SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240-11(c) orss.240.14a-12
MEDCOM USA, INCORPORATED.
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(Name of Registrant as Specified in Its Charter)
William T. Hart - Attorney for Registrant
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] 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:
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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:
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4) Proposed maximum aggregate value of transaction:
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[ ] 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 No.:
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3) Filing Party:
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4) Date Filed:
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22
MEDCOM USA, INCORPORATED
18001 cowan, Suite C & D
Irvine CA 92614
(949) 261-6665
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 19, 2000
To the Shareholders:
Notice is hereby given that a annual meeting of the shareholders of Medcom
USA, Incorporated (the "Company") will be held at the Company's offices, 18001
cowan, Suite C & D, Irvine, CA 92614 on December 19, 2000, at 10:00 A.M., for
the following purpose:
(1) to elect the directors who shall constitute the Company's Board of
Directors for the ensuing year;
(2) to ratify the appointment of Erhardt Keefe Steiner & Hottman PC as the
Company's independent accountants for the fiscal year ending June 30, 2001;
to transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on November 3, 2000
as the record date for the determination of shareholders entitled to notice of
and to vote at such meeting. Shareholders are entitled to one vote for each
share held. As of November 3, 2000, there were 33,819,222 shares of the
Company's common stock issued and outstanding.
MEDCOM USA, INCORPORATED
November 21, 2000 By Mark Bennett
---------------------
President
<PAGE>
MEDCOM USA, INCORPORATED
18001 cowan
Suite C & D
Irvine CA 92614
(949) 261-6665
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of the
Company for voting at the annual meeting of shareholders to be held on December
19, 2000, and at any and all adjournments of such meeting. If the proxy is
executed and returned, it will be voted at the meeting in accordance with any
instructions, and if no specification is made, the proxy will be voted for the
proposals set forth in the accompanying notice of the annual meeting of
shareholders. Shareholders who execute proxies may revoke them at any time
before they are voted, either by writing to the Company at the address set forth
on page one or in person at the time of the meeting. Additionally, any later
dated proxy will revoke a previous proxy from the same shareholder. This proxy
statement was mailed to shareholders of record on or about November 21, 2000.
Only the holders of the Company's common stock are entitled to vote at the
meeting. Each share of common stock is entitled to one vote and votes may be
cast either in person or by proxy. A quorum consisting of one-third of the
shares entitled to vote is required for the meeting. The affirmative vote of the
holders of a majority of the outstanding shares of the Company's common stock is
required to elect directors and to approve any other proposal to come before the
meeting. Cumulative voting in the election of directors is not permitted.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of November 3, 2000, information with
respect to the only persons owning beneficially 5% or more of the outstanding
common stock and the number and percentage of outstanding shares owned by each
director and officer and by the officers and directors as a group. Unless
otherwise indicated, each owner has sole voting and investment powers over his
shares of common stock.
Percent of
Name and Address Shares Owned (1) Class (2)
---------------- ----------------- -------------
Mark Bennett 262,400 1%
18001 Cowan, Suite C&D
Irvine, CA 92614
Michael Malet 154,900 *
18001 Cowan, Suite C&D
Irvine, CA 92614
<PAGE>
Percent of
Name and Address Shares Owned (1) Class (2)
---------------- ----------------- -------------
Alan Ruben 51,679 *
18001 Cowan, Suite C&D
Irvine, CA 92614
David Robinson -- --
6810 New Tampa Highway, #600
Lakeland, FL 33815
Jeffrey Yablon 1,000 *
1767 Veterans Memorial Hwy. #6
Islandia, NY 11722
Vladimir Havlena -- --
NA-VYHLIBCE, 457
67921 Cerna Hora
Czech Republic
David Breslow 17,000 *
701 N. Brand, #380
Glendale, CA 91203
Julio Curra 12,500 *
1767 Veterans Memorial Hwy. #6
Islandia, NY 11722 _______ ____
Officers and Directors as
a Group (8 persons) 499,479 2%
======= =====
* Less than 1%
(1) Excludes shares issuable prior to February 28, 2001 upon the exercise of
options or warrants granted to the following persons:
Name Shares Issuable Upon Exercise of Options
Mark Bennett 2,375,500
Michael Malet 2,152,000
Alan Ruben 458,333
David Robinson 244,444
Jeffrey Yablon --
Vladimir Havlena 149,444
David Breslow 168,333
Julio Curra 158,333
<PAGE>
Also excludes shares of common stock issuable upon the conversion of the
Company's Series D preferred stock held by the following persons:
Shares Issuable Upon
Name Conversion of Preferred Stock
David Robinson 33,000
Vladimir Havlena 491,923
(2) Excludes any shares issuable upon the exercise of any warrants, options or
other convertible securities.
ELECTION OF DIRECTORS
Unless the proxy contains contrary instructions, it is intended that the
proxies will be voted for the election of the directors listed below to serve
until the next annual meeting of shareholders and until their successors shall
be elected and shall qualify.
All nominees have consented to serve if elected. In case any nominee shall
be unable or shall fail to act as a director by virtue of an unexpected
occurrence, the proxies may be voted for such other person or persons as shall
be determined by the persons acting under the proxies in their discretion.
The Company's present officers and directors are as follows:
Name Age Position
Mark Bennett 41 President and a Director
Michael Malet 52 Executive Vice President and a Director
Alan Ruben 43 Chief Accounting and Financial Officer
David Robinson 37 Vice President and Chief Technology Officer
Jeffrey Yablon 39 Vice President of Sales
Vladimir Havlena 44 Managing Director - DCB Actuaries and
Consultants, s.r.o.
David Breslow 56 Director
Julio Curra 42 Director
Each director holds office until his successor is duly elected by the
stockholders. Executive officers serve at the pleasure of the Board of
Directors.
The following sets forth certain information concerning the past and
present principal occupations of the Company's officers and directors and other
key employees.
Mark Bennett has been the Company's President since November 1997 and has
been a Director of the Company since September 1997. Mr. Bennett has been the
President, Chief Executive Officer and a Director of Link International
Technologies, Inc., a subsidiary of the Company, since January 1996. From 1985
to 1987 Mr. Bennett was the General Manager for MovieBar, a video vending
company servicing the hotel and hospitality industry, with installations in over
35,000 hotel rooms worldwide. In 1987 Mr. Bennett became Vice President of
International Operations and General Manager of MovieBar and was subsequently
named as
<PAGE>
President of MovieBar Company USA. In December 1995 Mr. Bennett resigned his
position with MovieBar to co-found Link.
Michael Malet has been the Company's Vice President since November 1997 and
has been a director of the Company since September 1997. Mr. Malet has been the
President of New View Technologies, Inc., a wholly owned subsidiary of Link
International Technologies, Inc., since July 1995. From 1986 to 1987 Mr. Malet
was the President of Vending Control Systems, a manufacturer of video vending
machines. Mr. Malet was a Sales Manager (1987-1990) and later President
(1991-1995) of Keyosk Corporation, a Company involved on the development and
sale of intelligent on-line vending machines.
Alan Ruben joined the Company as Chief Accounting and Financial Officer in
October 1999. Prior to joining the Company, he was the Chief Financial Officer
for Direct Container Line, Inc., an international shipping company. Previously
Mr. Ruben was the Vice-President and Chief Financial Officer for Relsys
International, Inc., a medical software development company. Mr. Ruben is a
certified public accountant, licensed in the state of California. He began his
career with Coopers & Lybrand and was in public accounting for eighteen years.
He holds a Masters degree in Business Administration from California State
University, Long Beach, as well as a Bachelors degree in business from the
University of Southern California.
David Robinson joined the Company as Vice President and Chief Technology
Officer in April 2000. Prior to joining the Company, Mr. Robinson was the
President of DCB Actuaries & Consultants, s.r.o., since 1991. In 1986, he
founded DSM.net, a systems network integration company, and has served as its
President since inception. In 1998, Mr. Robinson was appointed to the Board of
Directors of Woodrow Milliman, a worldwide actuarial and consulting firm
Jeffrey Yablon joined the Company as its Vice President of Sales in June
2000. Mr. Yablon was the Vice President of Sales for Olsten Health Service in
New York. Previously, Mr. Yablon was employed by Abbott Laboratories for six
years, in various capacities, including Director of Managed Care, Director of
Marketing and Director of Alternate Site National Accounts. He is a Certified
Healthcare Executive (CHE) of the American College of Health Care Executives and
a member of the American Association of Health Plans. Mr. Yablon was a member of
the Executive Board of the Metropolitan Healthcare Administrators Association.
In addition to a bachelor's degree, he holds an MBA degree from Fairleigh
Dickinson University.
Vladimir Havlena became the Managing Director of the Company's wholly owned
subsidiary, DCB Actuaries & Consultants, s.r.o. in April 2000. Mr. Havlena was a
founder and had worked as the Managing Director of DCB Actuaries & Consultants,
s.r.o. since 1991. Between 1987 and 1990 Mr. Havlena received several
post-graduate degrees at the University of Brno, Czech Republic. Mr. Havlena
graduated in 1981 from the Czech Technical University with a degree in
engineering.
David Breslow has been a director of the Company since March 1999. Since
1996 Mr. Breslow has been the Executive Director of United Pharmacists Network,
Inc., a corporation involved in purchasing, management and providing other
services to pharmacies. Between 1976 and 1995 Mr. Breslow owned and managed
various pharmacies in the Los Angeles, California metropolitan area.
<PAGE>
Julio Curra has been a director of the Company since March 1999. Since 1996
Mr. Curra has been the president of All-Line Communications, Inc., a corporation
involved in telecommunication sales. Between 1987 and 1996 Mr. Curra was the
president of Julio Curra & Associates, a firm also involved in telecommunication
sales.
Key Employees
Robert Stevens is the Company's Director of Development and Information
Technology. He has been with the Company or its subsidiaries since 1994. Prior
to joining the Company, Mr. Stevens was the Vice President of Development for
three different companies. He was involved with a ten-year development effort on
EZ Fax, the first network fax server developed in 1984. He also spent seventeen
years at IBM, primarily in their complex systems group.
Julie Signorille became the Director of Operations for the Company's
MedCard Division in June 2000. Ms. Signorille was the Vice-President of
Operations for Citibank, serving as the Director of Banking Operations of
Citibank's Internet Bank. Ms. Signorille has over fifteen years of management
experience, primarily in operations. Prior to her tenure with Citibank, she
managed the day to day operations of a 36 branch banking network with assets in
excess of 6 billion dollars.
Ron Pizzolo became the president of the Company's MedCard division in June
2000. Previously, he had been providing services to the Company on a consulting
basis under the terms of the original license agreement for the MedCard System.
Mr. Pizzolo developed and managed many of the features of the MedCard System as
the founder and president of MedCard Management Systems, Inc. Prior to his
involvement with MedCard, he spent over twenty years with a major national
insurance company supervising the settlement of personal injury claims.
Tony Pizzolo became Executive Vice President of the Company's MedCard
division in June 2000. Previously, he had been providing services to the Company
on a consulting basis under the terms of the original license agreement for the
MedCard System. Prior to joining MedCard in 1997, Mr. Pizzolo was an executive
in a variety of service related businesses in the New York area.
All of the Company's officers devote substantially all of their time on the
Company's business. Mr. Breslow and Mr. Curra, as directors, devote only a
minimal amount of time to the Company.
The Company's Board of Directors met three times during the year ending
June 30, 2000. All of the Directors attended each of these meetings either in
person or by telephone conference call.
<PAGE>
The Company has an Audit Committee comprised of David Breslow and Julio
Curra. The purpose of the Audit Committee is to review and approve the selection
of the Company's auditors, review the Company's financial statements with the
Company's independent auditors, and review and discuss the independent auditor's
management letter relating to the Company's internal accounting controls. During
the fiscal year ending June 30, 2000 the Audit Committee held three meetings.
All members of the Audit Committee attended these meetings.
The Company's Board of Directors has adopted a written charter for the
Audit Committee. A copy of the Audit Committee charter is attached to this proxy
statement. The members of the Company's Audit Committee are independent as that
term is defined in Rule 4200 (a)(15) of the National Association of Securities
Dealers.
Audit Committee Report
(1) The Audit Committee reviewed and discussed the Company's audited financial
statements for the year ended June 30, 2000 with the Company's management.
(2) The Audit Committee discussed with the Company's independent auditors the
matters required to be discussed by Statement of Accounting Standards 61.
(3) The Audit Committee has received the written disclosures and the letter
from the Company's independent accountants required by Independence
Standards Board Standard No. 1 ( Independence Standards Board Standard No.
1, Independence Discussions with Audit Committees), and has discussed with
the Company's independent accountants the independent accountant's
independence; and
(4) Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements
be included in the Company's Annual Report on Form 10-KSB for the year
ended June 30, 2000 for filing with the Securities and Exchange Commission.
Members of the Audit Committee:
David Breslow Julio Curra
Change in Management
In September 1998 Cornelia Eldridge was appointed a director of the
Company. In February 1999 Chet Howard, George Pursglove and Ms. Eldridge
resigned as directors of the Company. In March 1999 David Breslow and Julio
Curra were appointed directors of the Company. In October 1999, Alan Ruben was
appointed Chief Accounting and Financial Officer after Ian Hart's employment
contract as chief financial officer expired. In January 2000, Mr. Marvin Berger
resigned as the Company's Vice President of Sales & Marketing. In April 2000,
Mr. David Robinson and Mr. Vladimir Havlena joined the Company as its
Vice-President and Chief Technology Officer and Managing Director of DCB
Actuaries and Consultants, s.r.o., respectively. Mr. Jeffrey Yablon and Ms.
Julie Signorille joined the Company in June 2000 as the Corporate Vice President
of Sales and Director of Operations for the MedCard division, respectively. Mr.
Ronald Pizzolo and Mr. Anthony Pizzolo also joined the Company as the President
and Executive Vice President of the Company's MedCard division in June 2000.
<PAGE>
Executive Compensation
The following table sets forth in summary form the compensation received
by (i) the Chief Executive Officer of the Company and (ii) by each other
executive officer of the Company who received in excess of $100,000 during the
past three fiscal years ended June 30, 2000.
Other Annual
Other Annual Compensation Options
Name and Fiscal Salary Bonus Compensation Stock Awards Granted
Principal Position Year (1) (2) (3) (4) (5)
------------------- ------ ------ ----- ------------ ------------ -------
Mark Bennett, 2000 $129,462 $112,350 $15,990 $136,648 800,000
President and
Chief 1999 $128,482 -- $ 8,400 -- 1,015,000
Executive Officer 1998 $111,350 -- $ 8,400 $ 67,500 560,500
Michael Malet, 2000 $104,942 $102,766 $ 9,200 $136,648 770,000
Vice President and 1999 $112,462 -- $ 8,400 -- 925,000
Chief Operating
Officer 1998 $100,923 -- $ 8,400 $ 58,500 457,000
Alan Ruben 2000 $77,539 $33,266 -- $98,535 500,000
Chief Accounting
and Financial Officer
since October 1999
Robert Stevens 2000 $107,385 $3,044 -- $4,969 100,000
Director of Develop-
ment and Information
Technology since
March 2000
(1) The dollar value of base salary (cash and non-cash) received.
(2) The dollar value of bonus (cash and non-cash) received.
(3) Any other annual compensation not properly categorized as salary or bonus,
including perquisites and other personal benefits, securities or property.
Amounts in the table represent automobile allowances.
(4) Amounts reflect the value of the shares of the Company's common stock
issued as compensation for services. No restricted awards were issued to
any of the above individuals .
The table below shows the number of shares of the Company's common stock
owned by the officers listed above, and the value of such shares as of June 30,
2000.
Name Shares Value
---- ------ -----
Mark Bennett 262,400 $595,648
Michael Malet 154,900 $351,623
Alan Ruben 51,679 $117,311
<PAGE>
Robert Stevens 8,000 $18,160
(5) The shares of common stock to be received upon the exercise of all stock
options granted during the fiscal years shown in the table.
Employment Contracts
The Company has employment agreements with the following officers.
Mark Bennett and Michael Malet.
The employment agreements with Mark Bennett and Michael Malet each provide
for the following:
1. Effective date of March 1999; term of three years.
2. Annual salary of $137,500 in the case of Mr. Bennett and $120,000 in the
case of Mr. Malet. In January, 2000, the annual compensation being paid to
Mr. Bennett and Mr. Malet was increased to $152,776 and $127,296,
respectively.
3. Automobile allowance of $700 per month. Mr. Bennett is currently receiving
an automobile allowance of $1,599 per month and Mr. Malet is currently
receiving $1,000 per month.
4. Four weeks of paid vacations and the right to participate in any group
medical, group life insurance or any other employee benefit plan that
the Company may, from time to time, maintain.
5. Reimbursement for any medical, dental or optical expenses not covered
by any Company group healthcare plan. No amounts have been reimbursed
in this regard.
6. Disability benefits equal to the employee's salary payable to the employee
for the remaining term of the employment agreement.
7. Premium payments for a $1,000,000 term life insurance policy with the
beneficiary to be designated by the employee.
In the event that there is a change in the control of the Company and the
employee is terminated without cause or the employee resigns for cause then the
Company is required to pay the employee a lump-sum amount equal to the
employee's annual salary multiplied by 2.99.
Alan Ruben
1. Effective date of October 1999; term of two years.
2. Annual salary of $144,000 to be payable in cash and/or shares of the
Company's common stock.
<PAGE>
3. Three weeks of paid vacation and the right to participate in any group
medical, group life insurance, or any other employee benefit plan that
the Company may, from time to time, maintain.
4. Disability benefits equal to the employee's salary payable to the employee
for a period of twelve months.
5. Options to purchase 100,000 shares of the Company's common stock at
$1.00 per share under the Company's Incentive Stock Option Plan, with
monthly vesting over two years.
6. A bonus of up to fifty percent (50%) of the employee's annual salary
based upon criteria to be determined by the Board of Directors.
In the event that Mr. Ruben is terminated without cause or Mr. Ruben
resigns for cause, then the Company is required to pay Mr. Ruben the lesser of
Mr. Ruben's annual salary or the salary to be paid to Mr. Ruben during the
remaining term of Mr. Ruben's contract, with such payments payable on a monthly
basis.
Robert Stevens
1. Effective date of March 2000; term of three years.
2. Annual salary of $115,000.
3. Three weeks of paid vacation and the right to participate in any group
medical, group life insurance or any of the employee benefit plans
that the Company may, from time to time, maintain.
4. Disability benefits equal to the employee's salary payable to the employee
for a period of twelve months.
5. Options to purchase 100,000 shares of the Company's common stock at
$5.00 per share, with 40,000 under the Company Incentive Stock Option
Plan and 60,000 under the Non-Qualified Stock Option Plan, with
monthly vesting over two years.
6. A bonus of up to fifty percent (50%) of the employee's annual salary
based upon criteria to be determined by the Board of Directors.
In the event that Mr. Stevens is terminated without cause or Mr. Stevens
resigns for cause, then the Company is required to pay Mr. Stevens the lesser of
Mr. Stevens annual salary or the salary to be paid to Mr. Stevens during the
remaining term of Mr. Stevens contract, with such payments payable on a monthly
basis.
<PAGE>
General Provisions
For purposes of the employment agreements a change in the control of the
Company means: (1) the acquisition by any person of more than 15% of the
Company's common stock; (2) the acquisition by any person more than 50% of the
voting capital stock of any subsidiary of the Company; (3) the merger of the
Company with another entity if after such merger the shareholders of the Company
do not own at least 85% of the voting capital stock of the surviving
corporation; (4) the approval by the shareholders of the Company of a plan to
liquidate or dissolve the Company; (5) the sale of substantially all of the
assets of the Company; or (6) a change in a majority of the Company's directors
which has not been approved by at least two-thirds of the incumbent directors.
The term "resignation for cause" means there is a material change in the
employee's authority, duties, compensation or activities, following a change in
control of the Company.
The employment agreements also provide that in the event the employee is
terminated without cause or the employee resigns for cause, all options granted
to the employee will be fully vested.
Options Granted
The following tables set forth information concerning the options granted
and/or exercised during the fiscal year ended June 30, 2000 to the persons named
below and the fiscal year-end value of all unexercised options (regardless of
when granted) held by these persons.
Number of Shares % of Total Options Exercise
Granted under Type Granted to Employees Price Per Expiration
Name Option of Plan in Fiscal Year Share Date
Mark Bennett 500,000 Non-Qualified 13% $0.56 11/17/04
20,000 Incentive --% $5.00 03/01/05
280,000 Not under plan 7% $5.00 03/01/05
------- -----
800,000 20%
======= =====
Michael Malet 470,000 Non-Qualified 12% $0.56 11/17/04
20,000 Incentive --% $5.00 03/01/05
280,000 Not under plan 7% $5.00 03/01/05
------- -----
770,000 19%
======= ====
Alan Ruben 100,000 Incentive 2% $1.00 10/18/02
300,000 Non-Qualified 8% $0.56 11/17/04
10,000 Incentive --% $5.00 03/01/05
90,000 Not under plan 2% $5.00 03/01/05
------ ----
500,000 12%
======= ====
Robert Stevens40,000 Incentive 1% $5.00 03/01/05
60,000 Non-Qualified 1% $5.00 03/01/05
------ ----
100,000 2%
======= ====
<PAGE>
All options issued to Mr. Bennett and Mr. Malet were fully vested upon
granting of the option.
The options issued to Mr. Ruben which expire in 2002 and all options issued to
Mr. Stevens vest monthly over two years. The options issued to Mr. Ruben which
expire in 2005 vest monthly over one year and the other options issued to Mr.
Ruben are fully vested.
Number of Value of Unexer-
Securities Underlying cised In-the-
Unexercised Options Money Options
at June 30, 2000 at June 30, 2000
Shares -------------------- ---------------
Acquired Value Exercisable/ Exercisable/
Name on Exercise (1) Realized (2) Unexercisable (3) Unexercisable (4)
----- --------------- ------------ ----------------- -----------------
Mark Bennett -- -- 2,375,500/-- $2,764,698/--
Michael Malet -- -- 2,152,000/-- $2,502,603/--
Alan Ruben -- -- 358,333/141,667 $554,583/$84,667
Robert Stevens -- -- 32,500/87,500 $8,467/$16,933
(1)The number of shares received upon exercise of options during the fiscal
year ended June 30, 2000.
(2)With respect to options exercised during the Company's fiscal year ended
June 30, 2000, the dollar value of the difference between the option
exercise price and the market value of the option shares purchased on the
date of the exercise of the options.
(3)The total number of unexercised options held as of June 30, 2000,
separated between those options that were exercisable and those options
that were not exercisable.
(4)For all in the money unexercised options held as of June 30, 2000, the
excess of the market value of the stock underlying those options (as of
June 30, 2000) and the exercise price of the option
Long Term Incentive Plans - Awards in Last Fiscal Year
None.
Employee Pension, Profit Sharing or Other Retirement Plans
The Company reactivated its 401(k) Plan in June 2000. All United States
based full-time employees are eligible to participate on the first day of a
calendar quarter after the employee completes ninety days of employment with the
Company. Participants can contribute the lesser of fifteen percent of their
compensation or the federally mandated maximum amount (currently $10,500). The
Company matches the employees' contributions fifty percent of the first six
percent, or a maximum of three percent of salary. Employees are fully vested in
amounts they contribute and vest twenty percent per year over five years on
Company contributions.
<PAGE>
Except as noted above and as provided in the Company's employment
agreements with its executive officers and other personnel, the Company does not
have a defined benefit, pension plan, profit sharing or other retirement plan,
although the Company may adopt one or more of such plans in the future.
Compensation of Directors
Effective July 1, 2000, the Company agreed to pay each member of the Board
of Directors $50,000 per year, payable in semi-annual installments at the
beginning of each six month period. Prior to this time, the Company had no
standard arrangement pursuant to which directors of the Company were compensated
for any services provided as a director or for committee participation or
special assignments.
During the year ending June 30, 2000, Mr. Breslow and Mr. Curra each
received 12,500 shares of the Company's common stock valued at $29,069 and
options to purchase 162,500 shares of the Company's common stock. The following
is a description of the options granted to Mr. Breslow and Mr. Curra:
Options Type of Exercise Expiration
Granted Plan Price Date Vesting
112,500 Non-Qualified $0.56 11/17/04 Fully vested
20,000 Non-Qualified $5.00 03/01/05 Vested monthly over one
year
30,000 Not under plan $5.00 03/01/05 Vested monthly over one
year
Except as disclosed elsewhere in this Proxy Statement no director of the
Company received any form of compensation from the Company during the year ended
June 30, 2000.
Stock Option and Bonus Plans
The Company has Incentive Stock Option Plans, Non-Qualified Stock Option
Plans and Stock Bonus Plans. A summary description of the Plans follows. In some
cases these three Plans are collectively referred to as the "Plans".
Incentive Stock Option Plans.
The Incentive Stock Option Plans authorize the issuance of options to
purchase shares of the Company's common stock to officers and employees of the
Company.
In order to qualify for incentive stock option treatment under the
Internal Revenue Code, the following requirements must be complied with:
1. Options granted pursuant to the Plan must be exercised no later than:
(a) The expiration of thirty (30) days after the date on which an
option holder's employment by the Company is terminated.
<PAGE>
(b) The expiration of one year after the date on which an option
holder's employment by the Company is terminated, if such
termination is due to the Employee's disability or death.
2. In the event of an option holder's death while in the employ of the
Company, his legatees or distributes may exercise (prior to the option's
expiration) the option as to any of the shares not previously exercised.
3. The total fair market value of the shares of Common Stock (determined
at the time of the grant of the option) for which any employee may be granted
options which are first exercisable in any calendar year may not exceed
$100,000.
4. Options may not be exercised until one year following the date of
grant. Options granted to an employee then owning more than 10% of the Common
Stock of the Company may not be exercisable by its terms after five years from
the date of grant.
5. The purchase price per share of Common Stock purchasable under an
option is determined by the Board of Directors, but cannot be less than the fair
market value of the Common Stock on the date of the grant of the option (or 110%
of the fair market value in the case of a person owning the Company's stock
which represents more than 10% of the total combined voting power of all classes
of stock).
Non-Qualified Stock Option Plans.
--------------------------------
The Non-Qualified Stock Option Plans authorize the issuance of options to
purchase shares of the Company's common stock to the Company's employees,
directors, officers, consultants and advisors, provided however that bona fide
services must be rendered by such consultants or advisors and such services must
not be in connection with the offer or sale of securities in a capital-raising
transaction. The option exercise price is determined by the Board of Directors
but cannot be less than the market price of the Company's common stock on the
date the option is granted.
In the event of an option holder's death while in the employ of the
Company, his heirs may exercise the option as to any of the shares not
previously exercised prior to the option's expiration.
Stock Bonus Plans.
-----------------
Under the Stock Bonus Plans, the Company's employees, directors, officers,
consultants and advisors are eligible to receive a grant of the Company's
shares; provided, however, that bona fide services must be rendered by
consultants or advisors and such services must not be in connection with the
offer or sale of securities in a capital-raising transaction.
<PAGE>
Other Information Regarding the Plans.
-------------------------------------
The Plans are administered by the Company's Board of Directors. The Board
of Directors has the authority to interpret the provisions of the Plans and
supervise the administration of the Plans. In addition, the Board of Directors
is empowered to select those persons to whom shares or options are to be
granted, to determine the number of shares subject to each grant of a stock
bonus or an option and to determine when, and upon what conditions, shares or
options granted under the Plans will vest or otherwise be subject to forfeiture
and cancellation.
In the discretion of the Board of Directors, any option granted pursuant
to the Plans may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also accelerate the date upon which any option (or any part of any options) is
first exercisable. Any shares issued pursuant to the Stock Bonus Plan and any
options granted pursuant to the Incentive Stock Option Plan or the Non-Qualified
Stock Option Plan will be forfeited if the "vesting" schedule established by the
Board of Directors at the time of the grant is not met. For this purpose,
vesting means the period during which the employee must remain an employee of
the Company or the period of time a non-employee must provide services to the
Company, unless specifically covered by an act addressed in an employee's
employment agreement. At the time an employee ceases working for the Company (or
at the time a non-employee ceases to perform services for the Company), any
shares or options not fully vested will be forfeited and cancelled. In the
discretion of the Board of Directors payment for the shares of Common Stock
underlying options may be paid through the delivery of shares of the Company's
Common Stock having an aggregate fair market value equal to the option price. A
combination of cash and shares of Common Stock may also be permitted at the
discretion of the Board of Directors.
Options are generally non-transferable except upon death of the option
holder. Shares issued pursuant to the Stock Bonus Plan will generally not be
transferable until the person receiving the shares satisfies the vesting
requirements imposed by the Board of Directors when the shares were issued.
The Board of Directors of the Company may at any time, and from time to
time, amend, terminate, or suspend one or more of the Plans in any manner it
deems appropriate, provided that such amendment, termination or suspension
cannot adversely affect rights or obligations with respect to shares or options
previously granted. The Board of Directors may not, without shareholder
approval: make any amendment which would materially modify the eligibility
requirements for the Plans; reduce the minimum option price per share; extend
the period for granting options; or materially increase in any other way the
benefits accruing to employees who are eligible to participate in the Plans.
The Plans are not qualified under Section 401(a) of the Internal Revenue
Code, nor are they subject to any provisions of the Employee Retirement Income
Security Act of 1974.
<PAGE>
The following sets forth certain information as of November 3, 2000
concerning the stock options and stock bonuses granted by the Company pursuant
to the Plans. Each option represents the right to purchase one share of the
Company's common stock.
Total Shares Remaining
Shares Reserved for Shares Options/
Reserved Outstanding Issued As Shares
Name of Plan Under Plan Options Stock Bonus Under Plan
------------ ---------- ------------- ----------- -------------
Incentive Stock Option
Plans 2,500,000 1,151,166 N/A 1,348,834
Non-Qualified Stock Option
Plans 5,000,000 3,093,667 N/A 1,906,333
Stock Bonus Plans 2,900,000 N/A 1,906,875 993,125
Transactions with Management
In April 2000, the Company acquired DCB Actuaries & Consultants, s.r.o.
(DCB), a Czech Republic based Company for cash of $1,403,847 and 494 shares of
the Company's Series D preferred stock. At the time of this acquisition David
Robinson and Vladimir Havlena owned 33% and 15% respectively, of DCB. Mr.
Robinson and Mr. Havlena were appointed officers of the Company following the
acquisition of DCB. DCB developed and operates a health insurance decision
system known as the Health Information Gateway.
The Company also acquired certain intellectual property from DSM, LLC, a
Florida limited liability company, for cash of $746,153 and 2,356 shares of the
Company's Series D preferred stock. DSM is owned by Vladimir Havlena. The
intellectual property acquired from DSM, LLC is used by the Company in its
Health Information Gateway and other products.
The table below shows the cash and Series D Preferred shares received by
David Robinson and Vladimir Havlena in connection with the Company's acquisition
of DCB and the intellectual property from DSM.
D. Robinson V. Havlena
Cash $380,770 $919,230
Shares of Series D 163.02 2,430
Preferred stock
Each Series D preferred share is convertible into 202.43 shares of the
Company's common stock at any time at the holder's option. The Company can
convert the Series D Preferred shares into shares of the Company's common stock,
in the manner described above, at any time after April 15, 2001 so long as the
bid price of its common stock exceeds $4.94 and the shares of common stock
issuable upon the conversion of the Series D Preferred shares are either covered
by an effective registration statement or are eligible for sale pursuant to Rule
144 of the Securities and Exchange Commission.
<PAGE>
During the year ended June 30, 2000, the Company purchased $218,936 of
equipment and $23,106 of services from DSM.net, a company owned by David
Robinson, an officer of the Company. The Company believes that it purchased such
equipment and services at prices equal to or below what it could have purchased
the same equipment and services from an unrelated party.
The Company may be required to issue to the former owners of One Medical
Services, LLC up to 1,485,000 shares of its common stock, depending upon the
future financial performance of the Company's One Medical Division. David
Breslow, a member of the Company's Board of Directors, is the Executive Director
of an entity that owned forty percent (40%) of One Medical Services, LLC. The
Company's acquisition of One Medical Services was completed before Mr. Breslow
became a director of the Company.
See "Stock Option and Bonus Plans" above for information concerning stock
options granted to the Company's officers and directors.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Ehrardt Keefe Steiner & Hottman PC,
independent certified public accountants, to audit the books and records of the
Company for the 2001 fiscal year. Ehrardt Keefe Steiner & Hottman PC served as
the Company's independent public accountants for the fiscal year ended June 30,
2000. A representative of Ehrardt Keefe Steiner & Hottman PC is not expected to
be present at the shareholders' meeting.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the year ending June 30, 2000
will be sent to any shareholder of the Company upon request. Requests for a copy
of this report should be addressed to the Secretary of the Company at the
address provided on the first page of this proxy statement.
SHAREHOLDER PROPOSALS
Any shareholder proposal which may properly be included in the proxy
solicitation material for the annual meeting of shareholders to be held after
the Company's fiscal year ending June 30, 2001 must be received by the Secretary
of the Company not later than July 1, 2001.
GENERAL
The cost of preparing, printing and mailing the enclosed proxy,
accompanying notice and proxy statement, and all other costs in connection with
solicitation of proxies will be paid by the Company, including any additional
solicitation made by letter or telephone. Failure of a quorum to be present at
the meeting will necessitate adjournment and will subject the Company to
additional expense. The Company's annual report, including financial statements
for the 2000 fiscal year, is included in this mailing.
Management of the Company does not intend to present and does not have
reason to believe that others will present any other items of business at the
Annual Meeting. However, if
<PAGE>
other matters are properly presented to the meeting for a vote, the proxies will
be voted upon such matters in accordance with the judgment of the persons acting
under the proxies.
Please complete, sign and return the enclosed proxy promptly. No postage
is required if mailed in the United States.
<PAGE>
MEDCOM USA, INCOPORATED
Audit Committee Charter
This Audit Committee Charter (the "Charter") has been adopted by the Board of
Directors ("the Board") of Medcom USA, Incorporated ("the Company"). The Audit
Committee of the Board (the Committee) shall review and reassess this charter
annually and recommend any proposed changes to the Board for approval.
Role and Independence: Organization
The Committee's job is one of oversight. Management is responsible for the
preparation of the Company's financial statements and the independent auditors
are responsible for auditing those financial statements. The Committee and the
Board recognize that management and the independent auditors have more resources
and time, and more detailed knowledge and information regarding the Company's
accounting, auditing, internal control and financial reporting practices than
the Committee; accordingly the Committee's oversight role does not provide any
expert or special assurance as to the financial statements and other financial
information provided by the Company to its shareholders and others.
The Committee will assist the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing, internal
control and financial reporting practices of the Company. It may also have such
other duties as may from time to time be assigned to it by the Board. The
membership of the Committee shall consist of at least two directors, who are
each free of any relationship that, in the opinion of the Board, may interfere
with such member's individual exercise of independent judgment. The Committee
shall maintain free and open communication with the independent auditors and
Company management. In discharging its oversight role, the Committee is
empowered to investigate any matter relating to the Company's accounting,
auditing, internal control or financial reporting practices brought to its
attention, with full access to all Company books, records, facilities and
personnel.
One member of the Committee shall be appointed as the chair. The chair shall be
responsible for leadership of the Committee, including scheduling and presiding
over meetings, preparing agendas, and making regular reports to the Board. The
chair will also maintain regular liaison with the Company's CEO, CFO, and the
audit partner of Company's independent accountants.
The Committee shall meet at least three times a year, or more frequently as the
Committee considers necessary. At least once each year the Committee shall have
separate private meetings with the independent auditors and management.
Responsibilities
Although the Committee may wish to consider other duties from time to time, the
general recurring activities of the Committee in carrying out its oversight role
are described below. The Committee shall be responsible for:
<PAGE>
o Recommending to the Board the independent auditors to be retained (or
nominated for shareholder approval) to audit the financial statements of the
Company. Such auditors are ultimately accountable to the Board and the
Committee, as representatives of the shareholders.
o Evaluating, together with the Board and management, the performance of the
independent auditors and, where appropriate, replacing such auditors.
o Obtaining annually from the independent auditors a formal written statement
describing all relationships between the auditors and the Company, consistent
with Independence Standards Board Standard Number 1. The Committee shall
actively engage in a dialogue with the independent auditors with respect to
any relationship that may impact the objectivity and independence of the
auditors and shall take, or recommend that the Board take, appropriate
actions to oversee and satisfy itself as to the auditors' independence.
o Reviewing the audited financial statements and discussing them with
management and the independent auditors. These discussions shall include the
matters required to be discussed under Statement of Auditing Standards No.61
and consideration of the quality of the Company's accounting principles as
applied in its financial reporting, including a review of particularly
sensitive accounting estimates, reserves and accruals, judgmental areas,
audit adjustments (whether or not recorded), and other such inquiries as the
Committee or the independent auditors shall deem appropriate. Based on such
review, the Committee shall make its recommendation to the Board as to the
inclusion of the Company's audited financial statements in the Company's
Annual Report on Form 10-KSB.
o Issuing annually a report to be included in the Company's proxy statement as
required by the rules of the Securities and Exchange Commission.
o Overseeing the relationship with the independent auditors, including
discussing with the auditors the nature and extent of the audit process,
receiving and reviewing audit reports, and providing the auditors full access
to the Committee and the Board to report on any and all appropriate matters.
o Discussing with a representative of management and the independent auditors:
(1) the interim financial information contained in the Company's Quarterly
Reports on Form l0-QSB prior to their filing, (2) earnings announcements
prior to their release (if practicable), and (3) the results of the review of
such information by the independent auditors. (These discussions may be held
with the Committee as a whole or with the Committee chair in person or by
telephone.)
o Discussing with management and the independent auditors the quality and
adequacy of and compliance with the Company's internal controls.
o Discussing with management and/or the Company's general counsel any legal
matters (including the status of pending litigation) that may have a material
impact on the Company's financial statements, and any material reports or
inquiries from regulatory or governmental agencies.
<PAGE>
o Reviewing the annual management letter with the independent auditors.
o Reviewing and approving audit fees.
o Reviewing management "conflict of interest" transactions.
o Reviewing alleged fraudulent actions or violations of law reported by
internal compliance programs or, under the terms of the Private Securities
Litigation Reform Act of 1995, by the independent auditors.
o Reviewing codes of ethics and/or codes of conduct.
o Reviewing compliance with codes of ethics and/or codes of conduct and the
procedures to monitor such compliance.
o Reviewing the performance of the chief financial officer and chief accounting
officer.
o Reviewing financial press releases.
o Reviewing policies and procedures with respect to expense accounts of senior
management.
<PAGE>
SIMS COMMUNICATIONS INC.
This Proxy is Solicited by the Board of Directors
The undersigned stockholder of the Company, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders, to be held December 19, 2000,
10:00 A.M. local time, at 18001 cowan, Suite C & D, Irvine CA 92614, and hereby
appoints Mark Bennett or Michael Malet, each with the power of substitution, as
Attorneys and Proxies to vote all the shares of the undersigned at said Annual
Meeting of stockholders and at all adjournments thereof, hereby ratifying and
confirming all that said Attorneys and Proxies may do or cause to be done by
virtue hereof. The above named Attorneys and Proxies are instructed to vote all
of the undersigned's shares as follows:
(1) To elect the directors who shall constitute the Company's Board of
Directors for the ensuing year.
___
/__/ For all nominees listed below (except as marked to the contrary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW
___
/__/ WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: Mark Bennett Michael Malet David Breslow Julio Curra
(2) To ratify the appointment of Ehrardt Keefe Steiner & Hottman PC as the
Company's independent accountants for the fiscal year ending June 30, 2001
__ __ __
/_/ FOR /_/ AGAINST /_/ ABSTAIN
To transact such other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DISCRETION IS INDICATED, THIS PROXY WILL BE
VOTED IN FAVOR OF ITEMS 1 AND 2.
<PAGE>
Dated this ____ day of _____, 2000.
---------------------------------
(Signature)
---------------------------------
(Signature)
Please sign your name exactly as it
appears on your stock certificate.
If shares are held jointly, each
holder should sign. Executors,
trustees, and other fiduciaries
should so indicate when signing.
Please Sign, Date and Return this
Proxy so that your shares may be
voted at the meeting.
