SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN 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 party other than the registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule14a-6(e)
(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 14a-11 or Rule 14a-12
VITECH AMERICA, INC.
- -------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------
(Name of Person(s) Filing Proxy Statement, If Other than Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(45) and 0-11
(1) Title of each class of securities to which transaction applies:
- --------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
<PAGE>
(4) Proposed maximum aggregate value of transaction:
- ---------------------------
[ ] 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:
- ----------------------------
(4) Date filed:
<PAGE>
VITECH AMERICA, INC.
8807 Northwest 23rd Street, Miami, Florida 33172-2419
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on June 14, 1999
TO THE HOLDERS OF THE COMMON STOCK:
PLEASE TAKE NOTICE that the 1999 Annual Meeting of Shareholders (the
"Annual Meeting") of Vitech America, Inc., a Florida corporation (the
"Company"), will be held at Holiday Inn Westside Corporate Center, 3255 NW 87th
Avenue, Miami, Florida 33172 on Monday, June 14, 1999 at 9:00 a.m., Eastern
Standard Time, or at any and all adjournments thereof, for the following
purposes:
(1) To elect six directors to our Board of Directors to hold
office until our 2000 Annual Meeting of Shareholders or until
their successors are duly elected and qualified;
(2) To ratify the appointment of Pannell Kerr Forster PC as
auditors of our financial statements for the fiscal year
ending December 31, 1999; and
(3) To transact such other business as may properly come before
the Annual Meeting and any adjournment thereof.
Our Board of Directors has fixed the close of business on April 21,
1999 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting.
Our financial statements for the fiscal year ended December 31, 1998
are included in our accompanying Annual Report. The Annual Report does not form
any part of the material for the solicitation of proxies.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if the enclosed envelope is used and mailed in
the United States.
By Order Of The Board Of Directors,
EDWARD A. KELLY, Secretary
Miami, Florida
May 10, 1999
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
<PAGE>
ANNUAL MEETING OF SHAREHOLDERS
OF
VITECH AMERICA, INC.
8807 Northwest 23rd Street
Miami, Florida 33172-2419
-------------------------
PROXY STATEMENT
-------------------------
The Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Vitech America, Inc, a Florida corporation (the
"Company"), of proxies for use at the 1998 Annual Meeting of Shareholders
("Annual Meeting") to be held at Holiday Inn Westside Corporate Center, 3255 NW
87th Avenue, Miami, Florida 33172 on Monday, June 14, 1999 at 9:00 a.m., Eastern
Standard Time, or at any and all adjournments thereof. The cost of this
solicitation will be borne by the Company. Directors, officers and employees of
the Company may solicit proxies by telephone, telegraph or personal interview.
The Annual Report of the Company for the fiscal year ended December 31, 1998 is
being mailed together with this Proxy Statement and form of Proxy. The date of
mailing of this Proxy Statement and form of Proxy is approximately May 10, 1999
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on April 21,
1999, as the record date for determining the shareholders entitled to notice of,
and to vote at, the Annual Meeting. Only shareholders of record on that date, on
which the transfer books of the Company remained open, will be entitled to vote.
A shareholder who submits a proxy on the accompanying form has the power to
revoke it by notice of revocation directed to the proxy holders of the Company
at any time before it is voted. Unless authority is withheld in writing, proxies
which are properly executed will be voted for the proposals thereon. Although a
shareholder may have given a proxy, such shareholder may nevertheless attend the
meeting, revoke the proxy and vote in person. The affirmative vote of a
plurality of the shares of Common Stock present or represented at the meeting is
required to elect the directors. Ratification of appointment of the Company's
auditors and any other matter that may be submitted to a vote of the
Shareholders, will require the affirmative vote of a majority of the shares of
the Company's Common Stock at the Annual Meeting in person or by proxy, unless
such matter is one for which a greater vote is required by law or by the
Company's Articles of Incorporation or Bylaws.
As of April 21, 1999, the record date for determining the shareholders
of the Company entitled to vote at the Annual Meeting, 14,635,655 shares of the
Common Stock of the Company, no par value per share ("Common Stock"), were
issued and outstanding. Each share of Common Stock entitles the holder to one
vote on all matters brought before the Annual Meeting. The quorum necessary to
conduct business at the Annual Meeting consists of a majority of the outstanding
shares of Common Stock as of the record date. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum and
have the effect of a negative vote on the ratification of the appointment of the
Company's independent auditors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth Common Stock ownership information as of
April 21, 1999, with respect to (i) each person known to the Company to be the
beneficial owner of more than 5% of the Company's Common Stock, (ii) each
director and named executive officer of the Company and (iii) all directors and
executive officers of the Company as a group:
Percentage
Beneficially
Name and Address of Beneficial Owner (1) Number of Shares Owned (2)
- ---------------------------------------- ---------------- ----------------
Georges C. St. Laurent, III 6,432,610 (3) 38.5%
William C. St. Laurent 6,167,475 (4)(5) 37.1%
Joseph K. Meyer 546,922 (6) 3.7%
1190 Pioneer Tower
8888 Southwest Fifth Avenue
Portland, OR 97204
Touma Makdassi Elias 91,407 (7) *
H.R. Shepherd 67,000 (8) *
705 B Weed Street
New Canaan, CT 06840
William Robin Blackhurst 21,000 (9) *
Rua Prof. Joao Barreto, 72
Sao Conrado, Rio de Janeiro
22610-200, Brazil
Edward A. Kelly 64,300 (10) *
Georges C. St. Laurent, Jr. 2,968,587 (11) 19.8%
5115 Dubois Avenue
Vancouver, WA 98661
All directors and named executive 13,390,714 (12) 70.6%
officers as a group (7 persons)
- --------------------
* Less than 1%
(1) Unless otherwise indicated, the address of each of the listed
beneficial owners identified is c/o Vitech America, Inc., 8807 N.W.
23rd Street, Miami, Florida 33172. Unless otherwise noted, the Company
believes that all persons named in the table have sole voting and
investment power with respect to all shares of Common Stock
beneficially owned by them.
(2) A person is deemed to be the beneficial owner of securities that can
be acquired by such person within 60 days from the date of this Proxy
Statement upon the exercise of options. Each beneficial owner's
percentage ownership is determined by assuming that options that are
held by such person (but not those held by any other person) and that
are exercisable within 60 days from the date of this Proxy Statement
have been exercised. As of April 21, 1999 there were 14,635,655 shares
of Common Stock outstanding.
(3) Includes options to purchase 2,075,700 shares of Common Stock.
(4) Includes 2,771,658 shares of Common Stock held by Wolf Partners, a
family Limited Partnership of which William C. St. Laurent is the
general partner.
(5) Includes options to purchase 1,994,300 shares of Common Stock.
<PAGE>
(6) Includes options and warrants to purchase 94,296 shares of Common
Stock and an option to convert a promissory note into 20,000 shares of
Common Stock.
(7) Includes options to purchase 21,000 shares of Common Stock.
(8) Includes options to purchase 43,000 shares of Common Stock.
(9) Includes options to purchase 21,000 shares of Common Stock.
(10) Includes options to purchase 59,540 shares of Common Stock.
(11) Includes options and warrants to purchase 382,827 shares of Common
Stock.
(12) See notes (3)-(10) above.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors and executive officers,
and persons who own more than ten percent (10%) of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than ten percent (10%) stockholders are required by Commission
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners have been complied
with for the period to which this proxy relates.
ELECTION OF DIRECTORS; NOMINEES
Six individuals have been nominated to serve as Directors for the
ensuing year and until their successors shall have been duly elected and
qualified. The persons named in the accompanying proxy have advised management
that unless authority is withheld in the proxy, they intend to vote FOR the
election of the individuals listed in the table on the following page.
Management does not contemplate that any of the nominees named in the table will
be unable, or will decline, to serve; however, if any of the nominees is unable
to serve or declines to serve, the persons named in the accompanying proxy may
vote for another person, or persons, in their discretion. The following table
sets forth certain information with respect to each nominee for election to the
Board of Directors. All of the nominees currently serve as Directors of the
Company. A summary of the background and experience of each nominee is set forth
in the paragraphs following the table.
Nominees For Election
---------------------
Name Age Position
- ---- --- --------
Georges C. St. Laurent, III(2) 38 Chairman of the Board of
Directors and Chief
Executive Officer
William C. St. Laurent(1) 34 President, Chief Operating
Officer, and Director
Joseph K. Meyer(1)(2) 43 Director
H.R. Shepherd(1)(2) 77 Director
Touma Makdassi Elias(2) 53 Director
William Robin Blackhurst(1) 64 Director
- ------------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
<PAGE>
Georges C. St. Laurent III. Mr. St. Laurent has served as Chairman of
the Board and Chief Executive Officer of Vitech since 1993. Between 1986 and
January 1993, Mr. St. Laurent operated a proprietary firm, GSL Trading Co.,
Miami, Florida, which was engaged in the re-manufacturing of computer hardware
for sale to Brazil and other countries in Latin America. Between 1986 and 1993,
Mr. St. Laurent was also an officer and principal shareholder of TNT Systems
Inc., which was a computer parts broker selling to customers in Latin America
and the U.S. Between 1983 and 1986, Mr. St. Laurent was a member of the Chicago
Mercantile Exchange and was engaged in trading activities for his proprietary
account specializing in currency options and futures market making. Since 1986
to the present, Mr. St. Laurent has been a director of Clinica Kirpalmar, a
not-for-profit Latin American medical foundation. Mr. St. Laurent graduated from
Yale University in 1982 with a B.S. in Molecular Biology. Georges C. St. Laurent
III is the brother of William C. St. Laurent.
William C. St. Laurent. Mr. St. Laurent has served as President and
Chief Operating Officer of Vitech and a Director since 1993. Mr. St. Laurent has
also served as Vice Chairman of the Board of Directors of the Western Bank of
Oregon from January 1989 through January 1996. Mr. St. Laurent previously owned
several private foods processing companies located in Oregon from 1988 to 1992.
Mr. St. Laurent graduated from Cornell University in 1986 with a B.S. in Hotel
Administration. Mr. St. Laurent also owns 100% of the voting shares of Vitoria
Tecnologia S.A., which was the primary customer of the Company from inception
until Vitoria Tecnologia S.A. ceased operations in March of 1996. William C. St.
Laurent is the brother of Georges C. St. Laurent III.
Joseph K. Meyer. Mr. Meyer has been a director of Vitech since
November 1996. Mr. Meyer has served as President and Chief Executive Officer of
Compass Advisors, Inc., an institutional financial and investment consulting
firm since 1991. Mr. Meyer is also Managing Director of Compass Partners, LLC,
an investment advisory and money management firm, principally investing outside
the United States. Mr. Meyer also serves as Managing Member and Principal of CAI
Tradex, LLC, which provides fully-disclosed securities brokerage services to
institutional clients. Prior to 1991 Mr. Meyer was First Vice President and
Senior Consultant at Kemper Securities Group, Inc. and Kemper Consulting Group,
respectively.
H.R. Shepherd. Mr. Shepherd has been a director of Vitech since
November 1996. Since 1993, Mr. Shepherd has served as special advisor to the
Chairman of Medeva PLC, an international pharmaceutical company. From 1955 to
1993 Mr. Shepherd served as Founder and Chairman of Armstrong Pharmaceuticals,
previously known as Aerosol Techniques, a pharmaceutical drug delivery company
which was acquired by Medeva PLC. Mr. Shepherd presently is the Chairman of the
Albert F. Sabin Vaccine Foundation.
Touma Makdassi Elias. Mr. Elias has been a director of Vitech since
July 1997. Mr. Elias founded Microtec Sistemas Industria e Comercio S.A. in 1982
and is credited with the manufacture of the first personal computer clone in
Brazil in 1983. Mr. Elias worked at Microtec from its inception until its
purchase by Vitech in 1997. Mr. Elias holds a Bachelor of Science degree from
Utah State University, a Master of Science in Electrical Engineering from
California State University in San Jose, and a Ph.D. in Electronic System Design
from the Cranfield Institute of Technology in Cranfield, England.
William Robin Blackhurst. Mr. Blackhurst has served as Director of
Vitech since January 1998. Mr. Blackhurst retired in 1997 after serving as
managing director for the Sao Paulo office of UBS Securities LLC since 1994.
Prior to 1994, Mr. Blackhurst was engaged in managerial positions at Banco
Multiplic S.A., ACP (Automated Call Processing), Inc. and Brazil Venture Capital
Partic. Ltda. Mr. Blackhurst holds a Master of Arts degree in Law from the
Balliol College, Oxford University in England.
Executive Officers
A summary of the background and experience of each executive officer,
other than Georges C. St. Laurent, III and William C. St. Laurent is set forth
below in the paragraphs following the table. The background and experience of
Georges C. St. Laurent, III and William C. St. Laurent are described in the
section captioned "Election of Directors; Nominees." All executive officers
serve at the discretion of the Board of Directors.
<PAGE>
Edward A. Kelly, age 31. Mr. Kelly has served as the Chief Financial
Officer of Vitech since June 1997. Prior to his appointment as Chief Financial
Officer, Mr. Kelly had served as Vitech's Corporate Controller since June 1996.
Mr. Kelly graduated from the University of Florida with a Bachelor of Science
Degree in Finance and holds a Master of Business Administration from the
University of Florida. Prior to joining Vitech, Mr. Kelly worked with a seed
capital fund that assisted start-up technology companies by providing capital in
the form of direct equity investments and provided management consulting
services. Prior to that, Mr. Kelly worked in the cellular industry with Bell
South Mobility, Inc.
Meetings and Committees of the Board of Directors
During the Company's fiscal year ended December 31, 1998, the Company's
Board of Directors held four (4) meetings and took action an additional one (1)
time by unanimous written consent. Each member of the Board participated in each
action of the Board.
The Board of Directors of the Company has established a Compensation
Committee and an Audit Committee. The Compensation Committee administers the
Company's stock option plan and makes recommendations to the full Board of
Directors concerning compensation, including incentive arrangements, of the
Company's officers and key employees. The members of the Compensation Committee
are Georges C. St. Laurent, Joseph K. Meyer, Touma M. Elias and H.R. Shepherd.
During the year ended December 31, 1998, the Compensation Committee held one (1)
meeting. The Audit Committee reviews the engagement of the independent
accountants and reviews the independence of the accounting firm. The Audit
Committee also reviews the audit and non-audit fees of the independent
accountants and the adequacy of the Company's internal accounting controls. The
members of the Audit Committee are William St. Laurent, Joseph K. Meyer, William
Robin Blackhurst and H.R. Shepherd. During the year ended December 31, 1998, the
Audit Committee held one (1) meeting. The Compensation Committee and the Audit
Committee consist of a majority of independent directors.
Directors who are not employees of the Company are paid $2,500 per
meeting for serving as directors.
EXECUTIVE COMPENSATION
The following table sets forth information relating to the compensation
paid by the Company for the past three fiscal years to: (i) the Company's
Chairman and Chief Executive Officer; and (ii) each of the Company's executive
officers who earned more than $100,000 during the fiscal year ended December 31,
1998 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
Stock All Other Annual
Name and Principal Position Year Salary Bonus Options (#) Compensation
- --------------------------- ---- ------ ----- ----------- ------------
<S> <C> <C> <C> <C> <C>
Georges C. St. Laurent, III, 1998 $240,000 $50,000 -- --
Chairman of the Board 1997 $240,000 -- -- --
and Chief Executive 1996 $240,000 -- 2,040,000 --
Officer
William C. St. Laurent, 1998 $240,000 $50,000 -- --
President and 1997 $240,000 -- -- --
Chief Operating Officer 1996 $240,000 -- 1,960,000 --
Edward A. Kelly 1998 $100,000 $18,063 -- --
Chief Financial 1997 $68,500 $13,000 27,500 --
Officer 1996 $28,600* -- 8,800 --
</TABLE>
- ------------------
* partial year
<PAGE>
The Company maintains keyman life insurance on the life of each of
Georges C. St. Laurent, III and William C. St. Laurent in the amount of
$2,000,000 payable to the Company.
Option Grants in Last Fiscal Year
No stock options were granted to the Named Executive Officers during
the year ended December 31, 1998.
Aggregated Fiscal Year-End Options Value Table
The table below sets forth certain information pertaining to
unexercised stock options held by the Named Executive Officers during the year
ended December 31, 1998. No Stock Options were exercised by the Named Executive
Officers during the year ended December 31, 1998.
<TABLE>
<CAPTION>
Number of Unexercised Options Value of Unexercised In-the-Money
Held at December 31, 1998 Options at December 31, 1998
Shares ----------------------------- ---------------------------------
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Georges C. St. Laurent, III 0 0 2,075,700 0 $730,422 0
William C. St. Laurent 0 0 1,994,300 0 $701,778 0
Edward A. Kelly 0 0 34,540 0 $152,174 0
</TABLE>
- ---------------------
(1) The closing price for the Company's Common Stock as reported by the
Wall Street Journal on December 31, 1998 was $15.50 and $11.50 on
April 26, 1999.
1996 Stock Option Plan
The 1996 Stock Option Plan provides for the grant of options to
purchase up to 550,000 shares of Common Stock to employees, officers, directors,
and consultants of the Company. Options may be either incentive stock options
within the meaning of Section 422 of the United States Internal Revenue Code of
1986, as amended (the Code ), or non-qualified options. Incentive stock options
may be granted only to employees of the Company, while non-qualified options may
be issued to non-employee directors, consultants, and others, as well as to
employees of the Company. The plan is in addition to the currently outstanding
options to purchase 990,000 shares of Common Stock that Georges C. St. Laurent
III and William C. St. Laurent have elected to reserve for the transfer to
employees of the Company.
The Plan is administered by the Compensation Committee of the Board of
Directors, which determines, among other things, those individuals who shall
receive options, the time period during which the options may be partially or
fully exercised, the number of shares of Common Stock issuable upon the exercise
of each option, and the option exercise price.
The exercise price of an incentive stock option may not be less than
the fair market value per share of Common Stock on the date the option is
granted. The exercise price of a non-qualified option may be established by the
Board of Directors (or the Compensation Committee). The aggregate fair market
value (determined as of the date the option is granted) of Common Stock for
which any person may be granted incentive stock options which first become
exercisable in any calendar year may not exceed $100,000. No person who owns,
directly or indirectly, at the time of the granting of an incentive stock option
to such person, 10% or more of the total combined voting power of all classes of
stock of the Company (a 10% Shareholder ) shall be eligible to receive any
incentive stock options under the Plan unless the exercise price is at least
110% of the fair market value of the shares of Common Stock subject to the
option, determined on the date of grant. Non-qualified options are not subject
to such limitations.
Incentive stock options may not be transferred by an optionee other
than by will or the laws of descent and distribution, and, during the lifetime
of an optionee, the option may be exercised only by the optionee. In the event
of termination of employment for cause or voluntary
<PAGE>
termination of employment by the optionee, the option will expire upon such
termination. In the event of termination of employment other than by death or
disability, for cause, or voluntary termination by the optionee, the optionee
will have no more than thirty days after such termination during which the
optionee shall be entitled to exercise the option, unless otherwise determined
by the Board of Directors. Upon termination of employment of an optionee by
reason of death or permanent and total disability, such optionee s options
remain exercisable for one year thereafter to the extent such options were
exercisable on the date of such termination. No similar limitation applies to
non-qualified options.
Options under the Plan must be issued within ten years from August 20,
1996, the effective date of the Plan. Incentive stock options granted under the
Plan cannot be exercised more than ten years from the date of grant. Incentive
stock options issued to a 10% Shareholder are limited to five year terms.
Options granted under the Plan generally provide for the payment of the exercise
price in cash and may provide for the payment of the exercise price by delivery
to the Company of shares of Common Stock already owned by the optionee having a
fair market value equal to the exercise price of the options being exercised, or
by a combination of such methods. Therefore, if so provided in an optionee s
grant, such optionee may be able to tender shares of Common Stock to purchase
additional shares of Common Stock and may theoretically exercise all of his or
her stock options with no additional investment other than the consideration
paid for the purchase of such optionee s original shares.
Any unexercised options that expire or that terminate upon an employee
s ceasing to be employed by the Company become available again for issuance
under the Plan.
The Plan may be terminated or amended at any time by the Board of
Directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the Plan may not be
increased without the consent of the shareholders of the Company.
As of the date of this report, options for 255,827 shares of Common
Stock have been issued pursuant to this plan. Such options were issued to
employees, directors and consultants of the Company at exercise prices ranging
from $8.18 to $16.36 per share.
Employment Agreements
Messrs. Georges C. St. Laurent, III and William C. St. Laurent were
parties to separate three-year employment agreements which terminated on
December 31, 1998. The Company and Messrs. St. Laurent and St. Laurent are
currently discussing terms for new employment agreements. Messrs. St. Laurent
and St. Laurent presently draw a salary at the rate of $240,000 per annum.
Board Compensation Committee Report or Executive Compensation
The following statement made by the Compensation Committee shall not be
deemed incorporated by reference into any filing under the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and shall not otherwise be deemed filed under
either of such Acts.
The Compensation Committee is responsible for making recommendations to
the Board of Directors concerning executive compensation, including base
salaries, bonuses, awards of stock options and reimbursement of certain business
related costs and expenses. The Compensation Committee currently consists of
Messrs. Joseph K. Meyer, Georges C. St. Laurent, III, Touma M. Elias and H.R.
Shepherd, Messrs. Meyer and Shepherd are non-employee directors of the Company.
Mr. St. Laurent does not vote on or participate in discussions concerning his
compensation.
In determining the compensation of the Company's Executive officers,
the Compensation Committee takes into account all factors which it considers
relevant, including the business conditions in general and in the Company's line
of business during the year in light of such conditions, the market compensation
for executives of similar background and experience, and the performance of the
specific executive officer under consideration and the business area of the
Company for which such executive officer is responsible. The structure of each
executive compensation package is weighted toward
<PAGE>
incentive forms of compensations, including stock options, so that such
executive's interest are aligned with the interests of the shareholders of the
Company. The Compensation Committee believes that granting stock options
provides an additional incentive to executive officers to continue in the
service of the Company and gives them an interest similar to shareholders in the
success of the Company. The Compensation program for the executive officers in
1998 consisted of base salaries, cash bonuses and stock option grants and
reimbursement of certain business related expenses.
To the extent readily determinable, another factor the Compensation
Committee considers when determining compensation is the anticipated tax
treatment to the Company and to the executive officer of various payments and
benefits. For example, some types of compensation plans and their deductibility
by the Company depend upon the timing of an executive officer's vesting or
exercise of previously granted rights. Further interpretations of, and changes
in the tax laws and other factors beyond the Compensation Committee's control
also could affect the deductibility of compensation.
Compensation Committee
Joseph K. Meyer, Chairman
Georges C. St. Laurent, III
H.R. Shepherd
Touma M. Elias
Stock Performance Graph
COMPARISON OF 26 MONTH CUMULATIVE TOTAL RETURN
AMONG VITECH AMERICA, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ COMPUTER MANUFACTURER INDEX
300
X
250
200
X
X
150 X
X
X
100 X
X
50
0
- --------------------------------------------------------------------------------
10/96 12/96 12/97 12/98
- --------------------------------------------------------------------------------
VITECH AMERICA INC. NASDAQ STOCK MARKET (U.S.)
NASDAQ COMPUTER MANUFACTURER
- --------------------------------------------------------------------------------
* $100 INVESTED ON 10/31/96 IN STOCK OR INDEX-
INCLUDING REINVESTING OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
<PAGE>
CERTAIN TRANSACTIONS
On June 26, 1997, the Company issued a senior convertible note to GSL
Jr. for the principal amount of $10,000,000, which had a term of two years and a
10% per annum coupon, payable monthly. The note was convertible into Common
Stock at the rate of one share for each $13.64 of principal. The proceeds from
this note were used for the acquisition of Microtec and for general working
capital purposes. On July 15, 1998, GSL Jr. converted this note into an
aggregate of 755,333 shares, which included an additional 22,000 shares as an
incentive for GSL Jr. to convert such note.
On August 19, 1997, the Company entered into a loan agreement with GSL
Jr. for a principal amount of up to $10,000,000 to be evidenced by senior
convertible notes. Each note had a two year term and accrued interest at the
annual rate of 10%, payable monthly, and was convertible into Common Stock at
the rate of one share for each $14.64 of principal. On August 19, 1997, the
Company issued the first of such notes for the principal amount of $5,000,000.
On October 10, 1997, the Company issued the second of such notes for the
principal amount of $5,000,000. The proceeds of the notes were used for general
working capital purposes. On July 15, 1998, GSL Jr. converted these notes into
an aggregate of 703,727 shares, which included an additional 21,497 shares as an
incentive for GSL Jr. to convert such note.
During the fourth quarter of 1998, the Company received a loan for $6.7
million from GSL Jr. The loan is evidenced by a promissory note and bears
interest at the annual rate of 15% and is payable on demand. The loan is secured
by certain assets of the Company. The Company used the proceeds from the loan
for the repayment of the Notes that were put to the Company as discussed above.
During 1998, the Company bought and sold products and services from/to
ITC.net, an entity related through common ownership, valued in the amount of
approximately $1.1 million. As of December 31, 1998, the Company had a payable
outstanding to ITC.net of $329,548 which is included in trade accounts payable.
Additionally, during 1998, the Company entered into a joint marketing agreement
with ITC.net, whereby the two companies will cross sell each others products. In
consideration for the joint marketing agreement, ITC.net granted to the Company
s shareholders of record date March 1, 1999, warrants to purchase one share of
ITC.net common stock for every share of the Company owned by the shareholder.
In March 1999, the Company received a loan from GSL Jr. for the
principal amount of $10 million. The loan bears interest at the annual rate of
15% and has a term of 120 days. The loan is evidenced by a promissory note and,
at the makers option, can be exchanged for a convertible note should the loan
not be repaid at maturity. In connection with this loan the Company issued to
GSL Jr., warrants to purchase 300,000 shares of the common stock of the Company
at an exercise price of $9.25 per share.
<PAGE>
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has approved and recommends the appointment of
Pannell Kerr Forster PC as independent auditors of the Company for the fiscal
year ending December 31, 1999.
Although the Board of Directors of the Company is submitting the
appointment of Pannell Kerr Forster PC for shareholder approval, it reserves the
right to change the selection of Pannell Kerr Forster PC as auditors, at any
time during the fiscal year, if it deems such change to be in the best interests
of the Company, even after shareholder approval. One or more representatives of
Pannell Kerr Forster PC are expected to be present at the Annual Meeting, will
have the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
APPOINTMENT OF PANNELL KERR FORSTER PC AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
INTEREST OF CERTAIN PERSONS IN
OPPOSITION TO MATTERS TO BE ACTED UPON
The Company is not aware of any substantial interest, direct or
indirect, by securities holdings or otherwise of any officer, director, or
associate of the foregoing persons in any matter to be acted on, as described
herein, other than elections to offices.
OTHER MATTERS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by proxy to
do otherwise.
SHAREHOLDERS' PROPOSALS TO BE PRESENTED AT THE
COMPANY'S NEXT ANNUAL MEETING OF SHAREHOLDERS
<PAGE>
Shareholder proposals intended to be presented at the 2000 Annual
Meeting of Shareholders of the Company must be received by the Company, at its
principal executive offices not later than January 5, 2000, for inclusion in the
Proxy Statement and Proxy relating to the 2000 Annual Meeting of Shareholders.
In addition, the proxy solicited by the Board of Directors for the 2000
Annual Meeting of Shareholders will confer discretionary authority to vote on
any shareholder proposal presented at that meeting, unless the Company is
provided with notice of such proposal no later than March 21, 2000.
AVAILABILITY OF FORM 10-K ANNUAL REPORT
Copies of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, and including related exhibits as filed with the Securities
and Exchange Commission, are available without charge to shareholders upon
request to Secretary, 8807 Northwest 23rd Street, Miami, Florida 33172-2419.
By Order Of The Board Of Directors,
EDWARD A. KELLY, Secretary
Miami, Florida
May 10, 1999
<PAGE>
This Proxy Is Solicited By And On Behalf Of The Board of Directors
VITECH AMERICA, INC.
Proxy -- Annual Meeting of Stockholders -- June 14, 1999
The undersigned, revoking all previous proxies, hereby appoint(s)
William C. St. Laurent, with full power of substitution, to represent and to
vote all Common Stock of Vitech America, Inc. owned by the undersigned at the
Annual Meeting of Stockholders to be held in Miami, Florida on Monday, June 14,
1999, including any original or subsequent adjournment thereof, with respect to
the proposals set forth in the Notice of Annual Meeting and Proxy Statement. No
business other than matters described below are expected to come before the
meting, but should any other matter requiring a vote of stockholders arise, the
person named herein will vote thereon in accordance with his best judgment. All
powers may be exercised by said Proxy. Receipt of the Notice of Annual Meeting
and Proxy Statement is hereby acknowledged.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE
DIRECTOR NOMINEES LISTED IN PROPOSAL (1) BELOW AND FOR THE APPROVAL OF PROPOSALS
(2) AND (3).
(1) Election of Georges C. St. Laurent, III, William C. St. Laurent,
Joseph K. Meyer, H.R. Shepherd, Touma Makdassi Elias, William Robin
Blackhurst as director of the Company.
[ ] VOTE FOR all nominees listed above, [ ] VOTE WITHHELD from all
except vote withheld from the nominees.
following nominees(s) (if any).
------------------------------------------
(2) Proposal to ratify the appointment of Pannell Kerr Forster PC as
auditors of the Company's financial statements for the fiscal year
ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Upon such other matters as may properly come before the Annual Meeting
and any adjournments thereof.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting, and any adjournments or
postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED IN
PROPOSAL (1) AND "FOR" THE APPROVAL OF PROPOSAL (2).
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting, (ii) the Proxy Statement and (iii) the Company's 1998 Annual Report.
<PAGE>
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in the corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
----------------------------------
Signature
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Signature If Held Jointly
----------------------------------
(Please Print Name)
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Number of Shares Subject to Proxy
Dated: ________________________, 1999
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
