ID Technologies Corporation
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NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:00 AM ON OCTOBER 23, 2000
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To the Shareholders:
A Special Meeting of the shareholders of ID Technologies Corporation (the
"Company") will be held in the conference room on the 2nd floor of the offices
of Poyner&Spruill, LLP which is located at 3600 Glenwood Avenue, Raleigh, NC
27605 on Monday, October 23, 2000 at 10:00 AM for the following purposes:
1. To elect five directors, each to serve for a one-year term expiring
in 2001 or until their successors shall have been duly elected and
qualified;
2. To consider and act upon a proposal to approve the Company's
Incentive Stock Option Plan.
3. To ratify the appointment of Ernst & Young, LLP as independent
certified public accountants; and
4. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.
The close of business on September 22, 2000 has been designated as the record
date for the determination of shareholders entitled to notice of and to vote at
such meeting and any adjournment thereof.
Company personnel will be in attendance to host our shareholders. We value our
shareholders and hope you will attend.
/s/ J. Phillips L. Johnston
J. Phillips L. Johnston,
President & Chief Executive Officer
September 29, 2000
IMPORTANT
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF YOU
CANNOT ATTEND THE MEETING, PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS
AND RETURN THE ENCLOSED PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED
ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES. DELAY IN
RETURNING YOUR PROXY MAY SUBJECT THE COMPANY TO ADDITIONAL EXPENSE. IF YOU
ATTEND THE MEETING, WE WILL BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN
PERSON AT THE MEETING.
<PAGE>
ID Technologies Corporation
NCSU Centennial Campus
920 Main Campus Drive, Suite 400
Raleigh, NC 27606
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD October 23, 2000
Introduction
The enclosed proxy is solicited by ID Technologies Corporation (hereafter
referred to as the "Company") for use at the Special Meeting of Shareholders
(the "Special Meeting") to be held in the conference room on the 2nd floor of
the offices of Poyner&Spruill, LLP which is located at 3600 Glenwood Avenue,
Raleigh, NC 27605 on Monday, October 23, 2000 at 10:00 AM for the purposes set
forth in the foregoing Notice of the Special Meeting of Shareholders. This Proxy
Statement and the form of proxy will be mailed to shareholders on or about
September 29, 2000.
Voting of Securities
The record date with respect to this solicitation is September 22, 2000 (the
"Record Date"). All holders of record of Common Stock of the Company as of the
close of Business on the Record Date are entitled to vote at the Special
Meeting. As of that date, the Company had 8,493,570 shares of Common Stock
outstanding, which shares constitute the only class of outstanding shares of the
Company entitled to notice of, and to vote at, the Special Meeting. Each share
of Common Stock is entitled to one vote.
A majority of the outstanding share of Common Stock must be represented in
person or by proxy at the Special Meeting in order to constitute a quorum for
the transaction of business. If a quorum exists, a proposal is approved if the
votes cast in person or by proxy favoring the proposal exceed the votes cast
opposing the proposal. Directors are elected by a plurality of the votes cast at
a meeting at which a quorum is present. Shareholders may not cumulate their
votes for directors. Abstentions and broker non-votes are not counted in the
calculation of the vote. A proxy may be revoked by the shareholder at any time
prior to its being voted by giving notice to the Secretary of the Company, by
executing and delivering a proxy with a later date or by voting in person at the
Special Meeting. Unless the proxy is revoked, or unless it is received in such
form as to render it invalid, the shares represented by it will be voted in
accordance with the instructions of the shareholder contained therein. If the
proxy is signed and returned without specifying choices, the shares will be
voted in accordance with the recommendations.
The cost of this solicitation will be borne by the Company, including expenses
incurred in connection with preparing and mailing this Proxy Statement. Such
expenses will include charges by brokers, banks or their nominees, other
custodians and fiduciaries for forwarding proxy material to the beneficial
owners of shares held in the name of a nominee. Proxies may be solicited
personally or by mail, facsimile, telephone or telegraph. Employees and
directors of the Company may solicit proxies but will not receive any additional
compensation for such solicitation.
As a matter of policy, proxies, ballots, and voting tabulations that identify
individual shareholders are held confidential by the Company. Such documents are
available for examination only by the inspectors of election who are appointed
to tabulate the votes. The identity of the vote of any shareholder is not
disclosed except as may be necessary to meet legal requirements.
<PAGE>
Common Stock Ownership
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of August 31, 2000 by (i) each person known by the
Company to own beneficially more than 5% of the outstanding Common Stock, (ii)
each director or nominee, (iii) each other executive officer named in the
Summary Compensation Table, and (iv) all executive officers and directors as a
group.
<TABLE>
<CAPTION>
Name Shares beneficially owned
---- -------------------------
Number Percent
---------- -------
<S> <C> <C>
William F. Lane (1) (6) 2,512,404 29.6%
J. Phillips L. Johnston (2) (6) 51,000 *
Harold H. Reddick, Jr.(6) 0 *
Peter L. Coker 200,000 2.4%
Michael C. Hillerbrand (3) (6) 300,000 3.5%
Robert E. Huffman, Jr.(6) 0 *
Information Resource Engineering, Inc. 1,120,660 13.2%
Joe S. Wakil (4) 57,006 *
Kaye B. Amick (5) 858,939 10.1%
All current directors and officers as a group (6 persons) 3,12,410 36.7%
</TABLE>
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* Less than one percent (1%) of Common Stock.
Beneficial ownership includes both outstanding Common Stock and shares
issuable upon exercise of options or warrants that are currently
exercisable or will become exercisable within 60 days after the date
hereof. Unless otherwise noted, sole voting and dispositive power is
possessed with respect to all Common Stock shown. All percentages are
calculated based on the number of outstanding shares plus shares which a
person or group has the right to acquire within 60 days. The address for
all persons listed with the exception of Kaye B Amick and Information
Resource Engineering, Inc.is in care of the Company at its Raleigh
location.
(1) Includes 100,000 shares subject to currently exercisable options.
(2) Includes 50,000 shares subject to currently exercisable options.
(3) Includes 301,000 shares subject to currently exercisable options. These
options are in the name of Centennial Venture Partners of which Mr.
Hillerbrand is CVP's designated director.
(4) Includes 50,000 shares subject to currently exercisable options.
(5) Mrs. Amick is not an officer or director of the Company.
(6) Current nominees.
I. ELECTION OF DIRECTORS
The five nominees for election as directors are identified below. There is no
reason why any nominee would be unable to serve as a director. If any nominee
should for any reason become unable to serve, the shares represented by all
valid proxies will be voted for the election of such other person as may be
designated.
The following material contains information concerning the nominees, including
their recent employment, positions with the Company, other directorships and age
as of the date of this Proxy Statement.
<PAGE>
William F. Lane, age 67 is the founder and current Chairman of the Board of
Directors of the Company and the assignor of the Lane Patent, a foundation
patent in stand-alone biometric fingerprint technology. Mr. Lane has founded
several companies since his graduation from North Carolina State University in
1959. Mr. Lane has been active in business and industry by serving as president
of three different trade associations, active in civic and religious endeavors,
and has served as Assistant Secretary of the North Carolina Department of
Commerce as well as Deputy Commissioner of the North Carolina Division of Motor
Vehicles. Mr. Lane has founded five companies that he later sold to public
companies.
J. Phillips L. Johnston, J.D., age 61 is the President and Chief Executive of
the Company. Prior to serving our Company, he was Chief Executive Officer of
Pilot Therapeutics, a private venture backed company, from December 1998 to
September 1999. From April 1990 to December 1998, Mr. Johnston was President and
Chief Executive of Digital Recorders, Inc., a NASDAQ company, and is currently a
member of their Board. He was Administrator of the North Carolina Credit Union
Division of the North Carolina Department of Commerce from September 1987 to
April 1990. From October 1997 to September 1987, Mr. Johnston served as
President and Chief Executive of Data Pix, Inc., Norman Perry-Chantry, Ltd., and
Erwin-Lambeth, Inc. From 1971 through 1979 he was President and Chief Executive
Officer of Currier Piano Company. He currently serves on the boards of three
E-Commerce companies. Mr. Johnston received his A.B. degree in economics from
Duke University and his law degree from the University of North Carolina at
Chapel Hill.
Harold H. Reddick, Jr., age 45 has served the Company as Secretary since 1997.
Since 1992 Mr. Reddick has been an independent financial advisor, marketing
consultant and management advisor to early stage companies as Managing Director
of Tip of the Spear, LLP. Prior to 1992 Mr. Reddick was active in the brokerage
industry and has been a member of NASD since 1986. He currently serves on the
Board of Directors of RemoteLight.com and Unibuzz Communities. Mr. Reddick
attended Wake Forest University and graduated from North Carolina State
University in 1983 with a BA degree in Sociology.
Michael C. Hillerbrand, age 38 has been actively involved with emerging
businesses for over 15 years. He is currently Managing Director of Capital
Investment Partners, the investment/merchant banking subsidiary of a regional
broker/dealer with approximately 150 stockbrokers in the Mid-Atlantic region.
The investments he initiated in 1999 have a current average IRR in excess of
100%. Mr. Hillerbrand currently serves as Chairman of YellowBrick Solutions,
Inc. and as a board member of etrail.com. Mr. Hillerbrand received a BA degree
from Dallas Baptist University and his MBA with a concentration in finance from
the Kenan-Flager Business School at the University of North Carolina at Chapel
Hill.
Robert E. Huffman, Jr., age 45 is a private investor and consultant to companies
involved in the development of security technologies for
computer/telecommunication networks. He served as vice president of business
development for SecureLogix Corporation. He was a founder in 1995 of WheelGroup
Corporation which was sold to Cisco Systems in 1998. In 1982 he was a Special
Agent with the Air Force Office of Special Investigations where he ran fraud and
counterintelligence investigations involving computers and related technology
and later was assigned as the Special Assistant for Counterintelligence Computer
Affairs in Washington, D.C. where he developed the first defensive computer
counterintelligence program within the Dept. of Defense. He planned and
implemented programs to counter real-time attacks on government computer and
network systems. He left the Air Force in 1992 and Trident Data Systems where he
developed the first Mission Target Analysis Program to support the Air Force
Information Warfare Center. Mr. Huffman has degrees in Economics and Computer
Science from the University of North Carolina Chapel Hill and Charlotte.
<PAGE>
Board Compensation
No employee of the Company receives any additional compensation for his services
as a director. Nonmanagement directors receive no salary for their services;
although, reasonable travel or other out- of-pocket expenses incurred by
non-management directors in attending meetings of the Board of Directors and
Committee meetings are reimbursed on an actual but reasonable basis.
Non-management directors have been granted certain options to purchase shares of
the Company. These options were granted at the bid price of the stock when
granted. Thus far none of these options have been exercised due to the current
price of the stock.
Executive Officers
The following material contains information concerning the executive officers of
the Company who are not nominees for election as directors, including their
recent employment, positions with the Company and age as of the date of this
Proxy Statement.
Katherine A. Chandler, age 40 is an independent contractor and has been engaged
to provide controller services to the Company. Mrs. Chandler formed Chandler
Consulting, Inc. ("CCI") in 1997. CCI provides temporary controller services and
performs all types of finance related projects for companies. From 1992 to 1997,
Mrs. Chandler served as Finance Director for Qualex, Inc. with $1 billion in
revenues and 12,000 employees. Prior to this, she was a senior accountant for
Ernst & Young, LLP. Mrs. Chandler graduated from the University of North
Carolina at Chapel Hill in 1986 with a BS degree in accounting where she was
inducted into Phi Beta Kappa.
Executive Compensation
Summary Compensation Table. The following table sets forth the annual
compensation for services for the executives of the Company.
Name and Principal Position 1999 Annual Compensation
--------------------------- ------------------------
Salary Bonus
------ -----
William F. Lane $30,000 None
Chairman & Former President & Chief
Executive Officer
J. Phillips L. Johnston $37,500 None
President & Chief Executive Officer
Began serving in this capacity Sept, 1, 1999
Harold H. Reddick, Jr None None
Secretary
<PAGE>
Board Committees
The Board of Directors has delegated certain of its authority to the
Compensation Committee. At the present time all other normal committee functions
are undertaken by the Board acting as a committee on the various issues that
arise.
The Board of Directors will appoint an Audit Committee and a Compensation
Committee at its next Board meeting which is scheduled to follow the annual
shareholders meeting.
Board and Committee Attendance
Committee attendance was 100% for 1999. One former member of the Board of
Directors attended less than 100% of the Board meetings while the others
attended 100% of the meetings.
II. PROPOSAL TO APPROVE THE INCENTIVE STOCK OPTION PLAN
Summary of the Incentive Stock Option Plan
The Company's 1999 Incentive Stock Option Plan (the "Option Plan") was adopted
by the Board of Directors. An aggregate of 1,383,148 shares of Common Stock are
reserved for issuance under the Option Plan. The Option Plan provides for the
granting of incentive stock options ("Incentive Stock Options") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and nonqualified stock options. Nonqualified stock options may be
granted to employees, directors and advisors of the Company, while Incentive
Stock Options may be granted only to employees at market price. No options may
be granted under the Option Plan subsequent to ten years from the adoption date.
The Board of Directors has unanimously approved and recommends that shareholders
vote FOR approval of the Incentive Stock Option Plan.
III. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Ernst & Young, LLP has examined the financial statements of the
Company for the year ended December 31, 1999. Subject to shareholder approval,
such firm has been appointed by the Board of Directors to serve as the Company's
independent auditors for the 2000 fiscal year. Representatives of Ernst & Young,
LLP are expected to be present at the Annual Meeting with the opportunity to
make a statement if it is their desire to do so and will be available to respond
to appropriate questions from shareholders.
The Board of Directors recommends a vote FOR ratification of Ernst & Young, LLP
as independent public accountants for the Company.
Shareholder Proposals
Shareholders who intend to submit proposals for inclusion in the Proxy Statement
for the 2001 Annual Meeting of Shareholders must do so by sending the proposal
and supporting statements, if any, to the Company no later than January 31,2001.
Such proposals should be sent to the attention of Mr. J. Phillips L. Johnston,
NCSU Centennial Campus, 920 Main Campus Drive, Suite 400, Raleigh, NC 27606.
<PAGE>
Other Matters
Except for the matters described herein, management does not intend to present
any matter for action at the Special Meeting and knows of no matter to be
presented at such Special Meeting that is a proper subject for action by the
shareholders. However, if any other matters should properly come before the
Special Meeting, it is intended that votes will be cast pursuant to the
authority granted by the enclosed Proxy in accordance with the best judgment of
the person acting under the Proxy.
Financial Information
Anyone wanting a copy of the Company's 10KSB which contains the 1999 audited
financial report can link to the Security Exchange Commission from
www.idtek.com.
Additional 1999 audited financial statements are available upon request.
CORPORATE OFFICE
ID Technologies Corporation
NCSU Centennial Campus
920 Main Campus Drive
Suite 400
Raleigh, NC 27606
Tel: 919-424-3722ext300
Fax: 919-424-3723
Email: [email protected]
<PAGE>
Please mark
your votes as |X|
indicated in
this example
1. To consider and act upon a proposal to elect the nominees present below as
directors to hold office for one-year terms or until their successors are
elected and qualified.
FOR election of all WITHHOLD
nominees listed except AUTHORITY
as listed below to vote for all nominees
|_| |_|
Nominees: William F. Lane, J. Phillips L. Johnston, Michael C. Hillerbrand,
Robert E. Huffman, Jr., Harold H. Reddick, Jr.
INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike
through the nominee's name at left.
2. To consider and act upon a proposal to approve the Company's Incentive Stock
Option Plan.
FOR AGAINST ABSTAIN
|_| |_| |_|
3. To ratify the appointment of Ernst & Young, LLP as the independent public
accountants for the Company.
FOR AGAINST ABSTAIN
|_| |_| |_|
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any and all adjournments
thereof.
AUTHORIZED ABSTAIN
TO VOTE
|_| |_|
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED AND FOR PROPOSALS 2 AND 3 AND THE PROXY HOLDERS
WILL VOTE ON ANY PROPOSAL UNDER 4 IN THEIR DISCRETION AND IN THEIR BEST
JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock
certificate. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: __________________________ , 2000
________________________________________
Signature
Dated: __________________________ , 2000
________________________________________
Signature
If this Proxy is not dated, the Proxy will be deemed to bear the date the form
was mailed to the shareholder.
^ FOLD AND DETACH HERE ^
<PAGE>
PROXY
ID TECHNOLOGIES CORPORATION
Special Meeting of Shareholders to be held on October 23, 2000
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of ID
Technologies Corporation (the Company) hereby constitutes and appoints
J.Phillips L. Johnston as attorney and proxy, with the power to appoint his
substitute, and hereby authorized him to represent and vote, as designated
below, all of the shares of stock of the Company which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Company to be
held October 23, 2000, and at any and all adjournments thereof with respect to
the matters set forth below and described in the Notice of the Special Meeting
of Shareholders and Proxy Statement dated September 29, 2000 receipt of which is
acknowledged.
^ FOLD AND DETACH HERE ^
