<PAGE> 1
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
RX MEDICAL SERVICES CORP.
--------------------------------------------------------
(Name of Registrant)
--------------------------------------------------------
(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)(4) 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:*
------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] 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 be registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------
(2) Form, Schedule or Registrations Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
RX MEDICAL SERVICES CORP.
888 EAST LAS OLAS BOULEVARD, SUITE 210
FORT LAUDERDALE, FLORIDA 33301
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
NOVEMBER 20, 1997
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting (the "Annual
Meeting") of the Stockholders of Rx MEDICAL SERVICES CORP., a Nevada
corporation (the "Company"), will be held on November 20, 1997, at 10:00 a.m.,
local time, at the Hyatt Regency Columbus Hotel, 350 North High Street,
Columbus, Ohio 43215, for the following purposes:
1. To elect five directors to hold office for a term of one year
and until their successors are elected and qualified.
2. To transact such other business as may properly come before the
Annual Meeting or any and all postponements or adjournments
thereof.
The Board of Directors has fixed October 1, 1997, as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting or any postponement or adjournment thereof, and only
stockholders of record at the close of business on that date are entitled to
notice of and to vote at such meeting.
You are cordially invited to attend the Annual Meeting. Whether or not
you plan to attend the meeting, it is important that your shares be
represented. Accordingly, please complete, date and sign the enclosed proxy and
return it promptly.
By Order of the Board of Directors
Joseph C. Wasch
Acting Secretary
Fort Lauderdale, Florida October 10, 1997
- -------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. SENDING IN THE PROXY WILL NOT PREVENT YOU FROM
VOTING AT THE ANNUAL MEETING.
- -------------------------------------------------------------------------------
<PAGE> 3
RX MEDICAL SERVICES CORP.
888 EAST LAS OLAS BOULEVARD, SUITE 210
FORT LAUDERDALE, FLORIDA 33301
PROXY STATEMENT
NOVEMBER 20, 1997 - ANNUAL MEETING OF STOCKHOLDERS
SOLICITATION, VOTING AND
REVOCABILITY OF PROXIES
PROXY SOLICITATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by Rx Medical Services Corp. (the "Company") for use at the 1997
Annual Meeting of Stockholders (the "Annual Meeting") of the Company to be held
on November 20, 1997, at 10:00 a.m., local time, at the Hyatt Regency Columbus
Hotel, 350 North High Street, Columbus, Ohio 43215, and any and all
postponements or adjournments thereof, for the purposes set forth below and in
the accompanying Notice of Annual Meeting.
The Notice of Annual Meeting, this Proxy Statement and the enclosed
proxy were first mailed to the Company's stockholders on or about October 15,
1997. Only stockholders of record at the close of business on October 1, 1997,
will be entitled to notice of and to vote at the Annual Meeting or any and all
postponements or adjournments thereof.
The Company's 1996 Annual Report, a copy of which is also enclosed
herewith, contains the Company's financial statements for its fiscal year ended
December 31, 1996.
The principal executive offices of the Company are located at 888 East
Las Olas Boulevard, Suite 210, Fort Lauderdale, Florida 33301, and the
Company's telephone number is (954) 462-1711.
PROXIES
Shares of the Company's common stock, par value $.002 per share (the
"Common Stock"), and preferred stock, par value $.001 per share (the "Preferred
Stock"), which are entitled to vote at the Annual Meeting and which are
represented by properly executed proxies, will be voted in accordance with the
instructions indicated in such proxies and at the discretion of the proxy
holders on all other matters that properly come before the Annual Meeting.
If the enclosed form of proxy card is properly completed, signed and
returned in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in
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accordance with the instructions marked thereon. Executed but unmarked proxies
will be voted FOR Proposal No. 1 to elect the five persons nominated as
directors of the Company. Except for procedural matters incident to the conduct
of the Annual Meeting, the Company does not know of any matters other than
those described in the Notice of Annual Meeting that are to come before the
Annual Meeting.
ANY PROXY GIVEN PURSUANT TO THIS SOLICITATION MAY BE REVOKED BY THE
PERSON GIVING IT AT ANY TIME BEFORE IT IS VOTED. Proxies may be revoked by (i)
filing with the Acting Secretary of the Company prior to the date of the Annual
Meeting written notice of revocation bearing a later date than the proxy, (ii)
duly executing and delivering to the Acting Secretary of the Company prior to
the date of the Annual Meeting a subsequent proxy relating to the same shares
of Common Stock or (iii) attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not in and of itself constitute
revocation of a proxy unless the stockholder votes his or hers shares of Common
Stock in person at the Annual Meeting. Any notice revoking a proxy should be
sent to the Acting Secretary of the Company at the Company's principal
executive offices, in a manner designed to ensure that it is received by the
Acting Secretary prior to the date of the Annual Meeting.
The solicitation of proxies to which this Proxy Statement relates is
made by and on behalf of the Company's Board of Directors (the "Board"). The
cost of soliciting the proxies in the form enclosed herewith will be borne BY
the Company. The Company will supply proxies and proxy materials, as requested,
to brokerage houses and other custodians, nominees and fiduciaries for
transmission to the beneficial owners of the Common Stock and will reimburse
them for their reasonable expenses in so doing. In addition to the use of the
mails, proxy solicitations may be made by telephone and telegraph by officers,
directors or agents of the Company.
A list of all of the Company's stockholders eligible to vote at the
Annual Meeting will be available for inspection at the Annual Meeting and will
be available for inspection for ten (10) days prior to the Annual Meeting
during normal business hours at the Company's principal executive offices
located at 888 East Las Olas Boulevard, Suite 210, Fort Lauderdale, Florida
33301, for such purposes as may be permitted under the Nevada General
Corporation Law.
RECORD DATE AND VOTING RIGHTS
The Board has fixed the close of business on October 1, 1997, as the
record date (the "Record Date") for the determination of stockholders entitled
to notice of and to vote at the Annual Meeting. As of the Record Date, there
were 9,164,117 shares of Common Stock and an aggregate of 1,022,758 shares of
two series of Preferred Stock outstanding and entitled to vote at the Annual
Meeting. No other class of capital stock of the Company is outstanding. Each
outstanding share of Common Stock and Preferred Stock is entitled to one vote
per share. The Common Stock and Preferred Stock vote together as a single class
with respect to the matters on the agenda for the Annual Meeting. There are no
cumulative voting rights. Only votes cast "For" a matter constitute affirmative
votes. Proxy cards which are voted by marking "Withheld" or "Abstain" on a
particular
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matter are counted for quorum purposes, but since they are not cast "For" a
particular matter, they will have the same effect as negative votes or votes
"Against" a particular matter. If a validly executed proxy card is not marked
to indicate a vote on a particular matter and the proxy granted thereby is not
revoked before it is voted, it will be voted "For" such matter. Where brokers
are prohibited from exercising discretionary authority for beneficial owners
who have not provided voting instructions (commonly referred to as "broker
non-votes"), such broker non-votes will be treated as shares that are present
for purposes of determining the presence of a quorum only and will not have the
same effect as negative votes or votes "Against" a particular matter. Holders
of a majority of the shares of Common Stock and Preferred Stock eligible to
vote at the Annual Meeting present in person or by proxy, or holders of
5,093,438 shares in the aggregate, will constitute a quorum for the transaction
of business at the Annual Meeting.
To be elected, a director must receive a plurality of the votes cast
by the shares present in person or represented by proxy at the Annual Meeting
and entitled to vote on the election of directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT OF THE COMPANY
Each share of Preferred Stock of the Company contains voting rights equivalent
to one share of RXM Common Stock. The Company currently has two series of
preferred stock outstanding, designated Series C and F. Effective November 1,
1996, the holder of the Company's Series E Preferred Stock exercised its right
to receive 625,000 shares of the Company's Common Stock in converting the
existing 1,250,000 shares of Series E Preferred Stock. The Preferred Shares had
been issued to the Company's primary lender, National Century Financial
Enterprises, Inc. (the "Financing Source") in 1994 in connection with the
disposition of the balance of the Company's real estate portfolio. On all
matters submitted for vote by the stockholders of the Company, including the
election of directors, the shares of Preferred Stock and the Company's Common
Stock vote together as a single class except as may otherwise be required by
law. At December 31, 1996, the 1,325,000 common shares in the name of the
Financing Source were transferred to Intercontinental Investment Associates,
Ltd. ("IIA"), a Nevada limited liability company affiliated with the Financing
Source. At December 31, 1996, 422,488 shares of Series C Preferred Stock
outstanding were owned of record and beneficially by three directors of the
Company, Michael L. Goldberg, Donald J. Brumlik and Morris Behar. Messrs.
Brumlik and Behar are not nominees for election as directors at the Annual
Meeting.
The following table sets forth information as of July 31, 1997, with respect to
all stockholders known by the Company to be the direct or indirect beneficial
owners of five percent (5%) or more of the Company's voting securities and by
the executive officers and directors of the Company as a group. Each percentage
is calculated by assuming that the named stockholder converted or exercised all
of such stockholder's securities convertible within the next 60 days into, or
exercisable for, shares of the Company's Common Stock at a time when no other
stockholder did so, irrespective of the conversion or exercise price thereof.
Except as otherwise noted, all persons and entities have sole voting and
investment power with respect to their shares.
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<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENTAGE
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP (1) OF CLASS
---------------- -------------- ------------- --------
<S> <C> <C> <C>
Michael L. Goldberg Common 514,633 (2) 5.6%
(also a director) Preferred 63,836 (3) 6.2%
888 East Las Olas Blvd., Suite 210
Fort Lauderdale, FL 33301
Morris Behar Common 257,245 (4) 2.8%
(also a director) Preferred 341,893 (5) 33.4%
209 State Street
Oldsmar, FL 34677
Kachina, Inc. Common 750,000 (6) 8.2%
6125 Memorial Drive
Dublin, OH 43017
Intercontinental Investment Assoc. Common 1,325,000 (7) 14.5%
6125 Memorial Drive
Dublin, OH 43017
Directors: (all with an address at
888 East Las Olas Blvd., Suite 210
Fort Lauderdale, FL 33301
Donald J. Brumlik Common 368,995 (8) 4.0%
Preferred 16,759 (9) 1.6%
Don L. Dominick Common 79,112(10) .86%
Phillip E. Pearce Common 39,914(11) .43%
Michael J. Pickering, M.D. Common 82,345(12) .90%
Randolph H. Speer Common 108,000(13) 1.2%
All Executive Officers, Directors Common 1,450,244(14) 15.8%
and Nominees as a Group Preferred 422,488(15) 41.3%
</TABLE>
(1) As of July 31, 1997, there were 9,164,117 shares of RXM Common
Stock and 1,022,758 shares of Preferred Stock issued and
outstanding.
(2) Includes 241,250 shares representing stock options
exercisable within 60 days.
(3) Represents 2,014,824 shares of RXM Common Stock that may be
obtained by conversion of Series C Preferred Stock.
(4) Includes 25,000 shares representing stock options exercisable
within 60 days and 232,245 shares of RxM Common Stock
registered in the name of Gulf Coast Medical, Inc., a company
controlled by Mr. Behar.
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<PAGE> 7
(5) Represents 10,790,997 shares of RXM Common Stock that may be
obtained by conversion of Series C Preferred Stock. Of the
341,893 shares of Series C Preferred Stock attributable to
Mr. Behar, 56,26 shares are registered in the name of Gulf
Coast Medical, Inc.
(6) (7) In July 1996, Kachina distributed, in equal amounts, the
750,000 shares to Lance K. Poulsen, Donald H. Ayers, Rebecca
S. Parrett and Barbara C. Larson. These individuals are
officers, directors and the sole shareholders of the Financing
Source, Kachina and IIA and may be deemed to be the beneficial
owners of the shares of RXM Common Stock owned by the
Financing Source and its affiliates, Kachina and IIA.
(8) Includes 159,500 shares representing stock options exercisable
within 60 days.
(9) Represents 528,956 shares that may be obtained by conversion
of Series C Preferred Stock.
(10) Includes 12,500 shares representing stock options exercisable
within 60 days.
(11) Consists of 39,914 shares representing stock options
exercisable within 60 days.
(12) Includes 56,409 shares representing stock options exercisable
within 60 days.
(13) Includes 100,000 shares representing stock options exercisable
within 60 days.
(14) Includes 578,323 shares representing stock options
exercisable within 60 days.
(15) Represents 13,334,777 shares that may be obtained by
conversion of Series C Preferred Stock.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Ownership of and transactions in the Company's securities by executive
officers and directors of the Company and owners of ten percent (10%) or more
of the Common Stock are required to be reported to the Securities and Exchange
Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934.
The Company does not have knowledge of any failure to file a required
form to report such ownership and transactions.
PROPOSAL 1 - ELECTION OF DIRECTORS
GENERAL
The Company's by-laws provide that the number of directors be not less
than three nor more than ten. The actual number of directors is determined by
resolution of the Board from time to time. The number of directors is currently
set at nine. Only five persons, however, have been nominated as directors, and
proxies may only be voted for no more than five nominees. The Board has not
reduced the number of directors because,
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although a vacancy may be filled by a majority of the directors then in office
though less than a quorum, a newly created directorship may only be filled at
an annual or special meeting of stockholders.
Directors need not be stockholders of the Company nor residents of the
State of Nevada. Directors are elected each year by the stockholders and
generally hold office until the next Annual Meeting of Stockholders and until a
successor has been duly elected and qualified. A director appointed by the
directors to fill a vacancy on the Board holds office until the next annual
election and until his successor is duly elected and qualified.
The nominees for election to the office of director, and certain
information with respect to their ages and backgrounds, are set forth below. It
is the intention of the persons named in the accompanying proxy card, unless
otherwise instructed, to vote to elect the nominees named herein as directors.
Each nominee has consented to be named in this Proxy Statement and to serve if
elected. In the event any nominee should become unable to serve as a director,
the persons authorized by the proxy will vote for the election of a substitute
recommended by the Board in place of that nominee.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE
ELECTION OF THE NOMINEES NAMED BELOW.
NOMINEES
The table below sets forth certain information with respect to the
candidates nominated for election as directors of the Company at the Annual
Meeting:
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE POSITION(S) CURRENTLY HELD
- ---- ----- --------------------------
<S> <C> <C>
MICHAEL L. GOLDBERG 1990 CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
RANDOLPH H. SPEER 1994 DIRECTOR, PRESIDENT AND CHIEF OPERATING
OFFICER
LANCE K. POULSEN - CHAIRMAN, NATIONAL CENTURY FINANCIAL
ENTERPRISES, INC.
PHILLIP E. PEARCE 1992 DIRECTOR
MICHAEL J. PICKERING 1990 DIRECTOR
</TABLE>
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BUSINESS EXPERIENCE OF NOMINEES FOR DIRECTORS
Michael L. Goldberg, 48 (a director since 1990). Mr. Goldberg was an Assistant
District Attorney in the Philadelphia District Attorney's office from 1974 to
1977 before entering private practice with a specialty in complex commercial
litigation. Mr. Goldberg joined the Company in May 1990. He was Chairman,
President and Chief Executive Officer of the Company from November 1991 to June
1994 at which time he relinquished the position of President.
Randolph H. Speer, 47 (a director since 1994). Mr. Speer was named President
and Chief Operating Officer of the Company in July 1994 and in August 1994, he
was appointed to the Board of Directors. Previously, Mr. Speer was Senior Vice
President, Treasurer and Chief Financial Officer of Summit Health Ltd. from
April 1989 through April 1994. In December 1993, Summit Health Ltd. was merged
into OrNda HealthCorp. Previous to Summit Health Ltd., from January 1981 until
April 1989, Mr. Speer was Vice President and Chief Financial Officer of Sierra
Land Group, Inc. which, prior to the merger with OrNda HealthCorp., was the
largest shareholder of Summit Health Ltd. Mr. Speer is a CPA licensed in the
State of California.
Lance K. Poulsen, 54. Mr. Poulsen is the Chairman and Chief Executive Officer
of National Century Financial Enterprises, Inc. which he co-founded in January
1991. He also co-founded National Premier Financial Services, an affiliate of
National Century, in 1985. Mr. Poulsen directs the finance administration and
securitization divisions of National Century's nine healthcare finance
companies. Mr. Poulsen is a former member of the board of directors and trustee
of United Fire Insurance and Associated Life of Chicago and the Rubber
Manufacturers of America. He is currently vice president and a director of HFMA
and a director of National Junior Achievement. Mr. Poulsen holds a B.S. degree
from Roosevelt University in Chicago, IL and a M.A. in international business
and marketing science from the University of Iowa.
Phillip E. Pearce, 67 (a director since 1992). Mr. Pearce has been in the
investment banking and securities business since receiving his Graduate Degree
from the Wharton School in 1954. From 1969 to 1983, he served as Senior Vice
President and a Director of E.F. Hutton of New York City, served on the Board
of Governors of the New York Stock Exchange and was Chairman of the Board of
Governors of the National Association of Securities Dealers, Inc. From 1983 to
1988, Mr. Pearce served as President of Phillip E. Pearce & Co., and since 1988
has been a partner in Pearce-Henry Capital Corp. of Charlotte, North Carolina,
an investment banking firm. Mr. Pearce was also a contributing author and
editor of the Dow Jones publication of the Stock Market Handbook, and sat on
the advisory council to the Securities and Exchange Commission on The
Institutional Study of the Stock Markets.
Michael J. Pickering, M.D., 65 (a director since 1990). Dr. Pickering has
practiced as a medical doctor specializing in nephrology since receiving his
medical degree from the University of Florida in 1961. He has certifications
from the American Board of Internal Medicine and the American Board of Internal
Medicine in the Subspecialty of Nephrology and is a member of the American and
Florida Medical Associations, is a Fellow, American
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<PAGE> 10
College of Physicians, and is a member of the American Society of Artificial
Internal Organs, American Society of Internal Medicine, the American Society of
Nephrology, the Florida Society of Internal Medicine, the Florida Society of
Nephrology, the Hillsborough County Medical Association, the International
Society of Nephrology, the National Kidney Foundation, the Southeastern
Dialysis and Transplantation Association, the South-Eastern Organ Procurement
Foundation, the Royal Society of Health and the American Board of Quality
Assurance & Utilization Review Physicians. Dr. Pickering currently practices
medicine, serves as an Associate Professor of Medicine at the University of
Florida and is a frequent speaker and lecturer on his area of specialty
throughout the country. He also has had articles and abstracts published in
more than one hundred medical journals and medical conferences.
The Board knows of no reason why any nominee will be unable or refuse
to accept election. If any nominee becomes unable or refuses to accept
election, however, the Board will either reduce the number of directors
standing for election or select a substitute nominee. If a substitute nominee
is selected, proxies received will be voted in favor of such nominee.
If elected, all nominees are expected to serve until the 1998 Annual
Meeting and until their successors are duly elected and qualified.
The affirmative vote of the holders of a plurality of the shares
represented in person or by proxy at the Annual Meeting are required for the
election of directors.
INFORMATION CONCERNING BOARD AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1996, the Board held one
meeting. Each incumbent member of the Board attended this meeting. The Board of
Directors has established an Audit Committee and a Compensation Committee.
However, such committees have not met since 1995 and the functions of such
committees since 1995 have been performed by the Board of Directors.
EXECUTIVE OFFICERS
The following are the executive officers of the Company, their
respective ages, the office of the Company held by each and the year in which
each was first elected an officer. Each executive officer will hold office
until the next annual meeting of the Board or until their respective successors
have been duly elected and qualified.
<TABLE>
<CAPTION>
Officer's Name Age Office Officer Since
- -------------- --- ------ -------------
<S> <C> <C> <C>
Michael L. Goldberg 48 Chairman of the Board and November 1991
Chief Executive Officer
Randolph H. Speer 47 President and July 1994
Chief Operating Officer
</TABLE>
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<PAGE> 11
For information regarding Messrs. Goldberg and Speer, see descriptions above.
SUMMARY COMPENSATION TABLE
The following table provides a summary of cash and non-cash compensation for
each of the fiscal years ended December 31, 1996, 1995 and 1994 with respect to
the Company's Chief Executive Officer and the other executive officers whose
compensation exceeded $100,000 in the fiscal year ended December 31, 1996 (the
"Named Officers"):
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
----------------------------------------------------------------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Option/SARs (#)
--------------------------- ---- ---------- --------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Michael L. Goldberg 1996 165,000 -0- -0- -0-
Chief Executive Officer 1995 165,000 -0- -0- -0-
1994 165,000 -0- -5,700- 175,000
Randolph H. Speer 1996 200,000 -0- -0- -0-
President and Chief 1995 200,000 -0- -0- -0-
Operating Officer 1994 76,900(1) -0- -0- 100,000
</TABLE>
- -------------------
(1) Mr. Speer's annual salary is $200,000. He commenced employment with the
Company in August 1994.
STOCK OPTIONS
There were no grants of stock options by the Company to the Named Officers
during 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table sets forth the information with respect to the Named
Officers concerning the exercise of options during 1996 and unexercised options
held as of December 31, 1996:
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<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at FY-End (#) FY-End ($)
------------------------------ ----------------------------
Shares
Acquired on
Name Exercise (#) Value Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Goldberg -0- -0- 200,000 (1) -0- -0- -0-
Randolph H. Speer -0- -0- 100,000 (1) -0- -0- -0-
</TABLE>
- -------------------------
(1) The exercise prices of these options are greater than the current market
value per share of the Company's Common Stock as of that date.
Compensation of Directors
It has been the policy of the Company not to compensate its directors for their
services as directors; however, in July 1993, the Company granted options to
purchase 12,500 shares of the Company's Common Stock to each director as
compensation for their respective services as directors. It is the policy of
the Company not to pay its directors for attending Board or committee meetings,
but the Company reimburses directors for travel expenses incurred in attending
such meetings.
Report on Executive Compensation
The following report, which documents the components of the Company's executive
officer compensation program with respect to the executive officers of the
Company, was included in Company's annual report for its fiscal year ended
December 31, 1995. The compensation levels of the Company's executive officers
have not changed since the date of that report. Because no determination to
change the compensation levels of any of the Company's executive officers has
been made since the date of such report, it is repeated in its entirety:
"Compensation Philosophy and Strategy With regard to executive
compensation, the Company's strategy is to maintain a strong
pay-for-performance culture and align reward systems with
shareholders' interests. The compensation structure is intended to
reflect the Company's current financial circumstances and places a
heavy emphasis on the long-term objectives of increasing value and
providing significant returns to shareholders. The particular
elements of the compensation program for executive officers are
explained below:
- BASE SALARY. Attract and retain executive officers by delivering
a competitive rate of base pay. Market competitive rates are
determined by comparison with average compensation levels of
comparable companies. The Board of Directors believes that the
average pay of these companies is a reasonable reference point to
which to target and manage base pay over time, recognizing the
Company's growth potential and need for executive-level
experience and skills in the current phase of the Company's
development. Until recently, the Company had been unable to
compensate its executive officers at a competitive rate and,
therefore, chose to supplement the base salary of
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its executive officers with Stock Option awards, as more
fully described below.
STOCK OPTION PROGRAM. The Company, through its 1992 Long Term
Incentive Plan, offers a stock option program to its executive
officers. The Board strongly believes that by providing those
persons who have substantial responsibility for the management
and growth of the Company with an opportunity to increase their
ownership of Company stock, the best interests of shareholders
and executives will be closely aligned. This is particularly
important given the Company's current financial condition. The
Compensation Committee believes that stock options are an
excellent vehicle for compensating its employees because options
tend to reward their holders for realizing longer term market
performance. As with other compensation components, the
Compensation Committee looks to individual performance as a guide
in determining option awards to executives.
ANNUAL INCENTIVE COMPENSATION. The Company is authorized
pursuant to the 1992 Long Term Incentive Plan to provide annual
incentive pay to its executive officers in cash; however, no such
compensation has been provided to date. The Committee believes
that this policy is appropriate given the difficulties faced by
the Company. The Company intends to implement the practice of
providing annual incentive pay once the Company's earnings and
cash flow are sufficient to justify such a program. The purpose
of such annual incentive compensation would be to deliver
competitive levels of compensation for the attainment of
strategic goals that the Board believes are primary determinants
of financial stability and share price over time.
Chief Executive Officer Compensation
In considering the compensation for the Chairman and Chief Executive
Officer, the Committee considered both Company and individual
performance. Factors considered include how well the CEO performed in:
- Establishing strategic direction for the Company.
- Building and maintaining a sound management team.
- Providing leadership to achieve the Company's goals and
objectives.
- Taking the actions necessary to reduce the Company's losses and
otherwise improve its financial condition.
The Committee has made the following determination regarding the
compensation of Mr. Goldberg:
- Mr. Goldberg's base salary was changed to $165,000
effective January 1, 1992. His prior annual salary was $60,000.
The Committee believes that a salary increase was justified
given the growth of the Company despite its then current
financial condition and Mr. Goldberg's willingness to accept a
lower than competitive pay level during such growth. Mr.
Goldberg's current base salary is still significantly below the
levels of CEO positions at comparable medical laboratory
12
<PAGE> 14
companies. Given the Company's financial difficulties, the Board
believes Mr. Goldberg's base salary has been at an appropriate
level and expects that it will not increase until the Company
becomes profitable and achieves it performance objectives.
- Mr. Goldberg did not receive annual incentive cash
compensation for his performance in 1995. The Committee
recommends that Mr. Goldberg be eligible to receive such annual
incentive cash compensation when the Company becomes profitable.
- Mr. Goldberg received stock options to purchase 57,500 shares of
the Company's Common Stock in 1994.
Chief Operating Officer Compensation
Mr. Speer commenced employment with the Company in August 1994 and is
the Company's President and Chief Operating Officer. Mr. Speer's base
salary of $200,000 per year was approved by the Board of Directors at the
time Mr. Speer was hired. In addition, at the commencement of his
employment with the Company, Mr. Speer received stock options to purchase
100,000 shares of the Company's Common Stock. Neither the Board nor the
Committee have established specific Company and individual performance
criteria in 1995 pertaining to Mr. Speer.
Conclusion
The Committee believes that its stated compensation philosophy serves
the Company's best interests and believes its decision regarding 1995
executive compensation adequately reflects the significant challenges the
Company faced in 1995 and the current operating environment."
THE BOARD OF DIRECTORS
Michael L. Goldberg
Randolph H. Speer
Donald J. Brumlik
Morris Behar
Don L. Dominick
Phillip E. Pearce
Michael J. Pickering, M.D.
13
<PAGE> 15
Performance Graph
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
AMONG RX MEDICAL SERVICES CORP., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P HEALTH CARE (HOSPITAL MANAGEMENT) INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
--------------------------------------------------
12/91 12/92 12/93 12/94 12/95 12/96
<S> <C> <C> <C> <C> <C> <C> <C>
RX MEDICAL SERVICES CORP. RXMS 100 147 126 40 15 1
NASDAQ STOCK MARKET (U.S.) INAS 100 116 134 131 185 227
S & P HEALTH CARE (HOSPITAL MGMT) IHSM 100 78 117 125 174 204
</TABLE>
- ----------------------------------
* $100 invested on 12/31/91 in stock or index including reinvestment of
dividends. Fiscal year ending December 31.
14
<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to an agreement, dated April 20, 1994 (the "Merger Agreement"), with
an affiliate of Kachina, Inc. ("Kachina"), the Company will sell, and Kachina
will purchase, up to 500,000 shares of RXM Common Stock at $6.00 per share,
subject to the completion of future acquisitions by the Company. This is in
addition to the 500,000 shares of RXM Common Stock previously issued to Kachina
as part of the Merger Agreement. The additional 500,000 shares are to be sold
to Kachina on the basis of 100,000 shares for every $4.0 million paid by the
Company in acquisition price, inclusive of consideration to be paid in cash,
property, services, stock, assumption of debt or other form of benefit to the
seller. Accordingly, the Company may receive up to an additional $3.0 million
for the additional shares of RXM Common Stock to be so issued. The Financing
Source is an affiliate of Kachina.
In conjunction with the Merger Agreement, on April 20, 1994, the Company
entered into an agreement-in-principle (the "Purchase Commitment") with the
Financing Source, pursuant to which the Financing Source, through one or more
of its subsidiaries or affiliates, would provide up to $20.0 million to be used
to purchase the medical accounts receivable of businesses which may be acquired
in the future by the Company. The terms of the Purchase Commitment are to be
substantially similar to the terms of the present purchase arrangement between
Manatee and affiliates of the Financing Source, pursuant to which the Company's
accounts receivable are financed. The Company has utilized the Purchase
Commitment to obtain the funds required to acquire CHC in July 1995, the
Company's hospital management subsidiary. In addition, the Company agreed to
employ a new executive officer who would also be a member of the Company's
Board of Directors. Pursuant to that agreement, Randolph H. Speer was elected
President and Chief Operating Officer of the Company by the Board of Directors
and serves as a member of the Board of Directors.
On September 20, 1994, the Company entered into an agreement which resulted in
the disposition of the wrap mortgage portfolio owned by a partnership in which
a subsidiary of the Company is the general partner. The transaction entailed a
transfer of the partnership's mortgage portfolio and a return to the Company
for cancellation of the 286,287 shares of the Company's Series B Preferred
Stock which was contributed by the Company to the partnership. In addition, the
sum of $200,000 has been paid in settlement of outstanding obligations totaling
$242,000 owed to an individual unaffiliated with the Company, who performed
consulting services to the partnership. The Financing Source provided the
Company with a loan of $200,000 to make the aforesaid settlement payment and
the Financing Source received as collateral, to secure repayment of that loan,
a pledge of 286,287 shares of a new class (Series D) of the Company's Preferred
Stock. The loan by the Financing Source to the Company was by a note,
originally for one year, at an interest rate of 20%, payable monthly, interest
only, with a balloon payment of $200,000, plus any accrued interest, due on
September 19, 1995. On September 26, 1995, the due date of this loan was
extended until January 31, 1996, and subsequently further extended until
September 30, 1997. Effective December 31, 1996, however, the Financing Source
canceled the note and added the principal and accrued interest on this loan,
totaling $243,333.29, to the outstanding balance of the debt due to Financing
Source. As a result
15
<PAGE> 17
of the cancellation of the note, the shares of the Company's Series D Preferred
Stock were released from the pledge.
On October 20, 1994, the Company entered into an agreement, pursuant to which
the Company divested itself of its interests in, and future obligations with
respect to, the balance of its real estate portfolio. In consideration for the
payment of $1,250,000 in cash, provided to the Company by the Financing Source
pursuant to the transaction described below, and the issuance by the Company of
stock options to purchase 50,000 shares of RXM Common Stock exerciseable at
$1.00 per share, the Company was completely released from any and all liability
resulting from and out of the operations of its income properties.
To consummate the above-described transaction, the Company sold to the
Financing Source for $1,250,000, (a) 700,000 shares of RXM Common Stock and (b)
1,250,000 shares of a new Series E Convertible Preferred Stock. The Series E
Preferred Stock provides for an annual dividend of 12%, payable monthly, and is
convertible into Common Stock at the rate of one share of RXM Common Stock for
every two shares of Series E Preferred Stock. The conversion in any one
calendar quarter cannot exceed 156,250 shares of RXM Common Stock, and any
shares of Series E Preferred Stock not converted by November 1, 1996 shall
automatically convert to shares of RXM Common Stock as of that date. The
Company agreed, with respect to the 700,000 shares of RXM Common Stock issued
on October 24, 1994, which had a market value as of that date of $787,500, and
the 625,000 shares of RXM Common Stock to be issued on conversion of the Series
E Preferred Stock, to include all of these shares in a registration statement
that the Company had previously filed with the Securities and Exchange
Commission, which registration statement has not yet been declared effective.
As of December 31, 1994, a total of $29,589 has accrued on account of dividends
payable on the Series E Preferred Stock. As part of this transaction, and the
transaction referred to above, relating to the disposition of the Company's
wrap mortgage portfolio, the Company issued 250,000 shares of RXM Common Stock
with a market value of $265,625 on the date of issuance (September 26, 1994),
to an affiliate of the Financing Source.
In consideration of the funding of $1.0 million by the Financing Source to
facilitate the acquisition by the Company of CHC, the Company pledged to the
Financing Source all of the issued and outstanding common and preferred stock
of CHC as collateral for the repayment of that loan.
On March 29, 1996, an affiliate of the Financing Source, purchased the Whitwell
Medical Center, Whitwell, Tennessee and the Dickenson County Medical Center,
Clintwood, Virginia, and simultaneously with the purchase, leased the two
facilities to subsidiaries of CHC for a term of 20 years pursuant to separate
operating agreements. Under the operating agreements, CHC is to pay a
stipulated rental for the facilities and equipment contained therein. In a
related agreement, CHC was granted an option to purchase both hospitals,
exerciseable at any time prior to May 1, 1997, for a purchase price equal to
the assumption of all liabilities and indebtedness attributable to or secured
by the land, buildings and equipment comprising both facilities. As of May 1,
1997, CHC transferred its option to purchase the Whitwell Medical Center to
Ameris Health Systems of
16
<PAGE> 18
Nashville, Tennessee ("Ameris"). Subsequently, the option was exercised by
Ameris, and Whitwell Medical Center was sold to Ameris on October 31, 1996. The
exercise date of CHC's option to purchase Dickenson County Medical Center has
been extended to December 31, 1997.
MATTERS RELATING TO AUDITORS
For the preceding five years, the Company's independent certified
public accountants have been Grant Thornton, LLP. As Grant Thornton, LLP has
yet to make a proposal for the 1997 annual audit of the Company, no
recommendation is made for the selection of the Company's independent certified
public accountants for the current year.
Representatives of Grant Thornton, LLP are not expected to be in
attendance at the 1997 Annual Meeting of Stockholders.
ANNUAL REPORT TO STOCKHOLDERS
The Company's 1996 Annual Report to Stockholders on Form 10-K is
enclosed herewith.
STOCKHOLDERS' PROPOSALS
The Company welcomes comments or suggestions from its stockholders,
including any recommendations stockholders may have as to future directors of
the Company. In the event that a stockholder desires to have a proposal
formally considered at the Company's 1998 Annual Meeting of Stockholders, and
included in the Proxy Statement for that meeting, the proposal must be received
in writing by the Company's Secretary on or before January 31, 1998.
ADDITIONAL BUSINESS
As of the date of this Proxy Statement, the Board of Directors does
not know of any other matters that will come before the 1997 Annual Meeting.
If, however, any other matters not now known are properly brought before the
meeting, the persons named in the accompanying proxy will vote such proxy at
their discretion.
By Order of the Board of Directors
Joseph C. Wasch
Acting Secretary
Fort Lauderdale, Florida
October 10, 1997
17
<PAGE> 19
APPENDIX A
[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE Rx MEDICAL SERVICES CORP.
WITH FOR ALL
ANNUAL MEETING NOVEMBER 20, 1997 PROPOSAL NO.1 FOR HOLD EXCEPT
THIS PROXY IS SOLICITED ON BEHALF OF 1. Election of
THE BOARD OF DIRECTORS the following [ ] [ ] [ ]
nominees as Directors to serve
in such capacities until their
successors are duly elected and
qualified (except as marked to
the contrary below):
Joseph C. Wasch and Rita E. Tholt and
each of them, as proxies, with full RANDOLPH H. SPEER, LANCE K. POULSEN,
power of substitution on each of them, MICHAEL L. GOLDBERG, PHILLIP E. PEAR
are hereby authorized to represent and CE, AND MICHAEL J. PICKERING
to vote, as designated below and on
the reverse side, upon the following INSTRUCTION: TO WITHHOLD TO VOTE FOR
proposals and in the discretion of the ANY INDIVIDUAL NOMINEE, MARK "FOR ALL
proxies on such other matters as may EXCEPT" AND WRITE THAT NOMINEE'S NAME
properly come before the Annual IN THE SPACE PROVIDED BELOW,
Meeting of Stockholders of Rx Medical
Services Corp. to be held at the Hyatt -------------------------------------
Regency Columbus Hotel, Columbus, Ohio
on November 20, 1997 at 10:00 a.m., or UNLESS OTHERWISE DIRECTED, THIS PROXY
any adjournment(s), postponement(s), WILL BE VOTED "FOR" PROPOSAL NO. 1
or other delay(s) thereof (the "Annual AND WILL BE VOTED IN THE DISCRETION
Meeting"), all shares of stock of Rx OF THE PROXIES ON SUCH OTHER MATTERS
Medical Services Corp. to which the AS MAY PROPERLY COME BEFORE THE
undersigned is entitled to vote at the ANNUAL MEETING. THE BOARD OF
Annual Meeting. The following DIRECTORS RECOMMENDS THAT
proposals are more fully described in STOCKHOLDERS VOTE "FOR" PROPOSAL NO.
the Notice of and and Proxy Statement 1.
for the Annual Meeting(receipt whereof
is hereby acknowledged). (Please sign exactly as name appears
on this card, date and return. If
shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
PLEASE BE SURE DATE by president or other authorized
TO SIGN AND DATE -------------- officer. If a partnership, please
THIS PROXY IN THE BOX BELOW. sign in partnership name by
authorized person.)
- ---------------------------------------
Stockholder sign above PLEASE CHECK THIS BOX IF YOU EXPECT
TO ATTEND THE ANNUAL MEETING IN
- --------------------------------------- PERSON.
Co-holder (if any) sign above [ ]
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
RX MEDICAL SERVICES CORP.
- --------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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