OCCUPATIONAL MEDICAL CORPORATION
OF AMERICA, INC.
9811 Bigge Avenue
Oakland, California 94603
NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
The 1995 Annual Meeting of Shareholders of Occupational Medical
Corporation of America, Inc. (the "Company") will be held at the Oakland
Airport Hilton, 1 Hegenberger Road, Oakland, California 94614 on December
15, 1995 at 1:00 p.m., Pacific Standard Time, for the following purposes:
1. To elect a Board of Directors for the ensuing year;
2. To consider and act upon a proposal to approve the
appointment of BDO Seidman as the independent accountants of the
Company for the fiscal year ending June 30, 1996; and
3. To transact such other business as may properly come
before the meeting or any adjournments thereof.
The stock transfer books of the Company will not be closed, but only
holders of Common Stock of record at the close of business on November 17,
1995 will be entitled to vote at the meeting.
Your proxy is enclosed. You are cordially invited to attend the
meeting, but if you do not expect to attend, or if you plan to attend but
desire the proxyholder to vote your shares, please date and sign your proxy
and return it in the enclosed postage paid envelope. The giving of this
proxy will not affect your right to vote in person in the event you find it
convenient to attend.
For the Board of Directors,
/s/ Don R. Livingston
Don R. Livingston
Chairman of the Board
November 27, 1995<PAGE>
OCCUPATIONAL MEDICAL CORPORATION
OF AMERICA, INC.
9811 Bigge Avenue
Oakland, California 94603
PROXY STATEMENT
FOR 1995 ANNUAL MEETING TO BE HELD
December 15, 1995
Your proxy is solicited on behalf of the Board of Directors of
Occupational Medical Corporation of America, Inc. (the "Company") for use
at the annual meeting of shareholders to be held at 1:00 p.m., Pacific
Standard Time, on December 15, 1995 at the Oakland Airport Hilton, 1
Hegenberger Road, Oakland, California 94614. If a proxy in the
accompanying form is duly executed and returned, the shares represented by
the proxy will be voted as directed. If no direction is given, the shares
will be voted for the election of the four nominees for Director named
herein, and for the approval of BDO Seidman as the Company's independent
accountants for the fiscal year ending June 30, 1996. Votes will be
tallied by an inspector of election at the annual meeting. Pursuant to
state law and the bylaws of the Company, abstentions and broker no-votes
will have the same effect as votes against any proposals presented at the
meeting. However, an affirmative vote that does not specify the number of
affirmative votes and abstentions will be presumed to be all affirmative
votes. A proxy given by a shareholder may be revoked at any time before it
is exercised by notifying the Secretary of the Company in writing of such
revocation, by giving another proxy bearing a later date or by voting in
person at the meeting.
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made by mail. In addition, the officers and
regularly engaged employees of the Company may, in a limited number of
instances, solicit proxies personally or by telephone. The Company will
reimburse banks, brokerage firms, other custodians, nominees and
fiduciaries for reasonable expenses incurred in sending proxy materials to
beneficial owners of Common Stock of the Company.
The Company's Annual Report including financial statements for its
fiscal year ended June 30, 1995 is being mailed to all shareholders
concurrently herewith. The Annual Report is not part of the proxy
materials.
Holders of Common Stock of record at the close of business on November
17, 1995 will be entitled to vote at the meeting. There were 2,519,550
shares of Common Stock outstanding at that time. Each share is entitled to
one vote and a majority of the shares of Common Stock outstanding is
necessary to constitute a quorum for the meeting. Shareholders have
cumulative voting rights in the election of Directors. Under the
cumulative voting method a shareholder may multiply the number of shares
owned by the number of Directors to be elected and cast this total number
of votes for any one candidate or distribute the total number of votes in
any proportion among as many candidates as the shareholder desires. A
shareholder may not cumulate his or her votes for a candidate unless such
candidate's name has been placed in nomination prior to the voting and
unless a shareholder has given notice at the meeting prior to the voting of
his or her intention to cumulate his or her votes. If any shareholder
gives such notice, all shareholders may then cumulate their votes.
ELECTION OF DIRECTORS
The Company's Directors are elected annually to serve until the next
annual meeting of shareholders and thereafter until their successors are
elected. The number of Directors presently authorized by the Bylaws of the
Company is five. Unless otherwise directed by shareholders, the
proxyholder will vote all shares represented by proxies held by him for the
election of the maximum number of the following nominees, all of whom are
now members of and constitute the Company's Board of Directors. The
Company is advised that all of the nominees have indicated their
availability and willingness to serve if elected. In the event that any
nominee becomes unavailable or unable to serve as a Director of the Company
prior to the voting, the proxyholder will vote for a substitute nominee in
the exercise of his best judgment.
The following table sets forth the name and age of each nominee, the
year in which each nominee first became a Director of the Company, other
offices and positions, if any, which each nominee holds with the Company or
his or her principal occupation, and the names of other publicly held
companies of which each nominee serves as a director:
Name, Offices and Position First
with the Company or Principal Became a
Occupation and Directorships Age Director
Don R. Livingston* 49 1980
Chief Executive Officer and President of
the Company since December, 1994.
Director of the Company since 1980.
Chairman of the Board of the Company
since April 1983. Chief Executive
Officer from 1980 through May 1987 and
from September 1987 until May 1990.
Chief Financial Officer from June 15,
1988 until October 14, 1988 and
Secretary from June 15, 1988 until May
1990. From 1979 to 1980, Regional
Medical Director of California
Industrial Medical Clinic, Inc. From
1978 to 1979, Medical Director of East
Bay Industrial Medical Center, Oakland,
California, an affiliate of California
Industrial Medical Clinic, Inc. **
Harry W. Brooks, Jr. 67 1984
Director of the Company. Chief
Executive Officer, Advanced Consumer
Marketing Corp., Burlingame, California
since 1985. From 1984 to 1990, Chairman
of the Board and Chief Executive Officer
of Gurney Seed and Nursery Corporation.
From 1982 to 1984, Chairman and
Executive Vice President of the
Horticulture Group of Amfac, Inc., a
publicly owned financial services
company. From 1978 to 1982, Senior Vice
President--Public Affairs of Amfac, Inc.
Frederick Foston* 44 1986
Director of the Company. Senior health
care consultant to British Airport
Authority and General Motors
Corporation, Packard Electric Division.
Since 1981, President and owner of
Frederick Foston, M.D. a professional
corporation (health care consulting and
provider of physician medical services).
Milton Sanders** 61 1994
Director of the Company. Vice President
of the Company since September 1994.
Healthcare consultant and provider of
physical therapy and rehabilitation
services from 1980 to 1994. Since 1989,
Vice President of the Pan African
Development Corporation, Washington, DC,
a nonprofit corporation involved in
business development in Africa. Since
1992, Vice President and Director of the
Pearl of Africa Islands Enterprise,
Inc., a privately held corporation
involved in business development in
Uganda. Since 1992, Board member of
Plus Fifteen, Inc., a privately held
company that sponsors a high blood
pressure control program.
OTHER EXECUTIVE OFFICERS OF THE COMPANY
George Fujikawa 52 N/A
Chief Financial Officer and Vice
President of the Company since December
22, 1994. From 1990 - 1992, Vice
President and General Manager of PRL
Corp., a real estate development and
management company. From 1992 to 1994,
Chief Financial Officer of Kowa Bussan
U.S.A., Inc., a real estate development
company.***
Dr. Larry A. Harikian resigned as a director of the Company Effective
January 1, 1995. A replacement director has not been elected or nominated
at this time. Dawn Schwartz was elected to replace Dr. Harikian as
Secretary.
* Member of the Executive Committee.
** Dr. Livingston is the majority shareholder, and a director and
executive officer of the following corp-orations (the "Medical
Corporations"): Spectrum Medical Care, A Medical Group, Inc. (f.k.a.
Interstate Environmental Medical Group, Inc.), a California
corporation; and Interstate Environmental Medical Group, P.S., a
Washington corporation. The Company has entered into sublease and
facilities management agreements with each of the Medical Corporations
under which the Medical Corporations provide all medical services at
the Company's medical centers.
*** As of December 22, 1994, Andry Yonathan, resigned as the chief
financial officer of the Company and Mr. Fujikawa was appointed as
vice president and chief financial officer by the Board of Directors.
Section 16(a) of the Exchange Act. Director Foston is a co-trustee
and co-beneficiary of the Arthur and Mary Foston Trust. Prior to Dr.
Foston's becoming a director, the trust acquired 500 shares of common stock
of the Company. Dr. Foston is in the process of filing a late report
pursuant to Section 16(a) of the Exchange Act to reflect this indirect
beneficial ownership.
All directors are elected to hold office until the next annual meeting
of shareholders of the Company or until their successors have been elected
and qualified. Officers of the Company are elected annually and serve at
the discretion of the Board.
The Company currently has an Audit Committee, Management Continuity
and Compensation Committee and Finance Committee as well as an Executive
Committee.
The Audit Committee of the Board of Directors consists of Mr. Brooks
and Mr. Foston. The Audit Committee recommends accounting policies to the
Board, meets annually with the Company's independent auditors and oversees
generally the financial controls and practices of the Company. The
Management Continuity and Compensation Committee, consisting of Mr. Foston
and Mr. Brooks, makes recommendations to the Board with regard to
compensation of directors, officers and other key employees of the Company,
including compensation under employee stock plans and other benefit
programs. The Finance Committee, consisting of Mr. Foston and Dr.
Livingston, makes recommendations to the Board with regard to capital
appropriations and dividend policies and oversees generally the capital
structure and financial condition of the Company.
At the present time, the Company has no standing nominating committee
of the Board of Directors and nominations are made by and through the
Executive Committee. During fiscal 1995, the Board of Directors held
three meetings and one Audit committee meeting. Each Director attended
100% of the Board and committee meetings held during the term of their
office.
Securities Ownership
The following table sets forth as of November 10, 1995, information
regarding the ownership of the Company's Common Stock by (i) each person
known by the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock, (ii) each of the Directors of
the Company, and (iii) the Officers and Directors of the Company as a
group:
Amount
and Nature
of Beneficial Percentage
Name of Beneficial Owner(1) Ownership (2) of Class(2)
Don R. Livingston(3) 1,158,000 44.2%
Harry W. Brooks, Jr. 1,000 (4)
Frederick Foston(5) 500 (4)
Milton Sanders(6) 50,000 1.9%
All directors and officers
as a group (six persons) 1,259,510 48.1%
Renaissance VI Ltd.(7) 251,700 9.6%
Larry A. Harikian(8) 281,200 10.7%
(1) The address of Drs. Livingston and Foston and Mr. Brooks and Mr.
Sanders is c/o Occupational Medical Corporation of America, Inc., 9811
Bigge Avenue, Oakland California 94603.
(2) All shareholders reflected in the table are sole owners of record and,
to the knowledge of the Company, beneficially, except as otherwise
specified.
(3) Dr. Livingston is a 75% shareholder of the Medical Corporations which
own 36,000 shares.
(4) Less than one percent.
(5) Dr. Foston is a co-trustee and co-beneficiary of the Arthur and Mary
Foston Trust which acquired 500 shares of common stock prior to Dr.
Foston's becoming a director of the Company.
(6) Mr. Sanders was issued an option to purchase 50,000 shares of common
stock on September 1, 1995 which vests 20% on December 22, 1995 and on
each anniversary thereafter and which expires on December 22, 2004.
(7) The address of Renaissance VI, Ltd is 8080 N. Central Expressway,
Dallas, Texas 75206.
(8) The address of Larry A. Harikian is P.O. Box 15316, Fritz Creek,
Alaska 99603.
EXECUTIVE COMPENSATION
Cash Compensation
The following table sets forth the cash compensation paid or accrued
during the fiscal year ended June 30, 1995 to each of the Company's highest
paid officers whose aggregate cash compensation exceeded $100,000 (other
than the chief executive officer).
(a) (b) (c) (d) (e)
Name and Other Annual
Principal Fiscal Compen-
Position Year Salary($) Bonus ($) sation ($)
Don R. Livingston
Chief Executive
Officer and
President from
January 1995 1994-95 $75,000 none none
1993-94 $78,000 none none
1992-93 $52,000 none none
Directors
Outside directors receive a fee of $1,000 per Board and Audit
Committee meeting attended.
Pension Plans
The Company has a 401(k) profit sharing plan under which employees may
defer a portion of their salary. Such amounts are disclosed and included
in the cash compensation table above with regard to the chief executive
officer.
1994 Stock Option Plan
At the 1994 annual shareholders meeting, the shareholders approved the
Company's 1994 Stock Option Plan and related issuance of stock options to
officers and directors of the corporation pursuant to said plan.
The Plan provides for the grant of incentive stock options ("ISOs")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and non-qualified stock options ("NQSOs") to certain
employees, officers, directors, consultants and agents of the Company. The
purpose of the Stock Option Plan is to attract and retain qualified
employees, agents, consultants, officers and directors.
The total number of shares of Common Stock with respect to which
options may be granted under the Plan is 250,000. The shares subject to,
and available under, the Plan may consist, in whole or in part, of
authorized but unissued stock or treasury stock not reserved for any other
purpose. Any shares subject to an option that terminates, expires or
lapses for any reason, and any shares purchased upon exercise of an option
and subsequently repurchased by the Company pursuant to the terms of the
option, become available for grant under the Plan.
The Stock Option Plan is administered by the Board of Directors of the
Company, which determines, in its discretion, among other things, the
recipients of grants, whether a grant will consist of ISOs or NQSOs, or a
combination thereof, and the number of shares of Common Stock to be subject
to such options. The Board may, in its discretion, delegate its power,
duties and responsibilities under the Stock Option Plan to a committee
consisting of two or more directors who are "disinterested persons" within
the meaning of Rule 16b-3 promulgated under the Exchange Act. The exercise
price for ISOs must be at least 100% of the fair market value per share of
Common Stock on the date of grant, as determined by the Board. ISOs are
not transferable other than by will or the laws of descent and
distribution. NQSOs may be transferred to the optionee's spouse or lineal
descendants, subject to certain restrictions. Options may be exercised
during the holder's lifetime only by the holder or his or her guardian or
legal representative.
Options may be exercisable for a term determined by the Board, which
may not be less than one year or greater than 10 years from the date of
grant. No options may be granted under the Stock Option Plan later than 10
years after the Stock Option Plan's effective date as of the date of
shareholder approval. ISOs are not transferable other than by will or the
laws of descent and distribution. NQSOs may be transferred to the
optionee's spouse or lineal descendants, subject to certain restrictions.
Options may be exercised during the holder's lifetime only by the holder or
his or her guardian or legal representative. Options may be exercised
only while the original optionee has a relationship with the Company which
confers eligibility to be granted options or within 90 days after
termination of such relationship with the Company, or up to six months
after death or total and permanent disability. In the event the Company
terminates such relationship between the original optionee and the Company
for cause (as defined in the Plan), all options granted to the optionee
terminate immediately. In the event of certain basic changes in the
Company, including a change in control of the Company (as defined in the
Plan), at the discretion of the Board, the Board may make certain
adjustments to the outstanding stock options.
The Board may modify, suspend or terminate the Plan; provided,
however, that certain material modifications affecting the Plan must be
approved by the shareholders, and any change in the Plan that may adversely
affect an optionee's rights under an option previously granted under the
Plan requires the consent of the optionee.
Option/SAR Grants in Last Fiscal Year 1995
Individual Grants
Percent of
Total Options
SARs granted Exercise or
Options/SARs to employees base price Expiration
Name Granted in fiscal year ($/Sh) date
(a) (b) (c) (d) (e)
George Fujikawa
Vice President & Chief
Financial Officer(1) 50,000 50% $.11 12/22/04
Milton Sanders
Vice President
and Director(1) 50,000 50% $.11 12/22/04
(1) Options authorized on December 22, 1994 and issued on September 1,
1995.
Aggregated Option/SAR Exercises in Last Fiscal Year 1995 and
1995 Fiscal Year-End Option/SAR Values
(a) (b) (c) (d) (e)
Value of
Number of Securities Unexercised
Shares Underlying In-the-Money
Acquired Value Unexercised Options Options/SARs
on Exercise Realized /SARs at FY-End (#) at FY-End ($)
Name (#)(1) ($) Unexble Exerble Unexble Exerble
George Fujikawa
Vice President & Chief
Financial Officer 0 $0 50,000 0 $0(1) $0
Milton Sanders
Vice President
and Director 0 $0 50,000 0 $0(1) $0
(1) Based on market value of $.015 per share as of June 30, 1995.
The Company has no other retirement, pension, profit sharing or
similar program at the present time. The creation of any such program will
be at the discretion of the Board of Directors of the Company. The Board
of Directors may adopt such employee benefit and executive compensation
plans in the future as it deems advisable and consistent with the best
interests of the shareholders and the financial condition and potential of
the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1983, the Company made a personal loan to Dr. Livingston.
Such loan bears interest at the rate of ten percent (10%) per annum and is
repayable, in the aggregate, in five substantially equal annual
installments of $34,029 each, with the remaining balance due in June 1995.
During the fiscal year ended June 30, 1995, the largest principal amount
owed to the Company by Dr. Livingston on account of this loan was $51,898.
During the fiscal year ended June 30, 1995, Dr. Livingston made no payments
to the Company on this loan. On June 30, 1995, the Company had an out-
standing loan to Dr. Livingston of $51,898. During the fiscal year ended
June 30, 1994, the largest principal amount owed to the Company by Dr.
Livingston on account of this loan was $51,898 (the June 30, 1994 balance
has been restated from the $58,906 amount previously reported to reflect a
reclassification of accrued interest). During the fiscal year ended June
30, 1994, Dr. Livingston made no payments to the Company on this loan. On
June 30, 1994, the Company had an outstanding loan to Dr. Livingston of
$51,898.
Under the laws of most states, the Company, as a general business
corporation, is prohibited from practicing medicine or providing medical
care. Accordingly, the Company has entered into agreements with the
Medical Corporations, which were organized expressly for the purpose of
providing all medical services at the Medical Centers. The Company
provides non-medical administrative, accounting, management and other
services to the Medical Centers, which retain absolute authority over the
medical services rendered and the fees charged to patients. Dr. Livingston
and Dr. Larry Harikian (former director and chief executive officer of the
Company until January 1995) are the sole shareholders of the Medical
Corporations and receive compensation as practicing physicians from the
Medical Corporations. During the fiscal years ended June 30, 1993, 1994
and 1995, Dr. Livingston received annual compensation of $212,292, $277,101
and $285,190, respectively, as a practicing physician of the Medical
Corporations. During the fiscal years ended June 30, 1993 and 1994, Dr.
Harikian received annual compensation of $108,000 for each fiscal year as
practicing physician of the Medical Corporations. Dr. Harikian received no
compensation as a practicing physician of the Medical Corporations for the
fiscal year ended June 30, 1995.
Any transactions between the Company and its Directors, Officers or
other affiliates are on a basis no less favorable to the Company than could
be obtained from unaffiliated parties on an arm's length basis and are
approved by a majority of the Company's disinterested Directors.
During 1991, the Company loaned a total of $49,808 to Spectrum Medical
Care, A Medical Group, Inc. (formerly known as "Interstate Environmental
Medical Group, Inc."), which executed an 8% unsecured promissory note that
was due on or before June 30, 1992. Spectrum Medical Care, A Medical
Group, Inc., purchased 36,000 shares of the Company's common stock with the
proceeds of the loan. The note is past due and has been classified as a
reduction of the Company's shareholders' equity.
As of June 30, 1994, the Company had an outstanding advance of $18,541
to Dr. Livingston. During fiscal year 1995, the Company made advances of
$59,200 to Dr. Livingston who made payments of $66,000 toward those
advances leaving a balance as of June 30, 1995 of $11,741.
Also, the Company made advances of fees to the Medical Corporations of
$51,593 during fiscal year 1993 and $25,505 during fiscal year 1995. No
payments were made on these advances in fiscal year 1995. On June 30,
1995, the Company had outstanding advances to the Medical Corporations of
$77,098.
INDEPENDENT ACCOUNTANTS
The Directors of the Company have directed that management's proposal
to engage BDO Seidman to act as its independent accountants for the fiscal
year ending June 30, 1996 be submitted for shareholder authorization at the
Company's 1995 annual meeting. BDO Seidman acted for the Company in such
capacity for the fiscal year ended June 30, 1995. Representatives of BDO
Seidman are expected to be present at the annual meeting and will have the
opportunity to make a statement if they desire to do so. They will also be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1996 annual
meeting must be received at the Company's principal office no later than
July 30 11, 1996 in order to be considered for inclusion in the proxy
statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other matter to be acted upon at
the meeting. However, if any other matter shall properly come before the
meeting, the proxyholder named in the proxy accompanying this statement
will have discretionary authority to vote all proxies in accordance with
his best judgment.
By Order of the Board of Directors,
/s/ Don R. Livingston
Don R. Livingston
Chief Executive Officer
and Chairman of the Board
November 27, 1995
Oakland, California
