SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
MEDICAL INDUSTRIES OF AMERICA, INC.
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________
(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:
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:
[ ] 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:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
MEDICAL INDUSTRIES OF AMERICA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 18, 1998
To the stockholders of Medical Industries of America, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Medical
Industries of America, Inc., a Florida corporation (the "Company"), will be held
at Holiday Inn, Boynton Beach, at 2:00 p.m., local time on Wednesday, November
18, 1998, for the following purposes:
1. To elect five directors to each serve until the next annual meeting of
stockholders of the Company and until their successors have been duly elected
and qualified;
2. To consider and act upon a proposal to amend the Company's Articles of
Incorporation to increase the number of authorized shares and par value of
capital stock of the Company; and
3. To consider and act upon a proposal to transact such other business as
may properly come before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on September 25,
1998, are entitled to notice of and to vote at the meeting, or any adjournment
thereof. A complete list of such stockholders will be available for examination
at the offices of the Company in Boynton Beach, Florida for ten business days
prior to the meeting.
Shareholders unable to attend the Annual Meeting in person are requested
to read the enclosed Proxy Statement and then complete and deposit the Proxy
together with the power of attorney or other authority, if any, under which it
was signed, or a notarized certified copy thereof, with the Company's transfer
agent, Corporate Stock Transfer, 370 17th Street, Denver, CO 80202, at least 48
hours (excluding Saturdays, Sundays and statutory holidays) before the time of
the Annual Meeting or adjournment thereof or with the chairman of the Annual
Meeting prior to the commencement thereof. Unregistered shareholders who
received the Proxy through an intermediary must deliver the Proxy in accordance
with the instructions given by such intermediary.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Linda Moore
Boynton Beach, Florida Linda Moore, Secretary
September 24, 1998
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE
CONSIDERED AT THE MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS NOTICE.
<PAGE>
MEDICAL INDUSTRIES OF AMERICA, INC
1903 S. CONGRESS AVENUE, SUITE 400
BOYNTON BEACH, FLORIDA 33426
-------------------
PROXY STATEMENT FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
-------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Medical Industries of America, Inc., a
Florida corporation (the "Company") (f/k/a Heart Labs of America, Inc., a
Florida corporation) for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at Holiday Inn, Boynton Beach, at 2:00 p.m., local time, on
Wednesday, November 18, 1998, and at any adjournments thereof for the purpose of
considering and voting upon the matters set forth in the accompanying Notice of
Annual Meeting of Stockholders (the "Notice"). This Proxy Statement and the
accompanying form of proxy are first being mailed to shareholders on or about
October 18, 1998. All costs of soliciting proxies will be borne by the Company.
The close of business on September 25, 1998 has been fixed as the record
date ("Record Date") for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment thereof. As of the Record
Date, there were 19,222,092 shares of Common Stock, no par value, issued and
outstanding.
The presence, in person or by proxy, of a majority of the outstanding
shares of common stock on the Record Date is necessary to constitute a quorum at
the Annual Meeting. Abstentions and broker non-votes will be counted towards a
quorum. If a quorum is not present or represented by proxy at the Annual
Meeting, the shareholders present or represented by proxy at the Annual Meeting
have the power to adjourn the Annual Meeting from time to time, without notice
other then an announcement at the Annual Meeting, until a quorum is present or
represented by proxy. At any such adjourned Annual Meeting at which a quorum is
present or represented by proxy, any business may be transacted that might have
been transacted at the original Annual Meeting.
With respect to the election of directors, votes may be cast in favor or
withheld. Directors are elected by a plurality of the votes cast at the Annual
Meeting, and votes that are withheld will be excluded entirely from the vote and
will have no effect. Any other matter that may be submitted to a vote of the
stockholders will be approved if the number of shares of common stock voted in
favor of the matter exceeds the number of shares voted against the matter,
unless the matter is one for which a greater vote is required by law or the
Company's Articles of Incorporation or Bylaws.
Abstentions will be considered as shares present and entitled to vote at
the Annual Meeting and will be counted as votes cast at the Annual Meeting, but
will not be counted as votes cast for or against any given matter. Shares
referred to as "broker or nominee non-votes" (shares held by brokers or nominees
as to which instructions have not been received from the beneficial owners or
persons entitled to vote and the broker or nominee does not have discretionary
voting power on a particular matter) will be treated as shares that are present
and entitled to vote for purposes of determining the presence of a quorum. For
purposes of determining the outcome of any matter as to which the proxies
reflect broker or nominee non-votes, shares represented by such proxies will be
treated as not present and not entitled to vote on that subject matter and
therefore will not be considered when counting votes cast on the matter (even
though those shares are considered entitled to vote for quorum purposes and may
be entitled to vote on other matters). Accordingly, abstentions and broker or
nominee non-votes will not have the same effect as a vote against the election
of any director.
All shares represented by properly executed proxies, unless such proxies
have been previously revoked, will be voted at the Annual Meeting in accordance
with the directions set forth on such proxies. If no direction is indicated, the
shares will be voted (i) FOR THE ELECTION OF THE NOMINEES NAMED HEREIN and, (ii)
FOR AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION INCREASING THE
NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK.
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<PAGE>
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by (a) the execution and submission of
a revised proxy, (b) written notice to the Secretary of the Company or (c)
voting in person at the Annual Meeting.
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997 is being mailed with this Proxy Statement. The Annual
Report does not form any part of the material for solicitation of proxies.
The Company will provide, without charge, a copy of the exhibits to its
Annual Report on Form 10- KSB, upon written request to Linda Moore, Secretary of
the Company, at 1903 S. Congress Avenue, Suite 400, Boynton Beach, Florida
33426; fax number (561) 737-5008.
PROPOSAL 1
ELECTION OF DIRECTORS
DIRECTOR NOMINEES
The directors are elected annually by the stockholders of the Company. The
Bylaws of the Company provide that the number of directors will be determined by
the Board of Directors. The stockholders will elect five directors for the
coming year. All of the nominees presently serve as directors of the Company.
Although the Board of Directors of the Company does not contemplate that
any of the nominees will be unable to serve, if such a situation arises prior to
the Annual Meeting, the persons named in the enclosed Proxy will vote for the
election of such person(s) as may be nominated by the Board of Directors. The
Company's directors hold office until the next annual meeting of shareholders or
until their successors have been duly elected and qualified.
The individuals listed below as nominees for the Board of Directors were
directors of MIOA during 1997. The name and age of each nominee, his principal
occupation, and the period during which such person has served as a director is
set forth below:
SERVICE
NAME OF NOMINEE AGE AS DIRECTOR POSITION
--------------- --- ----------- --------
Michael F. Morrell . . . . . . . . 56 since 1996 Chairman of the Board
Chief Executive Officer
Paul C. Pershes(1)(2) . . . . . . 55 since 1996 President and Director
Theodore J. Orlando(2). . . . . . 58 since 1997 Director
Terry Lazar(1)(2) . . . . . . . . 55 since 1997 Director
Glen Barber(1) . . . . . . . . . . 48 since 1997 Director
- -----------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
MICHAEL F. MORRELL (AGE 56). Mr. Morrell has served as a director of the
Company and as chairman of the board and chief executive officer since August
1996. From March 1994 through November 1995, Mr. Morrell served as president and
chairman of Westmark Group Holdings, Inc. of Delray Beach, Florida ("Westmark").
From March 1994 to January 1995, Mr. Morrell served as president of Churchill
Technology. From March 1990 to March 1994, Mr. Morrell served as president of
Nexus Leasing Corp. and Nexus Realty which he founded in March 1990.
3
<PAGE>
PAUL C. PERSHES (AGE 55). Mr. Pershes, president and director of the
Company, served as an outside director in August 1996. Mr. Pershes was a
director of Weinberg, Pershes and Company, P.A. of Boca Raton, Florida, a public
accounting firm, from August 1995 to May 1997. From January 1993 to August 1995,
Mr. Pershes was a director of Pershes & Company, P.A., a public accounting firm,
and its predecessor companies. From December 1990 to December 1992, Mr. Pershes
served as president of Temco Service Industries, Inc. Mr. Pershes is a certified
public accountant licensed in the states of New York and Florida. Mr. Pershes
serves on the Company's Audit and Compensation Committees.
THEODORE J. ORLANDO (AGE 61). Mr. Orlando has served as an outside
director to the company since March 1997. In 1994, Mr. Orlando founded Barkus
Capital Resources, Ltd., of East Northport, NY, an entity engaged in real estate
and stock investments where he serves as president. From 1980 to 1994, Mr.
Orlando acted as chairman and chief executive officer for TJ Systems Corporation
a computer leasing company he founded. Mr. Orlando serves on the Company's
Compensation Committee.
TERRY LAZAR (AGE 55). Mr. Lazar has served as an outside director since
April 1997. Since 1977 Mr. Lazar founded and serves as the senior partner of
Lazar, DeThomasis, Sanders and Company, LLP, of Jericho, NY, a full service
accounting firm specializing in real estate, healthcare, manufacturing,
insurance hotel industry and entertainment. In addition, Mr. Lazar serves as
partner and director of finance of an ambulatory surgery center. Mr. Lazar
serves on the Company's Audit Committee and Compensation Committee.
GLEN BARBER (AGE 48). Mr. Barber has served as an outside director since
April 1997. Mr. Barber founded New Age Communications, Inc., in 1988 and
currently serves as its president. New Age Communications, Inc. of Tallahassee,
Florida is a master distributor of operator services to Oncor, Conquest and
LDDS. For the past four years, Mr. Barber has served as President and Director
of the Museum of Art in Tallahassee, Florida. From 1991 through 1993 Mr. Barber
served on the Advisory Board to Oncor Communications, Inc, of Bethesda, MD. Mr.
Barber serves on the Company's Audit Committee.
COMMITTEES AND MEETINGS
The Board of Directors held eight (8) meetings in 1997 and each director
of the Company attended 100% of all Board meetings. In April 1997, the Board
established an Audit Committee and a Compensation Committee. The Audit Committee
reviews and reports to the Board on the financial results of the Company's
operations and the results of the audit services provided by the Company's
independent accountants, including the fees and costs for such services. The
Compensation Committee reviews compensation paid to management and recommends to
the Board appropriate executive compensation. Messrs. Lazar and Pershes serve on
both committees. Mr. Orlando serves on the Compensation Committee. Mr. Barber
serves on the Audit Committee.
DIRECTORS' FEES
Outside directors will receive an annual fee of up to $5,000 and are
entitled to reimbursement for reasonable travel expenses incurred in attending
board meetings. Each of the outside directors was granted 150,000 options in
November 1997 exercisable over thirty months.
REPORTS
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock, to file with the Securities and Exchange Commission
initial reports of ownerships and reports of changes in ownership, and to
furnish the Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, all Section 16(a) filing requirements
applicable to its officers, directors were complied with during the year ended
December 31, 1997. The Company has reason to believe that certain investors
owned at one point, and
4
<PAGE>
may currently own more than 5% and 10% of the Company's outstanding common
stock, but the Company has not received any filing indicating such as of the
date of this Proxy.
THE BOARD OF DIRECTORS HAS NOMINATED THE ABOVE-REFERENCED DIRECTORS FOR ELECTION
BY THE SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH
OF THE NOMINEES LISTED ABOVE.
PROPOSAL 2
INCREASE IN AUTHORIZED CAPITAL STOCK
The Company's Articles of Incorporation currently authorize the Company to
issue up to 50,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, no par value per share ("Preferred Stock"). Of the 10,000,000 shares of
Preferred Stock authorized, 33,414 shares are designated as Series A, 10,000
shares are designated as Series B, 75,000 shares are designated as Series C and
375,000 shares are designated as Series D. As of the Record Date, the Company
had 19,222,092 shares of Common Stock issued and outstanding. There are no
shares of Series A, Series C, Series D Preferred Stock outstanding; 10,000
shares of Series B Preferred Stock are issued and outstanding.
The Board of Directors deems it to be in the best interests of the Company
to increase the number of authorized shares of capital stock to 120,000,000
shares, consisting of 100,000,000 shares of Common Stock, $.0025 par value per
share, and 20,000,000 shares of Preferred Stock, $1.00 par value per share. The
purpose of these additional shares is to provide for a significant number of
shares of capital stock for acquisitions.
THE BOARD OF DIRECTORS HAS APPROVED THE AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK, AND
UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THIS AMENDMENT.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
NAME AGE POSITION
- ---- --- --------
Michael F. Morrell (1) 56 Chairman of the Board and Chief Executive Officer
Paul C. Pershes (l) 55 President and Director
Linda Moore 47 Senior Vice President and Secretary
Arthur P. Kobrin 37 Senior Vice President, Financial Affairs
E. Nicholas Davis, III 45 Senior Vice President, Legal Affairs
- -----------------------
(1) Biographical information with respect to these officers was previously
described in Item 1.
LINDA MOORE, who married Mr. Morrell in April 1997, has served as the
senior vice president and secretary of the Company since January 1997. She has
served as senior v.p./assistant secretary of Westmark Group Holdings, Inc. from
March 1994 through December 1995. Prior to her affiliation with Westmark, Ms.
Moore founded Moore Financial Services, Inc. to provide financial public
relations for public companies and private firms trying to go public. From 1986
to 1993, Moore Financial, originally based in New Jersey, participated in
several successful initial public offerings while representing additional
clients on a consulting basis.
ARTHUR P. KOBRIN joined the Company in June 1997 as chief financial
officer and later changed his title to senior vice president - financial
operations. Prior to joining the Company, Mr. Kobrin, a Certified Public
Accountant, from August 1987 to June 1997 was employed by Weinberg, Pershes &
Company, P.A. From June
5
<PAGE>
1983 to August 1987 he was employed by Dorfman, Abram & Music, P.A. and has
extensive experience in management consulting and public company reporting.
E. NICHOLAS DAVIS, III, J.D., L.L.M. joined the Company in March 1998 and
was elected as a senior vice president in June, 1998. Prior to joining the
Company, Mr. Davis, from March 1997 until March 1998, served as Executive Vice
President of PRN of North Carolina, Inc., a wholly owned subsidiary of the
Company. From January 1993 until 1996, Mr. Davis owned and operated a private
consulting firm specializing in mergers, acquisitions and investment banking.
Mr. Davis, from July 1981 until January 1993, practiced law in the State of
Florida specializing in healthcare, tax, securities, mergers and acquisitions.
The Company's officers are elected annually by the Board of Directors and
serve at the discretion of the Board.
STOCK OWNERSHIP
The following table and notes thereto set forth, as of August 31, 1998,
certain information regarding beneficial ownership of the Company's Common Stock
by (i) each person known by the Company to beneficially own more than 5% of the
Company's Common Stock, (ii) each of the Company's directors and director
nominees, (iii) each named executive officer, and (iv) all directors and
officers of the Company as a group.
SHARES OF PERCENTAGE
NAME AND ADDRESS COMMON STOCK OF CLASS
------------------ ------------ ----------
Michael F. Morrell 1,625,000 (1)** 7.8%
1903 S. Congress Avenue, Suite 400
Boynton Beach, Fl 33426
Paul C. Pershes 1,533,333 (1)** 7.4%
1903 S. Congress Avenue, Suite 400
Boynton Beach, FL 33426
Linda Moore 202,000 (1)** 1.0%
1903 S. Congress Avenue, Suite 400
Boynton Beach, FL 33426
Arthur P. Kobrin 141,666 (1)** *
1903 S. Congress Avenue, Suite 400
Boynton Beach, FL 33426
E. Nicholas Davis, III 100,000 (1)** *
1903 S. Congress Avenue, Suite 400
Boynton Beach, FL 33426
Terry Lazar 91,667(1)(2)** *
129 Foxwood Drive
Jericho, NY 11753
Glen Barber 151,607(1)(2)** *
1288 Timberlane Road
Tallahassee, FL 32312
Theodore J. Orlando 91,667(1)(2)** *
11 Stonehenge Lane
East Northport, NY 11731
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<PAGE>
Dr. A. Razzak Tai 79,167(1)(2)** *
595 Oak Commons Blvd.
Kissimmee, FL 34741
Christopher Doscher 1,082,886 5.2%
St. Petersburg Clearwater
International Airport
15707 Fairchild Drive, Hangar 4
Clearwater, FL 33762
Blaise Sciarra 1,082,886 5.2%
St. Petersburg Clearwater
International Airport
15707 Fairchild Drive, Hangar 4
Clearwater, FL 33762
Thomas L. Birt 1,082,886 5.2%
St. Petersburg Clearwater
International Airport
15707 Fairchild Drive, Hangar 4
Clearwater, FL 33762
All Directors and Executive 4,016,107(1) 19.4%
Officers as a Group
- -------------------------------
* less than 1%
** directors and/or officers
(1) Includes for purposes of this presentation, options and warrants to
purchase shares of Common Stock exercisable within 60 days of August 31,
1998.
(2) Includes 79,167 shares of Common Stock that are issuable upon exercise of
vested options. Does not include $475,000 worth of Preferred Stock and up
to 714,000 shares of Preferred Stock convertible into an aggregate of
959,161 shares of Common Stock that the Company contracted to issue in
connection with the acquisition of Florida Physicians Internet, Inc.,
which is now in dispute.
EXECUTIVE COMPENSATION
The following table sets forth the information with respect to each person
who served in the capacity of chief executive officer during l997, and other
officers of the Company whose total annual salary and bonus for the fiscal year
ended December 31, 1997 exceeded $100,000 (collectively, the "Named Executive
Officers"). These Named Executive Officers receive perquisites and other
personal benefits in amounts less than 10% of their total annual salary and
bonus.
COMPENSATION OF MIOA OFFICERS
The following table sets forth the compensation awarded to, earned by or
paid to MIOA's Chief Executive Officer and other executive officers for services
rendered to MIOA during 1997, and 1996 (the "MIOA Named Executive Officers"). No
other person, who, during 1997 or 1996 served as an executive officer of MIOA,
had a total annual salary and bonus in excess of $100,000.
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG -TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- ----------------------------
NAME AND PRINCIPAL FISCAL OTHER ANNUAL ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
-------- ---- -------- ----- ------------ --------- ------------
<S> <C> <C> <C>
Michael F. Morrell, ...... 1997 $173,461 -- -- 1,475,000 --
Chief Executive ........ 1996 $ 74,999 -- -- 25,000 --
Officer (1)
Paul C. Pershes, ......... 1997 $104,808 -- -- 1,425,000 --
President (2)
A. Razzak Tai (3) ........ 1997 $348,354 -- -- 50,000 --
</TABLE>
- -------------------------------
(1) Mr. Morrell was chief executive officer from August 1996 to the present.
(2) President from April 1997 to present.
(3) Director of Company and Florida Physicians Internet, Inc. from June 1997
and January 1997, respectively. Resigned as director of the Company in
September 1998.
EMPLOYMENT AGREEMENTS
In January 1997, the Company signed an employment agreement with Michael
Morrell to serve as Chief Executive Officer of the Company. The term of
agreement is for four years, with compensation equal to an annual salary of
$150,000, the granting of 775,000-925,000 stock options to be vested over a four
year period and the payment of normal business expenses. On November 1, 1997,
the Board of Directors approved an increase in salary to $200,000 per year.
The Company signed an employment agreement, commencing in May 1997, with
Paul Pershes to serve as president of the Company. The term of the agreement is
for four years, with compensation equal to an annual salary of $150,000, the
granting of 775,000 - 925,000 stock options to be vested over a four year period
and the payment of normal business expenses. On November 1, 1997, the Board of
Directors approved an increase in salary to $175,000 per year.
In November 1996, the Company signed an employment agreement with Linda
Moore. The term of agreement is for five years, with compensation equal to an
annual salary of $80,000, the granting of performance options to be vested over
a five year period and the payment of normal business expenses. Effective
February 8, 1998, the annual salary was increased to $100,000.
On June 16, 1997, the Company signed an employment agreement with Arthur
Kobrin. The term of the agreement is for four years and provides for annual
salary of $78,000, the granting of 100,000 stock options to be vested over a
three year period, and the payment of normal business expenses. Effective
February 8, 1998, the annual salary was increased to $100,000.
On March 15, 1998, the Company signed an employment agreement with E.
Nicholas Davis, III. The term of the employment agreement is for three years and
provides for an annual salary of $125,000, the granting of 200,000 options to be
vested over a two year period and the payment of normal business expenses.
The following tables show, as to the Named Executive Officers, certain
information concerning stock options:
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<PAGE>
OPTION GRANTS DURING 1997 AND AGGREGATE FISCAL YEAR-END OPTION VALUE
PERCENT OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE OR
UNDERLYING EMPLOYEES BASE EXPIRATION
NAME OPTIONS IN FISCAL YEAR PRICE ($/SH) DATE
---- ------- -------------- ------------ ----
Michael F. Morrell (3) 250,000 8.3 .50 4/9/07
925,000 30.8 .50 (1) 10/24/07
300,000 3.3 1.25 10/24/07
250,000 8.3 .50 4/9/07
Paul C. Pershes(4) 925,000 30.8 .50 (1) 10/24/07
250,000 2.8 1.25 10/24/07
50,000 1.7 .50 1/8/00
12,500 .4 (2) 7/8/01
12,500 .4 (2) 1/9/02
15,000 .5 (2) 7/9/02
A. Razzak Tai (5) 15,000 .5 (2) 1/9/03
- ------------
(1) Vesting date was revised on 10/24/97 from a three year vest to immediate.
(2) Price is at market value at vesting date.
(3) Does not include options to purchase 600,000 shares of the Company's
common stock granted on 2/10/98 at an exercise price of $1.25 per share.
(4) Does not include options to purchase 500,000 shares of the Company's
common stock granted on 2/10/98 at an exercise price of $1.25 per share.
(5) Does not include options to purchase 50,000 shares of the Company's common
stock granted on 2/10/98 at an exercise price of $1.25 per share.
AGGREGATE OPTION EXERCISES IN 1997
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN THE MONEY
SHARES OPTIONS AT 12/31/97 OPTIONS AT 12/31/97
ACQUIRED VALUE ----------------------------- -------------------------------
NAME ON EXERCISE REALIZED(1) EXERCISED UNEXERCISED EXERCISABLE UNEXERCISABLE
- ---------------------------- ------------ ------------ ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Michael F. Morrell ......... 0 0 1,275,000 200,000 $ 1,200,000 $ 50,000
Paul C. Pershes ............ 0 0 1,258,333 166,666 $ 1,195,833 $ 41,667
A. Razzak Tai .............. 0 0 50,000 55,000 $ 50,000 0
</TABLE>
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<PAGE>
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
<TABLE>
<CAPTION>
CASH COMPENSATION SECURITY GRANTS
---------------------------------------------- ------------------------------------
CONSULTING NUMBER OF
ANNUAL FEE/OTHER NUMBER OF SECURITIES UNDERLYING
NAME RETAINER FEE($) MEETING FEES($) FEES($) SHARES (#) OPTIONS/SARS (#)
- ------------------- ------------ ------------ ------------ ------------ ----------------
<S> <C> <C> <C>
Terry Lazar ....... -- 2,000 -- 175,000(2) 175,000
Glen Barber ....... -- 2,000 -- 175,000(2) 175,000
Theodore J. Orlando -- 2,000 -- 175,000(2) 175,000
</TABLE>
- ------------
(1) The Directors had eight meetings during 1997, of which four were telephonic
meetings.
(2) Does not include options granted on 2/10/98 to purchase 50,000 shares of the
Company's common stock at an exercise price of $1.25 per share.
LONG-TERM EMPLOYEE PLANS
The Company does not have any long-term incentive plans.
CERTAIN TRANSACTIONS
MERGER TERMINATION
Medical Industries of America, Inc. terminated, as of September 11, 1998,
the merger agreement with Atlanta-based Physician Health Corporation (PHC) in
accordance with the termination provisions of the Definitive Merger Agreement
dated August 3, 1998.
DISPUTE WITH DR. A. RAZZAK TAI, M.D.
Effective January 9, 1997, the Company entered into a purchase agreement
with Dr. A. Razzak Tai, M.D. ("Tai") for the purchase of Florida Physicians
Internet, Inc. ("FPII"). Consideration for the purchase included the issuance of
714,000 shares of the Company's preferred shares convertible into 714,000 shares
of common stock, $475,000 face amount of preferred stock convertible at market
in July 1997, and 50,000 common stock options at $.50 per share. A dispute
between the Company and Dr. Tai has arisen concerning various representations
and warranties made by Dr. Tai. In that regard, a controversy between the
parties exists as to how much, if any, of the purchase price for FPII is due Dr.
Tai. The parties are presently in negotiations in respect to such controversy.
While the Company believes that such matter will be settled without litigation,
no assurance can be given at this time that the matter will be amicably settled.
COST OF SOLICITATION
The Company will bear the cost of the solicitation of proxies from its
shareholders. In addition to the use of mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and employees
of the Company will not be compensated additionally for the solicitation, but
may be reimbursed for out-of-pocket expenses in connection with this
solicitation. Arrangements are also being made with brokerage houses and any
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of the Company, and the Company will reimburse
such brokers, custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses.
10
<PAGE>
OTHER MATTERS
Management is not aware of any other matters to be presented for action at
the meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their best judgment on such matters.
Proposals of shareholders of the Company which are intended to be
presented by such shareholders at the 1999 Annual Meeting must be received by
the Company no later than March 31, 1999 in order to have them included in the
proxy statement and form of proxy relating to that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Linda Moore, Secretary
September ___, 1998
Boynton Beach, Florida
11
<PAGE>
PROXY
MEDICAL INDUSTRIES OF AMERICA, INC.
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 18, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MEDICAL
INDUSTRIES OF AMERICA, INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
IN ACCORDANCE WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of Medical Industries of America, Inc. (the
"Company") hereby appoints Marc Woolf and Linda Moore, the true and lawful
attorneys, agents and proxies of the undersigned with full power of substitution
for and in the name of the undersigned, to vote all the shares of Common Stock
of the Company at the Annual Meeting of Stockholders of the Company to be held
at Holiday Inn, Boynton Beach, on Wednesday, November 18, 1998 at 2:00 p.m., and
any and all adjournments thereof, with all of the powers which the undersigned
would possess if personally present, for the following purposes:
1. To elect five Directors.
For Withhold
--- --------
Michael F. Morrell [ ] [ ]
Paul C. Pershes [ ] [ ]
Theodore J. Orlando [ ] [ ]
Glen Barber [ ] [ ]
Terry Lazar [ ] [ ]
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C>
2. To amend the Company's Articles of Incorporation [ ] [ ] [ ]
to increase the number of authorized shares and par
value of Capital stock.
3. To transact such other business as may properly [ ] [ ] [ ]
come before the meeting or any adjournment
thereof.
</TABLE>
This Proxy will be voted for the choices specified. If no choice is specified
for Items 1 and 2, this Proxy will be voted FOR these items.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated October 18, 1998.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
DATED:__________________________ ______________________________________
[Signature]
______________________________________
[Signature if jointly held]
______________________________________
[Printed Name]
Please sign exactly as name appears on stock certificate(s). Joint owners should
each sign. Trustees and others acting in a representative capacity should
indicate the capacity in which they sign.
