SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11( c ) ss. 240.14-a-12
- ------------------------------------------------------------------------------
GLOBAL TECHNOVATIONS, INC.
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
-----------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount of which the filing fee
is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------------
5. Total fee paid: ______________________________________________
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed
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<PAGE>
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF
GLOBAL TECHNOVATIONS, INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS
April 3, 2000 - 10:00 A.M., E.S.T.
To Be Held At The
The Palm Beach Gardens Marriott, 4000 RCA Blvd., Palm Beach Gardens, FL 33410
The undersigned hereby appoints William C. Willis, Jr. and David Natan as
my proxy with power of substitution for and in the name of the undersigned to
vote all shares of common stock of Global Technovations, Inc., (the "Company"),
which the undersigned would be entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at 10:00 A.M. at The Palm Beach Gardens
Marriott, 4000 RCA Blvd., Palm Beach Gardens, FL 33410, and at any adjournment
thereof, upon such business as may properly come before the meeting, including
the items set forth below:
Each share of common stock outstanding on the record date is entitled
to one vote on all proposals.
1. I hereby elect the following individual to serve on the board of
directors of the Company for a three-year term until the Company's
annual meeting of stockholders in 2003.
Name Yes No
a) G. Jeff Mennen ______ _______
2. I hereby ratify the appointment of the Arthur Andersen LLP as
independent auditors for the fiscal year ended September 30, 2000.
Yes______ No_____ Abstain_______
3. I hereby authorize the transaction of any other lawful business that may
properly come before the annual meeting of stockholders.
Yes _____ No _____ Abstain _____
(Shares cannot be voted unless this proxy is signed and returned, or
specific arrangements are made to have the shares
represented at the meeting).
If no direction is indicated, this Proxy will be voted as recommended by the
Board of Directors for all proposals.
Dated:_____________________________ ________________________________
Signature of Stockholder
_____ Number of Shares Owned: Printed Name:
<PAGE>
February 8, 2000
Dear Stockholder:
On behalf of the Board of Directors of Global Technovations, Inc. (the
"Company"), I am extending you a cordial invitation to attend the annual meeting
of stockholders of the Company (the "Annual Meeting"), which will be held April
3, 2000 at 10:00 A.M., Eastern Standard Time at The Palm Beach Gardens Marriott,
4000 RCA Blvd., Palm Beach Gardens, FL 33410. I look forward to greeting as many
stockholders as possible at the Annual Meeting.
At the Annual Meeting, you will be asked to vote on three proposals; (i) to
elect a director for three-year terms ending in 2003; (ii) to ratify the
appointment of Arthur Andersen LLP as independent auditors for the year ended
September 30, 2000, and (iii) any other matters that may properly come before
the Annual Meeting. (Details concerning the proposals are included in the
enclosed Proxy Statement.)
AT THE BOARD OF DIRECTORS' MEETINGS HELD TO CONSIDER THE PROPOSALS, THE
DIRECTORS OF THE COMPANY CAREFULLY CONSIDERED AND UNANIMOUSLY APPROVED THE
PROPOSALS AS BEING IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS. THE
COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" PROPOSALS NO. 1, 2, AND 3.
It is important that your shares be represented at the Annual Meeting
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy card promptly. If you later decide to attend the
Annual Meeting, you may revoke your proxy and vote in person.
Thank you for your time and consideration.
Sincerely,
William C. Willis, Jr.
Chairman, President and CEO
<PAGE>
GRAPHIC OMITTED]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 3, 2000
To All Stockholders:
The annual meeting of the Stockholders (the "Annual Meeting") of Global
Technovations, Inc. (the "Company") will be held April 3, 2000 at 10:00 A.M.,
Eastern Standard Time at The Palm Beach Gardens Marriott, 4000 RCA Blvd., Palm
Beach Gardens, FL 33410, for the following purposes:
1. To elect one person to the Board of Directors of the Company
to serve three-year terms ending in 2003;
2. To ratify the appointment of Arthur Andersen LLP as independent
auditors for the fiscal year ended September 30, 2000;
3. For the transaction of any other lawful business that may
properly come before the Annual Meeting.
The Board of Directors has fixed the close of business on February 4, 2000
as the record date for a determination of stockholders entitled to notice of,
and to vote at, this Annual Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
PROPOSALS NUMBERS 1, 2, AND 3.
Please vote, date, sign and mail the enclosed proxy card promptly in the
enclosed return envelope. It is extremely important that you vote. If we do not
have enough proxy cards returned, we will not have a quorum, resulting in
unnecessary expense to you, the stockholder. Help us help you.
By Order of the Board of Directors.
Dated: February 8, 2000
By: David Natan
Vice President, Chief Financial Officer
and Secretary
<PAGE>
[GRAPHIC OMITTED]
GLOBAL TECHNOVATIONS, INC.
PROXY STATEMENT
--------------------
This proxy statement (the "Proxy Statement") is sent to the holders of
shares of Common Stock, par value $.001 per share (the "Common Stock") of Global
Technovations, Inc. ("Global Tech", or the "Company"), a Delaware corporation,
in connection with the solicitation of proxies by our Board of Directors (the
"Board") for use at the Annual Meeting of Stockholders (the "Annual Meeting") to
be held at 10:00 A.M., EST. on April 3, 2000 at The Palm Beach Gardens Marriott,
4000 RCA Boulevard, Palm Beach Gardens, Florida 33410, for the following
purposes:
1. To elect one member to our Board to serve a three-year term ending 2003;
2. To ratify the appointment of Arthur Andersen LLP as our independent
accountants for the year ending September 30, 2000;
3. For the transaction of such other matters as may properly come before the
Annual Meeting.
Our Board is sending this Proxy Statement to holders of Common Stock in
connection with the solicitation of proxies for use at the Annual Meeting, and
any adjournments thereof. With this Proxy Statement, we are also mailing or
delivering to Global Tech's stockholders a proxy card, the notice of Annual
Meeting, and a copy of our Form 10-K for the year ended September 30, 1999
("Form 10-K").
All properly executed proxy cards delivered pursuant to this solicitation
and not revoked will be voted at the Annual Meeting in accordance with the
directions given. In voting by proxy with regard to the election of directors,
you may vote in favor of all nominees, withhold your votes as to all nominees or
withhold your votes as to specific nominees. With regard to other proposals, you
may vote in favor of each proposal or against each proposal, or in favor of some
proposals and against others, or you may abstain from voting on any or all
proposals. You should specify your respective choices on the accompanying proxy
card. If you do not give specific instructions with regard to the matters to be
voted upon, the shares of Common Stock represented by your signed proxy card
will be voted "FOR" Proposal Nos. 1, 2, and 3, listed on the proxy card. If any
other matters properly come before the Annual Meeting, the persons named as
proxies will vote for or against these matters according to their judgment.
<PAGE>
The presence, in person or by proxy, of a majority of the 29,799,281
outstanding shares of Common Stock, which includes 466,234 of treasury shares,
or 14,666,524 as of the record date of February 4, 2000 is necessary to
constitute a quorum at the Annual Meeting. Each of the proposals set forth in
this Proxy Statement will be voted upon separately at the Annual Meeting. The
affirmative vote of the holders of a plurality of shares of Common Stock present
in person or represented by proxy at the Annual Meeting will be required to
elect a director to our Board pursuant to Proposal No. 1. The vote of the
holders of a majority of shares of Common Stock present in person or represented
by proxy and entitled to vote at the Annual Meeting will be required to ratify
the appointment of Arthur Andersen LLP pursuant to Proposal No. 2 and to approve
any other business. For these reasons, it is important that all shares are
represented at the Annual Meeting, either in person or by proxy.
You may revoke your proxy and reclaim your right to vote up to and
including the day of the Annual Meeting by giving written notice to the
Secretary of the Company, by delivering a proxy card dated after the date of the
proxy or by voting in person at the Annual Meeting. All written notices of
revocation and other communications with respect to revocations of proxies
should be addressed to: Global Technovations, Inc., 7108 Fairway Drive, Suite
200, Palm Beach Gardens, Florida, 33418-3757, Attention: Mr. David Natan,
Secretary.
Proxies will initially be solicited by Global Tech by mail, but our
directors, officers and selected employees may solicit proxies from stockholders
personally or by telephone, facsimile or other forms of communication. These
directors, officers and employees will not receive any additional compensation
for such solicitation. We are also requesting that brokerage houses, nominees,
fiduciaries and other custodians send soliciting materials to beneficial owners.
We will reimburse them for their reasonable expenses incurred in doing so. All
expenses incurred in connection with the solicitation of proxies will be paid by
us.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
PROPOSALS NO. 1, 2, AND 3.
Our Common Stock is listed on the American Stock Exchange ("AMEX") under
the symbol "GTN". On January 27, 2000, the last sale price for the Common Stock
as reported by the AMEX was $.6875 per share.
This Proxy Statement and the accompanying proxy card are being mailed to
our stockholders on or about February 8, 2000.
The date of this Proxy Statement is January 28, 2000.
<PAGE>
Security Ownership of Certain Beneficial Owners
The following table sets forth the number of shares of our Common Stock
beneficially owned as of January 28, 2000 by (i) owners of more than 5% of our
Common Stock, (ii) by each director, and (iii) all of our directors and named
executive officers as a group.
<TABLE>
<S> <C> <C> <C>
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Amount and Nature Pecent
Title of Class Name and Address of Beneficial Owner of Beneficial of
Ownership Class
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock William C. Willis, Jr.(1) 416,666 1.38%
and Vested Options 7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock David Natan(2) 187,049 *
and Vested Options 7108 Fairway Drive, Suite 200
Palm Beach Gardens, FL 33418
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock Ronald P. Burd(3),(4) 214,250 *
and Vested Options 251 Linden Lane
Merion Station, PA 19066
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock, Vested G. Jeff Mennen(5) (6) 886,666 2.90%
and Vested Options, TMF Investments
Warrants and Preferred 25B Hanover Road
Stock Florham Park, NJ 07932
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock L. Kerry Vickar(7) 37,083 *
and Vested Options 19010 Mary Ardrey Circle
Cornelius, NC 28031
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock Mellon Bank Corporation(8) 1,694,011 5.68%
2875 N.E. 191st Street, Penthouse I
N. Miami, FL 33130
- ------------------------- ---------------------------------------------------------- --------------------- ---------------
- ------------------------------------------------------------------------------------ --------------------- ---------------
All directors and named executive officers of the Company as a group 1,747,214 5.60%
(6 persons)(1)(2)(3)(4)(5)(6)(7)
- ------------------------------------------------------------------------------------ --------------------- ---------------
</TABLE>
(1) Includes 200,000 vested Options held by Mr. Willis at approximately $2.00
per share, 50,000 vested Options at approximately $.88 per share, 50,000
vested Options at $1.00 per share, 16,666 vested Options at $1.32 per share
and 100,000 shares of Common Stock held by Mr. Willis.
(2) Includes 75,000 vested Options held by Mr. Natan exercisable at
approximately $3.00 per share, 7,000 vested Options exercisable at
approximately $1.56 per share and 33,333 vested Options at approximately
$1.38 per share, 50,000 vested Options at $1.00 per share, 2,166 vested
Options at $1.32 per share, 18,550 shares of Common Stock held by Mr. Natan
and 1,000 shares of Common Stock held by Mr. Natan's wife.
(3) Includes 25,000 vested Options exercisable at approximately $3.38 per
share, 40,000 vested Options exercisable at approximately $1.78 per share
and 30,000 vested Options exercisable at approximately $6.25, 6,250 vested
Options exercisable at approximately $1.75, 20,000 Options exercisable at
approximately $1.31 per share and 2,500 Options exercisable at $.75 per
share held by Mr. Burd.
(4) Includes 87,000 shares of Common Stock held jointly by Mr. Burd and his
wife and 3,500 shares of Common Stock gifted by Mr. Burd to the Devereux
Foundation, of which Mr. Burd is President and Chief Executive Officer.
(5) Includes 110,000 shares of Common Stock beneficially owned by Mr. Mennen,
which are held of record by the Wilmington Trust Company and George Jeff
Mennen, Co-Trustees for Christina M. Andrea and John Henry Mennen. Also
includes the shares of Common Stock reserved for exercise of presently
exercisable Options and Warrants beneficially owned by Mr. Mennen as
follows:
<PAGE>
<TABLE>
<S> <C> <C> <C>
------------------- ---------------- ----------------- --------------------------------------
Approximate
No. of Shares Type of Security Exercise Record Owner
Price
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
2,500 Options $ .75 G. Jeff Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
20,000 Options $1.38 G. Jeff Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
4,166 Options $1.75 G. Jeff Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
50,000 Warrants $ .875 G. Jeff Mennen, Trustee for George
S. Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
21,500 Warrants $1.75 G. Jeff Mennen, Trustee for George
S. Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
28,500 Warrants $1.75 Wilmington Trust Company and G. Jeff
Mennen, Co-Trusteees for John Henry
Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
150,000 Warrants $1.94 G. Jeff Mennen, Trustee for George
S. Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
200,000 Warrants $1.94 Wilmington Trust Company and G. Jeff
Mennen, Co-Trustees for John Henry Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
50,000 Warrants $2.00 G. Jeff Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
107,142 Warrants $2.38 G. Jeff Mennen, Trustee for George
S. Mennen
------------------- ---------------- ----------------- --------------------------------------
------------------- ---------------- ----------------- --------------------------------------
142,858 Warrants $2.38 Wilmington Trust Company and G. Jeff
Mennen, Co-Trustees for John Henry Mennen
------------------- ---------------- ----------------- --------------------------------------
</TABLE>
(6) Does not include 5,989,305 Common Stock reserved in the event of exercise
of $3,500,000 of 9% Series B Convertible Preferred Stock beneficially owned
by Mr. Mennen. The 9% Series B Preferred Stock may be converted into shares
of Common Stock at any time after January 1, 2001 at 85% of the closing bid
price. Also does not include 50,000 warrants exercisable at $.875 per share
commencing in August 2000.
(7) Includes 12,500 shares held by Mr. Vickar, 22,083 vested Options
exercisable at approximately $1.13 per share, and 2,500 vested Options at
$.75 per share.
(8) To the best of the Company's knowledge based on public filings, Mellon Bank
Corporation ("Mellon") formerly Ganz Capital Management, Inc. beneficially
owns 1,694,011 shares of Common Stock of the Company as of February 4,
1999. This represents beneficial ownership of 5.68% of the Company's
outstanding shares. The Company has no more current information.
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
Board of Directors
Our business is managed under the direction of the Board. The Board is
responsible for establishing broad corporate policies and for our overall
performance. It is not involved in the operating details on a day-to-day basis.
Management advises the Board of the status of Global Tech's business through
quarterly Board meetings and regular written communications and discussions.
Global Tech has a classified Board, which provides for three classes of
directors each of which serves a three-year term. One class is elected each
year. Two directors were elected at the 1999 Annual Meeting and each person
elected will hold office until his term expires in the year 2002 and until his
successor has been elected and qualified. One director is up for election at the
2000 Annual Meeting. Our by-laws provide that the Board shall consist of no less
than three and no more than nine members, with the actual number to be
established by resolution of the Board. The current Board has by resolution
established the number of directors at seven. There are currently two vacancies
on the Board. Global Tech does not intend to fill them at this time.
Compensation of Directors
Our outside directors each receive a fee of $1,000 per Board meeting
attended. Additionally, annually they receive 7,500 Options ("Options") in lieu
of higher cash attendance fees. All outside directors also automatically receive
grants of 30,000 Options upon election or appointment to the Board, and an
additional grant every three-year anniversary thereafter. They are reimbursed
for expenses incurred in attending Board and Committee meetings. Except as
otherwise disclosed in this Proxy Statement, all Options vest semi-annually over
a three-year period subject to continued service with the Company. Options are
exercisable for 10 years from the date of grant.
Board Meetings and Committees
The Board held six meetings during the fiscal year ended September 30,
1999. All directors were present at each of the meetings except for one meeting,
where Mr. Burd was absent. On several occasions throughout the year, the Board
took action by unanimous consent in lieu of holding a meeting.
The Board has a Compensation Committee comprised of Messrs. Willis,
Mennen and Vickar; an Audit Committee comprised of Messrs. Burd, and Vickar; and
a Nominating Committee comprised of Messrs. Willis, Mennen, and Vickar, which
met two, one and one times, respectively, during the year ended September 30,
1999.
<PAGE>
Current Board of Directors
<TABLE>
<S> <C> <C> <C> <C> <C>
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
Name Age Position With Company Since Term Ending
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
William C. Willis, Jr.(11)(12) 48 President, Chief Executive Officer and 1997 Three 2001
Chairman of the Baord of Directors Years
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
David Natan 46 Vice-President, Chief Financial 1995 Three 2002
Officer, Secretary and Director Years
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
Ronald P. Burd(12)(13) 53 Director 1995 Three 2002
Years
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
G. Jeff Mennen(11)(12) 60 Director 1998 Two 2000
Years
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
L. Kerry Vickar(11)(12)(13) 42 Director 1998 Three 2001
Years
- ------------------------------- -------- ---------------------------------------- --------- ---------- ----------
</TABLE>
(11) Member of the Nominating Committee
(12) Member of the Compensation Committee.
(13) Member of the Audit Committee.
<PAGE>
The nominee for election is set forth below. If you give us your proxy
vote, all proxies are for the nominee for the director listed below, unless you
tell us to vote differently. In the event a nominee is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be voted
for any nominee who shall be designated by the present Board to fill the
vacancy. In the event that additional persons are nominated for election as
director, the proxy holders intend to vote all proxies received by them for the
nominee listed below unless instructed otherwise. As of the date of this Proxy
Statement, the Board is not aware that any nominee is unable or will decline to
serve as a director. Nominees for Election at the 2000 Annual Meeting
<TABLE>
<S> <C> <C> <C> <C> <C>
NEW TERM
NAME AGE POSTION WITH THE COMPANY SINCE TERM ENDING
G. Jeff Mennen(12)(13) 60 Director 1998 Three 2003
Years
</TABLE>
G. Jeff Mennen - was appointed a director of the Company in October 1997.
Currently, Mr. Mennen is President of Peak Management, a consulting firm, which
he founded in 1989. Also, Mr. Mennen is a Managing Partner of TMF Investment
Holdings, a family investment firm. From 1981 until 1992, Mr. Mennen was Vice
Chairman of The Mennen Company where he served until that company was sold to
Colgate-Palmolive. From 1977 until 1981, Mr. Mennen was President of Mennen
International. Mr. Mennen is a director of Corbin, Ltd. and MBf USA, Inc.
<PAGE>
Other Board Members, Executive Officers and Key Employees
William C. Willis, Jr. - Mr. Willis has been President, Chief Executive
Officer and a member of the Board since May 1997. Since July 1, 1998, Mr. Willis
has served as Chairman of the Board. As President and Chief Executive Officer of
the Company, Mr. Willis is responsible for the overall management of the
business, with an emphasis on business strategy and long-term planning. Mr.
Willis also actively supervises the marketing of the Company's OSA-IIs. Prior to
joining the Company, Mr. Willis was Chairman of Willis & Associates, a
management consulting firm assisting small and medium sized technology, health
care and consumer products companies. From 1994 to 1995, Mr. Willis was
President and Chief Operating Officer of MBf USA, Inc., a marketer and
distributor of latex products whose Common Stock is traded on Nasdaq. From 1990
to 1994, Mr. Willis was President and Chief Executive Officer of Insituform
Technologies, Inc., a state of the art provider of technologies for the
reconstruction of pipelines and infrastructure. From 1985 to 1990, Mr. Willis
was President of The Paper Art Company, Inc., a subsidiary of The Mennen
Company.
David Natan - was appointed a director of the Company on April 16, 1998 in
order to fill a vacancy. Currently, Mr. Natan, a CPA, has been Vice President
and Chief Financial Officer of the Company since June 1995 and Secretary from
August 1997. Mr. Natan previously served on the Company's Board from June 1995
to January 1997. Mr. Natan brings nearly 20 years of management and analytical
experience to his responsibilities. Prior to joining the Company, from November
1992 through June 1995, Mr. Natan was Chief Financial Officer of MBf USA, Inc.,
which is a Nasdaq listed subsidiary of MBf Holdings Berhad, a multi-national
conglomerate. From August 1987 through October 1992, Mr. Natan was Treasurer and
Controller for Jewelmasters, Inc., an AMEX listed company.
Ronald P. Burd - Mr. Burd has been a director of the Company since March
1992. From 1984 through the present, Mr. Burd has been President and Chief
Executive Officer of the Devereux Foundation. Devereux, founded in 1912, is a
nationwide, private, not-for-profit organization that treats individuals of all
ages who have a wide range of emotional disorders and/or developmental
disabilities. Headquartered in Villanova, Pennsylvania, Devereux is the largest
non-profit provider of residential, day and community-based treatment programs
located in 13 states and the District of Columbia.
L. Kerry Vickar - Mr. Vickar was appointed a director of the Company in
January 1998. Mr. Vickar has a Bachelor of Law degree from the University of
Manitoba and has extensive experience with divestitures, acquisitions,
operations and financial re-structuring. Currently, Mr. Vickar is Chairman and
Chief Executive Officer of CorrFlex Graphics, LLC, a privately held packaging
company. In 1994, Mr. Vickar negotiated the sale of Gravure International Corp.
to ACX Technologies, Inc., where he remained until 1995 as Executive Vice
President and Chief Operating Officer of Flexible Division of Graphic Packaging
(a subsidiary of ACX Technologies, Inc.). From 1983 through 1994, Mr. Vickar
held various positions, including President and Chief Operating Officer with
Gravure International Corp.
Greg Brown - Mr. Brown joined the Company in March 1998 as Vice President
of Sales and is responsible for all direct sales of Global Tech's patented
technologies as well as for the development of corporate partnership programs.
From September 1996 to March 1998, Mr. Brown was Vice President of Marketing and
Sales for Boston Advanced Technologies where he was responsible for infrared
fuel and raman analyzer distribution. From March 1993 to August 1996, Mr. Brown
was the Sales and Service Manager for Perkin-Elmer Corporation, Real Time
Systems Division, where he developed Latin American, European, and Far Eastern
markets. From June 1992 to March 1993, Mr. Brown was the National Sales Manager
at UOP Guided Wave, where he established national account status for DuPont,
Dow, and Ashland Chemical, assisted in market development for Plastic
Extrusions, Polymers and Refineries and introduced the sale of value added model
calibrations with analyzer packages. He received his BS at the University of
Massachusetts.
David F. E. Farr - Mr. Farr left retirement after approximately one year to
join Global Tech on December 6, 1999 as Vice President of Marketing, and is
responsible for all marketing functions charged with increasing awareness and
ultimately orders for the patented MotorCheck(TM) On-Site Analyzer ("OSA-II").
Mr. Farr is also responsible for marketing additional technologies and/or
products in the Company's future arsenal. Prior to joining the Company, from
1978 to 1998, Mr. Farr was Sr. Vice President and General Manager of Corporate
Communications for North and South American operations for more than 20 years
with the Canon Corporation. He was an important member of the executive team
that built Canon into a Fortune 100 enterprise. Before joining Canon from 1972
to 1978, Mr. Farr was with British American Tobacco ("BAT") as President and CEO
of its New York affiliate, Turnpike Tobacco. He also spearheaded BAT's
multi-billion dollar U.S. acquisition program. Mr. Farr's career includes
numerous award winning advertising and public relations campaigns. A native of
the United Kingdom, Mr. Farr earned his undergraduate degree from Cambridge
University in the United Kingdom, where he later received two MBA degrees, in
marketing and business administration.
Executive Officer Compensation
The following table sets forth certain summary information concerning the
compensation we paid to the Chief Executive Officer and our other four most
highly compensated executive officers of the Company whose combined salary and
bonus for the fiscal year ended September 30, 1999 exceeded $100,000
(collectively, the "Named Executive Officers") for the years indicated.
<TABLE>
Summary Compensation Table
<S> <C> <C>
- ------------------------- --------------------------------------------------- ----------------------------- ---------------
Annual Compensation Long-Term Compensation
Awards
- ------------------------- --------------------------------------------------- ----------------------------- ---------------
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
(a) (b) (c) (d) (e) (f) (g) (i)
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
Name and Principal Other Annual Restricted Securities All Other
Position Year Salary ($) Bonus($) Compensation Stock Underlying Compensation
($) (14) Award(s)($) Option/SARs ($) (15)
(#)
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
- ---------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
William C. Willis, Jr. 1999 $319,725 $300,000 $12,000 $0 150,000 $ 5,306
President and 1998 $303,750 $0 $12,000 $0 100,000 $ 11,543
Chairman of the Board 1997 $109,231(16) $0 $ 4,369 $0 500,000 $ 569
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
David Natan 1999 $135,417 $55,000 $12,000 $0 38,000 $ 6,706
Vice President, Chief 1998 $126,667 $0 $12,000 $0 100,000 $ 6,117
Financial Officer, 1997 $125,000 $25,000 $11,298 $0 7,000 $ 3,511
Secretary and Director
- ------------------------- -------- ------------- ------------ --------------- ------------- --------------- ---------------
</TABLE>
(14) Amounts consist principally of automobile allowances paid by the Company.
The Company's policy is to provide executive officers with an automobile
allowance of $600 per month and a maintenance allowance of $400 intended to
cover the cost of all other expenses of operating the vehicle such as
insurance, maintenance, repairs and gasoline costs.
(15) These amounts, as follows, represent group term life insurance premiums
paid by the Company, the Company's match of the Retirement Salary Saving
Plan - 401(k) and reimbursement of out-of-pocket medical, dental, etc.
expenses not covered by the Company's insurance:
(a) The 1999 group term life insurance premiums were as follows: Mr. Willis
$1,652 and Mr. Natan $2,300.
(b) The 1999 employer match of the Retirement Salary Savings Plan - 401(K) was
as follows: Mr. Willis $2,604 and Mr. Natan $2,208.
(c) The 1999 reimbursement of out-of pocket medical and dental expenses not
covered by the Company's insurance was as follows: Mr. Willis $1,050, and
Mr. Natan $2,198.
<PAGE>
Stock Option Information
The following table sets forth certain information regarding Options
granted during fiscal 1999 to the executive officers named in the Summary
Compensation table above
Option/SAR Grants During The Fiscal Year
Ended September 30, 1999
<TABLE>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------- ---------------------------------
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option
Term(17)
- ---------------------------------------------------------------------------------------- ---------------------------------
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
(a) (b) (c) (d) (e) (f) (g)
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
Name Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs employees Base Expiration 5%($) 10%($)
Granted in Fiscal Price Date
(#) Year ($/Share)
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------------------------------------------------
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
William C. Willis, Jr. 50,000 11.4% $1.00 12/10/2008 $31,445 (18) $ 79,687 (19)
100,000 22.8% $1.32 5/17/2009 $83,014 (20) $210,374 (21)
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
David Natan 25,000 5.7% $1.00 12/10/2008 $15,722(18) $ 39,844 (19)
13,000 2.9% $1.32 5/17/2009 $10,792(20) $ 27,349 (21)
- ----------------------- ---------------- --------------- ---------------- -------------- ----------------- ---------------
</TABLE>
(17) The values shown are based on indicated assumed annual rates of
appreciation compounded annually through the applicable expiration date.
Actual gains realized, if any, on Stock Option exercises and Common Stock
holdings are dependent on the future performance of the Common Stock and
overall market conditions. There can be no assurances that the values shown
on this table will be achieved.
(18) Represents an assumed market price per share of Common Stock of $1.63.
(19) Represents an assumed market price per share of Common Stock of $2.59.
(20) Represents an assumed market price per share of Common Stock of $2.15.
(21) Represents an assumed market price per share of Common Stock of $3.42.
The following table sets forth certain information with respect to the
exercise of Options to purchase Common Stock and SARs during the fiscal year
ended September 30, 1999, and the unexercised Options held and the value thereof
at that date, by each of the executive officers named in the Summary
Compensation Table.
<PAGE>
Aggregated Option/SAR Exercises In Last Fiscal Year 1999
And Fiscal Year-End Option/SAR Values
<TABLE>
<S> <C> <C> <C> <C>
- ------------------- ------------- ----------------- -------------------------------- ---------------------------------
(a) (b) (c) (d) (e)
- ------------------- ------------- ----------------- -------------------------------- ---------------------------------
- ------------------- ------------- ----------------- -------------------------------- ---------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Oprtions/SARs at Fiscal In-the-Money Options/SARs
Year End (#) at Fiscal Year End ($) (22)
- ------------------- ------------- ----------------- -------------------------------- ---------------------------------
- ------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
Name Shares
Acquired
On Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable
(#)(23) ($)
- ------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
William C.Willis, Jr. 0 N/A 274,999 275,001 22,229 36,646
- ------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
- ------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
David Natan 0 N/A 138,332 81,668 9,114 14,323
- ------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
</TABLE>
(22) Based on the difference between the closing market price of the Company's
Common Stock on the AMEX at September 30, 1999 of $1.31 and the Option
exercise price.
(23) All Options were granted at 100% of fair market value.
Executive Compensation Agreements
William C. Willis, Jr.
In May 1997, the Company entered into an employment agreement with William
C. Willis, Jr., its then new President and Chief Executive Officer of the
Company. The term of this employment agreement is three years through May 21,
2000 ("Employment Period"). The employment agreement provides for a base salary
of $300,000 ("Annual Base Salary"). Effective July 1, 1998 Mr. Willis' Annual
Base Salary increased to $315,000. Mr. Willis receives an automobile allowance
of $600 per month and an automobile maintenance and gasoline allowance of $400
per month. Mr. Willis shall also be eligible to receive a cash bonus
("Performance Bonus") as described below for each successive period of four
fiscal quarters (prorated for any partial period) during the Employment Period,
as defined in the employment agreement, in an amount of between zero and 100% of
the Annual Base Salary. The Performance Bonus, if any, for each successive
four-quarter period shall be paid within 60 days after the end of such period.
The Performance Bonus shall consist of the following two components:
<PAGE>
(A) The first component of the Performance Bonus shall be an amount of between
zero and 50% of the Annual Base Salary based on the Company meeting annual
earnings per share targets of between $.01 and $.05 as defined in the
employment agreement.
(B) The second component of the Performance Bonus shall be an amount of between
zero and 50% of the Annual Base Salary based on the Company achieving five
annual performance based targets for each period of four fiscal quarters
during the Employment Period. In June 1998, the Company granted Mr. Willis
100,000 Options initially exercisable over a three-year term at $.875 per
share in exchange for his waiving his earned Performance Bonus of
approximately $127,500.
The earnings per share targets and five performance-based targets for each
succeeding four- quarter period during the Employment Period shall be reset and
established annually by the Compensation Committee. In December 1998, Mr. Willis
was awarded a $50,000 bonus and 50,000 Stock Options at an exercise price of
$1.00 per share. The bonus and Options were granted in recognition of Mr.
Willis' performance in bringing the new OSA-II technology to the marketplace,
and for attracting new capital to the Company on favorable terms, thus enabling
the Company to pay-off senior debt at a significant discount.
In May 1999, Mr. Willis waived a cash Performance Bonus of $157,500, which
he was entitled to receive. In exchange, Mr. Willis received a 4% salary
increase from $315,000 to $327,600 and 100,000 Stock Options at an exercise
price of $1.315.
On September 29, 1999, the Compensation Committee awarded Mr. Willis a
bonus of $250,000. This bonus was subsequently paid to Mr. Willis after the
receipt by Global Tech of Onkyo's $6,500,000 note payment relating to the
divestiture of Top Source Automotive, Inc. This note arose pursuant to the
Company's divestiture of substantially all of the assets of its automotive
subsidiary, TSA. The Committee awarded this bonus to Mr. Willis based upon his
ability to quickly locate a viable back-up buyer, and to consummate a favorable
transaction. The Committee also considered Mr. Willis' negotiation efforts in
the very difficult aspects of the transaction.
In the event Mr. Willis' employment is terminated by the Company for other
than cause, death or disability or Mr. Willis terminates his employment for good
reason, all as defined in his employment agreement, the Company is obligated to
pay Mr. Willis (1) his annual base salary for 12 months, (2) a lump cash sum
paid within 30 days equal to accrued obligations consisting of any owed but
unpaid Performance Bonus, vacation pay and other monetary payments Mr. Willis
was entitled to on the date of his termination, and (3) continued medical
coverage for Mr. Willis and his dependents for 12 months following termination.
The Company also pays the premiums on a $1,000,000 life insurance policy on
Mr. Willis where he is the beneficiary. Additionally, the Company is the
beneficiary on a $5,000,000 key-man policy on Mr. Willis.
David Natan
Mr. David Natan, Vice President and Chief Financial Officer, joined Global
Tech on June 30, 1995 at an annual salary of $125,000. In August 1998, Mr.
Natan's salary was increased to $135,000. Mr. Natan's employment agreement
provides for 12 months of severance benefits which include salary, medical and
dental benefits in the event of a qualifying termination of Mr. Natan, defined
as (1) a material adverse change to his job duties and responsibilities; (2) a
material reduction in his salary, compensation or eligibility to participate in
Global Tech benefit programs; or (3) an unwilling relocation to a location
greater than 50 miles away from his current work location. The Company also pays
the premiums on a $1,000,000 life insurance policy on Mr. Natan, which he is the
beneficiary.
In January 1998, Global Tech granted Mr. Natan new Options in exchange for
cancellation of higher priced mostly vested Options as follows:
<PAGE>
<TABLE>
<S> <C> <C> <C>
Number of
Options Exercise Price Number Vested
----------------------- ------------------- ---------------- -------------
Cancelled Options 93,750 $6.94 78,175
10,000 $7.75 10,000
---------------------- ------------------- ---------------- --------------
----------------------- ------------------- ---------------- -------------
New Grant 75,000 $3.00 75,000
----------------------- ------------------- ---------------- -------------
</TABLE>
In December 1998, Mr. Natan was awarded 25,000 Stock Options at an exercise
price of $1.00 per share. In May 1999, he received 13,000 Stock Options at an
exercise price of $1.315. Both sets of Options were awarded to Mr. Natan for his
efforts in maintaining the Company's liquidity during a period of time when the
Company's resources were strained due to delays by a proposed buyer in raising
the funds necessary to purchase TSA.
On September 1, 1999, Mr. Natan's salary increased from $135,000 to
$140,000 and he received a $5,000 bonus. On September 29, 1999, the Compensation
Committee awarded Mr. Natan a bonus of $50,000 for his efforts in closing the
TSA transaction. This bonus was subsequently paid to Mr. Natan after the receipt
by Global Tech of Onkyo's $6,500,000 note payment relating to the divestiture of
Top Source Automotive, Inc.
David Farr
Mr. David F. E. Farr, Vice President of Marketing joined Global Tech on
December 6, 1999 at an annual salary of $110,000. As part of Mr. Farr's
employment agreement, he was granted 25,000 Options, vesting twice a year over a
three-year period at a strike price of $.945 equal to the market closing price
on December 6, 1999. Mr. Farr is also eligible for an annual performance bonus
of up to 25% of his annual salary.
Retirement Salary Savings Plan
In October 1993, the Company established a 401(k) Retirement Salary Savings
Plan (the "Plan"). All current employees, including executive officers, were
eligible to participate as of October 1, 1993. Any individuals employed
thereafter must complete three months of service and be at least 21 years old to
meet the eligibility requirements. The enrollment dates are the first day of
each quarter. Employees may voluntarily contribute from 1% to 15% of their pay
each plan year although certain requirements may limit the contribution levels
of highly compensated employees. During fiscal 1999, the Company contributed
matching dollars equal to 25% of every dollar invested in the Plan on the first
6% of salary savings. The cost the Company incurred for matching employee
contributions during fiscal 1999 was approximately $18,000. The Plan provides
that the Company's matching contribution may change from year to year and that
the Company may declare additional matching dollars at year-end. All employees
vest ratably over a five-year term. Any forfeited non-vested amounts contributed
are used to reduce required Company matching contributions.
Repricing of Options
Repricing of Options held by a Named Executive Officer during the fiscal
year ended September 30, 1999 and information on all repricing of Options held
by any executive officer during the last 10 fiscal years is provided in the
following table:
<TABLE>
Ten-Year Option/SAR Repricings
<S> <C> <C> <C> <C> <C> <C>
- ------------------- ------------ ------------------ ------------------ ---------------- ----------- -------------------------
(a) (b) (c) (d) (e) (f) (g)
- ------------------- ------------ ------------------ ------------------ ---------------- ----------- -------------------------
Number of Market Price Exercise
Securities of Stock at Price at Length of Original
Underlying Time Time of New Option Term
Options/SARs Repricing or Repricing Exercise Remaining at Date
Repriced or Amendment or Amendment Price of Repricing or
Amended Amendment
Name Date (#) ($) ($)
- ------------------- ------------ ------------------ ------------------ ---------------- ----------- -------------------------
David Natan 1/28/98 75,000(25) $1.375 $6.94 $3.00 7 years and 5 months
- ------------------- ------------ ------------------ ------------------ ---------------- ----------- -------------------------
</TABLE>
(24) The repricing was in consideration of the cancellation of 103,750 Options
and the start of a new vesting period for all repriced Options.
Report on Executive Compensation by the Compensation and Stock Option Committees
The primary objective of the compensation policy of the Company is to align
executive compensation in a way that will encourage enhanced stockholder value,
while concurrently allowing us to attract, retain and satisfactorily reward all
employees who contributed to our long-term growth and economic success. The main
principles of the compensation program are (1) the development of incentive
plans, (2) the attainment of both our short-term and long-term growth
operational goals and strategic initiatives (3) the development of competitive
compensation packages that will enable us to attract retain and motivate high
caliber employees without depleting our resources, and (4) to provide incentives
to our executives and other employees to share in appreciation of the price of
our Common Stock, thereby aligning their interests with those of our
stockholders. The compensation program for our executives includes an annual
based salary, appropriate fringe benefits, some of which are standard Company
policy for all employees and some of which may be negotiated for management, the
potential for an annual cash bonus and grants of long-term stock option
incentives, which in the case of our Chief Executive Officer, are in large part
performance based. Chief Executive Officer
William C. Willis, Jr.
Mr. Willis' compensation package was finalized in 1997 after extensive
discussions by the Compensation Committee with the assistance of Korn/Ferry
International, a leading international search firm, which specializes in the
placement of high level senior executives. Mr. Willis' package meets the
Company's compensation goals as stated above. The Compensation Committee
believes that Mr. Willis' initial base salary at $300,000 (now $327,600 as of
May 25, 1999), his bonus and Option incentives represent compensation
commensurate to attract an executive of Mr. Willis's experience and background.
At the same time his agreement ties a large portion of any future bonus payment
or Option appreciation to performance. The 500,000 Options granted to Mr. Willis
was not based on any formula or general Company policy. However, the terms of
the grant, which provides for automatic vesting of 300,000 of the Options over a
three-year period and vesting of the remaining 200,000 Options based on the
Company's Common Stock reaching and remaining at a specific price, is in
accordance with the Company's goal of creating a financial incentive for
executives to increase stockholder value. Similarly, a large portion of his
Performance Bonus is tied to future profitability. By meeting certain
performance targets, Mr. Willis was entitled to a $127,500 bonus through May
1998. At his suggestion, the Compensation Committee agreed to issue him 100,000
Options exercisable at $.875 per share, which was the fair market value of the
Company's Common Stock. See "Executive Compensation Agreements". Issuance of the
Options conserved the Company's cash and furthered the goal of creating a
long-term equity incentive. In December 1998, Mr. Willis was awarded a $50,000
bonus and 50,000 Options at an exercise price of $1.00 per share. The bonus and
Options were granted in recognition of Mr. Willis' performance in bringing the
new OSA-II technology to the marketplace, and for attracting new capital to the
Company on favorable terms, thus enabling the Company to pay-off senior debt at
a significant discount.
In May 1999, Mr. Willis waived a cash performance bonus of $157,500, which
he was entitled to receive. In lieu of this bonus, Mr. Willis received a 4%
salary increase from $315,000 to $327,600 and 100,000 Options at an exercise
price of $1.315.
On September 29, 1999, the Compensation Committee awarded Mr. Willis a
bonus of $250,000. This bonus was subsequently paid to Mr. Willis after the
receipt by Global Tech of Onkyo's $6,500,000 note payment relating to the
divestiture of Top Source Automotive, Inc. This note arose pursuant to the
Company's divestiture of substantially all of the assets of TSA. The Committee
awarded this bonus to Mr. Willis based upon his ability to quickly locate a
viable back-up buyer, and to consummate a favorable transaction. The Committee
also considered Mr. Willis' negotiation efforts in the very difficult aspects of
the transaction.
David Natan
Mr. David Natan, Vice President and Chief Financial Officer, joined the
Company on June 30, 1995 at an annual salary of $125,000. In August 1998, Mr.
Natan's salary was increased to $135,000. He also receives pursuant to an
employment agreement, a car allowance of $600 per month and an automobile
maintenance and gasoline allowance of $400 per month. Mr. Natan's employment
agreement provides for 12 months of severance benefits which include salary,
medical and dental benefits in the event of a qualifying termination of Mr.
Natan, defined as (1) a material adverse change to his job duties and
responsibilities; (2) a material reduction in his salary, compensation or
eligibility to participate in Company benefit programs; or (3) an unwilling
relocation to a location greater than 50 miles away from his current work
location.
In January 1998, the Company granted Mr. Natan 75,000 new Options in
exchange for cancellation of 103,750 higher priced mostly vested Options for the
following reasons:
Mr. David Natan was hired as Vice President and Chief Financial Officer of
the Company in June 1995. During 1995, Mr. Natan was granted 103,750 Options. At
that time, the Company's stock was trading at prices substantially higher than
current levels. Between 1995 and 1998, the Company reported significant
operating losses. During this time period, except for Mr. Natan, substantially
the entire executive-management group and Board of Directors were replaced.
The Compensation Committee, consisting of Messrs. William C. Willis, G.
Jeff Mennen and L. Kerry Vickar, believes that despite the Company's losses, Mr.
Natan's quality performance in maintaining the Company's liquidity during this
period, arranging for difficult financings and continuing current performance,
justified a repricing. In order to incentivize Mr. Natan, reduce Company share
dilution, and to encourage Mr. Natan's ongoing employment with the Company, his
Options were repriced. As a precondition of the repricing, the Compensation
Committee requested that Mr. Natan forfeit 28,750 Options and re-vest the new
Options over a one-year period. On January 28, 1998, the Company cancelled
103,750 Options above fair market value held by Mr. Natan, and regranted to Mr.
Natan 75,000 new option shares exercisable at $3.00 per share, which was $1.625
above market value on January 28, 1998. See "Repricing of Options".
In December 1998, Mr. Natan was awarded 25,000 Stock Options at an exercise
price of $1.00 per share. In May 1999, he received 13,000 Stock Options at an
exercise price of $1.315. Both sets of Options were awarded to Mr. Natan for his
efforts in maintaining the Company's liquidity during a period of time when the
Company's resources were strained due to long delays by a proposed buyer in
raising the funds necessary to purchase TSA.
On September 1, 1999, Mr. Natan's salary increased from $135,000 to
$140,000 and he received a $5,000 bonus. On September 29, 1999, the Committee
awarded Mr. Natan a bonus of $50,000 for his efforts in closing the TSA
transaction. This bonus was subsequently paid to Mr. Natan after the receipt by
Global Tech of Onkyo's $6,500,000 note payment relating to the divestiture of
TSA, as previously described. The Committee believes that Mr. Natan's efforts in
negotiating the difficult and often-precarious TSA transaction, while managing
the Company's limited cash resources, justifies this recent award.
This report is submitted by the following Compensation Committee members.
William C. Willis, Jr.
G. Jeff Mennen
L. Kerry Vickar
<PAGE>
Performance Graph
The following Performance Graph assumes that $100 was invested in the
Company, the AMEX Market Index and the Peer Group Index on October 1, 1994.
Information on prices at which the Company's Common Stock traded prior to that
date is not readily available. The Performance Graph further assumes all
dividends were reinvested. However, the Company has never paid any dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
[OBJECT OMITTED]
COMPANY 1994 1995 1996 1997 1998 1999
- ------- ---- ---- ---- ---- ---- ----
Global Tech
Technovations,
Inc. 100 125.89 66.96 28.57 11.61 18.75
Peer Group 100 125.36 150.36 205.98 192.01 229.37
Broad Market 100 120.49 125.40 152.50 133.20 155.13
The Broad Market Index chosen was:
American Stock Exchange
The Peer Group is made up of the following securities:
Gentex Corp.
Johnson Controls, Inc.
Magna Internat Inc.
Source: Media General Financial Services
Richmond, VA 23293
Phone: 1-800-446-7922
<PAGE>
1
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 9, 1995, the Company sold $3,020,000 in notes to advisory clients
of Mellon Bank Corporation. The notes are subject to indebtedness to equity
ratio that cannot exceed 1.5 to 1.0. As of June 30, 1998, the Company was in
compliance with the ratio as the result of receiving the initial payment of
$1,450,000 from the Buyer. However, due to the Company's historic losses and due
to the uncertainty on the timing of OSA-II revenues, there was a possibility
that the Company would exceed this ratio in fiscal 1998. In order to assure it
would not violate the covenant, in January 1998, G. Jeff Mennen, a director of
the Company, agreed to infuse sufficient capital into the Company to maintain
compliance of this ratio through October 1, 1998 or refinance the notes. In
consideration for this guarantee, the Company issued to Mr. Mennen 50,000
10-year warrants exercisable at $2.00 per share and agreed to register the
underlying shares of Common Stock at its sole expense.
On November 17, 1998, the Company sold $3,500,000 of its Series B
Convertible Preferred Stock ("Series B Preferred") to two trusts in which Mr. G.
Jeff Mennen, a director of the Company, is one of the co-trustees and sole
trustee, respectively, and the beneficiaries are members of Mr. Mennen's
immediate family (the "Mennen Trusts"). The Series B Preferred is convertible on
or after January 1, 2001 into a number of shares of Common Stock computed by
dividing the stated value of $1,000 per share (the "Stated Value") by 85% of the
closing bid price of the Common Stock on the previous trading day (the
"Conversion Price"). The Company has the option to redeem the Series B Preferred
at a price of 115% of Stated Value plus accrued dividends, which option expires
on January 1, 2001. The Series B Preferred pays a dividend of 9% per annum in
cash or, if the Company is unable to pay cash, in shares of Common Stock. The
number of shares of Common Stock to be issued in such event shall equal to the
sum of: (A) the amount of the dividend divided by the Conversion Price plus (B)
25% of the amount obtained in clause (A). As additional consideration, the
Company issued to the Mennen Trusts 350,000 warrants to purchase the Company's
Common Stock exercisable over a 10-year period at a price of $1.94 per share
(which is equivalent to $1.00 above the closing price on the day of consummation
of the Series B Preferred sale transaction). Additionally, since the Series B
Preferred was not redeemed or converted into Common Stock on or before May 1,
1999 (which conversion required the Company's consent), the Company issued to
the Mennen Trusts an additional 50,000 10-year warrants exercisable at a price
of $1.75, $.50 per share above the closing price of the Company's Common Stock
on April 30, 1999. The Company consummated this transaction after diligently and
actively seeking alternative financing sources and concluding that the proposal
was superior to competing offers available in strict arms-length transactions.
The Board of Directors voted unanimously to approve the sale of the Series B
Preferred with Mr. Mennen abstaining.
Under the original terms of the Preferred B, the Company agreed to file a
registration statement by November 30, 1999 to cover the public sale of the
shares of Common Stock issuable on conversion of the Series B Preferred Stock
and exercise of the warrants. On October 21, 1999, the Mennen Trusts, holders of
Series B Preferred agreed to delay the time of initial convertability and allow
the Company to delay filing a registration statement until January 1, 2001 to
cover the potential public sale of the shares of the Company's Common Stock
issuable upon conversion of the Series B Preferred and warrants. Additionally,
under the terms of the agreement reached, the Mennen Trusts received 250,000
warrants at a strike price of $2.38. In return, the Company maintained its 15%
redemption right and was allowed to extend the required registration or
redemption until January 1, 2001.
On August 13, 1999, a trust in which Mr. G. Jeff Mennen, a director of the
Company, is one of the trustees (the "Trust") provided the Company a six-month
short-term unsecured loan of $500,000 at a 10% interest rate. The loan was paid
on January 4, 2000. As consideration, the Trust received 50,000 warrants at the
market price of $.875 exercisable immediately, and 50,000 warrants at the market
price of $.875 exercisable in one year. The Company consummated this transaction
after diligently and actively seeking alternative financing sources and
concluding that the proposal was superior to competing offers available in
strict arms-length transactions. The Board of Directors voted unanimously to
approve the unsecured loan with Mr. Mennen abstaining.
PROPOSAL 2. APPOINTMENT OF AUDITORS
Arthur Andersen LLP ("Arthur Andersen"), independent public accountants,
currently acts as our independent auditors. Unless directed to vote no, proxies
being solicited will be voted in favor of the election of Arthur Andersen as our
independent auditors for fiscal year ended September 30, 2000. Arthur Andersen
acted as our auditors for the Company for the fiscal year ended September 30,
1999. A representative of Arthur Andersen will be present at the meeting, be
available to respond to appropriate questions, and have the opportunity to make
statements should they desire to do so.
Ratification of the appointment of Arthur Andersen as our independent
accountants for fiscal year 2000 requires the affirmative vote of at least a
majority of the shares of the Company's Common Stock represented in person or by
proxy at the annual meeting and entitled to vote. Proxies solicited by
management will be voted for the proposal unless instructed otherwise.
PROPOSAL 3. OTHER MATTERS
Proposals
The Board has no knowledge of any other matters, which may come before the
meeting and does not intend to present any other matters. However, if any other
matters shall properly come before the meeting or any adjournment thereof, the
persons soliciting proxies will have the discretion to vote as they see fit
unless directed otherwise.
If you do not plan to attend the meeting, in order that your shares may be
represented and in order to assure the required quorum, please sign, date and
return your proxy promptly. In the event you are unable to attend the meeting,
at your request, we will cancel the proxy.
Stockholders' Proposals
Any of our stockholders who wish to present a proposal to be considered at
the 2000 Annual Meeting of stockholders of the Company and who wishes to have
that proposal included in the Company's proxy statement for that meeting must
deliver their proposal in writing to the Company no later than September 30,
2000. In addition, Global Tech by-laws state that its stockholders from
otherwise introducing business unless less than 75 days written notice is given
to us of the meeting (or prior public disclosure of the date of the meeting)
(collectively the "Notice Date") in which event notice must be given to us
within 15 days of such Notice Date.
We will send, without charge to any stockholder submitting a written
request, a copy of our annual report on Form 10-K as filed with the Commission
including financial statements and schedules thereto. Your written request
should be sent to Ms. Maggie DeLutri, Corporate Communications Coordinator,
Global Technovations, Inc., 7108 Fairway Drive, Suite 200, Palm Beach Gardens,
Florida, 33418.
By the Order of the Board of Directors
David Natan
Vice President, Chief Financial Officer
and Secretary
<PAGE>
[OBJECT OMITTED]TM
Oil analysis is akin to a blood test used to diagnose a broad range of
medical conditions that help physicians determine the course of treatment to
cure or prevent illness. Similarly, an oil sample contains information about
contaminants, engine wear, coolant leaks, and transmission faults that, when
compared to an extensive normal wear curve database, can provide early warning
of potential engine failures, thus allowing time for repairs or preventative
maintenance.
Global Technovations, Inc. has been offering used transmission and engine
oil analysis via the Internet. In response to many requests from its
shareholders, auto enthusiasts and other interested parties, to utilize Global
Tech's MotorCheck(TM) On-Site Analyzer ("OSA-II"), the Company has made this
analysis available via accessing its Web Site. Specifically, you simply click on
www.globaltechnovations.com to access the Company's Web Site, and then click on
the patented MotorCheck(TM) On-Site Analyzer symbol to purchase an OSA-II
mail-in oil analysis kit. Users will receive the same five-minute results as if
the test was conducted on-site. The report will contain meaningful information
regarding the condition of the respondent's engine or transmission and will be
mailed to you immediately. If an urgent problem is indicated, you will be
notified by phone.
If you do not have access to a computer, you may fill out the form below
and send it to Global Technovations, Inc. along with your payment.
TO ORDER A MOTORCHECK(TM) OIL ANALYSIS KIT
`
NAME: _____________________________________________
ADDRESS: __________________________________________
__________________________________________
PHONE: ________________________
Quantity: ______________ @ $14.95 per kit
-----------------
Shipping/Handling per kit:
U.S. $2.95
-----------------
International $5.00
-----------------
TOTAL _________________
**Please make your checks payable to Global Technovations, Inc.:
*** Mail your check to: Global Technovations, Inc.
Attention: Michele Brant
7108 Fairway Drive, Ste. 200
Palm Beach Gardens, FL 33418
If you have any questions, please call (561) 775-5756
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7108 Fairway Drive, Ste. 200
Palm Beach Gardens, FL 33418
(561) 775-5756 Telephone
(561) 691-5220 Fax
www.globaltechnovations.com
