NYER MEDICAL GROUP, INC.
PROXY STATEMENT
The enclosed proxy is solicited by Samuel Nyer and William J.
Clifford, Jr. on behalf of the Board of Directors (the "Board") of
Nyer Medical Group, Inc. (the "Company") for use at the annual
meeting of shareholders on September 30, 1996 at 10:00 a.m. to be
held at the Company's corporate office located at 1292 Hammond
Street, Bangor, Maine 04401. Such solicitation is being made by
mail, and the Company may also use its officers to solicit proxies
from shareholders either in person or by telephone or letter
without extra compensation. All expenses of this solicitation will
be paid by the Company. Since proxies are being solicited by the
Board, it may be deemed to have a conflict of interest in
recommending how shareholders vote for the proposals. An inherent
conflict of interest may arise from the Board recommending their
own re-election and the corporate governance provisions which will
tend to perpetuate control of the Board. A proxy may be revoked by
delivering a written notice of revocation to the principal office
of the Company or in person at the meeting at any time prior to the
voting thereof. If a shareholder wishes to give a proxy to someone
other than management, he or she may cross out the names appearing
on the enclosed proxy form, insert the name of some other person,
sign and give the form to that person for use at the meeting.
Only shareholders of record at the close of business on
August 1, 1996 (the "Record Date") are entitled to notice of, and
to vote at, the meeting. Each share of common stock outstanding on
the record date is entitled to one vote on all proposals. Nyle
International Corp. ("Nyle") is the holder of all of the Company's
Class A preferred stock which shares are entitled to 2,000,000
votes. As of the close of business on August 1, 1996, 3,128,293
shares of common stock of the Company were outstanding which means
that a total of 5,128,293 votes are eligible to be cast at the
meeting.
All proposals require a vote of the majority of the
shareholders present in person or by proxy except for the election
of directors who shall be elected by a plurality of such votes.
Proxies which abstain on one or more proposals and "broker non-
votes" will be deemed present for quorum purposes for all proposals
to be voted on at the meeting. Broker non-votes occur where a
broker holding stock in street name votes the shares on some
matters but not others. The missing votes are broker non-votes.
Client directed abstentions are not broker non-votes. Abstentions
and broker non-votes are counted in tabulations of the votes cast
on proposals presented to the shareholders and will have the same
effect as a vote against the proposed amendments to the Company's
Articles of Incorporation. Shareholders whose shares are in street
name and do not return a proxy are not counted for any purpose and
are neither an abstention nor a broker non-vote. Shareholders who
sign, date and return a proxy but do not indicate how their shares
are to be voted are giving management full authority to vote their
shares as they deem best for the Company.
This proxy statement and the accompanying proxy are first
being mailed to shareholders on or about September 10, 1996.
Voting Securities and Principal Holders Thereof
The following table sets forth the number of shares of the
Company's voting stock beneficially owned as of August 1, 1996 by
(i) owners of more than 5% of the Company's voting stock, (ii)
each director of the Company, and (iii) all executive officers and
directors of the Company as a group:
Amount and
Nature of
Name and Address of Beneficial Percent of
Class Beneficial Ownership Ownership 1,2 Class
Common Stock Samuel Nyer 2,798,000 1,3,4,5 53.9%
and Class A 1292 Hammond Street
Preferred Bangor, ME 04401
Stock
Common Stock Nyle International 2,710,000 1 52.8%
and Class A 72 Center Street
Preferred Brewer, ME 04412
Stock
Common Stock William Clifford, Jr. 12,000 4 *
1292 Hammond Street
Bangor, ME 04401
Common Stock Michael Anton 44,500 6 1.4%
9 Haigis Highway
Scarborough, ME 04074
Common Stock Donald C. Lewis, Jr. 12,000 7 *
c/o Nyle International Corp.
72 Center Street
Brewer, ME 04412
Common Stock Kenneth L. Nyer, M.D. 12,000 7 *
1933 Williamsbridge Rd.
Bronx, New York 10461
Common Stock Howard G. Parker, M.D. 11,000 8 *
358 Broadway
Bangor, ME 04401
Common Stock Daniel Striar 12,000 7 *
1 Fox Hill Drive
South Walpole, MA 02701
All directors and executive officers
of the Company as a group (eight persons) 2,889,700 1,3,6,9 55.0%
2 Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 and includes any options which
vest within 60 days of the Record Date, i.e., September 30, 1996. Unless
otherwise noted, the Company believes that all persons named in the table
have sole voting and investment power with respect to all shares of common
stock beneficially owned by them.
3 Includes shares owned by Nyle International Corp. ("Nyle") since Mr. Samuel
Nyer is chairman of that corporation.
4 Includes 12,000 shares of common stock underlying vested stock options
granted pursuant to the Company's 1993 Stock Option Plan (the "Plan").
5 Includes 50,000 shares of common stock underlying vested options granted
pursuant to the Company's Plan.
6 Does not include 10,000 shares issued to Mr. Anton vesting subject to
performance goals contained in the Asset Purchase Agreement through which
Mr. Anton sold Anton Enterprises to the Company, and which in any event,
cannot vest prior to the end of calendar 1996.
7 Includes 12,000 shares each underlying vested options granted to Messrs.
Lewis and Striar and Dr. Nyer pursuant to the Company's Plan.
8 Includes 2,000 shares underlying vested options granted to Dr. Parker
pursuant to the Company's Plan.
9 Includes 100 shares owned by Ms. Karen L. Wright, the Company's treasurer.
Item 1. Election of Directors
Seven directors are to be elected at the annual meeting.
Those persons elected will hold office until the next annual
meeting of shareholders and their successors have been elected and
qualified. The Company's bylaws provide that the actual number of
directors be established by resolution of the Board. The current
Board has by resolution established the number of directors at
eight. Assuming approval of the proposal to classify the Board,
Messrs. Samuel Nyer, William Clifford, Jr. and Donald C. Lewis are
designated Class A directors and will serve a three-year term, Dr.
Kenneth L. Nyer and Mr. Michael Anton will be Class B directors and
serve a two-year term, and Dr. Howard G. Parker and Mr. Daniel
Striar will be Class C directors and will serve a one-year term.
The nominees for the Board are set forth below. The proxy
holders intend to vote all proxies received by them for the
nominees for directors listed below unless instructed otherwise.
In the event any nominee is unable or declines to serves as a
director at the time of the annual meeting, the proxies will be
voted for any nominee who shall be designated by the present Board
to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to
vote all proxies received by them for the nominees listed below
unless instructed otherwise. As of the date of this proxy
statement, the Board is not aware of any nominee who is unable or
will decline to serve as a director.
Directors shall be elected by a plurality of the votes of the
shares cast at the annual meeting.
Nominees to Board of Directors
Name Age Position with the Company Since
Samuel Nyer 71 Chairman of the Board, 1991
President and Secretary
William J. Clifford, Jr. 46 Vice President of Sales
and Director 1991
Michael Anton 51 Director 1993
Donald C. Lewis, Jr. 58 Director 1993
Kenneth L. Nyer, M.D. 38 Director 1991
Howard G. Parker, M.D. 55 Director 1991
Daniel Striar 60 Director 1991
Samuel Nyer has been chairman of the board, president and
secretary of the Company since December 1991. He served as a
director of Genetic Vectors, Inc. ("Vectors") from December 1991 to
June 1996. Mr. Nyer has been president and director of ADCO
Surgical Supply, Inc. ("ADCO"), Nyle Home Health Supplies Inc.
("Nyle Home Health") and ADCO South Medical Supplies, Inc. ("ADCO
South") since 1988, 1990 and 1992, respectively. Since 1985, Mr.
Nyer has been chairman of the board of Nyle, a manufacturer of
drying equipment. Nyle, a publicly-held corporation, is the
Company's principal shareholder. Mr. Nyer also has interests in a
number of small businesses in the Bangor, Maine area.
William J. Clifford, Jr. has been vice president of sales and a
director of the Company since 1992, and vice president and general
manager of ADCO, Nyle Home Health and ADCO South since 1988, 1990
and 1992, respectively. Mr. Clifford was appointed a director of
Vectors in June 1996. From 1973 to 1988, Mr. Clifford was general
sales manager of ADCO. Mr. Clifford has over 20 years experience
in the medical supply industry and possesses substantial experience
in medical warehousing, purchasing, sales and sales management. He
has been an employee of ADCO since 1973.
Michael Anton has been a director and an employee of the Company
since September 1993. At that time, the Company acquired his sole
proprietorship, Anton Enterprises, through its subsidiary, Anton
Investments, Inc. ("Anton") and appointed Mr. Anton president of
Anton. The Company owns 80% and Mr. Anton 20% of Anton. Mr. Anton
is also the president and owner of 20% of the Company's 80% owned
subsidiary, Conway Associates, Inc. ("Conway"). Anton and Conway
distribute safety and fire equipment to municipal and industrial
departments and law enforcement agencies through their showrooms
and catalogs.
Donald C. Lewis, Jr. has been a director of the Company since
July 1993. Mr. Lewis has been president and a director of Nyle,
the Company's principal shareholder, since January 1985.
Kenneth L. Nyer, M.D. has been a director of the Company since
December 1991. Dr. Nyer is a specialist in internal medicine and
has practiced at the North Shore University Hospital, Manhasset,
New York since 1987. Dr. Nyer has held a faculty position at
Cornell University Medical School since 1987. Dr. Nyer is the son
of Mr. Samuel Nyer.
Howard G. Parker, M.D. has been a director of the Company since
December 1991. Dr. Parker has been an orthopedic surgeon in
Bangor, Maine since 1978. Dr. Parker acts as a medical advisor,
liaison, and consultant to numerous medical and athletic
organizations. Dr. Parker has conducted research at Harvard
Medical School and Massachusetts Institute of Technology and has
published widely on the subject of orthopedics.
Daniel Striar has been a director of the Company since December
1991. Since 1972, Mr. Striar has been a general partner of R.W.
Striar & Co., a Boston textile manufacturer and distributor.
Executive Compensation
The following table sets forth certain information with
respect to the annual and long-term compensation of the Company's
Chief Executive Officer for the fiscal years ended December 31,
1993, 1994 and 1995. No executive officer received compensation
exceeding $100,000 for the fiscal years ended December 31, 1993,
1994 or 1995.
SUMMARY COMPENSATION TABLE
Annual Long Term Compensation
Compensation Awards Payouts
(a) (b) (c) (d) (e) (f)
Securities
Other Annual Restricted Underlying
Name and Principal Compensation Stock Options/SARS
Position Year Salary($) ($)(2) Award(s)($) (#)
Samuel Nyer, Chief
Executive Officer 1993 $75,000 $ 4,200 -10 $ 0 $12,000 -11
1994 $75,000 $ 4,200 -13 $ 0 0
1995 $75,000 $ 4,200 -14 $ 0 $90,000 -15
(g) (h)
All other
LTIP Compensation
Payouts($) ($)
1993 $ 0 $ 0
1994 $ 0 $ 0
1995 $ 0 $ 0
10 Consists of automobile and automobile insurance allowance accrued in fiscal
1993, of which was $1,050 paid in 1994.
11 Consists of shares of common stock underlying options granted September 15,
1993 pursuant to the Company's Plan, exercisable at $4.75 per share, all of
which are vested.
12 Salary accrued in fiscal 1994 of which $12,981 was paid in February 1995.
13 Consists of automobile and automobile insurance allowance accrued in fiscal
1994, of which $1,400 was paid in 1995.
14 Consists of automobile and automobile insurance allowance accrued in fiscal
1995, of which $1,750 was paid in 1996.
15 Consists of shares of common stock underlying options granted in January
1995 pursuant to the Company's Plan, exercisable at $2.31 per share, of
which 50,000 options are vested.
The Company has not paid any cash compensation to any person
for serving as a director. The Company does not intend to
compensate non-employee directors for serving as directors except
to reimburse them for expenses incurred in connection with their
service as directors and to issue automatic grants of non-qualified
stock options pursuant to the Plan as described herein. Directors
who are employees receive no compensation for serving as directors;
however, they are reimbursed for out-of-pocket expenses incurred in
connection with their service as directors.
Employment Agreements
The Company employs its officers pursuant to oral agreements.
The Company entered into a two-year written employment
agreement with Mr. Samuel Nyer at a base annual salary of $75,000
effective June 16, 1993. Mr. Nyer's employment contract has been
orally renewed for a two-year term on the same terms and
conditions. However, it is anticipated that Mr. Nyer will seek to
renegotiate his employment agreement during 1996. Mr. Nyer's
employment agreement also provides for use of a car and automobile
insurance at an annual cost of approximately $4,200. Additionally,
in January 1995 the Board granted Mr. Nyer 90,000 incentive stock
options exercisable at approximately $2.31 per share (110% of fair
market value), 30,000 of which vested on the date of grant. The
remainder vest biannually over a three-year term each June 30 and
December 31 beginning December 31, 1995.
The Company has an oral employment agreement with Mr. William
Clifford, vice president of sales and a director, which provides
for an annual salary of $52,000 and use of an automobile including
all expenses associated with it at an annual cost of $8,000. The
Company has an oral employment agreement with its treasurer, Ms.
Karen L. Wright, which provides for an annual salary of $37,700.
The Company entered into a five-year written employment
agreement with Mr. Anton at a base annual salary of $62,500
effective September 16, 1993. Mr. Anton also receives a vehicle
allowance of $5,000 annually and life-insurance coverage of
$1,000,000, $300,000 of which is payable to Mr. Anton's designated
beneficiary and the remainder of which is payable to the Company.
Additionally, Mr. Anton received a grant of 12,000 non-qualified
options vesting biannually over a three-year term each December 31
and June 30, all of which have vested.
The Company does not have any formal pension, profit sharing
or such other similar plans pursuant to which it pays additional
cash or non-cash compensation to its employees including the
individuals specified above. However, in July 1993, the Company
established the Plan and obtained shareholder approval of the Plan
at the 1993 annual meeting held on October 11, 1993. In January
1995, the Board approved an amendment to the Plan increasing the
number of shares from 150,000 to 275,000 shares, which was approved
by the Company's shareholders at last year's annual meeting held on
October 27, 1995. Under the Plan, the Board of the Company from
time to time may grant options to purchase its common stock to
employees, including officers. Non-employee directors receive
automatic grants of 12,000 non-qualified options vesting semi-
annually each June 30th and December 31st over a three year term.
After vesting, and upon reelection to the Board, each non-employee
director will receive a new automatic grant of non-qualified
options on the same terms as above. As provided for in the Plan,
the exercise price of the options is the closing price of the
Company's common stock on the last business day prior to the grant
of options.
The following table gives information as to all options to
purchase the Company's common stock which were granted to each
outside director of the Company pursuant to the above automatic
grant provisions of the Plan.
Outside Directors
Option Grants
as of August 1, 1996 -16
Average Option
Date of Exercise Price
Name Grant Number Per Share
Donald C. Lewis, Jr. July 21, 1993 12,000 $4.62
Kenneth L. Nyer, M. D. July 21, 1993 12,000 -17 $4.62
Howard Parker, M. D. July 21, 1993 12,000 -17 $4.62
Daniel G. Striar July 21, 1993 12,000 -17 $4.62
16 As of August 1, 1996, 10,000 have been exercised, all by Dr. Parker.
17 As of Augusst 1, 1996, all of these options have vested and are
therefore exerciseable. If re-elected, each of these persons shall
receive an automatic grant of 12,000 options.
Board Meetings and Committees
The Board of the Company held three meetings during the fiscal
year ended December 31, 1995 and executed a Unanimous Consent in
lieu of formal meeting on one occasion. All directors except Mr.
Donald Striar attended each of the total number of meetings of the
Board during this period either in person or by telephone. Mr.
Striar did not attend any meetings of the Board.
Delinquent Filings
To the best of the Company's knowledge, Mr. Michael Anton, an
officer and director of the Company's subsidiary, Anton, failed to
file one Form 4 covering a transaction required to be filed with
the Securities and Exchange Commission. To the best of the
Company's knowledge, Form 3s have been filed as required during
calendar 1995.
Item 2. Appointment of Auditors
Coopers & Lybrand, LLP ("Coopers") independent public
accountants, currently acts as the independent auditors of the
Company and has been selected by the Board to act as auditors for
the fiscal year ended December 31, 1996 subject to shareholder
approval. Unless directed to vote no, proxies being solicited will
be voted in favor of the ratification of Coopers as independent
auditors for the Company's fiscal year ended December 31, 1996.
Coopers acted as auditors for the Company for the fiscal year ended
December 31, 1995. A representative of Coopers will be present at
the meeting to respond to questions.
Ratification of the appointment of Coopers as the Company's
independent accountants for fiscal 1996 will require the
affirmative vote of at least a majority of the votes represented in
person or by proxy at the annual meeting. Proxies solicited by
management will be voted for the proposal unless instructed
otherwise.
Item 3. Provisions Relating to Corporate Governance
Background and Purpose of Provisions Relating to Corporate
Governance.
Introduction
In the 1980s there were a number of takeovers of publicly-
owned corporations accomplished by a swift purchase of a control
block of stock by means of open market purchases or a tender offer
made directly to the company's shareholders at a price above the
prevailing market price, followed by a merger, consolidation,
recapitalization or other business combination or transformation of
the acquired company by the control block purchasers. Because of
the control purchased, the terms of such mergers or other
transformations are often determined primarily by the acquiring
entity with a minimum of negotiation with the Board of the acquired
company. While such a takeover may be beneficial to shareholders
of the acquired company, it may also be detrimental to them and/or
to the company, because the lack of negotiation with the acquired
company often precludes a proper evaluation of the merits of the
transaction in light of other possible alternatives. As a result,
the terms of the takeover and the compensation offered to
shareholders, both in a tender offer and in a subsequent merger or
other transformation, may be less favorable than is warranted.
The Company is not aware of any pending or threatened takeover
bid for the Company, but is recommending shareholder approval of
the proposed amendments to the Articles of Incorporation (the
"Amendments") at this time because of the possibility that such a
bid may be made in the future. While the Company's chairman
currently beneficially owns more than 50% of the outstanding voting
power of the Company, the sale of additional voting securities
could reduce such ownership. The adoption of the proposed
Amendments could make more difficult or discourage a proxy contest
or the assumption of control by a holder of a substantial block of
the Company's common stock or make more difficult the removal of
the incumbent Board and thus have the effect of entrenching
incumbent management. The Amendments could also have the effect of
discouraging a third party from making a tender offer at a premium
over the market price or otherwise attempting to obtain control of
the Company even though such an attempt might be desired by a
substantial number of the Company's shareholders. At the same
time, the Amendments will help ensure that the Board, if confronted
by a surprise proposal from a third party who has recently acquired
a block of the Company's common stock, will have sufficient time to
review the proposal and appropriate alternatives to the proposal
and attempt to negotiate a premium price for the shareholders. In
general, the proposed Amendments are intended to encourage persons
seeking to acquire control of the Company to initiate such an
acquisition through arm's-length negotiations with the Company's
Board. None of the proposed Amendments prohibit a person from
attempting to take over the Company or engaging in a proxy contest.
The Florida Business Corporation Act provides that a majority
of votes entitled to be cast on the Amendments by those present in
person or by proxy can approve a charter amendment. Proxies
solicited by the Board will be voted for all of these proposals
unless instructed otherwise. A copy of the proposed Amendments is
attached as Exhibit A.
Purpose and Effect
One of the purposes of the proposed Amendments is to encourage
potential takeover bidders to seek the approval of the Board
through negotiation prior to attempting a takeover or, if the
takeover bidder chooses not to obtain the approval of the Board, to
ensure that each of the shareholders will have a meaningful vote
upon or receive proper payment for their stock in any merger or
other transformation of the Company proposed by the takeover
bidder. This purpose is intended to be accomplished through the
proposed Amendments by making it more difficult for a takeover
bidder who has acquired a significant block of the Company's stock
to gain actual control of the Company. Because these provisions
will encourage negotiation with the Board at an early stage, the
Board would have a better opportunity to analyze any prospective
offers, negotiate more favorable terms, if appropriate, and make a
considered recommendation to shareholders as to the benefits and
detriments of the offer.
Although management believes the proposed Amendments would be
beneficial to shareholders by encouraging arm's length negotiation
with potential takeover bidders, the proposed Amendments would tend
to discourage some takeover bids. Since proxies are being
solicited by the Board, it may have a conflict of interest in
recommending shareholder approval of the proposed Amendments to the
Company's Articles of Incorporation.
Tender offers for control usually involve a purchase price
higher than the current market price and may involve a bidding
contest between competing takeover bidders. On the other hand,
defeating undesirable tender offers can be a very expensive and
time consuming process. To the extent the proposed Amendments
discourage undesirable tender offers, the Company may be able to
avoid these expenditures of the time and money. The proposed
Amendments could also discourage open market purchases by a
potential takeover bidder. Such purchases could increase the
market price of the Company's stock (which increase may be
temporary), enabling shareholders to sell their shares at a price
higher than that which would otherwise prevail. In addition, the
proposed Amendments could decrease the market price of the
Company's stock by making the stock less attractive to persons who
invest in securities in anticipation of an increase in price if a
takeover attempt develops.
If adopted, the proposed Amendments will make it more
difficult for a hostile party to obtain control of the Company by
replacing the Board and, thereby, management since the Board has
the power to retain and discharge management. Moreover, the
proposed Amendments will also make it more difficult for the
Company's shareholders to replace the Board or management even if
a majority of the shareholders believe such replacement to be in
the best interests of the Company. As a result, the Amendments, if
all adopted, would tend to perpetuate the incumbent Board and
management.
The proposed Amendments will be filed with the Secretary of
State of the State of Florida and will amend the Company's existing
Articles of Incorporation. The proposed Amendments contains
several provisions which will change the existing Articles of
Incorporation in several respects. For ease in explanation, each
of the major provisions of the proposed Amendments will be
described separately below. Since the proposed Amendments could
have a significant impact on the rights of shareholders generally,
each shareholder is urged to carefully study the information
presented below. The Board has considered the advantages and
disadvantages described above as well as the specific effects of
each section as described below, and has determined that the
adoption of the proposed Amendments is in the best interests of the
Company and its shareholders.
The proposed Amendments are being presented separately for
approval of the shareholders. The affirmative vote of a majority
of the shares entitled to vote, present in person or by proxy, is
required to pass each Amendment.
a. Authorization of Preferred Stock
The Company presently is authorized to issue 10,000,000 shares
of common stock, 2,000 shares of Class A Preferred Stock and
300,000 shares of Class B Preferred Stock, all $.0001 par value.
As of August 1, 1996, the 2,000 shares of Class A Preferred Stock
were issued and outstanding and the Class B Preferred Stock was
held in the treasury. Currently, the Company's Articles of
Incorporation do not provide for the Company to issue any preferred
stock with rights and preferences as authorized at the Board's
discretion. In order to issue preferred stock in the future,
Article IV of the proposed Amendments provides for the
authorization of a class of 2,500,000 shares of Class B Preferred
Stock, $.001 par value per share (the "Preferred Stock"). The
existing Class B Preferred Stock would be repealed.
Authorization of the Preferred Stock will permit the Board to
issue Preferred Stock from time to time, without further action by
the shareholders, in one or more series, with such designations,
preferences, special rights, qualifications, limitations and
restrictions thereof as the Board may determine. These would
include, without limitation, (a) whether that series shall have
voting rights, in addition to the voting rights provided by law,
and if so, the terms of such voting rights; (b) the number of
shares constituting that series and the distinctive designation of
that series; (c) the dividend rate on the shares of that series,
whether dividends shall be cumulative, and if so, from which date
or dates, and the relative rights of priority, if any, are paid on
dividends on shares of that series; (d) whether that series shall
have conversion privileges, and if so, the terms and conditions of
such conversion, including provision for adjustment of the
conversion rate in such events as the board of directors shall
determine; (e) whether or not the shares of that series shall be
redeemable, and if so, the terms and conditions of such redemption,
including the date or date upon or after which they shall be
redeemable, and the amount per share payable in case of redemption,
which amount may vary under different conditions and at different
redemption dates.
Shares of Preferred Stock could be issued at the direction of
the Board from time to time for any proper corporate purpose,
including the acquisition of other businesses, the raising of
additional capital for use in the Company's business, a dividend on
the then-outstanding shares or in connection with any employee
stock plan or program. For example, in the event of a takeover
proposal opposed by the Board, the authorization of the Preferred
Stock would enable the Company to issue a substantial block of
Preferred Stock, without obtaining shareholder approval, as part of
an alternative business combination or a recapitalization. Shares
of Preferred Stock could also be issued to one or more persons who
might thereby obtain sufficient voting power to ensure the defeat
of any proposal to remove directors, to prevent certain business
combinations opposed by the incumbent Board, or to alter, amend or
repeal any of the provisions of the proposed Amendments. Also, the
presence of the authorized Preferred Stock could discourage
unsolicited business combination transactions which might be
desirable to shareholders. The authorization of a new class of
Preferred Stock would provide the Board with the flexibility to
offer both common stock and Preferred Stock in its capital raising
efforts.
Shareholders should recognize that although the Board will
issue Preferred Stock only when it considers such issuance to be in
the best interest of the Company, the issuance of Preferred Stock
may, among other things, have a dilutive effect on earnings per
share of common stock and on the equity and voting rights of
holders of shares of common stock. However, the Board believes
that the benefits of providing it with the flexibility to issue
shares without delay for any business purpose, including as an
alternative to an unsolicited business combination opposed by the
Board, outweigh the possible disadvantages of dilution and
discouraging unsolicited business combination proposals and that it
is prudent and in the best interests of shareholders to provide the
advantage of greater flexibility which will result from the
authorization of the Preferred Stock.
b. Classified Board of Directors
Currently, the Company's Articles of Incorporation provides
for all directors to be elected for a term of one year and to stand
for re-election every year. Article VI of the proposed Amendments
would provide that the directors be divided into three equal or
nearly equal classes, designated Class A, Class B and Class C. It
is presently anticipated that if this proposal is approved,
directors will be divided into the three classes immediately
following the 1996 Annual Meeting of Shareholders. Assuming
approval of this Amendment, the following classes of directors will
be elected:
Shares Term Nominees
Class A 3 years Samuel Nyer
Class A 3 years William Clifford, Jr.
Class A 3 years Donald C. Lewis, Jr.
Class B 2 years Kenneth L. Nyer, M.D.
Class B 2 years Michael Anton
Class C 1 year Howard G. Parker, M.D.
Class C 1 year Donald Striar
The initial term of Class A directors would extend to the 1999
Annual Meeting of Shareholders, that of Class B directors shall
extend to the 1998 Annual Meeting, and that of Class C directors
shall extend to the 1997 Annual Meeting. As the one and two-year
terms expire new directors will be elected for three-year terms.
The number of directors to be elected at each Annual Meeting shall
be equal to the number of directors of the class whose terms
extends to the time of such meeting and those directors elected at
such meeting shall hold office until the third succeeding Annual
Meeting of Shareholders.
Classification of the Board would provide stability for the
management of the Company in that two-thirds of the then-incumbent
directors would continue to hold office regardless of the outcome
of any particular Annual Meeting. In addition, the classification
of the Board would eliminate the possibility of a successful
unwanted tender offeror who has gained control of a majority of the
voting power of the Company from gaining control of the Board in
any one year. Classification of the Board could discourage an
accumulation of voting power in that the acquirer could not
generally gain control of the Board for a period of two years. The
accumulation of voting power could result in the temporary increase
in value of the common stock and may be desirable to shareholders.
Because of the additional time required to change control of the
Board, classification of the Board will tend to perpetuate present
management. The classification of the Board, combined with the
restrictions on the power of shareholders to remove directors
described below, will also make it more difficult for the
shareholders to change the composition of the Board even if the
shareholders believe such a change would be desirable.
Control of the Company has rested with the Company's current
management since inception. Management has made significant
strides as evidenced by the Company's business acquisitions and
capitalization. The benefits of encouraging stability and
continuity of the current management and discouraging unwanted
tender offers or proxy contests outweigh the possible disadvantages
of the loss of a possible temporary increase in value of the
Company's common stock. Current management have established and
developed the relationships necessary to generate revenue. A
change in management at this time could disrupt the Company's
operations, adversely affecting its relationship with customers and
impair the Company's ability to expand.
c. Removal of Directors
Currently, the Company's Articles of Incorporation do not
address the removal of directors either "with cause" or "without
cause." However, the Company's Bylaws provide for the removal of
directors with or without cause by a vote of the holders of a
majority of the shares present in person or by proxy entitled to
vote at an election of directors. Florida law, in the absence of
any provision in the Articles of Incorporation, permits holders of
a majority of a corporation's voting stock to remove directors with
or without cause at a meeting of the shareholders called expressly
for the purpose. Article VI, Section (d) of the proposed
Amendments, which is more restrictive than is otherwise provided
under Florida law, would provide that the affirmative vote of
either (i) 75% of the shareholders could remove one or all of the
directors only "with cause," or (ii) 66-2/3% of the shareholders
and a majority of the "disinterested directors" (as hereinafter
defined) could remove one or all of the directors only "with
cause". "Cause" is defined as (i) a conviction of a felony
regardless of whether it relates to the Company or its securities;
(ii) declaration of incompetency or unsound mind by court order; or
(iii) commission of an action which constitutes intentional
misconduct or a knowing violation of law. "Disinterested Director"
is defined for purposes of this provision to be any director not
having an interest or role, direct or indirect, in the transaction
or incident which is the basis for claiming removal of a director
"with cause".
The primary purpose for Article VI, Section (d) of the
proposed Amendments is to preclude the removal of any director or
directors, by a takeover bidder or otherwise, unless removal is
warranted for reasons other than control of the Board. For a
takeover bidder to obtain effective control of the Company, it
would need to control at least a majority of the Board votes to
effect certain actions. One popular method for a takeover bidder
to obtain such control is to acquire a majority of the outstanding
shares of the Company through a tender offer or open market
purchases and to use that voting power to remove the existing
directors and replace them with persons chosen by the takeover
bidder. Requiring cause in order to remove a Director would defeat
this strategy, thereby encouraging potential takeover bidders to
obtain the cooperation of the existing Board before attempting a
takeover.
The disadvantage of the provisions of Article VI, Section (d)
is that it will become more difficult, particularly when combined
with the other provision being added by the proposed Amendments, to
remove a director prior to the expiration of his term in office.
Another disadvantage is that this Amendment could discourage an
acquisition of a majority of the shares by a person seeking to
replace the Board. The restrictions on removal of a director would
permit minority shareholders holding either 25% or 33-1/3% of the
current votes (depending upon whether a majority of Disinterested
Directors joins in the vote to remove a director) a veto in
deciding whether to remove a director prior to the expiration of
that director's term in office. However, as stated in detail at
the end of the section describing proposed Amendment to classify
the Board, the benefits of providing stability to the current
management outweigh the possible disadvantages of more easily
removing directors and the lack of temporary increases in value of
the common stock.
d. Limitations on Action by Written Consent
Article XII would add a requirement that shareholder action be
taken only at an annual or special meeting of shareholders and that
action by shareholders by written consent in lieu of a meeting be
prohibited unless such consent shall be signed by the holders of at
least two-thirds of the voting power. Pursuant to Florida law,
unless otherwise provided in the Articles of Incorporation (which,
for the Company, currently do not so provide), any action required
or permitted to be taken by shareholders of the Company may be
taken without any meeting, without prior notice and without a
shareholder vote if a written consent setting forth the action to
be taken is signed by the holders of shares of outstanding stock
having the requisite number of votes that would be necessary to
authorize such action at a meeting of the shareholders at which all
shares entitled to vote thereon were present and voted.
Article XII would prevent the holders of a majority (but not
two-thirds) of the voting power of the Company from using the
written consent procedure to take shareholder action in lieu of a
meeting. The proposed amendment would prevent a takeover bidder
holding a majority but less than two-thirds of the voting stock
from using the written consent procedure to take shareholder action
unilaterally. The Board does not believe that the limitation on
shareholder action by written consent will create a significant
impediment to a tender offer or other effort to take control of the
Company. Nevertheless, the effect of this proposal could make it
more difficult to acquire control of the Company and take other
shareholder action, even though such actions might be desired by or
beneficial to the holders of a majority of the Company's stock.
e. Advance Notice of Shareholder Nomination of Directors and
Business Introduced by Shareholders
Article XIII of the proposed Amendments provide that advance
notice of shareholder nominations for the election of directors and
of business to be brought by shareholders before any meeting of the
shareholders of the Company shall be given in the manner provided
in the Company's By-laws. In accordance with Article XIII, the
Board has adopted an amendment to the Company's By-laws, subject to
approval of the Amendments, to provide that any shareholder with
the power to vote at least 10% of the then-outstanding voting
securities of the Company who timely complies with the notice
procedures therein set forth (and management) may nominate
directors. To be timely, a shareholder's notice must be delivered
to or mailed to and received by the Secretary of the Company at the
principal executive office of the Company not less than 60 days
prior to the meeting subject to any other requirements of law;
provided, however, that in the event that less than 75 days' notice
or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must
be received not later than the close of business on the 15th day
following the day on which such notice of the date of the meeting
was mailed or such public disclosure was made, whichever first
occurs.
Advance notice of nominations by shareholders will afford a
meaningful opportunity to consider the qualifications of the
proposed nominees and, to the extend deemed necessary or desirable
by the Board will provide an opportunity to inform shareholders
about such qualifications. The requirement that shareholders have
the power to vote at least 10% of the then-outstanding voting
securities to nominate directors is intended to ensure that only
shareholders with a significant financial commitment to the Company
nominate directors. This nomination procedure may have the effect
of precluding a nomination for the election of directors at a
particular annual meeting if the proper procedures are not followed
and may discourage or deter a shareholder from conducting a
solicitation of proxies to elect its own directors or otherwise
attempting to obtain control of the Company.
The Amendment to the Bylaws provides that for business to be
properly introduced by a shareholder at a meeting of shareholders,
the shareholder must have given timely notice thereof in writing to
the Secretary of the Company. To be timely, a shareholder's notice
must be delivered to or mailed and received by the Secretary of the
Company in the same manner and subject to the same time
requirements provided for shareholder notice of nominations to the
Board. A shareholder's notice must set forth as to each matter the
shareholder proposes to bring before the meeting (i) a brief
description of the business desired to be brought before the
meeting and the reasons for conducting such business at the
meeting, (ii) the name and record address of the shareholder
proposing such business, (iii) the class, series and number of
shares of capital stock which are beneficially owned by the
shareholder, and (iv) any material interest of the shareholder in
such business.
The purpose of requiring advance notice of business to be
brought by a shareholder before a meeting is to enable the Board to
give advance notice of such business to the shareholders generally,
and to afford the Board a meaningful opportunity to consider the
merits of the matter to be raised by shareholders. Although this
procedure does not give the Board any power to approve or
disapprove such matters, this procedure may have the effect of
precluding the consideration of matters at a meeting if the proper
procedures are not followed, even if approval of such matters may
be deemed by some shareholders to be beneficial to the Company and
its shareholders.
Pursuant to Florida law, the Amendments to the foregoing
provisions of the Company's Articles of Incorporation must be
approved by a vote of the holders of the majority of those present
at the special meeting or by proxy, assuming a quorum. A similar
vote is required to adopt, amend or rescind bylaws adopted by the
Board. The Company's Bylaws have been amended to make it
consistent with those Amendments approved by the shareholders. The
proxy provides for shareholder approval, disapproval or abstention
of the proposed Amendments as a whole rather than individually.
Proxies solicited by the Board will be voted for all Amendments
described in this proposal unless instructed otherwise. Since the
Company's principal shareholder, Nyle, intends to vote its shares
of capital stock for the proposed Amendments, they will pass.
Item 4. Other Matters
The Board has no knowledge of any other matters which may come
before the meeting and does not intend to present any other
matters. However, if any other matters shall properly come before
the meeting or any adjournment thereof, the persons soliciting
proxies will have the discretion to vote as they see fit unless
directed otherwise.
If you do not plan to attend the meeting, in order that your
shares may be represented and in order to assure the required
quorum, please sign, date and return your proxy promptly. In the
event you are unable to attend the meeting, at your request, the
Company will cancel the proxy.
Shareholders' Proposals
Any shareholder of the Company, who wishes to present a
proposal to be considered at the 1997 annual meeting of the
shareholders of the Company and who wishes to have such proposal
presented in the Company's proxy statement for such meeting, must
deliver such proposal in writing to the Company no later than
December 31, 1996.
The Company will furnish, without charge to any shareholder
submitting a written request a copy of the Company's annual report
on Form 10-KSB as filed with the Securities and Exchange Commission
including financial statements and schedules thereto. Such written
request should be directed to Karen L. Wright, P.O. Box 1328,
Bangor, Maine, 04402-3928.
By the Order of the Board of Directors
Samuel Nyer, Secretary
EXHIBIT A
SECOND AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
NYER MEDICAL GROUP, INC.
The undersigned hereby certifies that the following Second
Amendment to the Articles of Incorporation, as amended, was
approved by the board of directors (the "Board") and approved by a
vote of the majority of holders of the outstanding voting power of
capital stock of Nyer Medical Group, Inc. (the "Company"), present
in person or by proxy and entitled to vote at the annual meeting of
shareholders held on the 30th day of September, 1996.
A. Article IV is repealed, the currently existing 300,000 shares
of Class B Preferred Stock held in treasury is cancelled and
Article IV will now read as follows:
Article IV - Capital Stock
This Company is authorized to issue 10,000,000 shares of
common stock, $.0001 par value.
The Company is authorized to issue 2,502,000 shares of
preferred stock, $.001 par value (the "Preferred Stock").
Of these shares of Preferred Stock, 2,000 shall be designated
as Class A Preferred Stock, each share of which shall have 1,000
votes on all matters at which shares of common stock are entitled
to vote.
The remaining 2,500,000 shares of Preferred Stock shall
be designated as Class B Preferred Stock. All Class B Preferred
Stock is subject to issuance by the Board subject to limitations
prescribed by law in the provisions of this Article and by filing
a certificate pursuant to the applicable law of the State of
Florida, to establish from time to time the voting powers thereof,
full or limited, and to fix the designation, powers, preferences
and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall
include, but not limited to, determination of the following:
(a)Whether that series shall have voting rights, in
addition to the voting rights provided by law, and if so, the
terms of such voting rights;
(b)The number of shares constituting that series and
the distinctive designation of that series;
(c)The dividend rate on the shares of that series,
whether dividends shall be cumulative, and if so, from which
date or dates, and the relative rights of priority, if any,
are paid on dividends on shares of that series;
(d)Whether that series shall have conversion
privileges, and if so, the terms and conditions of such
conversion, including provision for adjustment of the
conversion rate in such events as the board of directors shall
determine;
(e)Whether or not the shares of that series shall be
redeemable, and if so, the terms and conditions of such
redemption, including the date or date upon or after which
they shall be redeemable, and the amount per share payable in
case of redemption, which amount may vary under different
conditions and at different redemption dates;
(f)Whether that series shall have a sinking fund for
the redemption or purchase of shares of that series; and if
so, the terms and amount of such sinking fund;
(g)The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution or
winding up of the corporation, and the relative rights of
priority, if any, of payment of shares of that series; and
(h)Any other relative rights, preferences and
limitations of that series.
B. Article VI is hereby amended to include:
Article VI - Provision for Classified Board; Removal of
Directors For Cause
(a) The Board shall be divided into three classes, designated
Class A, Class B and Class C, as nearly equal in numbers as the
then total number of directors constituting the entire Board
permits with the term of the office of one class expiring each
year. Commencing with the 1996 Annual Meeting of Shareholders, the
initial term of Class A directors would extend to the 1999 Annual
Meeting of Shareholders, that of Class B directors shall extend to
the 1998 Annual Meeting, and that of Class C directors shall extend
to the 1997 Annual Meeting. As the one and two-year terms expire
new directors will be elected for three-year terms. The number of
directors to be elected at each Annual Meeting shall be equal to
the number of directors of the class whose terms extends to the
time of such meeting and those directors elected at such meeting
shall hold office until the third succeeding Annual Meeting of
Shareholders.
(b) Any vacancies in the Board for any reason, and any Board
seats resulting from an increase in the number of directors, may be
filled by the Board, acting by the majority of the directors then
in office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of the class for
which such directors have been chosen and until their successors
shall be elected and qualified. At each annual meeting of the
shareholders after each class has been elected for a three year
term, the successors to the class of directors whose term shall
then expire shall be elected to hold office for a term expiring at
the third succeeding annual meeting.
(c) The Corporation shall nominate persons to serve as
members of the Board upon the expiration of the term of each class
of directors, which nominations shall be submitted to the
shareholders at the annual meeting of shareholders for approval.
(d) Notwithstanding any other provision of the Articles of
Incorporation, as amended, or the By-laws of the Corporation, it
shall require the affirmative vote of either (i) 75% of the
outstanding shares of each class entitled to vote present in person
or by proxy assuming a quorum to remove one or all of the directors
and then only "with cause" or (ii) 66-2/3% of the outstanding
shares of each class entitled to vote present in person or by proxy
assuming a quorum cast at a meeting of the shareholders called for
that purpose and a majority of the "disinterested directors" could
remove one or all of the directors only "with cause". "Cause" is
defined as (i) a conviction of a felony regardless of whether it
relates to the Corporation or its securities; (ii) declaration of
incompetency or unsound mind by court order; or (iii) commission of
an action which constitutes intentional misconduct or a knowing
violation of law. "Disinterested Director" is defined for purposes
of this provision to be any director not having an interest or
role, direct or indirect, in the transaction or incident which is
the basis for claiming removal of a director "with cause".
C. New Articles XII and XII shall read as follows:
Article XII - Limitation On Action By Written Consent.
No action required to be taken at any annual or special
meeting of shareholders of the Corporation may be taken without a
meeting, and the power of shareholders to consent in writing in
lieu of a meeting to the taking of any action is specifically
denied unless such consent shall be signed of the holders of at
least two-thirds of the voting power of capital stock entitled to
vote on such matters.
Article XIII - Limitation On Nomination of Directors;
Business Introduced by Shareholders.
Advance notice of shareholder nominations for the election of
directors and of business to be brought by shareholders before any
meeting of the shareholders of the Corporation shall be given in a
manner provided in the Corporation's By-laws. Failure to submit
timely notice of nominations and business shall prevent
consideration of such nominations and business at such
shareholders' meeting.
IN WITNESS WHEREOF, the undersigned has executed this Second
Amendment to the Articles of Incorporation this 30th day of
September, 1996.
(CORPORATE SEAL) NYER MEDICAL GROUP, INC.
By: Samuel Nyer, President
STATE OF MAINE )
) ss:
COUNTY OF )
I HEREBY CERTIFY that before me, the undersigned authority,
personally appeared Samuel Nyer, and he acknowledged before me,
under oath, that he executed the foregoing Second Amendment to the
Articles of Incorporation and that the statement contained therein
is true and correct.
WITNESS my hand and official seal this ____ day of September,
1996.
Notary Public
My commission expires
<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
NYER MEDICAL GROUP, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON SEPTEMBER 30, 1996
The undersigned hereby appoints Samuel Nyer and William
Clifford, Jr. as my proxy with power of substitution for and in the
name of the undersigned to vote all shares of common stock of Nyer
Medical Group, Inc. (the "Company") which the undersigned would be
entitled to vote at the annual meeting of shareholders of the
Company to be held at the Company's principal offices located at
1292 Hammond Street, Bangor, Maine 04401 on September 30, 1996 at
10:00 a.m., and at any adjournment thereof, upon such business as
may properly come before the meeting, including the items set forth
below:
Each share of common stock outstanding on the record date of August
1, 1996 is entitled to one vote on all proposals.
1. I hereby elect the following individuals to serve on the board
of directors of the Company until the Company's next annual
meeting:
Name Yes No
a) Samuel Nyer
b) William Clifford, Jr.
c) Michael G. Anton
d) Donald L. Lewis, Jr.
e) Kenneth Nyer, M.D.
f) Howard Parker, M.D.
g) Daniel Striar
2. I hereby ratify the appointment of Coopers & Lybrand as
independent auditors for the fiscal year ended December 31,
1996.
Yes _____ No _____ Abstain _____
3. I hereby approve the amendments to the Company's articles of
incorporation relating to corporate governance.
Yes _____ No _____ Abstain _____
4. I hereby authorize the transaction of any other lawful
business that may properly come before the annual meeting of
shareholders.
Yes _____ No _____ Abstain _____
(Shares cannot be voted unless this proxy is signed and
returned, or specific arrangements are made to have the shares
represented at the meeting).
If no direction is indicated, this Proxy will be voted as
recommended by the board of directors for all proposals.
Dated: September __, 1996
Signature of Shareholder
Typed or Printed Name of Shareholder
Number of Shares Owned
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
NYER MEDICAL GROUP, INC.
To All Shareholders:
The annual meeting of the shareholders of Nyer Medical Group,
Inc. (the "Company") will be held at 1292 Hammond Street, Bangor,
Maine, 04401 on September 30, 1996 for the following purposes:
(1) To elect directors to serve on the board of directors of the
Company until the Company's next annual meeting.
(2) To ratify the appointment of Coopers & Lybrand as independent
auditors for the fiscal year ending December 31, 1996.
(3) To approve or disapprove the amendments to the Company's
articles of incorporation relating to corporate governance.
(4) For the transaction of other lawful business that may properly
come before the meeting.
The board of directors has fixed the close of business on
August 1, 1996 as the record date for a determination of
shareholders entitled to notice of, and to vote at, this meeting or
any adjournment thereof.
If you do not plan on attending the meeting, please vote,
date, sign and mail the enclosed proxy promptly to Ms. Karen L.
Wright, Nyer Medical Group, Inc., P.O. Box 1328, Bangor, Maine,
04402.
Dated: September __, 1996 By Order of the Board of Directors
By: Samuel Nyer, Secretary
