<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
VIRAGEN, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
VIRAGEN, INC.
865 S.W. 78TH AVENUE, SUITE 100
PLANTATION, FLORIDA 33324
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 27, 2000
To The Stockholders of Viragen, Inc.
PLEASE TAKE NOTICE that Viragen, Inc., a Delaware corporation, will hold
its 1999 annual meeting of stockholders at the American Stock Exchange, located
at 86 Trinity Place, New York, NY, on July 27, 2000 at 3:00 P.M., local time, or
at any and all adjournments for the following purposes:
1. To elect three directors to the board of directors, who will be
classified as class B directors, to serve for the term of their
designated class and until their successors have been elected and
qualified;
2. To ratify the appointment of our independent auditors; and
3. To transact other business that may properly come before the meeting
or any adjournment.
The proxy statement dated June 15, 2000 is attached.
The board of directors has fixed the close of business on June 1, 2000, as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting. Viragen's financial statements for the fiscal year
ended June 30, 1999 are contained in the accompanying annual report on Form
10-K/A. Viragen's financial statements for the quarterly period ended March 31,
2000 are contained in the accompanying quarterly report on Form 10-Q. Neither
the annual report nor the quarterly report form any part of the material for the
solicitation of proxies. If you do not expect to be present at the meeting, you
are urged to complete, date, sign and return the enclosed proxy. No postage is
required if the enclosed envelope is used and mailed in the United States. You
may also vote electronically via the internet or by telephone.
By Order of the Board of Directors,
Dennis W. Healey, Secretary
Plantation, Florida
June 15, 2000
THIS IS AN IMPORTANT MEETING, AND YOU ARE CORDIALLY INVITED TO ATTEND THE
MEETING IN PERSON. IF YOU ARE UNABLE TO ATTEND IN PERSON, PLEASE EXECUTE AND
RETURN THE ENCLOSED PROXY CARD, OR VOTE ELECTRONICALLY VIA THE INTERNET OR BY
TELEPHONE AT YOUR EARLIEST CONVENIENCE. PROMPTNESS IN RETURNING THE EXECUTED
PROXY CARD WILL BE APPRECIATED. IF YOU VOTE BY PROXY, YOU MAY NEVERTHELESS
ATTEND THE MEETING, REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
VIRAGEN, INC.
865 S.W. 78TH AVENUE, SUITE 100
PLANTATION, FLORIDA 33324
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
This proxy statement is being furnished to you by the board of directors of
Viragen, Inc., a Delaware corporation, in connection with a solicitation of
proxies for use at our 1999 annual meeting of stockholders. We will hold our
annual meeting at the American Stock Exchange located at 86 Trinity Place, New
York, NY, on July 27, 2000 at 3:00 P.M., local time, or at any and all
adjournments. Viragen will bear the cost of this solicitation. Viragen's annual
report on Form 10-K/A for the fiscal year ended June 30, 1999 and our quarterly
report for the quarterly period ended March 31, 2000 are being mailed together
with this proxy statement and form of proxy. The date of mailing of this proxy
statement and form of proxy is approximately June 15, 2000.
OUTSTANDING STOCK AND VOTING RIGHTS
In accordance with our by-laws, the board of directors has fixed the close
of business on June 1, 2000, as the record date for determining the stockholders
entitled to notice of, and to vote at, the annual meeting. Only stockholders of
record on that date will be entitled to vote. If you submit your proxy on the
accompanying form, you have the power to revoke it by notice of revocation
directed to the proxy holder at any time before it is voted. Unless you withhold
authority in writing, proxies, which are properly executed, will be voted for
the proposals. Although you may have given your proxy, you may nevertheless
attend the meeting, revoke your proxy and vote in person. The election of the
directors nominated requires the affirmative vote of a plurality of the shares
of Viragen's common stock voting at the annual meeting in person or by proxy.
As of June 1, 2000, the record date for determining our stockholders
entitled to notice of, and to vote at, the annual meeting 86,475,267 shares of
our common stock, $.01 par value, were issued, of which 845,277 shares are held
as treasury stock. Each share of common stock outstanding entitles the holder to
one vote on all matters brought before the annual meeting. The quorum necessary
to conduct business at the annual meeting consists of a majority of the shares
of common stock outstanding (42,814,996 shares) as of the record date.
Abstentions and broker non-votes will have no effect for the election of
directors or the ratification of our auditors.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
On February 28, 1997, we amended our certificate of incorporation and set
up a classified board of directors with the 1997 annual meeting. Following that
meeting, we divided directors into three subclasses consisting of class A, class
B and class C. The initial term of the class A directors expired after the 1998
annual meeting of stockholders; the term of the class B directors initially
expires after the 1999 annual meeting; and the term of the class C directors
initially expires after the 2000 annual meeting. At the annual meeting,
stockholders will be asked to elect three class B directors.
At each annual meeting of stockholders, directors of the respective class
whose term has expired will be elected, and the directors chosen to succeed
those whose terms have expired will be elected to hold office for a term to
expire at the third ensuing annual meeting of stockholders after their election,
and until their respective successors are elected and qualified. The term of the
class C directors initially will expire after the 2000 annual meeting of
stockholders. The term of the class A directors elected at the 1998 annual
meeting will expire at our 2001 annual meeting of stockholders.
<PAGE> 4
The following table lists Viragen's directors and officers:
<TABLE>
<CAPTION>
SERVED AS
OFFICER AND/OR
NAME AGE POSITION WITH THE COMPANY DIRECTOR SINCE CLASS
---- --- ------------------------- ----------------- -----
<S> <C> <C> <C> <C>
Gerald Smith............................. 69 Chairman of the Board 1994 C
Chief Executive Officer 1998
President 1993
Robert H. Zeiger......................... 56 Director 1995 B
Vice Chairman of the Board 1998
Dennis W. Healey......................... 51 Chief Financial Officer 1980
Treasurer 1980 B
Director 1984
Executive Vice President 1993
Secretary 1994
Dr. Magnus Nicolson...................... 39 Chief Operating Officer 1999
Melvin Rothberg.......................... 53 Executive Vice President 1999
Carl N. Singer........................... 81 Director 1997 C
Peter D. Fischbein....................... 59 Director 1981 B
Sidney Dworkin, Ph.D..................... 78 Director 1994 A
Charles J. Simons........................ 81 Director 1998 A
Robert C. Salisbury...................... 54 Director 1998 A
Jose I. Ortega........................... 28 Controller 1996
</TABLE>
Gerald Smith became president of Viragen in May 1993. From 1982 to 1994 Mr.
Smith was a principal stockholder, president, chief executive officer and a
director of Business Development Corp. Business Development has served as a
managing entity and consultant to several high technology ventures including
Compupix Technology Joint Venture. From August 1991 to December 1991, Mr. Smith
was the chief executive officer of Electronic Imagery, Inc., a company engaged
in the development of imaging software. Mr. Smith was also the president, chief
executive officer and a director of Cinescopic Corporation and International
Database Service, Inc. These are computer-oriented companies which developed
database technology using the personal computer for audio, video, animation and
real time communication. Mr. Smith discontinued the operations of Business
Development Corp. in order to devote all of his time to Viragen. Mr. Smith is
also chairman of the board and president of Viragen (Europe) Ltd.
Robert H. Zeiger was appointed chief executive officer and chief operating
officer of Viragen, during May 1995. At that time, he was also elected as a
director. Mr. Zeiger has served as a pharmaceutical executive since 1971. From
1985 to 1994, Mr. Zeiger was employed by Glaxo, Inc., Research Triangle Park,
North Carolina. He served as vice president and general manager of their
Dermatological Division from 1985 to 1988. He then served as vice president and
general manager of Glaxo Pharmaceuticals from 1991 to 1994. Previously, Mr.
Zeiger served as vice president marketing and sales with Stiefel Laboratories,
Inc., Coral Gables, Florida, from 1979 to 1985. He was national sales manager to
Knoll Pharmaceutical Company, Whipping, New Jersey from 1971 to 1979. Mr. Zeiger
has also served as chief executive officer and a director of Viragen (Europe).
On July 31, 1998 Mr. Zeiger resigned his positions of chief executive officer of
Viragen and Viragen (Europe) and director of Viragen (Europe) for health
reasons. His resignations were effective September 30, 1998. Mr. Zeiger
continues to serve as vice chairman and senior pharmaceutical advisor to the
Viragen board. He is a member of the executive committee of the board of
directors.
Dennis W. Healey is a certified public accountant. He was appointed
chairman of the board and chief executive officer on April 13, 1993. In June
1994, Mr. Healey relinquished his position as chairman of the board to Mr.
Smith. In July 1994, he relinquished the position of chief executive officer.
Upon Gerald Smith becoming president in May 1993, Mr. Healey became executive
vice president. He has served as chief financial officer and treasurer since
1980. Mr. Healey was appointed secretary in 1994. From July 1976 until
2
<PAGE> 5
his resignation in July 1996, Mr. Healy served as senior vice president,
principal financial officer and treasurer of Medicore, Inc. This is a public
company engaged primarily in electronics assembly and ownership of dialysis
centers. He was also executive vice president of its Techdyne affiliate. He
served as treasurer of most of Medicore's subsidiaries. He was also vice
president of Dialysis Corporation of America, a subsidiary of Medicore, and as
secretary, treasurer and director of other Dialysis Corporation of America
subsidiaries. Mr. Healey joined Medicore in 1976 as its controller. Mr. Healey
is also executive vice president, treasurer, secretary and a director of Viragen
(Europe) and Viragen U.S.A.
D. Magnus Nicolson, Ph.D. was appointed chief operating officer of Viragen
and Viragen (Europe) upon the resignation of Dr. Jay Sawardeker in July 1999 and
August 1999, respectively. Dr. Nicolson was elected a director of Viragen
(Europe) in 1997. He has served as the managing director of Viragen (Scotland)
since April 1996. From 1992 to 1995, Dr. Nicolson was employed by Scottish
Enterprise, an agency of the Scottish government responsible for generating
economic development in Scotland. During his time at Scottish Enterprise, he
served as:
- technology manager for Locate in Scotland (1995),
- a senior executive (1993 to 1995), and
- contractor, healthcare liaison office of Dunbartonshire Enterprise (1992
to 1993).
From 1990 to 1992, Dr. Nicolson conducted various market research projects for a
variety of public and private enterprises as an independent marketing
consultant. In 1988, Dr. Nicolson was awarded a Doctorate in Immunology from the
University of Strathclyde. He earned Masters Degrees in both Immunology and
Business in 1985 and 1992, respectively. Dr. Nicolson is a Fellow of the Royal
Society of Medicine, a Member of the Royal Society of Chemistry, and a Member of
the Chartered Institute of Marketing.
Melvin Rothberg joined Viragen as chief executive officer of Viragen U.S.A.
in April 1998. In April 1999, Mr. Rothberg assumed the position of an executive
vice president of Viragen. Prior to joining Viragen, Mr. Rothberg served as a
vice president of Althin Medical, Inc., a U.S. subsidiary of a Swedish medical
company, from 1990 to 1998. Mr. Rothberg served as a director and manager of a
number of divisions of C.D. Medical, a division of the Dow Chemical Company,
from 1983 to 1990. He was an engineer with Cordis Dow Corporation from 1974 to
1983.
Carl N. Singer was elected a director in August 1997. He currently serves
as chairman of the executive committee of the board of directors. Since 1981,
Mr. Singer has served as chairman of Fundamental Management Corporation, a
Florida-based institutional investment fund. Mr. Singer has also served as a
director, president and CEO of Sealy, Inc., Scripto, Inc. and the BVD Company.
Peter D. Fischbein is an attorney who has been practicing law for
approximately 35 years. Mr. Fischbein served as Viragen's secretary between May
and December 1994. His former law firm on occasion represented Viragen, Medicore
and the Viragen Research Associates Limited Partnership, which has contracts
with Viragen, Inc. Mr. Fischbein is also a director of Medicore since 1984 and a
director of Techdyne since 1985. Mr. Fischbein has been general partner of
several limited partnerships engaged in oil exploration and real estate
development.
Sidney Dworkin, Ph.D. was elected a director in August 1994. He was a
founder, former president, chief executive officer and chairman of Revco, Inc.
Between 1987 and the present, Dr. Dworkin has also served as chairman of
Stonegate Trading, Inc., an importer and exporter of various health, beauty
aids, groceries and sundries. Between 1988 and the present, Dr. Dworkin has
served as chairman of the board of Advanced Modular Systems, which is engaged in
the sale of modular buildings. Between June 1993 and the present, Dr. Dworkin
has also served as chairman of Comtrex Systems, Inc., which is engaged in
development and sale of programmable cash registers. Dr. Dworkin also serves on
the board of directors of CCA Industries, Inc., Interactive Technologies, Inc.,
Northern Technologies International Corporation and Crager Industries, Inc. All
are publicly traded companies.
Charles J. Simons was elected to the board of directors in July 1998. He
currently serves as chairman of the audit, finance and compensation committee of
the board of directors. Mr. Simons has been a director of
3
<PAGE> 6
Renex Corp. since its inception in July 1993. Mr. Simons is the chairman of the
board of G.W. Plastics, Inc., a plastic manufacturer. Also, he is an independent
management and financial consultant. From 1940 to 1981, he was employed by
Eastern Airlines, last serving as vice chairman, executive vice president and as
a director. Mr. Simons is a director of Arrow Air, Inc., a cargo air carrier;
Veridian, Inc., an aerospace company; and a number of private companies. He was
also a director of Home Intensive Care, Inc. from 1988 until July 1993. Mr.
Simons is also a director of MedWaste, Inc.
Robert C. Salisbury was appointed a director of Viragen in December 1998.
From 1974 to 1995, Mr. Salisbury was employed by the Upjohn Company serving in
several financial related positions. These positions included manager of cash
management, internal control and corporate finance from 1975 to 1981. He was
vice president from 1985 to 1990, senior vice president from 1991 to 1994, and
executive vice president for finance and chief financial officer from 1994 to
1995. Following the merger of Pharmacia and Upjohn, Inc. in 1995, Mr. Salisbury
served as executive vice president and chief financial officer until 1998.
Jose I. Ortega is a certified public accountant and joined Viragen as its
controller in June 1996. From 1993 until joining Viragen, Mr. Ortega was a
member of the audit staff of Ernst & Young LLP, Viragen's independent audit
firm.
There is no family relationship between any of the officers and directors.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table shows certain information regarding Viragen's common
stock beneficially owned at June 1, 2000, by:
- each person who is known by us to own beneficially or exercise voting or
dispositive control over 5% or more of Viragen's common stock,
- each of Viragen's directors,
- each officer named in the summary compensation table, and
- all officers and directors as a group.
A person is considered a beneficial owner of any securities that the person
has the right to acquire beneficial ownership of within 60 days. At June 1,
2000, there were 85,629,990 shares of common stock outstanding. Other than
indicated in the notes, we have been informed that these persons have sole
voting and dispositive power with respect to their shares.
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY OWNED
--------------------------
ACQUIRABLE
BENEFICIAL PERCENT OF WITHIN
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS CURRENTLY 60 DAYS
------------------------ ---------- ---------- --------- --------------
<S> <C> <C> <C> <C>
Gerald Smith...................................... 2,067,000 2.4% 17,000 2,050,000
Robert H. Zeiger.................................. 620,000 0.7 -- 620,000
Carl N. Singer.................................... 4,015,841 4.6 2,815,841 1,133,333
Dennis W. Healey.................................. 715,000 0.8 265,000 450,000
Peter D. Fischbein................................ 400,000 0.5 350,000 50,000
Sidney Dworkin, Ph.D.............................. 325,244 0.4 175,244 150,000
Charles J. Simons................................. 35,000 0.0 10,000 25,000
Robert C. Salisbury............................... 30,000 0.0 30,000 --
Officers & Directors (as a Group of 12 persons)... 8,789,535 9.8 3,697,535 4,933,667
</TABLE>
Section 16(a) of the Exchange Act of 1934 requires a company's directors
and executive officers, and persons who own more than ten percent (10%) of a
registered class of the company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership
4
<PAGE> 7
of common stock and other equity securities of the company. Officers, directors
and greater than ten percent (10%) stockholders are required by Securities and
Exchange Commission regulation to furnish the company with copies of all Section
16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representation that no other reports were required,
during the fiscal year ended June 30, 1999, all Section 16(a) filing
requirements applicable to our officers, directors and greater than ten percent
(10%) beneficial owners were timely filed.
ELECTION OF CLASS B DIRECTORS
The following table sets forth the names of the nominees, their positions
with Viragen, the year, if applicable, in which they became directors and other
related information. Executive officers are appointed annually and, except to
the extent governed by employment contracts, serve at the discretion of the
board of directors.
NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
POSITION WITH THE SERVED AS OFFICER
NAME AGE COMPANY AND/OR DIRECTOR SINCE CLASS
---- --- ----------------- --------------------- -----
<S> <C> <C> <C> <C>
Peter D. Fischbein.................... 59 Director 1981 B
Dennis W. Healey...................... 51 Chief Financial Officer 1980
Treasurer 1980
Director 1984 B
Executive Vice President 1993
Secretary 1994
Robert H. Zeiger...................... 56 Director 1995 B
Vice Chairman of the Board 1998
</TABLE>
During fiscal 1999, our board of directors met on four occasions.
We have constituted an audit, finance and compensation committee and an
executive committee. The audit, finance and compensation committee consists of
Messrs. Simons (Chairperson), Dworkin and Salisbury. The executive committee
consists of Messrs. Singer (Chairperson), Smith and Zeiger.
The audit, finance and compensation committee oversees Viragen's audit
activities to protect against improper and unsound practices and to furnish
adequate protection to all assets and records. The audit, finance and
compensation committee also acts as liaison to our independent certified public
accountants, and conducts such work as is necessary and receives written
reports, supplemented by such oral reports as it deems necessary, from the audit
firm. The audit, finance and compensation committee also provides overall
guidance for officer compensation programs, including salaries and other forms
of compensation and for our budget process. During fiscal 1999, the audit,
finance and compensation committee met on four occasions.
The executive committee is empowered to act for the full board in intervals
between board meetings, with the exception of certain matters, which by law may
not be delegated. The executive committee will meet as necessary, and all
actions by the executive committee are to be reported at the next board of
directors meeting. During fiscal 1999, the executive committee met on four
occasions.
AUDIT, FINANCE AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
Currently, there are three members of the audit, finance and compensation
committee, which was organized in February 1998, all of whom are outside
directors.
5
<PAGE> 8
EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS
Audit, Finance and Compensation Committee Report on Executive
Compensation. Under the rules established by the Securities and Exchange
Commission, management is required to provide certain data and information in
regard to the compensation and benefits provided to the chief executive officer
and other executive officers. The disclosure requirements for the chief
executive officer and executive officers include the use of tables and a report
explaining the rationale and considerations that led to the fundamental
compensation decision affecting those individuals.
Compensation Report. The audit, finance and compensation committee of the
board of directors is responsible for establishing compensation levels and
benefits for the executive officers of the company. The audit, finance and
compensation committee is also responsible for reviewing recommendations made by
management regarding compensation, including stock options, and benefits for
other employees.
Executive Compensation Policy. For the last fiscal year, the goals
established by the audit, finance and compensation committee for executive
compensation are as follows:
- to provide a compensation package which would attract and retain
experienced, scientific pharmaceutical and administrative personnel;
- to maintain reasonable yet competitive base salaries while conserving the
liquid assets of the company;
- to provide an environment where innovation, dedication and success are
rewarded; and
- to provide participation in stock appreciation as part of an incentive
based compensation package.
The performance of executive officers is evaluated routinely by the audit,
finance and compensation committee as well as by the board of directors as a
whole. The audit, finance and compensation committee considers each employee's
total compensation package, including base salary, stock options and other
benefits as provided in their respective employment agreements.
Chairman of the Board and Chief Executive Officer. Gerald Smith, chairman
of the board of directors and chief executive officer, entered into two two-year
employment agreements with both Viragen, Inc. and Viragen (Europe) Ltd. in March
1997. The agreements entitled the chairman to receive a combined salary of
$262,000 and $282,000 for the first and second years of the agreement,
respectively, and options to purchase 1,000,000 shares of common stock of the
company at an exercise price of $3.22 per share, exercisable over a period of
five years. The audit, finance and compensation committee believed that this
structure, heavily weighted towards performance compensation, would provide the
motivational structure necessary for the competitive environment in which we
operate. On March 1, 1999, Mr. Smith entered into a single employment agreement
with Viragen, Inc. under terms similar to his previous agreement. No additional
stock options were granted. This agreement provides for a total annual salary of
$282,000. Also, he continues to serve as the president and chairman of Viragen
(Europe).
Other Executive Officers. As with the compensation of the chief executive
officer, the audit, finance and compensation committee evaluates and establishes
the compensation packages for other executive officers of the company. These
executives are evaluated routinely based on the effectiveness of their efforts
in their respective areas of responsibility as well as their contribution to
achieving our overall goals. The audit, finance and compensation committee has
structured compensation packages so that the base salaries are conservative by
pharmaceutical industry standards. The emphasis is on compensation through the
issuance of stock options. As a consequence, the executive officers may maximize
their total compensation through the attainment of corporate goals as reflected
in appreciated stock values.
Submitted by the audit, finance and compensation committee of the board of
directors:
Charles J. Simons Sidney Dworkin, Ph.D. Robert C.
Salisbury
6
<PAGE> 9
SUMMARY COMPENSATION
The following table sets forth information concerning the compensation and
employment agreements of our chief executive officers and four other most highly
compensated executive officers as of June 30, 1999.
<TABLE>
<CAPTION>
OTHER RESTRICTED ALL
NAME AND ANNUAL STOCK OPTIONS/ LTIP OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS SARS(#) PAYOUTS COMPENSATION
------------------ ---- -------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerald Smith........................ 1999 $282,000
Chairman of Board, 1998 263,000
President and CEO 1997 175,885 1,050,000
Robert H. Zeiger.................... 1999 22,582
CEO, Director 1998 111,347
1997 65,250 $12,500 $5,000 50,000
Dennis W. Healey.................... 1999 252,000
Exec. V.P., 1998 240,000
Treasurer, CFO 1997 163,345 350,000
and Director
Charles F. Fistel................... 1999 151,846
Exec. V.P., 1998 150,000
Director 1997 138,886 300,000
Jay Sawardeker...................... 1999 174,039
Exec. V.P., and 1998 148,470
Director 1997 113,462 200,000
</TABLE>
Employment Agreements
On March 1, 1997 Mr. Smith entered into a two-year employment agreement.
This agreement provided for:
- a salary of $190,000 and $200,000 for the first and second years,
respectively,
- options to purchase 1,000,000 shares of common stock at $3.22 per share
exercisable over five years,
- health and life insurance,
- similar employee benefits generally available to other employees,
- use of an automobile and related maintenance, and
- reimbursement of business related expenses.
On March 1, 1997, Mr. Smith also entered into a two-year employment
agreement with Viragen (Europe) Ltd. under terms similar to those of his Viragen
employment agreement. The agreement provided for an annual salary of $10,000 and
$20,000 for the first and second years. We amended the agreement on July 3,
1997, to provide for an annual salary of $72,000 for the year July 1, 1997
through June 30, 1998, and $82,000 per annum for the period from July 1, 1998
through February 28, 1999. Mr. Smith's employment agreements with both Viragen
and Viragen (Europe) expired on March 1, 1999. On that date, he entered into a
single employment agreement with Viragen under terms similar to his previous
agreement. No additional stock options were granted. This agreement provides for
a total annual salary of $282,000. Mr. Smith continues to serve as the president
and chairman of Viragen (Europe).
On May 9, 1995, Viragen entered into a two-year employment agreement with
Robert H. Zeiger. Under the agreement, he was to serve as chief executive
officer and chief operating officer through May 1, 1997. The agreement provided
for:
- an annual salary of $120,000,
- the issuance of options to purchase 1,000,000 shares of common stock at
an exercise price of $.96 per share, with 500,000 shares being
exercisable commencing May 8, 1996 through May 8, 2001 and the remaining
500,000 shares being exercisable commencing May 8, 1997 through May 8,
2002,
7
<PAGE> 10
- health and life insurance,
- similar employee benefits generally made available to other employees,
- use of an automobile and related maintenance expenses, and
- reimbursement of business related expenses.
On August 1, 1997, Mr. Zeiger entered into a one-year employment agreement
under terms similar to his previous agreement except for certain notice of
termination provisions. This agreement provided for a salary of $120,000 per
year with an additional $5,000 per month, during the first six months of the
contract term. In July 1998, Mr. Zeiger resigned for health reasons his
positions as chief executive officer of Viragen and Viragen (Europe) and
director of Viragen (Europe), effective September 30, 1998. Mr. Zeiger continues
to serve as vice chairman and as senior pharmaceutical advisor to the Viragen
board. He is a member of the executive committee of the board of directors.
On March 1, 1997 Mr. Healey entered into a two-year employment agreement.
The agreement, which was amended on July 1, 1997, provided for:
- a salary $190,000 and $195,000 for the first and second years,
- options to purchase 300,000 shares of common stock at $3.22 per share,
exercisable over five years,
- health and life insurance,
- similar employee benefits generally available to other employees, and
- reimbursement of automobile and business related expenses.
On July 30, 1996, Viragen (Europe) entered into a two-year employment
agreement with Mr. Healey under terms similar to his employment agreement with
Viragen. It provided for a salary of $14,200 for the two month period ending
September 30, 1996, and $85,000 for the year ended September 30, 1997. On March
1, 1997, Mr. Healey entered into a new two-year employment agreement,
subsequently amended on July 3, 1997. This agreement was to run concurrent with
Mr. Smith's Viragen (Europe) agreement and superceded all previous agreements.
This agreement provided for a salary of $31,700 for the four month period ending
June 30, 1997, $52,000 for the year ended June 30, 1998, and $38,000 for the
eight month period ending February 28, 1998. Upon the expiration of Mr. Healey's
employment agreements with Viragen and Viragen (Europe), on March 1, 1999, he
entered into a single employment agreement with Viragen under terms similar to
his previous agreements. No additional stock options were granted. The agreement
provides for a total annual salary of $252,000. Mr. Healey continues to serve as
executive vice president, chief financial officer, secretary and director of
Viragen (Europe).
On July 1, 1996, Viragen entered into a two-year employment agreement with
Charles Fistel to serve as executive vice president. This agreement provided
for:
- an annual salary of $140,000 and $150,000 for the first and second years,
- health and life insurance,
- similar employee benefits generally made available to other employees,
and
- use of an automobile and related expenses.
In February 1997, Viragen issued to Mr. Fistel five-year options to
purchase 250,000 shares at $2.75 per share. Viragen recognized $218,750 in
compensation expenses as a result of the issuance of these options. On July 1,
1998, upon the expiration of Mr. Fistel's 1996 agreement, Viragen entered into a
two-year employment agreement with Mr. Fistel. The terms of this agreement are
similar to his previous agreement, modified to increase his annual salary to
$172,500 during the two-year term. Mr. Fistel resigned on May 14, 1999.
8
<PAGE> 11
From March 1996 to May 1996, Dr. Sawardeker served as an consultant to
Viragen in scientific affairs. On May 6, 1996, Dr. Sawardeker entered into
two-year employment agreement effective July 1, 1996. This agreement provided
for:
- a salary of $100,000 per year,
- a five year option to acquire 250,000 shares of common stock, exercisable
at $1.80 per share, vesting one third on the effective date of the
employment agreement and an additional one third vesting on the first and
second anniversary dates,
- similar employee benefits generally available to executive employees,
- $400 per month auto allowance, and
- reimbursement of business related expenses.
Dr. Sawardeker's employment agreement was subsequently amended and extended
through June 30, 1999. It provided for an annual salary of $150,000 for the
period from February 10, 1997 to February 9, 1998 and $160,000 for the period
from February 10, 1998 to June 30, 1999. Dr. Sawardeker's amended employment
agreement also provided for the grant of an option to acquire 200,000 shares of
common stock, exercisable at $1.59 per share with all options vesting June 30,
1999. Upon the expiration on Dr. Sawardeker's contract, he resigned as chief
operating officer of Viragen and a director of Viragen (Europe).
On July 1, 1999, Dr. Nicolson entered into a two-year employment agreement
with Viragen. This agreement supercedes all previous agreements. The agreement
provided for:
- an annual salary of $170,000,
- the grant of an option to acquire 200,000 shares of common stock at
$.625, vesting one-third on the date of grant, one-third on the first
anniversary of the grant date and one-third on the second anniversary,
- similar employee benefits generally available to executive officers,
- use of an automobile, and
- reimbursement of business related expenses.
On July 1, 1999, Mr. Rothberg entered into a two-year employment agreement
with Viragen. This agreement supercedes all previous agreements. The agreement
provided for:
- an annual salary of $160,000 and $172,500 for the first and second years,
- the grant of an option to acquire 250,000 shares of common stock at $.625
per share, vesting one-half on the date of grant and one-half on the
first year anniversary,
- health insurance,
- similar employee benefits generally available to executive employees,
- $400 per month auto allowance, and
- reimbursement of business related expenses.
9
<PAGE> 12
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to the grant of
options to purchase shares of common stock during the fiscal year ended June 30,
1999 to each person named in the summary compensation table.
<TABLE>
<CAPTION>
# OF TOTAL
NUMBER OF SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING OPTIONS/SARS GRANTED TO EMPLOYEES IN OR BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SHARES) DATE
---- ----------------------- ----------------------- ------------- ----------
<S> <C> <C> <C> <C>
Gerald Smith................... -- -- -- --
Robert H. Zeiger............... -- -- -- --
Dennis W. Healey............... -- -- -- --
Charles F. Fistel.............. -- -- -- --
Jay Sawardeker................. -- -- -- --
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the exercise of
options to purchase shares of common stock during the fiscal year ended June 30,
1999 to each person named in the summary compensation table and the unexercised
options held as of the end of the 1999 fiscal year.
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND 1999 FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN THE
VALUE REALIZED MONEY OPTIONS AT FY-END
MARKET PRICE NUMBER OF UNEXERCISED (BASED ON FY-END/SHARE)
SHARES AT EXERCISE OPTIONS AT FY END PRICE OF $0.75
ACQUIRED LESS PRICE ---------------------------- ----------------------------
NAME ON EXERCISE EXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Smith......................... 250,000 139,000 2,450,000 -- $ 350,000 $--
Robert H. Zeiger..................... -- -- 1,050,000 -- -- --
Dennis W. Healey..................... 250,000 139,000 650,000 -- 75,000 --
Charles F. Fistel.................... 410,000 41,250 300,000 -- -- --
Jay Sawardeker....................... -- -- 450,000 -- -- --
</TABLE>
1997 AMENDED STOCK OPTION PLAN AND 1995 AMENDED STOCK OPTION PLAN
On May 15, 1995 the board of directors adopted, subject to approval by the
stockholders, a stock option plan, called the 1995 stock option plan. On
September 22, 1995, the board of directors amended the 1995 stock option plan to
define certain terms and clarify the minimum exercise price of the non-qualified
options. The minimum exercise price of non-qualified options cannot be less than
55% of the fair market value. Viragen stockholders ratified the 1995 stock
option plan at the annual meeting held on December 15, 1995.
On January 27, 1997 the board of directors adopted, subject to approval by
the stockholders, a stock option plan called the 1997 stock option plan. The
1997 stock option plan contains terms and provisions similar to the 1995 stock
option plan. Viragen stockholders ratified the 1997 stock option plan at the
annual meeting held on February 28, 1997. On April 24, 1998 the board of
directors adopted, subject to ratification by the stockholders, an amendment to
the 1997 stock option plan. This amendment reserved an additional 1,000,000
shares of common stock for issuance under that plan. This amendment brought the
total shares reserved under the 1997 stock option plan to 4,000,000 shares. On
July 31, 1998, the stockholders ratified this amendment to the 1997 stock option
plan.
The audit, finance and compensation committee of the board of directors and
the board of directors currently administer the plans. Administration of the
plans includes determining:
- the persons who will be granted plan options,
- the type of plan options to be granted,
10
<PAGE> 13
- the number of shares subject to each plan options, and
- the plan options price.
Options granted under both the 1995 and the 1997 stock option plans may
qualify as incentive stock options, under Section 422 of the Internal Revenue
Code of 1986, as amended. In addition, the plans also include a reload option
provision. This provision permits an eligible person to pay the exercise price
of the plan option with shares of common stock owned by the eligible person. The
person then receives a new plan option to purchase shares of common stock equal
in number to the tendered shares. Any incentive option, which is granted under a
plan must provide for an exercise price of not less than 100% of the fair market
value of the underlying shares, on the date of such grant. The exercise price of
any incentive option granted to an eligible employee owning more than 10% of our
common stock must be at least 110% of the fair market value, as determined on
the date of the grant. The board of directors or the audit, finance and
compensation committee determine the term of each plan option and the manner in
which it may be exercised. No plan option may be exercisable more than 10 years
after the date of its grant. In the case of an incentive option granted to an
eligible employee owning more than 10% of Viragen's common stock, no plan option
may be exercisable more than five years after the date of the grant.
Officers, directors, key employees and consultants of Viragen and its
subsidiaries are eligible to receive non-qualified options under the stock
option plans. Only officers, directors and employees who are employed by Viragen
or by any of its subsidiaries are eligible to receive incentive options.
Incentive options are non-assignable and nontransferable, except by will or
by the laws of descent and distribution during the lifetime of the optionee.
Only the optionee may exercise incentive options. Under a recent amendment to
the 1997 stock option plan, non-qualified options may be transferable under
limited circumstances for estate planning, if authorized by the board of
directors or the audit, finance and compensation committee. If an optionee's
employment is terminated for any reason, other than his death or disability, or
if an optionee is not an employee but is a member of Viragen's board of
directors and his service as a director is terminated for any reason, other then
death or disability, the plan option granted to him will lapse to the extent
unexercised on the earlier of the expiration date or 30 days following the date
of termination. If the optionee dies during the term of his employment, the plan
option granted to him will lapse to the extent unexercised on the earlier of the
expiration date of the plan option or the date one year following the date of
the optionee's death. If the optionee is permanently and totally disabled, the
plan option granted to him lapses to the extent unexercised on the earlier of
the expiration date of the option or one year following the date of the
disability.
The board of directors or the audit, finance and compensation committee may
amend, suspend or terminate the stock option plans at any time. However, no
amendment can be made which changes the minimum purchase price, except in the
event of adjustments due to changes in Viragen's capitalization. Unless the
plans have been suspended or terminated by the board of directors, the 1995
stock option plan will terminate on May 15, 2005, and the 1997 stock option plan
will terminate on January 27, 2007. The termination of either plan will not
affect the validity of any plan options previously granted.
As of June 1, 2000, we have issued 3,197,800 options under the 1995 stock
option plan and 3,692,700 options under the 1997 stock option plan.
ADDITIONAL STOCK OPTIONS
During fiscal 1999, Viragen issued options to purchase 25,000 shares of
common stock to each of the two directors who joined the board of directors
during the year. In addition, we issued 35,000 options to Dr. Ray Ziai, our vice
president of research and development, in connection with an amendment and
extension of his employment agreement. All options were issued with a five-year
term, exercisable at the market price on the date of the grant.
11
<PAGE> 14
PERFORMANCE GRAPH - STOCKHOLDER RETURN
ON COMMON STOCK
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG VIRAGEN, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ HEALTH SERVICES INDEX
<TABLE>
<CAPTION>
NASDAQ STOCK MARKET
VIRAGEN, INC. (U.S.) NASDAQ HEALTH SERVICES
------------- ------------------- ----------------------
<S> <C> <C> <C>
6/94 100 100 100
6/95 135 133 109
6/96 870 171 166
6/97 405 208 153
6/98 300 274 149
6/99 120 393 139
</TABLE>
* $100 invested on 6/30/94 in stock or index -- including reinvestment of
dividends. Fisal year ending June 30.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Gerald Smith and Dennis W. Healey, who are principal officers of Viragen,
also serve as the principal officers of Viragen (Europe). Messrs. Smith and
Healey also serve as principal officers of our majority-owned subsidiary,
Viragen U.S.A., Inc.
On April 25, 1997, Viragen loaned William Saeger, a former director,
$100,000. In exchange, Viragen received a one-year promissory note bearing
interest at 8 1/2%. In April 1998, Mr. Saeger defaulted on this note. Due to a
subsequent deterioration in Mr. Saeger's health and financial condition, we were
unable to determine the amounts which could ultimately be realized on the
promissory note. Accordingly, we wrote-off the entire amount due under the note
with related accrued interest of approximately $10,000 as uncollectible by
fiscal 1998 year end. We are continuing to pursue collection efforts relative to
this transaction.
On September 1, 1998, Gerald Smith and Dennis W. Healey each exercised
250,000 options to purchase common stock. Both exercised their options through
the issuance of promissory notes payable to Viragen totaling $300,000. Smith and
Healey also entered into related pledge and escrow agreements. The promissory
notes bear interest at 5.47%, payable semi-annually, and are secured by the
underlying common stock purchased. The purchased shares were being held in
escrow, pending payment of the related notes pursuant to the provisions of the
pledge and escrow agreements. Mr. Smith paid $100,000 of the principal on his
promissory note, plus related interest, during January 2000. Mr. Healey
paid-in-full the $150,000 principal,
12
<PAGE> 15
plus related interest, on his promissory note, during March 2000. Viragen
released the collateral on the two promissory notes.
Carl N. Singer, a director of Viragen and the chairman of its executive
committee, also exercised options for 50,000 shares on October 1, 1998. Peter
Fischbein, a director, exercised options for 200,000 shares on October 8, 1998.
Charles F. Fistel, a former officer, exercised options totaling 410,000 shares
on May 3, 1999 and May 11, 1999 These options were all exercised through the
issuance of promissory notes payable Viragen totaling $302,000, and related
pledge and escrow agreements. The promissory notes bear interest at rates
ranging between 5.06% and 5.15%, payable semi-annually, and are secured by the
underlying common stock purchased. The purchased shares are being held in
escrow, pending payment of the related notes pursuant to the provisions of the
pledge and escrow agreements. During February 2000, Mr. Fischbein exercised
options for 25,000 additional common shares through the issuance of another
promissory note and escrow agreement. Principal on the promissory note totals
$12,500 and bears interest at 6.46%. Mr. Singer paid-in-full the $59,000
principal, plus related interest, on his promissory note, during March 2000. Mr.
Singer's collateral was released from escrow upon receipt of his payment. Mr.
Fistel paid $30,000 of the principal on his promissory notes, plus related
interest, during March 2000. The related escrowed common shares were released to
Mr. Fistel upon receipt of his payment.
During January 2000, we contracted Cameron Associates, Inc. to act as our
investor relation's contact. Cameron Associates receives $6,000 per month as
compensation for their services. They also received warrants to purchase 100,000
common shares of Viragen at $1.17 per share through January 2005. Mr. Singer
serves as a director on Cameron Associates' board of directors and is a minority
stockholder.
On February 7, 2000, the board of directors voted to modify the terms of an
option to purchase 1.4 million shares of common stock, which had been granted to
Mr. Smith, Viragen's president, during October 1995. The board of directors
delayed the expiration of this common stock option by three years. Under the
modified terms, the common stock option will now expire on October 5, 2003. No
other terms were changed. Under the provisions of APB 25, we recognized
compensation expense of $941,000 relating to the modification of the grant,
during the fiscal quarter ended March 31, 2000.
On February 18, 2000, we entered into a subscription agreement with Active
Investors Ltd. II, an investment fund managed by Mr. Singer. Under the terms of
the subscription agreement, we issued to Active Investors Ltd. II a convertible
promissory note for the principal amount of $1,000,000. The promissory note
bears interest at a rate of 9.5% per annum. The principal and interest are
payable on February 17, 2001. Charles Simons, a director of Viragen and the
chairman of its audit, finance and compensation committee, is an investor in
Active Investors Ltd. II.
Active Investors Ltd. II can elect to convert the unpaid principal and
interest, at any time, into common shares at the fixed rate of $1.00 per share.
Under the subscription agreement, Active Investors Ltd. II also received a
warrant to purchase 100,000 common shares. The warrant is exercisable at $2.00
per share through February 17, 2003.
Active Investors Ltd. II has also participated as an investor under the
shelf registration on Form S-3 dated March 21, 2000 (File No. 333-32306). Active
Investors Ltd. II invested $1,000,000 in exchange for 784,300 shares of our
common stock.
Between February and March 2000, Mr. Smith exercised options for 400,000
additional common shares through the issuance of two promissory notes and escrow
agreements. Principal on the promissory notes totaled $200,000. Mr. Smith
paid-in-full the principal on both notes during March 2000. The escrowed shares
were released upon receipt of Mr. Smith's payment.
During March 2000, Melvin Rothberg, an executive vice-president of Viragen,
exercised options for 100,000 common shares through the issuance of a promissory
note and escrow agreement. Principal on the promissory note totaled $62,500. Mr.
Rothberg paid-in-full the principal on his note during April 2000. The escrowed
shares were released upon receipt of Mr. Rothberg's payment.
13
<PAGE> 16
APPROVAL OF NOMINEES
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF THE NOMINEES FOR THE CLASS B DIRECTORS SET FORTH ABOVE.
APPOINTMENT OF THE COMPANY'S AUDITORS
The appointment of Ernst & Young LLP as our independent auditors for the
fiscal year ended June 30, 2000, will be submitted for ratification by the
stockholders.
Although the board of directors is submitting the appointment of Ernst &
Young LLP for stockholder approval, it reserves the right to change the
selection of Ernst & Young LLP as auditors, at any time during the fiscal year,
if it deems such change to be in Viragen's best interest, even after stockholder
approval. Representatives of Ernst & Young LLP are expected to be present at the
annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF ERNST & YOUNG LLP AS VIRAGEN'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING JUNE 30, 2000.
INTEREST OF CERTAIN PERSONS IN
OPPOSITION TO MATTERS TO BE ACTED UPON
Management is not aware of any substantial interest, direct or indirect, by
securities holdings or otherwise of any officer, director, or associate of the
foregoing persons in any matter to be acted on, as described herein, other than
elections to offices.
OTHER MATTERS
Management is not aware of any other business which may come before the
meeting. However, if additional matters properly come before the meeting,
proxies will be voted at the discretion of the proxy holders.
STOCKHOLDERS' PROPOSALS TO BE PRESENTED AT THE
COMPANY'S NEXT ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals intended to be presented at our 2000 annual meeting
of stockholders of must be received by us, at our principal executive offices
not later than February 8, 2001, or if the 2000 annual meeting of stockholders
differs by more than 30 days from the date of the 1999 annual meeting, then a
reasonable time before we print and mail the proxy materials for the 2000 annual
meeting, for inclusion in the proxy statement and proxy relating to the 2000
annual meeting of stockholders. Any proposal will be subject to our by-laws and
17 C.F.R. sec.240.14a-8 of the Rules and Regulations under the Securities Act of
1933.
In addition, the proxy solicited by the board of directors for the 2000
annual meeting of stockholders will confer discretionary authority to vote on
any stockholder proposal presented at that meeting, unless management is
provided with notice of such proposal no later than April 24, 2001, or if the
2000 annual meeting of stockholders differs by more than 30 days from the date
of the 1999 annual meeting, then a reasonable time before we print and mail our
proxy materials for the 2000 annual meeting.
14
<PAGE> 17
AVAILABILITY OF FORM 10-K/A ANNUAL REPORT
AND FORM 10-Q QUARTERLY REPORT
A copy of Viragen's annual report on Form 10-K/A for the year ended June
30, 1999, has been included with this proxy statement along with a copy of its
quarterly report on Form 10-Q for the quarterly period ended March 31, 2000.
Both are exclusive of exhibits filed with the Securities and Exchange
Commission. These exhibits are available without charge to stockholders upon
request to Gerald Smith, President, 865 S.W. 78th Avenue, Suite 100, Plantation,
Florida 33324.
By Order of the Board of Directors
Dennis W. Healey, Secretary
Plantation, Florida
June 15, 2000
15
<PAGE> 18
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
VIRAGEN, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- JULY 27, 2000
The undersigned, revoking all previous proxies, hereby appoint(s) Gerald
Smith as Proxy, with full power of substitution, to represent and to vote all
Common Stock of Viragen, Inc. owned by the undersigned at the Annual Meeting of
Stockholders to be held in New York, New York on July 27, 2000, including any
original or subsequent adjournment thereof, with respect to the proposals set
forth in the Notice of Annual Meeting and Proxy Statement. No business other
than matters described below is expected to come before the meeting, but should
any other matter requiring a vote of stockholders arise, the person named
herein will vote thereon in accordance with his best judgement. All powers may
be exercised by said Proxy.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
SPECIFIC DIRECTION IS GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
FOR THE NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
(continued and to be signed and dated on other side)
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. Call TOLL-FREE 1-800-840-1208 on a Touch-Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
2. Vote by internet at our Internet Address: http://www.eproxy.com/vra/
OR
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
<PAGE> 19
Please mark your
vote as indicated
in this example [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING.
1. To elect three directors to the Board of Directors, and who will be
classified as Class B directors, to serve for the term of their designated
class and until their successors have been elected and qualified.
Nominees: CLASS B DIRECTORS
01 Robert Zeiger
02 Dennis W. Healey
03 Peter D. Fischenbein
[ ] FOR all nominees listed (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PLEASE
DRAW A LINE THROUGH THAT NOMINEE'S NAME.)
2. To ratify the appointment of Ernst & Young LLP, as the Company's
independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
By checking the box to the right, I consent to future access of the Annual [ ]
Report, Proxy Statements, Prospectuses and other communications
electronically via the Internet. I understand that the Company may no
longer distribute printed materials to me for any future shareholder
meeting until such consent is revoked. I understand that I may revoke
my consent at any time by contacting the Company's transfer agent,
ChaseMellon Shareholder Services, L.L.C., Ridgefield Park, NJ. I also
understand that costs normally associated with electronic access, such
as usage and telephone charges, will be my responsibility.
The undersigned stockholder hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement and hereby revokes any proxy or
proxies heretofore given. This proxy may be revoked at any time prior to the
Annual Meeting. If you received more than one proxy card, please date, sign and
return all cards in the accompanying envelope.
<TABLE>
<CAPTION>
<S> <C>
------- Please sign exactly as name appears to the left. 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 or other entity,
please sign in the corporate name by President or other
authorized officer or person. If a partnership, please sign in
partnership name by authorized person.
--------------------------------------------------------------
Signature
--------------------------------------------------------------
Signature if Held Jointly
--------------------------------------------------------------
(Please Print Name)
--------------------------------------------------------------
Number of Shares Subject to Proxy
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE Date: , 2000
ENCLOSED ENVELOPE. -------------------------------------------------
</TABLE>
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY TELEPHONE OR INTERNET
QUICK * * * EASY * * * IMMEDIATE
Your telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy card.
VOTE BY PHONE: CALL TOLL-FREE ON A TOUCH-TONE TELEPHONE 1-800-840-1208
ANYTIME. THERE IS NO CHARGE TO YOU FOR THIS CALL.
You will be asked to enter the CONTROL NUMBER located in
the lower right of this form.
OPTION A: To vote as the Board of Directors recommends on ALL items,
press 1.
OPTION B: If you choose to vote on each item separately, press 0. You
will hear these instructions:
ITEM 1: To vote FOR ALL nominees, press 1, to WITHHOLD FOR
ALL nominees, press 9. To WITHHOLD FOR AN INDIVIDUAL
nominee, press 0 and listen to the instructions.
ITEM 2: To vote FOR, press 1; AGAINST, press 9;
ABSTAIN, press 0.
WHEN ASKED, YOU MUST CONFIRM YOUR VOTE BY PRESSING 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://www.eproxy.com/vra/
THANK YOU FOR VOTING.
CALL * * TOLL-FREE * * ON A TOUCH-TONE TELEPHONE
1-800-840-1208 - ANYTIME
There is NO CHARGE to you for this call.
