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
|X| Definitive proxy statement only (as permitted by Rule 14a-6(e)(2))
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ATLANTIC TECHNOLOGY VENTURES, 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)(4) 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:
(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:
<PAGE>
Atlantic Technology Ventures, Inc.
150 Broadway
Suite 1009
New York, New York 10038
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 29, 2000
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
(the "Annual Meeting") of Atlantic Technology Ventures, Inc. ("Atlantic"), which
will be held at 10:00 a.m. Eastern Daylight Saving Time on Friday, September 29,
2000, at the offices of Kramer Levin Naftalis & Frankel LLP, at 919 Third
Avenue, 40th Floor, New York, New York 10022.
At the Annual Meeting, certain proposals will be voted upon by the
holders of Atlantic's common and preferred stock. These proposals are described
in the enclosed Proxy Statement. Atlantic's board of directors has unanimously
approved each of these proposals and recommends that you vote in favor of each
of them.
Whether or not you plan to attend, to assure that you are represented at
the Annual Meeting, please read carefully the accompanying Proxy Statement,
which describes the matters to be voted upon, and complete, sign, date the
enclosed proxy card and return it in the reply envelope provided. If you receive
more than one proxy card because your shares are registered in different names
and addresses, please return each of them to ensure that all your shares are
voted. If you hold your shares of Atlantic in street name and decide to attend
the Annual Meeting and vote your shares in person, please notify your broker to
obtain a ballot so that you may vote your shares. If you are a holder of record
of Atlantic shares and submit the enclosed proxy card and then vote by ballot,
your proxy vote will be revoked automatically and only your vote by ballot will
be counted. Your prompt return of your proxy card will assist us in preparing
for the Annual Meeting.
A letter from Atlantic's President and a copy of Atlantic's 1999 Annual
Report on Form 10-KSB and Quarterly Report on Form 10-QSB, as amended, for the
period ending June 30, 2000, are also enclosed.
We look forward to seeing you at the Annual Meeting.
Sincerely,
Frederic P. Zotos, Esq.
President
New York, New York
August 31, 2000
<PAGE>
ATLANTIC TECHNOLOGY VENTURES, INC.
150 Broadway
Suite 1009
New York, New York 10038
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 29, 2000
General Information for Stockholders
The enclosed proxy card ("Proxy") is solicited on behalf of the board of
directors of Atlantic Technology Ventures, Inc., a Delaware corporation
("Atlantic"), for use at the 2000 annual meeting of stockholders (the "Annual
Meeting") to be held at 10:00 a.m. Eastern Daylight Saving Time on Friday,
September 29, 2000, at the offices of Kramer Levin Naftalis & Frankel LLP, at
919 Third Avenue, 40th Floor, New York, New York 10022, and at any
adjournment.
This Proxy Statement and the Proxy were first mailed to the stockholders
entitled to vote at the Annual Meeting on or about September 1, 2000.
Record Date and Voting
The specific proposals to be considered and acted upon at the Annual
Meeting are described in detail in this Proxy Statement. Stockholders of record
at the close of business on August 24, 2000, are entitled to notice of, and to
vote at, the Annual Meeting. As of the close of business on that date, there
were outstanding and entitled to vote 6,042,256 shares of Atlantic's common
stock, par value $0.001 per share (the "common stock"), and 376,936 shares of
Atlantic's Series A convertible preferred stock, par value $0.001 per share (the
"Series A preferred stock"). Each holder of common stock is entitled to one vote
for each share of common stock held by that stockholder on the record date. Each
holder of Series A preferred stock is entitled to one vote for each share of
common stock into which that holder's shares of Series A preferred stock were
convertible as of the record date. As of the record date, each share of Series A
preferred stock was convertible into 3.27 shares of shares of common stock, and
as a class the Series A preferred stock is entitled to an aggregate of 1,232,580
votes.
At the Annual Meeting, all holders of shares of common stock and Series
A preferred stock will be asked to vote on proposals 1, 2 and 3. A majority of
the votes cast by the holders of both common stock and Series A preferred stock,
voting together, is required in order to approve each of proposals 1, 2 and 3.
If a choice as to the matters coming before the Annual Meeting has been
specified by a stockholder on a returned Proxy, the shares will be voted
accordingly. If no choice is specified, the shares will be voted in favor of the
election of each of the directors proposed by the board and in favor of
proposals 2 and 3 described in the Notice of Annual Meeting and in this Proxy
Statement.
Abstentions and broker non-votes (that is, a Proxy submitted by a broker
or nominee that specifically indicates the lack of discretionary authority to
vote on the proposals) are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Abstentions will have the
same effect as negative votes, whereas broker non-votes will not be counted for
purposes of determining whether a proposal has been approved or not.
To ensure that your shares are voted at the Annual Meeting, please
complete, date, sign the enclosed Proxy and return it in the accompanying
postage-prepaid, return envelope as soon as possible.
Revocability of Proxies
Any stockholder giving a Proxy pursuant to this solicitation may revoke
it at any time prior to its exercise. A stockholder of record may revoke a Proxy
by filing with the Secretary of Atlantic at its principal executive offices
<PAGE>
at 150 Broadway, Suite 1009, New York, New York 10038 a duly executed Proxy
bearing a later date or by attending the Annual Meeting and voting that
stockholder's shares in person. Persons who hold Atlantic shares in street name
may revoke their Proxy by contacting their broker to obtain a legal ballot and
filing that ballot bearing a later date with the Secretary of Atlantic at its
principal executive offices or by attending the Annual Meeting and voting that
ballot in person.
Solicitation
Atlantic will bear the entire cost of solicitation, including preparing,
assembling, printing and mailing the Notice of Annual Meeting, this Proxy
Statement, the Proxy and any additional solicitation materials furnished to
stockholders. Copies of solicitation materials will be furnished to any
brokerage house, fiduciary or custodian holding shares in its name that are
beneficially owned by others, so that they may forward the solicitation
materials to the beneficial owners. To assure that a quorum is present in person
or by proxy at the Annual Meeting, it may be necessary for certain officers,
directors, employees or other agents of the Atlantic to solicit Proxies by
telephone, facsimile or other means or in person. Atlantic does not presently
intend to solicit Proxies other than by mail.
A letter from Atlantic's President as well as Atlantic's Annual Report
on Form 10-KSB for the year ended December 31, 1999, and Atlantic's Quarterly
Report on Form 10-QSB, as amended, for the period ending June 30, 2000, have
been mailed with the Notice of Annual Meeting and Proxy Statement to all
stockholders entitled to notice of and to vote at the Annual Meeting. The
President's letter, the Annual Report on Form 10-KSB, and the Quarterly Report
on Form 10-QSB are not incorporated into this Proxy Statement and are not
considered proxy soliciting material.
-2-
<PAGE>
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, a board of directors consisting of four directors
will be elected to serve until the next annual meeting of stockholders and until
their successors have been duly elected and qualified or until their earlier
resignation or removal. The board has selected four nominees, all of whom are
current directors of Atlantic. Each person nominated for election has agreed to
serve if elected, and management has no reason to believe that any nominee will
be unavailable to serve. Unless otherwise instructed, the Proxy holders will
vote the Proxies received by them in favor of the nominees named below. Holders
of shares of common stock and holders of shares of Series A preferred stock vote
together as a class for the election of directors. If any nominee is unable or
declines to serve as a director, the Proxies may be voted for a substitute
nominee designated by the current board. As of the date of this Proxy Statement,
the board is not aware of any nominee who is unable to or will decline to serve
as a director.
The board recommends that stockholders vote in favor of the election of
each of the following nominees to serve as directors of Atlantic until the next
annual meeting of stockholders and until their successors have been duly elected
and qualified or until their earlier resignation or removal.
Information With Respect to Nominees
Set forth below is information regarding the nominees.
NAME OF NOMINEE AGE POSITION DIRECTOR SINCE
A. Joseph Rudick, M.D. 43 Director and Chief Executive 1999
Officer
Frederic P. Zotos, Esq. 35 Director and President 1999
Steve H. Kanzer, C.P.A., Esq. 36 Director 1993
Peter O. Kliem 61 Director 2000
Business Experience of Nominees
A. Joseph Rudick, M.D., 43, has been Chief Executive Officer of Atlantic
since April 2000 and has been a director of Atlantic since May 1999. He served
as Atlantic's President from May 1999 to April 2000, and also was a co-founder
of Atlantic and two of its majority-owned subsidiaries, Optex and Channel. Dr.
Rudick served as a business consultant to Atlantic from January 1997 until
November 1998. From June 1994 until November 1998, Dr. Rudick was a Vice
President of Paramount Capital, Inc. ("Paramount"), an investment bank
specializing in the biotechnology and biopharmaceutical industries. Since 1988,
he has been a Partner of Associate Ophthalmologists P.C., a private
ophthalmology practice located in New York, and from 1993 to 1998 he served as a
director of Healthdesk Corporation, a publicly-traded medical information
company of which he was a co-founder. Dr. Rudick earned a B.A. in Chemistry from
Williams College in 1979 and an M.D. from the University of Pennsylvania in
1983.
Frederic P. Zotos, Esq., 34, has been President of Atlantic since April
2000 and has been a director of Atlantic since May 1999. He is currently a
member of Atlantic's Audit Committee and Compensation Committee. From June 1999
to April 2000, Mr. Zotos was Director of Due Diligence and Internal Legal
Counsel of Licent Capital, LLC, an intellectual property royalty finance company
located in Jericho, New York. From September 1998 until June 1999, Mr. Zotos
practiced as an independent patent attorney and technology licensing consultant
in
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<PAGE>
Cohasset, Massachusetts. From December 1996 until August 1998, Mr. Zotos was
Assistant to the President and Patent Counsel of Competitive Technologies, Inc.,
a publicly-traded technology licensing agency located in Fairfield, Connecticut.
From July 1994 until November 1996, Mr. Zotos was an Intellectual Property
Associate of Pepe & Hazard, a general practice law firm located in Hartford,
Connecticut. He is Co-Chair of the Fairfield-Westchester and Chair of the New
York City Chapters of the Licensing Executive Society. Mr. Zotos is a registered
patent attorney with the United States Patent and Trademark Office, and is also
registered to practice law in Massachusetts and Connecticut. He earned a B.S. in
Mechanical Engineering from Northeastern University in 1987, a joint J.D. and
M.B.A. degree from Northeastern University in 1993, and successfully completed
an M.S. in Electrical Engineering Prerequisite Program from Northeastern
University in 1994.
Steve H. Kanzer, C.P.A., Esq., 36, has been a director of Atlantic since
its inception in 1993. He is currently a member of Atlantic's Audit Committee
and Compensation Committee. Since December 1997, Mr. Kanzer has been President,
Chief Executive Officer and a member of the board of directors of Corporate
Technology Development, Inc., a privately held pharmaceutical research and
development company based in New York. From 1992 until December 1998, Mr. Kanzer
was a founder and Senior Managing Director of Paramount, and Senior Managing
Director--Head of Venture Capital of Paramount Capital Investments, LLC
("Paramount Investments"), a biotechnology and biopharmaceutical venture capital
and merchant banking firm that is associated with Paramount. From 1993 until
June 1998, Mr. Kanzer was a founder and a member of the board of directors of
Boston Life Sciences, Inc., a publicly-traded pharmaceutical research and
development company. Mr. Kanzer is a founder and Chairman of the Board of
Discovery Laboratories, Inc., and a member of the board of directors of Endorex
Corp., two publicly-traded pharmaceutical research and development companies.
Prior to joining Paramount, Mr. Kanzer was an attorney with Skadden, Arps,
Slate, Meagher & Flom LLP in New York, New York from September 1988 to October
1991. He received his J.D. from New York University School of Law in 1988 and a
B.B.A. in Accounting from Baruch College in 1985. In his capacity as employee
and Director of other companies in the venture capital field, Mr. Kanzer is not
required to present to Atlantic opportunities that arise outside the scope of
his duties as a director of Atlantic.
Peter O. Kliem, 61, has been a director of Atlantic since March 2000. He
is currently a member of Atlantic's Audit Committee and Compensation Committee.
Since January 1997, Mr. Kliem has acted as President and CEO of Enanta
Pharmaceuticals, a Boston-based biotechnology start-up of which he is a
co-founder. Prior to January 1997, he worked with Polaroid Corporation for 36
years, most recently in the positions of Senior Vice President, Business
Development, Senior VP, Electronic Imaging and Senior VP and Director of
Research & Development. During his tenure with Polaroid, he initiated and
executed major strategic alliances with corporations in the U.S., Europe, and
the Far East. Mr. Kliem also introduced a broad range of innovative products
such as printers, lasers, CCD and CID imaging, fiber optics, flat panel display,
magnetic/optical storage and medical diagnostic products in complex
technological environments. He serves as trustee and vice president of the
Boston Biomedical Research Institute and served as Chairman of PB Diagnostics.
He is a member of the board of directors of a privately held company, Corporate
Technology Development, Inc. In addition, he serves as Industry Advisor to
TVM-Techno Venture Management. Mr. Kliem earned his M.S. in Chemistry from
Northeastern University.
Number of Directors; Relationships
Atlantic's bylaws authorize the board to fix the number of directors
serving on the board. Since May 28, 1999, the number of directors has been fixed
at four. Each director holds office until the annual meeting of stockholders
following the initial election or appointment of that director and until that
director's successor has been duly elected and qualified, or until that
director's earlier resignation or removal. Officers are appointed to serve at
the discretion of the board.
There are no family relationships among the executive officers or
directors of Atlantic.
Board Meetings and Committees
The board held 16 meetings during the 1999 fiscal year.
The board has an Audit Committee and a Compensation Committee, but not a
standing Nominating Committee. The Audit Committee, which is currently composed
of Mr. Zotos, Mr. Kanzer and Mr. Kliem, reviews
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<PAGE>
the professional services provided by Atlantic's independent auditors and
monitors the scope and results of the annual audit; reviews proposed changes in
Atlantic's financial and accounting standards and principles; reviews Atlantic's
policies and procedures with respect to its internal accounting, auditing and
financial controls; makes recommendations to the board on the engagement of the
independent auditors and addresses other matters that may come before it or as
directed by the board of directors. Neither Mr. Kanzer nor Mr. Kliem is
currently an officer of Atlantic or any of its subsidiaries, and both are
"independent" under the NASDAQ listing requirements as currently in effect. The
Audit Committee did not hold any meetings during the 1999 fiscal year.
The Audit Committee operates pursuant to a charter approved by
Atlantic's board of directors. A copy of this charter is attached to this Proxy
Statement as Appendix A.
The Compensation Committee, which is currently composed of Mr. Zotos,
Mr. Kanzer and Mr. Kliem, sets the compensation for certain of Atlantic's
personnel and administers Atlantic's 1995 Stock Option Plan, as amended and
restated (the "1995 Stock Option Plan"). The Compensation Committee held seven
meetings during the 1999 fiscal year.
Director Compensation
Non-employee board members are eligible to participate in an automatic
stock option grant program pursuant to the 1995 Stock Option Plan. Non-employee
directors are granted an option for 10,000 shares of common stock upon their
initial election or appointment to the board and an option for 2,000 shares of
common stock on the date of each annual meeting of Atlantic stockholders for
those non-employee directors continuing to serve after that meeting.
The board agreed that effective October 21, 1999, each non-employee
member of the board is to receive $6,000 per year for his services as a
director, payable semi-annually in arrears, plus $1,500 for each board meeting
attended in person, $750 for each board meeting attended via telephone
conference call and $500 for each meeting of a committee of the board attended.
Board members are reimbursed for reasonable expenses incurred in
connection with attendance at meetings of the board and of committees of the
board.
PROPOSAL 2: RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The board has appointed the firm of KPMG LLP, independent auditors, to
audit the financial statements of Atlantic for the year ending December 31,
2000, and is asking the stockholders to ratify this appointment. KPMG LLP began
annually auditing Atlantic's financial statements in December 1995.
In the event the stockholders fail to ratify the appointment, the board
will reconsider its selection. Even if the selection is ratified, the board in
its discretion may direct the appointment of a different independent auditing
firm at any time during the year if the board believes that such a change would
be in the best interests of Atlantic and its stockholders. The affirmative vote
of the holders of a majority of the shares of common stock and shares of Series
A preferred stock, voting together as a class, present or represented by Proxy
at the Annual Meeting and entitled to vote is required to ratify the selection
of KPMG LLP.
The board recommends that stockholders vote in favor of the ratification
of the selection of KPMG LLP to serve as Atlantic's independent auditors for the
year ending December 31, 2000.
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<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
Certain information regarding the sole executive officer other than A.
Joseph Rudick, M.D. and Frederic P. Zotos, Esq. is set forth below (information
concerning Atlantic's directors is contained in proposal 1):
NAME AGE POSITION
Nicholas J. Rossettos 34 Chief Financial Officer, Treasurer and
Secretary
Nicholas J. Rossettos, C.P.A., 34, has been Chief Financial Officer
since April 2000. Mr. Rossettos's most recent position was as Manager of Finance
for CenterWatch, a pharmaceutical trade publisher headquartered in Boston,
Massachusetts, that is a wholly owned subsidiary of Thomson CP headquartered in
Toronto, Canada. Prior to that he was Director of Finance and Administration for
EnviroBusiness, Inc., an environmental and technical management-consulting firm
headquartered in Cambridge, Massachusetts. He holds an A.B. in Economics from
Princeton University and an M.S. in Accounting and an M.B.A. from Northeastern
University.
Compensation of Executive Officers
The following table sets forth, for the last three fiscal years, the
compensation earned for services rendered in all capacities by Atlantic's chief
executive officer and the other highest-paid executive officers serving as such
at the end of 1999 whose compensation for that fiscal year was in excess of
$100,000. The individuals named in the table will be hereinafter referred to as
the "Named Officers." No other executive officer of Atlantic received
compensation in excess of $100,000 during fiscal year 1999. No executive officer
who would otherwise have been included in this table on the basis of 1999 salary
and bonus resigned or terminated employment during the year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
Awards
---------- ---------- ---------------- -----------------
Name and Principal Position Year Salary($)(1Bonus($) Other Annual Securities
Compensation($) Underlying
Options/SARs(#)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. Joseph Rudick, M.D.(2) 1999 0 23,502 50,516 137,000
President and 1998 0 0 0 10,000
Chairman of the Board 1997 0 0 0 0
--------------------------------------------------------------------------------------------------
Shimshon Mizrachi (3) 1999 135,000 25,000 10,000 20,000
Chief Financial Officer, 1998 146,667 15,000 9,500 20,000
Treasurer and 1997 122,000 0 5,900 20,000
Assistant Secretary
--------------------------------------------------------------------------------------------------
Stephen R. Miller, M.D.(4) 1999 106,506 0 10,000 0
Senior Vice President and 1998 163,833 20,000 9,500 20,000
Chief Scientific and Medical 1997 164,200 0 9,500 30,000
Officer
--------------------------------------------------------------------------------------------------
</TABLE>
-----------
(1) Does not include amounts deferred under Atlantic's SAR-SEP retirement plan
pursuant to payroll deductions and matching contributions of Atlantic.
(2) Dr. Rudick became President of Atlantic on May 28, 1999. He initially
acted as a non-employee consultant but became an employee effective
January 1, 2000.
(3) Mr. Mizrachi's employment terminated effective January 7, 2000.
(4) Dr. Miller's employment terminated effective July 1, 1999.
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<PAGE>
Options and Stock Appreciation Rights
The following table contains information concerning the grant of stock
options under the 1995 Stock Option Plan to the Named Officers during the 1999
fiscal year. Except as described in footnote (1) below, no stock appreciation
rights were granted during the 1999 fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Individual Grants
-----------------------------------------------------------------------------------------------
Name Number of % of Underlying Exercise Expiration
Securities Options/SARs Price Date
Underlying Granted to ($/Share)(3)
Options/ Employees in
SARs Fiscal Year(2)
Granted(#)(1)
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. Joseph Rudick M.D. 50,000 32% 1.313 08/09/09
50,000 32% 1.313 08/09/09
10,000 6% 1.375 05/28/09
25,000 16% 1.500 10/21/09
2,000 1% 1.750 09/23/09
-----------------------------------------------------------------------------------------------
Shimshon Mizrachi 20,000 13% $1.313 04/07/00
-----------------------------------------------------------------------------------------------
</TABLE>
------------------------
(1) Each option has a maximum term of ten years, subject to earlier
termination in the event of the optionee's cessation of service with
Atlantic. Dr. Rudick's options became exercisable as follows: (1) the
first option for 50,000 shares, 25% upon granting and 25% on each of the
first three anniversaries of the date of granting; (2) the second option
for 50,000 shares will vest only in the event of the sale of Optex, (3)
the option for 10,000 shares, 33 1/3% on each of the first three
anniversaries of the date of granting, (4) the option for 25,000 shares is
immediately exercisable, and (5) the option for 2,000 shares, on the first
anniversary of the date of granting. Of the option granted to Mr.
Mizrachi, 25% became exercisable upon granting. Because Mr. Mizrachi's
employment was terminated by Atlantic on January 7, 2000, the remaining
options in that grant expired before becoming exercisable. Each option
will become immediately exercisable in full upon an acquisition of
Atlantic by merger or asset sale, unless the option is assumed by the
successor entity. Each option includes a limited stock appreciation right
pursuant to which the optionee may surrender the option, to the extent
exercisable for vested shares, upon the successful completion of a hostile
tender for securities possessing more than 50% of the combined voting
power of Atlantic's outstanding voting securities. In return for the
surrendered option, the optionee will receive a cash distribution per
surrendered option share equal to the excess of (i) the highest price paid
per share of common stock in that hostile tender offer over (ii) the
exercise price payable per share under the cancelled option.
(2) Calculated based on total option grants to employees of 157,000 shares of
common stock during the 1999 fiscal year.
(3) The exercise price may be paid in cash or in shares of common stock
(valued at fair market value on the exercise date) or through a cashless
exercise procedure involving a same-day sale of the purchased shares.
Atlantic may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares and
the federal and state income tax liability incurred by the optionee in
connection with such exercise. The optionee may be permitted, subject to
the approval of the Plan Administrator, to apply a portion of the shares
purchased under the option (or to deliver existing shares of common stock)
in satisfaction of such tax liability.
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<PAGE>
Option Exercises and Holdings
The following table provides information with respect to the Named
Officers concerning the exercisability of options during fiscal year 1999 and
unexercisable options held as of the end of fiscal year 1999. No stock
appreciation rights were exercised during fiscal year 1999, and, except for the
limited rights described in footnote (1) to the preceding table, no stock
appreciation rights were outstanding at the end of that fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR ("FY")
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Name Shares Value No. of Securities Value of Unexercised
Acquired Realized Underlying Unexercised In-the-Money Options/SARs at
on Exercise (1) Options/SARs at FY-End FY-End (Market price of
(#) shares at FY-End less
exercise price) ($)(1)
------------ ------------- -------------- ---------------
Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen R. Miller, M.D. 1 $ 0(2) 0 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
A. Joseph Rudick, M.D. 0 - 41,945 105,045 1,588 13,013
------------------------------------------------------------------------------------------------------------
Shimshon Mizrachi 0 - 61,389 48,611 625 0
------------------------------------------------------------------------------------------------------------
</TABLE>
------------------
(1) Equal to the fair market value of the purchased shares at the time of
the option exercise over the exercise price paid for those shares.
(2) Based on the fair market value of Atlantic's common stock on July 29,
1999 of $1.28 per share, the closing sales price per share on that date
on the Nasdaq SmallCap Market.
Long Term Incentive Plan Awards
No long term incentive plan awards were made to a Named Officer during
the last fiscal year.
Employment Contracts and Termination of Employment and Change of Control
Agreements
Effective November 15, 1995, Mr. Mizrachi became Controller of Atlantic
and of each of Atlantic's subsidiaries pursuant to a letter Agreement dated
November 6, 1995. Mr. Mizrachi and his dependents were also eligible to receive
paid medical and long-term disability insurance and such other health benefits
as Atlantic made available to its other senior officers and directors. Effective
January 7, 2000, Atlantic terminated the employment of Mr. Mizrachi and paid his
salary for six months thereafter, as required by his employment agreement
(subject to Mr. Mizrachi's duty to mitigate damages by seeking alternative
employment).
The Compensation Committee has the discretion under the 1995 Stock
Option Plan to accelerate options granted to any Named Officers in connection
with a change in control of Atlantic or upon the subsequent termination of the
Named Officer's employment following the change of control.
Change of Control Transactions
Atlantic is not aware of any transactions resulting in a change of
control during fiscal year 1999.
Certain Relationships and Related Transactions
In recognition of his role in negotiating an amendment to Optex's
contract with Bausch & Lomb, Atlantic agreed to pay to Dr. Rudick, Atlantic's
President, an amount equal to $141,012. This amount will be paid in 18 monthly
installments ($7,834 per month), which commenced October 1999, out of the profit
component of Bausch & Lomb's payments to Optex. Under this arrangement, Dr.
Rudick received in 1999 a total of $23,502. We felt it
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<PAGE>
was appropriate to enter into this arrangement, given that the deal struck with
Bausch & Lomb was considerably more advantageous to Atlantic than the deal
tentatively agreed to by Atlantic prior to Dr. Rudick's joining the board and
becoming President, and given also that in 1999 Dr. Rudick spent more time on
Atlantic matters than Atlantic had any right to expect, given that Dr. Rudick's
compensation was initially limited to consulting fees of $6,000 a month.
In June 1999, Mr. Zotos performed consulting services for Channel for
which he received $2,500. In the months of July, August, November and December
of 1999, Mr. Zotos performed consulting services for Atlantic for which he
received a total of $2,600, and he may perform further such services from time
to time in the future. On November 17, 1999, Channel Therapeutics, Inc., paid
Mr. Zotos $8,261 in recognition of his role in negotiating the termination of
Channel's license agreement with the Trustees of the University of Pennsylvania.
On January 12, 2000, Atlantic paid Mr. Zotos $2,600 for miscellaneous consulting
services.
On January 4, 2000, we entered into a Financial Advisory and Consulting
Agreement with Joseph Stevens & Company, Inc. In this agreement, we engaged
Joseph Stevens to provide us with investment banking services from January 4,
2000 until January 4, 2001. As partial compensation for the services to be
rendered by Joseph Stevens, we issued them three warrants to purchase an
aggregate of 450,000 shares of our common stock. The exercise price and exercise
period of each warrant is as follows:
================================================================================
Warrant Number No. of Shares Exercise Price Exercise Period
================================================================================
No.1 150,000 $2.50 1/4/00 through 1/4/05
--------------------------------------------------------------------------------
1/4/01 through 1/4/06
(subject to vesting in equal
monthly increments from
No.2 150,000 $3.50 1/4/00-1/4/01)
--------------------------------------------------------------------------------
1/4/02 through 1/4/07
(subject to vesting in equal
monthly increments from
No.3 150,000 $4.50 1/4/00-1/4/01)
--------------------------------------------------------------------------------
In addition, each warrant may only be exercised when the market price of
a share of common stock is at least $1.00 greater than the exercise price of
that warrant. In connection with issuance of the warrants, Atlantic and Joseph
Stevens entered into a letter agreement granting Joseph Stevens registration
rights in respect of the shares of common stock issuable upon exercise of the
warrants.
Pursuant to Atlantic's restated certificate of incorporation and bylaws,
Atlantic enters into indemnification agreements with each of its directors and
executive officers.
All transactions between Atlantic and its officers, directors, principal
stockholders and their affiliates are approved by a majority of the board of
directors, including a majority of the independent and disinterested outside
directors on the board of directors. Atlantic believes that all of the
transactions set forth above were made on terms no less favorable to Atlantic
than could have been obtained from unaffiliated third parties.
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Atlantic's officers, directors and persons who are the beneficial
owners of more than 10% of the common stock to file initial reports of ownership
and reports of changes in ownership of the common stock with the Securities and
Exchange Commission (the "Commission"). Officers, directors and beneficial
owners of more than 10% of the common stock are required by Commission
regulations to furnish Atlantic with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms furnished to
Atlantic and certain written representations that no other reports were
required, Atlantic believes that, during the period from January 1, 1999 to
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<PAGE>
December 31, 1999, all officers, directors and beneficial owners of more than
10% of the common stock complied with all Section 16(a) requirements.
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information known to Atlantic
with respect to the beneficial ownership of common stock as of August 24, 2000,
by (i) all persons who are beneficial owners of 5% or more of our common stock,
(ii) each director and nominee, (iii) the Named Officers in the Summary
Compensation Table above and (iv) all directors and executive officers as a
group. Atlantic does not know of any person who beneficially owns more than 5%
of the Series A preferred stock and none of Atlantic's directors or the Named
Officers owns any shares of Series A preferred stock. Consequently, the
following table does not contain information with respect to the Series A
preferred stock.
The number of shares beneficially owned is determined under rules
promulgated by the Commission, and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under those rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares which the individual has
the right to acquire within 60 days of August 24, 2000, through the exercise or
conversion of any stock option, convertible security, warrant or other right.
Including those shares in the tables does not, however, constitute an admission
that the named stockholder is a direct or indirect beneficial owner of those
shares. Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares that power with that person's
spouse) with respect to all shares of capital stock listed as owned by that
person or entity. The common stock represented here includes the common stock
that the beneficial holders would directly possess if they converted all shares
of Series A preferred stock held by them.
NUMBER OF PERCENT OF TOTAL SHARES
NUMBER OF % OF TOTAL SHARES
NAME AND ADDRESS SHARES OUTSTANDING (1)
---------------- ------ ---------------
CERTAIN BENEFICIAL HOLDERS:
Lindsay A. Rosenwald, M.D.(2) 499,238 8.1%
787 Seventh Avenue
New York, NY 10019
VentureTek, L.P.(3) 438,492 7.3%
40 Exchange Place 20th Floor
New York, NY 10005
Joseph Stevens & Company, Inc.(4) 480,000 7.4%
33 Maiden Lane, 8th floor
New York, NY 10038
MANAGEMENT:
A. Joseph Rudick, M.D.(5) 93,805 *
Frederic P. Zotos, Esq.(6) 92,833 *
Steve H. Kanzer, C.P.A., Esq.(7) 39,121 *
Peter O. Kliem(8) 5,750 *
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<PAGE>
All current executive
officers and directors as
a group (4 persons) 137,454 2.3%
------------------------
* Less than 1.0%
(1) Percentage of beneficial ownership is calculated assuming 6,042,256 shares
of common stock were outstanding on August 24, 2000.
(2) Includes 344,507 shares of common stock and 154,351 shares of common stock
issuable upon conversion of 47,202 shares of Series A preferred stock
issuable pursuant to a warrant exercisable within 60 days of August 24,
2000. Also includes 190 shares of common stock held by June Street
Corporation and 190 shares of common stock held by Huntington Street
Corporation. Dr. Rosenwald is the sole proprietor of both June Street
Corporation and Huntington Street Corporation.
(3) The general partner of VentureTek, L.P. is Mr. C. David Selengut. Mr.
Selengut may be considered a beneficial owner of shares owned by
VentureTek, L.P. by virtue of his authority as general partner to vote and
dispose of those shares. VentureTek, L.P. is a limited partnership, the
limited partners of which include Dr. Rosenwald's wife and children, and
sisters of Dr. Rosenwald's wife and children. Dr. Rosenwald disclaims
beneficial ownership of those shares.
(4) Represents two warrants each exercisable within 60 days of August 24,
2000. One warrant is a warrant to purchase 165,000 units, each unit
consisting of one share of common stock and one redeemable common stock
purchase warrant, each redeemable warrant entitling the holder to purchase
an additional share of common stock. The second warrant is a warrant to
purchase 150,000 shares of common stock at a purchase price of $2.50 per
share and was immediately exercisable on the date of granting, except that
it may be exercised only if the last sale price of a share of common stock
on NASDAQ (or the principal stock exchange on which the common stock is
then listed or admitted to trading) on the immediately preceding business
day is equal to or greater than $1.00 plus the exercise price then in
effect.
Does not include two additional warrants, each entitling the holder to
purchase 150,000 shares of common stock, which are not exercisable until
January 4, 2001 and January 4, 2002 respectively.
Does not include any units, shares of common stock or redeemable warrants
that may be held in the Joseph Stevens market-making account. Mr. Joseph
Sorbara and Mr. Steven Markowitz, each of whom is a controlling
shareholder, director and officer of Joseph Stevens, own beneficially the
shares of common stock owned beneficially by Joseph Stevens.
(5) Represents options exercisable within 60 days of August 24, 2000. 25,000
shares are exercisable pursuant to stock options granted October 21, 1999,
all of which are immediately exercisable; an additional 25,000 shares are
exercisable pursuant to stock options granted under the plan on April 12,
2000 for 100,000
shares, of which 25% or 25,000 shares are exercisable on issuance, then an
additional 25% annually thereafter; an additional 6,250 shares are
exercisable pursuant to stock options granted April 12, 2000 for 25,000
shares, of which 25% or 6,250 shares are exercisable on issuance, then an
additional 25% annually thereafter.
Does not include an option to purchase 50,000 shares of common stock,
which is exercisable only in the event of the sale of Optex.
(6) Represents options exercisable within 60 days of August 24, 2000. 25,000
shares are exercisable pursuant to stock options granted October 21, 1999,
all of which are immediately exercisable; an additional 25,000 shares are
exercisable pursuant to stock options granted under the plan on April 12,
2000 for 100,000
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<PAGE>
shares, of which 25% or 25,000 shares are exercisable on issuance, then an
additional 25% annually thereafter; an additional 37,500 shares are
exercisable pursuant to stock options granted April 12, 2000 for 150,000
shares, of which 25% or 37,500 shares are exercisable on issuance, then an
additional 25% annually thereafter.
(7) Includes 31,000 shares of common stock underlying options exercisable
within 60 days of August 24, 2000.
(8) Includes 35,000 shares of common stock underlying options exercisable
within 60 days of August 24, 2000.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Under the present rules of the Commission, the deadline for stockholders
to submit proposals to be considered for inclusion in Atlantic's Proxy Statement
for the next year's annual meeting of stockholders is May 3, 2001. Such
proposals may be included in next year's Proxy Statement if they comply with
certain rules and regulations promulgated by the Commission. The date of next
year's annual meeting of stockholders has not yet been fixed; if Atlantic fixes
a date that is more than 30 days earlier or later than the date of this year's
annual meeting, Atlantic will specify a revised deadline in a Form 10-QSB filed
with the Commission.
FORM 10-KSB
Atlantic filed a Form 10-KSB for the year ended December 31, 1999 with
the Commission. A copy of this Form 10-KSB has been mailed concurrently with
this Proxy Statement to all stockholders entitled to notice of and to vote at
the Annual Meeting. The Form 10-KSB is not incorporated into this Proxy
Statement and is not considered proxy soliciting material. Stockholders may
obtain additional copies of this report, without charge, by writing to Investor
Relations, Atlantic Technology Ventures, 150 Broadway, Suite 1009 New York, New
York 10038.
OTHER MATTERS
Atlantic knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the board may recommend.
Discretionary authority with respect to such other matters is granted by the
execution of the enclosed Proxy.
THE BOARD OF DIRECTORS
Dated: August 31, 2000
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<PAGE>
Appendix A
CHARTER AND POWERS OF THE AUDIT COMMITTEE
RESOLVED, that the membership of the Audit Committee shall consist of at
least one independent member of the board of directors (in conformity with the
small business rules of the Nasdaq) who shall serve at the pleasure of the board
of directors.
RESOLVED, that the charter and powers of the Audit Committee of the Board
of Directors (the "Audit Committee") shall be:
o Assisting the Board of Directors in the oversight of the maintenance
by management of the reliability and integrity of the accounting
policies and financial reporting and disclosure practices of the
Company.
o Assisting the Board of Directors in the oversight of the
establishment and maintenance by management of processes to assure
that an adequate system of internal control is functioning within
the Company.
o Assisting the Board of Directors in the oversight of the
establishment and maintenance by management of process to assure
compliance by the Company with all applicable laws, regulations and
Company policy.
RESOLVED, that the Audit Committee shall have the following specific
powers and duties:
1. Holding such regular meetings as may be necessary and such special
meetings as may be called by the Chairman of the Audit Committee or
at the request of the independent accountants;
2. Reviewing the performance of the independent accountants and making
recommendations to the Board of Directors regarding the appointment
or termination of the independent accountants;
3. Ensuring its receipt from the independent accountants of a formal
written statement delineating all relationships between the
independent accountants and the Company consistent with Independence
Standards Board Standard;
4. Actively engaging in a dialogue with the independent accountants
with respect to any disclosed relationships or services that may
impact the objectivity and independence of the independent
accountants and for taking or recommending that the Board of
Directors take appropriate action to oversee the independence of the
outside auditor;
5. Selecting, evaluating and, where appropriate, replacing the
independent auditors (or nominating independent auditors to be
proposed for shareholder approval in any proxy statement, which
independent auditors shall ultimately be accountable to the Board of
Directors and the Audit Committee;
6. Conferring with the independent accountants concerning the scope of
their examinations of the books and records of the Company and its
subsidiaries: reviewing and approving the independent accountants'
annual engagement letter: reviewing and approving the Company's
internal annual audit plans and procedures: and authorizing the
auditors to perform such supplemental reviews or audits as the
Committee may deem desirable;
7. Reviewing with management, the independent accountants significant
risks and exposures, audit activities and significant audit
findings;
8. Reviewing the range and cost of audit and non-audit services
performed by the independent accountants;
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<PAGE>
9. Reviewing the Company's audited annual financial statements and the
independent accountants opinion rendered with respect to such
financial statements, including reviewing the nature and extent of
any significant changes in accounting principles or the application
thereof;
10. Reviewing the adequacy of the Company's systems of internal control;
11. Obtaining from the independent accountants their recommendations
regarding internal controls and other matters relating to the
accounting procedures and the books and records of the Company and
its subsidiaries and reviewing the correction of controls deemed to
be deficient;
12. Providing an independent, direct communication between the Board of
Directors, and independent accountants;
13. Reviewing the adequacy of internal controls and procedures related
to executive travel and entertainment;
14. Reviewing the programs and policies of the Company designed to
ensure compliance with applicable laws and regulations and
monitoring the results of these compliance efforts;
15. Reporting through its Chairman to the Board of Directors following
the meetings of the Audit Committee;
16. Reviewing the powers of the Committee annually and reporting and
making recommendations to the Board of Directors on these
responsibilities;
17. Conducting or authorizing investigations into any matters within the
Audit Committee's scope of responsibilities; and
18. Considering such other matters in relation to the financial affairs
of the Company and its accounts, and in relation to the internal and
external audit of the Company as the Audit Committee may, in its
discretion, determine to be advisable.
IN WITNESS WHEREOF, the undersigned have executed this written Consent,
which written Consent may be signed in one or more counterparts which taken
together shall constitute one and the same written consent, as of this 13th day
of June, 2000.
/s/ Steve H. Kanzer
-------------------------------
Steve H. Kanzer
/s/ Peter O. Kliem
-------------------------------
Peter O. Kliem
/s/ A. Joseph Rudick
-------------------------------
A. Joseph Rudick
/s/ Frederic P. Zotos
-------------------------------
Frederic P. Zotos
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<PAGE>
ATLANTIC TECHNOLOGY VENTURES, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 29, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
ATLANTIC TECHNOLOGY VENTURES, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held September 29, 2000
and the Proxy Statement and appoints Frederic P. Zotos, Esq. and Mr. Nicholas J.
Rossettos, and each of them, the Proxy of the undersigned, with full power of
substitution, to vote all shares of common stock of Atlantic Technology
Ventures, Inc. ("Atlantic") that the undersigned is entitled to vote, either on
his or her own behalf or on behalf of any entity or entities, at the annual
meeting of stockholders of Atlantic to be held at the offices of Kramer Levin
Naftalis & Frankel LLP, at 919 Third Avenue, 40th Floor, New York, New York
10022, on September 29, 2000 at 10:00 a.m. Eastern Daylight Saving Time (the
"Annual Meeting"), and at any adjournment or postponement thereof, with the same
force and effect as the undersigned might or could do if personally present at
the Annual Meeting. The shares represented by this Proxy shall be voted in the
manner set forth below.
1. To elect four directors to serve on Atlantic's board of directors for
the ensuing year and until their respective successors are duly elected and
qualified:
FOR To withhold authority to vote for any
nominees, enter their name or names below:
A. Joseph Rudick, M.D. |_| ___________________________________
Frederic P. Zotos, Esq. |_| ___________________________________
Steve H. Kanzer, C.P.A., Esq. |_| ___________________________________
Peter O. Kliem, Esq. |_| ___________________________________
2. To ratify the Board of Director's selection of KPMG LLP to serve as
Atlantic's independent auditors for the year ending December 31, 2000;
FOR |_| AGAINST |_| ABSTAIN |_|
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
FOR |_| AGAINST |_| ABSTAIN |_|
<PAGE>
The board of directors recommends a vote in favor of each of the directors
listed above and a vote in favor of the other proposals. This Proxy, when
properly executed, will be voted as specified above. If no direction is made,
this Proxy will be voted in favor of the election of the directors listed above
and in favor of the other proposals.
Please print the stockholder name exactly as it appears on this Proxy. If
the shares are registered in more than one name, the signature of each person in
whose name the shares are registered is required. A corporation should sign in
its full corporate name, with a duly authorized officer signing on behalf of the
corporation and stating his or her title. Trustees, guardians, executors, and
administrators should sign in their official capacity, giving their full title
as such. A partnership should sign in its partnership name, with an authorized
person signing on behalf of the partnership.
------------------------------
(Print name)
------------------------------
(Authorized Signature)
Date:
------------------------
<PAGE>
ATLANTIC TECHNOLOGY VENTURES, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 29, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
ATLANTIC TECHNOLOGY VENTURES, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held September 29, 2000
and the Proxy Statement and appoints Frederic P. Zotos, Esq. and Mr. Nicholas J.
Rossettos, and each of them, the Proxy of the undersigned, with full power of
substitution, to vote all shares of preferred stock of Atlantic Technology
Ventures, Inc. ("Atlantic") that the undersigned is entitled to vote, either on
his or her own behalf or on behalf of any entity or entities, at the Annual
Meeting of Stockholders of Atlantic to be held at the offices of Kramer Levin
Naftalis & Frankel LLP, at 919 Third Avenue, 40th Floor, New York, New York
10022, on September 29, 2000 at 10:00 a.m. Eastern Daylight Saving Time (the
"Annual Meeting"), and at any adjournment or postponement thereof, with the same
force and effect as the undersigned might or could do if personally present at
the Annual Meeting. The shares represented by this Proxy shall be voted in the
manner set forth below.
1. To elect four directors to serve on Atlantic's board of directors for
the ensuing year and until their respective successors are duly elected and
qualified:
FOR To withhold authority to vote for any
nominees, enter their name or names below:
A. Joseph Rudick, M.D. |_| ___________________________________
Frederic P. Zotos, Esq. |_| ___________________________________
Steve H. Kanzer, C.P.A., Esq. |_| ___________________________________
Peter O. Kliem, Esq. |_| ___________________________________
2. To ratify the Board of Director's selection of KPMG LLP to serve as
Atlantic's independent auditors for the year ending December 31, 2000;
FOR |_| AGAINST |_| ABSTAIN |_|
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
FOR |_| AGAINST |_| ABSTAIN |_|
<PAGE>
The board of directors recommends a vote in favor of each of the
directors listed above and a vote in favor of the other proposals. This Proxy,
when properly executed, will be voted as specified above. If no direction is
made, this Proxy will be voted in favor of the election of the directors listed
above and in favor of the other proposals.
Please print the stockholder name exactly as it appears on this Proxy.
If the shares are registered in more than one name, the signature of each person
in whose name the shares are registered is required. A corporation should sign
in its full corporate name, with a duly authorized officer signing on behalf of
the corporation and stating his or her title. Trustees, guardians, executors,
and administrators should sign in their official capacity, giving their full
title as such. A partnership should sign in its partnership name, with an
authorized person signing on behalf of the partnership.
------------------------------
(Print name)
------------------------------
(Authorized Signature)
Date:
------------------------
