Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] | Preliminary Proxy Statement | [ ] | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[X] | Definitive Proxy Statement |
[ ] | Definitive Additional Materials |
[ ] | Soliciting Material Pursuant to |
[ ] | Rule 14a-11 (c) or rule 14a-12 |
DISABOOM, 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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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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| (2) | Aggregate number of securities to which transaction applies:
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[ ] | Fee paid previously with preliminary materials: |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
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DISABOOM, INC.
7730 E. Belleview Avenue, Suite A-306
Greenwood Village, Colorado 80111
(720) 407-6530
October 3, 2008
To Our Shareholders:
You are cordially invited to the Annual Meeting of Shareholders (the “Meeting”) of Disaboom, Inc. (the “Company”) to be held at the offices of our corporate counsel, Burns, Figa & Will, P.C., 6400 South Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111 on Wednesday, November 5, 2008 at 10:00 a.m. local time.
The formal Notice of the Meeting and Proxy Statement describing the matters to be acted upon at the Meeting are contained in the following pages. Shareholders also are entitled to vote on any other matters which properly come before the Meeting.
Enclosed is a proxy which will enable you to vote your shares on the matters to be considered at the Meeting even if you are unable to attend the Meeting. Please mark the proxy to indicate your vote, date and sign the proxy and return it in the enclosed envelope as soon as possible for receipt prior to the Meeting.
WHETHER YOU OWN FEW OR MANY SHARES OF STOCK, PLEASE BE SURE YOU ARE REPRESENTED AT THE MEETING EITHER BY ATTENDING IN PERSON OR BY RETURNING YOUR PROXY AS SOON AS POSSIBLE.
DISABOOM, INC.
7730 E. Belleview Avenue, Suite A-306
Greenwood Village, Colorado 80111
(720) 407-6530
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 5, 2008
October 3, 2008
To the Shareholders of Disaboom, Inc.:
The Annual Meeting of Shareholders (the “Meeting”) of Disaboom, Inc., a Colorado corporation (the “Company”) will be held at the offices of our corporate counsel, Burns, Figa & Will, P.C., 6400 South Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado, 80111 on Wednesday, November 5, 2008 at 10:00 a.m. local time, for the purpose of considering and voting upon proposals to:
| 1. | Elect seven directors to serve until the next annual meeting of shareholders or until their successors are elected and qualified. |
| 2. | Amend our Articles of Incorporation to increase our authorized common stock from 65,000,000 shares to 100,000,000 shares. |
| 3. | Adopt and approve our 2008 Stock Option Plan. |
| 4. | Transact such other business as may lawfully come before the Meeting or any adjournment(s) thereof. |
The Board of Directors is not aware of any other business to come before the Meeting. Pursuant to the Company’s Bylaws, the Board of Directors has fixed the close of business on Friday, August 29, 2008 as the record date for determination of the shareholders entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed proxy which is solicited by the Board of Directors and to return it promptly in the enclosed envelope. The proxy will not be used if you attend the Meeting and vote in person.
EACH SHAREHOLDER, WHETHER OR NOT HE PLANS TO ATTEND THE MEETING, IS REQUESTED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD. ANY PROXY GIVEN BY THE SHAREHOLDER MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY SHAREHOLDER PRESENT AT THE MEETING MAY REVOKE HIS PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE IN PERSON AT THE MEETING.
| BY ORDER OF THE BOARD OF DIRECTORS, |
DISABOOM, INC.
7730 E. Belleview Avenue, Suite A-306
Greenwood Village, CO 80111
(720) 407-6530
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 5, 2008
October 3, 2008
To Our Shareholders:
This proxy statement (the “Proxy Statement”) is furnished in connection with the solicitation by the Board of Directors of Disaboom, Inc. (the “Company”) of proxies to be used at the Annual Meeting of Shareholders (the “Meeting”) to be held at the offices of our corporate counsel, Burns, Figa & Will, P.C., 6400 South Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado, 80111 on Wednesday, November 5, 2008, at 10:00 a.m. local time, and at any adjournments or postponements thereof. The Meeting is being held for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement, the accompanying proxy card and the Notice of Annual Meeting of Shareholders (collectively, the “Proxy Materials”) are first being mailed to shareholders beginning on or about October 3, 2008.
GENERAL INFORMATION
Solicitation
The enclosed proxy is being solicited by the Company’s Board of Directors. The costs of the solicitation will be borne by the Company. Proxies may be solicited personally or by mail, telephone, facsimile or telegraph by directors, officers and regular employees of the Company, none of whom will receive any additional compensation for such solicitations. The Company will reimburse banks, brokers, nominees, custodians and fiduciaries for their reasonable out-of-pocket expenses incurred in sending the proxy materials to beneficial owners of the shares.
Voting Rights and Votes Required
Holders of shares of Disaboom, Inc. common stock (the “Common Stock”), at the close of business on Friday, August 29, 2008 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting. As of the Record Date 43,415,270 shares of Company’s Common Stock were outstanding. Holders of Common Stock are entitled to one vote per share.
The presence, in person or by proxy, of holders of one-third of the shares outstanding as of the Record Date constitutes a quorum for the transaction of business at the Meeting. In the event there are not sufficient votes for a quorum or to approve any proposals at the time of the Meeting, the Meeting may be adjourned in order to permit further solicitation of proxies. Abstentions will count towards quorum requirements.
As to the election of directors under Proposal One, the proxy card being provided by the Board enables a shareholder to vote for the election of each of the nominees proposed by the Board, or to withhold authority to vote for one or more of the nominees being proposed. Directors are elected by a plurality of votes cast, without respect to either (i) broker non-votes, or (ii) proxies as to which authority to vote for one or more of the other nominees being proposed is withheld.
The affirmative vote of a majority of the votes cast (either in person or by proxy) and entitled to vote on the matter is required to approve Proposals Two and Three. As to these proposals, a shareholder may: (i) vote “FOR” the proposal, (ii) vote “AGAINST” the proposal, or (iii) “ABSTAIN” with respect to the proposal. Each proposal shall be determined without regard to broker non-votes or proxies marked “ABSTAIN” as to the matter.
The proposed corporate actions on which the shareholders are being asked to vote are not corporate actions for which shareholders of a Colorado corporation have the right to dissent under the Colorado Business Corporation Act.
Shares of Common Stock represented by all properly executed proxies received at the Company’s transfer agent by Monday November 3, 2008 will be voted as specified in the proxy. Unless contrary instructions are indicated on the proxy, the shares of Common Stock represented by such proxy will be voted “FOR” the slate of directors described herein; “FOR” the amendment to our articles of incorporation to increase the number common shares from 65,000,000 to 100,000,000 and “FOR” approval of the 2008 Stock Option Plan, as described herein. Management and the Board of Directors of the Company know of no other matters to be brought before the Meeting other than as described herein. If any other matters properly are presented to the shareholders for action at the Meeting and any adjournments or postponements thereof, the proxy holder named in the enclosed proxy intends to vote in his discretion on all matters on which the shares of Common Stock represented by such proxy are entitled to vote.
The giving of the enclosed proxy does not preclude the right to vote in person should the shareholder giving the proxy so desire. A proxy may be revoked at any time prior to its exercise by (i) providing notice in writing to the Company’s corporate secretary that the proxy is revoked; (ii) presenting to the Company a later-dated proxy; or (iii) by attending the Meeting and voting in person.
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The number of shares outstanding of the Company’s common stock as of September 11, 2008 was 43,415,270.The following table sets forth the beneficial ownership of the Company’s Common Stock as of September 11, 2008 by each Director, each nominee for Director, and each executive officer of the Company, by all Directors and executive officers as a group, and sets forth the number of shares of Common Stock owned by each person who owned of record, or was known to own beneficially, more than 5% of the outstanding shares of Common Stock. To the knowledge of the Directors and executive officers of the Company, as of September 11, 2008, there are no persons and/or companies who or which beneficially own, directly or indirectly, shares carrying more than 5% of the voting rights attached to all outstanding shares of the Company, other than as set forth below.
Name and Address of Beneficial Owner
| | Position
| | Amount and Nature of Beneficial Ownership
| | Percentage of Common Stock
| |
---|
J.W. Roth | | | Chief Executive Officer, | | | | | | | | |
c/o Disaboom, Inc. | | | Director and | | | | 7,525,000 | | | 17.3% | |
7730 E. Belleview Avenue, Suite A-306 | | | Chairman of the Board | | |
Greenwood Village, CO 80111 | | | | | |
| | |
J. Glen House** | | | Chief Medical | | |
c/o Disaboom, Inc. | | | Officer and Director | | | | 7,500,000 | | | 17.3% | |
7730 E. Belleview Avenue, Suite A-306 | | |
Greenwood Village, CO 80111 | | |
| | |
Victor Lazzaro, Jr.(1) | | |
c/o Disaboom, Inc. | | | Director | | | | 300,666 | | | * | |
7730 E. Belleview Avenue, Suite A-306 | | |
Greenwood Village, CO 80111 | | |
| | |
R. Jerry Overgaard(2) | | |
c/o Disaboom, Inc. | | | Director | | | | 1,032,667 | | | 2.4% | |
7730 E. Belleview Avenue, Suite A-306 | | |
Greenwood Village, CO 80111 | | |
| | |
David Petso(3) | | |
c/o Disaboom, Inc. | | | Director | | | | 686,667 | | | 1.6% | |
7730 E. Belleview Avenue, Suite A-306 | | |
Greenwood Village, CO 80111 | | |
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Name and Address of Beneficial Owner
| | Position
| | Amount and Nature of Beneficial Ownership
| | Percentage of Common Stock
| |
---|
John Walpuck(4) | | | Chief Financial Officer, | | | | | | | | |
c/o Disaboom, Inc. | | | Secretary, Treasurer and | | | | 1,500,000 | | | 3.4% | |
7730 E. Belleview Avenue, Suite A-306 | | | Director | | |
Greenwood Village, CO 80111 | | | | | |
| | |
Patrick Templeton(5) | | |
c/o Disaboom, Inc. | | | Director | | | | 98,553 | | | * | |
7730 E. Belleview Avenue, Suite A-306 | | |
Greenwood Village, CO 80111 | | |
| | |
Kevin Hall**(6) | | |
c/o Disaboom, Inc. | | | Director | | | | 116,667 | | | * | |
7730 E. Belleview Avenue, Suite A-306 | | | | | |
Greenwood Village, CO 80111 | | |
| | |
Scott Chandler | | |
c/o Disaboom, Inc. | | | Nominee for Director | | | | 54,500 | | | * | |
7730 E. Belleview Avenue, Suite A-306 | | |
Greenwood Village, CO 80111 | | |
| | |
All Directors, Director Nominees and Executives | | |
as a Group | | | (9 persons) | | | | 18,814,720 | | | 42.1% | |
| * Indicates less than 1%. |
| ** Dr. House is not standing for re-election to the Company’s Board of Directors but will continue to serve as the Company’s Chief Medical Officer. Mr. Hall is not standing for re-election to the Company’s Board of Directors. |
| The number of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the selling stockholders has sole or shared voting power or investment power and also any shares, which the selling stockholders has the right to acquire within 60 days. The actual number of shares of common stock outstanding may increase prior to the effectiveness of this registration statement due to penalty shares which may be issued. |
| (1) | Includes 123,333 shares purchased by Nanine A. Odell, Mr. Lazzaro’s wife and 140,000 shares owned by the Victor Lazzaro, Jr. Trust DTD 10/03/2005. Also includes options to purchase 34,000 shares of common stock at $0.50 per share granted on March 9, 2007 as well as warrants to purchase 3,333 shares. Does not include options to purchase 66,000 shares of common stock vesting in equal amounts on December 31, 2008 and 2009, provided that Mr. Lazzaro is serving in his current capacity as a director on the vesting date. |
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| (2) | Includes 600,000 shares held by Carolyn Overgaard, Mr. Overgaard’s spouse, as well as 400,000 shares owned directly by Mr. Overgaard. Also includes options to purchase 16,000 shares of common stock at $0.50 per share granted on March 9, 2007 and warrants to purchase 16,667 shares owned by Mr. Overgaard’s spouse. Does not include options to purchase 34,000 shares of common stock vesting in equal amounts on December 31, 2008 and 2009, provided that Mr. Overgaard is serving in his current capacity as a member of our Board of Directors on the vesting date. |
| (3) | Includes 620,000 shares of common stock as well as options to purchase 50,000 shares at $0.50 per share granted on March 9, 2007. Also includes warrants to purchase 16,667 shares. Does not include options to purchase 100,000 shares of common stock vesting in equal shares on December 31, 2008 and 2009, providing that Mr. Petso is serving in his current capacity as a member of our Board of Directors on the vesting date. |
| (4) | Includes 500,000 shares purchased on March 23, 2007. Also includes options to purchase 1,000,000 shares of common stock at $0.50 per share granted on April 2, 2007. Does not include options to purchase 750,000 shares of common stock vesting on January 1, 2009 and thereafter. |
| (5) | Includes 27,745 shares of common stock as well as options to purchase 50,000 shares of common stock at $1.45 per share granted on July 3, 2007. Also includes warrants to purchase 20,808 shares. Does not include options to purchase 50,000 shares of common stock which will vest on December 31, 2008. |
| (6) | Includes 66,667 shares of common stock as well as warrants to purchase 50,000 shares. Does not include options to purchase 50,000 shares of common stock at $1.42 per share granted on February 29, 2008 and vesting in equal amounts on December 31, 2008 and 2009. |
MANAGEMENT
Executive officers of the Company are elected by the Board of Directors, and serve for a term of one year and until their successors have been elected and qualified or until their earlier resignation or removal by the Board of Directors. There are no family relationships among any of the directors, nominees for directors or executive officers of the Company.
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Name
| | Age
| | Position
| |
---|
J.W. Roth | | | | 44 | | Chief Executive Officer, Director and Chairman of the Board | | |
Dr. J. Glen House(1) | | | | 38 | | Chief Medical Officer, Director | | |
John Walpuck | | | | 46 | | Chief Financial Officer, President, Secretary, Treasurer and Director | | |
Victor Lazzaro, Jr. | | | | 62 | | Director | | |
David Petso | | | | 46 | | Director | | |
R. Jerry Overgaard | | | | 67 | | Director | | |
Patrick Templeton | | | | 65 | | Director | | |
Kevin Hall (2) | | | | 53 | | Director | | |
Scott Chandler | | | | 47 | | Nominee for Director | | |
(1) Dr. House is not standing for re-election to the Board of Directors at the annual meeting of shareholders but will continue to serve as the Company’s Chief Medical Officer.
(2) Mr. Hall is not standing for re-election to the Board of Directors at the annual meeting of shareholders and his biographical information has been intentionally omitted.
J.W. Roth is a co-founder of Disaboom and was appointed to serve on our Board of Directors in November 2006. Additionally, Mr. Roth currently serves as our Chief Executive Officer and as the Chairman of the Board. He is also a co-founder of Colorado Catheter Company, Inc, a private company engaged in the design and development of catheters. Since 1997 Mr. Roth has served as the President of JW Roth & Company, Inc., a consulting company. Prior to founding JW Roth & Company, Mr. Roth worked in the financial sales industry for American National Insurance Company and the Prudential Insurance Company. Additionally, Mr. Roth has worked for, and been associated with, the business development of several companies such as Fear Creek Ranches, IMI Global, Inc., CattleNetwork, Inc., Front Porch Direct, the CTURN Corp, and Aspen BioPharma, Inc.
Dr. J. Glen House is a co-founder of Disaboom. He was appointed to serve on our Board of Directors in November 2006. Currently Dr. House serves as our Chief Medical Officer. He also served as President from inception until August 21, 2007. Due to time demands and personal reasons Dr. House is not standing for re-election to our Board of Directors but will serve as a director through November 5, 2008. Dr. House currently serves as the Medical Director of Penrose Hospital’s Center for Neuro & Trauma Rehabilitation. He is also a co-founder, director and the Chief Medical Officer of Colorado Catheter Company, Inc. Since November 2003 he has served as President of Colorado Rehabilitation Physicians, P.C., a private medical rehabilitation company. From August 2001 to November 2003, he served as a Staff Physician at Penrose Hospital. Additionally he has served as the President of Flexlife, a medical device company since 1993. Dr. House holds U.S. Patents on the Colorado Catheter and continues to invent technology to help people that suffer from Spinal Cord related injuries. Dr. House completed his Spinal Cord Medicine Fellowship at the University of Medicine and Dentistry of New Jersey in July 2001. He attended medical school at the University of Washington, performed an internship in Internal Medicine at the LDS Hospital in Salt Lake City and completed a residency in Physical Medicine and Rehabilitation at Baylor College of Medicine.
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John Walpuck was appointed to our Board of Directors in April 2007 and also serves as our Chief Financial Officer, President, Secretary and Treasurer. He also served as Chief Operating Officer from April 2007 until his appointment as President on August 21, 2007. Mr. Walpuck has over 20 years experience working in corporate development, corporate finance and general financial management. From 2005 through 2007 Mr. Walpuck was the Chief Financial Officer of Nine Systems, a streaming media software services company acquired by Akamai in November 2006. From 2002 through 2005, Mr. Walpuck served as the sole partner for Palmyra Consulting, a consulting firm where he advised clients on issues and projects including merger and acquisitions, corporate finance, real estate finance, and government contracts. From 2000 through 2002, Mr. Walpuck served as the Chief Financial Officer for TecSec, Inc., a private security software company. Mr. Walpuck is a CPA and CMA, and also holds an MBA from the University of Chicago and a Bachelor’s degree from Edinboro State College.
Victor Lazzaro was appointed to our Board of Directors in February 2007. Mr. Lazzaro also serves as a director for Colorado Catheter Company, Inc. Before joining Disaboom, Mr. Lazzaro founded, and currently is the President of, International Health Technology Company, a consulting firm providing planning methods, strategies and processes to bring specialty medical clinics to China. Mr. Lazzaro is also currently a managing Director of Tivis Healthcare, a private equity company, focused on acquiring and building healthcare businesses. Prior to founding International Health Technology, Mr. Lazzaro served as the President and Chief Executive Officer of United HealthCare’s Mountain States Division from March 2000 to November 2005. Mr. Lazzaro also served as Chief Financial Officer and Chief Executive Officer for a California HMO and Louisiana insurance company from 1982 to 1990, and Regional Vice President of Health Plan Operations (Gulf South) for Prudential Insurance Company of America from 1990 to 2000.
R. Jerry Overgaard was appointed to our Board of Directors in November 2006. Mr. Overgaard has served as the Vice President of Financial Products of MKA Capital Group Advisors, LLC, since August 2004. Mr. Overgaard served as Vice President, Institutional Sales Division, for Dreyfus Services Corporation from 1998 to 2004. Mr. Overgaard began his career in 1962 with IBM Corporation and has spent the last 27 years in the financial services industry.
David Petso was appointed to our Board of Directors in March 2007. Mr. Petso also serves as a director for Colorado Catheter Company, Inc. Since 1980, Mr. Petso has worked for Petso Financial Consultants, LLC. Mr. Petso is currently the president and owner of Petso Financial Consultants and has over twenty-five years of experience in the financial planning industry.
Patrick Templeton was appointed to our Board of Directors in July 2007. Mr. Templeton has over 35 years of experience in the fields of government relations and public affairs. Following sixteen years with GE and four years at the National Aeronautics and Space Administration where he was Chief of External Relations, he established his own consulting firm, Templeton and Company. Since 1995, Mr. Templeton has been Senior Consultant to the government relations firm of BKSH & Associates. From 1999 through 2003, Mr. Templeton was also employed by the Coalinga Corporation, a private financial management company, serving as Washington Representative. Additionally, Mr. Templeton is Chairman of the Board of the EdVenture Group, a non-profit corporation that provides technology and related consulting services to educators and businesses. Mr. Templeton is also associated with outreach activities of prominent disabilities organizations.
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Scott Chandler was nominated to serve on our Board of Directors on September 12, 2008, and if elected, will begin serving as a director on November 5, 2008 at the conclusion of our annual meeting of shareholders. Mr. Scott Chandler has over 15 years of senior and executive level management experience. Mr. Chandler is currently managing partner for Franklin Court Partners, LLC, a company that provides a range of business consulting services including advising clients in the following areas: developing business plans to raise initial funding, assisting companies secure additional financing, business restructuring, and litigation support. Currently Mr. Chandler also serves as a director of other companies including Cimetrix Inc. (CMXX.OB) a software company engaged in the design, development, marketing, and support of factory automation solutions for the semiconductor and electronics industries. Prior to founding Franklin Court Partners, LLC Mr. Chandler was the Chief Financial Officer and Senior Vice President for RHYTHMS NetConnections, a provider of broadband services utilizing digital subscriber line technology. Additionally, Mr. Chandler has worked for other companies engaged in the telecommunications industry. Mr. Chandler’s business career began with Arthur Andersen & Co as a Senior Consultant/Accountant. Mr. Chandler earned an M.B.A. from the Wharton School of the University of Pennsylvania, and a B.A from Whitworth College.
Along with three other officers of Rhythms NetConnections, in 2002 Mr. Chandler was named as a defendant in litigation brought in the federal district court for the District of Colorado which alleged violations of the federal securities laws and other common law claims against the defendants. The defendants have moved for the court to dismiss the claims.
Transactions with Related Persons
The Company’s Audit Committee is charged with reviewing and approving all related party transactions.
Prior to March 31 2007, J.W. Roth our Chairman and Chief Executive Officer, or an entity controlled by him, advanced approximately $58,000 to the Company to provide working capital to the Company. At February 14, 2007, $50,000 of these advances was converted to equity in connection with the private placement conducted by the Company in March 2007, and the remaining $8,000 was subsequently repaid.
Prior to Mr. Templeton being appointed to our Board of Directors, we engaged BKSH & Associates (“BKSH”) to provide us governmental relations consulting services. We paid BKSH a monthly fee of $7,500 for three months for the consulting services. In his capacity as a consultant for BKSH, Mr. Templeton was involved in providing such consulting services to Disaboom, and received half of the fees paid to BKSH, for an aggregate of approximately $11,250.
The Company currently maintains a bank account through Petso Financial Advisors, Inc./Cambridge Investment Research Advisors, Inc. Through this account the Company invests a portion of its cash in short term liquid investments. David Petso, who currently serves on our Board of Directors and as the Chairman of our Audit Committee, is the president of Petso Financial Advisors. Mr. Petso has not received any commissions or other remuneration as a result of our maintenance of the account at Petso Financial Advisors.
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On February 29, 2008 Kevin Hall was appointed to our Board of Directors. Further, on March 1, 2008 Mr. Hall began providing the Company consulting services related to the continuing development of our website and technical operations. In consideration we orally agreed to pay Mr. Hall $10,000 per month through May 31, 2008, and thereafter agreed to pay Mr. Hall $3,750 per calendar quarter while he is serving as a Company consultant. Mr. Hall is no longer providing consulting services to the Company and we are not currently paying Mr. Hall under the oral agreement.
Meetings of the Board and Committees
The Company’s Board of Directors held 44 meetings during the Company’s year ended December 31, 2007, which included in-person meetings and actions taken through the written unanimous consent of the Board members. Between December 31, 2007 and September 11, 2008 the Board of Directors has held 24 additional meetings which have consisted of both in-person meetings and actions taken by unanimous written consent. Each Board member attended at least 75% of the Board meetings. The Company does not have a formal policy with regard to board members’ attendance at annual meetings, but encourages them to attend shareholder meetings. Four of our Board members attended the last meeting of shareholders held on August 21, 2007.
There is no arrangement or understanding between any Director and any other person pursuant to which any person was selected as a Director.
Through 2006, Directors of the Company were not paid cash for their services. Starting in March 2007 the Company began compensating each director $550 for attending each board meeting. Directors are reimbursed for travel and expenses.
Independence of the Board of Directors
Our Board of Directors currently consists of Messrs. Roth, Walpuck, House, Petso, Hall, Lazzaro, Overgaard and Templeton. The Company defines “independent” as that term is defined in Rule 4200(a) (15) of the Nasdaq listing standards. Messrs. Petso, Templeton, Lazzaro and Overgaard qualify as independent and none has any material relationship with the Company that might interfere with his exercise of independent judgment. If elected to the Board of Directors, Mr. Chandler will qualify as independent that term is defined in Rule 4200(a) (15) of the Nasdaq listing standards.
Committees
Audit Committee: The Company has a separately designated standing audit committee established in accordance with Section 3(a) (58) (A) of the Exchange Act. Four of the Company’s independent directors serve on the Audit Committee: David Petso (who currently serves as Chair of the Committee), Jerry Overgaard, Victor Lazzaro, and Patrick Templeton. Mr. Templeton was appointed to the Audit Committee on September 12, 2008. Mr. Petso has been designated as the financial expert on the Audit Committee and is “independent” as that term is defined in Rule 4200(a) (15) of the Nasdaq listing standards. If elected to our Board of Directors Mr. Chandler will be appointed to the Audit Committee and will assume the Chairman position from Mr. Petso.
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The Audit Committee was formed on March 9, 2007 and held four meetings during our fiscal year ended December 31, 2007 and subsequently has held four meetings. During our fiscal year ended December 31, 2007 all of the members attended the meetings in person or by telephone. However, Mr. Lazzaro was unable to attend one meeting held during our 2008 fiscal year. The Board of Directors has adopted a written charter for the Audit Committee. The Audit Committee charter is available on our website at www.disaboom.com.
The following constitutes the report the Audit Committee has made to the Board of Directors and, when read in connection with the Audit Committee Charter, generally describes the functions performed by the audit committee:
REPORT OF THE AUDIT COMMITTEE
To the Board of Directors of Disaboom, Inc.
Management is responsible for our internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of our financial statements in accordance with generally accepted auditing standards and to issue a report on our financial statements. Our responsibility is to monitor and oversee those processes. We hereby report to the Board of Directors that, in connection with the financial statements for the year ended December 31, 2007, we have:
| • | reviewed and discussed the audited financial statements with management and the independent accountants; |
| • | approved the appointment of the independent accountants; |
| • | discussed with the independent accountants the matters required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU section 380), as modified by SAS 89 and SAS 90; and |
| • | received the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees), as may be modified or supplemented, and discussed with the independent accountant the accountant’s independence. |
Based on the discussions and our review discussed above, we recommended to the Board of Directors that the audited financial statements for the year ended December 31, 2007 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 which is being provided contemporaneously with this Proxy Statement.
Respectfully submitted,
The Audit Committee of Disaboom, Inc.
David Petso, Chair
Victor Lazzaro, Member
R. Jerry Overgaard, Member
Mr. Templeton was appointed to the Audit Committee in September 2008 and therefore was not a signatory to the Report of the Audit Committee.
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Compensation Committee: Four of the Company’s independent directors currently serve on the Compensation Committee: David Petso, Jerry Overgaard, Victor Lazzaro, and Patrick Templeton (who currently serves as Chair of the Committee). Mr. Templeton was appointed to the Compensation Committee on September 12, 2008. If elected to the Board of Directors Mr. Chandler will begin serving on the Compensation Committee. The Compensation Committee was formed on March 9, 2007 and held five meetings in 2007. Duties of the compensation committee include reviewing and making recommendations regarding compensation of executive officers and determining the need for and the appropriateness of employment agreements for senior executives. The Compensation Committee has authority to retain such compensation consultants, outside counsel and other advisors as the Committee in its sole discretion deems appropriate. Our Compensation Committee’s charter was adopted by the Board of Directors on March 9, 2007, and is available on our web site at www.disaboom.com.
Nominating Committee: Four of the Company’s independent directors currently serve on the Nominating Committee: Victor Lazzaro, (who serves as Chair of the Committee), Jerry Overgaard, David Petso, and Patrick Templeton. Mr. Templeton was appointed to the Nominating Committee on September 12, 2008. If elected to the Board of Directors Mr. Chandler will begin serving on the Nominating Committee. Duties of the Nominating Committee include oversight of the process by which individuals may be nominated to our Board of Directors. Our Nominating Committee’s charter was adopted by the Board of Directors on March 9, 2007, and is available on our web site at www.disaboom.com.
The functions performed by the Nominating Committee include identifying potential directors and making recommendations as to the size, functions and composition of the Board and its committees. In making nominations, our Nominating Committee is required to submit candidates who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who shall be most effective, in conjunction with the other nominees to the board, in collectively serving the long-term interests of the shareholders.
The Nominating Committee considers nominees proposed by our shareholders. To recommend a prospective nominee for the Nominating Committee’s consideration, you may submit the candidate’s name by delivering notice in writing to Disaboom, Inc. c/o Nominating Committee Chair, via first class U.S. mail, at Disaboom, Inc., 7730 E. Belleview Avenue, Suite A-306, Greenwood Village, CO 80111.
A shareholder nomination submitted to the Nomination Committee must include at least the following information (and can include such other information the person submitting the recommendation desires to include), and must be submitted to the Company by the date mentioned in the most recent proxy statement under the heading “Proposal From Shareholders” as such date may be amended in cases where the annual meeting has been changed as contemplated in SEC Rule 14a-8(e), Question 5:
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| (i) | The name, address, telephone number, fax number and e-mail address of the person submitting the recommendation; |
| (ii) | The number of shares and description of the Company voting securities held by the person submitting the nomination and whether such person is holding the shares through a brokerage account (and if so, the name of the broker-dealer) or directly; |
| (iii) | The name, address, telephone number, fax number and e-mail address of the person being recommended to the nominating committee to stand for election at the next annual meeting (the “proposed nominee”) together with information regarding such person’s education (including degrees obtained and dates), business experience during the past ten years, professional affiliations during the past ten years, and other relevant information. |
| (iv) | Information regarding any family relationships of the proposed nominee as required by Item 401(d) of SEC Regulation S-K. |
| (v) | Information whether the proposed nominee or the person submitting the recommendation has (within the ten years prior to the recommendation) been involved in legal proceedings of the type described in Item 401(f) of SEC Regulation S-K (and if so, provide the information regarding those legal proceedings required by Item 401(f) of Regulation S-K). |
| (vi) | Information regarding the share ownership of the proposed nominee required by Item 403 of Regulation S-K. |
| (vii) | Information regarding certain relationships and related party transactions of the proposed nominee as required by Item 404 of Regulation S-K. |
| (viii) | The signed consent of the proposed nominee in which he or she consents to being nominated as a director of the Company if selected by the nominating committee; states his or her willingness to serve as a director if elected for compensation not greater than that described in the most recent proxy statement; states whether the proposed nominee is “independent” as defined by Nasdaq Marketplace Rule 4200(a)(15), and attests to the accuracy of the information submitted pursuant to this paragraph. |
Although the information may be submitted by fax, e-mail, mail, or courier, the Nominating Committee must receive the proposed nominee’s signed consent, in original form, within ten days of making the nomination.
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When the information required above has been received, the Nominating Committee will evaluate the proposed nominee based on the criteria described below, with the principal criteria being the needs of the Company and the qualifications of such proposed nominee to fulfill those needs.
The process for evaluating a director nominee is the same whether a nominee is recommended by a shareholder or by an existing officer or director. The Nominating Committee will:
| (i) | Establish criteria for selection of potential directors, taking into consideration the following attributes which are desirable for a member of our Board of Directors: leadership; independence; interpersonal skills; financial acumen; business experiences; industry knowledge; and diversity of viewpoints. The Nominating Committee will periodically assess the criteria to ensure it is consistent with best practices and the goals of the Company. |
| (ii) | Identify individuals who satisfy the criteria for selection to the Board and, after consultation with the Chairman of the Board, make recommendations to the Board on new candidates for Board membership. |
| (iii) | Receive and evaluate nominations for Board membership which are recommended by existing directors, corporate officers, or shareholders in accordance with policies set by the Nominating Committee and applicable laws. |
The Nominating Committee held two meetings in 2007 and through September 1, 2008 has met three times in fiscal 2008. On September 11, 2008, the Nominating Committee nominated J.W. Roth, John Walpuck, David Petso, Victor Lazzaro, Patrick Templeton, Jerry Overgaard and Scott Chandler to stand for election to the Board of Directors. The Company has not engaged the services of or paid a fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominees.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s Officers and Directors and persons who own more than 10% of the Company’s outstanding Common Stock to file reports of ownership with the Securities and Exchange Commission (“SEC”). Directors, officers, and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on a review of Forms 3, 4, and 5 and amendments thereto furnished to the Company during and for the Company’s year ended December 31, 2007, there were no Directors, officers or more than 10% shareholders of the Company who failed to timely file a Form 3, 4 or 5.
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Shareholder Communication with the Board of Directors
The Company values the views of its shareholders (current and future shareholders, employees and others). Accordingly, the Board of Directors established a system through its Audit Committee to receive, track and respond to communications from shareholders addressed to the Company’s Board of Directors or to its Non-Management Directors. Any shareholder who wishes to communicate with the Board of Directors or the Non-Management Directors may write to:
David Petso
Chair, Audit Committee
c/o Disaboom, Inc.
7730 E. Belleview Avenue, Suite A-306
Greenwood Village, CO 80111
e-mail address: dpetso@yahoo.com
The chair of the Audit Committee is the Board Communications Designee. He will review all communications and report on the communications to the chair of the Nominating Committee, the full Board or the Non-Management Directors as appropriate. The Board Communications Designee will take additional action or respond to letters in accordance with instructions from the relevant Board source.
EXECUTIVE COMPENSATION
Compensation and other Benefits of Executive Officers
The following table sets out the compensation received for each fiscal year since our inception, in respect to each of the individuals who served as the Company’s chief executive officer and chief financial officer at any time during the last fiscal year and the Company’s most highly compensated executive officers whose total salary and bonus exceeded $100,000 (the “Named Executive Officers”).
Name and Principal Position
| | Fiscal Year
| | Salary ($)
| | Bonus ($)
| | Option Awards ($)
| | All Other Compensation ($)
| | Total ($)
| |
---|
JW Roth | | | | | | | | | | | | | | | | | | | | |
Chief Executive Officer | | | 2007 | | | $ | 100,000 | | $ | 7,692 | | $ | 0 | | $ | 12,300 | | $ | 119,992 | |
| | | 2006 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| | |
J. Glen House | | |
Chief Medical Officer | | | 2007 | | | $ | 88,269 | | $ | 5,769 | | $ | 0 | | $ | 6,050 | | $ | 100,088 | |
| | | 2006 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| | |
John Walpuck | | |
President and Chief Financial Officer | | | 2007 | | | $ | 128,750 | | $ | 7,962 | | $ | 226,293 | | $ | 15,650 | | $ | 378,655 | |
| | | 2006 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| | |
Michael Fay(1) | | | 2007 | | | $ | 89,583 | | $ | 5,769 | | $ | 82,184 | | $ | 7,518 | | $ | 185,054 | |
Former Chief Operating Officer | | | 2006 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| | |
Howard Lieber(2) | | | 2007 | | | $ | 100,000 | | $ | 5,769 | | $ | 154,662 | | $ | 52,500 | | $ | 312,931 | |
Former Senior Vice President, Sales | | | 2006 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
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| (1) | Michael Fay resigned as the Company’s Chief Operating Officer effective February 29, 2008. |
| (2) | Howard Lieber resigned as the Company’s Senior Vice President of Sales on June 13, 2008. |
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis describes the material elements of compensation for the executive officers identified in the Summary Compensation Table contained above for Messrs. Roth, House, Walpuck, Fay and Lieber.
The Compensation Committee of our Board of Directors (the “Committee”) reviews and approves the total direct compensation packages for each of our executive officers. Notably the salary and other benefits payable to our named executive officers are set forth in employment agreements which are discussed below. Stock option grants, as applicable to certain of the named executive officers, are approved by the full board of directors.
Cash Compensation Payable To Our Named Executive Officers.
Our Named Executive Officers receive a base salary payable in accordance with our normal payroll practices and pursuant to contracts between each of these officers and Disaboom (which contracts are described in more detail below). Based on the Committee’s knowledge of the industry and Disaboom’s performance to date, the Committee believes that their base salaries are competitive to those that are received by comparable officers with comparable responsibilities in similar companies. Cash compensation in 2007 also included a year end bonus and other cash benefits or reimbursements, which approximated from 5% to 8% of the named executive officers annual salary, excluding approximately $50,000 paid to Mr. Lieber as an independent consultant for services he provided the Company prior to May 2007, and excluding board meeting fees for Messrs. Roth, House and Walpuck.
When the Committee considers total cash compensation for our named executive officers, we do so by evaluating their responsibilities, experience and the competitive marketplace. Specifically, the Committee considers the following factors:
| 1. | the executive's leadership and operational performance and potential to enhance long-term value to the Company's shareholders; |
| 2. | performance compared to the financial, operational and strategic goals established for the Company; |
| 3. | the nature, scope and level of the executive's responsibilities; |
| 4. | competitive market compensation paid by other companies for similar positions, experience and performance levels; and |
| 5. | the executive's current salary, bonus, cash incentive compensation, and the appropriate balance between incentives for medium-term and short-term performance. |
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Option Grants To Our Named Executive Officers.
We have granted stock options to certain of our Named Executive Officers. These option grants are intended to provide incentives to our officers who contribute to the success of Disaboom by offering them the opportunity to acquire an ownership interest in it. We believe that option grants also help to align the interests of our management and employees with the interests of shareholders.
To date, of our Named Executive Officers, we have granted options to our President and Chief Financial Officer, John Walpuck, our former Chief Operating Officer Michael Fay, and our former Senior Vice President of Sales, Howard Lieber. Mr. Walpuck’s options vest over time, with certain options only vesting upon the achievement of certain company events. Mr. Lieber’s options were to vest over time but only upon the achievement of certain defined billed revenue objectives. Certain of the options granted to Mr. Fay were to vest over time and certain were to vest in accordance with certain defined performance objectives and Company milestones. We believe that these option grants serve as additional incentive for our officers, and in turn, the achievement of these objectives will help our performance. Messrs. Roth and House have not been granted any options to date.
Employment Agreements with our Named Executive Officers.
We have entered into employment agreements with each of our Named Executive Officers. Each of our executive officers is paid a salary for their services and certain of our executive officers have been granted stock options in consideration for their services. When the Compensation Committee considers salaries for our executives, it does so by evaluating their responsibilities, experience, the competitive marketplace, and our financial resources and projections. Pursuant to its Charter, our Compensation Committee reviews and approves the terms of the compensation granted to our executive officers.
J.W. Roth: On October 1, 2007, we entered into an employment agreement with our Chief Executive Officer and Chairman of the Board, J.W. Roth. The agreement is for an initial three year term and may be automatically extended for additional one year terms. Pursuant to the agreement Mr. Roth receives an annual salary of $200,000. Unless the agreement is terminated for cause, or as a result of Mr. Roth’s death or disability preventing him from working, if we terminate the employment agreement Mr. Roth will be entitled to a severance payment equal to his annual salary.
J. Glen House: On October 1, 2007, we entered into an employment agreement with our Chief Medical Officer. The agreement is for an initial three year term and may be automatically extended for additional one year terms. Pursuant to the agreement we are currently paying Dr. House an annual salary of $75,000. Unless the agreement is terminated for cause, or as a result of Dr. House’s death or disability preventing him from working, if we terminate the employment agreement Dr. House will be entitled to a severance payment equal to his annual salary.
John Walpuck: On April 2, 2007 we entered into an employment agreement with John Walpuck who currently serves as our President, Chief Financial Officer, Secretary and Treasurer. The employment agreement is for an initial two year term and thereafter may be automatically extended for additional one year terms. Pursuant to the agreement, Mr. Walpuck’s annual salary initially received an annual salary of $150,000 but with the closing of our September and October 2007 private placement now receives an annual salary of $200,000. Mr. Walpuck is eligible for an annual bonus upon the achievement of certain milestones, with the milestones to be mutually agreed upon by Mr. Walpuck and Disaboom. Unless the employment agreement is terminated for cause, or as a result of Mr. Walpuck’s death or disability, if we terminate the agreement Mr. Walpuck will be entitled to a severance payment equal to six months of his annual salary.
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In connection with his employment, Mr. Walpuck was granted 1,750,000 options to purchase our common stock at $0.50 per share, of which 250,000 options vested immediately, 250,000 vested on September 1, 2007, 500,000 vested on January 1, 2008, and 500,000 on January 1, 2009 provided Mr. Walpuck is an employee or director of the Company on each vesting date. The final 250,000 options only vest upon the occurrence of certain Company events including a merger, acquisition or consolidation.
Howard Lieber: Effective as of December 1, 2007 we entered into an employment agreement with Mr. Lieber, our former Senior Vice President of Sales. Mr. Lieber’s employment agreement was for an initial one year term, pursuant to which at the time of his resignation we were paying him an annual salary of $150,000. Mr. Lieber resigned as a Company officer effective June 13, 2008 and terminated his employment agreement.
Michael Fay: On April 23, 2007, we entered into an employment agreement with Michael Fay, our former Chief Operating Officer. Mr. Fay’s employment agreement was for an initial two year term, pursuant to which at the time of his resignation we were paying him an annual salary of $150,000. Mr. Fay resigned as a Company officer effective February 29, 2008 and terminated his employment agreement.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2007
| Option Awards
| |
---|
| Number of Securities Underlying Unexercised Options(1) (#)
| | Option Exercise | | Option Expiration | |
---|
Name
| | Exercisable
| | Unexercisable
| | Price ($)
| | Date
| |
---|
JW Roth | | | | 0 | | | 0 | | | 0 | | 0 | | |
| | |
Glen House | | | | 0 | | | 0 | | | 0 | | 0 | | |
| | |
John Walpuck | | | | 500,000 | | | 1,250,000 | | | $0.50 | | 1/1/2012 | | |
| | |
Michael Fay(2) | | | | 325,000 | | | 125,000 | | | $0.50 | | 9/1/2011 | | |
| | | | | | | 200,000 | | | $1.50 | | 10/1/2013 | | |
| | |
Howard Lieber(3) | | | | 200,000 | | | 300,000 | | | $0.50 | | 6/1/2014 | | |
| | | | | | | 250,000 | | | $1.50 | | 10/1/2013 | | |
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| (1) | The material terms of these option grants are described in the Option Grants To Our Named Executive Officers notes above. |
| (2) | Michael Fay resigned as the Company’s Chief Operating Officer effective February 29, 2008. |
| (3) | Howard Lieber resigned as the Company’s Senior Vice President of Sales effective June 13, 2008. |
Option Exercises and Stock Vested
None of our executive officers exercised any stock options, SARs or similar instruments during the fiscal year ended December 31, 2007, or subsequently. None of our current executive officers serving were granted restricted common stock that was subject to a vesting schedule during our fiscal year ended December 31, 2007, or subsequently.
Pension Benefits
Disaboom has no defined benefit plans, supplemental executive retirement plans or actuarial plans.
Nonqualified Defined Contribution and Other Deferred Compensation Plans
Disaboom does not have any nonqualified defined contribution or deferred compensation plans.
Director Compensation
In January 2007 the Board adopted resolutions whereby each board member receives $550 for participating in Board meetings and is reimbursed for travel and related expenses if the meeting is attended in person. Additionally, the Company has granted each of its independent directors options for serving on the Board. Certain directors have been granted additional options for serving on the committees of the Board of Directors and for serving as the chairman of such committees.
The following table reflects the compensation of our directors for our fiscal year ended December 31, 2007:
DIRECTOR COMPENSATION
Name
| | Earned or Paid in Cash
| | Option Awards
| | Total
| |
---|
Victor Lazzaro | | | $ | 3,850 | | $ | 10,783 | | $ | 14,633 | |
Jay Belk(1) | | | $ | 3,300 | | $ | — | | $ | 3,300 | |
R. Jerry Overgaard | | | $ | 5,500 | | $ | 5,269 | | $ | 10,769 | |
David Petso | | | $ | 5,500 | | $ | 16,052 | | $ | 21,552 | |
Patrick Templeton | | | $ | 2,200 | | $ | 45,673 | | $ | 47,873 | |
(1) | Mr. Belk served as a director of the Company from its inception through August 23, 2007. |
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During our 2007 fiscal year Messrs. Roth, House, and Walpuck served on our Board of Directors and also served as executive officers of the Company. None received separate stock option compensation for serving as a director, but did receive the Board meeting fees described herein. Messrs. Roth, House, and Walpuck Board meeting fees are included in the “All Other Compensation” column of the Summary Compensation Table above.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee selected the independent accounting firm of GHP Horwath, P.C. (“GHP”) with respect to the audit of our financial statements for the year ended December 31, 2007. A representative of GHP is not expected to be present at the Annual Meeting.
Audit Fees. Our principal accountant, GHP Horwath, P.C., billed us aggregate fees in the amount of approximately $51,500 for the fiscal year ended December 31, 2007 and approximately $5,000 for the fiscal year ended December 31, 2006. These amounts were billed for professional services that GHP Horwath provided for the audit of our annual financial statements, registration statement consents, review of the financial statements included in our reports on 10-Q and other services typically provided by an accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
Audit-Related Fees. GHP Horwath billed us aggregate fees in the amount of $0 for the fiscal years ended December 31, 2007 and 2006 for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements.
Tax Fees. GHP Horwath fees related to tax return preparation were $0 and $2,200 for the fiscal years ended December 31, 2007 and 2006, respectively.
All Other Fees. GHP Horwath billed us aggregate fees in the amount of $0 for the fiscal years ended December 31, 2007 and 2006 for other fees.
Audit Committee’s Pre-Approval Practice
Section 10A(i) of the Exchange Act prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the audit committee of the Board of Directors, or unless the services meet certainde minimisstandards. The audit committee’s charter (adopted March 9, 2007) provides that the Audit Committee must pre-approve:
| • | all audit services that the auditor may provide to Disaboom or any subsidiary (including, without limitation, providing comfort letters in connection with securities underwritings or statutory audits); and |
| • | (or the chair of the Audit Committee may pre-approve) all non-audit services (other than certainde minimis services) that the auditors propose to provide to Disaboom or any of its subsidiaries with the understanding that such pre-approval must be detailed as to the particular services to be provided and cannot simply set forth broad, categorical services for pre-approval. Notwithstanding anything to the contrary herein, neither the Audit Committee nor any person with authority delegated from the Audit Committee may approve an auditor providing the services that are described in §10A(g) as “prohibited activities.” Where the chair pre-approves any non-audit services, his or her decisions will be presented to the full Audit Committee at its next meeting. |
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The Audit Committee considers at each of its meetings whether to approve any audit services or non-audit services. In some cases, management may present the request; in other cases, the auditors may present the request. The audit committee did not pre-approve any of the audit related fees for the fiscal year ended December 31, 2006, because the Audit Committee was not formed until March 9, 2007. The Audit Committee approved the audit related fees after they were incurred.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors is nominating seven persons to be elected to the Company’s Board of Directors: Messrs. Roth, Walpuck, Lazzaro, Petso, Templeton, Overgaard, and Chandler. Each director serves for a one year term or until his or her successor is elected and qualified.
Nominees for Election of Directors
The persons named in the enclosed form of Proxy will vote the shares represented by such Proxy for the election of the seven nominees for director named below. If, at the time of the meeting, any of these nominees shall become unavailable for any reason, which event is not expected to occur, the persons entitled to vote the Proxy will vote for such substitute nominee or nominees, if any, as they determine in their sole discretion. If elected, Messrs. Roth, Walpuck, Lazzaro, Petso, Templeton, Overgaard, and Chandler will each hold office for a term of one year, until their successors are duly elected or appointed or until their earlier death, resignation or removal.
The Board of Directors recommends a vote “FOR” the election of Messrs. Roth, Walpuck, Lazzaro, Petso, Templeton, Overgaard and Chandler to the Board of Directors. Unless otherwise specified, the enclosed proxy will be voted “FOR” the election of the Board of Directors’ slate of nominees. Neither Management nor the Board of Directors of the Company is aware of any reason which would cause any nominee to be unavailable to serve as a Director. Discretionary authority may be exercised by the proxy holders named in the enclosed proxy to vote for a substitute nominee proposed by the Board of Directors if any nominee becomes unavailable for election. At this time, the Board knows of no reason why any nominee might be unavailable to serve.
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PROPOSAL TWO
AN AMENDMENT TO OUR ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF
SHARES OF AUTHORIZED COMMON STOCK
The Board of Directors of the Company has approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of authorized Common Stock from 65,000,000 to 100,000,000.
Background and Discussion of Proposed Amendment
Currently our Articles of Incorporation authorize us to issue 65,000,000 shares of common stock and 10,000,000 shares of Preferred Stock. As of the September 11, 2008 (i) we have issued 43,415,270 shares of Common Stock and zero shares of Preferred Stock; (ii) 7,000,000 shares of authorized Common Stock have been reserved for issuance upon exercise of stock options granted or to be granted under the Company’s 2006 Stock Option Plan; (iii) 3,000,000 shares of authorized Common Stock have been reserved for issuance upon exercise of stock options granted or to be granted under the Company’s 2008 Stock Option Plan; and (iv) 9,428,340 shares of authorized Common Stock have been reserved for issuance upon the exercise of common stock purchase warrants. As such our Board of Directors has approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of authorized common stock from 65,000,000 shares to 100,000,000 shares. We are not seeking to increase the number of authorized shares of our Preferred Stock.
The additional authorized shares of Common Stock may be used for raising additional capital for the operations of the Company or acquiring other businesses. Such shares would be available for future issuance without further action by the shareholders, unless required by the Company’s Articles of Incorporation or Bylaws or by applicable law. If this Proposal is not approved, the Company may not have sufficient Common Stock to achieve future financings or for mergers or acquisitions that it may wish to pursue.
Anti-Takeover Effects. The issuance of additional shares of Common Stock by the Company may also potentially have an anti-takeover effect by making it more difficult to obtain stockholder approval of various actions, such as a merger or removal of management. The increase in authorized shares of common stock has not been proposed for an anti-takeover related purpose and the Board of Directors and management have no knowledge of any current efforts to obtain control of the Company or to effect large accumulations of its Common Stock.
Dilutive Effects. The authorization and subsequent issuance of additional shares of common stock may, among other things, have a dilutive effect on earnings per share and on the equity and voting power of existing holders of common stock. The actual effect on the holders of common stock cannot be ascertained until the shares of common stock are issued in the future. However, such effects might include dilution of the voting power and reduction of amounts available on liquidation.
Vote Required and Recommendation of Board
Proposal Two requires the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote. The Board of Directors recommends that shareholders vote “For” the proposed amendment to the Articles of Incorporation.
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PROPOSAL THREE
ADOPTION OF THE 2008 STOCK OPTION PLAN
On September 16, 2008 our Board of Directors formally adopted the 2008 Stock Option Plan Restructuring Equity Plan (the “Plan”), under which, a maximum of 3,000,000 shares of common stock have been reserved for issuance upon the exercise of options the grant of stock bonuses. The Plan includes: (i) options intended to qualify as “incentive stock options” (“Incentive Options”) under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”); (ii) non-incentive stock options which are not intended to qualify as Incentive Options (“Non-Incentive Options”); and (iii) shares issuable as stock bonuses. Although the Company already has one stock option plan, its 2006 Stock Option Plan, the Company determined that for administrative purposes and because the Company was unable to seek and obtain shareholder approval of the final amendment of that plan within twelve months, it was in the Company’s best interest to adopt a new plan.
Shareholder approval of the Plan is sought to qualify it under Rule 16b-3 of the Securities and Exchange Act of 1934, as amended (the “Act”), and thereby render certain transactions under it exempt from certain provisions of Section 16 of the Act, and to permit the issuance of Options which will qualify as Incentive Options pursuant to the Code. Options or bonuses may be granted under the Plan prior to approval by the shareholders. As of August 25, 2008 no options have been granted under the Plan.
The Plan is intended to provide incentives to officers, employees, consultants and advisers (including members of the Board of Directors), who contribute to the success of the Company by offering them the opportunity to acquire an ownership interest in it. The Board of Directors believes that this also will help to align the interests of our management and employees with the interests of shareholders. The terms of the Plan concerning the incentive options and non-qualified options are substantially the same except that only employees of the Company or its subsidiaries are eligible to receive incentive options. Non-qualified options may be granted to employees, officers and consultants of the Company.
The number of shares reserved for issuance under the Plan is a maximum aggregate so that the number of incentive options and/or non-qualified options that may be granted reduces the number of bonuses which may be granted, and vice versa.
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Administration of the Plan
The Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors (the “Committee”). Currently, the Board of Directors is the Committee. In addition to determining who will be granted options or bonuses, the Committee has the authority and discretion to determine when options and bonuses will be granted and the number of options and bonuses to be granted. The Committee also may determine a vesting and/or forfeiture schedule for bonuses and/or options granted, the time or times when each option becomes exercisable, the duration of the exercise period for options and the form or forms of the agreements, certificates or other instruments evidencing grants made under the Plan. The Committee may determine the purchase price of the shares of Common Stock covered by each option and determine the fair market value per share. The Committee also may impose additional conditions or restrictions not inconsistent with the provisions of the Plan. The Committee may adopt, amend and rescind such rules and regulations as in its opinion may be advisable for the administration of the Plan.
The Committee also has the power to interpret the Plan and the provisions in the instruments evidencing grants made under it, and is empowered to make all other determinations deemed necessary or advisable for the administration of it.
Eligibility
Participants in the Plan may be selected by the Committee from employees, officers, consultants and advisors (including Board members) of the Company. The Committee may take into account the duties of persons selected, their present and potential contributions to the success of the Company and such other considerations as the Committee deems relevant to the purposes of the Plan.
The grant of options or bonuses under the Plan does not confer any rights with respect to continuation of employment, and does not interfere with the right of the recipient or the Company to terminate the recipient’s employment, although a specific grant of options or bonuses may provide that termination of employment or cessation of service as an employee, officer, or consultant may result in forfeiture or cancellation of all or a portion of the bonuses or options.
Adjustment
In the event a change, such as a stock split, is made in our capitalization which results in an exchange or other adjustment of each share of Common Stock for or into a greater or lesser number of shares, appropriate adjustments will be made to unvested bonuses and in the exercise price and in the number of shares subject to each outstanding option. The Committee also may make provisions for adjusting the number of bonuses or underlying outstanding options in the event we effect one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of shares of our outstanding Common Stock. Options and bonuses may provide that in the event of the dissolution or liquidation of the Company, a corporate separation or division or the merger or consolidation of the Company, the holder may exercise the option on such terms as it may have been exercised immediately prior to such dissolution, corporate separation or division or merger or consolidation; or in the alternative, the Committee may provide that each option granted under the Plan shall terminate as of a date fixed by the Committee.
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Income Tax Consequences of the Plan
The incentive options issuable under the Plan are structured to qualify for favorable tax treatment to recipients provided by Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”). Pursuant to Section 422 of the Code, optionees will not be subject to federal income tax at the time of the grant or at the time of exercise of an incentive option. In addition, provided that the stock underlying the option is not sold within two years after the grant of the option and is not sold within one year after the exercise of the option, then the difference between the exercise price and the sales price will be treated as long-term capital gain or loss. An optionee also may be subject to the alternative minimum tax upon exercise of his options. The Company will not be entitled to receive any income tax deductions with respect to the granting or exercise of incentive options or the sale of the Common Stock underlying the options. The exercise price of incentive options granted cannot be less than the fair market value of the underlying Common Stock on the date the options were granted. In addition, the aggregate fair market value (determined as of the date an option is granted) of the Common Stock underlying the options granted to a single employee which become exercisable in any single calendar year may not exceed the maximum permitted by the Code for incentive options. This amount currently is $100,000. No incentive option may be granted to an employee who, at the time the option would be granted, owns more than ten percent of the outstanding stock of the Company unless the exercise price of the options granted to the employee is at least 110 percent of the fair market value of the stock subject to the option and the option is not exercisable more than five years from the date of grant.
Non-qualified options will not qualify for the special tax benefits given to incentive options under Section 422 of the Code. An optionee does not recognize any taxable income at the time he or she is granted a non-qualified option. However, upon exercise of the option, the optionee recognizes ordinary income for federal income tax purposes measured by the excess, if any, of the then fair market value of the shares over the exercise price. The ordinary income recognized by the optionee will be treated as compensation and will be subject to income tax withholding by the Company (if an employee) or self-employment tax (if a non-employee). Upon an optionee’s sale of shares acquired pursuant to the exercise of a non-qualified option, any difference between the sale price and the fair market value of the shares on the date when the option was exercised will be treated as long-term or short-term capital gain or loss. Upon an optionee’s exercise of a non-qualified option, the Company will be entitled to a tax deduction in the amount recognized as ordinary income to the optionee (provided that the Company effects withholding with the respect to the deemed compensation if the optionee is an employee).
With respect to bonuses, generally, a grantee will recognize as ordinary income the fair market value of the bonuses as of the date of receipt. If the grantee is an employee, then the grant is compensation and will be subject to income tax withholding by us (if an employee) or self-employment tax (if a non-employee).
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Other Provisions
The exercise price of any option granted under the Plan must be no less than 100% of the “fair market value” of our Common Stock on the date of grant. Any incentive stock option granted under the Plan to a person owning more than 10% of the total combined voting power of the Common Stock shall be at a price of no less than 110% of the fair market value per share on the date of grant.
The exercise price of an option may be paid in cash, in shares of our Common Stock or other property having a fair market value equal to the exercise price of the option, or in a combination of cash, shares and property. The Committee shall determine whether or not property other than cash or Common Stock may be used to purchase the shares underlying an option and shall determine the value of the property received.
The Board of Directors believes that the Planwill allow the Company to attract and retain the services of, and obtain maximum efforts by, directors, officers, and other key individuals by offering those persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company.
Anti-Takeover Effects. The issuance of additional shares of Common Stock upon the exercise of the options may also potentially have an anti-takeover effect by making it more difficult to obtain shareholder approval of various actions, such as a merger or removal of management. The 2008 Stock Option Plan has not been proposed for an anti-takeover related purpose and the Board of Directors and management have no knowledge of any current efforts to obtain control of the Company or to effect large accumulations of its Common Stock.
Dilutive Effects. The authorization and subsequent issuance of additional shares of Common Stock upon the exercise of the options granted under the 2008 Stock Option Plan may, among other things, have a dilutive effect on earnings per share and on the equity and voting power of existing holders of Common Stock. The actual effect on the holders of Common Stock cannot be ascertained until the shares of Common Stock are issued in the future. However, such effects might include dilution of the voting power and reduction of amounts available on liquidation.
Vote Required and Recommendation of Board
Proposal Three requires the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Meeting. The Board of Directors recommends that shareholders vote “For” this proposal.
ANNUAL REPORT TO SHAREHOLDERS
Included with this Proxy Statement is the Company’s 2007 Annual Report on Form 10-K for the year ended December 31, 2007 and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.
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OTHER MATTERS
Management and the Board of Directors of the Company know of no matters to be brought before the Meeting other than as set forth herein. However, if any such other matters properly are presented to the shareholders for action at the Meeting and any adjournments or postponements thereof, it is the intention of the proxy holder named in the enclosed proxy to vote in his discretion on all matters on which the shares represented by such proxy are entitled to vote.
DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS
Only one proxy statement and annual report is being delivered to shareholders sharing an address unless we have received contrary instructions from one or more of the shareholders. Upon the written or oral request of a shareholder, we will deliver promptly a separate copy of the proxy statement and annual report to a shareholder at a shared address to which a single copy was delivered. Shareholders desiring to receive a separate copy in the future may contact us through our Corporate Secretary, 7730 E. Belleview Avenue, Suite A-306, Greenwood Village, CO 80111, or by telephone: (720) 407-6530.
Shareholders who share an address but are receiving multiple copies of the proxy statement and/or annual report may contact us through our Corporate Secretary, 7730 E. Belleview Avenue, Suite A-306, Greenwood Village, CO 80111, or by telephone: (720) 407-6530 to request that a single copy be delivered.
SHAREHOLDER PROPOSALS
Disaboom expects to hold its next annual meeting of shareholders in November 2009. Proposals from shareholders intended to be present at the next Annual Meeting of shareholders should be addressed to Disaboom, Inc., Attention: Corporate Secretary, 7730 E. Belleview Avenue, Suite A-306, Greenwood Village, CO 80111and we must receive the proposals by April 2, 2009. Upon receipt of any such proposal, we shall determine whether or not to include any such proposal in the Proxy Statement and proxy in accordance with applicable law. It is suggested that shareholders forward such proposals by Certified Mail-Return Receipt Requested. After April 2, 2009, any shareholder proposal submitted outside the process of Rule 14a-8 will be considered to be untimely.
| BY ORDER OF THE BOARD OF DIRECTORS: |
| DISABOOM, INC. J.W. Roth, Chairman |
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PROXY
DISABOOM, INC.
7730 E. Belleview Avenue, Suite A-306
Greenwood Village, CO 80111
(720) 407-6530
ANNUAL MEETING OF SHAREHOLDERS - NOVEMBER 5, 2008
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Disaboom Inc. hereby constitutes and appoints J.W. Roth and John Walpuck, or either of them, as attorneys and proxies to appear, attend and vote all of the shares of Common Stock and/or standing in the name of the undersigned at the Annual Meeting of Shareholders to be held at the offices of our corporate counsel, Burns, Figa & Will, P.C., 6400 South Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111 on Wednesday, November 5, at 10:00 a.m. local time, and at any adjournment or adjournments thereof, upon the following:
Proposal One: To elect the following seven persons as directors to hold office until the next annual meeting of shareholders and until their successors have been elected and qualified:
| J.W. Roth | For [_] | Withhold Authority to vote [_] |
| John Walpuck | For [_] | Withhold Authority to vote [_] |
| Victor Lazzaro | For [_] | Withhold Authority to vote [_] |
| David Petso | For [_] | Withhold Authority to vote [_] |
| Patrick Templeton | For [_] | Withhold Authority to vote [_] |
| R. Jerry Overgaard | For [_] | Withhold Authority to vote [_] |
| Scott Chandler | For [_] | Withhold Authority to vote [_] |
Proposal Two: Approval of an amendment to our Articles of Incorporation increasing the number of shares of authorized common stock to 100,000,000 shares.
For [_] Against [_] Abstain [_]
Proposal Three: Approval of the 2008 Stock Option Plan.
For [_] Against [_] Abstain [_]
In their discretion, the Proxy is authorized to vote upon such other business as lawfully may come before the Meeting. The undersigned hereby revokes any proxies as to said shares heretofore given by the undersigned and ratifies and confirms all that said proxy lawfully may do by virtue hereof.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED HEREON WITH RESPECT TO THE ABOVE PROPOSALS, BUT IF NO SPECIFICATION IS MADE THEY WILL BE VOTED FOR ALL DIRECTOR NOMINEES ANDFOR THE OTHER PROPOSALS LISTED ABOVE. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY ON ANY OTHER BUSINESS.
Please mark, date and sign exactly as your name appears hereon, including designation as executor, Trustee, etc., if applicable, and return the Proxy in the enclosed postage-paid envelope as promptly as possible. It is important to return this Proxy properly signed in order to exercise your right to vote if you do not attend the meeting and vote in person. A corporation must sign in its name by the President or other authorized officer.All co-owners and each joint owner must sign.
Date: _______________________
| _____________________________________ Signature(s)
Address if different from that on envelope:
_____________________________________ Street Address
_____________________________________ City, State and Zip Code |
Please check if you intend to be present at the meeting: _______