UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
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:
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Preliminary
Proxy Statement
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CONFIDENTIAL,
FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to ss.240.14a-12
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Medical
Transcription Billing, Corp.
(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):
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[X]
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No
fee required.
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[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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Aggregate
number of securities to which transaction applies:
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(3)
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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)
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Proposed
maximum aggregate value of transaction:
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(5)
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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.
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(1)
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Amount
Previously Paid:
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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Date
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Medical
Transcription Billing, Corp.
7
Clyde Road
Somerset,
NJ 08873
April
18, 2017
Dear
Fellow Shareholder:
It
is my pleasure to invite you to attend the Annual Meeting of Shareholders of Medical Transcription Billing, Corp. at 11:00 a.m.,
Eastern Time, on Thursday June 15, 2017, at our principal executive offices at 7 Clyde Road, Somerset, NJ 08873.
The
following pages contain the formal Notice of the Annual Meeting and the Proxy Statement. If you plan to attend the Meeting, please
detach the Admission Ticket from your proxy card and bring it to the Meeting. The proxy materials will be first sent or given
to stockholders on or about April 26, 2017.
At
this year’s Annual Meeting, you will be asked to vote on the proposal set forth in the Notice of Annual Meeting of Stockholders
and proxy statement, which describe the formal business to be conducted at the Annual Meeting and follow this letter.
Your
vote is important. Whether you plan to attend the Annual Meeting in person or not, we hope you will vote your shares as soon as
possible. Please mark, sign, date, and return the accompanying card in the postage-paid envelope or instruct us via the Internet
as to how you would like your shares voted. Instructions are on the proxy card. This will ensure representation of your shares
if you are unable to attend.
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Sincerely,
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/s/
Mahmud U. Haq
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Mahmud
U. Haq
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Chairman
of the Board, Chief Executive Officer
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NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON JUNE 15, 2017
TIME
11:00
a.m., Eastern Time, on
Thursday,
June 15, 2017
PURPOSE
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To
elect two director candidates nominated by our Board of Directors.
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To
consider and act on such other business as may properly come before the Meeting.
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DOCUMENTS
This
Notice is only an overview of the Proxy Statement and proxy card included in this mailing which is also available at
ir.mtbc.com/annuals-proxy.cfm.
The Notice of Internet Availability will be mailed to shareholders on or about April 26, 2017.
PLACE
7
Clyde Road, Somerset, NJ 08873
RECORD
DATE
Owners
of shares of Medical Transcription Billing, Corp. (the “Company”)’s Common Stock, as of the close of
business on April 17, 2017, will receive notice of and be entitled to vote at the Meeting and any adjournments.
VOTING
Even
if you plan to attend the Meeting, please mark, sign, date, and return the enclosed proxy card in the enclosed postage-paid envelope.
You may revoke your proxy by filing with the Secretary of the Company a written revocation or by submitting a duly executed proxy
bearing a later date. If you are present at the Meeting, you may revoke your proxy and vote in person on each matter brought before
the Meeting. You may also vote over the Internet using the Internet address on the proxy card.
To be considered, all
votes must be received by midnight on June 13, 2017.
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Mahmud
U. Haq
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Chairman
of the Board
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Dated:
April 18, 2017
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Table
of Contents
QUESTIONS
AND ANSWERS
Q:
When and where is the Annual Meeting?
A:
The Company’s Annual Meeting of Shareholders will be held at 11:00 a.m., Eastern Time, Thursday, June 15, 2017, at our principal
executive offices at 7 Clyde Road, Somerset, NJ 08873.
Q:
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
A:
In accordance with rules adopted by the SEC, we may furnish proxy materials, including this proxy statement and our Annual Report,
to our shareholders by providing access to such documents on the Internet instead of mailing printed copies. Most shareholders
will not receive printed copies of the proxy materials unless they request them. Instead, the Notice of Internet Availability
of Proxy Materials, which was mailed to most of our shareholders, will instruct you as to how you may access and review all of
the proxy materials on the Internet. The Notice of Internet Availability also instructs you as to how you may submit your proxy
on the Internet. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions
for requesting such materials in the Notice
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Q:
Who is entitled to vote?
A:
You are entitled to vote at the Annual Meeting if the Company’s records on April 17, 2017 (the “record date”)
showed that you owned the Company’s common stock, par value $.001 (the “Common Stock”). As of April 17, 2017,
there were 10,487,677 shares of Common Stock outstanding.
Q:
What will I likely be voting on?
A:
There is one proposal that is expected to be voted on at the Annual Meeting, which is to elect two director
candidates
nominated by our Board of Directors to serve as directors.
As of the date of this Proxy Statement, the Company was not
aware of any additional matters to be raised at the Annual Meeting.
Q:
What is the Board’s recommendation?
A:
The Board of Directors recommends that you vote your shares:
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FOR
the director nominees.
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Q:
How many votes is each share entitled to?
A:
Each share of Common Stock has one vote. The enclosed proxy card shows the number of shares that you are entitled to vote.
Q:
Do I need a ticket to attend the Annual Meeting?
A:
Yes. Retain the top of the proxy card as your admission ticket. One ticket will permit two persons to attend. If your shares are
held through a broker, contact your broker and request that the broker provide you with evidence of share ownership. This documentation,
when presented at the registration desk at the Annual Meeting, will enable you to attend the Meeting.
Q:
How do proxies work?
A:
The Board of Directors is asking for your proxy. Giving us your proxy means that you authorize us to vote your shares at the Meeting
in the manner you direct. You may also abstain from voting. If you sign and return the enclosed proxy card but do not specify
how to vote, we will vote your shares in accordance with the Board of Directors’ recommendations.
Q:
How do I vote?
A:
You may:
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Vote
by marking, signing, dating, and returning a proxy card;
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Vote
via the Internet by following the voting instructions on the proxy card or the voting instructions provided by your broker,
bank, or other holder of record. Internet voting procedures are designed to authenticate your identity, allow you to vote
your shares, and confirm that your instructions have been properly recorded. If you submit your vote via the Internet, you
may incur costs associated with electronic access, such as usage charges from Internet access providers and telephone companies;
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Vote
in person by attending the Annual Meeting. We will distribute written ballots to any shareholder who wishes to vote in person
at the Annual Meeting.
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If
your shares are held in street name, your broker, bank, or other holder of record will include a voting instruction form with
this Proxy Statement. We strongly encourage you to vote your shares by following the instructions provided on the voting instruction
form. Please return your voting instruction form to your broker, bank, or other holder of record to ensure that a proxy card is
voted on your behalf.
Q:
Do I have to vote?
A:
No. However, we strongly encourage you to vote.
Q:
What does it mean if I receive more than one proxy card?
A:
If you hold your shares in multiple registrations, or in both registered and street name, you will receive a proxy card for each
account. Please mark, sign, date, and return each proxy card you receive. If you choose to vote by Internet, please vote each
proxy card you receive.
Q:
Will my shares be voted if I do not sign and return my proxy card?
A:
If your shares are held in street name and you do not instruct your broker or other nominee how to vote your shares, your broker
or nominee may use its discretion to vote your shares on “routine matters. For any “non-routine matters” being
considered at the Meeting, your broker or other nominee would not be able to vote on such matters.
Q:
Can I change my vote?
A:
Yes. You may revoke your proxy and change your vote before the Annual Meeting by submitting a new proxy card with a later date,
by casting a new vote via the Internet, by notifying the Company’s Corporate Secretary in writing, or by voting in person
at the Meeting. If you do not properly revoke your proxy, properly executed proxies will be voted as you specified in your earlier
proxy.
Q:
What is a quorum?
A:
A quorum is the number of shares that must be present, in person or by proxy, in order for business to be transacted at the Annual
Meeting. At least a majority of the outstanding shares eligible to vote must be represented at the Meeting, either in person or
by proxy, in order to transact business.
Q:
Who will tabulate the votes?
A:
A representative from our Company, Norman Roth, will tabulate the votes and act as inspector of election.
Votes
cast by proxy or in person at the Annual Meeting will be tabulated by the inspector of election. The inspector will also determine
whether a quorum is present at the Annual Meeting.
The
shares represented by the proxy cards received, properly marked, dated, signed, and not revoked, will be voted at the Annual Meeting.
If the proxy card specifies a choice with respect to any matter to be acted on, the shares will be voted in accordance with that
specified choice. Any proxy card that is returned signed but not marked will be voted as recommended by the Board of Directors.
Q:
How are proposals approved by the security holders?
A:
Our directors will be elected by a plurality of the votes cast by the shares entitled to vote at the Annual Meeting so long as
a quorum is present. All other corporate governance actions will be approved by a majority of the votes cast. Although state law
and our certificate of incorporation and bylaws are silent on the issue, abstentions or broker non-votes as to any matter will
be included in the calculations as to the presence of a quorum, but will not be counted as votes cast in such matter in the calculation
as to the needed majority vote.
Q:
Who will bear the costs of this solicitation?
A:
Our Board of Directors is making this solicitation, and we will pay the entire cost of preparing, assembling, printing, mailing
and distributing these proxy materials. If you choose to access the proxy materials over the internet, however, you are responsible
for internet access charges you may incur. The solicitation of proxies or votes may be made in person. We will also reimburse
brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy
and solicitation materials to stockholders.
Q:
What should I do now?
A:
You should read this proxy statement carefully and promptly submit your proxy card or vote by the internet as provided on the
proxy card to ensure that your vote is counted at the Annual Meeting.
Q:
How will shares in the Company’s employee benefit plans be voted?
A:
If you are or were a participant in the Company’s employee benefit plans, this Proxy Statement is being used to solicit
voting instructions from you with respect to shares of our stock that you own but which are held by the trustees of our benefit
plans for the benefit of you and other plan participants. Shares held in our benefit plans that you are entitled to vote will
be voted by the plan trustees pursuant to your instructions. Shares held in any employee benefit plan that you are entitled to
vote, but do not vote, will be voted by the plan trustees in proportion to the voting instructions received for other shares.
You must instruct the plan trustees to vote your shares by utilizing one of the voting methods described above.
Q:
How do I obtain a copy of the Company’s materials related to corporate governance?
A:
The Company’s Corporate Governance materials, charters of each standing Board Committee, Code of Conduct, and other materials
related to our corporate governance can be found in the Corporate Governance section of the Company’s website at
ir.mtbc.com/corporate-governance.cfm.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information, as of April 17, 2017, concerning:
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Each
person or group of persons known by the Company to own beneficially more than five percent of the outstanding shares of Common
Stock, based on information provided by the beneficial owner in public filings made with the Securities and Exchange Commission
(“SEC”).
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Each
person who has been a director or executive officer of the Company since the beginning of the last fiscal year.
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Each
nominee for the Board of Directors.
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Each
associate of any of the foregoing persons.
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Unless
otherwise noted below, the address of each beneficial owner listed in the table except Adage Capital Management, L.P., is c/o
MTBC, 7 Clyde Road, Somerset, NJ 08873. The address of Adage Capital Management L.P. is 200 Clarendon Street, 52
nd
floor, Boston, MA. 02116.
Beneficial ownership is determined in accordance with the rules
of the SEC, which deem a person to beneficially own any shares the person has or shares voting or dispositive power over and any
additional shares obtainable within 60 days through the exercise of options, warrants or other purchase rights. Shares of common
stock subject to options, warrants or other rights to purchase that are currently exercisable or are exercisable within 60 days
of the April 17, 2017 record date (including shares subject to restrictions that lapse within 60 days of the record date) are
deemed outstanding for purposes of computing the percentage ownership of the person holding such shares, options, warrants or
other rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise
indicated, each person possesses sole voting and investment power with respect to the shares identified as beneficially owned.
The percentages are based on
10,487,677
shares of Common Stock outstanding as of
April 14, 2017. Each share of Common Stock has one vote.
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Name
of Beneficial Owner
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Common
Stock Beneficially Owned
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Percent of Class
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Preferred Stock
Beneficially Owned
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Percent
of Class
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Five
Percent Shareholders
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Adage
Capital Management, L.P.
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1,000,000
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9.5
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%
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*
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Directors
and Named Executive Officers
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Mahmud
Haq, CEO and Chairman of the Board
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4,987,070
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47.6
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%
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11,400
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3.6
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%
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Anne
Busquet
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99,350
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0.9
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%
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*
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Howard
L. Clark, Jr.
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75,000
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0.7
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%
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*
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John
N. Daly
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92,500
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0.9
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%
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-
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*
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Bill
Korn
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133,000
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1.3
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%
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8,300
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2.6
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%
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Cameron
P. Munter
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92,500
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0.9
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%
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-
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*
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Stephen
A. Snyder
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156,000
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1.5
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%
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9,050
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2.8
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%
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All
current directors and executive officers as a group (7 persons)
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5,635,420
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53.7
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%
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28,750
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9.0
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%
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CORPORATE
GOVERNANCE
Role
and Composition of the Board of Directors
The
Company’s Board of Directors believes that good corporate governance principles and practices provide a strong framework
to assist the Board in fulfilling its responsibilities to shareholders. The Board recognizes the interests of the Company’s
shareholders, employees, customers, suppliers, consumers, creditors, and the communities in which it operates, who are all essential
to the Company’s success. Accordingly, the Board has adopted corporate governance principles relating to its role, composition,
structure, and functions. The Board periodically reviews the principles and other corporate governance matters.
Role
of the Board and Management
The
Company’s business is conducted by its employees, managers, and officers under the direction of the Chief Executive Officer
(“CEO”) and the oversight of the Board. The Board of Directors is elected by the shareholders to oversee management
and to ensure that the long-term interests of the shareholders are being served. Directors are expected to fulfill duties of care
and loyalty and to act with integrity as they actively conduct Board matters.
As
part of its general oversight function, the Board actively reviews and discusses reports by management on the performance of the
Company, its strategy, goals, financial objectives, and prospects, as well as issues and risks facing the Company. The opinions
of the independent Compensation Committee Board members are solicited with respect to the selection, evaluation, and determination
of compensation and succession planning for the CEO and senior executive officers who report directly to the CEO. The Board oversees
processes designed to maintain the quality of the Company, including the integrity of the financial statements, the integrity
of compliance with laws and ethics, and the integrity of relationships with stakeholders, including shareholders, employees, customers,
suppliers, consumers, and the communities in which the Company operates.
Board
Membership Qualifications
The
Board has the responsibility for nominating director candidates to shareholders and filling vacancies. The Nominating and Corporate
Governance Committee is responsible for recommending candidates to the Board, as well as recommending the selection criteria used
in seeking nominees for election to the Board. The Board has adopted the following director nominee selection criteria. Nominees
should possess the highest personal and professional ethics, integrity, and values, and be committed to representing the long-term
interests of all shareholders. Nominees should be selected on the basis of their business and professional experience and qualifications,
public service, diversity of background, availability to devote sufficient time to the Board and the needs of the Company in light
of the qualifications of the other directors or nominees. Candidates should be persons who have demonstrated leadership in multinational
companies or government, finance or accounting, higher education or other fields, or who are able to provide the Company with
relevant expertise, industry knowledge or marketing acumen. Nominees should also represent all shareholders rather than special
interest groups or any group of shareholders. In determining whether to recommend a director for re-election, the Nominating and
Corporate Governance Committee also considers the director’s past attendance at meetings and participation in and contribution
to the activities of the Board. The Nominating and Corporate Governance Committee may use the services of an executive search
firm to assist the Company in identifying potential nominees and to participate in the evaluation of candidates for Board membership.
Shareholders may suggest nominees for consideration by submitting names of nominees and supporting information to the Corporate
Secretary of the Company.
Size
of the Board
The
Company’s By-Laws establish that the Board shall determine the number of directors from time to time so long as the number
so determined shall not be less than three. The Board periodically reviews the appropriate size of the Board, which is presently
set at 6 Board members by resolution of the Board of Directors.
Chairman
and CEO
The
Chairman and the CEO are selected by the Board. The Board determines whether the roles of Chairman and CEO should be separate
or combined based upon its judgment as to the most appropriate structure for the Company at a given point in time.
Ethics
and Conflicts of Interest
The
Board expects its directors, as well as the Company’s officers and employees, to act ethically at all times and to acknowledge
their adherence to the policies comprising the Company’s Code of Conduct. The Board will not permit any waiver of any ethics
policy for any director or executive officer. The Board will resolve any conflict of interest question involving a director, the
CEO, or a member of the Office of the Chairman, and the CEO will resolve any conflict of interest issue involving any other officer
of the Company. The Code of Conduct is available at
ir.mtbc.com/corporate-governance.cfm.
BOARD
COMMITTEES
Number
and Responsibilities of Committees
The
current three committees of the Board are Audit, Compensation, and Nominating and Corporate Governance. The membership of the
committees is required to consist entirely of independent directors, based on the NASDAQ requirements. The Board may form new
committees, disband an existing committee, and delegate additional responsibilities to a committee. The responsibilities of the
committees are set forth in written charters, which are reviewed periodically by the committees, the Nominating and Corporate
Governance Committee, and the Board, and are available on the Company’s website at
ir.mtbc.com/corporate-governance.cfm.
Committee
Meetings
The
chair of each committee, in consultation with committee members and in compliance with the committee’s charter requirements,
determines the frequency of committee meetings and develops meeting agendas. The full Board is apprised of matters addressed by
the committees in their meetings.
BOARD
OPERATIONS
Board
Meetings
Regular
meetings of the Board are held at least four times per year. The Board may hold additional meetings, including by teleconference
or other electronic means, as needed, to discharge its responsibilities. The Chairman of the Board, in consultation with other
Board members, establishes the agenda for each Board meeting. Each Board member may suggest items for inclusion on the agenda.
During
2016, the Board held four meetings and acted by written/electronic consent eleven times. Each director attended at least 75% of
all Board of Directors and applicable committee meetings.
Board
Materials
Information
and data that is important to the business to be considered at a Board or committee meeting is distributed in advance of the meeting,
to the extent possible.
Management
Evaluation, Succession, and Compensation
The
performance of the CEO is evaluated annually by the Compensation Committee, in consultation with the full Board, based upon objective
criteria, including the performance of the business and the accomplishment of goals and strategic objectives. This committee also
makes recommendations to the Board with respect to CEO succession. The CEO reviews management succession planning and development
with the full Board of Directors on an annual basis. The Compensation Committee evaluates performance in setting CEO and senior
executive officer salary, bonus, and other incentive and equity compensation.
Board
Compensation
The
Compensation Committee is responsible for recommending any changes in Board compensation. In discharging this duty, the committee
is guided by the following considerations: compensation should fairly pay directors for work required for a company of MTBC’s
size and scope; compensation should align directors’ interests with the long-term interests of shareholders; and the structure
of compensation should be transparent and understandable.
Board
Access to Management and Independent Advisors
Members
of the Board have free access to the employees of the Company, and Board committees have the authority to retain such outside
advisors as they determine appropriate to assist in the performance of their functions. Additionally, members of the Board may
periodically visit Company facilities.
Approval
of Goals and Strategic and Financial Objectives
The
overall strategy of the Company is reviewed periodically at Board meetings.
Communication
with Management and Directors
The
response to any shareholder proposal is the responsibility of management subject to oversight by the appropriate Board committee.
The Board is apprised of shareholder proposals and the Company’s response to such proposals.
Shareholders
and other interested parties may contact the presiding director or non-management directors via the Corporate Secretary of the
Company at 7 Clyde Road, Somerset, NJ 08873.
Disclosure
and Review of Corporate Governance Principles
The
Company’s Corporate Governance Principles and all Board committee charters are available on the Company’s website
at
ir.mtbc.com/corporate-governance.cfm
and are also available in print to any shareholder upon request. The Nominating
and Corporate Governance Committee reviews these Corporate Governance Principles periodically, and reports the results of this
review to the full Board.
Policies
on Business Ethics and Conduct
All
Company employees and directors, including the CEO, the Chief Financial Officer, and the Principal Accounting Officer, are required
to abide by the Company’s Code of Conduct to ensure that the Company’s business is conducted in a consistently legal
and ethical manner. The Code of Conduct forms the foundation of a comprehensive program that requires compliance with all corporate
policies and procedures and seeks to foster an open relationship among colleagues that contributes to good business conduct and
an abiding belief in the integrity of our employees. The Company’s policies and procedures cover all areas of professional
conduct, including employment policies, conflicts of interest, intellectual property, and the protection of confidential information,
as well as strict adherence to all laws and regulations applicable to the conduct of the Company’s business.
Employees
are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Conduct.
The
full text of the Code of Conduct is published on the Company’s website at
ir.mtbc.com/corporate-governance.cfm
, and
is available in print to any shareholder upon request.
Director
Independence
Our
Board has considered the relationships of all directors with us and the independence of each director, and determined that Ms.
Anne Busquet, and Messrs. Howard Clark, John Daly and Cameron Munter, do not have any relationship which would interfere with
the exercise of independent judgment in carrying out his or her responsibility as a director and that each non-employee director
qualifies as an independent director under the applicable rules of NASDAQ.
Mr.
Mahmud Haq is both the Chairman of the Board and the Chief Executive Officer of the Company. The Company’s policy as to
whether the roles of the Chairman and the Chief Executive Officer should be separate is to adopt the practice that best serves
the Company’s needs at any particular time. The Board believes that combining the Chairman and Chief Executive Officer positions
is currently the most effective leadership structure and is in the best interests of the Company’s shareholders because
of Mr. Haq’s long tenure with the Company, including as the Chief Executive Officer, and his broad knowledge and experience
with the Company’s shareholders, clients and vendors. The Board may decide to separate or combine the roles of Chairman
and Chief Executive Officer, if appropriate, at any time in the future. The Company has no lead independent director.
Related
Person Transaction Policy
The
Related Person Transaction Policy of the Board ensures that the Company’s transactions with certain persons are not inconsistent
with the best interests of the Company. A “Related Person Transaction” is a transaction with the Company in an amount
exceeding $54,500 in which a Related Person has a direct or indirect material interest. A Related Person includes the executive
officers, directors, and five percent or more shareholders of the Company, and any immediate family member of such a person. If
a Related Person Transaction is identified, such transaction is brought to the attention of the General Counsel and the Audit
Committee for its approval, ratification, revision, or rejection in consideration of all of the relevant facts and circumstances.
Related
Party Transactions
The
Company was party to several related party transactions with its Chief Executive Officer, Mahmud Haq, during the year ended December
31, 2016. Below is a summary of the related party transactions the Company has entered into with Mr. Haq:
The
Company has a service agreement with a related party, a physician who is related to the CEO. Revenue from this customer was $18,064
for the year ended December 31, 2016. As of December 31, 2016, the receivable balance due from this customer was $1,553.
The
Company is a party to a nonexclusive aircraft dry lease agreement with Kashmir Air, Inc. (“KAI”), which is owned by
the CEO. The Company recorded an expense of $128,400 for the year ended December 31, 2016 related to the lease agreement with
KAI. As of December 31, 2016, the Company had a liability outstanding to KAI of $16,626.
The
Company leases its corporate offices, temporary housing for its foreign visitors and storage space in New Jersey and its backup
operations center in Bagh, Pakistan, from the CEO. The related party rent expense for the year ended December 31, 2016 was $178,000.
Security deposits were provided related to the lease of the Company’s corporate offices in the amount of $13,200.
Board
of Directors and Committees of the Board
Fiscal
Year 2016
|
Name
|
|
Board
|
|
Compensation
|
|
Audit
|
|
Governance
|
|
Mahamud
Haq
|
|
X*
|
|
|
|
|
|
|
|
Anne
M.Busquet
|
|
X
|
|
|
|
X
|
|
|
|
Howard
L. Clark, Jr.
|
|
X
|
|
|
|
X*
|
|
X
|
|
John
N. Daly
|
|
X
|
|
X*
|
|
X
|
|
|
|
Cameron
P. Munter
|
|
X
|
|
X
|
|
|
|
X*
|
|
Stephen
A. Snyder
|
|
X
|
|
|
|
|
|
|
During 2016, each committee held four meetings.
Executive
Officers and Directors
The
following table sets forth information as of December 31, 2016 regarding our directors and executive officers.
|
Name
|
|
Age
|
|
Position(s)
|
|
Mahmud
Haq
|
|
57
|
|
Chairman
of the Board and Chief Executive Officer
|
|
Stephen
A. Snyder
|
|
40
|
|
President
and Director
|
|
Anne
M. Busquet
|
|
66
|
|
Director
|
|
Howard
L. Clark
|
|
72
|
|
Director
|
|
John
N. Daly
|
|
79
|
|
Director
|
|
Cameron
Munter
|
|
62
|
|
Director
|
|
Bill
Korn
|
|
59
|
|
Chief
Financial Officer
|
|
Shruti
Patel
|
|
29
|
|
General
Counsel and Corporate Secretary
|
|
Norman
Roth
|
|
61
|
|
Principal
Accounting Officer
|
Mahmud
Haq
is our founder, and has served as our Chief Executive Officer and Chairman of the Board since our inception in 2001. Prior
to founding MTBC, Mr. Haq served as the Chief Executive Officer and President of Compass International Services Corporation from
1997 to 1999. During that time, Mr. Haq also served on its Board of Directors. From 1985 to 1996, Mr. Haq held various senior
executive positions at American Express, including Vice President ̵ Risk Management of Global Collections for the Travel
Related Services division (1994-1996). Mr. Haq received a Bachelor of Science in Aviation Management from Bridgewater State College
and holds an M.B.A. from Clark University with a concentration in Finance.
Stephen
A. Snyder
is our President and a member of our Board of Directors since 2013. Mr. Snyder joined MTBC in August 2005 as Vice
President, General Counsel and Secretary, and later served as Chief Operating Officer beginning January 2009, through his appointment
as President in August 2011. Prior to joining MTBC, Mr. Snyder practiced law. Mr. Snyder is a member of the New Jersey and New
York bars and his writings on healthcare law and policy have been published by the American Health Lawyers Association, American
Bar Association and various industry publications. Mr. Snyder received his Bachelor of Arts in Political Science,
magna cum
laude,
from Montclair State University and his Juris Doctor from Rutgers School of Law-Newark.
Cameron
P. Munter
has served as a member of our Board of Directors since June 2013, and is the Chairman of our Nominating and Governance
Committee and a member of our Compensation Committee. Mr. Munter served as the U.S. Ambassador to Pakistan from October 2010 through
July 2012. Prior to this appointment, Mr. Munter held a variety of high-profile diplomatic positions in Iraq and also served as
U.S. Ambassador to Serbia from March 2007 to March 2009. Mr. Munter received his Bachelor of Arts, magna cum laude, from Cornell
University and doctoral degree in Modern European History from the Johns Hopkins University. He is currently President and CEO
of the EastWest Institute, an international, non-partisan organization with offices in New York, Brussels, Moscow and Washington.
Howard
L. Clark, Jr.
has served as a member of our Board of Directors since October 2013 and is the Chairman of our Audit Committee.
He retired as Vice Chairman, Investment Banking of Barclays Capital Inc. on June 30, 2011. He served as Vice Chairman of Lehman
Brothers Inc. from February, 1993 to September, 2008. From February, 1990 until February, 1993, Mr. Clark served as Chairman and
Chief Executive Officer of Shearson Lehman Brothers, Inc. Prior to joining Shearson Lehman, Mr. Clark was Executive Vice President
and Chief Financial Officer of American Express Company.
Mr.
Clark is a member of the Board of Directors of Green Waste Energy, Inc. He is a former member of the Board of Directors of Maytag
Corporation, United Rentals and White Mountains Insurance Group. Additionally, he serves on the Board of Trustees of The Boys’
Club of New York. Mr. Clark is a former member of the Board of Overseers of Columbia University Graduate School of Business and
is an Honorary Trustee of Boston University. Mr. Clark was Chairman of the Securities Industry Association in 1994 and Chairman
of The Bond Club of New York in 1998.
A
1967 graduate of Boston University, Mr. Clark received his Master of Business Administration degree from Columbia University Graduate
School of Business in 1968. Mr. Clark resides in Greenwich, Connecticut.
John
N. Daly
has served as a member of our Board of Directors since December 2013, and is the Chairman of our Compensation Committee
and a member of our Audit Committee. Since May 2007, Mr. Daly has served as the President of IMMS, LLC, a third party marketer
of investment management firms. Previously, Mr. Daly held other management positions in the financial services industry, including
during his 23 years at E.F. Hutton & Co. from 1960 to 1983, where at various times he ran the Syndicate Department, the Commodities
Division and the Asset Management Division. He later joined Salomon Brothers, both at the New York and London offices, where he
headed the Private Client Division and International Equity Capital Markets. Mr. Daly also served as the Senior Managed Accounts
Specialist at Prudential Investments from 2002-2005. Mr. Daly graduated from Yale University and completed the Harvard Business
School Advanced Management Program in 1979.
Anne
M. Busquet
joined MTBC’s Board of Directors in July 2014 and is a member of our Audit Committee. Ms. Busquet is presently
the President of AMB Advisors, and has over three decades of executive business experience with American Express and Interactive
Corp (IAC). She has led several successful businesses and served on various boards, including Blyth, Inc., and Meetic. Currently,
Ms. Busquet serves on the Board of Pitney Bowes, Intercontinental Hotels Group (IHG), and Provista Diagnostics and is also a Trustee
on the Board of Overseers for Columbia University, Business School, the Romanian American Foundation and the French Institute
Alliance Francaise. Ms. Busquet graduated from Cornell University and received her MBA from Columbia University.
Bill
Korn
is our Chief Financial Officer. Mr. Korn joined MTBC in July 2013. Prior to joining MTBC, Mr. Korn served as the Chief
Financial Officer for six other early-stage technology businesses. From January 2013 until he joined us, Mr. Korn served as the
Chief Financial Officer of SnapOne, Inc., a developer of cloud-based applications for mobile devices, and from June 2012 until
December 2012, Mr. Korn was doing private advisory work. Prior to that, from August 2002 to June 2012, Mr. Korn was the Chief
Financial Officer of Antenna Software, Inc. Earlier in his career, Mr. Korn spent ten years with IBM, where he served on the senior
management team that created IBM’s services strategy in the 1990s. Mr. Korn received his Bachelor of Arts in Economics
magna
cum laude
from Harvard College and his Master of Business Administration from Harvard Business School.
Shruti
Patel
is our General Counsel and Corporate Secretary. Ms. Patel joined MTBC as an attorney in July 2015 and held various positions
with the Company until her appointment as General Counsel and Corporate Secretary in November 2016. Prior to joining MTBC, Ms.
Patel served as an associate at a family law firm and is currently a member of the New Jersey bar. Ms. Patel received her Bachelor
of Arts in Political Science from the University of Central Florida and her Juris Doctor from Florida A&M School of Law.
Norman
Roth
is our Controller and Principal Accounting Officer. Mr. Roth joined MTBC in September 2014. Prior to joining MTBC, Mr.
Roth worked as a forensic accountant since 2003 primarily in the accounting malpractice area. From 1991 through 2002, Mr. Roth
served as the Director of External Reporting, Treasury and Tax and later as Business Manager of WWOR-TV. Mr. Roth began his career
at Ernst & Young LLP in 1977 and left as a senior manager after 13 years of service. Mr. Roth received his Bachelor of Arts
degree summa cum laude from Rutgers College and his Master of Business Administration-Taxation from Fairleigh Dickinson University.
Mr. Roth is a certified public accountant and a certified fraud examiner.
Committee
Duties and Responsibilities
Audit
Committee
|
●
|
Oversees
management’s establishment and maintenance of processes to provide for the reliability and integrity of the accounting
policies, financial statements, and financial reporting and disclosure practices of the Company.
|
|
|
|
|
●
|
Oversees
management’s establishment and maintenance of processes to provide for an adequate system of internal control over financial
reporting at the Company and assists with the oversight by the Board of Directors and the Corporate Governance Committee of
the Company’s compliance with applicable laws and regulations.
|
|
|
|
|
●
|
Oversees
management’s establishment and maintenance of processes to provide for compliance with the Company’s financial
policies.
|
|
|
|
|
●
|
Oversees
the independence of the independent registered public accounting firm and the qualifications and effectiveness of the independent
registered public accounting firm.
|
|
|
|
|
●
|
Prepares
the report of the Audit Committee for inclusion in the Company’s annual proxy statement in accordance with applicable
rules and regulations.
|
|
|
|
|
●
|
Appoints,
retains, and reviews the performance of the independent registered public accounting firm.
|
|
|
|
|
●
|
Evaluates
the Committee’s performance annually.
|
Compensation
Committee
|
●
|
Makes
recommendations to the Board with respect to the structure of overall incentive compensation and equity-based plans applicable
to executive officers or other employees and administers such plans.
|
|
|
|
|
●
|
Selects
and retains outside consultants to review and recommend appropriate types and levels of executive compensation, with the sole
authority to approve consultant fees and other retention terms. Terminates such consultants as necessary.
|
|
|
|
|
●
|
Prepares
the report of the Compensation Committee for inclusion in the Company’s proxy statement in accordance with applicable
rules and regulations.
|
|
|
|
|
●
|
Evaluates
the Committee’s performance annually.
|
Nominating
and Corporate Governance Committee
|
●
|
Monitors
compliance with the Company’s Global Code of Conduct and all applicable laws and regulations.
|
|
|
|
|
●
|
Notifies
the Audit Committee of any matters regarding accounting, internal control, or audit matters of which the Committee has become
aware as a result of monitoring the Company’s compliance efforts.
|
|
|
|
|
●
|
Identifies
qualified candidates to serve on the Board, including candidates recommended by shareholders, and reviews Board candidate
qualifications, selection criteria, and any potential conflicts with the Company’s interests.
|
Director
Compensation Table (Fiscal Year 2016)
The
following table sets forth the compensation paid to the non-executive directors of the Company in fiscal year 2016:
|
Name
|
|
Fees
Earned or Paid in Cash
|
|
|
Stock
Awards
(1) (2) (3)
|
|
|
Total
|
|
|
Anne
Busquet
|
|
$
|
30,000
|
|
|
$
|
24,600
|
|
|
$
|
54,600
|
|
|
Howard
L. Clark, Jr.
|
|
|
40,000
|
|
|
|
24,600
|
|
|
|
64,600
|
|
|
John
N. Daly
|
|
|
30,000
|
|
|
|
24,600
|
|
|
|
54,600
|
|
|
Cameron
P. Munter
|
|
|
30,000
|
|
|
|
24,600
|
|
|
|
54,600
|
|
|
|
(1)
|
In
January 2016, the outside Board members were awarded 25,000 shares each of restricted stock that were to vest upon the achievement
of specified 2015 operating results. Those shares vested during March 2016 and are not included in the above table as they
related to 2015.
|
|
|
|
|
|
|
(2)
|
In
November 2016, the outside Board members were awarded 30,000 shares each of restricted stock which vested in January 2017.
The amounts included in the table above for the stock awards reflect the total amount of the grant date fair value for options
and restricted stock grants computed in accordance with Financial Accounting Standards Board ASC Topic 718.
|
|
|
|
|
|
|
(3)
|
As
of December 31, 2016, the aggregate number of shares of restricted stock plus restricted stock units outstanding for each
director, as applicable, is as follows: Ms. Busquet, 45,000, Mr. Clark, 45,000, Mr. Daly, 45,000 and Mr. Munter, 45,000.
|
Summary
Executive Compensation Table
The
following table is a summary of certain information concerning the compensation earned by our Named Executive Officers for fiscal
years 2016 and 2015:
|
Name
and Principal Position
|
|
Salary
(1)
|
|
|
Bonuses
(2)
|
|
|
Stock
Awards (3)
|
|
|
All
Other Compensation (4)(5)(6)
|
|
|
Total
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mahmud
Haq, CEO and Chairman of the Board
|
|
$
|
301,648
|
|
|
$
|
300,000
|
|
|
$
|
-
|
|
|
$
|
63,693
|
|
|
$
|
665,341
|
|
|
Stephen
A. Snyder, President
|
|
|
276,570
|
|
|
|
275,000
|
|
|
|
-
|
|
|
|
11,002
|
|
|
|
562,572
|
|
|
Bill
Korn, Chief Financial Officer
|
|
|
251,374
|
|
|
|
250,000
|
|
|
|
-
|
|
|
|
7,543
|
|
|
|
508,917
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mahmud
Haq, CEO and Chairman of the Board
|
|
$
|
300,824
|
|
|
$
|
-
|
|
|
$
|
82,500
|
|
|
$
|
23,622
|
|
|
$
|
406,946
|
|
|
Stephen
A. Snyder, President
|
|
|
275,755
|
|
|
|
-
|
|
|
|
82,500
|
|
|
|
11,037
|
|
|
|
369,292
|
|
|
Bill
Korn, Chief Financial Officer
|
|
|
250,687
|
|
|
|
-
|
|
|
|
82,500
|
|
|
|
10,333
|
|
|
|
343,520
|
|
|
|
(1)
|
Includes
amounts contributed by the Named Executive Officers to our 401(k) plan.
|
|
|
|
|
|
|
(2)
|
In
November 2016, the Compensation Committee of the Board of Directors awarded cash bonuses to Messrs. Haq, Snyder and Korn,
based upon the successful completion of the MediGain acquisition. Payment of these bonuses was made in 2017. Payment was originally
intended to be made in cash upon closing of additional financing, but was instead converted to the equivalent value of shares
of Series A Preferred Stock.
|
|
|
(3)
|
In
January 2016, the Compensation Committee of the Board of Directors awarded 75,000 shares of restricted stock each to Messrs.
Haq, Snyder and Korn upon the achievement of specified 2015 operating results. Those shares vested in March 2016. The amounts
included in the table above reflect the total grant date fair value and were determined in accordance with Financial Accounting
Standards Board ASC Topic 718. The assumptions used in determining the grant date fair values of these awards are set forth
in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2015, filed with the SEC.
|
|
|
|
|
|
|
(4)
|
Does
not include perquisites and other personal benefits, the aggregate amount of which with respect to each of the Named Executive
Officers does not exceed $10,000 reported for the fiscal year presented.
|
|
|
|
|
|
|
(5)
|
Includes
our matching contribution to the 401(k) plan equal to 100% match on the first 3% of the employee’s compensation which
is available to all employees who participate in the plan.
|
|
|
|
|
|
|
(6)
|
Excludes
group life insurance, health care insurance, long-term disability insurance and similar benefits provided to all employees
that do not discriminate in scope, terms or operations in favor of the Named Executive Officers.
|
Compensation
Committee Interlocks and Insider Participation
During
the fiscal year ended December 31, 2016, the Compensation Committee of the Board of Directors was comprised of John N. Daly and
Cameron P. Munter. Neither of these individuals, during the fiscal year ended December 31, 2016, was an officer or employee of
the Company. Neither of these individuals was formerly an officer of the Company.
During
the fiscal year ended December 31, 2016, Mr. Daly received $30,000 in director compensation and Mr. Munter received $30,000 in
director compensation, both exclusive of compensation received in the form of stock.
Executive
Employment Arrangements
We
are party to employment agreements with each of Messrs. Haq, Snyder and Korn (the “Employment Agreements”). Each of
the Employment Agreements has a two-year term unless earlier terminated, and is automatically renew at the end of the initial
term and annually thereafter in each case, for a one-year term, unless either party provides at least ninety days’ prior
written notice of non-renewal.
Each
Employment Agreement provides for the payment of base salary and bonus, as well as customary employee benefits. Under each of
the Employment Agreements, if the executive’s employment is terminated by the Company without “cause” or by
the executive if a “material demotion,” occurs (as such terms are defined in the applicable Employment Agreement)
the executive shall receive salary continuation payments for the remainder of the contractual term, but in no event for less than
twenty-four months with respect to Mr. Haq and twelve months for each of Messrs. Snyder and Korn. In addition to salary continuation
payments, executive shall receive payment of “COBRA” premiums for the executive and his dependents as long as the
executive does not become eligible for health coverage through another employer during this severance period. Each of the Employment
Agreements also restricts the executive from engaging in a competitive business during his employment and for 12 months thereafter,
or soliciting our employees and customers during his employment and for 12 months thereafter.
Our
compensation committee, currently comprised of Messrs. Daly and Munter, are tasked with discharging the Board of Directors’
responsibilities related to oversight of compensation of named executive officers and ensuring that our executive compensation
program meets our corporate objectives. The compensation committee is responsible for reviewing and approving corporate goals
and objectives relevant to the compensation of our named executive officers, as well as evaluating their performance in light
of those goals and objectives. Based on this review and evaluation, as well as on input from our Chief Executive Officer regarding
the performance of our other named executive officers and his recommendations as to their compensation, the Committee will determine
and approve each named executive officer’s compensation annually. As a public company, our named executive officers will
not play a role in their own compensation determinations.
Outstanding
Equity Awards at 2016 Fiscal Year End
The
following table provides information on the current holdings of all outstanding equity awards by our named officers at December
31, 2016:
Stephen
Snyder: 33,334 Restricted Stock Units (RSUs), having a market value of $24,334.
Bill
Korn: 16,666 RSUs, having a market value of $12,166.
These
RSUs provide for annual vesting based on continued employment over three years. The remaining RSUs vested on April 4, 2017.
Employee
Benefit Plans
Amended
and Restated Equity Incentive Plan.
The purpose of the Amended and Restated Equity Incentive Plan (the “Amended Plan”)
is to promote our success by linking the personal interests of our employees, officers, directors and consultants to those of
our shareholders, and by providing participants with an incentive for outstanding performance. The Amended Plan authorizes the
grant of awards in any of the following forms:
|
|
●
|
Options
to purchase shares of common stock, which may be nonstatutory stock options or incentive stock options under the Internal
Revenue Code (the “Code”). The exercise price of an option granted under the Amended Plan may not be less than
the fair market value of our common stock on the date of grant. Stock options granted under the Amended Plan have a term of
ten years.
|
|
|
|
|
|
|
●
|
Stock
appreciation rights, or SARs, which give the holder the right to receive the excess, if any, of the fair market value of one
share of common stock on the date of exercise, over the base price of the stock appreciation right. The base price of a SAR
may not be less than the fair market value of our common stock on the date of grant. SARs granted under the Amended Plan have
a term of ten years.
|
|
|
|
|
|
|
●
|
Restricted
stock, which is subject to restrictions on transferability and subject to forfeiture on terms set by the Compensation Committee.
|
|
|
|
|
|
|
●
|
Restricted
stock units, which represent the right to receive shares of common stock (or an equivalent value in cash or other property)
in the future, based upon the attainment of stated vesting or performance goals set by the Compensation Committee.
|
|
|
|
|
|
|
●
|
Performance
stock and cash settled awards, which represent the right to receive shares of common stock or cash, as applicable, in the
future upon the attainment of certain stated performance goals.
|
|
|
|
|
|
|
●
|
Preferred
stock, which is subject to restrictions on transferability and subject to forfeiture on terms set by the Compensation Committee.
|
|
|
|
|
|
|
●
|
Other
stock-based awards in the discretion of the Compensation Committee, including unrestricted
stock grants.
|
All
awards are evidenced by a written award certificate between MTBC and the participant, which include such provisions as may be
specified by the Compensation Committee. Dividend equivalent rights, which entitle the participant to payments in cash or property
calculated by reference to the amount of dividends paid on the shares of stock underlying an award, may be granted with respect
to awards other than options or SARs.
Awards
to Non-Employee Directors
. Awards granted under the Amended Plan to non-employee directors may be made only in accordance
with the terms, conditions and parameters of a plan, program or policy for the compensation of non-employee directors as in effect
from time to time. The Committee may not make discretionary grants under the Amended Plan to non-employee directors.
Shares
Available for Awards: Adjustments
. Subject to adjustment as provided in the Amended Plan, the aggregate number of shares of
common stock reserved and available for issuance pursuant to awards granted under the Amended Plan is 2,851,000. There are also
100,000 shares of our 11% Series A Cumulative Perpetual Preferred Stock reserved and available for issuance under the Amended
Plan. In the event of a nonreciprocal transaction between MTBC and its shareholders that causes the per share value of the common
stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring
cash dividend), the share authorization limits under the Amended Plan will be adjusted proportionately, and the Compensation Committee
must make such adjustments to the Amended Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or
enlargement of rights immediately resulting from such transaction.
Administration
.
The Amended Plan will be administered by the Compensation Committee. The Committee will have the authority to grant awards; designate
participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions thereof;
establish, adopt or revise any rules and regulations as it may deem advisable to administer the Amended Plan; and make all other
decisions and determinations that may be required under the Amended Plan. The Board of Directors may at any time administer the
Amended Plan. If it does so, it will have all the powers of the Compensation Committee under the Amended Plan. In addition, the
Board may expressly delegate to a special committee some or all of the Compensation Committee’s authority, within specified
parameters, to grant awards to eligible participants who, at the time of grant, are not executive officers.
Limitations
on Transfer: Beneficiaries
. No award will be assignable or transferable by a participant other than by will or the laws of
descent and distribution; provided, however, that the Compensation Committee may permit other transfers (other than transfers
for value) where the Compensation Committee concludes that such transferability does not result in accelerated taxation, does
not cause any option intended to be an incentive stock option to fail to qualify as such, and is otherwise appropriate and desirable,
taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities laws or
regulations applicable to transferable awards. A participant may, in the manner determined by the Compensation Committee, designate
a beneficiary to exercise the rights of the participant and to receive any distribution with respect to any award upon the participant’s
death.
Treatment
of Awards upon a Participant’s Death or Disability
. Unless otherwise provided in an award certificate or any special
plan document governing an award, upon the termination of a participant’s service due to death or disability:
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●
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all
of that participant’s outstanding options and SARs will become exercisable to the extent the participant was entitled
to exercise such option or SAR, but only within the period ending on the earlier of (i) twelve (12) months with respect to
a termination due to disability and eighteen (18) months with respect to a termination due to death, and (ii) the term of
the option or SAR;
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●
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shares
of common stock and outstanding awards which have not vested at the time of the termination of service may be forfeited; and
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●
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the
payout opportunities attainable under all of that participant’s outstanding performance-based awards may be forfeited
and the awards may payout on a pro rata basis, based on the time elapsed prior to the date of termination.
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Treatment
of Awards upon a Change in Control
. Unless subject to additional acceleration of vesting and exercisability as may be provided
in an award certificate or any special plan document governing an award, outstanding awards will be subject to one year acceleration
of vesting as provided in the Plan upon a change in control.
Termination
and Amendment
. The Amended Plan will terminate on April 3, 2024. The Board or the Compensation Committee may, at any time
and from time to time, terminate or amend the Amended Plan, but if an amendment to the Amended Plan would constitute a material
amendment requiring shareholder approval under applicable listing requirements, laws, policies or regulations, then such amendment
will be subject to shareholder approval. No termination or amendment of the Amended Plan may adversely affect any award previously
granted under the Amended Plan without the written consent of the participant. Without the prior approval of our shareholders,
the Amended Plan may not be amended to directly or indirectly reprice, replace or repurchase “underwater” options
or SARs.
Report
of the Audit Committee
The
Board of Directors of MTBC has a separately-designated standing Audit Committee established in accordance with section 3(a)(58)(A)
of the Exchange Act. MTBC’s Audit Committee has three members: Mr. Howard L. Clark, Jr., who serves as the Chairperson,
Ms. Anne B. Busquet and Mr. John N. Daly. The Audit Committee is comprised entirely of independent directors who meet the independence
requirements of the Listing Rules of the NASDAQ Stock Market and the SEC. The Board of Directors has determined that Mr. Clark
meets the criteria and definition of an “audit committee financial expert” pursuant to Item 407(d) of Regulation S-K.
The Audit Committee operates pursuant to a charter that is available on the Investor Relations section of our website at
ir.mtbc.com/corporate-governance.cfm.
Management
has primary responsibility for MTBC’s internal accounting controls and financial reporting process. The independent registered
public accounting firm is responsible for performing an independent audit of MTBC’s consolidated financial statements in
accordance with standards of the Public Company Accounting Oversight Board (United States) and to issue a report as a result of
such audit. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee serves as
a focal point for communication among the Board of Directors and its committees, the independent registered public accounting
firm and management, as the respective duties of such groups, or their constituent members, relate to MTBC’s financial accounting
and reporting and to its internal controls.
In
performing its responsibilities, the Audit Committee has reviewed and discussed with management and the independent registered
public accounting firm the audited consolidated financial statements in MTBC’s Annual Report on Form 10-K for the year ended
December 31, 2016. These discussions included the matters required to be discussed by Statement on Auditing Standard No. 16, as
adopted by the Public Company Accounting Oversight Board (Communication with Audit Committees).
The
Audit Committee also discussed with the independent registered public accounting firm its independence from MTBC and its management,
including the written disclosures submitted to the Audit Committee by the independent registered public accounting firm as required
by the Public Company Accounting Oversight Board.
Based
on the reviews and discussions referred to above, the Audit Committee unanimously recommended to the Board of Directors (and the
Board of Directors approved) that the audited financial statements be included in MTBC’s Annual Report on Form 10-K for
the year ended December 31, 2016 for filing with the SEC.
AUDIT
COMMITTEE
Howard
L. Clark, Jr., Chair
Anne
M. Busquet
John
N. Daly
Relationship
with Independent Registered Public Accounting Firm
Independent
Registered Public Accounting Firm
On
June 10, 2015, the Audit Committee approved the appointment of Grant Thornton LLP (“Grant Thornton”) as the Company’s
new independent registered public accounting firm commencing for its quarter ending June 30, 2015 and its fiscal year ending December
31, 2015. On May 10, 2016, the Audit Committee approved the appointment of Grant Thornton as the Company’s independent registered
public accounting firm for its fiscal year ending December 31, 2016.
In
connection with the Company’s appointment of Grant Thornton as the Company’s independent registered public accounting
firm, the Company has not consulted Grant Thornton on any matter relating to either (i) the application of accounting principles
to a specific transaction, either completed or contemplated, or the type of audit opinion that might be rendered on the Company’s
financial statements or (ii) any matter that was the subject of a disagreement (as that term is defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in Item 304(a)(1)(v)
of Regulation S-K).
Representatives
of Grant Thornton are not expected to be present at the Annual Meeting.
Independent
Registered Public Accounting Firm Fees
The
following table summarizes the fees billed to us by our independent registered public accounting firm for each of the last two
fiscal years.
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Fees
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2016
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2015
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Audit
Fees to Grant Thornton LLP
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$
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560,954
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$
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506,548
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Audit-Related
Fees to Grant Thornton LLP
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-
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65,832
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Tax
Fees to Grant Thornton LLP
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-
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41,588
|
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Total
Fees
|
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$
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560,954
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$
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613,968
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Audit-related
fees for 2015 include fees for an audit in connection with an acquisition and consents for registration statements paid to a Grant
Thornton affiliate. Tax fees for 2015 consist of fees related to the preparation of tax returns and assistance with other domestic
tax matters. There were no tax fees paid to Grant Thornton in 2016 as the Company utilized the services of another accounting
firm for tax preparation.
All
services performed for us by Grant Thornton during 2016 and 2015 were pre-approved by the Audit Committee, and the Audit Committee
was provided with regular updates as to the nature of such services and fees paid for such services.
Matters
to Be Acted Upon
(Item
1 on proxy card)
You
will have the opportunity to elect two members to our Board of Directors, currently consisting of six members, at the Annual Meeting.
Each director will be elected for a three-year term.
The
Board of Directors has nominated the following nominees for election as directors at the Annual Meeting:
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE NOMINEES NAMED BELOW.
Mahmud
Haq
is our founder, and has served as our Chief Executive Officer and Chairman of the Board since our inception in 2001. Prior
to founding MTBC, Mr. Haq served as the Chief Executive Officer and President of Compass International Services Corporation from
1997 to 1999. During that time, Mr. Haq also served on its Board of Directors. From 1985 to 1996, Mr. Haq held various senior
executive positions at American Express, including Vice President ̵ Risk Management of Global Collections for the Travel
Related Services division (1994-1996). Mr. Haq received a Bachelor of Science in Aviation Management from Bridgewater State College
and holds an M.B.A. from Clark University with a concentration in Finance.
Cameron
P. Munter
has served as a member of our Board of Directors since June 2013, and is the Chairman of our Nominating and Governance
Committee and a member of our Compensation Committee. Mr. Munter served as the U.S. Ambassador to Pakistan from October 2010 through
July 2012. Prior to this appointment, Mr. Munter held a variety of high-profile diplomatic positions in Iraq and also served as
U.S. Ambassador to Serbia from March 2007 to March 2009. Mr. Munter received his B.A.
magna cum laude
, from Cornell University
and doctoral degree in Modern European History from the Johns Hopkins University. He is currently President and CEO of the EastWest
Institute, an international, non-partisan organization with offices in New York, Brussels, Moscow and Washington.
2.
Required Vote
As
to Item I, the Election of Directors, the nominees must receive a plurality of the voting power, entitled to vote for the election
of directors, of the shares present or represented by proxy at the meeting in order to be elected. This means that the two director
candidates receiving the largest number of votes “for” their election will be elected to the Board of Directors.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10% of any
class of our equity securities, who collectively we refer to as “insiders,” to file with the SEC initial reports of
beneficial ownership and reports of changes in beneficial ownership of common stock and other equity securities of the company.
Our insiders are required by SEC regulation to furnish us with copies of all Section 16(a) reports the file. The Company has undertaken
the responsibility to file all Section 16(a) reports for the Board of Directors and Officers based on the information available
to them.
Based
solely on a review of the copies of the forms furnished to us, we believe that during the 2016 fiscal year, our insiders complied
with all applicable filing requirements, except for the late filing of a report by the Company for one transaction with Ms. Shruti
Patel. The foregoing late filing was subsequently filed.
OTHER
BUSINESS
Our
Board of Directors does not presently intend to bring any other business before the Annual Meeting, and, so far as is known to
the Board of Directors, no matters are to be brought before the Annual Meeting except as specified in the Notice of Annual Meeting
of Shareholders. We have not been informed by any of our shareholders of any intention to propose any other matter to be acted
upon at the Annual Meeting. The persons named in the accompanying Proxy are allowed to exercise their discretionary authority
to vote upon any other business as may properly come before the Annual Meeting. As to any such other business that may properly
come before the meeting, it is intended that proxies, in the form enclosed, will be voted in respect thereof in accordance with
the judgment of the persons voting such proxies.
ANNUAL
REPORT ON FORM 10-K
A
copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC, will be mailed without
charge to any beneficial owner of our common stock, upon request. Requests for the Annual Report on Form 10-K should be addressed
to: Investor Relations, Medical Transcription Billing, Corp. 7 Clyde Road, Somerset, NJ 08873. The Form 10-K includes certain
exhibits. Copies of the exhibits will be provided only upon receipt of payment covering our reasonable expenses for such copies.
The Form 10-K and exhibits may also be obtained from our investor relations
website,
ir.mtbc.com
or directly
from the SEC’s website,
www.sec.gov/edgar.shtml.
DELIVERY
OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
Only
one Notice of Internet Availability is being delivered to multiple security holders sharing an address unless we received contrary
instructions from one or more of the security holders. We shall deliver promptly, upon written or oral request, a separate copy
of the Notice of Internet Availability to a security holder at a shared address to which a single copy of the document was delivered.
A security holder can notify us that the security holder wishes to receive a separate copy of the Notice of Internet Availability
by sending a written request to us at Investor Relations, Medical Transcription Billing, Corp. 7 Clyde Road, Somerset, NJ 08873,
or by calling us at (732) 873-5133. A security holder may utilize the same address and telephone number to request either separate
copies or a single copy for a single address for all future proxy statements if any, Notices of Internet Availability, and annual
reports of the Company.
SHAREHOLDER
PROPOSALS FOR 2018 ANNUAL MEETING OF SHAREHOLDERS
Shareholder
proposals intended for inclusion in our proxy statement and form of proxy relating to our 2018 Annual Meeting of Shareholders
must be received by us not later than December 30, 2017. If we hold our 2018 Annual Meeting of Shareholders more than 30 days
before or after June 15, 2018 (the one-year anniversary date of the 2017 Annual Meeting of Shareholders), we will disclose the
new deadline by which shareholder proposals must be received under Item 5 of Part II of our earliest possible Quarterly Report
on Form 10-Q or, if impracticable, by any means reasonably determined to inform shareholders. In addition, shareholder proposals
must otherwise comply with the requirements of Rule 14a-8 under the Exchange Act. Such proposals also must comply with SEC regulations
under Rule 14a-8 regarding the inclusion of shareholder proposals in company-sponsored proxy materials. Proposals should be addressed
to: Corporate Secretary, Medical Transcription Billing, Corp., 7 Clyde Road, Somerset, New Jersey 08873.
Our
bylaws also establish an advance notice procedure for shareholders who wish to present a proposal before an annual meeting of
shareholders but do not intend for the proposal to be included in our proxy statement. Under our bylaws, director nominations
and other business may be brought at an Annual Meeting of Shareholders only by or at the direction of our Board of Directors or
by a shareholder entitled to vote who has submitted a proposal in accordance with the requirements of our bylaws as in effect
from time to time. Notice of Shareholder proposals for the 2018 Annual Meeting of Shareholders, other than proposals intended
for inclusion in our proxy statement as set forth in the preceding paragraph, must be received by the Corporate Secretary at our
principal executive offices no later than March 10, 2018. Please refer to the full text of our advance notice bylaw provisions
for additional information and requirements. If we hold our 2018 Annual Meeting of Shareholders more than 30 days before or after
June 15, 2018 (the one-year anniversary date of the 2017 Annual Meeting of Shareholders), then notice of a shareholder proposal
that is not intended to be included in our proxy statement must be received not later than the close of business on the earlier
of the following two dates:
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the
10
th
day following the day on which notice of the meeting date is mailed, or
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●
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the
10
th
day following the day on which public disclosure of the meeting date is made.
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Only
such proposals as are (1) required by the rules of the SEC and (2) permissible under the Delaware General Corporation Law will
be included on the 2018 Annual Meeting of Shareholders agenda. If a shareholder who has notified us of his or her intention to
present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, we are not required to
present the proposal for a vote at such meeting.
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MEDICAL
TRANSCRIPTION BILLING, CORP.
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VOTE
BY MAIL
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Important
Annual Meeting Information
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Record
holders may mark, sign and date your proxy card and return it to 18 Lafayette Place, Woodmere, New York 11598.
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VOTE IN
PERSON
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If
you would like to vote in person, please attend the Annual Meeting to be held at 7 Clyde Road, Somerset, New Jersey 08873,
on June 15, 2017, at 11:00 a.m. local time. Bring this ticket in order to be admitted.
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Admission
Ticket
DETACH
PROXY CARD HERE TO VOTE BY MAIL
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THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
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The
Board of Directors recommends you vote FOR the following proposal:
|
Proposal
1:
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To
elect two Director candidates.
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1.
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Mahmud
Haq
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[ ]
For
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[ ]
Withhold
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2.
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Cameron Munter
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[ ]
For
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[ ]
Withhold
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Non-voting
items:
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Please
indicate a change of address below:
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Please
indicate if you plan to attend this meeting
[ ]
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Please
sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign
in full corporate or partnership name by authorized officer.
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Date
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Signature
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Signature,
if held jointly
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Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The
Notice and Proxy Statement and Annual Report are available at
ir.mtbc.com/annuals-proxies.cfm
MEDICAL
TRANSCRIPTION BILLING, CORP.
Annual
Meeting of Shareholders
June
15, 2017 11:00 AM, Eastern Time
This
proxy is solicited by the Board of Directors
The
shareholder(s) hereby appoint(s) Mahmud U. Haq, Stephen A. Snyder and Shruti Patel and each of them, as proxies, each with the
power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side
of this ballot, all of the shares of common stock of Medical Transcription Billing, Corp. that the shareholder(s) is/are entitled
to vote at the Annual Meeting of Shareholders to be held at 11:00 AM, Eastern Time, on June, 15, 2017, at the Company's headquarters
located at 7 Clyde Road, Somerset, New Jersey 08873, and any adjournment or postponement thereof.
This
proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted
in accordance with the Board of Directors’ recommendations.
IF
VOTING BY MAIL, PLEASE COMPLETE BOTH SIDES OF THIS CARD.
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