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 December 18, 2000 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") authorizing the reservation
of an additional 450,000 shares of the Company's $.01 par value common
stock for issuance under the Stock Option Plan after January 1, 2001.
3. To approve an amendment to the Certificate of Incorporation (the
"Certificate") to effect a 37,500,000 share increase of the Company's
authorized Common Stock to a total of 50,000,000 authorized shares
4. To approve the selection of M.R. Weiser & Co. LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000; and
5. 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 October
25, 2000 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 (5) 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, Hirsch Chitrik, Sid Bornstein, H.
Gene Berger and Charles J. Pendola as six directors to serve until the next
Annual Meeting of Shareholders or until their successors are elected and
qualify.
FOR AGAINST ABSTAIN
2. To approve an amendment to the New York Health Care, Inc. Performance
Incentive Plan (the "Stock Option Plan") authorizing the reservation of an
additional 450,000 shares of the Company's $.01 par value common stock for
issuance under the Stock Option Plan after January 1, 2001.
FOR AGAINST ABSTAIN
3. To approve an amendment to the Certificate of Incorporation (the
"Certificate") to effect a 37,500,000 share increase of the Company's
authorized Common Stock to a total of 50,000,000 authorized shares.
FOR AGAINST ABSTAIN
4. To approve the selection of M.R. Weiser & Co. LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
5. To transact such other business as may properly come before the meeting or
any other adjournment or adjournments thereof.
FOR AGAINST ABSTAIN
<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
November 15, 2000
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
December 18, 2000 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
450,000 shares of the Company's $.01 par value common stock for issuance under
that Stock Option Plan after January 1, 2001; (iii) to approve an amendment to
the Certificate of Incorporation (the "Certificate") to effect a 37,500,000
share increase of the Company's authorized Common Stock to a total of 50,000,000
authorized shares; (iv) to approve the selection of M.R. Weiser & Co. LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000;
and (v) 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 DECEMBER 18, 2000
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 Monday, December 18, 2000, 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
November 27, 2000 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 October 25, 2000
are entitled to notice of and to vote at the Annual Meeting. As of October 25,
2000, 3,668,730 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 October 25,
2000. 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 450,000
shares of Common Stock for issuance under the Performance Incentive Plan (the
"Stock Option Plan") after January 1, 2001; 3) to approve an amendment to the
Certificate of Incorporation (the "Certificate") to effect a 37,500,000 share
increase of the Company's authorized Common Stock to a total of 50,000,000
authorized shares; and 4) the approval of the selection of M.R. Weiser & Co. LLP
as the Company's independent auditor for the fiscal year ending December 31,
2000. 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.
<PAGE>
2
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.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
------------------------------- --- ---------------------------------- --------------
<S> <C> <C> <C>
Jerry Braun 43 President, Chief Executive Officer 1983
and Director
Jacob Rosenberg 43 Vice President, Chief Operating 1983
Officer, Secretary and Director
Hirsch Chitrik 71 Director 1995
Sid Borenstein 46 Director 1995
H. Gene Berger 59 Director 1998
Charles J. Pendola 54 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.
3
<PAGE>
Charles J. Pendola has been a director of the Company since February 1998.
As of March 2000, Mr. Pendola has been employed as President by DLJ Managed
Plans Corporation, an investment banking company. 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 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, 1999. 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 review and act 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 1999, 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.
4
<PAGE>
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 an increase, by 450,000, the number of shares of Common
Stock authorized for issuance under the Stock Option from a total of 1,032,500
to 1,482,500.
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 July 28, 1999, the Shareholders 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.
On October 4, 2000, the Board approved an amendment to the Stock Option
Plan providing for an additional 450,000 shares of Common Stock to be available
for issuance beginning after January 1, 2001.
The Board believes that an increase in the number of shares of Common Stock
issuable under the Stock Option Plan by 450,000 shares is necessary to assure
that the Company will continue to have a sufficient reserve of Common Stock
available under the Stock Option Plan 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.
5
<PAGE>
Under the terms of the Stock Option Plan, options to purchase up to
1,032,500 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
989,500 shares, leaving a total of 43,000 shares presently available for the
granting of additional options. The Stock Option Plan is administered by the
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.
6
<PAGE>
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)
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.
7
<PAGE>
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.
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 2000 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 43,000 shares now available under the Stock Option Plan.
8
<PAGE>
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 1999, 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.
9
<PAGE>
PROPOSAL 3:
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF SHARES OF THE
COMPANY'S AUTHORIZED COMMON STOCK TO 50,000,000
The Company currently has 12,500,000 shares of authorized Common Stock and
2,000,000 shares of authorized Preferred Stock. As of the date of this proxy
statement, the Company has issued 3,750,000 shares of Common Stock, of which
3,668,730 shares are outstanding and 81,270 shares are treasury stock, and
590,375 shares of Class A Convertible Preferred Stock, each share of which is
convertible at any time into a share of Common Stock.
This proposal will authorize an increase of 37,500,000 shares in the
authorized Common Stock of the Company with the result that there will be a
total of 50,000,000 authorized shares of Common Stock.
The purpose of the proposal is to increase the number of shares of the
Company's Common Stock available for issuance in acquisitions and other
transactions. As of the date of this proxy statement, no particular transaction
is under consideration by the Company.
VOTE REQUIRED
The affirmative vote of the majority of the outstanding shares of Common
Stock and Preferred Stock is required to approve the proposal.
EFFECT OF THE INCREASE IN
AUTHORIZED SHARES OF COMMON STOCK
Implementation of the proposed amendment to the Certificate of
Incorporation will increase the number of authorized shares of Common Stock from
12,500,000 to 50,000,000. Voting rights and other rights of stockholders will
not be altered by the increase in authorized shares of Common Stock. Th proposed
amendment to the Certificate of Incorporation will have no material tax
consequences to stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL 3.
10
<PAGE>
PROPOSAL 4:
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, 2000 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.
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 4.
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, 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 1999 which is being delivered to stockholders
together with this proxy statement, and that material is incorporated herein by
reference. Information about the, compensation of the named executives of the
Company set forth below;
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
----------------------------
The following table sets forth, for the fiscal years ended December
31, 1998 and 1999, the cash compensation paid by the Company, as well as certain
other compensation paid with respect to those years, to the chief executive
officer and, to the extent applicable, each of the three other most highly
compensated executive officers of the Company in all capacities in which they
served.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------- ----------------------
AWARDS PAYOUTS
------ -------
NAME AND SECURITIES
PRINCIPAL POSITION (1) OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
------------ YEAR SALARY($) BONUS($) COMPENSATION($) STOCK AWARDS($) OPTIONS/SARS PAYOUTS COMPENSATION($)
---- --------- -------- --------------- --------------- ------------- ------- ---------------
<S> <C> <C> <C> <C>
Jerry Braun (1) 1999 $ 37,000 $212,395 $25,081 (1) 373,750 Shares
President and Chief 1998 $ 196,643 $ 24,600 $23,765 (1)
Executive Officer
Jacob Rosenberg (2) 1999 $ 169,726 $ 25,000 $25,314 (2) 280,000 Shares
Chief Operating Officer 1998 $ 157,554 $ 16,400 $26,337 (2)
David Grossman 1999 $ 57,212 $ 3,000 17,5000 Shares
Chief Financial and 1998 $ 88,270
Accounting Officer
Edward Hallis 1999 $ 25,953 $ 50
Chief Financial and
Accounting Officer
<FN>
(1) Includes $15,898 and $13,920 of medical insurance premiums paid on
behalf of such individual for each of the years ended 1999, and 1998
respectively, $9,184 and $7,234 for automobile and automobile-related
costs, including insurance, incurred on behalf of such individual,
respectively, for each of the years ended 1999 and 1998 and $3,500 in
expense allowance for each of the fiscal years ended 1999 and 1998.
(2) Includes $15,898 and $13,031 of medical insurance premiums paid on
behalf of such individual for each of the years ended 1999 and 1998
respectively, $9,416 and $9,806 for automobile and automobile-related
costs, including insurance, incurred on behalf of such individual,
respectively, for each of the years ended 1999 and 1998 and $3,500 in
expense allowance for each of the fiscal years ended 1999 and 1998.
</TABLE>
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, 1998 and 1999, was
selected by the Board of Directors to act in the same capacity for the fiscal
year ending December 31, 2000. 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.
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STOCKHOLDER PROPOSALS
Proposals of the stockholders of the Company which are intended to be
presented by stockholders at the Company's 2001 Annual Meeting must be received
by the Company no later than December 31, 2000 to be included in the proxy
statement and form of proxy relating to the 2001 Annual Meeting.
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, 1999 is being sent
with this Proxy Statement to all stockholders of record as of October 25, 2000.
Signature by order of the Board of Directors.
/s/ Jacob Rosenberg
--------------------
Jacob Rosenberg, Secretary
Dated: Brooklyn, New York
November 27, 2000
12
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