SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
U.S. MEDICAL GROUP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
U.S. MEDICAL GROUP, INC.
1405 S. ORANGE AVE., SUITE 603
ORLANDO, FL 32806
April 9, 2001
Dear Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of U.S. Medical Group, Inc., to be held on Monday May 14, 2001 at
5:00 p.m., local time, at the Company's offices located at 1405 S. Orange Ave
Suite 603, Orlando, FL 32806.
The matters to be acted upon at the Annual Meeting, as well as other
important information, are set forth in the accompanying Notice of Annual
Meeting and Proxy Statement which you are urged to review carefully. There will
also be a brief report on the current status of our business.
Regardless of your plans for attending in person, it is important that
your shares be represented and voted at the Annual Meeting. Accordingly, after
reading the Notice of Annual Meeting and Proxy Statement, you are requested to
complete, sign, date and return the enclosed proxy card in the enclosed postage
paid envelope. Signing this proxy will not prevent you from voting in person
should you be able to attend the meeting, but will assure that your vote is
counted if, for any reason, you are unable to attend.
We hope that you can attend the 2001 Annual Meeting of Stockholders. On
behalf of the Officers and Directors of U.S. Medical Group, Inc. I thank you for
your interest in the affairs of U.S. Medical Group, Inc.
Sincerely,
/S/ Thomas F. Winters
---------------------
Thomas F. Winters
Chairman of the Board of Directors
and Chief Executive Officer
U.S. MEDICAL GROUP, INC.
1405 S. ORANGE AVE., SUITE 603
ORLANDO, FL 32806
(407) 849-2288
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of U.S.
Medical Group, Inc., a Nevada corporation (the "Company") will be held at 1405
S. Orange Ave, Suite 603, Orlando, FL 32806 at 5:00 p.m., local time on May 14,
2001, for the following purposes:
1. To elect 3 persons to serve as directors of the Corporation until the
next annual meeting of stockholders;
2. To ratify and approve the adoption of the Company's 2000 Stock
Incentive Plan;
3. To ratify the selection of Stefanou & Company, LLP as the Corporation's
accountants and independent auditors; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on April 2, 2001,
are entitled to notice of and to vote at the meeting, or any adjournment
thereof. A complete list of such stockholders will be available for examination
at the offices of the Company in Orlando, Florida for ten business days prior to
the meeting.
Stockholders unable to attend the Annual Meeting in person are
requested to read the enclosed Proxy Statement and then complete and deposit the
Proxy with the Company's transfer agent, Pacific Stock Transfer Co., Inc., 5844
South Pecos Road, Las Vegas, NV 89120 before the time of the Annual Meeting or
adjournment thereof or with the chairman of the Annual Meeting, 1405 S. Orange
Ave., Suite 603, Orlando, FL 32806 prior to the commencement thereof.
Unregistered Stockholders who received the Proxy through an intermediary must
deliver the Proxy in accordance with the instructions given by such
intermediary. A Proxy may be revoked by a shareholder at any time before the
effective exercise thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Orlando, Florida
April 9, 2001 /S/ Thomas F. Winters
----------------------------------------
Thomas F. Winters, Chairman of the Board
of Directors and Chief Executive Officer
THE PROXY STATEMENT WHICH ACCOMPANIES THIS NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS CONTAINS MATERIAL INFORMATION CONCERNING THE MATTERS TO BE
CONSIDERED AT THE MEETING, AND SHOULD BE READ IN CONJUNCTION WITH THIS NOTICE.
Please sign the enclosed proxy and return it promptly in the enclosed
envelope. If mailed in the United States, no postage is required.
U.S. MEDICAL GROUP, INC.
1405 S. ORANGE AVE., SUITE 603
ORLANDO, FL 32806
(407) 849-2288
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PROXY STATEMENT
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INTRODUCTION
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION
OF PROXIES BY THE BOARD OF DIRECTORS OF U.S. MEDICAL GROUP, INC., A NEVADA
CORPORATION (THE "COMPANY"), FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON MAY 14, 2001.
A copy of the Company's report with financial statements for the year
ended December 31, 2000 is enclosed. This proxy statement and form of proxy were
first sent to stockholders on or about April 9, 2001.
Only stockholders of record as of the close of business on April 2,
2001 will be entitled to notice of and to vote at the meeting and any
postponement or adjournments thereof. As of that date, 13,655,380 shares of
Common Stock of the Company were issued and outstanding. Each share outstanding
as of the record date will be entitled to one vote, and stockholders may vote in
person or by proxy. Execution of a proxy will not in any way affect a
stockholder's right to attend the meeting and vote in person. Any stockholder
giving a proxy has the right to revoke it at any time before it is exercised by
written notice to the Secretary of the Company or by submission of another proxy
bearing a later date. In addition, stockholders attending the meeting may revoke
their proxies at any time before they are exercised.
If no contrary instructions are indicated, all properly executed
proxies returned in time to be cast at the meeting will be voted FOR: (i) the
election of the directors nominated herein, (ii) the ratification of the
adoption of the Company's 2000 Stock Incentive Plan, and (iii) the ratification
of the selection of the auditors. Members of the Company's management intend to
vote their shares in favor of each of the proposals. A quorum for the meeting
requires the presence in person or by proxy of stockholders entitled to cast a
majority of the votes entitled to be cast at the meeting. Absentions and broker
non-votes will be counted towards a quorum. The election of directors requires a
plurality of the votes cast at the meeting. The ratification of the adoption of
the Company's 2000 Stock Incentive Plan and the confirmation of the auditors
require the affirmative vote of a majority of the shares present at the meeting.
Stockholders will vote at the meeting by ballot and votes cast at the
meeting in person or by proxy will be tallied by the inspector of elections to
be appointed for the Annual Meeting. Shares held by stockholders present in
person at the meeting who do not vote and Ballots marked "abstain" or "withheld"
will be counted as present at the meeting for quorum purposes, but will not be
counted as part of the vote necessary to approve the proposals for the election
of directors or the confirmation of the auditors.
1
The solicitation of proxies will be made primarily by mail. Proxies may
also be solicited personally and by telephone or telegraph by regular employees
of the Company, without any additional remuneration. The cost of soliciting
proxies will be borne by the Company. The Company will also make arrangements
with brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to beneficial owners of stock held of record by such
persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses in forwarding solicitation material.
The Company knows of no other matter to be presented at the meeting. If
any other matter should be presented at the meeting upon which a vote properly
may be taken, then the persons named as proxies will use their own judgment in
voting shares represented by proxies.
ELECTION OF DIRECTORS
The directors of the Company are elected annually and hold office until
the next annual meeting and until their successors have been elected and have
qualified. The Company's Board of Directors (the "Board") is currently comprised
of three Directors. PROXIES CANNOT BE VOTED FOR A GREATER NUMBER OF PERSONS THAN
THE NUMBER OF NOMINEES NAMED.
Any stockholder submitting a proxy has the right to withhold authority
to vote for an individual nominee to the Board by writing that nominee's name in
the space provided on the proxy. Shares represented by all proxies received by
the Company and not marked to withhold authority to vote for any individual
director or for all directors will be voted FOR the election of all of the
nominees named below. The Company knows of no reason why any nominee would be
unable to serve, but if such should be the case, proxies will be voted for the
election of some other person.
NOMINEES FOR DIRECTORS
The Board has nominated the following persons to serve as the Company's
directors, and all proxies not marked otherwise will be voted for the nominees
for a term expiring at the Annual Meeting in 2002:
Dr. Thomas Winters has served as the Chairman and CEO of American
Mobile Surgical Services, Inc., the Company's predecessor ("AMSSI"), since April
1997, as its President from January 1996 to March 1999 and as Chairman and CEO
of the Company since March 31, 1999. From August 1986 to January 1996 Mr.
Winters was a partner with Matthews Orthopedic in Orlando, Florida. Dr. Winters
graduated from Brown University and thereafter in 1980 received his medical
degree from the University of Connecticut. He has completed fellowships in
Trauma. Sports Medicine and Adult Reconstructive Surgery at the Brigham and
Women's Hospital of Harvard Medical School. He has worked in free-standing
surgery centers since the late 1980's and was instrumental in the start-up of
such a surgery center in Orlando, Florida prior to the formation of AMSSI.
2
Richard Langley has served as a Director and the President of the
Company since March 31, 1999 and as Director and Vice President of AMSSI since
January 13, 1997. From 1964 to present, Mr. Langley has bought, sold and
developed residential properties, grown citrus crops and operated a cattle
ranch. From 1992 to 1995 he served as the District School Board Attorney in Lake
County, Florida. Mr. Langley is a University of Florida graduate with B.S.,
L.L.B. and Juris Doctor degrees and has maintained a legal practice in
Claremont, Florida since graduation in 1964. Mr. Langley has 22 years of public
service experience. He was elected to the Florida House of Representatives in
1972 and re-elected in 1974 and 1976. In 1980, he was elected to the Florida
Senate. He served as Minority Whip in the House and as Republican Whip and
Republican Leader in the Senate.
Sandra Thompson has served as a Director, Treasurer and Secretary of
the Company since March 31, 1999 and as Director, Treasurer and Secretary of
AMSSI since January 13, 1997. From 1992 to 1997, Ms. Thompson was the Director
of Nursing of the Orlando Center for Outpatient Surgery in Orlando, Florida
where she coordinated all nursing functions for the Center. She has worked as a
Registered Nurse in a number of Florida hospitals and held positions of Staff
Nurse and Operating Room Supervisor. She has designed pre-op and post-op
facilities for a Florida hospital and was Educational Coordinator at the Same
Day Surgery Center in Orlando. Prior to the founding of AMSSI, Ms. Thompson was
Director of Nursing and Risk Manager for four years. Commencing in 1993, at the
Orlando Center for Outpatient Surgery. Ms. Thompson is a 1980 Valencia Community
College graduate and received her Licensed Healthcare Risk Manager license from
the University of Central Florida.
EXECUTIVE OFFICERS; OFFICERS
The following persons serve as the officers indicated:
Principal
Occupation
Name and Address Position Last 5 Years
---------------- -------- ------------
Dr. Thomas Winters Chairman & Medicine
1405 South Orange Chief Executive Officer
Orlando, Florida 32806
Richard Langley Director & Real Estate
1405 South Orange President Development
Orlando, Florida 32806
Sandra Thompson Director Nursing &
1405 South Orange Treasurer & Health Care
Orlando, Florida 32806 Secretary Management
3
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the provisions of Section 16(a) of the Securities Exchange Act of
1934, the Company's officers, directors and 10% beneficial stockholders are
required to file with the SEC reports of their transactions in the Company's
securities. Based solely on a review of the Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, the Company believes that all forms were filed timely by the
Company's officers, directors and 10% beneficial stockholders.
EXECUTIVE COMPENSATION
No compensation in excess of $100,000 was awarded to, received by, or
paid to any executive Officer or Director of the Company during the fiscal years
ended December 31, 2000, 1999, and 1998. As of January 1, 2001, Mr. Winters, Mr.
Langley and Ms. Thompson receive annual salaries of $120,000, $110,000 and
$100,000 respectively. The Company's Directors have not received any other
remuneration for serving as directors. The following tables describe the
compensation of the Company's Chief Executive Officer and President for the last
three fiscal years.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS ($) COMPENSATION ($)
--------------------------- ---- ------ --------- ----------------
Thomas Winters, M.D. 2000 $ 0 $ 0 $ 0
Chief Executive Officer 1999 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0
Mike M. Mustafoglu(1) 2000 $ 0 $ 0 $ 0
President 1999 $ 0 $ 0 $ 0
1998 $ 0 $ 0 $ 0
------------------------
(1) Mr. Mustafoglu was President and a director of the Company from October
1995 to March 1999.
4
LONG TERM COMPENSATION*
SECURITIES
ALL OTHER NAMES AND RESTRICTED UNDERLYING
COMPENSATION STOCK OPTIONS
PRINCIPAL POSITION YEAR AWARD(S)($) SARS($) LTIP PAYOUTS($)
------------------ ---- ----------- ------- ---------------
Thomas Winters, M.D. 2000 -- -- --
Chief Executive Officer 1999 -- -- --
1998 -- -- --
Mike M. Mustafoglu 2000 -- -- --
President 1999 -- -- --
1998 -- -- --
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*The Company has adopted its 2000 Stock Incentive Plan (the "Option Plan"),
subject to Shareholder approval at the Company's Annual Meeting May 14, 2001.
The Company has reserved 500,000 shares for issuance under the terms of the
Option Plan.
No options were granted to the named officers during the fiscal year
ended December 31, 2000.
The Company has not paid any other compensation to any person for
serving as a director of the Company. The Company does not intend to compensate
non-employee directors for serving as directors, except to reimburse them for
expenses incurred in connection with their service as directors and grant them
options to acquire shares of the Company's stock pursuant to option plans that
shall be subject to shareholder approval at a future date. Directors who are
employees of the Company receive no compensation for serving as directors.
INFORMATION CONCERNING THE OPERATION OF THE BOARD OF DIRECTORS
During the year ended December 31, 2000, there were 4 meetings of the
Board of Directors. Each of the directors attended all of the meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company does not have any committees as
of this date.
AUDIT REPORT OF THE BOARD OF DIRECTORS
The Board of Directors of the Company oversees the Company's financial
reporting process.
The Board of Directors has reviewed and discussed the audited financial
statements with the Company's management. The Board of Directors has discussed
with the independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU ss. 380), as currently in
effect. The Board of Directors has received the written disclosures and the
letter from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees), as currently in effect, and has discussed
with the independent accountant the independent accountant's independence.
5
Based on its review and discussions referred to in this report, the
Board determined that the financial statements be included in its Annual Report
on Form 10-KSB for the last fiscal year as filed with the U.S. Securities and
Exchange Commission.
The Board has discussed with the independent auditors the auditor's
independence from management and the Company including the matters in the
written disclosures required by the Independence Standards Board and considered
the compatibility of non-audit services with the auditor's independence.
Thomas F. Winters
Richard Langley
Sandra Thompson
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth data as of March 30, 2001 concerning the
beneficial ownership of common shares by (i) the persons known to the Company to
beneficially own more than 5% of the outstanding common shares, (ii) all
directors and nominees and each Named Executive Officer (as defined under
"Executive Compensation" below) and (iii) all directors and executive officers
as a group.
NAME AND ADDRESS OF SHARES OF COMMON OPTIONS FOR COMMON PERCENTAGE
BENEFICIAL OWNER STOCK OWNED STOCK OWNED TOTAL SHARES OWNED
---------------- ----------- ----------- ------------ -----
Thomas F. Winters 5,250,000 0 5,250,000 38.36%
1405 S. Orange Ave.,
Orlando, FL 32806
Richard Langley, Sr. 2,100,000 0 2,100,000 15.35%
1405 S. Orange Ave.
Orlando, FL 32806
Sandra Thompson 1,295,000(1) 0 1,295,000(1) 9.97%
1405 S. Orange Ave.
Orlando, FL 32806
Daniel Williams 727,500 0 727,500 5.37%
1405 S. Orange Ave.
Orlando, FL 32806
Dr. Lee Adler Trust 500,000 0 500,000 3.65%
1405 S. Orange Ave.
Orlando FL 32806
Marlene Adler Trust 500,000 0 500,000 3.65%
2710 Rew Circle
Suite 100
Ocoee, FL 34761
All officers and directors as a 8,645,000 0 8,645,000 63.68%
group
---------------------------------
(1) Excludes 70,000 shares gifted to children and grandchildren of Ms.
Thompson with respect to which Ms. Thompson denies beneficial
ownership.
6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1999, the Company entered into a Consulting Agreement with
TransGlobal Financial Corporation ("TFC") pursuant to which TFC agreed to
provide certain consulting, advisory and other services to the Company. Other
services include strategic planning services and assisting in identifying,
evaluating and structuring mergers and acquisitions, consolidations, joint
ventures, strategic alliances and fundraising. The Company engaged TFC to
provide such services on an exclusive basis during the three-year period ending
April 25, 2002, provided, however, that the term of the agreement will be
renewed automatically in 12-month increments unless either party notifies the
other 90 days prior to the expiration of the term of the cancellation of the
agreement. Mr. Mike Mustafoglu is the President of TFC.
The agreement provides that TFC waive its retainer fee because the
Company issued TFC 575,000 shares of Common Stock for its services in connection
with the AMSSI acquisition. TFC subsequently transferred 287,500 of such shares
to Richard Langley, Jr. (the son of Richard H. Langley who is a Director and the
President of the Company) in consideration of services rendered with respect to
the merger of AMSSI and a subsidiary of the Company.
With respect to transaction fees, the agreement provides that:
(i) for financing from sources identified by TFC the Company will
pay TFC a seven percent (7%) fee for equity financing and a
three and one-half percent (3.5%) fee for debt financing of
any and all funds from such transactions that are committed
and available to the Company;
(ii) in the event that TFC represents the Company with respect to a
merger, acquisition, investment, exchange, or other securities
or assets transaction of the Company, then the Company will
pay TFC a fee equal to ten percent (10%) of the total market
value on the day of the closing of stock, cash, assets and all
other property (real or personal) exchanged or received,
directly or indirectly, by the Company, or any of its security
holders, in connection with any such transaction; and
(iii) in the event TFC introduces the Company to a joint venture
partner or customer and sales develop as a result of the
introduction, the Company will pay a fee of two percent (2%)
of the net sales revenue generated directly from this
introduction.
To date, TFC has provided general financial advisory services to the
Company pursuant to the Consulting Agreement. Such services have included
planning and review, business plan development, identification of financing
sources and evaluation of strategic partner opportunities. TFC has informed the
Company that it does not engage in the business of buying and selling securities
for others or for its own account or advising others, for compensation, as to
the value of securities or the advisability of investing in, purchasing or
selling, securities. TFC has further informed the Company that it is not
currently licensed as a broker-dealer or investment advisor and that TFC is not
required to be so licensed to perform the activities called for under the
Consulting Agreement. TFC has agreed with the Company that if any such
activities are required to be performed by a licensed broker-dealer or
investment advisor, TFC will take the appropriate steps to obtain such licenses
or will inform the Company that it must retain a licensed broker-dealer or
investment company, as appropriate, to perform such activities.
7
RATIFICATION OF ADOPTION OF
2000 STOCK INCENTIVE PLAN
The Company's Board of Directors has adopted, subject to the approval
of the Company's stockholders, the Company's 2000 Stock Incentive Plan (the
"Plan"). The Board has reserved 500,000 shares of the Company's Common Stock for
issuance pursuant to the exercise of options issued under the Plan. A copy of
the proposed Plan is attached as Exhibit A.
The Board believes that stock options are important to promote the
interest of the Company and its stockholders by strengthening the Company's
ability to attract and retain competent executives and other employees, to make
service on the Company's Board of Directors more attractive to present and
prospective non-employee directors and to provide a way to encourage stock
ownership and proprietary interest in the Company by non-employee directors and
valued executives and other employees upon whose judgment, initiative and
efforts the financial success and growth of the Company largely depend. The
Board believes that its stock option plans are an essential component of the
Company's compensation package which enables the Company to attract and retain
qualified management in order to maintain and strengthen the Company's
competitive position in an industry that is highly fragmented, rapidly
consolidating and characterized by intense competition.
SUMMARY OF THE PLAN
Under the terms of the Plan, the Board or a Committee designated by the
Board may issue options or shares of stock to those persons whom the Board deems
to be "key employees" of the Company or any of its subsidiaries and who may
include officers and directors of the Company and to consultants and directors
who are not employees of the Company. However, no director may vote upon the
grant to himself. The awards to be granted under the Plan may be incentive stock
options eligible for favored treatment under Section 422 of the Internal Revenue
Code of 1986 (the "Code"), non-qualified options that are not eligible for such
treatment or stock of the Company which may be subject to contingencies or
restrictions. Approximately twenty employees, officers and directors of the
Company are currently eligible to participate in the Plan.
The exercise price for any incentive stock option ("ISO") may not be
less than 100% of the fair market value of the stock on the date the option is
granted, except that with respect to a participant who owns more than 10% of the
Company's common stock the exercise price must be not less than 110% of fair
market value. The exercise price of any non-qualified option shall be in the
sole discretion of the Committee. The aggregate fair market value of the shares
that may be subject to any ISO granted to any participant may not exceed
$100,000. There is no comparable limitation with respect to non-qualified stock
options.
The term of all options granted under the Plan will be determined by
the Committee in its sole discretion; PROVIDED, HOWEVER, that the term of each
ISO shall not exceed 10 years from the date of grant thereof; and FURTHER,
PROVIDED, that if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, of
any of its Subsidiaries or of a Parent, the term of the ISO shall not exceed
five years from the date of grant.
8
The right of exercise will be cumulative, so that shares that are not
purchased in one year may be purchased in a subsequent year. The options may not
be assigned. Upon exercise of any option, in whole or in part, payment in full
is required (unless the applicable award contract permits installment payments)
for the number of shares purchased. Payment may be made in cash, by delivery of
shares of the Company's common stock of equivalent fair market value (in which
case reload options will be issued) or by any other form of legal consideration
that is acceptable to the Board.
In addition to ISOs and non-qualified options, the Plan permits the
Committee, consistent with the purposes of the Plan, to grant shares of Common
Stock to such key employees (including officers and directors who are key
employees) of, or consultants to, the Company or any of its Subsidiaries, as the
Committee may determine, in its sole discretion. The grant may require the
holder to pay such price per share therefor, if any, as the Committee may
determine. Such shares may be subject to such contingencies and restrictions as
the Committee may determine.
If an employee's employment is terminated by reason of death or
disability, either the employee or his or her beneficiary will have the right
for one year to exercise the option to the extent the option was exercisable on
the date of death or disability. If a Plan participant's relationship with the
Company is terminated by reason other than death or disability and other than
for cause or without the Company's consent (in which case the option shall
terminate immediately), he or she may, for a period of three months, exercise
the option to the extent that it was exercisable on the date of termination, but
in no event after the date the award would otherwise have expired; provided,
however, that in the event an employee's employment is terminated in connection
with a change in control of the Company, then the employee will have the right
to exercise the option until the date the award otherwise have expired.
The Plan will be administered by the Board, which is authorized to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan and to determine the employees to whom, and the time, terms
and conditions under which, options may be granted. The Board is also authorized
to adjust the number of shares available under the Plan, the number of shares
subject to outstanding options and the option prices to take into account the
Company's capitalization by reason of a stock dividend, recapitalization,
merger, consolidation, stock split, combination or exchange of shares or
otherwise.
The Board may amend, suspend or terminate the Plan in any respect at
any time. However, no amendment may (i) increase the number of shares reserved
for options under the Plan, (ii) modify the requirements for participation in
the Plan, or (iii) modify the Plan in any way that would require stockholder
approval under the rules and regulations under the Securities Exchange Act of
1934.
9
FEDERAL INCOME TAX CONSEQUENCES
Under current Federal law, no taxable income will be recognized by the
recipient of an incentive stock option within the meaning of Section 422 of the
Code upon either the grant or exercise of the incentive stock option (provided
the exercise occurs while the participant is an employee of the Company or
within three months after termination of employment), nor will a deduction be
allowed the Company by reason of the grant or exercise, provided the employee
does not dispose of the shares issued upon exercise within two years from the
date the option was granted and within one year from the date the shares were
issued. If the recipient fails to satisfy these holding period requirements, the
difference between the amount realized upon disposition of the shares and the
adjusted basis of the shares is includible as compensation in the recipient's
gross income and the Company will be entitled to a deduction in that amount.
Under current law, the holder of a non-qualified stock option is
taxable at the time of exercise on the difference between the exercise price and
the fair market value of the shares on the date of exercise. Upon disposition of
the stock, the stockholder is taxable upon the difference between the basis of
the stock (which is equal to the fair market value at the time the option was
exercised) and the amount realized upon the disposition.
A grant of shares of common stock that is subject to no vesting
restrictions will result in taxable income for federal income tax purposes to
the recipient at the time of grant in an amount equal to the fair market value
of the shares awarded. The Company would be entitled to a corresponding
deduction at that time for the amount included in the recipient's income.
Generally, a grant of shares of common stock under the Plan subject to
vesting and transfer restrictions will not result in taxable income to the
recipient for federal income tax purposes or a tax deduction to the Company in
the year of the grant. The value of the shares will generally be taxable to the
recipient as compensation income in the years in which the restrictions on the
shares lapse. Such value will be the fair market value of the shares on the
dates the restrictions terminate. Any recipient, however, may elect pursuant to
section 83(b) of the Code to treat the fair market value of the shares on the
date of such grant as compensation income in the year of the grant of restricted
shares, provided the recipient makes the election within 30 days after the date
of the grant. In any case, the Company will receive a deduction for federal
income tax purposes corresponding in amount to the amount of compensation
included in the recipient's income in the year in which that amount is so
included.
VOTE REQUIRED AND BOARD RECOMMENDATION
Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of the holders of a majority of the total shares of Common
Stock present at the Annual Meeting, in person or by proxy, and entitled to vote
at the Annual Meeting is required to approve and adopt the 2000 Plan.
10
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE COMPANY'S 2000
STOCK OPTION PLAN AND UNAMIONSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE PLAN
BY THE COMPANY'S SHAREHOLDERS.
RATIFICATION OF SELECTION OF AUDITORS
The Board has selected the firm of Stefanou & Company, LLP, independent
public accountants, to serve as auditors for the fiscal year ending December 31,
2001, subject to ratification by the stockholders. Stefanou & Company, LLP has
served as the Company's auditors since 1998. Fees for the last fiscal year were
$24,700 for annual audit services, $20,000 for audit related services and $5,000
for all other non-audit services.
The Board recommends a vote FOR ratification of this selection.
It is not expected that a member of the firm Stefanou & Company, LLP
will be present at the Annual Meeting.
FINANCIAL INFORMATION
The Financial Statements of the Company included in the Company's
Annual Report to Stockholders that accompanies this Proxy Statement are
incorporated herein by reference.
COST OF SOLICITATION
Company will bear the cost of the solicitation of proxies from its
Stockholders. In addition to the use of mail, proxies may be solicited by
directors, officers and regular employees of the Company in person or by
telephone or other means of communication. The directors, officers and employees
of the Company will not be compensated additionally for the solicitation, but
may be reimbursed for out-of-pocket expenses in connection with this
solicitation. Arrangements are also being made with brokerage houses and any
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of the Company, and the Company will reimburse
such brokers, custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses.
DEADLINE FOR FUTURE PROPOSALS OF STOCKHOLDERS
Proposals of Stockholders of the Company which are intended to be
presented by such Stockholders at the Annual Meeting to be held in 2002 must be
received by the Company no later than December 18, 2001 in order to have them
included in the proxy statement and form of proxy relating to that meeting.
11
The Company's by-laws require a Stockholder to give advance notice of
any business, including the nomination of candidates for the Board of directors,
that the Stockholder wishes to bring before a meeting of the Stockholders of the
Company. In general, for business to be brought before an annual meeting by a
Stockholder, written notice of the Stockholder proposal or nomination must be
received by the secretary of the Company not less than 90 days nor more than 120
days before the meeting, or if the Company gives less than 40 days, notice of
the meeting date , written notice of the stockholder proposal or nomination must
be received within ten days after the meeting date is announced. With respect to
Stockholder proposals, the Stockholder's notice to the secretary must contain a
brief description of the business to be brought before the meeting and the
reasons for conducting such business at the meeting, as well as such other
information set forth in the Company's by-laws or required by law. With respect
to the nomination of a candidate for the Board of Directors by a stockholder,
the stockholder's notice to the secretary of the Company must contain certain
information set forth in the Company's by-laws about both the nominee and the
Stockholder making the nominations.
If a Stockholder desires to have a proposal included in the Company's
proxy materials for the Annual Meeting of Stockholders to be held in 2002 and
desires to have such proposal brought before the same Annual Meeting, the
Stockholder must comply with both sets of procedures described in the two
immediately preceding paragraphs. Any required notices should be sent to U.S.
Medical Group, Inc., 1405 S. Orange Ave, Suite 603, Orlando, FL 32806, Attention
Secretary.
OTHER MATTERS
Management is not aware of any other matters to be presented for action
at the meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
April 9, 2001
Orlando, Florida
12
EXHIBIT A
2000 STOCK INCENTIVE PLAN
OF
U.S. MEDICAL GROUP, INC.
-----------------------
1. PURPOSES OF THE PLAN. This stock incentive plan (the "Plan") is
designed to provide an incentive to key employees (including directors and
officers who are key employees) and to consultants and directors who are not
employees of U.S. MEDICAL GROUP, INC., a Nevada corporation (the "Company"), or
any of its Subsidiaries (as defined in Paragraph 17), and to offer an additional
inducement in obtaining the services of such persons. The Plan provides for the
grant of "incentive stock options" ("ISOs") within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), nonqualified stock
options which do not qualify as ISOs ("NQSOs"), and stock of the Company which
may be subject to contingencies or restrictions (collectively, "Awards"). The
Company makes no representation or warranty, express or implied, as to the
qualification of any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph
10, the aggregate number of shares of Common Stock, $.001 par value per share,
of the Company ("Common Stock") for which Awards may be granted under the Plan
shall not exceed 500,000. Such shares of Common Stock may, in the discretion of
the Board of Directors of the Company (the "Board of Directors"), consist either
in whole or in part of authorized but unissued shares of Common Stock or shares
of Common Stock held in the treasury of the Company. Subject to the provisions
of Paragraph 11, any shares of Common Stock subject to an option which for any
reason expires, is canceled or is terminated unexercised or which ceases for any
reason to be exercisable or a restricted stock Award which for any reason is
forfeited, shall again become available for the granting of Awards under the
Plan. The Company shall at all times during the term of the Plan reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board of Directors or a committee of the Board of Directors consisting of not
less than two directors, each of whom shall be a "non-employee director" within
the meaning of Rule 16b-3 (as defined in Paragraph 17) (collectively, the
"Committee"). Unless otherwise provided in the By-laws of the Company or by
resolution of the Board of Directors, a majority of the members of the Committee
shall constitute a quorum, and the acts of a majority of the members present at
any meeting at which a quorum is present, and any acts approved in writing by
all members without a meeting, shall be the acts of the Committee. Subject to
the express provisions of the Plan, the Committee shall have the authority, in
its sole discretion, to determine: the key employees, consultants and directors
who shall be granted Awards; the type of Award to be granted; the times when an
Award shall be granted; the number of shares of Common Stock to be subject to
each Award; the term of each option; the date each option shall become
1
exercisable; whether an option shall be exercisable in whole or in installments
and, if in installments, the number of shares of Common Stock to be subject to
each installment, whether the installments shall be cumulative, the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any option or installment thereof; whether
shares of Common Stock may be issued upon the exercise of an option as partly
paid and, if so, the dates when future installments of the exercise price shall
become due and the amounts of such installments; the exercise price of each
option; the price, if any, to be paid for a share Award; the form of payment of
the exercise price of an option; whether to restrict the sale or other
disposition of a stock Award or the shares of Common Stock acquired upon the
exercise of an option and, if so, to determine whether such contingencies and
restrictions have been met and whether and under what conditions to waive any
such contingency or restriction; whether and under what conditions to subject
all or a portion of the grant or exercise of an option, the vesting of a stock
Award or the shares acquired pursuant to the exercise of an option to the
fulfillment of certain contingencies or restrictions as specified in the
contract referred to in Paragraph 9 hereof (the "Contract"), including without
limitation, contingencies or restrictions relating to entering into a covenant
not to compete with the Company, any of its Subsidiaries or a Parent (as defined
in Paragraph 17), to financial objectives for the Company, any of its
Subsidiaries or a Parent, a division of any of the foregoing, a product line or
other category, and/or to the period of continued employment of the Award holder
with the Company, any of its Subsidiaries or a Parent, and to determine whether
such contingencies or restrictions have been met; whether an Award holder is
Disabled (as defined in Paragraph 17); the amount, if any, necessary to satisfy
the obligation of the Company, a Subsidiary or Parent to withhold taxes or other
amounts; the Fair Market Value (as defined in Paragraph 17) of a share of Common
Stock; to construe the respective Contracts and the Plan; with the consent of
the Award holder, to cancel or modify an Award, PROVIDED, that the modified
provision is permitted to be included in an Award granted under the Plan on the
date of the modification, and FURTHER, PROVIDED, that in the case of a
modification (within the meaning of Section 424(h) of the Code) of an ISO, such
Award as modified would be permitted to be granted on the date of such
modification under the terms of the Plan; to prescribe, amend and rescind rules
and regulations relating to the Plan; to approve any provision which under Rule
16b-3 requires the approval of the Board of Directors, a committee of
non-employee directors or the stockholders to be exempt (unless otherwise
specifically provided herein); and to make all other determinations necessary or
advisable for administering the Plan. Any controversy or claim arising out of or
relating to the Plan, any Award granted under the Plan or any Contract shall be
determined unilaterally by the Committee in its sole discretion. The
determinations of the Committee on the matters referred to in this Paragraph 3
shall be conclusive and binding on the parties. No member or former member of
the Committee shall be liable for any action, failure to act or determination
made in good faith with respect to the Plan or any Award or Contract hereunder.
Prior to the creation and designation of the Committee by the Board of
Directors, all powers and authority allocated hereby to the Committee shall be
allocated to the Board of Directors and all references to the Committee shall be
deemed to be references to the Board of Directors.
2
4. OPTIONS
(a) GRANT. The Committee may from time to time, consistent
with the purposes of the Plan, grant options to such key employees (including
officers and directors who are key employees) of, and consultants to, the
Company or any of its Subsidiaries, and such Outside Directors, as the Committee
may determine, in its sole discretion. Such options granted shall cover such
number of shares of Common Stock as the Committee may determine, in its sole
discretion, as set forth in the applicable Contract; PROVIDED, HOWEVER, THAT THE
MAXIMUM NUMBER OF SHARES SUBJECT TO OPTIONS THAT MAY BE GRANTED TO ANY EMPLOYEE
DURING ANY CALENDAR YEAR UNDER THE PLAN (THE "162(M) MAXIMUM") SHALL BE 350,000
SHARES; AND FURTHER, PROVIDED, that the aggregate Fair Market Value (determined
at the time the option is granted) of the shares of Common Stock for which any
eligible employee may be granted ISOs under the Plan or any other plan of the
Company, of any of its Subsidiaries or of a Parent, which are exercisable for
the first time by such optionee during any calendar year shall not exceed
$100,000. Such ISO limitation shall be applied by taking ISOs into account in
the order in which they were granted. Any option granted in excess of such ISO
limitation amount shall be treated as a NQSO to the extent of such excess.
(b) EXERCISE PRICE. The exercise price of the shares of Common
Stock under each option shall be determined by the Committee, in its sole
discretion, as set forth in the applicable Contract; PROVIDED, HOWEVER, that the
exercise price per share of an ISO shall not be less than the Fair Market Value
of a share of Common Stock on the date of grant; and FURTHER, PROVIDED, that if,
at the time an ISO is granted, the optionee owns (or is deemed to own under
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, of any of its Subsidiaries
or of a Parent, the exercise price per share of such ISO shall not be less than
110% of the Fair Market Value of a share of Common Stock on the date of grant.
(c) TERM. The term of each option granted pursuant to the Plan
shall be determined by the Committee, in its sole discretion, and set forth in
the applicable Contract; PROVIDED, HOWEVER, that the term of each ISO shall not
exceed 10 years from the date of grant thereof; and FURTHER, PROVIDED, that if,
at the time an ISO is granted, the optionee owns (or is deemed to own under
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, of any of its Subsidiaries
or of a Parent, the term of the ISO shall not exceed five years from the date of
grant. Options shall be subject to earlier termination as hereinafter provided.
(d) EXERCISE. An option (or any part or installment thereof),
to the extent then exercisable, shall be exercised by giving written notice to
the Company at its then principal office stating which option is being
exercised, specifying the number of shares of Common Stock as to which such
option is being exercised and accompanied by payment in full of the aggregate
exercise price therefor (or the amount due upon exercise if the Contract permits
installment payments) (a) in cash or by certified check or (b) if the applicable
Contract permits, with previously acquired shares of Common Stock having an
3
aggregate Fair Market Value on the date of exercise equal to the aggregate
exercise price of all options being exercised, or with any combination of cash,
certified check or shares of Common Stock having such value. The Company shall
not be required to issue any shares of Common Stock pursuant to any such option
until all required payments, including any required withholding, have been made.
The Committee may, in its sole discretion, permit payment of
all or a portion of the exercise price of an option by delivery by the optionee
of a properly executed notice, together with a copy of his irrevocable
instructions to a broker acceptable to the Committee to deliver promptly to the
Company the amount of sale or loan proceeds sufficient to pay such exercise
price. In connection therewith, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
An optionee entitled to receive Common Stock upon the exercise
of an option shall not have the rights of a stockholder with respect to such
shares of Common Stock until the date of issuance of a stock certificate for
such shares or, in the case of uncertificated shares, until an entry is made on
the books of the Company's transfer agent representing such shares; PROVIDED,
HOWEVER, that until such stock certificate is issued or book entry is made, any
optionee using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
In no case may an option be exercised with respect to a
fraction of a share of Common Stock. In no case may a fraction of a share of
Common Stock be purchased or issued under the Plan.
(e) RELOAD OPTIONS. An optionee who, at a time when he is
eligible to be granted options under the Plan, uses previously acquired shares
of Common Stock to exercise an option granted under the Plan (the "prior
option"), shall, upon such exercise, be automatically granted an option (the
"reload option") to purchase the same number of shares of Common Stock so used
(or if there is not a sufficient number of shares available for grant under the
Plan remaining, such number of shares as are then available). Such reload
options shall be of the same type and have the same terms as the prior option
(except to the extent inconsistent with the terms of the Plan); PROVIDED,
HOWEVER, that the exercise price per share of the reload option shall be equal
to the Fair Market Value of a share of Common Stock on the date of grant of the
reload option, and FURTHER, PROVIDED, that if the prior option was an ISO and at
the time the reload option is granted, the optionee owns (or is deemed to own
under Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, of any of its
Subsidiaries or of a Parent, the exercise price per share shall be equal to 110%
of the Fair Market Value of a share of Common Stock on the date of grant and the
term of such option shall not exceed five years.
4
5. RESTRICTED STOCK. The Committee may from time to time, consistent
with the purposes of the Plan, grant shares of Common Stock to such key
employees (including officers and directors who are key employees) of, or
consultants to, the Company or any of its Subsidiaries, as the Committee may
determine, in its sole discretion. The grant may cover such number of shares as
the Committee may determine, in its sole discretion, and require the Award
holder to pay such price per share therefor, if any, as the Committee may
determine, in its sole discretion. Such shares may be subject to such
contingencies and restrictions as the Committee may determine, as set forth in
the Contract. Upon the issuance of the stock certificate for a share Award, or
in the case of uncertificated shares, the entry on the books of the Company's
transfer agent representing such shares, notwithstanding any contingencies or
restrictions to which the shares are subject, the Award holder shall be
considered to be the record owner of the shares, and subject to the
contingencies and restrictions set forth in the Award, shall have all rights of
a stockholder of record with respect to such shares, including the right to vote
and to receive distributions. Upon the occurrence of any such contingency or
restriction, the Award holder may be required to forfeit all or a portion of
such shares back to the Company. The shares shall vest in the Award holder when
all of the restrictions and contingencies lapse. Accordingly, the Committee may
require that such shares be held by the Company, together with a stock power
duly endorsed in blank by the Award holder, until the shares vest in the Award
holder.
6. TERMINATION OF RELATIONSHIP. Except as may otherwise be expressly
provided in the applicable Contract, if an Award holder's relationship with the
Company, its Subsidiaries and Parent as an employee or a consultant has
terminated for any reason (other than as a result of his death or Disability),
the Award holder may exercise the options granted to him as an employee of, or
consultant to, the Company or any of its Subsidiaries, to the extent exercisable
on the date of such termination, at any time within three months after the date
of termination, but not thereafter and in no event after the date the Award
would otherwise have expired; PROVIDED, HOWEVER, that if such relationship is
terminated either (a) for Cause (as defined in Paragraph 17), or (b) without the
consent of the Company, such option shall terminate immediately; and PROVIDED
FURTHER that in the event an employee's employment is terminated in connection
with a change in control of the Company, then the employee will have the right
to exercise the vested portion of the option until the date the award would
otherwise have expired.
For the purposes of the Plan, an employment relationship shall
be deemed to exist between an individual and the Company, any of its
Subsidiaries or a Parent if, at the time of the determination, the individual
was an employee of such corporation for purposes of Section 422(a) of the Code.
As a result, an individual on military, sick leave or other bona fide leave of
absence shall continue to be considered an employee for purposes of the Plan
during such leave if the period of the leave does not exceed 90 days, or, if
longer, so long as the individual's right to reemployment with the Company, any
of its Subsidiaries or a Parent is guaranteed either by statute or by contract.
If the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such leave.
5
Except as may otherwise be expressly provided in the
applicable Contract, options granted under the Plan shall not be affected by any
change in the status of the Award holder so long as he continues to be an
employee of, or a consultant to, the Company, or any of its Subsidiaries or a
Parent (regardless of having changed from one to the other or having been
transferred from one corporation to another).
Except as may otherwise be expressly provided in the
applicable Contract, if an Award holder's relationship with the Company as an
Outside Director ceases for any reason (other than as a result of his death or
Disability) then options granted to such holder as an Outside Director may be
exercised, to the extent exercisable on the date of such termination, at any
time within three months after the date of termination, but not thereafter and
in no event after the date the Award would otherwise have expired; PROVIDED,
HOWEVER, that if such relationship is terminated for Cause, such Award shall
terminate immediately. An Award granted to an Outside Director, however, shall
not be affected by the Award holder becoming an employee of, or consultant to,
the Company, any of its Subsidiaries or a Parent.
Except as may otherwise be expressly provided in the Contract,
upon the termination of the relationship of an Award holder as an employee of,
or consultant to, the Company, and its Subsidiaries and Parent, or as an Outside
Director, for any reason (including his death or Disability), the share Award
shall cease any further vesting and the unvested portion of such Award as of the
date of such termination shall be forfeited to the Company for no consideration.
Nothing in the Plan or in any Award granted under the Plan
shall confer on any Award holder any right to continue in the employ of, or as a
consultant to, the Company, any of its Subsidiaries or a Parent, or as a
director of the Company, or interfere in any way with any right of the Company,
any of its Subsidiaries or a Parent to terminate the Award holder's relationship
at any time for any reason whatsoever without liability to the Company, any of
its Subsidiaries or a Parent.
7. DEATH OR DISABILITY. Except as may otherwise be expressly provided
in the applicable Contract, if an Award holder dies (a) while he is an employee
of, or consultant to, the Company, any of its Subsidiaries or a Parent, (b)
within three months after the termination of such relationship (unless such
termination was for Cause or without the consent of the Company), or (c) within
one year following the termination of such relationship by reason of his
Disability, the options that were granted to him as an employee of, or
consultant to, the Company or any of its Subsidiaries, may be exercised, to the
extent exercisable on the date of his death, by his Legal Representative (as
defined in Paragraph 17) at any time within one year after death, but not
thereafter and in no event after the date the option would otherwise have
expired.
6
Except as may otherwise be expressly provided in the
applicable Contract, if an Award holder's relationship as an employee of, or
consultant to, the Company, any of its Subsidiaries or a Parent has terminated
by reason of his Disability, the options that were granted to him as an employee
of, or consultant to the Company or any of its Subsidiaries may be exercised, to
the extent exercisable upon the effective date of such termination, at any time
within one year after such date, but not thereafter and in no event after the
date the option would otherwise have expired.
Except as may otherwise be expressly provided in the
applicable Contract, if an Award holder's relationship as an Outside Director
terminates as a result of his death or Disability, the options granted to him as
an Outside Director may be exercised, to the extent exercisable on the date of
such termination, at any time within one year after the date of termination, but
not thereafter and in no event after the date the Award would otherwise have
expired. In the case of the death of the Award holder, the Award may be
exercised by his Legal Representative.
8. COMPLIANCE WITH SECURITIES LAWS. It is a condition to the issuance
of any share Award and exercise of any option that either (a) a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the shares of Common Stock to be issued upon such grant or
exercise shall be effective and current at the time of exercise, or (b) there is
an exemption from registration under the Securities Act for the issuance of the
shares of Common Stock upon such exercise. Nothing herein shall be construed as
requiring the Company to register shares subject to any Award under the
Securities Act or to keep any Registration Statement effective or current.
The Committee may require, in its sole discretion, as a
condition to the receipt of an Award or the exercise of any option that the
Award holder execute and deliver to the Company his representations and
warranties, in form, substance and scope satisfactory to the Committee, which
the Committee determines are necessary or convenient to facilitate the
perfection of an exemption from the registration requirements of the Securities
Act, applicable state securities laws or other legal requirement, including,
without limitation, that (a) the shares of Common Stock to be received under the
Award or issued upon the exercise of the option are being acquired by the Award
holder for his own account, for investment only and not with a view to the
resale or distribution thereof, and (b) any subsequent resale or distribution of
shares of Common Stock by such Award holder will be made only pursuant to (i) a
Registration Statement under the Securities Act which is effective and current
with respect to the shares of Common Stock being sold, or (ii) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption, the Award holder shall prior to any offer of sale or
sale of such shares of Common Stock provide the Company with a favorable written
opinion of counsel satisfactory to the Company, in form, substance and scope
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution.
7
In addition, if at any time the Committee shall determine, in
its sole discretion, that the listing or qualification of the shares of Common
Stock subject to any Award or option on any securities exchange, Nasdaq or under
any applicable law, or the consent or approval of any governmental agency or
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an Award or the issuing of shares of Common Stock
thereunder, such Award may not be granted and such option may not be exercised
in whole or in part unless such listing, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee.
9. AWARD CONTRACTS. Each Award shall be evidenced by an appropriate
Contract which shall be duly executed by the Company and the Award holder, and
shall contain such terms, provisions and conditions not inconsistent herewith as
may be determined by the Committee. The terms of each Award and Contract need
not be identical.
10. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of the Plan, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately prior
to such event, the aggregate number and kind of shares subject to the Plan, the
aggregate number and kind of shares subject to each outstanding Award, the
exercise price of each option, any contingencies and restrictions based on the
number or kind of shares, and the 162(m) Maximum shall be appropriately adjusted
by the Board of Directors, whose determination shall be conclusive and binding
on all parties. Such adjustment may provide for the elimination of fractional
shares which might otherwise be subject to Awards without payment therefor.
In the event of (a) the liquidation or dissolution of the
Company, (b) a merger in which the Company is not the surviving corporation or a
consolidation, or (c) any transaction (or series of related transactions) in
which (i) more than 50% of the outstanding Common Stock is transferred or
exchanged for other consideration, or (ii) shares of Common Stock in excess of
the number of shares of Common Stock outstanding immediately preceding the
transaction are issued (other than to stockholders of the Company with respect
to their shares of stock in the Company), any outstanding unvested stock options
shall terminate upon the earliest of any such event, unless other provision is
made therefor in the transaction.
11. AMENDMENTS AND TERMINATION OF THE PLAN. No ISO may be granted under
the Plan after January 1, 2010. The Board of Directors, without further approval
of the Company's stockholders, may at any time suspend or terminate the Plan, in
whole or in part, or amend it from time to time in such respects as it may deem
advisable, including, without limitation, in order that ISOs granted hereunder
meet the requirements for "incentive stock options" under the Code, to comply
with the provisions of Rule 16b-3, Section 162(m) of the Code, or any change in
applicable law, regulations, rulings or interpretations of any governmental
agency or regulatory body; PROVIDED, HOWEVER, that no amendment shall be
8
effective without the requisite prior or subsequent stockholder approval which
would (a) except as contemplated in Paragraph 10, increase the maximum number of
shares of Common Stock for which Awards may be granted under the Plan or the
162(m) Maximum, (b) change the eligibility requirements to receive Awards
hereunder, or (c) make any change for which applicable law, regulation, ruling
or interpretation by the applicable governmental agency or regulatory authority
requires stockholder approval. No termination, suspension or amendment of the
Plan shall adversely affect the rights of any Award holder under an Award
without his prior consent. The power of the Committee to construe and administer
any Awards granted under the Plan prior to the termination or suspension of the
Plan nevertheless shall continue after such termination or during such
suspension.
12. NON-TRANSFERABILITY. No option granted under the Plan shall be
transferable otherwise than by will or the laws of descent and distribution, and
options may be exercised, during the lifetime of the Award holder, only by him
or his Legal Representatives. Except as may otherwise be expressly provided in
the Contract, a stock Award, to the extent not vested, shall not be transferable
otherwise than by will or the laws of descent and distribution. Except to the
extent provided above, Awards may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and any such attempted assignment, transfer, pledge, hypothecation or
disposition shall be null and void AB INITIO and of no force or effect;
PROVIDED, HOWEVER, that a contract may provide that non-qualified Awards may be
donated to charity or assigned to a family trust or similar estate planning
vehicle.
13. WITHHOLDING TAXES. The Company, a Subsidiary or Parent may withhold
(a) cash, or (b) with the consent of the Committee, shares of Common Stock to be
issued under a stock Award or upon exercise of an option having an aggregate
Fair Market Value on the relevant date, or a combination of cash and shares
having such value, in an amount equal to the amount which the Committee
determines is necessary to satisfy the obligation of the Company, any of its
Subsidiaries or a Parent to withhold federal, state and local taxes or other
amounts incurred by reason of the grant, vesting, exercise or disposition of an
Award, or the disposition of the underlying shares of Common Stock.
Alternatively, the Company may require the holder to pay to the Company such
amount, in cash, promptly upon demand.
14. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend
or legends upon the certificates for shares of Common Stock issued under a stock
Award or upon exercise of an option under the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such shares as it
determines, in its discretion, to be necessary or appropriate to (a) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act and any applicable state securities laws, (b) implement the
provisions of the Plan or any agreement between the Company and the Award holder
with respect to such shares of Common Stock, or (c) permit the Company to
determine the occurrence of a "disqualifying disposition," as described in
Section 421(b) of the Code, of the shares of Common Stock issued or transferred
upon the exercise of an ISO granted under the Plan.
9
The Company shall pay all issuance taxes with respect to the
issuance of shares of Common Stock under a stock Award or upon the exercise of
an option granted under the Plan, as well as all fees and expenses incurred by
the Company in connection with such issuance.
15. USE OF PROCEEDS. The cash proceeds received upon the exercise of an
option, or grant of a stock Award under the Plan shall be added to the general
funds of the Company and used for such corporate purposes as the Board of
Directors may determine.
16. SUBSTITUTIONS AND ASSUMPTIONS OF AWARDS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the stockholders, substitute new
Awards for prior options, or restricted stock of a Constituent Corporation (as
defined in Paragraph 17) or assume the prior options or restricted stock of such
Constituent Corporation.
17. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Cause" shall mean: (i) in the case of an employee or
consultant, if there is a written employment or consulting agreement between the
Award holder and the Company, any of its Subsidiaries or a Parent which defines
termination of such relationship for cause, cause as defined in such agreement,
and (ii) in all other cases, cause as defined by applicable state law.
(b) "Constituent Corporation" shall mean any corporation which
engages with the Company, any of its Subsidiaries or a Parent in a transaction
to which Section 424(a) of the Code applies (or would apply if the option
assumed or substituted were an ISO), or any Subsidiary or Parent of such
corporation.
(c) "Disability" shall mean a permanent and total disability
within the meaning of Section 22(e)(3) of the Code.
(d) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(e) "Fair Market Value" of a share of Common Stock on any day
shall mean: (i) if the principal market for the Common Stock is a national
securities exchange, the average of the highest and lowest sales prices per
share of Common Stock on such day as reported by such exchange or on a composite
tape reflecting transactions on such exchange, (ii) if the principal market for
the Common Stock is not a national securities exchange and the Common Stock is
quoted on Nasdaq, and (A) if actual sales price information is available with
respect to the Common Stock, the average of the highest and lowest sales prices
10
per share of Common Stock on such day on Nasdaq, or (B) if such information is
not available, the average of the highest bid and lowest asked prices per share
of Common Stock on such day on Nasdaq, or (iii) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is not
quoted on Nasdaq, the average of the highest bid and lowest asked prices per
share of Common Stock on such day as reported on the OTC Bulletin Board Service
or by National Quotation Bureau, Incorporated or a comparable service; PROVIDED,
HOWEVER, that if clauses (i), (ii) and (iii) of this subparagraph are all
inapplicable, or if no trades have been made or no quotes are available for such
day, the Fair Market Value of a share of Common Stock shall be determined by the
Board of Directors by any method consistent with applicable regulations adopted
by the Treasury Department relating to stock options.
(f) "Legal Representative" shall mean the executor,
administrator or other person who at the time is entitled by law to exercise the
rights of a deceased or incapacitated optionee with respect to an option granted
under the Plan.
(g) "Nasdaq" shall mean the Nasdaq Stock Market.
(h) "Outside Director" shall mean a person who is a director
of the Company, but on the date of grant is not an employee of, or consultant
to, the Company, any of its Subsidiaries or a Parent.
(i) "Parent" shall have the same definition as "parent
corporation" in Section 424(e) of the Code.
(j) "Rule 16b-3" shall mean Rule 16b-3 promulgated under the
Exchange Act, as the same may be in effect and interpreted from time to time.
(k) "Subsidiary" shall have the same definition as "subsidiary
corporation" in Section 424(f) of the Code.
18. GOVERNING LAW; CONSTRUCTION. The Plan, the Awards and Contracts
hereunder and all related matters shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflict
of law provisions that would defer to the substantive laws of another
jurisdiction.
Neither the Plan nor any Contract shall be construed or
interpreted with any presumption against the Company by reason of the Company
causing the Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall include the
singular and plural, and any term stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter.
11
19. PARTIAL INVALIDITY. The invalidity, illegality or unenforceability
of any provision in the Plan, any Award or Contract shall not affect the
validity, legality or enforceability of any other provision, all of which shall
be valid, legal and enforceable to the fullest extent permitted by applicable
law.
20. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a
majority of the votes present in person or by proxy and entitled to vote hereon
at the next duly held meeting of the Company's stockholders at which a quorum is
present. No Award granted hereunder may vest or be exercised prior to such
approval; PROVIDED, HOWEVER, that the date of grant of any Award shall be
determined as if the Plan had not been subject to such approval. Notwithstanding
the foregoing, if the Plan is not approved by a vote of the stockholders of the
Company on or before July 30, 2001, the Plan and any Awards granted hereunder
shall terminate.
12
REVOKABLE PROXY
U.S. MEDICAL GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF U.S. MEDICAL
GROUP, INC. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE CHOICES SPECIFIED BELOW.
The undersigned stockholder of U.S. Medical Group, Inc. (the "Company") hereby
appoints Thomas F. Winters, the true and lawful attorney, agent and proxy of the
undersigned with full power of substitution for and in the name of the
undersigned, to vote all the shares of common stock of the Company at the Annual
Meeting of Stockholders of the Company to be held at 1405 S. Orange Ave, Suite
603, Orlando, FL 32806 on May 14, 2001 at 5:00 p.m., and any and all
adjournments thereof, with all of the powers which the undersigned would possess
if personally present, for the following purposes:
1. ELECTION OF DIRECTORS
FOR all nominees listed below |_| WITHHOLD AUTHORITY |_|
Thomas F. Winters Richard Langley Sandra Thompson
(THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR.)
This proxy will be voted in the Election of Directors in the
manner described in the Proxy Statement for the Annual Meeting of
Stockholders. (INSTRUCTION: To withhold authority to vote for one or
more individual nominees, write such name or names in the space
provided below.)
2. PROPOSAL TO RATIFY THE ADOPTION OF THE COMPANY'S 2000 STOCK INCENTIVE
PLAN. (The Board of Directors recommends a Vote FOR.)
|_| FOR |_| AGAINST |_| ABSTAIN
3. PROPOSAL TO CONFIRM THE SELECTION OF STEFANOU & COMPANY, LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE CORPORATION FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2000. (THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR.)
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy will be voted for the choices specified. If no choice is
specified for Items 1, 2 and 3, this Proxy will be voted FOR those items.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement dated April 9, 2001.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
DATED:
------------------------------------- --------------------------------
[Signature]
--------------------------------
[Signature if jointly held]
--------------------------------
[Signature if jointly held]
Please sign exactly as name
appears on stock certificate(s).
Joint owners should each sign.
Trustees and others acting in a
representative capacity should
indicate the capacity in which
they sign.