(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 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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-12
SANDATA, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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SANDATA, INC.
26 Harbor Park Drive
Port Washington, New York 11050
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 20, 2001
To the Stockholders of Sandata, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of SANDATA, INC., a Delaware corporation ("Sandata"), will be held at
Sandata's executive offices, 26 Harbor Park Drive, Port Washington, New York
11050 at 11:00 a.m. local time on November 20, 2001, for the following purposes:
(1) To elect a board of five (5) Directors;
(2) To approve an amendment to the Certificate of Incorporation, which
would change Sandata's corporate name; and
(3) To transact such other business as may properly come before the
Meeting.
Only stockholders of record at the close of business on October 23, 2001
are entitled to notice of, and to vote at, the Meeting or any adjournment(s) or
postponement(s) thereof.
By Order of the Sandata, Inc.
Board of Directors
Hugh Freund
Secretary
Port Washington, New York
November 2, 2001
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WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO
COMPLETE, VOTE, DATE AND SIGN THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE
BOARD OF DIRECTORS OF SANDATA, AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE
PROVIDED FOR THAT PURPOSE. ANY STOCKHOLDER MAY REVOKE HIS PROXY AT ANY TIME
BEFORE THE MEETING BY WRITTEN NOTICE TO SUCH EFFECT, BY SUBMITTING A
SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
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SANDATA, INC.
26 Harbor Park Drive
Port Washington, New York 11050
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 20, 2001
--------------------
This Proxy Statement and Proxy are being mailed on or about November 2,
2001 to the stockholders of record of Sandata, Inc. ("Sandata" or the "Company")
at the close of business on October 23, 2001 in connection with the solicitation
of proxies by the Board of Directors of Sandata of proxies to be voted at an
Annual Meeting of Stockholders to be held on November 20, 2001 at 11:00 a.m.
(local time), at Sandata's executive offices located at 26 Harbor Park Drive,
Port Washington, New York 11050, and any and all adjournments or postponements
thereof (the "Meeting").
All shares represented by proxies duly executed and received will be voted
on the matters presented at the Meeting in accordance with the specifications
made in such proxies. In the absence of specified instructions, proxies so
received will be voted (1) FOR the named nominees to Sandata's Board of
Directors, and (2) FOR an Amendment to the Certificate of Incorporation to
change the name of Sandata to "Sandata Technologies, Inc." The Board does not
know of any other matters that may be brought before the Meeting nor does it
foresee or have reason to believe that proxy holders will have to vote for
substitute or alternate nominees to the Board. In the event that any other
matter should come before the Meeting or any nominee is not available for
election, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies not marked to the contrary with respect to such
matters in accordance with their best judgment.
The total number of shares of Common Stock, par value $.001 per share, of
Sandata (the "Common Shares") outstanding and entitled to vote as of October 23,
2001 was 2,506,473. The Common Shares are the only class of securities of
Sandata entitled to vote on matters presented to the stockholders of Sandata,
each share being entitled to one noncumulative vote. A majority of the Common
Shares outstanding and entitled to vote as of October 23, 2001 or 1,253,238
Common Shares, must be present at the Meeting in person or by proxy in order to
constitute a quorum for the transaction of business. Only stockholders of record
as of the close of business on October 23, 2001 will be entitled to vote. With
regard to the election of Directors, votes may be cast in favor or withheld.
Directors shall be elected by a plurality of the votes cast for such
individuals. Votes withheld in connection with the election of one or more of
the nominees for Director will not be counted as votes cast for such
individuals. Stockholders may expressly abstain from voting on Proposal 2 by so
indicating on the Proxy. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions are counted as present in the tabulation of votes on
each of the proposals presented to the stockholders. Broker non-votes will not
be counted for the purpose of determining whether a particular proposal has been
approved. Since Proposal 2 requires the affirmative vote of a majority of the
votes of the outstanding Common Shares, abstentions and broker non-votes will
have the effect of a negative vote.
Any Sandata stockholder giving a proxy in the form accompanying this Proxy
Statement has the power to revoke it at any time before its exercise. The proxy
may be revoked by filing with Sandata written notice of revocation or a fully
executed proxy bearing a later date. The proxy may also be revoked by voting in
person while in attendance at the Meeting. However, a stockholder who attends
the Meeting need not revoke a proxy given and vote in person unless the
stockholder wishes to do so. Written revocations or amended proxies should be
sent to Sandata at 26 Harbor Park Drive, Port Washington, New York 11050,
Attention: Corporate Secretary.
This Proxy is being solicited by Sandata's Board of Directors. Sandata will
bear the cost of the solicitation of proxies, including the charges and expenses
of brokerage firms and other custodians, nominees and fiduciaries for forwarding
proxy materials to beneficial owners of Sandata's shares. Solicitations will be
made primarily by mail, but certain Directors, officers or employees of Sandata
may solicit proxies in person or by telephone, telecopier or telegram without
special compensation.
A list of Sandata stockholders entitled to vote at the Meeting will be
available for examination by any stockholder for any purpose for a period of ten
days prior to the Meeting at Sandata's offices, 26 Harbor Park Drive, Port
Washington, New York 11050 and also during the Meeting for inspection by any
stockholder who is present.
Certain information contained in this Proxy Statement includes
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and is subject to the safe harbor created by that
act. The Company cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
any forward-looking statements which may be deemed to have been made in this
Proxy Statement or which are otherwise made by or on behalf of the Company. For
this purpose, any statements contained in this Proxy Statement that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the generality of the foregoing, words such as "may", "will",
"expect", "believe", "anticipate", "intend", "could", "estimate", "plan", or
"continue" or the negative variations thereof, or comparable terminology, are
intended to identify forward-looking statements. Factors which may affect the
Company's results include, but are not limited to, the risks and uncertainties
associated with new technology developments, competitive bidding, litigation,
risks and uncertainties associated with the Internet and Internet-related
products, and other factors.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information for the fiscal years
ending May 31, 2001, 2000 and 1999 concerning the compensation of Bert E.
Brodsky, the Chairman and Chief Executive Officer of the Company; Stephen
Davies, President of the Company from February 2000 until August 6, 2001; Gary
Stoller, Executive Vice President and Chief Technology Officer of the Company;
and Hugh Freund, Executive Vice President and Secretary of the Company. No other
executive officer had a total salary and bonus in excess of $100,000 for the
fiscal year ended May 31, 2001:
=========================== ======= ===================================== ================================== ===========
Annual Compensation Long-Term Compensation
--------------------------- ------- ------------------------------------- ---------------------------------- -----------
--------------------------- ------- ------------ ---------- ------------- ------------------------ --------- -----------
Awards Payouts
--------------------------- ------- ------------ ---------- ------------- ------------------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
Other Restricted Securities All Other
Annual Stock Underlying LTIP Compensation
Salary Bonus Compensa- Awards Options/ Payouts ($)
Name and Principal Year ($) ($) tion ($) SARs (#) ($)
Position ($)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
Bert E. Brodsky, Chairman 2001 310,000 (2) -0- 27,918(4) -0- -0- -0- 41,246 (5)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
2000 200,000 (2) 113,650(3) 14,013 (4) -0- 350,000 -0- 28,564 (5)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
1999 200,000 (2) -0- 22,049 (4) -0- 310,000 -0- 16,678 (5)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
Gary Stoller, Executive 2001 150,000 5,800 22,391 (4) -0- -0- -0- 16,040 (6)
Vice President, Chief
Technology
Officer
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
2000 150,000 5,000 22,391 (4) -0- -0- -0- 16,040 (6)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
1999 119,039 -0- 22,391 (4) -0- 73,500 -0- 16,040 (6)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
Hugh Freund, Executive 2001 165,000 37,500 15,585 (4) -0- -0- -0- 22,670 (7)
Vice President, Secretary 17,064 (8)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
2000 82,789 28,000 15,585 (4) -0- -0- -0- 22,670 (7)
17,064 (8)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
1999 151,346 -0- 15,585 (4) -0- 137,000 -0- 22,669
17,066(8)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
Stephen Davies, President 2001 200,159 -0- -0- -0- 150,000 -0- -0-
(1a)
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
--------------------------- ------- ------------ ---------- ------------- ----------- ------------ --------- -----------
2000 62,307 -0- -0- -0- 100,000 -0- -0-
(1b)
=========================== ======= ============ ========== ============= =========== ============ ========= ===========
(1a) Mr. Davies' employment as President of the Company was terminated on August
6, 2001. For a description of the circumstances surrounding Mr. Davies'
termination, reference is made to the Company's Current Report on Form 8-K
filed on August 13, 2001.
(1b) Represents compensation paid to Mr. Davies from February 1, 2000 through
May 31, 2000, of which $12,000 were consultation fees.
(2) As of May 31, in each of 1999, 2000 and 2001 Mr. Brodsky signed a waiver
wherein he agreed to waive his rights to an additional $300,000, $300,000
and $190,000, respectively, of compensation due to be paid to him for the
fiscal years then ended, pursuant to the terms of the Brodsky Employment
Agreement discussed below under "Employment Agreements, Termination of
Employment and Change-in-Control Agreements."
(3) Represents 25,000 shares of Common Stock granted to Mr. Brodsky on February
4, 2000, and $82,000 in bonus paid in the fiscal year ended May 31, 2000.
(4) Represents personal benefits relating to the use of Company-leased
automobiles provided for business purposes from an affiliate of the
Company's Chairman.
(5) Represents insurance premiums paid by the Company on behalf of Mr. Brodsky,
for life insurance policies on his life, the benefits of which are payable
to his spouse.
(6) Represents insurance premiums paid by the Company on behalf of Mr. Stoller,
for life insurance policies on his life, the benefits of which are payable
to his spouse.
(7) Represents insurance premiums paid by the Company on behalf of Mr. Freund,
for life insurance policies on his life, the benefits of which are payable
to his spouse.
(8) Represents insurance premiums paid by the Company on behalf of Mr. Freund
for life insurance policies on his life, the benefits of which are payable
to an insurance trust, of which Mr. Freund is a co-Trustee.
Option/SAR Grants in Last Fiscal Year
The following table sets forth certain information concerning individual
grants of stock options during the fiscal year ending May 31, 2001:
========================================================================================== ==========================
Individual Grants
----------------------------------------------------------------------------------------------------------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Percent of Total
Options/SARs
Number of Granted to
Securities Employees in Exercise or
Underlying Fiscal Year Base Price Expiration
Name Options/SARs Granted (%) ($/Sh) Date
(#)
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Stephen Davies 150,000 (1) 59.2 3.00 12/21/10
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
(1) These options were originally exercisable over a seven year period to the
extent of (i) 33,333 shares of Common Stock in 2001, (ii) 33,333 shares of
Common Stock in each of 2004, 2005 and 2,006, and (iii) 16,668 shares of
Common Stock in 2007. Mr. Davies' employment as President of the Company
was terminated on August 6, 2001. Pursuant to the terms of the Plans under
which the options were granted, those options that were vested on that date
are exercisable for three (3) months after that date. All other options
expired as of that date.
Aggregated Option/SAR Exercise in Last Fiscal Year and
Fiscal Year-End Option Value Table
The following table sets forth certain information concerning the value of
unexercised options and warrants for the fiscal year ended May 31, 2001:
===================== ======================= ================= ========================== ==========================
Number of Securities Value of Unexercised
Underlying Unexercised in-the-Money Options and
Options and Warrants at Warrants at May 31,
Name Shares Acquired on Value Realized May 31, 2001(#) 2001($)
Exercise(#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
--------------------- ----------------------- ----------------- -------------------------- --------------------------
--------------------- ----------------------- ----------------- -------------------------- --------------------------
Bert E. Brodsky -0- -0- 461,000/199,000 1,510/0
--------------------- ----------------------- ----------------- -------------------------- --------------------------
--------------------- ----------------------- ----------------- -------------------------- --------------------------
Gary Stoller -0- -0- 143,500/0 0/0
--------------------- ----------------------- ----------------- -------------------------- --------------------------
--------------------- ----------------------- ----------------- -------------------------- --------------------------
Hugh Freund -0- -0- 137,000/0 0/0
--------------------- ----------------------- ----------------- -------------------------- --------------------------
--------------------- ----------------------- ----------------- -------------------------- --------------------------
Stephen Davies -0- -0- 66,683/183,317 0/0
===================== ======================= ================= ========================== ==========================
Compensation of Directors
During the fiscal year ended May 31, 2001 non-qualified options to purchase
up to 10,000 shares of Common Stock, at an exercise price of $3.00 per share,
were issued to each of Paul Konigsberg, a former director, and Ronald L. Fish.
In addition, during the fiscal year ended May 31, 2001, the Company paid an
aggregate of $2,000 in Director's fees.
Employment Contracts, Termination of Employment and
Change-in-Control Arrangements
On February 1, 1997 the Company and its Chairman ("Mr. Brodsky") entered
into an employment agreement for a five year term (the "Brodsky Employment
Agreement"). Among other things, the Brodsky Employment Agreement provides
compensation at the annual rate of $500,000 or a lesser amount if mutually
agreed. The Brodsky Employment Agreement also provides for payment of an annual
bonus at the sole discretion of the Board of Directors. Mr. Brodsky agreed to
accept a reduction in compensation for the fiscal years ended May 31, 2001,
2000, and 1999 and has signed waivers evidencing his agreement to such
reductions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial share ownership of (i) each
person who is known by the Company to be the beneficial owner of more than five
(5%) percent of the Company's Common Stock; (ii) each of the Company's current
Directors (iii) each person listed in the Summary Compensation Table; and (iv)
all of the Company's executive officers and Directors as a group. The ownership
percentages indicated are calculated, on a fully-diluted basis, in accordance
with Rule 13d-3 promulgated pursuant to the Securities Exchange Act of 1934, as
amended, which attributes beneficial ownership of securities to a person or
entity who holds options or warrants to purchase such securities.
============================================= ========================================= ==========================================
Name of Management Person and Name and Approximate Percentage
Address of Beneficial Owner Number of Shares of Outstanding Shares
--------------------------------------------- ----------------------------------------- ------------------------------------------
Bert E. Brodsky
26 Harbor Park Drive
Port Washington, NY 1,710,956 (1) 57.7%
--------------------------------------------- ----------------------------------------- ------------------------------------------
Hugh Freund
26 Harbor Park Drive
Port Washington, NY 137,000 (2) 5.2%
--------------------------------------------- ----------------------------------------- ------------------------------------------
Gary Stoller
26 Harbor Park Drive
Port Washington, NY 164,500 (3) 6.2%
--------------------------------------------- ----------------------------------------- ------------------------------------------
Ronald L. Fish
Unlimited Care Inc.
245 Main Street 19,400 (4) *
White Plains, NY 10601
--------------------------------------------- ----------------------------------------- ------------------------------------------
Jessica Heather Brodsky
26 Harbor Park Drive
Port Washington, NY 292,470 11.7%
--------------------------------------------- ----------------------------------------- ------------------------------------------
Jeffrey Holden Brodsky
26 Harbor Park Drive
Port Washington, NY 184,925 7.4%
--------------------------------------------- ----------------------------------------- ------------------------------------------
Martin Bernard
The Rampart Group
1983 Marcus Avenue -0- *
Lake Success, NY 11042
--------------------------------------------- ----------------------------------------- ------------------------------------------
All executive officers and Directors as a
group (5 persons) 2,031,856 (1) (2) (3) (4) 62.2%
============================================= ========================================= ==========================================
(1) Includes 18,684 shares of the Company's Common Stock owned by the trust
established for the benefit of Mr. Brodsky's minor son; includes 20,500 shares
of the Company's Common Stock owned by Mr. Brodsky's wife; excludes 292,470
shares of Common Stock owned by Mr. Brodsky's adult daughter, the beneficial
ownership of which Mr. Brodsky disclaims; excludes an aggregate of 203,708
shares of Common Stock owned by Mr. Brodsky's adult sons, the beneficial
ownership of which Mr. Brodsky disclaims. Includes 200,000 shares of Common
Stock owned by the Bert E. Brodsky Revocable Trust. Includes presently
exercisable options to purchase 310,000 shares of Common Stock at $1.41 per
share under the 1995 Stock Option Plan; includes presently exercisable options
to purchase 151,000 shares of common stock at $1.31 per share under the 1998
Stock Option Plan.
(2) Represents presently exercisable options to purchase 137,000 shares of
Common Stock at $1.41 per share under the 1995 Plan. Excludes 41,464 shares
of Common Stock owned by Mr. Freund's adult children. Mr. Freund disclaims
any beneficial interest in, or voting or dispositive control over, such
shares.
(3) Includes presently exercisable options to purchase 20,000 shares of Common
Stock at $2.34 per share under the 1995 Plan, which options have been
extended to expire on March 14, 2006; includes presently exercisable
options to purchase 50,000 shares of Common Stock at $2.61 per share under
the 1995 Plan, which options have been extended to expire on June 10, 2006;
includes presently exercisable options to purchase 73,500 shares of Common
Stock at $1.41 per share under the 1995 Plan. Includes 21,000 shares of
Common Stock owned by trusts established for the benefit of Mr. Stoller's
children of which Mr. Stoller is a trustee.
(4) Includes presently exercisable options to purchase 10,000 shares of Common
Stock at $3.00 per share under the 1998 Plan; includes presently
exercisable options to purchase 6,000 shares of Common Stock at $3.00 per
share under the 1998 Plan; includes presently exercisable options to
purchase 3,400 shares of Common Stock at $3.00 per share under the 1998
Plan.
* Less than one percent (1%)
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
IDA/SBA Financing
In November, 1996 the Company entered into an agreement with BFS Realty,
LLC, a company affiliated with the Company's Chairman ("Affiliate"), the Nassau
County Industrial Development Agency ("NCIDA"), and Marine Midland Bank (the
"Bondholder") (the "Agreement"). Pursuant to the Agreement, the Affiliate (i)
assumed all of the Company's rights and obligations under a Lease Agreement that
was previously between the Company and the NCIDA (the "Lease"), and (ii) entered
into a Sublease Agreement with the Company for the premises the Company
occupies. Pursuant to the Agreement, the Affiliate also obtained the right to
become the owner of the premises upon expiration of the Lease. Under the terms
of the Agreement, the Company is jointly and separately liable to the NCIDA for
all obligations owed by the Affiliate to the NCIDA under the Lease; however, the
Affiliate has indemnified the Company with respect to certain obligations
relative to the Lease and the Agreement. In addition, the Agreement provides
that the Company is bound by all the terms and conditions of the Lease, and that
a security interest is granted to the Affiliate in all of the Company's fixtures
constituting part of the premises.
The foregoing transactions and agreements were the last in a series of
transactions involving the Company, the Affiliate, NCIDA, the Bondholder and the
U.S. Small Business Administration. Chief among these was the borrowing by the
Affiliate in June of 1994 of $3,350,000 in the form of Industrial Development
Revenue Bonds (the "Bonds") to finance the acquisition of the Company's facility
(the "Facility"). Simultaneously with the issuance of the Bonds: (1) NCIDA
obtained title to the Facility and leased it to the Affiliate, (2) the Affiliate
subleased the Facility to the Company, (3) the Bondholder bought the Bonds, (4)
the Bondholder received a mortgage and security interest in the Facility to
secure the payment of the Bonds. The Affiliate's obligations under the Lease
were guaranteed by Mr. Brodsky, the Company, Sandsport and others. The
Affiliate's obligations respecting repayment of the Bonds were also guaranteed
by Mr. Brodsky, the Company, Sandsport and others.
The Bonds currently bear interest at the rate of 9%, and the outstanding
balance due on the Bonds as of May 31, 2001 was $1,617,778. During the years
ended May 31, 2001 and 2000, the Company paid rent to the Affiliate of
approximately $615,000 and $695,000, respectively.
At the same time as the Bond issuance, the Company incurred approximately
$500,000 of indebtedness to affiliates of Mr. Brodsky in connection with
additional capital improvements. As of July, 1998, this debt was paid in full.
In addition, the Company assumed certain indebtedness owed to affiliates of the
Company's Chairman. This indebtedness was also paid in full in July, 1998.
On August 11, 1995, the Company entered into a $750,000 loan agreement with
the Long Island Development Corporation ("LIDC"), under a guarantee by the U.S.
Small Business Administration ("SBA") (the "SBA Loan"). The SBA Loan was
assigned to the Affiliate in November 1996; however, repayment of the SBA loan
is guaranteed by the Company and various subsidiaries of the Company. The entire
proceeds were used to repay a portion of the Bonds. The SBA Loan is payable in
240 monthly installments of $6,255, which includes principal and interest at a
rate of 7.015%. The balance of the SBA Loan as of May 31, 2001 was $625,787.
Federation of Puerto Rican Organizations
The Company has been providing services to Federation of Puerto Rican
Organizations, and/or its affiliates (individually and collectively, the
"Federation"), an HRA Vendor Agency, since 1995. By November 30, 1997, the
Company had acquired a loan receivable for an aggregate of $300,000 from an
affiliate of the Company's Chairman, due from the Federation. Such loan
receivable was supposed to be secured by accounts receivable due to the
Federation from various affiliates of the Federation. Shortly following the
Company's acquiring such receivable, the Federation and its affiliates filed for
bankruptcy protection. While the bankruptcy petition for the Federation itself
has been dismissed, some of the Federation's affiliates remain in bankruptcy
proceedings. At May 31, 2000, the Company had written off the $300,000 principal
loan receivable in addition to $47,296 for services rendered against a reserve
established in prior years for these amounts. The affiliate from whom the
Company acquired the loan receivable subsequently obtained a judgment against
the Federation in the amount of $527,760, including pre-judgment interest. The
Company has been advised that, in light of the continuing bankruptcy proceedings
for the Federation's affiliates, from whom the Federation received substantially
all of its revenues, the collectibility of this judgment is extremely doubtful.
Advances and Loans to Affiliates
During the years ended May 31, 2001 and 2000, the Company paid an aggregate
of $65,894 and $36,404 on behalf of certain officers to companies affiliated
with the Company's Chairman for payment of automobile leases.
National Medical Health Card Systems, Inc.
The Company derived revenue from National Medical Health Card Systems, Inc.
("Health Card"), a company affiliated with the Company's Chairman, principally
for data base and operating system support, hardware leasing, maintenance and
related administrative services. The revenues generated from Health Card
amounted to approximately $2,458,000 and $1,753,000 for the years ended May 31,
2001 and 2000, respectively. The Company billed Health Card approximately
$821,000 and $540,000 for quality assurance testing of software programs
developed by Health Card and network support, and $561,000 and $302,000 for help
desk services, $447,800 and $320,000 for data processing center as well as
$533,600 and $472,000 for certain computer equipment leases and other services
for $94,600 and $119,000 for years ended May 31, 2001 and 2000, respectively. In
addition the Company resells its telephone services to Health Card. The billings
for such telephone services amounted to approximately $133,500 and $151,000 for
the years ended May 31, 2001 and May 31, 2000 and are recorded as a reduction of
operating expense. The Company was owed $550,000 from Health Card at May 31,
2001. Subsequent to May 31, 2001, the Company received approximately $536,300
from Health Card, representing substantially complete payment of amounts due as
of that date. Sandsport is expected to continue to provide data processing
services to Health Card at a monthly fee of about $36,000, subject to reduction
in the event Health Card decides to provide these services internally.
As of May 31, 2000, the Company owed Health Card $500,000 pursuant to a
promissory note, dated May 31, 2000 and due June 1, 2001, plus interest at the
rate of 9-1/2%; interest on such note was payable quarterly. The Note was paid
on May 31, 2001.
On June 9, 2001, the Company again gave a promissory note to Health Card in
the principal amount of $500,000, with interest at the rate of 7%, which was due
on June 8, 2002. This Note was paid in full on August 15, 2001.
Equipment Leases
The Company makes equipment lease payments to P.W. Medical Management,
Inc., an affiliate of the Company's Chairman. The payments were $395,989 and
$393,903 in fiscal 2001 and 2000, respectively.
Medical Arts Office Services, Inc.
Medical Arts Office Services, Inc. ("MAOS"), of which the Company's
Chairman is the sole shareholder, provided the Company with accounting,
bookkeeping and paralegal services. For the fiscal years ended May 31, 2001 and
2000 the total payments made by the Company to MAOS were $279,894 and $399,592
respectively.
PROPOSALS
1. Election of Directors
Five Directors are to be elected at the Meeting to serve until the next
annual meeting of stockholders and until their respective successors have been
elected and have qualified, or until their earlier resignation or removal. If
for some unforeseen reason one or more of the nominees is not available as a
candidate for Director, the proxies may be voted for such other candidate or
candidates as may be nominated by the Board. The Board of Directors of Sandata
unanimously recommends a vote FOR all nominees.
The following table sets forth the positions and offices presently held
with Sandata by each nominee for election as Director, his age as of October 23,
2001, and the year he became a Director of Sandata. Proxies not marked to the
contrary will be voted in favor of each such nominees' election.
================================= ========= ==================================================== ==================
Positions and Offices Presently Held Year Became a
Name Age with Sandata Director
--------------------------------- --------- ---------------------------------------------------- ------------------
--------------------------------- --------- ---------------------------------------------------- ------------------
Bert E. Brodsky 59 Chairman of the Board, Treasurer and Director 1983
--------------------------------- --------- ---------------------------------------------------- ------------------
--------------------------------- --------- ---------------------------------------------------- ------------------
Hugh Freund 64 Executive Vice President, Secretary and Director 1978
--------------------------------- --------- ---------------------------------------------------- ------------------
--------------------------------- --------- ---------------------------------------------------- ------------------
Gary Stoller 48 Executive Vice President and Director 1983
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Ronald L. Fish 60 Director 1998
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Martin Bernard 53 Director 2001
================================= ========= ==================================================== ==================
Bert E. Brodsky has been Chairman and Treasurer of the Company since June
1, 1983 and President from December 1989 through January 2000. From August 1983
through November 1984, from December 1988 through January 1991, from February
1998 to June 1998 and from December 1998 to present, Mr. Brodsky served as
Chairman of Health Card and from June 1998 through December 1998 served as
President of Health Card. From October 1983 through December 1993, Mr. Brodsky
served as Chairman of Compuflight, a provider of computerized flight planning
services. Since August 1980, Mr. Brodsky has served as Chairman of P.W. Medical
Management, Inc., which provides financial and consulting services to
physicians. Since 1979, Mr. Brodsky has also served as President of Bert Brodsky
Associates, Inc., which provides consulting services.
Hugh Freund, a founder of the Company, was the Company's President from
1978 to November 1986, and a Director of the Company since its formation in
1978. Since November 1986, Mr. Freund has served as an Executive Vice President
of the Company and Secretary since 1995. Mr. Freund is also President of
Sandsport, the Company's wholly-owned health care data processing subsidiary.
Additionally, Mr. Freund has been serving as the President of Pro-Health
Systems, Inc. since March 9, 1999. In addition to managing the Company's
operations, Mr. Freund has been responsible for the marketing efforts of the
Company.
Gary Stoller joined the Company at the time of its formation in 1978 as its
Senior Programmer and Analyst, and has been its Chief Information Officer and an
Executive Vice President and a Director of the Company since January 1983. Mr.
Stoller has been responsible for computer design, programming and operations of
the Company as its Chief Technology Officer since 1995, and is the architect of
the SHARP and SanTrax systems.
Ronald L. Fish served as a Director of the Company since January, 1998.
Since 1975, Mr. Fish served as Administrator, Treasurer and Director of
Unlimited Care Inc., a nursing services firm, and is a certified public
accountant. Mr. Fish also serves on the Company's Audit Committee.
Martin Bernard has served as a Director of the company since October 22,
2001. Since 1970, Mr. Bernard has worked in the insurance industry, most of
these years working for The Rampart Group, located in Lake Success, NY. Mr.
Bernard is a graduate of the New York Institute of Technology, earning a degree
in Business Administration and since 1997 has been a Trustee of the North Shore
LIJ Health Systems. Mr. Bernard serves on Sandata's Audit and Compensation
Committees.
Family Relationships
There is no family relationship among any of Sandata's executive officers,
Directors or nominees for Directors.
Meetings
During the fiscal year ended May 31, 2001, the Board of Directors of
Sandata held two (2) meetings and has acted on nine (9) occasions by unanimous
written consent in lieu of a meeting.
Board Committees
The Audit Committee of the Board of Directors is charged with the review of
the activities of Sandata's independent auditors, including the fees, services,
and scope of such audit. The Audit Committee is composed of Ronald L. Fish and
Martin Bernard. Such Committee met on one occasion during fiscal 2001. The Audit
Committee (as constituted at the end of the Company's fiscal year) reviewed and
discussed the audited financial statements with management, and has discussed
with the independent auditors the matters required to be discussed by SAS 61, as
may be modified or supplemented. The Audit Committee has also 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 has discussed with the independent accountant the
independent accountant's independence. Based on the review and discussions
referred to above, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Company's Annual Report
on Form 10-KSB for the fiscal year ended May 31, 2001 for filing with the
Securities and Exchange Commission. The Audit Committee Charter is made part of
this Proxy Statement as Exhibit A.
Sandata also maintains a Compensation Committee which did not meet during
fiscal 2001. The Compensation Committee is charged with analyzing the Company's
compensation policies and particulars, and with making recommendations to the
Board both as to such policies and as to particular compensation arrangements.
Sandata does not maintain a Nominating Committee. All other functions of the
Board of Directors are performed by the Board as a whole
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16 of the Securities Exchange Act of 1934, as amended ("Section
16"), requires that reports of beneficial ownership of capital stock and changes
in such ownership be filed with the Securities and Exchange Commission (the
"SEC") by Section 16 "reporting persons", including Directors, certain officers,
holders of more than 10% of the outstanding Common Stock and certain trusts of
which reporting persons are trustees. The Company is required to disclose in
this Proxy Statement each reporting person whom it knows to have failed to file
any required reports under Section 16 on a timely basis during the fiscal year
ended May 31, 2001 or prior fiscal years.
To the Company's knowledge, based solely on a review of copies of Forms 3,
4 and 5 furnished to it, during the fiscal year ended May 31, 2001, the
Company's officers, Directors and 10% shareholders complied with all Section
16(a) filing requirements applicable to them except: Jessica Miller failed to
timely file one report relative to one transaction and Mr. Davies, the President
of the Company until August 6, 2001 , failed to file one report relative to one
transaction.
2. Amendment to Certificate of Incorporation to Change Name
Sandata's Board of Directors has determined that it would be in the best
interest of Sandata and its stockholders to amend Sandata's Certificate of
Incorporation to change Sandata's name to "Sandata Technologies, Inc." The Board
of Directors believes that the proposed new name is more identifiable with the
business activities of Sandata and its Subsidiaries and that, accordingly, its
adoption will enhance Sandata's competitive position in its business.
At any time prior to the effectiveness of the filing of the Certificate of
Amendment, notwithstanding authorization of the amendment by the stockholders of
the Company, the Board of Directors may abandon the proposed amendment without
further action by the stockholders.
Recommendation of Board of Directors
The affirmative vote of a majority of the outstanding Common Shares of
Sandata is required for approval of this proposal. The Board recommends a vote
FOR the approval of the proposed amendment to the Certificate of Incorporation.
INDEPENDENT AUDITORS
Marcum & Kliegman LLP has served as Sandata's independent auditors since
February 28, 1995 and has been selected as Sandata's independent auditors for
the fiscal year ending May 31, 2001.
A representative of Marcum & Kliegman LLP is expected to be present at the
Meeting, will have the opportunity to make a statement, if such representative
so desires, and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at Sandata's 2002 Annual
meeting pursuant to the provisions of Rule 14a-8 of the SEC, promulgated under
the Exchange Act, must be received by the Secretary of Sandata at the principal
executive offices of Sandata by July 5, 2002 for inclusion in Sandata's Proxy
Statement and form of Proxy relating to such meeting. Sandata, however, may hold
next year's annual meeting earlier in the year than this year's meeting.
Accordingly, Sandata suggests that stockholder proposals intended to be
presented at next year's annual meeting be submitted well in advance of June 5,
2002, the earliest date upon which Sandata anticipates the Proxy Statement and
form of Proxy relating to such meeting will be released to stockholders.
OTHER BUSINESS
While the accompanying Notice of Annual Meeting of all Stockholders
provides for the transaction of such other business as may properly come before
the Meeting, Sandata has no knowledge of any other matter to be presented at the
Meeting other than matters 1 and 2 in the Notice. However, the enclosed Proxy
gives discretionary authority in the event any other matters should be
presented.
By Order of the Board of Directors
of Sandata, Inc.
Hugh Freund
Secretary
Port Washington, New York
Dated: November 2, 2001
EXHIBIT A
SANDATA, INC.
AUDIT COMMITTEE CHARTER
Membership
The Audit Committee (the "Committee") of Sandata, Inc. (the "Company") will
be composed of not less than two members of the Board of Directors (the
"Board"). They will be selected by the Board, taking into account prior
experience in matters to be considered by the Committee, probable availability
at times required for consideration of such matters and their individual
independence and objectivity.
The Committee's membership will meet the requirements of the audit
committee policy of the NASDAQ Stock Market as they relate to a company which is
a "small business filer" under the rules promulgated by the Securities and
Exchange Commission. Accordingly, a majority of the Committee members will be
directors independent of management and free from relationships that, in the
opinion of the Board and in conjunction with the "independence" standards of the
NASDAQ Stock Market, would interfere with the exercise of independent judgment
as a Committee member.
When considering relationships that might affect independence, including
possible affiliate status, the Board will give appropriate consideration, in
addition to its Audit Committee policy, to guidelines issued by the NASDAQ Stock
Market, which were provided to assist boards of directors in observing the
spirit of the NASDAQ Stock Market policy.
The primary function of the Committee is to assist the Board in fulfilling
its oversight responsibilities by reviewing the financial information that will
be provided to the shareholders and others, the systems of internal controls
that financial management and the Board have established and all audit
processes.
The Committee shall meet at least four times a year, or more frequently as
circumstances require. The Committee may ask members of management or others to
attend meetings and provide pertinent information as necessary.
Nothing contained in this charter is intended to, or should be construed
as, creating any responsibility or liability of the members of the Committee
except to the extent otherwise provided under the Delaware law which shall
continue to set the legal standard for the conduct of the members of the
Committee.
Actions of the Committee
The Committee's activities will include, but will not be limited to, the
following actions:
o Oversight of the financial statements and relations with the independent
auditors and:
o Require that the Board engage the independent auditors to perform
quarterly reviews of the Company's financial statements.
o Instruct the independent auditors that the Board is the client in
its capacity as the shareholders' representative.
o Expect the independent auditors to meet with the Board at least
annually so the Board has a basis on which to recommend the
independent auditors' appointment to the shareholders or to
ratify its selection of the independent auditors.
o Expect financial management and the independent auditors to
analyze significant financial reporting issues and practices on a
timely basis.
o Expect financial management and the independent auditors to
discuss with the Committee:
- Qualitative judgments about whether current or proposed
accounting principles and disclosures are appropriate, not
just acceptable.
- Aggressiveness or conservatism of accounting principles and
financial estimates.
o Expect the independent auditors to provide the Committee with:
- Independent judgments about the appropriateness of the
Company's current or proposed accounting principles and
whether current or proposed financial disclosures are clear.
- Views on whether the accounting principles chosen by
management are conservative, moderate, or aggressive as they
relate to income, asset, and liability recognition, and
whether these accounting principles are commonly used by
other similarly situated companies.
- Reasons why accounting principles and disclosure practices
used for new transactions or events are appropriate.
- Reasons for accepting or questioning significant estimates
made by management.
- Views on how selected accounting principles and disclosure
practices affect shareholder and public attitude about the
Company.
o Actions taken on the Board's behalf that require Board notification, but
not Board approval:
o Consider, through consultation with the independent auditor and
financial management, the audit scope and plan of the independent
auditor and the internal auditors.
o Review and approve the scope of the independent auditor's audit
of the Company.
o Review and approve the scope of the internal auditor's audit of
the Company.
o Review and approve the scope of the Company's annual profit and
pension trust audits, to the extent the Company has established
profit and pension trusts.
o Answer questions raised by shareholders during an annual
shareholder's meeting on matters relating to the Committee's
activities if asked to do so by the Chairman of the Board.
o Ask the Chief Executive Officer of the Company to have the
internal audit staff study a particular area of interest or
concern to the Committee.
o Matters requiring the Committee's review and study before making a
recommendation for the Board action:
o Appointment of the independent auditors.
o Implementation of major accounting policy changes.
o Securities and Exchange Commission ("SEC") registration
statements to be signed by the Board.
o Interim financial statements and year end financial statements,
and the accompanying auditor's reports, prior to the filing of
the Company's Quarterly Reports on Form 10-QSB and Annual Report
on Form 10-KSB (or the annual report to shareholders if
distributed prior to the filing of the Form 10-KSB) as
applicable.
o Matters requiring the Committee's review and study before providing
summary information to the Board:
o Annual review and reassessment of the Committee charter.
o Accounting policy changes proposed or adopted by organizations
such as the Financial Accounting Standards Board, the SEC, and
the American Institute of Certified Public Accountings, or by
comparable bodies outside the U.S.
o The independent auditors' assessment of the strengths and
weaknesses of the Company's financial staff, systems, controls
and other factors that might be relevant to the integrity of the
financial statements.
o Quarterly financial statement review before publication.
o The performance of management and operating personnel under any
code of ethics which may be established by the Company.
o Gaps and exposures in insurance programs.
o Reports about the Company or its subsidiaries submitted by
agencies of governments in countries in which the Company or its
subsidiaries operate.
o Periodic SEC filings and the adequacy of programs and procedures
to assure compliance with SEC regulations and regulations of the
NASDAQ Stock Market.
SANDATA, INC.
26 Harbor Park Drive
Port Washington, New York 11050
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Bert E. Brodsky and Hugh Freund as Proxies,
each with the power to appoint his substitute, and hereby authorizes them, and
each of them, to represent and vote, as designated below, all the shares of
common stock of Sandata, Inc. (the "Company") held of record by the undersigned
on October 23, 2001 at the Annual Meeting of Stockholders to be held on November
20, 2001 or any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted FOR Proposal 1 and Proposal 2 and in favor of any proposal to adjourn
the meeting in order to allow Sandata additional time to obtain sufficient
Proxies with regard thereto.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL
PROPOSALS.
1. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed.
contrary below).
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike such nominee's name from the list below.)
BERT E. BRODSKY HUGH FREUND GARY STOLLER
RONALD L. FISH MARTIN BERNARD
2. Proposal to amend the Certificate of Incorporation
FOR AGAINST ABSTAIN
DATED: ..................................., 2001
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by the President or other authorized officer. If a
partnership, please sign in full partnership name by authorized person.
Signature
Signature, if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE