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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
MANNATECH, INCORPORATED
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[MANNATECH LOGO APPEARS HERE]
May 12, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 annual shareholders meeting of
Mannatech, Incorporated to be held on Monday, June 19, 2000, at 9:00 a.m.,
Central Daylight Time, at the Grapevine Convention Center located at 1209
South Main Street, Grapevine, Texas.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
and describes the business agenda for the meeting. At the conclusion of the
formal part of the meeting management will respond to appropriate questions.
Your vote is very important. Whether or not you plan to attend the meeting,
I urge you to vote over the Internet, by telephone or by mailing the enclosed
proxy card to ensure your representation at the annual meeting. For your
convenience, we have given you three ways to vote your proxy; please review
the instructions on the proxy card regarding each of the voting options.
Space will be limited so if you plan on attending the meeting, please take
a moment to complete the meeting reservation/attendance reply card and return
it to Mannatech as soon as possible to help us ensure we provide adequate
meeting facilities for your convenience.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of Mannatech and look
forward to seeing you on June 19th.
Sincerely,
/s/ Robert M. Henry
Robert M. Henry
Chief Executive Officer
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[MANNATECH LOGO APPEARS HERE]
----------------------------------------
2000
Notice of
Annual Shareholders Meeting
and Proxy Statement
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Monday, June 19, 2000
At 9:00 A.M. Central Daylight Time
Grapevine Convention Center
1209 South Main Street
Grapevine, Texas
<PAGE>
MANNATECH, INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 7, 2000
To the Shareholders:
The 2000 annual shareholders meeting of Mannatech, Incorporated will be
held at the Grapevine Convention Center located at 1209 South Main Street,
Grapevine, Texas on June 19, 2000, at 9:00 a.m., Central Daylight Time for the
following purposes:
. Proposal 1--To elect three directors.
. Proposal 2--To ratify the reappointment of PricewaterhouseCoopers LLP as
Mannatech's independent public accountants for the fiscal
year ending December 31, 2000.
. Proposal 3--To approve Mannatech's 2000 Stock Option Plan.
. To act upon such other matters as may properly come before the board at
the annual meeting.
Only shareholders of record at the close of business on May 1, 2000 will be
entitled to vote by proxy or at the meeting on the basis of one vote for each
share held.
By order of the Board of Directors
Terry L. Persinger
Corporate Secretary
May 12, 2000
IMPORTANT
Whether or not you expect to attend in person, we urge you to sign,
date, and return your proxy at your earliest convenience. This will
ensure the presence of a quorum at the meeting. Promptly signing,
dating, and returning the proxy will save Mannatech the expenses and
extra work of additional solicitation. A preaddressed envelope for
which no postage is required, if mailed in the United States, is
enclosed for that purpose. Sending in your proxy will not prevent you
from voting your stock at the meeting if you desire to do so, as your
proxy is revocable at your option.
<PAGE>
MANNATECH, INCORPORATED
600 South Royal Lane, Suite 200
Coppell, Texas 75019
PROXY STATEMENT FOR ANNUAL SHAREHOLDERS MEETING
TO BE HELD ON JUNE 19, 2000
General information
Your proxy statement is furnished, to you, in connection with the
solicitation of proxies by the Board of Directors of Mannatech, Incorporated.
On May 1, 2000 there were 24,984,993 outstanding shares of common stock,
$0.0001 par value per share, which is the only voting securities of Mannatech.
On May 1, 2000, there were approximately 5,066 shareholders of record. The
proxy statement and accompanying proxy card are first being sent or given to
shareholders of record on or about May 12, 2000.
Voting by proxy
Properly executed proxies received prior to the meeting will be voted at
the annual shareholders meeting on June 19, 2000 and at any adjournment or
adjournments thereof. If a shareholder specifies how the proxy is to be voted
on any business to come before the meeting, it will be voted in accordance
with such specifications. If no specification is made, it will be voted in
accordance with the recommendations of the Board of Directors, which are FOR
all three proposals. Attendance at the 2000 annual meeting will not
automatically revoke your proxy, but a shareholder in attendance may request a
ballot and vote in person, thereby revoking a prior granted proxy.
Votes required
The presence, in person or by proxy, of the holders of at least a majority
of the shares of Mannatech's common stock outstanding on the record date is
necessary to have a quorum for the annual meeting. Abstentions and broker "no-
votes" are counted as present for purposes of determining a quorum. A broker
"no-vote" occurs when a nominees holding shares of Mannatech common stock for
a beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary voting power with respect to that item and has not
received instructions from the beneficial owner.
Any shares not voted by abstention will have the same effect as a vote
against the proposals and broker "no-votes" will have no effect on the outcome
of the vote. If you abstain from voting or withhold authority to vote, your
abstention or withholding will also have the effect of a negative vote with
respect to the three proposals. An affirmative vote of a majority of shares
entitled to vote at the annual meeting is required for proposal 1 to pass. An
affirmative vote of a majority of shares entitled to vote and are present or
represented by proxy are required for proposals 2 and 3 to pass.
Solicitation of proxies
Solicitation of proxies will be made by Mannatech through the mail, in
person, and by telecommunications. Mannatech will bear all the expenses in
preparing, printing and mailing the proxy materials to the shareholders. We
have not paid any of our officers, directors or employees any compensation
relating to their participation in soliciting proxies.
Admission to the annual meeting
Attendance at the meeting will be limited to shareholders of record on May
1, 2000, beneficial owners having evidence of ownership on that date, and
invited guests of Mannatech. If you plan to attend the meeting in person,
please complete and return the reservation/attendance card to Mannatech. No
cameras or recording equipment will be permitted in the meeting rooms. If you
are not a registered shareholder because your financial institution, broker or
other nominee holds your shares in "street name", please bring evidence of
your ownership to the meeting. Shareholders who have not obtained reservation
for the meeting will be admitted upon verification of stock ownership at the
meeting.
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Procedures for shareholder proposals and nominations
Under Mannatech's bylaws, nominations for a director may be made by the
Board of Directors or a committee of the board, or by a shareholder entitled
to vote who has delivered written notice to Mannatech not less than 30, nor
more than 60 days before the annual meeting.
The bylaws also provide that no business may be brought before an annual
meeting except as specified in the notice of the meeting (which includes
shareholder proposals that Mannatech is required to set forth in its proxy
statement under Securities and Exchange Commission Rule 14a-8) or as otherwise
brought before the meeting by or at the direction of the board or by a
shareholder entitled to vote who has delivered written notice to Mannatech
within the time limits described above for a nomination for the election of a
director. These requirements are separate and apart from and in addition to,
the Securities and Exchange Commission's requirements that a shareholder must
comply with in order to have a shareholder proposal included in Mannatech's
proxy statement under Securities and Exchange Commission Rule 14a-8.
A copy of Mannatech's bylaws may be obtained upon written request to the
General Counsel at our corporate offices.
Shareholder proposals for the 2001 annual meeting
Shareholder proposals for inclusion in the proxy materials for the 2001
annual meeting must be received, in writing, by Mannatech's General Counsel at
our principal executive offices on or before December 31, 2000. Shareholders
who intend to present a proposal at the 2001 annual meeting without inclusion
of such proposal in the proxy materials are required to provide written notice
of such proposal to Mannatech's General Counsel no later than May 1, 2001.
Mannatech reserves the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with
these and other applicable requirements. In addition, Mannatech's bylaws
provide that any shareholder wishing to make a nomination for director at the
2001 annual meeting must give written notice by December 31, 2001, subject to
certain exceptions, and that such notice must meet certain requirements set
forth in the bylaws.
Other matters
Management knows of no other matters to be brought before the annual
meeting, but if other matters come before the meeting, it is the intention of
the Board to take such action as in their judgment is in the best interest of
Mannatech and its shareholders.
PROPOSAL 1--ELECTION OF THREE DIRECTORS
The term of office of the current class I directors of Mannatech will
expire on June 19, 2000, the day of this annual meeting. There are two class I
directors of Mannatech to be elected at this annual meeting. In addition, the
board is nominating one additional member to the board, a class II director
for a total of eight board members. The class I directors elected at this
annual meeting will serve until the day of the 2003 annual meeting, and the
class II director will serve until the day of the 2001 annual meeting, which
are when their respective terms will expire or until the earlier of
disqualification, resignation, death or removal.
Nominees:
Mr. Henry and Mr. Canale, named below, currently are class I directors of
Mannatech and are nominated for re-election at the annual meeting. While the
board has no reason to believe that the nominees will not be available as
candidates, should such a situation arise, proxies may be voted for the
election of such other persons as the holders of the proxies may, in their
discretion, determine. The shares represented by the enclosed proxy card will
be voted in favor of the persons nominated, unless specified differently on
the proxy card, by the shareholder.
The Board of Directors unanimously recommends that shareholders vote FOR
each of the nominees below.
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Anthony E. Canale, age 47, joined Mannatech in January 1997 and since
then has served as Executive Vice President. From January 1997 to October
1999, Mr. Canale served as Chief Operating Officer. In October 1999, Mr.
Canale moved to Chief Operating Officer of International Operations and was
appointed as a director. His term as director will expire on June 19, 2000.
From February 1993 until October 1996, Mr. Canale was President of Canale
and Associates, an Outback Steakhouse, Inc. joint venture partnership. Mr.
Canale received a B.S. in Management from American International College in
Springfield, Massachusetts.
Robert M. Henry, age 53, began serving as our Chief Executive Officer on
April 1, 2000. Mr. Henry was appointed to the board on May 8, 2000. His
term as director will expire on June 19, 2000. From February 1999 to March
2000, Mr. Henry served as an Executive Partner for Gryphon Investors, a
private investor equity group. From 1995 until August 1998, Mr. Henry
served as the Chief Operating officer and Vice President of Operations and
Systems for the Hosiery Corp of America, who is a manufacturer and
distributor of pantyhose and other women's intimate apparel. From 1990 to
1995, Mr. Henry served as the Chief Operating Officer, Chief Financial
Officer and Vice Chairman for McCaffrey and McCall Partners, which is a
full service advertising agency. From 1971 to 1990, Mr. Henry worked as
various executive officers with WCRS North America, Amway Corporation and
Avon Products, Inc. Mr. Henry received a B.S. in Accounting from Hunter
College in New York, New York and a J.D. from Brooklyn Law School. Mr.
Henry has been a member of the New York State Bar since 1975. In addition,
Mr. Henry is a director of Purity Products, Inc.
Jules Zimmerman, age 65, retired in December 1996 as President and Chief
Executive officer of Hickok Associates Inc., a financial consulting firm.
From 1976 to 1988, Mr. Zimmerman worked as a senior officer at Avon
products Inc., a multinational manufacturer and distributor of cosmetics,
toiletries, jewelry, chemicals and clothing and from 1985 to 1988 served as
their Chief Financial Officer. Mr. Zimmerman received a B.B.A. degree from
Hofstra University and is a Certified Public Accountant. In addition, Mr.
Zimmerman is a director of the Greenpoint Financial Corporation and a
director for the Associated Blind.
PROPOSAL 2--RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Beginning for the fiscal year ending December 31, 2000 the appointment of
independent public accountants will be made annually by the board. The
decision of the board is based on the recommendation of the Audit Committee,
which reviews both the audit scope and estimated audit fees.
PricewaterhouseCoopers LLP has served as Mannatech's independent public
accountants to audit our consolidated financial statements and provide certain
tax and consulting services, beginning in the fiscal year ended December 31,
1997 through the fiscal year ended December 31, 1999. Representatives of
PricewaterhouseCoopers LLP are expected to attend the annual meeting and will
have the opportunity to respond to appropriate questions by shareholders.
The Board of Directors recommends a vote FOR the ratification of the
reappointment of PricewaterhouseCoopers LLP as Mannatech's independent public
accountants for the fiscal year ending December 31, 2000.
PROPOSAL 3--APPROVAL OF MANNATECH'S 2000 STOCK OPTION PLAN
The Board of Directors has adopted, subject to the approval of the
shareholders, the Mannatech 2000 Stock Option Plan (the "Plan") and reserve
2,000,000 shares of common stock for future issuance under the Plan. As of the
present date, no awards have been granted under this Plan. The Option
Committee plans to discuss with independent consultants various ways to
distribute future options based upon industry standards. At this annual
meeting, the shareholders are asked to approve the Plan and the reservation of
2,000,000 shares for future issuance, under the Plan.
Our Board of Directors recommends a vote FOR the approval of the Mannatech
2000 Stock Option Plan and the reservation of 2,000,000 shares of common stock
for future issuance, under the Plan.
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A summary of the 2000 Stock Option Plan is provided below, but is qualified
in its entirety by reference to the full text of the 2000 Stock Option Plan
which is included in Appendix A herein this proxy statement.
Shares available for issuance
The aggregate number of shares of common stock that may be issued under the
Mannatech 2000 Stock Option Plan will be 2,000,000. The 2,000,000 new shares
represent slightly less than 8 percent of the current outstanding shares.
Administration and eligibility
The Plan will be administered by the Option Committee consisting of two or
more directors, each of whom will qualify as a "non-employee director" within
the meaning set forth in the Securities and Exchange Commission Rule 16b-3
promulgated under the Securities Exchange Act of 1934. The Compensation
Committee will also approve any options awarded to executive officers. The
Plan may be terminated at any time by the Board of Directors.
General terms of the stock options
The Option Committee is authorized to grant both incentive stock options
and nonqualified stock options to employees, directors and consultants, called
Optionees. The exercise price of the stock options awarded to Optionees who
own more than 10 percent of the voting powers of all classes of stock of
Mannatech will be no less than 110 percent of the fair market value per share
on the date of grant. The exercise price of the stock options awarded to all
other Optionees will be no less than 100 percent of the fair market value per
share on the date of grant. The fair market value per share shall be
determined using the quoted closing sale price per share as reported by the
Nasdaq National Market.
The options will be exercisable over 3 years, beginning one year from the
date of grant. The term of each option shall be 10 years from the date of
grant or 5 years if the Optionee is a 10 percent or more shareholder.
The consideration paid for the shares to be issued upon exercise of an
option shall consist entirely of cash, certified or official bank check, other
shares of Mannatech's common stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the shares as to which said
option shall be exercised, or any combination of such methods of payment.
Federal income tax consequences
Mannatech has been advised by their independent accountants of the federal
income tax consequences as they relate to stock options; however, the tax
consequences are complex and are subject to change. Accordingly, Optionees
should consult their own tax advisors with respect to their individual
circumstances. The following is a summary of the general rules applicable to
stock options:
Incentive Stock Options. An Optionee does not generally recognize
taxable income upon the grant or upon the exercise of an incentive stock
option. Upon the sale of the incentive stock option shares, the Optionee
recognizes income in an amount equal to the difference, if any, between the
exercise price of the incentive stock options sold and the fair market
value of the shares on the date of sale. The income is taxed to the
Optionee, at long-term capital gains rates if the Optionee has not disposed
of the stock within two years after the date of the grant of the incentive
stock option and has held the shares for at least one year after the date
of exercise. If the income meets the qualifications to be treated as an
incentive stock option then Mannatech is not entitled to any federal income
tax deduction. The holding period, of an incentive stock option, are waived
if an Optionee dies. The exercise of the incentive stock option may;
however, trigger alternative minimum tax for the Optionee.
If the Optionee sells the incentive stock option shares before having
held them for at least one year after the date of exercise and two years
after the date of grant, the Optionee recognizes ordinary income in
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the amount of the lesser of: (a) the gain realized upon the sale; or (b)
the difference between the exercise price and the fair market value of the
shares on the date of exercise. Furthermore, any additional gain is treated
as long-term or short-term capital gain depending upon how long the
Optionee has held the incentive stock option shares prior to disposing of
them in a disqualifying disposition. In the year of disposition, Mannatech
will receive a federal income tax deduction in an amount equal to the
ordinary income which the Optionee recognizes as a result of the
disposition.
Non-Qualified stock options. An Optionee does not recognize taxable
income upon the grant of a non-qualified stock option. Upon the exercise of
such a stock option, the Optionee recognizes ordinary income to the extent
the fair market value of the shares received upon exercise of the non-
qualified stock option on the date of exercise exceeds the exercise price.
Mannatech will receive a federal income tax deduction in an amount equal to
the ordinary income, which the Optionee recognizes upon the exercise of the
stock option. If an Optionee sells shares received upon the exercise of an
non-qualified stock option, the Optionee recognizes capital gain income to
the extent the sales proceeds exceed the fair market value of such shares
on the date of exercise.
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DIRECTORS AND EXECUTIVE OFFICERS OF MANNATECH
Directors and Executive Officers
Our executive officers and directors and their ages as of May 1, 2000 are
as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Charles E. Fioretti......... 53 Co-Chairman of the Board
Samuel L. Caster(2)......... 49 Co-Chairman of the Board
Robert M. Henry(2).......... 53 Chief Executive Officer
Anthony E. Canale........... 47 Executive Vice President, Chief Operating
Officer of International Operations and
Director
Patrick D. Cobb............. 47 Executive Vice President of International
Finance
Deanne Varner............... 47 Senior Vice President of Compliance and
General Counsel
Jeffrey P. Bourgoyne(1)..... 38 Vice President of Operations
Peter E. Hammer(1).......... 45 Vice President of New Business and
International Development
Donald W. Herndon(1)........ 49 Vice President of Marketing Administration
Bill H. McAnalley, Ph.D. ... 55 Senior Vice President of Research and Product
Development and Chief Scientific Officer
Ronald D. Norman(1)......... 41 Vice President and Treasurer
Eoin Redmond(1)............. 34 Vice President of Information Technology and
Chief Information Officer
Stephen D. Fenstermacher.... 47 Senior Vice President of Accounting and Chief
Financial Officer
Eileen M. Vennum(1)......... 53 Vice President of Regulatory Affairs
Gwendolyn J. Pennington(1).. 56 Vice President of Human Resources
Terry L. Persinger.......... 55 President, Chief Operating Officer of
Domestic Operations, Director and Corporate
Secretary
Brad G. Wayment(1).......... 34 Vice President of Marketing
Steven A. Barker, Ph.D. .... 50 Director
Chris T. Sullivan........... 52 Director
James M. Doyle, Jr. ........ 55 Director
</TABLE>
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(1) In April 2000, the Board of Directors agreed to no longer consider these
employees as executive officers; however, they will still be subject to
Section 16(a) reporting until November 2000.
(2) On May 5, 2000, Mr. Samuel L. Caster resigned from the Board of Directors
and was replaced by Mr. Robert M. Henry.
Charles E. Fioretti is one of our founders and was the Chairman of the
Board and Chief Executive Officer from May 1997 until March 31, 2000. On April
1, 2000 Mr. Fioretti became the Co-Chairman of the Board and has been a
director since November 1993. His current term as director expires in 2001.
Mr. Fioretti was our Chief Operating Officer from November 1993 to July 1996.
From June 1990 until April 1995, Mr. Fioretti was an owner and operator of
several Outback Steakhouse, Inc. restaurants in Arizona, Indiana and Kentucky.
Mr. Fioretti is Peter E. Hammer's brother-in-law and William C. Fioretti's
cousin.
Samuel L. Caster is one of our founders and has served as President and as
a director from November 1993 until March 31, 2000. On April 1, 2000 Mr.
Caster resigned as President and became Co-Chairman of the Board. Mr. Caster
resigned from the board on May 8, 2000. From April 1992 until August 1993,
Mr. Caster served as co-founder, owner and President of Funds-4-Kids, Inc., a
multilevel marketing company that sold healthy alternative candy bars for
children. In 1999, Mr. Caster co-founded Manna-Relief, a non-profit
international ministry formed to help supply food supplements to at risk
children and adults by working with other ministries, non-profits and
missionaries throughout the world. Mr. Caster is Donald W. Herndon's
brother-in-law.
Robert M. Henry began serving as our Chief Executive Officer on April 1,
2000. From February 1999 to March 2000, Mr. Henry served as an Executive
Partner for Gyphon Investors, a private investor equity group. From 1995 until
August 1998, Mr. Henry served as the Chief Operating officer and Vice
President of Operations
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and Systems for the Hosiery Corp of America, who is a manufacturer and
distributor of pantyhose and other women's intimate apparel. From 1990 to
1995, Mr. Henry served as the Chief Operating Officer, Chief Financial Officer
and Vice Chairman for McCaffrey and McCall Partners, which is a full service
advertising agency. Mr. Henry received a B.S. in Accounting from Hunter
College in New York, New York and a J.D. from Brooklyn Law School. Mr. Henry
has been a member of the New York State Bar since 1975. Mr. Henry is a
director of Purity Products Inc.
Anthony E. Canale joined Mannatech in January 1997 and since then has
served as Executive Vice President. From January 1997 to October 1999, Mr.
Canale served as Chief Operating Officer. In October 1999, Mr. Canale was
moved to Chief Operating Officer of International Operations and appointed as
a director. His term as director expires on June 19, 2000. From February 1993
until October 1996, Mr. Canale was President of Canale and Associates, an
Outback Steakhouse, Inc. joint venture partnership. Mr. Canale received a B.S.
in Management from American International College in Springfield,
Massachusetts.
Patrick D. Cobb joined Mannatech in August 1994 and served as Chief
Financial Officer and Executive Vice President until October 1999. In October
1999, Mr. Cobb remained as Executive Vice President and moved to Chief
Operating Officer of subsidiaries until March 31, 2000. On April 1, 2000, Mr.
Cobb was appointed as Executive Vice President of International Finance. Mr.
Cobb was appointed as a director in November 1997 and resigned on November 19,
1999. Mr. Cobb served as our Corporate Secretary from February 1997 until
November 19, 1999. Mr. Cobb received a B.S. in Finance from the University of
Oklahoma and is a Certified Public Accountant.
Deanne Varner joined Mannatech in January 1996 and since May 1996 has
served as General Counsel and Senior Vice President of Compliance. From 1986
until January 1996, Ms. Varner maintained a law practice in Dallas, Texas
focusing on business law and related transactions. Ms. Varner has over 20
years of experience in business, corporate and transactional law. Ms. Varner
received a B.A. in Social Sciences and a J.D. from Southern Methodist
University.
Jeffrey P. Bourgoyne joined Mannatech in December 1996 and since February
1998 has served as Vice President of Operations. From May 1995 until December
1996, Mr. Bourgoyne served as Facility Manager for DSC Logistics, Inc., a
third-party logistics provider. From June 1993 until May 1995, Mr. Bourgoyne
was a Transportation Services Manager for Abbott Laboratories, a
pharmaceutical company. Mr. Bourgoyne received a B.S. in Management from
University of New Orleans and an M.B.A. from Lake Forest Graduate School of
Management.
Peter E. Hammer joined Mannatech in March 1995 and since January 1998 has
served as Vice President of New Business and International Development. From
November 1991 until February 1995, Mr. Hammer served as Vice President and
Chief Information Officer of The Network, Inc., a business solution company in
Atlanta, Georgia. Mr. Hammer received a B.A. in Liberal Arts from State
University College at Buffalo and an A.A.S. in Electronics from Suffolk
Community College. Mr. Hammer is Charles E. Fioretti's brother-in-law.
Donald W. Herndon joined Mannatech in November 1993 and until December 1996
served as Vice President of Distribution. From December 1996 until November
1999, Mr. Herndon served as Vice President of Marketing. Beginning in November
1999, Mr. Herndon was moved to Vice President of Marketing Administration.
From January 1993 through November 1993, Mr. Herndon served as the Vice
President of Operations for Funds-4-Kids, Inc. a multilevel marketing company
that sold healthy alternative candy bars for children. Mr. Herndon is the
brother-in-law of Samuel L. Caster and is also the brother-in-law of Terry L.
Persinger.
Bill H. McAnalley, Ph.D. joined Mannatech in July 1996 and has served as
Senior Vice President of Research and Product Development and Chief Scientific
Officer since December 1997. From March 1995 until July 1996, Dr. McAnalley
was a consultant to us. From March 1987 until February 1995, Dr. McAnalley was
Vice President of Research and Product Development at Carrington Laboratories,
Inc., a pharmaceutical research, development and manufacturing company. Dr.
McAnalley received a Ph.D. in Pharmacology and Toxicology from the University
of Texas Health Science Center in Dallas, Texas.
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Ronald D. Norman joined Mannatech in May 1996 and from August 1997 until
September 1998 served as Controller. In September 1998, Mr. Norman began
serving as Treasurer. In June 1998, Mr. Norman was promoted to Vice President.
From September 1994 until April 1996, Mr. Norman was a Tax Manager with Belew
Averitt L.L.P., a public accounting firm in Dallas, Texas. Mr. Norman received
an M.A. in Tax and a B.B.A. in Accounting from Baylor University and is a
Certified Public Accountant.
Eoin Redmond joined Mannatech in July 1997 and since served as Vice
President of Information Technology. In October 1999, Mr. Redmond was promoted
to Chief Information Officer. From August 1996 through June 1997, Mr. Redmond,
was a computer systems consultant for us. From October 1995 until August 1996,
Mr. Redmond was head of client services for Tate Bramald Ltd., an accounting
software provider. From December 1993 until September 1995, Mr. Redmond was
employed as the Technology Service Manager--Europe for SSA Europe Ltd., an
industrial software provider. Mr. Redmond matriculated at Presentation
College, County Wicklow, Ireland and subsequently attended AnCo Technology
Center, County Dublin, Ireland.
Stephen D. Fenstermacher joined Mannatech in November 1998 and until
October 1999 served as Vice President of Accounting and Controller. In October
1999, Mr. Fenstermacher was promoted to Senior Vice President and Chief
Financial Officer. From January 1998 until October 1998, Mr. Fenstermacher was
a consultant for Kibel, Green, ISSA, Inc., a crisis management firm
specializing in turnaround strategy and execution consulting. From April 1995
until October 1997, Mr. Fenstermacher served as Executive Vice President and
Chief Financial Officer for The Johnny Rockets Group, Inc. From May 1994 until
April 1995, Mr. Fenstermacher served as Vice President for Brinker
International, Inc., an international restaurant chain. From September 1991
until May 1994, Mr. Fenstermacher served as Chief Executive Officer and Chief
Financial Officer for On The Border Cafes, Inc., an international restaurant
chain. Mr. Fenstermacher received an M.B.A. from the University of Pittsburgh
and a B.A. from the University of Notre Dame.
Eileen M. Vennum joined Mannatech in January 1997 and until January 1998
served as Director of Regulatory Affairs. From January 1998 until June 1999,
Ms. Vennum served as Executive Director of Regulatory Affairs. In July 1999,
Ms. Vennum was promoted to Vice President of Regulatory Affairs. From 1988
until December 1996, Ms. Vennum was a Director of Regulatory Affairs, Document
Control and Technical Editor for Carrington Laboratories, Inc., a
pharmaceutical research, development and manufacturing company. Ms. Vennum
attended David Lipscomb University, Harding University and the University of
Dallas. Ms. Vennum holds a Regulatory Affairs Certified designation from the
Regulatory Affairs Professional Society.
Gwendolyn J. Pennington joined Mannatech in September 1996 and until
October 1999 served as Executive Director of Human Resources. In October 1999,
Ms. Pennington was promoted to Vice President of Human Resources. From October
1994 until August 1996, Ms. Pennington was the Director of Human Resources at
Excel Communications, Inc., a multilevel marketing telephone long-distance
service provider. Ms. Pennington received a B.S. in Behavioral Management from
the University of Texas at Dallas and an M.B.A. from the University of Dallas.
Terry L. Persinger joined Mannatech in November 1999 and since has served
as Chief Operating Officer of Domestic Operations, director and Corporate
Secretary. Mr. Persinger served as Executive Vice President until March 31,
2000. On April 1, 2000, Mr. Persinger was promoted to President. Mr.
Persinger's current term as director expires in 2002. From 1968 until August
1999, Mr. Persinger worked at Goodyear Tire & Rubber Company, an international
manufacturer of tires and rubber products and from January 1995 to August 1999
served as Vice President and General Manager of Engineered Products. Mr.
Persinger received a B.S. in Chemical Engineering from the University of
Cincinnati and a graduate of the PMD management program at Harvard University.
Mr. Persinger is the brother-in-law of Donald W. Herndon.
Brad G. Wayment joined Mannatech in November 1999 and since has served as
Vice President of Marketing. From June 1998 to October 1999, Mr. Wayment was
Vice President of Marketing at New Vision International, a network marketing
company involved in the distribution and sales of nutritional and personal
care products. From November 1996 to June 1998, Mr. Wayment served as Business
Development/Product
8
<PAGE>
Marketing Manager with Novell Inc., a network and Internet directory software
and services company. From November 1989 to November 1996, Mr. Wayment was
Product Management Team Leader of Marketing/Product Development at Nu Skin
Enterprises, Inc., a direct selling company involved in the distribution and
sales of nutritional and personal products. Mr. Wayment received a B.A. and
M.B.A. from Brigham Young University.
Steven A. Barker Ph.D. became one of our independent directors in January
1998. Mr. Barker's current term as director expires in 2002. Dr. Barker has
been a full professor of Physiology, Pharmacology and Toxicology at Louisiana
State University since April 1990. Dr. Barker received a B.S. and an M.S. in
Chemistry and a Ph.D. in Chemistry/Neurochemistry from the University of
Alabama-Birmingham.
Chris T. Sullivan became one of our independent directors in October 1997.
Mr. Sullivan's current term as director expires in 2001. Mr. Sullivan has been
the Chairman of the Board and Chief Executive Officer of Outback Steakhouse,
Inc. since founding that company in 1988. Mr. Sullivan serves on the executive
committee for The Outback/Gary Koch Pro-Am, the Tampa Bay Devil Rays, the
Employment Policies Institute and the Presidents Conference. Mr. Sullivan
received a degree in Business and Economics from the University of Kentucky.
James M. Doyle, Jr. became one of our independent directors in October
1999. Mr. Doyle's current term as director expires in 2002. In 1975, Mr. Doyle
joined Matthews & Branscomb, P.C., a law firm, located in San Antonio, Texas
where he is currently a shareholder. Mr. Doyle practices in the area of
business transactions, mergers and acquisitions and corporate law. Mr. Doyle
is a Fellow of the Texas Bar Foundation and a director of the San Antonio
Economic Development Foundation. Mr. Doyle received a B.A. from the University
of the South in Sewanee, Tennessee and a J.D. from Vanderbilt University.
Classes of our Board of Directors
Our Board of Directors is divided into three classes that serve staggered
three-year terms expiring at the annual shareholders meeting as follows:
<TABLE>
<CAPTION>
Class Expiration Member
----- ---------- ------
<S> <C> <C>
Class I.................................. 2000 Canale, Henry
Class II................................. 2001 Fioretti, Sullivan
Class III................................ 2002 Barker, Persinger, Doyle
</TABLE>
During fiscal 1999, the Board of Directors had 4 regular meetings and 1
special meeting. All of the directors attended at least 75 percent of the
meetings during fiscal 1999.
Committees of the Board of Directors
Our Board of Directors has three committees each composed solely of two of
our three independent directors, Messrs. Barker and Sullivan. The committees
and their function are as follows:
. The Audit Committee is charged with reviewing our annual audit and
meeting with our independent accountants to review our internal controls
and financial management practices. The Audit Committee had 2 meetings
during fiscal 1999.
. The Compensation Committee is responsible for establishing salaries,
bonuses and other compensation for our executive officers. The
Compensation Committee had 1 meeting during fiscal 1999.
. The Option Committee has the authority to determine the terms and
conditions of each option to be issued under our stock option plans and
responsible for administration of each such plan. The Option Committee
had 1 meeting during fiscal 1999.
In addition, Mannatech also maintains an Executive Operating Committee
comprised of seven executive officers. The Executive Operating Committee has
the authority to make specific recommendations and render
9
<PAGE>
advice to the Board of Directors on various matters regarding operations. The
seven members include the President, Chief Executive Officer and all Executive
and Senior Vice Presidents.
The entire Board of Directors nominates all of the directors and officers,
as they did not appoint a Nominating Committee. The Board of Directors may
consider nominees recommended, in writing, by shareholders. The written
nomination for a director, by a shareholder, must be submitted to Mannatech's
General Counsel no later than December 31st.
Director Compensation
Messrs. Barker and Sullivan, two of our three independent directors, each
receives an annual fee of $30,000 for serving on our Board of Directors. In
addition, our directors are reimbursed for their reasonable out-of-pocket
expenses, in connection with their travel to and attendance at meetings of our
Board of Directors or its committees. On October 19, 1999, we granted 50,000
stock options to Mr. Barker at an exercise price of $7.69 per share, which was
the approximate fair value of our common stock on that date.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of our common stock, to file with
the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of our common stock and other equity
securities. Such persons are required by the Securities and Exchange
Commission's regulations to furnish us with copies of all Section 16(a)
reports they file. Prior to our initial public offering, our directors,
executive officers and persons who own more than 10% of our common stock were
not subject to the requirements of the Exchange Act.
Based solely upon a review of the copies of such reports or written
representations that no other reports were required, we believe that during
the fiscal year ended December 31, 1999 our executive officers, directors and
greater than 10% beneficial owners complied with all applicable Section 16(a)
filing requirements, except for the following:
. Stephen D. Fenstermacher, Donald W. Herndon, Gwendolyn J. Pennington,
Terry L. Persinger, Eileen M. Vennum and Brad G. Wayment, all of whom are
our executive officers did not timely file their initial report on Form
3.
. Steven A. Barker, Ph.D., one of our directors and Jeffrey P. Bourgoyne,
Stephen D. Fenstermacher and Eileen M. Vennum, all of whom are our
executive officers did not timely file Form 4's required as a result of
being granted stock options.
. Mr. William C. Fioretti, 10% beneficial owner of our common stock, did
not timely file Form 4's on seven different occasions relating to the
sale of his shares.
. Peter E. Hammer, one of our executive officers, did not timely file a
Form 4 on two occasions relating to the sale of his shares.
. Donald W. Herndon, executive officer, did not timely file a Form 4 on two
occasions relating to the sale of his shares.
We have begun to send monthly reporting reminders to each of our executive
officer, directors and 10% beneficial owners to assist them in their Section
16(a) reporting requirements.
10
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or earned for each
of the three years ended December 31, 1999, by each person who served as the
Chief Executive Officer during 1999 and the four most highly compensated
executive officers, other than the Chief Executive Officer, who were serving
as executive officers at the end of 1999 (collectively, the "Named Executive
Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Number of
Annual Shares
Compensation Other Underlying
Name And Principal ----------------- Annual Options
Position Year Salary Bonus Compensation Granted
------------------ ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Charles E. Fioretti (2)... 1999 $600,000 $158,517 $ 112,593(3) --
Chairman of the Board and 1998 433,517 750,000 9,044(4) --
Chief Executive Officer 1997 403,434 760,000 109,765(4) --
Samuel L. Caster.......... 1999 600,000 101,981 29,571(5) --
President 1998 433,517 500,000 2,942(6) --
1997 403,434 760,000 16,012(6) --
Anthony E. Canale......... 1999 300,000 64,759 1,395,528(7) --
Executive Vice President 1998 287,500 326,293 11,925(8) 250,000
and Chief Operating 1997 221,978 190,172 -- 250,000
Officer of International
Patrick D. Cobb(9)........ 1999 300,000 51,990 1,172,911(10) --
Executive Vice President 1998 245,055 250,000 2,077 100,000
of International Finance 1997 214,011 171,666 43,000(11) 100,000
Deanne Varner............. 1999 261,539 58,032 1,388,900(12) --
Executive Vice President 1998 225,275 323,793 1,644 228,000
of Compliance and 1997 187,019 159,884 -- 228,000
General Counsel
</TABLE>
- --------
(1) Includes our matching contribution to the 401(k) plan, paid to executives
except for Mr. Fioretti and Mr. Caster.
(2) Mr. Fioretti became Chief Executive Officer on May 1, 1997 and resigned on
March 31, 2000.
(3) Represents the value of two of our vehicles transferred to Mr. Fioretti in
1999.
(4) Represents the amounts paid to Mr. Fioretti under his incentive
compensation agreement.
(5) Represents a car allowance paid to Mr. Caster.
(6) Represents the amount paid to Mr. Caster under his incentive compensation
agreement.
(7) Represents $10,000 for the 401(k) Plan matching contribution, $2,786 car
allowance paid to Mr. Canale and $1,274,680 for the noncash compensation
value for stock options sold.
(8) Represents the amount paid to Mr. Canale for costs of relocation.
(9) Mr. Cobb served as Chief Financial Officer until October 1999.
(10) Represents $10,840 car allowance, $10,000 for the 401(k) Plan matching
contribution paid to Mr. Cobb and $1,160,125 for the noncash compensation
value for stock options sold.
(11) Represents the value of one of our vehicles transferred to Mr. Cobb in
1997.
(12) Represents $10,000 for the 401(k) Plan matching contribution, $4,212 car
allowance paid to Ms. Varner and $1,374,688 for the noncash compensation
value for stock options sold.
11
<PAGE>
Stock Option Grants in the Last Fiscal Year
Mannatech did not grant any stock options to any of the "Named Executive
Officers" during the fiscal year ended December 31, 1999.
Stock Options Exercised in Last Fiscal Year
The following table sets forth certain information concerning the exercise
of stock options held by the Named Executive Officers during the fiscal year
ended December 31, 1999:
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Shares Underlying Value of Unexercised
Shares Acquired Value Unexercised Options at In-the-Money Options at
Name on Exercise (#) Realized ($) Fiscal Year-End Fiscal Year-End(1)
---- --------------- ------------ ----------------------------- -------------------------
Exercisable (2) Unexercisable Exercisable Unexercisable
--------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Anthony E. Canale....... 100,000 $ 135,000 400,000 -- $575,700 $--
Patrick D. Cobb......... 100,000 $ 135,000 100,000 -- $ -- $--
Deanne Varner........... 174,074 $ 235,000 281,926 -- $206,968 $--
</TABLE>
- --------
(1) Based on the closing price of $5.188 per share of our common stock on the
Nasdaq National Market on December 31, 1999, our fiscal year-end, less the
per share exercise price of $1.35.
(2) 250,000 of Mr. Canale's, 100,000 of Mr. Cobb's and 228,000 of Ms. Varner's
options are exercisable at $8.00 and were considered out-of-the-money for
the above value calculation.
Executive Employment Agreements
Mannatech has employment agreements with each of Messrs. Charles E.
Fioretti, Patrick D. Cobb, Anthony E. Canale, Bill H. McAnalley and Ms. Deanne
Varner. These agreements expire in September 2003 but will extend
automatically for one additional year unless both parties agree to terminate
the contract before the end of any term. In addition, in November 1999, we
entered into an employment agreement with Terry L. Persinger, which expires in
November 2002. All of these agreements provide for a current base salary,
bonus compensation based upon the management bonus plan formula the right to
receive stock options and certain confidentiality and non-compete clauses. If
we terminate any of these employment agreements for any reason other than
reasons specified in the agreements, the officer is entitled to receive an
amount equal to the sum of all salary and bonus that would have been paid
during the remainder of their employment agreement. On April 1, 2000, Mr.
Charles E. Fioretti resigned as Chief Executive Officer, however, he is still
bound by the terms of his existing employment agreement. On April 1, 2000, Mr.
Robert M. Henry signed a three-year employment agreement that provides for
similar terms as stated above for the other executive officers.
Management Bonus Plan
Executive officers and some other members of corporate management are
eligible to receive bonuses in addition to their base salaries. Our
Compensation Committee is responsible for reviewing and approving bonuses for
these officers.
Compensation Committee Interlocks and Insider Participation
In February 1999, after the completion of our initial public offering, our
Board of Directors established the Compensation Committee. The Compensation
Committee is responsible for decisions regarding compensation of our executive
officers. The Compensation Committee is composed solely of two of our three
independent directors, Messrs. Barker and Sullivan. None of the members of the
Compensation Committee has ever been an officer or employee of Mannatech.
12
<PAGE>
Executive Compensation Report of the Board of Directors
The Compensation Committee was formed in February 1999. Prior to February
1999, our Board of Directors performed the functions of the Compensation
Committee.
This Executive Compensation Report discusses our executive compensation
policies and the basis for the compensation paid to our executive officers,
including the Chief Executive Officer, Charles E. Fioretti, during the fiscal
year ended December 31, 1999.
Compensation Policy. Our policy with respect to executive compensation has
been designed to:
. adequately and fairly compensate executive officers in relation to their
responsibilities, capabilities and contributions to Mannatech and in a
manner that is commensurate with compensation paid by companies of
comparable size or within our industry; and
. reward our executive officers for the achievement of short-term
operating goals and for the enhancement of our long-term value.
Components of Compensation. The primary components of compensation paid to
our executive officers and the relationship of such components of compensation
to our performance are discussed below:
(a) Base Salary. As the Compensation Committee was not formed until
February 1999, the fiscal year ended December 31, 1999 base salaries
were reviewed and approved by our Board of Directors. At the beginning
of each new fiscal year the Compensation Committee reviews the base
salaries of the executive officers to ensure the salaries are based
correctly upon a number of factors. These factors include our
performance (to the extent such performance can fairly be attributed or
related to each executive officer's performance), as well as the nature
of each executive officer's responsibilities, capabilities, loyalties
and contributions. The Compensation Committee believes that base
salaries for our executive officers have been reasonable in relation to
our size and performance in comparison with the compensation paid by
similarly sized companies or companies within the same industry.
(b) Bonus. Mannatech's executive officers are eligible to participate in
our management bonus plan. The bonus plan is based upon the attainment
of certain financial goals including general performance of Mannatech
and to a reasonable degree, our performance in accordance with
projected budgets. The bonuses for the fiscal year ended December 31,
1999 were reviewed and approved by the Compensation Committee and paid
by January 15, 2000. Subsequent bonuses paid to the executive officers
will be reviewed and approved by the Compensation Committee and paid no
less than annually. During the fiscal year ended December 31, 1999, our
Chief Executive Officer, Charles E. Fioretti, was awarded an additional
bonus of $56,536 for his efforts with respect to the completion of our
initial public offering.
(c) Other Annual Compensation. Mannatech maintain certain other plans and
arrangements for the benefit of our executive officers and other
management, including participation in the 401(k) plan, use of a
company vehicle and health, life, automobile and long term disability
insurance. During the last quarter of 1999, the Compensation Committee
approved a new policy where by all employees at the Vice President
level and above were awarded monthly car allowances of $500.00. In
addition, the Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, Chief Scientific Officer, President, General Counsel
and Chief Executive Officer of our subsidiaries were awarded the use of
a vehicle leased by Mannatech. In 1999, the Chief Executive Officer
elected not to use a vehicle leased by Mannatech. We believe these
benefits are reasonable in relation to the executive compensation
practices of other similarly sized companies or companies within the
same industry.
(d) Long-term Compensation. Mannatech maintain stock option plans to reward
certain members of management for the attainment of certain goals or
events. The stock option grants are reviewed and approved by our Option
and Compensation Committees. We believe these long-term compensation
arrangements are reasonable in relation to the executive compensation
practices of other similarly sized companies or companies within the
same industry.
13
<PAGE>
1999 Chief Executive Officer Compensation
As previously described, the Compensation Committee considered several
factors in determining the Chief Executive Officer's compensation package,
with the primary factor being our performance and the competitive compensation
paid to other executive officers of comparable size companies of companies
within the same industry. Specific actions taken by the Compensation Committee
regarding Mr. Fioretti's 1999 compensation are summarized below:
(a) Base Salary. As with our other executive officers, Mr. Fioretti's 1999
salary was based on a number of factors. These factors include our
performance, overall consolidated financial results, as well as the
nature of his responsibilities, capabilities, loyalties and
contributions to Mannatech. For fiscal year 1999, Mr. Fioretti's salary
remained at $600,000.
(b) Bonus. Mannatech's Chief Executive Officer is allowed to participate in
our management bonus plan. Our bonus plan is based upon the attainment
of certain financial goals. The Board of Directors approved a $56,536
bonus to Mr. Fioretti in February 1999, prior to the formation of the
Compensation Committee. The bonus was awarded in recognition of Mr.
Fioretti's efforts relating to the successful completion of our initial
public offering. In addition, Mr. Fioretti was paid $101,981 pursuant
to the Management Bonus Plan.
(c) Other Annual Compensation. All of Mannatech's other executive officers
may participate in our 401(k) plan, but the Chief Executive officer has
elected not to participate at this time. In 1999, the Compensation
Committee elected to bonus two remaining company-owned vehicles having
a combined value of $112,595 to the Chief Executive Officer in lieu of
a cash bonus. Mr. Fioretti has elected not to be furnished a vehicle
leased by Mannatech at this time. Mr. Fioretti is also provided with
health, life, automobile and long-term disability insurance coverage.
$1 Million Pay Deductibility Cap. Under Section 162(m) of the Internal
Revenue Code, public companies are precluded from receiving a tax deduction on
compensation paid to executive officers in excess of $1 million, unless the
compensation is excluded from the $1 million limit as a result of being
classified as performance-based. At this time, none of our executive officers'
cash compensation levels exceed the $1 million pay limit. We do not anticipate
exceeding this limit in the near future. Nonetheless, the Compensation
Committee intends to periodically review its executive pay plans in light of
this regulation.
Conclusion. The Compensation Committee believes the concepts discussed
above further the shareholders' interests and that officer compensation
encourages responsible management of Mannatech. The Compensation Committee
regularly considers the effect of executive compensation on shareholder
interests. These factors, reports of the Executive Operating Committee and
discussions with and information compiled by various independent consultants
retained by us will be used in determining executive officer compensation.
Compensation Committee (1)
Chris T. Sullivan
Steven A. Barker Ph.D.
- --------
(1) The Compensation Committee was formed on February 10, 1999; prior to that
time, the Board of Directors approved compensation. In February 1999, the
Board of Directors consisted of Messr. Charles E. Fioretti, Samuel L.
Caster, Patrick D. Cobb, Chris T. Sullivan and Steven A. Barker Ph.D.
Stock Option Plans
The 1997 Stock Option Plan was adopted by our Board of Directors on May 14,
1997. The 1998 Incentive Stock Option Plan was adopted by our Board of
Directors on April 8, 1998 and amended on September 4, 1998 to increase the
number of shares reserved for issuance from 500,000 to 1,000,000 shares. Both
stock option plans are intended to encourage investment by our officers,
employees, non-employee directors and consultants in shares of our common
stock so that they will have an increased interest in and greater concern for
the welfare of Mannatech.
14
<PAGE>
Options granted under either stock option plan may either be incentive
stock options or options that do not qualify for treatment as incentive stock
options under Section 422 of the Internal Revenue Code of 1986. Options
granted under the 1998 Incentive Stock Option Plan may only be granted to our
officers, directors and employees.
Incentive stock options may be granted under our stock option plans to any
person who is one of our officers or other employees (including officers and
employees who are also directors) or any parent or subsidiaries that may exist
in the future. The exercise price of incentive stock options must equal at
least the fair market value of a share of our common stock on the date of
grant.
The following table sets forth information regarding our stock option plans
as of March 24, 2000:
Stock Option Plan Information
<TABLE>
<CAPTION>
# of Weighted Vested of Shares
Shares # of Options Average and Available
Authorized Granted Exercise Price Exercisable for Grant
---------- ------------ -------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1997 Stock Option
Plan................... 2,000,000 2,000,000 $2.34 1,001,152 --
1998 Incentive Stock
Option Plan............ 1,000,000 963,500 $7.89 291,333 36,500
</TABLE>
The Option Committee has full and final authority in its discretion,
subject to the stock option plans' provisions, to determine, among other
things:
. the individuals to whom options shall be granted;
. whether the option granted shall be an incentive stock option or a non-
qualified stock option;
. the number of shares of our common stock covered by each option;
. the time or times at which options will be granted;
. the option vesting schedule;
. the exercise price of the options;
. the duration of the options granted;
. to prescribe, amend and rescind rules and regulations relating to the
stock option plans;
. accelerate or defer (with the consent of the Optionee) the exercise date
of any option; and
. authorize any person to execute on our behalf any instrument required to
effectuate the grant of an option previously granted by our Board of
Directors.
The Option Committee consisting of two of our three independent directors,
Messr. Barker and Sullivan, also has the power to decide upon and make rules
that control our stock option plans and take all other actions necessary for
the proper administration of the stock option plans. The stock option plans
may be changed or canceled by our Board of Directors at any time without the
approval of our shareholders, with a few exceptions. However, they may not
take action that affects options previously granted under the stock option
plans.
401(k) Plan
On May 9, 1997, Mannatech adopted a 401(k) Pre-tax Savings Plan. All
employees who have been employed by us for at least 90 days at the beginning
of a quarter and are at least 21 years of age are eligible to participate.
Employees may contribute a maximum of 15.0% of their current compensation to
the 401(k) Plan, up to a statutorily prescribed annual limit. We will make
regular matching contributions to the 401(k) Plan in the amount of $0.25 for
each $1.00 contributed by a participating employee, up to 6.0% of a
participating employee's annual compensation, including overtime. The 401(k)
Plan also provides that Mannatech can make profit-sharing
15
<PAGE>
contributions to the plan each year based upon our profit. Employee
contributions and our matching contributions are paid to a corporate trustee
and invested as directed by the participating employee. Our contribution in the
401(k) Plan vests over 5 years or earlier if the participating employee retires
at age 65, becomes disabled or dies. Payments to participating employees may
also be made in the case of a financial hardship. Payments may be made in a
lump sum. The 401(k) Plan is intended to qualify under Section 401 of the
Internal Revenue Code of 1986, so that contributions made by employees or by us
to the 401(k) Plan, and income earned on these contributions, are not taxable
to employees until withdrawn from the 401(k) Plan.
Performance Graph
The graph below depicts our stock price as an index, assuming $100.00 was
invested on February 16, 1999, the date of our initial public offering, along
with the composite stock prices of companies listed in our peer group and those
in the S & P Midcap Index. This information has been provided to us by the
Nasdaq National Stock Market. The comparisons in the graph are required by
regulations of the Securities and Exchange Commission and are not intended to
forecast or to be indicative of the possible future performance of our common
stock. The publicly traded companies in our peer group are Rexall Sundown,
Inc.; Twinlab Corp.; Weider Nutrition International, Inc.; Nature's Sunshine
Products, Inc.; Reliv International, Inc.; and Nu Skin Enterprises Inc.
[PERFORMANCE GRAPH]
* This graph assumes $100.00 invested on February 16, 1999 in stock or index
including reinvestment of dividends and includes any adjustments for stock
splits and stock dividends, for the fiscal year ended December 31, 1999.
16
<PAGE>
The preceding report on executive compensation and the stock performance
graph is not incorporated by reference into any of our previous or future
filings under the Securities Act of 1933 or the Securities Exchange Act of
1934 which might incorporate filings made by us under those Acts, except to
the extent that we specifically incorporate this information by reference.
<TABLE>
<CAPTION>
Measurement Period Mannatech S&P Midcap Index Peer Group Index
------------------ --------- ---------------- ----------------
<S> <C> <C> <C>
February 16, 1999................ $100.00 $100.00 $100.00
December 31, 1999................ $ 23.10 $123.40 $ 59.76
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 29, 2000, the number of
shares of our common stock and the percentage of the outstanding shares of
such class that are beneficially owned by (A) each person who is the
beneficial owner of more than 5% of the outstanding shares of our common
stock, (B) each of our directors and the Named Executive Officers, and (C) all
of our current officers and directors, as a group.
<TABLE>
<CAPTION>
Beneficial Ownership(1)
------------------------------------
Number of
Shares
Name of Directors and Excluding Stock % of Class
Executive Officers Options Options(2) Total Outstanding(3)
--------------------- ---------- --------- ---------- --------------
<S> <C> <C> <C> <C>
Samuel L. Caster............ 5,713,549 -- 5,713,549 22.9%
c/o Mannatech, Incorporated
Suite 200
Coppell, TX 75019
Charles E. Fioretti......... 5,181,267 -- 5,181,267 20.8
c/o Mannatech, Incorporated
600 S. Royal Lane suite 200
Coppell, TX 75019
William C. Fioretti(4)...... 5,165,549 -- 5,165,549 20.7
c/o Agritech Labs, Inc.
6333 N. St. Highway 161
Suite 350
Irving, TX 75063
Chris T. Sullivan(5)........ 342,537 100,000 442,537 1.8
Patrick D. Cobb(6).......... 318,525 100,000 418,525 1.7
Anthony E. Canale........... -- 350,000 350,000 1.4
Deanne Varner............... 74,074 281,926 356,000 1.4
Terry L. Persinger.......... 1,000 -- 1,000 *
All 19 executive officers
and directors as a
group*..................... 12,344,489 1,195,485 13,539,974 51.8%
</TABLE>
- --------
* Less than 1%
(1) The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as defined in Rule 13d-3 under
the Exchange Act. All information with respect to the beneficial ownership
of any shareholder has been furnished by such shareholder and, except as
otherwise indicated or pursuant to community property laws, each
shareholder has sole voting and investment power with respect to shares
listed as beneficially owned by such shareholder.
17
<PAGE>
(2) The directors and executive officers have the right to acquire shares of
our common stock shown in this column within 60 days through the exercise
of stock options.
(3) Shares of our common stock which are not outstanding but the beneficial
ownership of which can be acquired by a person upon exercise of an option
within 60 days of February 29, 2000 are deemed outstanding for the purpose
of computing the percentage of outstanding shares beneficially owned by
such person and by the group of executive officers and directors. However,
such shares are not deemed to be outstanding for the purpose of computing
the percentage of outstanding shares beneficially owned by any other
person.
(4) Includes 1,450,102 shares of our common stock held by the Fioretti Family
Partnership, Ltd. of which William C. Fioretti is the general partner and
he, his wife and trusts for the benefit of their children are the limited
partners.
(5) All of these shares of our common stock and the options are held by Multi-
Venture Partners, Limited, an investment partnership formed by Mr.
Sullivan and two other partners. The management of Multi-Venture is
controlled by its sole general partner, SBG Investments, L.L.C., which
owns a 0.6% general partnership interest in Multi-Venture. Mr. Sullivan
owns a 27.2% interest in SBG. Mr. Sullivan shares voting and dispositive
power with respect to our common stock owned by Multi-Venture.
(6) Includes 60,000 shares of our common stock held by Joni J. Cobb, Mr.
Cobb's spouse, and 10,000 shares held by trusts established for the
benefit of Mr. Cobb's children and stepchildren.
We are not aware of any arrangements, including any pledge of our
securities, the operation of which may at a subsequent date result in a change
in control of Mannatech.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Loans to Officers
In December 1997, we orally agreed to advance four officers money to pay
the taxes caused by the cancellation of their incentive compensation
agreements and on December 31, 1997 we signed loan agreements with these four
officers. On December 31, 1997, we loaned $162,052 to Dr. Bill H. McAnalley
Ph.D., our Senior Vice President of Research and Product Development, and
$121,782 to Mr. Peter E. Hammer, our Vice President of new Business and
International Development. The non-interest bearing loans were collateralized
by shares of our common stock owned by these officers. The loans were repaid
in February 1999 after the officers received the proceeds from the sale of
their shares of common stock in our initial public offering.
The preceding report on executive compensation and the stock performance
graph is not incorporated by reference into any of our previous or future
filings under the Securities Act of 1933 or the Securities Exchange Act of
1934 which might incorporate filings made by us under those Acts, except to
the extent that we specifically incorporate this information by reference.
Loans to Agritech Labs, Inc.
During 1996 and 1997, we made cash advances to Agritech Labs, Inc. and
Agritech Technology, Ltd. totaling approximately $918,000. The Agritech
companies were owned by individual partners of which over 90% of the Agritech
companies were owned by Messrs. Charles E. Fioretti, Samuel L. Caster, Patrick
D. Cobb, who are shareholders and executive officers of Mannatech and Mr.
William C. Fioretti, who is a shareholder and former executive officer of
Mannatech. Because we were concerned about the ability of these Agritech
companies to repay the loans, each of Messrs. William C. Fioretti, Charles E.
Fioretti, Samuel L. Caster and Patrick D. Cobb agreed to pay the obligations
that these Agritech companies owed Mannatech. Each of these individuals gave
promissory notes to us totaling approximately $918,000. Each promissory note
bore interest at
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6.0% per year and was payable on the earlier of the sale of the Agritech
companies or December 31, 1998. The principal amount outstanding under the
notes issued by each of Messrs. William C. Fioretti, Charles E. Fioretti and
Samuel L. Caster at December 31, 1998 was approximately $275,400 and the
principal amount outstanding under the note made by Mr. Patrick D. Cobb at
December 31, 1998 was approximately $45,900. On December 31, 1998, we renewed
the notes with an extended due date of December 31, 1999. On February 17,
1999, we signed new notes with each of the shareholders. The new notes bear
interest at 6.0% per year, with the first payment due immediately and the
remainder to be paid in annual installments through February 17, 2004. As of
December 31, 1999, the principal amount outstanding under the new notes made
by each of Messrs. William C. Fioretti, Charles E. Fioretti and Samuel L.
Caster is approximately $210,000 and the principal amount outstanding under
the new note made by Mr. Patrick D. Cobb is approximately $35,000.
Commission Agreement, Consulting Fees and Receivables from Related Parties
In 1998 and 1999, Mr. William C. Fioretti earned approximately $121,000 and
$453,000, respectively, for commissions pursuant to an agreement with
Mannatech, which commissions were paid in 1998 and 1999. On October 20, 1998,
we paid Mr. Fioretti $250,000 for consulting services he performed for us over
the course of 1998 in sports marketing and product development issues. Mr.
Fioretti is one of our founders, a major shareholder and the cousin of Charles
E. Fioretti, our Chairman of the Board and Chief Executive Officer.
During 1997, we advanced $125,000 to Mr. William C. Fioretti's brother-in-
law, which remained unpaid at December 31, 1998. During 1999, Mr. Fioretti
guaranteed the repayment of this payable to us; however, in December 1999, we
wrote off this loan, when we determined it was not collectible and released
Mr. Fioretti from his guarantee.
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Forward-Looking Statements
Some of our statements in this proxy constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934 that are subject to
certain events, risks and uncertainties that maybe outside of our control.
These forward-looking statements include statements relating to the "2000
Stock Option Plan"; "Section 16(a) Beneficial Ownership Reporting Compliance";
"Executive Compensation". In some cases, forward-looking statements are
identified by terminology such as "may," "will," "should," "could," "expects,"
"plans," "intends," "anticipates," "believes," "estimates," "approximates,"
"predicts," "potential" or "continue" or the negative of such terms and other
comparable terminology.
Actual results, plans or developments could differ materially from those
expressed in or implied by such statements due to a number of factors,
including, without limitation; those described in the context of such forward-
looking statements; the entrance into new countries and markets; the risk
factors described from time to time in other documents and reports filed with
the Securities and Exchange Commission.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor anyone else
assumes responsibility for the accuracy and completeness of such statements.
We are under no duty to update any of the forward-looking statements after the
date of this report.
By Order of the Board of Directors
Terry L. Persinger
Corporate Secretary
Dated: May 12, 2000
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APPENDIX A
MANNATECH, INCORPORATED
2000 STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of this 2000 Stock Option Plan is to
attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to the
Employees of the Company and to promote the success of the Company's
business and reward directors and consultants of the Company.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Code" shall mean the Internal Revenue Code of 1986.
(b) "Common Stock" shall mean the Common Stock of the Company.
(c) "Company" shall mean Mannatech, Incorporated, a Texas corporation.
(d) "Option Committee" shall mean the Option Committee appointed by the
Board of Directors in accordance with paragraph (a) of Section 4 of the
Plan.
(e) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous
Status as an Employee shall not be considered interrupted in the case
of sick leave, military leave, or any other leave of absence approved
by the Option Committee; provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave
is guaranteed by contract or statute.
(f) "Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(g) "Incentive Stock Option" shall mean an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(h) "Non-Employee Director" shall mean a Non-Employee Director as defined
in Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), promulgated under SEC Release 34-37260 (May 31, 1996),
as such rule may be amended from time to time.
(i) "Option" shall mean a stock option granted pursuant to the Plan.
(j) "Optioned Stock" shall mean the Common Stock subject to an Option.
(k) "Optionee" shall mean an Employee, Director or Consultant, who receives
an Option.
(l) "Parent" shall mean a "parent corporation", whether now or hereafter
existing, as defined in Section 425(e) of the Code.
(m) "Plan" shall mean this 2000 Stock Option Plan.
(n) "Stock Option Agreement" shall mean a Stock Option Agreement, pursuant
to which Options are granted under the Plan.
(o) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(p) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of shares, which may be optioned and
sold under the Plan, is 2,000,000 shares of common stock. The Shares may be
authorized, but unissued or reacquired Common Stock.
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If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares, which were
subject thereto, shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the Option Committee
consisting of not less than two Non-Employee Directors to administer
the Plan, subject to such terms and conditions as the Board of
Directors may prescribe. From time to time the Board of Directors may
increase the size of the Option Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new
members in substitution therefore, fill vacancies however caused, or
remove all members of the Option Committee and thereafter directly
administer the Plan.
(b) Powers of the Option Committee. Subject to the provisions of the Plan,
the Option Committee shall have the authority, in its discretion to
grant Non-qualified Stock Options and Incentive Stock Options, in
accordance with Section 422 of the Code; to determine, upon review of
relevant information and in accordance with Section 8(b) of the Plan,
the fair market value of the Common Stock; to determine the exercise
price per share of Options to be granted, which exercise price shall be
determined in accordance with Section 8(a) of the Plan; to determine
the Employees to whom, and the time or times at which, Options shall be
granted and the number of shares to be represented by each Option; to
interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions
of each Option granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend each Option; to
accelerate or defer (with the consent of the Optionee) the exercise
date of any Option, consistent with the provisions of Section 5 of the
Plan; to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously
granted by the Option Committee; and to make all other determinations
deemed necessary or advisable for the administration of the Plan.
(c) Effect of Option Committee's Decision. All decisions, determinations
and interpretations of the Option Committee shall be final and binding
on all Optionees and any other holders of any Options granted under the
Plan.
5. Eligibility.
(a) Incentive Stock Options may be granted only to Employees. An Employee,
who has been granted an Option may, if such Employee is otherwise
eligible, is granted an additional Option or Options.
(b) The Plan shall not confer upon any Optionee any right with respect to
continuation of employment with the Company nor shall it interfere in
any way with Optionee's right or the Company's right to terminate
Optionee's employment at any time.
6. Term of Plan. The Plan shall become effective upon by the adoption by the
Option Committee and the approval by the shareholders of the Company as
described in Section 17 of the Plan. It shall continue in effect for a term
of ten (10) years unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be ten (10) years from the
date of. However, in the case of an Option granted to an Optionee who, at
the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the term of the Option shall be five (5) years
from the date of grant thereof or such shorter time as may be provided in
the Stock Option Agreement.
8. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the
Option Committee, but shall be subject to the following:
(i) In the case of an Option granted to an Optionee, who, at the time
of the grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the fair market value per Share on
the date of grant.
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(ii) In the case of an Option granted to any other Optionee, the per
Share exercise price shall be no less than 100% of the fair market
value per Share on the date of grant.
(b) The fair market value per share shall be determined using the quoted
closing sale price per share as reported by Nasdaq National Market.
(c) The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by
the Option Committee and may consist entirely of cash, certified or
official bank check, other Shares of the Company's Common Stock having
a fair market value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be
exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares to the
extent permitted under the Texas Business Corporation Act.
9.Exercise of Option
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions
as determined by the Option Committee, including performance criteria
with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.
(i) An Option may not be exercised for a fraction of a Share.
(ii) An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option
and full payment for the Shares with respect to which the Option
is exercised has been received by the Company. Full payment, as
authorized by the Option Committee, may consist of a consideration
and method of payment allowable under section 8(c) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of the duly authorized transfer agent of
the Company) of the stock certificate evidencing such Shares, no
right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is
prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan. Prior to the time of issuance,
the Company shall satisfy its employment tax and other tax
withholding obligations by requiring the Optionee to pay the
amount of withholding tax, if any, that must be paid under
federal, state and local law due to the exercise of the Option,
subject to such restrictions or procedures as the Company deems
necessary to satisfy Rule 16b-3 of the Exchange Act. The payment
of such withholding tax may be by certified or official bank check
or by the delivery of a number of shares of Common Stock (plus
cash if necessary) having a fair market value equal to the amount
of such withholding tax.
(iii) Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number
of Shares as to which the Option is exercised.
(b) Termination of Status as an Employee. If any Employee ceases to serve
as an Employee, such Employee may, but only within thirty (30) days
after the date such person ceases to be an Employee, exercise his or
her Option to the extent that such person was entitled to exercise it
at the date of such termination. To the extent that such Employee was
not entitled to exercise the Option at the date of such termination, or
if such Employee does not exercise such Option (which such person was
entitled to exercise) within the time specified herein, the Option
shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of Section 9(b)
above, in the event an Employee is unable to continue his or her
employment relationship with the Company as a result of such Employee's
total and permanent disability (as defined in Section 22(e)(3) of the
Code), such
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Employee may, but only within six (6) months (or such other period of
time not exceeding twelve (12) months as is determined by the Option
Committee at the time of grant of the Option) from the date of
termination, exercise his or her Option to the extent such person was
entitled to exercise it at the date of such termination. To the extent
that the Employee was not entitled to exercise the Option at the date of
termination, or if such Employee does not exercise such Option (which
such person was entitled to exercise) within the time specified herein,
the Option shall terminate.
(i) Death of Optionee. In the event of the death of an Optionee the
Option may be exercised, at any time within six (6) months following
the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance.
10. Non-Transferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares
of Common Stock covered by each outstanding Option, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of any Option, as
well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Option committee, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Option Committee. The Option
Committee may, in the exercise of its sole discretion in such instances,
declare that any Option shall terminate as of a date fixed by the Option
Committee and give each Optionee the right to exercise his or her Option as
to all or any part of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. In the event of the proposed sale
of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Option shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Option
Committee determines, in the exercise of its sole discretion and in lieu of
such assumption or substitution, that the Optionee shall have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable. If the Option Committee
makes an Option fully exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Option Committee shall notify
the Optionee that the Option shall be fully exercisable for a period of
thirty (30) days from the date of such notice, and the Option will terminate
upon the expiration of such period.
12. Time of Granting Options. The date of grant of an Option shall be the date
on which the Option Committee makes the determination granting such
Option. Notice of the determination shall be given to each Optionee to
whom an Option is so granted within a reasonable time after the date of
such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board of Directors may amend or
terminate the Plan from time to time in such respects as the Option
Committee may deem advisable; provided that, the following
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revisions or amendments shall require approval of the shareholders of
the Company in the manner described in Section 17 of the Plan:
(i) An increase in the number of Shares subject to the Plan above
2,000,000 Shares, other than in connection with an adjustment under
Section 11 of the Plan;
(b) Effect of Amendment or Termination. Any such amendment or termination
of the Plan shall not affect Options already granted and such Options
shall remain in full force and effect as if the Plan had not been
amended or terminated, unless mutually agreed otherwise between the
Optionee and the Option Committee, which agreement must be in writing
and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, applicable state securities laws, and
the requirements of the Nasdaq National Market upon which the Shares are
listed, and shall be further subject to the approval of general counsel
for the Company with respect to such compliance.
(a) As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such
Shares if, in the opinion of general in-house counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available up to 2,000,000 Shares as shall be
sufficient to satisfy the requirements of the Plan.
(a) Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's general
in-house counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written option agreements
in such form, as the Option Committee shall approve.
17. Shareholder Approval. Continuance of the Plan shall be subject to approval
by the Shareholders of the Company within twelve months before or after
the date, the Plan is adopted by the Board of Directors. If such
Shareholder approval is obtained at a duly held Shareholders meeting, it
may be obtained by the affirmative vote of the holders of a majority of
the outstanding shares of the Company, such holders being present or
represented and entitled to vote thereon.
18. Information to Optionees. The Company shall provide upon request, to each
Optionee, during the period for which such Optionee has one or more
Options outstanding, copies of all annual reports and other information
which are provided to all Shareholders of the Company. The Company shall
not be required to provide such information if the issuance of Options
under the Plan is limited to key employees whose duties in connection with
the Company assure their access to equivalent information.
19. CHOICE OF LAW. THE CORPORATE LAW OF THE STATE OF TEXAS WILL GOVERN ALL
QUESTIONS CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
SHAREHOLDERS. ALL OTHER QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY
AND INTERPRETATION OF THIS PLAN AND THE INSTRUMENTS EVIDENCING OPTIONS
WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE
STATE OF TEXAS.
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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Plan effective as of the 28th day of April, 2000.
MANNATECH, INCORPORATED
By: /s/ Robert M. Henry
-----------------------------------
Name: Robert M. Henry
Title: Chief Executive Officer
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MANNATECH, INCORPORATED
2000 COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 19, 2000 AT
9:00 a.m. AT THE GRAPEVINE CONVENTION CENTER, 1209 SOUTH MAIN
STREET, GRAPEVINE, TEXAS.
P
CHRIS T. SULLIVAN and STEVEN A. BARKER Ph.D., or any of them, with
R power of substitution are hereby appointed proxies to vote as
specified all shares of common stock with the shareholder(s)
O named on the reverse side is entitled to vote at the above Annual
Meeting or at any adjournment thereof, and in their discretion to
X vote upon all other matters as may properly be brought before the
Meeting.
Y
Please sign and date on the reverse side and mail promptly in the
enclosed postage-paid envelope or otherwise to P.O. Box 8647,
Edison, New Jersey 08818-8647.
-------------
SEE REVERSE
SIDE
-------------
FOLD AND DETACH HERE
[MANNATECH LOGO]
Annual Meeting of Shareholders
June 19, 2000
9:00 a.m.
Grapevine Convention Center
1209 South Main Street
Grapevine, Texas
Your Vote is Important
Thank you for Voting.
<PAGE>
X Please mark your |
votes as in this |
example. ______
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR the election of
directors, FOR proposals 2 and 3.
- --------------------------------------------------------------------------------
The Board of Directors Recommends a vote FOR proposals 1, 2 and 3.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors:
01. Anthony E. Canale
02. Robert M. Henry
03. Jules Zimmerman
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
2. Appointment of FOR AGAINST ABSTAIN
Independent
Accountants
3. Approval of the 2000
Stock Option Plan
- --------------------------------------------------------------------------------
----------------------------
SPECIAL ACTION
----------------------------
Comments
Discontinue Annual Report
Mailing for this Account
Will Attend Annual Meeting
----------------------------
SIGNATURE(S)________________________________________ DATE_______________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
FOLD AND DETACH HERE ONLY IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL
--------------------------------
--------------------------------
[LOGO OF MANNATECH INCORPORATED]
Dear Shareholder:
Mannatech encourages you to take advantage of new and convenient ways by which
you can vote your shares. You can vote your shares electronically through the
internet or the telephone. This eliminates the need to return the proxy card.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above is our personal code to access the system.
1. To vote over the internet:
. Log on to the internet and go to the web site
http://www.eproxyvote.com/mtex
2. To vote over the telephone:
. On a touch-tone telephone call 1-877-PRX-VOTE (1-877-779-8683) 24
hours a day, 7 days a week
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, do not mail back your proxy
card.
Your vote is important. Thank you for voting.
