SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
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.
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)).
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material under Rule 14a-12.
SURGICARE, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 1
SURGICARE, INC.
6699 CHIMNEY ROCK
SUITE 105
HOUSTON, TEXAS 77081
June 21, 2000
To Our Shareholders:
You are cordially invited to attend the annual meeting of shareholders,
which is to be held on Wednesday, July 26 2000, at 6:30 P.M. at the corporate
offices located at 6699 Chimney Rock, Suite 105, Houston, Texas 77081.
The following pages contain the formal notice of the annual meeting and our
proxy statement, which describe the specific business to be considered and voted
upon at the annual meeting.
It is important that your shares be represented at the meeting. Whether or
not you expect to attend in person, we would greatly appreciate your efforts to
return the enclosed proxy as soon as possible. If you decide to attend the
annual meeting, you may withdraw your proxy should you wish to vote in person.
We look forward to seeing you at the annual meeting.
Sincerely yours,
/s/ Dr. David Blumfield
-------------------------
Chairman of the Board
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD PROMPTLY.
Enclosures:
1. Proxy Card and Business Reply Envelope
2. Annual Report to Stakeholders
<PAGE> 2
SURGICARE, INC.
6699 Chimney Rock
SUITE 105
HOUSTON, TEXAS 77081
--------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
WEDNESDAY, JULY 26, 2000
--------------------
Notice is hereby given that the annual meeting of shareholders (the "Annual
Meeting") of SurgiCare, Inc. (the "Company") will be held on Wednesday, July 26
2000, at 6:30 P.M. at the corporate offices located at 6699 Chimney Rock, Suite
105, Houston, Texas 77081, for the following purposes:
(1) To elect Nine directors of the Company;
(2) To act upon the recommendation of the Board of Directors on the
appointment of Weinstein Spira & Company L.L.P. as the
Company's independent auditors for 2000; and
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on May 31, 2000 will
be entitled to vote at the Annual Meeting.
The enclosed Proxy Statement contains more information pertaining to
matters to be voted on at the Annual Meeting. Please read the Proxy Statement
carefully. Each shareholder who does not plan to attend the Annual Meeting is
requested to date, sign and return the accompanying proxy in the enclosed,
postage-paid envelope.
By Order of the Board of Directors,
/s/ DR. SHERMAN NAGLER
-----------------------
Secretary
Houston, Texas
June 23, 2000
<PAGE> 3
SURGICARE, INC.
6699 Chimney Rock
SUITE 105
HOUSTON, TEXAS 77081
--------------------
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 26 2000
--------------------
This Proxy Statement is furnished to the holders of common stock, $.001 par
value per share ("Common Stock"), of SurgiCare, Inc. (SurgiCare or the
"Company") in connection with the solicitation of proxies by the board of
directors of the Company (the "Board of Directors") to be voted at the annual
meeting of shareholders of the Company (the "Annual Meeting") to be held on
Wednesday, July 26 2000, at 6:30 p.m. at the corporate offices located at 6699
Chimney Rock, Suite 105, Houston, Texas 77081, and at any adjournments or
postponements thereof.
Only stockholders of record at the close of business on May 31, 2000, (the
"Record Date"), will be entitled to notice of and to vote the shares of common
stock of the Company, par value $.01 per share ("Common Stock") or Convertible
Preferred Stock, Series A, par value $.005 per share ("Series A Preferred
Stock"), held by them on such date at the Annual Meeting or any and all
postponements or adjournments thereof. On the Record Date, 12,596,657 shares of
Common Stock and 1,450,000 shares of Series A Preferred Stock were outstanding
and entitled to vote at the Annual Meeting.
A majority of the shares of Common and Preferred Stock entitled to vote,
represented in person or by proxy, is required to constitute a quorum. If a
quorum is not present at the time of the Annual Meeting, or if for any reason
the Company believes that additional time should be allowed for the solicitation
of proxies, the Company may adjourn or postpone the Annual Meeting with or
without a vote of the shareholders.
If you properly execute, return and do not revoke the enclosed proxy, the
proxy will be voted in accordance with your instructions, if any, and if you do
not provide instructions, your proxy will be voted (a) for the election as
directors of the nominees nominated by the Nominating Committee (the NC
Nominees)listed thereon and described in this proxy statement, (b) to approve
the appointment of Weinstein Spira & Company L.L.P., as the Company independent
auditors for 2000, and (c) in accordance with the recommendation of the Board of
Directors on any other proposal that may properly come before the Annual
Meeting.
Directors must be elected by a plurality of votes cast, in person or by
proxy, by the holders of Common Stock and Series A Preferred Stock, voting as a
single class, entitled to vote at the Annual Meeting if a quorum is present. In
voting by proxy for the election of nine directors to serve a one-year term,
shareholders may vote in favor of all of the Nominees, withhold their votes as
to all Nominees or withhold their votes as to a specific Nominee; in addition,
by writing in the name of additional nominee, shareholders may vote in favor of
Nominees to fill the nine member board. Abstentions and broker non-votes will be
counted for purposes of constituting a quorum, but will not have the effect of
voting in opposition to a director.
All matters to be voted on at the Annual Meeting other than the election of
the directors require approval by a majority of the votes cast, in person or by
proxy, at the Annual Meeting at which a quorum is present. Abstentions and
broker non-votes will be counted for purposes of constituting a quorum, but will
not have the effect of a vote against such proposals.
<PAGE> 3
All expenses of the Annual Meeting, including the cost of soliciting
proxies, will be paid by the Company. The Company may reimburse persons holding
hares in their names for others, or holding shares for others who have the right
to give voting instructions, such as brokers, banks, fiduciaries and nominees,
for such persons' reasonable expenses in forwarding the proxy materials to their
principals.
Any shareholder giving a proxy may revoke it by delivering a written notice
of such revocation to the Secretary of the Company at 6699 Chimney Rock, Suite
105, Houston, Texas 77081 prior to the Annual Meeting, by submitting to the
Company a more recently dated proxy or by attending the Annual Meeting and
voting at any time before it is exercised.
Pursuant to Section 3.1 of the SurgiCare by-laws, the Board of Directors,
on May 10, 2000, amend the Company's by-laws effective as of the date of the
Annual Meeting, July 18, 2000, to increase the number of directors that
constitute the whole Board of Directors to nine.
Prior to this amendment the number of directors that constituted the Board
of Directors was six.
PROPOSAL 1: ELECTION OF DIRECTORS
BOARD RECOMMENDATIONS
Six directors have been nominated for election by the Nominating Committee
of the Board of Directors at this Annual Meeting, to hold office until the next
Annual Meeting and unti the election and qualification of their successors. The
Nominating Committee has nominated, and recommend the election of, six persons,
Dr. Joe "Buddy" Huffmyer, D.P.M., Charles Cohen, Dr. David Blumfield, Dr.
Jeffrey Penso, Dr. Son Nguyen, Dr. Sherman Nagler to serve as directors of
SurgiCare.With the exception of Dr. Joe "Buddy" Huffmyer, D.P.M., all of the
Nominees are currently serving on the Board. It is intended that, unless
otherwise directed, the shares represented by proxy will be voted in favor of
all of these persons.
Dr. Joe "Buddy" Huffmyer
Age - 55
Dr. Joe "Buddy" Huffmyer, D.P.M. is a practicing podiatrist and has been
President and CEO of Surgery Centers of America II, L.L.C. (SCOA2) since 1994.
Dr. Huffmyer graduated from the Ohio College of Podiatric Medicine in 1974 and
has been board certified since 1979. He currently practices at his clinic,
Oklahoma Foot and Ankle Clinic, in Edmond, Oklahoma. Dr. Huffmyer became
involved in healthcare management in 1992 when a group of Oklahoma city area
physicians of which he was a member purchased a defunct out-patient surgery
center in hopes of getting better quality care for their patients. A year later,
having transformed it into a successful business venture, a national healthcare
company purchased the center. Surgery Centers of America was formed with the
proceeds of the sale. Since then Dr. Huffmyer has moved the company from
development and management of surgery centers to being participating partners.
To facilitate this transition SCOA2 was formed.
Dr. David Blumfield
Age - 41
Director since 1999
Dr. David Blumfield D.P.M. was elected as a Director and President and
Chief Executive Officer of SurgiCare, Inc. on July 10, 1999. Dr. Blumfield has
served as President of Bellaire SurgiCare, Inc. ("Bellaire") since March of
1995. He has been in private practice for 15 years. He received his
undergraduate degree in 1980 at Wilkes University, and then attended the Temple
College of Podiatric Medicine. He has been a diplomat of the American Board of
Podiatric Surgery since 1988.
<PAGE> 4
Mr. Charles S. Cohen
Age - 39
Director since 1999
Mr. Charles S. Cohen was elected as a Director and Chief Operating Officer
of SurgiCare on July 10, 1999. Mr. Cohen has been the Chief Operating Officer of
Bellaire since September 1998. Prior to September of 1998, Mr. Cohen was the
President of Medical Distributors International, Inc. (MDI) he was elected to
that position in November of 1994. He has served as a Director of TMDI Medical
Inc, ("TMDI"), from 1995-1997. Both MDI and TMDI were involved with the
international purchasing, importing, and exporting of medical and surgical
equipment. Mr. Cohen was educated at the University of Missouri at Columbia in
business.
Dr. Jeffrey Penso
Age - 45
Director Since 1999
Dr. Jeffrey Penso D.P.M. was elected as Director and Vice President of
SurgiCare on July 10, 1999. Dr. Penso has served as Vice-President of Bellaire
since July of 1998. He has been in private practice for 18 years. He received
his undergraduate degree in 1977 at University of Akron, and then attended the
Ohio College of Podiatric Medicine. He has been a Diplomat of the American Board
of Podiatric Surgery since 1988.
Dr. Son Nguyen
Age - 45
Director since September 1999
Dr. Son Nguyen M.D. Director - Dr. Nguyen was elected as a Director of
SurgiCare in August of 1999, and was elected by the Board of Directors to serve
as Treasurer. His Term as Treasurer will begin on the date of the annual
shareholders meeting, July 26, 2000. He has been in private practice for 13
years. He received his undergraduate degree from Waynesberg College and then
attended the University of Cincinnati Medical School. He has been a Diplomat of
the American Board of Anesthesia since 1989, and a Fellow of the American
College of Pain Medicine since 1994.
Dr. Sherman Nagler
Age - 45
Director Since 1999
Dr. Sherman Nagler D.P.M. was elected as Director and Secretary of
SurgiCare on July 10, 1999. Dr. Nagler has served as Secretary of Bellaire since
March of 1995. He has been in private practice for16 years. He received his
undergraduate degree in 1977 at State University of New York at Plattsburgh, and
then attended the New York College of Podiatric Medicine. He has been a Diplomat
of the American Board of Podiatric Surgery since 1985.
ADDITIONAL DIRECTORS
In addition to the Directors the Nominating Committee has recommended,
there are three vacant directors seats to be filled. The Nominating Committee
and the Board of Directors have chosen not to recommend and individuals to fill
these vacancies, however they have chosen to nominate the following individuals
to fill the vacancies and to hold office until the next Annual Meeting and until
the election and qualification of their successors, Dr. William Bradbury, Dr.
Shirley Browne, Dr. Larry Likover, Dr. Gregory Mangum, Dr. Bruce Miller, Dr.
Long Nguyen, Dr. Maynard Nussbaum, Dr. Robert parker, Dr, Jeffery Ross, and Dr.
Brain Zale. Dr. Shirley Browne is currently serving on the Board. It is intended
that unless a shareholder indicates on the enclosed proxy that he wishes to vote
for one or more of these nominees the shares represented by proxy will not be
voted, and will abstain from voting for any of these additional nominees.
<PAGE> 5
Dr. William Bradbury
Age - 50
Dr. William Bradbury, D. P.M. has been in private practice for 23 years. He
received his undergraduate degree in 1977 at University of Houston and then
attended the California College of Podiatric Medicine. He has been a Diplomat of
the American Board of Podiatric Surgery since 1986.
Dr. Shirley Browne
Age - 47
Director since September 1999
Dr. Shirley Browne M.D. has served as the Medical Director of Bellaire
since September of 1998. She has been in practice for 19 years. She received her
undergraduate degree from Lamar University, and then attended the University of
Texas Medical School, Houston.
Dr. Larry Likover
Age - 49
Dr. Larry Likover, M.D. has been in private practice for 21 years. He
received his undergraduate degree in 1972 at University of Michigan and then
attended the Baylor College of Medicine. He has been a Diplomat of the American
Board of Orthopedic Surgery since 1991.
Dr. Gregory Mangum
Age - 52
Dr. Gregory Mangum, D.P.M. has been in private practice for 21 years. He
received his undergraduate degree in 1971 at University of Maryland and then
attended the Pennsylvania College of Podiatric Medicine. He has been a Diplomat
of the American Board of Podiatric Surgery and American Board of Podiatric
Orthopedics since 1986.
Bruce Miller
Age - 52
Dr. Bruce Miller, D.P.M. has been in private practice for 25 years. He
received his undergraduate degree in 1969 at Temple University and then attended
the Pennsylvania College of Podiatric Medicine He has been a Diplomat of the
American Board of Podiatric Surgery since 1986.
Dr. Michael Mineo
Age - 57
Director Since 1999
Dr. Michael Mineo D.P.M. was elected as Director and Treasurer of SurgiCare
on July 10, 1999. Dr. Mineo has served as Vice-President of Bellaire SurgiCare,
Inc. since March of 1995. He has been in private practice for 29 years. He
received his undergraduate degree in 1964 from Geneva College, Beaver Falls, PA,
and then attended the Ohio College of Podiatric Medicine. He has been a Diplomat
of the American Board of Podiatric Surgery since 1979, and a Fellow of the
American College of Foot Surgeons since 1980.
Dr. Long Nguyen
Age - 53
Dr. Long Nguyen, M.D. has been in private practice for 16 years. He
received his undergraduate degree in 1967 at Saigon Medical School and then
attended the School of Medicine and Pharmacology, Univercity of Saigon.
<PAGE> 6
Dr. Maynard Nussbaum
Age - 53
Dr. Maynard Nussbaum, D.P.M. has been in private practice for 27 years. He
received his undergraduate degree in 1968 at University of Houston and then
attended the Wm. Scholl College of Podiatric Medicine. He has been a Diplomat of
the American Board of Podiatric Surgery since 1985.
Dr. Robert Parker
Age - 57
Dr. Robert Parker, D.P.M. has been in private practice for 31 years. He
received his undergraduate degree in 1965 at University of Houston and then
attended the Ohio College of Podiatric Medicine. He has been a Diplomat of the
American Board of Podiatric Surgery since 1976.
Dr. Jeffrey Ross
Age - 46
Dr. Jeffrey Ross, D.P.M. has been in private practice for 18 years. He
received his undergraduate degree in 1975 at University of Rhode Island and then
attended the New York College of Podiatric Medicine. He has been a Diplomat of
the American Board of Podiatric Surgery since 1984.
Dr. Brian Zale
Age - 45
Dr. Brian Zale, D.P.M. has been in private practice for 18 years. He
received his undergraduate degree in 1972 at Illinois State University and then
attended the Wm. Scholl College of Podiatric Medicine. He has been a Diplomat of
the American Board of Podiatric Surgery since 1985.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors held four meetings, including regular and special
meetings, and took action by written consent two times during 1999. Each
director attended at least 75% of the meetings of the Board of Directors and
committees thereof on which the director serves.
The Committees of the Board of Directors consist of an Audit Committee, on
which, Drs Blumfield, Son Nguyen, Nagler, and Mineo, and Charles Cohen serve, a
Compensation Committee, on which Drs Nagler, Browne, Son Nguyen, Penso, and
Mineo serve, and a Nominating Committee, on which Drs Blumfield, Browne, and
Penso, and Charles Cohen serve. During 1999, the Audit Committee met once, the
Compensation Committee met twice, and the Nominating committee met once. The
Audit Committee is responsible for recommending the independent public
accountants to the Board of Directors, reviewing audits, fees and supervising
matters relating to audit functions and other financial controls. The
Compensation Committee is responsible for approving compensation arrangements
for executive officers of the Company, reviewing compensation plans, granting
stock options, restricted stock and bonus stock awards and reviewing employee
compensation policies. The functions of the Nominating Committee are to screen,
select and recommend appropriate candidates for election as Directors to the
Company's Board of Directors. The Nominating Committee will consider nominees
recommended by stockholders of the Company for the 2001 Annual Meeting if the
names and qualifications of such nominees are submitted in writing by November
30, 2000, to the Secretary of the Company, 6699 Chimney Rock Suite 105, Houston,
Texas, who will then forward the recommendation to the Chairman of the
Nominating Committee.
COMPENSATION OF DIRECTORS
Directors are entitled to receive a retainer equal to 1,000 restricted
shares of the Company's Common Stock, to be issued effective the date of the
annual meeting of shareholders at which the director is elected to serve. In
addition all board members are reimbursed for expenses incurred in attending
such meetings. Each director has waved his or her right to any compensation for
the 1999/2000 term, (July 1999 through July 2000), and has further agreed to
accrue any compensation due from future terms, until such time has The Company
has successfully expanded beyond it current holdings.
REQUIRED VOTE
Directors must be elected by a plurality of the votes cast, in person or by
proxy, by the holders of Common Stock and Series A Preferred Stock entitled to
vote at the Annual Meeting at which a quorum is present. The Company's Amended
and Restated Certificate of Incorporation does not provide for cumulative
voting, and, accordingly, the holders of the common Stock do not have cumulative
voting rights with respect to the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE PROPOSED NOMINEES (Six Persons)
TO THE BOARD OF DIRECTORS.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth certain information regarding beneficial
ownership as of April 30, 2000 (unless otherwise indicated) by (i) all
directors, nominees for directors and executive officers, (ii) each person known
by the Company to be the beneficial owner of more than 5% of the Common Stock of
the Company, and (iii) all directors and officers as a group. Except as
otherwise indicated, the beneficial owners listed below have sole voting and
investment power with respect to all shares owned by them, except to the extent
such power is shared by a spouse under applicable law.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Title of Class Name and address of Amount and nature of Percent of Class
Beneficial Owner Beneficial Ownership (a)
Common Stock SCOA II / Dr. Huffmyer 1,095,556 8.695%
1930 S. Bryant
Edmond, OK 73013
Common Stock David Blumfield 804,444 (b) 6.357%
Common Stock Sherman Nagler 804,444 (b) 6.357%
Common Stock William Bradbury 804,444 (b) 6.357%
Common Stock Robert Parker 804,444 (b) 6.357%
Jeffrey Penso 804,444 (b) 6.357%
Common Stock Gregory Mangum 804,444 (b) 6.357%
Common Stock Jeffrey Ross 804,444 (b) 6.357%
Common Stock Michael Mineo 804,444 (b) 6.357%
Common Stock Bruce Miller 804,444 (b) 6.357%
Common Stock Brain Zale 804,444 (b) 6.357%
Common Stock Son Nguyen 804,444 (b) 6.357%
Common Stock Long Nguyen 804,444 (b) 6.357%
Common Stock Larry Likover 804,444 (b) 6.357%
Common Stock Shirley Browne 402,222 (c) 3.179%
Common Stock Dr. Maynard Nussbaum
All officers and 4,454,462 (a) 35.36%
directors 550,000 (b) 37.93%
(seven persons)
</TABLE>
a. As of April 30, 2000, 12,596,657shares of common stock were issued and
outstanding. Unless otherwise noted, the security ownership disclosed in
the table is of record and beneficial.
b. Includes 74,074 shares held in trust pursuant to that Voting Trust
Agreement, dated, of July 28, 1999 (the "Voting Trust Agreement"), between
and among the shareholders and David Blumfield, D.P.M., trustee. A total of
1,000,000 shares of Common Stock have been deposited in the voting trust
created pursuant to such Voting Trust Agreement. Dr. Blumfield is deemed to
have sole voting power as to such shares.
c. Includes 37,037 shares held in trust pursuant to the Voting Trust
Agreement.
d. As of April 30, 2000, 1,450,000 shares of Series A Preferred were issued
and outstanding. Unless otherwise noted, the security ownership of such
Series A Preferred disclosed in the table is of record and beneficial.
e. As of January 31, 2000, 12,596,657 shares of common stock were issued
and outstanding. Unless otherwise noted, the security ownership
disclosed in the table is of record and beneficial.
f. Includes 74,074 shares held in trust pursuant to that Voting Trust
Agreement, dated, of July 28, 1999 (the "Voting Trust Agreement"), between
and among the shareholders and David Blumfield, D.P.M., trustee. A total of
1,000,000 shares of Common Stock have been deposited in the voting trust
created pursuant to such Voting Trust Agreement. Dr. Blumfield is deemed to
have sole voting power as to such shares.
g. Includes 37,037 shares held in trust pursuant to the Voting Trust
Agreement.
h. As of April 30, 2000, 1,450,000 shares of Series A Preferred were issued
and outstanding. Unless otherwise noted, the security ownership of such
Series A Preferred disclosed in the table is of record and beneficial.
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth summary information concerning compensation
paid or accrued by or on behalf of the Company's Chief Executive Officer and the
four other most highly compensated executive officers of the Company whose total
annual salary and bonus exceeded $100,000 (hereinafter, collectively referred to
as the "Named Executive Officers") for services rendered in all capacities to
the Company for the years ended December 31, 1997, 1998 and 1999. Each of the
persons indicated received their compensation as a director or officer of
Bellaire.
<TABLE>
<S> <C> <C> <C>
Name .................. Principal Position Year Salary
David Blumfield ............ President and CEO 1999 $24,000
Charles Cohen ............. Chief Operating Officer 1999 $75,000
1998 $50,000
</TABLE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
<TABLE>
<S> <C> <C>
Name ........................ Age Principal Position
David Blumfield ................... 41 President and CEO
Charles Cohen .................... 39 Chief Operating Officer
</TABLE>
See "Proposal 1: Election of Directors" for information regarding the
backgrounds of Dr. Blumfield and Mr. Cohen.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report is submitted by the Compensation Committee of the Company at
the direction of the Board of Directors pursuant to rules established by the
Commission. This report provides certain data and information regarding the
compensation and benefits provided the Company's Chief Executive Officer, as
well as to Charles S. Cohen.
The Compensation Committee is responsible for establishing and
administering the Company's executive compensation policies and programs within
the guidelines of the Company's compensation philosophy. Recommendations
relating to the compensation of the Named Executive Officers are made by the
Compensation Committee to the Board of Directors, which makes the final
decisions as to compensation. Employees serving on the Board of Directors do not
participate in the determination of their own compensation.
COMPENSATION PHILOSOPHY
The Compensation Committee has recently adopted the philosophy to provide
significant ownership opportunity to the Named Executive Officers so that they
will be motivated to enhance shareholder return and increase shareholder value.
The compensation policies and programs utilized by the Compensation Committee
and endorsed by the Board of Directors generally consist of the following:
- Recommend the Named Executive Officers' total compensation in relation to
Company performance;
- Provide long-term incentive compensation in the form of stock options to
attract, retain, motivate and reward individuals with the experience
and skills necessary to promote the Company's success.
<PAGE> 8
The compensation program of the Company will generally consists of (i) base
salary and annual incentive compensation in the form of cash bonuses and/or
stock option awards and (ii) long-term incentive compensation in the form of
stock options.
COMPENSATION
The 1999 compensation package for each Named Executive Officer was
determined based on their individual and unique contributions to the Company.
The 1999 compensation package for the Named Executive Officers was in the
form of a base salary, which in 1999 was solely payable in cash.
The following briefly describes the sources of compensation:
BASE COMPENSATION
The Company's annual salary levels are intended to reflect the contribution
to the Company and level of responsibility of the particular executive officer
given the Company's challenging business environment. Individual base salary
levels are established based on these guidelines.
ANNUAL INCENTIVES
Bonus opportunities will be established in recognition of the bonuses paid
in the health care industry and in consideration of the level of each of the
Named Executive Officers' position in the Company and resulting influence on
business success. The bonus will be stated as a percentage of annual salary of
the Named Executive Officers. In establishing the level of bonuses actually
paid, the Compensation Committee expected to utilize a formula based upon a
comparison of actual earnings per share and return on capital achieved during
the year as compared to budgeted amounts for such results. Each of these factors
is expected to be weighted equally in application of the bonus formula.
LONG-TERM COMPENSATION
The Company's long-term compensation strategy will include the granting of
stock options. The Company has not adopted any stock option plan and has not
issued stock options as of the date of this proxy statement, and it is
anticipated that the Company adopt a stock option or similar plan within the
next "12" months. The Company expects to grant stock options to provide a total
compensation package that rewards contributions by the executive officers to the
Company's long-term stock performance. These grants will be intended not only to
motivate and retain the Named Executive Officers in the service of the Company,
but also to more closely align the Named Executive Officers' interests with
those of the Company's shareholders.
In making its decisions to approve stock option awards to the Named
Executive Officers, the Compensation Committee will evaluate the Company's
performance for the year, the Company's transition plans, the desirability of
long-term service from the Named Executive Officers. In connection with the
ongoing compensation plans, the Compensation Committee intends to promote
long-term compensation structures which, in the Compensation Committee's
opinion, provide features which properly align the Company's executive
compensation with corporate performance and the interest of its shareholders and
which offer competitive compensation relevant to comparable opportunities in the
marketplace.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 21, 1999, the Board of Directors of both SurgiCare and Bellaire
unanimously approved SurgiCare's acquisition, effective July 1, 1999 of 100%
(1,350 shares) of the issued and out standing common stock of Bellaire in
exchange for 10,955,556 shares of SurgiCare's common stock and 1,350,000 shares
of SurgiCare's Series A Preferred. This acquisition was accounted for as a
reverse merger. Following the closing of the transaction, Bellaire became a
wholly owned subsidiary of SurgiCare. At the time of the approval by both boards
of directors, the shareholders of Bellaire jointly held the majority of the
issued and outstanding shares of SurgiCare. In addition four of the five members
of the Board of Directors of SurgiCare each individually held 7.4% of the out
standing and issued shares of Bellaire.
In determining the amount and character of the consideration to be paid by
SurgiCare for the Bellaire stock, the boards of directors of both SurgiCare and
Bellaire considered numerous factors, including the then inactive status of
SurgiCare and prior offers that Bellaire had received for the acquisition of
Bellaire by others.
Bellaire has entered into a formal "Affiliation Agreement" effective July
1,1999 with Surgical Centers of America, Inc. ("SCOA") of which Dr. Huffmyer is
President and CEO and owns 8.695% of the outstanding equity interest, pursuant
to which agreement SCOA will render certain administrative and other services to
Bellaire. SCOA has developed extensive policies and procedures that have been
approved by all governmental licensing and regulatory authorities. These
policies and procedures pertain to both clinical and administrative services.
Throughout this affiliation agreement Bellaire is licensed to utilize these
policies and procedures at each of its centers. SCOA has a managed care
department that is continually reviewing managed care contracts, negotiating new
contracts and negotiating the renewal of existing contract. Through the SCOA /
Bellaire affiliation agreement, Bellaire utilizes the services provided by this
department. SCOA has also negotiated national buying contracts that increase the
buying power of each surgery centers which have affiliation with SCOA.. These
contracts can substantially decrease the cost of surgical supplies. SurgiCare
through its affiliation agreement participates in all of SCOA's national buying
contract. Bellaire will pay to SCOA 2% of the total cash surgery center
collections monthly for these services. SurgiCare believes that the terms of
such agreement are no less favorable to SurgiCare and Bellaire than could be
obtained from surgery center management companies not affiliated with the
Company. Prior to SurgiCare's reverse merger with Bellaire, SCOA provided
management and administrative services to Bellaire. In consideration of the
termination of this pre-existing management contract, SurgiCare issued SCOA
1,095,556 shares of SurgiCare common stock.
Bellaire-leases space for its offices in a medical office building owned by
a partnership in which Dr.Mineo, a director and shareholder of SurgiCare, has a
25% interest. The lease expires in 2004. During 1999, Bellaire paid
approximately $180,000 as rent to the partnership.
SHAREHOLDER PROPOSALS
2001 ANNUAL MEETING
If a shareholder wishes to have a proposal considered for inclusion in the
Company's proxy materials for the 2001 annual meeting of shareholders, the
proposal must comply with the Commission's proxy rules, be stated in writing and
be submitted on or before January 3, 2001.
DISCRETIONARY AUTHORITY
The deadline for delivering a notice of shareholder proposal, other than a
proposal to be included in the proxy materials for the 2001 annual meeting of
shareholders will be March 31, 2001. Any notice of shareholder proposal received
after March 31, 2001 will be considered untimely. The persons named as proxies
in the Proxy Statement may exercise discretionary voting authority with respect
to any matter that is not submitted to the Company by such date. Additionally,
even if proper notice is received on or prior to March 31, 2001, the individuals
named as proxies on the proxy card for that meeting may nevertheless exercise
their discretionary authority in voting such proxies with respect to such
proposal by advising the shareholders of the proposal and how they intend to
exercise their discretion to vote on such proposal, unless the shareholder
making the proposal solicits proxies with respect to the proposal to the extent
required by Rule 14a-4(c)(2) under the Exchange Act. Any proposals should be
mailed to the Company at 6699 Chimney Rock, SUITE 105, Houston, Texas 77081,
Attention: Dr. Sherman Nagler, Secretary.
<PAGE> 9
PROPOSAL 2: APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has recommended the appointment of Weinstein Spira &
Company L.L.P. ("Weinstein Spira") as the Company's independent auditors for the
fiscal year ending December 31, 2000. Weinstein Spira has served as independent
auditors to the Company or Bellaire since 1998.
Services provided to the Company and its subsidiaries by Weinstein Spira
with respect to 1999 included the audit of the Company's consolidated financial
statements and the 401(k) Plan, services related to filings with the Securities
and Exchange Commission, tax filings and consultations on various tax and
acquisition due diligence matters.
In the event stockholders do not ratify the appointment of Weinstein Spira
as the Company's independent auditors for the current fiscal year, such
appointment will be reconsidered by the Audit Committee and the Board of
Directors.
Representatives of Weinstein Spira will be present at the Annual Meeting to
respond to appropriate questions and to make The enclosed form of Proxy provides
a means for stockholders to vote for the approval of the appointment of
Weinstein Spira orto abstain from voting with regard to the approval of the
appointment of Weinstein Spira. Each properly executed Proxy received in time
for the meeting will be voted as specified therein. If a shareholder executes
and returns a Proxy but does not specify otherwise, the shares represented by
such shareholder's Proxy will be counted for approval of the appointment of
Weinstein Spira.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF WEINSTEIN SPIRA & COMPANY L.L.P. AS THE
COMPANY'S INDEPENDENT AUDITORS.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be brought
before the Annual Meeting. If any other matters, however, are properly brought
before the Annual Meeting, the persons named in the enclosed form of proxy will
have discretionary authority to vote all proxies with respect to such matters in
accordance with their best judgment.
UPON THE WRITTEN REQUEST OF ANY HOLDER OF THE COMMON STOCK ENTITLED TO VOTE
AT THE ANNUAL MEETING, THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1999, AS
FILED WITH THE COMMISSION. REQUESTS SHOULD BE DIRECTED TO CHARLES S. COHEN,
CHIEF OPERATING OFFICER, SURGICARE, INC., 6699 CHIMNEY ROCK, SUITE 105, HOUSTON,
TEXAS 77081.
By Order of the Board of Directors,
/s/ Dr. Sherman Nagler
-----------------------
Secretary
<PAGE> 10
SURGICARE, INC.
ANNUAL MEETING OF SHAREHOLDERS
JULY 26 2000
The undersigned hereby appoints Dr. David Blumfield and Dr. Sherman Nagler,
or either of them, with power of substitution, as proxies to vote all shares of
SurgiCare, Inc. (the "Company") owned by the undersigned at the Annual Meeting
of Shareholders to be held at the corporate offices located at 6699 Chimney
Rock, Suite 105, Houston, Texas 77081., at 6:30 P.M. on July 26 2000, on the
following matters as indicated below and such other business as may properly
come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1) AND (3)
(1) ELECTION OF DIRECTOR (Nominees Recommended by a majority vote of the
Nominating Committee)
a) Dr. David Blumfield
FOR AGAINST ABSTAIN
b) Charles S. Cohen
FOR AGAINST ABSTAIN
c) Dr. Son Nguyen
FOR AGAINST ABSTAIN
d) Dr. Jeffrey Penso
FOR AGAINST ABSTAIN
e) Dr. Sherman Nagler
FOR AGAINST ABSTAIN
f) Dr. Joe "Buddy" Huffmyer
FOR AGAINST ABSTAIN
(2) ELECTION OF ADDITIONAL DIRECTORS
Dr. William Bradbury
Dr. Shirley Browne
Dr. Larry Likover
Dr. Gregory Mangum
Dr. Bruce Miller
Dr. Michael Mineo
Dr. Long Nguyen
Dr. Maynard Nussbaum
Dr. Robert Parker
Dr. Jeffrey Ross
Dr. Brain Zale
Please select three names from the above list such
that the total of (1) and (2) equal nine.
a) __________________________________________
b) __________________________________________
c) __________________________________________
(3) PROPOSAL TO APPROVE THE SELECTION OF WEINSTEIN SPIRA & COMPANY
L.L.P. AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2000
FOR AGAINST ABSTAIN
(4) OTHER MATTERS
FOR AGAINST ABSTAIN
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR INDIVIDUAL NOMINEES, WRITE THEIR
NAMES IN THE SPACE PROVIDED BELOW:
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IN THEIR DISCRETION, THE PROXIES NAMED ABOVE MAY VOTE UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS.
ALL MATTERS TO BE VOTED ON ARE PROPOSED BY THE COMPANY IN THE MANNER
STATED IN THE ACCOMPANYING PROXY STATEMENT
The shares represented by this Proxy, when properly executed, will be voted
in the manner directed herein by the undersigned shareholder. A vote against any
of the proposals will not count as a vote for adjournment of the Annual Meeting.
If no direction is made, this Proxy will be voted (i) FOR the nominees listed in
item (1) as directors of the Company, and (ii) FOR approval of the appointment
of Weinstein Spira & Company, L.L.P., as independent auditors of the Company.
Please sign exactly as your name
appears on this Proxy Card. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporate name by
President or other authorized
officer. If a partnership or
limited liability entity, please
sign in full name of such entity
by authorized person.
Dated: , 2000
--------------------------
---------------------------------
Signature of Shareholder
---------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
