An ex-con rises from the ashes with a lot of perserverance and effort. In my consulting days, I dealt with a few business owners and presidents who had "jaded" backgrounds. They told me about it. Put everything out on the table because they felt I had to know to complete assignments effectively.
I, like most of our society, have an inherent bias against criminals. However, I also have a conscious tendency to turn this into skepticism and ask what has the individual done to rise above the past. Everything I can find indicates GIFS CEO has done so. Until someone can show me renewed criminal activity, it is a non-issue with me.
As for compensation:
I only have the 10SB12G dated 11/20/96 in my SEC file for GIFS. If I'm reading it right, in 1993-1995, the President (Mohammed) received $24,000 in compensation, which was used to obtain stock. Then the following section describes the 1996-2001 compensation package:
"On January 1, 1996, the Company entered into a five year employment agreement, with its President, which expires December 31, 2001. After the initial term, the agreement is subject to an automatic annual renewal, unless a sixty day notice is given by the president or the Company not to renew the agreement. Under the agreement, the president is to receive a base annual salary of $175,000 for 1996 and $350,000 for the remainder of the term. The agreement also contains provisions for incentive compensation payments and stock options.
Under the incentive compensation plan, the president is to receive a bonus equal to five percent (5%) of the net increase in the Company's revenues over the prior year's revenues, for each year of employment. Under the stock option provisions, the President has been granted an option to purchase 1,000,000 unregistered shares of common stock for $.25 per share. The president may exercise this option at any time within ten (10) years (January 1, 2006)."
Comparatively, this is a very good compensation package for MZ as well as shareholders. Salary is in line with other companies of GIFS size and activities, at least the ones I've dealt with. What I like in particular is the performance aspect of the compensation plan, i.e. MZ gets more compensation when GIFS does better. (This is a lot better than some of the comp plans I read about recently in BusinessWeek.)
If someone has the latest SEC documents, or can add or correct something I missed in my quick scan, please jump in.
A little history, again from the same 11/20/96 SEC filing. I suspect much of this will be changing given the CRIC sale, so the next couple SEC filings should be informative about the future (though I suspect most of us can point to some likelihood avenues given past info from GIFS):
"Created in 1988 as a Nevada Corporation trading under the name BIG BOSS MINES, then, SPECTRUM MANAGEMENT UNDERWRITERS GROUP, INC. (SMUG), the Company was later renamed after the acquisition of PAP Finance, Inc. to ACADEMY INSURANCE & FINANCIAL SERVICES, INC. and structured for the purpose of acquiring a series of insurance agencies and companies. On July 15, 1995, Academy Insurance & Financial Services, Inc., trading as AIFS (NASDAQ B.B. - OTC), acquired CONGRESS RE-INSURANCE CORPORATION, INC. CONGRESS, operating as a Non-Insurance Surety company, and associated with a group of financial services
companies incorporated since 1987. The CONGRESS group maintains assets valued at over 130 million dollars, with a value of approximately 90 million dollars after contingent liabilities. On December 4, 1995, the Company's name was changed to GUARDIAN INSURANCE & FINANCIAL SERVICES, INC. and, in settlement of a trademark dispute, to GENESIS INSURANCE & FINANCIAL SERVICES, INC.
"CONGRESS started its operations with over 12 million dollars in sales of Non-Insurance Surety bonding and collateral packages, and has grown to over 35 million dollars in sales in 1995. The average gross profit has historically been between 1% and 5% of gross sales, with the average cost of sales at forty percent. CONGRESS Re-Insurance Corporation, Inc., anticipates its bond and collateral package sales alone to increase by over 60% annually by 1998. Additionally, with regard to GENESIS' operations, our goal is to increase consolidated sales to as much as 180 million dollars (subject to the success of
the Company's anticipated public offering), where anticipated profits could reach 70 million dollars, projected from the combined operations of both GENESIS Insurance & Financial Services, Inc., and CONGRESS Re-Insurance Corporation. This projected revenue and sales base is the result of combining the agency acquisition plans of GENESIS Insurance & Financial Services, Inc. with the plan for increased bonding and acquisitions of diversified investments by the Company together with its subsidiary operations, all operating under the
umbrella of GENESIS Insurance & Financial Services, Inc. (The foregoing expansion, growth and revenue projections are subject to the successful placement of an anticipated 25 million dollar stock offering).
"During November of 1995, when CONGRESS RE-INSURANCE CORPORATION, INC.
acquired its parent, ACADEMY INSURANCE FINANCIAL SERVICES, INC., and Mohamed Khairy Mohamed Zayed, II, replaced Mr. Stan Cohen as its Chief Executive Officer. Academy was thereafter renamed GUARDIAN INSURANCE & FINANCIAL SERVICES, INC. and a comprehensive plan of acquisitions were formulated to combine its original "insurance agency acquisition plan" with the existing CONGRESS plan for the strategic acquisition of income-producing properties and investments in the Hospitality, Agriculture, Petroleum, Banking, Transportation, and Medical
Technology Industries. This plan of diversity in the Company's holdings creates, we believe, protected value for its shareholders and increases the value of its Non-Insurance Surety products, which are backed by the value of its diverse asset base.
"GENESIS Insurance & Financial Services, Inc., through the combined assets of its wholly-owned subsidiary, CONGRESS Re-Insurance Corporation, Inc., together with its existing and future subsidiaries program, believes it is in a position of financial strength which will allow it both to move into the rated, regulated insurance industry, as well as to take advantage of the global opportunities in growth through acquisitions and through the expansion of its diverse subsidiary and asset base.
"BACKGROUND
"For many years people have established financial service companies andinsurance companies with excellent operational plans and exciting growth plans for the future. Unfortunately, because of a lack of attention to diversification of assets and operations, many failed or became "Turn-Around Targets" which were acquired by stronger companies in their industry in order to save the newcomers from imminent demise.
"GENESIS Insurance & Financial Services, Inc., being well aware of the
pitfalls associated with changing economic and political conditions, has designed a comprehensive plan of diversification which has led to the current success of its wholly-owned subsidiary, CONGRESS Re-Insurance Corporation, and which management believes will also guarantee GENESIS Insurance Financial Services, Inc., a position of financial strength well into the future.
"GENESIS Insurance & Financial Services, Inc., through its subsidiary
CONGRESS Re-Insurance Corporation will continue marketing its unique brand of Non-Insurance, corporate indemnification products at competitive rates, while the GENESIS subsidiary will market a wide range of regulated insurance products through its agency acquisition program. All operations will offer a high degree of customer service and risk management. Additionally, profit centers in GENESIS' plan of growth through acquisitions, together with revenues from its various existing holdings, we believe will maintain the Company's growth
and will help to ensure its reputation and standing in the global economy as an established leader in service and product value.
"THE PRODUCTS
Performance Guarantee Bonds, Labor and Material Bonds, Financial Guarantee Bonds, 2% Trade Performance Bonds, and various other structured indemnification products currently being provided by GENESIS' wholly owned subsidiary, CONGRESS Re-Insurance Corporation, is the primary source of revenue at present, with its secondary source being the revenue of its other subsidiaries together with revenue generated by international financial consulting fees.
"GENESIS' subsidiary, CONGRESS Re-Insurance Corporation, Inc., has primarily focused on the minority-owned construction company market for its performance bonding activities. The Company services a wide variety of clients for whom it provides trade- related performance guarantees and financial guarantee products. There is a considerable niche market in the area of bonding minority-owned construction firms, and the Company enjoys considerable political support for its activities in this area, as many regulated "Insurance Sureties" are very demanding in their underwriting requirements, which has made it extremely difficult for many smaller firms to obtain rated bonding.
"GENESIS Insurance & Financial Services, Inc., through its subsidiary,
CONGRESS Re-Insurance Corporation, Inc., maintains a high degree of control and accountability in the area of risk management through the implementation of "builder disbursement accounts," a very broad "counter-indemnity" agreement and "power of attorney" over its clients, together with other comprehensive monitoring programs which ensure top-level risk management while allowing clients to bid on and obtain quality projects for which they could not obtain rated sureties elsewhere.
"We believe that CONGRESS' unique concept of collateralization and
indemnification programs are on the "cutting edge" of today's global economy, when the demand for various trade-related indemnification products has never been higher, through combining CONGRESS Re-Insurance Corporation's Non-Insurance Surety Bonding activities and acquisition plans with the insurance agency acquisitions planned by GENESIS Insurance & Financial Services, Inc. Accordingly, GENESIS will take full advantage of the opportunities available in today's global economy, giving it an extremely effective marketing and delivery system which will greatly enhance revenues in all profit centers.
"Genesis Insurance & Financial Services, Inc., and its subsidiaries also plans to take advantage of the opportunities in the international banking industry through the strategic acquisition of a small ($7 to $10 million in assets) internationally chartered bank in 1997, which will increase the multitude of financial services which the Company is able offer its clients throughout the world.
"GENESIS Insurance & Financial Services, Inc. further plans to acquire
various companies in the Medical Technology industry to further diversify its holdings, while maintaining the majority of its holdings in Treasuries and other Securities Portfolios, cash, gold, real estate, gas wells and other diversified assets.
"GENESIS' immediate goals, as set out above, included a small (Rule 504) stock offering to capitalize the beginning stages of its acquisition and marketing program. This Offering was successfully completed and placed for cash and services equal to $1,000,000 on August 8, 1996. Additionally, the Company plans a Secondary Offering of common stock to raise approximately 25 million dollars during 1996 and second quarter of 1997 in order to facilitate its acquisition and expansion program. The Company believes that by year-end, the Company's stock will exceed at least its book value, and therefore
substantial dilution will not occur as less shares will be required to reach 25 million dollars.
"GENESIS INSURANCE & FINANCIAL SERVICES, INC.'s long term mission is to build a strong, diversified and internationally prominent group of companies supplying quality and value to the Regulated Insurance markets, the Non-Insurance Surety markets, the medical industry, mechanical lift industry, mining industry and the International Banking community. With the Company's previous success and with the implementation of its quality, experienced management team, we hope to see GENESIS Insurance & Financial Services, Inc. grow into a multi-national Fortune 500 corporation in the coming years."
Not sure this is the human interest side of the story, but then again, that has to come from MZ and others since it is their lives. It's up to them to share them as they pertain to GIFS. (I hope I'm not misunderstanding your questions.)
And the adventure continues... |
