Schedule 14C Information
Information Statement Pursuant to
Section 14(c) of the Securities Exchange Act Of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
[x] Definitive Information Statement
Azul Holdings Inc.
------------------------------------------------
(Name of Registrant As Specified In Its Charter)
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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):
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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:
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<PAGE>
Azul Holdings Inc.
4450 Arapahoe Avenue, Suite 100
Boulder, CO 80303
Notice of 2000 Annual Meeting of Stockholders
To Be Held September 21, 2000
To All Stockholders:
The 2000 annual meeting of stockholders of Azul Holdings Inc., a
Delaware corporation, will be held on Thursday, September 21, 2000 at 10:00 a.m.
local time at the offices of Latham and Watkins, 885 Third Avenue, Third Floor,
Conference Room 3B, New York, New York. The purposes of the meeting are to:
o Elect three directors to serve during the next year, and
o Transact any other business which may properly come before the
meeting.
Only stockholders of record at the close of business on August 22, 2000
may vote at the meeting.
By Order of the Board of Directors,
/s/ Edward S. Wittman
------------------------------
Edward S. Wittman, Secretary
August 29, 2000
We Are Not Asking You for a Proxy and You are Requested Not to Send Us a Proxy
<PAGE>
Azul Holdings Inc.
4450 Arapahoe Avenue, Suite 100
Boulder, CO 80303
Information Statement
2000 Annual Meeting of Stockholders
To Be Held September 21, 2000
General
This information statement contains information about the 2000 annual
meeting of stockholders of Azul Holdings Inc. to be held on Thursday, September
21, 2000 at 10:00 a.m. local time at the offices of Latham and Watkins, 885
Third Avenue, Third Floor, Conference Room 3B, New York, New York. You can find
other detailed information about Azul in the accompanying annual report to
security holders, which includes Azul's annual report on Form 10-K for the
fiscal year ended March 31, 2000. This information statement is being mailed to
you on or about August 29, 2000.
Purposes of the Annual Meeting
At Azul's annual meeting, stockholders will vote to elect three
directors to serve during the next year and on any other business that may
properly come before the meeting.
Voting Securities and Vote Required
Only stockholders of record at the close of business on August 22, 2000
are entitled to vote at the meeting. As of August 22, 2000, there were issued
and outstanding 3,881,213 shares of Azul common stock, 232,407 shares of Series
B Convertible Preferred Stock and 175,000 shares of Series C Convertible
Preferred Stock. Holders of common stock are entitled to one vote per share,
holders of Series B preferred stock are entitled to the number of votes equal to
the number of whole shares of common stock into which shares of Series B
preferred stock are currently convertible (2/5 of a share) and holders of Series
C preferred stock are entitled to the number of votes equal to the number of
whole shares of common stock into which shares of Series C preferred stock are
currently convertible (10 shares). For the election of directors, holders of
common stock, Series B preferred stock and Series C preferred stock must vote
together as a single class. As of August 22, 2000, Tudor Trust and Jeffrey L.
Neuman, who controls Tudor Trust, held shares of Azul stock entitling them to
4,103,744 out of the 5,724,176 total votes that may be cast at the meeting,
representing 71.7% of those total possible votes. Mr. Neuman, the president and
chief executive officer and a director of Azul, has indicated that the shares of
Azul stock held by Tudor Trust and him will be voted in favor of each nominee
for election as director. Therefore, since such shares satisfy the quorum and
voting requirements for the election of directors as discussed below, each
nominee will be elected as a director.
We Are Not Asking You for a Proxy and You are Requested Not to Send Us a Proxy
<PAGE>
The presence in person or by proxy of the holders of a majority of the
outstanding shares of stock entitled to vote at the meeting is required to
constitute a quorum at the meeting. Abstentions count as present for
establishing a quorum. Where a quorum is present, the affirmative vote of the
holders of a plurality of the votes cast by the holders of stock entitled to
vote at the meeting is required for the election of directors. The shares of
Azul stock held by Tudor Trust and Mr. Neuman which Mr. Neuman has indicated
will be voted at the meeting in favor of each director nominee satisfy the
quorum and voting requirements for the election of directors.
Shares which abstain from voting and shares held in "street name" by
brokers or nominees who indicate that they do not have discretionary authority
to vote those shares on the particular matter being voted on will not be counted
as votes in favor of that matter, and will also not be counted as votes cast or
shares voting on that matter. Accordingly, abstentions and "broker non-votes"
will have no effect on the voting on a matter such as the election of directors
which requires the affirmative vote of a plurality or a certain percentage of
the votes cast or shares voting on a matter.
ELECTION OF DIRECTORS
Azul's board of directors currently has three members, and each of the
directors is to be elected annually. At this meeting stockholders will vote to
elect three directors to serve for a one year period. Azul's nominees for these
directorships are identified below. All of the nominees are currently members of
the board of directors and have indicated their willingness to serve if elected.
The names and biographical information for each director nominee are
set forth below. There are no family relationships among any of the Azul
directors or executive officers.
Director Nominees
Jeffrey L. Neuman, age 56, has been Azul's chairman of the board since
1996 and has been president and chief executive officer since 1999. Mr. Neuman
is also chairman of the board of directors and a director of Xyvision Enterprise
Solutions, Inc., currently a 57% owned subsidiary of Azul. He has also served
since 1995 as chairman of the board of directors and chief executive officer of
Antiqnet.com Inc. and its predecessors, privately held international fine art
and antique auction and internet marketing companies. Sloan's Auction Galleries,
a division of Antiqnet.com, is the sixth largest fine art and antique auction
business in the U.S. Mr. Neuman has been a private investor since 1986 when he
founded Tudor Trust, a merchant banking firm which has interests in a number of
public and private companies. Mr. Neuman received his BA from the University of
Pennsylvania and his MBA from the Wharton School of Business.
Lance Laifer became a director of Azul in June 2000. Mr. Laifer is
president and chief executive officer of RocketLinks, Inc., a privately held
advertiser pay-per-placement internet search engine business that he founded in
October 1999. Mr. Laifer is also the principal at Laifer Capital Management, a
registered investment advisory firm that he formed in March 1992. Mr. Laifer
received a Bachelor of Business Administration degree in Finance from Baruch
College.
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Deborah Seidel, age 52, became a director of Azul in June 2000. Ms.
Seidel is currently president of Sloan's Auction Galleries, a position which she
has held since October 1999. Ms. Seidel is also a director of Antiqnet.com. From
January 1997 until October 1999, Ms. Seidel was the senior vice president of
Phillips Son & Neale Auctions Limited, which is the third largest international
auction house. As senior vice president, Ms. Seidel was responsible for
Phillips' activities in the New York area as well as of its regional marketing
representatives. Ms. Seidel is a graduate of Smith College and the University of
Chicago Law School.
Board and Committee Meetings
The Azul board of directors met eight times (including by telephone
conference) during the fiscal year ended March 31, 2000. All directors attended
at least 75% of the meetings of the board of directors and of the committees on
which they served.
The board of directors has an audit committee, which provides the
opportunity for direct contact between Azul's independent public accountants and
the board of directors. The audit committee reviews the effectiveness of the
auditors during the annual audit, discusses Azul's internal accounting control
policies and procedures and considers and recommends the selection of Azul's
independent public accountants. The audit committee met once during fiscal 2000,
with each member attending. The current audit committee members are Ms. Seidel
and Mr. Laifer.
The board of directors has a compensation and stock option committee,
which provides recommendations to the board of directors regarding compensation
programs of Azul and administers Azul's stock option plan. The compensation
committee did not meet during fiscal 2000, as its function for that period was
performed by the full board of directors. The current compensation committee
members are Ms. Seidel and Mr. Laifer.
The board of directors does not have a nominating committee to provide
recommendations to the board for nominees for directorships. This function for
fiscal 2000 was performed by the full board of directors. The board of directors
will consider nominees recommended by stockholders. Stockholders who wish to
recommend nominees for directorships should submit their recommendations to
Edward S. Wittman, Secretary of Azul, at the principal executive offices of
Azul. Mr. Wittman will forward the recommendations to the board of directors for
its consideration.
Director Compensation
Directors receive directors' fees of $2,000 per year. Directors also
receive fees of $500 for each board of directors meeting attended in person and
$250 for each telephonic board meeting in which the director participates.
Directors who are members of committees of the board of directors receive fees
of $250 per committee meeting attended, provided that the committee meeting was
not held on the same day as a board of directors meeting. Directors are also
reimbursed for expenses incurred in attending board or committee meetings.
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In June 2000, each director nominee was granted as compensation for
then serving on the board of directors an option to purchase 20,000 shares of
Azul common stock at an exercise price equal to the fair market value of the
common stock as of the date of grant.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table shows beneficial ownership as of August 10, 2000 of
shares of Azul common stock, Series B preferred stock and Series C preferred
stock by each person known to Azul to beneficially own more than 5% of the
outstanding shares of that class of Azul stock, the Azul directors and the Azul
executive officers listed in the summary compensation table below, and all
current Azul directors and executive officers as a group. All share numbers have
been adjusted to give effect to the one-for-five reverse split of the
outstanding shares of common stock that occurred in October 1998.
<TABLE>
<CAPTION>
Common Stock Series B Preferred Stock Series C Preferred Stock
----------------------------- ------------------------- -------------------------
Name and Address of Number Percent Number Percent Number Percent
Beneficial Owner of Shares(1) of Class(2) of Shares of Class of Shares of Class
------------------------------------ ------------ ----------- --------- -------- --------- --------
Principal Stockholders
<S> <C> <C> <C> <C> <C> <C>
Tudor Trust u/d/t 4,782,010 (3) 74.7% 58,989 25.4% 175,000 100%
December 12, 1997
Jeffrey L. Neuman
450 N. Roxbury Avenue
Beverly Hills, CA 90210
James S. Saltzman 543,998(4) 13.9% 46,686 20.1% - -
Saltzman Partners
621 E. Germantown Pike
Plymouth Valley, PA 19401
JTH Associates 65,141(5) 1.7% 25,758 11.1% - -
400 Fifth Avenue South, Suite 305
Naples, FL 33940
Gerlach & Co. 5,847(5) * 14,618 6.3% - -
111 Wall Street, 8th Floor
New York, NY 10043
Lancer Enterprises 5,151(5) * 12,879 5.5% - -
Largo della Fontanella di Borghese 19
00186 Rome Italy
United Mineworkers of America 5,070(5) * 12,675 5.5% - -
One Financial Center
Boston, MA 02111
Directors and Executive Officers
Jeffrey L. Neuman, Director 4,782,010(3) 74.7% 58,989 25.4% 175,000 100%
Lance Laifer, Director 20,000(6) * - - - -
Deborah Seidel, Director 20,000(6) * - - - -
Kevin J. Duffy(7) 41,600(6) * - - - -
All current directors and executive 4,843,610(8) 74.7% 58,989 25.4% 175,000 100%
officers, as a group (4 Persons)
</TABLE>
* Less than one percent.
(1) The number of shares beneficially owned is determined under SEC rules and
the information is not necessarily indicative of beneficial ownership for
any other purpose. Under those rules, beneficial ownership includes any
shares as to which the individual or entity has sole or shared voting
power or investment power and also any shares which the individual or
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<PAGE>
entity has the right to acquire currently or within 60 days after August
10, 2000 through the exercise of any stock option or other right,
including upon the conversion of Series B preferred stock, Series C
preferred stock or Azul's 6% Convertible Subordinated Debentures due 2002.
Any references in these footnotes to options or other convertible
securities held by a person or entity refers only to options or other
convertible securities currently exercisable or exercisable within 60 days
after August 10, 2000. The inclusion herein of shares does not constitute
an admission that the named stockholder is a direct or indirect beneficial
owner of such shares. Unless otherwise indicated, each person or entity
named in the table has sole voting power and investment power (or shares
that power with his or her spouse) with respect to all shares of Azul
stock listed as beneficially owned by that person or entity.
(2) Number of shares of common stock deemed outstanding includes 3,881,213
shares outstanding as of August 10, 2000, plus any shares issuable upon
conversion of Series B preferred stock or Series C preferred stock or
subject to options or other convertible securities held by the person or
entity in question.
(3) Includes 23,595 shares of common stock issuable upon conversion of Series
B preferred stock, 1,750,000 shares of common stock issuable upon
conversion of Series C preferred stock, 158,266 shares of common stock
which Tudor Trust has the right to acquire by converting interest payable
by Azul to Tudor Trust under a loan agreement, 500,000 shares of common
stock issuable to Tudor Trust upon exercise of a warrant, and 20,000
shares of common stock subject to an outstanding stock option held by Mr.
Neuman. Includes securities held by both Mr. Neuman and by Tudor Trust.
Mr. Neuman is the grantor, sole trustee and sole current beneficiary of
Tudor Trust. Subsequent to August 10, 2000, on August 21, 2000 Tudor Trust
loaned $2,000,000 to Azul which may be converted at the option of Tudor
Trust into Azul common stock at a price of $3.25 per share. See "Certain
Relationships and Related Transactions."
(4) Includes 18,674 shares of common stock issuable upon conversion of Series
B preferred stock and 4,000 shares of common stock subject to outstanding
stock options. Consists of securities held by both Mr. Saltzman and
Saltzman Partners. Mr. Saltzman is affiliated with Saltzman Partners.
(5) Includes shares of common stock issuable upon conversion of Series B
preferred stock at the rate of 2/5 of a common share for each share of
Series B preferred stock which may be converted.
(6) Consists solely of shares of common stock subject to outstanding stock
options.
(7) Kevin J. Duffy is president of Xyvision Enterprise Solutions, Inc.,
currently a 57% owned principal subsidiary of Azul.
(8) Includes 23,595 shares of common stock issuable upon conversion of Series
B preferred stock, 1,750,000 shares of common stock issuable upon
conversion of Series C preferred stock, 158,266 shares of common stock
which Tudor Trust has the right to acquire by converting interest payable
by Azul to Tudor Trust under a loan agreement, 500,000 shares of common
stock issuable to Tudor Trust upon exercise of a warrant, and a total of
101,600 shares of common stock subject to outstanding stock options.
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<PAGE>
EXECUTIVE COMPENSATION
The following table shows annual, long-term and other executive
compensation information for the last three fiscal years with respect to Azul's
chief executive officer and the sole other executive officer whose total annual
salary and bonus exceeded $100,000 in fiscal 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation(1) Awards
--------------------- ------------------
Fiscal Securities All Other
Name and Principal Position Year Salary Bonus Underlying Options Compensation
--------------------------- ---- ------ ----- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Jeffrey L. Neuman 2000 - (2) - - -
Chairman, President and 1999 - (2) - - -
Chief Executive Officer 1998 - (2) - - -
Kevin J. Duffy 2000 $185,611 - - $1,600(3)
President of Xyvision 1999 $172,827 $1,500 - $1,743(3)
Enterprise Solutions, Inc. 1998 $150,000 - - $1,500(3)
</TABLE>
(1) In accordance with SEC rules, other annual compensation in the form of
perquisites and other personal benefits has been omitted since such
perquisites and other personal benefits did not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus for the named
executive officer.
(2) Mr. Neuman became Azul's chief executive officer in 1999. He does not
receive any annual compensation from Azul for this position.
(3) Consists of matching contributions to the Xyvision Enterprise Solutions
401(k) plan.
Azul did not grant any stock options or stock appreciation rights to
any named executive officer during the fiscal year ended March 31, 2000.
The following table sets forth information regarding the number and
value of unexercised stock options held as of March 31, 2000 by each of the
named executive officers.
Fiscal Year-End Option Values
Number of Securities
Underlying Unexercised
Options at Fiscal Year-End
Name Exercisable / Unexercisable
---- ---------------------------
Jeffrey L. Neuman - / -
Kevin J. Duffy 41,600 / 20,400
As of March 31, 2000, none of the named executive officers held any
unexercised in-the-money options. No stock options were exercised during fiscal
2000 by any named executive officer and no stock appreciation rights were
exercised during fiscal 2000 by any named executive officer or were outstanding
at March 31, 2000.
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Employee Severance Benefit Plan
Xyvision Enterprise Solutions, currently a 57% owned subsidiary of
Azul, has an employee severance benefit plan. All full-time employees, including
executive officers, who have been employed by Xyvision Enterprise Solutions for
at least 90 days participate.
Under this plan, if a "change in control" of Xyvision Enterprise
Solutions occurs, and within 12 months thereafter a participant's employment
with Xyvision Enterprise Solutions is terminated either by Xyvision Enterprise
Solutions other than for "cause" or "disability" or by the participant for "good
reason," then:
o the participant is entitled to:
o a cash payment equal to 50% of his or her annual base compensation
if he or she has been employed by Xyvision Enterprise Solutions for
less than one year or 100% of his or her annual base compensation if
he or she has been employed by Xyvision Enterprise Solutions for one
year or more, subject to reduction in some circumstances for tax
reasons, and
o a continuation of insurance benefits for a period of one year, and
o all outstanding stock options held by the participant will immediately
become exercisable in full.
However, if a particular change in control of Xyvision Enterprise Solutions is
approved in advance by the Xyvision Enterprise Solutions board of directors,
participants will not be entitled to any of the above benefits. All of the above
terms in quotations are defined in the plan document.
This plan may be amended or terminated by the Xyvision Enterprise
Solutions board of directors at any time prior to the occurrence of a change in
control. Amounts payable to any employee under the plan are reduced by amounts
payable to that employee under any other program or agreement under which he or
she will receive benefits.
Other Executive Compensation Matters
Azul does not currently have any specific formal compensation committee
or board of directors compensation policies applicable to executive officers
since under current circumstances its chief executive officer is not compensated
for serving in that position and its sole other executive officer is not
compensated on an annual basis in excess of $100,000. In addition, there is only
one officer of Xyvision Enterprise Solutions who is deemed to be for purposes of
this information statement an executive officer of Azul.
There is limited and sporadic public trading in Azul common stock. In
addition, during the fiscal year ended March 31, 2000 Azul underwent a
significant corporate restructuring and further significantly revised its
planned business operations during the fiscal year ended March 31, 2000.
Accordingly, and in view of the fact that Azul does not currently have specific
corporate performance criteria related to executive compensation as discussed
above, Azul does not believe that a five-year comparison of cumulative total
shareholder return for Azul to a broad equity market index and peer companies in
the same line-of-business or other companies with similar market capitalization
would be meaningful.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Tudor Trust
Tudor Trust and Jeffrey L. Neuman, a director and executive officer of
Azul, hold Azul stock which carries a majority of the voting rights associated
with issued and outstanding Azul stock. Mr. Neuman is the grantor, sole trustee
and sole current beneficiary of Tudor Trust. Mr. Neuman is also a director and
executive officer of Xyvision Enterprise Solutions, currently a 57% owned
subsidiary of Azul. Mr. Neuman holds the director and executive officer
positions in Azul and Xyvision Enterprise Solutions without compensation. Tudor
Trust also directly holds a minority stock interest in Xyvision Enterprise
Solutions and has the right to increase that interest through the conversion of
indebtedness.
Azul has a line of credit loan agreement with Tudor Trust under which
Tudor Trust may loan to Azul up to $12,500,000. As of June 30, 2000, Azul was
indebted to Tudor Trust under this loan agreement in the total principal amount
of $12,357,000. The first $5,000,000 of the principal balance bears interest at
6% and the remaining principal balance bears interest at 8%. The loan is secured
by a pledge of all of Azul's assets, including the shares of Xyvision Enterprise
Solutions stock that it holds.
In May 2000, Tudor Trust and Azul amended this loan agreement to
increase the aggregate amount of the loan by approximately $175,000 to the
current total of $12,500,000, and to change the maturity date to March 31, 2001.
Tudor Trust and Azul also agreed that:
o the interest payable of $830,897 for the period from July 1, 1998
through December 31, 1998 could be converted by Tudor Trust into
158,266 shares of Azul common stock by March 31, 2000,
o the interest payable of $1,039,919 for the period from January 1,
1999 through March 31, 2000 would be paid by the issuance to Tudor
Trust of 984,624 shares of Azul common stock, and
o interest for subsequent periods would at the option of Tudor Trust
be paid in cash or in shares of Azul common stock valued for such
purposes based upon their public trading market price at the end of
each quarterly interest payment period.
In connection with this amendment Azul agreed to issue to Tudor Trust a warrant
to purchase 500,000 shares of Azul common stock for an exercise price of $5.25
per share, with the term of the warrant ending on March 31, 2001.
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Xyvision Enterprise Solutions also has a line of credit loan agreement
with Tudor Trust under which Tudor Trust may loan to Xyvision Enterprise
Solutions up to $1,850,000. As of June 30, 2000, Xyvision Enterprise Solutions
was indebted to Tudor Trust under this loan agreement in the total principal
amount of $1,850,000. This loan bears interest at 8% and has a maturity date of
March 31, 2003. On August 9, 2000, Tudor Trust gave notice of its intent to
convert the full balance of the Xyvision Enterprise Solutions line of credit
into 649,123 shares of Xyvision Enterprise Solutions Class A common stock at
$2.85 per share under the terms and conditions of a February 2000 private
placement agreement by Xyvision Enterprise Solutions.
In June 2000, Tudor Trust also agreed to provide a separate $5,000,000
loan facility for Azul to be utilized by Azul for the making of loans to or
investments in other entities. The loan bears interest at 8%, is due March 31,
2001, and is secured by a pledge of all of the assets of Azul on the same basis
as the other indebtedness of Azul to Tudor Trust. The additional loan is
convertible at the option of Tudor Trust into Azul common stock at a price of
$3.25 per share. Azul has utilized this loan facility to make a loan commitment
to Antiqnet.com as discussed below, and on August 21, 2000 Azul borrowed
$2,000,000 under this agreement to loan to Antiqnet.com.
The transactions between Azul and Xyvision Enterprise Solutions with
Tudor Trust have been unanimously approved by the disinterested members of the
board of directors of each company.
Antiqnet.com
Tudor Trust holds a majority interest in Antiqnet.com as a result of
Antiqnet.com stock that it owns and stock which it has a right to acquire
through the conversion of debt. Mr. Neuman and Deborah Seidel, a director of
Azul, are also directors and executive officers of Antiqnet.com.
In June 2000, Azul entered into a $2,000,000 loan facility agreement
with Antiqnet.com. The loan agreement provides for Azul to loan Antiqnet.com up
to $2,000,000 convertible under present circumstances into 9% of the equity
interests of Antiqnet.com, with provisions for possibly subsequently increasing
that percent. The loan bears interest at 10% per annum, is secured by a first
lien on all of the assets of Antiqnet.com and is convertible at the option of
Azul into the common stock of Antiqnet.com. As of August 21, 2000, Azul had
loaned the entire $2,000,000 to Antiqnet.com under this agreement.
The $2,000,000 loan facility transaction was approved by the
disinterested members of the board of directors of each company.
Prospective Transactions
Azul provides financial and management support principally to high
technology companies. Part of Azul's business strategy is planned investments in
companies generally within technology sectors such as the e-commerce and
biotechnology industries. At this time Xyvision Enterprise Solutions is Azul's
principal portfolio company.
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Investment opportunities to be considered by Azul may be provided to
Azul by Tudor Trust as a result of Tudor Trust's existing investments in, and
frequent control of, other companies. In those instances an investment by Azul
will be approved by its disinterested directors with independent legal and
financial advice.
Azul will provide financial capital to its portfolio companies as
extension of debt, purchase of common stock or purchase of preferred stock in
the form of other financial instruments best determined to meet the specific and
unique requirements of each portfolio or potential portfolio company. Such
capital has historically been received by Azul from Tudor Trust. In the future,
Azul may attract further investment from Tudor Trust in order to expand its
investment in current and future portfolio companies.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, Azul's
directors, executive officers and beneficial owners of more than 10% of Azul
common stock must report their initial beneficial ownership of the common stock
and any changes in that ownership in reports which must be filed with the SEC
and Azul. The SEC has designated specific deadlines for these reports and Azul
must identify in this information statement those persons who did not file these
reports when due.
Based solely on a review of reports filed with Azul, all directors and
executive officers timely filed all reports regarding transactions in Azul
securities required to be filed for the fiscal year ended March 31, 2000, except
as follows:
Jeffrey L. Neuman and Tudor Trust, of which Mr. Neuman is the grantor,
sole trustee and sole current beneficiary, each failed to file a Form 5 for the
fiscal year ended March 31, 2000.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Richard A. Eisner & Company LLP served as Azul's independent
public accountants for the fiscal year ended March 31, 2000. Azul has not yet
selected independent public accountants for the fiscal year ending March 31,
2001. Representatives of Richard A. Eisner & Company are expected to be present
at the meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
On February 28, 2000, Azul replaced PricewaterhouseCoopers LLP with
Richard A. Eisner & Company as its independent public accountants for the fiscal
year ended March 31, 2000. Azul's audit committee and board of directors
participated in and approved the decision to change independent public
accountants.
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The reports of PricewaterhouseCoopers LLP on the Azul financial
statements for the fiscal years ended March 31, 1999 and 1998 contained no
adverse opinion and were not qualified or modified as to audit scope or
accounting principles, but their report dated June 25, 1999 relating to their
audit of the financial statements for the fiscal year ended March 31, 1999
included a separate paragraph concerning Azul's ability to continue as a going
concern and their report dated June 11, 1998 relating to their audit of the
financial statements for the fiscal year ended March 31, 1998 disclaimed an
opinion as a result of significant uncertainties regarding Azul's ability to
continue as a going concern.
In connection with its audits of the financial statements for the
fiscal years ended March 31, 1999 and 1998 and through February 28, 2000, there
were no disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements if not resolved to the satisfaction of
PricewaterhouseCoopers LLP would have caused them to make reference thereto in
their report on the financial statements for such fiscal years.
OTHER MATTERS
The Azul board of directors knows of no other business which will be
presented for consideration at the annual meeting other than the election of
directors.
By Order of the Board of Directors,
/s/ Edward S. Wittman
------------------------------
Edward S. Wittman, Secretary
August 29, 2000
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