<PAGE> 1
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 ss.240.14a-12
LIFE SCIENCES, 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
Life Sciences, Inc.
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
To be Held on June 6, 2000
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Life Sciences, Inc. (the "Company") will be held at the offices of the Company,
2900 72nd Street North, St. Petersburg, Florida 33710, on Tuesday, June 6, 2000
at 1:00 p.m., local time, for the following purposes as more fully described in
the accompanying proxy statement:
1. To elect three directors the Company to hold office until the
next annual election and until their respective successors are
elected and qualified;
2. To approve the 2000 Employee Stock Option Plan of Life
Sciences, Inc.;
3. To ratify the appointment of Grant Thornton LLP as LSI's
independent accountants of the Company for the 2000 fiscal
year; and
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
In accordance with the Bylaws of the Company, the Board of Directors
has selected the close of business on May 5, 2000 as the record date for the
Annual Meeting. Only those stockholders of record at the close of business on
that date will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof.
By Order of the Board of Directors
ALEX A. BURNS
Corporate Secretary
St. Petersburg, Florida
May 24, 2000
YOUR VOTE IS IMPORTANT. THE BOARD OF DIRECTORS URGES YOU TO MARK, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE PAID
ENVELOPE EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. THIS WILL
ASSURE THAT YOUR VOTE WILL BE COUNTED AND WILL NOT PREVENT YOU FROM VOTING IN
PERSON AT THE MEETING IF YOU CHOOSE TO DO SO.
<PAGE> 3
Life Sciences, Inc.
2900 72nd Street North
St. Petersburg, Florida 33710
(727) 345-9371
--------------------------------
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS
June 6, 2000
--------------------------------
INTRODUCTION
Solicitation and Voting of Proxies
This proxy statement and the accompanying proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of Life
Sciences, Inc. ("LSI" or the "Company") for use at the 2000 Annual Meeting of
Stockholders of LSI to be held on Tuesday, June 6, 2000 at 1:00 p.m., local
time, and any adjournments thereof (the "Annual Meeting" or the "Meeting") for
the purposes set forth in the preceding notice of the Meeting. The Meeting will
be held at the offices of the Company, 2900 72nd Street North, St. Petersburg,
Florida 33710. The approximate date of mailing of this proxy statement and
accompanying form of proxy is May 24, 2000.
The Board of Directors of LSI has selected the close of business on May
5, 2000 as the record date for the Meeting in accordance with LSI's Bylaws. Only
those stockholders of record as of the close of business on that date will be
entitled to notice of and to vote at the Meeting and any adjournment thereof. On
the record date, 4,196,670 shares of common stock, $.10 par value, of LSI
("Common Stock") were outstanding. Stockholders will be entitled to one vote for
each share of Common Stock held by them of record at the close of business on
the record date on any matter that may properly be presented at the Meeting for
consideration and action by stockholders.
All valid proxies received on a timely basis in response to this
solicitation will be voted in accordance with the directions given therein by
the stockholder executing the proxy or, if no directions are given, as indicated
on the form of proxy. Stockholders may revoke their proxies at any time before
they are voted at the Meeting by giving written notice of revocation to the
Corporate Secretary of LSI, by delivering to LSI's offices (attention Corporate
Secretary) a duly executed proxy bearing a later date, or upon request if the
stockholder is present at the Meeting and chooses to vote in person.
For purposes of determining a quorum for the Annual Meeting, proxies
marked as abstaining or as votes withheld, and any shares represented by broker
non-votes are counted as present at the meeting. Abstentions, votes withheld and
broker non-votes will not be treated as "no" votes in the election of directors,
will not be included in the vote and will have no effect on the outcome of the
vote. With respect to the approval of the 2000 Employee Stock Option Plan of
Life Sciences, Inc., Common Stock represented by abstentions and broker
non-votes will effectively be treated as votes against the proposal. In the vote
on the ratification of the appointment of Grant Thornton LLP as LSI's
independent accountants for the 2000 fiscal year, broker non-votes will have no
impact on the result and abstentions will effectively be treated as a vote
against the proposal.
Method and Expense of Solicitation
Proxies may be solicited in person, or by telephone, facsimile
transmission, telegram or other means, by directors, officers or regular
employees of LSI. These persons will not receive any additional compensation for
their services. LSI will request record holders of Common Stock beneficially
owned by others to forward proxy materials to and to obtain proxies from the
beneficial owners of those shares. Upon request, LSI will reimburse
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<PAGE> 4
these record holders for reasonable out-of-pocket expenses incurred by them in
complying with LSI's request. LSI will also pay the other costs of this proxy
solicitation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
No person or any "group" [as that term is used in section 13(d)(3) of the
Securities Exchange Act of 1934 (the "Exchange Act")] is known to the Company to
own beneficially more than 5% of the outstanding Common Stock as of May 5, 2000,
except as described in the following table.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Name and Address Amount and Nature Percent of
Of Beneficial Owner of Beneficial Ownership Class
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Alex A. Burns 350,100(1) 7.70%(1)
2900 - 72nd Street North
St. Petersburg, Florida 33710
- --------------------------------------------------------------------------------------------
Julius B. Srybnik 1,950,738(2)(3) 46.48%(2)(3)
140 - 53rd Street
Brooklyn, New York 11232
- -------------------------------------------------------------------------------------------
Louis D. Srybnik 2,011,230(2)(4) 47.92%(2)(4)
140 - 53rd Street
Brooklyn, New York 11232
- -------------------------------------------------------------------------------------------
Simon Srybnik 2,369,323(2)(5) 56.46%(2)(5)
140 - 53rd Street
Brooklyn, New York 11232
- -------------------------------------------------------------------------------------------
Kerns Manufacturing Corp. 656,909(6) 15.65%(6)
3714 - 29th Street
Long Island City, New York 11101
- -------------------------------------------------------------------------------------------
Sutton Investing Corp. 774,453(7) 18.45%(7)
140 - 53rd Street
Brooklyn, New York 11232
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 350,000 shares of Common Stock subject to presently
exercisable stock options held by Mr. Burns, which shares are considered to be
outstanding for purposes of calculating the percentage shown for him.
(2) Includes an aggregate of 1,784,088 shares beneficially owned,
directly or indirectly, by seven corporations (including the two named in the
table text) directly or indirectly owned by Julius B., Louis D. and Simon
Srybnik, each of whom directly or indirectly owns one-third of the outstanding
stock of each of the entities and shares in the voting and/or investment power
with respect to the LSI Common Stock owned by such entities. Accordingly, these
same 1,784,088 shares are shown in the table as beneficially owned by each of
Julius B., Louis D. and Simon Srybnik.
(3) Includes direct ownership of 166,650 shares, of which 150 shares
are held as custodian for his son Jed Srybnik.
(4) Includes direct ownership of 227,142 shares.
(5) Includes direct ownership of 585,235 shares.
(6) Includes 612,465 shares owned directly and an additional 44,444
shares owned by a wholly owned subsidiary, Apex Organization, Inc. All of these
shares are also shown in the table as beneficially owned by each of Julius B.,
Louis D. and Simon Srybnik. See note (2) to this table.
(7) These shares are also shown in the table as beneficially owned by
each of Julius B., Louis D. and Simon Srybnik. See note (2) to this table.
ELECTION OF DIRECTORS
Each of LSI's directors holds office for the term for which elected and
until any successor has been elected and qualified, or until resignation,
removal from office or death. Three directors of LSI are to be elected at the
Annual Meeting to hold office until the next annual election and until their
respective successors are elected and qualified. The nominees for election as
directors at the Annual Meeting are shown in the following table. Each of
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<PAGE> 5
these nominees for election has consented to being named as such in this proxy
statement and to serve as a director if elected. However, if any nominee becomes
unavailable prior to the Annual Meeting, the proxies solicited hereby will be
voted for the election of any other person designated by the Board of Directors
of LSI.
Directors will be elected by a plurality of the votes cast in person
and by proxy at the Annual Meeting. That is, the nominees receiving the three
highest number of votes for election will be elected since three directors are
to be elected at the Meeting. The Board of Directors recommends a VOTE FOR the
election of each of the nominees.
Each of the directors and executive officers of the Company is shown in
the following table, as are all persons presently nominated to become a director
or an executive officer of the Company. The following table also sets forth
certain additional information regarding those persons, including their
respective beneficial ownership of Common Stock, and the beneficial Common Stock
ownership of all directors and executive officers of LSI as a group. Beneficial
ownership of Common Stock is set forth as of May 5, 2000.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Name and Age Position(s) with Period Beneficial
or LSI and Served as Current Common Stock Percent
Identity of Principal Occupation Director Term Ownership of
Group (1) During Last 5 Years Expires Class
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Simon Srybnik Director, Chairman, Chief Executive Officer, 1963 2000 2,369,323(2) 56.46%(2)
83 President and Treasurer; nominee for re-election until Annual
as a director; a New York based industrialist 2000 Meeting
active in a number of closely held businesses,
including Kerns Manufacturing Corp. and S&S
Machinery Corp., whose activities include
precision manufacturing and merchandising of
industrial equipment
- --------------------------------------------------------------------------------------------------------------------
Norman Nominee for election as a director; for more than N/A N/A -0- -0-
J. Marcus the past five years, a psychiatrist and Chief of
M.D. Pain Service and Director of New York Pain
59 Treatment Program, Lenox Hill Hospital
(1983-1998) and Clinical Associate Professor in
Anesthesiology and Psychiatry, NYU School of
Medicine (1999-present)
- --------------------------------------------------------------------------------------------------------------------
Alex A. Burns Vice President and Secretary; nominee for N/A N/A 350,100(3) 7.70% (3)
59 election as a director; employed by the Company
since 1984, and its General Manager for more than
the past five years
- --------------------------------------------------------------------------------------------------------------------
All directors, executive 2,719,423(4) 59.81%(4)
officers and nominees
as a group (3 persons)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Steven Victor, M.D., a director of LSI since 1993, resigned as a
director on April 20, 2000. Dr. Victor did not beneficially own any Common
Stock.
(2) See notes (2) and (5) to the table presented above under the
caption "Security Ownership of Certain Beneficial Owners".
(3) Includes 350,000 shares of Common Stock subject to presently
exercisable stock options held by Mr. Burns, which shares are considered to be
outstanding for purposes of calculating the percentage shown for him and at note
(4) to this table.
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<PAGE> 6
(4) See the other notes to this table.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act and applicable regulations require
all officers, directors and persons who beneficially own more than 10% of the
Common Stock (collectively, the "Reporting Persons") to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission, and to furnish copies to the Company. Specific due dates for these
reports have been established by statute and the Commission. LSI is required to
report herein specified information regarding failures to file such reports on a
timely basis during the most recent fiscal year or prior fiscal years. Based on
its review of available records, the Company believes that all Section 16(a)
filing requirements applicable to the Reporting Persons have been complied with
during LSI's past nine fiscal years, except as shown in the following table.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Name of Reporting
Person and Position(s) No. of No. of
with LSI Late Reports Transactions
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Alex A. Burns; executive officer and 5 3
nominee for election as a director
- -----------------------------------------------------------------------------------------------
Kerns Manufacturing Corp.; more than 4 2
10% beneficial owner
- -----------------------------------------------------------------------------------------------
Charles M. Kleim; officer 4 2
- -----------------------------------------------------------------------------------------------
Julius B. Srybnik; more than 10% 8 7
beneficial owner
- -----------------------------------------------------------------------------------------------
Louis D. Srybnik; more than 10% 16 11
beneficial owner
- -----------------------------------------------------------------------------------------------
Simon Srybnik; executive officer, director 14 12
and nominee for re-election as a director,
and more than 10% beneficial owner
- -----------------------------------------------------------------------------------------------
Sutton Investing Corp.; more than 2 1
10% beneficial owner
- -----------------------------------------------------------------------------------------------
Steven Victor; former director (1) 2 1
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) No reports filed. Dr. Victor resigned as a director on April 20,
2000.
Board Meetings, Committees and Remuneration
Board Meetings and Committees. LSI's Board of Directors did not hold
any meetings during 1999, but did take action by unanimous written consent on
three occasions. The Board of Directors does not have a standing audit,
nominating or compensation committee.
Compensation of Directors. Directors are not compensated for their
service on the Board of Directors. Expenses for attendance at meetings of the
Board are either paid directly by the Company or reimbursed to directors.
Executive Compensation
Summary Compensation Table. The following table sets forth certain
information with respect to compensation awarded, earned or paid during the
three fiscal years ended May 31, 1999 to Simon Srybnik and Alex A. Burns, the
Company's only two executive officers, for their service in all capacities to
LSI and its subsidiary.
4
<PAGE> 7
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
- --------------------------------------------------------------------------------------------------
Other Securities
Fiscal Annual Underlying All Other
Name and Principal Positions Year Salary Compensation Options Compensation
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Simon Srybnik, Chairman of the 1999 -0- -0- -0- -0- (1)
Board, Chief Executive Officer and 1998 -0- -0- -0- -0-
President 1997 -0- -0- -0- -0-
- --------------------------------------------------------------------------------------------------
Alex A. Burns 1999 $35,000 -0-(2) 350,000 (3) -0-
Vice President and General Manager 1998 $35,000 -0- -0- -0-
1997 $35,000 -0- -0- -0-
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Expenses in connection with Mr. Srybnik's performance of his duties
for LSI are either paid directly by the Company or reimbursed to him.
(2) The Company makes a leased automobile available for use by Mr.
Burns. The dollar value of any personal use of the automobile is excluded from
the table because the amount thereof, if any, is less than 10% of his annual
salary.
(3) Represents two options granted to Mr. Burns in 1999. See the text
and table following the caption "Option Grants in Last Fiscal Year" below.
Options Grants in Last Fiscal Year. The follow table sets forth certain
information with respect to the grant of stock options during fiscal 1999 to
Alex A. Burns. Mr. Burns is the only individual named in the summary
compensation table that received any stock option grants during 1999. These
options were granted with an option exercise price of not less than 100% of the
fair market value of the underlying Common Stock on the date of the grant.
<TABLE>
<CAPTION>
Individual Grants
- -------------------------------------------------------------------------------------------------
Percentage
of Total Options
Number of Securities Granted to Employees
Underlying Options in Exercise or Base Expiration
Name Granted Fiscal Year Price /Share Date
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alex A. Burns 350,000 (1) 72.92% $0.405 05/26/09
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents two options, one of which for 150,000 shares was granted
under the Company's 1990 Employee Stock Option Plan. The other option was
granted as a "non-statutory" stock option outside of the terms of that plan.
Aggregated Option Exercises in Last Fiscal Year and FY-End Option
Values. The following table sets forth certain information with respect to all
options held by Alex A. Burns at May 31, 1999. Mr. Simon Srybnik, the only other
executive officer of the Company, does not hold any options granted by LSI.
5
<PAGE> 8
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Number of Securities Value of
Underlying Unexercised
Unexercised Options In-the-Money
at FY-End Options at FY-End
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alex A. Burns - - - (1) - - - (1) 350,000 (2)/ N/A (3)/
- 0 - N/A
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Burns did not exercise any options during fiscal 1999.
(2) Options covering these shares were granted to Mr. Burns in fiscal
1999.
(3) No amount is shown because the option exercise price of $0.405 with
respect to these options exceeds the reported quotation price of $0.25 per share
in the over-the-counter market at fiscal 1999 year-end.
Transactions With Certain Related Persons
During a period of more than five years preceding June 1, 1998, which
date was the beginning of the Company's 1999 fiscal year, various business
entities owned directly or indirectly in equal shares by Simon Srybnik and his
two brothers, Louis D. and Julius B. Srybnik, and Simon Srybnik and Louis D.
Srybnik individually, provided various loans in amounts that were required, when
combined with the limited revenues of LSI during the period, to allow LSI to
continue in business and to carry out only those activities absolutely essential
to its survival. Simon Srybnik is a director of the Company, a nominee for
re-election as a director of the Company, and is the Company's Chairman, Chief
Executive Officer and President. He and his two brother may be considered to be
the "parents" of LSI within the meaning of the Exchange Act by virtue of their
direct and indirect beneficial ownership of LSI Common Stock. See the tabular
information and related notes presented above under the caption "Security
Ownership of Certain Beneficial Owners".
While there may have been some upward and downward fluctuations in the
total amounts due to these affiliated parties during the period, from May 31,
1993 to May 31, 1998 the aggregate amount of the indebtedness to these related
parties, including interest and other charges, increased from approximately
$707,000 to approximately $2,425,000. The rates of interest on these loans
during this period was typically between 10.5% and 11.5%, and was 10.5% during
fiscal 1998. No interest accrued on this debt subsequent to May 31, 1998. During
fiscal 1998, the aggregate amount of this related party indebtedness increased
by approximately $186,648 to reach the total of approximately $2,425,000 at May
31, 1998. In the fiscal year ended May 31, 1999, the principal of this
indebtedness increased by $103,165 (net). All of this indebtedness was
eliminated through restructuring transactions between the Company and these
related parties in fiscal 1999.
Approximately $905,000 of the total of this indebtedness was eliminated
through the conversion in April and May 1999 of a total of $568,829 of principal
into 1,399,927 shares of the Company's Common Stock and the forgiveness by the
creditors of the balance. Louis D. Srybnik agreed in April 1999 to accept 57,142
shares of Common Stock at $0.4375 per share in payment and discharge of the
$25,000.00 principal amount of a debt due to him in connection with his earlier
loan to the Company. In May 1999 Simon Srybnik and certain of the business
entities controlled by him and his two brothers (Kerns Manufacturing Corp.,
Industrial Renting Corp., Continental Salvage Corp., Sutton Investing Corp., S&S
Machinery Corp., and Apex Organization, Inc.) agreed to accept an aggregate of
1,342,785 shares of Common Stock at $0.405 per share in payment and discharge of
the $543,829.39 aggregate principal amount of indebtedness represented by
various separate loans made by them to LSI over the prior years. Interest and
other charges due on these debts were forgiven in these stock issuance
transactions. The prices at which the shares were issued in these transactions
were each equal to the approximate mean between the last available reported bid
and ask prices of the Common Stock in the over-the-counter market prior to the
respective dates of the transactions. Kerns Manufacturing Corp. was a more than
10% beneficial
6
<PAGE> 9
owner of the Common Stock prior to the May 1999 transaction and increased its
ownership through it, and Sutton Investing Corp. became a more than 10%
beneficial owner of the Common Stock through that transaction.
Also in May 1999, the Company sold an outlying parcel of its land to an
unaffiliated neighboring business for $200,000 cash. In a separate transaction
on the same day with a related business entity, the Company sold all of its
remaining real estate and entered into a lease for the laboratory and office
facilities it historically owned and occupied. The latter sale transaction
satisfied $859,075 of the principal amount of a mortgage on the property and,
via forgiveness of interest and other amounts, extinguished an additional
approximately $764,000 of real estate related indebtedness. The Company's
aggregate historical cost from the 1960's of all of the land and building
improvements was less than $500,000. The aggregate of the sales prices in these
two real estate sale transactions was slightly greater than an appraisal secured
about a year earlier of the entire property. The mortgage satisfaction real
estate transaction and the lease transaction were effected with 186-194 Imlay
Street Realty Corp. ("Imlay Street Realty"), one of the business entities
equally owned by Simon, Louis D. and Julius B. Srybnik.
Imlay Street Realty leases the laboratory and office facilities of the
Company to the Company under a five year lease expiring in 2004. The lease of
the approximately 24,000 facility in St. Petersburg, Florida provides for an
annual rental for the initial two years of $90,000. The rent is subject to
adjustment each two years thereafter to reflect current market rental rates, but
not less than the initial rate.
APPROVAL OF STOCK OPTION PLAN
General. On May 5, 2000, the Board of Directors adopted the 2000
Employee Stock Option Plan of Life Sciences, Inc. (the "Plan" or the "Stock
Option Plan" or the "2000 Plan") in the belief that stock options provide key
full-time employees of LSI, or of any subsidiary or parent corporations
(together, "Affiliates", whether now existing or subsequently established), with
additional incentives to promote the success of the Company, assist in
attracting and retaining personnel with training, experience and ability, and
more closely associate the interests of those persons with those of the
stockholders of LSI. The 1990 Employee Stock Option Plan approved by
stockholders at the 1991 Annual Meeting expires in December 2000, and only
230,000 of the 500,000 shares of Common Stock subject to that plan are currently
available for future grants.
The 2000 Plan will only remain in effect if stockholders approve the
Plan at the Annual Meeting. The Plan is being submitted to stockholders to
satisfy that contingency and, assuming stockholder approval, in order that
incentive stock options granted under the Plan ("Incentive Options") may qualify
for favorable tax treatment under the Internal Revenue Code of 1986, as amended
(the "Code"), and in order that compensation considered as received in
connection with the Plan will be treated as performance-based compensation for
purposes of being excluded from the limitation on deductibility of compensation
under Section 162(m) of the Code, assuming the other conditions of that section
of the Code are met.
Because of their respective positions with LSI, each of the Company's
executive officers, directors and nominees for election as directors who may
come within the definition of "Employees" set forth below may be considered as
interested persons within the meaning of regulations under the Exchange Act with
respect to the approval of the 2000 Plan by stockholders.
The Board of Directors recommends a VOTE FOR approval of the Stock
Option Plan. The affirmative vote of a majority of the total votes entitled to
be cast at the Annual Meeting is required to approve the 2000 Plan.
Summary of Plan. The following summary of certain features of the Plan
is qualified in its entirety by the terms of the Plan, the text of which is
attached as Exhibit A to this proxy statement.
The Stock Option Plan is to be administered by a committee of LSI's
Board of Directors consisting of either all of the members of the Board of
Directors, or a sub-committee of the Board of Directors consisting solely of two
or more qualified members (the "Committee"). Within the limits imposed by the
2000 Plan, the Committee has the authority to administer the Plan, to grant
options thereunder, and to determine the terms and conditions of
7
<PAGE> 10
the options. No options have been granted under the 2000 Plan at the date of
this proxy statement, and any granted prior to the Annual Meeting may not be
exercised until stockholders approve the Plan and would be cancelled if
stockholder approval is not secured.
All key full-time employees of the Company and its Affiliates
("Employees") are eligible to participate in the 2000 Plan. Full-time employees
for purposes of the 2000 Plan are those who perform, or may be expected to
perform, at least 1,000 hours of service during a calendar year for the Company
or an Affiliate. LSI has approximately 20 full-time employees at the present
time. Future benefits under the Plan, including the number of Employees who are
likely to participate in the Plan and the number and extent of options likely to
be granted to any Employee or to all Employees as a group, are not currently
determinable since eligibility for option grants and the number of shares of
Common Stock to be the subject of any grant are to be determined in the future
by the Committee. Of the 480,000 shares covered by options granted in May 1999
(the only options granted in more than three years), 350,000 shares are subject
to an option awarded to an executive officer as detailed in the text and table
following the caption "Option Grants in Last Fiscal Year" above, and the other
130,000 are subject to options in favor of five other individuals who are not
executive officers of the Company.
Under the 2000 Plan, no one participant in the Plan ("Optionee") may be
granted during any year options under the 2000 Plan to purchase more than
200,000 shares of Common Stock (subject to adjustment). In addition, the
aggregate fair market value (determined at the time the option is granted) of
Common Stock with respect to which options are exercisable for the first time by
an Employee during any calendar year (under all stock option plans of the
Company, any Affiliate and any predecessor corporation of either the Company or
any Affiliates) may not exceed $100,000, or such larger amount as may be
specified in or pursuant to Section 422 of the Code. The option exercise price
of all options granted under the Stock Option Plan is required to be not less
than the fair market value of the Common Stock on the date the option is
granted. On May 12, 2000, the reported closing price of the Common Stock in the
over-the-counter market was $1.50 per share.
An aggregate of 600,000 shares of the Company's authorized but unissued
$.10 par value Common Stock is reserved for issuance under the Plan. The number
of shares reserved for issuance under the 2000 Plan and subject to outstanding
options is subject to modification or adjustment to reflect changes in LSI's
capitalization as, for example, in the case of a reorganization, merger, stock
dividend or stock split. If an option granted under the Plan should expire or
terminate without being exercised in full, the shares covered by the unexercised
portion of the option will again be available for the grant of options under the
Stock Option Plan.
The granting of an option does not confer on the Optionee any right to
remain in the Company's employment. No Optionee has any voting rights or other
stockholder rights with respect to the shares covered by an option until those
shares have been sold to him or her upon exercise of the option. The Plan
provides solely for the award of Incentive Options. Incentive Options are
contemplated by Section 422 of the Code and afford more favorable tax treatment
to the Optionee than is available for options that do not meet the requirements
of that section. The Plan does not limit in any way the power of the Company to
adopt other compensation arrangements, including the grant of stock options
outside of the terms of the 2000 Plan.
The general parameters applicable to options under the Plan are
described below.
(1) Options may only be granted to key full-time employees of
the Company and its Affiliates, and one or more options may be granted to an
Optionee.
(2) Options are exercisable during the period specified in the
relevant option agreement, but not later than 10 years from the date of grant
(not later than five years if the Optionee directly or indirectly owns more than
10% of the total combined voting power of all classes of stock of the Company
and its Affiliates).
(3) The minimum number of shares subject to exercise at any
one time is 100 shares, unless the number to be purchased is the total number
remaining available, and the full exercise price for all shares
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purchased upon exercise of options is required to be paid in cash, shares of
Common Stock, or a combination of cash and Common Stock, at the time of
exercise. The Company is authorized to make a loan to facilitate the exercise of
an option by an Optionee.
(4) To the extent designated in the relevant option agreement,
options granted to Employees may be exercisable in installments, and to the
extent not exercised, may accumulate.
(5) Unless otherwise specified in the relevant option
agreement, no option is exercisable within one year from the date of grant.
(6) Notwithstanding other provisions of the 2000 Plan, in the
event of a change in control or threatened change in control of LSI, all
outstanding options granted under the Plan become immediately exercisable unless
the change in control or threatened change in control is approved in advance by
not less than a two-thirds vote of the directors then in office. In addition,
options may be exercised in full within one year from the death or disability of
an Optionee while in the Company's and an Affiliate's employment, but no later
than the date the option would otherwise expire. Further, upon termination of
employment for any reason other than death or disability, options held by an
Optionee are immediately terminated to the extent not then exercisable, unless
the termination of employment or service is upon retirement in accordance with
the Company's normal retirement policies as determined by the Committee, or if
the employment or service of the Optionee is voluntarily or involuntarily
terminated within six months after a change in control of the Company. In those
events, the Optionee may exercise his or her options for three months after the
date of termination (in full if normal retirement or in the event of a change in
control, otherwise only to the extent exercisable at the date of termination),
but not later than the date the option would otherwise expire. "Control" for
these purposes refers to the acquisition of 25% or more of the voting securities
of LSI by any person, or by any persons acting as a group within the meaning of
the Exchange Act.
(7) The Plan also provides for the early exercise of
outstanding options in the event of a dissolution, liquidation or sale of
substantially all of the property of LSI, and in the event of a reorganization,
merger or consolidation involving LSI and another entity.
(8) Options are not transferable except by will or the laws of
descent and distribution, and may be exercised during the lifetime of the
Optionee only by the Optionee.
(9) The exercise price may not be less than the fair market
value of the related shares on the date of grant (not less than 110% of the fair
market value on the date of grant, if the Optionee directly or indirectly owns
more than 10% of the total combined voting power of all classes of stock of the
Company and its Affiliates).
Unless sooner terminated, the Plan will expire on May 4, 2010. No
options may be granted under the 2000 Plan after that date. The Stock Option
Plan may at any time or from time to time be terminated, suspended or amended by
the Company's Board of Directors. In addition, the Committee is authorized to
amend the 2000 Plan and outstanding options to reflect changes in capitalization
(e.g., in the event of stock dividends or stock splits). Other than changes
incident to a recapitalization, no amendment of the Plan may be made without the
approval of the Company's stockholders if the amendment would materially (1)
increase the benefits accruing to participants under the Plan, (2) increase the
number of securities that may be issued under the Plan, or (3) modify the
requirements for eligibility for participation in the Plan. No termination,
modification or amendment of the Plan may, without the consent of the Optionee
to whom the option has been granted, adversely affect the rights of the
Optionee.
Federal Tax Consequences. The following statements are intended to
summarize the general principles of current federal income tax law applicable to
Incentive Options that may be granted under the Plan. The statements are not
intended to be a complete explanation of all possible federal income tax
consequences or of any state and local tax consequences, or as tax advice to any
Optionee or other person. Further, the following
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statements do not address the applicable reporting requirements under the Code
(e.g., that the Company provide a statement to the person receiving shares of
Common Stock upon the exercise of an Incentive Option).
No gain, loss, income or deduction will be recognized by LSI or its
Affiliate employing any Optionee or the Optionee at the time an Incentive Option
is granted under the Plan. If an Optionee does not dispose of the Common Stock
acquired upon exercise of the option prior to the expiration of one year after
the date of transfer of the shares to the Optionee or two years after the date
the option was granted, whichever occurs later, (1) the Optionee will not
recognize any income at the time the option is exercised, (2) the difference
between the exercise price and the fair market value of the shares at the time
of exercise will be an item of tax preference to the Optionee, subject to the
alternative minimum tax, and (3) the difference between the exercise price and
the amount realized upon the sale of the shares by the Optionee will be treated
as long-term capital gain or loss. LSI will not be entitled to a deduction upon
exercise of an Incentive Option. The use of shares previously acquired through
exercise of an incentive stock option under the Code in satisfaction of some or
the entire price paid on exercise of another option is a disposition of the
previously acquired shares for purposes of the holding periods referred to
above. Except in limited circumstances, if the Optionee fails to satisfy these
holding period requirements, the Optionee will realize ordinary income at the
time of disposition of the Common Stock to the extent of the lesser of the
realized gain or the difference between the fair market value of the shares at
the time the option was exercised and the exercise price, and the Company or its
Affiliate employing the Optionee will be entitled to a corresponding deduction.
With certain exceptions, Section 162(m) of the Code limits the
deductibility by the Company of compensation paid to executive officers of the
Company. Compensation paid to such an individual in excess of $1,000,000 will
not be subject to the deduction limit, however, if it meets the test for
"performance-based compensation" under the Code. Stockholder approval of the
Plan, including the 200,000-share limit (subject to adjustment) on the number of
shares that may be the subject of the grant of options to a participant in the
Plan during any year, is an important element of this test. Another important
element of this test in the context of the Plan is the requirement that awards
of options be made by a committee composed of at least two "outside directors"
(within the meaning of the Code). As the Company does not have two directors
meeting the Code's definition for outside directors, the committee requirements
of the Code are not met, and compensation considered as received in connection
with the Plan would not be treated as performance-based compensation for
purposes of being excluded from the limitation on deductibility of compensation
under Section 162(m) of the Code. Notwithstanding that circumstance, the Company
does not anticipate encountering any difficulty with the deduction limit on
compensation.
Accelerated vesting or exercise of options in connection with a change
in control of LSI might, under certain circumstances, be considered an "excess
parachute payment" for purposes of the "golden parachute payment provisions of
Section 280G of the Code. In those circumstances, any Optionee to whom the
section was applicable would be subject to an excise tax equal to 20% of the
amount of the excess parachute payment, and the Company would be denied any tax
deduction that might otherwise be allowed for such payment.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed the firm of Grant Thornton LLP to
serve as LSI's independent certified public accountants for the year ending
December 31, 2000, subject to ratification of this appointment by the
stockholders of LSI. A representative of Grant Thornton LLP is expected to be
present at the Meeting and available to respond to appropriate questions. The
representative will have the opportunity to make a statement if the
representative desires to do so.
Ratification of the appointment of the independent accountants requires
the affirmative vote of a majority of the shares of Common Stock present and
entitled to vote at the Meeting. If stockholders do not ratify the appointment
by the Board of Directors of Grant Thornton LLP, the Board of Directors will
reconsider the appointment. The Board of Directors recommends a VOTE FOR
ratification of this appointment.
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STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposal intended to be presented at the next annual
meeting of stockholders of the Company must be received at LSI's principal
executive offices not later than January 24, 2001 in order to be eligible to be
considered for inclusion in LSI's proxy material for that meeting.
In addition, the proxy solicited by the Board of Directors for the next
annual meeting will confer discretionary authority to vote on any stockholder
proposal presented at that meeting, unless notice of such proposal is received
by the Company at its principal executive offices not later than April 9, 2001.
OTHER MATTERS
The Board of Directors does not know as of the date of this proxy
statement of any business to be presented for action at the Annual Meeting that
is not described in this proxy statement. If any other business is properly
presented before the Annual Meeting and may properly be voted upon, the proxies
solicited hereby will be voted on those matters in accordance with the best
judgment of the proxyholders.
By Order of the Board of Directors
ALEX A. BURNS
Corporate Secretary
May 24, 2000
--------------------------------
THE COMPANY'S FORM 10-KSB/A FOR THE FISCAL YEAR ENDED MAY 31, 1999,
INCLUDING THE FINANCIAL STATEMENTS FOR THE TWO YEARS THEN ENDED BUT EXCLUDING
THE OTHER EXHIBITS, AND A SEPARATE LETTER TO STOCKHOLDERS FROM LSI'S PRESIDENT
AND CHAIRMAN OF THE BOARD ARE BEING FURNISHED TO STOCKHOLDERS WITH THIS PROXY
STATEMENT IN SATISFACTION OF THE REQUIREMENT FOR AN ANNUAL REPORT. THAT
INFORMATION IS NOT PART OF THE MATERIAL FOR THE SOLICITATION OF PROXIES.
--------------------------------
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EXHIBIT A
2000 EMPLOYEE STOCK OPTION PLAN
OF
Life Sciences, Inc.
(1) PURPOSES. The purposes of the 2000 Employee Stock Option Plan of
Life Sciences, Inc. (as it may be amended from time to time, the "Plan") are to
provide key employees of Life Sciences, Inc., a Delaware corporation (the
"Company"), and its Affiliates (as defined below) with additional incentives to
promote the success of the Company, to assist the Company and its Affiliates in
attracting and retaining personnel with training, experience and/or ability, and
to more closely associate the interests of such personnel with those of the
Company's stockholders.
(2) EFFECTIVE DATE. The Board of Directors (as defined below) adopted
this Plan on May 5, 2000. The legal characterization and tax incidents of any
Incentive Option (as defined below) granted under this Plan is conditioned upon
the receipt, on or prior to May 4, 2001, of the approval of this Plan by the
affirmative vote of a majority of the Company's outstanding voting securities
entitled to vote. If that approval is not obtained within that time, Options (as
defined below) shall not thereafter be granted under the Plan, and any Option
granted prior to that date shall be cancelled not later than May 5, 2001
pursuant to a provisions that shall be contained in each Option Agreement (as
defined below) with respect to such an Option. Options may be granted prior to
the receipt of the specified affirmative vote, but may not be exercised in the
absence thereof.
(3) DEFINITIONS. The following terms shall have the meanings indicated
when used in this Plan, unless the context clearly indicates otherwise:
(a) "Affiliates" shall mean any Parent (as defined below) and any
Subsidiaries (as defined below) of the Company.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Committee" shall mean the stock option plan committee
established pursuant to Section (4) to administer the Plan.
(e) "Common Stock" shall mean the Company's authorized but unissued
common stock, par value $.10 per share.
(f) "Employee" shall mean an individual employed by the Company or
an Affiliate.
(g) "Fair Market Value" shall mean that amount which is:
(1) Not less than the average of the bid and asked prices [or
not less than the closing price, if the Common Stock is within the National
Market System ("NMS") list of securities or such closing price is otherwise
available] of the Common Stock on the NASDAQ System (as defined below) on the
date the Option is granted, or the last date preceding such date for which bid
and asked quotations were made (or a sale was made if the Common Stock is within
the NMS list of securities or closing price information is otherwise available),
if the Common Stock is admitted to quotation on such system on the date the
Option is granted;
(2) Not less than the closing price for the Common Stock on a
national securities exchange or exchanges on the date the Option is granted, or
on the principal such exchange on such date, or on the last date preceding such
date on which a sale was reported, if the Common Stock is admitted to trading on
such an exchange or exchanges on the date the Option is granted (whether or not
the Common Stock shall at that time also be admitted to quotation on the NASDAQ
System); or
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(3) If not admitted to quotation on the NASDAQ System or listed
on a national securities exchange, not less than the amount determined in good
faith by the Committee, on the basis of such factors as it deems appropriate and
as are consistent with the Code, on the date the Option is granted.
Bid, asked and closing price information shall be determined by the Committee
from the National Quotation Bureau, LLC, the Wall Street Journal, or other
authoritative source selected by the Committee.
(h) "Full-Time Employee" shall mean an Employee who customarily
performs, or may be expected to perform, at least 1,000 hours of service during
a calendar year for the Company or an Affiliate.
(i) "Incentive Option" shall mean an incentive stock option as
defined in Section 422(b) of the Code and granted under this Plan.
(j) "NASDAQ System" shall mean the National Association of
Securities Dealers Automated Quotation System or other comparable system.
(k) "Option" shall mean an Incentive Option.
(l) "Option Agreement" shall mean the written agreement executed
and delivered by the Company and an Optionee evidencing the grant of an Option
to the Optionee.
(m) "Optionee" shall mean the person to whom an Option is granted.
(n) "Parent" shall mean a corporation that owns at the relevant
time stock of the Company possessing 50% or more of the total combined voting
power of all classes of stock of the Company.
(o) "Qualifying Committee Member" shall mean a member of the Board
of Directors who meets the definition of "Non-Employee Director" in Rule 16b-3
under Section 16 of the Securities Exchange Act of 1934 ("Exchange Act") and/or
the definition of "outside director" adopted in implementation of Section 162(m)
of the Code (generally, one who was never an officer of the Company or any
Affiliate, not an employee or a former employee still receiving certain
compensation from any of them, or one who directly or indirectly receives
compensation for any goods or services, other than service as a director, from
the Company or any Affiliate).
(p) "Subsidiary" shall mean a corporation in which the Company owns
at the relevant time stock possessing 50% or more of the total combined voting
power of all classes of stock of such corporation.
(4) ADMINISTRATION.
(a) Establishment of Committee. The Plan shall be administered by a
Committee that shall consist of either all of the members of the Board of
Directors, or a sub-committee of the Board of Directors consisting solely of two
or more (but not less than two) Qualifying Committee Members (the "Committee").
Unless the Board of Directors by resolution otherwise directs, the full Board of
Directors shall be the Committee. A majority vote of the members of the full
Committee shall be required for all its actions. In addition, any action,
decision or determination reduced to writing and signed by all of the members of
the Committee shall be fully effective as if it had been made by a majority vote
at a meeting duly called and held.
(b) Power of Committee. The Committee shall have the power, subject
to and within the limits of the express provisions of the Plan:
(1) To determine the time or times at which Options shall be
granted, and to select those eligible persons to whom Options shall be granted;
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(2) To determine the purchase price of shares to be subject to
an Option and the method of the payment of such purchase price, including
whether the payment thereof may be made with Common Stock;
(3) To determine the number of shares to be subject to an
Option; provided, however:
(i) no Optionee shall be granted during any calendar year Options under
the Plan to purchase more than 200,000 shares of Common Stock [subject
to adjustment as provided in Section 10(a)], and
(ii) the aggregate Fair Market Value (determined at the time the grant
is made) of the Common Stock with respect to which Incentive Options
granted under this Plan are exercisable for the first time by an
eligible person during any calendar year (under all stock option plans
of the Company, any Affiliate and any predecessor corporation of either
the Company or any Affiliates) shall not exceed $100,000, or such larger
dollar amount as may hereafter be specified in or pursuant to Section
422 of the Code;
(4) To determine the time or times at which an Option may be
exercised and whether in whole or in installments;
(5) To prescribe the other terms and provisions (which need not
be identical) of each Option, in addition to those contemplated by the specific
terms of the Plan;
(6) To modify or amend any Option with the consent of the
holder thereof, and to accelerate any exercise date of any Option;
(7) To construe and interpret the Plan, Options and Option
Agreements and to establish, amend and rescind rules and regulations relating to
administration of the Plan. The Committee, in the exercise of this power, may
correct any defect or supply any omission, or reconcile any inconsistency in the
Plan, or in any Option Agreement, in the manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective. In exercising this
power, the Committee may retain counsel at the expense of the Company. All
decisions and determinations by the Committee in exercising this power in
accordance with the Plan shall be final and binding upon the Company and the
Optionees.
(8) To determine the duration and purposes of leaves of absence
that may be granted to an Optionee without constituting a termination of the
Optionee's employment for purposes of the Plan; and
(9) Generally, to exercise such powers and to perform such acts
as are deemed necessary or expedient to promote the best interests of the
Company and its stockholders with respect to the Plan.
(c) Limitations on Authority. Notwithstanding anything herein to
the contrary, the Committee shall not:
(1) Grant an Option with a per share exercise price of less
than the par value per share of the Common Stock subject to the Option; or
(2) Take any action as the Committee to amend, terminate or
suspend the Plan, these actions being reserved to the Board of Directors by
Sections (12) and (13).
(5) TYPE OF OPTIONS. The Options granted under this Plan shall only be
Incentive Options.
(6) STOCK SUBJECT TO OPTIONS.
(a) Description of Stock. The stock subject to Options shall be
shares of Common Stock.
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(b) Number of Shares Available. The number of shares available for
the grant of Options shall be an aggregate of 600,000 shares of Common Stock;
provided, however, the following shall apply:
(1) Whenever any outstanding Option expires or is canceled or
otherwise terminated without having been exercised in full, the shares of Common
Stock allocable to the unexercised portion of that Option shall again be subject
to the grant of Options;
(2) No shares of Common Stock delivered to the Company in full
or partial payment of an option exercise price shall become available for the
grant of other Options under this Plan; and
(3) The number of shares specified in this section shall be
subject to adjustment under Section (10).
(7) ELIGIBILITY. Subject to the other provisions of this Plan, the
Committee may from time to time grant Options to one or more Full-Time
Employees. An Optionee may receive and hold more than one Option.
(8) TERMS OF OPTION AGREEMENTS. Each Option Agreement shall contain such
terms and provisions consistent with this Plan as the Committee shall in its
sole discretion determine. Option Agreements need not be identical, but each
Option Agreement shall by appropriate language include the substance of all of
the provisions described in this section.
(a) Designation of Type of Option. Each Option Agreement shall
designate the type of Option granted thereby as an Incentive Option.
(b) Duration of Option. Each Option Agreement shall specify the
expiration date of the Option granted thereby, which date shall be no later than
10 years from the date the Option was granted; provided, however, if an
Optionee, at the time an Incentive Option is granted to him, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of any of its Affiliates [or, under Section 424(d) of
the Code, is deemed to own stock possessing more than 10% of the total combined
voting power of all such classes of stock by reason of the ownership of such
classes of stock, directly or indirectly, by or for any brother, sister, spouse,
ancestor or lineal descendant of such Optionee, or by or for any corporation,
partnership, estate or trust of which such Optionee is a stockholder, partner or
beneficiary], the Incentive Option granted to such Optionee shall not be
exercisable after the expiration of five years from the date of grant or such
earlier termination as provided in this Plan or as provided in any particular
Option Agreement.
(c) Minimum Exercise Requirement. Each Option Agreement shall
specify that the minimum number of shares of Common Stock with respect to which
an Option may be exercised at any one time shall be 100 shares, unless the
number of shares to be purchased is the total number available at such time for
purchase under the Option. No Option may be exercised for a fraction of a share
of Common Stock.
(d) Installment Exercise. Each Option Agreement shall specify
whether or not, and to what extent, Options granted thereby shall be exercisable
in installments, the amount of each installment (which need not be equal) and
the time or times of exercise. Each Option Agreement shall also specify whether
or not, and to what extent, such installments that are not exercised shall
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable; provided, however, any such unexercised installments shall expire
not later than the date the Option expires.
(e) General Exercise Restriction. Each Option Agreement shall
specify that, unless otherwise designated therein, no Option shall be
exercisable within one year from the date on which the Option was granted except
in the event of a change in control, or threatened change in control, of the
Company or any Parent, in which event all Options granted prior to such change
in control or threatened change of control shall become
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<PAGE> 18
immediately exercisable; provided, however, Section (8)(h) shall continue to
apply. As used herein, (1) the term "control" shall refer to the acquisition of
25% or more of the outstanding voting securities of the Company, or of any
Parent, from any person or persons other than the Company or any Affiliate by
any person or persons acting as a group within the meaning of Section 13(d) of
the Exchange Act, and (2) the phrase "threatened change" as used in the phrase
"threatened change in control" shall refer to an offer to acquire 25% or more of
the voting securities of the Company, or of any Parent, from any person or
persons other than the Company or any Affiliate by any person or persons acting
as a group within the meaning of Section 13(d) of the Exchange Act; provided,
however, that for purposes of the Plan, no change in control or threatened
change in control shall be deemed to have occurred if prior to the acquisition
of or offer to acquire 25% or more of the outstanding voting securities of the
Company or any Parent, the Board of Directors shall have adopted, by not less
than a two-thirds vote of the directors then in office, a resolution
specifically approving such acquisition or offer. Without limiting the
generality of the foregoing, a public offering or private placement of its
securities by the Company is not a change in control or threatened change in
control event. The term "person" refers to an individual or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organizations or any other form of entity not
specifically listed herein.
(f) Exercise Price. Each Option Agreement shall specify that the
exercise price per share of Common Stock under each Option shall be not less
than the Fair Market Value of the Common Stock on the date the Option is
granted; provided, however, if an Optionee, at the time an Incentive Option is
granted to him, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any of its Affiliates [or,
under Section 424(d) of the Code, is deemed to own stock possessing more than
10% of the total combined voting power of all such classes of stock by reason of
the ownership of such classes of stock, directly or indirectly, by or for any
brother, sister, spouse, ancestor or lineal descendant of such Optionee, or by
or for any corporation, partnership, estate or trust of which such Optionee is a
stockholder, partner or beneficiary], the purchase price per share under such
Incentive Option shall not be less than 110% of the Fair Market Value per share.
(g) Transferability Limitation. Except as provided in Section (11),
each Option Agreement shall specify that:
(1) No Option shall be transferable other than by will or the
laws of descent and distribution. During the lifetime of the Optionee, an Option
may be exercised only by such Optionee (or his or her legal representative); and
(2) No assignment or transfer of any Option, or of the rights
represented thereby, whether voluntary or involuntary, by operation of law or
otherwise, shall vest in the assignee or transferee any interest or right in the
Option whatsoever, but immediately upon any attempt to assign or transfer the
Option, the Option shall terminate and be of no force or effect.
(h) Compliance with Securities Laws. Each Option Agreement shall
specify that all Options granted thereby, and all shares of Common Stock issued
upon exercise thereof, are subject to any provisions necessary to assure
compliance with federal and state securities laws. If determined by the
Committee, upon advice of counsel, to be necessary to assure such compliance,
such provisions shall include an investment representation letter from the
Optionee at the time an Option is exercised and legends restricting or
conditioning transfer of the Common Stock acquired upon exercise of an Option.
Each Option Agreement shall also specify that if at any time the Committee shall
determine, in its discretion, that the listing, registration, or qualification
of the Option evidenced thereby, or the Common Stock covered thereby, upon any
securities exchange, or under any federal or state law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the issue or
purchase of Common Stock thereunder, such Option may not be exercised in whole
or in part unless and until such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
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(i) Commencement of Ownership Rights. Each Option Agreement shall
specify that an Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Common Stock subject to
an Option unless and until the Option shall have been properly exercised
pursuant to the terms thereof, the Company shall have issued and delivered the
shares to the Optionee, and the Optionee's name shall have been entered as the
holder of record of such shares on the books of the Company. Thereupon, the
Optionee shall have voting, dividend and other ownership rights with respect to
such shares of Common Stock.
(9) EXERCISE METHOD; PAYMENT OF PRICE; USE OF PROCEEDS.
(a) Method. An Option may only be exercised by the Optionee
delivering on any business day to the Committee, in care of the Company, a
written notice, together with the appropriate payment specified in subsection
(b) immediately below, identifying such Option and specifying the number of
shares of Common Stock with respect to which the Option is then being exercised
(the "Notice").
(b) Payment. Payment for the shares of Common Stock purchased
pursuant to the exercise of an Option shall be made in full at the time of
exercise of the Option. Nothing herein shall be construed to prohibit the
Company from making a loan to the Optionee for the purpose of financing, in
whole or in part, the purchase of shares subject to an Option. Payment of the
option exercise price for the number of shares specified in the Notice shall be
made, in the method specified in the relevant Option Agreement, (1) in cash
(whether or not such cash is lent by the Company to the Optionee for such
purpose) or (2) by the surrender of shares of Common Stock [valued at their fair
market value on the date on which the Option is exercised (such value to be
determined in the same manner as Fair Market Value is determined under the Plan,
except the date reference shall be the exercise date instead of the grant
date)], or (3) by any combination of cash and such shares; provided, however,
shares of Common Stock may not be surrendered to pay all or part of the option
exercise price without the approval of the Committee if within the preceding six
months the Optionee has either been granted an Option or has surrendered shares
of Common Stock in connection with the exercise of an Option.
(c) Allocation. Proceeds from the sale of Common Stock pursuant to
the exercise of Options shall constitute general funds of the Company. Such
proceeds shall be credited to the capital accounts of the Company in accordance
with generally accepted accounting principles and the requirements of applicable
law.
(10) ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) Internal Recapitalizations. If the outstanding shares of Common
Stock as a whole are increased, decreased or changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
recapitalization, reclassification, stock dividend, stock split, combination of
shares, exchange of shares or similar event not involving a reorganization,
merger or consolidation with another entity, an appropriate and proportionate
adjustment shall be made by the Committee in the number and kinds of shares
subject to the Plan, and in the number, kinds and per share exercise price of
shares subject to the Plan, and in the number, kinds and per share exercise
price of shares subject to unexercised Options or portions thereof granted prior
to any such change. Any such adjustment in an outstanding Option, however, shall
be made without a change in the total price applicable to the unexercised
portion of the Option, but with a corresponding adjustment in the price for each
share of Common Stock covered by the Option.
(b) Reorganizations. Upon the effective date of a dissolution or
liquidation of the Company, or upon the sale of substantially all of the
property of the Company, or upon a reorganization, merger or consolidation
involving the Company and another entity, each Optionee to whom an Option has
been granted under this Plan shall be entitled during the period of time
commencing with the public announcement of, as applicable, the adoption of
implementing resolutions by the Board of Directors (in the event of such a
dissolution,
6
<PAGE> 20
liquidation or sale) or the execution of the definitive agreement (in the event
of such a reorganization, merger or consolidation) and ending five business days
prior to the effective date of any such transaction:
(1) To exercise, in whole or in part, the Optionee's rights
under any Option granted to him or her without regard to any restrictions on
exercise in this Plan or in the applicable Option Agreement [other than such
restrictions as may be required by Section (8)(h)] that would otherwise apply;
or
(2) To surrender any such Option to the Company (along with the
applicable consideration otherwise payable upon exercise of such Option) in
exchange for receipt of such shares of stock or other securities as the Optionee
would have received had the Optionee exercised the right to exercise any Option
on account of any such transaction without regard to any restriction on exercise
in this Plan or in the applicable Option Agreement [other than such restrictions
as may be required by Section (8)(h)] that would otherwise apply.
Provided, however, to the extent that such exercise or surrender under (1) or
(2) immediately above is with respect to more shares of Common Stock than would
otherwise be available for purchase through exercise of such Option by the
Optionee at such time, such exercise or surrender shall be contingent upon the
consummation of such transaction. Provided further, however, nothing in this
Section (10)(b) shall extend the date on which any Option would otherwise
expire.
(c) No Fractional Shares. No fractional shares of Common Stock
shall be issued on account of any event under this Section (10).
(11) TERMINATION OF EMPLOYMENT.
(a) Death. In the event of the death of an Optionee while in the
employ of the Company or an Affiliate, any and all Options held by such Optionee
at the time of death, whether or not exercisable at such time, may be exercised
as provided in Section (9) by the estate of the Optionee, or by a person who
acquired the right to exercise such Option by bequest or inheritance from such
Optionee, within one year after the date of such death, but not later than the
date on which the Option would otherwise expire; provided, however, Section
(8)(h) shall continue to apply.
(b) Disability. If the employment by the Company or an Affiliate of
an Optionee is terminated by reason of his or her disability, within the meaning
contemplated by Section 422(c)(6) of the Code, any and all Options held by such
Optionee may be exercised, whether or not exercisable at the time of such
termination, within one year after such termination, but not later than the date
on which such Options would otherwise expire; provided, however, Section (8)(h)
shall continue to apply.
(c) Termination for Other Reasons. If the employment of an Optionee
by the Company or an Affiliate is terminated for any reason other than death or
disability, Options held by such Optionee shall, to the extent not theretofore
exercised, be canceled upon such termination and shall not thereafter be
exercisable; provided, however, to the extent such Options are exercisable as of
the date of such termination of employment, such Optionee shall be permitted to
exercise such Options for a period of three months after the date of such
termination; provided further, however, that an Optionee whose employment is
terminated by retirement in accordance with the Company's normal retirement
policies, as determined by the Committee, or whose employment is voluntarily or
involuntarily terminated within six months after a change in control [as defined
in Section (8)(e)] of the Company or of any Parent, shall be permitted to
exercise any and all Options held by such Optionee, whether or not exercisable
at the time of such termination, for a period of three months after the date of
such termination, but not later than the date on which the Options would
otherwise expire; provided further, however, Section (8)(h) shall continue to
apply. The transfer of an Optionee from the employ of the Company to an
Affiliate or vice versa, or from one Affiliate to another, shall not constitute
a termination of employment for purposes of the Plan.
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<PAGE> 21
(12) AMENDMENT OF PLAN.
(a) Right to Amend. The Board of Directors at any time, and from
time to time, may amend this Plan, subject to any required regulatory approval
and to the limitation that, except as provided in Section (10), no amendment
shall be effective unless approved by a vote of a majority of the Company's
outstanding voting securities entitled to vote on the issue within 12 months
before or after the date of such amendment's adoption, where such amendment
will:
(1) materially increase the benefits accruing to participants
under this Plan;
(2) materially increase the number of securities that may be
issued under this Plan; or
(3) materially modify the requirements as to eligibility for
participation in this Plan.
Notwithstanding the foregoing or Section (4)(c)(2), upon the occurrence of any
of the events described in Section (10)(a), the Committee shall have the
authority to amend this Plan to reflect the appropriate and proportionate
adjustments referred to therein.
(b) No Option Impaired. Except as provided in Section (10), rights
and obligations under any Option granted before amendment of the Plan shall not
be adversely affected or impaired by amendment of the Plan, except with the
consent of the person to whom the Option was granted.
(13) TERMINATION OR SUSPENSION OF PLAN.
(a) Right to Terminate. The Board of Directors at any time may
terminate or suspend this Plan, but such termination or suspension shall not
affect any Option theretofore granted. No Option may be granted while this Plan
is suspended or after it is terminated.
(b) Final Termination Date. Unless sooner terminated, this Plan
shall terminate on May 4, 2010.
(c) No Option Impaired. Rights and obligations under any Option
granted while this Plan is in effect shall not be adversely affected or impaired
by suspension or termination of this Plan, except as provided in Section (10) or
with the consent of the Optionee.
(14) EXCULPATION AND INDEMNIFICATION. The Company shall indemnify and
hold harmless the members of the Board of Directors and the members of the
Committee from and against any and all liabilities, costs and expenses incurred
by such persons as a result of any act, or omission to act, in connection with
the performance of such persons' duties, responsibilities and obligations under
this Plan, other than such liabilities, costs and expenses as may result from
the negligence, bad faith, willful conduct or criminal acts of such person.
(15) MISCELLANEOUS PROVISIONS.
(a) Nonexclusivity of Plan. Neither the adoption of this Plan by
the Board of Directors, nor its submission to the stockholders of the Company
for approval or any approval by them, shall be construed as creating any
limitations on the power of the Board of Directors to adopt such other incentive
arrangements as it may deem desirable, including the granting of stock options
otherwise than under this Plan. Any such other arrangements may be either
applicable generally or only in specific cases.
(b) Tax Withholding. The employer (whether the Company or an
Affiliate) of an Optionee shall have the right to deduct or otherwise effect a
withholding of any amount required by federal or state laws to be withheld from
the compensation of an Optionee with respect to the grant, exercise or surrender
of any Option or portion thereof, or the sale of stock acquired upon the
exercise of an Incentive Option, in order to meet applicable
8
<PAGE> 22
legal requirements and/or in order for the employer to obtain a tax deduction
available to the employer as a consequence of such a grant to such Optionee, or
such an exercise, surrender or sale by such Optionee. In the event the Company
determines that insufficient amounts are or will become readily available in a
timely manner for withholding hereunder, the Company may require, as a condition
to any action by the Company, the Optionee to deposit with the Company
sufficient funds to cover the withholding obligation.
(c) Continuation of Employment. Nothing contained in this Plan or
in any Option Agreement shall in and of itself obligate the Company or any
Affiliate to continue to employ, for any period, an Optionee.
(d) Governing Law. Except as preempted by federal law, this Plan
shall be governed by, and construed and enforced in accordance with the laws of
the State of Florida, including its deference as to certain matters to the
applicable laws of Delaware as the Company's state of incorporation. To the
extent preempted by federal law, this Plan shall be governed thereby and
construed in accordance therewith.
(e) Interpretation. The descriptive headings of sections and
subsections, and any cover page and table of contents, are inserted for
convenience only and are not a part of this Plan. Unless otherwise qualified,
references in this Plan to "Section", "section", "subsection" and similar
references are to provisions of this Plan and a reference thereto includes any
subparts. As used herein, the singular includes the plural, the plural includes
the singular, and words in one gender include the others. As used herein, the
terms "herein" and "hereof" refer to the whole of this Plan, and "include",
"including" and similar terms are not words of limitation. In the event any date
specified herein or pursuant hereto for action by an Optionee or the Company
shall be on a Saturday, Sunday or nationally declared holiday, then the date so
specified shall be deemed to be the next business day following such date and
accomplishment of such event by or on that day shall be deemed to be compliance
with the terms of this Plan.
9
<PAGE> 23
LIFE SCIENCES, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints Simon Srybnik
and Alex A. Burns, and either of them, with full power of substitution, the
proxies of the undersigned to vote all shares of the Common Stock of Life
Sciences, Inc. ("LSI") that the undersigned is entitled to vote at the 2000
Annual Meeting of Stockholders of LSI to be held as described in the
accompanying Notice of 2000 Annual Meeting of Stockholders and Proxy Statement
for the meeting (collectively, the "Proxy Statement"), and at any adjournment
thereof, on the matters described in the Proxy Statement in accordance with the
instructions on the reverse side of this proxy.
CONTINUED AND TO BE VOTED, SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE> 24
PLEASE DATE, SIGN AND MAIL YOUR PROXY
CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
Life Sciences, Inc.
JUNE 6, 2000
Please Detach and Mail in the Envelope Provided
A [ ] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
FOR all nominees WITHHOLD AUTHORITY
listed at right to vote for all nominees
(except as marked listed at right
1. ELECTION to the contrary below)
OF DIRECTORS. [ ] [ ]
NOMINEES: 2. APPROVAL OF THE 2000 FOR AGAINST ABSTAIN
Simon Srybnik EMPLOYEE STOCK OPTION PLAN [ ] [ ] [ ]
Norman J. Marcus
Alex A. Burns 3. APPOINTMENT OF FOR AGAINST ABSTAIN
INDEPENDENT ACCOUNTANTS [ ] [ ] [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, PRINT THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.)
- ----------------------------------------------------------------
4. The proxyholders are authorized to vote in their
discretion on business as may properly come before the
meeting.
THIS PROXY WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S) WHEN PROPERLY EXECUTED AND
RETURNED ON A TIMELY BASIS. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
Signature(s) Date , 2000
-------------------------------- --------
Signature(s) Date , 2000
-------------------------------- --------
Note: Please sign exactly as your name appears. All joint owners should sign.
Custodians, guardians, executors, administrators, trustees, attorneys, partners
and corporate officers signing should give full title as such.
