CASMYN CORP.
(A COLORADO CORPORATION)
1335 GREG STREET #104
SPARKS, NV 89431
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 23, 1996
To the Stockholders:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of Casmyn
Corp. ("Casmyn" or "the Company") will be held at the Airport Plaza Hotel,
Reno, Nevada, on the 23 day of August, 1996, at 9:00 AM (local time) for the
following purposes:
1. The election of five (5) directors to hold office until the next annual
election of directors by stockholders or until their respective successors
shall have been duly elected and shall have qualified; and
2. Approval of the 1995 Incentive Stock Option Plan as adopted by the Board
of Directors on March 29, 1995.
3. Approval of the 1995 Stock Option Plan as adopted by the Board of
Directors on March 29, 1995.
4. Approval of the 1995 Stock Option Plan for Amyn Dahya as adopted by the
Board on October 3, 1996.
5. Transact such other business that may properly come before the meeting or
any adjournment(s) thereof.
The Board of Directors has fixed the close of business on July 23, 1996, as
the Record Date for the determination of stockholders entitled to notice of
and to vote at such meeting or any adjournment(s) thereof. Only stockholders
of record at the close of business on the Record Date are entitled to notice
of and to vote at such meeting. The stock transfer books will not be closed.
You are cordially invited to attend the meeting; however, proxies are not
being solicited for the meeting. If you wish to vote your shares, you or your
representative must be present in person at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
<TABLE>
<CAPTION>
/s/ Douglas C. Washburn, Secretary
<S> <C>
By:_____________________________________
Douglas C. Washburn, Secretary
Dated: July 24, 1996
</TABLE>
<PAGE>
CASMYN CORP.
_________________________
INFORMATION STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 23, 1996
_________________________
This Information Statement is furnished on behalf of Casmyn Corp. ("Casmyn"),
a Colorado corporation, for the 1996 Annual Meeting of Stockholders to be held
on August 23, 1996 and any adjournment(s) thereof at the time and place and
for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
The executive offices of Casmyn are located at 1335 Greg Street #104, Sparks,
Nevada, 89431. Casmyn's mailing address is 1335 Greg Street #104, Sparks,
Nevada, 89431.
The Notice of Annual Meeting of Stockholders, this Information Statement, and
Casmyn's Annual Report to Stockholders, which includes Casmyn's Annual Report
on Form 10-K for the fiscal year ended September 30, 1995 are being mailed to
stockholders on or about July 24, 1996.
The record date for determination of stockholders entitled to vote at the
Annual Meeting was the close of business on July 23, 1996 (the "Record Date").
As of the close of business on the Record Date there were 7,286,992 issued
and outstanding shares of the common stock of Casmyn (the "common stock") and
2,707,000 voting preferred shares.
Each outstanding share of common stock entitles the holder to one vote on all
matters to be acted upon at the meeting. The presence, in person or by proxy,
of the holders of a majority of the issued and outstanding shares of common
stock entitled to vote at the meeting is necessary to constitute a quorum to
transact business. Assuming the presence of a quorum, the affirmative vote of
a plurality of the votes cast in the election of directors is required for the
election of directors and the affirmative vote of a majority of the shares
represented at the meeting is required to approve the other matters to be
voted upon. Abstentions and broker non-votes will be counted for purposes of
determining a quorum, but shall not be counted as voting for purposes of
determining whether a nominee has received the necessary number of votes for
election.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. Stockholders are welcome to attend the Special Meeting; however,
proxies are not being solicited for the meeting. If you wish to vote your
shares, you or your representative must be present in person at the Annual
Meeting.
Brokerage houses and other custodians, nominees and fiduciaries will, in
connection with shares of common stock registered in their names, be requested
to forward material to the beneficial owners of such shares. The costs will
be borne by Casmyn.
ELECTION OF DIRECTORS
The Bylaws of Casmyn Corp. provide that the Board of Directors shall consist
of not less than two (2) nor more than eleven (11) members and that the number
of directors, within such limits, shall be determined by resolution of the
Board of Directors. The Board of Directors is currently comprised of five (5)
directors.
No circumstances are presently known that would render any nominees named
herein unable or unwilling to serve. Should any of them become unavailable for
nomination or election or refuse to be nominated or to accept election as a
director of Casmyn, then any vacancy occurring in the Board of Directors may
be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A Director elected to
fill a vacancy shall be elected for the unexpired term of his predecessor in
office.
<PAGE>
The persons listed below are current members of the Board of Directors of
Casmyn. All of the current directors have agreed to stand for re-election as
directors.
<TABLE>
<CAPTION>
SHARES OF COMMON PERCENT OF
NOMINEE, AGE, PRINCIPAL OCCUPATION, STOCK BENEFICIALLY COMMON
SERVICE AS DIRECTOR, OTHER DIRECTORSHIPS HELD ON JUNE 30, 1996 STOCK
- -------------------------------------------- --------------------- ----------
<S> <C> <C>
Amyn S. Dahya, age 40, Chairman of
the Board, Chief Executive Officer and
President of Casmyn, director of Casmyn
since 1994. 2,957,000(1) 30%
Hanif S. Dahya, age 41, partner at Sandler,
O'Neil, a Wall Street investment bank, and
Vice Chairman of the Board of Directors of
Casmyn since 1995. 0 -
Vijay J. Fozdar, age 46, Managing Director
of Finance and Corporate Development of
Casmyn, director of Casmyn since 1995. 87,500 (2) *
Sandro Kunzle, age 42, of Managing
Director of Witra Inc., an investment firm
based in Switzerland, director of Casmyn
since 1994. 25,000 (3) *
Mehdi Nimjee, age 48, Consultant to Casmyn,
director of Casmyn since 1994. 50,000 (4) *
* Less than 1%
</TABLE>
(1) Mr. Dahya holds beneficial interest in 2,707,000 preferred shares of
Casmyn representing 100% of the preferred shares outstanding. Each
preferred share is convertible into one share of common at Mr. Dahya's
option and has a voting preference equal to five common shares. Mr. Dahya
also has been granted five year options to purchase 1,000,000 shares of
common stock at $7.00 per share. These options vested 250,000 shares on
October 3, 1995 and 250,000 shares on each of the three anniversary dates
thereafter.
(2) Consists of five year options to purchase 150,000 shares of common stock
at $5.00 per share under the 1995 Incentive Stock Option Plan which vest
annually over a four year period beginning December 1995. Of the 150,000
options to purchase, 37,500 are were vested as of December 31, 1995. Mr.
Fozdar has also been granted five year options to purchase 50,000 shares
at $0.04 per share under the 1995 Stock Option Plan which vested 100% on
the date of grant.
(3) Consists of five year options to purchase 25,000 shares at $0.04 per
share under the 1995 Stock Option Plan which vested 50% on the date of
grant and 50% on June 30, 1996.
(4) Consists of five year options to purchase 50,000 shares at $0.04 per
share under the 1995 Stock Option Plan which vested 50% on the date of
grant and 50% on June 30, 1996.
<PAGE>
BACKGROUND OF OFFICERSAND DIRECTORS OF THE COMPANY
AMYN S. DAHYA. Mr. Dahya has extensive international experience in project
development, engineering, joint ventures and finance. Prior to founding Casmyn
in 1987, Mr. Dahya held senior positions with the Davy McKee organization, one
of the world's largest engineering companies, where he was involved with the
development of minerals and environmental projects internationally. Mr. Dahya
has been the recipient of several distinguished awards. He holds a First Class
Honors Degree in Chemical Engineering from Aston University in Birmingham,
U.K.
HANIF S. DAHYA. Mr. Hanif Dahya, is a Partner of Sandler, O'Neil, a Wall
Street investment bank, and a graduate from Harvard Business School (MBA) with
an undergraduate degree (BSc) in Production Engineering from Loughborough
University, UK. He has built a distinguished career on Wall Street and has
held senior positions with investment banks including E.F. Hutton, L.F.
Rothschild Mortgage Corp. (CEO) and Union Bank of Switzerland (Managing
Director-UBS Securities). His experience includes multi-million dollar
financings and bond issues. Mr. Dahya provides strategic direction with
respect to financial planning and growth of the Casmyn Group of Companies.
VIJAY J. FOZDAR. Mr. Vijay J. Fozdar is Managing Director of Finance and
Corporate Development of Casmyn. In this capacity Mr. Fozdar is responsible
for all investments, merger and acquisition activities and finance, legal and
regulatory functions. Mr. Fozdar has served as President and Director of
Vector Environmental Technologies, Inc., ("VETI") a consolidated subsidiary of
Casmyn Corp. specializing in the development and application of water
treatment technologies for the industrial, institutional and consumer markets.
He is also a member of the Board of Casmyn Corp., whose primary business is
the acquisition and management of producing precious and strategic metals
mines. He also serves on Casmyn's Executive Committee which directs the
Company's strategic growth. In 1988, prior to joining the Casmyn Group of
Companies, Mr. Fozdar founded and served as the Managing Director of Bristol
International, Ltd. and Bristol WorldSource, Inc. These companies specialized
in international trade and sourcing, trade merchant banking, corporate and
project finance and client operations restructuring.
SANDRO KUNZLE. Mr. Kunzle has over 23 years of international banking and
finance experience. During his career, Mr. Kunzle has held senior positions
with several Swiss banks and financial institutions. He currently holds the
position of Managing Director of Witra Inc., an investment firm based in
Switzerland. His expertise in international finance and venture capital adds
significant experience to the Company's international business development
efforts.
MEHDI C. NIMJEE. Mr. Nimjee brings to the Company twenty years of project
management experience in the field of analytical chemistry and its
applications to exploration, mining, agriculture, hazardous materials handling
and the environment. He has also had experience in designing and setting up
project specific laboratories internationally. Mr. Nimjee currently provides
consulting services to Casmyn and VETI in various areas relating to water
treatment and mining.
<PAGE>
TRANSACTIONS WITH DIRECTORS AND OFFICERS
During 1995, VETI, a subsidiary of Casmyn paid $60,000 to Bristol for
international marketing and management consulting services; Mr. Fozdar is a
principal with Bristol WorldSource. There were no other significant
transactions with officers or directors during fiscal year ended September 30,
1995.
BOARD AND COMMITTEE MEETINGS
During 1995 there were 21 meetings of the Board in which all directors
participated.
During 1995 there were no committees of the Board. During 1996 the Board was
expanded from three (3) to five members and an executive committee comprised
of three members of the Board was formed. The Executive committee presently
consists of Mr. Amyn S. Dahya, Mr. Hanif S. Dahya and Mr. Vijay Fozdar and has
met twice during 1996 with all members present.
DIRECTOR COMPENSATION
The only director not otherwise employed by Casmyn was Mr. Sandro Kunzle.
During the fiscal year ended September 30, 1996 Mr. Kunzle was awarded five
year options to purchase 25,000 shares at $0.04 per share under the 1995 Stock
Option Plan, which vested 50% on the date of grant and 50% on June 30, 1996.
DIRECTOR STOCK OPTION PLANS
Employee directors of Casmyn participate in both the 1995 Incentive Stock
Option Plan and the 1995 Stock Option Plan. Nonemployee directors participate
only in the 1995 Stock Option Plan. See "Election of Directors" for additional
information on specific option grants.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information as of June
30, 1996 concerning persons known to Casmyn to own 5% or more of Casmyn stock
together with information concerning beneficial ownership by Casmyn's highest
paid executive officers who received cash compensation in excess of $100,000
for 1995 and Casmyn's officers and directors as a group.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT OF
OWNED ON COMMON
NAME JUNE 30, 1996 STOCK (2)
- ------------------------------- -------------- -----------
<S> <C> <C>
Amyn S. Dahya 2,707,000 (1) 27%
1500 W. Georgia, 18th Floor
Vancouver BC V6G2Z6
Bismillah Children's Foundation 1,807,750 18%
Charlotte House
Nassau, Bahamas
Societe Generale 877,580 9%
37 Rue Du Rocher
Paris, France 75008
</TABLE>
<PAGE>
(1) Mr. Dahya holds beneficial interest in 2,707,000 Series A preferred
shares representing 100% of the Series A preferred shares outstanding.
Each Series A preferred share is convertible into one share of common at
the holders option and votes with common share with each Series A
preferred share having the equivalent votes of five common shares.
(2) Percentages based on combined common and convertible voting preferred
shares of 9,993,992.
COMPENSATION OF EXECUTIVE OFFICERS
In 1994, upon Mr. Dahya's acquisition of a controlling interest in the
Company, the organizational structure of the Company was reconstituted to
implement the development of mineral resources and environmental technologies.
Prior to 1995 there was no compensation paid to any of the officers or
directors. On April 14, 1995, the Company hired an entirely new management
team, all of whom had previously maintained consulting relationships with the
Company and/or are officers of the Company's subsidiary VETI.
Since the Company has no compensation committee, or other board committee
performing equivalent functions, the Company's full Board of Directors
participates in and approves all deliberations concerning executive officer
compensation.
On December 31, 1993, VETI entered into a ten-year employment contract with
Amyn Dahya, Chairman of the Board, President and Chief Executive Officer.
Pursuant to the terms of the contract, Mr. Dahya will earn an annual base
salary of $150,000, which increases by no less than 10% per year if such an
increase is approved by the Board of Directors. Under this contract, Mr.
Dahya also receives reimbursement for business expenses and normal group
benefits available to other executives of VETI. This contract also provides
Mr. Dahya with 5-year, non-qualified, stock options to purchase shares of
common stock of VETI at an exercise price of $1.00 per share. The issuance of
these shares is not intended or anticipated to significantly dilute the equity
of VETI.
<PAGE>
Under the terms of the employment contract, Mr. Dahya has been granted options
to purchase shares of VETI's common stock pursuant to the schedule and LTIP
table:
NO. OF SHARES TIME OF VESTING
- ------------- ------------------------------------------------------
250,000 Immediately upon execution of the Employment Agreement
250,000 When gross sales of VETI reach $2,500,000
250,000 When gross sales of VETI reach $5,000,000
250,000 When gross sales of VETI reach $7,500,000
The following is a Summary Compensation Table disclosing annual compensation
over $100,000 paid to the executive officers of Registration and/or Option/SAR
Grants during the last fiscal year:
SUMMARY COMPENSATION TABLE
(INCLUDES COMPENSATION PAID BY THE COMPANY AND VETI)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------------------
AWARDS PAYOUTS
- ------------------------------------------------------------------------------
All
Fiscal Other Restricted Other
Name and Year Annual Stock Options/ LTIP Compen-
Principal Ending Salary Bonus Comp. Award(s) Sar's Payouts sation
Position
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Amyn Dahya, 1995 $150,000 None None
President 1994 $150,000 None None
and CEO 1993 $100,000 None None $718,750 250,000 None None
(1) (2)
- ------------------------------------------------------------------------------
Vijay Fozdar, 1995 $ 60,000* None $60,000 (4) (4) None None
Director (3)
Managing Director
Finance & Corp.
Development
- ------------------------------------------------------------------------------
Mehdi Nimjee, 1995 $ 60,000 None None (4) (4) None None
Director and 1994 $ 60,000 None None
Consultant 1993 $ 60,000 None None
- ------------------------------------------------------------------------------
Douglas Washburn, 1995 $ 60,000* None None (4) (4) None None
VP, Treasurer and 1994 $ 60,000* None None
Secretary 1993 $ 60,000* None None
- ------------------------------------------------------------------------------
Dennis Welling, 1995 $ 60,000* None None (4) (4) None None
Controller 1994 $ 54,162* None None
1993 $ 50,000* None None
- ------------------------------------------------------------------------------
Duane Dunk, 1995 $ 75,600* None None (4) (4) None None
EVP of VETI 1994 $ 73,000* None None
1993 $ 60,000 None None
- ------------------------------------------------------------------------------
David Chase, 1995 $ 72,000* None None (4) (4) None None
VP of VETI 1994 $ 72,000* None None
1993 $ 72,000* None None $431,250 150,000
(1)
==============================================================================
</TABLE>
* Paid by VETI.
(1) Calculations are based on $3.875 per share, the market value of stock on
December 31, 1993 the date the Options were granted, less the option price
of $1.00 per share. The 150,000 options granted to Mr. Chase expired
December 15, 1995 not having been exercised.
(2) Immediately upon execution of his employment contract, on December 31,
1993, Mr. Dahya was granted an option to purchase 250,000 shares of the
Company's common stock at an exercise price of $1.00 per share for a
period of 5 years, expiring on December 31, 1998. As of the date of this
Prospectus, none of these Options have been exercised.
<PAGE>
(3) Paid to Bristol for international marketing and management consulting
services, Mr. Fozdar is a principal with Bristol WorldSource.
(4) During 1995, the Company and VETI adopted stock option plans for key
officers and employees. All options granted by the Company during 1995
were granted on June 28, 1995; options to purchase 660,000 common shares
were granted with an option price equal to the then market price of $5.00
per share and options to purchase 246,000 shares were granted at $.04 per
share. On October 3, 1996, the Board approved a stock option plan granting
Amyn Dahya options to purchase up to 1,000,000 shares at $7.00 per share.
All options granted during 1995 by VETI were granted on June 20, 1995 with
an option price equal to the market price of $1.00 per share on the grant
date. The following tables summarize the number and value of options to
purchase stock granted under these plans:
THE COMPANY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Securities underlying
Restricted Stock Award (s) Options / SARs
Name ($) (#)
Exercisable / Unexercisable Exercisable / Unexercisable
==============================================================================
<S> <C> <C>
Vijay Fozdar $248,000 / $0 50,000/150,000
Douglas C. Washburn $62,000 / $62,000 12,500/62,500
Dennis E. Welling $24,800 / $24,800 5,000/35,000
Duane Dunk $24,800 / $24,800 5,000/35,000
David Chase $124,000 / $124,000 25,000/75,000
==============================================================================
</TABLE>
VETI
<TABLE>
<CAPTION>
Securities underlying
Restricted Stock Award (s) Options / SARs
Name ($) (#)
Exercisable / Unexercisable Exercisable / Unexercisable
==============================================================================
<S> <C> <C>
Vijay Fozdar $49,500 / $0 99,500/100,500
Douglas C. Washburn $ 0 / $0 13,200/26,800
Dennis E. Welling $ 0 / $0 13,200/26,800
Duane Dunk $ 0 / $0 16,500/33,500
David Chase $ 0 / $0 16,500/33,500
==============================================================================
* Options are subject to vesting period of up to four years.
</TABLE>
No compensation is currently paid to non-employee directors.
All other executive officers of the Company listed above received a combined
annual cash compensation of $156,000 for the fiscal year ended September 30,
1995. In addition, the Company pays a portion of each employee's health
insurance premium.
There are no employment contracts, other than with Mr. Amyn Dahya outlined
below, proposed termination of employment or change-in-control arrangements
between the Company and any of its directors or executive officers.
<PAGE>
The following table lists the Options granted to employees of the Company,
including those granted to Mr. Dahya in his employment contract, during the
last fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
THE COMPANY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
INDIVIDUAL GRANTS STOCK PRICE
APPRECIATION FOR
OPTION TERM
- --------------------------------------------------------------------------------
NO. OF % OF TOTAL
SECURITIES OPTIONS/SAR'S
UNDERLYING GRANTED TO EXERCISE EXPIR-
NAME AND OPTIONS/SAR'S EMPLOYEES OF BASE ATION
POSITION GRANTED IN FISCAL PRICE DATE 5% ($) 10% ($)
YEAR ($/SHARE)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vijay Fozdar, 50,000 6% $.04 6/2000 $316,518 $399,406
Director and 150,000 18% $5.00 12/2003 $ 61,500 $144,000
Managing
Director
of Finance
& Corporate
Development
- --------------------------------------------------------------------------------
Mehdi Nimjee, 50,000 6% $.04 6/2001 $324,431 $419,377
Director and
Consultant
- --------------------------------------------------------------------------------
Douglas Washburn 25,000 3% $.04 6/2001 $162,215 $209,689
VP, Treasurer 50,000 6% $5.00 12/2003 $20,500 $48,000
and
Secretary
- --------------------------------------------------------------------------------
Dennis Welling 10,000 1% $.04 6/2001 $64,900 $83,900
Controller 30,000 4% $5.00 12/2003 $12,300 $28,800
- --------------------------------------------------------------------------------
Duane Dunk, 10,000 1% $.04 6/2001 $64,900 $83,900
EVP of VETI 30,000 4% $5.00 12/2003 $12,300 $28,800
- --------------------------------------------------------------------------------
David Chase, 50,000 6% $.04 6/2001 $324,431 $419,377
VP of VETI 50,000 6% $5.00 12/2003 $20,500 $48,000
================================================================================
</TABLE>
<PAGE>
VETI
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
INDIVIDUAL GRANTS STOCK PRICE
APPRECIATION FOR
OPTION TERM
- --------------------------------------------------------------------------------
NO. OF % OF TOTAL
SECURITIES OPTIONS/SAR'S
UNDERLYING GRANTED TO EXERCISE OF EXPIR-
NAME AND OPTIONS/SAR'S EMPLOYEES BASE PRICE ATION
POSITION GRANTED IN FISCAL PRICE DATE 5% ($) 10% ($)
YEAR ($/SHARE)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vijay Fozdar, 50,000 7% $.01 6/2000 $63,176 $79,720
Director and 150,000 22% $1.00 6/2001 $47,850 $108,150
Managing
Director
of Finance
& Corporate
Development
- --------------------------------------------------------------------------------
Mehdi Nimjee, 50,000 7% $1.00 6/2001 $15,950 $36,050
Director and
Consultant
- --------------------------------------------------------------------------------
Douglas Washburn 40,000 6% $1.00 6/2001 $12,760 $28,840
VP, Treasurer
and
Secretary
- --------------------------------------------------------------------------------
Dennis Welling, 40,000 6% $1.00 6/2001 $12,760 $28,840
Controller
- --------------------------------------------------------------------------------
Duane Dunk, 50,000 7% $1.00 6/2001 $15,950 $36,050
EVP of VETI
- --------------------------------------------------------------------------------
David Chase, 50,000 7% $1.00 6/2001 $15,950 $36,050
VP of VETI
================================================================================
</TABLE>
No other benefits, salaries, bonuses, stock options, grants, SAR's or
compensation have been paid or given to executive officers during the last
fiscal year and it is not anticipated that any will be in the foreseeable
future. The following table lists the aggregated Option/SAR exercises during
the last fiscal year by directors and officers of the Company and the fiscal
year end Option/SAR values of both the exercised and unexercised Option/SAR
Grants:
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUES
THE COMPANY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Number of
Securities Value of Unexercised
Underlying In-the Money
Unexercised Options at
Options at Sept. 30, 1995
Shares Value Sept. 30, 1995 Exercisable/
Name Acquired Realized Exercisable/ Unexercisable
Unexercisable
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Vijay Fozdar 0 0 50,000/150,000 $448,000/$600,000
Douglas C. Washburn 0 0 12,500/62,500 $112,000/$312,000
Dennis E. Welling 0 0 5,000/35,000 $ 44,800/$164,800
Duane Dunk 0 0 5,000/35,000 $ 44,800/$164,800
David Chase 0 0 25,000/75,000 $224,000/$424,000
================================================================================
</TABLE>
VETI
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Number of
Securities Value of Unexercised
Underlying In-the-Money
Unexercised Options
Options at at Sept. 30, 1995
Shares Value Sept. 30, 1995 Exercisable/
Name Acquired Realized Exercisable/ Unexercisable
Unexercisable
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amyn S. Dahya 0 0 250,000/750,000 $437,500/$1,312,500
Vijay Fozdar 0 0 99,500/100,500 $223,625/$175,875
Douglas C. Washburn 0 0 13,200/26,800 $23,100/$46,900
Dennis E. Welling 0 0 13,200/26,800 $23,100/$46,900
Duane Dunk 0 0 16,500/33,500 $28,875/$58,625
David Chase 0 0 16,500/33,500 $28,875/$58,625
================================================================================
</TABLE>
SECTION 16(A) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Casmyn officers and directors, and persons who own
more than 10% of a registered class of Casmyn's equity securities, to file
reports of ownership and changes of ownership with the SEC. Officers and
directors and greater than 10% shareholders of Casmyn are required by SEC
regulations to furnish Casmyn with copies of all Section 16(a) forms they
file.
Based solely on the review of the copies of such forms received, Casmyn
believes that, from October 1, 1994 to September 30, 1995, all filings
required under section 16(a) applicable to its officers, directors and greater
than 10% shareholders were complied with except that Amyn S. Dahya failed to
report that his share holdings at September 30, 1995 were converted from
common shares to preferred shares and Vijay Fozdar, Mehdi Nimjee, Sandro
Kunzle, Douglas Washburn, Dennis Welling, Duane Dunk and David Chase failed to
report options granted to them as of September 30, 1995. Mr. Dahya's share
holdings and the options held by officers and directors were reported on Form
5 filed in July 1996.
VOTE REQUIRED
Assuming the presence of a quorum, the election of each of the nominees for
Officer and Director and each resolution requires the affirmative vote of a
plurality of the combined votes of common stock and Series A preferred, after
giving effect to voting preference, represented in person or by proxy at the
1996 Annual Meeting.
<PAGE>
APPROVAL OF THE
1995 INCENTIVE STOCK OPTION PLAN
On March 29, 1995, the Board of Directors adopted an Incentive Stock Option
Plan ("1995 ISOP") which provides for a maximum of 800,000 options to purchase
common stock of the Company. The material features of the 1995 ISOP are
discussed below.
GENERAL
The purpose of the 1995 ISOP is to provide and incentive for executives and
other key employees of the Company to advance the best interest of the Company
by providing those persons who have a substantial responsibility for its
management and growth by increasing their proprietary interest in the success
of the Company, thereby encouraging them to remain in its employ. Further,
the availability and offering of incentive stock options under the Plan
supports and increases the Company's ability to attract and retain individuals
of exceptional managerial talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depends. In furtherance of
this purpose, the 1995 ISOP authorizes the granting of options to eligible
individuals. Eligible individuals under the 1995 ISOP are key employees,
including officers and directors of the Company who are also employees of the
Company or affiliated corporations of the Company. Options granted under the
1995 ISOP are intended to qualify as incentive stock options under the
Economic Recovery Tax Act of 1981 (the "1981 Act") as amended by the Tax
Reform Act of 1986.
Stockholder approval of the 1995 ISOP is required as a condition for
qualifying the options to be granted under the 1995 ISOP as such under the
Code. Stockholder approval is also a condition of Rule 16b-3, a rule
promulgated by the SEC under Section 16(b) of the Exchange Act. Section 16(b)
provides, among other things, that any person who is a beneficial owner of
more than 10% of an equity security of a company registered under the Exchange
Act or who is an officer or director of that company will be liable to the
company for any profit realized from any purchase and sale (or any sale and
purchase) of any equity security of such company within a period of less than
six months, irrespective of the intention on the part of such person entering
into the transaction. Rule 16b-3 provides an exemption from the operation of
the "short-swing profit" recovery provisions of Section 16(b) of the Exchange
Act with respect to the granting and vesting of Options.
The Plan is administered by the Board of Directors through a committee
presently consisting of one member of the Board (its Chairman), who is a
"disinterested person." For purposes of the 1995 ISOP, a disinterested person
is generally one who, during the year preceding his service as an
administrator of the 1995 ISOP and during such service, was not granted or
awarded stock options pursuant to the 1995 ISOP. The committee determines
which persons receive options, the number of shares that may be purchased
under each option, vesting provisions, option terms and exercise price.
Options granted under the 1995 ISOP are required to have an exercise price
equal to or greater than the market price of the Company's common shares at
the grant date. The date of grant of an Option under the 1995 ISOP is, for all
purposes, the date on which the Compensation Committee completes all actions
constituting the grant of an Option to an employee. An Option will be
exercisable in such amounts and at such intervals as the Committee will
provide in the Option, provided that the Option has not expired on the date of
exercise. The term of each Option is determined by the Compensation Committee,
provided that it may not exceed ten years from the date of grant.
Each Option is evidenced by an Option Agreement that may contain any terms and
conditions that the Committee deems necessary, desirable or appropriate,
provided that such terms and conditions are not inconsistent with the 1995
ISOP or applicable law. Such other terms and conditions may include, without
limitation, relating an Option to the achievement of specific goals or to the
continued employment of the optionee for a specified period of time. Options
granted to eligible persons are in addition to regular salaries and other
benefits relating to such eligible person's position with the Company or
affiliated corporations of the Company. Neither the 1995 ISOP nor any Option
confers any right to continue in the employment of the Company or any
affiliated corporation of the Company or to continue to serve as a director of
the Company or any affiliated corporation of the Company.
<PAGE>
Options granted under the 1995 ISOP are not transferable other than by will or
by the laws of descent and distribution. The 1995 ISOP provides that the
number of shares and the option price will be adjusted on a pro-rata basis for
stock splits and stock dividends.
Options must be granted within five (5) years from the effective date of the
1995 ISOP. As of September 30, 1995, options to purchase up to 660,000 shares
of common stock were granted under the 1995 ISOP. All options granted under
the 1995 ISOP are valid for a term of five (5) years from the date of vesting
and vest 25% per year over a period of four years. All options granted to date
under the 1995 ISOP have a exercise price of $5.00 per share which represents
the market price per share on the date of grant. The table headed "Options/SAR
Grants in the Last Fiscal Year" describes Options granted pursuant to the 1995
Incentive Stock Option Plan.
Shares of common stock issuable upon the exercise of Options granted under the
1995 ISOP may be either shares held in the Company's treasury or from
authorized but unissued shares. If any Option or any part of such Option,
expires, terminates, or is canceled or surrendered as to any shares, for any
reason without having been exercised in full, the shares allocable to the
unexercised portion of such Option may again be subject to the grant of
Options under the 1995 ISOP.
EXERCISE PRICE. The exercise price per share of an Option is the price
determined by the Committee; provided, however, that the exercise price per
share of Incentive Stock Options shall not be less than the fair market value
of the common stock on the date of the grant.
EXERCISE OF OPTIONS AND PAYMENT. Each Option is exercisable in such amounts,
at such intervals and upon such terms as the Committee determines in its sole
discretion upon granting such Options; however, in no event shall an Option be
exercisable more than ten years after the date of grant.
An Option may be exercised by written notice to the Company. Such written
notice must be in accordance with the terms of such Option, and accompanied by
payment of the full exercise price for the shares of the optionee chooses to
exercise. In addition, arrangements must be made that are satisfactory to the
Committee for the optionee's payment to the Company of the amount that the
Committee determines to be necessary for the Company, or an affiliated
corporation of the Company employing the optionee, to withhold amounts in
accordance with applicable federal or state income tax withholding
requirements. The payment of the exercise price must be in cash or by
certified or cashier's check, or wire transfer or immediately available funds.
TERMINATION OF OPTION. Unless an Option provides otherwise, generally the
unexercised portion of an exercisable Option will terminate 90 days after the
holder ceases to be an eligible individual under the 1995 ISOP. In the event
an optionee voluntarily terminates his relationship with the Company, he has
the right to exercise his accrued options within 3 months of such termination.
However, the Company may redeem any accrued options held by an optionee by
paying the difference between the option price and the then fair market value.
If an optionee's relationship is involuntarily terminated, other than because
of death, he also has the right to exercise the accrued options within thirty
(30) days of such termination. Upon death, his estate or heirs have one year
to exercise his accrued options.
ADJUSTMENTS AND REORGANIZATION. To prevent dilution of the rights of a holder
of an Option, in certain instances such as stock splits, stock dividends or
other recapitalizations or reorganizations of the Company, the Compensation
Committee shall make appropriate adjustments to the number of shares reserved
under the 1995 ISOP and the number of shares subject to an exercise price of
each outstanding Option.
Generally, in the event of a dissolution or liquidation of the Company, a
material merger or consolidation of the Company in which the Company does not
survive, or a stockholder other than Amyn S. Dahya becoming the owner of 50%
or more of the total combined voting power of all classes of the Company's
stock, the Board of Directors may, at its election in order to retain the
value to the optionee, change the number and kind of shares of stock and
exercise price in a manner it deems appropriate or purchase the outstanding
Options from each holder for the excess of the fair market value of the Option
over its exercise price.
<PAGE>
TRANSFERABILITY. No Option is assignable or otherwise transferable, except by
will, the laws of the descent and distribution. Options may be exercised
solely by the optionee during his lifetime or after his death by the personal
representative of his estate or the persons entitled thereto under his will or
under the laws of descent and distribution.
TERMINATION OF 1995 SOP. The 1995 ISOP will terminate on May 29, 2006, the
tenth anniversary of the date of the Board approved the 1995 ISOP. Any
Options outstanding on such date will remain outstanding until they have
either expired or have been exercised.
AMENDMENTS. The Board of Directors may amend, modify, suspend or terminate
the 1995 ISOP at any time. Subject to changes in the law or other legal
requirements, including any changes in the provisions of Rule 16b-3, that
would permit otherwise, the 1995 ISOP may not be amended without the approval
of the stockholders to increase the aggregate number of shares of common stock
that may be issued under the 1995 ISOP (except adjustments to prevent
dilution, as discussed above), increase the maximum period during with Options
may be exercised or extend the effective period of the 1995 ISOP. No
amendment or termination of the 1995 ISOP may, without an optionee's consent,
alter or impair, other than as provided in the 1995 ISOP or the optionee's
Option Agreement, any of the rights or obligations under any Option previously
granted to such optionee under the 1995 ISOP.
FEDERAL INCOME TAX CONSEQUENCES. The federal tax information set forth below
is based upon present federal income tax laws and thus is subject to change
when laws change. Moreover, this summary of tax consequences attempts to
paraphrase only the general rules and is not intended to be a complete
description of all tax effects from participation in the 1995 ISOP.
GRANT OF OPTIONS. The grant of an Option will not be a taxable event to the
recipient option.
EXERCISE OF INCENTIVE STOCK OPTIONS. Options granted under the 1995 ISOP are
considered qualified "Incentive Stock Options" for tax purposes. The exercise
of an Incentive Stock Option will not be taxable to the optionee. However, to
qualify for this favorable tax treatment of Incentive Stock Options, the
optionee may not dispose of the shares of common stock acquired upon the
exercise of an Incentive Stock Option until after the later of two years
following the date of grant or one year following the date of exercise of the
Incentive Stock Option. Upon any subsequent taxable disposition of shares of
common stock received upon exercise of a qualifying Incentive Stock Option,
the optionee generally will recognize long-term or short-term capital gain or
loss measured by the difference between the amount realized and the exercise
price of the Incentive Stock Option.
If an Incentive Stock Option does not qualify for favorable incentive stock
option treatment under the Code as described above because of a failure to
satisfy the holding period requirements, the optionee will recognize ordinary
income in the year of the disqualifying disposition equal to the lesser of (i)
the excess of the amount realized over the adjusted bases in such shares or
(ii) the excess of the fair market value of the common stock at the time of
exercise over the exercise price, and the Company will be entitled to a
deduction of that amount in that year, if the amount realized exceeds the fair
market value of the common stock on the date of the Incentive Stock Option was
exercised, the excess will be taxable as long-term or short-term capital gain,
depending on the optionee's holding period for the shares received upon
exercise.
Notwithstanding the favorable tax treatment of Incentive Stock Options for
regular tax purposes, as described above, for alternative minimum tax
purposes, an Incentive Stock Option is treated in the same manner as a
Nonstatutory Stock Option. Accordingly, an optionee who is subject to
alternative minimum tax must include in alternative minimum taxable income,
for the year in which an Incentive Stock Option is exercised, the excess of
the fair market value of the shares of common stock received over the exercise
price.
<PAGE>
TAX CONSEQUENCES TO THE COMPANY. The Company will not be entitled to a
deduction for federal income tax purposes for the granting of any Option. The
Company will not be entitled to a deduction for federal income tax purposes
upon the exercise by the option of an Incentive Stock Option. If there is a
disposition of shares acquired by the optionee upon exercise of an Incentive
Stock Option before the optionee has satisfied the incentive stock option
holding periods, the Company will be entitled to a deduction for federal
income tax purposes at the same time and in the same amount as the ordinary
income realized by the optionee. All such deductions are subject to the usual
rules regarding the reasonableness of compensation and certain limitations
under Section 162 (m).
INDIVIDUAL TAX CONSULTATION. In addition to the federal income tax
consequences described above, the acquisition, ownership or disposition of an
Option or shares acquired upon the exercise of an Option may have tax
consequences under various state or foreign laws that may be applicable to
certain options. Since these tax consequences, as well as the federal income
tax consequences described above, may vary from optionee to optionee depending
upon the particular facts and circumstances involved, each optionee should
consult such optionee's own tax advisor with respect to the federal income tax
consequences of the grant or exercise of an Option, and also with respect to
any tax consequences under applicable state or foreign law.
RESTRICTIONS ON RESALE. Shares of common stock acquired upon exercise of
Options may be sold in compliance with the registration requirements of the
Securities Act and applicable state securities laws. The Company intends to
file a registration statement with the SEC on Form S-8 under which it will
register under the Securities Act the offer and sale of shares of common stock
reserved under the 1995 ISOP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL AND
ADOPTION OF THE 1995 INCENTIVE STOCK OPTION PLAN.
APPROVAL OF THE
1995 STOCK OPTION PLAN
On March 29, 1995, the Board of Directors adopted a Non-Qualified Stock Option
Plan (1995 SOP), which grants five year options to purchase a maximum of
250,000 shares of the Company's common stock at a price of $0.04 per share.
The material features of the 1995 SOP are discussed below.
GENERAL
The purpose of the 1995 SOP is to provide special recognition and incentive
for certain executives and key employees of the Company to advance the best
interest of the Company by providing those persons who have had and will
continue to have substantial responsibility for its management and growth by
increasing their proprietary interest in the success of the Company, thereby
encouraging them to remain in its employ. Options granted under the Plan are
not-intended to qualify as incentive stock options under the Economic Recovery
Tax Act of 1981 (the "1981 Act") as amended by the Tax Reform Act of 1986.
Stockholder approval of the 1995 SOP is required as a condition of Rule 16b-3,
a rule promulgated by the SEC under Section 16(b) of the Exchange Act.
Section 16(b) provides, among other things, that any person who is a
beneficial owner of more than 10% of an equity security of a company
registered under the Exchange Act or who is an officer or director of that
company will be liable to the company for any profit realized from any
purchase and sale (or any sale and purchase) of any equity security of such
company within a period of less than six months, irrespective of the intention
on the part of such person entering into the transaction. Rule 16b-3 provides
an exemption from the operation of the "short-swing profit" recovery
provisions of Section 16(b) of the Exchange Act with respect to the granting
and vesting of Options.
<PAGE>
The Plan is administered by the Board of Directors through a committee
presently consisting of one member of the Board (its Chairman), who is a
"disinterested person." For purposes of the 1995 SOP, a disinterested person
is generally one who, during the year preceding his service as an
administrator of the 1995 SOP and during such service, was not granted or
awarded stock options pursuant to the 1995 SOP. The committee determines which
persons receive options, the number of shares that may be purchased under each
option, vesting provisions, option terms and exercise price. All options
granted under the SOP are valid for a period of five years from the grant date
and have an exercise price equal to the par value of common shares of $0.04
(four cents) per share. The date of grant of all Option under the 1995 SOP is
March 29, 1995.
Each Option is evidenced by an Option Agreement that contains the terms and
conditions of the 1995 SOP and applicable law. Options granted are in
addition to regular, salaries and other benefits relating to such eligible
person's position with the Company or affiliated corporations of the Company.
Neither the 1995 SOP nor any Option confers any right to continue in the
employment of the Company or any affiliated corporation.
Options granted under the Plan are not transferable other than by will or by
the laws of descent and distribution. The Option Plan provides that the
number of shares and the option price will be adjusted on a pro-rata basis for
stock splits and stock dividends.
As of September 30, 1995, options to purchase up to 246,000 shares of common
stock were granted under the 1995 SOP. With the exception of Mr. Vijay
Fozdar, whose options vest 100% on the grant date, the options vest to the
optionee over a one (1) year period with 50% vesting at the grant date and 50%
on the first anniversary of the grant date. Options granted under the 1995 SOP
are compensatory in nature and result in total compensation expense of
approximately $1,220,160, of which $855,600 was recorded as compensation
expense during 1995 and $364,560 will be recorded as expense for the year
ended September 30, 1996.
Shares of common stock issuable upon the exercise of Options granted under the
1995 SOP may be either shares held in the Company's treasury or from
authorized but unissued shares. If any Option or any part of such Option,
expires, terminates, or is canceled or surrendered as to any shares, for any
reason without having been exercised in full, the shares allocable to the
unexercised portion of such will not be available for reissue.
EXERCISE PRICE. The exercise price per share of an Option under the 1995 SOP
is equal to par of $0.04 unless adjusted due to a stock split or dividend.
EXERCISE OF OPTIONS AND PAYMENT. Each Option is exercisable in such amounts,
at such as provided for in the plan; however, in no event shall an Option be
exercisable more than ten years after the date of grant.
An Option may be exercised by written notice to the Company. Such written
notice must be in accordance with the terms of such Option, and accompanied by
payment of the full exercise price for the shares of the optionee chooses to
exercise. In addition, arrangements must be made that are satisfactory to the
Committee for the optionee's payment to the Company of the amount that the
Committee determines to be necessary for the Company, or an affiliated
corporation of the Company employing the optionee, to withhold amounts in
accordance with applicable federal or state income tax withholding
requirements. The payment of the exercise price must be in cash or by
certified or cashier's check, or wire transfer or immediately available funds.
TERMINATION OF OPTION. Options, which have not vested under the 1995 SOP shall
expire upon termination of employment or contractual relationship for any
reason other than death, total disability (as defined in Section 22(e)(3) of
the Code), retirement or as specifically provided for under the terms of an
employment agreement, contract or the Option agreement.
ADJUSTMENTS AND REORGANIZATION. To prevent dilution of the rights of a holder
of an Option, in certain instances such as stock splits, stock dividends or
other recapitalizations or reorganizations of the Company, the Compensation
Committee shall make appropriate adjustments to the number of shares reserved
under the 1995 SOP and the number of shares subject to an exercise price of
each outstanding Option.
<PAGE>
Generally, in the event of a dissolution or liquidation of the Company, a
material merger or consolidation of the Company in which the Company does not
survive, or a stockholder other than Amyn S. Dahya becoming the owner of 50%
or more of the total combined voting power of all classes of the Company's
stock, the Board of Directors will make such changes as appropriate and
necessary to the number and kind of shares of stock and exercise price so as
to retain the value to the optionee or purchase the outstanding Options from
each holder for the excess of the fair market value of the Option over its
exercise price.
TRANSFERABILITY. No Option is assignable or otherwise transferable, except by
will, the laws of the descent and distribution. Options may be exercised
solely by the optionee during his lifetime or after his death by the personal
representative of his estate or the persons entitled thereto under his will or
under the laws of descent and distribution.
TERMINATION OF 1995 SOP. The 1995 SOP will terminate on May 19, 2001, the
fifth anniversary of the date of the date of grant.
AMENDMENTS. The Board of Directors may amend, modify, suspend or terminate
the 1995 SOP at any time. Subject to changes in the law or other legal
requirements, including any changes in the provisions of Rule 16b-3, that
would permit otherwise, the 1995 ISOP may not be amended without the approval
of the stockholders to increase the aggregate number of shares of common stock
that may be issued under the 1995 SOP (except adjustments to prevent dilution,
as discussed above), increase the maximum period during with Options may be
exercised or extend the effective period of the 1995 SOP. No amendment or
termination of the 1995 SOP may, without an optionee's consent, alter or
impair, other than as provided in the 1995 SOP or the optionee's Option
Agreement, any of the rights or obligations under any Option previously
granted to such optionee under the 1995 SOP.
FEDERAL INCOME TAX CONSEQUENCES
The federal tax information set forth below is based upon present federal
income tax laws and thus is subject to change when laws change. Moreover,
this summary of tax consequences attempts to paraphrase only the general rules
and is not intended to be a complete description of all tax effects from
participation in the 1995 SOP.
GRANT OF OPTIONS. The grant of an Option will not be a taxable event to the
recipient option.
EXERCISE OF NONSTATUTORY STOCK OPTION. Options granted under the 1995 SOP are
considered to be "Nonstatutory Options" for tax purposes. Generally, upon the
exercise of a Nonstatutory Stock Option, an optionee will recognize ordinary
income at the time of the exercise in the amount equal to the excess of the
fair market value of the shares of common stock received over the exercise
price paid to exercise the Nonstatutory Stock Option. The taxable income
recognized upon exercise of a Nonstatutory Stock Option will be treated as
compensation income.
When common stock received upon exercise of a Nonstatutory Stock Option
subsequently is sold or exchanged in a taxable transaction, the seller of the
stock generally will recognize capital gain (or loss) in the amount by which
the amount realized exceed (or is less than) the fair market value of the
common stock that was included in income in connection with the exercise; the
character of such gain or loss as long-term or short-term capital gain or loss
will depend upon the holding period of the shares following exercise.
TAX CONSEQUENCES TO THE COMPANY. The Company will not be entitled to a
deduction for federal income tax purposes for the granting of any Option. The
Company generally will be entitled to a deduction for federal income tax
purposes when an optionee exercises a Nonstatutory Stock Option, in the same
amount as the ordinary income realized by the optionee. All such deductions
are subject to the usual rules regarding the reasonableness of compensation
and certain limitations under Section 162 (m), discussed herein under "Report
of Compensation Committee -- $1 Million Deduction Cap."
<PAGE>
INDIVIDUAL TAX CONSULTATION. In addition to the federal income tax
consequences described above, the acquisition, ownership or disposition of an
Option or shares acquired upon the exercise of an Option may have tax
consequences under various state or foreign laws that may be applicable to
certain options. Since these tax consequences, as well as the federal income
tax consequences described above, may vary from optionee to optionee depending
upon the particular facts and circumstances involved, each optionee should
consult such optionee's own tax advisor with respect to the federal income tax
consequences of the grant or exercise of an Option, and also with respect to
any tax consequences under applicable state or foreign law.
<PAGE>
RESTRICTIONS ON RESALE. Shares of common stock acquired upon exercise of
Options may be sold in compliance with the registration requirements of the
Securities Act and applicable state securities laws. The Company intends to
file a registration statement with the SEC on Form S-8 under which it will
register under the Securities Act the offer and sale of shares of common stock
reserved under the 1995 SOP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL AND
ADOPTION OF THE 1995 STOCK OPTION PLAN.
APPROVAL OF THE
STOCK OPTION PLAN
AMYN S. DAHYA
On October 3, 1995, the Board of Directors adopted a Stock Option Plan for
Amyn S. Dahya (DAHYA-SOP) which provides that a maximum of 1,000,000 options
to purchase common stock of the Company. The material features of the
DAHYA-SOP are discussed below.
GENERAL
The purpose of the DAHYA-SOP is to provide an incentive for Mr. Dahya as the
Company's Chief Executive Officer to advance the best interest of the Company
by increasing his proprietary interest in the success of the Company. Options
granted under the DAHYA-SOP are not intended to qualify as incentive stock
options under the Economic Recovery Tax Act of 1981 (the "1981 Act") as
amended by the Tax Reform Act of 1986.
Stockholder approval of the DAHYA-SOP is required as a condition of Rule
16b-3, a rule promulgated by the SEC under Section 16(b) of the Exchange Act.
Section 16(b) provides, among other things, that any person who is a
beneficial owner of more than 10% of an equity security of a company
registered under the Exchange Act or who is an officer or director of that
company will be liable to the company for any profit realized from any
purchase and sale (or any sale and purchase) of any equity security of such
company within a period of less than six months, irrespective of the intention
on the part of such person entering into the transaction. Rule 16b-3 provides
an exemption from the operation of the "short-swing profit" recovery
provisions of Section 16(b) of the Exchange Act with respect to the granting
and vesting of Options.
The Plan is administered by the Board of Directors through a committee
presently consisting of all of the members of the Board with the exception of
Mr. Dahya, who are "disinterested persons" for purposes of the DAHYA-SOP. A
disinterested person is generally one who, during the year preceding his
service as an administrator of the DAHYA-SOP and during such service, was not
granted or awarded stock options pursuant to the DAHYA-SOP. The committee has
determined, the number of shares that may be purchased, vesting provisions,
option terms and exercise price.
Options granted under the DAHYA-SOP are not transferable other than by will or
by the laws of descent and distribution. The DAHYA-SOP provides that the
number of shares and the option price will be adjusted on a pro-rata basis for
stock splits and stock dividends.
<PAGE>
Options to purchase up to 1,000,000 shares of common stock were granted to Mr.
Dahya under the DAHYA-SOP. All such options are valid for a term of five (5)
years from the date of vesting and vest 25% on October 3, 1995 and 25% on each
of the anniversary dates thereafter. All options granted under the DAHYA-SOP
have a exercise price of $7.00 per share, the market price per share on
October 3, 1995, the date of grant.
Shares of common stock issuable upon the exercise of Options granted under the
DAHYA-SOP may be either shares held in the Company's treasury or from
authorized but unissued shares.
EXERCISE OF OPTIONS AND PAYMENT. An Option may be exercised by written notice
to the Company. Such written notice must be in accordance with the terms of
such Option, and accompanied by payment of the full exercise price for the
shares of the optionee chooses to exercise. In addition, arrangements must be
made that are satisfactory to the Committee for the optionee's payment to the
Company of the amount that the Committee determines to be necessary for the
Company, or an affiliated corporation of the Company employing the optionee,
to withhold amounts in accordance with applicable federal or state income tax
withholding requirements. The payment of the exercise price must be in cash
or by certified or cashier's check, or wire transfer or immediately available
funds.
TERMINATION OF DAHYA-SOP. The DAHYA-SOP will terminate on October 2, 2003,
the fifth anniversary of the date of the date of grant.
AMENDMENTS. The Board of Directors may amend, modify, suspend or terminate
the DAHYA-SOP at any time. Subject to changes in the law or other legal
requirements, including any changes in the provisions of Rule 16b-3, that
would permit otherwise, the DAHYA-SOP may not be amended without the approval
of the stockholders to increase the aggregate number of shares of common stock
that may be issued under the DAHYA-SOP (except adjustments to prevent
dilution, as discussed above), increase the maximum period during with Options
may be exercised or extend the effective period of the DAHYA-SOP. No
amendment or termination of the DAHYA-SOP may, without an Mr. Dahya's consent,
alter or impair, other than as provided in the DAHYA-SOP or the Option
Agreement.
FEDERAL INCOME TAX CONSEQUENCES
The federal tax information set forth below is based upon present federal
income tax laws and thus is subject to change when laws change. Moreover,
this summary of tax consequences attempts to paraphrase only the general rules
and is not intended to be a complete description of all tax effects from
participation in the DAHYA-SOP.
GRANT OF OPTIONS. The grant of an Option will not be a taxable event to the
recipient option.
EXERCISE OF NONSTATUTORY STOCK OPTION. Options granted under the DAHYA-SOP
are considered to be "Non Statutory Options" for tax purposes. Generally, upon
the exercise of a Nonstatutory Stock Option, an optionee will recognize
ordinary income at the time of the exercise in the amount equal to the excess
of the fair market value of the shares of common stock received over the
exercise price paid to exercise the Nonstatutory Stock Option. The taxable
income recognized upon exercise of a Nonstatutory Stock Option will be treated
as compensation income.
When common stock received upon exercise of a Nonstatutory Stock Option
subsequently is sold or exchanged in a taxable transaction, the seller of the
stock generally will recognize capital gain (or loss) in the amount by which
the amount realized exceed (or is less than) the fair market value of the
common stock that was included in income in connection with the exercise; the
character of such gain or loss as long-term or short-term capital gain or loss
will depend upon the holding period of the shares following exercise.
TAX CONSEQUENCES TO THE COMPANY. The Company will not be entitled to a
deduction for federal income tax purposes for the granting of any Option. The
Company generally will be entitled to a deduction for federal income tax
purposes when an optionee exercises a Nonstatutory Stock Option, in the same
amount as the ordinary income realized by the optionee. All such deductions
are subject to the usual rules regarding the reasonableness of compensation
and certain limitations under Section 162 (m), discussed herein under "Report
of Compensation Committee -- $1 Million Deduction Cap."
<PAGE>
INDIVIDUAL TAX CONSULTATION. In addition to the federal income tax
consequences described above, the acquisition, ownership or disposition of an
Option or shares acquired upon the exercise of an Option may have tax
consequences under various state or foreign laws that may be applicable to
certain options. Since these tax consequences, as well as the federal income
tax consequences described above, may vary from optionee to optionee depending
upon the particular facts and circumstances involved, each optionee should
consult such optionee's own tax advisor with respect to the federal income tax
consequences of the grant or exercise of an Option, and also with respect to
any tax consequences under applicable state or foreign law.
RESTRICTIONS ON RESALE. Shares of common stock acquired upon exercise of
Options may be sold in compliance with the registration requirements of the
Securities Act and applicable state securities laws. The Company intends to
file a registration statement with the SEC on Form S-8 under which it will
register under the Securities Act the offer and sale of shares of common stock
reserved under the DAHYA-SOP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL AND
ADOPTION OF THE STOCK OPTION PLAN FOR AMYN S. DAHYA.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as Casmyn's principal independent public
accountants during 1995 and will continue to serve as Casmyn's principal
independent accountants for the current year. Representatives of Deloitte &
Touche LLP are expected to be present at the 1996 Annual Meeting of
Stockholders, with the opportunity to make a statement if they desire to do
so, and are expected to be available to respond to appropriate questions.
DATE OF RECEIPT FOR STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities and Exchange Act of 1934, as
amended, stockholders may present proper proposals for inclusion in Casmyn's
proxy statement for consideration at its Annual Meeting of Stockholders by
submitting proposals to Casmyn in a timely manner. In order to be included for
the 1997 Annual Meeting, stockholder proposals must be received by Casmyn no
later than March 26, 1997, and must otherwise comply with the requirements of
Rule 14a-8.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Douglas C. Washburn
By ______________________
Douglas C. Washburn
Secretary
July 24, 1996
Sparks, Nevada
