<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMBI INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/_/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/_/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(1)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
/X/ No Fee Required.
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:*
-----------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------------
/_/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid: _________________________________________________
2) Form, Schedule or Registration No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
- -----------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
AMBI INC.
NOTICE OF AN ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of AMBI
Inc. (the "Company") will be held at the Rye Town Hilton, 699 Westchester
Avenue, Rye Brook, New York at 10:00 AM on November 19, 1999 for the following
purposes as set forth in the accompanying Proxy Statement:
1. To elect seven directors to serve for a term of one year;
2. To ratify the selection and appointment by the Company's Board
of Directors of KPMG LLP, independent certified public
accountants, as auditors for the Company for the fiscal year
ending June 30, 2000; and
3. To transact such other business as may properly come before
the meeting or any adjournments thereof.
Holders of record of the Company's Common Stock at the close of
business on October 8, 1999 will be entitled to vote at the meeting.
By Order of the Board of Directors
/s/ BENJAMIN T. SPORN
BENJAMIN T. SPORN, Secretary
Dated: October 12, 1999
Whether or not you plan to attend the meeting, please date and sign the
enclosed proxy and return it in the envelope provided. Any person giving a proxy
has the power to revoke it at any time prior to its exercise and if present at
the meeting may withdraw it and vote in person. Attendance at the meeting is
limited to shareholders, their proxies and invited guests of the Company.
1
<PAGE>
AMBI INC.
4 Manhattanville Road
Purchase, New York 10577
--------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 19, 1998
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of proxies to be voted at the Annual Meeting of
Shareholders of the Company to be held at the Rye Town Hilton, 699 Westchester
Avenue, Rye Brook, New York at 10 A.M. on November 19, 1999, and at any
adjournments thereof. The shares represented by proxies that are received in the
enclosed form and properly filled out will be voted in accordance with the
specifications made thereon. In the absence of specific instructions, proxies
will be voted in accordance with the recommendations made herein with respect to
the proposals described in this Proxy Statement. Proxies may be revoked by
shareholders by written notice received by the Secretary of the Company at the
address set forth above, at any time prior to the exercise thereof. Shareholders
of record at the close of business on October 8, 1999 are entitled to notice of
and to vote at the Annual Meeting or any adjournments thereof. As of October 8,
1999 the Company's voting securities outstanding totaled 30,514,215 shares of
Common Stock.
Item 1 -- Election of Directors
It is the intention of the persons named in the enclosed form of proxy,
unless such proxy specifies otherwise, to nominate and to vote the shares
represented by such proxy for the election of the nominees listed below to hold
office until the next Annual Meeting of Shareholders or until their respective
successors shall have been duly elected and qualified. The Company has no reason
to believe that any of the nominees will become unavailable to serve as
directors for any reason before the Annual Meeting. However, in the event that
any of them shall become unavailable, the person designated as proxy reserves
the right to substitute another person of his choice when voting at the Annual
Meeting. Certain information regarding each nominee is set forth in the table
and text below. The number of shares, if any, beneficially owned by each nominee
is listed below under "Principal Shareholders and Share Ownership of Directors
and Officers."
The directors serve for a term of one year and until their successors
are duly elected and qualified. The Board of Directors held 6 meetings in the
fiscal year ended June 30, 1999. All directors attended all meetings of the
Board during the fiscal year, except for two directors who each attended five
meetings. Sander A. Flaum was elected to the Board on May 18, 1999.
Non-management Directors each receive a quarterly director's fee of $1,800 and
the Chairman of the Board receives a quarterly director's fee of $3,600. Each
also receives $500 for each meeting of the Board attended in person, $250 for
each meeting of the Board attended telephonically, and each receives annually
options to acquire 10,000 shares of Common Stock. The Company has an Audit
Committee of the Board which consists of Mr. Flynn and Dr. Benson. There are no
arrangements as to compensation of members of this committee in such capacity.
The Audit
2
<PAGE>
Committee held two meetings during the fiscal year ended June 30,
1999. The Company has a Compensation Committee of the Board which currently
consists of Dr. Cross, Mr. Flynn and Dr. Pollack. There are no arrangements as
to compensation of members of this committee in such capacity. The Compensation
Committee held two meetings during the fiscal year ended June 30, 1999. Officers
serve at the pleasure of the Board of Directors. There are no family
relationships among directors, nominees or executive officers, nor are there any
arrangements or understandings between any such director or nominee and any
other person pursuant to which any director or nominee was selected as such
other than as described below.
On December 12, 1996, the Company completed the sale of its UK-based
subsidiary, Aplin & Barrett Limited ("A&B") to Burns, Philp & Company Limited
("BP") in accordance with the terms of a Share Purchase Agreement for $13.5
million in cash and the payment to the Company of 2.42 million shares of the
Company's Common Stock held by BP. So long as BP owns at least 20% of the
Company's outstanding common stock, BP is entitled to nominate one member for
election to the Company's Board. To date, BP has not nominated a director. See
also "Certain Relationships and Related Transactions."
All of the nominees are currently serving as directors. The name, age
and term of office as director of each nominee for election as director and his
or her present position(s) with the Company and other principal affiliations
are:
<TABLE>
<CAPTION>
Nominee for Election Director Since Position(s)
<S> <C> <C>
Fredric D. Price (53) 1994 President and Chief Executive Officer
Robert E. Flynn (66) 1996 Chairman of the Board
P. George Benson, PhD (53) 1998 Dean, Terry College of Business,
University of Georgia
Audrey T. Cross, PhD (53) 1995 Associate Clinical Professor, School of
Public Health, Columbia University
Sander A. Flaum (62) 1999 Chief Executive Officer,
Robert A. Becker, Inc. EURO SCG
Marvin Moser, MD (75) 1997 Clinical Professor of Medicine, Yale
University School of Medicine
Robert E. Pollack, PhD (59) 1995 Professor of Biological Science,
Columbia University
</TABLE>
Fredric Price has been President, Chief Executive Officer and a
Director of the Company since September 1994. From July 1991 to September 1994,
he was Vice President, Finance and Administration and Chief Financial Officer of
Regeneron Pharmaceuticals, Inc. For more than five years prior to joining
Regeneron, he was head of RxFDP, a consulting firm which provided strategic
planning, market development, and new product introduction services to
pharmaceutical and other health care businesses. From 1973 to 1986 he was at
Pfizer Pharmaceuticals, where he
3
<PAGE>
was a Vice President with both line and staff responsibilities. He has a BA from
Dartmouth College and an MBA from the Wharton School of the University of
Pennsylvania.
Robert E. Flynn was elected a Director of the Company in October 1996
and Chairman of the Board of Directors in October 1997. Mr. Flynn is a Senior
Advisor to CSC Index, management consultants. He served as Chairman of the
NutraSweet Company from June 1990 until he retired in December 1995. Mr. Flynn
also served as Chief Executive Officer of the NutraSweet Company from June 1990
until March 1995. From 1981 to 1990, he served in various executive capacities
with Fisher Controls International Inc., including Chairman and Chief Executive
Officer. Prior thereto from 1957 to 1981, Mr. Flynn held positions of increasing
importance with The Carborundum Co. Mr. Flynn is also a member of the Board of
Stanley Technology Group. He received a BSc from Loyola College, a BEE from
McGill University and an MBA from Rutgers University.
P. George Benson, PhD, was elected a Director of the Company in July
1998. Dr. Benson is Dean of the Terry College of Business and holds the Simon S.
Selig, Jr. Chair for Economic Growth at the University of Georgia. Dr. Benson
was previously the Dean of the Faculty of Management at Rutgers University and a
professor of decision sciences at the Carlson School of Management of the
University of Minnesota. In 1997, he was appointed by the U.S. Secretary of
Commerce to a three year term as one of the nine judges for the Malcolm Baldrige
National Quality Award. In 1996, Business News New Jersey named Dr. Benson one
of New Jersey's "Top 100 Business People". He received a BS from Bucknell
University and a PhD in decision sciences from the University of Florida.
Audrey T. Cross, PhD, was elected a Director of the Company in January
1995. Dr. Cross has been Associate Clinical Professor at the Institute of Human
Nutrition at the School of Public Health of Columbia University since 1988. She
also works as a consultant in the areas of nutrition and health policy. She has
served as a special assistant to the United States Secretary of Agriculture as
Coordinator for Human Nutrition Policy and has worked with both the United
States Senate and the California State Senate on nutrition policy matters. Dr.
Cross received a BS in dietetics, a Master of Public Health in nutrition and a
PhD from the University of California at Berkeley, and a JD from the Hastings
College of Law at the University of California at San Francisco.
Sander A. Flaum was elected a Director of the Company in May 1999. Mr.
Flaum has been CEO of Robert A. Becker, Inc. EURO SCG for 10 years, previously
having served in increasingly responsible management positions at Lederle
Laboratories. Mr. Flaum is Adjunct Associate Professor of Marketing at New York
University's Stern School of Business. Mr. Flaum is also a member of the Boards
of Directors of the Fischer College of Business at The Ohio State University,
Hollins Communications Research Institute and Neopharm Corporation. Mr. Flaum
received a BA from The Ohio State University and MBA from Fairleigh Dickinson
University.
Marvin Moser, MD was elected to the Board of Directors in October 1997.
He is clinical professor of medicine at Yale and senior medical consultant at
the National High Blood Pressure Education Program of the National Heart, Lung
and Blood Institute. Dr. Moser's work has focused on non pharmacological
approaches to the prevention and control of hypertension and he has published
extensively on this subject with over 300 publications. He has contributed to
over 30 books and numerous physician and patient education programs. Dr. Moser
is also a member
4
<PAGE>
of the Board of The Third Avenue Value Funds. Dr. Moser holds a BA from Cornell
University and an MD from Downstate University College of Medicine.
Robert E. Pollack, PhD, was elected a Director of the Company in
January 1995. Dr. Pollack has been a Professor of Biological Sciences at
Columbia University since 1978. In addition, from 1982 to 1989 he was Dean of
Columbia College. Prior thereto he was Professor of Microbiology at the State
University of New York School of Medicine at Stony Brook, Senior Scientist at
Cold Spring Harbor Laboratory, Special NIH fellow at the Weizmann Institute in
Israel, and NIH Fellow in the Department of Pathology at New York University
School of Medicine. He is the author of more than one hundred research papers on
the molecular biology of viral oncogenesis, a dozen articles in the popular
press, and three books. He received a BA in physics from Columbia University and
a PhD in biology from Brandeis University.
Executive Officers
The name, age and position(s) of each executive officer of the Company are:
<TABLE>
<CAPTION>
Name Position(s)
<S> <C>
Fredric D. Price (53) President, Chief Executive Officer and Director
Benjamin T. Sporn (61) Senior Vice President, General Counsel and Secretary
Gerald A. Shapiro (52) Vice President, Finance and Administration, and Chief
Financial Officer
Jonathan de la Harpe, PhD (54) Vice President, Technical Operations
Alan J. Kirschbaum (54) Controller
</TABLE>
----------------------------
Officers of the Company serve at the pleasure of the Board of Directors
subject to any contracts of employment. See the biographical descriptions under
nominees for election as directors for additional information on Mr. Price.
Benjamin T. Sporn has been legal counsel to the Company since 1990 and
has served as Secretary of the Company since 1986, and was appointed Senior Vice
President and General Counsel in February 1998. He was an attorney with AT&T
from 1964 until December 1989 when he retired from AT&T as a General Attorney
for Intellectual Property Matters. Mr. Sporn was a director of the Company from
1986 until 1994. He received a BSE degree from Rensselaer Polytechnic Institute
and a JD degree from American University.
Gerald A. Shapiro was appointed Vice President, Finance and
Administration & Chief Financial Officer of the Company in March 1998. From 1996
to 1998, Mr. Shapiro was Managing Director in the Corporate Finance practice at
KPMG Peat Marwick LLP, specializing in merger and acquisition activities. From
1995 to 1996, he was a Vice President in the Equity Capital Group of GE Capital
Services and also served as Chief Operating Officer and Director of Shoe-Town,
Inc., a GE Capital unit. From 1991 to 1995, Mr. Shapiro was a Managing Director
in the healthcare investment banking group at Furman Selz LLC, concentrating on
5
<PAGE>
pharmaceuticals and medical devices. Prior to that, he held senior executive
positions at Equitable Capital Management Corporation and ITT Corporation with
primary focus on mergers and acquisitions. Mr. Shapiro received a BSEE from City
College of New York and an MBA from the Columbia University Graduate School of
Business.
Jonathan de la Harpe, PhD, was appointed Vice President, Technical
Operations, of the Company in February 1998. Dr. de la Harpe has been on the
staff at AMBI since 1989, holding positions as Group Leader, Analytical and
Biochemistry; Program Manager; Senior Manager, Product Development; and Director
of Technical Operations, Pharmaceutical Products. In the years 1981 to 1988, Dr.
de la Harpe held positions as Post-doctoral Fellow and later Research Associate
at The Rockefeller University, and as Assistant Professor at Cornell University
Medical College. During this period, Dr. de la Harpe also held positions as a
Visiting Scientist at Genentech Inc., and Scientist at the Friedrich Miescher
Institute in Basel, Switzerland. Dr. de la Harpe holds a BSc (Hons) and PhD from
the University of Cape Town, South Africa.
Alan J. Kirschbaum was appointed Controller in October 1999. From 1996
to 1999, Mr. Kirschbaum was Vice President and Controller of AMS Asset
Management Services. From 1984 to 1996, he held a series of increasingly
responsible financial positions with Ascom Timeplex, Inc. He holds a BS from
Pennsylvania State University, an MBA from Pace University, and is a Certified
Public Accountant.
Executive Compensation
The following table sets forth the compensation paid or accrued by the
Company during the three fiscal years ended June 30, 1999 (i) to its Chief
Executive Officer and (ii) to the three highest paid current employees of the
Company, and two former executives, whose cash compensation exceeded $100,000 in
the 1999 fiscal year:
6
<PAGE>
SUMMARY COMPENSATION TABLE (1)(2)(5)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Name and Principal Position Long-Term All Other
(a) Annual Compensation Compensation Compensation
(b) (c) (d) (e) (i)
- ---------------------------------------------------------------------------------------------------------------------
Period Salary ($) Bonus ($) Securities ($)
Underlying
Options/SARs
(#)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fredric D. Price, President, 7/1/96 - 275,000 90,000 35,000
Chief Executive Officer and 6/30/97
Director
- ---------------------------------------------------------------------------------------------------------------------
7/1/97 - 275,000 75,000 465,000
6/30/98
- ---------------------------------------------------------------------------------------------------------------------
7/1/98 - 275,000 200,000 21,154
6/30/99
- ---------------------------------------------------------------------------------------------------------------------
Jonathan de la Harpe, Vice
President, Technical 7/1/96 - 89,000 10,000
Operations 6/30/97
- ---------------------------------------------------------------------------------------------------------------------
7/1/97 - 113,000 10,000
6/30/98
- ---------------------------------------------------------------------------------------------------------------------
7/1/98 - 129,923 15,000
6/30/99
- ---------------------------------------------------------------------------------------------------------------------
Alan Gallantar, Treasurer and
Controller (3) 3/23/98 - 33,654 90,000
6/30/98
- ---------------------------------------------------------------------------------------------------------------------
7/1/98 - 146,212 5,333
6/30/99
- ---------------------------------------------------------------------------------------------------------------------
Steven Morvay, Vice President 7/13/98 - 153,846 52,885
- - Marketing and Sales (4) 6/28/99
- ---------------------------------------------------------------------------------------------------------------------
Gerald A. Shapiro, Vice 3/9/98 - 49,231 75,000
President - Finance & 6/30/98
Administration, & CFO
- ---------------------------------------------------------------------------------------------------------------------
7/1/98 - 160,000 25,000 10,666
6/30/99
- ---------------------------------------------------------------------------------------------------------------------
Benjamin T. Sporn, Senior 7/1/96 - 127,500 5,000 42,500
Vice President, General 6/30/97
Counsel and Secretary
- ---------------------------------------------------------------------------------------------------------------------
7/1/97 - 147,000 15,000
6/30/98
- ---------------------------------------------------------------------------------------------------------------------
7/1/98 - 160,000 30,000 15,000
6/30/99
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
(1) The above compensation does not include the use of an automobile and
other personal benefits, the total value of which do not exceed as to
any named officer or director or group of executive officers, the
lesser of $50,000 or 10% of such person's or persons' cash compensation
(2) Pursuant to the regulations promulgated by the Securities and Exchange
Commission (the "Commission"), the table omits a number of columns
reserved for types of compensation not applicable to the Company.
(3) Mr. Gallantar's employment with the Company terminated September 26,
1999.
(4) Mr. Morvay's employment with the Company terminated June 28, 1999.
(5) All Other Compensation represents loans and interest forgiven.
None of the individuals listed above received any long-term incentive plan
awards during the fiscal year.
Employment Agreement
The Company entered into an employment agreement, effective September
1994, with Fredric Price, which was amended and restated on April 1, 1998. The
agreement has a three year term which ends on March 31, 2001, and provides for
an annual salary of $275,000 and the forgiveness of one-third of a $59,500 loan
on March 31 of each year of the term so long as Mr. Price is then employed by
the Company. See table of Option/SAR Grants in Last Fiscal Year for information
on certain stock options which have been granted to Mr. Price under the
employment agreement. Although employment under the agreement is at will, if
employment is terminated by the Company under certain circumstances, Mr. Price
will receive one year's salary in a single payment, certain benefits will
continue for twelve months after termination, and all of Mr. Price's stock
options will vest.
Stock Option Plans
The Board of Directors has adopted and the shareholders have approved
five Stock Option Plans (the "Plan(s)"):
1. The Incentive Stock Option Plan provides for the grant of qualified
incentive stock options to officers and key employees.
2. The Non-qualified Stock Option Plan provides for the grant of
options to various persons who render certain services to the Company.
3. The 1989 Stock Option Plan provides for the grant of options to
either group which, in the case of employees, may be incentive stock options.
8
<PAGE>
4. The 1991 Stock Option Plan provides for the grant of options to
either group which, in the case of employees, may be incentive stock options.
5. The 1998 Stock Option Plan provides for the grant of options to
either group which, in the case of employees, may be incentive stock options.
Each of the Incentive and Non-qualified Stock Option Plans permits the
purchase of an aggregate of up to 250,000 shares of Common Stock. The 1989 Stock
Option Plan permits the purchase of an aggregate of up to 500,000 shares of
Common Stock. The 1991 Stock Option Plan permits the purchase of an aggregate of
up to 3,000,000 shares of Common Stock. The 1998 Stock Option Plan permits the
purchase of an aggregate of up to 2,500,000 shares of Common Stock. The purpose
of the Plans is to attract and retain competent executive personnel and other
key employees and consultants and to provide incentives to all such persons to
use their effort and skill for the advancement and betterment of the Company by
permitting them to participate in the ownership of the Company.
Options granted as qualified incentive stock options are intended to
qualify as Incentive Stock Options within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended. The exercise price of Incentive Stock
Options granted under the Plans shall not be less than the fair market value
(110% of the fair market value for 10% or greater shareholders) of the Common
Stock on the date of grant. Incentive Stock Options may not be exercised later
than ten years from the date of grant (five years for 10% or greater
shareholders). Determinations as to recipients of stock options under the Plans
and other terms of such grants are made by the Company's Board of Directors.
The following table sets forth information as of June 30, 1999 with
regard to options granted (i) to the Company's Chief Executive Officer, and (ii)
to other officers of the Company named in the Summary Compensation Table.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Potential Realizable
Individual Grants Value At Assumed Annual
Rates Of Stock
- -------------------------------------------------------------------------------------------------------------------
Percent Of
Total
Number Of Options
Securities Granted To Exercise
Underlying Employees In Of Base
Name Options Fiscal Year Price Expiration
(a) Granted (#) (c) ($/Sh) Date 5% ($) 10% ($)
(b) (d) (e) (f) (g)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A. Jonathan de la Harpe 15,000 2.46 $1.4375 (1) $13,561 $34,365
- -------------------------------------------------------------------------------------------------------------------
B. Alan Gallantar (2) 10,000 1.64 $1.4375 (1) $9,040 $22,910
- -------------------------------------------------------------------------------------------------------------------
C. Steven Morvay (3) 100,000 16.38 $1.40625 $4,289 $8,719
- -------------------------------------------------------------------------------------------------------------------
D. Fredric D. Price 0 0 - - - -
- -------------------------------------------------------------------------------------------------------------------
E. Gerald A. Shapiro 25,000 4.10 $1.4375 (1) $22,601 $57,275
- -------------------------------------------------------------------------------------------------------------------
F. Benjamin T. Sporn 25,000 4.10 $1.4375 (1) $22,601 $57,275
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Vesting 20% per year; expiration the earlier of 5 years from vesting or
89 days after termination of employment.
(2) Mr. Gallantar's employment with the Company terminated on September 26,
1999.
(3) Mr. Morvay's employment with the Company terminated June 28, 1999,
40,000 options vested upon termination and expire December 28, 1999,
and 60,000 options expired upon termination.
10
<PAGE>
The following table sets forth information with regard to aggregated
option values at June 30, 1999 of options granted (i) to the Company's Chief
Executive Officer, and (ii) to the highest paid employees of the Company whose
cash compensation exceeded $100,000 per year in such year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Individual Grants
- -------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Name Shares Value Number of Unexercised Options at Value of Unexercised In-the-Money
Acquired realized ($) FY-End (#) Options at FY-End
in
Exercise
(#)
- -------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jonathan de la 0 0 34,000 56,000 $376 $16,511
Harpe
- ---------------- ------------ --------------- ---------------- ------------------ ------------------ ----------------
Alan 0 0 10,000 40,000 $3,075 $25,019
Gallantar
- ---------------- ------------ --------------- ---------------- ------------------ ------------------ ----------------
Steven Morvay 0 0 40,000 0 $103,200 $0
- ---------------- ------------ --------------- ---------------- ------------------ ------------------ ----------------
Fredric D. 0 0 669,000 331,000 $77,577 $155,155
Price
- ---------------- ------------ --------------- ---------------- ------------------ ------------------ ----------------
Gerald A. 0 0 20,000 80,000 $10,788 $68,164
Shapiro
- ---------------- ------------ --------------- ---------------- ------------------ ------------------ ----------------
Benjamin T. 0 0 104,500 53,000 $564 $27,268
Sporn
- ---------------- ------------ --------------- ---------------- ------------------ ------------------ ----------------
</TABLE>
11
<PAGE>
Pension Plans
AMBI Inc.
Eligible employees of the Company are entitled to participate in the
Burns Philp Inc. Retirement Plan for Non-Bargaining Unit Employees, a
non-contributory pension plan (the "Pension Plan") maintained by Burns Philp as
long as Burns Philp maintains the Pension Plan and owns at least 20% of the
Company's outstanding Common Stock. Burns Philp currently holds approximately
25% of the Company's outstanding Common Stock. Assuming retirement at age 65,
the Pension Plan provides benefits equal to the greater of (a) 1.1% of the
employee's final average earnings multiplied by the number of years of credited
service plus 0.65% of the employee's final average earnings in excess of the
average of the contribution and the benefit basis in effect under Section 230 of
the Social Security Act for each year in the 35-year period ending with the year
of Social Security retirement age, multiplied by the employee's years of
credited service up to 35, minus any predecessor plan benefit in the case of an
employee who participated in a predecessor plan or (b) $24 multiplied by the
number of years of credited service up to 25 years plus $12 multiplied by the
years of employment from 26-40 years, minus any predecessor plan benefit in the
case of an employee who participated in a predecessor plan. The "final average
earnings" are the average monthly earnings during the five highest-paid
consecutive calendar years within the last ten calendar years of credited
service with the Company. Earnings include the salary and bonus listed in the
summary compensation table. Earnings which may be considered under the Pension
Plan are limited to $160,000 per year subject to annual cost of living
adjustments as determined by the IRS.
The following table sets forth estimated annual benefits payable upon
retirement, assuming retirement at age 65 in 1999 and a single life annuity
benefit, according to years of credited service and final average earnings. The
benefits listed are not subject to any deduction for Social Security or other
offset amounts.
Years of Credited Service
<TABLE>
<CAPTION>
final average
earnings 15 20 25 30 35
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$25,000 $4,320 $5,760 $7,200 $8,160 $9,600
$50,000 $9,840 $13,200 $16,440 $19,800 $23,040
$75,000 $16,440 $21,840 $27,360 $32,880 $38,400
$100,000 $22,920 $30,600 $38,280 $45,960 $53,640
$150,000 $36,120 $48,120 $60,240 $72,240 $84,240
$160,000 $38,760 $51,600 $64,560 $77,520 $90,360
and up
</TABLE>
Jonathan de la Harpe, Gerald A. Shapiro, Benjamin T. Sporn and Fredric
D. Price each have 7.0, 1.5, 7.0 and 4.75 years, respectively, of credited
service under the Pension Plan as of
12
<PAGE>
June 30, 1999, and, at age 65, would have approximately 18, 15, 10, and 17 years
of credited service, respectively.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the period from July 1, 1998 through June 30, 1999, except
as noted below, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were complied
with. The Company has information that Steven Morvay, a former employee, failed
to file one or more Forms 4 reporting purchases and sales of the Company's
Common Stock during the fiscal year ended June 30, 1999.
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a
hypothetical investment made on June 30, 1994 through June 30, 1999 (assuming
reinvestment of dividends) in: (a) the Company's Common Stock; (b) all NASDAQ
stocks and (c) all pharmaceutical companies listed on NASDAQ. Pharmaceutical
companies represent the industry grouping for which information was readily
available which is most comparable to the Company. The graph shows how a $100
investment would increase or decrease in value over time, based on dividends
(stock or cash) and increases or decreases in the market price of the stock and
each of the indexes.
[LINE CHART APPEARS HERE]
Date AMBI NASDAQ NASDAQ Pharmaceutical
6/30/94 100 100 100
6/30/95 46.15 133.48 133.11
6/28/96 161.54 171.38 195.99
6/30/97 69.23 208.43 199.41
6/30/98 43.08 274.43 204.31
6/30/99 70.15 392.16 285.27
13
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Board of Directors determines executive compensation taking into
consideration recommendations of the Compensation Committee. No member of the
Company's Board of Directors is an executive officer of a company whose
compensation committee or board of directors includes an executive officer of
the Company.
Board of Directors Report on Executive Compensation
The process of determining the compensation of the executive officers
of the Company includes, among other things, evaluations of its executive
officers performance against certain objective and subjective assessments and
takes into consideration the performance of Company against planned objectives.
In March 1998 the Board of Directors approved a new three-year employment
agreement with Mr. Price. See "Employment Agreement." The Board adjusted
compensation of certain officers during the fiscal year to reflect its
evaluations of performance.
Principal Shareholders and Share Ownership of Directors and Officers.
The following table sets forth, as of September 22, 1999, information
regarding the beneficial ownership of the Company's Common Stock based upon the
most recent information available to the Company for (i) each person known by
the Company to own beneficially more than five (5%) percent of the Company's
outstanding Common Stock, (ii) each of the Company's executive officers and
directors and (iii) all officers and directors of the Company as a group. Unless
otherwise indicated, each stockholder's address is c/o the Company, 4
Manhattanville Road, Purchase, New York 10577-2197.
14
<PAGE>
Shares Owned Beneficially and of Record (1)
Name and Address No. of Shares % of Total
Fredric D. Price (2) 699,651 2.25
Robert E. Flynn (3) 102,000 *
P. George Benson (4) 20,000 *
Audrey T. Cross (6) 54,000 *
Jon de la Harpe (4) 34,000 *
Sander A. Flaum (4) 10,000 *
Alan Gallantar (4) 10,000 *
Marvin Moser (4) 65,000 *
Robert E. Pollack (4) 60,000 *
Gerald A. Shapiro (5) 31,300 *
Benjamin T. Sporn (7) 133,625 *
American Home Products Corporation 3,478,261 11.41
5 Giralda Farms
Madison, NJ 07940
Burns Philp & Company Limited (8) 7,763,837 25.46
7 Bridge Street
Sydney, NSW 2000, Australia
All Officers and Directors 1,219,576 3.86
as a Group (10 persons)
(2)(3)(4)(5)(6) and (7)
- ---------------------
* Less than 1%
(1) Includes shares issuable within 60 days upon the exercise of all
options and warrants. Shares issuable under options or warrants
are owned beneficially but not of record.
(2) Includes 669,000 shares issuable upon exercise of currently
exercisable options under the Company's Stock Option Plans.
(3) Includes 90,000 shares issuable upon exercise of currently
exercisable options under the Company's Stock Option Plans.
15
<PAGE>
(4) Consists of shares issuable upon exercise of currently
exercisable options under the Company's Stock Option Plans.
(5) Includes 20,000 shares issuable upon exercise of currently
exercisable options under the Company's Stock Option Plans.
(6) Includes 50,000 shares issuable upon exercise of currently
exercisable options under the Company's Stock Option Plans.
(7) Includes 104,500 shares issuable upon exercise of currently
exercisable options under the Company's Stock Option Plans.
(8) Consists of shares owned by subsidiaries.
Certain Relationships and Related Transactions
As of June 30, 1999, BP owned 7,763,837 shares of Common Stock, and
continues such Common Stock ownership as of the date hereof.
On December 12, 1996, the Company completed the sale of its UK-based
subsidiary, A&B to BP in accordance with the terms of a Share Purchase
Agreement. As part of the transaction, BP has provided the Company with a
revolving line of credit of up to $2.5 million. Any borrowings under this line
of credit can be forgiven under certain circumstances. As of the date hereof, no
amount has been drawn under this line of credit.
In connection with the transaction, the Company and A&B entered into two
License Agreements. Pursuant to the first License Agreement, the Company is
exclusively licensed by A&B for the use of nisin generally in pharmaceutical
products and animal healthcare products. Pursuant to the second License
Agreement, A&B is exclusively licensed by the Company generally for the use of
nisin as a food preservative and for food preservation.
In connection with the transaction, the Company and BP entered into an
Investors' Rights Agreement pursuant to which BP agreed until December 11, 1998,
not to acquire, directly or indirectly, the Company's securities, and to refrain
from selling the Company's Common Stock, except under certain circumstances
through underwritten public offerings and private placement transactions. Until
December 11, 1998 and so long as BP owns at least 10% of the Company's
outstanding common stock, BP was to vote its shares in favor of Fredric D. Price
and one nominee of Fredric D. Price for election to the Company's Board. So long
as BP owns at least 20% of the Company's outstanding common stock, BP is
entitled to nominate one member for election to the Company's Board. Currently,
BP has not nominated a member for election to the Company's Board. The amount of
consideration for the sale was arrived at through arms-length negotiation and a
fairness opinion was obtained.
In October 1998, the Company issued 3,478,261 shares of Common Stock to
AHP for $4.0 million. AHP currently holds approximately 11.4% of the Company's
outstanding Common Stock. Under a separate agreement in October 1998, AHP paid
the Company $1.0 million for exclusive rights to sell the Company's Cardia Salt
in retail markets in the United States.
16
<PAGE>
Item 2 -- Ratification Of Appointment Of Independent Accountants
Subject to the approval by the shareholders, the Board of Directors has
appointed KPMG LLP as the Company's independent public accountants to audit its
financial statements for the fiscal year ending June 30, 2000. KPMG LLP also
audited the Company's financial statements since the fiscal years ended June 30,
1993. It is expected that a representative of KPMG LLP will be present at the
Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK AS INDEPENDENT ACCOUNTANTS FOR FISCAL 2000.
Vote Required
Under New York law, the affirmative vote of a majority of the votes
cast at the Annual Meeting is required ratify the appointment of the independent
accountants. The affirmative vote of a plurality of the votes cast at the Annual
Meeting is required to elect directors.
Expense Of Solicitation
The cost of soliciting proxies, which also includes the preparation,
printing and mailing of this Proxy Statement, will be borne by the Company.
Solicitation will be made by the Company primarily through the mail, but regular
employees of the Company may solicit proxies personally, by telephone or
telegram. The Company will request brokers and nominees to obtain voting
instructions of beneficial owners of stock registered in their names and will
reimburse them for any expenses incurred in connection therewith.
Proposals Of Shareholders
Shareholders of the Company who intend to present a proposal for action
at the 2000 Annual Meeting of Shareholders of the Company, must notify the
Company's management of such intention by notice received at the Company's
principal executive offices not later than July 24, 2000 for such proposal to be
included in the Company's proxy statement and form of proxy relating to such
Meeting.
17
<PAGE>
Financial Statements
The Company's Annual Report to Shareholders for the year ended June 30,
1999 is being delivered with this Proxy Statement to the Company's shareholders.
Other Matters
The Board of Directors knows of no matters that are expected to be
presented for consideration at the Annual Meeting which are not described
herein. However, if other matters properly come before the meeting, it is
intended that the person named in the accompanying proxy will vote thereon in
accordance with his best judgment.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT WILL SAVE THE
EXPENSE OF FURTHER MAILINGS.
Dated: Purchase, New York
October 12, 1999
By Order of the Board of Directors
/s/ BENJAMIN T. SPORN
BENJAMIN T. SPORN, Secretary
18
<PAGE>
AMBI INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
November 19, 1999 10 a.m.
The undersigned hereby appoints Fredric D. Price proxy, with full power
of substitution and revocation, to vote on behalf of the undersigned all shares
of Common Stock of AMBI Inc. which the undersigned is entitled to vote at the
Annual Meeting of Shareholders to be held November 19, 1999 or any adjournments
thereof.
1. ELECTION OF DIRECTORS
FOR all the nominees listed below
(except as marked to the contrary below) / /
WITHHOLD AUTHORITY
To vote for all nominees listed below / /
(INSTRUCTION: To WITHHOLD authority to vote for any individual
nominee, mark the box next to the nominee's name below.)
P. George Benson / /
Audrey T. Cross / /
Sander A. Flaum / /
Robert E. Flynn / /
Marvin Moser / /
Fredric D. Price / /
Robert E. Pollack / /
19
<PAGE>
The Board of Directors recommends a vote FOR the following:
2. RATIFICATION OF APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR FISCAL 2000.
FOR / / AGAINST / / ABSTAIN / /
In his discretion, the proxy is authorized to vote upon such other business
as may properly come before the meeting or any adjournment(s) thereof.
(Continued and to be signed on reverse side)
20
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED TO
ELECT MS. CROSS AND MESSRS. BENSON, FLAUM, FLYNN, MOSER, POLLACK AND PRICE AS
DIRECTORS, AND TO APPROVE THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR 2000.
Dated:
-------------------------
- --------------------------------
Signature
- -------------------------------
Signature if held jointly
(Please sign exactly as ownership appears on this proxy. Where stock is
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)
Please mark, date, sign and
return this Proxy in the enclosed envelope.
21
