SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12. [ ]
Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)).
UCI MEDICAL AFFILIATES, INC.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (check the appropriate box):
[ X ] No fee required.
1
UCI MEDICAL AFFILIATES, INC.
4416 Forest Drive
Columbia, SC 29206
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on Wednesday, July 30, 2003
TO THE STOCKHOLDERS OF UCI MEDICAL AFFILIATES, INC.:
The annual meeting of stockholders of UCI Medical Affiliates, Inc., a
Delaware corporation ("UCI"), will be held on Wednesday, July 30, 2003 at 10:00
a.m., local time, at the Adam's Mark Hotel, 1200 Hampton Street, Columbia, South
Carolina for the following purposes:
1. To elect six members of the Board of Directors, two of which shall hold
office for a term expiring at the third annual meeting of stockholders
after the date of their election, two of which shall hold office for a
term expiring at the second annual meeting of stockholders after the
date of their election, and two of which shall hold office for a term
expiring at the first annual meeting of stockholders after the date of
their election.
2. To ratify the appointment of Scott McElveen, L.L.P. as our independent
auditors for the fiscal year ended September 30, 2003.
3. To transact such other business as may properly come before the annual
meeting or any adjournment or postponement of the annual meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this Notice. Only stockholders of record of our common
stock at the close of business on June 2, 2003 are entitled to notice of, and
will be entitled to vote at, the annual meeting or any adjournment or
postponement of the annual meeting.
BY ORDER OF THE BOARD OF DIRECTORS
D. Michael Stout, M.D.
President and Chief Executive Officer
June 18, 2003
We cordially invite and urge you to attend the annual meeting in
person, but if you are unable to do so, please complete, date, sign, and
promptly return the enclosed form of proxy in the postage-paid envelope
provided. If you attend the annual meeting and desire to revoke your proxy and
vote in person, you may do so. You can withdraw your proxy at any time before it
is voted.
UCI MEDICAL AFFILIATES, INC.
4416 Forest Drive
Columbia, SC 29206
PROXY STATEMENT
General
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of UCI Medical Affiliates, Inc. ("UCI") to
be used in voting at the annual meeting of our shareholders to be held at the
Adam's Mark Hotel, 1200 Hampton Street, Columbia, South Carolina, on Wednesday,
July 30, 2003 at 10:00 a.m. and at any adjournment thereof. The purposes of the
annual meeting are (1) to elect six directors to our Board of Directors; (2) to
ratify the appointment of Scott McElveen, L.L.P. as our independent auditors for
the fiscal year ending September 30, 2003; and (3) to transact such other
business as may properly come before the annual meeting or any adjournment of
the annual meeting. This proxy statement and the accompanying form of proxy are
being mailed to stockholders commencing on or about June 18, 2003.
Record Date
Only holders of record of our common stock, par value $0.05 per share,
at the close of business on June 2, 2003 are entitled to notice of and will be
entitled to vote at the annual meeting.
Shares Outstanding and Entitled to Vote
Holders of our common stock are entitled to one vote per share on each
matter that is presented for stockholder approval at the annual meeting. At the
close of business on the above-listed record date, 9,650,478 shares of our
common stock were outstanding and entitled to vote, held of record by
approximately 305 stockholders. All of such shares are eligible to be voted on
each matter currently scheduled to come before the annual meeting.
Voting and Revocation of Proxies
The form of proxy accompanying this proxy statement is solicited on
behalf of our Board of Directors for use at the annual meeting. You are
requested to complete, date, and sign the accompanying form of proxy and
promptly return it in the accompanying envelope or otherwise mail it to us. All
proxies that are properly executed and returned, and that are not revoked, will
be voted at the annual meeting in accordance with the instructions indicated on
the proxies. If no instructions are indicated, such proxies will be voted FOR
each of the proposals described in this proxy statement, including election of
the director nominees set forth in this proxy statement.
The Board of Directors does not presently intend to bring any business
before the annual meeting other than the specific proposals referred to in this
proxy statement and specified in the notice of the annual meeting. So far as is
known to the Board, no other matters are to be brought before the annual
meeting. If any other business properly comes before the annual meeting,
however, we intend that the proxies, in the form enclosed, will be voted on such
matters in accordance with the judgment of the persons voting such proxies.
Any of our stockholders who have signed the proxy referred to in this
proxy statement may revoke it at any time before it is exercised at the annual
meeting by (i) delivering to our Corporate Secretary a written notice, bearing a
date later than the proxy, stating that the proxy is revoked, (ii) signing and
so delivering a proxy relating to the same shares and bearing a later date prior
to the vote at the annual meeting or (iii) attending the annual meeting and
voting in person (although attendance at the annual meeting will not, by itself,
revoke a proxy). Whether or not you plan to attend the annual meeting, you are
urged to sign and return the enclosed proxy.
Quorum
The presence in person or by proxy of the holders of a majority of the
issued and outstanding shares of our common stock entitled to vote at the annual
meeting is necessary to constitute a quorum at the annual meeting or an
adjournment thereof. We will consider directions to withhold authority to vote
for directors, abstentions, and broker non-votes to be shares present in person
or by proxy and entitled to vote. Therefore, we will count such shares for
purposes of determining whether a quorum is present at the annual meeting. If a
quorum is not present or represented at the annual meeting, the chairman of the
meeting or the stockholders holding a majority of the shares of our common stock
entitled to vote, present in person or represented by proxy, have the power to
adjourn the meeting from time to time, without notice other than an announcement
at the meeting, until a quorum is present or represented. Our directors,
officers and employees may solicit proxies for the reconvened annual meeting in
person or by mail, telephone, or telegraph. At any such reconvened annual
meeting at which a quorum is present or represented, any business may be
transacted that might have been transacted at the meeting as originally
scheduled.
Vote Required
Except for the election of directors, for each matter specified in this
proxy statement to be submitted for stockholder approval at the annual meeting,
the affirmative vote of a majority of the shares of our common stock present at
the annual meeting in person or by proxy and entitled to vote on such matter is
required for approval. We will consider abstentions as shares present in person
or by proxy and entitled to vote. Consequently, abstentions will have the effect
of a vote against such matter. We will consider broker non-votes to be shares
present but not entitled to vote. Consequently, broker non-votes will have no
effect on the outcome of the vote.
Under the Delaware General Corporation Law, the six director nominees
receiving the greatest number of votes cast (although not necessarily a majority
of the votes cast) in the election of directors at the annual meeting will be
elected to the Board of Directors. Accordingly, directions to withhold
authority, abstentions and broker non-votes will have no effect on the outcome
of the vote for directors. Our Amended and Restated Certificate of
Incorporation, as amended, does not allow for cumulative voting in the election
of directors.
A broker non-vote occurs when a broker or other nominee holding shares
for a beneficial owner votes on one proposal, but does not vote on another
proposal because the broker or other nominee does not have the discretionary
voting power and has not received voting instructions from the beneficial owner.
Solicitation of Proxies and Expenses
We will bear the cost of preparing, assembling, and mailing this proxy
statement and the accompanying form of proxy to stockholders. In addition to
solicitation by mail, our directors, officers, and employees may solicit proxies
from stockholders by telephone, telegram, letter, facsimile, or in person. No
compensation will be paid for such solicitations. We may request brokers,
custodians, nominees, and other record holders to forward copies of the proxy
and other soliciting materials to persons for whom they hold shares of our
common stock and to request authority for the exercise of proxies. Upon the
request of such record holders, we will reimburse such holders for their
reasonable expenses.
STOCKHOLDER PROPOSALS FOR 2004 ANNUAL MEETING
If you would like to have a proposal considered for inclusion in the
proxy statement for the 2004 annual meeting, we must receive your written
proposal at the address on the cover of this proxy statement, attention
Corporate Secretary, no later than January 31, 2004. Each shareholder submitting
proposals for inclusion in the proxy statement must comply with the proxy rules
under the Securities Exchange Act of 1934, as amended, including without
limitation being the holder of at least $2,000 in market value, or 1%, of the
securities entitled to be voted on the proposal at the annual meeting for at
least one year by the date the shareholder submits the proposal and continue to
hold those securities through the date of the 2004 annual meeting.
If you wish to submit a proposal for consideration at the 2004 annual
meeting, but which will not be included in the proxy statement for such meeting,
we must receive your proposal in accordance with our Bylaws. Our Bylaws require
timely advance written notice of any proposals to be presented at an annual
meeting of shareholders. For a notice to be timely, it must be received at our
principal offices at the address on the cover of this proxy statement sixty
days, but not more than ninety days, prior to the anniversary date of the
immediately preceding annual meeting of shareholders. In other words, proposals
for the 2004 annual meeting must be received by at least May 31, 2004, but not
prior to May 1, 2004. However, if the 2004 annual meeting is not held within
thirty days before or after July 30, 2004, then for the notice by the
shareholder to be timely, it must be received at our principal offices at the
address on the cover of this proxy statement not later than the close of
business on the tenth day following the date on which the notice of the 2004
annual meeting was actually mailed. The notice must give: (a) a brief
description of the business desired to be brought before the 2004 annual meeting
(including the specific proposal(s) to be presented) and the reasons for
conducting such business at the 2004 annual meeting; (b) the name and address,
as they appear on our books, of the shareholder(s) proposing such business; (c)
the class and number of shares that are held beneficially, but not held of
record, by the proposing shareholder(s) as of the record date for the 2004
annual meeting, if such date has been made publicly available, or as of a date
within ten days of the effective date of the notice by the proposing
shareholder(s) if the record date has not been made publicly available, and (d)
any interest of the proposing shareholder(s) in such business. Shareholders
desiring to make proposals to be presented at the 2004 annual meeting are
directed to these requirements as more specifically set forth in our Bylaws, a
copy of which is available upon request to our Corporate Secretary at the
address listed on the cover of this proxy statement. The chairman of the 2004
annual meeting may exclude from the meeting any matters that are not properly
presented in accordance with these Bylaw requirements.
PROPOSAL ONE
ELECTION OF DIRECTORS
Six directors are to be elected at the annual meeting. Our Amended and
Restated Certificate of Incorporation, as amended, provides for a classified
Board of Directors so that, as nearly as possible, one-third of our Board
rotates off at each annual meeting. Pursuant to the authority granted to it
under our Bylaws, as amended, our Board has set the size of the Board at six
members with staggered terms expiring at the forthcoming annual meeting and at
the next two succeeding annual meetings of stockholders. The following persons
have been nominated by the Board of Directors for election as directors at the
forthcoming annual meeting to serve for terms expiring at the third annual
meeting of stockholders after the date of their election or until their
successors shall have been elected and shall been duly qualified: Charles M.
Potok and Harold H. Adams, Jr. The following persons have been nominated by the
Board of Directors for election as directors at the forthcoming annual meeting
to serve for terms expiring at the second annual meeting of stockholders after
the date of their election or until their successors shall have been elected and
shall been duly qualified: John M. Little, Jr., M.D. and Ashby M. Jordan, M.D.
The following persons have been nominated by the Board of Directors for election
as directors at the forthcoming annual meeting to serve for terms expiring at
the first annual meeting of stockholders after the date of their election or
until their successors shall have been elected and shall been duly qualified:
Louis M. McElveen and Timothy L. Vaughn. See "Management."
The Board has designated the persons named in the accompanying proxy,
and unless authority is specifically withheld, they intend to vote for the
election of the nominees listed above. A stockholder executing the enclosed
proxy may vote for the nominees or may withhold such vote from the nominees. In
each case where the stockholder has appropriately specified how the proxy is to
be voted, it will be voted in accordance with such stockholder's specifications.
Although we do not contemplate that the nominees will become unable to serve
prior to the annual meeting, the persons named on the enclosed proxy will have
the authority to vote for the election of another person in accordance with
their best judgment.
THE PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE
ELECTION OF THE NOMINEES LISTED ABOVE.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board, adopting the recommendation of the Audit Committee of the
Board of Directors, has appointed the certified public accounting firm of Scott
McElveen, L.L.P. as our independent auditors for the fiscal year ended September
30, 2003, subject to ratification by the stockholders at the annual meeting. We
expect representatives of Scott McElveen, L.L.P. to be present at the annual
meeting and to be available to respond to questions. We will provide such
representatives the opportunity to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL. THE
PERSONS NAMED IN THE FORM OF PROXY WILL VOTE THE PROXY AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED "FOR" THE RATIFICATION OF THE
COMPANY'S INDEPENDENT AUDITORS.
OTHER MATTERS
The Board of Directors knows of no other matters that are likely to be
brought before the annual meeting. If any matters are brought before the annual
meeting, the proxy agents named in the enclosed proxy will vote on such matters
in accordance with their best judgment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us
regarding the beneficial ownership of our common stock as of June 2, 2003.
Information is presented for (i) stockholders owning more than five percent of
the outstanding common stock, (ii) each of our directors and executive officers
individually, and (iii) all of our directors and executive officers, as a group.
The percentages are calculated based on 9,650,478 shares of common stock
outstanding on June 2, 2003.
Shares
Beneficially
Name Owned (1) Percentage
- ------------------------------------------------------------------------- --- ---------------- ------------
Blue Cross and Blue Shield of South Carolina (2)...............................4,645,010 48.13
MainStreet Healthcare Corporation (3)..........................................1,481,009 15.35
M.F. McFarland, III, M.D. (4)....................................................521,962 5.41
Harold H. Adams, Jr................................................................2,500 *
Ashby M. Jordan, M. D................................................................. 0 0
A. Wayne Johnson.......................................................................0 0
John M, Little, Jr., M.D...............................................................0 0
Louis M. McElveen......................................................................0 0
Charles M. Potok.......................................................................0 0
Timothy L. Vaughn......................................................................0 0
D. Michael Stout, M.D. (5).......................................................357,185 3.70
Jerry F. Wells, Jr. (6)..........................................................134,825 1.40
All current directors and executive officers
As a group (8 persons).....................................................1,016,472 10.53
* Amount represents less than 1.0 percent.
(1) Beneficial ownership reflected in the table is determined in accordance
with the rules and regulations of the SEC and generally includes voting
or investment power with respect to securities. Shares of common stock
issuable upon the exercise of options currently exercisable or
convertible, or exercisable or convertible within 60 days, are deemed
outstanding for computing the percentage ownership of the person
holding such options, but are not deemed outstanding for computing the
percentage ownership of any other person. Except as otherwise
specified, each of the stockholders named in the table has indicated to
us that such stockholder has sole voting and investment power with
respect to all shares of common stock beneficially owned by that
stockholder.
(2)......The business address of the named beneficial owner is I-20 at Alpine
Road, Columbia, SC 29219. The shares reflected in the table are held of
record by Companion HealthCare Corporation (4,026,829 shares) and
Companion Property and Casualty (618,181 shares), each of which is a
wholly owned subsidiary of Blue Cross and Blue Shield of South
Carolina.
(3) The business address of the named beneficial owner is 2370 Main Street,
Tucker, Georgia 30084. (4) The business address of the named beneficial owner is
1829 Senate Street, Columbia, SC 29201. (5) Includes 74,825 shares issuable
pursuant to currently exercisable stock options. (6) All shares are issuable
pursuant to currently exercisable stock options.
MANAGEMENT
Directors
The following sets forth certain information concerning the persons nominated
for election as directors. As used in this proxy statement, the term UCI-SC
refers to UCI Medical Affiliates of South Carolina, Inc., one of our
wholly-owned subsidiaries; the term DC-SC refers to Doctor's Care P.A., a
professional corporation affiliated with us and UCI-SC; the term UCI-GA refers
to UCI Medical Affiliates of Georgia, Inc., one of our wholly-owned
subsidiaries; and the term the P.A.s refers to DC-SC and Doctor's Care of
Tennessee, P.C., a professional corporation affiliated with us.
Nominees for Election as Directors at the Annual Meeting for Terms Expiring
at the Third Annual Meeting of Stockholders After the Date of Their Election
Harold H. Adams, Jr., 57, has served as one of our directors since June 1994 and
as President and owner of Adams and Associates, International, Adams and
Associates, and Southern Insurance Managers since June 1992. He served as
President of Adams Eaddy and Associates, an independent insurance agency, from
1980 to 1992. Mr. Adams has been awarded the Chartered Property Casualty
Underwriter designation and is currently a member of the President's Board of
Visitors of Charleston Southern University in Charleston, South Carolina. He has
received numerous professional awards as the result of over 32 years of
involvement in the insurance industry and is a member of many professional and
civic organizations. Mr. Adams was most recently reelected as a director at the
annual meeting of stockholders in 2000.
Charles M. Potok, 55, has served as one of our directors since September 1995;
as Executive Vice President and Chief Operating Officer of Companion Property
and Casualty Company, a wholly-owned subsidiary of Blue Cross and Blue Shield of
South Carolina, since March 1984; and, as President of Companion Property and
Casualty Company since April 2002. Mr. Potok is an Associate of the Casualty
Actuarial Society and a member of the American Academy of Actuaries. Prior to
joining Companion Property and Casualty Company, Mr. Potok served as Chief
Property and Casualty Actuary and Director of the Property and Casualty Division
of the South Carolina Department of Insurance. Mr. Potok was most recently
reelected as a director at the annual meeting of stockholders in 1997.
Nominees for Election as Directors at the Annual Meeting for Terms Expiring
at the Second Annual Meeting of Stockholders After the Date of Their Election
John M. Little, Jr., M.D., MBA, 54, has served as one of our directors since
August 11, 1998 and as Chief Medical Officer of Companion HealthCare
Corporation, a wholly-owned subsidiary of Blue Cross and Blue Shield of South
Carolina, since 1996. Additionally, he has served since 1994 as Medical Director
of Managed Care Services of Companion HealthCare Corporation, as Chairman of the
Quality Assurance Committee and the Pharmacy and Therapeutics Committee of
Companion HealthCare Corporation, and as a Co-Chair of the Managed Care
Oversight Committee of Companion HealthCare Corporation. Prior to joining
Companion HealthCare Corporation in 1994, Dr. Little served as Assistant
Chairman for Academic Affairs, Department of Family Practice, Carolinas Medical
Center, Charlotte, North Carolina from 1992 to 1994. Dr. Little was most
recently reelected as a director at the annual meeting of stockholders in 1999.
Ashby M. Jordan, M.D., 64, has served as one of our directors since August 1996
and as Vice President of Medical Affairs of Blue Cross and Blue Shield of South
Carolina since December 1986. Prior to joining Blue Cross and Blue Shield of
South Carolina, Dr. Jordan was the Vice President of Medical Affairs for CIGNA
HealthPlan of South Florida, Inc. Dr. Jordan is Board Certified by the American
Board of Pediatrics. Dr. Jordan was most recently reelected as a director at the
annual meeting of stockholders in 1999.
Nominees for Election as Directors at the Annual Meeting for Terms Expiring
at the First Annual Meeting of Stockholders After the Date of Their Election
Louis M. McElveen, CPA, CVA, 41, received his B.S. in Accounting, as well as his
Masters degree in Accountancy/Taxation from the University of South Carolina. He
is licensed to practice in multiple States, and is a member of several societies
including: American Institute of Certified Public Accounts (AICPA), S.C.
Association of Certified Public Accounts (SCACPA), where he is also Chairman of
the Taxation Committee and the National Association of Certified Valuation
Analysts (NACVA). Mr. McElveen is currently the Chief Financial Officer of
Southern Anesthesia & Surgical, Inc, a privately-owned, national pharmaceutical
distribution company. Prior to this, he was Partner in Charge of Taxation with
Scott McElveen, LLP, a private CPA firm. Mr. McElveen has had 17 years of public
accounting, of which, 9 years were spent with international accounting firms.
Mr. McElveen is a board member of several local non-profit organizations.
Timothy L. Vaughn, CPA, 38, has served as Chief Financial Officer of Companion
HealthCare since January, 2002. Prior to that, Vaughn was Contracts Manager for
Blue Cross Blue Shield of South Carolina's TRICARE line of business. This
federal program provides health benefits administration for military dependents
and retirees across the nation. Vaughn is a Certified Public Accountant and is a
Fellow in both the Academy of Healthcare Management and Life Management
institute and is currently serving as Corporate Secretary and Treasurer of EAP
Alliance, Inc., which provides employee assistance programs to business and
industry. He is a member of numerous civic and professional organizations.
Executive Officers
The following sets forth certain information concerning the persons who
currently serve as our executive officers who do not also serve on the Board of
Directors.
D. Michael Stout, M.D., 58, has served as Executive Vice President of Medical
Affairs of UCI and DC-SC since 1985 and as President and Chief Executive Officer
of UCI, UCI-SC, UCI-GA and the P.A.s since November 1, 2002. He is Board
Certified in Emergency Medicine and is a member of the American College of
Emergency Physicians, the Columbia Medical Society, and the American College of
Physician Executives.
Jerry F. Wells, Jr., 41, has served as our Chief Financial Officer and Executive
Vice President since he joined us in February 1995 and as our Corporate
Secretary since December 1996. He has served as Executive Vice President of
Finance, Chief Financial Officer and Corporate Secretary of UCI-SC since
December 1996, and of UCI-GA since its organization in February 1998, and as
Corporate Secretary of DC-SC since December 1996. Prior to joining us, he served
as a Senior Manager and consultant for Pricewaterhouse Coopers LLP from 1985
until February 1995. Mr. Wells is a certified public accountant and is a member
of the American Institute of Certified Public Accountants, the South Carolina
Association of Certified Public Accountants, and the North Carolina CPA
Association.
Board of Directors and Board Committees
Board of Directors
The Board of Directors met or acted by written consent a total of three times
during our fiscal year ended September 30, 2002. No director attended fewer than
75 percent of the total of such Board meetings and the meetings of the
committees upon which the director served. Among the standing committees
established by the Board of Directors are a Compensation Committee, an Audit
Committee, and a Revenue Enhancement Committee. The Board of Directors has not
established a nominating committee for recommending to stockholders candidates
for positions on the Board of Directors. Such functions are currently performed
by the Board of Directors acting as a whole. Currently, six directors serve on
the Board of Directors.
Audit Committee
The Audit Committee consists of Mr. Adams and Dr. Jordan. This committee
recommends to the Board of Directors the engagement of our independent auditors,
determines the scope of the auditing of our books and accounts, reviews the
reports submitted by the auditors, examines procedures employed in connection
with our internal control structure, reviews and approves the terms of
acquisitions between us and any related party entities, undertakes certain other
activities related to our fiscal affairs, and makes recommendations to the Board
of Directors as may be appropriate. This committee met one time during our
fiscal year ended September 30, 2002. The report of the Audit Committee appears
in this proxy statement on page 11.
Compensation Committee
The Compensation Committee consists of Dr. Little, Mr. Johnson, and Mr.
Potok. This committee monitors our executive compensation plan, practice and
policies, including all salaries, bonus awards and fringe benefits, and makes
recommendations to the Board of Directors with respect to changes in existing
executive compensation plans and the formation and adoption of new executive
compensation plans. This committee met one time during our fiscal year ended
September 30, 2002. The report of the Compensation Committee appears in this
proxy statement on page 11.
Revenue Enhancement Committee
The Revenue Enhancement Committee consists of Messrs. Adams and Potok. This
committee monitors our ancillary and complementary services and makes
recommendations to the Board of Directors with respect to changes in such
existing services. This committee did not meet during our fiscal year ended
September 30, 2002.
Executive Compensation
The following table sets forth the total compensation earned during the
fiscal year ended September 30, 2002 and during each of the two prior fiscal
years by our President and Chief Executive Officer and our other executive
officers whose annual compensation from us exceeded $100,000 for all services
provided to us. No other of our executive officers earned compensation in excess
of $100,000 for services provided to us in any of the three fiscal years
reflected in the table.
Summary Compensation Table
Long Term
Compensation
Annual Awards
Compensation
Securities
Underlying All Other
Name and Principal Position Fiscal Year Salary (1) Bonus (1) Options Compensation (2)
--------------------------- ----------- ---------- --------- ------- ----------------
M. F. McFarland, III, M.D. 2002 $ 325,000 (3) $155,500 0 9,272
Chairman, President and 2001 325,000 (3) 0 0 9,272
Chief Executive Officer 2000 325,000 (3) 0 0 9,272
D. Michael Stout, M.D. 2002 $ 210,000 (4$ 58,000 0 0
Executive Vice President of 2001 210,000 (4) 0 0 0
Medical Affairs 2000 210,000 (4) 0 0 0
Jerry F. Wells, Jr. 2002 $ 137,600 $ 38,000 0 0
Executive Vice President of 2001 112,000 0 0 0
Finance, Chief Financial Officer, 2000 99,640 0 0 0
and Secretary
(1) Amounts included under the heading "Salary" and "Bonus" include
compensation from both UCI-SC and DC-SC. The remuneration described in
the table above does not include our cost of benefits furnished to
certain officers that were extended in connection with the conduct of
our business. The amount of such benefits accrued for each of the named
executives in each of the years reflected in the table did not exceed
10% of the total annual salary and bonus reported for such executive in
such year.
(2) Amounts included under the heading "All Other Compensation" are
comprised of premiums for long-term disability and life insurance
provided by us for the benefit of Dr. McFarland.
(3) For services performed by Dr. McFarland for UCI-SC, Dr. McFarland
received an annual salary of $157,500 during each of the three fiscal
years ended September 30, 2002, 2001, and 2000. For services performed
by Dr. McFarland for DC-SC, an affiliated professional association
which was wholly owned by Dr. McFarland that contracts with UCI-SC to
provide all medical services at our medical facilities, Dr. McFarland
received an annual salary of $167,500 for each of the three fiscal
years ended September 30, 2002, 2001, and 2000. Dr. McFarland's
employment with UCI-SC and DC-SC terminated on November 1, 2002.
(4) For services performed by Dr. Stout for UCI-SC, Dr. Stout received an
annual salary of $50,000 in each of the three fiscal years ended
September 30, 2002, 2001, and 2000. For services performed by Dr. Stout
for DC-SC, Dr. Stout received an annual salary of $160,000 in each of
the three fiscal years ended September 30, 2002, 2001, and 2000. Dr.
Stout has served as the President and Chief Executive Officer of UCI,
UCI-SC, UCI-GA, and DC-SC since November 2002.
Fiscal Year-End Option Values
The following table sets forth certain information with respect to
unexercised options to purchase our common stock held at September 30, 2002.
None of the named executive officers exercised any options during the fiscal
year ended September 30, 2002. Additionally, no options were granted to any
officer or director during the fiscal year ended September 30, 2002.
2002 FISCAL YEAR-END
OPTION VALUES
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money
Fiscal Year End Options at Fiscal Year End
------------------------------------------ ---------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------- ---------------------- -------------------- -------------------
0 0 0 0
M.F. McFarland, III, M.D. Chairman, President and Chief Executive Officer
74,825 0 0 0
D. Michael Stout, M.D. Executive Vice President
of Medical Affairs
134,825 0 0 0
Jerry F. Wells, Jr.
Executive Vice President of
Finance, Chief
Financial Officer, and
Secretary
Director Compensation
We pay our non-employee directors a fee of $500 for attendance at each
meeting of our Board of Directors. We reimburse our non-employee directors for
all out-of-pocket expenses reasonably incurred by them in the discharge of their
duties as directors, including out-of-pocket expenses incurred in attending
meetings of the Board of Directors.
During the fiscal year ended September 30, 1996, we adopted a
Non-Employee Director Stock Option Plan (the "1996 Non-Employee Plan"). The 1996
Non-Employee Plan provided for the granting of options to two non-employee
directors for the purchase of 10,000 shares of our common stock at the fair
market value as of the date of grant. Under this plan, we issued 5,000 options
to Harold H. Adams, Jr. and 5,000 options to Russell J. Froneberger. These
options are exercisable during the period commencing on March 20, 1999 and
ending on March 20, 2006. At September 30, 2002, stock options for 10,000 shares
were outstanding under the 1996 Non-Employee Plan, all of which were
exercisable.
During the fiscal year ended September 30, 1997, we adopted a
Non-Employee Director Stock Option Plan (the "1997 Non-Employee Plan"). The 1997
Non-Employee Plan provided for the granting of options to four non-employee
directors for the purchase of 20,000 shares of our common stock at the fair
market value as of the date of grant. Under this plan, we issued 5,000 options
each to Thomas G. Faulds, Ashby M. Jordan, M.D., and Charles M. Potok. These
options are exercisable during the period commencing on March 28, 2000 and
ending on March 28, 2007. At September 30, 2002, stock options for 15,000 shares
were outstanding under the 1997 Non-Employee Plan, all of which were
exercisable.
Employment Contracts
None
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended September 30, 2002, the Compensation
Committee of the Board of Directors decided matters of executive compensation.
The Compensation Committee is currently composed of Dr. Little, Mr. Johnson, and
Mr. Potok. None of the members of the Compensation Committee have served as our
executive officers or employees or as executive officers or employees of any of
our subsidiaries. None of the members of the Compensation Committee served as
members of the compensation committees of another entity. None of our executive
officers served as a member of the compensation committee of another entity, one
of whose executive officers served on our Compensation Committee. None of our
executive officers served as a director of another entity, one of whose
executive officers served as one of our directors.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors generally
determines the compensation of our executive officers and has furnished the
following report with respect to certain compensation paid or awarded to our
executive officers during the fiscal year ended September 30, 2002.
General Policies. Our compensation program is intended to enable us to attract,
motivate, reward, and retain the management talent to achieve corporate
objectives and thereby increase shareholder value. Our policy is to provide
incentives to senior management to achieve both short-term and long-term
objectives. To attain these objectives, our executive compensation program is
composed of a base salary and bonus.
Base Salary. Base salaries for each of Dr. McFarland, Dr. Stout, and Mr. Wells
were determined by a subjective assessment of the executive officer's
performance, in light of the officer's responsibilities and position with us and
our performance during prior periods. In evaluating our overall performance, the
primary focus is upon not only our financial performance, but also on the
personal performance of the executives in areas such as quality assurance and
personal development.
Incentive Compensation. Incentive compensation for each of Dr. McFarland and Dr.
Stout was established in his respective employment agreement, both of which are
no longer in effect as of the date of this proxy statement, and was most
influenced by our profitability. Such compensation is completely "at risk"
depending upon our performance. The Compensation Committee reviews periodically,
and adjusts accordingly, incentive compensation.
Stock Options. Executive compensation includes the grant of stock options in
order to more closely align the interests of the executive with the long-term
interests of the shareholders.
Report of Compensation Committee: John M. Little, Jr., MD, MBA; A. Wayne
Johnson; and Charles M. Potok
Audit Committee Report
The Audit Committee has reviewed and discussed the audited financial
statements for the year ended September 30, 2002 with management and the
independent auditors, Scott McElveen, L.L.P. Management represented to the Audit
Committee that our consolidated financial statements were prepared in accordance
with generally accepted accounting principles. The discussions with Scott
McElveen, L.L.P. also included the matters required by Statement on Auditing
Standards No. 61 (Codification of Statements on Auditing Standards).
Scott McElveen, L.L.P. provided to the Audit Committee the written
disclosures and the letter regarding its independence as required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees). The Audit Committee discussed this information with Scott McElveen,
L.L.P.
Based on the above-described discussions and reviews, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements be included in our Annual Report on Form 10-K for the year
ended September 30, 2002 and filed with the Securities and Exchange Commission
on December 27, 2002.
Our Board of Directors has adopted a written charter for the audit
committee, which is attached hereto as an Appendix A.
Report of the Audit Committee: Harold H. Adams, Jr. and Ashby M. Jordan, M.D.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires our directors and officers to
file reports of holdings and acquisitions in common stock with the Securities
and Exchange Commission. Based on our records and other information, we believe
that all SEC filing requirements applicable to our directors and officers were
complied with in respect to our fiscal year ended September 30, 2002.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Administrative Services Agreements
UCI-SC has entered into an Administrative Services Agreement with
DC-SC. UCI-GA has entered into Administrative Services Agreements with Doctor's
Care of Tennessee, P.C. Under these Administrative Services Agreements, UCI-SC
and UCI-GA perform all non-medical management of the P.A.s and have exclusive
authority over all aspects of the business of the P.A.s (other than those
directly related to the provision of patient medical services or as otherwise
prohibited by state law). The non-medical management provided by UCI-SC and
UCI-GA includes, among other functions, treasury and capital planning, financial
reporting and accounting, pricing decisions, patient acceptance policies,
setting office hours, contracting with third party payors and all administrative
services. UCI-SC and UCI-GA provide all of the resources (systems, procedures
and staffing) to bill third party payors or patients, and provide all of the
resources (systems, procedures and staffing) for cash collection and management
of accounts receivables, including custody of the lockbox where cash receipts
are deposited. From the cash receipts, UCI-SC and UCI-GA pay all physician
salaries, operating costs of the centers and operating costs of UCI-SC and
UCI-GA. Compensation guidelines for the licensed medical professionals at the
P.A.s are set by UCI-SC and UCI-GA, and UCI-SC and UCI-GA establish guidelines
for establishing, selecting, hiring and firing the licensed medical
professionals. UCI-SC and UCI-GA also negotiate and execute substantially all of
the provider contracts with third party payors, with the P.A.s executing certain
of the contracts at the request of a minority of payors. Neither UCI-SC nor
UCI-GA loans or otherwise advances funds to any P.A. for any purposes.
During UCI's fiscal years ended September 30, 2002 and 2001, the P.A.s
received an aggregate of approximately $38,527,000 and $38,117,000,
respectively, in fees prior to deduction by the P.A.s of their payroll and other
related deductible costs covered under the Administrative Agreement and its
predecessor agreement. For accounting purposes, the operations of the P.A.s are
combined with the operations of UCI and are reflected in our consolidated
financial statements. Pursuant to the employment agreement, in effect during the
period covered by this report, between DC-SC and Dr. McFarland, Dr. McFarland
served as Executive Medical Director of the centers and was paid an annual
salary for his services in such position. Pursuant to the employment agreement
in effect during the period covered by this report between DC-SC and Dr. Stout,
Dr. Stout provided medical services to DC-SC and was paid an annual salary for
such services. During the period covered by this report, Dr. McFarland was the
Chief Executive Officer of UCI and was the President, sole director and sole
owner of DC-SC. As of November 1, 2002, Dr. Stout has served as the President
and Chief Executive Officer of UCI, UCI-SC, UCI-GA, and the P.A.s. During the
period covered by this report, Dr. Stout was the Executive Vice President of
Medical Affairs for UCI, UCI-SC and UCI-GA, and was the President, sole director
and sole stockholder of the P.A.s.
Medical Center Leases
The Doctor's Care Northeast facility is leased from a partnership in
which Dr. McFarland is a general partner. The lease was renewed in October 1997
for a fifteen-year term. The terms of this lease are believed to be no more or
less favorable to UCI-SC than those that would have been obtainable through
arm's-length negotiations with unrelated third parties for similar arrangements.
Total lease payments made by UCI-SC under this lease during the fiscal years
ended September 30, 2002 and 2001 were $96,000 each year, plus utilities and
real estate taxes.
Other Transactions with Related Parties
At June 2, 2003, Companion HealthCare Corporation owned 4,026,829
shares of common stock and Companion Property and Casualty owned 618,181 shares
of common stock, which combine to approximately 48.13 percent of the outstanding
common stock. Each of Companion HealthCare Corporation and Companion Property
and Casualty is a wholly owned subsidiary of Blue Cross and Blue Shield of South
Carolina. The following is a historical summary of purchases of common stock by
Blue Cross and Blue Shield of South Carolina subsidiaries directly from us.
Price Total
Date Blue Cross and Blue Shield of South Number per Purchase
Purchased Carolina of Shares Share Price
Subsidiary
------------------- ------------------------------------- -------------- ------------ ------------------
12/10/93 Companion HealthCare Corporation 333,333 $1.50 $ 500,000
06/08/94 Companion HealthCare Corporation 333,333 3.00 1,000,000
01/16/95 Companion HealthCare Corporation 470,588 2.13 1,000,000
05/24/95 Companion HealthCare Corporation 117,647 2.13 250,000
11/03/95 Companion HealthCare Corporation 218,180 2.75 599,995
12/15/95 Companion HealthCare Corporation 218,180 2.75 599,995
03/01/96 Companion HealthCare Corporation 109,091 2.75 300,000
06/04/96 Companion Property and Casualty 218,181 2.75 599,998
06/23/97 Companion Property and Casualty 400,000 1.50 600,000
Additionally, on May 13, 2003, Companion HealthCare Corporation
purchased 2,020,387 shares of common stock from MainStreet Healthcare
Corporation and other shareholders for 40 cents ($0.40) per share for a total
purchase price of $808,155.
The common stock acquired by Companion HealthCare Corporation and
Companion Property and Casualty directly from us was purchased pursuant to
exemptions from the registration requirements of federal securities laws
available under Section 4(2) of the 1933 Act. Consequently, the ability of the
holders to resell such shares in the public market is subject to certain
limitations and conditions. The shares acquired by Companion HealthCare
Corporation and Companion Property and Casualty were purchased at share prices
below market value at the respective dates of purchase in part as a consequence
of the lower issuance costs incurred by us in the sale of these unregistered
securities and in part as consequence of the restricted nature of the shares.
Companion HealthCare Corporation and Companion Property and Casualty have the
right to require registration of the stock under certain circumstances as
described in the respective stock purchase agreements.
These Blue Cross and Blue Shield of South Carolina subsidiaries have
the option to purchase as many shares as may be necessary for Blue Cross and
Blue Shield of South Carolina and its subsidiaries in the aggregate to obtain
and maintain ownership of 47 percent of the outstanding common stock in the
event that we issue additional stock to other parties (excluding shares issued
to our employees or directors). To the extent either of these Blue Cross and
Blue Shield of South Carolina subsidiaries exercises its right in conjunction
with a sale of voting stock by us, the price to be paid by such entity is the
average price to be paid by the other purchasers in that sale. Otherwise, the
price is the average closing bid price of our voting stock on the ten trading
days immediately preceding the election by a Blue Cross and Blue Shield of South
Carolina subsidiary to exercise its purchase rights. Consequently, to the extent
either of the Blue Cross and Blue Shield of South Carolina subsidiaries elects
to exercise any or a portion of its rights under these anti-dilution agreements,
the sale of shares of common stock to a Blue Cross and Blue Shield of South
Carolina subsidiary will have the effect of reducing the percentage voting
interest in us represented by a share of the common stock.
During the fiscal year ended September 30, 1998, UCI-SC entered into a
capital lease purchase agreement with Blue Cross and Blue Shield of South
Carolina for a new billing and accounts receivable system, which includes
computer equipment, for an aggregate purchase price of $1,253,000. UCI-SC has
the option to purchase the equipment at the end of the lease term for $1. The
lease obligation recorded at September 30, 2002 is $628,000, which includes
lease addenda. The terms of the lease purchase agreement are believed to be no
more or less favorable to UCI-SC than the terms that would have been obtainable
through arm's-length negotiations with unrelated third parties for a similar
billing and accounts receivable system, which includes computer equipment.
During the fiscal year ended September 30, 1994, UCI-SC entered into an
agreement with Companion Property and Casualty pursuant to which UCI-SC, through
DC-SC, acts as the primary care provider for injured workers of firms carrying
worker's compensation insurance through Companion Property and Casualty.
Additionally, during the fiscal year ended September 30, 1995, UCI-SC executed a
$400,000 note payable to Companion Property and Casualty payable in monthly
installments of $4,546 (including 11 percent interest) from April 1, 1995 to
March 1, 2010. The terms of the agreement with Companion Property and Casualty
are believed to be no more or less favorable to UCI-SC than those that would
have been obtainable through arm's-length negotiations with unrelated third
parties for similar arrangements.
UCI-SC, through DC-SC, provides services to members of a health
maintenance organization operated by Companion HealthCare Corporation who have
selected DC-SC as their primary care provider. The terms of the agreement with
Companion HealthCare Corporation are believed to be no more or less favorable to
UCI-SC than those that would have been obtainable through arm's-length
negotiations with unrelated third parties for similar arrangements.
PERFORMANCE GRAPH
The following graph compares cumulative total shareholder return of our common
stock over a five-year period with The Nasdaq Stock Market (US) Index and with a
Peer Group of companies for the same period. Total shareholder return represents
stock price changes and assumes the reinvestment of dividends. The graph assumes
the investment of $100 on September 30, 1997.
Fiscal Year Ended
-----------------------------------------------------------------------------------
09/30/97 09/30/98 09/30/99 09/30/00 09/30/01 09/30/02
----------- ---------- ----------- ---------- ---------- ----------
UCI Medical Affiliates, Inc. 100.00 45.00 22.50 16.25 12.40 10.40
Nasdaq Market Index 100.00 103.92 168.12 229.98 94.23 75.81
Peer Group 100.00 93.24 36.76 45.57 103.61 69.79
The members of the Peer Group are AmeriPath, Inc., Continucare Corporation,
IntegraMed America, Inc., Pediatrix Medical Group, Inc., and Metropolitan Health
Networks. Metropolitan Health Networks replaced PhyCor, Inc., which was a member
of the Peer Group for the 10-K for fiscal year ended September 30, 2001, because
based on our knowledge, PhyCor, Inc. has been liquidated in bankruptcy. The
returns of each company in the Peer Group have been weighted according to their
respective stock market capitalization for purposes of arriving at a Peer Group
average. The prices of our common stock used in computing the returns reflected
above are the average of the high and low bid prices reported for our common
stock during the fiscal quarter ended on such dates.
SCOTT MCELVEEN, L.L.P.'s FEES
Audit Fees
During fiscal year ended September 30, 2002, Scott McElveen, L.L.P.
billed us an aggregate of $56,313 for professional services rendered for the
audit of our annual financial statements for the year ended September 30, 2002
and reviews of the financial statements included in our Forms 10-Q for that
year. We estimate that the total fees for such services for the year ended
September 30, 2003 will be approximately $60,000.
Financial Information Systems Design and Implementation Fees
During the year ended September 30, 2002, Scott McElveen, L.L.P. did
not provide us with any services related to financial information systems design
or implementation.
All Other Fees
During the year ended September 30, 2002, Scott McElveen, L.L.P. billed
us an aggregate of $17,776 for the following professional services provided
during 2002: tax return preparation, assistance with preparation of the Annual
Report on Form 10-K, audit of our retirement plan, and advice relating to
internal audit functions. Scott McElveen, L.L.P. has informed us that no
additional amounts shall be billed during 2003 for such services provided in
2002. The Audit Committee considered whether provision of these services was
compatible with maintaining Scott McElveen, L.L.P.'s independence.
EQUITY COMPENSATION PLAN INFORMATION
The following table gives information about our common stock that may
be issued upon the exercise of options, warrants and rights under all of our
existing equity compensation plans as of September 30, 2002.
Number of securities
remaining available for
Number of securities future issuance under
to be issued upon Weighted-average equity compensation
exercise of exercise price of plans {excluding
outstanding options, outstanding options, securities reflected in
Plan category warrants and rights warrants and rights column (a)}
- ---------------------------------- ----------------------- ----------------------- -------------------------
- ---------------------------------- ----------------------- ----------------------- -------------------------
(a) (b) (c)
Equity compensation plans
approved by security holders 524,950 2.49 409,350
Equity compensation plans not
approved by security holders
0 0 0
----------------------- ----------------------- -------------------------
----------------------- ----------------------- -------------------------
Total 524,950 2.49 409,350
======================= ======================= =========================
MISCELLANEOUS
The information referred to under the captions "Compensation Committee
Report on Executive Compensation", "Performance Graph" and "Audit Committee
Report" (to the extent permitted under the Securities Exchange Act of 1934): (i)
shall not be deemed to be "soliciting material" or to be "filed" with the
Securities and Exchange Commission or subject to Regulation 14A or the
liabilities of Section 18 of the Securities Exchange Act of 1934, and (ii)
notwithstanding anything to the contrary that may be contained in any filing by
us under the Securities Exchange Act of 1934 or the Securities Act of 1933,
shall not be deemed to be incorporation by reference in any such filing.
ANNUAL REPORT
A copy of our Annual Report on Form 10-K for the fiscal year ended
September 30, 2002, which was filed with the Securities and Exchange Commission
on December 27, 2002, accompanies this proxy statement.
By order of the Board of Directors,
D. Michael Stout, M.D.
President and Chief
Executive Officer
Columbia, South Carolina
June 18, 2003
A-3
APPENDIX A
UCI MEDICAL AFFILIATES, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
Organization
The audit committee of the board of directors shall be comprised of at
least two directors who are independent of management and the company. Members
of the audit committee shall be considered independent if they have no
relationship to the company that may interfere with the exercise of their
independence from management and the company. A director will not be considered
"independent" if, among other things, he or she has:
X been employed by the corporation or its affiliates in the current or past
three years;
X accepted any compensation from the corporation or its affiliates in excess
of $60,000 during the previous fiscal year (except for board service,
retirement plan benefits, or non-discretionary compensation);
X an immediate family member who is, or has been in the past three years,
employed by the corporation or its affiliates as an executive officer;
X been a partner, controlling shareholder or an executive officer of any
for-profit business to which the company made, or from which it received,
payments (other than those which arise solely from investments in the
corporation's securities) that exceed five percent of the organization's
consolidated gross revenues for that year, or $200,000, whichever is more,
in any of the past three years; or
X been employed as an executive of another entity where any of the company's
executives serve on that entity's compensation committee.
All audit committee members will be financially literate, and at least one
member will have accounting or financial management expertise.
Statement of Policy
The audit committee shall provide assistance to the directors in fulfilling
their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the company, and the quality and integrity of financial reports to the company.
In doing so, it is the responsibility of the audit committee to maintain free
and open communication between the directors, the independent auditors, and the
financial management of the company.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the company are in accordance
with all requirements and are of the highest quality. The primary
responsibility of the audit committee is to oversee the company's financial
reporting process on behalf of the board and report the results of their
activities to the board. Management is responsible for preparing the company's
financial statements, and the independent auditors are responsible for auditing
those financial statements.
In carrying out these responsibilities, the audit committee will:
C Obtain the full board of director's approval of this Charter and review and
reassess this Charter as conditions dictate (or at least annually).
C Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the company and its divisions
and subsidiaries.
C Have a clear understanding with the independent auditors that they are
ultimately accountable to the board of directors and the audit committee,
as the shareholders' representatives, who have the ultimate authority in
deciding to engage, evaluate, and if appropriate, terminate their services.
C Meet with the independent auditors and financial management of the company
to review the scope of the proposed audit and timely quarterly reviews for
the current year and the procedures to be utilized, the adequacy of the
independent auditor's compensation, and at the conclusion thereof review
such audit or review, including any comments or recommendations of the
independent auditors.
C Review with the independent auditors, and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the company, and elicit any recommendations for the improvement
of such internal controls or particular areas where new or more detailed
controls or procedures are desirable. Particular emphasis should be given
to the adequacy of internal controls to expose any payments, transactions,
or procedures that might be deemed illegal or otherwise improper.
C Review reports received from regulators and other legal and regulatory
matters that may have a material effect on the financial statements or
related company compliance policies.
C Review with management the proposed audit plans for the coming year, and
the coordination of such plans with the independent auditors.
C Inquire of management and the independent auditors about significant risks
or exposures and assess the steps management has taken to minimize such
risks to the company.
C Review the quarterly financial statements with financial management and the
independent auditors prior to the filing of the Form 10-Q (or prior to the
press release of results, if possible) to determine that the independent
auditors do not take exception to the disclosure and content of the
financial statements and discuss any other matters required to be
communicated to the committee for purposes of this review.
C Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that the
independent auditors are satisfied with the disclosure and the content of the
financial statements to be presented to the shareholders. Review with the
financial management and the independent auditors the results of their timely
analysis of significant financial reporting issues and practices, including
changes in, or adoptions of, accounting principles and disclosure practices, and
discuss any other matters required to be communicated to the committee by the
auditors. Also review with financial management and the independent auditors
their judgments about the quality, not just acceptability, of accounting
principles and the clarity of the financial disclosure practices used or
proposed to be used, and particularly, the degree of aggressiveness or
significant decisions made in preparing the financial statements.
C Provide sufficient opportunity for independent auditors to meet with the
members of the audit committee without members of management present. Among
the items to be discussed in these meetings are the independent auditor's
evaluation of the company's financial, accounting, personnel, and the
cooperation that the independent auditors received during the course of the
audit.
C Review accounting and financial human resources within the company.
C Report the results of the annual audit to the board of directors. If
requested by the board, invite the independent auditors to attend the full
board of directors meeting to assist in reporting the results of the annual
audit or to answer other directors' questions (alternatively, the other
directors, particularly the other independent directors, may be invited to
attend the audit committee meeting during which the results of the annual
audit are reviewed.).
C On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional services
as required by independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees. In addition, review with independent
auditors the nature and scope of any disclosed relationships or
professional services and take, or recommend that the board of directors
take appropriate action to ensure the continuing independence of the
auditors.
C Review the report of the audit committee in the annual report to
shareholders and the Annual Report on Form 10-K disclosing whether or not
the committee had reviewed and discussed with management and the
independent auditors, as well as discussed within the committee (without
management or the independent auditors present), the financial statements
and the quality of accounting principles and significant judgments
affecting the financial statements. In addition, disclose the committee's
conclusion on the fairness of presentation of the financial statements in
conformity with GAAP based on those discussions.
C Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
C Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if in its
judgment, that is appropriate.
C Review the company's disclosure in the proxy statement for its annual
meeting of shareholders that describes that the Committee has satisfied its
responsibilities under this Charter for the prior year. In addition,
include a copy of this Charter in the annual report of shareholders or the
proxy statement at least triennially or the year after amendment to the
Charter.
A-[PG NUMBER]
UCI MEDICAL AFFILIATES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, JULY 30, 2003 AT THE ADAM'S MARK HOTEL, 1200 HAMPTON
STREET, COLUMBIA, SOUTH CAROLINA AT 10:00 A.M. LOCAL TIME.
The undersigned hereby acknowledges receipt of the Notice of annual
meeting of stockholders and proxy statement for the above-referenced annual
meeting and appoints each of Jerry F. Wells, Jr. and S. Louise Parker as proxy
and attorney-in-fact of the undersigned, each with full power of substitution,
to vote all of the shares of common stock of UCI Medical Affiliates, Inc., a
Delaware corporation, held or owned by the undersigned or standing in the name
of the undersigned at the annual meeting of our stockholders and at any
adjournments thereof, and the undersigned hereby instructs said proxies and
attorneys to vote as follows:
1. Election of Directors: Terms as set forth in proxy statement
FOR the nominee WITHHOLD AUTHORITY
listed below to vote as to the nominee
Harold H. Adams, Jr. [ ] [ ]
Charles M. Potok [ ] [ ]
John M. Little, Jr., M.D. [ ] [ ]
Ashby M. Jordan, M.D. [ ] [ ]
Louis M. McElveen [ ] [ ]
Timothy L. Vaughn [ ] [ ]
2. To ratify the appointment of Scott McElveen, L.L.P. as our
independent auditors for the fiscal year ended September 30,
2003.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In the discretion of each proxy and attorney-in-fact, upon any
other business which may properly come before the meeting or
any adjournment thereof.
DATE: , 2003
-----------------------------------------------
____________________________________
(Signature)*
NUMBER OF SHARES:
---------------------------
____________________________________
(Signatures, if held jointly)
_____________________________________
Print Name
Note: Please sign exactly as shown on the envelope addressed to you. When
shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian, or corporate
officer or partner, please give full title as such. If a corporation,
please sign in corporate name by president or other authorized officer.
If a partnership, please sign in partnership name by authorized person.
THIS PROXY WILL BE VOTED AS INSTRUCTED. IN THE ABSENCE OF SUCH INSTRUCTIONS,
THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED, AND THE PROXIES
HEREIN NAMED WILL VOTE ON OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF IN ACCORDANCE WITH THEIR JUDGMENT.