DEF 14A 1 universaldef14a.txt ANNUAL MEETING STOCKHOLDERS OCTOBER 22, 2003 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 [X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 UNIVERSAL COMMUNICATION SYSTEMS, 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: -------------------------------------------------------------------------------- UNIVERSAL COMMUNICATION SYSTEMS, INC. -------------- Notice of Annual Meeting of Stockholders to be held October 22, 2003 -------------- Miami Beach, Florida September 30, 2003 To the Holders of Common Stock of UNIVERSAL COMMUNICATION SYSTEMS, INC. The Annual Meeting of the Stockholders of UNIVERSAL COMMUNICATION SYSTEMS, INC. will be held at 407 Lincoln Road, Suite 6K, Miami Beach, Florida, on Wednesday, October 22, 2003 at 10:30 A.M., local time, for the following purposes, as more fully described in the accompanying Proxy Statement: 1. to elect directors of the Company for the ensuing year; 2. to approve the re-appointment of Reuben E. Price, P.A. to serve as the Company's independent auditors for the Company's fiscal year ending September 30, 2003; and 3. to transact such other business as may properly come before the Meeting or any adjournment or postponements thereof as well as on matters related to the conduct of the Meeting. The close of business on September 9, 2003 has been fixed by the Board of Directors as the record date for the determination of stockholders entitled to notice of, and to vote at, the Meeting. By Order of the Board of Directors, /s/ Alexander Walker, Jr. ------------------------------------ Secretary You are cordially invited to attend the Meeting in person. If you do not expect to be present, please mark, sign and date the enclosed form of Proxy and mail it in the enclosed return envelope, which requires no postage if mailed in the United States, so that your vote can be recorded. PROXY STATEMENT This Proxy Statement, which will be mailed commencing on or about October 3, 2002 to the persons entitled to receive the accompanying Notice of Annual Meeting of Stockholders, is provided in connection with the solicitation of Proxies on behalf of the Board of Directors of Universal Communication Systems, Inc. (the "Company") for use at the 2003 Annual Meeting of Stockholders (the "Meeting") to be held on October 22, 2002, and at any adjournment or adjournments thereof, for the purposes set forth in such Notice. The Company's executive office is located at 407 Lincoln Road, Miami Beach, Florida 33139. Any Proxy may be revoked at any time before it is exercised. The casting of a ballot at the Meeting by a stockholder who may theretofore have given a Proxy or the subsequent delivery of a Proxy will have the effect of revoking the initial Proxy. At the close of business on September 9, 2003, the record date stated in the accompanying Notice, the Company had outstanding 69,211,779 shares of common stock, $.001 par value ("Common Stock"), each of which is entitled to one vote with respect to each matter to be voted on at the Meeting. Directors are elected by plurality vote and therefore, abstentions and broker non-votes (as hereinafter defined), will have no effect on the outcome of this vote. Adoption of proposal 2 will require the affirmative vote of a majority of the shares of Common Stock present and voting thereon at the Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining the presence of a quorum. For the purpose of determining the vote required for approval of Proposal 2, shares held by stockholders who abstain from voting will be treated as being "present" and "entitled to vote" on the matter and, thus, an abstention has the same legal effect as a vote against the matter. However, in the case of a broker non-vote or where a stockholder withholds authority from his Proxy to vote the Proxy as to Proposal 2, such shares will not be treated as "present" and "entitled to vote" on the matter and, thus, a broker non-vote or the withholding of a Proxy's authority will have no effect on the outcome of the vote on the matter. A "broker non-vote" refers to shares of Common Stock represented at the Meeting in person or by proxy by a broker or nominee where such broker or nominee (i) has not received voting instructions on a particular matter from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on such matter. I. ELECTION OF DIRECTORS Five directors will be elected at the Annual Meeting of Stockholders to be held on October 22, 2003, each to serve until the 2004 Annual Meeting of Stockholders and until a successor shall have been chosen and qualified. It is the intention of each of the persons named in the accompanying form of Proxy to vote the shares of Common Stock represented thereby in favor of the nominees listed in the following table, unless otherwise instructed in such Proxy. All of such nominees are presently serving as directors. In case any of the nominees is unable or declines to serve, such persons reserve the right to vote the shares of Common Stock represented by such Proxy for another person duly nominated by the Board of Directors in such nominee's stead. The Board of Directors has no reason to believe that the nominees named will be unable or will decline to serve. Certain information concerning the nominees for election as directors is set forth below. Such information was furnished by them to the Company. -2- Name and Certain Biographical Information ----------------------------------------- MICHAEL ZWEBNER, age 49, has served as a Director since November, 2001 and is the Chairman of the Board of Directors. He is the founder of TVC Telecom, Inc. (formerly Talk Visual Corporation) and has served as a Director and its Chairman of the Board of Directors from September, 1998 until March, 2003. From 1974 to 1986, Mr. Zwebner founded and ran a travel and tourism company and a charter airline, specializing in the areas of air charter travel, wholesale ticketing and general business and tourist travel. From 1986 to 1990, Mr. Zwebner owned and operated several real estate companies as well as managed a chain of five family restaurants and related catering services in England. From 1991 to 1997, Mr. Zwebner founded and served as Vice-President of Cardcall International Holdings Inc. (USA) and Operating Manager of Cardcall (UK) Ltd. for which he designed and developed telecommunications and marketing concepts and organized the prepaid phone card operations. Mr. Zwebner also coordinated corporate finance activities for Cardcall. In February of 1997, Mr. Zwebner negotiated and secured the sale/merger of the Cardcall Group to a publicly-held entity based in Connecticut. In addition, in February of 1988, Mr. Zwebner negotiated the creation of a multi-million dollar joint venture between Cardcaller Canada Inc. with Datawave Systems Inc. of Vancouver, Canada. ALEX WALKER, JR., age 76, has served as a Director of the Company since November, 2001. Mr. Walker has served as Chairman of the Board of the Nevada Agency and Trust Company in Reno, Nevada, a licensed and registered trust company and transfer agent in business since 1903. He received his B.A. from Waynesburg College in 1950 and his J.D. from the University of Pittsburgh School of Law in 1952. From 1956 to date, he has maintained a private practice as an attorney. CURTIS A. ORGIL, age 52, has served as a Director of the Company since November, 2001. He received his Bachelor of Science degree in 1974 from Brigham Young University. He worked for Deloitte Haskins & Sells in Salt Lake City, Utah. Later he transferred to Reno, Nevada where he helped establish their new office. While in Reno, Mr. Orgil was the Partner-in-Charge of the tax department there and was the senior tax partner in the state of Nevada. While with Deloitte, Mr. Orgil was on its National Industry Teams for Qualified Retirement Plans and Agribusiness. Since 1995, he has been a principal with Bartig, Basler & Ray, CPA's, Inc., a regional accounting firm with headquarters in Sacramento, California. He is the treasurer of the Northern Nevada International Center and of the BYU Management Society of Northern Nevada. He has chaired the Taxation Committee for the Nevada Society of Certified Public Accountants. He is a former treasurer and board member of the Nevada Museum of Art, the American Lung Association of Reno, the Economic Development Authority of Western Nevada, and the Northern Nevada Development Authority. He was a founding board member of the Nevada World Trade Council and was a member of the Advisory Council for the University of Nevada, Reno College of Business. RAMSEY SWEIS, age 38, has served as a Director since May, 1998. He has had extensive experience in management and in the product design industry. He has been a leader and developer of high performance teams by enabling, training and motivating team members. In the recent past he has provided computer and engineering services to General Motors and Chrysler Corporation. In connection with those activities Mr. Sweis has developed designs between engineering, prototype models, tooling and vendor sources. Mr. Sweis resides in Roseville, Michigan. He currently serves as a Program Manager for Hanke Training & Design of Clawson, Michigan. From 1997 to 1999 Mr. Sweis served as a designer for Computer and Engineering Services of Auburn Hills, Michigan. From 1991 to 1997, Mr. Sweis was a design leader for Megatech Engineering of Warren, Michigan, contracted to General Motors of Warren, Michigan. -3- AMI R. ELAZARI, age 53, is the founder, President and CEO of Millennium Electric T.O.U. Ltd. He is a Lt. Col. (Res.) in the Israeli army and served in the IDF Intelligence special unit. Mr. Elazari is an energy and computer engineer and holds a BA in Psychology and an MBA with honors. He is the Vice Chairman of the Israel Export Institute Environmental Technology Center and the Vice Chairman of the Israel Export Institute Start-Up Company Center. Mr. Elazari is an internationally renowned energy expert on solar energy. He represents Israel in the IEA and holds a number of world patents in his name, mainly in renewable energy. Between 1990-1995 Mr. Elazari managed Amitec Energy and Computer Industries, from 1995-1999 he managed the PV division of Chromagen Solar Systems. He is a member of the Israeli Financial forum, High tech forum and has published numerous articles in his field of expertise. During the fiscal year ended September 30, 2002 the Board of Directors of the Company met 4 times. The Board members, during their term in fiscal year 2002, attended all of the meetings of the Board of Directors and meetings of any committees of the Board of Directors on which such person served which were held during the time that such person served. Key Employees of the Company ---------------------------- None Committees of the Board of Directors ------------------------------------ The Board of Directors has appointed an Audit Committee and a Compensation Committee, but has not appointed a standing Nominating Committee. The members of the Audit Committee as appointed are Curtis Orgil, Ramsey Sweis and Alexander H. Walker, Jr. During the fiscal year ended September 30, 2002, the Audit Committee met once. The Audit Committee is responsible for reviewing financial statements, consulting with the independent auditors concerning the Company's financial statements, accounting and financial policies and internal controls and reviewing the scope of the independent auditors' activities and fees. All members of the Audit Committee are "independent" within the meaning of Rule 4200(a)(15) of the NASD's listing standards. The current members of the Compensation Committee are Messrs. Michael Zwebner, Curtis Orgil and Alexander H. Walker, Jr. The Compensation Committee reviews and makes recommendations to the Board of Directors with respect to the compensation of all officers of the Company and issuances of equity securities of the Company to directors, officers, employees and consultants of the Company. Audit Committee Report ---------------------- The following report of the Audit Committee of the Company shall not be deemed to be "soliciting material" or to be "filed" with the SEC, nor shall this report be incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. -4- Report of the Audit Committee To the Board of Directors of Universal Communication Systems, Inc.: We have reviewed and discussed with management the Company's audited consolidated financial statements as of and for the fiscal year ended September 30, 2002. We have discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61. We have received and reviewed the written disclosures and the letter from the independent auditors required by Independence Standard No. 1, as may be modified or amended, and have discussed with the auditors their independence. The following table presents fees for the audits of the Company's annual consolidated financial statements for the fiscal year ended September 30, 2002 and for other services provided by Reuben E. Price, P.A. Audit Fees................................................ $35,000 Audit-Related Fees........................................ -0- Tax Fees.................................................. -0- All Other Fees............................................ -0- Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the consolidated financial statements referred to above be included in the Company's Annual Report on Form 10-KSB for the fiscal year ended September 30, 2002. Audit Committee Curtis Orgil Ramsey Sweis Alexander H. Walker, Jr. Director Compensation --------------------- The Company has no standard arrangements pursuant to which directors of the Company are compensated for any services provided as a director. The following stock grants were made to non-employee Directors as compensation for serving for the calendar year 2002: Name shares -------------------- ------ Curtis Orgil 51,000 Ramsey Sweis 52,000 Alexander Walker, Jr. 57,000 Compensation of Executive Officers ---------------------------------- The following table sets forth certain summary information concerning compensation paid or accrued by the Company on behalf of the Chief Executive Officer. No other executive officers of the Company have total annual salary and bonus for fiscal year 2002 which exceeded $100,000, (the "Named Executive Officers") with respect to services rendered by such persons to the Company and its subsidiaries for each of the fiscal years ended September 30, 2002, 2001 and 2000. -5-
Long-Term Compensation Other Annual Awards Salary Compensation ---Securities--- Name and Principal Position(6) Year ($) ($) Underlying Options(#) --------------------------- ---- ------ ------------ --------------------- Michael J. Zwebner (1) 2002 $240,000(2) -0- -0- Chairman of the Board of Directors, CEO Curtis A. Orgil 2002 -0- $10,000(3) -0- Chief Financial Officer
----------- (1) Mr. Zwebner works under a contract with Overseas Communications, Ltd. (2) During the fiscal year, this amount was paid with common stock in the amount of 378,578 shares. (3) Mr. Orgil received 200,000 shares of common stock at a value of $0.05 per share. AGGREGATED OPTION EXERCISES IN FISCAL 2002 AND VALUE OF OPTIONS AT SEPTEMBER 30, 2002 The following tables set forth certain information with respect to the Company's Named Executive Officers concerning unexercised stock options held as of September 30, 2002.
Individual Grants Number of Percent of Securities options Options Fiscal Year Underlying granted to Exercise Exercised Options Options~ employees Price as of Expiration Granted Granted from 9/30/00 ($/Share) 9/30/01 Date ------- ------- ------------ --------- ------- ---- - NONE
Aggregated Options/ SAR Exercises at September 30, 2002 ------------------------------------------------------- Number of Securities Underlying Value of Unexercised In- Unexercised Options/SARS at the-Money Options/ SARS at September 30, 2002 September 30, 2002 Exercisable/Unexercisable Exercisable/Unexercisable - NONE
Compliance with Section 16(a) of the Securities Exchange Act of 1934 ------------------------------------------------------------------------ Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors and executive officers, and persons who own more than ten percent of the Company's Common Stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stock. Officers, directors and greater than ten percent stockholders are required by Securities and Exchange Commission regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and representations that no other reports were required, during the fiscal year ended September 30, 2002, we believe that Alex Walker, Ramsey Sweis and Curtis Orgil have not filed the required Form 4s. -6- Certain Relationships and Related Transactions ---------------------------------------------- Commencing November 1, 2001, we engaged the services of the Chairman Michael Zwebner under a consulting agreement through Overseas Development Holdings Corporation, a foreign corporation. The annual payment is $240,000. Overseas Development Holdings Corporation is 33% owned by our Chairman. Alexander Walker, Jr., a Director of our company, is Chairman of the Board and a shareholder of Nevada Agency and Trust Company, our transfer agent since November 6, 2001. Information Concerning Certain Stockholders ------------------------------------------- The following table sets forth, as of September 9, 2003, the number and percentage of shares of Common Stock beneficially owned (as defined in Rule 13d-3 adopted under the Exchange Act) by (a) all persons known to the Company to own beneficially more than 5% of any class of voting security of the Company, (b) each of the Company's directors, (c) the Company's Named Executive Officers and (d) all directors and executive officers of the Company as a group.
Name of Named Executive Officer, Number of Percentage Upon Exercise of Director, or Beneficial Owner Shares Ownership Options or Warrants ------------------------------ ------ --------- ------------------- Michael Zwebner 4,957,910 7.2 0 Alexander Walker, Jr 557,000 * 0 Ramsey Sweis 52,000 * 3,600(1) Curtis Orgil 251,000 * 0 Executive Officers and Directors 5,817,910 8.4 shares as a Group Amro International S. A. 2,305,908 3.3% 5,985,761(2) Grossmuenster Platz 26 Zurich, Switzerland CH8022 The Endeavour Capital Investment Fund S. A. -0- 0.0% 16,804,031(3) Cumberland House #27 Cumberland St Nassau, New Providence, The Bahamas Esquire Trade & Finance Inc. 1,135,000 1.6% 2,932,350(3) Trident Chambers, Road Town Tortola, BVI Celeste Trust Reg 18,687 * 2,897,716(3) Trevisa-Treuhand-Anstalt Landstrasse 8, 9496 Furstentums Balzers, Liechtenstein
------------------------------------------- * Less than 1% (1) The 1,600 shares subject to options are immediately exercisable. (2) Represents shares held and convertible under convertible debentures held. (3) Represents shares held and convertible under convertible debentures held, which shareholder is contractually limited from converting in excess of 9.9%. -7- II. APPOINTMENT OF INDEPENDENT AUDITORS The Company's independent auditors for the fiscal year ended September 30, 2002, were Reuben E. Price, P.A., San Francisco, California. The Board of Directors of the Company has recommended that Reuben E. Price, P.A. be reappointed to serve as independent auditors for the Company for the fiscal year ending September 30, 2003. The Board of Directors considers Reuben E. Price, P.A. to be eminently qualified. Reuben E. Price, P.A. have served as the Company's auditors since September 30, 1999. Although it is not required to do so, the Board of Directors is submitting its selection of the Company's auditors for ratification at the Meeting, in order to ascertain the views of stockholders regarding such selection. If the selection is not ratified, the Board of Directors will reconsider its selection. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE SELECTION OF REUBEN E. PRICE, P.A. TO EXAMINE THE FINANCIAL STATEMENTS OF THE COMPANY FOR THE COMPANY'S FISCAL YEAR ENDING SEPTEMBER 30, 2002. IT IS THE INTENTION OF THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY TO VOTE THE SHARES OF COMMON STOCK REPRESENTED THEREBY IN FAVOR OF SUCH RATIFICATION UNLESS OTHERWISE INSTRUCTED IN SUCH PROXY. A representative of Reuben E. Price, P.A. will not be present at the Meeting, but will be available to respond to appropriate questions by teleconference. Audit Fees ---------- The Company estimates that the aggregate fees billed by its independent auditors for professional services rendered in connection with (a) the audit of the Company's annual financial statements set forth in the Company's Form 10-KSB for the year ended September 30, 2002, and (b) the review of the Company's quarterly financial statements set forth in the Company's quarterly reports on Form 10-QSB for the quarters ended December 31, 2001, March 31, 2002, and June 30, 2002, were approximately $35,000. There were no fees billed for advisory services or other services. III. OTHER MATTERS The Board of Directors of the Company does not know of any other matters which may be brought before the Meeting. However, if any such other matters are properly presented for action, it is the intention of the persons named in the accompanying form of Proxy to vote the shares represented thereby in accordance with their judgment on such matters. IV. MISCELLANEOUS If the accompanying form of Proxy is executed and returned, the shares of Common Stock represented thereby will be voted in accordance with the terms of the Proxy, unless the Proxy is revoked. If no directions are indicated in such Proxy, the shares represented thereby will be voted IN FAVOR of the nominees proposed by the Board of Directors in the election of directors and FOR the ratification of the Board of Directors' selection of independent auditors for the Company. All costs relating to the solicitation of Proxies will be borne by the Company. Proxies may be solicited by officers, directors and regular employees -8- of the Company personally, by mail or by telephone or telegraph, and the Company may pay brokers and other persons holding shares of stock in their names or those of their nominees for their reasonable expenses in sending soliciting material to their principals. It is important that Proxies be returned promptly. Stockholders who do not expect to attend the Meeting in person are urged to mark, sign and date the accompanying form of Proxy and mail it in the enclosed return envelope, which requires no postage if mailed in the United States, so that their votes can be recorded. Stockholder Proposals --------------------- Stockholder proposals intended to be presented at the 2004 Annual Meeting of Stockholders of the Company must be received by the Company by June 3, 2004 in order to be considered for inclusion in the Company's Proxy Statement relating to such Meeting. In the event that a stockholder fails to notify the Company by August 17, 2004 of an intent to be present at the Company's 2004 Annual Meeting of Stockholders in order to present a proposal for a vote, the Company will have the right to exercise its discretionary authority to vote against the proposal, if presented, without including any information about the proposal in its proxy materials. Annual Report on Form 10-KSB ---------------------------- A copy of the Company's Annual Report on Form 10-KSB, including the financial statements and financial statement schedules for the fiscal year ended September 30, 2002, which has been filed with the Securities and Exchange Commission, is being included with the mailing of this Proxy Statement. Directors' Approval ------------------- The contents of this proxy statement have been approved and its mailing has been authorized by the Directors of the Company. BY ORDER OF THE BOARD OF DIRECTORS Alexander Walker, Jr., Secretary Miami Beach, Florida September 30, 2003 -9- UNIVERSAL COMMUNICATION SYSTEMS, INC. PROXY FOR THE 2003 ANNUAL MEETING OF STOCKHOLDERS Vote on Directors ----------------- 1. To elect five directors, with the following persons to be presented at the meeting by the current Board of Directors for election to the Board of Directors: (01) Michael J. Zwebner, (02) Alexander Walker, Jr., (03) Curtis Orgil,(04) Ramsey Sweis and (05) Ami Elazari. / / FOR ALL / / WITHHOLD ALL / / FOR ALL EXCEPT _________________ To withhold authority to vote, mark "For All Except" and write the nominee's number(s). Vote On Proposals ----------------- 2. To ratify the appointment of Reuben E. Price & Co. as the independent auditors of the Company for fiscal year ending September 30, 2003. / / FOR / / AGAINST / / ABSTAIN Note: To take action upon any other matters that may properly come before the meeting or any adjournments thereof. Print Shareholder Name:________________________ # of Shares:______________ __________________________________ Authorized Signature PLEASE FAX TO (775) 322-5623 OR MAIL NEVADA AGENCY & TRUST CO., 50 W LIBERTY ST., STE 880, RENO, NV 89501-1977