<PAGE>
SCHEDULE 14A
(Rule 14a-101)
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
[x] Definitive Proxy Statement the Commission only
[ ] Definitive Additional Materials (as permitted by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-ll(c) or Rule 14a-12
UNIVEC, INC.
------------
(Name of Registrant as Specified In Its Charter)
UNIVEC, INC.
------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:___________________________
(2) Aggregate number of securities to which transaction
applies:__________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1________________________
(4) Proposed maximum aggregate value of transaction:_____________________
(5) Total fee paid:__________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-ll(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>
UNIVEC, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on August 24, 2000
To the Stockholders of Univec, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of
Univec, Inc., a Delaware corporation (the "Company") for the year ending
December 31, 1999, will be held on August 24, 2000, at the executive offices of
the Company, 22 Dubon Court, Farmingdale, New York 11735, at the hour of 10:00
a.m. This meeting is also being held in lieu of a separate meeting for the
fiscal year ending December 31, 1998. The meeting is being held for the
following purposes:
1. To elect six Directors of the Company to serve until the next
annual meeting of stockholders and until their successors are duly
elected and qualified.
2. To approve the adoption of Company's 2000 Stock Option Plan.
3. To approve a proposed amendment to the Certificate of
Incorporation of the Company to increase the authorized Common
Stock of the Company from 25,000,000 shares to 75,000,000 shares.
4. To ratify the appointment of Most Horowitz & Company, LLP as the
Company's independent public accountants for the years ending
December 31, 1998, 1999, and 2000.
5. To transact such other business as may properly come before the
Annual Meeting or adjournments thereof.
Only stockholders of record at the close of business on June 26, 2000,
are entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
Farmingdale, New York 11735 By Order of the Board of Directors
July 17, 2000
Flora Schoenfeld
Secretary
IMPORTANT:
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY, AND RETURN IT TO THE COMPANY. THE PROXY MAY BE REVOKED
AT ANY TIME BEFORE IT IS VOTED, AND STOCKHOLDERS EXECUTING PROXIES MAY ATTEND
THE MEETING AND VOTE IN PERSON SHOULD THEY SO DESIRE.
<PAGE>
UNIVEC, INC.
22 Dubon Court
Farmingdale, New York 11735
(516) 777-2000
-----------------------------
PROXY STATEMENT
-----------------------------
The Board of Directors of Univec, Inc. (the "Company") presents this
Proxy Statement and the enclosed proxy card to all stockholders and solicits
their proxies for the Annual Meeting of Stockholders to be held on August 24,
2000. The record date of this proxy solicitation is June 26, 2000 (the "Record
Date"). All proxies duly executed and received will be voted on all matters
presented at the Annual Meeting in accordance with the instructions given by
such proxies. In the absence of specific instructions, proxies so received will
be voted for the named nominees for election to the Company's Board of Directors
and in favor of proposals 2, 3, and 4 described below. The Board of Directors
does not anticipate that any of its nominees will be unavailable for election
and does not know of any matters that may be brought before the Annual Meeting
other than those listed on the Notice of the Annual Meeting.
In the event that any other matter should come before the Annual
Meeting or that any nominee is not available for election, the persons named in
the enclosed proxy will have discretionary authority to vote all proxies not
marked to the contrary with respect to such matter in accordance with their best
judgment. A proxy may be revoked at any time before being voted by sending a new
proxy bearing a later date or a revocation notice to the Company at the above
address, attn: Secretary, or by notifying the Secretary of the Company at the
Annual Meeting. The Company is soliciting these proxies and will pay the entire
expense of solicitation, which will be made by use of the mails. This Proxy
Statement is being mailed on or about July 18, 2000
The total number of shares of common stock, $.001 par value ("Common
Stock"), of the Company outstanding as of the Record Date, was 5,618,209 shares.
The Common Stock is the only outstanding class of securities of the Company
entitled to vote. Each share of Common Stock has one vote. Only stockholders of
record as of the close of business on June 26, 2000 will be entitled to vote at
the Annual Meeting or any adjournments thereof.
The affirmative vote by holders of a plurality of the votes cast for
the election of directors at the Annual Meeting is required for the election of
Directors. The affirmative vote of a majority of the votes present in person or
by proxy at the Annual Meeting and entitled to vote is required for approval of
the 2000 Stock Option Plan and to ratify the appointment of Most Horowitz &
Company, LLP, as independent accountants for the years ending December 31, 1998,
1999, and 2000. The affirmative vote of a majority of all outstanding shares of
common stock is necessary to amend the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 25,000,000 to
75,000,000. All proxies will be counted for determining the presence of a
quorum. Votes withheld in connection with the election of one or more nominees
for Director will not be counted as votes cast for such individuals. In
addition, where brokers are prohibited from exercising discretionary authority
for beneficial owners who have not provided voting instructions (commonly
referred to as "broker non-votes"), those shares will not be included in the
vote totals.
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Company's principal office, 22 Dubon Court, Farmingdale, New
York 11735, during business hours, for a period of ten (10) days prior to the
Annual Meeting for examination by any stockholder. Such list shall also be
available at the Annual Meeting.
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
PROPOSAL 1: ELECTION OF DIRECTORS
The Directors to be elected at the Annual Meeting will serve until the
next Annual Meeting of Stockholders and until their successors are duly elected
and qualified. Proxies not marked to the contrary will be voted "FOR" the
election to the Board of Directors of the following six persons:
1
<PAGE>
Set forth below is certain information as of the Record Date concerning
each Nominee, including his age, position with the company, present principal
occupation, and business experience during the past five years, and the period
he has served as a director.
<TABLE>
<CAPTION>
Director
Name Age Position Since
---- --- -------- --------
<S> <C> <C> <C>
Alan H. Gold, M.D. 53 Chief Executive Officer and Director August, 1992
Joel Schoenfeld 55 Chairman of the Board of Directors and Director August, 1992
John Frank 60 Director and a consultant to the Company in the areas August, 1992
of corporate development and strategic planning
Marla Manowitz 47 Chief Financial Officer and Director April, 1999
Andrew Rosenberg, M.D. 55 Director November, 1999
Richard Mintz 55 Director March, 1999
</TABLE>
ALAN H. GOLD, M.D. has served as Chief Executive Officer of the Company
since November 30, 1999 and a Director since the Company's inception in August,
1992. Prior to November, 1999, Dr. Gold served as President of the Company since
July, 1996 and as Chairman of the Board of Directors from March, 1999 to
November, 1999. Dr. Gold has been a plastic surgeon since 1972 and currently
serves as a medical advisor to the United Nations Development Program.
JOEL SCHOENFELD, the founder of the Company, has been Chairman of the
Board of Directors since November 1999 and from the Company's inception until
March, 1999. Mr. Schoenfeld was Chief Executive Officer of the Company from its
inception in August, 1992 until November 30, 1999. Mr. Schoenfeld was the
founder and President of J&B Schoenfeld, a global trading company whose main
focus was on the import, export and processing of pelts and hides, specializing
in trade with the USSR and Europe.
In 1988, Mr. Schoenfeld formed the American-Russian International
Trading Company, which advised on trade agreements between the USSR and United
States. AMRU's broad base of interest and expertise enabled it to take on such
diverse projects as a joint venture with the Soviet government and military
known as AMRU-STAR, the representation of the Soviet Space Agency to Washington,
D.C., the introduction of western advertising to the USSR in conjunction with
another American company, Transportation Displays, Inc. ("TDI"), and the
construction of a studio producing children's films for international
distribution.
As a result of the political changes in the former USSR, Mr. Schoenfeld
sought to further his business strategies. In 1990, he founded Joel Schoenfeld &
Associates in Garden City, New York. With affiliate offices in Moscow, San Jose,
London, and Boston, the company's purpose was to originate, structure,
capitalize, negotiate and advise on the implementation of import and export
trade transactions, projects and programs.
Mr. Schoenfeld has been a commercial attache and a consultant to a
number of foreign and multinational governments. Currently, Mr. Schoenfeld is an
advisor to United Nations Development Programs. Previously, he served as:
2
<PAGE>
o Senior Advisor to the Costa Rican Ambassador to the United
Nations
o Senior Advisor and Coordinator, Chief of Staff to the Chairman
of the Committee of States Parties to the International
Covenant on Civil and Political Rights to the United Nations
o Senior Economic and Trade Advisor to the United Nations
Commission on Transnational Corporations
In February, 1999, Mr. Schoenfeld was named in a Federal Grand Jury
Indictment filed in the United States District Court for the Southern District
of Ohio, Western Division. The indictment alleges that Mr. Schoenfeld, along
with four other persons named in the indictment, engaged in conspiracy, wire
fraud, and laundering of monetary investments in connection with a commercial
transaction in 1991. In November, 1999, Mr. Schoenfeld resigned as Chief
Executive Officer and was elected to the position of Chairman of the Board of
Directors. Mr. Schoenfeld continues as an employee of the Company.
JOHN FRANK has been a Director and a consultant to the Company in the
areas of corporate development and strategic planning since its inception in
August, 1992. Mr. Frank has been Vice President, Strategy and Corporate
Development of The Hartford Steam Boiler Inspection and Insurance Co. since
February, 2000 and served as Chief Information Officer from August, 1996 through
February, 2000. Mr. Frank was Special Projects Manager for Electronic Data
Systems Corporation from October, 1994 to August, 1996; Chief Auditor of
Travelers Insurance Companies from August, 1993 to September, 1994; principal of
Lipera Frank Inc. from September, 1991 to July, 1993; and a partner of Coopers &
Lybrand from January, 1982 to September, 1991.
MARLA MANOWITZ has been a Director since April 30, 1999 and Chief
Financial Officer since March 18, 1999. Ms. Manowitz served as head of the
Company's internal accounting department since March, 1998. Prior thereto for
more than the past five years, Ms. Manowitz was principally engaged as an
accountant in her own private practice.
ANDREW ROSENBERG, M.D. has been a Director since November 30, 1999, and
serves as the Vice Chairman, Department of Anesthesiology, Hospital of Joint
Diseases, Orthopedic Institute. Dr. Rosenberg has acted as a consultant to the
Company since 1998.
RICHARD MINTZ has been a Director since March 18, 1999. Mr. Mintz is
President of Peristaltic Technologies, Inc., a manufacturer of medical infusion
pumps and plastic disposable catheters, and Vice President and General Manager
of A. K. Allen & Co., Inc./Allen Avionics, Inc., a manufacturer of electronic
components and fluid power products, positions he has held for more than the
past five years.
All directors hold office until the annual meeting of stockholders of
the Company following their election or until their successors are duly elected
and qualified. Officers are appointed by the Board of Directors and serve at its
discretion.
INFORMATION ABOUT THE BOARD OF DIRECTORS,
COMMITTEES OF THE BOARD AND EXECUTIVE OFFICERS
Meetings of the Board of Directors and Information Regarding Committees
The Board of Directors has one standing committee, an Audit Committee.
The Audit Committee is composed of Dr. Gold and Mr. Frank. The duties of the
Audit Committee include: recommending the engagement of independent auditors,
reviewing and considering actions of management in matters relating to audit
functions, reviewing with independent auditors the scope and results of its
audit engagement, reviewing reports from various regulatory authorities,
reviewing the system of internal controls and procedures of the Company, and
reviewing the effectiveness of procedures intended to prevent violations of law
and regulations. The Audit Committee held two meetings in 1999.
3
<PAGE>
The Board of Directors held six meetings in 1999, which include special
telephonic meetings as well as Unanimous Written Consents. All Directors
attended at least 75% of the total number of Board meetings and meetings of
committees on which they served during 1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
NOMINEES FOR DIRECTORS IN THE FOREGOING PROPOSAL 1
EXECUTIVE COMPENSATION
----------------------
(d) SUMMARY COMPENSATION
The following table sets forth the compensation awarded to, earned by
or paid to the Company's Chief Executive Officer and each other executive
officer of the Company whose salary and bonus for the year ended December 31,
1999 exceeded $100,000.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Other Annual Securities
Name and Principal Position Year Salary Compensation Underlying Options
--------------------------- ---- ------ ------------ ------------------
<S> <C> <C> <C> <C>
Joel Schoenfeld, 1999 $221,150(2) -- 1,700,524(3)
Chairman and Chief Executive 1998 $228,142(2) -- 2,145,000(4)(5)
Officer (1) 1997 $226,189(2) -- --
Alan H. Gold, M.D., 1999 $ -0- -- 500,000(6)
Chief Executive Officer (5)
</TABLE>
-------------------------------------
(1) Joel Schoenfeld served as the Company's Chief Executive Officer from
the Company's inception until November 30, 1999 and as Chairman of the
Board of Directors since November 30, 1999 and prior to March 1999.
(2) The Company accrues compensation expense for Joel Schoenfeld at a rate
of $192,000 per annum, plus benefits, which include a car allowance
(approximately $7,900 in 1999, $9,200 in 1998, and $9,800 in 1997) and
life/disability/health and car insurance (approximately $21,250 in
1999, $27,000 in 1998, and $24,400 in 1997).
(3) During the year ending December 31, 1999, Mr. Schoenfeld was granted
the option to convert $204,063 in accrued payroll, into 1,700,524
shares of common stock representing a price of $.12 per share.
(4) Represents the following stock options: (a) options expiring March 28,
2003 to purchase 2,130,000 shares at exercise price of $1.75 per share;
and (b) options expiring November 13, 2003 to purchase 15,000 shares at
an exercise price of $1.50 per share. The options expiring March 28,
2003 were granted in connection with an extension of Mr. Schoenfeld's
employment agreement in September 1998 following the cancellation of a
like number of options expiring in April 11, 2007 with an exercise
price of $3.50 per share.
(5) Dr. Gold has served as the Company's Chief Executive Officer since
November 30, 1999.
(6) Represents options expiring March 28, 2003 exercisable at a price of
$1.75 per share which were issued upon cancellation of options granted
in 1997 expiring on April 11, 2007, exercisable at a price of $3.50 per
share.
The foregoing table does not include options granted in February, 2000
expiring February 12, 2003, exercisable at a price of $0.59 per share to Mr.
Schoenfeld and Dr. Gold, respectively, to purchase 2,130,000 and 500,000 shares.
4
<PAGE>
(b) EMPLOYMENT AGREEMENTS
Joel Schoenfeld serves as Chairman of the Board of Directors and as an
employee of the Company pursuant to an employment agreement which expires on
March 28, 2003. The agreement provides Mr. Schoenfeld with a salary of $192,000
per annum and life, disability and health insurance benefits. The Company also
has agreed to reimburse Mr. Schoenfeld for automobile lease payments under his
existing vehicle lease, or alternatively, to provide him with an automobile
allowance of $10,800 per annum, and at the expiration of the vehicle lease, to
pay him the fair market value of the vehicle if he elects to exercise the option
to purchase the vehicle pursuant to the lease. The agreement contains a
non-competition covenant that prohibits him, directly or indirectly, from
engaging in a competitive business (as defined) for a period of twelve months
following the termination of his employment. The foregoing restriction does not
apply if the Company does not offer to extend or renew his employment following
the expiration of his employment agreement on terms not less favorable to him
than those set forth in his employment agreement.
(c) OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options to Joel Schoenfeld and Alan H. Gold (the "Named Executive Officers")
during the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Number of Shares Percent of Total Options
Underlying Options Granted to Employees in Exercise Price Expiration
Name Granted Fiscal Year Per Share Date
----- ------- ----------- --------- ----
<S> <C> <C> <C> <C>
Joel Schoenfeld 1,700,524(1)(2) 59% $0.12 November 29, 2003
Alan H. Gold, M.D. 500,000(3)(4) 17% $1.75 March 28, 2003
</TABLE>
------------
(1) In November, 1999, Joel Schoenfeld was granted the right to convert all
or part of his claim of $203,063 for accrued compensation for 1998 and
1999 to a maximum of 1,700,524 shares, representing a price of $0.12
per share.
(2) This amount does not include the grant on February 12, 2000 of an
additional 2,130,000 non-qualified options to purchase Common Stock
exercisable at $0.59 per share.
(3) Represents options expiring March 28, 2003 exercisable at a price of
$1.75 per share which were issued upon cancellation of options granted
in 1997 expiring on April 11, 2007, exercisable at a price of $3.50 per
share.
(4) This amount does not include the grant on February 12, 2000 of an
additional 500,000 non-qualified options
to purchase common stock exercisable at $0.59 per share.
The following table summarizes for each of the Named Executive Officers
the total number of unexercised options, if any, held at December 31, 1999, and
the aggregate dollar value of in-the-money, unexercised options, held at
December 31, 1999. The value of the unexercised, in-the-money options at
December 31, 1999, is the difference between their exercise or base price
($0.12), and the fair market value of the underlying Common Stock on December
31, 1999. The closing bid price of the Common Stock on December 31, 1999 was
$0.3125.
5
<PAGE>
(D) AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Shares Acquired Upon Number of Securities In-The-Money
Exercise of Options Underlying Unexercised Options at
During Fiscal 1999 Options at December 31, 1999 December 31, 1999
------------------ ---------------------------- -----------------
Name Number Value Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joel Schoenfeld None None 3,845,524 None $327,351 None
Alan H. Gold, None None 525,000 None None None
M.D.
</TABLE>
(E) REPORT ON REPRICING OF OPTIONS/SAR
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Length of
Original
Number of Exercise Option
Securities Market Price Price of Term
Underlying of Stock at Stock at Remaining
Options Time of Time of New at Date of
Reprice/ Repriced or Repricing or Repricing or Exercises Repricing or
Name Regrant Date Amended Amendment Amendment Price Amendment
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Gold January, 20, 500,000 1.25 $3.50 $1.75 8.1 years
M.D. 1999
------------------------------------------------------------------------------------------------------------------------------------
Joel Schoenfeld September 4, 2,130,000 1.31 $3.50 $1.75 8.5 years
1998
------------------------------------------------------------------------------------------------------------------------------------
John Frank January 20, 250,000 1.25 $3.50 $1.75 8.1 years
1999
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Board of Directors approved the replacement of these options to Dr.
Gold and Messrs. Schoenfeld and Frank, at an exercise price of $1.75 per share,
having concluded that the principal purpose of the Company's stock option
program (i.e. to provide an equity incentive to remain in the employment of the
Company and to work diligently in its best interests) would not be achieved if
those persons held options exercisable above the market price of the Common
Stock.
PROPOSAL 2: APPROVAL OF THE COMPANY'S 2000 STOCK OPTION PLAN
The Board of Directors of the Company, subject to stockholder approval,
has adopted the Company's 2000 Stock Option Plan (the "2000 Plan"), which
authorizes the grant of options to purchase an aggregate of 2,250,000 shares of
Common Stock. As of June 15, 2000 options to purchase 1,000,000 shares of Common
Stock have been granted under the 2000 Plan subject to stockholder approval of
the Plan.
The affirmative vote of a majority of the shares of Common Stock of the
Company present in person or by proxy and entitled to vote at the Annual Meeting
is required for approval of the 2000 Plan. The Board recommends a vote in favor
of the 2000 Plan.
6
<PAGE>
The Board of Directors has deemed it in the best interest of the
Company to establish the 2000 Plan so as to provide employees and other persons
involved in the continuing development and success of the Company and its
subsidiaries an opportunity to acquire a proprietary interest in the Company by
means of grants of options to purchase Common Stock. The 2000 Plan authorizes
additional options for grant to eligible participants since only 660,219
options to purchase shares remain available for grant under the Company's
Amended 1996 Stock Option Plan and its 1998 Stock Option Plan. It is the opinion
of the Board of Directors that by providing the Company's employees and other
individuals contributing to the Company and its subsidiaries the opportunity to
acquire an equity investment in the Company, the 2000 Plan will maintain and
strengthen their desire to remain with the Company, stimulate their efforts on
the Company's behalf, and also attract other qualified personnel to provide
services on behalf of the Company.
The following statements summarize certain provisions of the 2000 Plan.
All statements are qualified in their entirety by reference to the text of the
2000 Plan, copies of which are available for examination at the Securities and
Exchange Commission and at the executive office of the Company, 22 Dubon,
Farmingdale, New York 11735.
The 2000 Plan allows the Company to grant incentive stock options
("ISOs"), as defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), Non-Qualified Stock Options ("NQSOs") not intended to
qualify under Section 422(b) of the Code and Stock Appreciation Rights ("SARs").
ISO's, NQSO's and SAR's may be collectively referred to as "Options." The
vesting of one or more options granted hereunder may be based on the attainment
of specified performance goals of the participant or the performance of the
Company, one or more subsidiaries, parent and/or division of one or more of the
above. The 2000 Plan is intended to provide the employees, directors,
independent contractors and consultants of the Company with an added incentive
to commence or continue their services to the Company and to induce them to
exert their maximum efforts toward the Company's success. The Board of Directors
has deemed it in the best interest of the Company to establish the 2000 Plan so
as to provide employees and the other persons listed above the opportunity to
acquire a proprietary interest in the Company by means of grants of options to
purchase Common Stock. The 2000 Plan is not subject to ERISA.
Eligibility for Participation
Under the 2000 Plan, ISOs or ISOs in tandem with SARs, which are
subject to the requirements set forth in Temp. Reg. Section 14a.422A-1, A-39
(a)-(e), may be granted, from time to time, to employees of the Company,
including officers, but excluding directors who are not otherwise employees of
the Company. ISOs, NQSOs and SARs (collectively, "Options") may be granted from
time to time, under the 2000 Plan, to employees of the Company, officers,
directors, independent contractors, consultants and other individuals who are
not employees of, but are involved in the continuing development and success of
the Company (persons entitled to receive ISOs, NQSOs, and/or SARs are
hereinafter referred to as "Participants"). ISOs and ISOs in tandem with SARs
may not be granted under the 2000 Plan to any person for whom shares first
become exercisable under the 2000 Plan or any other stock option plan of the
Company in any calendar year having an aggregate fair market value (measured at
the respective time of grant of such options) in excess of $100,000. Any grant
in excess of such amount shall be deemed a grant of a NQSO. To date, the Company
has approximately 12 employees (4 of whom are also Officers or Directors) who
are eligible for grants of one or more types of Options under the 2000 Plan. The
Company cannot presently compute the number of non-employees who may be entitled
to NQSOs.
Administration
The 2000 Plan is to be administered by the Board of Directors of the
Company and/or by a stock option or compensation committee (the administrator of
the 2000 Plan whether the Board of Directors itself or a committee thereof is
hereinafter referred to as the "Committee" unless the context otherwise
requires) which shall be comprised solely of at least two "outside directors"
(as such term is defined under Section 162(m) of the Code. The Committee
will have the authority, in its discretion, to determine the persons to whom
options shall be granted, the character of such options and the number of shares
of Common Stock to be subject to each option. The Board of Directors may
administer the 2000 Plan; provided, however, that in the event a Committee has
been appointed, the Committee will administer the 2000 Plan with respect to
employees included within the term "covered employee" under Section 162(m) of
the Code.
7
<PAGE>
Terms of Options
The Terms of Options granted under the 2000 Plan are to be determined
by the Board of Directors or the Committee. Each Option is to be evidenced by a
stock option agreement between the Company and the person to whom such option is
granted, and is subject to the following additional terms and conditions:
(a) Exercise of the Option: The Committee will determine the
time periods during which Options granted under the 2000 Plan may be
exercised. An Option must be granted within ten (10) years from the
date the 2000 Plan was adopted or the date the 2000 Plan is approved by
the stockholders of the Company, whichever is earlier. Options will be
exercisable in whole or in part at any time during the period but will
not have an expiration date later than ten (10) years from the date of
grant. Unless otherwise provided in any option agreement issued under
the 2000 Plan, any Option granted under the 2000 Plan may be
exercisable in whole or in part at any time during the exercise period
and except for performance based options, must become fully exercisable
within five years from the date of its grant, and not less than 20% of
the Option shall become exercisable on an aggregate basis by the end of
any of the first five years of the Option. The Committee may, in its
sole discretion, accelerate any such vesting period after the grant
thereof. Notwithstanding the above, ISOs or SARs granted in tandem with
ISOs, granted to holders owning directly or through attribution more
than 10% of the Company's Common Stock are subject to the additional
restriction that the expiration date shall not be later than five (5)
years from the date of grant. An Option is exercised by giving written
notice of exercise to the Company specifying the number of full shares
of Common Stock to be purchased and tendering payment of the purchase
price to the Company in cash or certified check, or if permitted by the
instrument of grant, with respect to an ISO, or at the discretion of
the Committee with respect to NQSOs, by delivery of Common Stock having
a fair market value equal to the Option Price, by delivery of an
interest bearing promissory note having an original principal balance
equal to the Option Price and an interest rate not below the rate which
would result in imputed interest under the Code or by a combination of
cash, shares of Common Stock and promissory notes. Furthermore, in the
case of a NQSO, at the discretion of the Committee, the Participant may
have the Company withhold from the Common Stock to be issued upon
exercise of the Option that number of shares having a fair market value
equal to the exercise price and/or the withholding amount due.
(b) Option Price: The option price of an NQSO or an SAR
granted in tandem with an NQSO granted pursuant to the 2000 Plan is
determined in the sole discretion of the Committee. The option price of
an ISO or SAR granted in tandem with an ISO pursuant to the 2000 Plan
shall not be less than the fair market value thereof at the date of
grant. Such fair market value of an ISO shall be determined by the
Committee and, if the Common Stock is listed on a national securities
exchange or quoted on The Nasdaq Stock Market, Inc., the fair market
value shall be the closing price of the Common Stock, or if closing
prices are not available or the Common Stock is quoted on the National
Association of Securities Dealers, Inc. ('NASD") OTC Bulletin Board
("OTC Bulletin Board") or otherwise in the over-the-counter market, the
mean of the closing bid and asked prices of the Common Stock as
reported by The Nasdaq Stock Market, Inc., the NASD, the OTC Bulletin
Board or the National Quotation Bureau, Inc., as the case may be, on
such date, or if there is no closing price or bid or asked price on
that day, the closing price or mean of the closing bid and asked prices
on the most recent day preceding the day on which the Option is granted
for which such prices are available. ISOs or SARs granted in tandem
with ISOs, granted to holders owning directly or through attribution,
more than 10% of the Company's Common Stock are subject to the
additional restriction that the option price must be at least 110% of
the fair market value of the Company's Common Stock on the date of
grant.
(c) Termination of Employment or Consulting Agreement; Death;
Disability: Except as provided in the 2000 Plan, or otherwise extended
by the Committee in its sole discretion, subject to the last paragraph
of this subpart (c), upon the voluntary termination of employment with
the Company, or, in the case of a consultant, termination of the
consulting relationship prior to the termination of the term thereof a
holder of an Option under the 2000 Plan may exercise such Option to the
extent such Option was exercisable as of the date of termination or at
any time within thirty (30) days after the date of such termination.
Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, if such employment
or consulting relationship shall terminate for any reason other than
death, voluntary termination by the employee or for cause, then such
Options may be exercised at anytime within three (3) months after such
termination. Notwithstanding the above, unless otherwise determined by
the Committee in its sole discretion, any Options granted under the
2000 Plan shall immediately terminate in the event the Optionee is
terminated as a result of the Optionee having not adequately performed
the services for which he/she/it was hired.
8
<PAGE>
Unless extended by the Committee, if the holder of an Option
granted under the 2000 Plan dies (i) while employed by the Company or a
subsidiary or parent corporation or (ii) within three (3) months after
the termination of such holder's employment, such option may be
exercised at anytime determined by the Committee, but in no event less
than six months of death by a legatee or legatees of such option under
such individual's last will or by such individual's estate, to the
extent such option was exercisable as of the date of death or date of
termination of employment, whichever date is earlier.
If the holder of an Option under the 2000 Plan becomes
disabled within the definition of Section 22(e)(3) of the Code while
employed by the Company or a subsidiary or parent corporation, such
Option may be exercised at any time within six months after such
holder's termination of employment due to the disability.
An Option may not be exercised except to the extent that the
holder was entitled to exercise the option at the time of termination
of employment or death unless otherwise extended by the Committee in
its sole discretion, and in any event it may not be exercised after the
original expiration date of the Option.
(d) Nontransferability of Options; No Liens: ISOs and SARs
granted in tandem with ISOs shall be nontransferable and nonassignable
except by will or the laws of intestacy, and any ISO or SAR in tandem
with an ISO is exercisable during the lifetime of the Optionee only by
the Optionee, or in the event of his or her death, by a person who
acquires the right to exercise the Option by bequest or inheritance or
by reason of the death of the Optionee. The Board or its Committee has
the right to grant options other than ISO's or SAR's in tandem with
ISO's which may or may not be transferable or assignable.
The option agreement may contain such other terms, provisions and
conditions not inconsistent with the 2000 Plan as may be determined by the
Committee.
Termination, Modification and Amendment
The 2000 Plan (but not options previously granted under the 2000 Plan)
shall terminate ten years from the earlier of the date of its adoption by the
Board of Directors or the date the 2000 Plan is approved by the stockholders of
the Company. No Option will be granted after termination of the 2000 Plan.
The Board of Directors of the Company may terminate the 2000 Plan at
any time prior to its expiration date, or from time to time make such
modifications or amendments of the 2000 Plan, as it deems advisable. However,
the Board of Directors may not, without the approval of a majority of the then
shares of the capital stock of the Company present in person or by proxy at an
Annual or Special Meeting of Stockholders and voting thereon, except under
conditions described under "Adjustments Upon Changes in Capitalization,"
increase the maximum number of shares as to which options may be granted under
the 2000 Plan, materially change the standards of eligibility under the 2000
Plan, or adopt a new plan.
No termination, modification or amendment of the 2000 Plan may
adversely affect the terms of any outstanding Options without the consent of the
holders of such Options.
9
<PAGE>
Adjustments Upon Changes in Capitalization
In the event that the number of outstanding shares of Common Stock of
the Company is changed by reason of recapitalization, reclassification, stock
split, stock dividend, combination, exchange of shares, or the like, the Board
of Directors of the Company will make an appropriate adjustment in the aggregate
number of shares of Common Stock available under the 2000 Plan, in the number of
shares of Common Stock reserved for issuance upon the exercise of then
outstanding Options and in the exercise prices of such Options. Any adjustment
in the number of shares will apply proportionately only to the unexercised
portion of Options granted under the 2000 Plan. Fractions of shares resulting
from any such adjustment shall be revised to the next higher whole number of
shares.
In the event of the proposed dissolution or liquidation of
substantially all of the assets of the Company, all outstanding Options will
automatically terminate, unless otherwise provided by the Board of Directors.
Federal Income Tax Consequences
The following discussion is only a summary of the principal federal
income tax consequences of the Options granted under the 2000 Plan and is based
on existing federal law, which is subject to change, in some cases
retroactively. This discussion is also qualified by the particular circumstances
of individual optionees, which may substantially alter or modify the federal
income tax consequences discussed below. Accordingly, optionees should consult
their own tax advisors.
NQSOs. No income will be recognized by an Option recipient upon the
grant of an NQSO. On the exercise of an NQSO, the optionee will generally have
ordinary income in an amount equal to the excess of the fair market value of the
shares acquired over the exercise price. The income recognized by an optionee
who is also an employee of the Company will be subject to tax withholding. Upon
a later sale of such shares, the optionee will have short-term or long- term
capital gain or loss, as the case may be, in an amount equal to the difference
between the amount realized on such sale and the tax basis of the shares sold.
ISOs. No income will be recognized by an Option recipient upon the
grant of an ISO. Also, the optionee will recognize no income at the time of
exercise (although the optionee will have income for alternative minimum income
tax purposes at that time as if the option were an NQSO). If the acquired shares
are sold or exchanged after the later of (a) one year from the date of exercise
of the options and (b) two years from the date of grant of the option, the
difference between the amount realized by the optionee on that sale or exchange
and the option price will be taxed to the optionee as a long-term capital gain
or loss. If the shares are disposed of before such holding period requirements
are satisfied, then the optionee will have ordinary income in the year of
disposition equal to the difference between the exercise price and the lower of
the fair market value of the stock at the date of the Option exercise or the
sale of the stock and the optionee will have capital gain or loss, long-term or
short-term, as the case may be, in an amount equal to the difference between (i)
the amount realized by the optionee upon that disposition of the shares and (ii)
the option price paid by the optionee increased by the amount of ordinary
income, if any, so recognized by the optionee.
SARs. The grant of an SAR is generally not a taxable event for the
optionee. Upon the exercise of an SAR the optionee will recognize ordinary
income in an amount equal to the amount of cash and with respect to SARs granted
in tandem with NQSOs, the fair market value of any shares of Common Stock
received upon such exercise, and the Company will be entitled to a deduction
equal to the same amount. However, if the sale of any shares received would be
subject to Section 16(b) of the Securities Exchange Act of 1934, ordinary income
attributable to such shares received will be recognized on the date such sale
would not give rise to a Section 16(b) action, valued at the fair market value
at such later time, unless the optionee has made a Section 83(b) election within
30 days after the date of exercise to recognize ordinary income as of the date
of exercise based on the fair market value at the date of exercise.
The foregoing discussion is only a brief summary of the applicable
federal income tax laws as in effect on this date and should not be relied upon
as being a complete statement. The federal tax laws are complex, and they are
subject to legislative changes and new or revised judicial or administrative
interpretations at any time. In addition to the federal income tax consequences
described herein, an optionee may also be subject to state and/or local income
tax consequences in the jurisdiction in which the grantee works and/or resides.
10
<PAGE>
New Plan Benefits
As of June 15, 2000, options to purchase 1,000,000 shares of Common
Stock had been granted or allocated under the 2000 Plan to the following
directors or executive officers:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Options
Name Position Granted
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alan H. Gold, M.D. Chief Executive Officer and Director 300,000
---------------------------------------------------------------------------------------------------------------------
Joel Schoenfeld Chairman of the Board of Directors and Director 300,000
---------------------------------------------------------------------------------------------------------------------
John Frank Director and a consultant to the Company in the areas 300,000
of corporate development and strategic planning
---------------------------------------------------------------------------------------------------------------------
Marla Manowitz Director and Chief Financial Officer and head of the 50,000
Company's internal accounting department
---------------------------------------------------------------------------------------------------------------------
Randy Cohen Vice-President and General Manager 50,000
---------------------------------------------------------------------------------------------------------------------
</TABLE>
Each option granted is exercisable at a price of $.675 per share and
expires June 13, 2005. The options were granted to Dr. Gold and Messrs.
Schoenfeld and Frank were in partial consideration of their joint and several
personal guarantees of the Company's equipment lease obligations. See "Certain
Transactions" for a description of the guarantee and the equipment lease.
Options Granted to Officers and Directors Outside of Plans
In November, 1999, Joel Schoenfeld was granted the right to convert all
or part of his claim of $204,063 for accrued compensation for 1998 and 1999 to a
maximum of 1,700,524 shares, representing a price of $0.12 per share.
In February, 2000 the Company granted non qualified options expiring
February 12, 2003 to purchase the Company's common stock outside any stock
option plan, at $0.59 per share, to the following officers and directors: Joel
Schoenfeld, 2,130,000; Flora Schoenfeld, 200,000; Dr. Alan Gold, 500,000; John
Frank, 500,000; Richard Mintz, 50,000; Andrew Rosenberg, 50,000. The holders of
these option have agreed not to exercise them prior to the time the Company has
a sufficient number of shares of common stock authorized and not reserved for
other purposes. The adoption of Proposal 3 which authorizes an increase in the
amount of the Company's authorized Common Stock from 25,00,000 shares to
75,000,000 shares would provide a sufficient number of shares.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE ADOPTION OF THE 2000 STOCK OPTION PLAN (PROPOSAL 2)
11
<PAGE>
PROPOSAL 3: AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK
FROM 25,000,000 TO 75,000,000
The Board of Directors of the Company has adopted a resolution to amend
the Company's Certificate of Incorporation to authorize the Company to increase
the number of authorized shares of Common Stock by 50,000,000 shares (from
25,000,000 shares to 75,000,000 shares). The amendment will not affect the par
value of the Common Stock, which would remain $0.001 per share.
The additional Common Stock to be authorized by adoption of the
amendment would have rights identical to the currently outstanding Common Stock
of the Company. Adoption of the proposed amendment and issuance of the Common
Stock would not affect the rights of the holders of currently outstanding Common
Stock of the Company, except for effects incidental to increasing the number of
shares of the Company's Common Stock outstanding, such as dilution of the
earnings per share and voting rights of current holders of Common Stock. If the
amendment is adopted, it will become effective upon filing of a Certificate of
Amendment of the Company's Amended and Restated Certificate of Incorporation
with the Secretary of State of the State of Delaware.
The Company is presently authorized to issue 2,500 shares of Series A
8% cumulative convertible preferred stock, $0.001 par value per share, 1,000
shares of series B preferred stock, 1,000 shares of series C preferred stock and
4,995,500 shares of "blank check" preferred, $0.001 par value per share. On June
15, 2000, 2,072 shares of series A preferred stock, 402 Series B preferred stock
and 250 shares of series C preferred stock were issued and outstanding
(collectively, the "Preferred Stock"). The adoption of the proposed amendment
would not affect the rights of the holders of the Preferred Stock of the
Company, except for effects incidental to increasing the number of shares of the
Company's Common Stock outstanding such as dilution of the earnings per share
and voting rights of current holders of the Preferred Stock.
As of June 15, 2000 all 25,000,00 authorized shares of Common Stock
were issued and outstanding or reserved for issuance in connection with the
Company's Redeemable Warrants, conversions of the Company's Series A, Series B
and Series C Preferred Stock, a litigation reserve, and upon exercise of other
outstanding warrants and options, exclusive of (i) an additional 2,250,000
shares which are intended to be reserved for issuance upon exercise of options
issued or issuable pursuant to the 2000 Stock Option Plan, subject to
stockholder approval and (ii) an additional 3,485,941 shares issuable upon
exercise of options granted in February, 2000 outside of any plan to officers
and directors who have agreed not to exercise these options until the Company
has authorized a number of shares not reserved for other purposes that is
sufficient for the exercise of the options.
If the proposal to increase the number of shares of authorized Common
Stock is not adopted, there would be an insufficient number of shares available
for issuance upon exercise of options to purchase shares granted or that may be
granted in the future under the 2000 Stock Option Plan or upon exercise of the
other options granted in March 2000 and it would not be possible to reserve or
issue shares for these purposes.
In addition to providing a sufficient number of shares of Common Stock
for the 2000 Stock Option Plan and upon exercise of the options granted in March
2000, the additional Common Stock would be available for dividends with respect
to the Company's Preferred Stock and for other stock dividends. Additional
shares of Common Stock would also provide needed flexibility for future
financial and capital requirements so that proper advantage could be taken of
propitious market conditions and possible business acquisitions. Additional
shares would be available for issuance for these and other purposes, which may
include employee benefit programs, subject to the laws of the State of Delaware,
at the discretion of the Board of Directors of the Company without, in most
cases, the delays and expenses attendant to obtaining further stockholder
approval. To the extent required by Delaware law, stockholder approval will be
solicited in the event shares of Common Stock are to be issued in connection
with a merger. The Board of Directors has no present plans for a stock split or
a business acquisition in which shares of Common Stock would be issued, but the
Company may issue additional shares of Common Stock from time to time to raise
capital. Additional shares of Common Stock could also be used to discourage
hostile takeover attempts of the Company. The additional shares could be
privately placed, thereby diluting the stock ownership of persons seeking to
obtain control of the Company.
12
<PAGE>
Amendment to Restated Certificate
If approved, the first sentence of Paragraph 4 of the Restated
Certificate of Incorporation would be amended and restated as follows:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is 80,000,000 shares, of which 5,000,000 shares
shall be designated as preferred stock each having a par value of $0.001 per
share (the "Preferred Stock"), and 75,000,000 shares shall be designated as
common stock, each having a par value of $0.001 per share (the "Common Stock").
The affirmative vote of shareholders holding a majority of the
outstanding shares of common stock is required for approval of this amendment to
the Company's certificate of incorporation.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF AND URGES YOU TO VOTE "FOR" THE
PROPOSED AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION DESCRIBED IN
PROPOSAL 3.
PROPOSAL 4: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On April 6, 1999, the Company engaged Most Horowitz & Company, LLP as
its principal accountant to audit the Company's financial statements for the
fiscal years ending December 31, 1998 and 1999. Most Horowitz & Company, LLP has
completed its audit report of the financial statements for the fiscal years
ending December 31, 1998 and 1999 and has been engaged to audit the 2000
financial statements.
Most Horowitz & Company, LLP have no financial interest, either direct
or indirect, in the Company. A representative of Most Horowitz & Company, LLP is
expected to be present at the Annual Meeting to respond to appropriate questions
from stockholders and to make a statement if they desire to do so.
Most Horowitz & Co was initially engaged after Richard A. Eisner &
Company resigned on March 22, 1999 as the Company's independent accountant of
record for the 1998 calendar year before rendering an audit report. Previously,
on April 17, 1998, the Company dismissed Coopers & Lybrand, LLP, the Company's
independent public accountants since 1992, to reduce professional fees.
The reports of Coopers & Lybrand, LLP on the financial statements for
the fiscal years ended December 31, 1996 and 1997 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles, except for an explanatory
note concerning the Company's ability to continue as a going concern as a result
of recurring losses from operations since its inception.
The decision to dismiss Coopers & Lybrand, LLP was approved by the
Board of Directors.
During the Company's last two fiscal years and the subsequent interim
periods through the date of Coopers & Lybrand, LLP's dismissal and Richard A.
Eisner & Company's resignation, there were no disagreements with either former
accountant, whether or not resolved, on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of the former accountants,
would have caused either firm to make reference to the subject matter of the
disagreements in connection with its report.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL 4)
13
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at
the Annual Meeting except the matters set forth in the Notice of Annual Meeting
and described in this Proxy Statement. Unless otherwise directed, all shares
represented by Board of Directors' proxies will be voted in favor of the
proposals of the Board of Directors described in this Proxy Statement. If any
other matters come before the Annual Meeting, the persons named in the
accompanying Proxy will vote on those matters according to their best judgment.
Security Ownership and Certain Beneficial Owners and Management
The following table sets forth certain information concerning the
beneficial ownership of the Common Stock as of June 15, 2000 by (i) each
stockholder known by the Company to be a beneficial owner of more than five
percent of the outstanding Common Stock, (ii) each director of the Company and
each Named Executive Officer and (iii) all directors and officers as a group.
<TABLE>
<CAPTION>
Amount and Percentage of Common
Nature of Beneficial Stock Beneficially
Name Ownership(1) Owned (2)
<S> <C> <C>
Joel and Flora Schoenfeld(3)........................ 7,226,612 (4)(5) 59.16%(6)
Alan H. Gold, M.D.(3)............................... 1,409,888 (4)(7) 21.14%(8)
John Frank(9) ...................................... 1,549,375 (10) 23.61%(11)
Marla Manowitz(12).................................. 60,600 (13) *
Richard Mintz(14)................................... 118,000 (15) *
Andrew Rosenberg(16)................................ 114,000 (17) *
All directors and executive officers as a group
(7 persons)........................................ 10,478,475 (18)( 19) 72.86 %(20)
</TABLE>
------------
* Less than 1%
(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated, subject to community
property laws, where applicable. For purposes of computing the
percentage of outstanding shares held by each person or group of
persons named above as of June 15, 2000, any security which such person
or group of persons has the right to acquire within 60 days after such
date is deemed to be outstanding for the purpose of computing the
percentage ownership for such person or persons, but is not deemed to
be outstanding for the purpose of computing the percentage ownership of
any other person.
(2) Except as otherwise stated, calculated on the basis of 5,618,209 shares
of Common Stock issued and outstanding on June 26, 2000.
(3) Address is c/o the Company, 22 Dubon Court, Farmingdale, New York 11735.
(4) All of the shares owned by Dr. Gold have been pledged to secure certain
indebtedness to Joel Schoenfeld. Dr. Gold retains voting and
dispositive power with respect to the pledged shares until the
occurrence of a default in the payment of the indebtedness secured by
the pledged shares. Accordingly, the pledged shares have been included
in the number of shares beneficially owned by Dr. Gold and excluded
from the number of shares beneficially owned by Mr. Schoenfeld.
(5) Includes 6,158,858 shares upon exercise of presently exercisable
options, 432,885 shares issuable upon conversion of Series A Preferred
Stock, and 4,000 shares issuable upon exercise of the Company's
Redeemable Common Stock Purchase Warrants.
14
<PAGE>
(6) Calculated on the basis of 12,213,952 of Common Stock issued and
outstanding.
(7) Includes 1,025,000 shares upon exercise of presently exercisable
options and 27,555 shares issuable upon conversion of Series A
Preferred Stock.
(8) Calculated on the basis of 6,670,764 shares of Common Stock issued and
outstanding.
(9) Address is c/o The Hartford Steam Boiler Insurance & Inspection Co.,
P.O. Box 5204, One State Street, Hartford, Connecticut 06102-5024.
(10) Includes 778,236 shares issuable upon exercise of options, and 166,000
shares issuable upon exercise of the Company's Redeemable Common Stock
Purchase Warrants.
(11) Calculated on the basis of 6,562,445 shares of Common Stock issued and
outstanding.
(12) Address is c/o the Company, 22 Dubon Court, Farmingdale, NY 11735.
(13) Includes 50,000 shares upon exercise of presently exercisable options.
(14) Address is c/o Sonic Industries, Inc., 225 Henrietta Avenue, Oceanside,
New York 11572.
(15) Includes 50,000 shares upon exercise of presently exercisable options.
(16) Address is c/o the Company, 22 Dubon Court, Farmingdale, NY 11735.
(17) Includes 70,000 shares upon exercise of presently exercisable options.
(18) For purposes of this calculation, shares of Common Stock beneficially
owned by more than one person have only been included once.
(19) Includes 8,132,094 shares issuable upon exercise of presently
exercisable options. See footnotes (5)(7)(10)(13)(15) and (17).
(20) Calculated on the basis of 14,380,743 shares of Common Stock issued and
outstanding.
Executive Officers and Significant Employees
The names, ages and business backgrounds of the executive officers and
other significant employees of the Company who are not nominees for Director are
as follows:
Name Age Office Officer Since
---- --- ------ -------------
Flora Schoenfeld * 53 Treasurer and Secretary August 1992
-------------
* Flora Schoenfeld is the wife of Joel Schoenfeld, Chairman of the Board
and Chief Executive Officer of the Company.
15
<PAGE>
Certain Transactions
In November 1999, Joel Schoenfeld, the former Chief Executive Officer
of the Company and current Chairman of the Board of Directors, and Flora
Schoenfeld, Treasurer/ Secretary, were granted the right to convert $204,063 and
$24,000, respectively, in accrued payroll due to them to 1,900,524 shares of
common stock of the Company representing a price of $.12 per share. In addition,
Mr. John Frank, Director, was granted the right to convert a loan of $25,000 due
to him by the Company, plus interest and some expenses, into 223,600 shares of
common stock of the Company representing a price of $.12 per share which
conversion rights were exercised on January 28, 2000. On January 29, 2000, Mr.
Schoenfeld exercised his right to convert $50,000 of the amount due to him into
416,666 shares of Common Stock.
On March 15, 2000, Dr. Alan Gold, the Current Chief Executive Officer;
Joel Schoenfeld, the former Chief Executive Officer of the Company and current
Chairman of the Board of Directors; and John Frank, a director, jointly and
severally guaranteed the Company's obligation in connection with an equipment
lease with the Business Alliance Capital Corporation ("BACC"). The Company sold
equipment for an aggregate sales price of $360,777, net of expenses of $74,223,
and leased back the equipment. The lease requires equal monthly payments of
$12,083 for three years. In partial consideration for the guarantee, the Company
issued 300,000 options to each guarantor under the 2000 Stock Option Plan. These
option exprire June 13, 2005 and are exercisable at a price of $0.675 per share.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Officers, Directors and persons who own more than ten percent of a
registered class of the Company's equity securities within specified time
periods to file certain reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission"). Officers, Directors and
ten percent stockholders are required by regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on a review of copies
of such reports received by the Company and written representations from such
persons concerning the necessity to file such reports, the Company is not aware
of any failures to file reports or report transactions in a timely manner during
the fiscal years ended December 31, 1998 and 1999.
Expenses
The entire cost of preparing, assembling, printing and mailing this
Proxy Statement, the enclosed Proxy and other materials, and the cost of
soliciting Proxies with respect to the Annual Meeting, will be borne by the
Company. The Company will request banks and brokers to solicit their customers
who beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of proxies by mail may be
supplemented by telephone and telegram by officers and other regular employees
of the Company, but no additional compensation will be paid to such individuals.
Stockholder Proposals
No person who intends to present a proposal for action at a forthcoming
stockholders' meeting of the Company may seek to have the proposal included in
the proxy statement or form of proxy for such meeting unless that person (a) is
a record beneficial owner of at least 1% or $1,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
his name, address, the number of shares held by him and the dates upon which he
acquired such shares with documentary support for a claim of beneficial
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Delaware law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of stockholders, will be submitted timely only if the proposal has been received
at the Company's principal executive office no later than April 1, 2001. If
the date of such meeting is changed by more than 30 calendar days from the date
such meeting is scheduled to be held under the Company's By-Laws, or if the
proposal is to be presented at any meeting other than the next annual meeting of
stockholders, the proposal must be received at the Company's principal executive
office at a reasonable time before the solicitation of proxies for such meeting
is made.
16
<PAGE>
Even if the foregoing requirements are satisfied, a person may submit
only one proposal with a supporting statement of not more than 500 words, if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
AVAILABLE INFORMATION
Copies of the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1999 as filed with the Securities and Exchange
Commission, including the financial statements, can be obtained without charge
by stockholders (including beneficial owners of the Company's Common Stock) upon
written request to Flora Schoenfeld, Company's Secretary, Univec, Inc., 22 Dubon
Court, Farmingdale, New York 11735 or on the Commission's Web Site at
www.sec.gov.
By Order of the Board of Directors
Flora Schoenfeld, Secretary
Farmingdale, New York 11735
July 17, 2000
17
<PAGE>
UNIVEC, INC.
22 Dubon Court
Farmingdale, New York 11735
PROXY
The undersigned, a holder of Common Stock of Univec, Inc., a Delaware
corporation (the "Company"), hereby appoints Joel Schoenfeld and Flora
Schoenfeld, and each of them, the proxy of the undersigned, with full power of
substitution, to attend, represent and vote for the undersigned, all of the
shares of the Company which the undersigned would be entitled to vote, at the
Annual Meeting of Stockholders of the Company to be held on August 24, 2000 and
any adjournments thereof, as follows:
1. The election of six Directors of the Company to serve until the next
annual meeting of stockholders and until their successors are duly
elected and qualified.
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below.
(Instructions: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH OR OTHERWISE STRIKE OUT HIS OR HER NAME BELOW)
Dr. Alan H. Gold, Joel Schoenfeld, John Frank, Richard Mintz, Marla
Manowitz and Dr. Andrew Rosenberg.
2. The adoption of the Company's 2000 Stock Option Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The proposed amendment to the Certificate of Incorporation of the
Company to increase the authorized Common Stock of the Company from
25,000,000 shares to 75,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
4. The ratification of the appointment of Most Horowitz & Company as the
Company's independent public accountants for the years ending December
31, 1998, 1999 and 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Upon such other matters as may properly come before the meeting or any
adjournments thereof.
The undersigned hereby revokes any other proxy to vote at such Annual
Meeting, and hereby ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof. With respect to matters not
known at the time of the solicitations hereby, said proxies are authorized to
vote in accordance with their best judgment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE SIX DIRECTORS NAMED IN PROPOSAL 1 AND FOR THE
ADOPTION OF PROPOSALS 2, 3, AND 4, AND AS SAID PROXIES SHALL DEEM ADVISABLE ON
SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting dated July 17, 2000 relating to the Annual Meeting.
______________________________
Signature(s) of Stockholder(s)
The signature(s) hereon should correspond exactly with the name(s) of
the Stockholder(s) appearing on the Stock Certificate. If stock is jointly held,
all joint owners should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If signer is a corporation,
please sign the full corporate name, and give title of signing officer.
Date:_________________________________________, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
UNIVEC, INC.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
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