SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GENETIC VECTORS, INC.
-------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] 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:
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(4) Date Filed:
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<PAGE>
GENETIC VECTORS, INC.
5201 N. W. 77TH AVENUE, SUITE 100
MIAMI, FLORIDA 33166
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Genetic Vectors, Inc. The annual meeting will be held on Thursday, February 8,
2001, at 11:00 a.m., local time, at the Hotel Inter-Continental, 100 Chopin
Plaza, Miami, Florida 33131.
Your vote is important and I urge you to vote your shares by proxy,
whether or not you plan to attend the meeting. After you read this proxy
statement, please indicate on the proxy card the manner in which you want to
have your shares voted. Then date, sign and mail the proxy card in the
postage-paid envelope that is provided. If you sign and return your proxy card
without indicating your choices, it will be understood that you wish to have
your shares voted in accordance with the recommendations of the Company's Board
of Directors.
We hope to see you at the meeting.
Sincerely,
/s/ Mead M. McCabe, Jr.
-----------------------
Mead M. McCabe, Jr.
Chief Executive Officer, Chief Financial Officer
and Secretary
January 16, 2001
<PAGE>
GENETIC VECTORS, INC.
5201 N. W. 77TH AVENUE, SUITE 100
MIAMI, FLORIDA 33166
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 8, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"ANNUAL MEETING") of Genetic Vectors, Inc. (the "COMPANY") will be held on
Thursday, February 8, 2001, at 11:00 a.m., local time, at the Hotel
Inter-Continental, 100 Chopin Plaza, Miami, Florida 33131, for the following
purposes, as more fully described in the attached Proxy Statement:
1. To elect six directors, each until the next annual meeting of the
Company's shareholders or until their successors are duly elected and qualified;
2. To approve an amendment to the Company's Articles of Incorporation
to increase the authorized common stock to 50,000,000 shares; and
3. To consider any other matters that may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on January 8, 2001,
as the record date for determining the shareholders entitled to notice of and to
vote at the Annual Meeting or at any adjournment thereof. A complete list of the
shareholders entitled to vote at the Annual Meeting will be open for examination
by any shareholder during ordinary business hours for a period of ten days prior
to the Annual Meeting at the executive offices of the Company, 5201 N. W. 77th
Avenue, Suite 100, Miami, Florida 33166.
IMPORTANT
You are cordially invited to attend the Annual Meeting in person. In order
to ensure your representation at the meeting, however, please promptly complete,
date, sign and return the enclosed proxy in the accompanying envelope. If you
should decide to attend the Annual Meeting and vote your shares in person, you
may revoke your proxy at that time.
By Order of the Board of Directors,
Mead M. McCabe, Jr.
-------------------
Mead M. McCabe, Jr.
Chief Executie Officer, Chief Financial Officer
and Secretary
January 16, 2001
<PAGE>
TABLE OF CONTENTS
PAGE NO.
--------
ABOUT THE MEETING..............................................................1
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?...............................1
WHO IS ENTITLED TO VOTE?.................................................1
WHO CAN ATTEND THE MEETING?..............................................1
WHAT CONSTITUTES A QUORUM?...............................................1
HOW DO I VOTE?...........................................................2
WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED?..................2
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?.......................2
WHAT ARE THE BOARD'S RECOMMENDATIONS?....................................2
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?..............................2
STOCK OWNERSHIP................................................................3
BENEFICIAL OWNERS........................................................3
DIRECTORS AND EXECUTIVE OFFICERS.........................................3
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..................4
PROPOSAL 1 - ELECTION OF DIRECTORS.............................................5
DIRECTORS STANDING FOR ELECTION..........................................5
RECOMMENDATION OF THE BOARD OF DIRECTORS.................................5
DIRECTORS - PRESENT TERM EXPIRES AT THE ANNUAL MEETING...................5
MEETINGS...........................................................7
COMMITTEES OF THE BOARD OF DIRECTORS...............................7
COMPENSATION OF DIRECTORS..........................................7
EXECUTIVE COMPENSATION...................................................8
OPTION GRANTS IN FISCAL 2000.............................................8
EMPLOYMENT AGREEMENTS....................................................9
STOCK PLANS.............................................................10
1999 STOCK OPTION PLAN.............................................1
OVERVIEW OF THE 1999 INCENTIVE PLAN........................10
ADMINISTRATION.............................................10
SHARES SUBJECT TO THE 1999 INCENTIVE PLAN..................10
1996 STOCK INCENTIVE PLAN.........................................10
OVERVIEW OF THE 1996 INCENTIVE PLAN........................10
ADMINISTRATION.............................................11
SHARES SUBJECT TO THE 1996 INCENTIVE PLAN..................11
CERTAIN TRANSACTIONS AND RELATIONSHIPS WITH THE COMPANY.................11
i
<PAGE>
PROPOSAL 2 - AMENDMENT TO THE ARTICLES OF INCORPORATION.......................12
RECOMMENDATION OF THE BOARD OF DIRECTORS................................12
DESCRIPTION OF CAPITAL STOCK............................................13
COMMON STOCK......................................................13
CONVERTIBLE INDEBTEDNESS..........................................13
OPTIONS...........................................................13
PRIVATE PLACEMENT WARRANTS........................................14
CONVERTIBLE PROMISSORY NOTES......................................14
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE ARTICLES OF
INCORPORATION, BYLAWS AND FLORIDA LAW.............................15
OTHER MATTERS...........................................................15
INDEPENDENT ACCOUNTANTS.................................................15
ADDITIONAL INFORMATION..................................................15
ii
<PAGE>
GENETIC VECTORS, INC.
5201 N. W. 77TH AVENUE, SUITE 100
MIAMI, FLORIDA 33166
---------------------
PROXY STATEMENT
JANUARY 16, 2001
-------------------------
This proxy statement contains information related to the annual meeting of
shareholders of Genetic Vectors, Inc., to be held on Thursday, February 8, 2001,
at 11:00 a.m., local time, at the Hotel Inter-Continental, 100 Chopin Plaza,
Miami, Florida 33131, and at any postponements or adjournments thereof. The
Company is making this proxy solicitation.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Company's annual meeting, shareholders will act upon the matters
outlined in the notice of meeting on the cover page of this proxy statement,
including the election of directors and the approval of an amendment to the
Company's Articles of Incorporation to increase the authorized common stock to
50,000,000 shares. In addition, the Company's management will report on the
performance of the Company during fiscal 1999 and respond to questions from
shareholders.
WHO IS ENTITLED TO VOTE?
Only shareholders of record on the close of business on the record date,
January 8, 2001, are entitled to receive notice of the annual meeting and to
vote the shares of common stock that they held on that date at the meeting, or
any postponements or adjournments of the meeting. Each outstanding share of
common stock will be entitled to one vote on each matter to be voted upon at the
meeting.
WHO CAN ATTEND THE MEETING?
All shareholders as of the record date, or their duly appointed proxies,
may attend the meeting, and each may be accompanied by one guest. Seating,
however, is limited. Admission to the meeting will be on a first-come,
first-serve basis. Registration will begin at 10:00 a.m., and seating will begin
at 10:30 a.m. Each shareholder may be asked to present valid picture
identification, such as a driver's license or passport. Cameras, recording
devices and other electronic devices will not be permitted at the meeting.
Please note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date and check in at
the registration desk at the meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. As of the
record date, 3,785,197 shares of common stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculation of the number of shares considered to be present at the
meeting.
1
<PAGE>
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return
it to the Company, it will be voted as you direct. If you are a registered
shareholder and attend the meeting, you may deliver your completed proxy card in
person or vote by ballot at the meeting. "Street name" shareholders who wish to
vote at the meeting will need to obtain a proxy form from the institution that
holds their shares.
WHAT IF I DO NOT SPECIFY HOW MY SHARES ARE TO BE VOTED?
If you submit a proxy but do not indicate any voting instructions, then
your shares will be voted in accordance with the Board's recommendations.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy card, you may change your
vote at any time before the proxy is exercised by filing with the Secretary of
the Company either a notice of revocation or a duly executed proxy bearing a
later date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendation of the Board of Directors. The Board's recommendation is set
forth together with the description of each item in this proxy statement. In
summary, the Board recommends a vote:
o FOR the election of the nominated slate of directors (see page 5);
o FOR the approval of an amendment to the Company's Articles of
Incorporation to increase the authorized shares of the Company's
common stock to 50,000,000 shares (see page 12).
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of directors. This means that
the six nominees will be elected if they receive more affirmative votes than any
other person. A properly executed proxy marked "Withheld" with respect to the
election of any director will not be voted with respect to such director
indicated, although it will be counted for purposes of determining whether there
is a quorum.
INCREASE IN AUTHORIZED SHARES AND OTHER ITEMS. For the approval of an
amendment to the Company's Articles of Incorporation to increase the authorized
shares of the Company's common stock to 50,000,000 and any other item that
properly comes before the meeting, the affirmative vote of the holders of a
majority of the shares represented in person or by proxy and entitled to vote on
the item will be required for approval. A properly executed proxy marked
"Abstain" with respect to any such matter will not be voted, although it will be
counted for purposes of determining whether there is a quorum. Accordingly, an
abstention will have the effect of a negative vote.
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to some of the matters to be acted upon. Thus, if you do
not give your broker or nominee specific instructions, your shares may not be
voted on those matters and will not be counted in determining the number of
shares necessary for approval. Shares represented by such "broker non-votes,"
however, will be counted in determining whether there is a quorum.
2
<PAGE>
STOCK OWNERSHIP
BENEFICIAL OWNERS
The following table shows persons (other than directors and executive
officers) who own beneficially more than five percent (5%) of the Company's
common stock as of November 30, 2000.
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED(1)(2) OF CLASS
---------------- ----------- --------
Nyer Medical Group 853,048 (2)(3) 22.9% (2)(3)
1292 Hammon Street
Bangor, ME 04401
Orbiter Fund, Ltd. 380,000 (7) 9.6%
Kaya Flamboyan 9
Curacao, Netherlands Antilles
Lancer Offshore, Inc. 525,000 14.1%
Kaya Flamboyan 9
Curacao, Netherlands Antilles
DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the amount of common stock of the Company
beneficially owned by the Company's directors, the executive officers named in
the Summary Compensation Table below and by all directors and executive officers
as a group as of November 30, 2000. Unless otherwise indicated, beneficial
ownership is direct and the person indicated has sole voting and investment
power. As of November 30, 2000, the Company had 3,785,197 shares of common stock
outstanding.
SHARES
BENEFICIALLY PERCENT
NAME AND ADDRESS OWNED OF CLASS
---------------- ----- --------
Mead M. McCabe, Sr. 295,166 (2) 7.6% (2)
Mead M. McCabe, Jr. 230,293 (2) 6.0% (2)
Jack W. Fell, Jr., Ph.D. 12,500 (1)(5) *
Michael C. Foley 10,000 (1)(5) *
Mark E. Burroughs 17,500 (1)(5) *
Eric Wilkinson 135,000 (6) 3.6%
All Officers and 700,459 19.7%
Directors as a
Group(4)(5)
-----------------------
* Indicates that the ownership percent is less than one percent (1%).
(1) Applicable percentage of ownership is based on 3,785,197 shares of common
stock outstanding as of November 30, 2000 together with applicable options
for each shareholder. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of common
stock subject to options that are currently exercisable or exercisable
within 60 days of November 30, 2000 are deemed to be beneficially owned by
the person holding such options for the purpose of computing the percentage
of ownership of such person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person. The
common stock is the only outstanding class of equity securities of our
company.
3
<PAGE>
(2) Mr. McCabe, Sr. and his wife, Marigrace McCabe, hold most of these shares
jointly. Pursuant to a five-year letter agreement dated March 25, 1996, Nyer
Medical agreed to vote the shares of common stock held by it to elect one
member of the Board of Directors designated by Nyer Medical and the
remaining members of the Board of Directors as designated by Dr. McCabe,
Mrs. McCabe and Mr. McCabe. If, pursuant to this agreement, the beneficial
ownership of Nyer Medical's Common Stock is attributed to Dr. McCabe and Mr.
McCabe, they would own 1,148,214 and 1,083,341 shares of common stock,
respectively. Their ownership percentages would be 30.7% and 29.0%,
respectively. Dr. McCabe, Sr. has vested options to purchase 143,333 shares
of common stock, of which 33,333 are exercisable at $6.03125 per share,
100,000 are exercisable at $12.00 per share and 10,000 are exercisable at
$6.75 per share. Mr. McCabe, Jr. has vested options to purchase 118,333
shares of common stock, of which 33,333 are exercisable at $6.03125 per
share, 75,000 are exercisable at $12.00 per share and 10,000 are exercisable
at $6.75 per share.
(3) Includes common stock owned by Nyle International Corp. (118,333 shares) and
Mr. Samuel Nyer (10,999 shares), which are deemed to be beneficially owned
by Nyer Medical Group, which he is a principal shareholder, officer and
director. Mr. Samuel Nyer may be deemed to be the beneficial owner of the
shares of the Common Stock held by Nyer Medical.
(4) Six (6) persons
(5) Represents shares which may be acquired upon the exercise of presently
exercisable stock options.
(6) Excludes options to acquire 75,000 shares of common stock held by Mr.
Wilkinson. These options are exercisable at $7.25 per share. These options
vest one-third on each of the first, second and third anniversary of the
date of the grant.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We are aware of the following instances since January 1, 1999, when an
executive officer, director or owner of more than ten percent of the outstanding
shares of common stock failed to comply with reporting requirements of Section
16(a) of the Securities Exchange Act of 1934:
o Mr. McCabe, Jr. failed to timely file a Form 4 in connection with
the grant on July 1, 1999 of options to purchase up to 10,000 shares
of our common stock.
o Mr. McCabe, Sr. failed to timely file a Form 4 in connection with
the grant on July 1, 1999 of options to purchase up to 10,000 shares
of our common stock.
o Mr. Wilkinson failed to timely file a Form 3 in connection with his
receipt of 135,000 shares of our common stock on January 17, 2000,
as well as the grant of options to purchase up to 75,000 shares of
common stock.
o Orbiter Fund, Ltd. failed to timely file a Schedule 13D and, if
required, Form 3 in connection with its purchase of 130,000 shares
of common stock and warrants to purchase 250,000 shares of common
stock. In addition, and upon certain events, Orbiter Fund will
receive warrants to purchase 575,000 shares of common stock at $3.00
per share.
o Lancer Offshore, Inc. failed to timely file a Schedule 13D and Form
3 in connection with its purchase of 525,000 shares of common stock.
4
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
DIRECTORS STANDING FOR ELECTION
The Board of Directors of the Company consists of six seats. Each director
holds office until the first annual meeting of shareholders following their
election or appointment and until their successors have been duly elected and
qualified.
The Board of Directors has nominated Mead M. McCabe, Sr., Ph.D., Mead M.
McCabe, Jr., Eric Wilkinson, Mark E. Burroughs, Jack W. Fell, Ph.D. and Michael
C. Foley for election as directors. The accompanying proxy will be voted for the
election of these nominees, unless authority to vote for one or more nominees is
withheld. In the event that any of the nominees is unable or unwilling to serve
as a director for any reason (which is not anticipated), the proxy will be voted
for the election of any substitute nominee designated by the Board of Directors.
The nominees for directors have previously served as members of the Board of
Directors of the Company and have consented to serve such term.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
OF THE NOMINEES
DIRECTORS - PRESENT TERM EXPIRES AT THE ANNUAL MEETING
MEAD M. MCCABE, SR., PHD. Mead M. McCabe, Sr., Ph.D. is the founder of our
Age 63 company and the inventor of the EpiDNA technology.
Dr. McCabe is the Chairman of the Board of
Directors of our company. He holds a B.S. in
Zoology from Pennsylvania State University and a
Ph.D. in Biology from the University of Miami.
From 1972 to 1999, he was on the faculty of the
University of Miami School of Medicine. Dr.
McCabe's research interests center on the molecular
mechanisms of microbial diseases and he has taught
courses in molecular pathogenesis. Dr. McCabe
served four years on the Oral Biology and Medicine
Study Section at the National Institutes of Health
and has consulted for the NIH on numerous other
occasions since 1976. He has been awarded several
NIH research grants, including a S.B.I.R. Phase I
grant. Dr. McCabe has been Chairman since our
inception. Dr. McCabe is the father of Mead M.
McCabe, Jr.
MEAD M. MCCABE, JR. Mead M. McCabe, Jr. is the Chief Executive Officer,
Age 34 Chief Financial Officer and Secretary of our
company and is responsible for the execution of our
company's corporate strategy. Mr. McCabe has a
B.S. in International Business from Auburn
University and a dual M.B.A. in both Finance and
International Business from the University of
Miami. Mr. McCabe joined us in September 1993.
Prior to that, Mr. McCabe was a financial
consultant with Merrill Lynch for two years. Mr.
McCabe is the son of Dr. McCabe. Mr. McCabe became
a director on October 16, 1993.
5
<PAGE>
ERIC WILKINSON Eric Wilkinson has been the President of our company
Age 41 since January 17, 2000. Mr. Wilkinson is responsible
for our company's daily operations, including
business development, sales and marketing and
manufacturing. Mr. Wilkinson became a director on
January 18, 2000. He served as the President of DNA
Sciences, Inc. since its inception in March 1997.
Between December 1995 and February 1997, Mr.
Wilkinson was President of Immune Complex
Corporation, a biotechnology company specializing in
DNA diagnostics, drug metabolism, and
immunodiagnostics. Between June 1996 and February
1997, Mr. Wilkinson served as Director of Chemistry
with Synthetic Genetics, a biotechnology company
involved in the development of DNA diagnostic kits.
Mr. Wilkinson received a B.S. in Biology from the
University of California in San Diego in 1982 and
has served in senior management and product
development positions in several biotechnology
companies.
MARK E. BURROUGHS Mark E. Burroughs has served as a director since
Age 44 March 1995. He is currently a principal of Burroughs
Properties, L.L.C., a full service real estate
development, brokerage and asset management concern.
He has been the Managing Partner/Broker-In-Charge of
Diversified Holdings International, Inc., an
investment and venture capital firm with primary
holdings in real estate, management consulting,
computer software and wine making since 1984. From
1988 to 1991 Mr. Burroughs also represented Stiles
Corporation/Tribune Company Joint Venture as Owner's
Representative/Senior Development Manager, managing
the development of the New River Center in Fort
Lauderdale, Florida. He also served from 1980 to
1983 as Vice President and Project Manager of
Cheezem Development Corp., a publicly held real
estate development and asset management company.
JACK W. FELL, PH.D. Jack W. Fell, Ph.D. has served as a director since
Age 62 February 1997. He is currently a professor of
Microbiology at the University of Miami's Rosenstiel
School of Marine and Atmospheric Science and has
served in that capacity since 1977. Dr. Fell has a
B.S. in Biology from Northwestern University, an
M.S. in Marine Biology from the University of
Miami's Institute of Marine Science, a Ph.D. in
Microbiology from the University of Miami's School
of Medicine and Institute of Marine Science and a
post-doctorate in Microbiology from the University
of California, Davis.
MICHAEL C. FOLEY Michael C. Foley has served as a director since
Age 56 January 1998. He is currently a Senior Vice
President and Director of Janney Montgomery Scott,
Inc., an investment banking firm, where he has been
employed since 1994. Prior to these positions he
served as President and Chief Executive Officer of
Foley Mufson Howe & Company, an investment banking
firm, from 1992 to 1994. Mr. Foley has worked in the
securities industry for over twenty-five years. He
is past Chairman of the Securities Industry
Association's Mid-Atlantic Division and past
President of the Bond Club of Philadelphia. Mr.
Foley has a B.S. in Mechanical Engineering from
Villanova University and received a Masters Degree
in Business Administration from the University of
Pittsburgh.
6
<PAGE>
MEETINGS
During the Company's fiscal year ending December 31, 1999 ("FISCAL 1999"),
the Board of Directors met on 13 occasions. Each director attended more than 75%
of the total number of meetings of the Board and Committees on which he served.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE. Mark Burroughs serves as the sole member of the Audit
Committee. The functions of the Audit Committee are to: (1) recommend annually
to our Board of Directors the appointment of our independent auditors, (2)
discuss and review, in advance, the scope and the fees of the annual audit and
review the results thereof with the independent auditors, (3) review and approve
non-audit services of the independent auditors, (4) review compliance with our
existing major accounting and financial reporting policies, (5) review the
adequacy of our financial organization, and (6) review management's procedures
and policies relating to the adequacy of our internal accounting controls and
compliance with applicable laws relating to accounting practices.
COMPENSATION AND STOCK OPTION COMMITTEE. Mark Burroughs serves as the sole
member of our Compensation and Stock Option Committee, which is responsible for
making recommendations to our Board of Directors regarding compensation
arrangements for our officers and for making recommendations to our Board of
Directors regarding the adoption of any employee benefit plans and the grant of
stock options or other benefits under such plans.
COMPENSATION OF DIRECTORS
Non-employee directors receive $500 plus expenses for attendance at Board
of Director meetings in person and by telephone. Directors are reimbursed for
all out-of-pocket expenses incurred in attending meetings of the Board of
Directors and committees thereof. In addition, on June 9, 2000, the non-employee
directors received a one-time grant of options based on the number of years of
service to our company. Mr. Burroughs, Mr. Fell and Mr. Foley received 17,500,
12,500 and 10,000 options, respectively. These options are exercisable for ten
years at an exercise price of $6.03 per share.
Our 1996 Incentive Plan (the "1996 Incentive Plan") provides that
directors who are not employees are automatically granted an option to purchase
5,000 shares of our common stock in connection with their appointment to the
Board of Directors. Such options will vest after one year of service on the
Board of Directors. The options granted to non-employee directors (Mr. Burroughs
and Dr. Fell) have an exercise price of $12.00 per share (120% of the offering
price in our IPO). Options to purchase 5,000 shares of common stock were granted
to Mr. Michael Foley on January 12, 1998 (the date he joined the Board of
Directors) at an exercise price of $7.75. Options granted in the future under
the 1996 Incentive Plan will be priced at no less than 100% of the common
stock's fair market value on the date of the grant. Options granted to
non-employee directors will be non-statutory options and will become exercisable
after one year of service on the Board and will be exercisable for ten years
from the date of the grant, except that options exercisable at the time of a
director's death may be exercised for twelve months thereafter. Under the terms
of the 1996 Incentive Plan, neither the Board of Directors nor any committee of
the Board of Directors will have any discretion with respect to options granted
to directors.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table shows all the cash
compensation paid by us, as well as certain other compensation paid or accrued,
during the fiscal years ended December 31, 1999, 1998 and 1997 to Mead M.
McCabe, Sr., Ph.D., Chairman of our company, and to Mead McCabe, Jr., CEO, CFO
and Secretary of our company. No restricted stock awards, long-term incentive
plan payouts or other types of compensation, other than the compensation
identified in the chart below, were paid to Dr. McCabe or Mr. McCabe during
fiscal years 1999, 1998 and 1997. No other executive officer earned a total
annual salary and bonus for any of these years in excess of $100,000. The
summary compensation table that follows includes all payments to Dr. McCabe and
Mr. McCabe for fiscal years 1999, 1998 and 1997.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION(1) AWARD(S) SARS(2) PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
---------- ---- --- --- --- --- ------- --- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mead M. McCabe, Sr., 1999 $146,129 -0- $6,000 -0- 10,000 -0- -0-
Ph.D., Chairman of the 1998 $125,000 -0- -0- -0- -0- -0- -0-
Board of Directors 1997 $125,000 -0- -0- -0- -0- -0-
Mead M. McCabe, Jr., 1999 $126,692 -0- $5,250 -0- 10,000 -0- -0-
CEO,CFO and Secretary 1998 $73,558 -0- -0- -0- -0- -0- -0-
1997 $75,866 -0- -0- -0- -0- -0- -0-
</TABLE>
-----------------
(1) This other annual compensation represents a $750 per month automobile
allowance.
(2) These options were granted on July 1, 1999, and have an exercise price of
$5.75 per share. These options are fully vested. All of these grants are for
options to purchase our common stock. No SAR's were granted.
<TABLE>
<CAPTION>
AGGREGATED OPTIONS/SAR EXERCISES
IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTIONS/SAR VALUES(1)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS/SAR'S OPTIONS/SAR'S
NAME ON EXERCISE REALIZED ($) AT FISCAL YEAR END AT FISCAL YEAR END
---- ----------- ------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Mead M. McCabe, Sr. -0- -0- Exercisable: 110,000 -0-
Mead M. McCabe, Jr. -0- -0- Exercisable: 85,000 -0-
</TABLE>
---------------------------------
(1) These grants represent options to purchase common stock. No SAR's have
been granted.
(2) None of these options were in-the-money as of December 31, 1999.
OPTION GRANTS IN FISCAL 2000
On June 9, 2000, we granted the following options under our 1999 Stock
Option Plan:
o To Mead M. McCabe, Sr., the Chairman of our company, options to
purchase up to 100,000 shares of common stock at an exercise price of
$6.03125 per share. These options vest one-third immediately and
one-third on each of the second and third anniversaries of Dr. McCabe's
1999 employment agreement. These options may be exercised within ten
years of the date of grant.
8
<PAGE>
o To Mead M. McCabe, Jr., the Chief Executive Officer of our company,
options to purchase up to 100,000 shares of common stock at an exercise
price of $6.03125 per share. These options vest one-third immediately
and one-third on each of the second and third anniversaries of Mr.
McCabe's 1999 employment agreement. These options may be exercised
within ten years of the date of grant.
o To Mark Burroughs, a director of our company, options to purchase
17,500 shares of common stock at an exercise price of $6.03125 per
share. 12,500 of these options vest immediately and 5,000 vest in March
2001. These options may be exercised within ten years of the date of
grant.
o To Jack Fell, a director of our company, options to purchase 12,500
shares of common stock at an exercise price of $6.03125 per share.
7,500 of these options vest immediately and 5,000 vest in March 2001.
These options may be exercised within ten years of the date of grant.
o To Michael Foley, a director of our company, options to purchase 10,000
shares of common stock at an exercise price of $6.03125 per share.
5,000 of these options vest immediately and 5,000 vest in January 2001.
These options may be exercised within ten years of the date of grant.
On January 17, 2000, we granted the following options under our 1999 Stock
Option Plan:
o To Eric Wilkinson, options to purchase up to 75,000 shares of common
stock at an exercise price of $7.25 per share. These options vest
one-third in one year, one-third in two years and one-third in three
years. These options may be exercised within ten years of the date of
grant.
EMPLOYMENT AGREEMENTS
Effective July 1, 1999, our company and Mead M. McCabe, Jr. entered into a
new employment agreement pursuant to which Mr. McCabe will serve as the Chief
Executive Officer. The agreement has a three year term and pays Mr. McCabe a
base salary of $125,000, plus annual cost of living adjustments and other
increases to be determined by the Board of Directors. Mr. McCabe also receives a
monthly automobile allowance of $750. Mr. McCabe was granted options to purchase
10,000 shares of common stock at an exercise price of $5.75 per share. These
options are immediately exercisable. In addition, Mr. McCabe is entitled to an
annual bonus in an amount to be determined by the Board of Directors. The
agreement further provides that Mr. McCabe will devote his full working time and
efforts to the business and affairs of our company. The agreement also provides
that upon termination of employment without "cause" or termination by the
executive for "good reason" (which includes a change of control), the executive
is entitled to receive, in addition to all accrued or earned but unpaid salary,
bonus or benefits, an amount equal to two times the compensation such executive
would be entitled to receive in the then current fiscal year, including base
salary and incentive bonus compensation. For the purposes of the employment
agreement, the amount of incentive bonus compensation such executive would be
entitled to receive in the then current fiscal year is equal to the largest
amount accrued for any of the two most recently completed fiscal years. The
agreement also provides that the executive will not compete with us during his
employment and for one year thereafter.
Effective July 1, 1999, our company and Mead M. McCabe, Sr. entered into a
new employment agreement pursuant to which Dr. McCabe will serve as the Chairman
of the Board of Directors. The agreement has a three year term and pays Dr.
McCabe a base salary of $132,750, plus annual cost of living adjustments and
other increases to be determined by the Board of Directors. Dr. McCabe also
receives a monthly automobile allowance of $750. Dr. McCabe was granted options
to purchase 10,000 shares of common stock at an exercise price of $5.75 per
share. These options are immediately exercisable. In addition, Dr. McCabe is
entitled to an annual bonus in an amount to be determined by the Board of
Directors. The agreement further provides that Dr. McCabe will devote his full
working time and efforts to the business and affairs of our company. The
agreement also provides that upon termination of employment without "cause" or
termination by the executive for "good reason" (which includes a change of
control), the executive is entitled to receive, in addition to all accrued or
earned but unpaid salary, bonus or benefits, an amount equal to two times the
compensation such executive would be entitled to receive in the then current
fiscal year, including base salary and incentive bonus compensation. For the
purposes of the employment agreement, the amount of incentive bonus compensation
such executive would be entitled to receive in the then current fiscal year is
9
<PAGE>
equal to the largest amount accrued for any of the two most recently completed
fiscal years. The agreement also provides that the executive will not compete
with us during his employment and for one year thereafter.
Effective January 17, 2000, our company and Eric Wilkinson entered into an
employment agreement pursuant to which Mr. Wilkinson will serve as the President
of our company and our wholly-owned subsidiary, Genetic Vectors of California,
Inc. The agreement has a two-year term that may be renewed on its then-current
terms by us for subsequent one year extension terms. Mr. Wilkinson's base salary
is $125,000 per year, plus a bonus as determined by the Board of Directors. Mr.
Wilkinson also received options to purchase up to 75,000 shares at an exercise
price of $7.25 per share. The agreement requires Mr. Wilkinson to devote his
full working time and efforts to our company. Mr. Wilkinson has agreed not to
compete with us during his employment and for two years thereafter.
STOCK PLANS
1999 STOCK OPTION PLAN
OVERVIEW OF THE 1999 INCENTIVE PLAN
Incentive compensation for non-employee directors, executives and other
key employees is also provided under our 1999 Incentive Plan. The purpose of the
1999 Incentive Plan is to (a) increase the proprietary and vested interest of
our non-employee directors in the growth and performance of our company, (b)
assist in attracting and retaining highly competent employees, (c) provide an
incentive for motivating selected officers and other key employees of our
company, (d) achieve long-term corporate objectives and (e) enable cash
incentive awards to qualify as performance-based for purposes of the tax
deduction limitations under Section 162(m) of the Internal Revenue Code of 1986,
as amended.
The 1999 Incentive Plan is administered by the Compensation Committee of
the Board of Directors of our company. Eligible participants include our
non-employee directors and such officers and other key employees as the plan
administrator may designate from time to time. The 1999 Incentive Plan will
continue in effect until terminated by its terms or, if earlier, by the Board of
Directors.
ADMINISTRATION
The 1999 Incentive Plan is administered by a plan administrator, which is
currently the Compensation Committee of the Board of Directors. The plan
administrator has been granted exclusive and final authority under the 1999
Incentive Plan with respect to all determinations, interpretations and other
actions affecting the 1999 Incentive Plan and its participants.
SHARES SUBJECT TO THE 1999 INCENTIVE PLAN
Four hundred thousand shares of our common stock have been initially
authorized to be issued under the 1999 Incentive Plan. Such authorized shares
will be appropriately adjusted to reflect adjustments (if any) to our capital
structure. As of November 30, 2000, 312,646 options have been issued under the
1999 Plan.
1996 STOCK INCENTIVE PLAN
OVERVIEW OF THE 1996 INCENTIVE PLAN
Incentive compensation for non-employee directors, executives and other
key employees is provided under our 1996 Incentive Plan. The purpose of the 1996
Incentive Plan is to (a) increase the proprietary and vested interest of our
non-employee directors in the growth and performance of our company, (b) assist
in attracting and retaining highly competent employees, (c) provide an incentive
10
<PAGE>
for motivating selected officers and other key employees of our company, (d)
achieve long-term corporate objectives and (e) enable cash incentive awards to
qualify as performance-based for purposes of the tax deduction limitations under
Section 162(m) of the Internal Revenue Code of 1986, as amended.
Eligible participants of the 1996 Incentive Plan include our non-employee
directors and such officers and other key employees as the Board of Directors of
our company may designate from time to time. The 1996 Incentive Plan will
continue in effect until terminated by its terms or, if earlier, by the Board of
Directors.
The 1996 Incentive Plan authorizes the plan administrator to grant any or
all of the following types of awards: (1) stock options, including nonqualified
stock options and incentive stock options, (2) stock appreciation rights, (3)
restricted shares of our common stock, (4) performance awards, (5) other
stock-based awards, and (6) short-term cash incentive awards.
ADMINISTRATION
The Board of Directors has been granted exclusive and final authority
under the 1996 Incentive Plan with respect to all determinations,
interpretations and other actions affecting the 1996 Incentive Plan and its
participants.
SHARES SUBJECT TO THE 1996 INCENTIVE PLAN
Three hundred thousand shares of our common stock have been authorized to
be issued under the 1996 Incentive Plan. Such authorized shares will be
appropriately adjusted to reflect adjustments (if any) to our capital structure.
As of December 15, 2000, 260,029 options have been issued under the 1996 Plan.
CERTAIN TRANSACTIONS AND RELATIONSHIPS WITH THE COMPANY
Pursuant to an agreement with the University of Miami, our company has
agreed to pay approximately $44,000 of Dr. Fell's, a director of our company,
salary as an employee of the University of Miami. In exchange, Dr. Fell devotes
approximately one-half of his business time to research and development efforts
on behalf of our company.
On January 17, 2000, we acquired all of the outstanding capital stock of
DNA Sciences, Inc., a California corporation. In consideration for the shares of
DNA Sciences, Inc. we issued the former shareholders of DNA Sciences, Inc. a
total 450,000 shares of our common stock. Eric Wilkinson was one of the former
shareholders of DNA Sciences, Inc. After the acquisition, Mr. Wilkinson became
the President and a Director of our company.
11
<PAGE>
PROPOSAL 2 - AMENDMENT TO THE ARTICLES OF INCORPORATION
Our Company's Board of Directors proposes an amendment to our Company's
Articles of Incorporation to increase the number of authorized shares of common
stock, par value $0.001 per share, from 10,000,000 to 50,000,000 shares.
The amendment to our Company's Articles of Incorporation shall provide for
the authorization of 40,000,000 additional shares of our Company's common stock.
Currently, 3,785,197 shares of our Company's common stock is issued and
outstanding and 3,936,486 shares underlie certain outstanding options, warrants
and convertible debt.
If the amendment to our Company's Articles of Incorporation is adopted,
Articles of Amendment shall be filed with the Florida Secretary of State so that
the first paragraph of Article V of the Articles of Incorporation shall be as
follows:
"The maximum number of shares of stock which this Corporation is
authorized to issue is Fifty Million (50,000,000) shares of common
stock having a par value of $.001 per share."
Our Company's Board of Directors believes that it is desirable to have
additional authorized shares of common stock and authorized shares of preferred
stock available for possible future financings, possible future acquisition
transactions and other general corporate purposes. Having such additional
authorizes shares of common stock available for issuance in the future would
give our Company greater flexibility and may allow such shares to be issued
without the expense and delay of a special shareholders' meeting. Although such
issuance of additional shares with respect to future financings and acquisitions
would dilute existing shareholders, management believes that such transactions
would increase the value of our Company to our shareholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS
Our Board of Directors unanimously recommends a vote "FOR" the approval of
an amendment to our Company's Articles of Incorporation to increase the number
of authorized shares of common stock, par value $0.001 per share, from
10,000,000 to 50,000,000 shares.
12
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of our company consists of 10,000,000 shares,
par value $0.001 per share, of common stock. As of December 15, 2000, we have
3,785,197 shares of our common stock outstanding. In addition, we have (a)
outstanding indebtedness convertible into 671,667 shares of our common stock and
(b) outstanding options and warrants to purchase 572,675 and 2,692,144 shares of
common stock, respectively, including (i) warrants to purchase 775,000 shares of
our common stock to be issued upon the repayment of certain indebtedness, (ii)
warrants to purchase 1,233,294 shares of our common stock to be issued if
certain indebtedness is converted into shares of our common stock; (iii)
warrants to purchase 683,850 shares of our common stock outstanding as of the
date hereof, and (iv) options to purchase 572,675 shares of our common stock
outstanding as of the date hereof. The following description is a summary of the
capital stock of our company and contains the material terms of our capital
stock. Additional information can be found in our Articles of Incorporation and
our Bylaws, which were filed as exhibits to our registration statement for our
initial public offering.
COMMON STOCK
Each share of our common stock entitles the holder to one vote on each
matter submitted to a vote of our shareholders, including the election of
directors. There is no cumulative voting. The holders of our common stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by our Board of Directors out of funds legally available therefore.
Holders of our common stock have no preemptive, conversion or other subscription
rights. There are no redemption or sinking fund provisions available to our
common stock. In the event of liquidation, dissolution or winding up our
company, the holders of our common stock are entitled to share ratably in all
assets remaining after payment of liabilities.
CONVERTIBLE INDEBTEDNESS
In March 2000, we borrowed $175,000 in the form of convertible notes.
These loans have an annual interest rate of 12% and were due in September 2000.
The lenders have extended the due date to December 31, 2000. At the lenders'
option, these notes are convertible into shares of our common stock at a
conversion rate of $5.00 per share. We are currently in default on these notes.
In April 2000, we borrowed $100,000 in the form of a convertible note.
This loan has an annual interest rate of 12% and was due in October 2000. The
lender has extended the due date to December 31, 2000. At the lenders' option,
this note is convertible into shares of our common stock at a conversion rate of
$5.00 per share. We are currently in default on this note.
In May 2000, we borrowed $600,000 in the form of convertible notes. These
loans have an annual interest rate of 12% and are due on December 31, 2000. At
the lenders' option, these notes are convertible into shares of our common stock
at a conversion rate of $3.00 per share. We are currently in default on these
notes.
In June 2000, we borrowed $50,000 in the form of a convertible note. This
loan has an annual interest rate of 12% and is due on December 31, 2000. At the
lenders' option, this note is convertible into shares of our common stock at a
conversion rate of $3.00 per share. We are currently in default on this note.
In July 2000, we borrowed $1,200,000 in the form of convertible notes.
These loans have an annual interest rate of 12% and are due on December 31,
2000. At the lenders' option, these notes are convertible into shares of our
common stock at a conversion rate of $3.00 per share. We are currently in
default on these notes.
OPTIONS
As of November 30, 2000, we have outstanding options to purchase 572,675
shares of our common, consisting of:
13
<PAGE>
NUMBER OF OPTIONS EXERCISE PRICE
----------------- --------------
210,000 $12.00
2,020 10.375
7,963 8.00
75,000 7.25
20,000 6.75
237,646 6.03
20,046 5.00
PRIVATE PLACEMENT WARRANTS
We have outstanding warrants to purchase 683,850 shares of our common
stock in connection with previous private placement efforts, consisting of:
NUMBER OF WARRANTS EXERCISE PRICE
------------------ --------------
80,000 0.01
220,000 1.00
100,000 3.00
35,000 3.50
28,850 5.50
192,500 6.00
27,500 6.20
--------------------
We are also obligated to issue additional warrants to purchase 775,000
shares of our common stock upon the full repayment of certain loans or our
successful consummation of a financing in an amount equal to or greater than
$1.5 million. In addition, if the holders elect to convert certain indebtedness
into shares of common stock, then we will issue warrants to purchase (a) 616,647
shares of common stock at an exercise price of $6.00 per share and (b) 616,647
shares of common stock at an exercise price of $7.10 per share. These warrants
consist of:
NUMBER OF WARRANTS EXERCISE PRICE
------------------ --------------
50,000 1.50
120,000 2.50
455,000 3.00
150,000 5.50
616,647* 6.00
616,647* 7.10
--------------------
* To be issued if the holder elects to convert certain indebtedness
into shares of common stock. If the holder does not elect to so convert, then
the holders would receive warrants to purchase 370,000 shares of common stock at
an exercise price of $6.60 per share and warrants to purchase 370,000 shares of
common stock at an exercise price of $8.00 per share.
CONVERTIBLE PROMISSORY NOTES
In connection with a private offering completed on August 1, 2000, our
company issued 50 units, for a total purchase price of $1,250,000, consisting of
a Convertible Promissory Note and the right to receive warrants to purchase
shares of a specified amount of our company's common stock. Each Note is due
December 31, 2000. Interest will accrue at 12% per year on the outstanding
principal balance of the Note. Prior to the repayment of the principal balance
of the Note, the holders may convert, at their option at anytime up to 30 days
after the closing of an equity financing by our company of $5 million or more,
all amounts due into shares of the common stock at a conversion rate of $3.00
14
<PAGE>
per share. In addition, and in the event of a conversion of the Note, the
holders will receive for each Unit purchased in this offering warrants to
purchase 8,333 shares of common stock at an exercise price of $6.00 per share
and 8,333 shares of common stock at an exercise price of $7.10 per share. If no
conversion occurs, then holders will receive for each Unit purchased in this
offering warrants to purchase 5,000 shares of common stock at an exercise price
of $6.60 per share and 5,000 shares of common stock at an exercise price of
$8.00 per share. In the event of default, the holders may choose between two
exclusive remedies: (a) the holders may elect to convert all amounts due into
shares of common stock at a conversion rate of $3.00 per share or (b) the
holders may request repayment of all amounts due, in which case the holders
would be issued warrants to purchase 2,500 shares of common stock at an exercise
price of $5.00 per share for each month that the principal balance remains
unpaid under the Note up to a total of six months. The holders must elect one of
these exclusive remedies within 15 days of an event of default and upon the
expiration of any notice or cure period. All warrants to be issued in connection
with these notes will expire on June 30, 2004. We are currently in default on
these notes.
The issuance of these contingent or any other warrants will result in a
significant non-cash charge to our company in the period in which these
additional warrants are issued.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE ARTICLES OF INCORPORATION, BYLAWS AND
FLORIDA LAW
The following provisions of the Articles of Incorporation and Bylaws of
our Company could discourage potential acquisition proposals and could delay or
prevent a change in control of our Company. Such provisions may also have the
effect of preventing changes in the management of our Company, and preventing
shareholders from receiving a premium on their common stock.
AUTHORIZED BUT UNISSUED STOCK. The authorized but unissued shares of
common stock and preferred stock are available for future issuance without
shareholder approval. These additional shares may be utilized for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans.
TRANSFER AGENT AND REGISTRAR. Continental Stock and Transfer Company is
the transfer agent and registrar of our common stock. Its address is 2 Broadway,
19th Floor, New York, New York 10004.
OTHER MATTERS
As of the date of this proxy statement, our Company knows of no business
that will be presented for consideration at the meeting other than the items
referred to above. If any other matter is properly brought before the meeting
for action by shareholders, proxies in the enclosed form returned to our Company
will be voted in accordance with the recommendation of our Board of Directors
or, in the absence of such a recommendation, in accordance with the judgment of
the proxy holder.
INDEPENDENT ACCOUNTANTS
The firm of BDO Seidman, LLP served as our Company's independent
accountants for Fiscal 1999. Representatives of the firm will be available by
telephone to respond to questions at the Annual Meeting of the Shareholders.
These representatives will have an opportunity to make a statement if they
desire to do so. The Company has selected BDO Seidman, LLP as its independent
accountants for Fiscal 2000.
ADDITIONAL INFORMATION
ADVANCE NOTICE PROCEDURES. Under our Company's bylaws, no business may be
brought before an annual meeting unless it is specified in the notice of the
meeting (which includes shareholder proposals that our Company is required to
include in its proxy statement pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934) or is otherwise brought before the meeting by or at the
discretion of the Board or by a shareholder entitled to vote who has delivered
notice to the Company (containing certain information specified in the bylaws)
not less than 120 days nor more than 180 days prior to the first anniversary of
the preceding year's annual meeting. These requirements are separate from and in
addition to the SEC's requirements that a shareholder must meet in order to have
a shareholder proposal included in our Company's proxy statement.
15
<PAGE>
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING. Shareholders interested
in submitting a proposal for inclusion in the proxy materials for our 2000
Annual Meeting of the Shareholders may do so by following the procedures
prescribed in SEC Rule 14a-8. To be eligible for inclusion, shareholder
proposals must be received by our Company's Secretary no later than September 1,
2001. Any shareholder proposals should be addressed to our Company's Secretary,
5201 N. W. 77th Avenue, Suite 200, Miami, Florida 33166.
PROXY SOLICITATION COSTS. Our Company is soliciting the enclosed proxies.
The cost of solicting proxies in the enclosed form will be borne by our Company.
Officers and regular employees of our Company may, but without compensation
other than their regular compensation, solicit proxies by further mailing or
personal conversations, or by telephone, telex, facsimile or electronic means.
Our Company will, upon request, reimburse brokerage firms for their reasonable
expenses in forwarding solictation materials to the beneficial owners of stock.
INCORPORATION BY REFERENCE. Certain financial and other information
required pursuant to Item 13 of the Proxy Rules is incorporated by reference to
the Company's Annual Report, which is being delivered to the shareholders with
this proxy statement. In order to facilitate compliance with Rule 2-02(a) of
Regulation S-X, one copy of the definitive proxy statement will include a
manually signed copy of the accountant's report.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mead M. McCabe, Jr.
-----------------------
Mead M. McCabe, Jr.
Chief Executive Officer, Chief Financial
Officer and Secretary
Miami, Florida
January 16, 2001
16
