MB Software Corporation
2225 E. Randol Mill Road, Suite 305
Arlington, Texas 76011-6306
August 26, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of MB Software Corporation, a Colorado corporation (the
"Company"), to be held at 2225 E. Randol Mill Road, Suite 305, Arlington, Texas,
on September 30, 1997, at 10:00 a.m., local time, or such other times and places
to which the Meeting may adjourn. The attached Notice of Annual Meeting and
Information Statement fully describe the formal business to be transacted at the
Meeting, which includes: (i) the election of directors of the Company and (ii)
ratification of the selection of independent public accountants. We have also
enclosed a copy of the Company's Annual Report for the fiscal year ended
December 31, 1996.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
A number of directors and officers of the Company will attend the
meeting and will be available to respond to your questions.
Sincerely,
Scott A. Haire
Chairman of the Board
MB Software Corporation
2225 E. Randol Mill Road, Suite 305
Arlington, Texas 76011-6306
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 30, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of MB Software Corporation, a Colorado corporation (the "Company"),
will be held at the offices of the Company at 2225 E. Randol Mill Road, Suite
305, Arlington, Texas, on September 30, 1997, at 10:00 a.m., local time, or at
such other times and places to which the Meeting may be adjourned. An
Information Statement for the Meeting is enclosed.
The Meeting is for the following purposes:
(1) To elect seven members of the Board of Directors for the term of office
stated in the Information Statement.
(2) To consider and ratify the selection of the Company's independent
public accountants.
(3) To transact any other business that may properly come before the
Meeting or any adjournments thereof.
The close of business on August 8, 1996, has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Meeting or
any adjournments thereof. For a period of at least 10 days prior to the Meeting,
a complete list of shareholders entitled to vote at the Meeting will be open to
the examination of any shareholder during ordinary business hours at the offices
of the Company at 2225 E. Randol Mill Road, Suite 305, Arlington, Texas.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Information concerning the matters to be acted upon at the Meeting is set
forth in the accompanying Information Statement.
By Order of the Board of Directors
Lucy J. Singleton
Secretary
Arlington, Texas
August 26, 1997
MB Software Corporation
2225 E. Randol Mill Road, Suite 305
Arlington, Texas 76011-6306
INFORMATION STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held September 30, 1997
This Information Statement is being first mailed on August 26, 1996, to
shareholders of MB Software Corporation, a Colorado corporation (the "Company"),
by the Board of Directors in connection with the Annual Meeting of Shareholders
(the "Meeting") to be held at the offices of the Company at 2225 E. Randol Mill
Road, Suite 305, Arlington, Texas, on September 30, 1997, at 10:00 a.m., local
time, or at such other times and places to which the Meeting may be adjourned.
The purpose of the Meeting is to consider and act upon: (i) the election of
seven directors for terms expiring in 1997; (ii) the ratification of the
selection of King Griffin & Adamson P.C. (formerly King, Burns & Company, P.C.)
as the Company's independent public accountants; and (iii) such other matters as
may properly come before the Meeting or any adjournments thereof.
RECORD DATE AND VOTING SECURITIES
The record date for determining the shareholders entitled to vote at the
Meeting was the close of business on August 8, 1997 (the "Record Date"), at
which time the Company had issued and outstanding 68,485,080 shares of Common
Stock, par value $.001 per share ("Common Stock"). The shares of Common Stock
constitute the only outstanding voting securities of the Company entitled to be
voted at the Meeting.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THE COMPANY HAS BEEN ADVISED THAT SHAREHOLDERS OWNING AN AGGREGATE OF
40,869,992 SHARES OF COMMON STOCK (CONSTITUTING APPROXIMATELY 60% OF THE ISSUED
AND OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY AS OF AUGUST 8, 1997)
INTEND TO VOTE IN FAVOR OF ALL MATTERS TO BE ACTED UPON AT THE MEETING, THEREBY
ASSURING THEIR ADOPTION.
QUORUM AND VOTING
In an election of directors, that number of candidates equaling the number
of directors to be elected having the highest number of votes cast in favor of
their election, are elected to the Board of Directors of the Company (the "Board
of Directors"), provided a quorum is present. Votes may be cast or withheld with
respect to the proposal to elect seven members of the Board of Directors for
terms expiring at the Company's Annual Meeting of Shareholders in 1998. Votes
that are withheld will be counted toward a quorum, but will be excluded entirely
from the tabulation for such proposal and, therefore, will not affect the
outcome of the vote on such proposal.
Approval of the proposal to ratify the selection of King Griffin & Adamson
P.C. as the Company's independent public accountants requires the affirmative
vote of a majority of the shares present at the meeting and entitled to vote on
such proposal, provided a quorum is present. Abstentions will be counted toward
a quorum, but will count as a vote against such proposal.
1
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The current Board of Directors has fixed the number of authorized
directors at seven, effective upon election at the Meeting. Thus, there are
seven directors to be elected for terms expiring at the Company's Annual Meeting
of Shareholders in 1998 or until their successors have been elected and
qualified. It is intended that the names of the persons indicated in the
following table will be placed in nomination. Each of the nominees has indicated
his willingness to serve as a member of the Board of Directors if elected;
however, if any nominee becomes unavailable for election to the Board of
Directors for any reason not presently known or contemplated, a substitute may
be nominated and elected.
The nominees are as follows:
Name Age Position
---- --- --------
Scott A. Haire 32 Chairman of the Board, Chief Executive
Officer and President
Gilbert A. Valdez 54 Chief Operating Officer and Director
Tom M. Wilkins 33 Chief Financial Officer and Director
Robert E. Gross 50 Director
Araldo A. Cossutta 72 Director
Steven W. Evans 44 Director
Thomas J. Kirchhofer 54 Director
- -----------------
The Company has been advised that shareholders owning an aggregate of
40,869,992 shares of Common Stock intend to vote in favor of the election as
directors of the seven nominees listed above, thereby assuring their election to
the Board of Directors.
Scott A. Haire is Chairman of the Board, Chief Executive Officer and President
of the Company. Prior to founding MedBanc Data Corporation (a subsidiary of the
Company) ("MedBanc"), he was an employee of the Company from November 1993 to
June 1994. Previously, Mr. Haire was president of Preferred Payment Systems, a
company specializing in electronic claims and insurance system related projects.
Gilbert A. Valdez is Chief Operating Officer of the Company and past President
and CEO of four major financial and healthcare corporations. Most recently, he
served as CEO of Hospital Billing and Collection Services, Inc., a $550 million
healthcare receivables financing entity located in Wilmington, Delaware; Datix
Corporation, an Atlanta-based corporate divestiture from Harris-Lanier; Medaphis
Corporation, an interstate, multi-dimensional healthcare service agency based in
Atlanta; and NEIC, a national consortium of 40 major insurance companies formed
for development of electronic claim billing standards. Mr. Valdez has 28 years
of senior healthcare receivables financing experience.
Thomas M. Wilkins is Chief Financial Officer of the Company. Previously, Mr.
Wilkins held either the position of Controller or other high level financial
management positions in the thoroughbred horse racing industry with various
organizations such as the Breeders' Cup Ltd., Churchill Downs, Inc., and
Lone Star Race Park, Ltd. He also spent time as a consultant on accounting and
report writing software for Vision Consulting Corporation.
2
Robert E. Gross is President of R. E. Gross & Associates, providing consulting
and systems projects for clients in the multi-location service, banking and
healthcare industries. From 1987 to 1990, he was vice president -- technical
operations for Medaphis Physicians Service Corp., Atlanta, Georgia. Prior to
that, he held executive positions with Chi- Chi's, Inc., Royal Crown and
TigerAir. He also spent 13 years as an engineer with IBM.
Araldo A. Cossutta is President of Cossutta and Associates, an architectural
firm based in New York City, with major projects throughout the world.
Previously, he was a partner with I.M. Pei and is a graduate of the Harvard
Graduate School of Design and the Ecole des Beaux Arts in Paris. Mr. Cossutta
was a significant shareholder in Personal Computer Card Corporation ("PC3") and
was chairman of PC3 at the time of its acquisition by the Company in November
1993. He is also a director of Computer Integration Corporation of Boca Raton,
Florida.
Steven W. Evans is a Certified Public Accountant and President of Evans Phillips
& Co., PSC, an accounting firm which he established in 1976 in Barbourville and
Middlesboro, Kentucky. He is also a founder and active in PTRL, which operates
contract research laboratories located in Kentucky, North Carolina, California
and Germany. He is also a founder and active in the management of environmental,
financial and hotel corporations in Kentucky and Tennessee.
Thomas J. Kirchhofer is president of Synergy Wellness Centers of Georgia, Inc.
He is past president of the Georgia Chiropractic Association.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information as of July 31, 1997, regarding
the beneficial ownership of capital stock of the Company by: (i) each person
known by the Company to beneficially own more than 5% of the outstanding shares
of Common Stock; (ii) each director of the Company and person to be elected as a
director; (iii) the Company's Chief Executive Officer; and (iv) the directors
and executive officers of the Company as a group. The persons named in the table
have sole voting and investment power with respect to all shares of capital
stock owned by them, unless otherwise noted.
Amount and Nature
Name of Beneficial of Beneficial Percent
Owner or Group(1) Ownership of Class
- ------------------------ ---------- --------
Scott A. Haire 29,121,297 2) 41.1%
Araldo A. Cossutta 2,982,025 4.4%
Steven W. Evans 2,000,000(3) 2.9%
Thomas J. Kirchhofer -- *
Gilbert A. Valdez 600,000(4) *
Robert E. Gross 200,000(5) *
Tom M. Wilkins 400,000(6) *
Robert Shaw 11,000,000 16.1%
All Directors and Executive Officers as a group 35,303,322 48.64%
(seven in number)
- -----------
* Less than 1%.
(1) The address for each person or entity listed is 2225 E. Randol Mill Road,
Suite 305, Arlington, Texas, 76011.
3
(2) Includes 1,800,000 shares and 600,000 shares subject to options and a
warrant, respectively, that are presently exercisable.
(3) Includes 500,000 shares subject to a warrant that is presently exercisable
by Mr. Evans.
(4) Consists of shares subject to options that are presently exercisable by Mr.
Valdez.
(5) Consists of shares subject to options that are presently exercisable by Mr.
Gross.
(6) Consists of shares subject to options that are presently exercisable by Mr.
Wilkins.
BOARD OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board of
Directors. The Board of Directors meets on a regularly scheduled basis to review
significant developments affecting the Company and to act on matters requiring
Board approval. It also holds special meetings or acts by unanimous written
consent when an important matter requires Board action between scheduled
meetings. The Board of Directors or its authorized committees met six times and
acted by unanimous consent six times during fiscal 1996. During fiscal 1996,
each member of the Board of Directors participated in 100% of all Board and
applicable committee meetings held during the period for which he was a
director.
The Company does not have any written employment agreements with any of its
officers or directors.
The Board of Directors does not have an audit, compensation or nominating
committee. The functions customarily attributable to those committees are
performed by the Board of Directors as a whole.
There are no standard compensation arrangements for directors.
4
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three fiscal years to the Company's Chief
Executive Officer. No other executive officer's total annual salary and bonus
exceeded $100,000, based on salary and bonus earned during fiscal 1996.
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
----------------------------------- ------------------ -------
Securities
Restricted Underlying
Name and Principal Fiscal Other Annual Stock Options LTIP All Other
Position Year Salary Bonus Compensation Award(s) /SARs Payouts Compensation
---------- ---- ------ ----- ------------ -------- ---- ------- ------------
Scott A. Haire 1996 120,000 -- -- -- -- -- --
Chairman of the Board, 1995 -- (1) -- -- -- 1,800,000 -- --
Chief Executive Officer and 1994 58,750(1) -- -- -- -- -- --
President
- -------------
(1) Mr. Haire elected not to receive salary from July 1994 through December
1995.
OPTION GRANTS DURING FISCAL 1996
The Company did not grant any options to the named executive officer during
fiscal 1996.
OPTION EXERCISES DURING FISCAL 1996
AND FISCAL YEAR END OPTION VALUES
The following table provides information related to options exercised by
the named executive officer during fiscal 1996 and the number and value of
options held at fiscal year end. The Company does not have any outstanding stock
appreciation rights.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Number of Options/SARs at Options/SARs
Shares Fiscal Year End at Fiscal Year End (1)
------------------------------- ------------------------------
Acquired Value
on Exercise Realized
----------- --------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Scott A. Haire . . . . . -0- N/A 1,800,000 -- $180,000 --
(1) The closing price for the Company's Common Stock based upon the NASDAQ-OTC
Bulletin Board on December 31, 1996, was $0.125.
5
SECTION 16 REQUIREMENTS
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC").
Directors, officers and greater than 10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1996, or written representations from certain reporting
persons, the Company believes that all filing requirements applicable to its
directors, officers and greater than 10% beneficial owners have been complied
with.
PROPOSAL NO. 2
INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the shareholders at the Meeting, the Board of
Directors has selected King Griffin & Adamson P.C. (formerly King, Buns &
Company, P.C.) to audit the consolidated financial statements of the Company and
its subsidiaries for the fiscal year ending December 31, 1997. King Griffin &
Adamson P.C. has served the Company in this capacity since March 10, 1994.
Representatives of King Griffin & Adamson P.C. are expected to be present at the
Meeting, will have the opportunity to make a statement, if they desire to do so,
and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Exchange Act. For such proposals to be considered for
inclusion in the Proxy Statement and Proxy relating to the 1998 Annual Meeting
of Shareholders, such proposals must be received by the Company not later than
April 24, 1998. Such proposals should be directed to MB Software Corporation,
2225 E. Randol Mill Road, Suite 305, Arlington, Texas, 76011-6306, Attention:
Secretary.
OTHER BUSINESS
The Board of Directors knows of no matter other than those described herein
that will be presented for consideration at the Meeting. However, should any
other matters properly come before the Meeting or any adjournments thereof, it
is the intention of the persons named in the accompanying Proxy to vote in
accordance with their best judgment in the interest of the Company.
MISCELLANEOUS
All costs incurred in the mailing of this Information Statement will be
borne by the Company. The Company may make arrangements with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding of information
materials to the beneficial owners of shares of Common Stock held of record by
such persons, and the Company may reimburse such brokerage houses and other
custodians, nominees and fiduciaries for their out-of-pocket expenses incurred
in connection therewith.
6
Accompanying this Information Statement is a copy of the Company's Annual
Report for the fiscal year ended December 31, 1996.
By Order of the Board of Directors
Lucy J. Singleton
Secretary
Arlington, Texas
August 26, 1997
7