SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
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Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
GUM TECH INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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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:
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4) Date Filed:
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<PAGE>
GUM TECH INTERNATIONAL, INC.
246 East Watkins Street
Phoenix, Arizona 85004
(602) 252-1617
----------------------------------
NOTICE AND PROXY STATEMENT
For Annual Meeting of Shareholders
To Be Held on August 9, 2000
---------------------------------
To the Holders of Our Common Stock:
The Annual Meeting of Shareholders (the "Annual Meeting") of Gum Tech
International, Inc. will be held at the Radisson Phoenix Airport Hotel, 3333
East University Drive, Phoenix, Arizona, on August 9, 2000 at 10:00 AM, local
time, to consider and act upon the following proposals:
1. To elect four directors to Gum Tech's Board of Directors to serve for
the next year or until their successors are elected; and
2. To transact such other business as may properly come before the Annual
Meeting. Management is presently aware of no other business to be
considered at the Annual Meeting.
The Board of Directors has fixed the close of business on June 30, 2000 as
the record date for the determination of shareholders entitled to receive notice
of and to vote at the Annual Meeting or any adjournment thereof. Shares of
common stock can be voted at the Annual Meeting only if the holder is present at
the Annual Meeting in person or by valid proxy. A copy of our 1999 Annual Report
to Shareholders which includes our financial statements was mailed with this
Notice and Proxy Statement on or about July 19, 2000 to all shareholders of
record as of the record date. We cordially invite you to attend the Annual
Meeting.
Your attention is directed to the attached Proxy Statement.
By Order of the Board of Directors,
William J. Hemelt
Secretary
Phoenix, Arizona
July 19, 2000
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IMPORTANT
Shareholders are earnestly requested to DATE, SIGN and MAIL the enclosed proxy.
A postage paid envelope is provided for mailing.
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<PAGE>
GUM TECH INTERNATIONAL, INC.
246 East Watkins Street
Phoenix, Arizona 85004
(602) 252-1617
PROXY STATEMENT
Proxies in the form enclosed are solicited by the Board of Directors of Gum
Tech International, Inc., a Utah corporation ("Gum Tech"), for use at our 2000
Annual Meeting of Shareholders (the "Annual Meeting") to be held on August 9,
2000. The proxy materials were mailed on or about July 19, 2000 to shareholders
of record as of the close of business on June 30, 2000 (the "Record Date").
VOTING SECURITIES OUTSTANDING
As of July 6, 2000, there were 8,929,047 outstanding shares of our common
stock. Each share of our common stock is entitled to one vote on each matter of
business to be considered at the Annual Meeting. Cumulative voting for directors
is not permitted. A majority of the issued and outstanding shares entitled to
vote, represented at the meeting in person or by proxy, will constitute a
quorum.
BOARD OF DIRECTORS
At the Annual Meeting, four directors will be elected, each to hold office
until our next Annual Meeting of Shareholders or until his successor is elected
and qualified. Cumulative voting is not permitted for the election of directors.
In the absence of instructions to the contrary, the person named in the
accompanying proxy will vote in favor of the election of each of the persons
named below as our director nominees. All of the nominees are presently members
of the Board of Directors. Each of the nominees has consented to be named herein
and to serve if elected. It is not anticipated that any nominee will become
unable or unwilling to accept nomination or election, but if such should occur,
the person named in the proxy intends to vote for the election in his stead of
such person as our Board of Directors may recommend.
For information regarding the nominees proposed for election at the Annual
Meeting, see "Information Concerning Directors, Nominees and Executive Officers"
in the following section.
REVOCATION OF PROXIES
Should you submit the enclosed proxy, you have the power to revoke it at
any time before it is exercised by either: (i) attending the Annual Meeting and
voting in person; (ii) duly executing and delivering a proxy bearing a later
date; or (iii) sending written notice of revocation to the Secretary of the
Company at 246 East Watkins Street, Phoenix, Arizona 85004.
SOLICITING PROXIES
We will bear the cost of solicitation of proxies, including the charges and
expenses of brokerage firms and others who forward proxy materials to beneficial
owners of stock. Our solicitation will be by mail, except for any incidental
personal solicitation made by our directors, officers and employees, who will
receive no additional compensation for such solicitations.
1
<PAGE>
The information contained in this Proxy Statement should be reviewed in
conjunction with the financial statements, notes to financial statements,
independent auditors' reports and other information included in our 1999 Annual
Report to Shareholders that was mailed with this Proxy Statement to all
shareholders of record on the Record Date.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Annual Meeting, we will seek the election of Gary S. Kehoe, W. Brown
Russell, III, William D. Boone and William Yuan as directors, each to hold
office until our next Annual Meeting of Shareholders or until his successor is
elected and qualified.
Required Vote
The four nominees receiving the highest number of votes cast at the Annual
Meeting will be elected.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF GARY S. KEHOE,
W. BROWN RUSSELL, III, WILLIAM D. BOONE AND WILLIAM YUAN.
INFORMATION CONCERNING
DIRECTORS, NOMINEES, AND EXECUTIVE OFFICERS
The following sets forth certain information with respect to Directors,
nominees to the Board of Directors, and executive officers of the Company.
NAME AGE POSITION WITH COMPANY AND TENURE
---- --- --------------------------------
Gary S. Kehoe 41 President since 1998 and Chief Operating
Officer and Director since 1995
W. Brown Russell, III 44 Chairman of the Board of Directors since 1999,
Director of Investor Relations and Legal and
Director since 1998
William D. Boone 52 Director since 1998
William A. Yuan 39 Director since 1998
William J. Hemelt 46 Secretary, Treasurer, and Chief Financial
Officer since 1998 (Principal Financial Officer)
2
<PAGE>
GARY S. KEHOE joined Gum Tech in 1995 as Chief Operating Officer and a
Director. He was responsible for construction and start-up of our manufacturing
facility and research and development of gum products. In February 1998, the
Board of Directors elected Mr. Kehoe as our President. Prior to joining Gum
Tech, Mr. Kehoe was employed by Planters/LifeSavers, a division of Nabisco Food
Group, in various capacities, including Senior Food Technologist, where he was
responsible for functional and nutriceutical products in the confectionery
division. He developed or co-developed several new technologies, processes, and
products involving CareFree, Bubble Yum, Fruit Stripe, and BeechNut chewing gums
and is listed as inventor or co-inventor on 22 U.S. patents filed by Nabisco and
Gum Tech.
W. BROWN RUSSELL, III was elected to the Board of Directors in February
1998 and appointed as Chairman of the Board in August 1999. He joined Gum Tech
as a Special Advisor to the President in February 1998 before assuming his
current position as Director of Investor Relations and Legal. Before joining Gum
Tech, Mr. Russell operated Brown Russell Investment Services, Inc., a private
money management firm. From 1987 to 1994, Mr. Russell was the President of
Capital Investment Properties, a real estate and property management firm based
in Athens, Georgia. During this time, Mr. Russell was also a partner in the law
firm of Russell & Russell. Mr. Russell earned a Juris Doctorate and Bachelor of
Arts from the University of Georgia.
WILLIAM D. BOONE was elected to the Board of Directors in February 1998,
and served as a manufacturing consultant to Gum Tech in early 1998. Mr. Boone
has 30 years experience in small business management and sales growth, including
co-founding and co-managing Trade Printers, Inc., a Phoenix-based wholesale
printing manufacturer, which he subsequently sold.
WILLIAM A. YUAN has been a Director since 1998. Mr. Yuan is President and
Chief Executive Officer of Reliance Management, LLC. From 1985 until 1996, Mr.
Yuan was employed by Merrill Lynch and Salomon Smith Barney in various
positions. Mr. Yuan earned a Bachelor of Science in Economics from Cornell
University.
WILLIAM J. HEMELT joined us in June 1998 as our Chief Financial Officer,
Treasurer, and Secretary. From 1980 to 1997, Mr. Hemelt held a variety of
financial positions with Arizona Public Service Company, Arizona's largest
utility, including 6 years as Treasurer and 4 years as Controller. Mr. Hemelt
earned a Master of Business Administration and a Bachelor of Science in
Electrical Engineering from Lehigh University.
BRUCE A. JORGENSON, M.D., resigned from the Board of Directors effective
February 17, 2000. We intend to add at least one additional board member in the
future.
All Directors' terms are on an annual basis.
3
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
AND ITS COMMITTEES
During the fiscal year ended December 31, 1999, our Board of Directors held
7 meetings, either in person or by consent resolution. All Directors attended or
participated in at least 75% of those meetings and the total number of meetings
held by all committees of the Board on which they served.
AUDIT COMMITTEE
In 1998, our Board of Directors elected Dr. Bruce A. Jorgenson, William
Boone, William A. Yuan, and W. Brown Russell to the Audit Committee. In
connection with Dr. Jorgenson's resignation from the Board in February 2000, Dr.
Jorgenson no longer serves on the Audit Committee. The functions of the Audit
Committee are to receive reports with respect to loss contingencies, the public
disclosure or financial statement notation of which may be legally required;
annually review and examine those matters that relate to a financial and
performance audit of our employee plans; recommend to our Board of Directors the
selection, retention, and termination of our independent accountants; review the
professional services, proposed fees and independence of such accountants; and
provide for the periodic review and examination of management performance in
selected aspects of corporate responsibility. The Audit Committee did not meet
in 1999.
COMPENSATION COMMITTEE
In 1998 our Board of Directors elected Dr. Bruce A. Jorgenson and William
Boone to the Compensation Committee. In connection with Dr. Jorgenson's
resignation from the Board in February 2000, Dr. Jorgenson no longer serves on
the Compensation Committee. The functions of the Compensation Committee are to
review annually the performance of the President and of the other principal
officers whose compensation is subject to the review and recommendation by the
Compensation Committee to our Board of Directors. Additionally, the Compensation
Committee is to review compensation of outside directors for service on our
Board of Directors and for service on committees of our Board of Directors, and
to review the level and extent of applicable benefits provided by us with
respect to automobiles, travel, insurance, health and medical coverage, stock
options and other stock plans and benefits. The Compensation Committee held two
meetings during fiscal 1999.
DIRECTOR COMPENSATION
The Company's nonemployee Directors receive $500 for each Board meeting
attended and reimbursement for out-of-pocket expenses incurred in attending
Board of Director's meetings. All Board members have been granted stock options
under the Company's 1995 Stock Option Plan for their service on the Board.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table discloses, for the years ended December 31, 1997, 1998,
and 1999, certain compensation paid to the Company's Chief Executive Officer,
and to each other executive officer whose total compensation in 1999 exceeded
$100,000. No other executive officer of the Company at December 31, 1999 earned
more than $100,000 in annual compensation during the fiscal year ended December
31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------------------- -------
------------------------------------------ RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION(1)
------------------ ---- ------ ----- ------------ -------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary S. Kehoe 1999 $132,292 $50,000 0 0 80,000 0 $3,965
President, Chief 1998 $ 95,000 $30,000(2) 0 0 188,000(3) 0 $2,847
Operating Officer 1997 $ 84,333 $20,000(4) 0 0 88,000(5) 0 $ 880
William J. Hemelt 1999 $100,000 $ 0 0 0 24,000 0 $3,000
Chief Financial 1998 $ 58,333 $ 0 0 0 50,000 0 $1,750
Officer, Treasurer
and Secretary
W. Brown Russell 1999 $ 96,667 $ 0 0 0 60,000 0 $2,821
Chairman of the 1998 $ 44,000 $ 0 0 0 70,000 0 $ 0
Board and Director
of Legal and
Investor Relations
</TABLE>
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(1) Includes matching contributions under our SRA/IRA defined contribution
program.
(2) Includes $10,000 that was accrued in 1998 but paid in 1999.
(3) Represents options originally granted in prior years that were repriced in
1998. (See footnote 5 below). In accordance with SEC rules, these options
are reported as options granted during the fiscal year 1998 as a result of
the repricing of these options in April 1998.
(4) Includes $10,000 that was accrued in 1997 but paid in 1998.
(5) Each option was repriced to $5.625 per share in April 1998, equal to the
fair market value on the date of repricing.
5
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants during the year
ended December 31, 1999 to the named executive officers:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS/ EXERCISE
UNDERLYING SARS GRANTED PRICE GRANT DATE
OPTIONS/SARS TO EMPLOYEES IN (PER EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR (1) SHARE) DATE VALUE (1)
----------------- ---------- --------------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Gary S. Kehoe 70,000 (2) 15% $11.7500 08/10/2002 $384,090
10,000 (3) 2% $12.5625 10/07/2002 $ 58,680
William J. Hemelt 24,000 (4) 5% $11.7500 08/10/2004 $131,688
W. Brown Russell 50,000 (5) 11% $11.7500 08/10/2002 $274,350
10,000 (3) 2% $12.5625 10/07/2002 $ 58,680
</TABLE>
----------
(1) The grant date present values per option share were derived using the
Black-Scholes option pricing model in accordance with SEC rules and
regulations and are not intended to forecast future appreciation of our
stock price. The options granted on August 10, 1999 had a grant date
present value of $5.487 per option and the options granted on October 7,
1999 had a grant date present value of $5.868 per option. The Black-Scholes
model was used with the following assumptions: volatility of 63.1% based on
a historical weekly average; dividend yield of 0%; risk-free interest of
5.90% based on a U.S. Treasury rate of three years; and a three year option
life.
(2) 30,000 vested upon the completion of the second clinical test of Zicam's
efficacy, 20,000 vest upon completion of a major dental gum contract, as
determined by the Compensation Committee of the Board, and 20,000 vest upon
completion of a major nicotine gum contract, as determined by the
Compensation Committee of the Board.
(3) 5,000 vested upon the completion of the second clinical test of Zicam's
efficacy, 2,500 vest upon completion of a major dental gum contract, as
determined by the Compensation Committee of the Board, and 2,500 vest upon
completion of a major nicotine gum contract, as determined by the
Compensation Committee of the Board.
(4) 12,000 vested upon the completion of the second clinical test of Zicam's
efficacy, and 4,000 vest on each of August 10, 2000, August 10, 2001 and
August 10, 2002.
(5) 30,000 vested upon the completion of the second clinical test of Zicam's
efficacy, 10,000 vest upon completion of a major dental gum contract, as
determined by the Compensation Committee of the Board, and 10,000 vest upon
completion of a major nicotine gum contract, as determined by the
Compensation Committee of the Board.
6
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
The following table provides information on the value realized by the
exercise of options by the named executive officers during 1999 and the value of
the named executive officer's unexercised options at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS AT IN-THE-MONEY OPTIONS/
ACQUIRED FISCAL YEAR-END SARS AT FISCAL YEAR-END
ON VALUE --------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary S. Kehoe 100,000 $1,191,250 88,000 80,000 $913,000 $331,875
William J. Hemelt 18,000 $ 218,812 7,000 49,000 $ 73,500 $364,500
W. Brown Russell 10,000 $ 111,250 60,000 60,000 $597,400 $246,875
</TABLE>
Gum Tech has entered into an employment agreement with Mr. Kehoe. Mr.
Kehoe's agreement, which was originally executed on June 1, 1995, expires on
December 31, 2000. Mr. Kehoe's annual salary has been increased by the Board to
$150,000, which is above the level required in the contract, to reflect the
additional responsibilities Mr. Kehoe has assumed as President of Gum Tech. This
employment agreement also provides a bonus payment structure that is related to
annual sales levels of new gums developed by Mr. Kehoe.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee is responsible for recommending to the Board the
establishment of salaries and grants of options to officers and directors and
the grant of options for other key employees of the Company.
Due to the limited cash resources and negative earnings of the Company over
the past couple of years, the Compensation Committee and the Board have relied
heavily on the use of option grants to compensate the Company's three principal
management individuals. Certain adjustments to salary levels have been made
during this period. Mr. Kehoe's salary was increased in two separate actions to
its present level of $150,000 annually reflecting his increased responsibilities
as President of the Company and the important role he plays in leading the gum
formulation work critical to the growth in the Company's gum operations. Mr.
Russell's salary was increased to $100,000 in early 1999 reflecting his
increased responsibilities.
Option grants were made to each of the three management individuals during
this period, including Mr. Hemelt, the Company's Chief Financial Officer. The
option grants were largely structured with vesting schedules tied to the
accomplishment of three significant goals: (1) the completion of certain
clinical testing of Zicam's therapeutic benefits; (2) completion of a final
agreement for nicotine gum development; and (3) completion of a final agreement
for a major oral care project. The first two of these objectives have been met.
7
<PAGE>
Compensation for Board members, until recently, consisted solely of grants
of stock options. Upon joining the Board each of the current outside members was
given 20,000 options that vested over a two-year period. An additional grant of
10,000 options was awarded in late 1999 to all Board members. This latter grant
vests in accordance with the management options discussed above. All options
provided for an exercise price equal to the fair market value of the Company's
common stock as of the date of grant. In May 2000, the Board approved, as an
interim step towards a more appropriate board compensation program, cash
compensation to non-employee board members at a rate of $500 per Board meeting
attended.
As noted, the Company has relied heavily on option grants both to provide
incentives for management and the Board to achieve certain strategic objectives,
as well as align the interests of these parties directly with our shareholders.
We believe the program as structured was appropriate for the Company's stage of
development over the past couple of years. As the Company continues to grow, we
believe it is appropriate to review and establish compensation structures that
may be more appropriate for our next stage of development. To that end, we are
engaged in a complete review of these compensation structures and expect
modifications to be approved and implemented in the near future. Our goal in
this process will be to establish a compensation program that will attract,
motivate and retain executives and board members of outstanding ability and
potential while continuing to align their interests with the interests of our
stockholders.
William D. Boone, Compensation Committee
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires Gum Tech's officers and directors, and persons who own more than ten
percent of a registered class of Gum Tech's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). These officers, directors and shareholders are required by
SEC regulation to furnish Gum Tech with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms were
required for such persons, Gum Tech believes that during the fiscal year ended
December 31, 1999, all of Gum Tech's officers, directors, and greater than ten
percent beneficial owners complied with their respective filing requirements
except as set forth below.
Messrs. Russell, Kehoe, Jorgenson, Boone, and Yuan reported the October
1999 grant of options to each of them on a Form 5 filing in February 2000.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of July 6, 2000, with
respect to the number of shares of Gum Tech's Common Stock beneficially owned by
the named executive officers, by individual directors, by all directors and
officers as a group, and by persons known by Gum Tech to own more than 5% of its
outstanding Common Stock. The address of all persons (unless otherwise noted in
the footnotes below) is in care of Gum Tech at 246 E. Watkins Street, Phoenix,
Arizona 85004. The indicated percentages are based upon the number of shares of
Common Stock outstanding as of July 6, 2000, plus, where applicable, the number
of shares that the indicated person or group had a right to acquire within 60
days of that date.
PERCENT OF
NAME OF BENEFICIAL NUMBER OF COMMON STOCK
OWNER AND ADDRESS SHARES OWNED
----------------- ------ -----
Gary S. Kehoe (1) 269,400 2.9%
William D. Boone (2) 80,200 0.9%
William A. Yuan (3) 20,071 0.2%
W. Brown Russell, III (4) 133,500 1.5%
William J. Hemelt (5) 69,000 0.8%
All directors and officers as
a group (5 persons) 572,171 6.0%
----------
(1) Includes options to purchase 88,000 shares at $5.625 per share, 70,000
shares at $11.75 per share and 10,000 shares at $12.5625 per share.
(2) Includes options to purchase 50,000 shares at $5.625 per share, 20,000
shares at $6.88 and 10,000 shares at $12.5625 per share.
(3) Includes options to purchase 10,000 shares at $5.81 per share and 10,000
shares at $12.5625 per share.
(4) Includes options to purchase 20,000 shares at $6.88 per share, 40,000
shares at $5.625 per share, 50,000 shares at $11.75 per share and 10,000
shares at $12.5625.
(5) Includes options to purchase 29,000 shares at $5.50 per share and 16,000
shares at $11.75 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Gum Tech entered into a five year consulting agreement with Mr. Kehoe, its
President and Chief Operating Officer and a member of its Board of Directors.
The agreement is designed primarily to ensure continuation of Mr. Kehoe's
research and development services, as required by the recently announced
agreement with Swedish Match, in the event of his termination of his employment
with Gum Tech. As principal consideration for his services under the agreement,
which is effective only upon his termination from Gum Tech, Mr. Kehoe will
receive $12,500 per month and five percent (5%) of the net income realized by
Gum Tech from the joint venture with Swedish Match.
9
<PAGE>
In February 2000, Gum Tech loaned $200,000 to W. Brown Russell, III, its
Chairman of the Board of Directors and Director of Legal and Investor Relations.
The loan carries an interest rate of 10% per annum and matures on September 30,
2000. The loan may be prepaid in whole or part prior to that date and must be
prepaid from proceeds realized from the exercise of any of Mr. Russell's options
to acquire Gum Tech's Common Stock or from proceeds realized from the sale of
any other Gum Tech Common Stock currently owned by Mr. Russell.
PERFORMANCE GRAPH
The following line graph compares the cumulative total stockholder return
on our Common Stock, based on its market price, with the cumulative total
stockholder return of the Nasdaq Stock Market Index and the Russell 2000 Growth
Index. The comparisons utilize an investment of $100 on April 30, 1996, the last
date of the month in which our Common Stock first started trading on the Nasdaq
National Market.
PERFORMANCE TABLE
Gum Tech Nasdaq Russell 2000 Growth
-------- ------ -------------------
04/30/96 100.00 100.00 100.00
12/31/96 89.09 108.54 97.37
12/31/97 98.18 133.00 109.51
12/31/98 111.83 187.41 110.38
12/31/99 232.17 338.58 157.31
10
<PAGE>
The Nasdaq Stock Market Index comprises all domestic shares traded on the
Nasdaq National Market and the Nasdaq SmallCap Market, excluding preferred
stocks, rights and warrants. The Russell 2000 Growth Index is a growth industry
index that measures the performance of the 2,000 smallest companies in the
Russell 3000 Index with the highest, proportionately weighted, growth
characteristics including higher price-to-book ratios and forecasted growth
values.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm utilized by Gum Tech during the
fiscal year ended December 31, 1999, was Angell & Deering (the "Auditors"). We
presently contemplate that the Auditors will be retained as our principal
accounting firm throughout the fiscal year ending December 31, 2000. We
anticipate that a representative of the Auditors will attend the Annual Meeting
for the purpose of responding to appropriate questions. At the Annual Meeting, a
representative of the Auditors will be afforded an opportunity to make a
statement if the Auditors so desire.
PROPOSALS BY SHAREHOLDERS
Any shareholder desiring to have a proposal included in our proxy statement
for our 2001 Annual Meeting must deliver such proposal (which must comply with
the requirements of Rule 14a-8 promulgated under the Securities Exchange Act of
1934) to our principal executive offices not later than December 31, 2000.
OTHER MATTERS
Our Board of Directors is not presently aware of any matters to be
presented at the meeting other than those described above. However, if other
matters properly come before the meeting, it is the intention of the persons
named in the accompanying proxy to vote said proxy on such matters in accordance
with their judgment.
ANNUAL REPORT
A copy of our 1999 Annual Report to Shareholders which includes our
financial statements for the fiscal year ended December 31, 1999, was mailed
with this Notice and Proxy Statement on or about July 19, 2000 to all
shareholders of record on June 30, 2000. We will provide our complete Annual
Report on Form 10-K at no charge to any requesting person.
GUM TECH INTERNATIONAL, INC.
William J. Hemelt
Secretary
Phoenix, Arizona
July 19, 2000
11
<PAGE>
GUM TECH INTERNATIONAL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints GARY S. KEHOE and WILLIAM
J. HEMELT with full power of substitution, the true and lawful attorney and
proxy of the undersigned, to attend the Annual Meeting of the Shareholders of
GUM TECH INTERNATIONAL, INC. to be held at Radisson Phoenix Airport Hotel, 3333
East University Drive, Phoenix, Arizona, on August 9, 2000 at 10:00 a.m., local
time, and any adjournments thereof, and to vote the shares of Gum Tech common
stock standing in the name of the undersigned, as directed below, with all the
powers the undersigned would possess if personally present at the meeting.
Proposal No. 1: To elect four directors to Gum Tech's Board to serve for
the next year or until their successors are elected.
Nominees: GARY S. KEHOE, W. BROWN RUSSELL, III, WILLIAM D. BOONE, AND
WILLIAM A. YUAN
[ ] VOTE for all nominees except those whose names are written on the line
provided below (if any).
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[ ] VOTE WITHHELD on all nominees
PLEASE PROMPTLY DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE.
This proxy will be voted in accordance with the directions indicated herein. If
no specific directions are given, this proxy will be voted for approval of all
nominees listed herein, for approval of the proposals listed herein and, with
respect to any other business as may properly come before the meeting, in
accordance with the discretion of the proxies.
DATED: , 2000
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(Signature)
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Signature, if held jointly,
or office or title held)
When signing as executor, administrator,
attorney, trustee or guardian, please
give full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person. If a joint tenancy,
please have both joint tenants sign.