SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A--INFORMATION REQUIRED
IN A PROXY STATEMENT
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
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Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Materials Pursuant toss.240.14a-11(c) orss.240.14a-12
NUWAVE TECHNOLOGIES, 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 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth amount
on which the filing fee is calculated and state how it was
determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
<PAGE>
[_] 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:
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2) Form, Schedule or Registration Statement No:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
NUWAVE TECHNOLOGIES, INC.
ONE PASSAIC AVE.
FAIRFIELD, NEW JERSEY 07004
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 11, 2000.
To the Stockholders of NUWAVE Technologies, Inc.:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders (the
"Meeting") of NUWAVE Technologies, Inc., a Delaware corporation (the "Company"),
will be held at The Ramada Inn, 38 Two Bridges Road, Fairfield, NJ at 10:00 a.m.
local time, on Thursday, May 11, 2000, to consider and act upon the following
matters:
1. to elect five directors; and
2. to consider and act upon any other matters that properly may come
before the Meeting.
Only stockholders of record of Common Stock of the Company at the
close of business on March 29, 2000 (the "Record Date") shall be entitled to
receive notice of and to vote at the Meeting and any adjournments or
postponements thereof. A list of such stockholders will be available for
examination by a stockholder as of the Record Date for any purpose germane to
the Meeting during ordinary business hours at the offices of the Company at One
Passaic Avenue, Fairfield, New Jersey, during the ten business days prior to the
Meeting.
Information concerning the matters to be acted upon at the Meeting is
set forth in the accompanying Proxy Statement.
All stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors,
Jeremiah F. O'Brien
Secretary
Fairfield, New Jersey
April 3, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE
PROXY IS MAILED IN THE UNITED STATES. THE GIVING OF YOUR PROXY AS REQUESTED
HEREBY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON SHOULD YOU DECIDE TO ATTEND
THE MEETING.
<PAGE>
NUWAVE TECHNOLOGIES, INC.
ONE PASSAIC AVE.
FAIRFIELD, NEW JERSEY 07004
(973) 882-8810
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 11, 2000.
April 3, 2000
TO THE STOCKHOLDERS:
GENERAL INFORMATION
-------------------
This Proxy Statement has been prepared and is being furnished by the
Board of Directors of NUWAVE Technologies, Inc., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies for the Annual
Meeting of Stockholders (the "Meeting") to be held at The Ramada Inn, 38 Two
Bridges Road, Fairfield, NJ on May 11, 2000, at 10:00 a.m. local time, and at
any adjournment or postponement thereof, for the purposes set forth in the
attached Notice. When proxies are properly dated, executed, and returned, the
shares they represent will be voted at the Meeting in accordance with the
instructions of the stockholder completing the proxy.
It is anticipated that this Proxy Statement and the accompanying form
of proxy will be mailed to the stockholders on or about April 4, 2000. The
Company's Annual Report, including audited financial statements for the fiscal
year ended December 31, 1999 is being mailed or delivered concurrently with this
Proxy Statement. The Annual Report is not to be regarded as proxy soliciting
material.
VOTING SECURITIES AND VOTE REQUIRED
-----------------------------------
Only holders of record (the "Stockholders") of the Company's common
stock, $.01 par value (the "Common Stock"), on the books of the Company at close
of business on March 29, 2000 (the "Record Date") are entitled to vote at the
Meeting and any adjournments or postponements thereof. On that date, there were
10,557,497 issued and outstanding shares of Common Stock entitled to vote at the
Meeting. Each Stockholder is entitled to one vote for each share of Common Stock
registered in that person's name on the books of the Company on the Record Date
on all business to come before the Meeting.
At the Meeting, the Stockholders will consider and vote upon (1) the
election of five directors to hold office until the next annual meeting and
until their respective successors shall have been elected and qualified or until
resignation, removal or death as provided in the By-laws of the Company and (2)
such other matters as may properly come before the Meeting or any adjournments
or postponements thereof.
The presence in person or by proxy of a majority of the shares of
Common Stock outstanding and entitled to vote as of the Record Date is required
for a quorum at the Meeting. If a quorum is present, those nominated directors
receiving a plurality of the votes cast will be elected. Accordingly, shares not
voted in the election of directors (including shares covered by a proxy as to
which authority is withheld to vote for all nominees) and shares not voted for
any particular nominee (including shares covered by a proxy as to which
authority is withheld to vote for only one or less than all of the identified
nominees) will not prevent the election of any of the nominees for director. For
all other matters submitted to Stockholders at the Meeting, the affirmative vote
of a majority of the shares represented at the Meeting and entitled to vote is
required for approval. As a result, abstention votes will have the effect of a
vote against such matters.
<PAGE>
Shares of Common Stock which are represented by properly executed
proxies, unless such proxies shall have previously been properly revoked, will
be voted in accordance with the instructions indicated in such proxies. If no
contrary instructions are indicated, such shares will be voted (1) FOR the
election of all of the nominees for director named in this Proxy Statement; and
(2) in the discretion of the persons named in the proxies as proxy appointees as
to any other matter that may properly come before the Meeting.
Shares held by brokers and other Stockholder nominees may be voted on
certain matters but not others. This can occur, for example, when the broker or
nominee does not have the discretionary authority to vote shares of Common Stock
and is instructed by the beneficial owner thereof to vote on a particular matter
but is not instructed on other matters. These are known as "non-voted" shares.
Non-voted shares will be counted for purposes of determining whether there is a
quorum at the Meeting, but with respect to the matters as to which they are
"non-voted," they will have no effect upon the outcome of the vote thereon.
Each proxy granted by a Stockholder may be revoked by such Stockholder
at any time thereafter by writing to the Secretary of the Company prior to the
Meeting, or by execution and delivery of a subsequent proxy or by attendance and
voting in person at the Meeting, except as to any matters upon which, prior to
such revocation, a vote shall have been cast pursuant to the authority conferred
by such proxy.
The Company is paying all the expenses of the solicitation of proxies,
including the expenses of printing and mailing this Proxy Statement, the
accompanying Notice of Annual Meeting of Stockholders, the enclosed proxy and
the Annual Report. The Company will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their expenses, in accordance with the
regulations of the Securities and Exchange Commission (the "SEC"), in sending
proxies and proxy materials to the beneficial owners of the Company's Common
Stock. Officers or employees of the Company may also solicit proxies in person,
or by mail, telephone or by other means, but such persons will receive no
compensation for such work, other than their normal compensation as such
officers or employees.
Stockholders are requested, regardless of the number of shares owned,
to sign the proxy and return it promptly in the enclosed envelope.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The table below is based on information obtained from the persons
named therein with respect to the shares of Common Stock beneficially owned, as
of the Record Date (except as noted below), by (i) each person known by the
Company to be the owner of more than 5% of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each executive officer of the
Company, and (iv) all executive officers and directors of the Company as a
group.
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<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
AMOUNT AND NATURE OF OUTSTANDING SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP (2) OWNED
- - ---------------------------------------- ------------------------ ------------
<S> <C> <C>
Gerald Zarin 1,054,667 (3) 9.45
Edward Bohn 85,668 (4) .85
Lyle Gramley 55,334 (5) .52
Richard E. Ekstract 23,000 (6) .22
Joseph A. Sarubbi 70,334 (7) .66
Jeremiah F. O'Brien 119,167 (8) 1.12
Robert Webb 116,667 (9) 1.09
Don Legato 115,834 (10) 1.09
Bruce Meyers 2,347,768 (11) 18.87
c/o Roan-Meyers Associates, L.P.
17 State Street
New York, NY 10004
Peter Janssen 634,414 (12) 5.74
c/o Janssen Partners
1345 Old Northern Blvd.
Roslyn, NY 11576
Helen Burgess 577,854 5.47
40 E. 30th St., 10th Fl.
New York, NY 10016
All executive officers and directors as a 1,645,671 (14) 14.10
group (8 persons)
</TABLE>
(1) Unless otherwise noted, the address of the beneficial owner is:
c/o NUWAVE Technologies, Inc., One Passaic Ave., Fairfield, NJ 07004.
(2) The number of shares of Common Stock beneficially owned by each
person is determined in accordance with the rules of the SEC, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power and also any
shares of Common Stock which the individual has the right to acquire within 60
days after the Record Date through the exercise of any stock option, warrant or
other right. The inclusion herein of any shares of Common Stock deemed
beneficially owned does not constitute an admission of beneficial ownership of
those shares. Unless otherwise indicated, the persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(3) Includes 601,667 shares subject to exercisable options.
(4) Includes 85,668 shares subject to exercisable options.
(5) Includes 35,334 shares subject to exercisable options.
(6) Includes 15,000 shares subject to exercisable options.
(7) Includes 35,334 shares subject to exercisable options.
(8) Includes (i) 111,167 shares subject to exercisable options and
(ii) 2,500 shares subject to exercisable warrants held by Mr. O'Brien's wife, as
to which Mr. O'Brien disclaims beneficial interest.
(9) Includes 103,334 shares subject to exercisable options.
(10) Includes (i) 113,334 shares subject to exercisable options; (ii)
500 shares subject to exercisable Class A Redeemable Warrants, and (iii) 2,000
shares owned by Mr. Legato's wife, as to which Mr. Legato disclaims beneficial
interest.
-3-
<PAGE>
(11) Includes (i) 682,147 shares subject to exercisable Class A
Redeemable Warrants, (ii) 226,520 shares subject to exercisable Unit Warrants,
(iii) 140,520 shares subject to exercisable Class A Redeemable Warrants which
underlie the Unit Warrants, and (iv) 1,204,250 shares of the Company's Common
Stock beneficially owned by Roan-Meyers, as to which Mr. Meyers disclaims
beneficial interest. Bruce Meyers is a principal of Roan-Meyers.
(12) Includes (i) 234,231 shares subject to exercisable Class A
Redeemable Warrants, (ii) 233,818 shares subject to exercisable Unit Warrants,
(iii) 175,365 shares subject to exercisable Class A Redeemable Warrants which
underlie the Unit Warrants.
(13) See footnotes (1) through (10) above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
any persons who beneficially own ten percent or more of the Company's Common
Stock, to file with the Commission initial reports of beneficial ownership and
reports of changes in beneficial ownership of Common Stock. Such persons are
required by regulations of the SEC to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon a review of (i) copies of Section 16(a) filings
received by the Company during or with respect to the 1999 fiscal year and (ii)
certain written representations of its officers and directors with respect to
the filing of annual reports of changes in beneficial ownership on Form 5, the
Company believes that each filing required to be made pursuant to Section 16(a)
of the Exchange Act during the 1999 fiscal year has been filed in a timely
manner.
PROPOSAL
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ELECTION OF DIRECTORS
---------------------
The Board of Directors of the Company consists of five members, all of
whom are currently Directors and have been renominated for election at the
Annual Meeting. Directors elected at the Meeting will serve until the next
annual meeting of stockholders and until their respective successors are elected
and qualified or until their death, resignation or removal. In the event that
any nominee is unable or unwilling to serve, discretionary authority is reserved
to the persons named in the accompanying form of proxy to vote for substitute
nominees. Management does not anticipate that such an event will occur. Each
Director shall be elected by a plurality of the votes cast.
NOMINEES FOR DIRECTOR
The Company's Board of Directors is set at five persons. The following
five persons have been nominated by the Board of Directors to fill such
positions. All are currently Directors of the Company.
NAME AGE POSITION
- - -------------------- -------- -----------------------------------------
Gerald Zarin 59 Chairman of the Board of Directors,
President and Chief Executive Officer
Edward Bohn 54 Director
Richard E. Ekstract 69 Director
Lyle E. Gramley 73 Director
Joseph A. Sarubbi 71 Director
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<PAGE>
GERALD ZARIN has been a Director and President and Chief Executive
Officer of the Company since July 1995. He has been Chairman of the Board of
Directors since January 28, 1996. From June 1993 to July 1995, he was President
and Chief Executive Officer at AMD Consulting, Inc., a business consulting firm.
From June 1991 until January 1993, Mr. Zarin was the Chairman, President and
Chief Executive Officer of Emerson Radio Corporation ("Emerson Radio"), which
designs and sells consumer electronics products. From November 1990 to June
1991, he was President and Chief Executive Officer of JEM, Inc., an importer of
fine furnishings. From August 1987 to October 1990, he was Senior Vice President
and Chief Financial Officer of Horn & Hardart, Inc. Horn & Hardart, Inc. is the
parent company for Hanover House and various other hotels and fast food chains.
From 1976 to 1986, he was President and Chief Executive Officer of Morse
Electro, Inc., which designed and sold consumer electronics products.
EDWARD BOHN has been a Director of the Company since July 1995. Since
December 1999, he has been a Director and Consultant of Nova Corp. which
constructs and manages the construction of data centers serving the
telecomunications (Internet) industry both domestically and internationally.
Since February 1995, he has been a Director and Consultant of Jennifer
Convertibles, a furniture distributor. Since September 1994, he has operated as
an independent consultant in financial and operational matters. From January
1983 to March 1994, Mr. Bohn was employed in various capacities by Emerson
Radio, including from March 1993 to March 1994, he was Senior Vice
President-Special Projects; and from March 1991 to March 1993, he was Chief
Financial Officer and Treasurer/Vice President of Finance.
RICHARD E. EKSTRACT has been a Director of the Company since September
1999. Since 1959, Mr.Ekstract has created, financed and launched more than
twenty periodicals about the consumer electronics industry, including Audio
Times, Consumer Electronics Show Daily, Autosound and Communications, Satellite
Retailing and Video Business, Video Review, TWICE, CARS, and License! Mr.
Ekstract is also the founder and Chairman of Home Office Association of America
and the creator of the Audio Hall of Fame and Video Hall of Fame.
LYLE E. GRAMLEY has been a Director of the Company since December
1995. Since 1985, he has been employed by the Mortgage Bankers Association in
Washington, D.C., serving as Senior Staff Vice President and Chief Economist
since 1985 to 1992, and as a Consulting Economist since 1992. From 1980 to 1985,
Mr. Gramley was a member of the Board of Governors of the Federal Reserve Board.
JOSEPH A. SARUBBI has been a Director of the Company since March 1996.
From October 1993 to June 6, 1996, he was a director of The Panda Project, Inc.,
a manufacturer of computers and semiconductor packages. Since April 1988, Mr.
Sarubbi has been a self-employed management and technical consultant to various
technology companies. From February 1986 to April 1988, he was Senior Vice
President of Manufacturing Operations for Tandon Corporation, a computer
manufacturer. From December 1952 to January 1986, Mr. Sarubbi was employed by
IBM in various senior engineering positions.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company are entitled to a fee
of $2,500 per year and $500 per meeting attended (other than telephonic
meetings) for serving on the Board of Directors. Each director is also
reimbursed for expenses incurred in connection with attendance at meetings of
the Board of Directors. For the fiscal year ended December 31, 1999, Messrs.
Bohn, Gramley and Sarubbi received compensation of $ 1,500, $1,500 and $1,000
for attendance at non-telephonic board meetings. Richard Ekstract who was
elected to the Board on September 28, 1999 did not receive compensation from the
Company during the fiscal year ended December 31,1999.
The 1996 Non-Employee Director Stock Option Plan (the "Director Stock
Option Plan") provides for the automatic grant to each individual elected,
re-elected or continuing as a non-employee director of the Company of a stock
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<PAGE>
option for 5,000 shares of Common Stock at an option exercise price equal to the
fair market value of the Common Stock on the date of grant. 235,000 shares have
been reserved for issuance under the Director Stock Option Plan. Richard
Ekstract was granted 45,000 options under the Plan upon his election to the
Board. At December 31, 1999, options for an aggregate of 202,000 shares of
Common Stock exercisable at prices ranging from $2.56 to $ 6.75 per share
expiring from November 26, 2001 to September 28, 2009 were outstanding under the
Director Stock Option Plan.
For a description of consulting fees paid to Messrs. Bohn, Ekstract
and Sarubbi, see "Certain Relationships and Related Transactions."
BOARD AND COMMITTEE MEETINGS
The Board of Directors of the Company held four meetings during its
fiscal year ended December 31, 1999. No member of the Board of Directors
attended in 1999 fewer than 75% of the aggregate of (i) the total number of
meetings of the Board of Directors held during the period for which he has been
a director and (ii) the total number of meetings held by all committees on which
he served.
The Board of Directors has a standing Audit Committee and a standing
Compensation Committee. The Audit Committee met two times and the Compensation
Committee met one time during the fiscal year ended December 31, 1999.
Messrs. Bohn and Gramley comprise the Audit Committee. This Committee
makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the results of the
audit engagement, approves professional services provided by the independent
accountants, reviews the independence of the independent public accountants,
considers the range of audit and non-audit fees, and reviews the adequacy of the
Company's internal accounting controls.
Messrs. Gramley, Bohn and Zarin comprise the Compensation Committee.
The Compensation Committee makes recommendations to the Board regarding the
executive and employee compensation programs of the Company. See "Report of
Compensation Committee On Executive Compensation."
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" ALL NOMINEES FOR DIRECTOR.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the annual and long-term compensation
paid by the Company for services performed on the Company's behalf for the three
fiscal years ended December 31, 1999, with respect to those persons who were, as
of December 31, 1999, the Company's Chief Executive Officer and the Company's
executive officers who received compensation for fiscal 1999 in excess of
$100,000 (the "Named Executive Officers").
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<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- -------------------
SECURITIES
UNDERLYING
OPTIONS
NAME AND OTHER ANNUAL (NUMBER ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OF SHARES) COMPENSATION
------------------ ---- ------ ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Zarin, President and Chief 1999 $ 120,000 $ 25,000 $0 50,000 $0
Executive Officer 1998 $ 120,000 $ 25,000 $0 385,000 $0
1997 $ 120,000 $ 0 $0 0 $0
Don Legato, 1999 $ 150,000 $ 5,000 $0 10,000 $0
Vice President, Sales 1998 $ 150,000 $ 12,500 $0 50,000 $0
1997 $ 129,800 $ 0 $0 60,000 $0
Jeremiah F. O'Brien, Chief 1999 $ 100,000 $ 10,000 $0 20,000 $0
Financial Officer, Vice President 1998 $ 103,800 $ 15,000 $0 75,000 $0
and Secretary 1997 $ 100,000 $ 0 $0 0 $0
Robert Webb, Vice President, 1999 $ 108,000 $ 10,000 $0 20,000 $0
Marketing/Technical 1998 $ 108,000 $ 12,500 $0 40,000 $0
Development 1997 $ 108,000 $ 0 $0 0 $0
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The number of shares available for grant under the Company's 1996
Stock Incentive Plan for Employees and Consultants (the "Employee Stock Option
Plan") is 1,205,000. Options for an aggregate of 897,500 shares have been
granted under the Employee Stock Option Plan. During the Company's 1999 fiscal
year, options covering an aggregate of 145,000 shares of Common Stock were
granted under the Employee Stock Option Plan to 8 persons at exercise prices
ranging from $1.97 to $2.50 per share.
The following table sets forth certain information regarding options
granted under the Employee Stock Option Plan during the fiscal year ended
December 31, 1999 to the Named Executive Officers:
<TABLE>
<CAPTION>
OPTION GRANTS FOR YEAR ENDED DECEMBER 31, 1999
(INDIVIDUAL GRANTS IN FISCAL YEAR)
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE PRICE
NAME OPTIONS EMPLOYEES PER SHARE (1) EXPIRATION DATE
- - -------------------- ---------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
Gerald Zarin 50,000 28.9 $1.97 June 30, 2009
Don Legato 10,000 6.9 $1.97 June 30, 2009
Jeremiah F. O'Brien 20,000 13.8 $1.97 June 30, 2009
Robert Webb 20,000 13.8 $1.97 June 30, 2009
TOTAL 100,000 66.6
</TABLE>
(1) All grants of options have been made with exercise prices equal to fair
market value at date of grant.
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<PAGE>
OPTION EXERCISES AND YEAR-END OPTION VALUES
No options were exercised in fiscal year 1999 by any of the Named
Executive Officers. The following table sets forth, as of December 31, 1999, the
number of stock options and the value of unexercised in-the-money stock options
held by the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS(1)
OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999
--------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - --------------------- ------------- ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Gerald Zarin 473,334 161,666 $168,317 $11,433
Robert Webb 103,334 26,666 $ 59,197 $ 4,573
Don Legato 96,668 23,332 $ 1,143 $ 2,286
Jeremiah F. O'Brien 86,667 38,333 $ 24,177 $ 4,573
TOTAL 760,003 249,997 $252,834 $55,865
</TABLE>
(1) The dollar value of the unexercised options has been calculated by
determining the difference between the fair market value of the securities
underlying the options and the exercise price of the option at fiscal year-end.
EMPLOYMENT AGREEMENTS
As of April 1, 2000, the Company entered into a new Employment
Agreement with Gerald Zarin, employing him as its President and Chief Executive
Officer through December 31, 2005, with automatic one-year renewals, subject to
either party giving notice of termination as of an anniversary date. His
employment agreement of July 20, 1995 was then terminated. The annual base
compensation is $120,000, with an annual performance bonus equal to (i) 50% of
the base compensation if the Company's net profits before taxes (the "net
profits") are equal to projections approved by the Board of Directors, (ii) 75%
of the base compensation if the net profits are equal to 105% of the
projections, and (iii) 100% of the base compensation if the net profits are
equal to 115% of the projections, and with discretionary bonuses as determined
by the Board of Directors. If the Company terminates the Employment Agreement as
the end of any term or without "good cause," as defined, or if the Company
materially breaches the Agreement, Mr. Zarin would receive from 150% of his then
annual base compensation and average bonus for the prior two calendar years to
an amount equal to the balance of the base compensation plus an additional
amount related to his base compensation and prior bonuses, dependent upon the
reason for the termination and the date of termination. In addition to such
termination payments, the Company would continue to pay the health insurance
premiums for Mr. Zarin and his spouse, but not to exceed $15,000 per year,
subject to Mr. Zarin being offered similar coverage by a subsequent employer,
and automobile expenses for five years, and any unvested options would vest. For
a period of eight months, commencing thirty days after a "change of control" of
the Company, Mr. Zarin could terminate his Employment Agreement and receive a
lump sum payment equal to three times his highest annual base salary and average
annual bonus, continuation of health insurance premiums and automobile as
described above, plus accelerated vesting of his options, provided that the
payment would be reduced to the largest amount which would not be considered a
"parachute payment" under Section 280G of the Internal Revenue Code of 1986. A
"change of control" would include persons becoming the beneficial owners of more
than 25% of the outstanding shares of Common Stock or a merger in which the
Company's stockholders own less than 50% of the surviving corporation, in
transactions not approved by the Incumbent Directors.
Mr. Webb entered into an employment agreement with the Company, dated
as of September 11, 1995, pursuant to which Mr. Webb was appointed Vice
President-Marketing of the Company. In March 1997, his title was changed to Vice
President-Marketing/Technical Development in order to more accurately reflect
his duties. The employment agreement continued until March 31, 1996 and
thereafter has been continuing for successive 3-month periods. Mr. Webb's
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<PAGE>
initial salary was $5,000 per month and was increased to $108,000 per year as of
August 14, 1996.
Mr. Legato entered into an employment agreement with the Company,
dated as of February 11, 1997, pursuant to which Mr. Legato was appointed Vice
President-Sales of the Company. The employment agreement continued until March
31, 1996 and thereafter has been continuing for successive 3-month periods. Mr.
Legato's salary has been at $150,000 per year.
EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program consists of base salary,
periodic incentive compensation and long-term equity incentives in the form of
stock options. Executive officers also are eligible to participate in certain
benefit programs which are generally available to all employees of the Company,
such as medical insurance programs. In addition to the basic medical insurance
program, the executive officers are eligible to participate in an enhanced
medical insurance program which is available only to the executive officers of
the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since 1996, Mr. Edward Bohn, a director of the Company, has been
acting as a consultant to the Company from time to time on matters specified by
the Company's President. In March 1997, Mr. Bohn entered into a consulting
agreement with the Company pursuant to which he agreed to act as the Company's
consultant at a rate of $1,000 per day with a maximum of $2,750 per week
regardless of the actual time spent on the Company's behalf. For the years ended
December 31, 1999 and 1998, Mr. Bohn received $22,008 and $35,025, respectively
on account of such consulting services.
Since 1996, Mr. Joseph A. Sarubbi, a director of the Company, has been
acting as a consultant to the Company from time to time on matters specified by
the Company's President. In that connection he has received compensation on a
per diem basis of $1,000 per day. For the years ended December 31, 1999 and
1999, Mr. Sarubbi received $2,000 and $20,000, respectively, on account of such
consulting services.
On September 28, 1999, the Company granted Richard Ekstract an option
to purchase 100,000 shares of the Company's Common Stock at an exercise price of
$2.56 per share, subject to certain performance-based vesting rules, in
consideration for certain advisory and referral services to be rendered by him
to the Company. The option shall vest to the extent of 15,000 option shares (A)
for each (i) OEM order obtained or (ii) alliance or partnership entered into
between the Company and a third party as a result of the Mr. Ekstract's's
efforts, up to a maximum of five such orders, alliances or partnerships or an
aggregate of 75,000 option shares, and (B) for which a majority of the
non-employee directors of the Company then in office (excluding the Mr. Ekstract
if he is then a non-employee director) have approved in advance each such order,
partnership or alliance and also have agreed that such order, partnership or
alliance would give rise to vesting of the option . The option shall vest for
25,000 option shares after five OEM orders have been placed with the Company or
five alliances or partnerships with the Company have been created, or an
aggregate of five orders, alliances or partnerships have occurred as a result of
the Mr. Ekstract's efforts, provided that at least two of the five vesting
transactions are OEM orders.
On May 11, 1998, the Company entered into a placement agency agreement
with Janssen-Meyers Associates, L.P., now Roan-Meyers Associates, L.P.
("Janssen-Meyers") to act as the Company's placement agent in a private equity
placement whereby the Company issued 2,742,904 shares of Common Stock and
2,057,207 Class A Redeemable Warrants between May 19, 1998 and June 9, 1998 for
an aggregate purchase price of $7,280,546. For acting as placement agent,
Janssen-Meyers received a commission of $728,055, as well as a non-accountable
expense allowance of $218,416 and reimbursement of other costs. In addition,
Janssen-Meyers received as part of its compensation warrants exercisable until
May 11, 2003, to purchase up to (i) 688,084 shares of Common Stock at prices per
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share ranging from $2.50 to $3.06 and (ii) 516,068 Class A Redeemable Warrants
to purchase up to 516,068 shares of Common Stock at a price per share of $3.24.
Bruce Meyers, who purchased 270,270 shares and Peter Janssen, who purchased
154,440 shares of Common Stock of the Company in the private placement, were
principals of Janssen-Meyers at the time of the private placement.
On February 14, 2000, the Company entered into a placement agency
agreement with Janssen-Meyers to act as the Company's placement agent in a
private equity placement whereby the Company issued 2,088,608 shares of Common
Stock and 1,044,304 Class A Redeemable Warrants for an aggregate purchase price
of $6,600,000. For acting as placement agent, Janssen-Meyers received a
commission of $660,000, as well as a non-accountable expense allowance of
$198,000 and reimbursement of other costs, including legal expenses relating to
the offering. In addition, Janssen-Meyers received as part of its compensation
warrants exercisable until May 11, 2003, to purchase up to (i) 522,152 shares of
the Company's Common Stock at a price per share of $3.16 and (ii) 261,076 Class
A Redeemable Warrants to purchase up to 261,076 shares of the Company's Common
Stock at a price per share of $3.95. In addition, Janssen-Meyers has been
retained to perform consulting services related to corporate finance and other
financial services at a fee of $5,000 a month through May31, 2001.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
-------------------------------------------------
The next annual meeting of stockholders of the Company is expected to
be held in May 2001 (the "2001 Annual Meeting"). Any stockholder who wishes to
present a proposal for action at such meeting must comply with the applicable
rules and regulations of the SEC then in effect, and the Company's By-laws. In
accordance with regulations issued by the SEC, stockholder proposals intended
for presentation at the next annual meeting of stockholders must be received by
the Secretary of the Company no later than December 5, 2000, if such proposals
are to be considered for inclusion in the Company's proxy statement for the next
annual meeting of stockholders.
Stockholder proposals should be submitted to: Jeremiah F. O'Brien,
Secretary, NUWAVE Technologies, Inc., One Passaic Avenue, Fairfield, New Jersey
07004.
OTHER MATTERS
-------------
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH BENEFICIAL HOLDER OF
ITS COMMON STOCK ON THE RECORD DATE WHO DID NOT RECEIVE A COPY OF THE COMPANY'S
ANNUAL REPORT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE ANNUAL
REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, AS FILED WITH
THE SEC. ANY SUCH REQUEST SHOULD BE MADE IN WRITING TO THE SECRETARY OF THE
COMPANY, ONE PASSAIC AVENUE, FAIRFIELD, NEW JERSEY 07004.
The Board is not aware of any matters to be presented at the Meeting
other than the matters described herein and does not intend to bring any other
matters before the Meeting. However, if any other matters should come before the
Meeting, or any adjournments or postponements thereof, the persons named in the
proxies will have discretionary authority to vote all proxies in accordance with
their best judgment.
By Order of the Board of Directors,
Gerald Zarin
Chairman
Fairfield, New Jersey
April 3, 2000
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NUWAVE TECHNOLOGIES, INC.
-------------------------
PROXY FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 11, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-----------------------------------------------------------
The undersigned stockholder of NUWAVE Technologies, Inc. (the
"Company"), revoking all prior proxies, hereby appoint(s) Gerald Zarin and
Jeremiah F. O'Brien, and each of them, with full power of substitution, as
proxies to represent and vote, as designated herein, all shares of stock of
NUWAVE TECHNOLOGIES, INC. (the "Company"), which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
the Company to be held at The Ramada Inn, 38 Two Bridges Road, Fairfield, NJ at
10:00 a.m., local time, and at any adjournment or postponement thereof (the
"Meeting").
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE
1. To elect the following five (5) directors (except as marked
below) for the ensuing year.
NOMINEES: Gerald Zarin, Edward Bohn, Richard E. Ekstract,
Lyle Gramley and Joseph A. Sarubbi
[_] FOR all nominees (except as marked below)
[_] WITHHOLD authority to vote for all nominees
FOR all nominees EXCEPT the following nominee(s):
---------------------------------------
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is given, this
proxy will be voted FOR the above proposal.
Please sign and date this proxy where shown below and return it
promptly:
Date: , 2000
-------------------
Signed:
---------------------------------------------------------------
SIGNATURE:
------------------------------------------------------------
SIGNATURE IF HELD JOINTLY:
--------------------------------------------
Please sign exactly as name appears hereon. If the stock is registered
in the names of two or more persons, each should sign. Executors,
administrators, trustees, guardians, attorneys, and corporate officers should
add their titles.
