SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2)
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14(a)-12
Nutrition Management Services Company
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(Name of Registrant as Specified in Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NUTRITION MANAGEMENT SERVICES COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held December 18, 1997
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of NUTRITION MANAGEMENT SERVICES COMPANY, a Pennsylvania corporation
(the "Company"), will be held at Collegeville Inn, 4000 Ridge Pike,
Collegeville, PA, 19426, on December 16, 1998, at 10:00 A.M., Local Time, for
the following purposes:
1. To elect six (6) members of the Board of Directors to
serve until the next annual meeting of shareholders
and until their successors have been duly elected and
qualified;
2. To transact such other business as may properly be
brought before the meeting or any adjournment
thereof.
The Board of Directors has fixed the close of business on November 25,
1998 as the record date for the Meeting. Only shareholders of record on the
stock transfer books of the Company at the close of business on that date are
entitled to notice of, and to vote at, the Meeting.
By Order of the Board of Directors
JOSEPH V. ROBERTS
Chairman and Chief Executive Officer
Dated: Kimberton, Pennsylvania
November 26, 1998
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE
URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY
IN THE ENVELOPE THAT IS PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
<PAGE>
NUTRITION MANAGEMENT SERVICES COMPANY
725 Kimberton Road
Kimberton, Pennsylvania 19442
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
This Proxy Statement is being furnished to shareholders by the Board of
Directors of Nutrition Management Services Company, a Pennsylvania corporation
(the "Company"), in connection with the solicitation of the accompanying Proxy
for use at the 1998 Annual Meeting of Shareholders of the Company (the
"Meeting") to be held at Collegeville Inn, 4000 Ridge Pike, Collegeville,
Pennsylvania, 19426 on December 16, 1998, at 10:00 A.M., Local Time, or at any
adjournment thereof.
The principal executive offices of the Company are located at 725
Kimberton Road, Kimberton, Pennsylvania 19442. The approximate date on which
this Proxy Statement and the accompanying Proxy will first be sent or given to
shareholders is November 26, 1998.
RECORD DATE AND VOTING SECURITIES
Only shareholders of record at the close of business on November 25,
1998, the record date (the "Record Date") for the Meeting, will be entitled to
notice of, and to vote at, the Meeting and any adjournment thereof. As of the
close of business on the Record Date, there were 2,859,569 outstanding shares of
the Company's Class "A" common stock, no par value (the Class "A" "Common
Stock"). Each of such shares is entitled to one vote. As of the close of
business on the Record Date, there were 100,000 outstanding shares of the
Company's Class "B" Common Stock, no par value (the "Class B Common Stock").
Each of the Class B common shares is entitled to seven votes. The Class "A"
Common Stock and the Class "B" Common Stock are sometimes collectively referred
to herein as the "Common Stock." There was no other class of voting securities
of the Company outstanding on that date. A majority of the outstanding shares
present in person or by proxy is required for a quorum.
VOTING OF PROXIES
Shares of Common Stock represented by Proxies, which are properly
executed, duly returned and not revoked will be voted in accordance with the
instructions contained therein. If no specification is indicated on the Proxy,
the shares of Common Stock represented thereby will be voted (i) for the
election as Directors of the persons who have been nominated by the Board of
Directors, and (ii) for any other matter that may properly be brought before the
Meeting in accordance with the judgment of the person or persons voting the
Proxies. If a signed Proxy Card is returned by a stockholder and expressly
reflects an abstention upon any proposal, the shares evidenced thereby will be
counted towards the quorum necessary to convene the meeting. Abstentions and
broker non-votes are not counted as votes cast on any matter to which they
relate. The execution of a Proxy will in no way affect a shareholders' right to
attend the Meeting and vote in person. Any Proxy executed and returned by a
stockholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Meeting, or by execution of a subsequent proxy which is presented
to the Meeting, or if the shareholder attends the Meeting and votes by ballot,
except as to any matter or matters upon which a vote shall have been cast
pursuant to the authority conferred by such Proxy prior to such revocation.
The cost of solicitation of the Proxies being solicited on behalf of
the Board of Directors will be borne by the Company. In addition to the use of
the mails, proxy solicitation may be made by telephone, telegraph and personal
interview by officers, directors and employees of the Company. The Company will,
upon request, reimburse brokerage houses and persons holding Common Stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
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<PAGE>
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the
Company's Common Stock, as of the Record Date, by each person known to be the
beneficial owner of more than five percent of the Common Stock, each director,
nominees for director, and by all directors and executive officers of the
Company as a group:
<TABLE>
<CAPTION>
Percentage of
Name and Address Shares Outstanding Percentage of
of Beneficial Owner Beneficially Owned Common Stock Voting Power(1)
------------------- ------------------ ------------ ---------------
<S> <C> <C> <C>
Joseph V. Roberts 1,958,000(2)(3) 66.1% 71.9%
725 Kimberton Road
Kimberton, PA 19442
Kathleen A. Hill 110,000(3) 3.7% 3.1%
Janet Paroo 15,000(4) * *
Michael Gosman 15,000(4) * *
Samuel R. Shipley, III 21,000(4)(5) * *
Michelle Roberts (6) 15,000(4) * *
All executive officers and Directors 2,134,000(2)(3)
as a Group (7 persons) (4)(5) 72.1% 76.8%
</TABLE>
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* Less than 1%
(1) Calculated on the basis of the Class A Common Stock having one vote per
share and the Class B Common Stock having seven votes per share.
(2) Mr. Roberts owns 1,858,000 shares of Class A Common Stock and 100,000
shares of Class B Common Stock. Mr. Roberts' beneficial ownership does
not include shares held by his adult son and his adult daughter and Mr.
Roberts disclaims any beneficial ownership of such stock.
(3) Mr. Roberts has granted Ms. Hill an immediately exercisable option to
purchase 105,000 shares of his Class A Common shares at an exercise
price of $4.00 per share.
(4) Consists of presently exercisable options to acquire 15,000 shares of
Class A Common Stock at an exercise price of $4.00 per share.
(5) Mr. Shipley has a 50% interest in a partnership that owns 6,000 shares
of Class A Common Stock.
(6) Michelle Roberts is the daughter of Joseph V. Roberts.
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<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
Nominees
Unless otherwise specified, all Proxies received will be voted in favor
of the election of the persons named below as directors of the Company, to serve
until the next Annual Meeting of Shareholders of the Company and until their
successors shall be duly elected and qualified. Directors shall be elected by a
plurality of the votes cast, in person or by proxy, at the Meeting. The terms of
the current directors expire at the Meeting and when their successors are duly
elected and qualified. Management has no reason to believe that any of the
nominees will be unable or unwilling to serve as a director, if elected. Should
any of the nominees not remain a candidate for election at the date of the
Meeting, the Proxies will be voted in favor of those nominees who remain
candidates and may be voted for substitute nominees selected by the Board of
Directors. All nominees are currently directors of the Company. The names of the
nominees and certain information concerning them are set forth below:
<TABLE>
<CAPTION>
First Year
Name Principal Occupation Age Became Director
- ---- -------------------- --- ---------------
<S> <C> <C> <C>
Joseph V. Roberts Chairman of the Board and Chief 50 1979
Executive Officer
Kathleen A. Hill Secretary and Chief Operating Officer 42 1979
of the Company
Janet E. Paroo President of Global Health Group, 42 1997
Inc.
Michael Gosman President of Continuum Care 33 1993
Corporation, Wellsley, Massachusetts
Samuel R. Shipley, III Investment Banker 56 1995
Philadelphia, PA
Michelle Roberts General Manager-Skilled Nursing 28 1997
Division of the Company
</TABLE>
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<PAGE>
Joseph V. Roberts, has been Chairman of the Board and Chief Executive
Officer of the Company since its inception in March, 1979.
Kathleen A. Hill, has been President and Chief Operating Officer of the
Company since June 1995; Chief Operating Officer of the Company from
1991 to 1995; Senior Vice President of the Company from 1985 to 1991;
and Secretary of the Company and a Director since 1979.
Janet Paroo, has been President of Global Health Group, Inc. since 1995
and prior thereto was Senior Vice President, Suburban Commercial
Banking since 1986. She is currently a Director of Progress Financial
Corporation and Progress Federal Savings Bank, a NASDAQ listed company.
Michael Gosman is the Executive Vice President and a Director of
CareMatrix Corporation, Needham, MA. He was executive Vice President of
Continuum Care Corporation, Wellsley, MA, from 1990 to 1996. From 1987
until 1990, Mr. Gosman was a financial analyst with Meditrust located
in Waltham, MA.
Samuel R. Shipley, III has been the Managing Director of Shipley Raidy
Capital Partners, LP, an investment banking firm in West Conshohocken,
PA since 1993. From 1983 to 1993, Mr. Shipley was the Managing Director
of Philadelphia First Group, an investment banking firm in West
Conshohocken, PA. For more than fifteen years, Mr. Shipley has been a
senior executive in the investment banking industry, with specialties
in corporate finance, mergers and acquisitions, and valuations.
Michelle Roberts, has served in various capacities at the Company since
1987, most recently as General Manager-Skilled Nursing Division since
1995.
Meetings
The Board of Directors held four meetings during the year ended June
30, 1997. All Directors attended at least 75% of such meetings who attended % of
the meetings that were held while she was a Director of the Company. From time
to time, the Members of the Board of Directors act by unanimous written consent
pursuant to the Laws of the Commonwealth of Pennsylvania.
Recommendation
The Board of Directors recommends a vote FOR all of the Nominees.
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<PAGE>
EXECUTIVE COMPENSATION
The table set forth below shows all annual and long-term compensation
for services accrued by the Company for services in all capacities for the years
ended June 30, 1998, 1997 and 1996 of those persons who were, at June 30, 1998,
(i) the Chief Executive Officer and (ii) the Chief Operating Officer, whose
compensation exceeded $100,000 in fiscal year 1998:
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Fiscal Base Award All
Name and Capacity Served Year Salary Bonus Other Options Payouts Other(2)
- ------------------------ ---- ------ ----- ----- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph V. Roberts 1998 339,052(4) 14,172 0 0 0 32,400
Chairman and Chief 1997 370,000(3) 14,172 0 0 0 32,400
Executive Officer 1996 280,000 0 0 0 0 25,598
Kathleen A. Hill 1998 180,251 41,160 0 0 0 884
Director and Chief 1997 180,251 101,161 0 0 0 884
Operating Officer 1996 175,000 57,000 0 0 0 884
</TABLE>
(1) Presentation of all compensation is on an accrual basis.
(2) Includes the amount of life insurance premiums paid on behalf of these
executives.
(3) Includes the payment of $15,000 per month by The Collegeville Inn and
Conference and Training Center, Inc. ("Collegeville"), a wholly-owned
subsidiary of the Company, for supervisory fees.
(4) Includes the payment of $49,828 from Collegeville.
STOCK OPTION GRANTS
During the fiscal years ended June 30, 1998, 1997, and 1996, there were
no stock options granted to any executive officer of the Company.
Employment Agreements
Effective October 1991, the Company entered into a five-year employment
agreement with Joseph V. Roberts, the Chief Executive Officer of the Company,
providing that Mr. Roberts will devote full-time to the Company's business for a
base annual salary of $270,000, adjusted for cost of living increases. In
addition, Mr. Roberts will receive each year a bonus of 10% of his base salary,
as adjusted, if the Company meets budgeted pre-tax earnings for such year as
determined by the Board of Directors of the Company. The agreement has expired
and a new agreement is expected to be executed with terms to be negotiated
between the parties.
Effective September 1991, Kathleen Hill, President and Chief Operating
Officer of the Company entered into a three-year employment agreement with the
Company providing that Ms. Hill will devote full-time to the Company's business
for a base annual salary of $120,000. The agreement entitles Ms. Hill to a bonus
of up to 50% of her base salary based on the achievement of specified goals
regarding operating standards, regulatory compliance,
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<PAGE>
customer retention and corporate profitability. The agreement has expired and a
new agreement is expected to be executed with terms to be negotiated between the
parties.
Directors Compensation
Directors who are employees of the Company do not receive additional
compensation for their services as Directors. Non-employee Directors are
compensated for their services at the rate of $500 for each meeting attended and
$200 for each meeting participated in by telephone. During the fiscal year ended
June 30, 1997, non-employee Directors received $6,500 in compensation.
Certain Relationships and Related Transactions
The Company leases its executive offices from Ocean 7, Inc., a
corporation wholly owned by Joseph V. Roberts. The term of the lease is for ten
years, and the Company has the option to renew the lease, on three occasions,
for additional two-year periods each. Rent for the first five years of the lease
is fixed. Rent for the term remaining thereafter shall be determined based on
then prevailing market rates. The minimum monthly rent for the first two lease
years is $11,600. Thereafter, the rent shall increase by a percentage equal to
the increase, if any, in the Consumer Price Index. During the fiscal year ended
June 30, 1998, the rental expenses paid to Ocean 7, Inc. totaled $229,705.
Pursuant to the prior sale of the property to Ocean 7, the Company held a second
mortgage on the property to secure a debt owed from Ocean 7, Inc. to the
Company. Ocean 7 has repaid in full the balance due to the Company on the second
mortgage.
Management believes that the terms of each of the transactions
described herein are comparable to those generally available to unaffiliated
third parties.
Annual Report
All shareholders of record as of the Record Date, have been sent, or
are concurrently herewith being sent, a copy of the Company's 1998 Annual Report
for the year ended June 30, 1998, which contains certified consolidated
financial statements of the Company and its subsidiaries for the year ended June
30, 1998.
ANY SHAREHOLDER OF THE COMPANY MAY OBTAIN, WITHOUT CHARGE, A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 1997
(WITHOUT EXHIBITS) AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY
WRITTEN REQUEST TO THE COMPANY'S SECRETARY, NUTRITION MANAGEMENT SERVICES
COMPANY, 725 KIMBERTON ROAD, KIMBERTON, PENNSYLVANIA 19442.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next Annual Meeting of Shareholders of the
Company, shareholders proposals for such meeting must be submitted to the
Company no later than September 1, 1999.
On May 21, 1998 the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Securities and Exchange Act of
1934, as amended. The amendment to Rule 14a-4(c)(1) governs the Company's use of
its discretionary proxy voting authority with respect to a stockholder proposal
which is not addressed in the Company's proxy statement. The new amendment
provides that if a proponent of a proposal fails to notify the Company at least
45 days prior to the month and day of mailing of the prior year's proxy
statement, then the Company will be allowed to use its discretionary voting
authority when the proposal is raised at the meeting, without any discussion of
the matter in the proxy statement.
With respect to the Company's 1999 Annual Meeting of Stockholders, if
the Company is not provided notice of a stockholder proposal, which the
stockholder has not previously sought to include in the Company's proxy
statement, by October 12, 1999, the Company will be allowed to use its voting
authority as outlined above.
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<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Grant Thornton, LLP ("Grant Thornton") served as
the Company's independent public accountants for the fiscal year ended June 30,
1998. Such firm has no other relationship to the Company or its affiliates. The
Board of Directors has selected Grant Thornton to serve as the independent
public accountants of the Company for the current fiscal year ending June 30,
1999. A representative of Grant Thornton is expected to attend the Annual
Meeting, and such representative will have the opportunity to make a statement
if he so desires and will be available to respond to appropriate questions from
shareholders.
The Audit Committee of the Board of Directors of the Company has
dismissed Moore Stephens, P.C. ("Moore Stephens") as independent accountants to
the Company and appointed Grant Thornton LLP as the new independent accountants
to the Company. Moore Stephens' accountant's report on the financial statements
of the Company for the past two years and any subsequent interim period through
the date of dismissal did not contain an adverse opinion or a disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. There were no other reportable events or disagreements
with Moore Stephens to report in response to Item 304(a) of Regulation S-K.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
other than those set forth herein which will be presented for consideration at
the Meeting. If any other matter or matters are properly brought before the
Meeting or any adjournment thereof, the persons named in the accompanying Proxy
will have discretionary authority to vote or otherwise act, with respect to such
matters in accordance with their judgment. Proxy will have discretionary
authority to vote or otherwise act, with respect to such matters in accordance
with their judgment.
JOSEPH V. ROBERTS
Chairman and
Chief Executive Officer
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NUTRITION MANAGEMENT SERVICES COMPANY
PROXY -- Annual Meeting of Shareholders, December 18, 1997
The undersigned, a shareholder of Nutrition Management Services
Company, a Pennsylvania corporation (the "Company"), does hereby constitute and
appoint Joseph Roberts and Kathleen Hill and each of them, the true and lawful
attorneys and proxies with full power of substitution, for and in the name,
place and stead of the undersigned, to vote all of the shares of Common Stock of
the Company that the undersigned would be entitled to vote if personally present
at the 1998 Annual Meeting of Shareholders of the Company to be held at
Collegeville Inn, 4000 Ridge Pike, Collegeville, Pennsylvania 19426 on December
16, 1998 at 10:00 a.m., local time, or at any adjournment or adjournments
thereof.
The undersigned hereby instructs said proxies or their substitutes as
set forth below.
1. ELECTION OF DIRECTORS:
The election of Joseph V. Roberts, Kathleen A. Hill, Janet Paroo,
Michael Gosman, Samuel M. Shipley, III and Michelle Roberts.
/ / FOR / / TO WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), PRINT
NAME(S) BELOW:
--------------------------------
2. DISCRETIONARY AUTHORITY.
(Continued on the reverse side)
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<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE
NOMINEES AS DIRECTORS, AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES OR
PROXY WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE ANNUAL MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given
and acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated November 26, 1998, and a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1998.
Please mark, date, sign and mail this
proxy in the envelope provided for
this purpose. No postage is required
if mailed in the United States.
, 1998
------------------------------------(L.S.)
------------------------------------(L.S.)
Signature(s)
NOTE: Please sign exactly as your name or
names appear hereon. When signing as
attorney, executor, administrator, trustee
or guardian, please indicate the capacity
in which signing. When signing as joint
tenants, all parties in the joint tenancy
must sign. When a proxy is given by a
corporation, it should be signed with full
corporate name by a duly authorized
officer.
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