UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule
(RULE 14a-101)
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-12
Filed by the Registrant o | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: | |
| o | Preliminary Proxy Statement. |
| o | Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2)). |
| x | Definitive Proxy Statement. |
| o | Definitive Additional Materials. |
| o | Soliciting Material Pursuant to §240.14a-12. |
| MEDICAL NUTRITION USA, 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): | ||
o | No fee required. | |
| o | 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: | |
o | Fee paid previously with preliminary materials. | |
| o | 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: | |
MEDICAL NUTRITION USA, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:
MEDICAL NUTRITION USA, INC.
-----------
10 West Forest Avenue
Englewood, NJ 07631
NOTICE OF 2007
2010 ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 6, 2007
To the Shareholders ofSTOCKHOLDERS
AND PROXY STATEMENT
Dear Stockholders,
I am pleased to invite you to Medical Nutrition USA, Inc.:
You are cordially invited to attend the 2007’s 2010 Annual Meeting of ShareholdersStockholders (the "2007 Annual Meeting"“Annual Meeting”) of Medical Nutrition USA, Inc. (the
"Company"), which. We will be heldhost the meeting at the Company's executiveour corporate offices at 10 West Forest Avenue, Englewood, New Jersey 07631, on June 2, 2010 at 10:00 a.m. local timeEastern Time. In addition to covering the formal items on Wednesday, June 6, 2007 for the purposes of considering and voting upon:
1. A proposal to elect four directors toagenda, we will review the Board of Directorsmajor developments of the Company (the "Board")past year and answer your questions. As used herein, the term “we,” “our,” “us,” or “Company” refer to Medical Nutrition USA, Inc., a Delaware corporation, and its subsidiaries.
This matter is described more fully inbooklet includes the agenda for this year’s Annual Meeting and the Proxy Statement accompanying
this notice.
2. Such other business as may properly come before(the “Proxy Statement”). The Proxy Statement explains the meeting or any
adjournment or postponement thereof. The Board is not aware of any
other businessmatters we will discuss at the Annual Meeting and provides general information about us.
We are pleased to be presentedusing the Securities and Exchange Commission (the “SEC”) rule that allows companies to a votefurnish proxy materials to their stockholders primarily over the Internet. We believe that this process should expedite stockholders’ receipt of proxy materials, lower the costs of the shareholdersAnnual Meeting and help to conserve natural resources. On or about April 23, 2010, we mailed our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 (the “Annual Report”) and how to vote online. The Notice also included instructions on how to receive a paper copy of the proxy materials, including the notice of Annual Meet ing, Proxy Statement, Annual Report and proxy card.
Whether or not you plan to attend the Annual Meeting, your vote is important and we encourage you to review our proxy materials and promptly cast your vote using the instructions provided in the Notice. You may vote your shares over the Internet or via a toll-free telephone number. Alternatively, if you requested or received a paper copy of the proxy materials by mail, you may sign, date and mail the proxy card in the envelope provided. Instructions regarding the methods of voting are contained in the Notice or proxy card. If you plan on attending the Annual Meeting and prefer to vote in person, you may still do so even if you have already returned your proxy.
IF YOU ARE A STOCKHOLDER OF RECORD (THAT IS, IF YOUR STOCK IS REGISTERED WITH US IN YOUR OWN NAME), YOU MAY VOTE BY FOLLOWING THE INSTRUCTIONS INCLUDED WITH THE NOTICE AND PROXY CARD. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING, YOU: (I) SHOULD PROVIDE VOTING INSTRUCTIONS TO YOUR BROKER, BANK OR OTHER NOMINEE; OR (II) IF YOU WISH TO VOTE IN PERSON, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
We look forward to seeing you at the 2007 Annual Meeting.
| Sincerely, | |||
/s/ F.A. Newman | |||
Francis A. Newman Chairman and Chief Executive Officer | |||
Englewood, New Jersey April 23, 2010 |
i
MEDICAL NUTRITION USA, INC.
10 West Forest Avenue
Englewood, NJ 07631
NOTICE OF 2010 ANNUAL MEETING OF STOCKHOLDERS
Date: | June 2, 2010 | |
Time: | 10:00 a.m. Eastern Time | |
Place: | 10 West Forest Avenue Englewood, NJ 07631 |
Dear Stockholders,
At our 2010 Annual Meeting, we will ask you to:
| 1. | Elect four (4) directors to serve on our Board of Directors (the “Board”) until our 2011 Annual Meeting of Stockholders or until their successors have been duly elected and qualified; | |
| 2. | Ratify our Audit Committee’s selection of Amper, Politziner & Mattia, LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2011; and | |
| 3. | Transact any other business that may be properly presented at the Annual Meeting. |
The Board has fixedforegoing items of business are more fully described in the enclosed Proxy Statement.
All holders of outstanding shares of our stock, as of the close of business on May 2, 2007 as the record
date (the "Record Date") for determining those shareholders who will beApril 15, 2010, are entitled to receive notice of, and to vote at, the 2007 Annual Meeting. The stock transfer books
will remain open between the Record Date and the date of the 2007 Annual
Meeting.
Representation of at least a majority in voting interest of the common
stock of the Company either in personMeeting or by proxy is required to constitute a
quorum for purposes of voting on the proposal set forth above. Accordingly, it
is important that your shares be represented at the 2007 Annual Meeting.any adjournment or postponement thereof.
| By order of the Board of Directors, | ||
| /s/ F.J. Kimmerling | ||
Frank J. Kimmerling Vice President Finance, Chief Financial Officer | ||
Englewood, New Jersey April 23, 2010 |
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT YOU PLANEXPECT TO ATTEND THE 2007 ANNUAL MEETING, PLEASE COMPLETE, DATEVOTE BY FOLLOWING THE INSTRUCTIONS INCLUDED WITH THE NOTICE AND SIGNPROXY CARD AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE ENCLOSED PROXY ANDANNUAL MEETING. A RETURN ITENVELOPE (WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED ENVELOPE. You may revoke
your proxy at any time prior to the time it is voted at the 2007 Annual Meeting.
Please read the accompanying proxy material carefully. Your vote is
important and the Company appreciates your cooperation in considering and acting
on the matters presented.
By Order of the Board of Directors,
/s/ Francis A. Newman
-----------------------------------
Francis A. Newman
Chairman
May 16, 2007
Englewood, New Jersey
Shareholders Should Read the Entire Proxy Statement
Carefully Prior to Returning Their Proxies
-----------FOR A MAILED PROXY. EVEN IF YOU HAVE GIVEN YOUR PROXY, STATEMENT
FOR
2007YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE ANNUAL MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING, OF SHAREHOLDERS
OF
YOU: (I) SHOULD PROVIDE VOTING INSTRUCTIONS TO YOUR BROKER, BANK OR OTHER NOMINEE; OR (II) IF YOU WISH TO VOTE IN PERSON, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
ii
MEDICAL NUTRITION USA, INC.
To Be Held
10 West Forest Avenue
Englewood, NJ 07631
PROXY STATEMENT
INFORMATION ABOUT THE 2010 ANNUAL MEETING AND VOTING
General
The enclosed proxy card has been sent to you by our Board, for use at the Annual Meeting to be held on June 6, 2007
This Proxy Statement is furnished in connection with2, 2010, at 10:00 a.m. Eastern Time, or at any adjournment or postponement of the solicitation
by the Board of Directors (the "Board") of Medical Nutrition USA, Inc. ("MNI" or
the "Company") of proxies to be voted at the 2007 Annual Meeting, of Shareholders
(the "2007for the purposes stated in this document. The Annual Meeting"), whichMeeting will be held at 10:00 a.m. local time on June
6, 2007our corporate offices at the Company's executive offices, 10 West Forest Avenue, Englewood, New Jersey 07631, or at any adjournments or postponements thereof, for the
purposes set forth in the accompanying Notice of 2007 Annual Meeting of
Shareholders (the "Notice").07631. This Proxy Statement summarizes the information you will need to know to vote in an informed manner.
Voting Rights, Outstanding Shares and Quorum
As permitted by the SEC rules, we are making this Proxy Statement and our Annual Report available to our stockholders primarily via the Internet, rather than mailing printed copies of these materials to each stockholder. We believe that this process should expedite stockholders’ receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. On or about April 23, 2010, we mailed to each stockholder (other than those who previously requested electronic or paper delivery) the Notice containing instructions on how to access and review the proxy are first being
mailed to shareholders on or about May 16, 2007. The Company's 2007 Annual
Report to Shareholders, which includes the Company'smaterials, including our Proxy Statement and our Annual Report, on Form
10-KSB for the year ended January 31, 2007, is being mailedInternet and how to shareholders
concurrently with this Proxy Statement.access an electronic proxy card to vote on the Internet or by telephone. The 2007 Annual ReportNotice also contains instructions on how to Shareholders
isreceive a paper copy of the proxy mate rials. If you received a Notice by mail, you will not receive a printed copy of the proxy materials unless you request one. If you received a Notice by mail and would like to be regarded asreceive a printed copy of our proxy soliciting material or asmaterials, please follow the instructions included in the Notice.
If you are a communication by
meansholder of which any solicitationrecord of proxies is to be made.
VOTING RIGHTS AND SOLICITATION
Theour common stock at the close of business on May 2, 2007 was the record dateApril 15, 2010 (the "Record
Date"“Record Date”) for shareholders entitled to notice of and to vote at the 2006 Annual
Meeting. As of the Record Date, the Company had 14,068,145 shares of common
stock issued and outstanding. All of the shares of the Company's common stock
outstanding on the Record Date, you are entitled to vote at the 2007 Annual Meeting.
Holders of the common stock of record entitled to vote at the 2007 Annual
Meeting will have one vote for each share of our common stock so held with regardyou hold. We currently have twenty million (20,000,000) shares of common stock authorized for issuance, and as of the Record Date, there were fourteen million four hundred forty two thousand four hundred twenty five (14,442,425) shares of our common stock, par value $0.001 per share, issued and outstanding.
A quorum of stockholders is necessary to each matter to be voted upon by such shareholders.
All voteshold a valid meeting. A quorum will be tabulated by the inspector of elections appointed for
the 2007 Annual Meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes.
The holders ofpresent if at least a majority in voting interest of the commonoutstanding shares of stock
outstanding and entitled to vote are present at the 2007 Annual Meeting in person or by proxy. Your shares will constitutebe counted towards the quorum only if you submit a quorum for the transaction of businessvalid proxy card or vote at the 2007 Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. The voting interestinspectors of shares ofelection we appoint will tabulate the common stock representedvotes cast in person or by proxy will be counted for purposes of determining whether a quorum is
present at the 2007 Annual Meeting. Shares which abstain from voting as to a
particular matterThe inspectors of election will be treatedtreat proxies marked “withhold” and/or “abstain” as shares that are present and entitled to vote for purposes of determining the voting interest present and entitledpresence of a quorum, but as unvoted for purposes of determining the approval of any matter submitted to the stockholders for a vote at the 2007 Annual Meeting, but will not be counted as votes cast on such
matter.. If a broker or nominee holding stock in "street name" indicates on athe proxy that it does not have discretionary authority as to certain shares to vote as toon a particular matter, those shares will not be considered as present and entitled to vote by the inspectors of election with respect to such matter, butthat matter.
The inspectors of election will not be counted as a vote cast on such matter.
separately count “For” and “Against” votes, abstentions and broker non-votes. In voting with regard to the proposal to elect directors, (Proposal 1),
shareholdersstockholders may vote in favor of all the nominees, withhold their votes as to all nominees or withhold their votes as to a specific nominee. The vote required by Proposal 1 is governed by Delaware law and is a plurality of the votes cast by the holders of shares entitled to vote, provided a quorum is present. AsWith respect to the election of directors, stockholders do not affirmatively vote “Against” directors. Instead, if a result, in accordance with Delaware law, votes that are withheldstockholder does not want to elect a particular director, the stockholder may simply withhold their “For” vote. Abstentions will be counted towards the vote total for each proposal, and brokerwill have the same effect as “Against” votes. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.
1
If your broker holds your shares as your nominee (that is, in “street name”), you will need to obtain a proxy form from the institution that holds your shares and will have no effectfollow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary” items. Discretionary items are typically proposals considered routine under the voting for election
of directors.
Sharesrules of the Company's common stock represented by proxiesNew York Stock Exchange on which a broker may vote shares held in the
accompanying form which are properly executed and returned to the Company will
be voted at the 2007 Annual Meetingstreet name in accordance with the shareholders'
instructions contained therein. In the absence of contrary instructions,your voting instructions. Proposal 1 is considered a non-discretionary item and your broker will not be able to vote your shares represented by such proxies will be voted FOR all nominees for director listedwith respect to Proposal 1 absent your voting instructions.& #160;Proposal 2 is considered discretionary and your broker may vote your shares with respect to Proposal 2 even if you do not provide voting instructions.
You may vote in Proposal 1. Management does not know of any matters to be presented at the
2007 Annual Meeting other than those set forth in this Proxy Statement and in
the Notice accompanying this Proxy Statement. If other matters should properly
come before the 2007 Annual Meeting, the proxy holders will vote on such matters
in accordance with their best judgment.
Any shareholder has the right to revoke his, her or its proxy at any
time before it is voted at the 2007 Annual Meeting by giving written notice to
the Secretaryone of the Company, by executing and delivering to the Secretary a
duly executed proxy bearing a later date, or by appearingfollowing ways:
| ● | attend the Annual Meeting and vote in person; | |
| ● | complete, sign, date and return the enclosed proxy card; or | |
| ● | online or via a toll-free telephone number, by following the instructions in the Notice. |
We will announce preliminary voting results at the 2007 Annual Meeting and publish final voting results in person.
Theour Current Report on Form 8-K to be filed within four (4) business days of the Annual Meeting.
Solicitation
We are making this proxy solicitation and will bear the entire cost of soliciting proxies, including preparing, assembling, printing and mailing the Notice, this Proxy Statement, the proxy card and any additional information furnished to stockholders. This cost is estimated to be approximately $15,000. Copies of solicitation materials will be bornefurnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our stock beneficially owned by the Company.
Proxies will be solicited principally through the useothers, to forward to such beneficial owners. We may reimburse persons representing beneficial owners of theshares of our stock for their costs of forwarding solicitation materials to such beneficial owners. Original solicitation of proxies by mail but, if
deemed desirable, may be solicited personally orsupplemented by telephone, telegraphtelegram or special letterpersonal solicitation by our Board, officers and regular Companyor other employees. We will not pa y our Board or employees any additional compensation for no additional
compensation.soliciting proxies. In addition, the Company has retained American Stock Transfer & Trust Co., its transfer agent, to assist in the solicitation of proxies. The Company will bear all reasonable solicitation fees and expenses of American Stock Transfer & Trust Co. Arrangements may be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies and proxy material to the beneficial owners of the Company'sCompany’s common stock, and such persons may be reimbursed for their expenses.
For Shares Registered in the Name of a Broker or Bank
Most beneficial owners whose stock is held in street name receive instructions for voting their shares from their bank, broker or other agent, rather than from our proxy card.
Revocability of Proxies
Once you have submitted your proxy, you may revoke it at any time before we exercise it at the Annual Meeting. You may revoke your proxy by any one of the following three ways:
| ● | you may submit another proxy marked with a later date; | |
| ● | you may notify our Secretary in writing that you wish to revoke your proxy before the Annual Meeting takes place; or | |
| ● | you may vote in person at the Annual Meeting. Please note that attendance at the Annual Meeting will not, by itself, revoke a proxy. |
2
PROPOSAL 1
ELECTION OF DIRECTORS
COMPOSITION OF BOARD
Description of our Current Board
The Company'sCompany’s Bylaws provide that the Board will consist of not fewer
than four nor more than seven (7) directors. The Board currently consists of four (4) members, all of whom were elected by the holders of the common stock at the 2006
Annual Meeting of Shareholders.with three (3) vacancies. The Board currently has no current plans to change its size, after the 2007size.
The term of office of our four (4) current directors expires at this Annual Meeting and the Board will consist of fournominees are subject to a vote as proposed below. The current members of whom Messrs.our Board are listed in the table below.
| NAME OF DIRECTOR | AGE | DIRECTOR SINCE | ||
| Francis Newman | 61 | November 2002 | ||
| Andrew Horowitz | 48 | September 2002 | ||
| Mark Rosenberg | 48 | March 2004 | ||
| Bernard Korman | 78 | September 2004 |
Nominees for Election as Directors
Each of our current four (4) directors has been nominated by our Nominating Committee for re-election as a director at the Annual Meeting. Each director elected at the Annual Meeting will serve for a term expiring at the Company’s 2011 Annual Meeting or when his successor has been duly elected and Rosenberg are independent underqualified. The Board has no reason to believe that any nominee will refuse or be unable to accept election; however, in the independence standards ofevent that any nominee is unable to accept election or if any other unforeseen contingencies should arise, each proxy that does not direct otherwise will be voted for the Nasdaq stock market.
The Company's directors are electedremaining nominees, if any, and for such other person(s) as may be designated by the shareholders at each annual
meeting of shareholders and will serve until their successors are elected and
qualified, or until their earlier resignation or removal.Board. There are no family relationships among any of the current directors, the nominees for directors andor executive officers of the Company.
The proxy holders named onCompany, other than as descr ibed below under the proxy intendheading “Management” with respect to vote all proxies
received by them inArnold Gans, the accompanying form FORCompany’s Chief Scientific Officer and Myra Gans, the election of the nominees
listed below, unless instructionsCompany’s Executive Vice President.
Below is information with respect to the contrary are marked on the proxy. These
nominees have been selected by the Board. All of the nominees are currently
members of the Board. If elected, each nominee will serve until the annual
meeting of shareholders to be held in 2008 or until his or her successor has
been duly elected and qualified.
In the event that a nominee is unable or declines to serve as a
director at the time of the 2007 Annual Meeting, the proxies will be voted for any nominee who will 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 instructions are given to the contrary. As of the date of
this Proxy Statement, the Board is not aware of any nominee who is unable or
will decline to serve as a director.
The following is certain information as of April 30, 2007 regarding the
nominees for election as directors.
NOMINEES FOR ELECTION AS DIRECTORS
NAME POSITION AGE
---------------- ------------------------------------------- ---
election.
Francis Newman Chairman, Chief Executive Officer, Director 57
Andrew Horowitz Director 44
Mark Rosenberg Director 44
Bernard Korman Director 74
BIOGRAPHICAL INFORMATION REGARDING DIRECTORS
Francis Newman.
Mr. Newman has been a director since November 2002, and Chief Executive Officer of the Company since March 2003, and Chairman since July 2003. From 2001 to 2003, Mr. Newman was a private investor and advisor to health care and pharmaceutical companies. From 2000 to 2001, heMr. Newman was President and CEO of more.com, an internet pharmacy company. From 1993 to 2000, heMr. Newman was President and CEO and from 1997 until 2000, Chairman, President and CEO of Eckerd Corporation, one of the largest drug store chains in the United States. From 1986 until 1993, heMr. Newman was President and CEO of F&M Distributors, Inc., a drug store chain. Mr. Newman is a director of Jabil Circuit, Inc. and JoAnn Stores, Inc. HeMr. Newman has served on the board of the National Association of Chain Drug Stores since 1993, including as its Chairman (1999-2000). Mr.Mr . Newman is a member of the University of Michigan, School of Pharmacy Board of Advisors and a TrusteeChair of the Board of Trustees of Sidwell Friends School, Washington DC. 3
“Mr. Newman’s broad experience as our Chief Executive Officer and as architect of the current strategy for growing the Company, as well as his expertise in the area of health care, consumer products and pharmacology, led to the conclusion he should serve as a director of the Company. “Mr. Newman is not “independent” pursuant to the definition contained in Rule 5605(a)(2) of the NASDAQ Marketplace Rules because Mr. Newman is currently employed as our CEO.
Andrew Horowitz, J.D.
Mr. Horowitz has been a Director since September 2002. HisMr. Horowitz’s most recent ventures were Partners Healthcare, a leading institutional pharmacy company that he started in 1998, and Care Alternatives, a hospice service provider, that he acquired in 2000. Upon graduation from Emory Law School, Mr. Horowitz joined the New Jersey law firm of Norris, McLaughlin & Marcus in the practice of business and tax law. Mr. Horowitz has been in healthcare since succeeding his father in the management of Scotchwood Pharmacy, a successful pharmacy business his dad started 35 years earlier. In 1995, Scotchwood was acquired by The Multicare Companies, a nursing home company traded on the NYSE. Pursuant to that acquisition, Mr. Horowitz became Director of Multicare'sMulticare’s pharmacy operations and in 1996 became a senior officer in the
Company,at Multicare, responsible for all ancillary businesses, including homecare, portable diagnostics and medical supply. Upon Multicare'sMulticare’s acquisition by Genesis Health Ventures in 1997, he left to develop Partners. In 2003, Partners, Care Alternatives and Solutions Healthcare, a JCAHO accredited infusion-therapy business also owned by Mr. Horowitz, were sold to investors as part of a like-kind roll-up, and heMr. Horowitz left the Company in May 2005. HeMr.. Horowitz currently serves as Founder and Chairman of Enclara Health, an End of Life Healthcare services company, headquartered in San Mateo, California.
West Deptford, NJ. Mr. Horowitz’s diverse experience in matters of law and pharmacology as well as his experience in finance, strategic planning and business development, led to the conclusion he should serve as a director of the Company.”Mr. Horowitz is &# 8220;independent” pursuant to the definition contained in Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
3
Mark Rosenberg. Rosenberg
Mr. Rosenberg has been a director since March 2004. He
is one of eight investment professionalsSince 2002, Mr. Rosenberg has been a Principal at MHR Fund Management LLC, a $2
billion fund focused on middle market distressed businesses. He previouslyLLC. Previously, Mr. Rosenberg was Vice President with CRT Capital Group LLC in Greenwich, CT, where he was a Research Analyst of distressed high yield and convertible debt covering the healthcare industry, among others. HeMr. Rosenberg is the former presidentPresident of Rosemark Management, Inc. HeMr. Rosenberg serves on the Board of Ben Arnold Sunbelt Beverage Company of South Carolina, L.P., Columbia, SC. Mr. Rosenberg graduated from the Wharton School, University of Pennsylvania and holds a Bachelors of Science in Economics, 1984. Mr. Rosenberg’s extensive background and broad experience in capital markets, and his expertise in current conditions and trends in corporate finance and structured investments, led to the conclusion he should serve as a director of the Company.” Mr. Rosenberg is “independent” pursuant to the definition contained in Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
Bernard Korman. Korman, J.D.
Mr. Korman has been a director since September 2004. Mr. Korman is Chairman of Philadelphia Health Care Trust, a Foundation dedicated to supporting healthcare delivery, research and education. After practicing law in Philadelphia for 13 years, in 1968 he founded and was Chairman, President and CEO of American Medicorp, Inc. (NYSE), one of the first public hospital management companies in the United States. From 1977 until 1995, heMr. Korman served as President and CEO of MEDIQ Incorporated (AMEX), a healthcare services company, and Chairman of PCI Services, Inc. (NASDAQ), a pharmaceutical packaging services company (1983-1996). Mr. Korman presently serves as a Director of The New America High Income Fund, Inc. (NYSE); and Omega Healthcare Investors, Inc. (NYSE);. Mr. Korman’s extensive background and NutraMax Products, Inc.broad experience in hea lth care, matters of law and capital markets, led to the conclusion he should serve as a director of the Company.” Mr. Korman is “independent” pursuant to the definition contained in Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
OUR BOARD MEETINGS AND COMMITTEES
The RECOMMENDS A VOTE IN FAVOR OF EACH OF THE NOMINEES NAMED ABOVE
4
CORPORATE GOVERNANCE
Board held a total of five meetings duringMeetings
During the fiscal year ended January 31, 2007 (the "2007 Fiscal Year"). The2010, our Board held six (6) meetings. During the 2010 fiscal year, no director attended fewer than seventy five percent (75%) of the number of meetings of our Board held during the period he served on our Board.
Board Committees
Our Board has three (3) committees: an Audit Committee (the “Audit Committee”), a Compensation Committee (the “Compensation Committee”) and a Nominating and Governance Committee.
4
TheCommittee (the “Nominating Committee”). Below is a description of each committee. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
Audit Committee
Our Board established an Audit Committee operates under a written charterin accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and adopted by the
Boardan Audit Committee Charter on January 14, 2003. A copy of theour Audit Committee Charter is locatedavailable online at the Company's web siteour website at www.mdnu.com, under the "Investor Relations" heading. The
Audit Committee's duties include responsibility for reviewing the Company's
accounting practices and audit procedures.heading “Investor Relations / Corporate Governance.” The Audit Committee which consistsadvises and makes recommendations to the Board concerning our internal controls, our independent auditors and other matters relating to our financial activities and reporting.
The Audit Committee is comprised of a total of three (3) directors: Bernard Korman (Chairman), Andrew Horowitz and Mark Rosenberg, held four
meetings duringRosenberg. Our Board has determined that Mr. Korman is qualified to serve as our Audit Committee financial expert as defined in the fiscal year ended January 31, 2007 (the "Fiscal Year").applicable regulations of the SEC. Each member of the Audit Committee meets the independence requirements of the NASDAQ Stock Market listing standards (the "Nasdaq standards"). (SeeMarketplace Rules.
The Audit Committee held four (4) meetings during the "Report2010 fiscal year. During the 2010 fiscal year, no Audit Committee member attended fewer than seventy five percent (75%) of Audit Committee" later in this Proxy Statement, which details the duties and
performancenumber of meetings of the Audit Committee held during the period he served on the Audit Committee.) The Company's
Compensation Committee
Our Board established a Compensation Committee and adopted a Compensation Committee Charter on April 15, 2009. A copy of Directors has
determined that Mr. Kormanour Compensation Committee Charter is qualified to serve as an audit committee financial
expert as defined inavailable online at our website at www.mdnu.com, under the applicable regulations of the Securities and Exchange
Commission.heading “Investor Relations / Corporate Governance.” The Compensation Committee recommends to the Board the compensation and
benefitsis comprised of the Company's executive officers, and has established and reviews
general policies relating to compensation of the Company's employees. The
Compensation Committee, which consists ofthree (3) directors: Andrew Horowitz (Chairman), Bernard Korman and Mark Rosenberg,Rosenberg. Each member of the Compensation Committee meets the independence requirements of the NASDAQ Marketplace Rules.
The Compensation Committee advises and makes recommendations to the Board concerning the compensation of officers and senior management. The Compensation Committee performs its duties by reviewing and approving corporate goals and objectives relevant to the compensation of our officers and senior management. The Compensation Committee then evaluates the performances of our officers and senior management based on the goals and objectives that the Compensation Committee has set for each individual and then uses such evaluations in making its compensation recommendations to our Board. Pursuant to the Compensation Committee Charter, the Compensation Committee may delegate its responsibilities to such subcommittees or individuals as the Compensation Committee deems appropriate in its discretion
The Compensation Committee held threesix (6) meetings during the 2007 Fiscal Year.
The 2010 fiscal year. During the 2010 fiscal year, no Compensation Committee member attended fewer than seventy five percent (75%) of the number of meetings of the Compensation Committee held during the period he served on the Compensation Committee.
5
Nominating & GovernanceCommittee
Our Board established a Nominating Committee operates underand adopted a written charter
adopted by the boardNominating Committee Charter on February 25, 2004. A copy of theour Nominating & Governance Committee Charter is available on the Company'sonline at our website at www.mdnu.com, under the "Investor Relations" heading.heading “Investor Relations / Corporate Governance.” The Nominating & Governance Committee'sCommittee is comprised of three (3) directors: Mark Rosenberg (Chairman), Andrew Horowitz and Bernard Korman. Each member of the Nominating Committee meets the independence requirements of the NASDAQ Marketplace Rules.
The Nominating Committee’s duties include developing and maintaining a current list of the functional needs and qualifications of members of the Board, evaluating and recommending whether a member of the Board meets the criteria to qualify as an "independent"“independent” director under the Nasdaq standards,NASDAQ Marketplace Rules, to interview, evaluate, nominate and recommend individuals for membership on the Board as required and to evaluate the effectiveness of the meetings of the Board, including agendas, meeting materials, meeting structure and organization, schedule of meetings and minutes. The committeeNominating Committee also prepares, recommends and establishes Board policies for corporate governance and planning.
The Nominating & Governance Committee, which
consists of Mark Rosenberg (Chairman), Andrew Horowitz and Bernard Korman, had
two meetings during the 2007 Fiscal Year. Each member of the Nominating &
Governance Committee meets the independence requirements of the Nasdaq
standards.
The Nominating & Governance Committee'sCommittee’s purpose is to periodically report to the Board of Directors regarding corporate governance matters, including making recommendations of qualified nominees for election to the Board
of Directors.Board. The Nominating Committee identifies director candidates through recommendations made by members of the Board, of Directors, management, shareholdersstockholders and others, or an executive search firm. At a minimum, a Directordirector nominee should have significant management or leadership experience which is relevant to the Company'sCompany’s business, as well as professional and personal integrity. Recommendations are developed based on the nominee'snominee’s own knowledge and experience in a variety of fields, and research conducted by the Company'sCompany’s staff at the Nominating and Governance Committee'sCommittee’s direction. 5
NominationAdditionally , while the Nominating Committee does not have a formal policy relating specifically to the consideration of Director Candidates. diversity in making recommendations of qualified nominees for election to the Board, the Nominating Committee considers a variety of factors, including diversity of viewpoints, in making recommendations of such qualified nominees.
The Nominating Committee held three (3) meetings during the 2010 fiscal year. During the 2010 fiscal year, no Compensation Committee member attended fewer than seventy five percent (75%) of the number of meetings of the Compensation Committee held during the period he served on the Compensation Committee.
Nominations for the election of directors may be made by the Board, or a proxy committeeby the Nominating Committee appointed by the Board or by stockholders of the company.Company. Any stockholder nominating Directordirector candidate(s) for election at a meeting of the shareholdersstockholders must: (1) Be(i) be a stockholder of record of the Company at the time of the giving of the notice of meetingthe Annual Meeting and at the time of the meeting.
(2) BeAnnual Meeting; (ii) be entitled to vote at the meeting inAnnual Meeting for the election of Directors.
(3) Givedirectors; and (iii) give timely written notice of the nomination to the Secretary.
Stockholder's
A stockholder’s notice nominating a director candidate must be received by the Secretary at the principal offices of the Company not later than the close of business on the fifteenthtwentieth (20th) calendar day, and not earlier than the opening of business on the thirtieth (30th) calendar day, prior to the meeting;meeting. A shareholder'sstockholder’s notice must set forth all of the information about each director candidate required to be disclosed in a proxy statement complying with the rules of the Securities and Exchange CommissionSEC used in connection with the solicitation of proxies for the election of the director candidate as a Director.director. If the officer presiding at the meetingmeet ing determines that one or more of the director candidates has not been nominated in accordance with these procedures, he or she will so declare at the meeting, and the director candidates will not be considered or voted upon at the meeting.
Shareholders
Communications with the Board of Directors
Stockholders who wish to communicate with members of the Board may send correspondence to them in care of Corporate Secretary, Medical Nutrition USA, Inc., Corporate Secretary, 10 West Forest Avenue, Englewood, New Jersey 07631. The Corporate Secretary will forward all communications received to the Board not later than the next regularly scheduled Board meeting.
6
Code of Ethics
The Company has adopted a code of ethics that applies to our directors and executive officers, including our principal executive officer, principal financial officer and controller. This codecontroller (the “Code of ethicsEthics”). The Code of Ethics can be found on the Company'sCompany’s website www.mdnu.com under the "Investor Relations" heading.
DIRECTOR COMPENSATIONheading “Investor Relations / Corporate Governance.”
Attendance of Directors at Annual Meetings of Stockholders
The Company does not have a requirement with regard to board members’ attendance at the Annual Meeting. However, we encourage each of our directors to attend each annual meeting of stockholders. All of our current directors who were directors as of the Company who are not officers or employees receive,2009 Annual Meeting of Stockholders (the “2009 Annual Meeting”) attended the 2009 Annual Meeting.
Board Leadership Structure and Role in Risk Oversight
Currently, Mr. Newman serves as compensation for their servicesthe Company’s CEO and as directors, including the committees on which
they serve: (a) a grant, at the time of their election or appointment, of an
option to purchase 15,000 sharesChairman of our common stock,Board. The Board does not have a policy on whether or not the roles of CEO and (b) an annual grantChairman should be separate. Instead, the Company’s by-laws provide that the Company’s Board has the authority to choose its Chairman in any way it deems best for the Company at any given point in time. Accordingly, the Board reserves the right to vest the responsibilities of an option to purchase 15,000 sharesthe CEO and Chairman in the same person or in two different individuals depending on what it believes is in the best interest of our common stock.Company. The Board believes that there is no single Board leadership structure that would be most effective in all circumstances and therefore retains the authority to modify this structure to best address our Company’s and Board’s then current circu mstances as and when appropriate.
The Board and, in particular, the Company’s Audit Committee are involved on an ongoing basis in the general oversight of our material identified enterprise-related risks. Each of the Company’s CEO, CFO and general counsel, with input as appropriate from other appropriate management members, report and provide relevant information directly to either the Board and/or the Audit Committee on various types of identified material financial, reputational, legal, environmental and business risks to which the Company is or may be subject, as well as mitigation strategies for certain key identified material risks. The Board’s and Audit Committee’s roles in the Company’s risk oversight process have not affected the Board leadership structure.”
MANAGEMENT
The following sets forth the names, ages and positions of the Company’s executive officers as of April 15, 2010:
| NAME | POSITION | AGE | ||
| Francis Newman | Chairman, Chief Executive Officer and Director | 61 | ||
| Frank Kimmerling | Vice President – Finance, Chief Financial Officer, Treasurer | 41 | ||
| Jeffrey Janco | Senior Vice President/Operations, Chief Operations Officer | 53 | ||
| Arnold Gans | Chief Scientific Officer | 75 | ||
| Myra Gans | Executive Vice President | 72 | ||
| Robert Mathias | Vice President Sales and Marketing | 56 |
Background
Francis Newman
See “ELECTION OF DIRECTORS – Nominees for Election as Directors” for additional biographical information on Mr. Newman.
7
Frank Kimmerling
Mr. Kimmerling has served as our Vice President Finance, Chief Financial Officer and Treasurer since November 11, 2008. Mr. Kimmerling was most recently Chief Financial Officer of Lamina Lighting, a global high tech manufacturing company focused on LED technology from August 2007 through August 2008. Mr. Kimmerling previously served as Senior Manager and a Chief Financial Officer for Geller and Company’s Emerging Business Group from March, 2004, through August, 2007 where he provided outsourced finance and accounting services to a range of businesses, serving as Chief Financial Officer for each of his clients. Prior to that, Mr. Kimmerling served as a Divisional CFO for the BISYS Group Inc. (NYSE), a financial services company from April 2002 through December 2003. Mr. Kimmerling is a Magna Cum Laude graduate of Ball State University where he received a BS in accounting, and is also a CPA.
Jeffrey Janco
Mr. Janco has been the Senior Vice President and Chief Operations Officer since February 2007. Mr. Janco previously served as the Company’s Senior Vice President of Operations since 2006 and Vice President of Operations since 1989. His responsibilities include office administration, supply chain management, inside sales/customer service, human resources, information technology and logistics. He earned his Bachelor of Business Administration degree from the University of Miami.
Arnold Gans
Mr. Gans has been Chief Scientific Officer since February 2007. Mr. Gans previously served as President from the founding of the Company’s predecessor in 1981 until 2007. Mr. Gans was previously President of Control Drug, Inc. a manufacturer of nutritional protein supplements. Mr. Gans has served on the Board of Holy Name Hospital in Teaneck, New Jersey. Mr. Gans serves on the Alumni Board of Columbia University’s School of Public Health and was Chairman of the committees receive an additional 5,000 optionsAlumni Federation Scholarship Aid Committee. Mr. Gans is married to purchase sharesMyra Gans, the Company’s Executive Vice President.
Myra Gans
Ms. Gans has been Executive Vice President since 1982 and was Secretary from 1990 to December 2006. Ms. Gans has over 25 years of our common
stock. experience working with clinicians and hospitals to integrate the Company’s products and programs. Ms. Gans initiates and manages customer agreements and distribution contracts for branded products as well as federal, state and county bids. She is responsible for marketing and advertising for branded products. Ms. Gans also develops the marketing and business plans for all new products. She attended Cornell University and Finch College and holds a Bachelor of Arts degree in English Literature. Ms. Gans is married to Arnold Gans, the Company’s Chief Scientific Officer.
Bob Mathias
Mr. Mathias joined Medical Nutrition’s management team as Vice President of Sales and Marketing effective April 13, 2009. From 2006 to 2009, Mr. Mathias was Vice President Marketing and Business Development for Alimentary Health Inc., a development stage Biotechnology company. From 2004 to 2006, Mr. Mathias served as Director of Marketing for Novartis Medical Nutrition (a Novartis Consumer Health company), a $1 billion global manufacturer and marketer of consumer and medical nutritional products. Prior to that, from 1986 to 2004 Mr. Mathias served in various sales and management capacities for Mead Johnson Nutritionals (a Bristol-Meyers Squibb company). Mr. Mathias earned his Bachelor of Commerce / Business Administration from Concordia University in Montreal, Canada.
8
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The exercise price of these options is equal to the last reported sale
price for our common stock on the trading day preceding the grantAudit Committee of the options.
CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS
On April 26, 2006,Board has selected Amper, Politziner & Mattia, LLP. (“Amper”) as our independent registered public accounting firm for the "Company" was notified by Goldstein & Ganz, P.C.
("Goldstein & Ganz") that they were decliningfiscal year ending January 31, 2011, and has requested management to standask for re-election asstockholder ratification of such selection at the Company's independent accountant.
6
The audit reports of Goldstein & Ganz on the consolidatedAnnual Meeting. Amper has audited our financial statements of the Company as of and for the fiscal year ended January 31, 20062010. Representatives of Amper are expected to be at the Annual Meeting to answer any questions and 2005 didmake a statement should they be asked to do so.
Although our bylaws do not contain an adverserequire stockholders to approve our independent registered public accounting firm, the Audit Committee would like our stockholders’ opinion as a matter of good corporate practice. If the stockholders vote against Amper, the Audit Committee will reconsider whether to keep the firm. However, even if the stockholders ratify the selection, the Audit Committee may choose to appoint a different independent accounting firm at any time during the year if it believes that a change would be in the best interests of our stockholders and our Company.
We require the affirmative vote of the holders of a majority of the outstanding shares of stock present in person or disclaimerrepresented by proxy and entitled to vote at the Annual Meeting to ratify the selection of opinionAmper. Abstentions will be counted toward the tabulation of votes cast on proposals presented to our stockholders and werewill have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not qualified as to uncertainty,counted for any purpose in determining whether this matter has been approved.
Principal Accountant Fees and Services
Aggregate fees billed by Amper for audit scope or accounting principals, except
that the audit reportservices for the fiscal year ended January 31, 2005 stated that the
Company's consolidated financial statements for its fiscal years ended January 31, 20052009 and 2004 had been restated.
During the two most recent fiscal years ended January 31, 20062010, and subsequent interim period through April 26, 2006, there were no disagreements
betweenfor other professional services billed in the Company and Goldstein & Ganz on any matter of accounting principals
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Goldstein & Ganz,
would have caused Goldstein & Ganz to make reference to the subject matter of
the disagreement in their audit reports.
AUDIT FEES
During the lastmost recent two fiscal years, Goldstein & Ganz and Amper,
Politziner & Mattia billed the Company the following fees for its services:
Fiscal Year Ending
-----------------------------------
January 31, 2006 January 31, 2007
---------------- ----------------
Audit Fees $ 40,000 $ 90,000
Audit-Related Fees $ 6,325 $ 0
Tax Fees (1) $ 0 $ 10,700
All Other Fees (2) $ 26,375 $ 17,781
(1) Represents $5,700 paid to Dischino & Associates and $5,000 to Amper,
Politziner & Mattia, P.C. for tax return preparation.
(2) All other fees includes additional SEC filings and miscellaneous items. For
fiscal year ended January 31, 2007, $17,134 was paid to Goldstein & Ganz and
$647 to Amper, Politziner & Mattia, P.C. For fiscal year ended January 31, 2006,
all monies were paid to Goldstein & Ganz.
as follows:
| Fees billed by for | Fees billed by for | |||||||
| Type of Service | the year ended January 31, 2009 | the year ended January 31, 2010 | ||||||
| Audit Fees | $ | 114,000 | $ | 114,000 | ||||
| Audit-Related Fees | $ | 0 | $ | 663 | ||||
Tax Fees (1) | $ | 24,025 | $ | 28,785 | ||||
All Other Fees (2) | $ | 23,820 | $ | 17,165 | ||||
| Total | $ | 161,845 | $ | 160,612 | ||||
(1) [For fiscal year ended January 31, 2010 tax fees represent $28,785 paid to Eichen & DeMeglio P.C. . For fiscal year ended January 31, 2009, tax fees represents $24,025 paid to Eichen & DeMeglio P.C.. |
(2) All other fees include additional SEC filings, Sarbanes-Oxley preparation costs and miscellaneous items. For the fiscal year ended January 31, 2010 $12,115 was paid to Accume Partners, $4,650 to Amper Politziner & Mattia, LLP AND $400 to the Public Accounting Oversight Board. For fiscal year ended January 31, 2009, $10,320 was paid to Accume Partners and $500 to the Public Accounting Oversight Board. |
It has historically been the practice of the Company that all audit fees are approved by the Audit Committee. However, other fees paid to our
independent auditors have historically not been pre-approved by the Audit
Committee, and such fees were not pre-approved by the Audit Committee during the
2006 Fiscal Year. In compliance with the rules adopted by the SEC in order to implement the requirements of the Sarbanes-Oxley Act of 2002, our Audit Committee has adopted pre-approval policies and procedures, which policies and procedures are discussed below.
Our Audit Committee has considered whether the provision of services other than those described above under the heading "Audit Fees"“Audit Fees” are compatible with maintaining the independence of our principal accountants, and concluded that they are compatible.
AUDIT COMMITTEE PRE-APPROVAL POLICIES
9
Pre-Approval Policies
Our Audit Committee has adopted pre-approval policies and procedures pursuant to which audit and permissible non-audit services may be pre-approved by category of service. The fees are budgeted, and actual fees versus the budget are monitored throughout the year. During the year, circumstances may arise when it may become necessary to engage the independent auditor for additional services not contemplated in the original pre-approval. In those instances, for any fees for services above $5,000, we will obtain the specific pre-approval of the Audit Committee before engaging the independent auditor for such services. The policies require the Audit Committee to be informed of each service, and the policies do not include any delegation of the Audit Committee'sCommittee’s responsibilities to management. The Audit Committee may delegate pre-approvalpre-appr oval authority to one or more of its members. The member to whom such authority is delegated will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. 7
MANAGEMENT
The following sets forth the names, ages and positionsNone of the Company's
executive officers ashours expended on services provided by Amper were attributable to persons other than Amper’s full-time, permanent employees.
OUR BOARD RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
10
AUDIT COMMITTEE REPORT (1)
The Audit Committee oversees our financial reporting process on behalf of May 10, 2007:
BACKGROUND
Francis Newman. Mr. Newmanour Board. Management has been Chairmanthe primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 with management, including a discussion of the Company since July
2003, Chief Executive Officer since March 2003 and a Directorquality, not just the acceptability, of the Company
since November 2002. See, "Proposal 1--Electionaccounting principles, the reasonableness of Directors"significant judgments, and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with our independent auditors, Amper, who are responsible for additional
biographical information on Mr. Newman.
Alan Levy. Mr. Levy has been Vice President, Finance and Chief
Financial Officer, Treasurer and Principal Financial and Accounting Officer
since October 2006 and Secretary since December 2006. From 2004 to 2006 he was a
consultant to public and private companies in a variety of industries. From 2000
to 2004 he was Senior Vice President, Finance, Chief Financial Officer of ATC
Healthcare, Inc. (AMEX), a company providing medical staffing personnel to
hospitals, nursing homes, clinics and other health care facilities. From 1997 -
1999, Mr. Levy was the Corporate Controller and Chief Accounting Officer of
Globix Corp (NASDAQ),expressing an internet service provider and computer hardware
reseller. His prior experience also includes management positions at Del
Laboratories Inc.(AMEX), the American Institute of Certified Public Accountants
and Ernst & Young. Mr. Levy is a Certified Public Accountant and received his
Bachelor of Science in Accounting from Long Island University.
Jeffrey Janco. Mr. Janco has been the Senior Vice President and Chief
Operations Officer since February, 2007. Mr. Janco previously served as the
Company's Senior Vice President of Operations since 2006 and Vice President of
Operations since 1992. His responsibilities include office administration,
supply chain management, inside sales/customer service, human resources,
information technology and logistics. He earned his Bachelor of Business
Administration degree from the University of Miami.
8
Arnold Gans. Mr. Gans has been Chief Scientific Officer since February,
2007. Mr. Gans previously served as President from the founding of the Company's
predecessor in 1981 until 2007. He was previously President of Control Drug,
Inc. a manufacturer of nutritional protein supplements. Mr. Gans has servedopinion on the conformity of our audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of our accounting principles and any other matters as are required to be discussed with the Audit Committee under generally accepted auditing principles. The Audit Committee also discussed with our independent auditors the matters required by the Statement on Auditing Standards No. 61, as amended, and as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has discussed with the independent auditors the auditors’ independence from management and us, including the matters in the written disclosure s required by the Independence Standards Board. The Audit Committee received from Amper written disclosure and the letter regarding the independence of Holy Name HospitalAmper as required by Independence Standards Board Standard No. 1, and as adopted by the Public Company Accounting Oversight Board in Teaneck, New Jersey. He servesRule 3600T, and has discussed Amper’s independence with Amper.
The Audit Committee discussed with our independent auditors the overall scope and plans for their audit. The Audit Committee met with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.
In reliance on the Alumnireviews and discussions referred to above, the Audit Committee recommended that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 for filing with the SEC. The Audit Committee and our Board have also recommended, subject to stockholder approval, the selection of Columbia University's SchoolAmper as our independent auditors.
The Audit Committee of our Board | ||
Bernard Korman (Chairman) Andrew Horowitz Mark Rosenberg |
(1) This Section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of Public Health and was Chairmanour filings under the Securities Act of 1933, as amended, or the Alumni Federation Scholarship Aid Committee. Mr. Gans is married to Myra Gans,
the Company's Executive Vice President.
Myra Gans. Ms. Gans has been Executive Vice President since 1982 and
was Secretary from 1990 to December 2006. Ms. Gans has over 25 years of
experience working with clinicians and hospitals to integrate the Company's
products and programs. Ms. Gans initiates and manages customer agreements and
distribution contracts for branded products as well as federal, state and county
bids. She is responsible for marketingand advertising for branded products. Ms.
Gans also develops the marketing and business plans for all new products. She
attended Cornell University and Finch College and holds a Bachelor of Arts
degree in English Literature. Ms. Gans is married to Arnold Gans, the Company's
Chief Scientific Officer.
David Shapiro. Mr. Shapiro has been Vice President of Sales since
December 2006. Mr. Shapiro was Regional Vice President - Sales, for Novartis
Medical Nutrition from 2004 to 2006 and has over 20 years of international sales
and general management experience with Mead Johnson Nutritionals, Bristol Myers
Squibb and Philip Morris International, including responsibility for
establishing new business units and managing market expansions in Vietnam,
Australia, South Korea and the Philippines. Mr. Shapiro holds a Bachelor Degree
from Monash University in Melbourne, Australia.
9
Exchange Act.
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of April 15, 2010, we had a total of fourteen million four hundred forty two thousand four hundred twenty five (14,442,425) shares of common stock, issued and outstanding. The following table sets forth, certain information regardingas of April 15, 2010, the beneficialstock ownership of the Company's common stockeach of our Named Executive Officers (as defined below), each of our directors, all of our Named Executive Officers and directors as of May10, 2007 by: (i)a group and each person (or group of affiliated persons) known by the Companyus to be thea beneficial owner of 5% or more than 5% of the outstanding shares of the Company'sour common stock; (ii) each of the Company's directors; (iii) the Chief Executive
Officer of the Company and each of the three other most highly-compensated
executive officers of the Company serving as such as of the end of the last
fiscal year whose total annual salary and bonus exceeded $100,000, for services
rendered in all capacities to the Company (such individuals are hereafter
referred to as the "Named Executive Officers"); and (iv) all of the Company's
directors and Named Executive Officers as a group:
(1) Unless otherwise noted, the address for each person is c/o Medical Nutrition
USA, Inc., 10 West Forest Avenue, Englewood, New Jersey 07631.
(2) Percentage ownership is based on 14,068,145 shares of common stock
outstanding on May 2, 2007. Beneficial ownership is determined in accordance
withstock. Under the rules of the SEC, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security which that person has the right to acquire within sixty (60) days, such as warrants or options to purchase shares of our common stock. Unless otherwise noted, each person listed below is the sole beneficial owner of the shares and generally includeshas sole investment and voting or investment power of such shares.
| Title of Class | Name and address of Beneficial Owner(1) | Shares Beneficially Owned(2) | �� | Percentage Beneficially Owned | ||||
Executive Officers and Directors: | ||||||||
| Common | Francis Newman, Chief Executive Officer, Chairman, Director | 2,470,799 | (3) | 16.4 | % | |||
| Common | Bernard Korman, Director | 350,278 | (4) | 2.4 | % | |||
| Common | Andrew Horowitz, Director | 328,348 | (5) | 2.3 | % | |||
| Common | Mark Rosenberg, Director | 111,933 | (6) | * | ||||
| Common | Arnold Gans, Chief Scientific Officer | 1,342,927 | (7) | 8.7 | % | |||
| Common | Myra Gans, Executive Vice President | 1,342,927 | (8) | 8.7 | % | |||
| Common | Jeffrey Janco, Senior Vice President, Chief Operations Officer | 391,176 | (9) | 2.7 | % | |||
| Common | All directors and executive officers as a group (7 persons) | 4,995,460 | (10) | 30.1 | % | |||
| 5% Stockholders: | ||||||||
| Common | Richard Ullman, | 2,886,662 | (11) | 20.0 | % | |||
| 1200 Route 46 West, Clifton, New Jersey 07013 | ||||||||
| Common | Mark Rachesky, | 2,882,233 | (12) | 20.0 | % | |||
40 West 57th Street, New York, New York 10019 | ||||||||
| * | Less than 1% |
| (1) | Except as otherwise noted, the address for each person is c/o Medical Nutrition USA, Inc., 10 West Forest Avenue, Englewood, New Jersey 07631. |
| (2) | Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock listed as beneficially owned by them. A person is deemed to be the beneficial holder of securities that can be acquired by such person within sixty (60) days of April 15, 2010. Each beneficial holder’s percentage ownership is determined by including shares underlying options, warrants or convertible securities which are exercisable or convertible by such person currently or within sixty (60) days of April 15, 2010, and excluding shares underlying options, warrants or convertible securities held by any other person. |
| (3) | Consists of (a) 1,858,799 shares of common stock, and (b) 612,000 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held by Mr. Newman. |
| (4) | Consists of (a) 258,278 shares of common stock, and (b) 92,000 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held by Mr. Korman. |
| (5) | Consists of (a) 224,348 shares of common stock, and (b) 104,000 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held by Mr. Horowitz. |
| (6) | Consists of (a) 14,932 shares of common stock, and (b) 97,000 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held by Mr. Rosenberg. |
| (7) | Consists of (a) 401,927 shares of common stock jointly owned with Myra Gans, (b) 520,500 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held directly by Mr. Gans and jointly owned with Ms. Gans, and (c) 420,500 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held directly by Ms. Gans and jointly owned with Mr. Gans. |
| (8) | Consists of (a) 401,927 shares of common stock jointly owned with Arnold Gans, (b) 420,500 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held directly by Ms. Gans and jointly owned with Mr. Gans, and (c) 520,500 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held directly by Mr. Gans and jointly owned with Ms. Gans. |
12
| (9) | Consists of (a) 91,176 shares of common stock, and (b) 300,000 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held by Mr. Janco. |
| (10) | Includes (a) 2,849,460 shares of common stock and (b) 2,146,000 shares of common stock issuable upon the exercise of options that are exercisable within sixty (60) days of April 15, 2010 held by our directors and executive officers as a group. |
| (11) | Mr. Ullman is a limited partner of the Ullman Family Partnership LP. Ownership consists of shares of common stock beneficially owned on behalf of the Ullman Family Partnership LP. |
| (12) | Based on the statement on Schedule 13D/A filed with the Securities and Exchange Commission on February 26, 2008 which reported on the behalf of Mark H. Rachesky, MD and various other entities. Dr. Rachesky is the managing member of MHR Capital Partners Master Account LP, MHR Advisors LLC and MHR Fund Management LLC. These funds have sole voting power over 1,986,133 shares. Dr. Rachesky owns directly and has sole voting power over 896,100 shares. Dr. Rachesky is the brother-in-law of Francis A. Newman. |
13
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires our directors, executive officers and holders of more than ten percent (10%) of a registered class of our equity securities to file with respect to securities. Sharesthe SEC initial reports of ownership and reports of changes in ownership of our common stock subjectand our other equity securities. Directors, executive officers and greater than ten percent (10%) stockholders are required by SEC regulation to options, warrants and
convertible notes currently exercisable or convertible, or exercisable or
convertible within 60 days, are deemed outstanding for determining the numberfurnish us with copies of shares beneficially owned and for computing the percentage ownershipall Section 16(a) reports they file. Based solely on our review of the person holdingcopies of such options, but are not deemed outstandingforms that we received, we believe that all reporting requirements under Section 16(a) for computing the percentage ownershipfiscal year ended January 31, 2010 were met in a timely manner by our directors, executive officers and greater than ten percent (10%) beneficial owners.
14
EXECUTIVE COMPENSATION
Compensation of any other person. Except as indicatedExecutive Officers
Set forth below is information regarding compensation earned by, footnote,paid or awarded to the following executive officers during the fiscal year ended January 31, 2010: (i) Francis Newman, our Chairman and subject to community property laws where applicable, the persons named in the
table have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them.
10
(3) Consists of (a) 1,883,929 shares of common stock, (b) 462,000 shares of
common stock issuable upon the exercise of options that are immediately
exercisable.
(4) Consists of (a) 34,101 shares of common stock, (b) 233,000 shares of common
stock issuable upon the exercise of options that are immediately exercisable.
(5) Consists of (a) 372,556 shares of common stock jointly owned with Myra Gans,
(b) 395,499 shares of common stock issuable upon the exercise of options owned
directly and immediately exercisable, and 320,499 shares of common stock
issuable upon the exercise of options beneficially owned by Ms. Gans and
immediately exercisable.
(6) Consists of (a) 372,556 shares of common stock jointly owned withChief Executive Officer; (ii) Arnold Gans, (b) 320,499 shares of common stock issuable upon the exercise of options
owned directlyour Chief Scientific Officer; and immediately exercisable, and 395,499 shares of common stock
issuable upon the exercise of options beneficially owned by(iii) Jeffrey Janco our Senior Vice President – Operations & Chief Operations Officer. Mr. Gans and immediately exercisable.
(7) ConsistsMr. Janco represent our two (2) most highly-compensated executive officers whose total compensation exceeded $100,000, other than Mr. Newman, who were serving as executive officers at January 31, 2010. The identification of (a) 224,348 shares of common stock owned directly and (b) 44,000
shares of common stock issuable uponsuch named executive officers is determined based on the exercise of options owned directly that
are immediately exercisable.
(8) Consists of (a) 14,933 shares of common stock, (b) 37,000 shares of common
stock issuable uponindividual’s total compensation for the exercise of options that are immediately exercisable.
(9) Consists of (a) 258,278 shares of common stock, (b) 26,000 shares of common
stock issuable uponfiscal year ended January 31, 2010, as reported below in the exercise of options that are immediately exercisable.
(10) Mr. Ullman isSummary Compensation Table, other than amounts reported as a limited partner of the Ullman Family Partnership LP.
Ownership consists of (a) 2,322,001 shares of common stock beneficially ownedbove-market earnings on behalf of the Ullman Family Partnership LP. Their address is 1200 Route 46 West,
Clifton, New Jersey 07013.
(11) Consists of (a) 1,296,100 shares of common stock owned directly and 496,000
beneficially owned MHR Capital Partners LP, and 1,994,699 beneficially owned MHR
Capital Partners Master Account LP. Mr. Rachesky is the brother-in-law of
Francis A. Newman. (See "Certain Relationships and Related Transactions" later
in this Proxy Statement for further information regarding the convertible
promissory note). Their address is 40 West 57th Street, New York, New York
10019.
11
COMPENSATION DISCUSSION AND ANALYSIS
OUR COMPENSATION PHILOSOPHY AND PROGRAM OBJECTIVES.
The underlying philosophy of our compensation program is pay for
performance. Our goal is to design and maintain a performance-oriented
compensation program that will support our long-term objectives. We believe we
can achieve that goal by providing competitive salaries, short-term and
long-term incentivedeferred compensation and the actuarial increase in pension benefit programs that support our strategy.
Specifically, our compensation program seeks to:
o Establish compensation performance objectives that are aligned with
corporate goals;
o Provide a high degree of correlation between compensation and
performance;
o Create long-term incentives directly linkedaccruals. We refer to shareholder returns;
o Attract, retain and motivate our employees; and
o Value our employees contributions to our success.
HOW WE SET COMPENSATION LEVELS.
We strive to deliver total compensation that is commensurate with each
employee's role and relative impact on our overall business, and comparable to
that offered bythese executives collectively as the companies with which we compete for talent.
Our Chief“Named Executive Officer makes recommendations to the Compensation
Committee regarding the compensation of all officers, within guidelines
established by the Compensation Committee. The Compensation Committee approves
the compensation of each officer, including our Chief Executive Officer.
ELEMENTS OF OUR COMPENSATION PROGRAM.
Our compensation program for executives and managers consists of three
elements:
o A base salary;
o A performance-based annual bonus; and
o Long-term incentive compensation in the form of grants of stock
option awards and time-based restricted shares.
Officers.”
The following table sets forth each element of compensation, andfor our Named Executive Officers: (i) the role and purpose of that element in our compensation program.
12
- --------------------------------------------------------------------------------
ELEMENT ROLE & PURPOSE
- --------------------------------------------------------------------------------
Base Salary o Reflect the marketdollar value of the position
and provide a stable source of income for
the individual.
o Attract, retain and motivate qualified
individuals.
- --------------------------------------------------------------------------------
Short-Term Incentive o Focus efforts on the attainment of the
Compensation company's annual performance objectives.
o Reward exceptional performance.
- --------------------------------------------------------------------------------
Long-Term Incentive o Align employee interests with those of
Compensation our shareholders.
o Provide a balance between the achievement
of short-term results and long-term value
creation.
o Promote a culture of share ownership.
o Provide an incentive for employees to
remain with the Company over time.
- --------------------------------------------------------------------------------
Base Salary. In general, base salary and other components of
compensation are determined by job responsibility, market data, internal equity
andearned during the individual's performance, experience and skills. Individual performance
is considered byfiscal year ended January 31, 2010; (ii) the Compensation Committee when determining future base salary
and may have an impact on an officer's opportunity to receive short-term or
long-term incentive compensation. Because of the addition of two officers in
late fiscal 2007, and the resulting realignment of responsibilities, we granted
no base salary increases to our officers for fiscal 2008.
Short-Term Incentive Compensation. We provide our officers with the
opportunity to earn annual bonuses through our Executive Bonus Plan. We believe
that this aligns their interests with our business plan, encourages teamwork in
achieving common goals and rewards individuals for achieving financial
performance goals. Bonuses are based on a percentage of each person's base
salary, which percentage generally is set at the same level for all officers of
a similar rank. Personal performance goals are established for each officer in
order to align his or her activities with Company goals. The Compensation
Committee established Mr. Newman's individual performance goals. All individual
performance goals for the officers were established with and approved by Mr.
Newman and reviewed by the Compensation Committee. Our fiscal 2007 and 2008
performance goals are discussed in more detail below.
13
Fiscal Year 2007. In June 2005, the Compensation Committee approved a
bonus plan for officers whereby 50% was based on sales and 50% on EBITDA, with
annual targets to be set at a level approved by the Board. The percentage
combinationdollar value of cash and common stock of the Company used to pay the bonuses each
year was to be at the discretion of the Board of Directors, but in no case would
the cash portion be less than 25% of the bonuses awarded. For Fiscal 2007, the
Company achieved 82% of the sales target and 79 % of the EBITDA target, and paid
total bonuses of $30,400.
Fiscal Year 2008. During fiscal 2008, the objective performance
measures established by the Compensation Committee will be based on our earnings
before interest, taxes, depreciation, amortization and stock-based compensation
expense ("EBITDAS") and sales, each established as a range (Threshold, Target,
Maximum). The achievement of target performance is based on the achievement of
our business plan for fiscal 2008. We believe that our business plan is
challenging, but achievable. Therefore, we believe that there is a reasonable
possibility that our actual performance will approach, if not meet, the target
levels of performance under the plan. Our threshold performance level for
EBITDAS is approximately 80% of our target performance level, and our Maximum
performance level for EBITDAS is approximately 120% of our target performance
level. Bonuses will not be payable under the plan if the Threshold performance
level set by the Compensation Committee for EBITDAS and sales is not achieved.
Under the plan, each executive officer's bonus opportunity for fiscal 2008 will
be based on our level of achievement of our EBITDAS and sales goals. The bonus
opportunity for Mr. Newman and Mr. Gans, will be up to 100% of their base
salary. The bonus opportunity for Mr. Levy, Mr. Janco, Ms. Gans and Mr. Shapiro
will be up to 50% of their base salary.
Long-Term Incentive Compensation. The Compensation Committee believes
that long-term incentive compensation is best achieved through equity-based
incentives, thereby ensuring that our employees not only have a continuing stake
in our long-term success but also that their interests are aligned with the
interests of our shareholders. We also believe that this ownership interest
helps provide our officers and other members of management with an incentive to
consider both the short-term results of their actions as well as the longer-term
impact on overall Company performance.
Performance shares, stock option awards and time-based restricted
shares are available for grant to officers and other management team members
under the 2003 Omnibus Equity Incentive Plan ("OEIP"). The Compensation
Committee oversees the OEIP, specifically approves all awards to officers and
other members of management team, and approves, on a program basis, grants to
other employees. We believe that each vehicle serves a specific purpose and
employ each vehicle, as necessary, to meet our compensation objectives. The
Compensation Committee's approach with respect to long-term incentive
compensation has evolved over time; the present approach can be summarized as
follows:
14
The Compensation Committee grants long-term incentive compensation
awards based on a targeted dollar value that is determined in relation to an
employee's level and base salary. In addition, the Compensation Committee bases
its decisions on such considerations as the potential for dilution to our
shareholders, the expense associated with the awards, the relative proportion of
long-term incentives within the total compensation mix, and, the importance of
the individual to us. As a result, a significant portion of our executives'
total compensation is dependent upon the achievement of our performance
objectives and increases in the price of our common shares. We believe that our
compensation program rewards our officers for achieving performance goals over
which they have control.
Fiscal Year 2007. During fiscal 2007, we granted time-based restricted
shares to our executive team, a stock option award to Mr. Levy who joined the
Company in October 2006 and a stock option award to Mr. Shapiro who joined the
Company in December 2006.
Equity-based incentives made during fiscal 2007 to the Chief Executive
Officer represented 9% percent of all equity-based incentives granted during the year. Grants of equity-based incentives to the Chief Executive Officerfiscal year ended January 31, 2010; (iii) option and all
other executive officers during fiscal 2007 represented 59% of all equity-based
incentivesstock awards granted during the year.
15
Fiscal Year 2008. In fiscal 2008, we expect to grant stock options and
time-based restricted shares to our executive officers. The stock options and
time-based restricted share awards will vest in equal installments over a
three-year period following the date of grant and will expire in ten years.
Other Officer Benefits and Perquisites. Our executive officers receive
health insurance coverage on the same basis as all of our employees. Officers
are also eligible to receive an automobile allowance.
TAX AND ACCOUNTING CONSIDERATIONS.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation over $1,000,000 paid for any
fiscal year toended January 31, 2010; (iv) all other compensation for the corporation's chief executive officer or onefiscal year ended January 31, 2010; and (v) the dollar value of total compensation for the four
other most highly compensated executive officers, unless such compensation is
performance-based. Qualifying performance-based compensation will not be subject
to the deduction limit if certain requirements are met. Cash payments under the
Plan, as well as stock option awards are intended to qualify as
performance-based compensation under Section 162(m).
OFFICERfiscal year ended January 31, 2010.
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2)(4) | Option Awards ($) (3)(4) | All Other Compensation ($) (5) | Total ($) | |||||||||||||||||||
| Francis Newman (6) | 2010 | $ | 207,321 | $ | 166,720 | $ | 112,427 | $ | 0 | $ | 29,774 | $ | 516,242 | |||||||||||||
| Chief Executive Officer | 2009 | $ | 198,680 | $ | 55,390 | $ | 107,850 | $ | 63,605 | $ | 25,947 | $ | 451,472 | |||||||||||||
| and Chairman | ||||||||||||||||||||||||||
| Arnold Gans | 2010 | $ | 176,272 | $ | 100,236 | $ | 84,779 | $ | 0 | $ | 20,235 | $ | 381,522 | |||||||||||||
| Chief Scientific Officer | 2009 | $ | 169,600 | $ | 55,387 | $ | 82,411 | $ | 53,004 | $ | 19,984 | $ | 380,386 | |||||||||||||
| Jeffrey Janco | 2010 | $ | 155,358 | $ | 73,565 | $ | 78,699 | $ | 0 | $ | 11,246 | $ | 318,868 | |||||||||||||
Senior Vice President and Chief Operations Officer | 2009 | $ | 142,767 | $ | 31,257 | $ | 75,495 | $ | 31,803 | $ | 11,711 | $ | 293,032 | |||||||||||||
| (1) | For fiscal 2010, “Bonus” consists of the following: (i) Mr. Newman received $132,387 in performance based bonus and $34,333 in a cash retention bonus; (ii) Mr. Gans received $76,236 in performance based bonus and $24.000 is a cash retention bonus; and Mr. Janco received $49,565 in performance based bonus and $24,000 in a cash retention bonus. For fiscal 2009, “Bonus” consisted only of performance based bonuses. During fiscals 2009 & 2010, each of the Named Executive Officers received the following cash retention awards: Mr. Newman $103,000 each year; Mr. Gans $72,000 each year; and Mr. Janco $72,000 each year. These awards vest in equal installments over a three year period from the date of the award. As of 1/31/10, the following amounts remained unvested: (i) Mr. Newman $171,667; Mr . Gans $120,000; and Mr. Janco $120,000. |
| (2) | Restricted stock awards granted include all compensation cost recognized in the financial statements in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, “Stock Compensation” (“ASC Topic 718”). For fiscal year 2010, each of these Named Executive Officers received the following grants: Francis Newman 25,000; Arnold Gans 17,500; Jeffrey Janco 17,500. |
| (3) | Stock option awards granted include all compensation cost recognized in the financial statements in the applicable fiscal year in accordance with ASC Topic 718. For fiscal year 2010, no options were actually granted to any of the executive officers. |
| (4) | For a discussion of the assumptions we made in valuing the stock and option awards, see “Note 2 – Significant Accounting Policies – Stock-Based Compensation” and “Note 9– Stockholders’ Equity” in the notes to our consolidated financial statements contained in the accompanying 2010 Annual Report. |
| (5) | For fiscal 2010, “All Other Compensation” consists of the following: (i) Mr. Newman received $21,500 in a travel allowance which was paid in monthly installments and a 401(k) match of $8,274; and (ii) Mr. Gans received $13,200 in a travel allowance which was paid in monthly installments and a 401(k) match of $7,035, and (iii) Mr. Janco received $6,000 in a travel allowance which was paid in monthly installments and a 401(k) match of $5,246. For fiscal 2009, “All Other Compensation” consists of the following: (i) Mr. Newman received $18,000 in a travel allowance which was paid in monthly installments and a 401(k) match of $7,947; (ii) Mr. Gans received $13,200 in a travel allowance which was paid in monthly installments and a 401(k) match of $6,784; and (iii) Mr. Janco received $6,000 in a travel allowa nce which was paid in monthly installments and a 401(k) match of $5,711. |
| (6) | Mr. Newman is not compensated by us in his capacity as a director. |
15
Employment Agreements
Frank Newman
In April 2006, the Company entered into an employment agreement with Mr. Newman pursuant to which he serves as the Company'sCompany’s Chief Executive Officer. The agreement provides for an initial base salary of $185,000 per year. In addition, the base salary may be increased annually, at the discretion of the Board. Mr. Newman is eligible to receive an annual bonus in an amount up to 100% of his then-current base salary (payable 50% in cash and 50% in restricted stock or stock options) if the Company achieves certain agreed upon targets. The agreement automatically renews each year, unless earlier terminated in accordance with its terms .terms. If Mr. Newman'sNewman’s employment is terminated by the Company without cause, by Mr. Newman for good reason or in connection with a change in control, he will be entitled to receive (i) any amounts earned, accrued or owing under the agreement, but not yet paid; (ii) a lump sum severance payment in an aggregate amount equal to the sum of one (1) times his then-current annual Base Salary;base salary; and (iii) a continuation of all benefits for which he is eligible to participate as of the termination date in a fashion which is similar to those which he is receiving immediately prior to the termination date for a period of one year after such termination. Additionally, in such circumstances all unvested stock options or restricted stock held by Mr. Newman will become immediately 100% vested, , and any restrictions on restricted stock held by Mr. Newman will lapse.
In October 2006, the Company entered into an employment agreement with
Mr. Levy pursuant to which he serves as the Company's Vice President/Finance and
Chief Financial Officer. The agreement provides for an initial base salary of
$130,000 per year. In addition, the base salary may be increased annually, at
the discretion of the Board. Mr. Levy is eligible to receive a bonus in an
amount up to 50% of his then-current base salary (payable 50% in cash and 50% in
restricted stock or stock options) if the Company achieves certain agreed upon
targets. The agreement automatically renews each year unless earlier terminated
in accordance with its terms.
16
If Mr. Levy's employment is terminated by the Company in connection
with a change in control, he will be entitled to receive (i) any amounts earned,
accrued or owing but not yet paid; (ii) a lump sum severance payment in an
aggregate amount equal the sum of one (1) times his then-current Base Salary;
and (iii) a continuation of all benefits for which he is eligible to participate
as of the termination date in a fashion which is similar to those which he is
receiving immediately prior to the termination date for a period of one year
after such termination without cause. Additionally, in such circumstances all
unvested stock options or restricted stock held by Mr. Levy will become
immediately 100% vested, and any restrictions on restricted stock held by Mr.
Levy will lapse.
In January 2003, the Company entered into an employment agreement with
Mr. Janco pursuant to which he would serve as the Company's Vice
President/Operations. The agreement originally provided for an initial base
salary of $78,500 per year. In October 2006, the agreement was revised, to
provide for Mr. Janco service as Senior Vice President/Operations with a base
salary of $130,000. In addition, the base salary may be increased annually, at
the discretion of the Board. Mr. Janco is eligible to receive a bonus in an
amount up to 50% of his then-current base salary (payable 50% in cash and 50% in
restricted stock or stock options) if the Company achieves certain agreed upon
targets. The agreement automatically renews each year unless earlier terminated
in accordance with its terms.
If Mr. Janco's employment is terminated by the Company without cause or
in connection with a change in control, he will be entitled to receive (i) any
amounts earned, accrued or owing but not yet paid; (ii) a lump sum severance
payment in an aggregate amount equal the sum of one (1) times his then-current
Base Salary; and (iii) a continuation of all benefits for which he is eligible
to participate as of the termination date in a fashion which is similar to those
which he is receiving immediately prior to the termination date for a period of
one year after such termination without cause. Additionally, in such
circumstances all unvested stock options or restricted stock held by Mr. Janco
will become immediately 100% vested, and any restrictions on restricted stock
held by Mr. Janco will lapse.
Arnold Gans
In May 2006, the Company entered into an employment agreement with Mr. Gans itspursuant to which he serves as Chief Scientific Officer. The agreement provides for an initial base salary of $169,600 per year. In addition, the base salary may be increased annually at the discretion of the Board. Mr. Gans is eligible to receive a bonus in an amount up to 100% of his then-current base salary (payable 50% in cash and 50% in restricted stock or stock options) if the Company achieves certain agreed upon targets. The agreement automatically renews each year unless earlier terminated in accordance with its terms. If Mr. Gans'Gans’ employment is terminated by the Company without cause or in connection with a change in control, he will be entitled to receive (i) any amounts earned, accrued or owing under the agreement but not yet paid; (ii) a lump sum severance payment in an aggregate amount equal to the sum of one (1) times his then-current annual Base Salary;base salary; and (iii) a continuation of all benefits for which he is eligible to participate as of the termination date in a fashion which is similar to those which he is receiving immediately prior to the Termination Date for a period of one year after such termination without cause. Additionally, in such circumstances all unvested stock options or restricted stock held by Mr. Gans will become immediately 100% vested, and any restrictions on restricted stock held by Mr. Gans will lapse.
17
Jeffrey Janco
In May 2006,January 2003, the Company entered into an employment agreement with Ms.
Gans, its ExecutiveMr. Janco pursuant to which he serves as the Company’s Vice President and Secretary.Operations. The agreement provides for an initial base salary of $130,000 per year. In addition, the base salary may be
increased per year at the discretion of the Board. Ms. Gans is eligible to
receive a bonus in an amount up to 50% of her then-current base salary (payable
50% in cash and 50% in restricted stock or stock options) if the Company
achieves certain agreed upon targets. The agreement automatically renews each
year unless earlier terminated in accordance with Section its terms.
If Ms. Gans' employment is terminated by the Company without cause or
in connection with a change in control, she will be entitled to receive (i) any
amounts earned, accrued or owing but not yet paid; (ii) a lump sum severance
payment in an aggregate amount equal to the sum of one (1) times her
then-current annual Base Salary; and (iii) a continuation of all benefits for
which she is eligible to participate as of the termination date in a fashion
which is similar to those which she is receiving immediately prior to the
termination date for a period of one year after such termination without cause.
Additionally, in such circumstances all unvested stock options or restricted
stock held by Ms. Gans will become immediately 100% vested , and any
restrictions on restricted stock held by Ms. Gans will lapse.
In December 2006, the Company entered into an employment agreement with
Mr. Shapiro pursuant to which he serves as the Company's Vice President, Sales.
The agreement provides for an initial base salary of $155,000$78,750 per year. In addition, the base salary may be increased annually, at the discretion of the Board. Mr. ShapiroJanco is eligible to receive a bonus in an amount up to 50% of his then-current base salary (payable 50% in cash and 50% in restricted stock or stock options) if the Company achieves certain agreed upon targets. The
agreement automatically renews each year unless earlier terminated in accordance
with its terms.
If Mr. Shapiro'sJanco’s employment is terminated by the Company without cause or in connection with a change in control, he will be entitled to receive (i) any amounts earned, accrued or owing but not yet paid; and (ii) a lump sum severance payment in an aggregateag gregate amount equal to the sum of one (1) times Employee'shis then-current Base
Salary; and (iii) a continuation of all benefits for which he is eligible to
participate as of the termination date in a fashion which is similar to those
which he is receiving immediately prior to the termination date for a period of
one year after such termination without cause.base salary. Additionally, in such circumstances as a change in control, all unvested stock options or restricted stock held by Mr. ShapiroJanco will become immediately 100% vested, and any restrictions on restricted stock held by Mr. ShapiroJanco will lapse.
18
COMPENSATION OF OUR OFFICERS.
EXECUTIVE COMPENSATION
16
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information relatingon outstanding option and stock awards held by the Named Executive Officers at January 31, 2010, including the number of shares underlying both exercisable and unexercisable portions of each stock option as well as the exercise price and expiration date of each outstanding option.
| Option Awards | Stock Awards | |||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||
| Francis Newman | 12,000 | — | — | $ | 0.75 | 11/04/2012 | — | — | — | — | ||||||||||
| 150,000 | — | — | $ | 2.00 | 03/06/2013 | — | — | — | — | |||||||||||
| 150,000 | — | — | $ | 1.90 | 03/17/2014 | — | — | — | — | |||||||||||
| 150,000 | — | — | $ | 2.52 | 12/08/2014 | — | — | — | — | |||||||||||
| 150,000 | — | — | $ | 2.70 | 12/07/2015 | — | — | — | — | |||||||||||
| — | — | — | — | — | 50,000(1) | $ | 117,000 | — | — | |||||||||||
| Arnold Gans | 20,500 | — | — | $ | 1.25 | 01/14/2013 | — | — | — | — | ||||||||||
| 125,000 | — | — | $ | 2.00 | 03/06/2013 | — | — | — | — | |||||||||||
| 125,000 | — | — | $ | 1.90 | 03/17/2014 | — | — | — | — | |||||||||||
| 125,000 | — | — | $ | 2.52 | 12/08/2014 | — | — | — | — | |||||||||||
| 125,000 | — | — | $ | 2.70 | 12/07/2015 | — | — | — | — | |||||||||||
| — | — | — | — | — | 35,000(2) | $ | 81,900 | — | — | |||||||||||
| Jeffrey Janco | 75,000 | — | — | $ | 1.20 | 07/08/2013 | — | — | — | — | ||||||||||
| 75,000 | — | — | $ | 1.90 | 03/17/2014 | — | — | — | — | |||||||||||
| 75,000 | — | — | $ | 2.52 | 12/08/2014 | — | — | — | — | |||||||||||
| 75,000 | — | — | $ | 2.70 | 12/07/2015 | — | — | — | — | |||||||||||
| — | — | — | — | — | 35,000(3) | $ | 81,900 | — | — | |||||||||||
| (1) | In Dec 2007, 2008 & 2009, Mr. Newman was granted 25,000, 25,000 & 25,000 shares of restricted stock respectively. As of 1/31/10, 50,000 remained unvested, of which 25,000 will vest in Fiscal 2011; 16,667 will vest in Fiscal 2012 and 8,333 will vest in Fiscal 2013. |
| (2) | In Dec 2007, 2008 & 2009, Mr. Gans was granted 17,500, 17,500 & 17,500 shares of restricted stock respectively. As of 1/31/10, 35,000 remained unvested, of which 17,500 will vest in Fiscal 2011; 11,667 will vest in Fiscal 2012 and 5,833 will vest in Fiscal 2013. |
| (3) | In Dec 2007, 2008 & 2009, Mr. Janco was granted 17,500, 17,500 & 17,500 shares of restricted stock respectively. As of 1/31/10, 35,000 remained unvested, of which 17,500 will vest in Fiscal 2011; 11,667 will vest in Fiscal 2012 and 5,833 will vest in Fiscal 2013. |
17
DIRECTOR COMPENSATION
The following table provides information concerning all compensation paid to compensation forour directors during the fiscal year ended January 31, 2007 for our Chief Executive Officer, our
Chief Financial Officer, and other executive officers employed by us as of the
end of fiscal 2007. The individuals listed2010.
| Name (1) | Fee Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards (2) ($) | Total ($) | ||||||||||
| Andrew Horowitz | — | — | $ | 25,600 | $ | 25,600 | ||||||||
| Bernard Korman | — | — | $ | 25,600 | $ | 25,600 | ||||||||
| Mark Rosenberg | — | — | $ | 25,600 | $ | 25,600 | ||||||||
| (1) | Mr. Newman is not compensated by the Company in his capacity as a director. The compensation paid to Mr. Newman has been fully reflected in the Summary
Compensation of Our fiscal year 18 TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN During fiscal year 2010, the Company HOUSEHOLDING OF PROXY MATERIALS The SEC has adopted rules that permit companies and This year, a PROPOSALS OF STOCKHOLDERS FOR THE 2011 ANNUAL MEETING Stockholders may present proposals for inclusion in the In accordance with SEC Rule 14a-8, in order to If our 2011 Annual Meeting date To be in proper form, a stockholder’s notice must include the specified information concerning the proposal or nominee as described in the SEC rules. A stockholder who wishes to submit a proposal or nomination is encouraged to seek independent counsel about our bylaws and SEC requirements. We will not consider any proposal or nomination that does not meet the bylaw requirements and the SEC’s requirements for Notices of intention to present proposals at the 2011 Annual Meeting should be addressed to Medical Nutrition USA, Inc., Secretary 10 West Forest Avenue, Englewood, New Jersey 07631. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. 19 ANNUAL REPORT We filed our Annual Report with the SEC on OTHER MATTERS The Board knows of It is important that your shares be represented at the
20
MEDICAL NUTRITION USA, INC. 2010 ANNUAL MEETING OF SHAREHOLDERS JUNE THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MEDICAL NUTRITION USA, INC. As an alternative to completing this form, you may enter your vote instruction by telephone at 1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM and follow the simple instructions. Use the Company Number and Account Number shown on your proxy card. The undersigned revokes all previous proxies, acknowledges receipt of the Notice of (Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF MEDICAL NUTRITION USA, INC. June 2, 2010 NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at http://ir.medicalnutritionusa.com/financials.cfm Please sign, date and mail your proxy card in the envelope provided as soon as possible.
ANNUAL MEETING OF SHAREHOLDERS OF MEDICAL NUTRITION USA, INC. June 2, 2010
Important Notice of Availability of Proxy Materials for the Shareholder Meeting of MEDICAL NUTRITION USA, INC. To Be Held On: June 2, 2010 at 10:00 a.m. 10 West Forest Avenue, Englewood, New Jersey 07631
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. If you want to receive a paper or e-mail copy of the proxy materials you must request one. There is no charge to you for requesting a copy. To facilitate timely delivery please make the request as instructed below before 5/18/10. Please visit http://ir.medicalnutritionusa.com/financials.cfm, where the following materials are available for view:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
