SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
BAYWOOD INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
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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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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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 on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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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BAYWOOD INTERNATIONAL, INC.
NOTICE OF 1999
ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
YOUR VOTE IS IMPORTANT!
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE
<PAGE>
BAYWOOD INTERNATIONAL, INC.
June 29, 1999
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to invite you to
attend the Annual Meeting of Stockholders of Baywood International, Inc. on
August 13, 1999, in Scottsdale, Arizona. Information about the meeting is
presented on the following pages.
In addition to the formal items of business to be brought before the
meeting, members of management will report on the Company's operations and
answer stockholder questions.
Your vote is very important. Please ensure that your shares will be
represented at the meeting by completing, signing, and returning your proxy card
in the envelope provided, even if you plan to attend the meeting. Sending us
your proxy will not prevent you from voting in person at the meeting should you
wish to do so.
Sincerely,
/s/ Neil Reithinger
Neil Reithinger
Chairman of the Board, President & C.E.O.
<PAGE>
BAYWOOD INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 29, 1999
The Annual Meeting of Stockholders of Baywood International, Inc. (the
"Company") will be held at the Doubletree Paradise Valley Resort, 5401 North
Scottsdale Road, Scottsdale, Arizona on August 13, 1999 at 10:00 A.M. local time
for the following purposes:
1. To elect the directors of the Company to serve for the ensuing
year;
2. To ratify the selection of King, Weber & Associates, P.C. as
independent auditors for the Company;
3. To approve the amendments to the Company's 1996 Incentive
Stock Option Plan as adopted by the Board of Directors of the
Company;
4. To approve the amendment to the Company's 1998 Non-Employee
Director Stock Option Plan as adopted by the Board of
Directors of the Company;
5. To transact any other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on June 24, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting. A list of such stockholders will be available during
regular business hours at the Company's office at 14950 North 83rd Place, Suite
1, Scottsdale, Arizona, on and after June 29, 1999, for inspection by any
stockholder for any purpose germane to the meeting.
By Order of The Board of Directors,
/s/ Karl H. Rullich
Karl H. Rullich
Secretary
<PAGE>
BAYWOOD INTERNATIONAL, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Baywood International, Inc. (the
"Company") for use at the Annual Meeting of Stockholders of the Company to be
held at the time and place and for the purposes set forth in the foregoing
Notice of Annual Meeting of Stockholders. The address of the Company's principal
executive offices is 14950 North 83rd Place, Suite 1, Scottsdale, Arizona,
85260. This Proxy Statement and the form of proxy are being mailed to
stockholders on or about June 29, 1999.
REVOCABILITY OF PROXY AND VOTING OF PROXY
A proxy given by a stockholder may be revoked at any time before it is
exercised by giving another proxy bearing a later date, by notifying the
Secretary of the Company in writing of such revocation at any time before the
proxy is exercised, or by attending the meeting in person and casting a ballot.
Any proxy returned to the Company will be voted in accordance with the
instructions indicated thereon. If no instructions are indicated on the proxy,
the proxy will be voted for the election of the nominees for directors named
herein and in favor of all other proposals described herein. Because abstentions
with respect to any matter are treated as shares present or represented and
entitled to vote for the purposes of determining whether that matter has been
approved by the stockholders, abstentions have the same effect as negative
votes. Broker non-votes and shares as to which proxy authority has been withheld
with respect to any matter are not deemed to be present or represented for
purposes of determining whether stockholder approval of that matter has been
obtained.
The Company knows of no reason why any of the nominees named herein
would be unable to serve. In the event, however, that any nominee named should,
prior to the election, become unable to serve as a director, the proxy will be
voted in accordance with best judgment of the persons named therein. The Board
of Directors knows of no matters, other than as described herein, that are to be
presented at the meeting, but if matters other than those herein mentioned
properly come before the meeting, the proxy will be voted by the persons named
in a manner that such persons (in their judgment) consider to be in the best
interests of the Company.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on June 24, 1999
are entitled to vote at the meeting. On such record date, the Company had
outstanding and entitled to vote 25,791,259 shares of Common Stock. Each
stockholder entitled to vote shall have one vote for each share of Common Stock
registered in such stockholder's name on the books of the Company as of the
record date.
ANNUAL REPORT ON FORM 10-KSB
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998 (the "Annual Report"), which was mailed to stockholders with
or preceding this Proxy Statement, contains financial and other information
about the Company but is not incorporated into this Proxy Statement and is not
to be considered a part of these proxy soliciting materials or subject to
Regulations 14A or 14C or to the liabilities of Section 18 of the Securities
Exchange Act of 1934, as amended (the"Exchange Act").
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BAYWOOD INTERNATIONAL, INC.
The Company will provide to each stockholder of record as of the Record Date, a
copy of any exhibits listed in the Annual Report, upon receipt of a written
request and a check for $20 to cover the Company's expense in furnishing such
exhibits. Any such requests should be directed to the Company's Secretary at the
Company's executive offices set forth in this Proxy Statement.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
On February 18, 1997, the Board of Directors established a Standing
Nominating Committee which shall continually be comprised of three directors.
The directors appointed to serve on the committee until their successors have
been elected or appointed and shall qualify are: Dr. Michael Shapiro, Glen Holt
and Karl Rullich. On May 12, 1999, the Board of Directors held a meeting where a
quorum was present and determined the Board's nominations for directors. The
following persons were nominated by a quorum of the Board of Directors for
directors of the Company:
NOMINEE NAME AGE DIRECTOR SINCE
- ------------ --- --------------
Neil Reithinger 29 1997
Karl H. Rullich 65 1991
Glen Holt 69 1991
Michael B. Shapiro, M.D. 44 1995
David M. Franey, M.D. 47 1998
Denise Forte-Pathroff, M.D. 42 1998
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the shares of common stock
present or represented by proxy and voting at the Annual Meeting of Stockholders
is required for approval of this proposal. THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE FOR ALL OF THE NOMINEES.
INFORMATION RELATED TO ELECTION OF DIRECTORS
All directors hold office until the Annual Meeting of Stockholders of
the Company and until their successors have been elected and qualified.
Information about each nominee for director is given below.
Mr. Neil T. Reithinger has been the Company's Chairman of the Board,
President and Chief Executive Officer since April 3, 1998 and previously served
as Interim President from December 10, 1997. He was elected as a Director on
February 18, 1997. He was elected Chief Financial Officer, Secretary and
Treasurer on October 28, 1996. Mr. Reithinger has been Controller of the Company
since January 1994. Prior to joining the Company and from July 1992 through
December 1993, Mr. Reithinger worked in branch operations for Bank of America.
He received a Bachelors degree in accounting from the University of Arizona in
1992 and his certification as a Certified Public Accountant in 1996.
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BAYWOOD INTERNATIONAL, INC.
Mr. Karl H. Rullich has been a Director since 1991. He was appointed
Vice-President on April 3, 1998 and has served as the Company's Director of
International Sales since May 1996. Prior to April 19, 1996, he served as
President, Chief Executive Officer and Treasurer of the Company. He worked as a
Marketing Director, General Manager and Vice President for Pfizer Hospital
Products Group in their international businesses and operations for over 25
years. Mr. Rullich holds a degree in economics from the Business College in
Essen, Germany. He emigrated from Germany to the United States in 1956 and
became a naturalized citizen in 1961.
Mr. Glen Holt has been a Director of the Company since 1992. As a
rancher and successful breeder for over 35 years, Mr. Holt, is an expert on
animal health and nutrition. He is a graduate from the University of Smith
Cornel. He is married to actress Annette Funicello, who is associated with the
Company's Cello by Annette(TM) fragrance line.
Dr. Michael B. Shapiro has been a Director of the Company since August
1995. Dr. Shapiro is an ophthalmologist at the University of Wisconsin, Madison.
He has also been Chairman of Davis Duehr Eye Associates, S.C. in Wisconsin since
1994 and is currently President of Eye-Deal Ocular Safety Products. Dr. Shapiro
received his degree in medicine from the Washington University in St. Louis,
Missouri. He completed his internship at Mercy Hospital and Medical Center at
the University of San Diego and his residency at the University of Wisconsin,
Madison. Dr. Shapiro has consulted for companies such as Bausch and Lomb,
Allergan and Unilens.
Dr. David M. Franey has been a Director of the Company since May of
1998. Dr. Franey is Associate Medical Director for Intergroup of Arizona. He is
board certified by the American Board of Internal Medicine. Dr. Franey received
his undergraduate and medical school education from the University of Wisconsin,
Madison. He completed his residency in internal medicine at Good Samaritan/VA
Hospital Program in Phoenix. He was in private practice from 1981 to 1985 before
joining The Scottsdale Clinic. After the acquisition of The Scottsdale Clinic by
Thomas-Davis Medical Centers in 1990, he became site medical director. He has
served as Department of Medicine Chair for SMH-North Hospital, Medical Records
Committee Chair for TDMC, and a member of the TDMC Q1 Committee. Dr. Franey is a
member of the American Medical Association, the Arizona Medical Association,
Maricopa County Medical Society, and the American College of Physician
Executives.
Dr. Denise Forte-Pathroff has been a Director of the Company since May
of 1998. Dr. Forte-Pathroff is a dermatologist in private practice in Bismarck,
North Dakota. She is currently President of DFP, Inc., a dermatological skin
care products company, and serves on the Board of Directors of BNC National
Bank. Dr. Forte-Pathroff received her degree in medicine from Tufts University
Medical School in Boston, Massachusetts and completed her residencies at the
University of Minnesota in Minneapolis, Minnesota and Temple University Skin &
Cancer Hospital in Philadelphia, Pennsylvania. She completed her internal
medicine internship at Abington Memorial Hospital in Abington, Pennsylvania. She
has been Board Certified with the American Academy of Dermatology since 1986 and
is a Clinical Associate Professor of Internal Medicine at the University of
North Dakota.
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BAYWOOD INTERNATIONAL, INC.
STANDING AUDIT AND COMPENSATION COMMITTEES
On August 29, 1996, the Board of Directors established Standing Audit
and Compensation Committees. The directors currently serving on the committees
until their successors have been elected or appointed and shall qualify are:
Audit Committee Compensation Committee
--------------- ----------------------
Neil Reithinger Neil Reithinger
Karl H. Rullich Dr. Michael Shapiro
Glen Holt Glen Holt
The Audit Committee's duty is to recommend for approval by the Board of
Directors a firm of certified public accountants whose duty it is to audit the
financial statements of the Company for the fiscal year in which they are
appointed, monitor the effectiveness of the audit effort, and to evaluate the
Company's internal financial and accounting organization and controls and
financial reporting. The Audit Committee met on May 29, 1998 when the Company's
auditors presented and discussed the Audit Committee Report for the year ended
December 31, 1997. On May 12, 1999, the Board of Directors of the Company
recommended the ratification of the appointment of the accounting firm of King,
Weber & Associates, P.C. of Tempe, Arizona to audit the Company's financial
statements for the Company's fiscal year ended December 31, 1998 and appointed
King, Weber & Associates, P.C. as its auditors for the fiscal year ending
December 31, 1999.
The Compensation Committee's duties include administering grants under
stock option plans, reviewing and approving salaries and other matters relating
to compensation of the executive officers of the Company. On May 12, 1999, the
Board of Directors granted certain options to outside directors and adopted an
amendment to increase the total number of shares available under the Company's
1998 Non-Employee Director Stock Option Plan which is subject to shareholder
approval and further described herein. On May 13, 1999, the Board of Directors
acted by unanimous written consent in lieu of a meeting to grant certain options
to key employees and adopt amendments, which are subject to shareholder approval
and are described herein, to the Company's 1996 Incentive Stock Option Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding shares of
common stock beneficially owned as of June 24, 1999 by (i) each person or group,
known to the Company, who beneficially owns more than 5% of the common stock;
(ii) each of the Company's officers and directors; and (iii) all officers and
directors as a group. The percentage of beneficial ownership is based on
25,791,259 shares outstanding on June 24, 1999 plus, for each person or group,
any securities that person or group has the right to acquire within 60 days
pursuant to options, warrants, conversion privileges or other rights. Unless
otherwise indicated, the following persons have sole voting and investment power
with respect to the number of shares set forth opposite their names:
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<PAGE>
BAYWOOD INTERNATIONAL, INC.
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Owner Class
- -------------- ------------------- -------------------- ----------
Common Francis Choi (1) 7,301,587 26.2%
Hong Kong, China
Common Linda Lee (2) 1,466,147 5.3%
Hong Kong, China
(1) Mr. Choi is a citizen of Hong Kong, China. Mr. Choi holds 7,301,587
common shares.
(2) Ms. Lee is a citizen of Hong Kong, China and a prior director of the
Company. Ms. Lee holds 1,466,147 common shares.
SECURITY OWNERSHIP OF MANAGEMENT
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Owner Class
- -------------- ---------------- ---------------- -----
Common Neil Reithinger (1)(8) 544,900 2.0%
Scottsdale, AZ
Common Karl H. Rullich (3)(8) 807,000 2.9%
Scottsdale, AZ
Common Glen Holt (4)(8) 387,500 1.4%
Encino, CA
Common Dr. Michael Shapiro (5) 272,500 1.0%
Madison, WI
Common Dr. Denise Forte-Pathroff (6) 120,500 (2)
Bismarck, ND
Common Dr. David M. Franey (7) 114,500 (2)
Scottsdale, AZ
Common All Officers and Directors 2,246,900 8.1%
as a Group (1) - (7)
(1) Mr. Reithinger is the Company's Chairman of the Board, President and
Chief Executive Officer. He holds 124,900 common shares, an option,
granted January 29, 1997, which expires January 29, 2007 to purchase
20,000 common shares at $0.42 per share and an option, granted February
26, 1998, which expires February 26, 2008 to purchase 100,000 common
shares at $0.13 per share and granted May 13, 1999, which expires May
13, 2009 to purchase 300,000 common shares at $0.15 per share. Members
of Mr. Reithinger's immediate family hold approximately an additional
325,000 common shares for which Mr. Reithinger disclaims all beneficial
interest and control.
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<PAGE>
BAYWOOD INTERNATIONAL, INC.
(2) Less than one percent
(3) Mr. Rullich is Vice-President, Secretary and a Director of the Company.
Mr. Rullich beneficially owns 530,000 shares, 505,000 shares of which
are owned in joint tenancy with his wife, Florence Rullich. He also
holds an option, granted January 29, 1997, which expires January 29,
2007, to purchase 25,000 common shares at $0.42 per share and an
option, granted February 26, 1998, which expires February 26, 2008 to
purchase 100,000 common shares at $0.13 per share and granted May 13,
1999, which expires May 13, 2009 to purchase 150,000 common shares at
$0.15 per share.
(4) Mr. Holt directly owns 125,000 common shares. He also beneficially owns
150,000 common shares held by his wife, Annette Funicello. He holds an
option, granted July 7, 1998, which expires July 7, 2008 to purchase
62,500 common shares at $0.06 per share and granted May 12, 1999, which
expires May 12, 2009 to purchase 50,000 common shares at $0.15 per
share.
(5) Dr. Shapiro directly owns 160,000 common shares. He holds an option,
granted July 7, 1998, which expires July 7, 2008 to purchase 62,500
common shares at $0.06 per share and granted May 12, 1999, which
expires May 12, 2009 to purchase 50,000 common shares at $0.15 per
share.
(6) Dr. Forte-Pathroff directly owns 8,000 common shares. She holds an
option, granted July 7, 1998, which expires July 7, 2008 to purchase
62,500 common shares at $0.06 per share and granted May 12, 1999, which
expires May 12, 2009 to purchase 50,000 common shares at $0.15 per
share.
(7) Dr. Franey directly owns 2,000 common shares. He holds an option,
granted July 7, 1998, which expires July 7, 2008 to purchase 62,500
common shares at $0.06 per share and granted May 12, 1999, which
expires May 12, 2009 to purchase 50,000 common shares at $0.15 per
share.
(8) Director
CHANGES IN CONTROL
As previously disclosed under Item 11 - "Changes in Control" of the
Company's Annual Reports on Form 10-KSB for the fiscal years ended December 31,
1997 and 1996 and on Form 8-K filed May 28, 1998, on April 11, 1997, the Company
issued 1,466,147 shares of Common Stock and 800,000 shares of Class "B"
Preferred Stock to Linda Lee, a citizen of Hong Kong, China, in a private
placement in exchange for $800,000 cash. Hong Kong investor Francis Choi, or
Choi Chee Ming, is a relative of Ms. Lee and the beneficial owner of the
1,466,147 shares of Common Stock and the 800,000 shares of Preferred Stock.
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BAYWOOD INTERNATIONAL, INC.
The original 800,000 shares of Class "B" Preferred Stock were
redeemable for cash or convertible to shares of Common Stock on May 8, 1997. On
May 5, 1997, the Company reached an agreement with Ms. Lee to exchange her
800,000 shares of Class "B" Preferred Stock for 800,000 shares of Class "C"
Preferred Stock which would no longer be redeemable for cash and which would not
be convertible to Common Stock until one year later, or May 8, 1998. In
consideration for this transaction, the Company agreed to issue Ms. Lee 120,000
additional shares of Class "C" Preferred Stock, with the same conversion
privileges, as a Preferred Stock dividend. The 920,000 Class "C" Shares are
convertible into that number of shares which results from $920,000 divided by
the average price of the Company's shares of Common Stock for the three months
prior to May 8, 1998, as set forth in paragraphs 1(a) and 1(b) (i) of the
"Certificate Describing Rights and Restrictions of Class "C" Preferred Shares"
filed with the Secretary of State of Nevada and included as Exhibit 4.5 to the
Company's Annual Report on form 10-KSB for the fiscal year ended December 31,
1997.
On May 12, 1998, Mr. Choi, as beneficial owner of the shares held in
the name of Ms. Lee, confirmed to the Company his intention to convert the
920,000 shares of Class "C" Preferred Stock to shares of Common Stock and
thereafter tendered the certificates for conversion. According to the conversion
rights of the Class "C" Preferred Shares, and based upon an average share price
of $0.126 per share of the Company's Common Stock prior to May 8, 1998, Mr. Choi
received 7,301,587 shares of Common Stock upon conversion. The restrictive
legend placed on the shares states that the shares are subject to resale
restrictions and may be resold only pursuant to a registration statement or in
reliance upon a valid exemption from registration. After the conversion,
including Ms. Lee, Mr. Choi now beneficially owns 8,767,734 or 34% of the
Company's 25,791,259 issued and outstanding shares of Common Stock.
The Company knows of no arrangements or understandings between Mr. Choi
and Ms. Lee with respect to election of directors. No special arrangements exist
between the Company or its Management and Mr. Choi or Ms. Lee with respect to
election of directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 12, 1999, each outside director (Holt, Shapiro, Forte-Pathroff
and Franey) was granted options to purchase 100,000 shares of Common Stock at
$0.15 per share which expire May 12, 2009 with 50,000 vesting immediately and
50,000 vesting after one year of service.
On May 13, 1999, the Board of Directors granted Neil Reithinger options
to purchase 2,500,000 shares of Common Stock at $0.15 per share which expire May
13, 2009 with 300,000 vesting immediately, 350,000 vesting when revenues reach
$3.0 million annually, 350,000 vesting when the market price of the Common Stock
reaches $1.00, 400,000 vesting when revenues reach $5.0 million annually,
500,000 vesting when revenues reach $10.0 million annually and 600,000 when
revenues reach $15.0 million annually.
On May 13, 1999, the Board of Directors granted Karl Rullich options to
purchase 500,000 shares of Common Stock at $0.15 per share which expire May 13,
2009 with 150,000 vesting immediately, 150,000 vesting after one year of service
and 200,000 after two years of service.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following persons did not file any Forms 4 during the fiscal year
ended December 31, 1998 and have not provided the Company with a written
representation that no such forms were required: Glen Holt, Dr. Michael B.
Shapiro, Dr. David M. Franey and Dr. Denise Forte-Pathroff.
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BAYWOOD INTERNATIONAL, INC.
EXECUTIVE COMPENSATION
OFFICERS
SUMMARY COMPENSATION TABLE
Summary compensation information for Mr. Neil Reithinger, the Company's
Chief Executive Officer for the year ended December 31, 1998 (the only "named
executive officer" within the meaning of Regulation
S-B, Item 402(a)(2) Instruction (1)), is as follows:
<TABLE>
<CAPTION>
Other Restricted
Name and Annual Stock Securities All Other
Principal Compen- Awards Underlying LTIP Payouts Compensation
Position Year Salary ($) Bonus ($) sation ($) ($) Options/SARs (#) ($) ($)
-------- ---- ---------- --------- ---------- ---------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mr. Reithinger 98 57,000 -0- -0- -0- 100,000 -0- 1,200 (1)
CEO 97 -0- -0- -0- -0- -0- -0- -0-
96 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
(1) The Company paid Mr. Reithinger a phone allowance of $1,200 during
fiscal year 1998 in his capacity as Chairman of the Board.
DIRECTORS
DIRECTOR COMPENSATION TABLE
<TABLE>
<CAPTION>
Number of
Consulting Securities
Annual Retainer Fees/Other Fees Number of Underlying
Name Fees ($) Meeting Fees ($) ($) Shares (#) Options/SARs (#)
---- --------------- ---------------- --------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Neil Reithinger -0- -0- 1,200 -0- 100,000
Karl Rullich -0- -0- 1,200 -0- 100,000
Glen Holt -0- 1,000 -0- -0- 62,500
Dr. Michael Shapiro -0- 1,000 -0- -0- 62,500
Dr. Denise Forte-Pathroff -0- 1,000 -0- -0- 62,500
Dr. David M. Franey -0- -0- -0- -0- 62,500
</TABLE>
(1) Each "outside" Director not residing in Arizona (Messrs. Holt,
Shapiro and Forte-Pathroff) each received reimbursement for travel related
expenses during fiscal year 1998 associated with their attendance at the
Company's annual meeting.
(2) Mr. Reithinger and Mr. Rullich received a phone allowance of $1,200
in their capacity as Directors of the Company.
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BAYWOOD INTERNATIONAL, INC.
EMPLOYMENT CONTRACTS
The Company had previously entered into an Employment Agreement with
Harvey J. Turner on July 19, 1996. On December 10, 1997, Mr. Turner resigned as
the Company's Chairman of the Board, President and Chief Executive Officer. The
Company and Mr. Turner entered a Settlement Agreement, dated January 9, 1998,
which provided that Mr. Turner would continue to receive his current monthly
salary until April 18, 1998, that he would cooperate with the Company in
maintaining its relationships and that he would remain subject to the covenant
not to compete provisions of his original Employment Agreement.
There are currently no other Employment Agreements with any officers of
the Company.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS OF THE COMPANY
During 1998, the Board of Directors held three (3) meetings. All
Directors attended at least two (2) of the three (3) meetings. The Compensation
Committee held one (1) meeting in which all members were present and the
Nominating Committee held one (1) meeting in which all members were present. Two
(2) meetings were held via unanimous consent. In addition to regularly scheduled
meetings, a number of Directors were involved in numerous informal meetings with
management, offering advice and suggestions on a broad range of corporate
matters.
RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(ITEM 2 ON PROXY CARD)
The Company, on January 4, 1996, engaged King, Weber & Associates, P.C.
("King, Weber") of Tempe, Arizona as its principal accountant to audit the
Company's financial statements beginning with the Company's fiscal year ended
December 31, 1995. King, Weber audited the Company's financial statements for
the fiscal years ending December 31, 1995, 1996, 1997 and 1998 and the Board of
Directors has appointed King, Weber to audit the Company's financial statements
for the fiscal year ended December 31, 1999. It is not anticipated that a
representative of King, Weber will be present at the Annual Meeting of
Stockholders to respond to questions or make a statement.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the shares of common stock
present or represented by proxy and voting at the Annual Meeting of Stockholders
is required for approval of this proposal. THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE FOR RATIFICATION OF THE BOARD OF DIRECTOR'S
APPOINTMENT OF KING, WEBER & ASSOCIATES, P.C. as the Company's independent
certified public accountants for the fiscal years ending December 31, 1998 and
1999.
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BAYWOOD INTERNATIONAL, INC.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
APPROVAL OF THE AMENDMENTS TO THE COMPANY'S 1996 INCENTIVE STOCK OPTION PLAN
(ITEM 3 ON PROXY CARD)
In order to advance the interests of the Company by encouraging and
enabling the acquisition of the continued contributions and financial interests
in the Company by key employees, the Board of Directors has recently adopted,
subject to shareholder approval at the Annual Meeting of Stockholders, certain
amendments to the Company's 1996 Incentive Stock Option Plan (the "Plan").
Management believes that this Plan as amended will aid the Company in attracting
and retaining key employees upon whose judgment, interest and special efforts
the Company may depend for the successful operation of its corporate structure
to compete effectively with other enterprises. It is believed that the
acquisition of such option grants will stimulate the efforts of such key
employees on behalf of the Company and strengthen their desires to remain
employed with the Company.
SUMMARY OF AMENDMENTS
The Board of Directors proposes for adoption by the shareholders the
following amendments to the Plan which was approved at the 1996 Annual Meeting
of Stockholders:
1. Paragraph 2 of the Plan shall be amended to allow up to an
additional 5,000,000 shares to be available for the grant of
options under the Plan. Under the original plan, only 500,000
shares were available.
2. Paragraph 5(e) shall be deleted in its entirety. Paragraph
5(e) under the original plan provides that the aggregate fair
market value of shares as to which options are exercisable for
the first time by an eligible employee during any calendar
year shall not exceed
$100,000.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the shares of common stock
present or represented by proxy and voting at the Annual Meeting of Stockholders
is required for approval of this proposal. THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENTS TO THE 1996 INCENTIVE
STOCK OPTION PLAN.
APPROVAL OF THE AMENDMENT TO THE COMPANY'S 1998 NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN
(ITEM 4 ON PROXY CARD)
In order to advance the interests of the Company by encouraging and
enabling the acquisition of the continued contributions and financial interests
in the Company by directors, the Board of Directors has recently adopted,
subject to shareholder approval at the Annual Meeting of Stockholders, an
amendment to the Company's 1998 Non-Employee Director Stock Option Plan (the
"Director Option Plan"). Management believes that this Director Option Plan as
amended will aid the Company in attracting and retaining a strong Board of
Directors upon whose judgment, interest and special efforts the Company may
depend for the successful operation of its corporate structure to compete
effectively with other enterprises. It is believed that the acquisition of such
option grants will stimulate the efforts of such directors on behalf of the
Company and strengthen their desires to remain on the Board of Directors of the
Company.
- 11 -
<PAGE>
BAYWOOD INTERNATIONAL, INC.
SUMMARY OF AMENDMENT
The Board of Directors proposes for adoption by the shareholders the
following amendment to the Director Option Plan which was approved at the 1998
Annual Meeting of Stockholders:
Paragraph 2 of the Director Option Plan shall be amended to allow up to
an additional 750,000 shares to be available for the grant of options
under the Plan. Under the original plan, only 250,000 shares were
available.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the shares of common stock
present or represented by proxy and voting at the Annual Meeting of Stockholders
is required for approval of this proposal. THE BOARD OF DIRECTORS RECOMMENDS
THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE 1998
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN.
STOCKHOLDER PROPOSALS FOR 1999
Proposals of security holders intended to be presented at the Company's
2000 Annual Meeting of Stockholders must be received by the Company by no later
than January 29, 2000.
OTHER MATTERS
The cost of soliciting proxies will be borne by the Company and will
consist primarily of printing, postage and handling, including the expenses of
brokerage houses, custodians, nominees, and fiduciaries in forwarding documents
to beneficial owners. Solicitations also may be made by the Company's officers,
directors, or employees, personally or by telephone.
Scottsdale, Arizona
June 29, 1999
- 12 -
<PAGE>
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
BAYWOOD INTERNATIONAL, INC. ANNUAL MEETING TO BE HELD ON 08/13/99 FOR HOLDERS AS
OF 06/24/99
CUSIP: 073260101
THE UNDERSIGNED HEREBY APPOINTS NEIL T. REITHINGER AND KARL H. RULLICH AS
PROXIES, EACH WITH THE POWER TO APPOINT HIS OR HER SUBSTITUTE, AND HEREBY
AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS DESIGNATED, ALL OF THE SHARES OF
COMMON STOCK OF BAYWOOD INTERNATIONAL, INC. HELD BY THE UNDERSIGNED ON JUNE 24,
1999, AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 13, 1999 AT
10:00 A.M. AT THE DOUBLETREE PARADISE VALLEY RESORT, 5401 NORTH SCOTTSDALE ROAD,
SCOTTSDALE, ARIZONA OR ANY ADJOURNMENT THEREOF. IF NO INSTRUCTIONS ARE INDICATED
ON THE PROXY, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS NAMED HEREIN AND IN FAVOR OF ALL PROPOSALS DESCRIBED HEREIN.
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE: [X]
DIRECTORS DIRECTORS
- --------- ---------
(MARK X FOR ONLY ONE BOX -
IF NOT SPECIFIED, WILL BE
VOTED FOR ALL NOMINEES)
1. DIRECTORS RECOMMEND: A VOTE FOR [ ] FOR ALL NOMINEES
ELECTION OF THE FOLLOWING DIRECTORS:
01-NEIL REITHINGER, 02-KARL RULLICH [ ] WITHHOLD ALL NOMINEES
03-GLEN HOLT, 04-DR. MICHAEL SHAPIRO
05-DR. DAVID FRANEY, 06-DR. DENISE [ ] WITHHOLD AUTHORITY TO
FORTE-PATHROFF VOTE FOR ANY INDIVIDUAL
NOMINEE. WRITE NUMBER(S) OF
NOMINEE(S) BELOW.
USE NUMBER ONLY
--------------------
DIRECTORS
PROPOSAL(S) RECOMMENDED FOR AGAINST ABSTAIN
- ----------- ----------- --- ------- -------
2. RATIFICATION OF KING, WEBER & FOR [ ] [ ] [ ]
ASSOCIATES, P.C. AS INDEPENDENT
AUDITORS AS DESCRIBED IN THE
PROXY STATEMENT.
3. APPROVAL OF THE AMENDMENTS FOR [ ] [ ] [ ]
TO THE COMPANY'S 1996
INCENTIVE STOCK OPTION PLAN
AS DESCRIBED IN THE PROXY
STATEMENT.
4. APPROVAL OF THE AMENDMENT FOR [ ] [ ] [ ]
TO THE COMPANY'S 1998
NON-EMPLOYEE DIRECTOR STOCK
OPTION PLAN AS DESCRIBED IN
THE PROXY STATEMENT.
5. AUTHORITY TO VOTE ON ANY FOR [ ] [ ] [ ]
BUSINESS THAT MAY PROPERLY
COME BEFORE THE MEETING.
- -------------------------------------------------------------- ---------------
SIGNATURE(S) DATE
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS ON YOUR STOCK CERTIFICATE. JOINT
OWNERS SHOULD EACH SIGN. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
