SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED BY A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential For Use of the
Commission Only (as Permitted
by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12
NEW YORK HEALTH CARE, INC.
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(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee: (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act
Rule 14a-6(I)(1) 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 the 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.
|_| 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 the filing.
(1) Amount Previously Paid:
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(2) For, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NEW YORK HEALTH CARE, INC.
1850 MCDONALD AVENUE
BROOKLYN, NEW YORK 11223
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of New York Health Care, Inc.:
The Annual Meeting of Shareholders of New York Health Care, Inc. (the
"Company") will be held at the offices of the Company, 1850 McDonald Avenue,
Brooklyn, New York 11223 on July 28, 1999 at 10:00 A.M. local time, for the
purpose of considering and voting upon the approval and adoption of the
following:
1. To elect six directors to serve until the next Annual Meeting of
Shareholders, or until their successors are elected and qualify;
2. To approve an amendment to the New York Health Care, Inc. Performance
Incentive Plan (the "Stock Option Plan") (a) authorizing the
reservation of an additional 350,000 shares of the Company's $.01 par
value common stock for issuance under the Stock Option Plan after
January 1, 2000 and (b) amending Section 12 of the Stock Option Plan
to provide that each stock option granted under the Stock Option Plan,
including unexercised options outstanding on the date of the
amendment, shall be exercisable in either one, two or three equal
annual installments, as designated by the Company's Compensation
Committee, which administers the Stock Option Plan, from time to time;
3. To approve the selection of M.R. Weiser & Co. LLP as the Company's
independent auditors for the fiscal year ending December 31, 1999; and
4. To transact such other business as may properly come before the
meeting or any other adjournment or adjournments thereof.
Only holders of record of the Company at the close of business on June 11,
1999 will be entitled to notice of and to vote at the Annual Meeting and any
adjournment or adjournments thereof.
By Order of the Board of Directors
/s/ Jacob Rosenberg
----------------------------
Jacob Rosenberg, Secretary
<PAGE>
IMPORTANT
IT IS IMPORTANT THAT AS MANY SHARES AS POSSIBLE BE REPRESENTED AT THE ANNUAL
MEETING. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON, WE URGE THAT YOU DATE, SIGN AND PROMPTLY RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE (WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES). YOUR PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT HAS BEEN VOTED.
<PAGE>
NEW YORK HEALTH CARE, INC.
PROXY FOR NEW YORK HEALTH CARE, INC.
ANNUAL MEETING OF SHAREHOLDERS
The undersigned, a holder of record of shares of Common Stock, par value $.01
per share ("Common Stock") of New York Health Care, Inc. (the "Company"),
hereby revokes all prior proxies and appoints Jerry Braun and Jacob Rosenberg,
or each of them, proxies for the undersigned to vote all shares of Common Stock
of the Company which the undersigned would be entitled to vote at the Annual
Meeting of Shareholders and any adjournments, postponements or rescheduling
thereof, and instructs said proxies to vote as follows:
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE, IF NO
SPECIFICATIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS REFERRED TO
IN (1) THROUGH (4) BELOW PROVIDED YOU HAVE SIGNED THIS PROXY.
PLEASE INDICATE YOUR PROPOSAL SELECTION BY PLACING AN "X"
IN THE APPROPRIATE BOX.
1. To elect Jerry Braun, Jacob Rosenberg, [ ]FOR [ ]AGAINST [ ]ABSTAIN
Hirsch Chitrik, Sid Bornstein, H.
Gene Berger and Charles J. Pendola as
six director to serve until the next
Annual Meeting of Shareholders or until
their successors are elected andqualify
2. To approve an amendment to the New York [ ]FOR [ ]AGAINST [ ]ABSTAIN
Health Care, Inc. Performance Incentive
Plan (the "Stock Option Plan") (a)
authorizing the reservation of an
additional 350,000 shares of the
Company's $.01 par value common stock
for issuance under the Stock Option
Plan after January 1, 2000 and (b)
amending Section 12 of the Stock Option
Plan to provide that each stock option
granted under the Stock Option Plan,
including unexercised options outstanding
on the date of the amendment, shall be
exercisable in either one, two or three
equal annual installments, as designated
by the Company's Compensation Committee,
which administers the Stock Option Plan,
from time to time.
3. To approve the selection of M.R. [ ]FOR [ ]AGAINST [ ]ABSTAIN
Weiser & Co. LLP as the Company's
independent auditors for the fiscal year
ending December 31, 1999.
4. To transact such other business as may [ ]FOR [ ]AGAINST [ ]ABSTAIN
properly come before the meeting or any
other adjournment or adjournments thereof.
<PAGE>
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING ON BEHALF OF THE UNDERSIGNED.
_______________________________________________
(Signature(s)
_______________________________________________
(Print name(s)signed above)
IF SIGNATURE IS BY A PERSON ACTING IN A REPRESENTATIVE
OR FIDUCIARY CAPACITY (e.g. CORPORATE OFFICER OR
TRUSTEE), PLEASE PROVIDE TITLE
______________________________________
Date: _______________________________
<PAGE>
NEW YORK HEALTH CARE, INC.
1850 MCDONALD AVENUE
BROOKLYN, NEW YORK 11223
June 15, 1999
Dear Shareholders:
As President of New York Health Care, Inc. (the "Company"), I cordially
invite you to attend the Annual Meeting of the Shareholders to be held on July
28, 1999 at the offices of the Company, 1850 McDonald Avenue, Brooklyn, New
York, at 10:00 A.M. for the purpose of (i) electing six directors to serve until
the next Annual Meeting of Shareholders or until their successors are elected
and qualify; (ii) to approve an amendment to the Performance Incentive Plan (the
"Stock Option Plan") authorizing the reservation of an additional 350,000 shares
of the Company's $.01 par value common stock for issuance under that Stock
Option Plan after January 1, 2000 and amending Section 12 of the Stock Option
Plan to provide that each stock option granted under the Stock Option Plan,
including unexercised options outstanding on the date of the amendment, shall
be exercisable in either one, two or three equal annual installments, as
designated by the Company's Compensation Committee from time to time; (iii) to
approve the selection of M.R. Weiser & Co. LLP as the Company's independent
auditors for the fiscal year ending December 31, 1999; and (iv) to conduct such
other business as may properly come before the Annual Meeting and any
adjournment or adjournments thereof.
Your representation and vote are very important and your shares should be
voted. Therefore, even if you do not plan to attend the Annual Meeting, we urge
you to review and consider the enclosed proxy material and then complete, date
and return the enclosed proxy.
Very truly yours,
NEW YORK HEALTH CARE, INC.
By: /s/ Jerry Braun
------------------------
Jerry Braun, President
<PAGE>
NEW YORK HEALTH CARE, INC.
1850 MCDONALD AVENUE
BROOKLYN, NY 11223
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 28, 1999
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of New York Health Care,
Inc., a New York corporation ("NYHC" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors for use at the Annual Meeting
of Stockholders to be held on Wednesday, July 28, 1999, at 10:00 a.m. local
time, and at any and all adjournments or postponements thereof for the purposes
set forth in the Notice of Annual Meeting accompanying this Proxy Statement. The
Annual Meeting will be held at the Company's offices at 1850 McDonald Avenue,
Brooklyn, New York 11223.
These proxy solicitation materials are first being mailed on or about June
15, 1999 to all stockholders entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (sent to the
attention of Mr. Jacob Rosenberg, Secretary) a written notice of revocation or a
duly executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person. Attendance at the meeting will not, by itself, revoke a
proxy.
VOTING AND SOLICITATION
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation personally
or telephonically through its officers, directors and regular employees, none of
whom will receive additional compensation for assisting with the solicitation.
Only stockholders of record at the close of business on June 11, 1999 are
entitled to notice of and to vote at the Annual Meeting. As of June 11, 1999,
3,708,030 shares of the Company's Common Stock were issued and outstanding. On
each matter to be considered at the Annual Meeting, stockholders will be
entitled to cast one vote for each share held of record on June 11, 1999. The
Company's by-laws do not provide for cumulative voting by stockholders.
<PAGE>
A majority of the shares of Common Stock entitled to vote will constitute a
quorum for the transaction of business at the Annual Meeting. Each matter to be
submitted to a vote of the stockholders, other than the election of directors,
must receive an affirmative vote of the majority of shares present, in person or
represented by proxy, and entitled to vote at the Annual Meeting. Directors
shall be elected by a plurality of the votes cast. Votes withheld from any
director are counted for purposes of determining the presence or absence of a
quorum for the transaction of business, but have no legal effect under New York
law. The Company believes that abstentions should be counted for purposes of
determining whether a quorum is present at the Annual Meeting for the
transaction of business and, except for the election of directors, should also
be counted in tabulating votes cast on proposals presented to stockholders. The
Company intends to count broker non-votes as present or represented for purposes
of determining the presence or absence of a quorum for the transaction of
business. Broker non-votes will not be counted for purposes of determining
whether a proposal has been approved.
The shares represented by all valid proxies will be voted in accordance
with the specifications therein. Unless otherwise directed in the proxy, the
persons named therein will vote FOR: 1) the election to the Board of Directors
of the six nominees listed below; 2) the authorization of an additional 350,000
shares of Common Stock for issuance under the Performance Incentive Plan (the
"Stock Option Plan") after January 1, 2000, and amending Section 12 of the Stock
Option Plan to provide that each stock option granted under the Stock Option
Plan, including unexercised options outstanding on the date of the amendment,
shall be exercisable in either one, two or three equal annual installments, as
designated by the Company's Compensation Committee from time to time; and 3) the
approval of the selection of M.R. Weiser & Co. LLP as the Company's independent
auditor for the fiscal year ending December 31, 1999. As to any other business
which may properly come before the meeting, they will vote in accordance with
their best judgment. The Company does not presently know of any other such
business.
PROPOSAL 1:
ELECTION OF DIRECTORS
The Amended and Restated Certificate of Incorporation of the Company
provides for the Company's Board of Directors to serve until their successors
have been duly elected and qualified or until they resign, become disqualified
or disabled, or are otherwise removed. The nominees for election to the Board
of Directors are listed below.
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<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
- ------------------------ ----- ------------------------------------- -------------------
<S> <C> <C> <C>
Jerry Braun 42 President, Chief Executive Officer 1983
and Director
Jacob Rosenberg 41 Vice President, Chief Operating 1983
Officer, Secretary and Director
Hirsch Chitrik 70 Director 1995
Sid Borenstein 45 Director 1995
H. Gene Berger 58 Director 1998
Charles J. Pendola 53 Director 1998
</TABLE>
Jerry Braun has been the President, Chief Executive Officer and Chief
Operating Officer of the Company since its inception in 1983.
Jacob Rosenberg, has been Secretary and a Director since the Company's
inception in 1983, and Vice President and Chief Operating Officer since February
1995.
Hirsch Chitrik has been a Director of the Company since May 1995. For more
than the last five years, Mr. Chitrik has been the President of Citra Trading
Corporation, a privately-held company in New York engaged in the jewelry
business.
Sid Borenstein has been a Director of the Company since May 1995. For more
than the last five years, Mr. Borenstein, a Certified Public Accountant, has
been a General Partner in Sid Borenstein & Co., CPA's, in Brooklyn, New York.
H. Gene Berger has been a director of the Company since February 1998.
Since 1981 Mr. Berger has been the president of Jay Isle Associates, a
consulting firm to the health care industry. From October 1991 to October 1997,
Mr. Berger was employed by Transworld Health Care, Inc., which is a regional
provider of alternate site health care services and products, in a number of
capacities including executive vice president, president, chief operating
officer and chief executive officer.
Charles J. Pendola has been a director of the Company since February 1998.
Since April 1997, Mr. Pendola has been an independent management consultant to
various organizations in the health care industry. From August 1996 to March
1997 Mr. Pendola was the president and chief executive officer of First Medical
Corporation, an international health care management firm providing services to
health care networks, managed care organizations and independent health
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providers in the United States and Europe. From April 1989 to June 1996, Mr.
Pendola was the president and chief executive officer of Preferred Health
Network, a not-for-profit corporation which managed a diversified group of
health care providers and health related organizations including five acute care
hospitals and 20 ambulatory care centers. Mr. Pendola is a certified public
accountant.
There is no family relationship between any director or executive officer
of the Company.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company's Board of Directors met a total of 3 times during the fiscal
year ended December 31, 1998. Each of the directors attended all of the
meetings of the Board of Directors.
The Company has an Audit Committee which was formed in February 1998 and
consists of three non-employee directors; Mr. Borenstein, Mr. Pendola and Mr.
Berger. The Audit Committee assists in selecting the independent auditors,
designating services they are to perform and maintaining effective
communications with those auditors. The Company also has a Compensation
Committee which was formed in May 1998 and is composed of Mr. Braun, Mr. Pendola
and Mr. Berger. The Compensation Committee will reviews and acts on all matters
relating to compensation levels and benefit plans for executive officers and key
employees of the Company, including salary, bonus and stock options. The
Compensation Committee is responsible for granting stock awards, stock options
and other awards to be made under the Company's existing incentive Performance
Incentive Plan.
Directors who are officers of the Company receive no compensation for
attending committee or regular or special Board meetings. Non-employee
directors receive $1,000 for attending each regular or special board meeting and
$500 for attending each Audit Committee or Compensation Committee meeting.
Directors who are employed by the Company are eligible to receive stock
options pursuant to the Company's Stock Option Plan. Non-employee directors, who
are not eligible to receive such stock options, have been issued warrants by the
Company.
Information relating to the Company's issuance of stock options and
warrants to executive officers and directors has been fully set forth in the
Company's Form 10-KSB Annual Report for 1998, which is being delivered to
stockholders together with this proxy statement and that material is
incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR PROPOSAL 1.
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PROPOSAL 2:
APPROVAL OF AMENDMENT TO STOCK OPTION PLAN
GENERAL
The Company's stockholders are being asked to approve amendments to the
Stock Option Plan to (a) increase, by 350,000, the number of shares of Common
Stock authorized for issuance under the Stock Option from a total of 682,500 to
1,032,500, and (b) amend Section 12 of the Stock Option Plan to provide that
each stock option granted under the Stock Option Plan, including unexercised
options outstanding on the date of the amendment, shall be exercisable in
either one, two or three equal annual installments, as designated by the
Company's Compensation Committee from time to time.
The Stock Option Plan became effective in March 1996 in connection with the
Company's initial public offering. An amendment to the Stock Option Plan, which
increased the number of shares of Common Stock available for options under the
Stock Option Plan by a total of 420,000 shares, was approved by the stockholders
at the 1998 Annual Meeting held on June 25, 1998.
On May 28, 1999, the Board approved an amendment to the Stock Option Plan
providing for an additional 350,000 shares of Common Stock to be available for
issuance beginning after January 1, 2000, and also approved an amendment of the
Stock Option Plan to provide that options, including those unexercised options
already outstanding, shall be exercisable in either one, two or three equal
annual installments, as designated by the Company's Compensation Committee.
Absent such an amendment, the Compensation Committee has no flexibility to vary
the requirement that options may only be exercised in three equal annual
installments.
The Board believes the increase in the number of shares of Common Stock
issuable under the Stock Option Plan by 350,000 shares, and the provision of
flexibility to the Compensation Committee in permitting the exercise of options
in either one, two or three equal annual installments, are both necessary to
assure that the Company will continue to have a sufficient reserve of Common
Stock available under the stock Option Plan, and sufficient flexibility in
setting the exercise provisions, to provide appropriate incentives and to
attract and retain the services of key individuals essential to the Company's
long-term success.
The following is a summary of the principal features of the Stock Option
Plan. The summary, however, does not purport to be a complete description of
all the provisions of the Stock Option Plan. Any stockholder of the Company who
wishes to obtain a copy of the actual plan document may do so upon written
request to the Corporate Secretary at the Company's principal executive offices
in Brooklyn, New York.
Under the terms of the Stock Option Plan, options to purchase up to 682,500
shares of Common Stock may be granted to key employees of the Company. To date,
options have been granted under the Stock Option Plan for a total of 426,500
shares, leaving a total of 256,000 shares presently available for the granting
of additional options. The Stock Option Plan is administered by the
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Compensation Committee (the "Committee"), which is authorized to grant incentive
stock options and non-qualified stock options to selected employees of the
Company and to determine the participants, the number of options to be granted
and other terms and provisions of each option.
The exercise price of any incentive stock option or non-qualified option
granted under the Stock Option Plan may not be less than the fair market value
of the shares of Common Stock of the Company at the time of the grant. In the
case of incentive stock options granted to holders of more than 10% of the
voting power of the Company, the exercise price may not be less than 110% of the
fair market value.
Under the terms of the Stock Option Plan, the aggregate fair market value
(determined at the time of grant) of shares issuable to any one recipient upon
exercise of incentive stock options exercisable for the first time during any
one calendar year may not exceed $ 100,000. Options granted under the Stock
Option Plan become exercisable in whole or in part from time to time as
determined by the Committee, but in no event may a stock option granted in
conjunction therewith be exercisable prior to the expiration of six months from
the date of grant, unless the grantee dies or becomes disabled prior thereto.
Stock options granted under the Stock Option Plan have a maximum term of 10
years from the date of grant, except that with respect to incentive stock
options granted to an employee who, at the time of the grant, is a holder of
more than 10% of the voting power of the Company, the stock option shall expire
not more than five years from the date of the grant. The option price must be
paid in full on the date of exercise and is payable in cash or in shares of
Common Stock having a fair market value on the date the option is exercised
equal to the option price.
If a grantee's employment by, or provision of services to, the Company is
terminated, the Committee may, in its discretion, permit the exercise of stock
options for a period not to exceed one year following such termination of
employment with respect to incentive stock options and for a period not to
extend beyond the expiration date with respect to non-qualified options, except
that no incentive stock option may be exercised after three months following the
grantee's termination of employment, unless it is due to death or permanent
disability, in which case they may be exercised for a period of up to one year
following such termination.
FEDERAL INCOME TAX CONSEQUENCES
PLAN BENEFITS
Options granted under the Stock Option Plan may be either incentive stock
options which satisfy the requirements of Section 422 of the Internal Revenue
Code or non-statutory options which are not intended to meet such requirements.
The Federal income tax treatment for the two types of options differs as
follows:
Incentive Options. No taxable income is recognized by the optionee at the
-------------------
time of the option grant, and no taxable income is generally recognized at the
time the option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise disposed
of. For Federal tax purposes, dispositions are divided into two categories: (i)
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qualifying and (ii) disqualifying. A qualifying disposition occurs if the sale
or other disposition is made after the optionee has held the shares for more
than two years after the option grant date and more than one year after the
exercise date. If either of these two holding periods is not satisfied, then a
disqualifying disposition will result.
If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs, equal to the excess of (i) the fair
market value of such shares on the option exercise date over (ii) the exercise
price paid for the shares. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.
Non-Statutory Options. No taxable income is recognized by an optionee upon
----------------------
the grant of a non-statutory option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares, and the optionee will be required
to satisfy the tax withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are not
vested and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Internal Revenue Code to
include as ordinary income in the year of exercise of the option an amount equal
to the excess of (i) the fair market value of the purchased shares on the
exercise date over (ii) the exercise price paid for such shares. If the Section
83(b) election is made, the optionee will not recognize any additional income as
and when the repurchase right lapses.
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised
non-statutory option. The deduction will in general be allowed for the taxable
year of the Company in which such ordinary income is recognized by the optionee.
ACCOUNTING TREATMENT
The Company accounts for stock-based awards to employees using the
intrinsic value method in accordance with Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees. Pursuant to APB
Opinion No. 25, option grants or stock issuances with exercise or issue prices
less than the fair market value of the shares on the grant or issue date will
result in a compensation expense to the Company's earnings equal to the
difference between the exercise or issue price and the fair market value of the
shares on the grant or issue date. Such expense will be accruable by the
Company over the period that the option shares or issued shares are to vest.
Option grants or stock issuances at 100% of fair market value will not result in
any charge to the Company's earnings.
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In addition, the Company is subject to the disclosure requirements of
Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation. SFAS No. 123 requires the disclosure of pro forma net
income and earnings per share had the Company adopted the fair value method as
of the beginning of fiscal 1995. Under SFAS No. 123, the fair value of
stock-based awards to employees is calculated through the use of option pricing
models, even though such models were developed to estimate the fair value of
freely tradable, fully transferable options without vesting restrictions, which
significantly differ from the Company's stock option awards. These models also
require subjective assumptions, including future stock price volatility and
expected time to exercise, which greatly affect the calculated values.
Whether or not granted at a discount, the number of outstanding options may
be a factor in determining the Company's earnings per share on a primary and
fully-diluted basis, as the Company uses the treasury stock method for computing
weighted average common and common equivalent shares outstanding.
STOCKHOLDER APPROVAL
The affirmative vote of a majority of the outstanding voting shares of the
Company present or represented and entitled to vote at the 1999 Annual Meeting
is required for approval of the amendment to the Stock Option Plan. Should such
stockholder approval not be obtained, then any options granted will have to be
limited to the 256,000 shares now available under the Stock Option Plan and
options will be exercisable only in three equal annual installments.
OPTION GRANTS
Information relating to the Company's issuance of stock options and
warrants to executive officers and directors has been fully set forth in the
Company's Form 10-KSB Annual Report for 1998, which is being delivered to
stockholders together with this proxy statement and that material is
incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR PROPOSAL 2.
PROPOSAL 3:
RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
The Board of Directors has selected M.R. Weiser & Co. LLP as the Company's
independent auditors for the fiscal year ending December 31, 1999 and has
further directed that the Audit Committee submit the selection of independent
auditor for ratification by stockholders at the Annual Meeting. Representatives
of M.R. Weiser are expected to be present at the Annual Meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
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Stockholder ratification of the selection of M.R. Weiser & Co. LLP as the
Company's independent auditor is not required by the Company's by-laws or
otherwise. However, the Board is submitting M.R. Weiser & Co. LLP to the
stockholders for ratification as a matter of good corporate practice. If the
stockholders fail to ratify the selection, the Board of Directors will
reconsider whether to retain that firm. Even if the selection is ratified, the
Board of Directors in their discretion may direct the appointment of a different
independent accounting firm at any time during the year if they determine that
such a change would be in the best interests of the Company and its
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR PROPOSAL 3.
MANAGEMENT AND PRINCIPAL STOCKHOLDERS
Information relating to the Company's executive officers and directors, the
stock ownership of management and the Company's principal stockholders,
employment agreements between the Company and its management, compensation of
the named executives of the Company, certain relationships and related
transactions and compliance with Section 16(a) of the Securities and Exchange
Act of 1934 has been fully set forth in the Company's Form 10-KSB Annual Report
for 1998 which is being delivered to stockholders together with this proxy
statement, and that material is incorporated herein by reference.
APPOINTMENT OF INDEPENDENT AUDITOR
The firm of M.R. Weiser & Co. LLP, the Company's independent auditor for
the fiscal years ended December 31, 1995, 1996, 1997 and 1998, was selected by
the Board of Directors to act in the same capacity for the fiscal year ending
December 31, 1999. Neither the firm of M.R. Weiser & Co. LLP nor any of its
members has any relationship with the Company or any of its affiliates except in
the firm's capacity as the Company's Auditor.
Representatives of M.R. Weiser & Co. LLP are expected to be present at the
Annual Meeting and will have the opportunity to make statements if they so
desire and respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
Proposals of the stockholders of the Company which are intended to be
presented by stockholders at the Company's 2000 Annual Meeting must be received
by the Company no later than December 31, 1999 to be included in the proxy
statement and form of proxy relating to the 2000 Annual Meeting.
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OTHER MATTERS
The Company knows of no other matters to be brought before the Annual
Meeting. If any other business should properly come before the Annual Meeting,
the persons named in the proxy intend to vote thereon in accordance with their
best judgment.
The Company's Annual Report on Form 10-KSB as filed with the Securities and
Exchange Commission for the fiscal year ended December 31, 1998 is being sent
with this Proxy Statement to all stockholders of record as of June 11, 1999.
Signature by order of the Board of Directors.
/s/ Jacob Rosenberg
----------------------------
Jacob Rosenberg, Secretary
Dated: Brooklyn, New York
June 15, 1999
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