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
___ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MEDIA SOURCE INC.
(Name of Registrant as Specified in Its Charter)
______________________________________________________________________________
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction: $____________
(5) Total fee paid:
___ Fee paid previously with preliminary materials:
___ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Media Source, Inc.
5695 Avery Road
Dublin, Ohio 43016
August 8, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Media Source, Inc. on August 29, 2001. The meeting will begin at 9:00 a.m. at
15735 John J. Delaney Drive, Charlotte, North Carolina 28277.
Information regarding the matters to be voted upon at the Annual Meeting is
contained in the attached Proxy Statement. We urge you to read the Proxy
Statement carefully.
Because it is important that your shares be voted at the Annual Meeting,
whether or not you plan to attend in person, we urge you to complete, date and
sign the enclosed proxy card and return it as promptly as possible in the
accompanying envelope. If you do attend the meeting and wish to vote your shares
in person, even after returning your proxy, you still may do so.
We look forward to seeing you in Charlotte on August 29, 2001.
Very truly yours,
/s/ S. Robert Davis
S. Robert Davis, Chairman
Media Source, Inc.
5695 Avery Road
Dublin, Ohio 43016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on August 29, 2001
To the Stockholders of Media Source, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of Media
Source, Inc. (the "Company") will be held at 15735 John J. Delaney Drive,
Charlotte, North Carolina 28277 on August 29, 2001, at 9:00 a.m., Eastern
Standard Time, to consider and take action on the following matters:
1. To elect six Directors to serve on the Board of Directors of the Company
for one year and until their successors are duly elected and shall qualify.
2. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
Stockholders of record at the close of business on August 8, 2001 are
entitled to notice of and to vote at the meeting or any adjournment thereof. A
list of stockholders entitled to notice of and to vote at the meeting may be
examined at the executive offices of the Company at 5695 Avery Road, Dublin,
Ohio 43016.
So that we may be sure your vote will be included, please date, sign and
return the enclosed proxy promptly. For your convenience, a postage paid return
envelope is enclosed for your use in returning your proxy. If you attend the
meeting, you may revoke your proxy and vote in person.
If you would like to attend the meeting and your shares are held by a
broker, bank or other nominee, you must bring to the meeting a recent brokerage
statement or a letter from the nominee confirming your beneficial ownership of
the shares. You must also bring a form of personal identification. In order to
vote your shares at the meeting, you must obtain from the nominee a proxy issued
in your name.
Dated August 8, 2001 By Order of the Board of Directors
/s/ S. Robert Davis
_________________________
S. Robert Davis, Chairman
MEDIA SOURCE, INC.
PROXY STATEMENT
For Annual Meeting of Stockholders
To be Held on August 29, 2001
Summary
This Proxy Statement is furnished to Stockholders in connection with the
solicitation of proxies on behalf of the Board of Directors of Media Source,
Inc. (the "Company") for use at its Annual Meeting of Stockholders to be held on
August 29, 2001 at 9:00 a.m., Eastern Standard Time, at 15735 John J. Delaney
Drive, Charlotte, North Carolina, as set forth in the accompanying Notice of
Annual Meeting of Stockholders and at any adjournments thereof. This Proxy
Statement, the accompanying form of proxy, and the Company's Annual report on
Form 10-KSB for the fiscal year ended December 31, 2000 are first being mailed
to stockholders entitled to vote at the meeting on or about August 8, 2001.
The Annual Meeting has been called to consider and take action on the
election of six Directors to serve on the Board of Directors of the Company for
one year and until their successors have been duly elected and shall qualify.
The close of business on August 8, 2001, has been fixed as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournments thereof (the "Record Date"). The stock
transfer books will not be closed.
Solicitation and Revocation of Proxies
This Proxy Statement is being furnished to Stockholders in connection with
the solicitation of proxies by the Board of Directors of the Company for use at
the Annual Meeting of Stockholders to be held at the time, place, and for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders
and at any adjournments thereof.
As of the Record Date, there were 323,776 shares of the Company's common
stock, $.01 par value ("Common Stock") issued and outstanding, (exclusive of
19,361 shares held in treasury). As of the Record Date, all of the present
directors, nominees for director, and executive officers of the Company, a group
of four persons, owned beneficially 203,157 shares, or 62.75% of the outstanding
shares of Common Stock. The Company believes that such officers and directors
intend to vote their shares of Common Stock for each of the nominees to be
elected as Directors named in this Proxy Statement.
The presence in person or by proxy of a majority of the issued and
outstanding shares of Common Stock constitutes a quorum at the meeting. To be
elected, the nominees, as Directors named in this Proxy Statement must receive a
plurality of the votes cast by the Common Stock entitled to vote.
Proxies given by stockholders for use at the meeting, may be revoked at any
time prior to the exercise of the powers conferred by giving notice of
revocation to the Company in writing or at the meeting or by delivering to the
Company a later appointment which supersedes the earlier one. Abstentions and
broker non-votes will be counted only for the purpose of determining the
existence of a quorum. Votes cast by proxy or in person at the Annual Meeting
will be tabulated by an inspector of elections appointed for that purpose.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED
IN SUCH PROXIES. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE DISCRETION OF
THE BOARD OF DIRECTORS WITH RESPECT TO ANY OTHER BUSINESS THAT MAY COME BEFORE
THE MEETING.
The cost of soliciting proxies in the accompanying form will be borne by
the Company. Proxies may also be solicited by personal interview or by
telephone, in addition to the use of the mails, by directors, officers and
regular employees of the Company without additional compensation therefor. The
Company may reimburse brokerage firms and others for their expenses in
forwarding proxy materials to the beneficial owners and soliciting them to
execute proxies.
Voting Rights
Stockholders of record at the close of business on the Record Date, are
entitled to notice of and to vote at the Annual Meeting of Stockholders or any
adjournments thereof. Each outstanding share of Common Stock of record as of the
Record Date is entitled to one vote in all matters properly brought before the
meeting.
Item 1. Election of six directors to serve for one year and until their
successors have been duly elected and shall qualify
The Board of Directors has concluded that the election of S. Robert Davis,
Juan F. Sotos, M.D., Randall J. Asmo, Charles R. Davis, Rodney L. Taylor and
Brent A Garland as Directors is in the best interests of the Company and
recommends their election. The Board of Directors has no reason to believe that
the nominees named above will be unavailable, or if elected, will decline to
serve. Biographical information concerning Messrs. Robert Davis, Sotos, Asmo,
Charles Davis, Taylor and Garland can be found under "Directors and Executive
Officers."
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted for the election of the nominees listed herein.
Although the Board of Directors of the Company does not contemplate that any of
such nominees will be unable to serve, if such a situation exists prior to the
Annual Meeting, the persons named in the enclosed proxy will vote for the
election of such other persons as may be nominated by the Board of Directors.
The Board of Directors unanimously recommends a vote FOR the election of
the nominees listed above. Unless indicated to the contrary, the enclosed Proxy
will be voted "FOR" such nominees.
Directors and Executive Officers
The following table sets forth certain information concerning the directors
and executive officers of the Company, not including Robert J. Tierney, a
current director who is not nominated for re-election.
Director or Executive
Name Age Position (1) Officer Since
---- --- ------------ ---------------------
S. Robert Davis 62 Chairman of the Board, President, 1990
Assistant Secretary, and Director
Randall J. Asmo 36 Executive Vice President and Director 1992
Juan F. Sotos, M.D 74 Director 1992
Robert J. Tierney 53 Director 1992
Charles R. Davis(1) 39 Director 2000
Rodney L. Taylor 45 Nominee for Director ---
Brent A. Garland 36 Nominee for Director ---
Donald R. Hollenack 37 Chief Financial Officer 1999
(1) S. Robert Davis is the father of Charles R. Davis.
Executive officers are elected by the Board of Directors and serve until their
successors are duly elected and qualify, subject to earlier removal by the Board
of Directors. Directors are elected at the annual meeting of shareholders to
serve for one year and until their respective successors are duly elected and
qualify, or until their earlier resignation, removal from office, or death. The
remaining directors may fill any vacancy in the Board of Directors for an
unexpired term.
Business Experience of Directors and Executive Officers and Nominee for Director
S. Robert Davis. Mr. Davis has served as a director and Chairman of the
Board since 1990, and has served as Assistant Secretary since 1992. Prior to his
election to the Board of Directors, he served as Assistant to the President from
1988 to 1990, on a part-time basis. Additionally, during the past five years,
Mr. Davis has operated several private businesses involving the developing, sale
and/or leasing of real estate including Mid-States Development Corp. a
privately-held real estate development and leasing company, and American Home
Building Corp., a privately-held real estate development company. Mr. Davis is
also the Chairman of the Board of Casco International Inc., a company with a
class of securities registered pursuant to section 12 of the Securities Exchange
Act of 1934.
Randall J. Asmo. Mr. Asmo was elected Vice President in 1992 and has served
as a director since 1997. In 1998, Mr. Asmo was elected Secretary and Executive
Vice President. Prior to that time, he served as Assistant to the President from
1990 to 1992. Additionally, since 1987, Mr. Asmo has served as Vice President of
Mid-States Development Corp., and American Home Building Corp. Mr. Asmo is also
a director of Casco International Inc. as well as an officer in several other
small business enterprises.
Juan F. Sotos, M.D. Dr. Sotos has served as a director since 1992. Dr.
Sotos has been a Professor of Pediatrics at The Ohio State University College of
Medicine since 1962 and also serves as Chief of Endocrinology and Metabolism at
Children's Hospital in Columbus, Ohio.
Charles R. Davis. Mr. Davis, was elected to the Board of Directors in 2000.
He is a director and has been the president of Casco International, Inc. since
1992. Mr. Davis is also a director and executive officer of American Home
Building Corp.
Robert J. Tierney. Mr. Tierney was elected as a director in 1992. Mr.
Tierney currently serves as the dean of education at the University of British
Columbia. Mr. Tierney served as a professor at The Ohio State University from
1984-2000. Mr. Tierney has not been nominated for reelection to the Board of
Directors.
Rodney L. Taylor. Mr. Taylor, is nominated for election to the Board of
Directors. He has been the general manager of Family Ford Lincoln Mercury in
Marietta, Ohio, an automobile dealership, since June 1997. From 1994 to 1997,
Mr. Taylor was General Sales Manager for Bobb Chevrolet. He is also a director
of Casco International, Inc.
Brent A. Garland. Mr. Garland, is nominated for election to the Board of
Directors. He has been the senior director of corporate and network development
of Mount Carmel Health, since March 1997. Mr. Garland has worked in health care
since 1986 in the areas of human resources and corporate development.
Donald R. Hollenack. Donald R. Hollenack was elected chief financial
officer in 1999. From May, 1997 to March, 1999, Mr. Hollenack served as
Controller for National Church Residences, a privately-held real estate company
providing housing for the elderly and low income families. From September, 1996
to March, 1997, Mr. Hollenack served in a similar capacity as Controller for
J.P. Services, Inc., a distribution and delivery company. From December 1989 to
September 1996, he was Controller for Long's College Book Company, a retail
college book store. Prior to December, 1989, Mr. Hollenack served as a
consultant in a public accounting firm. Mr. Hollenack is a non-practicing
Certified Public Accountant.
The Board of Directors
The Company's Bylaws provide that the number of Directors which shall
constitute the whole Board of Directors shall be as from time to time determined
by resolution of the Board of Directors, but the number shall not be less than
three. The Board of Directors currently consists of five members, but will be
increased to six members. The Board of Directors held three meetings during the
fiscal year ended December 31, 2000.
There are no material proceedings to which any Director, officer or
affiliate of the Company, any owner of record or beneficially of more than 5% of
any class of voting securities of the Company, or any associate of any such
Director, officer, affiliate of the Company, or security holder is a party
adverse to the Company or any of its subsidiaries or has a material interest
adverse to the Company or any of its subsidiaries.
Committees of the Board of Directors
Audit Committee. The Audit Committee is responsible for making
recommendations to the Board of Directors concerning the selection and
engagement of the Company's independent certified public accountants and reviews
the scope of the annual audit, audit fees, and results of the audit. The Audit
Committee also reviews and discusses with management and the Board of Directors
such matters as accounting policies and internal accounting controls, and
procedures for preparation of financial statements. Management has the primary
responsibility for preparing the financial statements and the Company's
financial reporting process, including the Company's systems of internal
controls. Dr. Sotos, S. Robert Davis and Robert J. Tierney are members of such
Committee. The Committee met once during the fiscal year ended December 31,
2000.
The Board of Directors has adopted a written Audit Committee charter which
is included as Appendix A to this Proxy Statement.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality and the acceptability of the Company's financial
reporting and such other matters as are required to be discussed with the Audit
Committee under generally accepted auditing standards. In addition, the Audit
Committee received from and discussed with the independent auditors the written
disclosure and the letter required by Independence Standards Board Standard No.
1 ("Independence Discussions with Audit Committees") and considered the
compatibility of non-audit services with the auditors' independence. The Audit
Committee also discussed with the independent auditors any matters required to
be considered by Statement on Auditing Standards No. 61 ("Communication with
Audit Committees").
The Audit Committee also discussed with the independent auditors and the
Company's internal audit director the overall scope and plans for their
respective audits. The Audit Committee met with the independent auditors and the
internal audit director, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. In
reliance on these reviews and discussions, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 for
filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Robert J. Tierney, Chairman
Juan F. Sotos, M.D.
S. Robert Davis
The report of the audit committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the securities act of 1933 or under the
securities exchange act of 1934 (together, the "acts"), except to the extent
that the company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such acts.
Executive Compensation Committee. The Executive Compensation Committee
approves the compensation for executive employees of the Company. Dr. Sotos, and
Robert J. Tierney are members of such Committee. The Committee met once during
the fiscal year ended December 31, 2000.
Compensation Committee Interlocks and Insider Participation. Juan F. Sotos,
M.D. and Robert J. Tierney served as the Executive Compensation Committee during
the last fiscal year. Neither Dr. Tierney nor Dr. Sotos serve or have served as
an officer or employee of the Company or any of its subsidiaries. Neither of
such persons serves on the Board of Directors of any other public company.
Stock Ownership
The following table sets forth, to the best of the Company's knowledge,
certain information as of July 16, 2001, with respect to the beneficial
ownership of shares of the Common Stock by (i) each person known to the Company
to be the beneficial owner of more than 5% of the Company's outstanding Common
Stock, (ii) each Director and nominee, (iii) the President (the Company's only
executive officer whose salary and bonus during 2000 exceeded $100,000) and (iv)
all Directors and executive officers of the Company as a group:
Amount and Nature Percent
Name and Address of Beneficial Ownership (1) of Class(2)
---------------- --------------------------- -----------
S. Robert Davis 165,261(3) 51.04%
5695 Avery Road
Dublin, Ohio 43016
Charles R. Davis 25,610 7.91%
13900 Conlan Circle, Suite 150
Charlotte, North Carolina 28277
Robert Moton 16,600 5.13%
1406 Casa DeOro
Corpus Christi, TX 78411
Randall J. Asmo 9,258 2.86%
5695 Avery Road
Dublin, Ohio 43016
Juan F. Sotos, M.D. 2,890 *
700 Children's Drive, Room ED 421
Columbus, Ohio 43220
Robert J. Tierney 138 *
University of British Columbia
2125 Main Mall, Room 2616
Vancouver, BC Canada V6T 1Z4
Rodney L. Taylor 0 *
105 Social Row
Marietta, Ohio 45750
Brent A. Garland 125 *
2948 Brookdown Dr.
Columbus, Ohio 43235
All executive officers,
directors and 203,157(4) 62.75%
nominees as a group (7 persons)
------------------
*less than 1%
(1) Represents sole voting and investment power unless otherwise indicated.
(2) Based on 323,775 shares of Common Stock outstanding as of July 16, 2000.
(3) Includes 1,255 shares owned by Mr. Davis' wife as to which Mr. Davis
disclaims beneficial ownership.
(4) Includes the number of shares of Common Stock beneficially owned by all
executive officers, directors and nominees, and 1,255 shares of Common
Stock owned by Mrs. S. Robert Davis as to which Mr. Davis disclaims any
beneficial ownership.
Certain Transactions
An option to purchase stock was granted on May 10, 2000 to the Company
Chairman, S. Robert Davis, holder of a $500,000 subordinated convertible note
payable due August 1, 2000. In exchange for granting this option, S. Robert
Davis agreed to extend the due date of his note, cancel the conversion feature
associated with the note, and allow the Company to repay the debt over 20
quarterly installments of $25,000 starting in April 2000. The stock option
entitles S. Robert Davis to purchase from the Company 100,000 shares at 1/8th
over the closing bid price on the day of grant. The closing bid price on May 10,
2000 was $2.125 and therefore the exercise price is $2.25 per share. The option
is only exercisable after May 10, 2003, three years after the date of the grant
and expires on May 10, 2006, six years after the date of the grant.
The Junior Library Guild entered into a lease with Mid-States Development
Corp., which is 100% owned by the Company's Chairman, S. Robert Davis, to lease
a warehouse and office facility in Union County, Ohio. The lease is for twenty
years commencing November 1, 2000 with annual rents of $120,000 per year in
years one through five, $132,000 per year during years six through ten, $145,200
during years 11 through 15, and $159,700 per year during years 16 through 20.
S. Robert Davis continued to defer his compensation during fiscal year
2000. At December 31, 2000, Mr. Davis' total deferred compensation was $496,577.
Mr. Davis' deferred compensation earns interest at 7 percent. Interest on
deferred compensation at December 31, 2000 was $46,541. On January 10, 2001, the
Company paid Mr. Davis his deferred compensation and interest. Commencing
January 1, 2001, the Company has resumed paying Mr. Davis his annual salary of
$185,000.
In November 2000, the Company received CASCO shares of common stock that
were exercised for notes receivable by former employees as part of the spin off
of the former subsidiary. The CASCO shares are currently being held as trading
securities.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and Directors, and persons who beneficially own more than 10% of the
Company's Common Stock, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC") and the
National Association of Securities Dealers, Inc. Executive officers, Directors
and greater than 10% beneficial owners are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company and
written representations from the executive officers and Directors, the Company
believes that all Section 16(a) filing requirements applicable to its executive
officers, Directors, and greater than 10% beneficial owners were complied with.
Compensation of Executive Officers and Directors
Director Compensation. Each Director who is not an officer of the Company
receives a fee of $1,100 for attendance at each Board meeting, a fee of $550 for
attendance at each telephonic Board meeting, and a fee of $500 for attendance at
each meeting of a Board committee of which he is a member. Directors who are
also officers of the Company receive no additional compensation for their
services as Directors.
Executive Compensation. The following table shows, for the fiscal years
ended December 31, 2000, 1999, and 1998, the cash compensation paid or accrued
by the Company and its subsidiaries, as well as certain other compensation paid
or accrued for those years, to the Company's President, (the "Named Executive
Officer"), and the principal capacity in which he served
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------------------------------------
Securities
Underlying
Name and Other Annual Options/Warrants
Principal Position Year Salary Bonus Compensation SAR's(#)(1)
------------------ ---- ------ ----- ------------ ---------------
S. Robert Davis, 2000 $192,243(2) $0 $0 100,000
Chairman and 1999 $185,000(2) $0 $0 0
President 1998 $185,000(2) $0 $0 0
(1) Stock options previously granted to Mr. Davis, by their terms,
automatically adjust to reflect certain changes in the outstanding Common
Shares of the Company, including stock dividends.
(2) Mr. Davis was paid $54,423 in salary through May 7, 1998, after which he
elected to defer and accrue his salary. In June 1999, Mr. Davis elected to
continue to defer and accrue his annual salary of $185,000 per year through
1999. Mr. Davis was paid $192,243 in salary in 2000. Mr. Davis' accrued
salary earns interest at 7 percent per annum.
No executive officers have employment agreements with the Company.
Option/Warrant Grants in Last Fiscal year to Named Executive Officer
Number of Percent of Total
Securities Options/SARS
Underlying Granted to Exercise or
Options/SARS Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
---- ------------ ---------------- ----------- ---------
S. Robert Davis 100,000(1) 100% $2.250 May, 2006
(1) See "Certain Relationships and Related Transactions", for the material
terms of the Option.
Aggregated Options Exercised in 2000 and Fiscal Year-End Option Values. The
following table provides certain information with respect to options exercised
in fiscal year 2000 by the Named Executive Officer and the value of such
officer's unexercised options at December 31, 2000.
Value of Unexercised
Number of Unexercised In-the-Money Options/
Options/Warrants at Warrants at
Year End(#) Year End($)(1)
----------------------- ------------------------
Name Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ----------- ----------- ------------- ----------- -------------
S. Robert
Davis None N/A 0 100,000 $ 0 $231,300
(1) Options are "In-the-Money" if the fair market value of the underlying
securities exceeds the exercise or base price of the option at fiscal year
end. The value is calculated by determining the difference between the fair
market value of the securities underlying options and the exercise or base
price of the option at exercise or fiscal year-end, respectively.
Independent Public Accountants
The accounting firm of Hausser + Taylor LLP, Columbus, Ohio, was the
Company's principal auditor and accountant for the year ended December 31, 2000
and has been selected as the Company's auditor and accountant for the next
fiscal year. Management expects that a representative of Hausser + Taylor LLP
will be present at the Annual Meeting of Stockholders. The Hausser + Taylor
representative will be afforded an opportunity to make a statement at the
meeting if desired and is expected to be available to respond to appropriate
questions.
Hausser + Taylor LLP has a continuing relationship with American Express
Tax and Business Services, Inc. ("TBS") from which it leases auditing staff who
are full-time, permanent employees of TBS and through which Hausser + Taylor
LLP's partners provide non-audit services. As a result of this arrangement,
Hausser + Taylor LLP has no full-time employees, and, therefore, none of the
audit services performed were provided by permanent full-time employees of
Hausser + Taylor LLP. Hausser + Taylor LLP manages and supervises the audit and
audit staff and is exclusively responsible for the opinion rendered in
connection with its examination. Other Services, which do not include Financial
Information System Design and Implementation fees, have been provided by TBS.
Audit Fees. The aggregate fees billed by Hausser + Taylor LLP for
professional services for the audit and review of the Company's 2000 financial
statements amounted to $31,500.
Financial Information Systems Design and Implementation Fees. There were no
fees billed by Hausser + Taylor LLP for professional services for information
and technology services relating to financial information systems design and
implementation for the fiscal year ended December 31, 2000.
All Other Fees. There were no fees billed by Hausser + Taylor LLP for
services rendered to the Company, other than the services described above under
"Audit Fees" and "Financial Information Systems Design and Implementation Fees,"
for the fiscal year ended December 31, 2000 were none.
Annual Report
The 2000 Annual Report on Form 10-KSB, which includes financial statements
was mailed to each shareholder receiving this Proxy Statement.
The Company will provide, without charge, to any person receiving a copy of
this Proxy Statement, upon written or oral request of such person, by first
class a copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2000, including the financial statements and the financial
statement schedules thereto. Such requests should be addressed to S. Robert
Davis, Chairman, Media Source, Inc., 5695 Avery Road, Dublin, Ohio, 43016, (800)
242-8749.
Other Proposed Action
The Board of Directors does not intend to bring any other matters before
the meeting nor does the Board of Directors know of any matters which other
persons intend to bring before the meeting. If, however, other matters not
mentioned in this Proxy Statement properly come before the meeting, the persons
named in the accompanying form of proxy will vote thereon in accordance with the
recommendation of the Board of Directors.
Stockholder Proposals and Submissions for the 2001 Annual Meeting
If any Stockholder wishes to present a proposal pursuant to Rule 14a-8 of
the Securities Exchange Act of 1934 for inclusion in the proxy materials to be
solicited by the Company's Board of Directors with respect to the next Annual
Meeting of Stockholders, such proposal must be presented to the Company's
management on or before March 9, 2002. Notice of a shareholder proposal
submitted outside the processes of Rule 14a-8 of the Securities Exchange Act of
1934 will be considered untimely if it is not received by the Company before
June 25, 2002.
Appendix 1
PROXY
MEDIA SOURCE, INC.
5695 Avery Road
Dublin, Ohio 43016
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints S. Robert Davis and Randall J. Asmo and
each of them, as Proxies, each the power to appoint his substitute, and hereby
authorizes each of them to represent and vote, as designated below, all of the
shares of the Common Stock of Media Source, Inc. (the "Company") held of record
by the undersigned at the close of business on August 8, 2001, at the Annual
Meeting of Stockholders to be held on August 29, 2001, or any adjournment(s)
thereof.
1. Election of Directors
____ For all nominees listed below (except as marked to the contrary
below)
____ Withhold Authority to vote for all nominees listed
below
S. Robert Davis, Randall J. Asmo, Juan F. Sotos, M.D.,
Charles R. Davis, Brent A. Garland and Rodney L. Taylor.
(Instruction: To withhold authority to vote for any nominee, write that
nominee's name in the space below. Do not mark "Withhold Authority" above unless
you intend to withhold authority for all nominees.)
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting
Please execute this proxy as your name appears hereon. 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 partnership name by
authorized persons. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE NOMINEES LISTED ABOVE AND IN THE DISCRETION OF THE PROXY
WITH RESPECT TO ANY OTHER MATTER THAT IS PROPERLY PRESENTED AT THE MEETING.
DATED: __________________, 2001 ____________________________
Signature
____________________________
Signature if held jointly
Appendix 2
MEDIA SOURCE, INC.
AUDIT COMMITTEE CHARTER
Our committee of the board of directors will be known as the audit committee.
Only independent directors will serve on the audit committee. An independent
director is free of any relationships that could influence his or her judgment
as a committee member. An independent director may not be associated with a
major vendor to, or customer of, the company. When there is some doubt about
independence, as when a member of the committee has a short-term consulting
contract with a major customer, the director should rescue himself from any
decisions that might be influenced by that relationship.
The primary function of the audit committee is to assist the board in fulfilling
its oversight responsibilities by reviewing the finance information that will be
provided to the shareholders and others the systems of internal controls
management and the board of directors have established and all audit processes.
GENERAL RESPONSIBILITIES
1. The audit committee provides open avenues of communication among the
Company's independent auditors (the "Auditor"), and the board of directors.
2. The audit committee must report committee actions to the full board of
directors and may make appropriate recommendations.
3. The audit committee has the power to conduct or authorize investigations
into matters within the committee's scope of responsibilities. The
committee is authorized to retain independent counsel, accountants or
others it needs to assist in an investigation.
4. The committee will meet at least two times each year, more frequently if
circumstances make their preferable. The audit committee chairman has the
power to call a committee meeting whenever he or she thinks there is a
need. An audit committee member should not vote on any matter in which he
or she is not independent. The committee may ask members of management or
others to attend the meeting and is authorized to receive all pertinent
information from management.
5. The committee will do whatever else the law, the company's charter or
bylaws or the board of directors require.
RESPONSIBILITIES FOR ENGAGING THE AUDITOR
1. The audit committee will select the Auditor for company audits. The
committee's selection is subject to approval by the full board of
directors. The audit committee will review and set any fees paid to the
Auditor and review and approve dismissal of the Auditor.
2. The audit committee will confirm and assure the independence of the
Auditor, including a review of management consulting services provided by
the Auditor and the fees paid for them.
3. The audit committee will consider, in consultation with the Auditor, the
audit scope and procedural plans made by the Auditor.
4. The audit committee will listen to management and the Auditor if either
think there might be a need to engage additional auditors. The audit
committee will decide whether to engage an additional firm and, if so,
which one.
RESPONSIBILITIES FOR REVIEWING THE ANNUAL AUDIT AND THE REVIEW OF QUARTERLY AND
ANNUAL FINANCIAL STATEMENTS.
1) The audit committee will ascertain that the Auditor views the board of
directors as its client, that it will be available to the full board of
directors at least annually and that it will provide the committee with a
timely analysis of significant financial reporting issues.
2) The audit committee will ask management and the Auditor about significant
risks and exposures and will assess management's steps to minimize them.
3) The audit committee will review the following with the Auditor:
(a) The adequacy of the company's internal controls, including computerized
information system controls and security.
(b) Any significant findings and recommendations made by the Auditor, together
with management's responses to them.
4) Shortly after the annual examination is completed, the audit committee will
review the following with management and the Auditor:
(a) The company's annual financial statements and related footnotes.
(b) The Auditor's audit of and report on the financial statements.
(c) The Auditor's qualitative judgments about the appropriateness, not just the
acceptability, of accounting principles and financial disclosures and how
aggressive (or conservative) the accounting principles and underlying
estimates are.
(d) Any serious difficulties or disputes with management encountered during the
course of the audit.
(e) Anything else about the audit procedures or findings that GAAS requires the
Auditors to discuss with the committee.
5) The audit committee will review annual filings with the SEC and other
published documents containing the company's financial statements and will
consider whether the information in the filings is consistent with the
information in the financial statements.
6) The audit committee will review the interim financial reports with
management and the Company's CFO before those interim reports are released
to the public or filed with the SEC or other regulators.
7) The audit committee will prepare a letter for inclusion in the annual
report that describes the committee's composition and responsibilities and
how the responsibilities were fulfilled.
PERIODIC RESPONSIBILITIES
1) Review and update the committee's charter annually.
2) Review policies and procedures covering officers' expense accounts and
perquisites, including their use of corporate assets, and consider the
results of any review of those areas by Auditor.
3) Review legal and regulatory matters that may have a material effect on the
organization's financial statements, compliance policies and programs and
reports from regulators.
4) Meet with the CFO, the Auditor and management in separate executive
sessions to discuss and matters the committee or these groups believe
should be discussed privately with the audit committee.