<PAGE> 1
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 sec.240.14a-11(c) or sec.240.14a-12
MED-EMERG INTERNATIONAL, INC.
- ----------------------------------------------------------------------------
(Name of Registrant as specified in its charter)
- ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement), if other than
Registrant
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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: (A) -----------------------------
(4) Proposed maximum aggregate value of transaction: --------------------
(5) Total fee paid: -----------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting 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: ----------------------------------------------------------
<PAGE> 2
MED-EMERG INTERNATIONAL, INC.
2550 ARGENTIA ROAD, SUITE 250
MISSISSAUGA, ONTARIO, CANADA L5N 5R1
------------------------
NOTICE OF ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 21, 1998
TO THE STOCKHOLDERS OF MED-EMERG INTERNATIONAL INC.:
NOTICE IS HEREBY GIVEN, that the Annual and Special Meeting (the "Meeting")
of Stockholders of Med-Emerg International, Inc. (the "Company") will be held at
12:00 on August 21, 1998 at Hotel Inter-Continental, Whitney Room, 111 East 48th
Street, New York, New York, 10017 for the following purposes:
1. To receive the consolidated financial statements and the auditors' report
thereon for the fiscal year ended December 31, 1997;
2. To elect the Board of Directors of the Company for the ensuing year;
3. To ratify the appointment of Schwartz, Levitsky, Feldman, Chartered
Accountants, as the Company's independent auditors for the ensuing year;
4. To authorize, by special resolution, an amendment to the Company's Articles
of Incorporation to include a class of special shares, issuable in series,
as part of the Company's authorized capital.
5. To authorize, by special resolution, a reduction in the stated capital of
the Company's Preferred Shares of Cdn$5,525,414.
6. To transact such other business as may properly come before the Meeting and
any continuations and adjournments thereof.
Stockholders of record at the close of business on July 7, 1998 are
entitled to notice of and to vote at the meeting. In order to ensure a quorum,
it is important that Stockholders representing at least 5% of the total number
of shares issued and outstanding and entitled to vote, be present in person or
represented by their proxies. Therefore, whether you expect to attend the
meeting in person or not, please sign, fill out, date and return the enclosed
proxy in the self-addressed, postage-paid envelope also enclosed. If you attend
the meeting and prefer to vote in person, you can revoke your proxy.
In addition, please note that abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, for
purposes of determining the presence or absence of a quorum for the transaction
of business. Neither abstentions nor broker non-votes are counted as voted
either for or against a proposal.
By Order of the Board of Directors,
William E. Thomson
Chairman of the Board
July 28, 1998
<PAGE> 3
MED-EMERG INTERNATIONAL, INC.
2550 ARGENTIA ROAD, SUITE 250
MISSISSAUGA, ONTARIO, CANADA L5N 5R1
------------------------------------
PROXY STATEMENT
------------------------------------
ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 21, 1998
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Med-Emerg International Inc. (the "Company"), for
use at the Annual and Special Meeting of Stockholders of the Company (the
"Meeting") to be held on August 21, 1998 at Hotel Inter-Continental, Whitney
Room, 111 East 48(th) Street, New York, New York, 10017, and at any continuation
and adjournment thereof. Anyone giving a proxy may revoke it at any time before
it is exercised by giving the Chairman of the Board of Directors of the Company
written notice of the revocation, by submitting a proxy bearing a later date or
by attending the meeting and voting. This statement, the accompanying Notice of
Meeting and form of proxy have been first sent to the Stockholders on or about
July 28, 1998.
In addition, please note that abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, for
purposes of determining the presence or absence of a quorum for the transaction
of business. Neither abstentions nor broker non-votes are counted as voted
either for or against a proposal.
All properly executed, unrevoked proxies on the enclosed form, which are
received in time will be voted in accordance with the stockholder's directions,
and unless contrary directions are given, will be voted for the election of
directors of the nominees described below.
OWNERSHIP OF SECURITIES
Only stockholders of record at the close of business on July 7, 1998, the
date fixed by the Board of Directors in accordance with the Company's by-laws,
are entitled to vote at the meeting. As of July 7, 1998, there were issued and
outstanding 3,140,044 shares of the Company's common stock. There were also
issued and outstanding 500,000 shares of the Company's preferred stock which
have aggregate voting rights equal to 500,000 shares of common stock. The common
stock and the preferred stock are collectively referred to as the Voting
Securities.
Each outstanding share of common stock is entitled to one vote on all
matters properly coming before the meeting. At least 5% of the outstanding
Voting Securities is necessary to constitute a quorum for the meeting.
The following table sets forth certain information as of July 7, 1998 with
respect to each beneficial owner of five percent (5%) or more of the outstanding
shares of common stock of the Company, each executive officer and director of
the Company and all executive officers and directors as a group. The table does
not include options that have not yet vested or are not exercisable within 60
days of the date hereof. Unless otherwise indicated, the address of each such
person or entity is in care of the company.
<PAGE> 4
<TABLE>
<CAPTION>
SHARES OF PERCENTAGE
NAME (1) COMMON STOCK OF CLASS
- -------- ------------ ----------
<S> <C> <C>
1245841 Ontario Inc. (2).................................... 1,042,544 26.8%
Ramesh Zacharias M.D., FRCSC (3)............................ 1,107,544 28.0%
Victoria Zacharias (4)...................................... 1,107,544 28.0%
Carl W. Pahapill CA (5)..................................... 165,000 5.1%
Robert Rubin (6)............................................ 750,000 19.5%
Hampton House International (7)............................. 410,000 13.1%
Peter Deeb (8).............................................. 425,000 13.5%
William E. Thomson (9)...................................... 15,000 *
Kathryn Gamble, CA (9)...................................... 15,000 *
Ambrose Group............................................... 170,000 5.4%
All Officers and Directors as a group (3)(4)(5)(6)(8)(9).... 2,477,544 52.0%
</TABLE>
- ---------------
* Less than 1%
(1) Unless otherwise indicated, the address is c/o Med-Emerg International Inc.,
2550 Argentia Road, Suite 205, Mississauga, Ontario L5N 5Rl, Canada.
(2) 1245841 Ontario Inc. is a Canadian company in which the beneficial ownership
is held by Ramesh and Victoria Zacharias.
(3) Includes (i) 292,544 shares owned by 1245841 Ontario Inc., which is owned by
Dr. and Mrs. Zacharias (ii) 65,000 shares issuable upon exercise of
currently exercisable options granted under the Company's 1997 Stock Option
Plan, and (iii) 750,000 shares of Common stock issuable upon conversion of
up to 500,000 shares of Convertible Preferred Stock, such preferred stock
currently held by 1245841 Ontario Inc., which is owned by Dr. and Mrs.
Zacharias. For a period of ten years from issuance, each share of preferred
stock is convertible into 1.5 shares of Common Stock and thereafter into
such number of shares of Common Stock as is equal to U.S.$4,500,000 divided
by the then current market price of the Common Stock on the date of
conversion. For purposes of the above chart, the number of shares of Common
Stock issuable upon conversion of the Preferred Stock was calculated by
assuming a one for one and one-half conversion. Dr. Zacharias disclaims
beneficial ownership of the shares owned by his wife.
(4) Includes (i) 292,544 shares owned by 1245841 Ontario Inc., which is owned by
Dr. and Mrs. Zacharias, (ii) 65,000 shares issuable upon exercise of
currently exercisable options granted under the Company's 1997 Stock Option
Plan, all of which are owned by Dr. Zacharias, and (iii) 750,000 shares of
Common stock issuable upon conversion of up to 500,000 shares of Convertible
Redeemable Preferred Stock such preferred stock currently held by 1245841
Ontario Inc., which is owned by Dr. and Mrs. Zacharias. For a period of ten
years from issuance, each share of preferred stock is convertible into 1.5
shares of Common Stock issuable upon conversion of the Preferred Stock was
calculated by assuming a one for one and one-half conversion. Mrs. Zacharias
disclaims beneficial ownership of the shares owned by her husband.
(5) Includes 65,000 shares issuable upon exercise of currently exercisable
options granted under the Company's 1997 Stock Option Plan.
(6) Includes 700,000 shares of Common Stock currently issuable upon exercise of
options and 50,000 shares of Common Stock for acting as director. See
"Management."
(7) These shares may be deemed to be owned by Peter Deeb, a director of the
Company. Mr. Deeb owns 75% of Hampton House and is its Chairman and Chief
Executive Officer.
(8) Includes (i) 410,000 shares of Common Stock held in the name of Hampton
House, and (ii) 15,000 shares of Common Stock issuable upon exercise of
currently exercisable options granted under the Company's 1997 Stock Option
Plan.
(9) Represents shares of Common Stock issuable upon exercise of currently
exercisable options issued under the Company's Stock Option Plan.
This proxy statement contains certain forward-looking statements which
involve risks and uncertainties. The Company's actual results could differ
materially from those anticipated in the forward-looking statements as a result
of certain factors, including those set forth below and elsewhere in this Proxy
Statement.
2
<PAGE> 5
PROPOSAL 1
APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS AND AUDITORS' REPORT
The Board of Directors has unanimously approved and unanimously recommends
that the stockholders approve the acceptance of the Company's consolidated
financial statements and auditors' report for the fiscal year ended December 31,
1997.
STOCKHOLDER VOTE REQUIRED
Approval of the Company's consolidated financial statements and auditors'
report will require the affirmative vote of the majority of the Voting
Securities present in person or represented by proxy at the Annual and Special
Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE COMPANY'S
CONSOLIDATED FINANCIAL STATEMENTS AND AUDITORS' REPORT.
PROPOSAL 2
ELECTION OF DIRECTORS
Unless marked otherwise, proxies received will be voted FOR the election of
each of the nominees below. If any nominee is unable or unwilling to serve as a
nominee for the office of director at the time of the Annual Meeting, the
proxies may be voted for either (i) a substitute nominee who shall be designated
by the proxy holders or by the Chairman of the Board to fill such vacancy, or
(ii) for the balance of the nominees, leaving a vacancy. Alternatively, the size
of the Board may be reduced accordingly. The Board of Directors has no reason to
believe that any of such nominees will be unwilling or unable to serve if
elected as director. Such persons have been nominated to serve until the next
annual meeting of stockholders or until their successors, if any, are elected or
appointed. Certain Directors of the Company may receive compensation for acting
in such capacities and may be reimbursed for expenses incurred in connection
with their services as such.
STOCKHOLDER VOTE REQUIRED
The election of the directors will require the affirmative vote of the
majority of the Voting Securities present in person or represented by proxy at
the Annual and Special Meeting of Stockholders and entitled to vote on the
election of directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Ramesh Zacharias, M.D., FRCSC........................ 46 Chief Executive Officer, Director
Chief Operating Officer, President
Carl W. Pahapill, CA................................. 39 and Director
William E. Thomson................................... 56 Chairman of the Board
Peter Deeb........................................... 31 Director
Robert M. Rubin...................................... 57 Director
</TABLE>
Ramesh Zacharias, M.D., FRCSC. Dr. Ramesh Zacharias is the founder and
Chief Executive Officer of Med-Emerg Inc. He has acted as Chief Executive
Officer and a director of the Company since its inception. He has practiced
medicine in Canada since 1981 and has extensive experience in the delivery of
emergency medical care. He functions as the Medical Director and on-call
physician for the Terminal I and 2 Medical Clinics at Toronto's Lester B.
Pearson International Airport. He also provided consulting services regarding
the delivery of emergency care in the Caribbean, Saipan and Malaysia and
provided management consulting services regarding the operation of medical
clinics in Canada, the United States and Russia. Dr. Zacharias is the husband of
Victoria Zacharias, a director of the Company.
Carl W. Pahapill, CA. Mr. Pahapill joined the Company as Chief Operating
Officer in February 1996 and became a director of the Company in October 1996.
From September 1995 to January 1996, Mr. Pahapill
3
<PAGE> 6
acted as a consultant to the Company. From 1994 to 1995, Mr. Pahapill was the
Chief Operating Officer of Signature Brands Limited, a publicly traded food
processing Company (TSE). From 1984 to 1993, Mr. Pahapill was a Partner at BDO
Dunwoody Chartered Accountants. Prior to that, Mr. Pahapill was a supervisor at
Ernst & Young Chartered Accountants.
William E. Thomson. Mr. Thomson has been a director of the Company since
January 1996. Mr. Thomson has been an advisor of Med-Emerg Inc. since January
1991. From 1978 to the present, Mr. Thomson has served as the President of
William E. Thomson Associates Inc., a firm specializing in financial
inter-mediation and restructuring. From 1992 to 1997, he served as Chairman of
Cyphertech Systems, Inc., a company he founded. From 1993 to 1995, he served as
Chairman of Votek Systems, Inc., a software development company. In addition,
from 1991 to 1994, he served as Chairman of Accomodex Franchise Management Inc.
Mr. Thomson currently serves as a director of numerous companies, and as
Chairman of Asia Media Group, Inc., a public company.
Peter Deeb. Mr. Deeb has been a director of the Company since January
1996. Mr. Deeb founded the North American engineering and construction firm,
Deeb-Wallans Corporation where he served as Chairman and Chief Executive Officer
from 1987 to 1993. Mr. Deeb is currently Vice Chairman of the financial services
firm, Deeb & Company Limited, as well as Vice Chairman and Managing Director of
its Toronto, Ontario based investment banking subsidiary, Hampton Securities
Limited.
In addition, Mr. Deeb holds the position of Chairman and CEO of the New
York based merchant banking firm, Hampton House International Corp., and as
Chief Executive of its Canadian subsidiary, Carlton International Brands
Limited. Mr. Deeb also serves on the board of Lynx Investment Advisory, Inc.
(Washington DC) and Capital Investment Circle Plc. (Dublin, Ireland).
Robert M. Rubin. Mr. Rubin has served as a director of the Company since
October 1996. Since June 1992, Mr. Rubin has served as a director of Diplomat
Corporation, a publicly traded company involved in the sale of infant wear and
babycare products through direct mail order catalogues.
Since November 20, 1992, Mr. Rubin has served as the Chairman of the Board
of Directors of Western Power & Equipment Corp. ("WPEC"), a construction
equipment distributor. Between November 20, 1992 and March 7, 1993, Mr. Rubin
served as Chief Executive Officer of WPEC. Between October, 1990 and January 1,
1994, Mr. Rubin served as the Chairman of the Board and Chief Executive Officer
of American United Global Inc. ("AUGI"), a technology and communication company
and majority owner of WPEC and since January 1, 1994, solely as Chairman of the
Board of AUGI. Mr. Rubin was the founder, President, Chief Executive Officer and
a Director of Superior Care, Inc. ("SCI") from its inception in 1976 until May
1986 and continued as a Director of SCI (now known as Olsten Corporation
("Olsten")) until the latter part of 1987. Olsten, a New York Stock Exchange
listed company, is engaged in providing home care and institutional staffing
services and health care management services. Mr. Rubin is also a Director of
Help at Home, Inc. and the Chairman and a principal stockholder of ERD Waste
Corp., a public company specializing in the management and disposal of municipal
solid waste, industrial and commercial nonhazardous solid waste and hazardous
waste. In September 1997 ERD Waste Corp. filed for protection under title II for
reorganization under Chapter II of the Bankruptcy Code.
Mr. Rubin's involvement with all of the aforementioned companies may result
in conflicting demands for his time. Management believes that the Company has
taken adequate measures to assure that Mr. Rubin will devote the amount of time
to the Company that it deems necessary. However, there can be no assurance that
all such conflicting demands will be resolved in favor of the Company.
The Board of Directors recommends a vote for election to the Board of
Directors of the Company of each of the Nominees.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation, as well as certain
other compensation paid or accrued to the Company's Chief Executive Officer and
Chief Operating Officer for the fiscal years ended
4
<PAGE> 7
December 31, 1995, 1996 and 1997. No other officer has a total annual salary and
bonus of more than U.S. $100,000 during the reporting periods. The dollar
amounts stated below are in Canadian dollars.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------- OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------- ---- -------- ------- ------------
<S> <C> <C> <C> <C>
Ramesh Zacharias.................................... 1997 $214,000 $ 0 $13,064
Chief Executive Officer 1996 $169,462 $ 0 $19,582(1)
1995 $ 73,000 $ 0 $83,004(1)
Carl Pahapill....................................... 1997 $185,000 $ 0 $ 0
Chief Operating Officer, President 1996 $131,845 $15,000 $ 9,000(2)
1995 $ 0 $ 0 $31,000(2)
All Officers and Directors as a Group (8 people).... 1997 $519,013 $ 0 $13,064
1996 $454,686 $17,500 $28,582
</TABLE>
- ---------------
(1) In addition to being the Chief Executive Officer of the Company, Dr.
Zacharias on occasion covers physician assignments that the Company is
otherwise unable to fill. For each assignment that Dr. Zacharias covers, he
is paid as an independent contracting physician. This amount represents fees
paid to Dr. Zacharias for services rendered as a physician.
(2) Represents fees paid to Mr. Pahapill for acting as a consultant to the
Company from September 1995 through December 1995.
EMPLOYMENT AGREEMENTS
All of the Company's executive officers intend to devote their full
business time to the affairs of the Company. The Company entered into employment
agreements with both Dr. Zacharias and Mr. Pahapill. The agreements became
effective on February 12, 1997. Dr. Zacharias agreement provides that he will
devote all of his business time to the Company in consideration of an annual
salary of Cdn$204,000 for the first year increasing to Cdn$225,000 per year
during the final year. The agreement is for a term of three years, but may be
terminated by the company for cause, or without cause with penalty. Mr.
Pahapill's agreement is for a term of two years, but may be terminated by the
Company for cause or without cause with penalty. The agreement provides that Mr.
Pahapill devote all of this business time to the Company in consideration of an
annual salary of Cdn$175,000.
STOCK OPTION PLAN
In April 1997, the Board of Directors and shareholders adopted and approved
the Company's 1997 Stock Option Plan (the "Plan" or the "1997 Stock Option
Plan"). The Plan is administered by the Board of Directors or by the
compensation committee (the "Plan Administrator"). Pursuant to the Plan, options
to acquire an aggregate of 638,000 shares of Common Stock may be granted,
229,300 of which have been granted. The Plan provides for grants to employees
and directors of the Company.
OPTIONS TO NAMED EXECUTIVE OFFICERS
The following table sets forth certain information with respect to all
outstanding options granted to the Company's Named Executive Officers during the
Company's fiscal year ended December 31, 1997.
OPTION GRANTS
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES IN PRICE EXPIRATION
NAME OF HOLDER OPTIONS GRANTED FISCAL YEAR ($/SH) DATE
- -------------- --------------- ------------ -------- -----------
<S> <C> <C> <C> <C>
Ramesh Zacharias.......................... 65,000 28.3% US$2.50 April, 2002
Carl Pahapill............................. 65,000 28.3% US$2.50 April, 2002
</TABLE>
5
<PAGE> 8
CERTAIN TRANSACTIONS
Between 1994 and 1996, the Company loaned an aggregate of $137,719 to Dr.
Zacharias and Victoria Zacharias and two of their affiliated companies. Of such
loans. $48,224 was used to acquire a residence, $37,255 arose in connection with
the transfer of shares of an unrelated company's stock from two of the Company's
subsidiaries to two unrelated companies owned by the Zacharias', and $39,247 was
loaned to satisfy tax liabilities of the Zacharias'. These loans are
non-interest bearing with no specific repayment terms. The Company has
repurchased, immediately prior to the completion of the Initial Public Offering,
37,456 shares of its common stock from Ramesh and Victoria Zacharias at a
purchase price of US$2.75 per share. The US$2.75 price was based on what the
Company believed to be an appropriate discount to the IPO price. The aggregate
consideration payable by the Company has been used to repay all outstanding
amounts owed by Dr. Zacharias and Victoria Zacharias and their affiliated
companies.
In June 1996, the Company loaned $60,000 to Carl Pahapill, the Company's
President, to purchase 100,000 shares of Common Stock in the Company. The loan
is non-interest bearing, unsecured and repayable over a five year period with
principal payments commencing in June 1999.
On November 1, 1996, the Company effected a recapitalization whereby Dr.
Zacharias, the Company's Chief Executive Officer and Director, and Victoria
Zacharias, a Director of the Company, converted an aggregate of 2,203,333 shares
of Common Stock into an aggregate of 500,000 shares of preferred stock. Also as
part of the recapitalization, the Company issued Hampton House an aggregate of
610,000 shares of Common Stock, valued at $1,695.800, for past services
rendered, including the identification of potential acquisition candidates, such
as the St. George's Medical Clinic, and assisting the Company in developing a
strategic business plan.
On November 1, 1996, the Company granted Robert Rubin, a director, an
option to purchase 700,000 shares of Common Stock at US$.75 per share and
approved the issuance of 50,000 shares of Common Stock, all of which shares were
issued in 1997 in consideration of services rendered to the Company as director.
Mr. Rubin extended the Company a US$800,000 line of credit which bears interest
at 2% above the prime rate. As of December 31, 1997, there was a US$200,000
outstanding balance under such line of credit. In January 1998, an additional
US$50,000 was drawn under the line of credit. The outstanding balance under the
line of credit was repaid out of the proceeds of the Company's Initial Public
Offering which was completed in February, 1998.
In connection with a bridge financing in January 1997, the Company issued
8% promissory notes in the principal amount of US$500,000 and an aggregate of
125,000 shares of Common Stock to four investors for gross proceeds of
US$500,000. Robert Rubin, a director of the Company, purchased a promissory note
in the principal amount of US$150,000 and 37,500 shares of Common Stock. To
comply with the National Association of Securities Dealers, Inc. ("NASD"), Mr.
Rubin and another investor agreed to surrender to the Company for cancellation
without consideration an aggregate of 62,500 shares of Common Stock obtained in
the bridge financing. The Company has since repaid in full the promissory notes
issued to the two investors in the aggregate principal amount of $250,000.
In April 1997, the Company granted options to purchase an aggregate of
229,300 shares of Common Stock pursuant to the 1997 Stock Option Plan to certain
of its directors, executive officers and employees. These options are
exercisable at US$2.50 per share.
SECTION 16(A) REPORTING
Under the securities laws of the United States, the Company's directors,
its executive and certain other officers, and any persons holding ten percent or
more of the Company's common stock must report on their ownership of the
Company's common stock and any changes in that ownership to the Securities and
Exchange Commission and to the National Association of Securities Dealers,
Inc.'s Automated Quotation System. Specific due dates for these reports have
been established. During the year ended December 31, 1997, the Company believes
all reports for all transactions were filed on a timely basis.
6
<PAGE> 9
PROPOSAL 3
RATIFICATION OF SCHWARTZ, LEVITSKY, FELDMAN, CHARTERED ACCOUNTANTS, AS THE
COMPANY'S INDEPENDENT AUDITORS
The Board of Directors has unanimously approved and unanimously recommends
that the stockholders approve the appointment of Schwartz, Levitsky, Feldman,
Chartered Accountants as the Company's independent auditors for the ensuing
year.
STOCKHOLDER VOTE REQUIRED
Ratification of the appointment of Schwartz, Levitsky, Feldman, Chartered
Accountants as independent auditors will require the affirmative vote of the
majority of the Voting Securities present in person or represented by proxy at
the Annual and Special Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF SCHWARTZ, LEVITSKY, FELDMAN, CHARTERED ACCOUNTANTS AS THE COMPANY'S
INDEPENDENT AUDITORS.
PROPOSAL 4
AMENDMENT TO ARTICLES OF
INCORPORATION TO CREATE A
CLASS OF SPECIAL SHARES
The Board of Directors has unanimously approved and unanimously recommends
that the stockholders authorize an amendment to the Company's Articles of
Incorporation to create a new class of an unlimited number of special shares of
stock, issuable in series, which special shares shall, as a class, have and be
subject to the following rights, privileges, restrictions and conditions:
1. DIRECTORS' RIGHT TO ISSUE IN ONE OR MORE SERIES -- Special shares may
at any time or from time to time be issued in one or more series. Prior
to the issue of the shares of any series, the directors may, subject to
the limitation set out in the articles, fix the number of shares in, and
shall determine the designation, rights, privileges, restrictions and
conditions attaching to, the shares of such series which may include,
without limitation:
(a) the rate, amount or method of calculation of dividends and whether
they are cumulative, partly cumulative or non-cumulative;
(b) the dates, manner and currency of payments of dividends and the
dates from which they accrue or become payable;
(c) if redeemable, retractable or purchasable, the redemption,
retraction or purchase prices and terms and conditions of
redemption, retraction or purchase, with or without provision for
purchase or similar funds;
(d) the voting rights, if any;
(e) any conversion, exchange or reclassification rights; and
(f) any other terms not inconsistent with these provisions;
the whole subject to the receipt by the Director appointed under the
Business Corporations Act (Ontario) of articles of amendment in
prescribed form designating such series of special shares and the
issuance by him of a certificate of amendment with respect thereto.
2. BANKING OF SPECIAL SHARES ON DIVIDENDS -- The special shares of each
series shall, with respect to the payment of dividends, rank on a parity
with the special shares of every other series and shall be subject to
the prior rights of the preferred shares and be entitled to a preference
over the common shares and the shares of any other class ranking junior
to the special shares. If any amount of
7
<PAGE> 10
cumulative dividends, whether or not declared, or declared
non-cumulative dividends in respect of shares of a series of special
shares is not paid in full, the shares of such series of special shares
shall participate rateably with the shares of all other series of
special shares in respect of all accumulated cumulative dividends
whether or not declared, and all declared non-cumulative dividends.
3. BANKING OF SPECIAL SHARES ON RETURN OF CAPITAL -- The special shares
of each series shall, with respect to the distribution of assets in the
event of the liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, or any other return of capital or
distribution of the assets of the Corporation among its shareholders for
the purpose of winding up its affairs, rank on a parity with the special
shares of every other series and shall be subject to the prior rights of
the preferred shares and be entitled to a preference over the common
shares and the shares of any other class ranking junior to the special
shares. If any amount payable on return of capital in respect of shares
of a series of special shares is not paid in full, the shares of such
series of special shares shall participate rateably with the shares of
all other series of special shares in respect of all amounts payable on
return of capital. The special shares of any series shall also be
entitled to such other preferences, not inconsistent with these
provisions and the provisions of the Act, over the common shares and the
shares of any other class ranking junior to the special shares as may be
fixed in accordance with Section 1.
4. APPROVAL OF HOLDINGS OF SPECIAL SHARES -- The approval of the holders
of the special shares as to any matters referred to in these provisions
may be given:
(a) in writing signed by all the holders of the special shares; or
(b) by resolution passed by a majority of not less than two-thirds of
the votes cast by holders of special shares in respect of such
resolution either at a special shares in respect of such resolution
either at a special meeting of the holders of the special shares or
as a separate vote at a special meeting of the shares of the
Corporation, in either case called to consider such resolution.
At any special meeting of, or upon any separate vote at a special
meeting of the shareholders of the Corporation by the holders of the
special shares, each holder shall be entitled to one vote for each
special share held by such holder. The provisions of the by-laws of the
Corporation governing the giving to shareholders of notice of, the
quorum required to legally constitute voting by proxy at, the conduct
of, and the procedure at, special meetings of shareholders shall apply
mutatis mutandis, to the like matters with respect to any special
meeting of the holders of the special shares.
5. RESTRICTIONS ON ISSUE OF SPECIAL SHARES -- No special shares may be
issued if the Corporation is in arrears in the payment of cumulative
dividends, whether or not declared, or declared non-cumulative dividends
on, or is in a breach of any of the provisions attaching to, any
outstanding series of special shares without the approval of the holders
of the special shares then outstanding given in accordance with section
4.
STOCKHOLDER VOTE REQUIRED
Ratification of this Proposal 4 will require the affirmative vote of
two-thirds of the holders of common stock present in person or represented by
proxy at the Annual and Special Meeting of Stockholders voting separately as a
class, and the affirmative vote of two-thirds of the holders of the preferred
stock present and in person or represented by proxy at the Annual and Special
Meeting of Stockholders voting separately as a class.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AUTHORIZATION OF THE AMENDMENT
TO THE COMPANY'S ARTICLES OF INCORPORATION TO CREATE A NEW CLASS OF SPECIAL
SHARES.
8
<PAGE> 11
PROPOSAL 5
REDUCTION IN STATED CAPITAL
The Board of Directors has unanimously approved and unanimously recommends
that the Company reduce the stated capital of the preferred shares by
Cdn$5,525,414. In November 1996, Ramesh and Victoria Zacharias, the Company's
Chief Executive Officer and a Director, respectively, exchanged 2,203,333 shares
of common stock for 500,000 shares of preferred stock. The book value of the
common stock surrendered was Cdn.$594,586, while the preferred stock was valued
at U.S.$4,500,000 (Cdn$6,120,000), resulting in a charge to retained earnings of
Cdn$5,525,414. The Board of Directors proposes to reduce the value of the
preferred stock as stated on the Company's balance sheet by Cdn$5,525,414 and
reduce the Company's deficit by the same amount.
STOCKHOLDER VOTE REQUIRED
Approval of this Proposal 5 will require the affirmative vote of two-thirds
of the holders of the common stock present in person or represented by proxy at
the Annual and Special Meeting of Stockholders voting separately as a class, and
the affirmative vote of two-thirds of the holders of the preferred shares
present in person or represented by proxy at the Annual and Special Meeting of
Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AUTHORIZATION OF A REDUCTION IN
THE STATED CAPITAL OF THE COMPANY'S PREFERRED SHARES BY CDN$5,525,414.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
referred to in the Notice of Meeting which will be presented for consideration
at the meeting. However, it is possible that certain proposals may be raised at
the meeting by one or more stockholders. In such case, or if any other matter
should properly come before the meeting, it is the intention of the person named
in the accompanying proxy to vote such proxy in accordance with his or her best
judgement.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made by mail, personal interview, telephone, and telegram by directors,
officers and employees of the Company. The Company will reimburse banks,
brokerage firms, other custodians, nominees and fiduciaries for reasonable
expenses incurred in sending proxy material to beneficial owners of the
Company's capital stock.
STOCKHOLDER PROPOSALS
In order to be included in the materials for the Company's next Annual
Meeting of Stockholders, stockholder proposals must be received by the Company
on or before February 1, 1999.
ANNUAL AND QUARTERLY REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION
The consolidated financial statements and auditors' report for the year
ended December 31, 1997 and management's discussion and analysis of financial
condition and results of operations are included in the Company's annual report,
which is attached hereto.
By Order of the Board of Directors,
William E. Thomson
Chairman of the Board
July 28, 1998
9
<PAGE> 12
GENERAL PROXY -- ANNUAL AND SPECIAL MEETING OF STOCKHOLDERS OF
MED-EMERG INTERNATIONAL, INC.
The undersigned hereby appoints Carl Pahapill, with full power of substitution,
proxy to vote all of the shares of Common Stock of the undersigned and with all
of the powers the undersigned would possess if personally present, at the Annual
and Special Meeting of Stockholders of Med-Emerg International, Inc., to be held
at the Hotel Inter-Continental, Whitney Room, 111 East 48th Street, New York,
New York 10017 on August 21, 1998 at 9:30 a.m. and at all adjournments thereof,
upon the matters specified below, all as more fully described in the Proxy
Statement dated July 28, 1998 and with the discretionary powers upon all other
matters which come before the meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF MED-EMERG INTERNATIONAL, INC.'S BOARD OF
DIRECTORS.
1. To receive the Company's consolidated financial statements and the
auditors' report thereon for the fiscal year ended December 31, 1997:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To elect the Directors to hold office for the ensuing year.
[ ] FOR ALL NOMINEES NAMED BELOW
[ ] WITHHELD FOR ALL NOMINEES NAMED BELOW
Ramesh Zacharias, M.D., Carl W. Pahapill, William E. Thompson, Peter
Deeb, Robert M. Rubin
INSTRUCTION: To withhold authority to vote for any individual, write
that nominee's name in the space provided below:
- ---------------------------------------------------------------------------
3. To ratify the appointment of Schwartz, Levitsky, Feldmen, Chartered
Accountants, as the Company's independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To authorize an amendment to the Company's Articles of Incorporation
to include a class of special shares, issuable in series, as part of
the Company's authorized capital.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To authorize a reduction in the stated capital of the Company's
preferred shares of Cdn$5,525,414.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, upon such other matter or matters that may
properly come before the meeting, or any adjournments thereof.
- --------------------------------------------------------------------------
(Continued and to be signed on the other side)
<PAGE> 13
(Continued from other side)
Every properly signed proxy will be voted in accordance with the specifications
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2, 3, 4 and 5.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Meeting and Proxy Statement and hereby revokes any proxy or proxies
heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope provided.
Date: , 1998
------------------------------
(Print name of Stockholder)
------------------------------
(Print name of Stockholder)
------------------------------
Signature
------------------------------
Signature
Number of Shares _____________
Note: Please sign exactly as name
appears in the Company's
records. Joint owners should
each sign. When signing as
attorney, executor or trustee,
please give title as such.
