MEDICAL NUTRITION USA, INC.
(Name of Registrant as Specified In Its Charter)(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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MEDICAL NUTRITION USA, INC.
10 West Forest Avenue Englewood, NJ 07631 NOTICE OF 2008 2010 ANNUAL MEETING OF SHAREHOLDERSTo Be Held on June 4, 2008To 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 2008’s 2010 Annual Meeting of ShareholdersStockholders (the “2008 Annual“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 4, 2008the agenda, we will review the major developments of the 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 booklet includes the agenda for this year’s Annual Meeting and the purposes of considering and voting upon: | | 1.
| A proposal to elect four directors to the Board of Directors of the Company (the “Board”Proxy Statement (the “Proxy Statement”).
| | | | This matter is described more fully in the Proxy Statement accompanying this notice.
| | | 2.
| Such other business as may properly come before the meeting or any adjournment or postponement thereof. The Board is not aware of any other business to be presented to a vote of the shareholders at the 2008 Annual Meeting.
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The Board has fixedProxy Statement explains the close of business on April 15, 2008 as the record date (the “Record Date”) for determining those shareholders whomatters we will be entitled to notice of and to votediscuss at the 2008 Annual Meeting. The stock transfer books will remain open between the Record DateMeeting and the date of the 2008 Annual Meeting. Representation of at least a majority in voting interest of the common stock of the Company either in person 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 2008 Annual Meeting.
provides general information about us. We are pleased to be amongusing the first companies to take advantage of new Securities and Exchange Commission rules(the “SEC”) rule that allow issuersallows companies to furnish proxy materials to their stockholders viaprimarily over the Internet. We believe the new rules will allow us to provide our stockholders with the information they need, while loweringthat this process should expedite stockholders’ receipt of proxy materials, lower the costs of deliverythe Annual Meeting and reducing the environmental impacthelp 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 Meeting. YourReport on Form 10-K for the fiscal year ended January 31, 2010 (the “Annual Report”) and how to vote is important. 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 are ableplan to attend the Annual Meeting, in person, ityour vote is important thatand we encourage you to review our proxy materials and promptly cast your shares be represented.vote using the instructions provided in the Notice. You may vote your shares over the Internet or byvia a toll-free telephone number. IfAlternatively, if you requested or received a paper copy of the proxy cardmaterials by mail, you may sign, date and mail the proxy card in the return envelope provided. Instructions regarding all threethe methods of voting are contained in the Notice of Internet Availability of Proxy Materials sentor proxy card. If you plan on attending the Annual Meeting and prefer to each shareholder. The Company appreciatesvote in person, you may still do so even if you have already returned your participation in this important annual process.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 Annual Meeting. | | Sincerely, | | | | /s/ F.A. Newman | | | | Francis A. Newman Chairman and Chief Executive Officer | | Englewood, New Jersey April 23, 2010 | | | |
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 foregoing 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 April 15, 2010, are entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. | | By Orderorder of the Board of Directors,
| | /s/ F. A. Newman
| | |
| /s/ F.J. Kimmerling | | Francis A. Newman
| | | Chairman
| Frank J. Kimmerling Vice President Finance, Chief Financial Officer | April 25, 2008
| | Englewood, New Jersey April 23, 2010 | | |
Shareholders Should Read the Entire Proxy Statement
Carefully Prior to Completing Their Proxies
PROXY STATEMENT
FOR
2008
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE BY FOLLOWING THE INSTRUCTIONS INCLUDED WITH THE NOTICE AND PROXY CARD AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR A MAILED PROXY. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE ANNUAL MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF SHAREHOLDERS
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. 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 4, 2008 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 2008 Annual Meeting, of Shareholders (the “2008for the purposes stated in this document. The Annual Meeting”), whichMeeting will be held at 10:00 a.m. local time on June 4, 2008our corporate offices at the Company’s executive offices, 10 West Forest Avenue, Englewood, New Jersey 07631, or at any adjournments or postponements thereof, for07631. This Proxy Statement summarizes the purposes set forthinformation you will need to know to vote in an informed manner.
Voting Rights, Outstanding Shares and Quorum As permitted by the accompanying NoticeSEC 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 2008 Annual Meeting of Shareholders (the “Notice”). Under rules and regulationsthese materials to each stockholder. We believe that the Securities and Exchange Commission, or SEC, recently adopted, instead of mailing a printed copythis 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 shareholder of recordstockholder (other than those who previously requested electronic or beneficial owner ofpaper delivery) the Company’s common stock,Notice containing instructions on how to access and review the Company is now furnishing proxy materials, which include the Company’sincluding our Proxy Statement and our Annual Report, to its shareholders overon the Internet and providinghow to access an electronic proxy card to vote on the Internet or by telephone. The Notice also contains instructions on how to receive a paper copy of the proxy mate rials. If you received a Notice of Internet Availability of Proxy Materials by mail. Youmail, you will not receive a printed copy of the proxy materials unless you request to receive these materials in hard copy by following the instructions provided in the Notice of Internet Availability of Proxy Materials. Instead, the Notice of Internet Availability of Proxy Materials will instruct you how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also instructs you how you may submit your proxy via telephone or the Internet.one. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of theour proxy materials, you shouldplease follow the instructions for requesting such materials included in the NoticeNotice. If you are a holder of Internet Availabilityrecord of Proxy Materials. The Company is mailingour common stock at the Notice of Internet Availability of Proxy Materials to shareholders on or about April 25, 2008.
VOTING RIGHTS AND SOLICITATION
The close of business on April 15, 2008 was the record date2010 (the “Record Date”) for shareholders entitled to notice of and to vote at the 2008 Annual Meeting. As of the Record Date, the Company had 14,018,236 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 2008 Annual Meeting. Holders of the common stock of record entitled to vote at the 2008 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 2008 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 2008 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 2008 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 2008 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 2008 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. Representatives of Amper, Politziner & Mattia, P.C., our independent public accountants, will be present at the 2008 Annual Meeting. They will have an opportunity to make a statement if they desire to do soseparately count “For” and will be available to respond to appropriate questions from shareholders. Amper, Politziner & Mattia, P.C. has acted as independent public accountants of the Company since April 26, 2006.
“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. 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 are properly submitted to the Company will be voted at the 2008 Annual Meetinga broker may vote shares held in accordance with the shareholder’s instructions contained therein. Instreet name 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 2008 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 2008 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 2008 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 2008 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 the Internet andshares 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’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. |
ELECTION OF DIRECTORS Composition
Description of our Current Board The Company’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 2007 Annual Meeting of Shareholders.with three (3) vacancies. The Board currently has no current plans to change its size, after the 2008size. 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 2009 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 2008 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 15, 2008 regarding the nominees for election as directors.
Nominees for Election as Directors
| | | Name
| Position
| Age
|
|
|
| | | | Francis Newman
| Chairman, Chief Executive Officer, Director
| 59
| Andrew Horowitz
| Director
| 45
| Mark Rosenberg
| Director
| 45
| Bernard Korman
| Director
| 75
|
Biographical Information Regarding Directors
election. 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 Chair of the Board of Trustees of Sidwell Friends School, Washington DC. “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.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’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’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.
Mark Rosenberg. Mr. Rosenberg has been a director since March 2004. He isSince 2002, Mr. Rosenberg has been a Principal at MHR Fund Management LLC, which has in excess of $5 billion under management. 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 President 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,. 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 RECOMMENDS A VOTE IN FAVOR OF EACH OF THE NOMINEES NAMED ABOVE CORPORATE GOVERNANCE Board Meetings And Committees The Board held a total of 5 meetings during
During the fiscal year ended January 31, 2008 (the “2008 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. The Company does not haveCommittee (the “Nominating Committee”). Below is a requirement with regarddescription of each committee. Each of the committees has authority to board members’ attendance at the annual meeting. All board members did attend the 2007 annual meeting.engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
TheAudit 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 heading “Investor Relations” heading. The Audit Committee’s duties include responsibility for reviewing the Company’s accounting practices and audit procedures.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 5 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, 2008 (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 of Directors has determined that Mr. Korman is qualified to serve as an audit committee financial expert as defined in the applicable regulations of the Securities and Exchange Commission. Theestablished a Compensation Committee recommends to the Board the compensation and benefits of the Company’s executive officers, and has established and reviews general policies relating to compensation of the Company’s employees.adopted a Compensation Committee Charter on April 15, 2009. A copy of theour Compensation Committee Charter is available on the Company’sonline at our website at www.mdnu.com, under the heading “Investor Relations” heading.Relations / Corporate Governance.” The Compensation Committee which consistsis comprised of three (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 3six (6) meetings during the 2008 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.
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 Charteris available on the Company’sonline at our website at www.mdnu.com, under the heading “Investor Relations” heading.Relations / Corporate Governance.” The Nominating & GovernanceCommittee 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” director under the NASDAQ standards,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 2 meetings during the 2008 Fiscal Year. Each member of the Nominating & Governance Committee meets the independence requirements of the NASDAQ standards. The Nominating & Governance Committee’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’s business, as well as professional and personal integrity. Recommendations are developed based on the nominee’s own knowledge and experience in a variety of fields, and research conducted by the Company’s staff at the Nominating and Governance Committee’s direction.
Nomination Additionally , 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 by the Nominating & Goverance committeeCommittee appointed by the Board or by stockholders of the Company. Any stockholder nominating director candidate(s) for election at a meeting of the shareholdersstockholders must: (i) be a stockholder of record of the Company at the time of the giving of the notice of the Annual Meeting and at the time of the Annual Meeting; (ii) be entitled to vote at the Annual Meeting for the election of directors; and (iii) give timely written notice of the nomination to the Secretary. | | | (1) Be a stockholder of record of the Company at the time of the giving of the notice of meeting and at the time of the meeting.
| | | | (2) Be entitled to vote at the meeting in the election of Directors.
| | | | (3) 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. 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’s website www.mdnu.com under the heading “Investor Relations” heading.Relations / Corporate Governance.” Director CompensationAttendance of Directors at Annual Meetings of Stockholders Directors
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. 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. 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.
Audit Fees
During the last two fiscal years,Board has selected Amper, Politziner & Mattia, billedLLP. (“Amper”) as our independent registered public accounting firm for the Companyfiscal year ending January 31, 2011, and has requested management to ask for stockholder ratification of such selection at the following feesAnnual Meeting. Amper has audited our financial statements for its services:
| | | | | | | | | | Fiscal Year Ending | | | |
| | | | January 31, 2007 | | January 31, 2008 | | | |
| |
| | | | | | | | | | Audit Fees | | $ | 90,000 | | $ | 105,000 | | Audit-Related Fees | | $ | 6,325 | | $ | 0 | | Tax Fees (1) | | $ | 10,700 | | $ | 8,150 | | All Other Fees (2) | | $ | 17,781 | | $ | 26,289 | |
(1) Forthe fiscal year ended January 31, 2008, represents $8,000 paid2010. Representatives of Amper are expected to Eichen & DeMeglio P.C.be at the Annual Meeting to answer any questions and $150make a statement should they be asked to do so.
Although our bylaws do not require 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, Politziner & Mattia. Forthe 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 represented by proxy and entitled to vote at the Annual Meeting to ratify the selection of Amper. Abstentions will be counted toward the tabulation of votes cast on proposals presented to our stockholders and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved. Principal Accountant Fees and Services Aggregate fees billed by Amper for audit services for the fiscal yearyears ended January 31, 2007, represents $5,700 paid to Dischino & Associates2009 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, 2008, $10,715 was paid to Eichen & DeMeglio P.C., $8,230 to Accume Partners, $5,000 to Amper, Politziner & Mattia, P.C, $2,144 to Goldstein & Ganz2010, and $200 tofor other professional services billed in the Pubic Company Accounting Oversight Board. Formost recent two fiscal year ended January 31, 2007, $17,134 was paid to Goldstein & Ganz and $647 to Amper, Politziner & Mattia, P.C.years, were 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. 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” are compatible with maintaining the independence of our principal accountants, and concluded that they are compatible.Audit Committee
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’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.
MANAGEMENT
The following sets forth the names, ages and positions None of the Company’s executive officershours 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 AUDIT COMMITTEE REPORT (1) The Audit Committee oversees our financial reporting process on behalf of our Board. Management has the 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 quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Audit Committee reviewed with our independent auditors, Amper, who are responsible for expressing an opinion on the conformity of our audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of April 15, 2008: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 Amper as required by Independence Standards Board Standard No. 1, and as adopted by the Public Company Accounting Oversight Board in Rule 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 reviews 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 Amper as our independent auditors. | | The Audit Committee of our Board | Name
| Position
| Age
|
|
|
| | | | Francis Newman
| Chairman, Chief Executive Officer and Director
| 59
| Alan Levy
| Vice President, Finance, Chief Financial Officer, Treasurer, Secretary, Principal Financial and Accounting Officer
| 46
| Jeffrey Janco
| Senior Vice President/Operations, Chief Operations Officer
| 51
| Arnold Gans
| Chief Scientific Officer
| 73
| Myra Gans
| Executive Vice President
| 70
| David Shapiro
| Vice President, Sales
| 46
Bernard Korman (Chairman) Andrew Horowitz Mark Rosenberg |
Background
Francis Newman. Mr. Newman has been Chairman
(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 our filings under the Company since July 2003, Chief Executive Officer since March 2003 and a DirectorSecurities Act of 1933, as amended, or the Company since November 2002.See, “Proposal 1—Election of Directors” 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), 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 Public 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.
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 served on the Board of Holy Name Hospital in Teaneck, New Jersey. He serves on the Alumni Board of Columbia University’s School of Public Health and was Chairman of the Alumni Federation Scholarship Aid Committee. Mr. Gans is married to Myra Gans, the Company’s Executive Vice President.
Exchange Act.
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 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.
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.
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 regarding the beneficial ownership of the Company’s common stock as of April 15, 2008 by: (i)2010, the stock ownership of each of our Named Executive Officers (as defined below), each of our directors, all of our Named Executive Officers and directors as 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: | | | | | | | | | | | Shares of
Common Stock Beneficially Owned | | |
| Name and Address of Beneficial Owner(1) | | Number | | | Percent(2) |
| |
| | |
| | | | | | | | | | Francis Newman (3) | | | 2,332,234 | | | | 16.0 | % | | | | | | | | | | Alan Levy (4) | | | 32,607 | | | | * | | | | | | | | | | | Jeffrey Janco (5) | | | 305,751 | | | | 2.1 | % | | | | | | | | | | Arnold Gans (6) | | | 1,184,772 | | | | 7.5 | % | | | | | | | | | | Myra Gans (7) | | | 1,184,772 | | | | 7.5 | % | | | | | | | | | | David Shapiro (8) | | | 16,790 | | | | * | | | | | | | | | | | Andrew Horowitz (9) | | | 288,348 | | | | 2.0 | % | | | | | | | | | | Mark Rosenberg (10) | | | 71,933 | | | | * | | | | | | | | | | | Bernard Korman (11) | | | 310,278 | | | | 2.2 | % | | | | | | | | | | Richard Ullman (12) | | | 2,886,662 | | | | 20.6 | % | | | | | | | | | | Mark Rachesky (13) | | | 2,882,233 | | | | 20.6 | % | | | | | | | | | | Goldsmith & Harris (14) | | | 1,518,347 | | | | 10.8 | % | | | | | | | | | | All directors and Named Executive Officers as a group (9 persons) | | | 4,542,713 | | | | 28.5 | % |
* Less than 1%
(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 14,018,236 shares of common stock outstanding on April 15, 2008. 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. |
| | | (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. |
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. 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.
(3) Consists of (a) 1,770,234 shares of common stock, (b) 562,000 shares of common stock issuable upon the exercise of options that are immediately exercisable.
(4) Consists of (a) 7,607 shares of common stock, (b) 25,000 shares of common stock issuable upon the exercise of options that are immediately exercisable.
(5) Consists of (a) 30,751 shares of common stock, (b) 275,000 shares of common stock issuable upon the exercise of options that are immediately exercisable.
(6) Consists of (a) 318,773 shares of common stock jointly owned with Myra Gans, (b) 478,833 shares of common stock issuable upon the exercise of options owned directly and immediately exercisable, and 387,166 shares of common stock issuable upon the exercise of options beneficially owned by Ms. Gans and immediately exercisable.
(7) Consists of (a) 318,773 shares of common stock jointly owned withChief Executive Officer; (ii) Arnold Gans, (b) 387,166 shares of common stock issuable upon the exercise of options owned directlyour Chief Scientific Officer; and immediately exercisable, and 478,833 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.
(8) 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) 4,290 shares of common stock owned directly and (b) 12,500 shares of common stock issuable upon the exercise of options owned directly that are immediately exercisable.
(9) Consists of (a) 224,348 shares of common stock, (b) 64,000 shares of common stock issuable upon the exercise of options that are immediately exercisable.
(10) Consists of (a) 14,933 shares of common stock, (b) 57,000 shares of common stock issuable upon the exercise of options that are immediately exercisable.
(11) Consists of (a) 258,278 shares of common stock, (b) 52,000 shares of common stock issuable upon the exercise of options that are immediately exercisable.
(12) Mr. Ullmansuch named executive officers 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. Their address is 1200 Route 46 West, Clifton, New Jersey 07013.
(13) Baseddetermined based on the statementindividual’s total compensation for the fiscal year ended January 31, 2010, as reported below in the Summary Compensation Table, other than amounts reported as a bove-market earnings 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. Their address is 40 West 57th Street, New York, New York 10019.
(14) Based on the statements on forms Schedules 13G filed with the Securities and Exchange Commission on February 12, 2008 which reported on the behalf of Goldsmith & Harris, Inc. and various other entities. Consists of 702,561 shares of common stock in which Goldsmith & Harris, Inc. have shared voting power, 348,854 shares of common stock in which Goldsmith & Harris Asset Management have shared voting power, 441,432 shares owned directly by Jay R. Harris who has sole voting power and 25,500 shares owned directly by Phillip W. Goldsmith who has sole voting power. Goldsmith & Harris Inc. is a broker -dealer registered under Section 15 of the Securities Exchange Act of 1934 and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940. Goldsmith & Harris Asset Management is a registered investment adviser under Section 203 of the Investment Advisers Act of 1940. Their address is 80 Pine Street, New York, NY 10005.
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:
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| Establish compensation performance objectives that are aligned with corporate goals;
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| Provide a high degree of correlation between compensation and performance;
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| Create long-term incentives directly linked to shareholder returns;
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| Attract, retain and motivate our employees; and
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| Value our employees contributions to our success.
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How we set compensation levels.
accruals. We striverefer 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:
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| A base salary;
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| A performance-based annual bonus; and
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| Long-term incentive compensation in the form of grants of stock option awards and time-based restricted shares.
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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.
| | | | Element
| | Role & Purpose
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| Base Salary
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| Reflect the marketdollar value of the position and provide a stable source of income for the individual.
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| Attract, retain and motivate qualified individuals.
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| Short-Term Incentive Compensation
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| Focus efforts on the attainment of the Company’s annual performance objectives.
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| Reward exceptional performance.
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| Long-Term Incentive Compensation
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| Align employee interests with those of our shareholders.
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| Provide a balance between the achievement of short-term results and long-term value creation.
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| Promote a culture of share ownership.
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| Provide an incentive for employees to remain with the Company over time.
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Base Salary. In general, base salary and other components of compensation are determined by job responsibility, market data, internal equity relative to other officers salaries 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.
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 establishes Mr. Newman’s individual performance goals. All individual performance goals for the other officers were established with and approved by Mr. Newman and reviewed by the Compensation Committee. Our fiscal 2008 and 2009 performance goals are discussed in more detail below.
Fiscal Year 2008. In June 2005, the Compensation Committee approved an annual bonus plan for officers. The annual bonus targets were set at a level approved by the board. For Fiscal 2008, the bonus opportunities for Mr. Newman and Mr. Gans, were set up to 100% of their base salary. The bonus opportunities for Mr. Levy, Mr. Janco, Ms. Gans and Mr. Shapiro were set up to 50% of their base salary. The calculation of the bonus was as follows: for Mr. Newman, Mr. Levy and Mr. Janco, 50% of their bonuses was based on total company sales and 50% on EBITDAS. For Mr. Gans, 1/3 of his bonus was based on total company sales, 1/3 on private label sales and 1/3 on EBITDAS. For Ms. Gans, 1/3 of her bonus was based on New York Area Metropolitan sales, 1/3 on Branded sales and 1/3 on EBITDAS. For Mr. Shapiro, he would receive 2.5% of salary for each % of Branded sales above 80% of target as long as sales and marketing expenses did not exceed 22.27% of branded sales. 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 2008, the Company achieved 84% of the total company sales target, 99% of the EBITDAS target, 87% of the private label sales target, 84% of the branded sales target and 87% of the New York Area Metropolitan sales target. Sales and marketing expenses were 22.54% of branded sales. The Company paid total bonuses based on these calculations of $147,800. (See Summary Compensation Table)
Fiscal Year 2009. The objective performance measures established by the Compensation Committee for fiscal 2009 are based on our earnings before interest, taxes, depreciation, amortization and stock-based compensation expense (“EBITDAS”) and on our net 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 2009. 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. The formulas used to calculate the bonuses will be similar to Fiscal Year 2008. 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:
| | | | | | Vehicle
| | Role
| | Frequency of Use
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| Stock Options
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| Align employee’s interests with those of our shareholders.
| | Considered annually for current officers and other employees, upon the hiring of new employees and promotion of current employees.
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| Provide employees with an incentive for increasing shareholder value.
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| Provide a balance between the achievement of short-term results and long-term value creation
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| Restricted Shares
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| Align employee’s interests with those of our shareholders.
| | Considered annually for current officers and other employees and promotion of current employees.
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| Promote a culture of share ownership
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| Minimize dilutive effect of equity-based incentives.
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| Provide incentive for key employees to remain with the Company over time.
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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 2008. During fiscal 2008, we granted restricted shares with a 3 year vesting period to our executive team.
Restricted share grants made during fiscal 2008 to the Chief Executive Officer represented 18% percent of all restricted shares granted during the year. Grants of restricted shares to the Chief Executive Officerfiscal year ended January 31, 2010; (iii) option and all other executive officers during fiscal 2008 represented 79% of all restricted sharesstock awards granted during the year.
Fiscal Year 2009. In fiscal 2009, 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 $1,000,000 paid for any fiscal year toended January 31, 2010; (iv) all other compensation for the corporation’s chief executive officer or onefiscal year ended January 31, 2010; and (v) the dollar value of total compensation for the four other most highly compensated executive officers, unless such compensation is performance-based. Qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met. Cash payments under the Executive Bonus Plan, as well as stock option awards are intended to qualify as performance-based compensation under Section 162(m).
fiscal year ended January 31, 2010. SUMMARY COMPENSATION TABLE Name and Principal Position | | Year | | Salary ($) | | | 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. |
Employment Agreements Officer CompensationFrank NewmanIn April 2006, the Company entered into an employment agreement with Mr. Newman pursuant to which he serves as the Company’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. If Mr. Newman’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.
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 pursuant 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’ 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. Jeffrey Janco In May 2006, the Company entered into an employment agreement with Ms. Gans pursuant to which she serves as Executive Vice President and Secretary. 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,January 2003, the Company entered into an employment agreement with Mr. ShapiroJanco pursuant to which he serves as the Company’s Vice President Sales.Operations. The agreement provides for an initial base salary of $155,000$78,750 per year. In addition, the base salary may be increased annually, at the discretion of the Board. Mr. ShapiroJanco is eligible to receive a bonus in an amount up to 50% of his then-current base salary (payable 50% in cash and 50% in restricted stock or stock options) if the Company achieves certain agreed upon targets.
If Mr. Shapiro’sJanco’s employment is terminated by the Company without cause or in connection with a change in control, he will be entitled to receive (i) any amounts earned, accrued or owing but not yet paid; and (ii) a lump sum severance payment in an aggregateag gregate amount equal to the sum of one (1) times Employee’shis then-current Base Salary; and (iii) a continuation of all benefits for which he is eligible to participate as of the termination date in a fashion which is similar to those which he is receiving immediately prior to the termination date for a period of one year after such termination without cause.base salary. Additionally, in such circumstances as a change in control, all unvested stock options or restricted stock held by Mr. ShapiroJanco will become immediately 100% vested, and any restrictions on restricted stock held by Mr. ShapiroJanco will lapse.
Compensation of Our Officers.
EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth information relatingon outstanding option and stock awards held by the Named Executive Officers at January 31, 2010, including the number of shares underlying both exercisable and unexercisable portions of each stock option as well as the exercise price and expiration date of each outstanding option. | | | Option Awards | | Stock Awards | Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | 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. |
DIRECTOR COMPENSATION The following table provides information concerning all compensation paid to compensation forour directors during the fiscal year ended January 31, 2008 for our Chief Executive Officer, our Chief Financial Officer, and other executive officers employed by us as of the end of fiscal 2008. The individuals listed in the Summary Compensation Table are referred to collectively in this proxy statement as the “named officers.”SUMMARY COMPENSATION TABLE
| | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) | | Bonus($)(1) | | Stock Awards
($)(2)(4) | | Option Awards
($)(3)(4) | | All Other Compen-sation ($)(5) | | Total ($) |
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| | | | | | | | | | | | | | | | | | | | | | | | Francis A Newman | | 2008 | | | $ | 185,500 | | $ | 52,910 | | $ | 110,000 | | $ | — | | $ | 18,000 | | $ | 366,410 | | Chairman of the Board,
Chief Executive Officer | | 2007 | | | $ | 185,500 | | $ | 11,644 | | $ | 207,500 | | $ | — | | $ | 18,000 | | $ | 422,644 | | | | | | | | | | | | | | | | | | | | | | | | | Alan Levy | | 2008 | | | $ | 130,000 | | $ | 18,590 | | $ | 77,000 | | $ | — | | $ | 6,000 | | $ | 231,590 | | Vice President, Finance
Chief Financial Officer | | 2007 | | | $ | 46,500 | | $ | 1,360 | | $ | 145,250 | | $ | 140,468 | | $ | 10,000 | | $ | 343,578 | | | | | | | | | | | | | | | | | | | | | | | | | Jeffrey Janco | | 2008 | | | $ | 130,000 | | $ | 18,590 | | $ | 77,000 | | $ | — | | $ | 6,000 | | $ | 231,590 | | Senior Vice President,
Chief Operations Officer | | 2007 | | | $ | 120,365 | | $ | 1,883 | | $ | 145,250 | | $ | — | | $ | — | | $ | 267,498 | | | | | | | | | | | | | | | | | | | | | | | | | Arnold Gans | | 2008 | | | $ | 169,600 | | $ | 41,951 | | $ | 77,000 | | $ | — | | $ | 13,200 | | $ | 301,751 | | Chief Scientific Officer | | 2007 | | | $ | 169,600 | | $ | 10,646 | | $ | 166,000 | | $ | — | | $ | 13,200 | | $ | 359,446 | | | | | | | | | | | | | | | | | | | | | | | | | Myra Gans | | 2008 | | | $ | 130,000 | | $ | 15,746 | | $ | 77,000 | | $ | — | | $ | 12,000 | | $ | 234,746 | | Executive Vice President | | 2007 | | | $ | 130,000 | | $ | 4,080 | | $ | 145,250 | | $ | — | | $ | 12,000 | | $ | 291,330 | | | | | | | | | | | | | | | | | | | | | | | | | David Shapiro | | 2008 | | | $ | 155,000 | | $ | — | | $ | 77,000 | | $ | — | | $ | 7,500 | | $ | 239,500 | | Vice President, Sales | | 2007 | | | $ | 23,846 | | $ | 811 | | $ | 72,625 | | $ | 75,585 | | $ | 8,049 | | $ | 180,916 | |
| 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 Table above. | (1)
| Represents performance based bonuses.
| | | | (2) | Restricted stock awardsMessrs Horowitz, Korman & Rosenberg were each granted include all compensation cost recognized in the financial statements in accordance with Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (“FAS No. 123R”). For20,000 options during fiscal year 2008, each of these executive officers received the following grants on January 8, 2008: Mr. Newman — 25,000 shares, Mr. Levy — 17,500 shares, Mr. Janco — 17,500 shares, Mr. Gans — 17,500 shares, Ms. Gans — 17,500 shares2010 and, Mr. Shapiro — 17,500 shares
| | | (3)
| Stock option awards granted include all compensation cost recognized in the financial statements in accordance with FAS No. 123R. For fiscal year 2008, noincluding such grant, hold 104,000, 92,000 and 97,000 options, were grantedrespectively, to anyacquire common stock of the executive officers.
| | | (4)
| For a discussionCompany. The value of the assumptions we made in valuinggrant is determined based on the stock and option awards, see “Note 1 – Significant Accounting Policies – Stock-Based Compensation” and “Note 9– Stock-Based Compensation” inBlack Scholes value at the notes to our consolidated financial statements contained in the accompanying 2008 Annual Report.
|
| | (5)
| For fiscal 2008, “All Other Compensation” consists of the following:
| | | | Mr. Newman received $18,000 in a travel allowance which was paid in monthly installments
| | | | Mr. Levy received $6,000 in a travel allowance which was paid in monthly installments
| | | | Mr. Janco received $6,000 in a travel allowance which was paid in monthly installments
| | | | Mr. Gans received $13,200 in a travel allowance which was paid in monthly installments
| | | | Ms. Gans received $12,000 in a travel allowance which was paid in monthly installments
| | | | Mr. Shapiro received $7,500 in a travel allowance which was paid in monthly installments
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The following table sets forth information relating to all of our named officers’ outstanding equity-based awards as of the end of fiscal 2008.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END (2008)
| | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | |
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| Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | 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 ($) |
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| | | | | | | | | | | | | | | | | | | | | Francis Newman(1) | | 12,000 | | | — | | | $ | 0.75 | | 11/04/2012 | | | 58,333 | | | | 197,749 | | Francis Newman(1) | | 150,000 | | | — | | | $ | 2.00 | | 03/06/2013 | | | | | | | | | Francis Newman(1) | | 150,000 | | | — | | | $ | 1.90 | | 03/17/2014 | | | | | | | | | Francis Newman(1) | | 150,000 | | | — | | | $ | 2.52 | | 12/08/2014 | | | | | | | | | Francis Newman(1) | | 100,000 | | | 50,000 | | | $ | 2.70 | | 12/07/2015 | | | | | | | | | Alan Levy(2) | | 25,000 | | | 50,000 | | | $ | 4.05 | | 10/06/2016 | | | 40,833 | | | | 138,424 | | Jeffrey Janco(3) | | 75,000 | | | — | | | $ | 1.20 | | 07/08/2013 | | | 40,833 | | | | 138,424 | | Jeffrey Janco(3) | | 75,000 | | | — | | | $ | 1.90 | | 03/17/2014 | | | | | | | | | Jeffrey Janco(3) | | 75,000 | | | — | | | $ | 2.52 | | 12/08/2014 | | | | | | | | | Jeffrey Janco(3) | | 50,000 | | | 25,000 | | | $ | 2.70 | | 12/07/2015 | | | | | | | | | Arnold Gans(4) | | 20,500 | | | — | | | $ | 1.25 | | 01/14/2013 | | | 44,166 | | | | 149,723 | | Arnold Gans(4) | | 125,000 | | | — | | | $ | 2.00 | | 03/06/2013 | | | | | | | | | Arnold Gans(4) | | 125,000 | | | — | | | $ | 1.90 | | 03/17/2014 | | | | | | | | | Arnold Gans(4) | | 125,000 | | | — | | | $ | 2.52 | | 12/08/2014 | | | | | | | | | Arnold Gans(4) | | 83,333 | | | 41,667 | | | $ | 2.70 | | 12/07/2015 | | | | | | | | | Myra Gans(5) | | 20,500 | | | — | | | $ | 1.25 | | 01/14/2013 | | | 40,833 | | | | 138,424 | | Myra Gans(5) | | 100,000 | | | — | | | $ | 2.00 | | 03/06/2013 | | | | | | | | | Myra Gans(5) | | 100,000 | | | — | | | $ | 1.90 | | 03/17/2014 | | | | | | | | | Myra Gans(5) | | 100,000 | | | — | | | $ | 2.52 | | 12/08/2014 | | | | | | | | | Myra Gans(5) | | 66,666 | | | 33,334 | | | $ | 2.70 | | 12/07/2015 | | | | | | | | | David Shapiro(6) | | 12,500 | | | 25,000 | | | $ | 4.15 | | 12/18/2016 | | | 29,166 | | | | 98,873 | |
| | (1)
| During fiscal 2008, Mr. Newman was granted 25,000 shares of restricted stock, which will vest in three equal installments commencing one year after the datetime of the grant. Mr. Newman also has the following unvested option award: 50,000 shares will vest 12/7/08.
| | | (2)
| During fiscal 2008, Mr. Levy was granted 17,500 shares of restricted stock, which will vest in three equal installments commencing one year after the date of the grant. Mr. Levy also has the following unvested option awards: 25,000 shares will vest on 10/6/08 and 25,000 shares will vest on 10/6/09.
| | | (3)
| During fiscal 2008, Mr. Janco was granted 17,500 shares of restricted stock, which will vest in three equal installments commencing one year after the date of the grant. Mr. Janco also has the following unvested option award: 25,000 shares will vest 12/7/08.
| | | (4)
| During fiscal 2008, Mr. Gans was granted 17,500 shares of restricted stock, which will vest in three equal installments commencing one year after the date of the grant. Mr. Gans also has the following unvested option award: 41,667 shares will vest 12/7/08.
| | | (5)
| During fiscal 2008, Ms. Gans was granted 17,500 shares of restricted stock, which will vest in three equal installments commencing one year after the date of the grant. Mr. Gans also has the following unvested option award: 33,334 shares will vest 12/7/08.
| | | (6)
| During fiscal 2008, Mr. Shapiro was granted 17,500 shares of restricted stock, which will vest in three equal installments commencing one year after the date of the grant. Mr. Shapiro also has the following unvested option awards: 12,500 shares will vest on 12/18/08 and 12,500 shares will vest on 12/18/09.
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DIRECTOR COMPENSATION
Compensation of Directors Our fiscal 2008year 2010 compensation program for each non-employee director consisted solely of grants of stock options as described below. No cash payments were made to any director in fiscal 2008year 2010 for compensation of their service as a director. | | | Stock options
| | | ·Upon election
| | 15,000 shares
| | | | Subsequent yearly award
| | 15,000 shares
| ·Additional award for committee chairmen
| | 5,000 shares
|
Stock options. Non-employee Directors of the Company who are not officers or employees receive, as compensation for their services as directors, are granted stockincluding the committees on which they serve: (a) a grant, at the time of their election or appointment, of an option awards. Each non-employee directorto purchase 15,000 shares of our common stock. In addition, the Chairman of each committee annually receives a stock option for 15,000 common shares upon commencement of service as a director and an additional 5,000 options to purchase shares of our common stock. The exercise price of these options is equal to the last reported sale price for our common stock optionon the trading day preceding the grant of 5,000 common shares for serving as chairman of a committee.the options. Generally, stock optionoptio n awards are fully exercisable after one year following the date of grant and expire in ten years. Upon termination of a director from the Board for any reason, he or shea director has the right to exercise the vested portion of an outstanding stock option during the three-month period immediately following the termination date.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS During fiscal year 2010, the Company did not enter into any transaction, and there is not any proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest.
FISCAL 2008 DIRECTOR COMPENSATIONHOUSEHOLDING OF PROXY MATERIALS | | | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($) | | Option Awards ($)(1)(2) | | Total ($) | |
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| | | | | | | | | | | | Andrew Horowitz | | $ | — | | $ | — | | $ | 53,596 | | $ | 53,596 | | Bernard Korman | | $ | — | | $ | — | | $ | 53,596 | | $ | 53,596 | | Mark Rosenberg | | $ | — | | $ | — | | $ | 53,596 | | $ | 53,596 | |
| | (1)
| 20,000 options were granted to Messrs. Horowitz, Korman and Rosenberg in September 2007. Including this grant, Mr. Horowitz has options to acquire 84,000 shares of common stock, Mr. Korman has options to acquire 72,000 shares of common stock and Mr. Rosenberg has options to acquire 77,000 shares of common stock.
| | | (2)
| For a discussion of the assumptions we made in valuing the stock and option awards, see “Note 1 – Significant Accounting Policies – Stock-Based Compensation” and “Note 9 – Stock-Based Compensation” in the notes to our consolidated financial statements contained in the accompanying 2008 Annual Report.
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COMPENSATION COMMITTEE REPORT
The Compensation CommitteeSEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single copy of the Notice or certain proxy materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, a number of brokers with account holders who are our stockholders will be “householding” the Notice and proxy materials for stockholders who do not participate in electronic delivery of proxy materials, unless contrary instructions are received from the affected stockholders. Once you have received notice from your broker or us that they or we will be householding the Notice or proxy materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of the Notice or proxy materials, or if you share an address with another stockholder and you would prefer to receive a single copy of the Notice or proxy materials instead of multiple copies, please noti fy the Company’s BoardSecretary at (201) 569-1188, Medical Nutrition USA, Inc., 10 West Forest Avenue, Englewood, New Jersey 07631 or, if your shares are held in a brokerage account, your broker. The Company promptly will deliver to a stockholder who received one copy of Directors has reviewed and discussed the Compensation Discussion and Analysis included herein with management and, based on such review and discussions,Notice or proxy materials as the Compensation Committee recommendedresult of householding a separate copy of the Notice or proxy materials upon the stockholder’s written or oral request directed to the BoardCompany’s Secretary at (201) 569-1188, Medical Nutrition USA, Inc., 10 West Forest Avenue, Englewood, New Jersey 07631. Please note, however, that if you wish to receive a paper proxy card or other proxy materials for purposes of this year’s Annual Meeting, you should follow the Compensation Discussion and Analysisinstructions provided in the Notice. PROPOSALS OF STOCKHOLDERS FOR THE 2011 ANNUAL MEETING Stockholders may present proposals for inclusion in the proxy materials to be includeddistributed in this Proxy Statement. | | | Compensation Committee
| | | Andrew Horowitz(Chairperson)
Bernard Korman
Mark Rosenberg
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and holders of more than 10% of a registered class of the Company’s equity securities to fileconnection with the SEC initial reports2011 Annual Meeting of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Directors, executive officers and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of copies of such forms received by it, or written representation from certain reporting persons that no Form 5s were required for those persons, the Company believes that all reporting requirements under Section 16(a) for the 2008 Fiscal Year were met in a timely manner by its directors, executive officers and greater than 10% beneficial owners. All such filings have been made as of the Record Date. Each of such filings were filed to report one reportable transaction.
REPORT OF AUDIT COMMITTEE
The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates this report by reference therein.
The Audit Committee Charter was adopted by the Board and reflects the standards set forth in SEC regulations andStockholders (the “2011 Annual Meeting”). As the rules of the Exchange.
The Audit Committee’s primary duties and responsibilities are:
| | | | ·
| Serve as an independent objective party to monitor the Company’s financial reporting process and internal control system.
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| Review and appraise the audit efforts of the Company’s independent accountants.
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| Provide an open avenue of communication among the independent accountants, financial and senior management and the Board.
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The duties and responsibilities ofSEC make clear, simply submitting a memberproposal does not guarantee that it will be included.
In accordance with SEC Rule 14a-8, in order to be properly brought before the 2011 Annual Meeting, a stockholder’s notice of the Audit Committee are in additionmatter the stockholder wishes to hispresent, or her dutiesthe person or persons the stockholder wishes to nominate as a member of the Board. The Audit Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or appropriate to each of the matters assigned to it under its charter. The Audit Committee met five times during the 2008 Fiscal Year.
In overseeing the preparation of the Company’s financial statements, the Audit Committee met with both management and the Company’s outside auditors to review and discuss all financial statements prior to their issuance and to discuss significant accounting issues. Management advised the Audit Committee that all financial statements were prepared in accordance with U.S. generally accepted accounting principles, and the Audit Committee discussed the statements with both management and the outside auditors. The Audit Committee’s review included discussion with the outside auditors of matters required to be discussed pursuant to Statements on Auditing Standards No. 61 and 90 (Communication with Audit Committees).
With respect to the Company’s outside auditors, the Audit Committee, among other things, discussed with Amper, Politziner & Mattia, P.C., matters relating to its independence, including the written disclosures made to the Audit Committee as required by the Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees).
The Audit Committee of the Company’s Board of Directors has reviewed and discussed the report of the audit committee included herein with management and, based on such review and discussions, the Audit Committee recommended to the Board that the this report be included in this Proxy Statement.
| | | Audit Committee
| | Bernard Korman, Chairman
| | Andrew Horowitz
| | Mark Rosenberg
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SHAREHOLDER PROPOSALS
From time to time shareholders present proposals which may be proper subjects for inclusion in a proxy statement and for consideration at an annual meeting. To be timely, a proposal by a shareholder intended to be included in our proxy statement and presented at the 2009 annual meetingdirector, must be receiveddelivered to our Secretary at our principal executive offices no later than 120 days before the anniversaryour 2011 Annual Meeting. As a result, any notice given by a stockholder pursuant to these provisions must be received no later than 120 days before our 2011 Annual Meeting, unless our 2011 Annual Meeting date of our 2009 annual meeting, provided such annual meeting is held withinmore than 30 days before or after the anniversaryJune 2, 2011 [Assuming 2011 Annual Meeting is scheduled for first Thursday in June 2011].
If our 2011 Annual Meeting date of the 2009 annual meeting. If the 2009 annual meeting is not held withinadvanced or delayed by more than 30 days before or afterfrom the anniversary date of the 2009 annualin 2010 coinciding with this year’s meeting date, then the shareholder’s noticeproposals must be delivered to, or mailed and received not later than a reasonable time before the Company begins to print and mailsend its proxy materialsmaterials. 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 such meeting.submitting a proposal or nomination. 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. ANNUAL REPORT ON FORM 10-KSB A complete copy of the Company’sWe filed our Annual Report with the SEC on Form 10-KSB for the year ended January 31, 2008 is included in the Company’s 2008 Annual Report to Shareholders.April 16, 2010. A copy of the Company’s 2008 Annual Report to Shareholders is available to all shareholdersstockholders via the Internet. ShareholdersInternet by going to the investor relations portion of our website and clicking on “Financial Information” and “SEC Filings.” Stockholders may also obtain paper copies of the Company’s Annual Report on Form 10-KSB and the exhibits thereto, without charge, by either writing to Alan Levy, Vice President, Finance of the Company, at the Company’s principal executive offices at theMedical Nutrition USA, Inc., Secretary, 10 West Forest Avenue, Englewood, NJ 07631, via email toalevy@mnidirect.net or by calling our toll free phone number 800-221-0308.New Jersey 07631.OTHER MATTERS Management does not know
The Board knows of anyno other matters tothat will be presented for consideration at the 2008 Annual Meeting other than those set forth herein and in the Notice accompanying this Proxy Statement.Meeting. If a shareholder vote is necessary to transact any other business atissues are properly brought before the 2008 Annual Meeting, themeeting, we will ask our proxy holders intend to vote their proxies in accordance withon the matters using their best judgment related to such business.judgment. It is important that your shares be represented at the meeting,Annual Meeting, regardless of the number of shares that you hold. Whether or not you plan to attend the annual meetingAnnual Meeting in person, we urge you to vote on all the matters to be considered at the annual meeting.Annual Meeting. You may vote your shares over the Internet or by a toll-free telephone number. If you received a paper copy of the proxy card by mail, you may sign, date and mail the proxy card in the return envelope provided. Shareholders whoIf you received the Notice or proxy materials by mail, we strongly encourage you to conserve natural resources and reduce the Company’s printing and processing costs by signing up to receive your stockholder communications via e-mail. With electronic delivery, we will notify you via e-mail as soon as the Annual Report and the Proxy Statement are presentavailable on the Internet, and you can submit your vote easily online. Electronic delivery can help reduce the number of bulky documents in your personal files and eliminate duplicate mailings. Your electronic delivery enrollment will be effective until you cancel it. If you have questions about electronic delivery, please call our Secretary at the 2008 Annual Meeting may revoke their proxies and vote in person or, if they prefer, may abstain from voting in person and allow their proxies to be voted.(201) 569-1188. | | | By Order of the Board of Directors | | | | | /s/ F. A. Newman
| /s/ F.J. Kimmerling | |
| | April 23, 2010 Englewood, New Jersey | Francis A. Newman
Chairman
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April 25, 2008
Englewood, New Jersey
Important Notice Regarding the Availability of Proxy Materials for the Shareholder meeting of
Medical Nutrition USA, Inc.
be held on June 4, 2008 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 May 15, 2008.
Please visit http://www.mdnu.com, where the following materials are available for view:
| | Frank J. Kimmerling Vice President Finance, Chief Financial Officer | | ·
| Notice of Annual Meeting of stockholders
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| Proxy Statement
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| Form of Electronic Proxy Card
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| Annual report of Form 10-KSB
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| | TO REQUEST MATERIAL: | TELEPHONE: 800-221-0308
| | | | E-MAIL: alevy@mnidirect.net
| | | | WEBSITE: http://www.mdnu.com
| | | TO VOTE:
| ONLINE:To access your online proxy card, please visitwww.voteproxy.comand follow the on-screen instructions. You may enter your voting instructions at www.voteproxy.com up to 11:59 PM Eastern Time the day before the cut-off or meeting date.
| | | | -OR-
| | | | IN PERSON:You may vote your shares in person by attending the Annual Meeting.
| | | | -OR-
| | | | TELEPHONE:To vote by telephone, please visit http://www.amstock.com/ProxyServices/ViewMaterials.asp to view the materials and to obtain the toll free number to call.
| | | | -OR-
| | | | MAIL:You many request a card by following the instructions above.
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MEDICAL NUTRITION USA, INC. 2010 ANNUAL MEETING OF SHAREHOLDERS OFMEDICAL NUTRITION USA, INC.
June 4, 2008
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
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| PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx
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| | 1.
| To elect directors to serve for a term ending at the 2008 Annual Meeting of Shareholders or until his or her successor is duly elected and qualified.
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| FOR ALL NOMINEES
| NOMINEES
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| Francis A. Newman
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| WITHHOLD AUTHORITY
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| Andrew Horowitz
| | FOR ALL NOMINEES
| o
| Bernard Korman
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| Mark H. Rosenberg
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| FOR ALL EXCEPT
| | | (See instructions below)
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INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here:x
In their discretion, the proxies are authorized to vote upon such other business that properly may come before the 2008 Annual Meeting and any adjournments thereof.
The Company’s Board of Directors recommends a vote FOR the election of the directors listed above. If no instruction to the contrary is indicated, this Proxy will be voted for the election of the directors listed above.
Please mark, sign, date and return this card in the enclosed postage-paid envelope today.
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.o
| | | | Signature of Shareholder
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| Date:
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| | | | Signature of Shareholder
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| Date:
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Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
MEDICAL NUTRITION USA, INC.
2008 ANNUAL MEETING OF SHAREHOLDERS
JUNE 4, 2008
2, 2010 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 20082010 Annual Meeting of Shareholders and the Proxy Statement and appoints Francis A. Newman and Alan Levy,Frank J. Kimmerling, and each of them, the attorneys and proxies of the undersigned, each with full power of substitution, to vote all the shares of common stock of Medical Nutrition USA Inc, Inc. (the “Company”) which the undersigned is entitled to vote, either on his or her own behalf or on behalf of any entity or entities, at the 20082010 Annual Meeting of Shareholders of the Company (the “2008“2010 Annual Meeting”) to be held at the Company’s executive offices, 10 West Forest Avenue, Englewood, New Jersey 07631, at 10:00 a.m. on June 4, 2008,2, 2010, and at any adjournments or postponements thereof, with the same force and effect as the undersignedu ndersigned might or could do if personally present thereat. The shares represented by this Proxy will be voted in the manner set forth below: (Continued and to be signed on the reverse side) 27
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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. | Please detach along perforated line and mail in the envelope provided. | |
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x | | | | | | | | | | FOR | AGAINST | ABSTAIN | | | 1. | To elect directors to serve for a term ending at the 2011 Annual Meeting of Shareholders or until his or her successor is duly elected and qualified. | | 2. | Ratify our Audit Comittee’s selection of Amper, Politziner & Mattia, LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2011. | o | o | o | | | | | NOMINEES: | | | | | | | | | | | o FOR ALL NOMINEES | O Francis A. Newman O Andrew Horowitz O Mark Rosenberg O Bernard Korman | | | 3. | To transact any other business as may properly be presented at the Annual Meeting or any adjournment or postponement thereof. | | | | o WITHHOLD AUTHORITY FOR ALL NOMINEES | | | | | | | o FOR ALL EXCEPT ` (See instructions below) | | | In their discretion, the proxies are authorized to vote upon such other business that properly may come before the 2010 Annual Meeting and any adjournments thereof. | | | | | | | The Company’s Board of Directors recommends a vote FOR the election of the directors listed herein. If no instruction to the contrary is indicated, this Proxy will be voted for the election of the directors listed herein. Please mark, sign, date and return this card in the enclosed postage-paid envelope today. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: ● | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o | | | | | | |
| Signature of Shareholder | | Date: | | Signature of Shareholder | | Date: | |
| | Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. | |
ANNUAL MEETING OF SHAREHOLDERS OF MEDICAL NUTRITION USA, INC. June 2, 2010 | PROXY VOTING INSTRUCTIONS | |
INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions. Have your proxy card available when you access the web page, and use the Company Number and Account Number shown on your proxy card. | | | | | | | | TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call and use the Company Number and Account Number shown on your proxy card. | | COMPANY NUMBER | | | | ACCOUNT NUMBER | | | Vote online/phone until 11:59 PM EST the day before the meeting. | | | | MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. | | | | | | IN PERSON - You may vote your shares in person by attending the Annual Meeting. | |
| 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 | | i | Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. | i |
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x | | | | | | | | | | FOR | AGAINST | ABSTAIN | | | 1. | To elect directors to serve for a term ending at the 2011 Annual Meeting of Shareholders or until his or her successor is duly elected and qualified. | | 2. | Ratify our Audit Comittee’s selection of Amper, Politziner & Mattia, LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2011. | o | o | o | | | | | NOMINEES: | | | | | | | | | | | o FOR ALL NOMINEES | O Francis A. Newman O Andrew Horowitz O Mark Rosenberg O Bernard Korman | | | 3. | To transact any other business as may properly be presented at the Annual Meeting or any adjournment or postponement thereof. | | | | o WITHHOLD AUTHORITY FOR ALL NOMINEES | | | | | | | o FOR ALL EXCEPT ` (See instructions below) | | | In their discretion, the proxies are authorized to vote upon such other business that properly may come before the 2010 Annual Meeting and any adjournments thereof. | | | | | | | The Company’s Board of Directors recommends a vote FOR the election of the directors listed herein. If no instruction to the contrary is indicated, this Proxy will be voted for the election of the directors listed herein. Please mark, sign, date and return this card in the enclosed postage-paid envelope today. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to e ach nominee you wish to withhold, as shown here: ● | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o | | | | | | |
| Signature of Shareholder | | Date: | | Signature of Shareholder | | Date: | |
| | Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. | |
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
| | COMPANY NUMBER | | | | ACCOUNT NUMBER | | | | CONTROL NUMBER | |
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: | ● Notice of Annual Meeting of stockholders | | ● Proxy Statement | | ● Form of Electronic Proxy Card | | ● Annual Report on Form 10-K | | | | TO REQUEST MATERIAL: | TELEPHONE: 888-Proxy-NA (888-776-9962) 718-921-8562 (for international callers) | | E-MAIL: info@amstock.com | | WEBSITE: http://www.amstock.com/proxyservices/requestmaterials.asp | | TO VOTE: | ONLINE: To access your online proxy card, please visit www.voteproxy.com and follow the on-screen instructions. You may enter your voting instructions at www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or meeting date. | | - OR - | | IN PERSON: You may vote your shares in person by attending the Annual Meeting. | | - OR - | | TELEPHONE: To vote by telephone, please visit http://ir.medicalnutritionusa.com/financials.cfm to view the materials and to obtain the toll free number to call. | | - OR - | | MAIL: You may request a card by following the instructions above. |
| | 1. | To elect directors to serve for a term ending at the 2011 Annual Meeting of Shareholders or until his or her successor is duly elected and qualified. | | 2. | Ratify our Audit Comittee’s selection of Amper, Politziner & Mattia, LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2011. | | | | | | | | | | | | NOMINEES: | | | 3. | To transact any other business as may properly be presented at the Annual Meeting or any adjournment or postponement thereof. | | | | | | | | | | | | | | | | | | | Bernard Korman | | In their discretion, the proxies are authorized to vote upon such other business that properly may come before the 2010 Annual Meeting and any adjournments thereof. | | | | | | | | | | | | | | | These items of business are more fully described in the proxy statement. The record date for the Annual Meeting is April 15, 2010. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment thereof. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Please note that you cannot use this notice to vote by mail. | | | | | | | | | | | | | | | |
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