ITEM 9. DIRECTORS AND EXECUTIVE OFFICER, PROMOTERS & CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS
All directors of the Company hold office until the next annual meeting of
the Company's shareholders and until their successors are duly elected and
qualified, or until their earlier death, resignation or removal. Executive
officers are elected by the Board of Directors on an annual basis and serve at
the discretion of the Board of Directors.
Directors of the Company who are salaried employees of the Company do not
receive any additional compensation for serving as a director and the directors
who are not salaried employees of the Company do not receive any compensation
for serving as a director.
The Audit Committee is comprised of Ronald Glime, the Company's Chief
Financial Officer, and two non-employee directors. The Audit Committee is
responsible for overseeing and monitoring management's and the Company's
independent auditors' participation in the financial reporting process. The
Audit Committee must recommend the Company's financial statements for a
particular period to the Board of Directors before the Company may include them
in any report filed with the Securities and Exchange Commission. The Audit
Committee also performs such other duties as are set forth in its written
charter. Directors do not receive any compensation for serving on the Audit
Committee.
The Compensation Committee is comprised of Ronald Glime, the Company's
Chief Financial Officer, and two non-employee directors. The Compensation
Committee is responsible for determining the compensation of the Chief Executive
Officer and the other senior executives of the Company and to establish policies
for senior management.
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DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company as of December 31, 2001
were:
Name Age Position
--------------------------------- ------------- ------------------------------------------------------------
Jerry R. Farrar 65 Director, Chief Executive Officer and President
--------------------------------- ------------- ------------------------------------------------------------
Joel San Antonio 49 Director and Chairman of the Board
--------------------------------- ------------- ------------------------------------------------------------
David L. Knowlton 55 Director
--------------------------------- ------------- ------------------------------------------------------------
Ronald Glime 57 Director, Chief Financial Officer, Secretary and Treasurer
--------------------------------- ------------- ------------------------------------------------------------
David Scotch 63 Director
--------------------------------- ------------- ------------------------------------------------------------
Jeffrey D. Mamorsky* 55 Director
--------------------------------- ------------- ------------------------------------------------------------
Lee Roberts 34 Vice President, Chief Technology Officer and Assistant
Secretary
--------------------------------- ------------- ------------------------------------------------------------
Brenda Farrar 61 Vice President of Communications and Sales Center
Operations
--------------------------------- ------------- ------------------------------------------------------------
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*Mr. Mamorsky resigned as of January 30, 2002 for personal reasons.
JERRY R. FARRAR
Mr. Farrar, the Company's President and Chief Executive Officer, has served
as a director of the Company since the Company's inception. Mr. Farrar is an
executive with extensive background in both the financial services and
technology fields. He served as founder and chief strategist from September 1998
to September 2000 for CarsDirect.com, the e-commerce leader of online automobile
sales, including finance and insurance services. Mr. Farrar developed and
supported critical path strategies resulting in excess of $300 million of
pre-IPO funding from the private investment community. He was President and
Chief Executive Officer from January 1993 to September 1998 of Financial
Technology, Inc., a financial insurance company. He has led five start-up
companies in the financial services field. He was appointed to serve on the
faculty of the World Auto Congress. He authored the comprehensive History of the
Vehicle Service Contract for the White House and has been honored as a finalist
in the Ernst and Young and Inc. Magazine entrepreneur of the year awards. Mr.
Farrar has been retained by MedStrong under a three-year employment agreement.
Mr. Farrar and Brenda Farrar were formerly married and are now divorced.
JOEL SAN ANTONIO
Mr. San Antonio has served as Chairman of the Board since the Company's
inception and serves on the Company's Audit Committee and Compensation
Committee. Mr. San Antonio began his career as co-founder of a business in the
women's fashion industry. In 1983, Mr. San Antonio and his partner exited the
fashion industry and founded Warrantech Corporation, a third party administrator
of service contracts and extended warranty programs. The company went public in
1984 and, in September 1997, was recognized by Fortune Magazine as one of the
"100 Fastest Growing Companies in America." Today, Mr. San Antonio serves as
Chairman of the Board and Chief Executive Officer of Warrantech Corporation and
each of its operating subsidiaries. In addition, he was a founder of Corniche
Group, Inc., a provider of insurance products and services, and served as a
director from May 1998 through September 1999. Mr. San Antonio is a member of
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the Southwestern Connecticut Area Commerce and Industry Association and the
Young Presidents' Organization, Inc. A recipient of many industry awards, he was
a national finalist in Ernst & Young's 1998 "Entrepreneur of the Year" program.
He is also involved in a variety of philanthropic and charitable activities and
is a member of the Metropolitan Museum of Art and the Stamford Theater for the
Performing Arts.
DAVID L. KNOWLTON
Mr. Knowlton has served as a director of the Company since the Company's
inception. Mr. Knowlton is the founder and Chief Executive Officer of
ElderPairs, Inc. a company founded in 1999 that is intended to provide an Au
Pair-type live-in support for elderly clients. He is also a principal of
Knowlton & Associates, a healthcare consulting company founded in 1999. Since
1991, Mr. Knowlton has served as a director and was a founder of Healthcare
Payers Coalition of New Jersey and presently serves as the Chair of the Quality
and Data Committee. From 1996 to 1999, Mr. Knowlton was the Vice President of
The MIIX Group, Inc. a publicly-traded diversified company where he was
President of a wholly-owned subsidiary, The MIIX Healthcare Group. From March
16, 2001 to April 5, 2001, Mr. Knowlton was president of MedStrong.
RONALD GLIME
Mr. Glime, the Company's Chief Executive Officer, Secretary and Treasurer,
has served as a director of the Company since the Company's inception and serves
on the Company's Audit Committee and Compensation Committee. Mr. Glime began his
career with Life Investors Insurance Company of America developing and marketing
a national program of consumer products sold through a network of automobile
dealers. He moved to American Warranty Corporation in 1978, resigning as its
Chief Executive Officer in 1982. From 1983 through February 1991, Mr. Glime
owned and operated an independent general insurance agency, managing over thirty
sales people whose efforts resulted in the agency being consistently recognized
as a leading national producer of vehicle service contracts. In 1991, he joined
Warrantech Automotive, Inc. (formerly known as Warrantech Dealer Based Services,
Inc.) as Regional Sales Manager and assumed the office of President in October
1992. He held this position until March 1999 at which time he assumed the office
of President of U.S. and Canadian Operations for Warrantech Corporation, a
publicly traded company. Mr. Glime has been recognized on a number of occasions
for his achievements as a businessman.
DAVID SCOTCH, M.S., M.D.
Dr. Scotch has served as a director of the Company since the Company's
inception and serves on the Company's Audit Committee and Compensation
Committee. Dr. Scotch is licensed to practice medicine in the State of New York.
Since 1998, Dr. Scotch has served as the Vice Dean for New York University
School of Medicine and the Vice Dean for Faculty Affairs of New York University
School of Medicine, responsible for various academic and administrative matters,
including the operations of personnel and maintenance, the allocation of
resources. Dr. Scotch served on the Admissions Committee and the Education and
Research Committee and acted as a representative of the Dean's Office to the
Faculty Council and to the Faculty Promotions and Tenure Committee. From 1972 to
1998, Dr. Scotch served as the Associate Dean of New York University School of
Medicine. Dr. Scotch holds a B.A from Boston University, a M.D. from New York
University School of Medicine and a M.S. from Massachusetts Institute of
Technology, Sloan School of Management.
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LEE ROBERTS
Mr. Roberts, the Company's Vice President, Chief Technology Officer and
Assistant Secretary, founded and has been the principal stockholder since
January 1998 of Dominion Technology Partners, Inc., a Dallas-based provider of
management information systems. Mr. Roberts was a director of Computer Language
Research, a software development company from June 1997 to July 1998. Mr.
Roberts was a Manager of IMCO Recycling, Inc. an aluminum recycling company from
February 1995 to June 1, 1997. Mr. Roberts received his masters degree in
management information systems from Texas Tech University. Mr. Roberts was a key
member from December 1993 to February 1995 of Arthur Andersen Consulting
Company's system development team that focused on the medical field. Mr. Roberts
has engineered and executed key systems for companies such as Computer Language
Research, Bank One, Warrantech, Progressive Database Systems, MedSynergies,
Patriot American, Arthur Andersen Consulting Company and Motorola.
BRENDA FARRAR
Ms. Farrar, the Company's Vice President of Communications and Sale Center
Operation, was a director of CarsDirect.com from September 1998 to July 2000.
She directed and engineered the growth of CarsDirect.com's e-commerce sales
center from six sales people to one-hundred-fifty sales people selling $600 to
$800 million worth of vehicles, per month excluding financing and insurance. In
the CarsDirect.com's start-up period, she constructed systems to streamline the
delivery and fulfillment process. Ms. Farrar was a Vice President of Financial
Technology, Inc. from January 1993 to September 1998. Ms. Farrar and Jerry
Farrar were formerly married and are now divorced.
MEDICAL ADVISORY BOARD
The Company's Advisory Board consists of five doctors whose biographies are set
forth below.
ROBERT K. BIER, M.D.
Dr. Bier, 72, is a radiologist licensed to practice medicine in California.
Dr. Bier has been practicing radiology with the Harborside Radiologic Medical
Group since June 1997. Dr. Bier was a diagnostic radiologist from July 1995 to
November 2000 with Health Care Partners. He has over 35 years of medical
experience in general medicine, diagnostic radiology and radiation medicine He
has trained at Harbor-UCLA in radiology and has worked in both academics and
private practice of radiology. Dr. Bier has trained residents in MRI at King
Drew Medical Center. Dr. Bier holds a M.D. from the University of Brussels and
formally served as Chief of Radiology at St. Francis Medical Group. Prior to
retirement, he was a member of the Los Angeles Radiological Society and the
American Medical Association.
JOSEPH PONTICIELLO, M.D.
Dr. Ponticiello, 39, is a doctor of emergency medicine licensed to practice
medicine in the State of New York. Since 1998 he has served as the Associate
Director of the Department of Emergency Medicine at New York United Hospital.
From 1996 to 1998, Dr. Ponticiello was an attending physician in the Emergency
Medical Department at Montefiore Medical Center, Bronx, New York and was an
Assistant Professor of Emergency Medicine at the Albert Einstein College of
Medicine. Dr. Ponticiello holds a B.A. from S.U.N.Y. Binghamton and a M.D. from
S.U.N.Y. Stony Brook.
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ERVIN BRAUN, D.M.D.
Dr. Braun, 48, is a dentist licensed to practice dentistry in the State of
Connecticut. Since July 1983, Dr. Braun has been in private practice in Darien,
Connecticut. Dr. Braun has special training in Prosthodontics and has had the
opportunity to do a fellowship in Maxillo-Facial Prosthetics at Memorial
Sloan-Kettering Cancer Center. Dr. Braun holds a B.S. from Fairleigh Dickinson
University and a Doctor of Medical Dentistry from the University of Pennsylvania
School of Medicine.
SAMUEL J. BRODSKY, M.D.
Dr. Brodsky, 51, is a cardiologist licensed to practice medicine in the
State of Connecticut. Since 1982, Dr. Brodsky has practiced medicine with the
Cardiology Associates of Fairfield County in Stamford, Connecticut. He holds a
B.A. from Boston University and a M.D. from State University of New York,
Upstate Medical Center. Dr. Brodsky is a member of the American College of
Cardiology, the Council on Clinical Cardiology of the American Heart Association
ELAINE LEVENTHAL, M.D.
Dr. Leventhal, 70, is Professor of Medicine and Director of the
Gerontological Institute at Robert Wood Johnson Medical School, funded by Robert
Wood Johnson Foundation. Dr. Leventhal has been the Director of the
Gerontological Institute since 1998. The mission of the Institute is to foster
research and education across the multiple disciplines both in the basic
sciences and in the clinical domain that engage in aging research. The ultimate
goal is to explore avenues to translate their research findings into the
clinical setting and to educate the next generation of practitioners.
In 1966 she earned her Ph.D. from Yale University in Developmental Genetics
and is a 1974 graduate of the University of Wisconsin School of Medicine,
completing her Internal Medicine training at UW, Mt. Sinai Medical Center,
Milwaukee from 1977 to 1979 and her Geriatric Fellowship training at the William
S. Middleton Memorial Veterans Medical Center, Madison, Wisconsin from 1979 to
1981.
Her research interests include defining risks for frailty in the ambulatory
elderly, exploring the role of immune competency in health and chronic illness,
and studying health and illness behaviors that effect health care utilization.
She has also looked at elder-specific treatment for substance abuse and the
identification and treatment of geriatric depression in the primary care
setting. She is a past President of the Academy of Behavioral Medicine Research
(1998-2000).
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act of 1934 requires the Company's directors
and executive officers to file reports of their holdings of and transactions in
the Company's stock with the Securities and Exchange Commission. Based on the
Company's records and the directors and executive officers' representations to
the Company, the Company believes that during fiscal 2001 these requirements
were met.
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ITEM 10. EXECUTIVE COMPENSATION
During the fiscal year ended December 31, 2001, Jerry R. Farrar, the
Company's President and Chief Executive Officer, was paid a base salary of
$150,000 and was entitled to a $50,000 signing bonus pursuant to the terms of
his employment agreement with the Company described below. There were no other
executive officer of the Company who was paid a salary equal to or in excess of
$100,000.
EMPLOYMENT AGREEMENTS
In January 2001, MedStrong and Jerry R. Farrar entered into a three year
employment agreement pursuant to which Mr. Farrar became the President and Chief
Executive Officer of MedStrong. The employment agreement provides for a base
salary of $150,000 with a minimum annual increase of 5%. A signing bonus of
$50,000 was to be paid to Mr. Farrar within 30 days of MedStrong receiving
$1,000,000 in capital from any source. Due to the financial situation of the
Company, Mr. Farrar agreed to a reduction of his base salary for the 2002 fiscal
year by 10% on March 15, 2002 and by a total of 25% on March 31, 2002. As of the
date of this Annual Report on Form 10-KSB, Mr. Farrar received only $30,000 of
his signing bonus. The Company is still indebted to Mr. Farrar for the remainder
of the bonus. In addition to the annual increase in his salary described above,
Mr. Farrar is also eligible to receive an annual incentive bonus that will not
exceed his salary. The Compensation Committee will determine the criteria for
this incentive bonus. If and when the Company creates a stock option plan, Mr.
Farrar will be granted options to purchase up to $333,000 worth of shares of the
Company's common stock pursuant to the terms of the plan. Mr. Farrar received
additional benefits including medical insurance, group term life insurance and
automobile expenses.
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