UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
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:
[
] Preliminary Proxy Statement
[
]
Confidential, for Use
of the Commission Only (as permitted by Rule 14a-6(e)(2))
[x]
Definitive Proxy Statement
[
] Definitive Additional Materials
[
] Soliciting Material Pursuant to 240.14a-12
NYER
MEDICAL GROUP, INC.
(Name
of Registrant as Specified in its Charter)
Payment
of Filing Fee (Check the appropriate box):
[x]
No fee required.
[
] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
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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.
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Previously Paid: _________________
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January
22, 2009
To
the Shareholders of Nyer Medical Group, Inc.:
You
are invited to attend the Annual Meeting of Shareholders of Nyer Medical Group,
Inc. to be held on Monday, February 23, 2009, at 9:00 a.m. (EST) at Embassy
Suites Boston at Logan Airport, Mystic A Meeting Room, 207 Porter Street,
Boston, MA 02128.
At
the meeting, shareholders will be asked to vote on the re-election of two
directors.
The
Notice of Annual Meeting of Shareholders and Proxy Statement accompanying this
letter provide detailed information concerning matters to be considered at the
meeting.
We
hope you will be able to attend the Annual Meeting. Whether or not you currently
plan to attend, please complete, date and return the proxy card in the enclosed
envelope.
On
behalf of the Board of Directors, we thank you for
your continued
support.
Sincerely,
/s/ Mark A.
Dumouchel
Mark A.
Dumouchel,
President and Chief
Executive Officer
NYER
MEDICAL GROUP, INC.
13
Water Street
Holliston,
Massachusetts 01746
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
January
22, 2009
To
the Shareholders of Nyer Medical Group, Inc.
Notice
is hereby given that the Annual Meeting of the Shareholders of Nyer Medical
Group, Inc. will be held on Monday, February 23, 2009, at 9:00 a.m. (EST) at
Embassy Suites Boston,
Mystic
A, Logan Airport, 207 Porter Street, Boston, MA 02128, for the following
purposes:
1)
Re-electing
two members of the Board of Directors named in the accompanying Proxy Statement,
each to serve a three-year term until the Annual Meeting of the Shareholders for
the fiscal year ending June 30, 2011, or until his successor is elected and
qualified.
2)
Acting
upon any and all other matters in connection with or for the purpose of
effecting the foregoing, or as otherwise may properly come before the Annual
Meeting or any and all adjournments thereof.
Further
information regarding voting rights and the business to be transacted at the
Annual Meeting is given in the attached Proxy Statement.
Only
Common Shareholders and Preferred Shareholders of record on our stock transfer
books at the close of business on January 20, 2009, will be entitled to vote at
the Annual Meeting. Shareholders who are unable to attend the Annual Meeting in
person and wish to have their stock voted are requested to sign, date and return
the accompanying Proxy.
INTERNET
AVAILABILITY OF PROXY MATERIALS
This
notice of meeting, the proxy statement and the proxy card are available at
www.nyermedicalgroup.com/2009/proxy
.
By
Order of the Board of Directors,
/s/
Mark A. Dumouchel
Mark
A. Dumouchel
President
and Chief Executive Officer
January
22, 2009
TABLE
OF CONTENTS
|
ITEM
|
PAGE
|
|
Annual
Meeting
of Shareholders
|
1
|
|
Proxy
and Solicitation
|
1
|
|
Item
1 Election of Directors
|
3
|
|
Current
Board of Directors
|
3
|
|
Nominees
for Election to Board of Directors
|
3
|
|
Continuing
Directors
|
5
|
|
Family
Relationships
|
5
|
|
Communications
with the Board of Directors
|
5
|
|
Independence
of Directors
|
6
|
|
Executive
Session of Independent Directors
|
6
|
|
Board
Meetings and Committees
|
6
|
|
Audit
Committee Meetings
|
6
|
|
Compensation
Committee Meetings
|
7
|
|
Nomination
Process
|
7
|
|
Stock
Option Committee Meetings
|
7
|
|
Attendance
at Meetings
|
8
|
|
Other
Matters
|
9
|
|
Executive
Compensation
|
10
|
|
Voting
Securities and Holdings of Certain Beneficial Owners and
Management
|
17
|
|
Additional
Information
|
20
|
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
20
|
|
Audit
Committee Report
|
20
|
|
Principal
Accountant Fees and Services
|
21
|
|
Change
of Control
|
23
|
|
Deadline
for Submission of Shareholder Proposals
|
23
|
|
Householding
of Annual Meeting Materials
|
24
|
|
Annual
Report on Form 10-K
|
24
|
NYER
MEDICAL GROUP, INC.
13
Water St.
Holliston,
Massachusetts 07149
ANNUAL
MEETING OF SHAREHOLDERS, FEBRUARY 23, 2009
PROXY
AND SOLICITATION
The
enclosed Proxy is solicited on behalf of the Board of Directors of Nyer Medical
Group, Inc. for use at our Annual Meeting of Shareholders, or the Annual
Meeting, on Monday, February 23, 2009, at 9:00 a.m. (EST) at Embassy Suites
Boston, Mystic A, Logan Airport, 207 Porter Street, Boston, MA 02128,
and at any and all
adjournments thereof, for the purposes set forth in the Notice of said meeting
attached and incorporated herein by this reference. We are paying for the
expense of soliciting proxies. We have retained Broadridge Financial Solutions,
51 Mercedes Way, Edgewood, NY 11717, to assist in the solicitation of proxies.
We may also use our officers to solicit proxies from shareholders either in
person or by telephone or letter without extra compensation. We will pay all
expenses of this solicitation, which are estimated to be approximately $8,000.
You may revoke your proxy by delivering a written notice of revocation to our
principal office or in person at the Annual 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 Annual Meeting.
Only
shareholders of record at the close of business on January 20, 2009, or the
Record Date, are entitled to notice of, and to vote at the Annual Meeting. Each
share of common stock outstanding on the Record Date is entitled to one vote on
all proposals presented at the Annual Meeting. Series 2 Class B preferred stock,
or Series 2 Stock, has aggregate voting rights equal to 2,000 shares of our
common stock. The preferred stock has voting rights on all matters
that come before the common shareholders for vote. As of the close of business
on the Record Date, we had 3,978,199 shares of common stock outstanding and
2,000 shares of Series 2 Stock outstanding, which means that a total of
3,978,199 votes are eligible to be cast at the Annual Meeting.
A
majority of the outstanding shares of each class or series of voting stock then
entitled to vote, represented in person or by proxy, shall constitute a quorum
at the Annual Meeting. Directors shall be elected by a
plurality of votes cast by the shares entitled to vote in the
election.
If
your shares are held in the name of a brokerage firm, bank, nominee or other
institution (referred to as “in street name”), you will receive instructions
from the holder of record that you must follow in order for you to specify how
your shares will be voted. If you do not specify how you would like your shares
to be voted, your shares held in street name may still be voted. Certain street
name holders have the authority to vote shares for which their customers do not
provide voting instructions on certain routine, uncontested items.
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
us.
This
proxy statement and the accompanying proxy are first being mailed on or about
January 22, 2009 to shareholders of record at the close of business on January
20, 2009.
ITEM
1
ELECTION
OF DIRECTORS
Current
Board of Directors
|
Name
|
Age
|
Position with
Company
|
Since
|
Term
|
Ending
|
|
David
Dumouchel
|
47
|
Director
|
1996
|
3
years
|
2010
|
|
Mark
A. Dumouchel
|
49
|
Chief
Executive Officer, President and Director
|
1995
|
3
years
|
2011
|
|
Robert
J. Landis
|
49
|
Director
|
2004
|
3
years
|
2011
|
|
James
J. Schweiger
|
73
|
Director
|
2002
|
3
years
|
2009
|
|
Gerald
Weston
|
66
|
Director
|
2004
|
3
years
|
2009
|
Our
Board consists of five seats. Two directors are to be elected by a plurality of
the votes cast at the Annual
Meeting.
Our Articles of Incorporation, as amended, provide for a staggered Board
designed to elect approximately one-third of the directors each
year.
The
nominees for the Board are set forth below. The proxy holders intend to vote all
proxies received by them for the nominees for director listed below unless
instructed otherwise. In the event that either of the nominees is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for a 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 that either of the nominees is unable or will
decline to serve as a director.
Nominees
for Election to Board of Directors
|
Name
|
Age
|
Position with
Company
|
Since
|
Term
|
|
James
J. Schweiger
|
73
|
Director
|
2002
|
3
years
|
|
Gerald
Weston
|
66
|
Director
|
2004
|
3
years
|
James J. Schweiger
has been
one of our Class C directors since January 2002. Mr. Schweiger is also Chairman
of our Audit Committee, and a member of our Compensation Committee and Stock
Option Committee. Mr. Schweiger is currently President and CEO of James J.
Schweiger Financial Consultants, Orlando Florida, a position he has held since
1986. From 1969 to 1986, Mr. Schweiger was an Area Managing Partner in the firm
of KPMG Main Hurdman in charge of the Ft. Lauderdale/Miami Florida office,
Northeastern Regional Managing Partner and later served as the Southern Area
Director. From 1980 to 1985 he served on our Policy Board and Management
Committee. He was previously a Board member of AICPA on accounting for real
estate transactions. From 1989 to 1992, Mr. Schweiger served as
Treasurer/Director on the EASE Foundation Board (a charitable foundation in
Davie Florida). Mr. Schweiger graduated from Duquesne University, Pittsburgh,
Pennsylvania in 1961, with a BS degree in Business Administration.
Gerald Weston
has been one of
our Class C directors since December 2004. Mr. Weston is also a member of our
Audit Committee, Compensation Committee and Stock Option Committee. Mr. Weston
is a Certified Public Accountant and is an owner of an accounting firm, where he
has worked since 1985. From 1982 to 1985, Mr. Weston was an Audit Manager in the
firm Kern, DeWenter, Viere, CPA’s in St. Cloud, Minnesota. Prior to 1982, he had
various positions and served in the United States Air Force. Mr. Weston received
a Bachelors of Science Degree in Accounting from St. Cloud State University, St.
Cloud, Minnesota in 1979.
The
election of directors requires a plurality of votes cast by the shares entitled
to vote at the Annual Meeting.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR BOTH OF THE DIRECTOR
NOMINEES.
Continuing
Directors
David Dumouchel
has been one
of our Class A directors since February 2008. He was one of our
directors from 1996 to 2000. Mr. Dumouchel has been a director of our
wholly owned subsidiary, D.A.W., Inc., or D.A.W., since August
1996. Additionally, Mr. Dumouchel has been a Vice President of D.A.W.
since 1988. Mr. Dumouchel is a registered pharmacist in the State of
Massachusetts. Mr. Dumouchel received his Bachelors of Science degree
in Pharmacy from Purdue University in 1983 and his Masters of Business
Administration from Amos Tuck School at Dartmouth College in 1986.
Mark A. Dumouchel
has been our
Chief Executive Officer and President and a Class B director since February
2008. He was one of our directors from 2004 to 2005. He
has been president and director of D.A.W. since 1990. He is a
registered pharmacist in the State of Massachusetts and has over 32 years
experience working in and running pharmacies. Mr. Dumouchel serves as
a director of Northeast Pharmacy Services Corporation. He received his Bachelors
of Science degree in Pharmacy from Massachusetts College in 1982 and his Masters
of Business Administration from Babson College in 1984.
Robert J. Landis
has been one
of our Class B directors since December 2004. Mr. Landis is also a member of our
Audit Committee and Chairman of our Compensation Committee. Mr. Landis has
served as Chairman of the Board of Directors since January 2000 and as Chief
Financial Officer and Treasurer since July 1998 of Comprehensive Care
Corporation, or CompCare. CompCare provides behavioral health, substance abuse,
and employee assistance programs for governmental agencies, managed care
companies and employer groups throughout the United States, headquartered in
Tampa, Florida. Mr. Landis also serves on the Board of Directors and on the
audit committee of Global Axcess Corporation. Mr. Landis served as Treasurer of
Maxicare Health Plans, Inc. from November 1988 to July 1998. Mr. Landis is a
Certified Public Accountant. He received a Bachelors Degree in Business
Administration from the University of Southern California in 1981 and a Masters
Degree in Business Administration from California State University at Northridge
in 1990.
Family
Relationships
David
Dumouchel and Mark A. Dumouchel are brothers.
Communications
with the Board of Directors
We
have adopted a procedure to enable our shareholders to communicate in writing
with the Board, with committees of the Board or with any individual director or
directors. Shareholders may send communications directly to: Nyer Board of
Directors, c/o Directors, 13 Water Street, Holliston, Massachusetts 01746. Such
communications will be screened for appropriateness before notifying the members
of the Board or any committee thereof, as the case may be, of receipt of a
communication and forwarding it to the appropriate person or
persons.
Please
note that the foregoing procedure does not apply to (i) shareholder proposals
pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, and communications made in connection with such proposals or
(ii) service of process or any other
notice
in a legal proceeding. For information concerning shareholder proposals, see
“Deadline for Submission of Shareholder Proposals” in this proxy
statement.
Independence
of Directors
The
Board has determined that each of Messrs. Landis, Schweiger and Weston is an
independent director in that he does not have any relationship that, in the
opinion of the Board, would interfere with the exercise of independent judgment
in carrying out the responsibilities of a director and is not in any
relationship specified in Nasdaq Rule 4200(a)(15) that precludes a determination
of independence. None of the independent directors is or has been party to any
transactions, relationships or arrangements with us other than serving as
director.
Executive
Sessions of Independent Directors
In
accordance with Nasdaq Rule 4350(c)(2), the independent directors of the Board
have regularly scheduled meetings in executive session, at which only the
independent directors are present (together with counsel, if requested by the
independent directors), at least twice a year in conjunction with regularly
scheduled Board meetings, and more frequently whenever deemed desirable or
appropriate or whenever the full Board has a meeting.
Board
Meetings and Committees
The
Board met six times during the fiscal year ended June 30, 2008, and acted by
unanimous written consent twice. Each person who served as a director during the
fiscal year ended June 30, 2008 attended in excess of 75% of the aggregate of
(i) the total number of meetings of the Board held during such fiscal year and
(ii) the total number of meetings held during such fiscal year by each committee
of the Board, on which such director served.
The
Board has a standing audit, compensation and stock option committees. As noted
below, the Board does not have a nominating committee.
Audit
Committee Meetings
Our
audit committee members consist of Mr. Schweiger, Chairman, and Messrs. Landis
and Weston. The audit committee’s function is to oversee our financial reporting
process. The audit committee met five times during the fiscal year ended June
30, 2008. Our board of directors adopted a written charter for the audit
committee on June 12, 2000, which charter was amended and restated in January 3,
2009 and appears on our website at www.nyermedicalgroup.com. (Click “Financial
Information” and then “Audit Committee Charter.”) Each member of the audit
committee is “independent”, as that term is defined in Rule 10A-3(b)(1)
promulgated under the Exchange Act, and each such member satisfies the
requirements of the Nasdaq rules relating to audit committee membership. The
Nasdaq rules require at least three independent directors who have, among other
things, financial literacy and experience and at least one member who
has past employment experience in
finance or accounting, requisite professional certification in accounting, or
any other comparable experience or background which results in the individual’s
financial sophistication
. Securities and Exchange Commission,
or SEC, rules require that one member of the audit committee may qualify as an
“audit committee financial expert” under
Regulation
S-K. Although more than one member of our audit committee may so qualify, Mr.
Schweiger, the committee chairman, is designated audit committee financial
expert.
Compensation
Committee Meetings
Our
compensation committee members consist of Mr. Landis, Chairman, and Messrs.
Schweiger and Weston. The compensation committee’s function is to
oversee the compensation of Company’s executive officers and does not have a
charter. The compensation committee met once during the fiscal year ended June
30, 2008. The compensation committee makes recommendations on the compensation
of our executive officers to our Board of Directors and our Board of Directors
makes the final compensation determination. As discussed below under
“2008 Executive Compensation Components” our current executive officers’
compensation is determined pursuant to existing employment
agreements. Mr. Mark Dumouchel, our President and Chief Executive
Officer and David Dumouchel, a Vice President of D.A.W., do not participate in
the determination of their own compensation or in the compensation of the
other. They do, however, participate in the determination of the
compensation of the other named executive officers.
Nomination
Process
Due
to our small size, our Board does not currently deem it necessary to have a
standing nominating committee or a charter governing
nominations. Nominations are recommended to the full Board by our
independent directors. Our articles of incorporation state that we shall
nominate persons to serve as members of our Board of Directors and that
directors may be nominated by shareholders as provided in our
Bylaws. Please review the section entitled “Deadline for Submission
of Shareholder Proposals” in this proxy statement for information on the process
for shareholders to nominate directors.
For
identification of nominees, existing directors and officers and other sources
deemed appropriate have been used. Third parties have not been engaged to assist
in the nominee identification process.
We
desire to maintain flexibility in choosing appropriate board candidates and,
therefore, do not require that nominees meet any specific or minimum
qualifications. When evaluating potential director candidates, factors are
considered as deemed appropriate, including the candidate’s independence,
character, judgment, financial literacy, business and professional skills and
experience. All nominees are expected to be able to commit the time and effort
necessary to fulfill their duties and responsibilities as one of our
directors.
Stock
Option Committee Meetings
Our
stock option committee members consist of Mr. Schweiger and Mr. Weston. Mr.
Schweiger has been a member since 2002, and Mr. Weston has been a member since
2004. The stock option committee’s function is to administer our 2002 Stock
Option Plan. The stock option committee met once during the fiscal year ended
June 30, 2008.
Attendance
at Meetings
Our
Board meetings are scheduled at times that are mutually convenient for all
members in order to ensure full attendance of the Board of Directors. All
directors attended our annual meeting of shareholders held in February
2008.
OTHER
MATTERS
The
Board has no knowledge of any other matters, which may come before the Annual
Meeting and does not intend to present any other matters. However, if any other
matters shall properly come before the Annual Meeting or any adjournment
thereof, the individuals named in the enclosed form of proxy will have the
discretion to vote as they see fit unless directed otherwise.
If
you do not plan to attend the Annual 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 able to attend the Annual
Meeting, at your request, we will cancel the proxy.
Executive
Compensation
Summary
Compensation Table
SEC
rules require disclosure regarding executive compensation for anyone serving as
our principal executive officer during the last fiscal year and our two most
highly compensated executive officers, other than our principal executive
officer, who were serving as executive officers at the end of the last completed
fiscal year. Ms. Karen Wright was our principal executive officer
until February 2008, at which point Mr. Mark A. Dumouchel was appointed to such
position. The following individuals are referred to as our “named
executive officers” throughout this proxy statement: (a) Mark A. Dumouchel; (b)
Karen Wright; (c) David Dumouchel; and (d) Wayne Gunter.
The
following table shows compensation earned by our named executive officers during
the fiscal year ended June 30, 2008 and 2007:
|
Summary Compensation
Table
|
|
Name
and
principal
position
|
Year
|
Salary
($)
|
Option
Awards
($)
(1)
|
Non-Equity
Incentive
Plan
Compensation($)
|
All
Other
Compensation($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
Mark
A. Dumouchel President and Chief Executive Officer and President of
D.A.W.
|
2008
|
158,405
(2)
|
7,680
|
21,973
|
16,118
(2)
|
204,176
|
|
2007
|
143,788
|
0
|
14,976
|
16,023
(2)
|
174,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Dumouchel Vice President of D.A.W.
|
2008
|
148,789
|
7,680
|
21,973
|
15,794
(3)
|
194,236
|
|
2007
|
143,788
|
0
|
14,976
|
15,653
(3)
|
174,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wayne
Gunter Vice President of D.A.W.
|
2008
|
148,789
|
5,760
|
21,973
|
16,334
(4)
|
192,856
|
|
2007
|
143,788
|
0
|
14,976
|
16,143
(4)
|
174,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Karen
Wright Chief Financial Officer, Treasurer and Secretary
|
2008
|
110,000
|
5,884
|
0
|
8,673
(5)
|
124,557
|
|
2007
|
102,500
|
7,316
|
0
|
8,054
(5)
|
117,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The option
awards are for serving on our Board of Directors, serving as one of our Officers
and pursuant to employment agreements of executive officers of
D.A.W. The values in the table reflect the dollar amount recognized
for financial statement reporting purposes in accordance with SFAS 123(R)
“Share-Based Payment” during the fiscal year ended June 30, 2008, based on a
fair value of options granted in 2007 and 2008 to Karen Wright for serving as an
officer; in 2008 to Messrs. David and Mark A. Dumouchel for serving as
directors; and pursuant to the employment agreements of each of David and Mark
A. Dumouchel and Wayne Gunter, using the Black-Scholes option pricing model,
which incorporates various assumptions about volatility, expected dividend
yield, expected life, and applicable interest rates, as detailed
in Note 2 to our audited financial statements for the fiscal year
ended June 30, 2008, included in Item 8 in the annual report on Form 10-K for
the fiscal year ended June 30, 2008.
(2) For
the fiscal year ended June 30, 2008, Mark A. Dumouchel’s salary was $149,588
until February 4, 2008, when his salary was increased to $175,000 pursuant to a
new employment agreement. Other compensation includes $8,018 in matching
contributions from our 401(k) plan, a vehicle allowance of $6,700 and officer’s
life insurance of $1,400. For the fiscal year ended June 30, 2007,
Mark A. Dumouchel’s other compensation includes $6,823 in matching contributions
from our 401(k) plan, a vehicle allowance of $7,800 and officer’s life insurance
of $1,400.
(3)
For
the fiscal year ended June 30, 2008, David Dumouchel’s salary was $143,788 until
February 4, 2008, when his salary was increased to $148,789 pursuant to a new
employment agreement.
David Dumouchel’s
other compensation includes $7,634 in matching contributions from our 401(k)
plan, a vehicle allowance of $7,130 and officer’s life insurance of
$1,030. For the fiscal year ended June 30, 2007, David Dumouchel’s
other compensation includes $6,823 in matching contributions from our 401(k)
plan, a vehicle allowance of $7,800 and officer’s life insurance of
$1,030.
(4) For
the fiscal year ended June 30, 2008, Wayne Gunter’s salary was $143,788 until
February 4, 2008, when his salary was increased to $148,789 pursuant to a new
employment agreement. Wayne Gunter’s other compensation
includes $7,634 in matching contributions from our 401(k) plan, a vehicle
allowance of $7,180 and officer’s life insurance of $1,520. For the
fiscal year ended June 30, 2007, Wayne Gunter’s other compensation includes
$6,823 in matching contributions from our 401(k) plan, a vehicle allowance of
$7,800 and officer’s life insurance of $1,520.
(5) For
the fiscal year ended June 30, 2008, Karen Wright’s other compensation includes
$5,073 in matching contributions from our 401(k) plan and a vehicle allowance of
$3,600. For the fiscal year ended June 30, 2007, Karen
Wright’s other compensation includes $4,454 in matching contributions from our
401(k) plan and a vehicle allowance of $3,600.
2008
Executive Compensation Components
|
·
|
Executive
Employment Agreements; Arrangements
|
Effective
February 4, 2008, Mr. Mark A. Dumouchel entered into a new three-year employment
agreement which may be renewed upon agreement of the
parties. Pursuant to his employment agreement, Mr. Mark A. Dumouchel
will be employed as our Chief Executive Officer and President of D.A.W. and will
receive a base salary of $175,000 per year of which we will pay him $43,750 and
D.A.W. will pay him $131,250. The salary shall be increased on each
anniversary date of the employment agreement in an amount equal to the
percentage change over the past twelve months in the average hourly rate paid to
pharmacists employed by D.A.W. Under his employment agreement, D.A.W.
will also pay Mr. Mark A. Dumouchel an annual lump sum payment equal to five
percent of the total amount royalties and licensing fees collected by D.A.W.
during the prior fiscal year, or the “Franchise Payment.
Effective
February 4, 2008, Messrs. David Dumouchel and Wayne Gunter each entered into a
new three-year employment agreement with D.A.W. which may be renewed upon
agreement of the parties, as a pharmacy manager at annual base salary of
$150,000. The annual base salary will be adjusted each anniversary
date of the employment agreement in an amount equal to the percentage change
over the past twelve months in the average hourly rate paid to pharmacists
employed by D.A.W.
Under
their employment agreements, Messrs. Mark and David Dumouchel and Wayne Gunter
will each be entitled to (a) medical, dental, disability and life insurance
coverage consistent with D.A.W.’s policies and plans in existence on the date of
the signing of their respective employment agreements and (b) additional term
life insurance coverage in the amount of $1,000,000 with beneficiaries designed
by each such officer.
Under
the employment agreements, D.A.W. will establish a bonus pool, or the DAW Bonus
Pool, which will be equal to a percentage of income (before deductions for
income taxes and management fees paid to us). The percentage of
income paid into the DAW Bonus Pool is as follows: (i) ten percent (10%) of
income between $450,000 and $900,000; (ii) fifteen percent (15%) of income
between $900,001 and $1,350,000; and (iii) twenty percent (20%) of income in
excess of $1,350,000. Fifty percent (50%) of the DAW Bonus Pool will
be used for bonuses to be paid to the officers under their respective employment
agreements as follows: (i) Mr. Mark A. Dumouchel will receive seventeen percent
(17%), and (ii) Messrs. David Dumouchel and Wayne Gunter will share the
remaining thirty-three percent (33%) in equal lots with two other executive
officers (8.25% each).
Under
the employment agreements, we granted to each of the officers non-qualified
options to purchase 12,000 shares of common stock at an exercise price equal to
the Market Price (as defined in our 2002 Plan) on the date of grant, which was
$1.49 on February 4, 2008. Under the Plan, the Market Price on any
day is, in the sole discretion of the stock option committee administering the
Plan, either (x) the average of the high and low reported consolidated trading
sales prices, or if no such sale is made on such day, the average of the closing
bid and asked prices reported on the consolidated trading listing for such day
or (y) the closing price reported on the consolidated trading listing for such
day. Our stock option committee determined the Market Price based
upon the closing price. The options granted under the employment
agreements will be exercisable in their entirety on February 4,
2009.
Pursuant
to the employment agreements, each of the officers will be entitled to a cash
severance payment in the event that we or D.A.W. terminate the particular
agreement without Cause (as defined in the employment agreement) or the
employment agreement is terminated by the officer for Good Reason (as defined in
the employment agreement) which severance will be equal to the total of (i) one
year of base salary at the salary rate then in effect to the extent allocable as
to D.A.W. and us, as the case may be, but not to exceed the aggregate base
salary then in effect; (ii) the last annual bonus paid to the officer (or, in
the event that the termination occurs before any bonus has been paid, the
annualized bonus for the year in which the termination occurs); and (iii) in the
case of Mr. Mark A. Dumouchel only, the last Franchise Payment paid to Mr. Mark
A. Dumouchel (or, in the event that the termination occurs before any Franchise
Payment has been paid, the annualized Franchise Payment for the year in which
the termination occurs). Additionally, in the event of any termination under an
employment
agreement,
the officer will be entitled to COBRA continuation coverage for six months after
any such termination. The executives each would be entitled to unused vacation
time.
Under
the employment agreements, each of the officers is subject to non-compete and
non-solicitation provisions and a non-disclosure provision. The
non-compete and non-solicitation provisions survive for six months after the
termination of the employment agreements and the non-disclosure provision has no
termination date.
Effective
July 1, 2007, Karen Wright’s annual base salary was increased to $110,000
pursuant to a written agreement between us and Ms. Wright. The terms
of that agreement applied for fiscal year 2008 and for each fiscal year
thereafter until terminated by either party. On March 31, 2008, we
provided Ms. Wright with written notice of our election not to renew her
employment agreement. By Letter Agreement dated March 31, 2008, we
agreed with Ms. Wright to amend her employment agreement to terminate her
positions with us as an employee as of September 30, 2008. Following
September 30, 2008, we will pay to Ms. Wright her base salary of $110,000 over a
period of 52 weeks (less applicable payroll taxes), plus any owed vacation time
(not to exceed three weeks).
In
addition, Ms. Wright’s agreement provided that: (A) she will not disclose
proprietary information relating to us at any time during her tenure with us or
any time thereafter; (B) in the event of her termination (i) for any reason
whatsoever, (ii) pursuant to the action of Ms. Wright or both of Ms. Wright and
us and (iii) whether such termination occurs prior to the end of the
then-current one-year term or otherwise, Ms. Wright agrees that she will not,
for a period of six months following such termination, directly or indirectly
enter into or become associated with or engage in any other business (whether as
a partner, officer, director, shareholder, employee, consultant, or otherwise),
which business is primarily in competition with us, our subsidiaries or
affiliated companies or otherwise become involved in the business of developing
or marketing any such business in the state of Maine, Massachusetts or New
Hampshire in which we, our subsidiaries or our affiliated companies currently
have, or during the term of the employment agreement actively had business; and
(C) Ms. Wright shall not during a twenty-four month period of after
leaving our employ, directly or indirectly, solicit any person who was employed
by us or solicit any existing customer/client or any potential customer/client
that had been actively solicited by us, our subsidiaries or our affiliate
companies (i.e., potential customers/clients that are “in the sales
pipeline”).
On
October 1, 2008, we orally agreed with Ms. Wright to have her remain as our
Chief Financial Officer, Vice President-Finance, Treasurer and Secretary from
October 1, 2008 through October 31, 2008. As compensation for this
additional employment, we paid Ms. Wright $9,167.
|
·
|
Non-Equity
Incentive Payments and Bonuses
|
The
non-equity incentive payments of Messrs. Mark and David Dumouchel and Wayne
Gunter are determined based on the formulas in their employment agreements as
described above. Income for purposes of the DAW Bonus Pool is
calculated before income taxes and the management fees paid to us by
D.A.W.
The
named executive officers may also receive a bonus as may be determined from time
to time by our Board of Directors in its sole discretion, which bonus would be
based upon specific achievement within the fiscal year in which such
compensation would be provided. No discretionary bonuses were paid to
any named executive officer for the fiscal years ended June 30, 2007 or
2008.
We
have two stock option plans under which employees, consultants and directors may
be granted options to purchase shares of our common stock. During the
fiscal year ended June 30, 2008, each of Messrs. Mark and David Dumouchel and
Wayne Gunter received options to acquire 12,000 shares of our common stock
pursuant to their employment agreements, as described above. Ms.
Wright was granted options to acquire 12,000 shares of our common stock at the
discretion of our Board of Directors. Those options are exercisable
at $1.49 per share and vest in six equal installments on each of June 30, 2008,
December 31, 2008, June 30, 2009, December 31, 2009, June 30, 2010 and December
31, 2010.
In
addition, Mr. Mark A. Dumouchel received options to acquire an additional 12,000
shares of our common stock for his service as our director. Those
options are exercisable at $1.49 per share and vest in six equal installments on
each of June 30, 2008, December 31, 2008, June 30, 2009, December 31, 2009, June
3, 2010 and December 31, 2010. Mr. David Dumouchel received options
to acquire an additional 8,000 shares of our common stock for their service as
our director. Those options are exercisable at $1.49 per share and
vest in four equal installments on each of June 30, 2008, December 31, 2008,
June 30, 2009 and December 31, 2009.
We
do not have any severance agreements with our named executive officers other
than those described above pursuant to the employment agreements with each such
officer.
Our
sponsored 401(k) plan is a deferred salary arrangement under Section 401(k) of
the Internal Revenue Code for eligible employees. Participants may elect to
contribute up to 20% of their eligible compensation, as defined. We
match at the rate of 100% of the first 5% and 50% of the next 2%.
Outstanding
Equity Awards at Fiscal Year-end
The
following table shows information of all outstanding equity awards held by our
named executive officers during fiscal year ended June 30, 2008:
|
|
Number of shares underlying unexercised options
|
|
|
|
Name
|
Exercisable (#)
|
Unexercisable (#)
|
Option
Exercise
Price $
|
Option
Expiration
Date
|
|
|
|
|
|
|
|
Mark
A. Dumouchel
|
4,000
|
-
|
2.44
|
03/21/14
|
|
|
2,000
|
-
|
2.91
|
03/29/15
|
|
|
2,000
|
10,000
(1)
|
1.49
|
02/03/18
|
|
|
|
|
1.49
|
02/03/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Dumouchel
|
2,000
|
-
|
3.38
|
08/09/08
|
|
|
2,000
|
6,000
(3)
|
1.49
|
02/03/18
|
|
|
|
|
1.49
|
02/03/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wayne
Gunter
|
|
|
1.49
|
02/03/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Karen
Wright
|
6,000
|
-
|
6.44
|
10/24/09
|
|
|
12,000
|
-
|
3.15
|
10/25/11
|
|
|
35,000
|
-
|
1.71
|
12/05/12
|
|
|
12,000
|
-
|
1.95
|
10/01/14
|
|
|
4,000
|
-
|
1.88
|
06/24/17
|
|
|
|
|
1.49
|
02/03/18
|
|
|
|
|
|
|
1)
These options are exercisable for 2,000 shares on each of 12/31/08, 06/30/09,
12/31/09, 06/30/10 and 12/31/10.
2)
These options are exercisable for 12,000 shares on 02/04/09 as part of an
employment agreement.
3)
These options are exercisable for 2,000 shares on each of 12/31/08, 06/30/09 and
12/31/09.
Director
Compensation
The
following table shows information regarding compensation paid to directors who
are not named executive officers for the fiscal year ended June 30,
2008:
|
Name
|
Fees
Earned or Paid
Paid in Cash ($)
|
Option Awards ($)(1)
|
Total ($)
|
|
Current
directors*
|
|
|
|
|
Robert
J. Landis
|
7,900
|
8,817
|
16,717
|
|
James
J. Schweiger
|
9,100
|
8,020
|
17,120
|
|
Gerald
Weston
|
7,400
|
8,020
|
15,420
|
|
|
|
|
|
|
Former
directors*
|
|
|
|
|
Donald
Lewis
(2)
|
0
|
4,010
|
4,010
|
|
Kenneth
Nyer
(2)
|
0
|
6,897
|
6,897
|
* Compensation
paid to Messrs. David Dumouchel and Mark A. Dumouchel, who are current
directors, and Ms. Karen Wright, who served as a director until February 4,
2008, are included in the Summary Compensation Table above and, accordingly, are
not included in this table.
(1)
Reflects the dollar amount recognized for financial statement reporting purposes
in accordance with SFAS 123(R) “Share-Based Payment”. The options
were granted in accordance with our Stock Option Plan with the fair value
calculated using the Black-Scholes option pricing model, which incorporates
various assumptions including expected volatility, expected life of the options
and applicable interest rates.
(2)
Donald Lewis and Kenneth Nyer resigned from the Board of Directors on February
4, 2008.
We
have not paid any cash compensation to any person for serving as a director with
the exception of the members of our Audit Committee, Compensation Committee and
Stock Option Committee, which members receive (a) $600 each per telephone
meeting of the Board of Directors or of a committee of the Board of Directors
and (b) $1,000 each per in-person meeting of the Board of Directors or in-person
meeting of a committee of the Board of Directors, with each Chairman receiving
an additional 50% of the sum which he is to receive under (a) and (b) above with
respect to each meeting. With the exception of the amounts mentioned
in the first sentence of this paragraph, we do 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 2002
Plan. Directors who are employees receive no cash compensation for
serving as directors; however, they are reimbursed for out-of-pocket expenses
incurred in connection with their service as directors and are issued stock
options pursuant to the 2002 Plan. Pursuant to the 2002 Plan, our
directors receive automatic grants of options for 4,000 shares of our common
stock for each year served as a director, with 2,000 of such options vesting
semi-annually each June 30th and December 31st, provided that the optionee is
still serving as a director, as applicable, on such date.
VOTING
SECURITIES AND HOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth the number of our shares of voting stock beneficially
owned as of January 22, 2009 by (i) owners of more than 5% of our voting stock,
(ii) each of our directors and named executive officers, and (iii) all of our
executive officers and directors as a group:
Name
and address of
beneficial
owner
|
Amount
and nature of
1
beneficial
ownership
|
Percentage
of
Voting
Power (%)
|
|
|
|
|
|
Samuel
Nyer
698
Essex Street
Bangor,
ME 04401
|
1,320,774
(2)
|
14.6
|
|
|
|
|
|
Michael
and Lucille Curry
13
Water Street
Holliston,
MA 01746
|
919,565
(3)
|
11.5
|
|
David
Dumouchel
13
Water Street
Holliston,
MA 01746
|
921,565
(4)
|
11.5
|
|
|
|
|
|
Mark
A. Dumouchel
13
Water Street
Holliston,
MA 01746
|
927,566
(5)
|
11.6
|
|
|
|
|
|
Wayne
Gunter
13
Water Street
Holliston,
MA 01746
|
919,565
(6)
|
11.5
|
|
|
|
|
|
Donato
Mazzola
13
Water Street
Holliston,
MA 01746
|
925,965
(7)
|
11.6
|
|
|
|
|
|
Robert
J. Landis
1292
Hammond Street
Bangor,
Maine 04401
|
14,000
(8)
|
*
|
|
|
|
|
|
James
J. Schweiger
1843
Morning Sky Drive
Winter
Haven, FL 34787
|
34,000
(9)
|
*
|
|
|
|
|
|
Gerald
Weston
1292
Hammond Street
Bangor,
ME 04401
|
14,000
(10)
|
*
|
|
|
|
|
|
Karen
L. Wright
1292
Hammond Street
Bangor,
ME 04401
|
72,100
(11)
|
*
|
|
|
|
|
|
All
our directors and executive
|
|
|
|
officers
as a group (nine persons)
________________
*
less than 1% of class
|
4,748,326
3,4,5,6,7,8,9,10 & 11
|
58.4
|
1
Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange
Act and includes any options and warrants which vest within 60 days of January
22, 2009, i.e., by March 23, 2009. Unless otherwise noted, we believe
that all persons named in the table have sole voting and investment power with
respect to all voting securities beneficially owned by them.
2 This
information is as of February 8, 2008 and is based solely on a Form 4/A filed
with the SEC on such date except for options to acquire 12,000 shares of common
stock that expired since the date of such Form 4/A. Includes 272,774
shares of common stock (of which 183,174 shares are held by an
affiliate of Mr. Nyer), 548,000 shares of common stock underlying options
granted to Mr. Nyer pursuant to the 1993 Plan and the 2002 Plan. Also
includes 500,000 vested non-qualified options granted pursuant to Mr. Nyer’s
1999 employment agreement, as amended. All of Mr. Nyer’s 1,048,000
granted stock options are vested and currently exercisable.
3 Includes
400 shares of Series 2 Stock which carry the right to 2,000 votes per share on
any matter put to a vote of the common stock (equivalent to an aggregate of
800,000 votes of common stock) and 119,565 shares of common stock. The Curry’s
are married to one another and thus beneficially own, with the shared power to
vote and shared power to dispose of, these securities.
Does not include
108,695 shares of common stock issuable upon conversion of convertible
promissory notes that Ms. Curry does not intend to convert until after October
1, 2009.
4 Includes
400 shares of Series 2 Stock which carry the right to 2,000 votes per share on
any matter put to a vote of the common stock (equivalent to an aggregate of
800,000 votes of common stock); 119,565 shares of common stock and 2,000 shares
of common stock underlying options pursuant to the Plans. Does not include
163,043 shares of common stock issuable upon conversion of convertible
promissory notes that Mr. Dumouchel does not intend to convert until after
October 1, 2009.
5 Includes
400 shares of Series 2 Stock which carry the right to 2,000 votes per share on
any matter put to a vote of the common stock (equivalent to an aggregate of
800,000 votes of common stock); 119,566 shares of common stock and 8,000 shares
of common stock underlying options pursuant to the Plans. Does not include
163,043 shares of common stock issuable upon conversion of convertible
promissory notes that Mr. Dumouchel does not intend to convert until after
October 1, 2009.
6 Includes
400 shares of Series 2 Stock which carry the right to 2,000 votes per share on
any matter put to a vote of the common stock (equivalent to an aggregate of
800,000 votes of common stock) and 119,565 shares of common stock. Does not
include 163,043 shares of common stock issuable upon conversion of convertible
promissory notes that Mr. Gunter does not intend to convert until after October
1, 2009.
7 Includes
400 shares of Series 2 Stock which carry the right to 2,000 votes per share on
any matter put to a vote of the common stock (equivalent to an aggregate of
800,000 votes of common stock) and 119,965 shares of common stock and 6,000
shares of common stock underlying options pursuant to the Plans. Does not
include 163,043 shares of common stock issuable upon conversion of convertible
promissory notes that Mr. Mazola does not intend to convert until after October
1, 2009.
8 Consists
of 14,000 shares of common stock underlying vested options granted pursuant to
the Plans.
9 Consists
of 34,000 shares of common stock underlying vested options granted pursuant to
the Plans.
10 Consists
of 14,000 shares of common stock underlying vested options granted pursuant to
the Plans.
11 Ms.
Wright was our Chief Financial Officer, Vice President-Finance, Treasurer and
Secretary until October 31, 2008. Includes 71,000 shares of common
stock underlying vested options granted pursuant to the Plans and 1,100 shares
of common stock held by an ADCO employee
investment club
by which Ms. Wright owns 220 shares. The common stock held in the
investment club is considered beneficially owned by Ms. Wright as she has voting
and investment power over this stock.
Additional
Information
Report
on Executive Compensation
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our executive officers and directors, and
persons who own more than 10% of a registered class of our equity securities to
file reports of ownership and changes in ownership with the SEC. These persons
are also required by SEC regulation to furnish us with copies of all Section
16(a) forms they file. Based solely on our review of such forms or
written representations from reporting persons, we believe that during the
fiscal year ended June 30, 2008, our executive officers and directors and other
reporting persons complied with the filing requirements of Section
16(a).
Audit
Committee Report*
The
Audit Committee is directly responsible for, among other things, the
appointment, compensation, retention and oversight of our independent auditors.
Additionally, the Audit Committee must pre-approve all audit and non-audit
services performed by our independent auditors. Management is responsible for
the financial reporting process, including the system of internal controls, and
for the preparation of consolidated financial statements in accordance with
accounting principles generally accepted in the United States. Our independent
auditors, Sweeney, Gates & Co., were responsible for auditing those
financial statements. However, the functions of the members of the Audit
Committee are not intended to duplicate or to certify the activities of
management and the independent auditors. Rather, we rely, without independent
verification, on the information it is provided and on the representations made
by management and the independent auditors.
The
Audit Committee hereby reports as follows:
1.
The
Audit Committee has reviewed and discussed the audited financial statements with
our management.
2.
The
Audit Committee has discussed with Sweeney, Gates & Co. the matters required
to be discussed by Statement on Auditing Standards No. 61, as amended, as
adopted by the Public Accounting Oversight Board in Rule 3200T.
3.
The
Audit Committee has received the written disclosures and the letter from
Sweeney, Gates & Co. required by applicable requirements of the Public
Company Accounting Oversight Board regarding the independent accountant’s
communications with the audit committee concerning independence, and has
discussed with Sweeney, Gates & Co. its independence from us. When
considering Sweeney, Gates & Co.’s independence, the Audit Committee
considered whether its provision of services to us beyond those rendered in
connection with its audit and review of our consolidated financial statements
was compatible with maintaining its independence and determined that such
services were indeed compatible. The Audit Committee also has reviewed, among
other things, the amount of fees paid to Sweeney, Gates & Co. for audit and
non-audit services.
4. Based
on the reviews and discussions referred to in paragraphs (1) through (3) above,
the Audit Committee recommended to our Board of Directors the audited financial
statements be included in our annual report on Form 10-K for the fiscal year
ended June 30, 2008, which was filed with the SEC on October 10,
2008.
The
Audit Committee
Robert
J. Landis,
Chairman
James
J. Schweiger
Gerald
Weston
*
The material in this report is not soliciting material, is not deemed filed with
the SEC, and is not incorporated by reference in any of our filings under the
Exchange Act, whether made before or after the date of this proxy statement and
irrespective of any general incorporation language in such filing.
Principal
Accountant Fees and Services
Our
Audit Committee appointed Sweeney, Gates & Co. as our independent registered
public accounting firm for our fiscal years ended June 30, 2008 and June 30,
2007. The fees for services provided by Sweeney, Gates & Co. to
us for the fiscal years ended June 30 were as follows:
|
|
|
2008
|
|
|
2007
|
|
|
Audit
Fees(1)
|
|
$
|
143,145
|
|
|
$
|
140,100
|
|
|
Audit-Related
Fees(2)
|
|
|
3,550
|
|
|
|
5,100
|
|
|
Tax
Fees(3)
|
|
|
21,789
|
|
|
|
26,000
|
|
|
All
Other Fees(4)
|
|
|
0
|
|
|
|
0
|
|
|
Total
Fees
|
|
$
|
168,484
|
|
|
$
|
171,200
|
|
(1) Audit
Fees include professional services rendered for the audits of our annual
financial statements for the fiscal years ended June 30, 2008 and June 30, 2007,
and for review of the financial statements included in our quarterly reports on
Form 10-Q during the last two fiscal years.
(2) Audit
Related Fees include professional services rendered for assurance and related
services that are reasonably related to the performance of the audit and reviews
of our financial statements. Such services in June 30, 2008 were for
research of accounting treatments and June 30, 2007 were for attending an
audit committee meeting and research of accounting treatments.
(3)
Tax Fees include professional services rendered for tax compliance work, tax
planning and tax advice.
(4)
Sweeney, Gates & Co. did not provide us or our subsidiaries with any
other services during the fiscal years ended June 30, 2008 and June 30, 2007,
respectively.
The
charter of the Audit Committee requires that the Committee review and
pre-approve all audit, review or attest engagements of, and non-audit services
to be provided by the independent registered public accounting firm (other than
with respect to the de minimis exception permitted by the Sarbanes-Oxley Act of
2002 and the SEC rules promulgated thereunder). The Audit Committee
pre-approved all audit services and permitted non-audit services rendered by
Sweeney, Gates & Co. in our fiscal years ended June 30, 2008 and June 30,
2007. The pre-approval duty may be delegated to one or more
designated members of the Audit Committee, with any such pre-approval reported
to the Committee at its next regularly scheduled meeting. Any such
designated member(s) of the Committee shall also have the authority to approve
non-audit services already commenced by the independent registered public
accounting firm if (i) the aggregate amount of all such services provided
constitutes no more than 5% of the total amount of revenues paid by us to the
independent registered public accounting firm during the fiscal year in which
the services are provided, (ii) such services were not recognized by us at the
time of the engagement to be non-audit services, and (iii) such services are
promptly brought to the attention of the Committee and approved by such
designated member(s) prior to the completion of the audit.
Change
of Control
Purchase
of Minority Interest in D.A.W. and Change of Control
In
February 2008, we acquired the remaining 20% of the outstanding common stock of
D.A.W. through a series of transactions, or the Acquisition. In
consideration for the Acquisition, we paid and issued the following: (1) a cash
payment of $1,750,000 (which we borrowed from D.A.W. and which was funded by
increased credit terms by D.A.W.’s major supplier), (2) shares of the Series 2
Stock, a newly-created series of convertible Series 2 Class B preferred stock
which are initially convertible into 218,000 shares of our common stock and have
the same aggregate 4,000,000 voting rights as our then existing Class A
preferred stock, or the Class A Stock, and Class B preferred stock, or the Class
B Stock, (3) a promissory note in the aggregate principal amount of $350,000,
and (4) convertible promissory notes in the aggregate principal amount of
$1,500,000, convertible into our common stock at an initial conversion price of
$1.84 per share, subject to adjustment.
Also
in February 2008, we purchased from Mr. Samuel Nyer 2,000 shares of Class A
Stock and 1,000 shares of Class B Stock held by Mr. Nyer (which represented all
of the then issued and outstanding shares of such preferred stock) in exchange
for a promissory note in the amount of $400,000. Further, the former
minority shareholders of D.A.W., or the Minority Shareholders, purchased from
Nyle International Corp., or Nyle, a corporation controlled by Mr. Nyer, 597,826
shares of our common stock.
As
a result of the Acquisition, the purchase by the Minority Shareholders from
Nyle, repurchase of shares from Mr. Nyer and the appointment of Mark and David
Dumouchel to fill director and officer vacancies, we experienced a change of
control with the Minority Shareholders owning an aggregate of approximately 58%
of the voting power of our outstanding common stock.
There
are no arrangements, known to us, including any pledge by any person of its
securities, the operation of which may at a subsequent date result in a change
in our control.
Deadline
for Submission of Shareholder Proposals
Our
Bylaws provide that any shareholder proposal intended to be presented at any
annual meeting of shareholders must be received by our Secretary at least 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, such proposal must be received
not later than the close of business on the 15
th
day
following the day on which notice of the date of the meeting was mailed or such
public disclosure was made, whichever first occurs. A shareholder with the power
to vote at least ten percent of our then-outstanding voting securities may
nominate a director following the procedures outlined in the preceding
sentence.
If
we hold our annual meeting of shareholders for the fiscal year ending June 30,
2009 on or about the same time as this year’s Annual Meeting, any shareholder
proposal intended to be included in our proxy statement must be received at the
executive offices of us not later no later than 120 calendar days before the
anniversary of the release of this proxy statement, and must otherwise satisfy
the conditions established by the SEC and by our Bylaws in order to be
considered
for inclusion in our proxy statement for that meeting. However, if we hold our
annual meeting of shareholders for the fiscal year ending June 30, 2009 on a
date that is more than 30 days earlier or later than this year’s Annual Meeting,
then a shareholder proposal must be received by us at our principal place of
business in a reasonable amount of time prior to when we begin to print and mail
our proxy materials.
Householding
of Annual Meeting Materials
Some banks,
brokers and other record holders of our common stock may participate in the
practice of “householding” proxy statements, annual reports and
notices of internet availability of those documents. This means that, unless
shareholders give contrary instructions, only one copy of our proxy statement,
annual report or notice of internet availability may be sent to multiple
shareholders in each household. We will promptly deliver a separate copy of any
of those documents to you if you call or write to us at the following address:
Nyer Medical Group, Inc., 13 Water Street, Holliston, Massachusetts 07149. If
you want to receive separate copies of our proxy statement, annual report or
notice of internet availability in the future, or if you are receiving multiple
copies and would like to receive only one copy per household, you should contact
your bank, broker or other record holder, or you may contact us at the above
address.
Annual Report on Form
10-K
We
will furnish, without charge to any shareholder submitting a written request a
copy of our annual report on Form 10-K as filed with the SEC including financial
statements and schedules thereto. Such written request should be directed to
Mark A. Dumouchel, President and Chief Executive Officer, 13 Water Street,
Holliston, Massachusetts 07149.
By
Order of the Board of Directors
/s/
Mark A. Dumouchel
Mark
A. Dumouchel,
President
and Chief Executive Officer
Important
Notice Regarding Internet Availability of Proxy Materials for the Annual
Meeting:
The
annual report and proxy statement are available at
www.nyermedicalgroup.com/2009/proxy.
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PROXY
NYER
MEDICAL GROUP, INC.
ANNUAL
MEETING OF SHAREHOLDERS
Monday,
February 23, 2009
9:00
a.m.
Embassy
Suites Boston at Logan Airport
207
Porter Street
Boston,
MA 02128
Mystic
A Meeting Room
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned hereby appoints MARK DUMOUCHEL and DAVID DUMOUCHEL, and each of
them, as proxies of the undersigned, each with the power to appoint his
substitute, and hereby authorizes both of them, or either one if only one be
present, to represent and to vote, as designated on the reverse hereof, all the
common stock, $0.0001 par value per share, of Nyer Medical Group, Inc. held of
record by the undersigned or with respect to which the undersigned is entitled
to vote or act at the Annual Meeting of Shareholders to be held on
February 23, 2009 at 9:00 a.m., local time, or any adjournment or
postponement thereof.
This
proxy when properly executed will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this proxy will be voted FOR
the election of each of the nominees for Director listed in Item 1.
Additionally, the votes entitled to be cast by the undersigned will be cast in
the discretion of the proxy holders on any other business as may properly come
before the Annual Meeting.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY
ENVELOPE
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SEE
REVERSE
SIDE
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CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
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SEE
REVERSE
SIDE
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TO
VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
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NYER
MEDICAL GROUP, INC.
THE
BOARD OF DIRECTORS
RECOMMENDS
A VOTE
“FOR”
ITEM 1.
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For
All
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Withhold
All
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For
All
Except
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To
withhold authority to vote for any individual nominee(s), mark “For All
Except” and write the number(s) of the nominee(s) on the line
below.
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1.
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The
election of two (2) directors of the Nyer Medical Group, Inc. board
of directors for a three-year term or until their successors are elected
and qualified:
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Nominees:
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01)
James Schweiger
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02)
Gerald Weston
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2.
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In
their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting or any adjournment or
postponement thereof.
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THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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Note:
Please sign exactly as your name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by an authorized officer or if a partnership, please
sign in full partnership name by an authorized person.
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Signature
[PLEASE SIGN WITHIN
BOX]
Date
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Signature
(Joint Owners)
Date
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