<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
FRM NEXUS, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the 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
FRM NEXUS, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------
The Annual Meeting of Shareholders of FRM Nexus, Inc. will be held at The
Harvard Club, Presidents Room, 27 West 44th Street, New York, NY 10036 on
Thursday, July 20, 2000, at 11:00 A.M. eastern daylight savings time. The
purpose of the meeting is to elect five directors of the Company and to transact
such other business as may properly come before the meeting or any adjournments
thereof.
The record date of the Annual Meeting is June 1, 2000. Only shareholders of
record at the close of business on that date can vote at the meeting.
By Order of the Board of Directors
Deborah Knowlton
Secretary
June 14, 2000
<PAGE> 3
FRM NEXUS, INC.
271 NORTH AVENUE
NEW ROCHELLE, NY 10801
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
June 14, 2000
This Proxy Statement is being furnished to the Shareholders (the
"Shareholders") of FRM Nexus, Inc. a Delaware corporation (the "Company" or
"Nexus"), in connection with the solicitation of proxies by the Board of
Directors for use at the Annual Meeting of Shareholders (the "Meeting") of the
Company to be held on July 20, 2000 and at any adjournments thereof.
At the Meeting, Shareholders will be asked:
1. To elect five directors,
2. To transact such other business as may properly come before the
Meeting or any adjournments of the Meeting.
June 1, 2000 is the record date (the "Record Date") for the determination
of the holders of the Company's common shares, par value $.10 per share (the
"Common Shares") entitled to notice of and to vote at the Meeting. Each such
Shareholder will be entitled to one vote for each Common Share held on all
matters to come before the Meeting and may vote in person or by proxy authorized
in writing. At the close of business on June 1, 2000, there were 1,816,462
Common Shares entitled to vote.
This Proxy Statement and the accompanying form of proxy are first being
sent to holders of the Common Shares on or about June 14, 2000.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. Such information may also be
accessed electronically by means of the Commissions's home page on the Internet
(http://www.sec.gov.).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 0-29346) with the
Commission are incorporated by reference into this Proxy Statement:
The Company's Registration Statement (Form 10) Pursuant to Section 12(g)
of the Securities Exchange Act of 1934, dated June 27, 1997, as amended
on September 19, 1997, November 21, 1997, February 19, 1998, March 4,
1998 and March 12, 1998. The Company's Annual Report (Form 10-K) for the
fiscal year ended February 28, 1999. The Annual Report (Form 10-K) for
the fiscal year ended February 29, 2000 which is a part of the Annual
Report sent to Shareholders with this Proxy Statement.
All documents and reports subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Proxy Statement and prior to the date of the Meeting shall be deemed to be
incorporated by reference in this Proxy Statement and to be a part hereof from
the date of filing of such documents or reports.
THE MEETING
DATE, TIME AND PLACE
The Meeting will be held on Thursday, July 20, 2000 at 11:00 a.m., local
time, at The Harvard Club, 27 West 44th Street, New York, New York 10036.
MATTERS TO BE CONSIDERED
At the Meeting, Shareholders will be asked to elect five directors. The
Board of Directors knows of no matters that are to be brought before the Meeting
other than as set forth in the Notice of Meeting. If any other matters properly
come before the Meeting, the persons named in the enclosed form of proxy or
their substitutes will vote in accordance with their best judgment on such
matters.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Shareholders as of the Record Date (i.e., the close of business on June 1,
2000) are entitled to notice of and to vote at the Meeting. As of the Record
Date, there were 1,816,462 Common Shares outstanding and entitled to vote, with
each share entitled to one vote.
REQUIRED VOTES
Under Delaware law, the affirmative vote of the holders of a plurality of
the Common Shares voted at the Meeting is required to elect each director.
Consequently, only shares that are voted in favor of a particular nominee will
be counted toward such nominee's achievement of a plurality. Shares present at
the Meeting that
2
<PAGE> 5
are not voted for a particular nominee (including broker non-votes) will not be
counted toward such nominee's achievement of a plurality.
VOTING AND REVOCATION OF PROXIES
Shareholders are requested to complete, date, sign and promptly return the
accompanying form of proxy in the enclosed envelope. Common Shares represented
by properly executed proxies received by the Company and not revoked will be
voted in accordance with the specifications, if any, made in the proxy. If not
otherwise specified in the proxy, the shares will be voted FOR election of each
nominee for director named herein.
If any other matters are properly presented at the Meeting for
consideration, including among other things, consideration of a motion to
adjourn the Meeting to another time and/or place (including, without limitation,
for the purpose of soliciting additional proxies), the persons named in the
enclosed form of proxy and acting thereunder will have discretion to vote on
such matters in accordance with their best judgment.
Any proxy signed and returned by a Shareholder may be revoked at any time
before it is voted by filing with the Secretary of the Company, at the address
of the Company set forth herein, written notice of such revocation or a duly
executed proxy bearing a later date or by attending the Meeting and voting in
person. Attendance at the Meeting will not in and of itself constitute
revocation of a proxy.
PROXY SOLICITATION
The Company will bear the costs of solicitation of proxies for the Meeting.
In addition to solicitation by mail, directors, officers and regular employees
of the Company may solicit proxies from Shareholders by telephone, telegram,
personal interview or otherwise. Such directors, officers and employees will not
receive additional compensation, but may be reimbursed for out-of-pocket
expenses in connection with such solicitation. Brokers, nominees, fiduciaries
and other custodians have been requested to forward soliciting material to the
beneficial owners of Common Shares held of record by them, and such custodians
will be reimbursed for their reasonable expenses.
MARKET PRICES AND DIVIDEND POLICY
The Common Shares of the Company traded on the NASDAQ Bulletin Board under
the symbol FRMO for the first time on August 28, 1998. See Item 5 of the
Company's accompanying Annual Report (Form 10-K) for market prices of the
Company's Common Stock. The Company has never paid a cash dividend on its Common
Stock and there is no present intention to declare a cash dividend in the
future.
STOCK DIVIDEND
The Board of Directors, at its meeting on May 14, 1998, declared a common
stock dividend of one share of common stock for every two shares of common stock
owned of record on June 24, 1998. Holders of record on that date received the
stock dividend on July 14, 1998. The Company accounted for the stock dividend in
the same manner as a 3 for 2 stock split.
3
<PAGE> 6
ELECTION OF DIRECTORS
Five directors will be elected at this year's annual meeting. Each director
will serve until the next annual meeting or until he is succeeded by another
qualified director who has been elected.
We will vote your shares as you specify when providing your proxy. If you
do not specify how you want your shares voted when you provide your proxy, we
will vote them for the election of all the nominees listed below. If unforeseen
circumstances (such as death or disability) make it necessary for the Board of
Directors to substitute another person for any of the nominees, we will vote
your shares for that other person.
Each of the nominees for director is now a member of the Board of
Directors. The following information about the nominees was provided by the
nominees.
NOMINEES
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SETH GROSSMAN
Age: 32
Director Since: January 1994
Principal Occupation: President and CEO of Nexus since January 1, 1997 [SETH GROSSMAN
PHOTO]
Recent Business Experience: Mr. Grossman is the President and CEO of the
Company. He is a director of M & A London, LLC, of
New York, NY, which provides corporate development
services to mid-range public and private companies.
In 1991, Mr. Grossman founded a transportation
company which he sold in 1994.
---------------------------------------------------------------------------------------------------
ALLAN KORNFELD
Age: 62
Director Since: November 1996
Principal Occupation: Independent consultant on financial matters [ALLAN KORNFELD
PHOTO]
Recent Business Experience: Mr. Kornfeld is a certified public accountant and attorney. He was
an accountant and audit partner at Ernst & Young from 1960-1975, a
comptroller, Vice President and Senior Vice President of Ametek,
Inc. (NYSE) from 1975-1986 and then Chief Financial Officer and
Executive Vice President of Ametek from 1986-1994. Mr. Kornfeld is a
director of M & A London, LLC and has been Chairman of the Board of
Nexus since March 1, 1998.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C> <C>
------------------------------------------------------------------------------------------------------------------
DAVID MICHAEL
Age: 62
Director Since: May 23, 2000
Principal Occupation: President of David Michael & Co., P.C., Certified Public
Accountants
Recent Business Experience: Mr. Michael has been a certified public accountant practicing as a partner in
independent public accounting firms for more than 25 years and as the President
of David Michael & Co., P.C. since 1983. He is a director of the Del Global
Technologies Corp (NASDAQ : DGTC) since 1986.
------------------------------------------------------------------------------------------------------------------
ANDERS STERNER
Age: 56
Director Since: May 23, 2000
Principal Occupation: President of Of-Counsel Systems, consultants in computer [ANDERS STERNER
applications. PHOTO]
Recent Business Experience: Mr. Sterner has his Bachelor's and Law degrees from Yale University. He was
admitted to the bar in 1970 and practiced as an associate with two Wall Street
law firms. In 1976 he was a founding partner at the law firm of Tanner Propp
Fersko & Sterner from which he retired in 1992 to form Of-Counsel Systems, which
is engaged in computer applications in the legal field.
------------------------------------------------------------------------------------------------------------------
LESTER TANNER
Age: 76
Director Since: May 21, 1999
Principal Occupation: Partner, Tanner Propp, LLP a law firm In New York, N.Y. [LESTER TANNER
PHOTO]
Recent Business Experience: Mr. Tanner has practiced law as a partner in his law firm for more than 30 years
with a concentration in corporate, real estate and financial matters
------------------------------------------------------------------------------------------------------------------
</TABLE>
The Board of Directors recommends a vote FOR the above-named nominees.
5
<PAGE> 8
INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND BOARD COMMITTEES
MEETINGS AND COMMITTEES
Since the last annual meeting of shareholders on July 20, 1999, the Board
of Directors held four meetings. The Board of Directors has a standing Executive
Committee, Audit Committee and Compensation Committee.
The Executive Committee exercises the authority of the Board of Directors
in the management of the business of the Company at such times as the full Board
of Directors is unavailable. The Executive Committee, which met once in 1999 and
once in 2000 currently consists of Messrs. Grossman (Chair), Tanner and Sterner.
The functions of the Audit Committee are to recommend to the Board of
Directors' independent public accountants to audit the Company's books and
records, to consult with these accountants concerning the scope of their audit,
to analyze their reports and recommendations and to review internal audit
procedures and controls. The Audit Committee met once in 1999 and twice in 2000
and currently consists of Messrs. Kornfeld (Chair), Michael and Sterner.
The Compensation Committee reviews the compensation, benefits and stock
options for the Company's executive and key personnel and makes recommendations
to the Board of Directors. The Compensation Committee which met once in 1999 and
once in 2000, currently consists of Messrs. Michael (Chair), Kornfeld and
Tanner.
A Shareholder entitled to vote in the election of directors may nominate
one or more persons for election as directors at a meeting if written notice of
such Shareholder's intent to make such nomination has been given to the Company,
not less than five days prior to the meeting date. Such notice shall set forth
the name and address of the Shareholder and his or her nominees, a
representation that the Shareholder is entitled to vote at such meeting and
intends to nominate such person, a description of all arrangements or
understandings between the Shareholder and each nominee, such other information
as would be required to be included in a proxy statement soliciting proxies for
the election of such Shareholder's nominees, and the consent of each nominee to
serve as a director of the Company if so elected. The Company may require any
proposed nominee to furnish such other information as may reasonably be required
to determine the eligibility of such proposed nominee to serve as a director of
the Company.
The three directors in office, prior to May 23, 2000 when David Michael and
Anders Sterner were elected, attended all four meetings of the Board and all of
the meetings of the committees of the Board on which they served.
6
<PAGE> 9
PRESENT BENEFICIAL OWNERSHIP OF COMMON SHARES
The table below is as of May 12, 2000 and shows the beneficial ownership of
the Company's Common Shares by (i) each person who, to the knowledge of the
Company, is the beneficial owner of more than 5% of the outstanding Common
Shares (the Company's only class of voting securities), (ii) each executive
officer and director and (iii) all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES PERCENT
BENEFICIALLY OWNED OF CLASS
------------------ --------
<S> <C> <C>
Seth Grossman(a)(b)........................................ 169,156 9.3%
Victor Brodsky(b).......................................... 20,600 1.1%
Deborah Knowlton(b)........................................ 150 --
Allan Kornfeld(c).......................................... 550 --
David Michael.............................................. 10,000 0.6%
Anders Sterner............................................. 0 --
Lester Tanner(d)........................................... 345,790 19.0%
Jed Schutz(c).............................................. 152,656 8.4%
Santa Monica Partners(c)................................... 200,000 11.0%
All executive officers and directors (7 persons)........... 546,246 30.1%
</TABLE>
---------------
(a) Includes all shares owned by Seymour Grossman Pension Trust of which Seth
Grossman is sole Trustee for the benefit of himself and his sister, Joy
Testa Grossman, whose shares are included above.
(b) The addresses of Seth Grossman, Victor Brodsky, and Deborah Knowlton is 271
North Avenue, Suite 520, New Rochelle, N.Y. 10801.
(c) Allan Kornfeld has an option to purchase 1,500 shares of common stock at
$1.625 per share expiring July 20, 2004. His address is 5 Patterson Place,
Newtown Square, PA 19073. The address of David Michael is 7 Penn Plaza, New
York, N.Y. 10001. The address of Anders Sterner is 195 Adams Street,
Brooklyn, N.Y. 11201. The address of Jed Schutz is 24 Borden Lane, East
Hampton, N.Y. 11937. The address of Santa Monica Partners is 1865 Palmer
Avenue, Larchmont, N.Y. 10538.
(d) Includes (i) shares owned by Tanner Gilbert P.C. Retirement Plan Trust, of
which Mr. Tanner is the sole Trustee and beneficiary of the shares in his
segregated account, (ii) the shares owned by Northwest Management Corp, of
which Mr. Tanner is the President with the power to vote its shares which
are owned by his two adult children, Jonathan Tanner and Shari Tanner Stack
and (iii) the shares owned by his wife, Dr. Anne-Renee Testa, the mother of
Seth Grossman. Mr. Tanner's address is 99 Park Avenue, New York, NY 10016.
7
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below shows for the three Fiscal Years ended February 28, 2000,
1999, 1998 compensation paid by Nexus, including salaries, bonuses and certain
other compensation, to the following executive officers of the Company in those
periods:
<TABLE>
<CAPTION>
FISCAL YEAR SALARY BONUS OTHER ANNUAL
NAME AND PRINCIPAL POSITION ENDED 2/28 $ $ COMPENSATION(a)
--------------------------- ----------- ------- ------ ---------------
<S> <C> <C> <C> <C>
Seth Grossman,................................ 2000 117,500 -- $10,000
President and CEO 1999 110,000 -- 10,000
1998 36,000 -- --
Victor Brodsky,............................... 2000 107,500 20,000 10,000
Vice President and CFO 1999 79,577 20,000 8,846
1998 -- -- --
Kenneth Fuld.................................. 2000 60,800 -- 6,600
President, Medical 1999 100,000 -- 10,000
Financial Corp. 1998 100,000 -- --
</TABLE>
---------------
(a) The amounts in this column represent automobile allowances and certain
unaccountable and reasonable expense allowances.
EMPLOYMENT AGREEMENTS
The Company has no present employment agreements with Seth Grossman,
President and Chief Executive Officer of the Company or Victor Brodsky, Vice
President and Chief Financial Officer of the Company, but the Company intends to
consider the following compensation policy for Fiscal 2000 for them and other
key employees.
COMPENSATION POLICY
The Company's compensation package for Seth Grossman, Victor Brodsky, and
other key employees are expected to consist of three elements: (1) base salary,
(2) annual bonus compensation and (3) long-term incentive in the form of stock
options.
Each element of compensation has a different purpose. Salary and bonus
payments are discretionary with the Board of Directors and are designed to
reward current and past performance. Stock options are designed to provide
strong incentive for superior long-term performance and are directly linked to
shareholders' interests because the value of the awards will increase or
decrease based upon the future price of the Common Shares.
Base compensation of each executive officer is determined by the Board of
Directors consistent with the executive's office, period of incumbency and level
of responsibility. For Fiscal 2001, the fiscal year ending February 28, 2001,
the Board has fixed the base annual compensation for Mr. Grossman at $132,500
and for Mr. Brodsky at $122,500 plus an automobile allowance of $10,000 for each
of them and indicated that the Board will consider an appropriate bonus, if any,
based on the factors indicated below.
The Company's executive compensation policy emphasizes performance-based
compensation. Accordingly, a significant percentage of annual compensation may
consist of bonus compensation. This ensures that compensation paid to an
executive reflects the individual's specific contributions to the success of the
Company. Bonus compensation is determined on the basis of the directors'
subjective assessment of an executive's performance, the Company's performance
and each individual's contribution thereto. Bonus compensation is not based on
any specific formula.
The Company plans to adopt a Stock Option Plan, designed to retain the
services of persons now holding key positions and to secure the services of
persons capable of filling such positions. This would include key management
personnel as well as the executive officers. From time to time, stock options
may be awarded
8
<PAGE> 11
which, under the terms of the Stock Option Plan, will permit the employee to
purchase Common Shares at not less than the fair market value of the Common
Shares on the date of grant. The extent to which the employee realizes any gain
is, therefore, directly related to increases in the price of the Common Shares
and hence, shareholder value, during the period of the option. Options granted
to employees will become exercisable at the rate of 20% per year, commencing one
year after the date of grant. The amount of stock options awarded to an employee
is not based on any specific formula, but rather on a subjective assessment of
the executive's performance and the Company's performance by the Board of
Directors.
The Company believes that, as it grows, its compensation program will
enable it to attract, motivate and retain senior management by providing a
competitive total compensation opportunity based on performance.
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company (at present, only Mr.
Grossman is an employee) will receive no remuneration for services as a member
of the Board or any committee of the Board. For the period from March 1, 1999 to
February 28, 2000 each director who was not then an employee received $500 for
each meeting of the Board and each meeting of a Committee of the Board that he
attended except that the Chairman of the Board, who was Allan Kornfeld since
March 1, 1998, received $10,000 per annum (increased to $12,500 per annum as of
June 1, 2000) as a director in addition to the other compensation. In addition,
each non-employee director, who does not own as much as 5% of the Company's
stock, is automatically granted a five year option to purchase 1,500 shares of
common stock on the date on which the annual meeting of the Company's
shareholders is held each year if he or she is re-elected at that meeting,
beginning in 1999. The purchase price of the common stock covered by such
options is the mean between the high bid and low asked price at the close of
trading on the date of grant. As yet no options have been granted to any
employee or director other than Allan Kornfeld and Joseph Dolan who received
options for 1,500 shares each at $1.625 per share expiring July 20, 2004.
INDEMNIFICATION
The Company maintains an indemnification insurance policy covering all
directors and officers of the Company and its named subsidiaries. No claims have
been made and no payments were received under the Company's indemnification
insurance.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Lester Tanner, a director of the Company, is President of Northwest
Management Corp. with power to vote its shares which are owned by his two adult
children, and that corporation has given the Company a $785,000 secured line of
credit to February 28, 2003, pursuant to which the Company can borrow at an
interest rate of 12% per annum on a self amortizing basis to October 2003,
prepayable by the Company at any time. At February 29, 2000 and May 12, 2000
there were no amounts outstanding on the line of credit. At February 28, 1999,
$781,483 was outstanding in the line of credit. Interest expense was $51,748 and
$19,723 for the years ended February 28, 1999 and 2000, respectively.
Northwest Management Corp. has indemnified the Company for any liability
the Company may have in the period from September 1, 2002 to February 28, 2006
under a lease made by the Company with the landlord for the office space in East
Granby, Connecticut which is presently vacant and being offered for rental under
a lease for six or more years. The landlord has released the Company for any
liability through August 31, 2002. Northwest Management Corp has the risk and
benefit of obtaining a new tenant and, with the landlord, is seeking to rent the
office space for a term ending on or after February 28, 2006, in which event the
Company's liability to the landlord would be terminated, as well as Northwest
Management Corp's indemnification agreement.
In February 1999, a related partnership, whose partners are Seth Grossman
and Lester Tanner, directors, of the Company, committed to loan until March 15,
2001 an investment portfolio currently valued at $300,000 to the Medical
Financial Corp. subsidiary. This investment portfolio is being held in escrow
and is used as collateral for the purpose of obtaining margin loans. All risks
and rewards of the investment portfolio pass to
9
<PAGE> 12
the related party. Medical Financial Corp. may borrow up to the maximum margin
of the investment portfolio balance. Between March 1, 1999 and August 31, 1999
the Company used margin loans totaling $120,000. No margin loans were
outstanding between September 1, 1999 and April 30, 2000. At May 12, 2000 margin
loans used by the Company were outstanding in the total amount of $170,000. The
margin loans bear interest at a variable rate based on market condition set at
the discretion of the investment brokerage. A fee is payable monthly to the
related party at the rate of 5% per annum on the value of the investment escrow
account. No fees or interest were paid for the year ended February 28, 1999. A
total of $15,431 of fees and interest were paid for the year ended February 29,
2000. Proceeds from the margin loan may only be used to fund the purchase of
certain medical receivables. The margin loan is repaid as payment is received
from such receivables.
During the year ended February 28, 1999, the Company borrowed at various
times a total of $60,000 from Seth Grossman and Kenneth Fuld, directors of the
Company. These loans were payable on demand and carried interest at the rate of
12% per annum. $25,000 was repaid on these loans in March 1999 and the balance
in June 1999. Interest expense on these loans for the years ended February 28,
1999 and 2000 were $1,202 and $1,029 respectively.
It is management's opinion that these transactions would have been at the
same terms had Lester Tanner, Seth Grossman and Kenneth Fuld not been directors
of Nexus at the time they took place.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Based solely upon a review of the copies of such forms furnished to
the Company and written representations from the Company's executive officers,
directors and greater than 10% beneficial shareholders, the Company believes
that since the effective date of the Company's Registration Statement Pursuant
to Section 12(g) of The Securities Exchange Act of 1934, all persons subject to
the reporting requirements of Section 16(a) filed the required reports on a
timely basis.
COMPARISON OF CUMULATIVE TOTAL RETURN
The following graph sets forth the Company's total cumulative shareholder
return as compared to the Standard and Poor's 500 Composite Index and the
Standard and Poor's Managed Healthcare Index for the period August 28, 1998 (the
date the Company's common stock commenced trading through February 29, 2000.
Total shareholder return assumes $100 invested at the beginning of the period in
the Common Stock of the Company, the stocks represented in the Standard and
Poor's 500 Composite Index and the stocks represented in the Standard and Poor's
Managed Healthcare Index, respectively. Total return also assumes reinvestment
of dividends; the Company has never paid dividends on its common stock
Historical stock price performance should not be relied upon as indicative
of future stock price performance.
10
<PAGE> 13
TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 8/28/98)
<TABLE>
<CAPTION>
FRM NEXUS, INC. S&P 500 S&P MANAGED HEALTHCARE
--------------- ------- ----------------------
<S> <C> <C> <C>
8/28/98 100 100 100
2/28/99 50 121 131
2/29/00 60 133 99
</TABLE>
INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP, the Company's independent public
accountants for the fiscal years ended February 28, 1998, 1999 and 2000, was
selected by the Board of Directors, upon recommendation of the Audit Committee.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will be available to respond to appropriate questions and to
make such statements as the representative may desire.
ANNUAL REPORT
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended February 29, 2000 is being furnished to Shareholders concurrently
herewith.
11
<PAGE> 14
PROPOSALS BY SHAREHOLDERS
Proposals that Shareholders wish to include in the Company's Proxy
Statement and form of proxy for presentation at the Company's 2001 Annual
Meeting of Shareholders, presently scheduled to be held on July 19, 2001, must
be received by the Company at 271 North Avenue, New Rochelle, NY 10801,
Attention of Deborah Knowlton, Secretary, no later than March 27, 2001.
By Order of the Board of Directors
Seth Grossman
President and Chief Executive Officer
Deborah Knowlton
Secretary
June 14, 2000
12
<PAGE> 15
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE REVOCABLE PROXY
FRM NEXUS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS,
Revoking any such prior appointment, the undersigned hereby appoints Seth
Grossman, Allan Kornfeld and Lester Tanner, and each of them, attorneys and
agents, with power of substitution to vote as Proxy for the undereigned as
herein stated, at the Annual Meeting of Stockholders of FRM Nexus, Inc. (the
"Company"), to be held at The Harvard Club, 27 West 44th Street, New York, New
York 10036 on Thursday, July 20, 2000 at 11:00 a.m., and at any adjournments
thereof, with respect to the number of shares the undersigned would be entitled
to vote if personally present.
1. Election of Directors: To elect the With- For All
nominees listed below: For hold Except
[ ] [ ] [ ]
Seth Grossman, Allan Kornfeld, David Michael,
Anders Sterner and Lester Tanner
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
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The Board of Directors recommends a vote FOR the election of the nominees.
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED FOR THE ELECTION OF THE
DIRECTORS IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED AND IN THE DISCRETION
OF THE NAMED ATTORNEYS AND AGENTS ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
The stockholder(s) hereby acknowledge(s) receipt of a copy of the Proxy
Statement relating to such Annual Meeting.
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Please be sure to sign and date | Date |
this Proxy in the box below. | |
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----Stockholder sign above--------Co-holder (if any) sign above--
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Detach above card, sign, date and mail in postage paid envelope provided
FRM NEXUS, INC.
Your signature should appear the same as your name appears hereon. If
signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which you are signing. When signing as joint tenants,
all parties to the joint tenancy must sign. When the proxy is given by a
corporation, it should be signed by an authorized officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
