AN-CON GENETICS, INC.
734 WALT WHITMAN ROAD
SUITE 207
MELVILLE, NY 11747
(516) 421-5452
Notice of Special Meeting of Shareholders
To be Held September 3, 1998
At 10:00 A.M.
To our Shareholders:
A Special Meeting of the Shareholders of An-Con Genetics, Inc.
(the "Company") will be held at the Holiday Inn, 215 Sunnyside
Boulevard, (Exit 46N LI Expressway) Plainview, New York on
September 3, 1998 at 10:00 a.m. to consider and take action on
the following matters:
1. Authorize an amendment to the Company's Certificate of
Incorporation increasing the authorized capitalization of the
Company from a total of 15,000,000 shares of common stock
having a par value $.001 per share to 50,000,000 shares of
Common Stock having a par value of $.001 per share.
2. Authorize an amendment to the Company's Certificate of
Incorporation creating 10,000,000 blank preferred shares of
stock having $.001 par value per share.
3. Authorize an amendment to the Company's certificate of
incorporation to change the name of the Company to Bovie
Medical Corporation;
4. Ratify the Company's 1998 Non-Statutory Stock Purchase
and Option Plan.
5. Transact such other business as may properly come before
the meeting or any adjournments thereof.
Only holders of record of shares of common stock at the close
of business on July 31, 1998 are entitled to notice of and to
vote at the Special Meeting. A Proxy Statement explaining the
matters to be acted upon at the Special Meeting follows.
Please read it carefully.
WHETHER OR NOT YOU EXPECT TO BE PERSONALLY PRESENT AT THE
MEETING, PLEASE BE SURE THAT THE ENCLOSED PROXY IS PROPERLY
COMPLETED, DATED, SIGNED AND RETURNED WITHOUT DELAY IN THE
ENCLOSED ENVELOPE. ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE
IT IS EXERCISED BY FOLLOWING THE INSTRUCTIONS SET FORTH ON PAGE
ONE OF THE ACCOMPANYING PROXY STATEMENT.
BY ORDER OF THE BOARD OF DIRECTORS
ANDREW MAKRIDES
PRESIDENT
AN-CON GENETICS, INC.
734 Walt Whitman Road
Suite 207
Melville, NY 11747
(516) 421-5452
PROXY STATEMENT
Special Meeting of Shareholders
To Be Held on September 3,1998
September 3, 1998
Solicitation and Voting of Proxies
This Proxy Statement is furnished in connection with the
solicitation on behalf of AN-CON GENETICS, INC. (the "Company" or
An-Con) of proxies to be voted at the Special Meeting of
Shareholders to be held on September 3, 1998, at the Holiday Inn,
215 Sunnyside Boulevard, (Exit 46N Expressway) Plainview, New
York at 10 A.M.
The Board of Directors of the Company has fixed the close of
business on July 31, 1998 as the record date for the
determination of holders of shares of outstanding common stock
entitled to notice of and to vote at the Special Meeting. On
July 31, 1998, there were outstanding 13,629,693 shares of the
Company's common stock, the holders of which will be entitled to
one vote per share for each matter submitted to a vote at the
Meeting. The presence, in person or by proxy, of the holders of
a majority of the issued and outstanding shares entitled to vote
will constitute a quorum for the transaction of business.
A proxy in the accompanying form which is properly signed,
dated and returned to the Company and not revoked will be voted
in accordance with the instructions contained therein. If no
instructions are indicated, proxies will be voted as recommended
by the Board of Directors. Shareholders who execute proxies may
revoke them at any time prior to their being exercised by
delivering written notice to the Secretary of the Company or by
subsequently executing and delivering another proxy at any time
prior to the voting. Mere attendance at the Meeting will not
revoke the proxy, but a shareholder present at the Meeting may
revoke his proxy and vote in person.
As of the date of this Proxy Statement, the only business
which the management of the Company intends to present at the
Meeting are the matters set forth in the accompanying Notice of
Special Meeting. Management has no knowledge of any other
business to be presented at the Meeting. If other business is
brought before the Meeting, the persons named in the enclosed
form of proxy will vote according to their discretion.
The cost of soliciting proxies is estimated not to exceed
$20,000 and will be borne by the Company, including expenses in
connection with the preparation and mailing of this Proxy
Statement and all papers which now accompany or may hereafter
supplement it. The solicitation will be made by mail. The
Company will supply brokers or persons holding shares of record
in their names or in the names of nominees for other persons, as
beneficial owners, with such additional copies of proxies, proxy
materials and Annual Reports as may reasonably be requested in
order for such record holders to send one copy to each beneficial
owner, and will upon request of such record holders, reimburse
them for their reasonable expenses in mailing such material.
Representatives of Bloom and Company, the independent
auditors and principal accountants for the current year, are
expected to be present at the securities holders meeting, will
have the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate
questions.
Certain directors, officers and employees of the Company,
not especially employed for this purpose, may solicit proxies,
without additional remuneration therefor, by mail, telephone,
telegraph or personal interview.
Shareholders should note that this meeting is not the annual
meeting of shareholders, which will be scheduled following this
Special Meeting.
Shareholder Proposals:
Management plans to hold its annual meeting of shareholders for
1997 on December 14, 1998, and all shareholder proposals intended
to be presented at the next annual meeting must be received by
the Company by September 15, 1998 for inclusion in the Company's
next proxy statement. If the date of the next annual meeting is
subsequently advanced by more than 30 calendar days or delayed by
more than 90 calendar days from the date of the annual meeting to
which the proxy statement relates, the Company shall, in a timely
manner, inform security holders of such change, and the date by
which proposals of security holders must be received by any means
reasonably calculated to inform them.
Directors and Executive Officers
As of March 31, 1998, the Company s Executive Officers and
directors were as follows:
Name Age Position
Director since
J. Robert Saron 45 Chairman of the Board
August, 1994 Chief Executive
Officer, Director
Andrew Makrides 56 President, Director
December, 1982
Joseph F. Valenti 81 Director
October, 1995
George W. Kromer 56 Director
October, 1995
Delton Cunningham 33 Secretary, Treasurer
Vice President/CFO
Moshe Citronowicz 45 Executive Vice President
Chief Operating Officer
_________________________
On April 14, 1998 Alfred V. Greco, age 62, a principal of
Alfred V. Greco, P.C., counsel to the Company, was elected an
additional director of the Company to serve until the next annual
meeting of shareholders presently scheduled for December 14,
1998.
On May 8, 1998, Kenneth W. Davidson, age 51, Chairman of
the Board and Chief Executive Officer of Maxxim Medical, Inc, a
Delaware corporation the shares of which are traded on the New
York Stock Exchange was duly elected as an additional director of
the Company to serve until the next annual meeting of
shareholders.
On July 21, 1998, Joseph F. Valenti resigned as a director
of the Company due to his retirement from all business
activities.
J. Robert Saron, Chairman of the Board and Chief Executive
Officer, holds a Bachelors degree in Social and Behavioral
Science from the University of South Florida. From 1988 to
present Mr. Saron has served as President and director of Aaron
Medical Industries, Inc. (formerly Suncoast Medical
Manufacturing, Inc.). In March, 1995 Mr. Saron was elected
Chairman and Chief Executive Officer of An-Con Genetics, Inc.
Andrew Makrides, Esq., President, member of the Board of
Directors, and former Chairman, received a Bachelor of Arts
degree in Psychology from Hofstra University and a Juris Doctor
Degree from Brooklyn Law School. He is a member of the New York
Bar and has practiced law from 1968 until joining An-Con
Genetics, Inc. as Executive Vice President and director, in 1982.
Mr. Makrides became President of the Company in 1985 and served
as such to date.
Joseph F. Valenti, filled a vacancy on the Board of Directors and
became a member of the Board of Directors on October 1, 1995. He
is the former Vice-President of the International Division of
Aaron Medical Industries, Inc. and retired as of January 1, 1995,
from that position. He continues to be the principal shareholder
and chief executive officer of Valpex International Corporation,
a company, which is wholly owned by him, and engaged in the
import of products. This import company has been a supplier of
the Company's light bulbs which, are used in the Company's
various manufactured lighting products. The prices paid by the
company for the products are competitive with those from other
sources. He received a Bachelor of Arts Degree in Languages from
the College of the City of New York in 1939. He has been
associated with Aaron Medical Industries, Inc. and its
predecessor companies since 1980 and was charged with developing
the international sales department and increasing exports sales
on behalf of Aaron. See Certain Transactions .
George W. Kromer, Jr., filled a vacancy on the Board of Directors
and became a director on October 1, 1995. Mr. Kromer is a Senior
Financial Correspondent for "Today's Investor" and is utilized as
a consultant by other companies whose shares are listed on the
American Stock Exchange and Over-the-Counter Exchange. An-Con
has also retained Mr. Kromer on a month-to-month basis as a
consultant in addition to his capacity as a director. He
received a Master's Degree in 1976 from Long Island University in
Health Administration. He also holds a Bachelor of Science
Degree from Long Island University's Brooklyn Campus and an
Associate in Applied Science Degree from New York City Community
College, Brooklyn, New York. See Certain Transactions .
Moshe Citronowicz, is a graduate of the University of Be'er
Sheva, Be'er Sheva, Israel, with a Bachelor of Science degree in
Electrical Engineering. He has also received certificates from
Worcester Polytech, Lowell University and the American Management
Association for completion of seminars in MRP, master scheduling,
purchasing SPC, JIT, accounting and plant management. Since
coming to the United States in 1978, Mr. Citronowicz has worked
in a variety of manufacturing and high tech industries. In
October 1993, Mr. Citronowicz joined the Company as Vice
President of Operations. He is responsible for all areas of
manufacturing, purchasing, product re-design, as well as new
product design. In September 1997, Mr. Citronowicz was
appointed by the board of directors to the position of Executive
Vice President and Chief Operating Officer.
Delton N. Cunningham, Vice President and Chief Financial Officer
of the Company, holds a Bachelor of Science in Accounting from
the University of Florida. He is a Certified Public Accountant
and is a member of the American Institute of Certified Public
Accountants and the Florida Institute of Certified Public
Accountants. Mr. Cunningham began his career with the Miami
office of Arthur Anderson & Company. In June of 1991, Mr.
Cunningham joined Aaron Medical Industries, Inc., as the
Company's Chief Financial Officer. In June of 1992 Mr.
Cunningham became Vice President of Aaron Medical Industries,
Inc. and in April of 1993, he was elected Corporate Secretary of
Aaron by the Board of Directors.
Alfred V. Greco, is President of Alfred V. Greco, P.C., counsel
to the Company. Mr. Greco is a member of the bar of the State of
New York and has been engaged in the practice of law for the past
35 years in the City of New York. The main focus of Mr. Greco's
experience for the past 30 years has been in the area of
corporate and securities law during which he has represented a
large number of public companies, securities brokerage firms,
executives and registered representative and has developed a
broad range of experience in administrative, regulatory and legal
aspects of public companies. Mr. Greco graduated from Fordham
University School of Law with a Doctor of Law degree, in June
1960. He was admitted to the New York State Bar in March, 1961.
No Director has indicated to the Company that he intends
to oppose any action intended to be taken at this special meeting
of shareholders.<PAGE>
REMUNERATION
The following table sets forth the compensation paid to the
executive officers of the registrant for the three years ended
December 31, 1997:
Summary Compensation Table
Annual Compensation
Name and
Principal
Annual
Position Year Salary Bonus(a)
J.Robert Saron
CEO/Chairman 1997$155,865 $ 2,460
1996 143,000 42,600
1995 116,000 39,600
Andrew Makrides
President 1997 103,382 1,784
1996 90,000 8,400
1995 77,000 11,800
Moshe Citronowicz
Executive Vice President-
Chief Operating
Officer 1997 107,044 1,921
1996 104,600 11,200
1995 97,000 11,800
Delton Cunningham
Secretary, Treasurer,
Vice President/
CFO 1997 90,325 1,516
1996 86,000 8,400
1995 82,900 8,800
(a) In 1997, the officers waived their right to 1996
bonuses and the bonuses were cancelled. No bonuses were
declared for 1997 and all future bonuses shall be in the
discretion of the Board.
<PAGE>
REMUNERATION(CONTINUED)
Long Term Compensation
Awards Pay-outs Securities
Restricted Underlying
Other(b) Stock Option/
YearCompensationAwards SARS(#)Pay-outs
J.Robert Saron
CEO/Chairman1997 $9,352 -- -- --
1996 8,100 -- 90,000 --
1995 23,700 -- -- --
Andrew Makrides
President 1997 9,598 -- -- --
1996 9,700 -- 70,000 --
1995 8,000 -- -- --
Moshe Citronowicz
Executive Vice President-
Chief Operating
Officer 1997 9,352 -- -- --
1996 8,100 -- 25,000 --
1995 8,000 -- -- --
Delton Cunningham
Secretary,
Treasurer,
Vice President/
CFO 1997 9,262 -- -- --
1996 7,400 -- 55,000 --
1995 8,000 -- -- --
(b) Other compensation consists of medical insurance, life
insurance and automobile allowance. <PAGE>
Option/SAR Grants Table
Values of
securities
Number of underlying
shares unexercisee
AcquiredOptions
on Value FY-End(#) sar/s at
Name and
Principal
Position Year Exercisable Realized Exercisable
J. Robert Saron
CEO 1997 -- -- --
1996 -- -- 101,250
1995 -- -- --
Andrew Makrides
President 1997 -- -- --
1996 -- -- 78,750
1995 -- -- --
Moshe Citronowicz
Vice President
Operations 1997 -- -- --
1996 -- -- 28,125
1995 -- -- --
Delton Cunningham
Vice, President/
CFO
Secretary,
Treasurer, 1997 -- -- --
1996 -- -- 61,875
1995 -- -- --
Outside Directors are compensated in their capacities as Board
members through option grants. Through the year 1997, the
Company's Board of Directors presently consisted of J.Robert
Saron, the CEO, Andrew Makrides, President, Joseph F. Valenti and
George W. Kromer, Jr. Mr. Saron is also President and CEO of
Aaron. Mr. Kromer has been retained on a month-to-month basis
pursuant to verbal agreement as a financial and public relations
consultant by An-Con for the past year at an average monthly fee
of $950.
In 1996 and 1997 George Kromer and Joseph Valenti were awarded
105,000 and 120,000 options, respectively, each for five to ten
years to purchase An-Con stock from $.75 to $1.125 per share.
There have been no changes in the pricing of any options
previously or currently awarded.
As of the 1st day of January, 1998, the Company cancelled its
prior employment agreements with its officers, and certain key
employees and entered into new employment agreements with them.
The agreements vary in terms over a period of between 2 and 5
years and provide for compensation in amounts varying from
$51,100 to $136,000 for the highest paid executive officer per
year, plus additional amounts for automobile allowance ($500 to
$600 per month). In addition to the foregoing, each agreement
for the company's executive officers provides for customary
executive benefits, indemnification for corporate accounts and
may be terminated (a) upon death, or (b) on thirty (30) days
notice by the officer to terminate, or (c) by the Company, (i)
without cause, upon the majority approval of the Board of
Directors on thirty (30) days written notice (wherein the Company
shall be obligated to pay the employee compensation under the
agreement for the balance term of the agreement) and (ii) the
employee may elect, in lieu of (i) above, to cancel his agreement
and obtain severance payments equal to three times the annual
salary and bonus in effect during the month preceding such
termination; or (d) by the Company for cause, if during the time
of employment, the employee violates the covenant not to compete
provisions of the agreement, or is found guilty of a felony or
crime of moral turpitude. The agreement also provides for a
covenant not to compete directly or indirectly against the
Company for a period of one year and a 7 1/2 percent salary
increase per year subject to approval of the board.
In May of 1997 the officers as a group waived their right to the
bonuses as set forth in their contracts. The board of directors
will determine future bonuses.
Security Ownership of Certain Beneficial Owners and Management
of An-Con.
The following table sets forth certain information as of December
31, 1997, with respect to the beneficial ownership of the
Company's common stock by all persons known by the Company to be
the beneficial owners of more than 5% of its outstanding shares,
by directors who own common stock and by all officers and
directors as a group.
Number of NaturePercentage of
Name andTitle Shares of outstanding
Addressof Classownedownership(i)shares(i)
5% Beneficial
Owners
Robert Speiser(iii) Common 753,333 Includes 5.3%
1340 Boca Ciega Stock shares only
Isle Drive
St. Petersburg,
Florida 33706
Directors
J. Robert Saron Common 523,805 Includes 3.7%
(iii) Stock 90,000 shares
Ashley Drive reserved for
Seminole, FL 34642 options
J.Valenti Common 177,205 Includes 1.3%
5700 Mariner Drive Stock shares 120,000
Tampa, Florida 33609 reserved
for options
G. Kromer Common 105,000 Includes .7%
P.O. Box 188 Stock 105,000 shares
Farmingdale, NY 11738 reserved for
options
A.Makrides Common 390,000 Includes .7%
(iv) Stock 70,000 shares
20 Damin Circle reserved for
St. James, NY 11780 options
Officers and Directors
as a Group Common 1,499,034 Includes10.6%
Stock 465,000 shares
reserved for
options
_______________________________
(i) Based on 14,116,274 shares outstanding on a fully diluted
basis. Officers and directors have 465,000 options to acquire
shares at March 31, 1998.
(ii) Mr. Robert Speiser resigned as the Company Chairman and
Chief Executive Officer on March 20, 1995.
(iii) Robert Saron, who replaced Mr. Speiser as Chairman, is the
President and a director of Aaron Medical Industries, Inc. As a
result of the exchange of shares pursuant to the Aaron
Acquisition Agreement, Mr. Saron is the beneficial owner of
408,805 additional shares of An-Con (in addition to the 25,000
shares he had received prior to the merger). Mr. Saron also has
the option to acquire an additional 90,000 shares.
(iv) Includes an option to acquire 70,000 shares at varying
prices.
(v) During 1996, one transaction took place that materially
changed shareholders' control of the Company: Aaron shareholders
received their shares on November 25, 1996 from the escrow agent,
which gave them 37.7% of the outstanding shares of the Company at
that time. (See "Certain Relationships and Related
Transactions").
Certain Relationships and Related Transactions
Valpex International Corporation ("Valpex"), a Company owned and
operated by Mr. Joseph Valenti, was a supplier of vacuum and
Krypton bulbs and vinyl pouches to Aaron for several years. In
1996, Mr. Valenti joined An-Con as a director. On May 10, 1996,
Valpex and Aaron entered a three year agreement that allows Aaron
to purchase products directly from Valpex's manufacturers and
suppliers. In exchange, Aaron agreed to pay a commission to
Valpex on purchases from the agreed upon list of Valpex's
suppliers. In 1997 and 1996, respectively, the equivalent sales
of Valpex to Aaron were $117,700 and $126,000, respectively.
George Kromer, a director, also serves as a consultant to the
Company with average consulting compensation of approximately
$950 per month.
The aforesaid transactions were on terms no less favorable to the
Company than could have been obtained in arms-length transactions
with unrelated third parties.
Aaron Medical Industries, Inc. is a 100% owned subsidiary of the
Company. The Company's acquisition of Aaron in January, 1995, is
deemed vital to the Company's potential for growth in the medical
device and electro-surgical products industry. The Company's
medical device and electro-surgical products are all manufactured
by Aaron and bear the Aaron trademark. Aaron is the Company's
sole operating subsidiary and an integral part of the Company.
Directors' Compensation
Independent (unaffiliated) directors, who are not
employees, do not receive compensation for attending meetings.
However the company pays their expenses for attending meetings of
the Board. Approximately $5,000 was paid to cover expenses of
independent directors attending Board of Director meetings during
the year ended December 31, 1997. Independent directors are
compensated essentially in the form of stock options under the
Company s 1996 Employee and Consultant Stock Option Plan. A
total of 195,000 stock options were granted to directors in
fiscal 1997.
RECENT ASSET AND CORPORATE ACQUISITIONS
Maxxim Medical, Inc. Asset Acquisition, Supply and License
Agreement
On May 8, 1998, the Company entered into and consummated
a strategic alliance agreement with Maxxim Medical, Inc.,
( Maxxim ), a Delaware corporation the shares of which are listed
on the New York Stock Exchange, which agreement provided for the
acquisition by the Company of the tradename and the trademark
Bovie , a supply, license and distributorship arrangement
concerning electro-surgical devices and the acquisition of
Maxxim s electro-surgical generator product line in exchange for
3,000,000 shares of common stock of An-Con. More specifically,
the agreement provides for (a) an irrevocable royalty-free sub-
license to Maxxim to use the Bovie name on any electro-surgical
products marketed by Maxxim; (b) a 2-year exclusive
distributorship in Maxxim to resell the Bovie electro-surgical
generator product line anywhere in the world, and (c) a non-
exclusive right to sell An-Con products anywhere in the world.
The distributorship arrangement provides for anticipated
cooperation between Maxxim and An-Con with respect to research
and development of new products and Maxxim s option to become the
exclusive distributor thereof. Maxxim also agreed to certain
minimum purchase orders for the Bovie generator product line, the
Aaron 1200 generators and other An-Con products and accessories
aggregating $3,000,000 during the initial 5-year term of the
agreement, subject to quality control and An-Con s ability
to meet commercially reasonable purchase orders of Maxxim.
Kenneth Davidson, the chairman of the Board of Maxxim, has been
appointed a member of the Board of Directors of An-Con.
As consideration for the foregoing, the Company agreed
to exchange 3,000,000 shares of common stock for the Bovie
Electrosurgical Generator line, the Bovie trademark and
tradename, and entered into agreements for the aforementioned
supply, license, and distributorship arrangement involving
Maxxim s commitments to purchase the Company s current and future
products. Due to the Company s lack of sufficient authorized
shares, in lieu of common stock, the Company has issued a secured
convertible promissory note to Maxxim in the principal amount of
$3,000,000 due on May 7, 2008, bearing interest at the rate of
1% above the prime lending rate in effect at Nations Banc
Montgomery Securities LLC which provides for ten annual payments
of principal and interest commencing May 7, 1999. Subject to
approval of shareholders of Proposal #2 below, this note is
secured by the Company's equipment and machinery and inventory.
In the event, the shareholders fail to authorize the increase as
requested, the Company will be forced to seek alternate financing
to meet its obligations under the note. No assurance can be
given it will be successful in such endeavor.
Advanced Refractory Technologies, Inc. ( ART ) and BSD Development
Beta Corporation ( BSD ) Asset and Corporate Acquisitions
On February 9, 1998, the Company entered into a series of
contemporaneous agreements for the manufacturing and licensing of
a certain DYLYN coating technology ("DYLYN Technology"), and
exchange of shares, ( Contemporaneous Agreements ) involving two
non-affiliated companies, Advanced Refractory Technologies, Inc.
("ART") a privately held New York corporation engaged in research
and development of a certain patented diamond-like nanocomposite
technology for the coating of products ("DYLYN Technology"), and
BSD Development Beta Corporation, a privately held Delaware
corporation. As a result of the aforesaid transactions, the
registrant acquired certain jobcoating equipment valued at
$2,000,000 and consisting of two DYLYN deposition reactors
inclusive of components and two electro-blade surgical mounting
fixtures (the "Equipment") for coating electro-surgical blades
and other specified medical devices utilizing the DYLYN
Technology. The aforesaid, in addition to the acquisition by the
Company of the Equipment, resulted in the acquisition by it of an
exclusive 10-year license to use the DYLYN Technology to jobcoat
specified medical products together with a manufacturing
arrangement with ART whereby ART will operate and maintain the
Equipment for the use of the DYLYN Technology under the License
Agreement at ART's location in Buffalo, New York. The Company
acquired all of the outstanding securities of BSD which is now a
wholly owned subsidiary of registrant.
Future Obligation of the Company
Pursuant to the Contemporaneous Agreements, ART is entitled to
exchange the 2,000,000 common shares of the Company for 2,000,000
shares of the Company s Series A Preferred Stock to be designated
by management to have the specified rights and preferences
(Preferred Stock) agreed upon in the Contemporaneous Agreements,
on or before September 6, 1998. (Although the Board of Directors
is not seeking shareholder's approval for the exchange of stock
with ART), subject to the approval of shareholders of a
Certificate of Amendment of registrant's Certificate of
Incorporation authorizing the shares of Preferred Stock,
management shall immediately issue and exchange 2,000,000
preferred shares (for 2,000,000 common shares previously issued
to ART), which shall have the right and designations agreed to in
the Contemporaneous Agreements. Among other things, the
Preferred Stock to be issued to ART is to be convertible into
2,000,000 shares of common stock of An-Con and shall have certain
preferences on liquidation and anti-dilution aspects. In the
event the Company is unable, for any reason, to deliver the
Preferred Stock to ART on or before September 6, 1998, then,
prior to September 15, 1998, An-Con is to issue and deliver,
without payment of any additional consideration by ART, an
additional number of shares of An-Con's common stock having an
aggregate fair market value of $500,000. Furthermore, in the
event An-Con should issue any shares of any series or class of
its preferred stock having substantially the same rights and
preferences as the Preferred Stock without the prior consent of
ART (which shall not be unreasonably withheld), then An-Con is to
issue and deliver to ART, without payment of any additional
consideration by ART, an additional number of shares of An-Con's
common stock having an aggregate fair market value equal to
$500,000
The approval sought in the proposal authorizing 10,000,000
blank preferred shares does not call for any approval or
ratification of the Company's decision to issue the shares to
ART, by the shareholders. The business decision by the Board is
now a contractual obligation to ART under the Contemporaneous
Agreements. However, as indicated heretofore, subject to
shareholder approval of the proposed amendment authorizing
10,000,000 shares of Preferred Stock, shareholders are advised
that the Company will issue 2,000,000 shares of preferred stock
(the "Preferred Stock") to ART in exchange for the 2,000,000
shares of common stock of the Company heretofore issued to Art
under the Contemporaneous Agreements. For further information to
shareholders, as specified in the Contemporaneous Agreements, the
Preferred Stock to be issued to ART will have the following
characteristics:
(a) While the Class A Preferred Stock issued to ART is
outstanding, An-Con will not authorize or issue any Preferred
Stock which will be entitled to any rights or preferences senior
to the Preferred Stock issued to Art.
(b) In the event An-Con issues Preferred Stock having
rights and preferences substantially equal to those of the
Preferred Stock to be granted to ART ( ART Preferred Stock ) it
will do so only on consent of ART or it shall issue to ART at no
additional cost to ART shares of An-Con s common stock having a
current market value equal to $500,000.
(c) The ART Preferred Stock will be entitled to dividends
and preference to dividends on any other class or series of
common stock or Preferred Stock on a fully Participating basis
with the common stock.
(d) The Preferred Stock will be convertible into 2,000,000
shares of An-Con s common stock unless pursuant to its terms the
number of shares of common stock into which it is convertible is
otherwise adjusted due to sales of common stock at less than
$1.00 per share, merger, acquisition, stock split, subdivision of
shares prior thereto. There will be anti-dilution protection in
the event of corporate reorganizations and similar transactions.
There will be anti-dilution protection in the event the
corporation issues common stock, or securities convertible into
common stock, at a price per share less than the conversion rate
applicable to the ART Preferred Stock which is presently $1.00
per share.
(e) Subject to adjustment in conversion rate in the case
of sales by An-Con of common stock at prices less than $1.00 per
share merger, consolidation, stock split or subdivision of
shares, the Preferred Stock shall be converted into common stock
at An-Con s option ("compulsory conversion") in the event the
aggregate fair market value of the common stock acquirable upon
conversion of the Preferred Stock exceeds four times the then
current fair market value of the common stock as evidenced by the
minimum bonafide bids at that time of at least one independent
market maker for a period of 45 consecutive days immediately
preceding the date of such compulsory conversion.
(f) Subject to adjustment of the conversion rate in the
case of conversion, or adjustment in the number of shares into
which the Preferred Stock would be entitled to be converted in
the event of merger, consolidation, stock split or subdivision of
shares, the Preferred Stock will be entitled to vote with all the
common stock of the corporation and will be entitled to the
number of votes to which it would be entitled assuming it had
been converted into common stock immediately prior to the
occasion of voting.
(g) The Preferred Stock shall have $2,000,000 minimum
liquidation value and have a preference on liquidation.
(h) The Preferred Stockholders will be entitled to receive
reports made generally available to common stockholders.
Based upon the foregoing and in the light of Company's
acquisition program, the Company is seeking shareholder approval
to amend the certificate of incorporation to provide for a total
of 50,000,000 shares of common stock. The increased authorized
common stock, in addition to enabling the Company s acquisition
program to continue, will permit the Company to complete the
Maxxim asset acquisition and cancel the Company's outstanding
note in the amount of Three Million ($3,000,000) Dollars.
Subject to the approval of shareholders of the proposed
amendment to the Company's Certificate of Incorporation
authorizing 10,000,000 shares of preferred stock, a total of
2,000,000 preferred shares will be issued and exchanged for
2,000,000 shares of common stock heretofore issued by the Company
to ART pursuant to the agreement with ART and will have the
aforementioned designated rights and preferences. Although the
Company presently intends to issue and exchange 2,000,000
preferred shares having the designation, rights and preferences
outlined above for the 2,000,000 shares of Common Stock
previously issued to ART, the Company is presently seeking to
amend the Company's Certificate of Incorporation to provide for
a total 10,000,000 shares of blank preferred stock in order to
give management, without further approval of shareholders, the
necessary ability and flexibility to issue additional preferred
shares in future dealings with other potential candidates or
asset acquisitions. The Proposed amendment to the Company's
Certificate of Incorporation will enable management to fashion,
without approval of shareholders, the needed specified rights and
preferences that may be required to consummate a desirable
acquisition of assets or company, including rights and
preferences having characteristics which may be different in
nature and amount from the rights and preferences of the
preferred stock issuable to ART, described above. Although the
proposed amendment to the Certificate of Incorporation deals with
blank preferred stock, the Company will initially file an
appropriate Certificate of Designation of Rights and Preferences
for the 2,000,000 shares of such preferred stock as required
pursuant to the ART transaction, heretofore described. The
balance of 8,000,000 preferred shares will remain available for
future issuance by the Company (without further shareholder
approval) in connection with asset or company acquisitions. Any
future issuances, depending upon their terms votability,
conversion, preferences may have adverse effects upon existing
shareholder percentage voting, ownership dilution of book value
and participation rights in the event of future liquidation by
the Company.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except to the extent that officers and directors of the
Company have become recipients of stock options pursuant to the
Company s 1998 Non-Statutory Stock Purchase and Option Plan,
and except to the extent that additional shares will be
required to be authorized to provide shares issuable on
exercise of options granted under the plan, no officer,
director or principal shareholder of the Company has any direct
or indirect interest in Proposal 3 and 4,with the exception of
Kenneth W. Davidson, the Chief Executive Officer of Maxxim and
A Director of the Company.
On May 8, 1998, Kenneth W. Davidson, Chief Executive
Officer of Maxxim Medical, Inc., a Delaware corporation the
shares of which are traded on the New York Stock Exchange, was
elected a director of the Company to serve until the next
annual meeting of shareholders. Pursuant to the Company s
asset acquisition agreement with Maxxim, hereinafter discussed,
the Company desires to deliver 3,000,000 shares of common stock
in exchange for and cancellation of the Company s outstanding
convertible promissory note for $3,000,000. Accordingly as CEO
of Maxxim, Mr. Davidson is For Proposal 1 increasing the
authorized Common Stock of the Company, which, among other
things, will enable the Company to deliver the 3,000,000 shares
of common stock (and convert and cancel the 3,000,000
promissory note) pursuant to the Maxxim agreement. See Maxxim
Medical Asset Acquisition, Supply and License Agreement.
Advanced Refractory Technologies, Inc., ("ART") a
principal shareholder of the Compnay's Common Stock (as a
result of the acquisition of 2,000,000 shares pursuant to the
Contemporaneous Agreements), is For Proposal 2 which seeks to
amend the Certificate of Incorporation to authorize 10,000,000
shares of blank preferred stock. If Proposal 2 is approved by
shareholders, the Company will issue and exchange 2,000,000
shares of Preferred Stock (having rights and preferences
heretofore agreed upon by the Company and ART) for ART's
2,000,000 shares of Common Stock. In this manner the Company
will be able to avoid a penalty of having to issue additional
shares of Common Stock having a market value of $500,000. See
Recent Asset and Corporate Acquisitions .
MANAGEMENT POLICIES FOR GROWTH
As of July 31, 1998, there were 13,629,693 shares of
Common Stock issued and outstanding, 1,144,255 shares of Common
Stock reserved for issuance upon future exercise of outstanding
stock options and/or grants. A total of 14,773,948 shares will
be issued and outstanding if all of the aforementioned options
and grants are exercised.
The Company is currently seeking to increase its
authorized capitalization of Common Stock from 15,000,000
shares to 50,000,000 shares of Common Stock essentially in
order to enable it, (a) to effectively deliver 3,000,000 shares
of Common Stock (and cancel the Company's outstanding
promissory note in the amount of $3,000,000) pursuant to the
Company s existing agreement with Maxxim Medical, Inc.
discussed below; (b) to pursue its current acquisition policy
to acquire additional assets or companies having assets and/or
operations which are compatible with the Company's business;
and (c) to provide additional shares for funding and growth.
Management believes that this policy of growth through
operation and acquisition can best be pursued through
utilization of equity (Common Stock) as opposed to cash. The
Company is constantly in need of its cash reserves for
materials, operations and for internal growth as sales of its
products continue to increase and new products are brought to
market. The proposed increase in capitalization is deemed
necessary by management to provide a sufficient amount of
shares that will enable the Company to raise capital, to be
flexible in proposals to acquisition candidates and to consider
significant acquisitions. The increase will provide the
wherewithal for management to consider and aggressively pursue
a desirable acquisition candidate or asset situation (of
relatively significant size) without the necessity of further
requesting shareholders to authorize an increase in the
capitalization with the statutory and regulatory delays which
are usually occasioned thereby. In many instances, such a
delay could result in loss of opportunity. The proposed
increase in capitalization is deemed by management to enable it
to meet potential anticipated operational objectives by
providing shares for future funding, if necessary or warranted,
and to provide shares for continued growth by acquisition. The
Company plans to consider or pursue a desirable acquisition
candidates or asset situations. Although the Company will
enter into discussions with potential acquisition candidates or
asset acquisitions, there are no specific agreements in place
for any new acquisition candidate or asset acquisition at this
time. The Company is generally amenable and will confer with
and consider any potential asset or acquisition candidate that
will provide additional synergistic technology, cash and/or
revenue for the Company's future growth. In addition the
increased capitalization will give management the flexibility
to issue stock dividends to shareholders, as deemed
appropriate.
General Observations
Possible Adverse Aspects for Shareholders
An increase in the authorized shares of Common Stock (and
authorization of preferred stock) shall enable management to
make additional issuances of Common Stock (or preferred stock)
without approval of shareholders. Such issuances of common
stock will dilute the percentage ownership of the Company by
existing shareholders, and any issuances of preferred stock, if
convertible into common stock, may have similar dilutive
consequences. Furthermore, preferred stock may grant
preference in dividends to the preferred stockholder over the
common stockholder. In addition, a further consequence of
increasing the authorized shares of Common Stock (or creation
of a series of Preferred Stock) of the Company is that
management will have the potential ability, without approval of
shareholders to issue such common shares or create and issue
such preferred stock (convertible into common stock in
desirable conversion ratios) so as to make more difficult, or
to stave off hostile and/or friendly takeover attempts by third
parties. The foregoing will be applicable even if such a
transaction may appear, on its face, to be favorable to the
interests of the shareholders. Such anti-takeover measures may
include declaring a dividend and issuing shares to the existing
shareholders of the Company, or selling the shares, on
agreeable terms to a friendly investor (a person or other
entity whose interests are not opposed to those of the Company
and its shareholders) or taking other measures with its
authorized but unissued shares (without approval of
shareholders) within its corporate powers to stave off takeover
attempts. The use by management of anti- takeover measures
which may include the issuance of additional shares, share
dividends, and/or options to acquire shares at favorable
prices, may have a dilutive effect on the Company's book value
and further erode percentage ownership of shares by existing
shareholders. However, there are currently no "anti-takeover"
measures contemplated by the Company or included in any debt
agreement, By-law or provision of the Company's Certificate of
Incorporation or any amendment thereto and management does not
plan or presently contemplate seeking shareholder approval for
any such amendment to the By-Laws.
The increase in the authorized number of shares together
with other factors may also make the removal of management more
difficult even if such removal would appear to be beneficial to
shareholders generally, and may have the effect of limiting
shareholder participation in certain transactions such as
mergers or tender offers whether or not such transactions are
favored by incumbent management. However, it is essential to
note that whatever course of action management chooses to
pursue, it is required and has a fiduciary obligation to do so
in the best interests of the shareholders.
As of July 31, 1998 the Company had 13,629,693 shares of
Common Stock issued and outstanding without giving effect to
outstanding options or other derivative securities. The
Company's certificate presently authorizes 15,000,000 shares of
common stock. Accordingly, based upon the aforementioned
reasons and the Company s current acquisition policy,
Management has determined to request shareholder approval of
its resolution to amend its Certificate of Incorporation to
increase the authorized shares of Common Stock from 15,000,000
to 50,000,000 shares and provide for an additional 10 million
shares which shall be blank preferred stock. The foregoing
will, among other things, provide the necessary shares for the
Company to (a) issue and exchange 2,000,000 shares of preferred
stock, which shall have the rights and preferences previously
agreed upon with ART, for 2,000,000 shares of the Company's
Common Stock previously issued to ART, and (b) issue and
deliver 3,000,000 shares of Common Stock to Maxxim and thereby
cancel an outstanding note of the Company held by Maxxim in the
amount of Three Million ($3,000,000) Dollars. Although these
transactions have already been consummated and shareholder
approval of such agreements is not being sought, management
believes the foregoing issuances, exchange and note
cancellation, are in the best interests of the Company and its
shareholders.
PROPOSAL 1
PROPOSED AMENDMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES
OF COMMON STOCK FROM 15,000,000 SHARES TO 50,000,000 SHARES
Article Fourth of the Company's Certificate of Incorporation
presently reads:
FOURTH: The corporation shall be authorized to issue the
following shares:
Number of
Class Shares Par Value
Common 15,000,000 $0.001
Subject to the approval of shareholders, the Board of Directors
intends to amend the Company's Certificate of Incorporation to
provide for a new Article (Fourth) thereof, as follows:
"FOURTH: The corporation shall be authorized to issue
the following shares:
Number of
Class Shares Par Value
Common 50,000,000 $0.001
Possible Adverse Aspects to Stockholders
Since the present issued and outstanding shares of the
Company's Common Stock do not have any preemptive rights, the
present shareholders of the Company risk dilution of the book
value per share of their Common Stock should the newly
authorized stock be issued by the Company for a consideration
less than the Company's then current book value which was $.25
per share as of December 31, 1997. In addition, the percentage
ownership of the common stock of present shareholders will be
diminished with each future issuance of additional shares of
common stock. Furthermore, no shareholder approval may be
required by management to issue either the common stock or the
preferred stock sought to be authorized.
Any additional dilution factor is presently incalculable
in that it is not yet determined at what price the securities
will be issued by the Company (publicly or privately) in the
future, if issued at all, or for what price they will be
exchanged as consideration for an acquisition candidate, if one
is found. However, the increase in the number of authorized
shares of common stock, when and if issued, will not in any way
change the inherent rights of existing or future common
shareholders. If and when issued, each share of additional
authorized Common Stock will continue to: (1) entitle the
holder to one vote per share on matters to be voted upon by the
shareholders; (2) not entitle the holder to any cumulative
voting, cumulative dividends, preemptive, subscription or
redemption rights; (3) entitle the holder to receive dividends
from available funds, if and when declared by the Company's
Board of Directors; (4) entitle the holder to share ratably in
the assets of the Company legally available for distribution to
shareholders in the event of liquidation, dissolution or
winding up of the Company. (See "General Observation Possible
Adverse Aspects for Shareholders").
Required Vote for Adoption
Under Delaware Law the affirmative vote of a majority of
the outstanding shares of the Company's Common Stock is
required for the approval of Proposal 1, the proposed
amendment to the Company's Certificate of Incorporation which
increases the authorized shares of Common Stock available for
issuance. Once given effect, a majority vote of the Company's
Common Stock at a properly called meeting at which a quorum is
present will be required to repeal or modify the amendment.
RECOMENDATION OF MANAGEMENT
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ADOPTION
OF THE PROPOSED AMENDMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION INCREASING THE AUTHORIZED COMMON STOCK OF THE
COMPANY FROM FIFTEEN MILLION (15,000,000) SHARES OF COMMON
STOCK TO FIFTY MILLION SHARES OF COMMON STOCK, PAR VALUE $.001
PER SHARE.
PROPOSAL 2
PROPOSED AMENDMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION TO CREATE 10,000,000 SHARES OF
BLANK PREFERRED STOCK
Article Fourth of the Company's Certificate of Incorporation
presently only provides for the issuance of Common Stock and
makes no provision for the issuance of any other class of stock
or any preferred stock.
Subject to the approval of shareholders and IN ADDITION TO THE
AMENDMENT OF ARTICLE FOURTH CONTAINED IN PROPOSAL NUMBER 1
(ABOVE), management proposes to amend Article Fourth of the
Company's Certificate of Incorporation to provide for the
creation of 10,000,000 shares of blank preferred stock, to read
as follows:
"FOURTH: The corporation shall be authorized to
issue the following shares:
Class Shares Par Value
Common (*) $0.001
Preferred10,000,000 0.001
"The total number of shares of capital stock of all
classifications which the Corporation shall have the
authority to issue is (*) shares, of which (i) (*)
shares shall be designated common stock, having a par
value of $.001 per share, and (ii) TEN MILLION
(10,000,000) shares shall be designated "Preferred
Stock" having a par value of $.001 per share.
(a) All shares of common stock will be equal to each
other and shall have all the rights granted to
stockholders under the General Corporation Law of the
State of Delaware, as amended, and the Certificate of
Incorporation, including, without limitation, one vote
for each share outstanding in the name of each holder,
the power to elect directors or consent or dissent to
any action to take place at any regular or special
meeting of stockholders, and the right to receive
dividends and distributions subject to the rights and
preferences of any outstanding shares of Preferred Stock
authorized hereby.
(b) The Preferred Stock may be issued from time to time
in one or more classes and one or more series of each
class with specified serial designations, shares of each
series of any class shall have equal rights and shall be
identical in all respects, and (1) may have specified
voting powers, full or limited or may be without voting
power, (2) may be subject to redemption at such time or
times as may be designated, and at designated prices;
(3) may be entitled to receive dividends (which may be
cumulative or non-cumulative) at designated rates, on
such conditions and specified times, and payable in any
other class or classes of stock; (4) may have such
rights upon the dissolution of, or upon any distribution
of the assets of, the corporation; (5) may be made
convertible into, or exchangeable for shares of any
other class or classes or of any other series of the
same or any other class or classes of stock of the
Corporation, at such price or prices or at specified
rates of exchange and with specified designated
adjustments; and (6) may contain such other special
rights and qualification, as shall hereafter be stated
and expressed in the resolution or resolutions providing
for the issue of such Preferred Stock from time to time
adopted by the Board of Directors pursuant to the
authority so to do which is hereby granted and expressly
vested in the Board of Directors.
The Board of Directors shall have authority to cause the
Corporation to issue from time to time, without any vote
or other action by the stockholders, any or all shares
of stock of the corporation of any class or series at
any time authorized, and any securities convertible into
or exchangeable for any such shares, and any options,
rights or warrants to purchase or acquire any such
shares, in each case to such persons and on such terms
(including as a dividend or distribution on or with
respect to, or in connection with a split or combination
of, the outstanding shares of stock of the same or any
other class or series) as the Board of Directors from
time to time in its discretion lawfully may determine;
provided, that the consideration for the issuance of
shares of stock of the corporation (unless issued as
such a dividend or distribution or in connection with
such a split or combination) shall not be less than the
par value of such shares. Shares so issued shall be
full-paid stock, and the holders of such stock shall not
be liable to any further calls or assessments thereon."
(*) To be determind based upon approval or disapproval
of proposal 1.
Subject to the approval of the proposed amendment to the
Certificate of Incorporation by shareholders, upon the filing of
such Certificate of Amendment, the Board of Directors will cause
a Certificate of Designation of Rights and Preferences to be
filed, outlining the rights and preferences of the class of
Preferred Stock issuable to ART as heretofore described.
Effect on Future Shareholder Rights and Possible Adverse Aspects
to Existing Shareholders
The proposed 2,000,000 shares of Preferred Stock to be
authorized and issued to ART, subject to shareholder approval,
shall give the holder a priority in liquidation of the Company,
up to $2,000,000. If such liquidation were to occur shortly
after approval by shareholders, a substantial amount of the net
proceeds derived from such liquidation would be allocable to the
Preferred Stockholder (approximately $2,000,000) prior to any
funds being allocable to common stockholders.
In the event Proposal 2 is adopted by shareholders, in as
much as ART is exchanging its Common Stock for preferred stock
(which has similar voting rights), the existing percentage of
voting control of common stockholders will not be affected by the
exchange. In addition by virtue of the conversion privilege and
the anti-dilution aspects of the Preferred Stock, it is not
likely that ART will convert the Preferred Stock into common
stock unless ART has a need to avail itself of liquidation of its
investment or the market value of the common stock is otherwise
at a level deemed favorable to ART to convert into common stock.
The proposed amendment also authorizes the Board of
Directors to issue Preferred Stock of different classes (in
addition to those heretofore discussed in connection with the ART
transaction). The proposed authority gives the Board of
Directors maximum discretion to fashion rights and preferences
for future Preferred Stock to be issued and to issue such shares
without further approval of shareholders. This is deemed
necessary by management to give it the broad latitude to act
quickly when an acquisition opportunity presents itself and be
able to fashion preferred stock containing rights and preferences
in a variety of ways. Such possible future issuances (with no
requirement to obtain shareholder approval prior thereto) may be
specifically fashioned by management in a manner which will
increase the likelihood of achieving the corporate objective for
an acquisition of assets or acquisition of another company and
may contain rights and preferences which are different to those
granted to ART. However such newly issued preferred stock may
also have an adverse effect on the interests of common
stockholders due to provisions therein which may provide for
voting, anti-dilution, conversion, priority in liquidation and
possibly other factors not yet predictable or calculable. (See
"General Observation Possible Advers Aspects For Shareholders").
Required Vote for Adoption
Under Delaware Law the affirmative vote of a majority of
the outstanding shares of the Company's Common Stock is required
for the approval of Proposal 2, the proposed amendment to the
Company's Certificate of Incorporation which authorizes the
Company to issue 10,000,000 shares of common stock and thereby
increases the total authorized shares available for issuance.
Once given effect, a majority vote of the Company's Common Stock
and outstanding preferred stock (if the preferred stock is
subject to repeal or modification)at a properly called meeting at
which a quorum is present will be required to repeal or modify
the amendment.
RECOMMENDATION OF MANAGEMENT
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE PROPOSED AMENDMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION AUTHORIZING 10,000,000 SHARES OF BLANK PREFERRED
STOCK PAR VALUE $.001.
PROPOSAL 3
AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE OF NAME OF CORPORATION
Since the Company has not engaged in any aspect of genetic
analysis for number of years, management proposes that the name
of the Company be changed. As all shareholders are aware, the
Company is currently engaged in the manufacture and sale of a
line of electro-surgical and other medical products together with
industrial lighting. In addition the Company has recently
acquired a new surgical generator product line sold under the
tradename Bovie , a highly respected and well known name in the
electro medical device industry. Accordingly management believes
that the name "Bovie Medical Corporation" will provide the
benefits of a well known and highly respected name in the medical
device field, preserve the product identity of the corporation
and remove the misleading characteristic of it being a genetics
company.
Management anticipates a need to change the Company's
trading symbol for its shares which are presently traded on the
OTC electronic bulletin board under the symbol "AGNT" and,
subject to shareholder approval for the change of name, will
propose a new symbol for the OTC Bulletin Board. As of the date
hereof no symbol has been determined nor has any application
therefor been submitted to the OTC Bulletin Board.
Amendment of Certificate of Incorporation
Article "First" of the Company's certificate of
incorporation presently reads:
"First: the name of the corporation is "An-Con Genetics, Inc."
Subject to the approval of shareholders, the Board of
Directors has resolved to amend the Company's certificate of
incorporation to provide for a new article First thereof to read
as follows:
"First: the name of the corporation is: Bovie Medical
Corporation .
Required Vote for Adoption
Under Delaware Law the affirmative vote of a majority of
the outstanding shares of the Company's Common Stock is required
for the approval of the Proposal 2, the proposed amendment to the
Company's Certificate of Incorporation which authorizes the
Company to isuue 10,000,000 shares of common stock and thereby
increases the total authorized shares available for issuance.
Once given effect, a majority vote of the Company's Common Stock
and soutstanding preferred stock (if rights of teh preferred
stock are subject to repeal or modification at a properly called
meeting at which a quorum is present will be required to repeal
or modify the amendment.
Recommendation of Management
THE BOARD OF DIRECTORS RECOMMENDS A VOTE APPROVING THE PROPOSED
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE
THE NAME OF THE CORPORATION FROM AN-CON GENETICS, INC. TO "BOVIE
MEDICAL CORPORATION".
PROPOSAL 4
RATIFICATION OF COMPANY S 1998 NON-STATUTORY STOCK PURCHASE AND
OPTION PLAN
In January, 1998, the Board of Directors adopted a new stock
option plan for the purpose of acquiring, retaining and
incentivizing executive and other key employees and consultants
of the Company and its subsidiary, Aaron Medical Industries, Inc.
The Company s 1998 Non-Statutory Stock Purchase and Option Plan
(the Plan ) authorizes the issuance of options to employees and
consultants of the corporation to purchase up to a total of
1,200,000 shares thereunder.
The Plan requires that options may be issued at an exercise
price equal to at least 80% of the market price for the Company s
shares in the over-the-counter market (on the Electronic Bulletin
Board). Any options issuable to officers or directors under the
Plan must be issued at an exercise price equal to no less than
the then current market price for the shares in the over-the-
counter market. The determination for grant of options is made
by the Board of Directors under the Plan. The options are non-
transferable. The Option shall terminate and expire on the
expiration date of the option. In addition each option shall
automatically terminate upon the earlier of:
(i) The termination of the Optionee's employment with the Company
for cause (as defined under the Plan);
(ii) The expiration of twelve (12) months from the date of
termination of the Optionee's employment with the company for any
reason other than death, without cause; provided, that if the
Optionee dies within such twelve-month period, subclause (iii)
below shall apply; or
(iii) The expiration of fifteen (15) months after the date of
death of the Optionee.
Potential Adverse Aspects of the Plan:
Although management believes it is in the interests of
shareholders that the Plan be approved in order to attract and
retain qualified employees and consultants, since the Plan
authorizes the grant of options to purchase up to 1,200,000
shares, the future grant and exercise of the options would tend
to dilute the percentage ownership of shareholders in the
Company. Furthermore, the nature of the options is such that the
options would be exercised at a time that the Company would be
able to derive a higher price for Company shares than the
exercise price.
Recommendation of Management
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
TO RATIFY AND APPROVE THE COMPANY S 1998 NON-STATUTORY STOCK
PURCHASE AND OPTION PLAN.
Other Matters
The Board of Directors of the Company knows of no other
matters to come before the Meeting, other than that which is set
forth herein and in the accompanying Notice of Special Meeting.
However, if any other matters should properly come before the
Meeting, it is the intention of the persons named in the
accompanying Proxy to vote such Proxies as in their discretion
they may deem advisable.
Rights of Dissenting Shareholders
Dissenting shareholders do not have any rights of appraisal
with respect to the proposals to which this Proxy Statement
relates. Any negative vote with respect to any specific
proposal, will, of course, be duly noted and recorded in the
computation to determine whether majority approval has been
obtained.
By Order of the Board of Directors
President
Melville, New York
May , 1998
<PAGE>
PROXY CARD
AN-CON GENETICS, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints Andrew Makrides and Delton
Cunningham each with the power to appoint his or her substitutes,
and hereby authorizes them to represent and to vote, as
designated above, all the shares of common stock of An-Con
Genetics, Inc. held of record by the undersigned on , 1998, at
the meeting of shareholders to be held on September 3, 1998 or
any adjournment thereof.
In their discretion the proxies are authorized to vote upon such
other business as may properly come before the meeting. This
proxy, when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this proxy will be voted FOR Proposals 1, 2 and 3.
Please sign exactly as your name appears on the reverse side.
When shares are held by joint tenants, both should sign.*
*When signing as attorney, as executor, administrator, trustee or
guardian, please give full title as such. If shareholder is a
corporation, please sign in full corporate name by President or
other authorized officer. If shareholders is a partnership,
please sign in partnership name by authorized person.
(To Be Signed on Reverse Side.)
FRONT OF CARD
<PAGE>
PROXY CARD
AN-CON GENETICS, INC.
A Please mark your
votes as in this example.
Vote For Against Withhold
1. Proposal to increase
the authorize
capitalization from
15,000,000 shares common
stock par value $.001 per
share to 50,000,000 shares
of common stock par value
$.001.
2. Proposal to create a
class of blank preferred
stock having a par value
of $.001 per share.
3. Proposal to change
the name of the
corporation to "Bovie
Medical Corporation".
4. Proposal to ratify
the Company's 1998 Non-
Statutory Stock Purchase
and Option Plan.
SIGNATURE(S) Date
NOTE: Please sign exactly as name appears hereon.
joint owners should each sign. When signing as
attorney, administrator trustee or guardian, please
give full title as such.
BACK CARD
