def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
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Preliminary Proxy Statement |
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(E)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to § 240.14a-11(c) or § 240.14a-12 |
HearUSA, 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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HearUSA,
Inc.
1250 Northpoint Parkway
West Palm Beach, Florida 33407
NOTICE OF
ANNUAL MEETING OF
STOCKHOLDERS
To be held on June 12, 2008
The Annual Meeting of Stockholders of HearUSA, Inc. (the
Company) will be held on Thursday June 12, 2008
at 2:30 p.m. local time at Palm Beach Gardens Marriott
located at 4000 RCA Boulevard, West Palm Beach, Florida 33410,
for the following purposes:
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To elect seven directors of the Company, each to hold office
until the next Annual Meeting of Stockholders and thereafter
until his successor is duly elected and qualified, or as
otherwise provided by law;
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2.
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To consider such other matters as may properly come before the
Annual Meeting.
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Only stockholders of record as shown on the books of the Company
at the close of business on April 23, 2008, the record date
fixed by the Board of Directors, will be entitled to vote at the
meeting and any adjournments thereof. The voting rights of the
stockholders are described in the accompanying proxy statement.
By order of the Board of Directors,
Denise Pottlitzer
Secretary & VP of Reporting & Compliance
May 7, 2008
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN,
DATE AND RETURN YOUR PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
ENCLOSED POSTAGE-PAID ENVELOPE WHETHER OR NOT YOU EXPECT TO
ATTEND IN PERSON. YOU MAY ALSO VOTE YOUR SHARES BY
TELEPHONE OR THE INTERNET. INSTRUCTIONS FOR USING THESE
SERVICES ARE SET FORTH ON THE ENCLOSED PROXY CARD.
TABLE OF CONTENTS
HearUSA, Inc.
1250 Northpoint Parkway
West Palm Beach, Florida 33407
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To be held on June 12, 2008
This Proxy Statement with the accompanying proxy card is being
mailed or given to stockholders commencing on or about
May 7, 2008, in connection with the solicitation of proxies
by the Board of Directors of HearUSA, Inc. (the
Company) to be used at the 2008 Annual Meeting of
Stockholders of the Company to be held at 4000 RCA
Boulevard, West Palm Beach, Florida 33410, on Thursday,
June 12, 2008 at 2:30 p.m. local time and any
adjournments thereof.
The Companys principal executive offices are located at
1250 Northpoint Parkway, West Palm Beach, Florida 33407.
Voting at
Meeting
The record date for the Annual Meeting is April 23, 2008.
Holders of shares of the Companys common stock, par value
$.10 per share (Common Stock), and holders of
exchangeable shares (Exchangeable Shares) of HEARx
Canada, Inc., a subsidiary of the Company, as of the close of
business on the record date, are entitled to notice of, and to
vote at, the Annual Meeting or any adjournments thereof. Each
holder of Common Stock is entitled to one vote for each share
held on the record date, and Computershare Trust Company of
Canada (the Trustee), the holder of the
Companys Special Voting Preferred Stock, is entitled to
one vote for each Exchangeable Share outstanding as of the
record date. Votes cast with respect to the Exchangeable Shares
will be voted through the Special Voting Preferred Stock by the
Trustee as directed by the holders of Exchangeable Shares,
except votes cast with respect to Exchangeable Shares whose
holders request to vote directly in person as proxy for the
Trustee at the Annual Meeting.
As of the record date, there were issued and outstanding
38,073,157 shares of Common Stock, one share of the
Companys Special Voting Preferred Stock and 534,761
Exchangeable Shares (excluding Exchangeable Shares owned by the
Company and its subsidiaries). Each Exchangeable Share is
exchangeable at any time, at the option of the holder, for one
share of the Companys Common Stock. The holders of a
majority of the shares of Common Stock and Exchangeable Shares
entitled to vote as of the record date present in person or by
proxy will constitute a quorum at the meeting. Under the
Delaware General Corporation Law, any stockholder who submits a
proxy and abstains from voting on a particular matter described
herein will still be counted for purposes of determining a
quorum. Broker non-votes will be treated as not represented at
the meeting as to any matter for which a non-vote is indicated
on the brokers proxy.
Proxy
Procedure
Stockholders of record (stockholders who hold their shares in
their own name) can vote any one of three ways:
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By Mail: If the enclosed proxy card is properly executed and
returned prior to the meeting, the shares represented thereby
will be voted in accordance with the stockholders
directions or, if no directions are indicated, the shares will
be voted in accordance with the recommendations of the Board of
Directors as specified in this proxy statement. The Board of
Directors does not know of any other business to be brought
before the meeting, but it is intended that, as to any such
other business, a vote may be cast pursuant to the proxy in
accordance with the judgment of the person or persons acting
thereunder.
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By Telephone: Call the toll-free number on your proxy card to
vote by phone. You will need to follow the instructions on your
proxy card and the voice prompts.
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By Internet: Go to the web site listed on your proxy card to
vote through the Internet. You will need to follow the
instructions on your proxy card and the web site. If you vote
through the Internet, you may incur telephone and Internet
access charges.
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If you vote by telephone or the Internet, your electronic vote
authorizes the named proxies in the same manner as if you
signed, dated and returned your proxy card. IF YOU VOTE BY
TELEPHONE OR THE INTERNET, YOU SHOULD NOT RETURN YOUR PROXY CARD.
If your shares are held in the name of a bank, broker or other
holder of record, you will receive instructions from the holder
of record that you must follow in order for your shares to be
voted in accordance with your instructions. Telephone and
Internet voting also will be offered to stockholders owning
shares through most banks and brokers.
Any stockholder voting by written proxy by mail may revoke that
proxy at any time prior to the voting thereof either by
delivering written notice to the Secretary of the Company or by
voting in person at the meeting. If you voted by telephone or
the Internet, you may also change your vote with a timely and
valid later telephone or Internet vote, as the case may be.
Attendance at the meeting will not have the effect of revoking a
proxy unless you give proper written notice of revocation to the
Secretary before the proxy is exercised or you vote by written
ballot at the meeting.
If you hold Exchangeable Shares and you wish to direct the
Trustee to cast the votes represented by your Exchangeable
Shares attached to the Special Voting Preferred Stock on your
behalf, you should follow carefully the instructions provided by
the Trustee, which accompany this Proxy Statement. The procedure
for instructing the Trustee differs in certain respects from the
procedure for delivering a proxy, including the place for
depositing the instructions and the manner of revoking the proxy.
Proxy
Solicitation
All costs of the solicitation of proxies will be borne by the
Company. In addition to the solicitation of proxies by use of
the mails, the Company may utilize the services of some of the
officers and regular employees of the Company (who will receive
no compensation therefore in addition to their regular salaries)
to solicit proxies personally and by telephone. The Company will
request banks, brokers, custodians, nominees and fiduciaries to
forward copies of the proxy solicitation materials to beneficial
owners and to request authority for the execution of proxies.
The Company will reimburse such persons or entities for their
expenses in doing so.
Important
Information About Proxy Material Availability
A copy of our proxy materials, including this proxy statement
and our Annual Report to Stockholders, can be found on our
website at www.hearusa.com.
Proposal No. 1
ELECTION OF DIRECTORS
Seven directors of the Company are to be elected at the meeting,
each to hold office until the next Annual Meeting of
Stockholders and until his successor is elected and qualified,
or as otherwise provided by the Companys Amended and
Restated Bylaws or by Delaware law.
The Board of Directors, upon the recommendation of the
Nominating and Corporate Governance Committee, has nominated the
seven persons named below for election as directors, all of whom
are presently serving as such after election by the
stockholders. It is intended that the shares represented by the
enclosed proxy will be voted for the election of these seven
nominees (unless such authority is withheld by a stockholder).
In the event that any of the nominees should become unable or
unwilling to serve as a
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director (which is not anticipated), it is intended that the
proxy will be voted for the election of such person or persons,
if any, who shall be designated by the Board of Directors.
The nominees for election as directors are as follows:
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Director
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Position with the
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Name and Age
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Since
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Company
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Thomas W. Archibald (69)
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1993
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Director
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Bruce N. Bagni (63)
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2005
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Director
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Paul A. Brown (70)
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1986
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Director
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Joseph L. Gitterman III (72)
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1997
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Director
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Stephen J. Hansbrough (61)
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1997
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President and Chief Executive
Officer, Chairman of the Board
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Michel Labadie (54)
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2002
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Director
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David J. McLachlan (69)
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1986
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Director
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Thomas W. Archibald attended the London School of
Economics and received a B.A. degree in economics from Denison
University and a Juris Doctor degree from the Ohio State
University Law School. He retired from the Bank of New York in
1995, where he served as Executive Vice President of the
Personal Trust Sector. He held that position at Irving
Trust Company when it merged with The Bank of New York in
1988. Mr. Archibald is a past Director of Group Health
Incorporated, the only not-for-profit health insurance carrier
chartered to operate throughout New York State.
Bruce N. Bagni, holds a Bachelor of Arts degree
from the University of Southern California, a Juris Doctor
degree from Indiana University (Indianapolis) and a Masters of
Law degree from Columbia University. Mr. Bagni retired from
Blue Cross Blue Shield of Florida at the end of 2004 where he
was Senior Vice President for Public Affairs, General Counsel
and Corporate Secretary. He was a member of the Office of the
CEO, which developed corporate strategy and provided overall
management and leadership for the enterprise. Before joining
Blue Cross Blue Shield of Florida in early 1992 he was employed
for six years by UNUM Life Insurance Company, a large national
and international disability and life insurer, serving primarily
in legal roles, including Vice President and Chief Counsel. He
is currently involved in various business ventures and
charitable activities.
Paul A. Brown, M.D. holds an A.B. from
Harvard College and an M.D. from Tufts University School of
Medicine. Dr. Brown founded HearUSA in 1986 and most
recently served as Chairman of the Board until February 2008,
when he retired and was appointed Chairman Emeritus.
Dr. Brown served as Chief Executive Officer from 1986 until
July 2002. From 1970 to 1984, Dr. Brown was Chairman of the
Board and Chief Executive Officer of MetPath Inc., a New
Jersey-based corporation offering a full range of clinical
laboratory services to physicians and hospitals, which he
founded in 1967 while a resident in pathology at Columbia
Presbyterian Medical Center in New York City. MetPath developed
into the largest clinical laboratory in the world with over
3,000 employees and was listed on the American Stock
Exchange prior to being sold to Corning in 1982 for
$140 million. Dr. Brown is formerly Chairman of the
Board of Overseers of Tufts University School of Medicine, an
Emeritus member of the Board of Trustees of Tufts University, a
past member of the Visiting Committee of Boston University
School of Medicine and currently is a part-time lecturer in
pathology and member of the Visiting Community at Columbia
University College of Physicians and Surgeons.
Joseph L. Gitterman, III is the manager of
the EIP Group, an investing, trading and consulting firm that he
founded in 1994. Until 1994, he was a Senior Managing Director
of LaBranche & Co. He was a member of the New York
Stock Exchange for over thirty years and was appointed a
Governor in 1986. At the New York Stock Exchange, he served on
more than fourteen committees, serving as chairman of many of
them. He is a director of Intrepid International, Custom Data
Services and the Daylight Company. He also serves on numerous
not for profit boards.
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Stephen J. Hansbrough, President, Chief Executive
Officer and Chairman of the Board, has been with the Company
since December of 1993. Mr. Hansbrough was formerly the
Senior Vice President of Dart Drug Corporation and was
instrumental in starting their affiliated group of companies
(Crown Books and Trak Auto). These companies along with Dart
Drug Stores had over 400 retail locations, generated
approximately $550 million in annual revenues and employed
over 3,000 people. Mr. Hansbrough subsequently became
Chairman and CEO of Dart Drug Stores with annual revenues in
excess of $250 million. After leaving Dart,
Mr. Hansbrough was an independent consultant specializing
in turnaround and
start-up
operations, primarily in the retail field, until he joined
HearUSA.
Michel Labadie, B.Sc., M.Sc.,
MBA. Mr. Labadie was a Director of Helix Hearing Care
of America Corp before the combination with HearUSA, Inc. He
currently is President and Chief Executive Officer of Les Pros
de la Photo (Quebec) Inc., the largest photo finishing company
in Canada, and has been since 1992. He has also spent several
years working as the head of the Venture Capital, Portfolio
Management and Mergers and Acquisition Departments of a major
financial institution. He currently serves as a director for
several public and private non-US companies.
David J. McLachlan is the former Executive Vice
President and Chief Financial Officer of Genzyme Corporation, a
biotechnology company, from 1989 to 1999 and a senior advisor to
Genzymes chairman and chief executive officer through June
2004. Currently he serves as a Director of Dyax Corp., a
biotechnology company, and Skyworks Solutions, Inc., a
manufacturer of analog, mixed signal and digital semiconductors
for mobile communications. He is a graduate of Harvard Business
School and Harvard College.
There are no family relationships between or among any directors
or executive officers of the Company.
Vote
Required
The seven director nominees receiving the greatest number of
votes of the Common Stock and the Special Voting Preferred Stock
represented at the meeting (in person or by proxy) will be
elected directors assuming a quorum is present at the meeting.
All shares of Common Stock and the share of Special Voting
Preferred Stock represented by valid proxies will be voted in
accordance with the instructions contained therein. Shares of
Common Stock represented by proxies that are marked
without authority with respect to the election of
one or more nominees for director and broker non-votes will have
no effect on the outcome of the election. Votes with respect to
Exchangeable Shares represented by valid voting instructions
received by the Trustee will be cast by the Trustee through the
Special Voting Preferred Stock in accordance with those
instructions. If no instructions are received by the Trustee
from a holder of Exchangeable Shares, the votes to which such
holder is entitled will not be exercised.
THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR EACH
OF THE ABOVE NAMED DIRECTOR NOMINEES
Board of
Directors and Committees of the Board
Board of
Directors
The Board of Directors has determined that the following
directors, constituting a majority of the Board, are
independent as defined by the American Stock
Exchange listing standards: Messrs. Archibald, Bagni,
Gitterman, Labadie and McLachlan. The Board specifically
considered Mr. Labadies beneficial ownership of
approximately 6% of the Companys outstanding Common Stock,
both in his name and through Les Partenaires de Montreal, s.e.c.
and Gestion Fremican, Inc. The Board concluded that stock
ownership alone did not preclude Mr. Labadie from being
independent of management, particularly noting the small
percentage of beneficial ownership and the lack of sole voting
and dispositive power by Mr. Labadie relative to such stock.
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The standing committees of the Board of Directors are the Audit
Committee, the Compensation Committee and the Nominating and
Corporate Governance Committee. The charters for the Audit,
Compensation and Nominating and Corporate Governance Committees
are posted on the Companys web site at www.hearusa.com
(select Investors then the desired committee
charter). A copy of each of these charters is also available in
print at no charge to any stockholder who requests the charter
by writing to the Corporate Secretary at HearUSA, Inc.,
1250 Northpoint Parkway, West Palm Beach, Florida 33407.
All committee members are appointed by the Board of Directors on
the recommendation of the Nominating and Corporate Governance
Committee. The membership and the function of each committee are
described below.
There were nine meetings of the Board of Directors during the
fiscal year ended December 29, 2007. All of the directors
attended at least 75% of the aggregate number of the meetings
held by the Board of Directors and its respective committees on
which they served during the fiscal year. Directors are
encouraged, but not required to attend annual meetings of
stockholders. All of the Companys directors
attended the 2007 Annual Meeting of Stockholders.
Corporate
Governance and Stockholder Communication with the
Board
The Board of Directors has adopted corporate governance
guidelines upon the recommendation of the Nominating and
Corporate Governance Committee. The Board also has adopted a
Code of Ethics applicable to all the Companys directors,
officers and employees. A copy of both the corporate governance
guidelines and the code of ethics are available on the
Companys website at www.hearusa.com.
In accordance with our corporate governance guidelines, our
independent directors hold executive sessions regularly without
management present. In 2007, the independent directors selected
David J. McLachlan as the Presiding Director of the Boards
non-management directors. In early 2008, upon the recommendation
of the Nominating and Corporate Governance Committee, the Board
adopted changes to the Companys corporate governance
guidelines to establish the position of Lead Independent
Director during any period that the Board has determined that it
was best for the Chairman of the board to also serve as Chief
Executive Officer of the Company. In February of 2008, upon the
retirement of Dr. Brown as Chairman of the Board, the Board
unanimously appointed Stephen J. Hansbrough, President and Chief
Executive Officer of the Company, to serve as Chairman of the
Board. At that time, the Board also selected David J. McLachlan
to serve as Lead Independent Director. The Lead Independent
Director presides at the executive sessions of the independent
directors. His role and responsibilities include maintaining an
active relationship with the Chairman and Chief Executive
Officer, participating in preparation for board meetings
(suggesting agenda items as appropriate), serving as a
supplemental channel for communications between board members
and the Chairman and Chief Executive Officer and providing
counsel to individual directors on the performance of their
duties.
Any stockholder may communicate with any member of the Board of
Directors by sending such communication to 1250 Northpoint
Parkway, West Palm Beach, Florida 33407 to the attention of the
director or directors of the stockholders choice. The
Company will relay all such communications addressed in this
manner to the appropriate director(s). Any communications
addressed to the attention of The Board of Directors
will be forwarded to the Chairman of the Board for review and
further handling. Any communications addressed to the attention
of The Independent Directors will be forwarded to
the Lead Independent Director for review and further handling.
Stockholders wishing to communicate with the Lead Independent
Director also may send email to
LeadDirector@hearusa.com.
Audit
Committee
During 2007, the Audit Committee was comprised of
Messrs. Archibald, Bagni, Gitterman, Labadie and McLachlan,
all of whom are independent as defined by the
American Stock Exchange listing standards and
Rule 10A-3
under the Securities Exchange Act of 1934, as amended.
Mr. McLachlan serves as Chairman of the Audit Committee. In
addition, the Board of Directors has determined that each member
of the Audit Committee is financially literate and
Mr. McLachlan is an audit committee financial
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expert within the meaning of the rules and regulations
adopted by the Securities and Exchange Commission. The Audit
Committee met ten times during fiscal 2007.
The principal functions of the Audit Committee are to oversee
the audit of the Companys financial statements provided to
the Securities and Exchange Commission, the Companys
shareholders and the general public; the Companys internal
financial accounting processes and controls; the Companys
disclosure controls and procedures; and the independent audit
process. The Audit Committee is responsible for appointing,
retaining, compensating, evaluating and, if necessary,
terminating HearUSAs independent registered public
accounting firm. The Audit Committee meets periodically with
representatives from our independent registered public
accounting firm separate from management. The Audit Committee
has established procedures for the receipt, retention and
treatment of confidential and anonymous complaints regarding
HearUSAs accounting, internal controls and auditing
matters. A copy of these procedures is available in print at no
charge to any stockholder who requests the procedures by writing
to the Corporate Secretary at HearUSA, Inc.,
1250 Northpoint Parkway, West Palm Beach, Florida 33407.
Compensation
Committee
During 2007, the Compensation Committee was comprised of
Messrs. Archibald, Bagni, Gitterman, Labadie and McLachlan,
all of whom are independent as defined by the
American Stock Exchange listing standards. The Compensation
Committee, chaired by Mr. Archibald, met seven times during
the 2007 fiscal year. The primary function of the Compensation
Committee is to assist the Board in fulfilling its oversight
responsibilities relating to officer and director compensation.
Its primary duties and responsibilities are the overall design,
approval and implementation of the executive compensation plans,
policies and programs for directors, officers and other key
executives of the Company.
Nominating and
Corporate Governance Committee
During 2007, the Nominating and Corporate Governance Committee
was comprised of Messrs. Archibald, Bagni, Gitterman,
Labadie and McLachlan, all of whom are independent as defined by
the American Stock Exchange listing standards. The Nominating
and Corporate Governance Committee, chaired by Mr. Bagni,
met three times during fiscal year 2007. The principal functions
of the Nominating and Corporate Governance Committee are to
recommend to the Board of Directors the director nominees for
the next annual meeting of stockholders, candidates to fill
vacancies on the Board and directors to be appointed to Board
committees. In addition, the Nominating and Governance Committee
develops and recommends to the Board a set of corporate
governance guidelines applicable to the Board and the Company
and oversees the effectiveness of the Companys corporate
governance in accordance with these guidelines, making suggested
changes from time to time as appropriate. This Committee also
oversees the process of evaluations of the Board, its committees
and executive management of the Company.
Director
Nominating Process
The Nominating and Corporate Governance Committee is responsible
for identifying individuals qualified to become Board members
and recommending to the Board director nominees for the next
annual meeting of shareholders and candidates to fill vacancies
on the Board.
The Nominating and Corporate Governance Committee considers
candidates for Board membership suggested by Board members. The
Committee may also use outside consultants to identify potential
directors. Additionally, in selecting nominees for directors,
the Committee will review candidates recommended by stockholders
using the same general criteria as other candidates. Any
stockholder wishing to recommend a candidate for consideration
by the Committee as a nominee for director should follow the
procedures set forth below.
Once the Nominating and Corporate Governance Committee has
identified a prospective nominee, the Committee makes an initial
determination as to whether to conduct a full evaluation of the
candidate. This initial determination is based on the
information provided to the Committee with the recommendation
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of the prospective candidate, as well as the Committees
own knowledge of the prospective candidate, which may be
supplemented by inquiries of the person making the
recommendation or others. The preliminary determination is based
primarily on the need for additional Board members and the
likelihood that the prospective nominee can satisfy the
evaluation factors described below. The Committee then evaluates
the prospective nominee against the standards and qualifications
set out in the Companys Corporate Governance Guidelines,
which include among others things, considerations of judgment,
specific business experience, independence (for purposes of the
American Stock Exchange and SEC rules) and skills (such as
understanding of technology, finance and marketing and
healthcare), all in the context of an assessment of the
perceived needs of the Board at the time.
Upon completion of this evaluation and interview process, the
Committee makes a recommendation to the full Board as to whether
the candidate should be nominated by the Board
and the Board determines whether to approve the nominee after
considering the recommendation and report to the Committee.
Stockholders may recommend director nominee candidates by
sending the following information to Nominating Committee
Chairman, HearUSA, Inc., 1250 Northpoint Parkway, West Palm
Beach, Florida, 33407: stockholders name, number of shares
owned, length of period held, and proof of ownership; name, age
and address of candidate; candidates detailed resume;
description of any arrangements or understandings between the
stockholder and the candidate; and signed statement from the
candidate confirming his or her willingness to serve on the
Board of Directors.
If a stockholder seeks to nominate a candidate for election at
the 2009 annual meeting of stockholders, the stockholder must
follow the procedures described under the Stockholder
Proposals below.
Compensation of
Directors
The following table provides information about compensation to
directors during 2007.
DIRECTOR COMPENSATION
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Fees Earned
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All Other
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Or Paid in Cash
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Option Awards
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Compensation
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Total
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Name(1)
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($)
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($)(2)
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($)
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($)
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Thomas W. Archibald
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39,350
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1,301
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40,651
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Bruce Bagni
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39,350
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1,301
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40,651
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Joseph L. Gitterman III
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35,700
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1,301
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37,001
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Michel Labadie
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12,650
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|
|
|
1,301
|
|
|
|
|
|
|
|
13,951
|
|
David J. McLachlan
|
|
|
40,350
|
|
|
|
1,301
|
|
|
|
|
|
|
|
41,651
|
|
|
|
|
|
(1) |
|
In 2007, neither Dr. Brown nor Mr. Hansbrough were
compensated separately for their service on the Board of
Directors. See Summary Compensation Table below. For 2008, after
his retirement as Chairman of the Board, Dr. Brown will be
compensated separately for his service as a director. |
|
(2) |
|
On November 30, 2007, each independent director was granted
a 10-year
option to purchase up to 20,000 shares of Common Stock
pursuant to the Companys 2007 Incentive Compensation Plan
approved by stockholders in 2007. The exercise price of those
options was the market price on date of grant (closing price of
the Common Stock on the next preceding trading day of $1.45) and
the options vest ratably over three years commencing on the
first anniversary of the grant. The dollar amounts here listed
are the grant date fair value of the options computed in
accordance with FAS 123R. As of December 29, 2007,
options granted to the independent directors and still
outstanding were as follows: Thomas W. Archibald, 49,500; Bruce
Bagni, 20,000; Joseph L. Gitterman, 49,500; Michal Labadie,
45,000; David J. McLachlan, 49,500. |
7
The Company pays each non-employee director a meeting fee of
$1,300 for each in person meeting of the Board that they attend
and a fee of $650 for each telephonic Board or special committee
meeting in which they participate. For each committee meeting
the Company pays $650. Each committee chair is paid an annual
amount of $3,000 except that the Audit Committee Chairman is
paid an amount of $4,000. In addition, the Company pays each
non-employee director a cash annual retainer fee of $17,500 and
an annual grant of 20,000 ten-year options (at the market on
date of grant, vesting ratably over three years) upon
re-election to the Board. The Company reimburses directors for
their out-of-pocket expenses for attendance at meetings of the
Board.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys directors and executive officers and
persons who own beneficially more than ten percent of any class
of equity security of the Company to file with the Securities
and Exchange Commission initial reports of such ownership and
reports of changes in such ownership. Officers, directors and
such beneficial owners are required by Securities and Exchange
Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
To the Companys knowledge, based solely on review of
copies of reports furnished to the Company, during the fiscal
year ended December 29, 2007, all Section 16(a) filing
requirements applicable to its executive officers and directors
were made on a timely basis.
Audit Committee
Report
We have met and held discussions with the Companys
management and with the Companys independent registered
public accountants, BDO Seidman, LLP. We have reviewed and
discussed the audited consolidated financial statements of
HearUSA, Inc. for the 2007 fiscal year with the Companys
management. We discussed with BDO Seidman, LLP matters required
to be discussed by standards of the Public Company Accounting
Oversight Board (Untied States) (PCAOB), including standards set
forth in Statement on Auditing Standards No. 61, as
amended. BDO Seidman, LLP also provided to us the written
disclosures regarding their independence required by
Independence Standards Board Standard No. 1, and we
discussed with BDO Seidman, LLP their independence
Based on these reviews and discussions, we recommended to the
Board of Directors that the audited consolidated financial
statements for 2007 be included in HearUSA, Inc.s Annual
Report on
Form 10-K
for the fiscal year ended December 29, 2007 filed with the
Securities and Exchange Commission.
David J. McLachlan, Chairman
Thomas W. Archibald
Bruce N. Bagni
Joseph L. Gitterman, III
Michel Labadie
Compensation
Discussion and Analysis
The Compensation Committee is comprised entirely of independent
directors and has the responsibility for reviewing and approving
the Companys executive compensation programs. The
Compensation Committee approves all compensation for the Chief
Executive Officer and other named executive officers.
The Compensation Committee uses salary and bonus compensation to
reward current and past performance while using equity based
compensation to provide incentives for long-term performance. To
establish compensation for 2007 for the Companys executive
officers, including the CEO, the Compensation Committee used
subjective performance evaluations, compensation statistics of
similar sized health care organizations and, with respect to
executive officers other than Mr. Hansbrough, the salary
recommendations of Mr. Hansbrough. The Committee also
retained a compensation consultant, Radford Surveys +
Consulting, to provide industry information and compensation
recommendations.
8
Objectives and
Design of the Executive Compensation Programs
HearUSAs executive compensation program is designed to
attract and retain quality executive talent and to provide
meaningful incentives for the executives to enhance stockholder
value. The Committees executive compensation philosophy is
threefold: (1) all compensation should be referenced and
validated based on industry surveys for comparably situated
health care related companies; (2) compensation grants and
changes to compensation should be performance based; and
(3) executive and director pay should be targeted at the
mid-range of the industry surveys.
The Committee reviews the executive compensation program at
least annually to ensure that its compensation goals and
objectives are being met. The Committee determines the final
compensation for our Chief Executive Officer and other named
executive officers, although with respect to the other named
executive officers, the Chief Executive Officer works closely
with the Committee to make recommendations to the Committee
regarding the named executive officers compensation. In
reviewing our executive compensation program and in making
compensation decisions, the Committee has utilized surveys
provided by Radford and has used tally sheets to
ensure that the Committee has a comprehensive picture of total
compensation paid to our named executive officers.
Elements of
Compensation
Base Salaries. The Committee typically
reviews the base salary of each executive officer on an annual
basis to make adjustments based on performance of the officer
and performance of the Company. In making base salary decisions,
the Committee reviewed comparable salary data from an industry
peer group generated by Radford as generally comparable. The
Committee targets base salaries at the 50th percentile of
those surveyed organizations.
The Committee makes a specific decision on annual adjustments to
base salary with input from the Chief Executive Officer
regarding the performance appraisal for each officer. In 2007,
the survey results reflected that the cash compensation for each
named executive officer was slightly below the 50% guideline.
The Committee determined to wait until early 2008 to re-evaluate
compensation and performance.
Short Term Incentive Awards (Cash Incentive
Awards). The Committee believes that short
term incentives should be closely tied to the performance of the
Company and the creation of shareholder value. One way to
accomplish this is through the issuance of cash-based
performance awards. The executive is only paid the cash bonus if
the Company meets or exceeds target expectations set by the
Committee, with inputs from the CEO based on budgets for the
year, at the beginning of each year. Executives can earn up to
fifty percent of their base salary as a cash incentive award.
The Committee, at its discretion, can award a portion of this
cash incentive award in the event performance targets are not
achieved. No cash incentive awards were made to executives in
2007 as none of the Company performance targets were achieved.
Long Term Incentive Awards (Equity
Awards). In keeping with the Committees
performance based philosophy, the Committee believes that long
term incentives should be closely tied to creation of
shareholder value. One way to accomplish this is through the
grant of stock options and restricted stock units, either time
vesting or performance-based. Historically, the Committee has
made annual grants of stock options to its named executive
officers. With changes in accounting for options and the
emergence of restricted stock units, the Committee began
considering other equity-based performance awards for its
executives. In early 2007, the Company adopted an equity
compensation plan which was approved by shareholders at the last
annual meeting. This plan contemplates the grant not only of
options but also of restricted stock and restricted stock units.
In making decisions regarding equity-based incentive awards for
2007, the Committee considered the industry data provided by
Radford. The Committee looked at the need to align its
executives long term interest with those of the
stockholders and undertook to grant to each of the executives in
late 2007 stock options to bring their potential equity
ownership in the company to what the Committee believed was a
more appropriate level and one that was consistent
with the industry information provided in the
9
surveys. Because the new equity compensation plan was not in
place early enough in the year to make meaningful
performance-based grants, the Committee deferred until early
2008 the task of establishing performance based equity grants
for the executives.
The Compensation Committee expects that it may make equity-based
grants at three different times: (1) upon the hiring of an
executive or employee (typically, the grant date is the
employees start date with the Company), (2) on the
date of regularly scheduled quarterly Board of Directors
meetings, and (3) on some occasions, in connection with a
promotion or special recognition grant. Historically, although
most of the grants are scheduled to be made on an annual basis
at the Board of Directors meeting in February of each year,
grants are occasionally made at other Board meetings. The
regularly scheduled quarterly Board of Directors meetings are
typically one or two days prior to the date of the
Companys regular quarterly earnings press release for the
just completed quarters. Therefore, any grants made at such
regularly scheduled meetings are made at a time just prior to
the release by the Company of material non-public information
(i.e., the Companys results of operations for the
just-completed quarter). The Committee believes that the timing
of such grants is appropriate because by having made such grants
on an approximately regular timetable, the unpredictability of
both the Companys operating results and the trading
markets reaction to those operating results does not
factor into the Committees decision.
Employment Agreements. Each of our
named executive officers has an employment agreement with the
Company. Each of the employment agreements provides that the
executive will be entitled to receive base compensation, to be
reviewed and adjusted in the discretion of the Committee
(usually on an annual basis), and performance bonuses, at the
discretion of the Compensation Committee, and to participate in
and receive benefits, at the discretion of the Committee, under
the equity-based compensation plans, and to participate in and
receive benefits under the Companys welfare benefit and
similar employee benefit plans generally made available by the
Company to other key employees. These agreements include change
in control provisions that were generated to ensure that the
executives would be incentivized to remain with the Company
during any potential change in control and not leave the Company
at a time when their participation may be critical. The terms of
the change in control provision of the 2005 executive employment
agreements which were effective during 2007 are described
elsewhere in this proxy statement. In its review of the total
compensation of the executives in late 2007 and early 2008, the
Committee undertook to revise the agreements to reduce some of
the post-termination benefits to which the executives otherwise
would have been entitled. The new contracts are also described
elsewhere in this proxy statement. The changes were made to
bring the agreements more into line with prevailing industry
agreements for comparably situated executives in similar
healthcare companies, all as demonstrated by the Radford surveys.
Report of the
Compensation Committee
The Compensation Committee has reviewed and discussed the
foregoing Compensation Discussion and Analysis with management.
Based on this review and discussion, the Compensation Committee
has recommended to the full Board that the Compensation
Discussion and Analysis be included in this proxy statement for
filing with the Securities and Exchange Commission.
COMPENSATION COMMITTEE:
Thomas W. Archibald, Chairman
Bruce N. Bagni
Joseph L. Gitterman, III
Michel Labadie
David McLachlan
10
Executive
Compensation
The following table presents summary information concerning 2007
compensation awarded or paid to, or earned by, (i) the
Companys Chief Executive Officer, (ii) the
Companys Chief Financial Officer and (iii) each of
the other executive officers whose salary and bonus exceeded
$100,000 (the Named Executive Officers) for the year
2007.
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Compen-
|
|
|
|
|
Principal
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
sation
|
|
|
Total
|
|
Positions
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
Stephen J. Hansbrough
|
|
|
2007
|
|
|
|
341,000
|
|
|
|
|
|
|
|
|
|
|
|
164,422
|
(2)
|
|
|
|
|
|
|
505,422
|
|
President and CEO
|
|
|
2006
|
|
|
|
385,000
|
|
|
|
|
|
|
|
|
|
|
|
130,344
|
|
|
|
|
|
|
|
515,344
|
|
Gino Chouinard
|
|
|
2007
|
|
|
|
264,000
|
|
|
|
|
|
|
|
|
|
|
|
149,106
|
(2)
|
|
|
|
|
|
|
413,106
|
|
Executive Vice President
|
|
|
2006
|
|
|
|
260,000
|
|
|
|
|
|
|
|
|
|
|
|
136,175
|
|
|
|
24,000
|
(3)
|
|
|
420,175
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul A. Brown
|
|
|
2007
|
|
|
|
196,000
|
|
|
|
|
|
|
|
|
|
|
|
59,571
|
|
|
|
|
|
|
|
255,571
|
|
Chairman of the Board
|
|
|
2006
|
|
|
|
240,000
|
|
|
|
|
|
|
|
|
|
|
|
70,716
|
|
|
|
|
|
|
|
310,716
|
|
Kenneth Schofield(1)
|
|
|
2007
|
|
|
|
215,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
22,086
|
|
|
|
289,000
|
(1)
|
|
|
526,086
|
|
Chief Operating Officer
|
|
|
2006
|
|
|
|
260,000
|
|
|
|
|
|
|
|
|
|
|
|
21,156
|
|
|
|
36,000
|
(3)
|
|
|
317,156
|
|
|
|
|
|
(1) |
|
Mr. Schofield left the Company on October 12, 2007.
Pursuant to a separation agreement, the Company will pay to
Mr. Schofield a total separation amount of $301,547.50
payable in regular bi-weekly payments until the full amount is
paid. The Company is making Mr. Schofields COBRA
payments for twelve months from his separation. |
|
(2) |
|
Each of Mr. Hansbrough and Mr. Chouinard were awarded
options in 2007 on September 24, 2007, Mr. Hansbrough
in the amount of 420,000 and Mr. Chouinard in the amount of
210,000. Both options vest ratably over three years and have an
exercise price of $1.47. The dollar amounts here listed are the
grant date fair value of the options computed in accordance with
FAS 123R. |
|
(3) |
|
These cash payments were made to the named executive officers in
lieu of vacation time. |
Employment
Agreements
In 2007, each of Dr. Paul A. Brown, Stephen J. Hansbrough,
Gino Chouinard and Kenneth Schofield were parties to an
executive employment agreement with the Company. The term of the
agreements for each of Dr. Brown and Mr. Hansbrough
was five years (to 2010) with automatic renewals for
successive five-year terms. The term of the agreements for each
of Mr. Chouinard and Mr. Schofield was three years (to
2008) with automatic renewals for successive three-year
terms. The employment agreements provided that the executive
were entitled to receive base compensation (to be reviewed and
adjusted in the discretion of the Committee usually on an annual
basis) and performance bonuses, at the discretion of the
Compensation Committee, and to participate in and receive
benefits under the Companys welfare benefit and similar
employee benefit plans generally made available by the Company
to other key employees.
The agreements contemplated severance payments in the event of
termination without cause, non-renewal at the end of the term or
termination by the executive for good reason after a change in
control. The severance payments in the case of Dr. Brown
and Mr. Hansbrough were in an amount equal to three times
base salary and in the case of Mr. Chouinard and
Mr. Schofield in an amount equal to two times base salary.
In addition, on such termination, all outstanding and unvested
options would accelerate and the Company would be liable to
continue to provide benefits to the executives for a period of
three years for Dr. Brown and Mr. Hansbrough and for a
period of two years for Mr. Chouinard and
Mr. Schofield.
11
In the event of the executives death or termination
because of disability, the agreements provided that all then
outstanding options and similar rights would become fully vested
and the executive or his legal representatives could exercise
such rights for a one-year period following the executives
death or termination for disability.
The agreements also provided for gross up payments
to the executive to cover the executives incremental tax
liabilities in the event payments made under the agreements were
subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code.
On October 12, 2007, the Company and Mr. Schofield
entered into a separation agreement upon
Mr. Schofields departure from the Company. Pursuant
to the separation agreement, the Company will pay a total of
$301,547.50, including forgiveness of $60,000 of loans from the
Company to Mr. Schofield, an initial cash payment to
Mr. Schofield of approximately $30,000 and the regular
bi-weekly payments until the full amount is paid. The Company
agreed to assist Mr. Schofield with COBRA payments for
twelve months and to extend the time for him to exercise vested
options from 90 days to six months from the date of his
separation. Effective October 12, 2007, his employment
agreement with the Company was terminated.
Subsequent to the end of the fiscal year, Dr. Brown retired
from the Company. Pursuant to his retirement agreement,
effective February 4, 2008, the Company will pay to
Dr. Brown an amount of $720,000 over three years, provide
continuing health and life insurance benefits for three years
and extend the exercise period for his options. Accordingly, as
of February 4, 2008, Dr. Browns employment
agreement with the Company was terminated.
Also subsequent to the end of the fiscal year, the Company
entered into new executive employment agreements on
February 25, 2008 with each of Mr. Hansbrough and
Mr. Chouinard. The new agreements replace the employment
agreements described above. Each is for a three-year term,
renewable for successive one-year terms unless notice of
non-renewal is given. The agreements provide for annual base
compensation (for Mr. Hansbrough in the amount of $420,000
and for Mr. Chouinard in the amount of $310,000),
participation in the companys current employee benefit
plans and, at the discretion of the Board of Directors, in
equity compensation plans and cash incentive plans. In the event
Mr. Hansbrough is terminated without cause prior to the end
of the term, or if the Company declines to renew the agreement
at the end of the term, Mr. Hansbrough is entitled to
severance of two times base salary plus cash bonus for the year,
continuation of health and life insurance benefits for
24 months, acceleration by 12 months of unvested
options and extension of post-termination option exercise
periods of such vested options. In the event Mr. Chouinard
is terminated without cause prior to the end of the term, or if
the company declines to renew the agreement at the end of the
term, Mr. Chouinard is entitled to severance of 1.5 times
base salary plus cash bonus for the year, continuation of health
and life insurance benefits for 18 months, acceleration by
12 months of unvested options and extension of
post-termination option exercise periods of such vested options.
In the event of a change in control and the termination of
Mr. Hansbrough without cause or his resignation with good
reason, Mr. Hansbrough will be entitled to receive three
times his base salary plus bonus for the year, continuation of
health and life insurance benefits for a period of
36 months, acceleration of vesting of all unvested options
and extension of the exercise period, and immediate vesting of
all performance-based restricted stock or stock unit grants. In
the event of a change in control and the termination of
Mr. Chouinard without cause or his resignation with good
reason, Mr. Chouinard will be entitled to receive two times
his base salary plus bonus for the year, continuation of health
and life insurance benefits for a period of 24 months,
acceleration of vesting of all unvested options and extension of
the exercise period, and immediate vesting of all
performance-based restricted stock or stock unit grants.
12
The executives have agreed to specified non-compete obligations
during the term of their employment and for a period of time
following their termination.
2007 GRANTS OF PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
Awards: Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
Securities
|
|
|
Exercise or Base
|
|
|
|
|
|
|
Stock or
|
|
|
Under-lying
|
|
|
Price of Option
|
|
|
|
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
Name
|
|
Grant Date
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
|
|
Stephen J. Hansbrough
|
|
|
9/24/07
|
|
|
|
None
|
|
|
|
420,000
|
|
|
$
|
1.47
|
|
Gino Chouinard
|
|
|
9/24/07
|
|
|
|
None
|
|
|
|
210,000
|
|
|
$
|
1.47
|
|
Paul A. Brown
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth Schofield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OUTSTANDING
EQUITY AWARDS AT 2007 FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable(1)
|
|
($)
|
|
Date
|
|
|
Stephen J. Hansbrough
|
|
|
250,000
|
|
|
|
|
|
|
$
|
0.35
|
|
|
|
3/31/2013
|
|
|
|
|
300,000
|
|
|
|
100,000
|
|
|
$
|
1.33
|
|
|
|
8/25/2014
|
|
|
|
|
|
|
|
|
420,000
|
|
|
$
|
1.47
|
|
|
|
9/24/2017
|
|
Gino Chouinard
|
|
|
21,540
|
|
|
|
|
|
|
$
|
2.60
|
|
|
|
12/14/2010
|
|
|
|
|
53,055
|
|
|
|
|
|
|
$
|
2.60
|
|
|
|
11/1/2009
|
|
|
|
|
200,000
|
|
|
|
|
|
|
$
|
0.35
|
|
|
|
3/31/2013
|
|
|
|
|
262,500
|
|
|
|
87,500
|
|
|
$
|
1.33
|
|
|
|
8/25/2014
|
|
|
|
|
25,000
|
|
|
|
25,000
|
|
|
$
|
1.79
|
|
|
|
5/9/2015
|
|
|
|
|
|
|
|
|
210,000
|
|
|
$
|
1.47
|
|
|
|
9/24/2017
|
|
Paul A. Brown
|
|
|
200,000
|
|
|
|
|
|
|
$
|
0.35
|
|
|
|
3/31/2013
|
|
|
|
|
150,000
|
|
|
|
50,000
|
|
|
$
|
1.33
|
|
|
|
8/25/2014
|
|
Kenneth Schofield
|
|
|
2,500
|
|
|
|
|
|
|
$
|
7.50
|
|
|
|
4/12/08
|
|
|
|
|
10,000
|
|
|
|
|
|
|
$
|
3.88
|
|
|
|
4/12/08
|
|
|
|
|
10,000
|
|
|
|
|
|
|
$
|
4.00
|
|
|
|
4/12/08
|
|
|
|
|
25,000
|
|
|
|
|
|
|
$
|
1.65
|
|
|
|
4/12/08
|
|
|
|
|
25,000
|
|
|
|
|
|
|
$
|
1.79
|
|
|
|
4/12/08
|
|
|
|
|
|
(1) |
|
Mr. Hansbroughs unexercisable options become
exercisable as follows: 100,000 on August 25, 2008, 140,000
on September 24, 2008, 140,000 on September 24, 2009
and 140,000 on September 24, 2010.
Mr. Chouinards unexercisable options become
exercisable as follows: 87,500 on August 25, 2008, 12,500
on May 9, 2008, 12,500 on May 9, 2009, 70,000 on
September 24, 2008, 70,000 on September 24, 2009 and
70,000 on September 24, 2010. Dr. Browns
unexercisable options become exercisable as follows: 50,000 on
February 4, 2008. |
13
The following table sets forth certain information concerning
stock option exercises during 2007 by the executive officers
named in the Summary Compensation Table.
2007 OPTION
EXERCISES
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
|
Acquired on
|
|
|
on
|
|
|
|
Exercise
|
|
|
Exercise
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
|
|
Stephen J. Hansbrough
|
|
|
None
|
|
|
|
|
|
Gino Chouinard
|
|
|
None
|
|
|
|
|
|
Paul A. Brown
|
|
|
None
|
|
|
|
|
|
Kenneth Schofield
|
|
|
447,500
|
|
|
|
242,000
|
|
|
Compensation
Committee Interlocks and Insider Participation
None.
Security
Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of April 25, 2008 the
names of all persons known by the Company to be beneficial
owners of more than five percent of the Common Stock. As of
April 25, 2008, there were 38,073,157 shares of Common
Stock and 534,761 Exchangeable Shares issued and outstanding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature
|
|
|
|
|
Title of
|
|
Name and Address of
|
|
Of Beneficial
|
|
|
Percent of
|
|
Class
|
|
Beneficial Owner
|
|
Ownership
|
|
|
Class
|
|
|
|
|
Common Stock
|
|
Paul A. Brown, M.D.
1250 Northpoint Parkway
West Palm Beach, FL 33407
|
|
|
2,641,900
|
(1)
|
|
|
6.73
|
%
|
Common Stock
|
|
Michel Labadie
90, Beaubien Street West
Montreal, Quebec
Canada, H2S 1V6
|
|
|
2,404,468
|
(2)
|
|
|
6.20
|
%
|
Common Stock
|
|
Jack Silver
SIAR Capital LLC
660 Madison Avenue
New York, NY 20021
|
|
|
2,937,839
|
(3)
|
|
|
7.57
|
%
|
|
|
|
|
(1) |
|
Includes 400,000 shares of Common Stock subject to options
and 240,000 shares of common stock subject to warrants
acquired as part of private placements which are currently
exercisable (or exercisable within 60 days). |
|
(2) |
|
Includes 1,485,540 shares of Common Stock held by Les
Partenaires de Montréal, s.e.c. Michel Labadie is a
director of Les Partenaires de Montréal Inc., general
partner for Les Partenaires de Montréal, s.e.c. Also
includes 733,928 shares plus 160,000 shares which may
be acquired upon the exercise of warrants by held by Gestion
Fremican Inc. Michel Labadie is a shareholder and director of
Gestion Fremican, Inc. Also includes 25,000 shares of
Common Stock issuable to Mr. Labadie upon the exercise of
options, which are currently exercisable. |
|
(3) |
|
As reported on Schedule 13G filed for the 2007 calendar
year, this includes 1,784,839 shares of Common Stock held
by Sherleigh Associates Inc. Profit Sharing Plan, a trust of
which Jack Silver is a trustee, and 153,000 shares of
common stock held by Sherleigh Associates Inc. Defined Benefit
Pension Plan, a trust of which Jack Silver is a trustee. |
14
Security
Ownership of Management
The following table sets forth, as of April 25, 2008 the
number of shares of Common Stock owned beneficially by each
director, each executive officer named in the Summary
Compensation Table and all directors and executive officers as a
group.
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
Percent of
|
|
Name
|
|
Beneficial Ownership
|
|
|
Class (*)
|
|
|
|
|
Paul A. Brown, M.D.
|
|
|
2,641,900
|
(1)
|
|
|
6.73
|
%
|
Stephen J. Hansbrough
|
|
|
653,000
|
(2)
|
|
|
1.67
|
%
|
Gino Chouinard
|
|
|
578,486
|
(3)
|
|
|
1.47
|
%
|
Kenneth Schofield
|
|
|
|
|
|
|
|
|
David J. McLachlan
|
|
|
203,545
|
(4)
|
|
|
|
*
|
Thomas W. Archibald
|
|
|
234,100
|
(5)
|
|
|
|
*
|
Joseph L. Gitterman III
|
|
|
334,764
|
(6)
|
|
|
|
*
|
Michel Labadie
|
|
|
2,404,468
|
(7)
|
|
|
6.20
|
%
|
Bruce Bagni
|
|
|
|
|
|
|
|
|
All directors and executive
|
|
|
7,050,263
|
(8)
|
|
|
17.28
|
%
|
officers as a group (9 persons)
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Less than one percent of class calculated as a percentage of
issued and outstanding Common Stock and Exchangeable Shares as
of April 25, 2008. |
|
(1) |
|
Includes 400,000 shares of Common Stock subject to options
and 240,000 shares of Common Stock subject to warrants
acquired as part of private placements, which are currently
exercisable (or exercisable within 60 days). |
|
(2) |
|
Includes 550,000 employee stock options which are currently
exercisable (or exercisable within 60 days). |
|
(3) |
|
Includes 574,595 employee stock options which are currently
exercisable (or exercisable within 60 days). |
|
(4) |
|
Includes 29,500 shares of Common Stock issuable upon the
exercise of non-qualified options, all of which are currently
exercisable. |
|
(5) |
|
Includes 29,500 shares of Common Stock issuable upon the
exercise of non-qualified options, all of which are currently
exercisable. |
|
(6) |
|
Includes 29,500 shares of Common Stock issuable upon the
exercise of non-qualified options, all of which are currently
exercisable. |
|
(7) |
|
Includes 1,485,540 shares of Common Stock held by Les
Partenaires de Montréal, s.e.c. Michel Labadie is a
director of Les Partenaires de Montréal Inc., general
partner for Les Partenaires de Montréal, s.e.c. Also
includes 733,928 shares plus 160,000 shares of which
may be acquired on the exercise of warrants held by Gestion
Fremican Inc. Michel Labadie is a shareholder and director of
Gestion Fremican, Inc. Also includes 25,000 shares of
Common Stock issuable to Mr. Labadie upon the exercise of
options which are currently exercisable. |
|
(8) |
|
Includes 2,038,095 shares of Common Stock issuable upon the
exercise of options and warrants, which are currently
exercisable (or exercisable within 60 days). |
15
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Our Audit Committee charter requires that the Audit Committee
review and approve all transactions between the Company and any
related parties.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM SERVICES AND FEES
The Board of Directors has reappointed BDO Seidman, LLP as the
independent registered public accounting firm for the Company
and its subsidiaries for the fiscal year 2008. Representatives
of BDO Seidman, LLP are expected to be present at the Annual
Meeting of Stockholders and will be allowed to make a statement
if they wish. Additionally, they will be available to respond to
appropriate questions from stockholders during the meeting.
Aggregate fees for professional services rendered for the
Company by BDO Seidman, LLP for the years ended
December 29, 2007 and December 30, 2006, were as
follows:
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit fees
|
|
$
|
315,000
|
|
|
$
|
443,860
|
|
Audit related fees
|
|
|
9,500
|
|
|
|
19,550
|
|
Tax fees
|
|
|
72,950
|
|
|
|
72,200
|
|
All other fees
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
397,450
|
|
|
$
|
535,610
|
|
Audit fees consisted principally of professional services
rendered by BDO Seidman, LLP for the audit of our annual
financial statements for the fiscal year ended December 29,
2007 and for the reviews of the financial statements included in
our Quarterly Reports on
Form 10-Q
for that fiscal year.
Audit-related fees consisted principally of professional
services rendered for the audits of the Companys employee
benefit plans and various accounting consultations.
Tax fees consisted of services rendered in connection with the
preparation and review of federal, state, local, franchise and
other tax returns and consultations as to the tax treatment of
transactions or events and the actual
and/or
potential impact of final or proposed tax laws, rules,
regulations or interpretations by tax authorities.
The Companys Audit Committee has considered whether the
non-audit services provided by the Companys independent
registered public accounting firm in connection with the year
ended December 29, 2007 were compatible with the
auditors independence and concluded that they were so
compatible.
The Company has adopted a pre-approval policy requiring that the
Audit Committee pre-approve all audit and non-audit services
performed by the Companys independent registered public
accounting firm. Under the policy, some services may be
pre-approved without consideration of specific
case-by-case
services, while others require the specific pre-approval of the
Audit Committee. Annual audit services are subject to the
specific pre-approval of the Audit Committee.
STOCKHOLDER
PROPOSALS
Stockholder proposals submitted pursuant to
Rule 14a-8
under the Securities Exchange Act of 1934, as amended, and
intended to be presented at the 2009 annual meeting of
stockholders must be received by us no later than
January 7, 2009 for inclusion, if appropriate, in the
Companys proxy statement and form of proxy for that
meeting.
In order for a stockholder to nominate a candidate for election
as a director at the 2009 annual meeting of stockholders, a
stockholder must provide timely notice of the nomination. Such
notice must be given not less than 90 nor more than
120 days prior to the anniversary of the 2008 annual
meeting of stockholders. The stockholder must include
information about the nominee, such as his or her name, address
and occupation, all as provided by the Companys Amended
and Restated Bylaws.
16
In order for a stockholder to bring any other business before
the 2009 annual meeting of stockholders, the stockholder must
provide advance notice as provided in the Amended and Restated
Bylaws in respect of such proposal. The notice must be given not
less than 90 nor more than 120 days prior to the
anniversary date of the 2008 annual meeting of stockholders.
These time limits apply in determining whether notice is timely
for purposes of rules adopted by the Securities and Exchange
Commission relating to the exercise of discretionary voting
authority by the Companys designated proxies. The notice
must contain specific information as prescribed by the
Companys Amended and Restated Bylaws. These requirements
are separate from and in addition to those requirements imposed
by the federal securities laws concerning inclusion of a
stockholder proposal in the proxy statement and form of proxy
for the meeting.
In each case, the notice must be given to the Companys
Secretary at the Companys principal offices, 1250
Northpoint Parkway, West Palm Beach, Florida 33407. Any
stockholder desiring a copy of the Companys Amended and
Restated Certificate of Incorporation or Amended and Restated
Bylaws will be furnished a copy without charge upon written
request to the Companys Secretary.
OTHER
MATTERS
As of the date hereof, the Board of Directors knows of no other
matters which are likely to be presented for consideration at
the meeting. In the event any other matters properly come before
the meeting, however, it is the intention of the persons named
in the enclosed proxy to vote said proxy in accordance with
their best judgment.
HOUSEHOLDING OF
PROXIES
The Securities and Exchange Commission has adopted rules that
permit companies and intermediaries such as brokers to satisfy
delivery requirements for annual reports and proxy statements
with respect to two or more stockholders sharing the same
address by delivering a single annual report
and/or proxy
statement addressed to those stockholders. This process, which
is commonly referred to as householding, potentially
provides extra convenience for stockholders and cost savings for
companies. The Company and some brokers household annual reports
and proxy materials, delivering a single annual report
and/or proxy
statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders.
Once you have received notice from your broker or the Company
that your broker or the Company will be householding materials
to your address, householding will continue until you are
notified otherwise or until you revoke your consent. You may
request to receive at any time a separate copy of our annual
report or proxy statement, by sending a written request to
HearUSA, Inc. 1250 Northpoint Parkway, West Palm Beach, Florida
33407, Attn: Corporate Secretary, or by telephoning
561-478-8770.
If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate annual
report
and/or proxy
statement in the future, please notify your broker if your
shares are held in a brokerage account or the Company if you
hold registered shares. You can notify the Company by sending a
written request to HearUSA, Inc. 1250 Northpoint Parkway, West
Palm Beach, Florida 33407, Attn: Corporate Secretary, or by
telephoning
561-478-8770.
If, at any time, you and another stockholder sharing the same
address wish to participate in householding and prefer to
receive a single copy of the Companys annual report
and/or proxy
statement, please notify your broker if your shares are held in
a brokerage account or the Company if you hold registered
shares. You can notify the Company by sending a written request
to HearUSA, Inc. 1250 Northpoint Parkway, West Palm Beach,
Florida 33407, Attn: Corporate Secretary, or by telephoning
561-478-8770.
May 7, 2008
17
ANNUAL MEETING OF STOCKHOLDERS OF
HearUSA, Inc.
June 12, 2008
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
6 Please detach along perforated line and mail in the envelope provided. 6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
1. |
|
The election of the following nominees as directors of the Company. |
|
|
|
|
|
o
|
|
FOR ALL NOMINEES
|
|
O Thomas W. Archibald |
o
|
|
|
|
O Bruce Bagni |
|
WITHHOLD AUTHORITY
|
|
O Paul A. Brown, M.D. |
|
FOR ALL NOMINEES
|
|
O Joseph L. Gitterman III |
o
|
|
|
|
O Stephen J. Hansbrough |
|
FOR ALL EXCEPT
|
|
O Michel Labadie |
|
(See instructions below)
|
|
O David J. McLachlan |
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: l
|
|
|
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
|
2. |
|
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting and any and
all adjournments thereof. |
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
REPLY ENVELOPE.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
|
Signature of Stockholder
|
|
|
|
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.
HEARUSA, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING TO BE HELD ON JUNE 12, 2008
The undersigned stockholder(s) of HearUSA, Inc. (Company) hereby appoint(s) Stephen J. Hansbrough
and Gino Chouinard, and each of them, with full power of substitution in each, proxies to vote all
shares which the undersigned would be entitled to vote if personally present at the Annual Meeting
of Stockholders of the Company to be held in West Palm Beach, Florida on Monday, June 12, 2008 at
2:30 P.M. Eastern Time, and any and all adjournments thereof, on the following matters.
THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH THE STOCKHOLDERS DIRECTIONS HEREIN,
BUT WHERE NO DIRECTIONS ARE INDICATED, SAID SHARES WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF
THE NOMINEES LISTED ON THE REVERSE SIDE AND IN THE DISCRETION OF THE PROXIES, ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING, ALL IN ACCORDANCE WITH THE COMPANYS PROXY STATEMENT,
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
HearUSA, Inc.
June 12, 2008
PROXY VOTING INSTRUCTIONS
MAIL Date, sign and mail your proxy card in the
envelope provided as soon as possible.
- OR -
TELEPHONE Call toll-free 1-800-PROXIES (1-800-776-9437) from
any touch-tone telephone and follow the instructions. Have
your proxy card available when you call.
- OR -
INTERNET Access www.voteproxy.com and follow the
on-screen instructions. Have your proxy card available
when you access the web page.
|
|
|
|
|
|
|
COMPANY NUMBER
|
|
|
|
|
|
ACCOUNT NUMBER
|
|
|
|
|
|
You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up until 11:59 PM
Eastern Time the day before the cut-off or meeting date.
6 Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
1. |
|
The election of the following nominees as directors of the Company. |
|
|
|
|
|
o
|
|
FOR ALL NOMINEES
|
|
O Thomas W. Archibald |
o
|
|
|
|
O Bruce Bagni |
|
WITHHOLD AUTHORITY
|
|
O Paul A. Brown, M.D. |
|
FOR ALL NOMINEES
|
|
O Joseph L. Gitterman III |
o
|
|
|
|
O Stephen J. Hansbrough |
|
FOR ALL EXCEPT
|
|
O Michel Labadie |
|
(See instructions below)
|
|
O David J. McLachlan |
|
|
|
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: l
|
|
|
|
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 |
3. |
|
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting and any and
all adjournments thereof. |
PLEASE DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
REPLY ENVELOPE.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
|
Signature of Stockholder
|
|
|
|
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.