MEDICAL ADVISORY SYSTEMS, Inc.
June 4, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of
Stockholders of Medical Advisory Systems, Inc. which will be held on
Friday, June 25, 1999 at 2:00 P.M., at Damon's International (Waldorf
Holiday Inn) 45 Patrick's Drive, Waldorf, Maryland 20603-4507. The
official notice of the meeting together with a proxy statement and form
of proxy are enclosed. Please give this information your careful
attention.
Stockholders of the Company are being asked to elect three
directors and to amend the Company's Certificate of Incorporation.
Whether or not you expect to attend the meeting in person, it is
important that your shares be voted at the meeting. PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE. The giving of your proxy will not
affect your right to vote in person should you later decide to attend the
meeting.
/s/ Ronald W. Pickett /s/ Thomas M. Hall, M.D., M.I.M.
RONALD W. PICKETT THOMAS M. HALL, M.D., M.I.M.
Chairman of the Board Chief Executive Officer and
and President Chief Physician
MEDICAL ADVISORY SYSTEMS, INC.
8050 Southern Maryland Boulevard
Owings, Maryland 20736
___________________________________
Notice of Annual Meeting of Stockholders
June 4. 1999
___________________________________
To Our Stockholders:
The 1999 Annual Meeting of Stockholders of Medical Advisory
Systems, Inc. (the "Company") will be held at Damon's International
(Waldorf Holiday Inn) 45 Patrick's Drive, Waldorf, Maryland 20603-
4507, on Friday, June 25, 1999 at 2:00 P.M., for the following purposes
as more fully described in the annexed Proxy Statement:
1. To elect three directors for terms of one year each and until
their successors are duly elected and qualified.
2. To amend the Company's Certificate of Incorporation to
provide that the number of shares of Common Stock which
the Company has authority to issue be increased from
10,000,000 to 500,000,000 shares.
3. To transact such other business as may properly come
before the meeting or any postponement or adjournment
thereof.
The Board of Directors has fixed May 14, 1999, as the record
date for the determination of Stockholders entitled to vote at the meeting
or any postponement or adjournment thereof. Only holders of record of
the Company's Common Stock on that date are entitled to vote on
matters coming before the meeting and any adjournment or
postponement thereof. A complete list of stockholders at the meeting
will be maintained in the Company's offices at 8050 Southern Maryland
Boulevard, Owings, MD 20736, for 10 days prior to the meeting.
Please advise the Company's transfer agent, American
Securities Transfer & Trust, Inc., 938 Quail Street, Suite 101,
Lakewood, Colorado 30215, of any change in your address.
IF YOU PLAN TO ATTEND:
Only Stockholders as of the record date, or their duly
appointed proxies, may attend the meeting. Registration and seating
will begin at 2:00 P.M. Each stockholder may be asked to present
valid picture identification, such as a driver's license or passport.
Please note that if your shares, or the person or entity for whom you
are the duly appointed proxy, are held in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a
brokerage statement reflecting stock ownership as of the record date.
Cameras, recording devices and other electronic devices will not be
permitted at the meeting.
Whether or not you expect to attend the meeting in person, you
are urged to sign and date the enclosed proxy and return it promptly in
the envelope provided for that purpose.
By the Order of the Board of Directors
/s/ Robert P. Crabb
ROBERT P. CRABB
Secretary
MEDICAL ADVISORY SYSTEMS, INC.
8050 Southern Maryland Boulevard
Owings, Maryland 20736
____________________
PROXY STATEMENT
____________________
This proxy statement, which together with the accompanying
proxy card, is being mailed to stockholders on or about June 4th, 1999,
and is furnished to the stockholders of the Company in connection with
the solicitation of proxies by the Board of Directors on behalf of the
Company for use in voting at the 1999 Annual Meeting of Stockholders,
including any adjournment or postponement thereof.
Proxies in the form enclosed, if properly executed and received
in time for voting, and not revoked, will be voted as directed in
accordance with the instructions thereon. Any proxy not so directing to
the contrary will be voted FOR the Company's nominees as directors and
FOR approval of the amendment to the Company's Certificate of
Incorporation. Sending in a signed proxy will not affect a stockholder's
right to attend the meeting and vote in person since the proxy is
revocable. Any stockholder giving a proxy may revoke it at any time
before it is voted at the meeting by delivering a later dated proxy or by
giving written notice to the Secretary of the Company.
The cost of this solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone, telegraph or facsimile, by directors, officers or employees of
the Company and its subsidiaries without additional compensation. The
Company will, on request, reimburse stockholders of record who are
brokers, dealers, banks or voting trustees, or their nominees, for their
reasonable expenses in sending proxy materials and annual reports to
the beneficial owners of the shares they hold of record.
Voting Securities
At the close of business on May 14, 1999, the record date for
the determination of stockholders entitled to receive notice of and to vote
at the meeting, the Company's outstanding voting securities consisted of
4,716,438 shares of Common Stock. Each share of Common Stock
outstanding is entitled to one vote on each matter which may be brought
before the Annual Meeting. In order for a quorum to be present at the
Annual Meeting, a majority of the outstanding shares of the Company's
Common Stock as of the close of business on the record date must be
present in person or represented by proxy at the Annual Meeting. All
such shares that are present in person or represented by proxy at the
Annual Meeting will be counted in determining whether a quorum is
present, including abstentions and broker non-votes.
The election of directors will be determined by a plurality vote.
Approval of the amendment to the Company's Certificate of
Incorporation requires that a majority of the Company's outstanding
shares of Common Stock vote "for" the proposal. The affirmative vote
of a majority of the shares present or represented by proxy is required to
approve any other business matters properly brought before the Annual
Meeting. Under the Delaware General Corporation Law, an abstention,
withholding of authority to vote or broker non-vote on any proposal,
other than the election of directors, will have the same legal effect as an
"against" vote.
PROPOSAL ONE
ELECTION OF DIRECTORS
Information Concerning Nominees
The Company's Bylaws provide that the number of directors
that shall constitute the entire Board of Directors shall not be less than
three and shall be fixed from time to time exclusively by the Board of
Directors. The Board of Directors has set the number of directors at
three (3). The three (3) nominees for director listed below will stand for
election at this Annual Meeting for a one-year term of office expiring at
the Year 2000 Annual Meeting of Stockholders and until their
successors are duly elected and qualified.
The Company is currently considering applying to list shares of
its Common Stock on a national securities exchange (i.e., the New York
Stock Exchange or the American Stock Exchange) or an automated
quotation system (i.e., the NASDAQ National Market or the NASDAQ
SmallCap Market). Should the Company elect to pursue listing its
Common Stock on one of the above-mentioned stock markets, such
stock market's listing requirements may obligate the Company to
appoint two additional directors who are not officers of the Company.
In such event, the Board of Directors is empowered, pursuant to Article
III of the Company's Bylaws, to appropriately increase the authorized
number of directors and elect such new directors to serve as directors
until the next annual stockholders' meeting and until their successors are
elected and qualified.
The following table sets forth certain information as to the
nominees for directors of the Company:
Director
Name Age Position with the Company Since
Ronald W. Pickett 51 Chairman of the Board of Directors 1981
and President
Thomas M. Hall 47 Chief Executive Officer, Chief Physician, 1992
and Director
Robert P. Crabb 51 Director, Secretary 1998
While it is not anticipated that any of the nominees will be
unable to serve, if any nominee should decline or become unable to serve
as a director for any reason, votes will be cast instead for a substitute
nominee designated by the Board of Directors or, if none is so
designated, will be cast according to the judgement of the person or
persons voting the proxy.
Business Experience of Directors
Ronald W. Pickett, 51, the founder of the Company, Chairman
of the Board of Directors and President. He has been an officer and
director of the Company since its inception in 1981. A graduate of
Gordon College, Mr. Pickett has engaged in various entrepreneurial
activities for 30 years.
Thomas M. Hall, M.D., M.I.M., 47, a graduate of George
Washington University School of Medicine, "with distinction", has
served as President of Hall & Associates, P.A., and its predecessor firm
since April, 1988, as Chief Physician of the Company since 1982, and as
Chief Executive Officer of the Company since July 1992. Dr. Hall has
been a director of the Company since March 1992. As Chief Executive
Officer of the Company, Dr. Hall supervises all day-to-day operations.
As Chief Physician, Dr. Hall is in charge of the medical personnel
utilized in the Company's medical information, advice and training
operations. Dr. Hall is a diplomat of the National Board of Medical
Examiners, the American Board of Internal Medicine, and the American
Board of Preventive Medicine (Certified Occupational Medicine
Specialist). He is a member of Phi Beta Kappa and Alpha Omega Alpha
honor societies. Dr. Hall also holds a Masters degree in International
Management from the University of Maryland.
Robert P. Crabb, 51, has over 30 years of marketing, sales and
public and private corporate management experience. His
entrepreneurial expertise includes commercial and residential real estate
development and a career in insurance and financial planning with the
Metropolitan Insurance Company. He serves as Corporate Secretary and
Director of Corporate Development of the Company. Mr. Crabb's
consulting company Susquehanna Development has been instrumental
in the development of the Americas Doctor project and the creation of
Doc-Talk, L.L.C., a subsidiary of the Company.
Unless authority has been withheld, the proxy agents intend to
vote FOR the election of all of the Company's nominees. The election of
a director requires the affirmative vote of a majority of the votes cast by
all stockholders represented and entitled to vote thereon. An abstention,
withholding of authority to vote or broker non-vote, therefore, will not
have the same legal effect as an "against" vote and will not be counted
in determining whether the nominee has received the required
stockholder vote. The Board of Directors unanimously recommends
that you vote "For" the election of each nominee.
Board Meetings and Committees of the Board
The Board of Directors held one regular meeting and no special
meetings during the fiscal year ended October 31, 1998. All of the
directors attended the meeting.
The Company does not have an Executive Committee, Stock
Option Committee or Audit Committee.
Director Compensation
Directors who are not officers of the Company receive $250 for
each meeting of the Board of Directors or committee of the Board of
Directors that they attend. Officers of the Company do not receive
additional compensation for attending board meetings.
Executive Officers
The current executive officers of the Company, their ages and
positions are as follows:
Name Age Position
Ronald W. Pickett 51 Chairman of the Board of Directors of the
Company, President of the Company,
Managing Member of DocTalk, LLC
Thomas M. Hall, MD, M.I.M. 47 Chief Executive Officer of the Company,
Chief Physician of the Company,
President of Hall & Associates, P.A.
President of Hall & AmDoc Associates,P.A.
President of Hall & DocTalk Associates,
P.A.
Robert P. Crabb 51 Secretary of the Company
Dale L. Hutchins, Ph.D. 37 Executive Vice President of the Company,
Chief Operating Officer of DocTalk, LLC
Robert C. Snyder 42 Chief Financial Officer and Treasurer of
the Company
Ronald W. Pickett is the founder of the Company, Chairman of
the Board of Directors and President. He has been an officer and
director of the Company since its inception in 1981. A graduate of
Gordon College, Mr. Pickett has engaged in various entrepreneurial
activities for 30 years.
Thomas M. Hall, M.D., M.I.M., a graduate of George
Washington University School of Medicine, "with distinction", has
served as President of Hall & Associates, P.A., and its predecessor firm
since April, 1988, as Chief Physician of the Company since 1982, and as
Chief Executive Officer of the Company since July 1992. Dr. Hall has
been a director of the Company since March 1992. As Chief Executive
Officer of the Company, Dr. Hall supervises all day-to-day operations.
As Chief Physician, Dr. Hall is in charge of the medical personnel
utilized in the Company's medical information, advice and training
operations. Dr. Hall is a diplomat of the National Board of Medical
Examiners, the American Board of Internal Medicine, and the American
Board of Preventive Medicine (Certified Occupational Medicine
Specialist). He is a member of Phi Beta Kappa and Alpha Omega Alpha
honor societies. Dr. Hall also holds a Masters degree in International
Management for the University of Maryland.
Robert P. Crabb, Secretary, joined the Company in 1998. Mr.
Crabb has over 30 years of sales and marketing and public and private
corporate management experience, including 15 years with the
Metropolitan Life Insurance Company where he played an integral role
in the Company's development and implementation of its marketing and
training programs. His entrepreneurial expertise includes marketing
and financial consulting and commercial and residential real estate
development. Mr. Crabb serves as the Director of Corporate
Development of the Company and he is the Vice President of Marketing
for Doc-Talk, LLC. Mr. Crabb studied Accounting and Finance at
Benjamin Franklin University in Washington, DC and Business Finance
and Estate Planning at the University of North Carolina.
Dale L. Hutchins, PH.D., Executive Vice President, joined the
Company in 1982. He also serves as the Chief Operating
Officer of DOC-TALK, LLC. He has 18 years of experience in
management, operations and marketing. Dr. Hutchins also has
considerable import, export, foreign product/capability representation,
and counter-trade experience. He holds a PH.D. in business
administration, as well as varied medical certifications. He is active in a
wide range of charitable, industry, technology, and civic organizations.
Robert C. Snyder, Chief Financial Officer, joined the Company
in May of 1996. Mr. Snyder has over 20 years of accounting experience
working in the private sector in Washington D.C. His experience
includes serving as senior financial and administrative director for
several rapid growth software R & D Companies and director of three
Maryland based non-profit organizations. He brings to MAS the talents
necessary to provide for the successful and controlled financial growth
of the Company. Mr. Snyder has degrees from the University of
Maryland in Accounting, Business Administration and Economics.
OWNERSHIP OF COMMON STOCK
The following table sets forth as of May 14, 1999, certain
information with respect to the beneficial ownership of the Company's
Common Stock (i) by each person who is known by the Company to be
the beneficial owner of more than five percent of the Common Stock,
(ii) by each director, (iii) by the Company's Chief Executive Officer and
its four most highly compensated executive officers and (iv) by all
directors and executive officers as a group.
Shares of Common Percent of
Stock Beneficially Common
Owned (1) Stock Owned
Thomas M. Hall, M.D., M.I.M. 1,182,750(1) 24.06%
8050 Southern Maryland Boulevard
Owings, MD 20736
637,568(2) 13.5%
Ronald W. Pickett
8050 Southern Maryland Boulevard
Owings, MD 20736
Robert P. Crabb 100,000(3) 2.01%
583 Lombard Road
Rising Sun, MD 21911
Dale L. Hutchins, Ph.D. 68,111(4) 1.4%
8050 Southern Maryland Boulevard
Owings, MD 20736
Robert C. Snyder 30,000(5) 0.6%
8050 Southern Maryland Boulevard
Owings, MD 20736
All directors and executive officers as a 2,018,429 41.57%
group (5 individuals)
(1) Includes immediately exercisable options to purchase 200,000
shares of the Company's Common Stock at $.50 per share.
(2) Includes 304,678 shares of Common Stock owned by family
members and associates, and 332,890 shares beneficially owned
by Ronald W. Pickett and Cynthia P. Pickett (his spouse).
(3) Consists ofimmediately exercisable options to purchase 100,000
shares of the Company's Common Stock at $0.50 per share.
(4) Includes immediately exercisable options to purchase 50,000
shares of the Company's common stock at $.50 per share.
(5) Consists of immediately exercisable options to purchase 12,000
shares of the Company's common stock at $0.50 per share. Per
the terms of an employment agreement between the Company
and Mr. Snyder, Mr. Snyder is eligible to receive additional
options to purchase 18,000 shares of Common Stock of the
Company at the rate 6,000 options per year, at prices to be set
by the Board of Directors of the Company based on the then
market value of the Company's stock and Mr. Snyder's
continued satisfactory employment.
PROPOSAL TWO
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION INCREASING THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK TO 500,000,000 AND THE
NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK TO 10,000,000
Under the Company's Certificate of Incorporation, the
Company currently is authorized to issue up to 10,000,000 shares of
Common Stock and up to 1,000,000 shares of Preferred Stock. In May
1999, the Board of Directors approved an amendment to the Company's
Certificate of Incorporation that increases the maximum number of
authorized shares of Common Stock by 490,000,000 to a total of
500,000,000 shares, and increases the maximum number of authorized
shares of Preferred Stock by 9,000,000 to 10,000,000, subject to
approval by the stockholders of the Company. The purpose of the
Amendment is to provide sufficient shares for future financings, equity-
based compensation plans, recapitalizations, acquisitions and other
corporate transactions. Once authorized, the additional shares of
Common Stock and Preferred Stock may be issued with approval of the
Board of Directors but without further approval of the stockholders
unless stockholder approval is required by applicable law, rule or
regulation. Accordingly, this solicitation may be the only opportunity for
stockholders to approve such transactions.
Stockholder approval of this proposal is required under
Delaware law. Approval of the amendment to the Company's Certificate
of Incorporation increasing the number of authorized shares of Common
Stock by 490,000,000 and the number of authorized shares of Preferred
Stock by 9,000,000 requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock. If the stockholders
do not approve the amendment, then the number of authorized shares of
the Company's Common Stock will remain at 10,000,000, and the
number of authorized shares of the Company's Preferred Stock will
remain at 1,000,000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
PROPOSAL TWO.
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
The Company's compensation policies for executive officers are
to (i) provide compensation packages, so as to attract, motivate and
retain executives, (ii) link a significant portion of compensation to
financial results, so as to reward successful performance, and (iii)
provide long-term equity based compensation, so as to further align the
interests of executives with those of the stockholders and further reward
success and performance. The principal components of the Company's
executive compensation are base salary, incentive compensation and
stock options.
In determining compensation levels, the Company considers
compensation packages offered by similar sized companies within the
health care industry. Compensation levels for individual executive
officers may be more or less than those offered by such other companies,
depending on a subjective assessment of individual factors, such as the
executive's position, skills, achievements, tenure with the Company and
historical compensation levels.
The Company has employment agreements with Thomas M.
Hall, M.D., Ronald W. Pickett, Dale L. Hutchins, Ph.D., and Robert C.
Snyder. In addition, the Company has a consulting agreement with
Susquehanna Development Corporation, which is wholly owned by Mr.
Crabb.
Under the stock option plans established by the Company, stock
options are periodically granted to employees at the discretion of the
Board of Directors or Compensation Committee. It is contemplated that
executives of the Company will be eligible to receive stock option
grants, subject to individual performance and the performance of the
Company as a whole.
Summary Compensation Table
The following table sets forth certain information regarding the
compensation paid to the Chief Executive Officer and each of the four
other most highly compensated executive officers of the Company for
services rendered in all capacities for fiscal 1998, fiscal 1997 and fiscal
1996.
Fiscal Other Annual
Name and Principal Position Year Salary Bonus Compensation
Thomas M. Hall, M.D., 1998 $ 61,538 $ 110,231 (2) $ 83,260 (3)
M.I.M. 1997 $ 50,000 $ 95,105 (2) $ 85,694 (3)
CEO and 1996 $ 50,000 $ 65,135 (2) $ 87,625 (3)
Chief Physician (1)
Ronald W. Pickett 1998 $ 86,538 -- --
Chairman of the Board, 1997 $ 50,000 -- --
President and Treasurer 1996 $ 50,000 -- --
Robert P. Crabb 1998 $ 3,231 -- $ 36,175 (4)
Secretary
Dale L. Hutchins, Ph.D. 1998 $ 55,230 $ 8,077 --
Executive Vice President
Robert C. Snyder
Chief Financial Officer and 1998 $ 52,500 $ 5,000 --
Treasurer
(1) Prior to November 1, 1998, Dr. Hall also received income from the
Company as an independent contractor and independent commissioned
sales agent, as detailed in notes (2) and (3) below. Dr. Hall is
required to pay certain of his own business and travel expenses
related to this income.
(2) Received as an independent commissioned sales agent, representing
a percentage of the Company's gross sales of certain travel-related
medical advisory services. See "Certain Relationships and Related
Transactions."
(3) Received as an independent contractor through the Company's
agreement with Hall & Associates, P.A., under which Hall &
Associates, P.A. provides the Company with medical staff
personnel. See "Certain Relationships and Related Transactions."
(4) Received as an independent consultant to DocTalk, L.L.C. through
Susquehanna Development Corporation which is controlled by Mr. Crabb.
See "Certain Relationships and Related Transactions."
No person (other than the Chief Executive Officer) who served
as an executive officer of the Company at the end of the fiscal year
ended October 31, 1998 had total annual salary and bonus for that year
in excess of $100,000. But see "Certain Relationships and Related
Transactions."
Employment Agreements
Dr. Hall, Mr. Pickett, Dr. Hutchins and Mr. Snyder have
written employment contracts with the Company. The terms of each are
summarized below.
Dr. Hall's employment contract is for a 3-year term which
commenced November 1, 1998. Dr. Hall receives a salary of $260,000
for each Fiscal Year of the Company during the term of the employment
contract, and is eligible for bonuses and benefits commensurate with the
Company's internal policies. This contract replaces a previous agreement
whereby Dr. Hall received a salary plus commission and contractor income.
Mr. Pickett's employment contract is for a 3-year term which
commenced November 1, 1998. Mr. Pickett receives a salary of
$130,000 for each Fiscal Year of the Company during the term of the
employment contract, and is eligible for bonuses and benefits
commensurate with the Company's internal policies.
Dr. Hutchins' employment contract is for a 1-year term which
commenced November 1, 1998. Dr. Hutchins receives a salary of
$70,000 for each Fiscal Year of the Company during the term of the
employment contract, and is eligible for bonuses and benefits
commensurate with the Company's internal policies.
Mr. Snyder's employment contract commenced May 6, 1996.
Mr. Snyder receives an annual salary of $55,000 plus a quarterly bonus of
$1,250. Mr. Snyder is eligable for other bonuses and benefits commensurate
with the Company's internal policies.
Retirement Plan
The Company has a 401(k) retirement plan for which all employees who
have served with the Company at least one year are eligible.
Stock Option Plans
The Company presently maintains the "June 23, 1993
Employee Stock Option Plan" pursuant to which awards are made
based on the Company's performance during the prior Fiscal Year and
upon the individual participants' performance and achievement of
certain goals.
Option Grants
The following table sets forth certain information concerning
stock options granted and not forfeited under the Employee Stock
Option Plan during fiscal 1998 to the Chief Executive Officer and each
of the four other most highly compensated executive officers of the
Company:
Option Grants in Last Fiscal Year
Potential
Realizable
Value at
Assumed Annual
Rates of Stock
Price
Appreciation
for Option
______________ Individual Grants________________ Term
Percent of
Total Options
Granted to Option
Options Employees In Exercise Expiration
Name Granted Fiscal Year Price Date 5% 10%
Ronald W. Pickett - - - - - -
Thomas M. Hall - - - - - -
Robert P. Crabb 100,000 82.6% $.50 6/30/2001 $117,193 $160,976
The following table sets forth certain information concerning
the shares acquired upon exercise of options, the number of unexercised
options and the value of unexercised options at the end of fiscal 1998
held by the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company:
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values
Number of Value of Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Shares Year-End Year-End
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
Ronald W. Pickett - - - -
Thomas M. Hall - - 200,000 $162,000/0
Robert P. Crabb 100,000 $ 81,000/0
For purposes of this table, the value of the Common Stock is $1.31 per
share, the last sales price of the Common Stock on October 31, 1998, as
reported on the NASDAQ Bulletin Board System.
Certain Relationships and Related Transactions
The Company has an agreement with Hall & Associates, P.A.
(the "Hall Agreement") to provide the Company with medical personnel
as needed to staff its maritime and international travel operations. The
Company pays fees in equal amounts every two-week pay period for
personnel provided, plus reimbursement for professional liability
insurance, the direct costs of any extra physicians for coverage of the
call center, training costs and incidental expenses. The agreement with
Hall & Associates derives from a written agreement with the predecessor
of Hall & Associates, Vaillancourt Associates, P.A., which was executed
in 1982. The written agreement has been modified by oral agreement on
several occasions. Ronald W. Pickett, the Chairman, President and
second largest stockholder of the Company, is the Treasurer of Hall &
Associates, but has no direct or indirect financial interest in Hall &
Associates. Thomas M. Hall, M.D., M.I.M., who is the Chief Executive
Officer of the Company and the largest stockholder, is the sole owner of
Hall & Associates, P.A..
Pursuant to the Hall Agreement, in Fiscal Year 1998, the
Company paid $319,117.50 to Hall & Associates, P.A. for services
rendered.
On December 4, 1998, two new Professional Associations were
created: Hall & AmDoc Associates, P.A., and Hall & DocTalk
Associates, P.A. The Company plans to enter into agreements with
these Professional Associations to provide medical staffing for its
programs with AmericasDoctor.com, Inc., and Doc-Talk, LLC,
respectively. Ronald W. Pickett, the Chairman, President and second
largest stockholder of the Company, is the Treasurer of Hall and
AmDoc, Associates, P.A., and Hall and DocTalk Associates, P.A., but
has no direct or indirect financial interest in either Professional
Association. Thomas M. Hall, M.D., M.I.M., who is the Chief Executive
Officer of the Company and the largest stockholder, controls the two new
professional associations.
The Company has an annually renewable marketing consulting agreement
with Susquehanna Development Corporation which is wholly owned by
Robert Crabb, the Secretary of the Company. The Company pays Susquehanna
Development Corporation an annual consulting fee of $98,400.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Stefanou & Company acted as the
Company's independent public accountants for the fiscal year ended
October 31, 1998 and has been selected by the Board of Directors to
serve as the Company's independent public accountants for the fiscal
year ending October 31, 1999. A representative of Stefanou & Company,
LLP is expected to be present at the stockholders' meeting and to have
the opportunity to make a statement, if he desires to do so, and is
expected to be available to respond to appropriate questions.
OTHER MATTERS
As of the date hereof, the Company knows of no other business
that will be presented for consideration at the Annual Meeting.
However, the enclosed proxy confers discretionary authority to vote with
respect to any and all of the following matters that may come before the
meeting: (i) matters that the Company's Board of Directors did not have
notice of at least 45 days before the date on which the Company first
mailed its proxy materials for the 1998 Annual Meeting of Stockholders;
(ii) approval of the minutes of a prior meeting of stockholders, if such
approval does not amount to ratification of the action taken at the
meeting; (iii) the election of any person to any office for which a bona
fide nominee is named in this Proxy and such nominee is unable to serve
or for good cause will not serve; (iv) any proposal omitted from this
Proxy Statement and the form of proxy pursuant to Rule 14a-8 or Rule
14a-9 under the Securities Exchange Act of 1934 (the "Exchange Act");
and (v) matters incidental to the conduct of the meeting. If any such
matters come before the meeting, the proxy agents named in the
accompanying proxy card will vote in accordance with their judgment.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
Pursuant to recent amendments to the proxy rules under the
Exchange Act, the Company's stockholders are notified that the deadline
for providing the Company timely notice of any stockholder proposal to
be submitted outside of the Rule 14a-8 process for consideration at the
Company's 2000 Annual Meeting of Stockholders (the "2000 Meeting")
is January 1, 2000. As to all such matters which the Company does not
have notice on or prior to January 1, 2000, discretionary authority shall
be granted to the persons designated in the Company's proxy related to
the 2000 Meeting to vote on such proposal. This change in procedure
does not affect the Rule 14a-8 requirements applicable to inclusion of
stockholder proposals in the Company's proxy materials related to the
2000 Meeting. A stockholder proposal regarding the 2000 Meeting must
be submitted to the Company at its headquarters located at 8050
Southern Maryland Boulevard, Owings, Maryland 20736, by January 1,
2000 to receive consideration for inclusion in the Company's 2000 proxy
materials. Any such proposal must also comply with the proxy rules
under the Exchange Act, including Rule 14a-8.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-KSB FOR THE YEAR ENDED OCTOBER 31, 1998 AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WITHOUT CHARGE EXCEPT FOR EXHIBITS TO
THE REPORT, BY SENDING A WRITTEN REQUEST TO THE CORPORATE SECRETARY,
AT 8050 SOUTHERN MARYLAND BOULEVARD, OWINGS, MARYLAND 20736.
By Order of the Board of Directors
/s/ Robert P. Crabb
ROBERT P. CRABB
Secretary
