful refusal to perform his duties or breach of the employment
agreement; (ii) termination by the executive for Good Reason defined in the executives
employment agreements to include a material reduction in compensation, material reduction in
responsibilities, or the Companys breach of the employment agreement; or (iii) the
executives death or permanent disability. If an executive is terminated for Cause or
resigns his employment without Good Reason, he will not receive any payments.(4)
    
    Mr. Stearns resigned from the Company effective January 15, 2010, and he received and will
receive none of the payments or acceleration of stock options described. Director Compensation
  FeesEarned or
    
    
    Stock
    
    
    OptionPaid in
    
    
    Awards
    
    
    Awards
    
    
    TotalName
    
    Cash ($)
    
    
    ($)(1)
    
    
    ($)(2)
    
    
    ($)Philip M. Berman(3)
    
    
    7,500
    
    
    
    0
    
    
    
    0
    
    
    
    7,500Stephen J. DeNelsky(4)
    
    
    43,255
    
    
    
    34,500
    
    
    
    2,173
    
    
    
    79,928Joseph D. Hill(5)
    
    
    33,255
    
    
    
    30,000
    
    
    
    3,256
    
    
    
    66,511Stephen J. Lifshatz(6)
    
    
    43,255
    
    
    
    34,500
    
    
    
    3,467
    
    
    
    81,222David B. Shepherd(7)
    
    
    37,255
    
    
    
    30,000
    
    
    
    3,433
    
    
    
    70,688John J. Sviokla(8)
    
    
    37,255
    
    
    
    30,000
    
    
    
    3,489
    
    
    
    70,744
 
 (1)
    
    Restricted stock had been granted to the Companys non-employee directors, which vest on
the earlier of one year from the date of grant and the date the director completes a full term
as a director. The fair value of the restricted stock awards was based on the closing market
price of the Companys common stock on the date of the grant of the award and is being
amortized on a straight line basis over the vesting period. In 2009, each director received
one restricted stock award with a grant date fair value of $30,000, and Messrs. DeNelsky and
Lifshatz each received a second award with a grant date fair value of $4,500.(2)
    
    These amounts represent the aggregate grant date fair value of all option awards granted
during our fiscal year ended December 31, 2009, computed in accordance with FASB ASC Topic
718. A discussion of the assumptions used in determining grant date fair value may be found in
Note L to our Financial Statements, included in our Annual Report on Form 10-K for the year
ended December 31, 2009. As each director only received one stock option award in fiscal 2009,
the grant date fair value of each award is reflected in the table above.(3)
    
    Dr. Berman had no options and no shares of unvested restricted stock outstanding as of
December 31, 2009. Following Dr. Bermans death in February 2009, the Board accelerated the
vesting of all outstanding and unvested stock options and shares of restricted stock that had
been held by Dr. Berman.(4)
    
    Mr. DeNelsky had 55,000 options and 13,038 shares of unvested restricted stock outstanding as
of December 31, 2009.(5)
    
    Mr. Hill had 277,500 options outstanding as of December 31, 2009; 12,500 shares were granted
to Mr. Hill in respect of his service as a director, and 265,000 shares were granted to him in
respect of his employment as the Companys Senior Vice President and Chief Financial Officer
until his resignation in April 2008. Mr. Hill had 11,538 shares of unvested restricted stock
outstanding as of December 31, 2009.(6)
    
    Mr. Lifshatz has 15,000 options and 13,038 shares of unvested restricted stock outstanding as
of December 31, 2009. 22




---



##### Table of Contents



(7)
    
    Mr. Shepherd had 52,500 options and 11,538 shares of unvested restricted stock outstanding as
of December 31, 2009.(8)
    
    Dr. Sviokla has 17,500 options and 11,538 shares of unvested restricted stock outstanding as
of December 31, 2009.  Cash Payments
  2006 Stock Incentive Plan
   Directors Stock Option Plan
    Compensation Committee Interlocks and Insider Participation
  23




---



##### Table of Contents



COMPENSATION COMMITTEE REPORT
  By the Compensation Committee:
John J. Sviokla (Chair)
Stephen J. DeNelsky
Stephen J. Lifshatz  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   Shares
    
    PercentageBeneficially
    
    BeneficiallyName of Beneficial Owner
    
    Owned
    
    Owned5% OwnersDimensional Fund Advisors LP(1)
    
    
    3,371,933
    
    
    
    9.11
    %Centaurus Capital, LP(2)
    
    
    3,192,205
    
    
    
    8.62
    %Harvest Capital Strategies LLC(3)
    
    
    2,122,142
    
    
    
    5.73
    %J. Caird Investors (Bermuda) L.P.(4)
    
    
    2,033,900
    
    
    
    5.49
    %Directors and Named Executive OfficersStephen N. Kahane(5)
    
    
    2,457,180
    
    
    
    6.23
    %Kevin C. Burns(5)
    
    
    555,429
    
    
    
    1.48
    %Joseph D. Hill(5)
    
    
    295,717
    
    
    
    0.79
    %Paul B. Merrild(5)
    
    
    320,000
    
    
    
    0.86
    %Craig Newfield(5)
    
    
    195,000
    
    
    
    0.52
    %
 24




---



##### Table of Contents



Shares
    
    PercentageBeneficially
    
    BeneficiallyName of Beneficial Owner
    
    Owned
    
    OwnedFrank E. Stearns, Jr.(6)
    
    
    
    
    
    
    David B. Shepherd(5)
    
    
    107,190
    
    
    
    *Stephen J. DeNelsky(5)
    
    
    95,434
    
    
    
    *John J. Sviokla(5)
    
    
    44,325
    
    
    
    *Stephen J. Lifshatz(5)
    
    
    36,769
    
    
    
    *All Current Directors and Executive Officers as a Group(9 persons)(5)
    
    
    4,110,252
    
    
    
    10.05
    %
 
 *
    
    Represents less than 1% of the outstanding shares of Common Stock.(1)
    
    Number of shares beneficially owned based solely upon a Schedule 13G filed by Dimensional
Fund Advisors, LP on February 8, 2010. The address of Dimensional Fund Advisors, LP is
Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas, 78746.(2)
    
    Number of shares beneficially owned based solely upon a Schedule 13D filed by Centaurus
Capital LP and Centaurus Capital Limited (collectively, Centaurus) on March 11, 2010. The
address of Centaurus is 33 Cavendish Square, 16th Floor, London, W1G OPW, United Kingdom.(3)
    
    Number of shares beneficially owned based solely upon a Schedule 13D filed by Harvest Capital
Strategies LLC. on February 16, 2010. The address of Harvest Capital Strategies LLC is 600
Montgomery Street, Suite 2000, San Francisco, CA 94111.(4)
    
    Number of shares beneficially owned based solely upon a Schedule 13D filed by J. Caird
Investors (Bermuda) L.P. and Wellington Global Holdings, Ltd. on February 12, 2010. The
address of J. Caird Investors (Bermuda) L.P. and Wellington Global Holdings, Ltd. is c/o
Wellington Management Company, LLP, 75 State Street, Boston, MA 02109.(5)
    
    Includes shares that are issuable on exercise of Presently Exercisable Options as follows: PresentlyExercisableHolder
    
    Options *Stephen N. Kahane
    
    
    2,401,425Kevin C. Burns
    
    
    552,500Joseph D. Hill
    
    
    277,500Paul B. Merrild
    
    
    320,000Craig Newfield
    
    
    180,000David B. Shepherd
    
    
    52,500Stephen J. DeNelsky
    
    
    52,500John J. Sviokla
    
    
    17,500Stephen J. Lifshatz
    
    
    15,000
 
 *
    
    Includes options that will accelerate and become vested in connection with the closing of the
Offer or the consummation of the transactions contemplated by the Merger Agreement.(6)
    
    Mr. Stearns resigned from the Company effective as of January 15, 2010. 
 Item 13. Certain Relationships and Related Transactions, and Director Independence
   25




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##### Table of Contents



Director Independence
   
 Item 14. Principal Accounting Fees and Services
  Fee Category
    
    2009
    
    
    2008Audit Fees(1)
    
    $
    741,000
    
    
    $
    565,000Audit-Related Fees(2)
    
    $
    31,733
    
    
    $
    47,130All Other Fees
    
    
    
    
    
    
    Total Fees
    
    $
    772,733
    
    
    $
    612,130
 
 (1)
    
    Audit fees consist of fees for the audits of our financial statements and internal
controls, the review of the interim financial statements included in our quarterly reports on
Form 10-Q, and other professional services provided in connection with statutory and
regulatory filings or engagements that generally only the independent auditor can reasonably
be expected to provide.(2)
    
    Audit-related fees consist of fees for assurance and related services that are reasonably
related to the performance of the audit and the review of our financial statements and which
are not reported under Audit Fees. These services relate to due diligence related to mergers
and acquisitions, employee benefit audits, and consultations concerning financial accounting
and reporting standards.  Pre-Approval Policy and Procedures
  www.amicas.com/investorrelations
 26




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##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 Item 15(a)(1) and (2) Financial Statements.
  Financial Statements and Supplementary Data
 PageFinancial Statements:Report of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    F-3Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007
    
    
    F-4Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) for the
years ended December 31, 2009, 2008 and 2007
    
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008, and 2007
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
 Item 15(a)(3) Exhibits .
  ExhibitNo.
    
    
    
    Description
 27




---



##### Table of Contents



31.1
    
    
    
    Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    
    Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    
    Certifications of Chief Executive Officer and Chief
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (incorporated by reference
to Exhibit 32.1 to the Registrants Annual Report on
Form 10-K, filed with the Commission on March 11,
2010).
 28




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##### Table of Contents



SIGNATURES
 th
 AMICAS, Inc.By:

/s/
Steven M. OreskovichSteven M. OreskovichChief Financial Officer 29