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Washington, D.C. 20549
FORM 10-K/A-1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 COMMISSION FILE NUMBER 1-10418
UNITED MEDICORP, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 75-2217002
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
10210 NORTH CENTRAL EXPRESSWAY, SUITE 400
Dallas, Texas 75231
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 691-2140
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
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NONE NONE
Securities Registered Pursuant to Section 12(g) of the Act:
Title of Each Class
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COMMON STOCK
Indicate by check mark whether the Registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this form
10-K or any amendment to this Form 10-K.
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The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based on the average of the bid and asked prices of such
stock on April 18, 1997 was $1,814,322.
As of April 18, 1997 there were 26,310,217 shares of Common Stock, $.01
par value outstanding.
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UNITED MEDICORP, INC.
INDEX TO FORM 10-K/A-1
ITEM
NUMBER PART III PAGE
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10 Directors and Executive Officers of the Registrant . . . . . . . . 3
11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 6
12 Securities Ownership of Certain Beneficial Owners and
Management. . . . . . . . . . . . . . . . . . . . . . . . . . 9
13 Certain Relationships and Related Transactions . . . . . . . . . . 10
2
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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The Company's Bylaws provide that the number of directors which shall
constitute the whole Board shall be fixed from time to time by resolution of
the Board of Directors or stockholders but shall not be less than one nor
more than eleven. The current Board of Directors consists of four members.
Of the current directors, one is an employee of the Company and three have
principal occupations or employment which are outside the Company.
Information regarding each director is set forth below:
MICHAEL P. BUMGARNER (53) was elected to the Board of Directors on November
12, 1996. Mr. Bumgarner is Chairman/CEO of Beacon Enterprises, Inc., a
holding company which he co-founded in May, 1994 with interests in a number
of healthcare concerns including GSS "Gold Seal Services", one of the largest
home healthcare providers in the San Antonio area. GSS was sold to a Dallas
based public company in December, 1996. Prior to starting Beacon
Enterprises, Mr. Bumgarner worked as a consultant for a number of national
distributors of cardiovascular equipment in the southwest United States.
From 1977 to 1986, Mr. Bumgarner was founder and president of a national
healthcare company providing arrhythmia monitoring by telephone to patients
in their homes. During this period, he developed the "continuous loop
memory" arrhythmia transmitter and received a patent registered in the U.S.
Patent Office. After graduating from Auburn University, he was honorably
discharged from the USAF as a Captain and carried his electronics background
to the medical industry where he has spent over 25 years gaining extensive
senior business and management experience.
JOHN F. LEWIS (49) was elected to the Board of Directors on November 12,
1996. Mr. Lewis is a consultant specializing in Medicare reimbursement and
regulatory compliance for a number of healthcare industry concerns in Puerto
Rico and the Caribbean market area. From 1992 to 1995, Mr. Lewis served as
Health Advisor to the Governor of the U.S. Virgin Islands. From 1988 to
1992, Mr. Lewis was employed as Assistant Vice President for Medicare
Operations at Seguros de Servicios de Salud, the Medicare Part B Carrier for
Puerto Rico and the Caribbean. Mr. Lewis holds a B.A. in Business
Administration from the American College of Switzerland, an a License in
Economic and Social Sciences from the University of Geneva.
THOMAS H. MCCONNELL, III, M.D. (59) was elected to the Board of Directors on
November 12, 1996. Dr. McConnell is former CEO of AM Laboratories, Inc., a
medical testing laboratory, and is active as an investor and consultant to a
number of healthcare providers. From 1992 to 1994, Dr. McConnell served as
Chairman of the Executive Committee and a member of the Board of Directors of
AdvaCare, Inc., a publicly traded medical billing and collection agency.
From 1992 to 1995, Dr. McConnell served as a member of the Board of Directors
of Osprey Holdings, Inc., a publicly traded holding company formerly in the
medical laboratory software business. Dr. McConnell is a past Governor of
the College of American Pathologists, past President of the Texas Society of
Pathologists, and past member of the Board of Directors of the Dallas County
Medical Society. Dr. McConnell attended Rice University, holds a Doctor of
Medicine Degree from the University of Texas Southwestern Medical School and
an OPM certificate from the Harvard Business School.
3
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PETER W. SEAMAN (47) was elected President and Chief Executive Officer on
February 10, 1994, and Chairman of the Board of Directors on November 12,
1996. Mr. Seaman joined the Company on July 17, 1991 as Vice President and
Chief Financial Officer and was elected to the Board of Directors on August
12, 1991. Mr. Seaman's prior employment includes serving as Director of
Business Development for TRW Receivables Management Services from March, 1989
to June, 1991, and Vice President of Planning and Systems Development for the
Accounts Receivable Management Division of the Chilton Corporation from
March, 1986 to March, 1989. Prior to joining the Chilton Corporation, Mr.
Seaman was Vice President and Chief Financial Officer for Corliss, Inc., a
collection systems and services company. Before that, Mr. Seaman held a
number of finance, marketing, and auditing positions with the Datapoint
Corporation, Rockwell International, and Coopers and Lybrand. Mr. Seaman
holds a B.A. in Accounting from Duke University, and is a Certified Public
Accountant.
Each director will hold office until this year's annual meeting of
stockholders, expected to be held in August, 1997, or until his successor is
elected and has qualified.
BOARD COMMITTEES AND MEETINGS
The principal standing committees of the Board of Directors include the
following:
AUDIT COMMITTEE. The Audit Committee's responsibilities include recommending
to the Board of Directors the independent auditors to be employed for the
purpose of conducting the annual audit of the Company's financial statements,
discussing with the auditors the scope of their examination, reviewing the
Company's financial statements and the auditors' report thereon with Company
personnel and the auditors, determining whether the auditors have received
all the explanations and information which they had requested, and inviting
the recommendations of the auditors regarding internal controls and other
matters.
The Company's Audit Committee was formed on August 15, 1990 and met once
during 1996. As of the date of this report, the Committee consists of Michael
P. Bumgarner, Chairman, and John Lewis.
COMPENSATION COMMITTEE. The Compensation Committee's responsibilities
include reviewing the Company's compensation plans, making recommendations in
areas concerning employee relations, and taking action or making
recommendations with respect to the compensation of executive officers,
including those who are directors.
The Company's Compensation Committee was formed on August 15, 1990. During
1996, the Compensation Committee held two meetings. The Committee consists
of Thomas McConnell, Chairman, Michael Bumgarner, and John Lewis.
4
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STOCK OPTION COMMITTEE. The Company's Stock Option Committee was formed on
April 25, 1992 for the purpose of administering the Company's Stock Option
Plans. The Stock Option Committee consists of Thomas McConnell, Chairman,
Michael Bumgarner, and John Lewis.
The mailing address for each of these committees is c/o Robert Powell,
Secretary/Treasurer, United Medicorp, Inc., 10210 North Central Expressway,
Suite 400, Dallas, Texas 75231.
The Board of Directors held five regularly scheduled meetings during the
fiscal year ended December 31, 1996. Various matters were approved during
the last fiscal year by unanimous written consent of the Board of Directors.
Each incumbent director attended all of the meetings that occurred subsequent
to his election to the Board of Directors. During the last fiscal year each
director attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors during his term; and (ii) the total number
of meetings held by all committees of the Board on which such director served
during his term.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Pursuant to Section 16(a) of the Securities Act of 1934 and the rules issued
thereunder, the Company's executive officers and directors are required to
file with the Securities and Exchange Commission and the Boston Stock
Exchange reports of ownership and changes in ownership of the Common Stock.
Copies of such reports are required to be furnished to the Company.
Messrs. Bumgarner, Lewis and McConnell were elected to the Board of Directors
on November 12, 1996. An Initial Report of Ownership On Form 3 for each of
these new directors was not filed until April 11, 1997. These reports
disclosed the award on April 1, 1997 to each of Messrs. Bumgarner, Lewis and
McConnell of a UMC Common Stock Purchase Warrant for 400,000 shares at an
exercise price of $.08 per share.
Messrs. O'Boyle, Spiak, and Winters resigned from the Board of Directors on
or about November 11, 1996. A Form 5 "Annual Statement Of Beneficial
Ownership Of Securities" reporting the termination of service for each of
these directors is expected to be filed by May 31, 1997.
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ITEM 11. EXECUTIVE COMPENSATION
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EXECUTIVE OFFICERS
Set forth below are tables showing: (1) in summary form, the compensation
paid for the years shown in the table to Peter W. Seaman; (2) the options
granted to Mr. Seaman in 1996; and (3) exercise and year end valuation
information pertaining to stock options granted to Mr. Seaman. No other
executive officer of the Company received total annual salary and bonus in
excess of $100,000 in the fiscal year 1996.
Summary Compensation Table
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Restricted
Name of Principal Other Annual Stock Options/ All Other
Position Year Salary $ Bonus Compensation Award $ SAR's # Payouts Compensation $
- -------- ---- -------- ------ ------------ ---------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter W. Seaman, 1996 106,556 11,333 0 0 300,000 0 0
Chairman & CEO 1995 97,501 0 0 0 100,000 0 0
1994 92,165 0 0 0 100,000 0 0
</TABLE>
Options Granted in 1996
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Potential Realized Value at
% of Total Assumed Annual Rates of
Options Stock Price Appreciation for
Granted to Option Term
Options Employees in Exercise or
Name Granted 1996 Base Price Expiration Date 5% 10%
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<S> <C> <C> <C> <C> <C> <C>
Peter W. Seaman 300,000 (1) 44% $.05/share August 20, 2006 (2) $9,420 $23,910
</TABLE>
(1) This option was granted subject to a three year vesting period.
(2) This option was granted for a term of ten years, subject to termination upon
termination of the optionee's employment.
On April 7, 1997, as a part of the cancellation and reissuance of options
described under "Stock Option Plans" below, Mr. Peter W. Seaman, Chairman and
Chief Executive Officer, had options to purchase 325,000 shares (of which
291,667 were vested) with exercise prices from $0.13 to $0.31 canceled and
reissued. The reissued options will become exercisable over a three year
period beginning April 7, 1997, with 33 percent of the options exercisable
after April 7, 1998, 66 percent of the options exercisable after April 7,
1999, and all of the options exercisable after April 7, 2000. In addition,
Mr. Seaman was granted new options on April 7, 1997, to purchase an
additional 375,000 shares under the same conditions as the reissued options.
As of April 18, 1997, the total number of options held by Mr. Seaman is
1,000,000 shares. Of these, 700,000 options are priced at $0.07 per share
and 300,000 options are priced at $0.05 per share.
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Aggregated Option/SAR Exercises in 1996 (1)
and FY-End Options/SAR Values
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<TABLE>
Number of Unexercised Options/SARs Value of Unexercised In-the-Money
at FY-End (#) Options/SARs at FY-End
Name Exercisable/Unexercisable Exercisable/Unexercisable
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<S> <C> <C>
Peter W. Seaman 301,665/323,335 $0/$0
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(1) Since no options were exercised by the above-named executive in 1996, no
shares were acquired or value realized upon the exercise of options by
such person in the last fiscal year.
STOCK OPTION PLANS
The Company currently has in effect the Third Amended and Restated 1989 Stock
Option Plan (the "1989 Plan"), which provided for the granting of incentive
and non-incentive stock options for up to 1,000,000 shares of Common Stock to
employees, directors and consultants. The 1989 Plan became effective August
6, 1989 and terminates after 10 years. The Board of Directors approved the
discontinuance of any further option grants under the 1989 Plan on April 25,
1992, when the 1992 Plan (as defined below) was approved by stockholders.
The stockholders of United Medicorp, Inc. approved the 1992 Stock Option Plan
(the "1992 Plan") at the 1992 Annual Meeting of Stockholders. The 1992 Plan
provides for the granting of incentive and nonqualified stock options for up
to 1,000,000 shares of Common Stock to employees, directors, and consultants.
The 1992 Plan became effective on July 13, 1992 and terminates after 10 years.
The stockholders of United Medicorp, Inc. approved the 1995 Stock Option Plan
(the "1995 Plan") at the 1995 Annual Meeting of Stockholders. The 1995 Plan
provides for the granting of incentive and non qualified stock options for up
to 1,000,000 shares of Common Stock to employees, directors, and consultants.
The 1995 Plan became effective on August 14, 1995 and terminates after 10
years.
On April 7, 1997, there were 465,500 options outstanding which had been
previously issued to officers and employees at exercise prices ranging from
$0.13 to $0.31 per share with various vesting schedules that began upon the
various option grant dates. The Board of Directors decided that, because
these options were priced in excess of the then current market value of
$0.07, they were no longer effective in providing an incentive for and
retaining key executives and employees. Therefore, subject to the approval
of the optionee, the Board decided to cancel and reissue all options
outstanding which had an exercise price greater than $0.07 per share. As a
result of this action, options to purchase 465,500 shares were canceled and
reissued with an exercise price of $0.07 per share and a reset vesting
schedule. These reissued options will become exercisable at the rate of one
third of the number of options granted per year over a three year period, and
will remain in force for up to ten years consistent with the 1992 Plan and
the 1995 Plan.
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DIRECTOR COMPENSATION
Members receive no cash compensation for serving on the Board of Directors.
Board members are reimbursed for expenses of meeting attendance. Each member
of the current Board of Directors was granted a UMC Common Stock Purchase
Warrant on April 1, 1997. The warrants entitle each director to purchase up
to 400,000 shares at $.08 per share during a ten year period expiring on
March 31, 2007. The warrants are exercisable to the extent of 33 percent of
the shares immediately, 66 percent of the shares following the first
anniversary of the award, and 100 percent of the shares following the second
anniversary of the award.
In addition to the Stock Purchase Warrants described above, each director has
signed a Director's Incentive Compensation Agreement ("DICA"). Under the
DICA, each director may qualify for a commission, payable in either cash,
paid up shares of UMC Common Stock, or additional UMC Common Stock Purchase
Warrants at the Company's option. The commission is computed as a percentage
of fees billed and collected by UMC from customers sold by or with assistance
from the director, using 10 percent during the first year of a given customer
contract, 6 percent during the second year, and 4 percent thereafter. The
Company has the right to terminate the services of any director who fails to
produce new business of at least $20,000 per month in fees during any given
12 month period.
Pursuant to the 1995 Plan, each non-employee director is entitled to receive
nonqualified stock options for the purchase of 25,000 shares of Common Stock
on August 25 of each year during his term as a director. The right to
receive these options was waived by Messrs. Bumgarner, Lewis and McConnell in
conjunction with the award of the UMC Common Stock Purchase Warrants and the
signing of the DICA described above.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None
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ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
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The following table and the notes thereto set forth certain information
regarding the beneficial ownership of shares of the Company's Common Stock as
of April 18, 1997 by (i) each current director and nominee for director; (ii)
all current directors and officers of the Company as a group; and (iii) each
person known to the Company to own beneficially more than five percent (5%)
of the currently outstanding Common Stock.
Amount and Nature
of Beneficial
Name of Beneficial Owner Ownership (1) Percent of Class (1)
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Mercury Asset Management plc. (2)
33 King William Street 8,067,200 30.7%
London EC4R 9AS Great Britain
Tambura Limited
Rue du Moulin 1,484,000 5.6%
Sark, Channel Islands
Peter W. Seaman (3) 1,100,000 4.2%
Michael P. Bumgarner (4) 400,000 1.5%
John F. Lewis (5) 400,000 1.5%
Thomas H. McConnell (6) 400,000 1.5%
Mary E. Rogers (7) 200,000 *
Robert D. Powell (8) 50,000 *
All officers and directors as 2,550,000 9.5%
a group (6 persons)
*less than 1%
(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to the shares of Common Stock
shown as beneficially owned by them, subject to community property laws
where applicable. Beneficial ownership as reported in the above table has
been determined in accordance with Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The percentages are based
upon 26,310,217 shares outstanding except with respect to certain persons
who hold presently exercisable options to purchase shares. The percentage
for each person who holds presently exercisable options is based upon the
sum of 26,310,217 shares outstanding plus the number of shares subject to
presently exercisable options held by such person, as indicated in the
following notes.
(2) According to a Schedule 13D filed with the Company, Mercury Asset
Management plc. ("MAM") manages investments for its clients and the
securities indicated are held solely for the accounts of such clients. With
respect to 1,535,000 of the shares held on behalf of a unit trust, a
wholly-owned subsidiary of MAM, as manager of the trust, has power to vote
the shares. MAM has the power to sell the shares for the benefit of the
trust. With respect to the remainder of the shares, MAM has dispositive
power, but not voting power, subject to its clients' guidelines. MAM does
not admit that it is the beneficial owner of any of the indicated shares.
(3) Includes outstanding exercisable options to purchase 100,000 shares.
(4) Includes outstanding exercisable warrants to purchase 133,333 shares.
(5) Includes outstanding exercisable warrants to purchase 133,333 shares.
(6) Includes outstanding exercisable warrants to purchase 133,333 shares.
(7) Includes outstanding exercisable options to purchase 33,333 shares.
(8) Includes outstanding exercisable options to purchase 16,667 shares.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
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Michael O'Boyle, a former director of the Company who resigned from the
UMC Board of Directors on November 12, 1996, is Chief Financial Officer of
Medlantic Healthcare Group and Senior Vice President, Finance of WHC. WHC is
the Company's largest customer. See Item 7. Management's Discussion And
Analysis of Financial Condition And Results Of Operations.
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SIGNATURES
Pursuant to the requirement of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
United Medicorp, Inc.
Date: April 30, 1997 By: /s/ Peter W. Seaman
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Peter W. Seaman, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
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/s/ Peter W. Seaman April 30, 1997
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Peter W. Seaman Chairman of the Board and
Chief Executive Officer
(Principal Accounting Officer)
/s/ Michael P. Bumgarner April 30, 1997
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Michael P. Bumgarner Director
/s/ John F. Lewis April 30, 1997
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John F. Lewis Director
/s/ Thomas H. McConnell April 30, 1997
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Thomas H. McConnell, III Director
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